How Scenario Planning Influences Strategic Decisions

• Published in: MIT Sloan management review Vol. 57; no. 4; p. 24
• Main Authors: Phadnis, Shardul, Caplice, Chris, Sheffi, Yossi
• Format: Journal Article
• Language: English
• Published: Cambridge Massachusetts Institute of Technology, Cambridge, MA 01-08-2016
• Subjects: Confidence; Credit unions; Decision making; Executives; Influence; Infrastructure; Investment; Judgment; Leadership; Long term planning; Strategic management; Strategic planning; Workshops; United States > US
• ISSN: 1532-9194

Scenario planning can obviously help leaders make smarter long-term decisions, but effective scenario planning requires a great deal of legwork and research. Committing to it can be extremely beneficial and it is recommended but it is a time- and resource-consuming effort. The authors' studies provide objective evidence that the use of scenarios influences executives judgments about long-range, strategic decisions. But their study does not provide a comprehensive picture of the efficacy of scenario planning. Their results pertain to the effect of a onetime use of scenario planning on long-term decisions. However, the researchers did not examine whether the continual practice of scenario planning would help executives improve when it comes to their long-term decision-making skills.