MGMT 304: Critical Evaluation of Scenario Planning Essay

This essay critically evaluates scenario planning as a key strategic management concept. It begins by defining scenario planning and its historical origins, tracing its evolution from early applications to its current role in business strategy. The essay explores the process of scenario planning, including identifying trends, driving forces, and developing various scenarios to assess potential future outcomes. It examines the benefits of scenario planning, such as improved risk management, better decision-making, and enhanced organizational adaptability in the face of economic volatility and other uncertainties. The essay also addresses criticisms and limitations of the concept, highlighting how organizations can use scenario planning to make better business decisions. Finally, the essay concludes by emphasizing the importance of scenario planning for long-term organizational success and sustainability.

Running head: SCENARIO PLANNING
Critical evaluation of scenario planning
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The essay will be addressing on the critical evaluation of scenario planning concept of
essential strategic management. Strategic management is the continual process which is used for
improving not only the business performance as well as improving the growth of the business by
keeping in account the business industries and the competitors of an organization (Amer, Daim
and Jetter 2013). The concept which has been chosen in this essay will be discussed keeping in
mind the advancements and the critics the concept has faced in the past years. There a lot of
different concepts that comprises the strategic management concept but only scenario planning is
highlighted.
In the 16th century Spanish Jesuit theologist and scholar Luis de Molina introduced the
concept of ‘futuribilia’ for explaining the concept of free will in an individual and many others
has contributed for the implementation of the theory (Coates 2016). Herman Kahn is attributed
for the introduction of scenario planning. During his work for the military in 1950s at the RAND
Corporation Kahn helped in developing a technique which comprised of stories which stated the
future by stories and it was depicted in such a way that it seemed that someone from the future
has written those stories (Stewart,French and Rios 2013). Kahn used the term ‘scenarios’ for
explaining these stories. Scenario planning comprises of creating different practices by the help
of various courses of action which will be implemented in a business based on the potential
outcomes of different situation which might happen in the future. These situations are defined as
the ‘scenarios’. The different kinds of potential related scenarios includes changes a market goes
through, different problems faced by the supply chain of an organization, new products released
by the rival competitor companies, changes in the events of environment and personnel factors
are some of the numerous possibilities which are looked upon. Planning in advance by the
company for different kinds of situation which might happen in the future helps the company to

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plan in advance and respond to these mishaps in an effective way. This practice of scenario
planning helps a company to resolve the risk factors which might be faced in the future and even
alternatively create different opportunities which might be missed if the different scenarios are
not assessed before (Ramirez and Selin 2014). Different tools like What If Scenario analysis
(WISA) helps in facilitating planning in the processes which are involved. Scenario planning
helps an organization in assessing the changes in the specific inputs like the cost of the product,
the human resources and the availability of the supplies and how these factors will be affecting
the outcomes of the total cost of the product or the delivery of the proposed date of a project.
In the recent years a lot of organization has faced a lot of issues regarding the volatility of
the economy, factors like an unexpected change in the political scenario, natural calamities and
others which has resulted in the company getting to be caught off guard. This in mainly due to
the absence of planning for the risk factors in the organization (Schoemaker,Day and Snyder
2013). Strategic planning in the organization helps it to cope up with the future mishaps and
creating ways to avoid them in the future. But a lot of changes has been brought to the process as
time changed. In the past scenario planning was used by the help of inputting a lot of factors
from the future scenarios which resulted in the increase in the number of possible outcomes. This
hampered to process of assessing the risk factors and narrowed down the possibilities of avoiding
the problems and finding the probable solutions. At present many organizations has narrowed
down the probable scenarios of the future and planned their risk management program in such a
way that the problems can be easily avoided. Thus scenario planning has helped a lot of
companies and have been very productive when it has been introduced to an organization.
Scenario planning can be described in different steps which includes investigation of the trends
in the present market, choosing different driving forces, making a template based on the seen

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scenarios, presenting the scenarios which are being looked upon, evaluation of the different
scenarios and finally formulating the different policy for making certain recommendations which
is based on the different scenarios (Meissner and Wulf 2013). Different scenarios like an
optimistic scenarios, a normal scenario and a most likely scenario is implied when an
organization needs to reach to a conclusion of forming the risk assessment of the different
problems which the company might be facing in the future. At present scenario planning is not
only about making the accurate forecasts of the future rather it is about exploring the future
circumstances which might happen (Oteros-Rozas,Ravera and Palomo 2015). This things gives
the organizations to be successful in the different scenarios. Scenario planning is increasingly
used by the small and medium sized industries which are engaged in developing vision.
Scenario planning concept has been an effective way for improving an organization
policies for a long time and it continues to do so. The process has gone through a lot of changes
and has been improved according to the circumstances of the present world. It can be concluded
that this process can be considered to be the best strategic management plan for an organization
in strengthening its roots and stay in the competition for the long run. The future vision of the
company stays impact when it follows this process. Visualizing the future predictions is very
important for the sustainability of an organization.

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Reference List
Amer, M., Daim, T.U. and Jetter, A., 2013. A review of scenario planning. Futures, 46, pp.23-40.
Coates, J.F., 2016. Scenario planning. Technological forecasting and social change, 113, pp.99-
102.
Meissner, P. and Wulf, T., 2013. Cognitive benefits of scenario planning: Its impact on biases
and decision quality. Technological Forecasting and Social Change, 80(4), pp.801-814.
Oteros-Rozas, E., Ravera, F. and Palomo, I., 2015. Participatory scenario planning in place-
based social-ecological research: insights and experiences from 23 case studies. Ecology and
Society.
Ramirez, R. and Selin, C., 2014. Plausibility and probability in scenario planning. Foresight,
16(1), pp.54-74.
Rickards, L., Wiseman, J., Edwards, T. and Biggs, C., 2014. The problem of fit: scenario
planning and climate change adaptation in the public sector. Environment and Planning C:
Government and Policy, 32(4), pp.641-662.
Schoemaker, P.J., Day, G.S. and Snyder, S.A., 2013. Integrating organizational networks, weak
signals, strategic radars and scenario planning. Technological Forecasting and Social Change,
80(4), pp.815-824.
Stewart, T.J., French, S. and Rios, J., 2013. Integrating multicriteria decision analysis and
scenario planning—Review and extension. Omega, 41(4), pp.679-688.