Decision making and planning under low levels of predictability: Enhancing the scenario method
AbstractIn this paper we review and analyse scenario planning as an aid to anticipation of the future under conditions of low predictability. We examine how successful the method is in mitigating issues to do with inappropriate framing, cognitive and motivational bias, and inappropriate attributions of causality. Although we demonstrate that the scenario method contains weaknesses, we identify a potential for improvement. Four general principles that should help to enhance the role of scenario planning when predictability is low are discussed: (i) challenging mental frames, (ii) understanding human motivations, (iii) augmenting scenario planning through adopting the approach of crisis management, and (iv) assessing the flexibility, diversity, and insurability of strategic options in a structured option-against-scenario evaluation.
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Bibliographic InfoArticle provided by Elsevier in its journal International Journal of Forecasting.
Volume (Year): 25 (2009)
Issue (Month): 4 (October)
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Web page: http://www.elsevier.com/locate/ijforecast
Scenario planning Crisis management Framing Judgment Heuristics and biases Low predictability Rare events;
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