Mind mapping the topic of scenario planning
Joseph Kim-keung Ho
Independent
Trainer
Hong
Kong, China
Abstract: The topic of scenario
planning is a main one in Strategic Management. This article makes use of the
mind mapping-based literature review (MMBLR) approach to render an image on the
knowledge structure of scenario planning. The finding of the review exercise is
that its knowledge structure comprises four main themes, i.e., (a) Descriptions
of basic concepts and information (b) Major underlying theories and thinking,
(c) Main research topics and issues, and (d) Major trends and issues related to
practices. There is also a set of key concepts identified from
the scenario planning literature review. The article offers
some academic and pedagogical values on the topics of scenario planning,
literature review and the mind mapping-based literature review (MMBLR)
approach.
Key words: Scenario planning, literature review, mind
map, the mind mapping-based literature review (MMBLR) approach
Introduction
Scenario planning
is a main topic in Strategic Management. It is of academic and pedagogical
interest to the writer who has been a lecturer on Strategic Management for some
tertiary education centres in Hong Kong. In this article, the writer presents
his literature review findings on scenario planning using the mind
mapping-based literature review (MMBLR) approach. This approach was proposed by
this writer in 2016 and has been employed to review the literature on a number
of topics, such as supply chain management, strategic management accounting and
customer relationship management (Ho, 2016). The MMBLR approach itself is not
particularly novel as mind mapping has been employed in literature review since
its inception. The overall aims of this exercise are to:
1.
Render an image of the knowledge structure of
scenario planning via the application of the MMBLR approach;
2.
Illustrate how the MMBLR approach can be
applied in literature review on an academic topic, such as scenario planning.
The findings from this literature review exercise
offer academic and pedagogical values to those who are interested in the topics
of scenario planning, literature review and the MMBLR approach. Other than
that, this exercise facilitates this writer’s intellectual learning on these
three topics. The next section makes a brief introduction on the MMBLR
approach. After that, an account of how it is applied to study scenario
planning is presented.
On the mind
mapping-based literature review approach
The mind mapping-based literature review
(MMBLR) approach was developed by this writer in 2016 (Ho, 2016). It makes use
of mind mapping as a complementary literature review exercise (see the Literature on mind mapping Facebook page
and the Literature on literature review
Facebook page). The approach is made up of two steps. Step 1 is a thematic
analysis on the literature of the topic chosen for study. Step 2 makes use of
the findings from step 1 to produce a complementary mind map. The MMBLR
approach is a relatively straightforward and brief exercise. The approach is not
particularly original since the idea of using mind maps in literature review
has been well recognized in the mind mapping literature. It is also an
interpretive exercise in the sense that different reviewers with different
research interest and intellectual background inevitably will select different
ideas, facts and findings in their thematic analysis (i.e., step 1 of the MMBLR
approach). To conduct the approach, the reviewer needs to perform a literature
search beforehand. Apparently, what a reviewer gathers from a literature search
depends on what library facility, including e-library, is available to the
reviewer. The next section presents the findings from the MMBLR approach step
1; afterward, a companion mind map is provided based on the MMBLR approach step
1 findings.
Mind
mapping-based literature review on scenario planning: step 1 findings
Step 1 of the MMBLR approach is a thematic analysis on
the literature of the topic under investigation (Ho, 2016). In our case, this
is the scenario planning topic. To prepare for the review, the writer gathers
some academic articles from some universities’ e-libraries as well as via the
Google Scholar. With the academic articles collected, the writer conducted a
literature review on them to assemble a set of ideas, viewpoints, concepts and
findings (called points here). The points from the scenario planning literature
are then grouped into four themes here. The key words in the quotations are
bolded in order to highlight the key concepts involved.
Theme
1: Descriptions of basic concepts and information
Point 1.1.
“…scenarios are descriptive narratives of
plausible alternative projections of a specific part of the future. They are
methodically researched and developed in sets of three, four, or more to study
how an organization, or one of its decisions, would fare in each future in the
set” (Fahey and Randall, 1998a);
Point 1.2.
“…“Scenario
planning is a process of positing several informed, plausible and imagined
alternative future environments in which decisions about the future may be
played out, for the purpose of changing current thinking, improving decision
making, enhancing human and organization learning and improving performance”…”
(Chermack and Nimon,
2013);
Point 1.3.
“Scenario planning is a tool used by firms to
translate their organizational learning capabilities into preconceived
operational responses designed to react to, and then recover from, an exogenous
shock” (Worthington, Collins and Hitt, 2009);
Theme 2: Major underlying theories
and thinking
Point 2.1.
“…scenarios are often subjective. Caution should be taken to avoid groupthink and preconceived notions” (Hovav, 2014);
Point 2.2.
“A good scenario has the following
characteristics: Reasonable to a critical mass of decision-makers; Internally consistent; Relevant to the topic or issue of interest; Recognizable from early and weak signals of change; and Challenging as it contains some elements of surprise or
novelty in directions where the organization’s vision needs to be stretched” (Miesing and Van Ness,
2007);
Point 2.3.
“Although knowledge is often captured at the
individual level before integration into the larger organizational entity ….,
organizations that actively utilize scenario planning as a knowledge management tool can enhance their absorptive capacity …
by facilitating knowledge transfer” (Worthington, Collins and Hitt,
2009);
Point 2.4.
“On the basis of perspective,
scenarios are classified into descriptive
and normative scenarios … Descriptive scenarios
are extrapolative in nature and present a range of future likely alternative
events. Normative scenarios are goal directed and respond to policy planning
concerns in order to achieve desired targets” (Amer, Daim and Jetter, 2013);
Point 2.5.
“The appropriate starting
point for scenario formation is the clarification of the goals and purposes
of scenarios. …The typical process of scenario formation can be split into
three key phases. These phases are: (1) choice of participants to be involved
in the scenario formation process; (2) determination of driving forces and
future events (risks or uncertainties); and (3) scenario elaboration process
and testing of consistency” (Fort, Špaček, Souček and Vacík, 2015);
Point 2.6.
“The
industry organisation (IO) perspective
…. on the other hand suggests that globalisation has gone into overdrive and so
too is the dynamism of the external business environment of firms. There is
complexity in the business environment making the future uncertain and
unpredictable …. Firms are therefore required to engage in adaptive sense making of the environment if they are to survive and
succeed” (Nyuur, 2015);
Point 2.7.
“….it is necessary to examine the
consistency and validity of scenarios, subject them to logic analysis and based
on these scenarios to establish “Early
Warning Signals”
as well. Such signals
indicate assumptions for their validity. On the basis of these scenarios it is
possible to ensure interlinking tactical and operational plans and reinforce
the flexibility of company process
management” (Fort,
Špaček, Souček and Vacík, 2015);
Point 2.8.
“…“Scenario
planning” is a powerful instrument that guides and supports the imagination, creativity, and vision
necessary for mapping a range of viable strategies for competitive success” (Miesing and Van Ness,
2007);
Point 2.9.
“…scenario planning presents all complex
elements together into a coherent, systematic, comprehensive and plausible
manner….. Scenarios are also very useful for highlighting implications of
possible future system discontinues, identifying nature and timings of these
implications, and projecting consequences of a particular choice or policy decision” (Amer, Daim and Jetter, 2013);
Point 2.10.
“Chermack and Lynham …. suggested five
primary espoused outcome domains of
scenario planning: (a) changed thinking, (b) improved decision making, (c)
improved human learning and imagination, (d) plausible stories about the
future, and (e) improved performance. The theoretical support for these outcome
domains might include decision theory, system theory, learning theory, and
performance improvement theory” (Chermack,
2004);
Point 2.11.
“Pierre Wack ….presented
scenario building criteria based on
three main principles including, identification of the predetermined elements
in the environment, the ability to change mindset in order to re-perceive
reality and developing macroscopic view of the business environment” (Amer, Daim and Jetter, 2013);
Point 2.12.
“Scenario planning can serve as a ‘‘time reckoning system’’ …. where sense is made forward and
backward, drawing in both retrospective
and prospective sensemaking iteratively” (Ramírez and Selin,
2014);
Point 2.13.
“Scenario planning is an example of applied double
loop … or second order learning …. While single loop learning may aid firms
with incremental improvements in efficiency, double loop learning is more explorative and can lead to
fundamental shifts in organizational strategy” (Worthington, Collins and Hitt,
2009);
Point 2.14.
“Scenarios are applicable to the
planning needs of all large public and private institutions especially at times
when a critical decision has to be
made in uncertain environment” (Amer, Daim and Jetter, 2013);
Point 2.15.
“Scenarios can be classified
according various criteria … The most important criterion is the method of
their application. ….Commonly known scenario classifications include the
following: by degree of their quantification (quantitative, semi quantitative,
qualitative), by degree of optimism (realistic, optimistic, pessimistic and
warning) or by material content” (Fort, Špaček, Souček and Vacík, 2015);
Point 2.16.
“Scenarios containing decision-making
elements can be characterized by specific features since these
decision-making elements are oriented towards a certain way of influencing the
future. Such scenarios are designated as “transformation
scenarios”..” (Fort, Špaček, Souček and Vacík, 2015);
Point 2.17.
“Sondeijker
… describes three phases in the
development of futures study and
scenario planning, each leading to a specific type of scenarios. The first
generation of scenarios that evolved after the war is strongly influenced by
the work of Kahn and Diener. The approach is mainly statistical, technological
and economic…… During the second phase
futures studies and scenario planning entered the world of business and
corporate strategic planning. The oil crisis in 1973 made businesses aware
about their vulnerability to unexpected external factors …. Sondeijker … identifies a propagation of a
third generation in futures studies and scenario planning …. This approach is
fuelled by the notion of sustainable development and is based on the assumption
that a more sustainable world can only be created by means of a structural and
societal transition of society” (Postma, 2015);
Point 2.18.
“The
resource-based view (RBV) of the firm
…. suggests that firms do not need to be overly concerned about the external
environment, and read meaning into possible changes in the future, but should
concentrate on developing their resources and capabilities which are critical
to the survival and sustenance of competitive advantage” (Nyuur, 2015);
Point 2.19.
“The
usefulness of learning in a system
of scenario planning is embedded in the assumption that a core goal of any
planning system is to reperceive the organization and its environment” (Chermack, 2004);
Point 2.20.
“This
process that we call scenario learning can help an organization understand how
to manage the future strategically –
that is, how to lay the foundations for tomorrow’s success while competing to
win in today’s marketplace” (Fahey and Randall, 1998a);
Point 2.21.
“To
be an effective planning tool, scenarios should be written in sets of four or
five absorbing, convincing stories
that describe the range of alternative futures most relevant to an
organization’s success. Each scenario story should have a unique plot and each
plot should be flawlessly rational” (Schwartz and Ogilvy, 1998);
Point 2.22.
“When
performed properly, the scenario approach offers a way of formalizing such conversation, of focusing the dialogue on the
really interesting aspects of the unknown and unknowable future” (Fahey and
Randall, 1998b);
Point 2.23.
“Scenario
building works well when it departs from the comfortable familiarity of established plausibility and/or the
settling security of purported probabilities to venture into the discomfort of
inquiring into the unknown” (Ramírez and Selin, 2014);
Point 2.24.
“The
scenario approach requires that managers first stop trying to make strategic
decisions before they have done their best strategic thinking. To perform high-quality strategic thinking, they
must start by learning how to have strategic conversation, or dialogues” (Fahey
and Randall, 1998b);
Theme 3: Main research topics and
issues
Point 3.1.
“Econometric
models offer a number of advantages over more informal ways
of creating scenarios. First, they provide an explicit framework that clarifies
which assumptions were used to develop a scenario….. Secondly, using an econometric model imposes
internal consistency on the scenario process…. Third, comprehensive econometric
models provide more reliable projections” (Behravesh, 1998);
Point 3.2.
“Scenario
planning is often promoted as a cognitive
aid to overcome limitations of human judgment in long-range planning ….
However, evidence of the effect of scenario planning on managerial cognition is
almost nonexistent” (Phadnis,
Caplice, Sheffi and Singh, 2015);
Point 3.3.
“Scenario planning practices are highly personalized and hence difficult to compare
…. Strategy practices used by firms are often not publicized, ruling out the
use of panel analysis to test if the practice of scenario planning leads to
superior firm performance” (Phadnis,
Caplice, Sheffi and Singh, 2015);
Point 3.4.
“The key to good
scenario building is not to try and describe a predictable future but to create a set of diverse futures and
analyze the drivers and consequences of each. As such, scenario building
methodologies often represent the views of the researchers that use them and
the state-of affairs at the time they are developed” (Hovav, 2014);
Point 3.5.
“The scenario methodology in retail research
was first advocated to provide an alternative approach to study the competitive
dynamics of retail formats that had reached the more advanced stages of the
life cycle” (Mukherjee and Cuthbertson, 2016);
Point 3.6.
“….the
IL [intuitive logics] method has been
criticized by researchers and practitioners alike. …. scenario planning methods
in general may be subject to errors that stem from poor process facilitation or
a suboptimal team composition” (Meissner
and Wulf, 2015);
Point 3.7.
“…it is fair to say that we know what
scenario planning is, but we must rely on theory to tell us how this process
works. A description of how scenario
planning works is precisely what is missing”
(Chermack, 2004);
Point 3.8.
“…multiple studies have found that
scenario-based planning can overcome negative
cognitive biases in the strategy process on the group and individual
levels. ….. the strategic conversation that is created inside the organization
through scenario-based planning can help overcome groupthink” (Meissner and Wulf, 2015);
Point 3.9.
“Although
scenarios are powerful, they are not
quantitative, and this is one of the disadvantages of scenarios in
practice” (Hashemkhnai
Zolfani, Maknoon and Zabadskas, 2016);
Point 3.10.
“Comparing the relative merits of
actually deploying a probability-centered
approach to scenarios with those of a plausibility-centered
approach within a single scenarios situation is difficult for practical and
methodological reasons” (Ramírez and Selin, 2014);
Point 3.11.
“Experts
suggest that there are times when it is useful for organisations to think of
their contextual environment as a
subject domain and to develop scenarios in reference to this domain rather than
more directly to the organisation” (Mukherjee and
Cuthbertson, 2016);
Point 3.12.
“IL
[intuitive logics] is one of the
most frequently and widely used methods for developing scenarios in
organizations … In fact, many authors refer to this method as the standard tool
for scenario-based planning …. IL develops scenarios based on the industry’s most important and uncertain driving forces, which form the
basis for a two-by-two matrix that frames the scenarios …, or by inductively
using causal narratives …. These
scenarios are further developed into consistent causal stories in a
chronological structure. Finally, the scenarios are used to derive strategies
for the respective organization” (Meissner and Wulf, 2015);
Point 3.13.
“Inayatullah develops an integrated approach to scenario planning consisting
of the preferred future, the disowned future, the integrated and the outlier …. He develops causal layered
analysis and demonstrates the role for causal layered analysis for
transformative futures thinking” (Amer, Daim and Jetter, 2013);
Point 3.14.
“Most
authors agree that successful cases of scenario planning feature serious
commitment of time and energy to the project …., and it is the time dedicated to conversations and
exploring organizational issues that yields results” (Chermack and Nimon, 2013);
Point 3.15.
“Once planning is reframed as a learning process (as in scenario
planning), two immediate and logical questions are: (1) Who should be involved
in the planning/learning exercise? (2) Who should facilitate the
planning/learning exercise?” (Chermack
and Nimon, 2013);
Point 3.16.
“Research
has shown that scenario planning can change participant mental models, promoting a more systemic view of
organizational dynamics” (Chermack
and Nimon, 2013);
Point 3.17.
“Scenario
planning as the research area is still developing and not yet matured.
Notwithstanding, there are a number of theoretical
perspectives that can be adopted to make sense of how firms prepare and act
to overcome the potentially devastating effects of the unstable forces in the
external environment in order to survive” (Nyuur, 2015);
Point 3.18.
“Scenario planning is a heavily practiced phenomenon, with a
growing body of published conceptual work and research ….. However, there is
inadequate research to make predictions about scenario planning outcomes” (Chermack and Nimon, 2013);
Point 3.19.
“Scenario planning is argued to mitigate
the negative effects of overconfidence.
The two experimental studies of scenario planning we found, which measured
whether scenario use affected confidence in judgment, reached contrary
conclusions” (Phadnis,
Caplice, Sheffi and Singh, 2015);
Point 3.20.
“Scenario-based planning has evolved
into a widely used technique for strategic planning and for developing strategic foresight in
corporate practice … Prior research has identified three main advantages of scenario-based planning
for corporate practice. First, scenario-based planning helps organizations
enhance their understanding of causal processes that shape the future. Second,
it challenges conventional thinking and established mindsets. Third, it can
contribute to improved decision making in the strategy process” (Meissner and Wulf, 2015);
Point 3.21.
“Some researchers regard scenario
planning as a method for creating images
of the future that are not directly linked with strategy development while
others consider scenario planning as a combination of scenario development and
strategy development” (Meissner
and Wulf, 2015);
Point 3.22.
“The concept of scenarios is not perceived unanimously,
differences being attributable to different
typology of scenarios which the authors bear in mind” (Fort, Špaček, Souček and Vacík,
2015);
Point 3.23.
“The IL [intuitive logics] approach aims to foster strategic thinking in the
strategy process in order to derive a
more holistic and contingency-based strategic plan” (Meissner and Wulf, 2015);
Point 3.24.
“The
limited research on scenario planning in the context of SMEs is unfortunate and leaves us less knowledgeable about the
challenges SMEs encounter in their attempt to use scenario planning technique
as large firms; and how they co-evolve within their dynamic external
environment or posture themselves for their long-term survival and superior
performance” (Nyuur,
2015);
Point 3.25.
“The link between business failure and the lack of
perceiving or planning for future changes in the business environment through
scenario planning has been acknowledged” (Nyuur, 2015);
Point 3.26.
“There are three areas that have been
neglected by the ‘futurists’ who developed the scenario-planning process, or
three opportunities for development that exist for HRD professionals. These are 1) the construction of the theory of
the scenario planning process, 2) research around the effectiveness of the
process, and 3) the development of evaluative tools” (Chermack, 2004);
Point 3.27.
“There is
no theory of scenario planning.
While many prominent scenario-planning practitioners have developed significant
variety in their modes of application …, none has articulated a core set of
theoretical foundations or provided efforts to develop theory” (Chermack, 2004);
Point 3.28.
“To build scenarios,
identifying major actors and
stakeholders appears as a critical step to study how they influence matters
and how they live in scenarios ….. However, to manage strategies in the scenario process has never
really been achieved, as scenarios are often based on major economic and
political uncertainties which do not seem to be made by any actor whose
strategies are often more based on a reactive anticipation than playing
projects” (Marchais-Roubelat
and Roubelat, 2008);
Point 3.29.
“When scenario sets leave their site of generation (the scenario
workshops, the expert’s computers, the core production team, maybe the
organization that spawned them) and travel to new locations (e.g. the policy
milieu, the strategy process, or a public audience) the
plausibility/probability debate is tied to the uptake of scenarios instead of
defining how they are produced and /or negotiated” (Ramírez
and Selin, 2014);
Point 3.30.
“Different scenarios are suitable for
developing an appropriate outlook toward
different probable futures. Scenarios are not inherently quantitative, but
recently different integrated quantitative methods have been incorporated with
the processes in various studies” (Hashemkhnai Zolfani, Maknoon and Zabadskas, 2016);
Point 3.31.
“Many HRD
professionals may not see the link between HRD and scenario planning, but
HRD professionals can provide much in the development and facilitation of the scenario-planning
process because of their expertise in learning, performance, research, theory
building and evaluative techniques” (Chermack, 2004);
Point 3.32.
“Scholars
consider scenario planning variously
as a method …, tool …, strategic planning tool …., process …, and sometimes as
an activity equated with foresight …. Yet, others refer to it as a capability,
competence or skill” (Nyuur,
2015);
Theme 4: Major trends and issues
related to practices
Point 4.1.
“Although the development of futures studies and scenario planning dates
back to the renaissance when Thomas Moore wrote Utopia in 1516 …, it was
fuelled by the enlightenment that separated humankind from its environment …
and gave a boost to the idea of the feasible society. The institutionalisation of futures studies and scenario planning
evolved since the Second World War, a period during which the western world was
characterised by recovery and reconstruction … and the maturation of the idea
of the welfare state in countries such as the Netherlands … and Great Britain”
(Postma, 2015);
Point 4.2.
“The
rise of multiple scenario analysis has been largely ascribed to the failure of traditional forecasting techniques to
provide credible forecast in the past few decades…. The real problem with such
analytical technique is that they produce forecasts by extrapolating the past
and in doing so implicitly view the
world as essentially stable” (Bood and Postma, 1997);
Point 4.3.
“Attention
has been paid to the concept of scenarios since the 1970s, especially in
conjunction with the crude oil crisis
that occurred at that time. Royal Dutch Shell, which is regarded as one of the
world’s biggest crude oil companies, has
been a pioneer in scenario decision making with an emphasis on the investment
decision-making process. Companies have become even more aware of the need to
work with scenarios. Procedures applied, however, are mainly based upon mere
experience, are not supported by relevant methodology and often do not
penetrate all management levels” (Fort, Špaček, Souček and Vacík, 2015);
Each of the four themes has a set of
associated points (i.e., idea, viewpoints, concepts and findings). Together
they provide an organized way to comprehend the knowledge structure of the
scenario planning topic. The bolded key words in the quotation reveal, based on
the writer’s intellectual judgement, the key concepts examined in the scenario
planning literature. The referencing indicated on the points identified informs
the readers where to find the academic articles to learn more about the details
on these points. Readers are also referred to the Literature on scenario planning Facebook page for additional
information on this topic. The process of conducting the thematic analysis is
an exploratory as well as synthetic learning endeavour on the topic’s
literature. Once the structure of the themes, sub-themes[1]
and their associated points are finalized, the reviewer is in a position to
move forward to step 2 of the MMBLR approach. The MMBLR approach step 2
finding, i.e., a companion mind map on scenario planning, is presented in the
next section.
Mind
mapping-based literature review on scenario planning: step 2 (mind mapping)
output
By adopting the findings from the MMBLR
approach step 1 on scenario planning, the writer constructs a companion mind
map shown as Figure 1.
Referring to the mind map on scenario
planning, the topic label is shown right at the centre of the map as a large
blob. Four main branches are attached to it, corresponding to the four themes
identified in the thematic analysis. The links and ending nodes with key
phrases represent the points from the thematic analysis. The key phrases have
also been bolded in the quotations provided in the thematic analysis. As a
whole, the mind map renders an image of the knowledge structure on scenario
planning based on the thematic analysis findings. Constructing the mind map is
part of the learning process on literature review. The mind mapping process is
speedy and entertaining. The resultant mind map also serves as a useful
presentation and teaching material. This mind mapping exercise confirms the
writer’s previous experience using on the MMBLR approach (Ho, 2016). Readers
are also referred to the Literature on
literature review Facebook page and the Literature
on mind mapping Facebook page for additional information on these two
topics.
Concluding
remarks
The MMBLR approach to study scenario planning
provided here is mainly for its practice illustration as its procedures have
been refined via a number of its employment on an array of topics (Ho, 2016).
No major additional MMBLR steps nor notions have been introduced in this
article. In this respect, the exercise reported here primarily offers some
pedagogical value as well as some systematic and stimulated learning on
scenario planning in the field of Strategic Management. Nevertheless, the
thematic findings and the image of the knowledge structure on scenario planning
in the form of a mind map should also be of academic value to those who
research on this topic.
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Pdf version at: https://www.academia.edu/31541734/Mind_mapping_the_topic_of_scenario_planning
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