FBL5010 Scenario Planning: Managing People & Organisations, ECU

This report provides an overview of scenario planning as a strategic tool for managers to navigate future uncertainties and ensure business sustainability. It emphasizes the importance of considering environmental safety, resource allocation, and adapting to global challenges like carbon emissions and water scarcity. The report also highlights the need for companies to integrate scenario planning with waste management and explore alternative resources, ensuring long-term resilience and positive societal impact. The analysis is framed within the context of Edith Cowan University's FBL5010 course, Managing People and Organisations.

RUNNING HEAD: Scenario Planning 0
FBL5010

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Contents
INTRODUCTION.................................................................................................................................1
Literature Review..................................................................................................................................2
CONCLUSION.....................................................................................................................................6
REFERENCES......................................................................................................................................6

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INTRODUCTION
The scenario planning is an organized way for the managers to think about the future of an
organization. It identifies a specific set of uncertainties which might happen in the future
(Amer, Daim & Jetter, 2013). In an organization, managers use scenario planning to cope up
with the unlikely situations. Scenario planning is a tool of strategic planning. It enables
managers to test future strategies. The scenario planning has become an integral means of
management and is utilized in the capital intensive industries (Abdallah & Langley, 2014).
This is done seeking not only the benefits of the organisation but also the benefits that it
provides to society. This works in favour of the goodwill of the company. It does not focus
on predicting future but creates possibilities for the future which are credible (Varum &
Melo, 2010). The managers can gain benefit from the scenario planning for its organization
concerning safety of environment. The managers can use scenario planning for the systematic
thinking. It has been experienced that the persons having interest in chess always keep a
variety of possible scenarios in the upcoming steps. The scenario planning provides a
preventive mechanism to the managers. It also helps managers to reduce possible scenarios
based on logic and empirical facts by making use of business acumen and the immediate
perception. It looks trends in the evolution of things, shapes and impacts changing trends in
the structure.
Literature Review
Klatt, Schlaefke & Moeller, (2011) believes that the managers can also make use of
systematic thinking derived from the scenario planning to take into account various factors
which can affect the decision of making overall well-depth analysis (Chermack, 2011). It
supports them to avoid narrow personal bias. The optimum allocation of the resources can be
made with the help of scenario planning as it predicts the possible future scenarios. The
managers can match internal resources to the external environment in order to allocate
resources in an effective and rational manner. This works in parallel with resources planning
and helps the company in utilisation of their resources for the longer period of time. It makes
managers to be more aware of the external environment, company’s status and future
directions. It helps in stabilising the business in the current and the future situations. The
weak signals can be identified which can cause uncertainties in the future. Scenario planning
aims to eliminate these uncertainties so as to ensure that companies might not face any
business failure chances. The managers prepare themselves to tackle new situations and

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keeps business alive and prosperous. Scenario planning needs analysis that aims to
understand the different variables that is challenging their business. For decision makers
scenario planning has been understood as the tool that helps in improving the strategic agility.
This aims not only to tackle multiple scenarios but also providing multiple consistent
strategies.
On the contrary Aldehayyat & Twaissi, (2011) believes that the scenario planning assists
managers in understanding the complexity of the environment. It can influence objectives,
approaches, and decisions making process. The scenario planning systematically addresses
the hazards found in the working environment along with the wellbeing of employees. It
ensures the safety of the environment by not causing any harm to it. The scenario planning
focuses on the prevention effort for the environment in which workers work. The physical,
environment and safety related hazards are addressed which impacts the safety of workers.
The scenario planning has great importance in the changing environment. The internal and
external resources are evaluated to serve the specific community in a society.
As per Tapinos, (2012) the global environment challenges are increasing and the managers
have to ready for it. Scenario planning needs to be done on various variables that are
disturbing the society due to their business. These are long term plans that are highly flexible.
This flexibility ensures the managers to think of different domains in which adaptation and
generalisation is required. This system thinking approach would help the organisation in
recognising the factors that many create situation which is surprising (Cafaro & Grossmann,
(2014). This method gives the inclusion of factors that are difficult to formalise for example
deep shifts in the values, unprecedented interventions or regulations as well as novel insight
regarding the future. Systems thinking utilised in addition with scenario planning leads to
future state because of the formal relationship developed among different factors. These both
are used together for scenario development which sometimes referred to as the dynamic
scenarios.
Gössling & Scott, (2012) believes that in the past strategic plans were understood to be as the
future that company has planned for itself. This was basically done on the basis of trends of
today that may lead to future. In such type of scenario planning the major role was played by
accounts department and rest other factors were not considered in the process like qualitative
difference in social conditions, demographics etc. In the modern time managers do not
believe that simple guesses are not very good as it fails to consider qualitative social changes

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that might affect the business. Qualitative social changes like environmental safety have
become the responsibility of the organisations (Rickards, 2013). In the scenario planning
various variables that might influence the environment which has direct effect on the society
and hence streamlines the ways in which safety is ensured. This can be understood by fact
that company works on its supply chain management. Modern day organisations generate a
huge amount of wastes in the supply chain management especially in terms of the carbon
emission from the transports (Owolabi & Makinde, (2012). Manager aims to use of supply
chain management system along with scenario planning so as to reduce the problems like
this.
Chakraborty, (2011) states that carbon emission has become a major issue in the modern day
business and it is the role of the leaders and managers to think to limit it. This is due to fact
that it is directly affecting the health in the society. Scenario planning helps the companies to
underlining the factors that is generating huge carbon and hence make the organisation ready
for any special problems in this regards. For example the manufacturing industry which is the
major contributor to economies of many countries needs to rethink about their manufacturing
processes. The plastic and metal products manufacturing industries are generating huge
amount of waste that are not easy to manage. In the coming future due to depleting quality
and quantity of resources, the chances of pollution increases. This is neither good for
company’s image neither for the stakeholders attached with it (Ajagbe, 2011). Civil societies
have always demanded to the manufacturing companies to do business that reduces carbon
emission. The challenges related to the global warming have already at the alarming state.
As per Wade, (2012) pollution is the biggest challenge that is confronting the business of the
modern day organisation and they will have to be ready with their plans so as to diminish the
problems that are arising due to pollution. The examples of the cities like Delhi, Tokyo and
Beijing states that at many cases government has put bans on the business so as to limit the
problems that are related to pollution. For example the government of Delhi has banned the
entry of commercial vehicles like trucks that are more than 10 years old to enter into the city.
At the same time the same government had put the ban on any type of construction in Delhi
in the winters so as to limit the smog situation within the city. These are not the situation for
which contingency planning would work. The collaborative efforts of all the companies could
help the companies in controlling the situation (French & Rios, 2013).

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On the other hand Evans, (2011) believes that water scarcity is another major problematic
scenario in front of the modern day companies. In order to face this problem and finding
solution is a major challenge for the modern day managers. According to various researches
it is estimated that water scarcity in many countries is going to become a major inhibitor of
the business. Scenario planning is required in this regards for over next 20 years. This is due
to the fact that if the water does not get available for the business process then the chances of
business interruption could arise (Holway, 2011). Scenario planning will help the company in
analysing the future scenario based on the current trends. This might be done in stages where
the water resource utilisation is planned for the years in slots (Stoeglehner, Edwards, Daniels
& Narodoslawsky, 2011).
According to Konno, N., Nonaka & Ogilvy, (2014) the there are many industries that are
generating pollution related to land. The waste that is generated by the companies is dumped
into the ground. These areas become unproductive and lead to many types of chemical
hazards. Scenario planning along with waste management plan is required for eliminating
such situation. Managers must ensure that they have taken proper steps that do not create
more land fill sites. At the same time it is also essential that companies manage their
operation and take use of the strategies such as lean production to limit the quantity of waste
generated (Chakraborty, Kaza, Knaap & Deal, 2011). The use of tactical decision by
managers would help the organisation in making a proper strategic plan. Recycling and
reusing are the major two areas that might help the organisation
On the contrary Kennedy & Avila, (2013) suggests that since oil resources are going to get
depleted in the coming decade. This will have serious effect on many industries. This is due
to the fact that without fuel many operations cannot run. The managers of today not only
need to think about the usability of petroleum resources for today but they will also have to
think about the future. In other words they need to find alternative sources as its supplement.
This is a very serious issue for the society as the oil price has risen up and it is getting beyond
the reach of common people. The companies will have to accumulate the stocks with them
before they find any alternative sources for their business operations. Scenario planning is
also needed for the ways in which the dependence on such fuels has to be limited in the years
to come. Managers must do scenario planning on any environmental problems keeping in
mind the innovation that could change the scenario.

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Chermack & Nimon, (2013) suggests that companies will have to take care of the resources
they have todays before they could actually make any scenario planning. In the dynamic
nature of the economic conditions of the world, company’s accounts department have to
rethink about the investments that is made in finding the solution. Scenario planning becomes
more crucial in this situation as without evaluating the factors that are degrading the physical
environment companies cannot actually make the investment. CSR activities could not alone
solve the problem for the society. The increasing socio-economic dimensions in the society
have made rich more rich and poor more poor. In this situation managers in the companies
will not only have to call for environmental protection in the areas like cities but will also
have to think about the people living in the rural and tribal regions (Ramírez, Churchhouse,
Palermo & Hoffmann, 2017). This is extremely important in the case of manufacturing
industries as most of their mines are in the areas that are not connected to the main stream of
the society.
CONCLUSION
From the above based report, it can be concluded that Scenario planning is highly important
in the modern day business context. This not only ensures the long term of safety of the
environment but also seeks to help the company by ensuring sustainability in their business.
They can minimise the possible scenarios before occurring problems. The scenario planning
is effective in imagining tomorrow by understanding today in a better way. The managers of
the firms will have to rethink about the situation and make the scenario planning so as to
avoid the problems they face in such kind of situations. In future the situation related to
pollution is going to get worse and hence companies in the manufacturing sector will have to
be ready for the situation.

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REFERENCES
Abdallah, C., & Langley, A. (2014). The double edge of ambiguity in strategic
planning. Journal of Management Studies, 51(2), 235-264.
Ajagbe, A. M. (2011). The relationship between strategic planning and the effectiveness of
marketing operations. International Journal of Innovation Management and
Technology, 2(5), 390-396.
Aldehayyat, J., & Twaissi, N. (2011). Strategic planning and corporate performance
relationship in small business firms: Evidence from a Middle East country
context. International Journal of Business and Management, 6(8), 255.
Amer, M., Daim, T. U., & Jetter, A. (2013). A review of scenario planning. Futures, 46, 23-
40.
Cafaro, D. C., & Grossmann, I. E. (2014). Strategic planning, design, and development of the
shale gas supply chain network. AIChE Journal, 60(6), 2122-2142.
Chakraborty, A. (2011). Enhancing the role of participatory scenario planning processes:
Lessons from Reality Check exercises. Futures, 43(4), 387-399.
Chakraborty, A., Kaza, N., Knaap, G. J., & Deal, B. (2011). Robust plans and contingent
plans: Scenario planning for an uncertain world. Journal of the American Planning
Association, 77(3), 251-266.
Chermack, T. J. (2011). Scenario planning in organizations: how to create, use, and assess
scenarios. Berrett-Koehler Publishers.
Chermack, T. J., & Nimon, K. (2013). Drivers and outcomes of scenario planning: a
canonical correlation analysis. European Journal of Training and
Development, 37(9), 811-834.
Evans, S. K. (2011). Connecting adaptation and strategy: the role of evolutionary theory in
scenario planning. Futures, 43(4), 460-468.

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Gössling, S., & Scott, D. (2012). Scenario planning for sustainable tourism: an
introduction. Journal of Sustainable Tourism, 20(6), 773-778.
Holway, J. (2011). Scenario planning tools for sustainable communities. Land Lines, 23(4),
7-13.
Kennedy, P. J., & Avila, R. J. (2013). Decision making under extreme uncertainty: blending
quantitative modeling and scenario planning. Strategy & Leadership, 41(4), 30-36.
Klatt, T., Schlaefke, M., & Moeller, K. (2011). Integrating business analytics into strategic
planning for better performance. Journal of business strategy, 32(6), 30-39.
Konno, N., Nonaka, I., & Ogilvy, J. (2014). Scenario planning: The basics. World
Futures, 70(1), 28-43.
Owolabi, S. A., & Makinde, O. G. (2012). The effects of strategic planning on corporate
performance in university education: A study of Babcock University. Kuwait Chapter
of the Arabian Journal of Business and Management Review, 2(4), 27.
Ramírez, R., Churchhouse, S., Palermo, A. and Hoffmann, J. (2017) Using Scenario Planning
to Reshape Strategy Retrieved from: https://sloanreview.mit.edu/article/using-
scenario-planning-to-reshape-strategy/
Rickards, L. (2013). Climate change adaptation and scenario planning: framing issues and
tools. Proceedings of the Royal Society of Victoria, 125(1), 34-44.
Stewart, T. J., French, S., & Rios, J. (2013). Integrating multicriteria decision analysis and
scenario planning—Review and extension. Omega, 41(4), 679-688.
Stoeglehner, G., Edwards, P., Daniels, P., & Narodoslawsky, M. (2011). The water supply
footprint (WSF): a strategic planning tool for sustainable regional and local water
supplies. Journal of Cleaner Production, 19(15), 1677-1686.
Tapinos, E. (2012). Perceived environmental uncertainty in scenario planning. Futures, 44(4),
338-345.
Varum, C. A., & Melo, C. (2010). Directions in scenario planning literature–A review of the
past decades. Futures, 42(4), 355-369.
Wade, W. (2012). Scenario planning: A field guide to the future. John Wiley & Sons.