Scenario Planning: An Essential Tool for Handling the Organisational Crisis

Abstract

Scenario planning also well known as scenario thinking or scenario analysis is a strategic planning tool that some organization use to create multiple long-term plans. The scenario planning is largely an adaptation and generalization of classic methods used by Military intelligence. The scenario planning method was that a group of analyst would generate imaginary simulation games for the decision makers. The scenarios contains known facts about the future such as demographics, geography, military, political, industrial information and mineral reserves with different alternatives social, technical, economic, environmental, educational, political and aesthetic trends which are the key driving forces. Scenario planning further may involvement of systems thinking, specifically the recognition of many factors which may combine in complex ways to create unprecedented future situation. The method also allow the inclusion of factors difficult to formalize like novel insights about the future, deep shifts in values, unexpected change in rules and regulations. Systems thinking used along with scenario planning leads to probable scenario story lines due to causal relationships can be demonstrated. When scenario planning is integrated with a system thinking approach to scenario development it is referred to as structural dynamics (Annon 2011a).

Royal Dutch Shell company has been using the Scenario planning for formulating their enterprise strategies for the last 3 decade actively to predict a highly uncertain industry future and stay ahead of other industry players.

In this Paper we will explore 3 different scenarios and strategic response for Royal Arcade Mall. The shopping mall industry has experienced vast expansion in UAE for the last one decade with at least 15 large scale shopping malls has been built from 2001 to 2011 and 5 malls still to come in the market within next 2 years period of time.

UAE is a popular destination and preferred work place for expatriate professionals and with this trend UAE expatriate population is going to increase in the coming years (anon-2007).

We will examine the Mall industry in Abu Dhabi in three different scenarios and will formulate strategic responses to these scenarios as follows:-
a) No external environmental change
b) Negative external change
c) Positive external change

In the later stage of this Paper we will explore the relevance of Scenario planning in Strategic Management and decision making process.