Exploring the relationship between scenario planning and strategic flexibility and complexity

Abstract

An organisation's ability to deal with uncertainty and to adapt to changes is a key strategic capability in dynamic environments. Thus, firms need a flexible planning in order to adapt and survive. Scenario planning is one of the tools that stimulates strategic thinking and offers strategic choices by creating multiple futures. However, little evidence is available about its effects on organisational competencies. This paper explores the direct contributions of scenario planning to strategic flexibility and complexity. A structural equation modelling (SEM) is used to evaluate the causal links between concepts. Data analysis derived from a sample of 108 European manufacturing firms.