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Scenario-driven planning – Learning to Manage Strategic Uncertainty 2009/02/20

Posted by gsavix in Memorando.

19.02.2009 quinta-feira
citação do livro:
Nicholas C. Georgantzas,
William Acar
1995 – First Edition
Quorum Books, Westport, Connecticut ; London


Scenarios are about the multiple perspectives that strategic thinkers use to defeat the tyranny of dogmatism that has assailed American business for the past two decades. This book introduces the scope, methods, and uses of scenario-driven planning. Its extensive literature review, numerous examples, practical guidelines, and real-life cases show how scenarios help firms manage uncertainty, that necessary disciple of our free enterprise system.
Scenario-driven planning is a new management technology. Often, it is the technology behind the superior performance of world-class firms. Their managers use scenarios to articulate their mental models about the future and thereby make better decisions. Their outstanding performance is the result of their continuous effort to improve their strategy design, which scenario-driven planning enhances through a tireless renewal of organizational mind-sets. Computing scenarios can help a management team produce insights much richer than those expected from a single-point forecast.
In writing this book, we gathered our clues from a variety of sources – from the literature and from many colleagues and friends. We drew on talks, published works, presentations and personal communications. It is hoped that we have put them together in a way that will help ours readers get more than a glimpse of the emerging management technology of scenario-driven planning.
Sincere thanks to our mentors, friends, early draft readers, and families.


In the last decade. Western economies have felt the pinch of foreign competition, particularly from the Pacific rim nations. A recent Business Week, article reports that Edith Cresson, the French prime minister, has been marshaling European countries into organized resistance. Political barriers to business may become one of Europe’s answers to the Japanese onslaught. From a practical perspective, erecting political barriers to business and trade is much like taking arms against a sea of trouble. Trade barriers are not part of the United States’ mercantile tradition.
Us firms have made an implementation-oriented response to the Japanese challenge, shifting from the overcautious just in case approach to the exhilarating dare of just in time (JIT), rediscovering of statistical quality control (SQC), and placing a strong emphasis on total quality management (TQM). JIT, SQC and TQM stem from the wisdom and experience of Western Europe and the United States before World War II. While the West later abandoned these techniques, Japan both perpetuated their use and enhanced them.
Not only was the Western line of defense against foreign competitions ineffective, but if was not even sustainable. Hard times require new organizational mind-sets. Confusion still reigns in the West about the perspective from which to approach long-term strategic thinking and strategy design. In start contrast to the multidisciplinary approach to management originating from the European tradition, the US consulting tradition has been primarily mono-thematic. Consequently, most US firms are designed to function according to a simple scenario, the one representing “the official corporate future” (Schoemaker, 1993, p. 199).
Our more prominent learned societies, such as the Academy of Management and the MS/OR group, operate in near-isolation. Quantitative management scientists have devised problem-solving methods which have met with success in the military and business spheres, but have not sat well with generalists. When asked, the Japanese insist that ours is not a worker but a management problem.
Firms around the globe use scenarios to enhance institutional learning, to reengineer their systems, and to bolster productivity. In the US, however, debate is lively between those who feel that Americans do no plan enough for the long term and those who see us reach paralysis by analysis. Thus far, the “quick fixers” have dominated the business press while purists have tied up the academic literature. This state of affairs has been more favorable to strategic implementation theory than to design. We hope that this book will redress this imbalance by appealing to both the academic and the consulting publics.
Learning about the subtleties of scenario methods and their variations can produce the best of both worlds in the 1990s. One is better management of strategic uncertainty through sharpened intuition, whereas the other is conducive to a deeper understanding of the principles underlying existing scenario methods and their range of variations. In order to disseminate this information to academics as well as managers and strategy consultants, this book undertakes the following tasks.

1. Charting the principal weakness of disconnected forecasts or wishes, including their lack of compatibility both in substance and in terms of their implicit assumptions.
2. Explaining the advantage of using internally coherent scenarios or scenario bundles.
3. Explaining the advantage of using computed decision scenarios. These allow an examination of the joint consequences of changes in the environment and in a firm’s strategy, and not mistaking mere environmental hipothesizing for scenario-driven planning.

This important information should bu disseminated to business managers, consultants, and academics. We try to do this here gradually, with increasingly focused chapters, and then we give illustrative examples. Our real-world examples emphasize how the value of scenario-driven planning lies in its ability to determine what changes in strategy can make its design more robust if a firm’s desirable future shows signs of not happening.

Intended Audience

Planning with scenarios is exciting. It permits firms to transform themselves and their environment by managing strategic uncertainty and interdependence. At a modest price, planning with scenarios can make the work of managers and planners easier, yet more productive and rewarding.
Instructors of business policy and strategic management will find this book a useful companion to cases, for environmental and strategic scenarios bring creativity to the classroom. In addition, they complement the conventional approach to cases, that is, by argumentation alone. By computing scenarios, both student and instructor can learn much more from the strategic situations described in the cases. Action recommendations derived from computed scenarios give a whole new meaning to case analysis. Scenario-driven planning enables strategy students to move up toward higher learning and to build confidence and intuition beyond their instructor’s initial insight.
Executive trainers will find the ideas underlying scenario-driven planning readily applicable to real-life strategic situations. The book will provide their course participants with a good introduction to this exciting and rapidly evolving management technology. It invites open communication and participation in a process of new information creation. Because scenario-driven planning does not solicit single-point forecasts from participants, it eliminates the need for any face-saving strategies.
Corporate planners will find in this book a critical evaluation of modern scenario techniques as well as procedures for tailoring these techniques to a firm’s particular needs. Scenario-driven planning will help them revive and extend their field of competence beyound strategy design to the larger context of governing strategic uncertainty and interdependence. Those with expertise in scenarios will find the book valuable for sharing their knowledge with co-workers.
General managers concerned with creating a promising future will find a useful frameword in this book. It can help them implant the systems view into their organizations and reengineer the process of strategy design so that strategic uncertainty can be transformed into opportunities for competitive advantage. The book may even help them stem the tide of offshore competitors. It is through institutional learning that world-class firms design their future.
Rather than being simply a gift, intuition is often the result of accumulated knowledge that comes from hard analytical thinking. Because computed scenarios sharpen intuition, then speed up organization learning and better process reengineering efforts (Davenport, 1993; Tobias, 1991). A firm’s capability of learning faster than its competitors may be the only sustainable competitive advantage (de Geus, 1988)

Driving Principle

Looking beyound the quick fix, Ralph Kilmann (1989) urges managers to stop seeking single-track answers to business problems. Similarly, proponents of total quality management (TQM) dismiss the United States’ fixation on worker motivation, which is often viewed as the sole task of managerial work (Zeleny, 1991). The progression from fig. 1a to fig. 1b illustrates the positive effect of management technology on productivity. This is the technology to which the Japanese attribute their worldwide business success. To these two factors, strategy researchers add the cricial role of the business environment.

This book subscribes to the expanded view of fig. 1c. It examines how firms account for environmental changes in their business strategies through scenario-driven planning, which blends hard and soft components of strategy design. The book addresses basic questions about what the future may hold for this new management technology.
Part I creates the context required for answering these questions, while providing a comprehensive glossary. This is necessary because, outside our teachng in the Management Systems Area at Fordham University and Administrative Science Department at Kent State University, business courses rarely cover the material treated in this book. Assuredly, MBA and undergraduate business policy and strategy courses cover some of our topics occasionally, but then only cursorily and without the benefit of a text. Nowhere else is scenario-driven planning treated in a unified and systematic way with other important aspects of strategic intelligence.
We bring to the consulting and upper-level management audiences a better way to deal with strategic uncertainty. We do not talk about environmental scenarios alone because these are merely inputs to strategy design. Neither is our message about the usual sense of hypothesizing about a future. That may be the state of current practice, but it makes feeble use of scenarios. We promoto scenarios with an analytical twist, putting forth scenario-driven planning as a multirational inquiry process for strategic scenarios, the outcomes of modeling strategic situations.
Conceptual confusion can lead to language games at best and to operational confusion at worst (Donaldson, 1992). Using the most recent technologies available, we can avert both types of confusion. Instead of shifting their focus away from actuality and rationality, our managers can improve their understanding of the fundamental assumptions underlying changes in strategy.



1. leitor ambiente web - 2009/02/26

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