Benefits of Scenario Planning for Managers

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.

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 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.

Scenario Planning to Tackle Environmental Safety Issues

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 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.

Carbon Emission and Pollution Control

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).

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).

Water Scarcity and Resource Utilization

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.

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.

Land Pollution and Waste Management

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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