Unravelling the complexity of collective mental models: A method for developing and analysing scenarios in multi-organisational contexts

In multi-organisational contexts, scenario building has been used to engage stakeholders in a critical discussion on issues of mutual importance, and to gain their support with regards to possible future responses. A review of existing literature suggests that much has been written regarding the process of scenario development and the benefits of the process, but the detailed analysis of scenario building outcomes, which encompass a large number of issues and their complex interconnections, has not been made explicit for studying and enhancing understanding of a complex societal problem. This paper presents a systematic method for analysing such complex outcomes in order to facilitate reflective thinking on important issues within the wider context for policy development. The method was employed in a series of participative scenario development workshops, which yielded several causal maps around the theme of construction industry skills. A collective map merging the individual subject-specific causal maps was created to help provide a more holistic overview of the pertinent issues surrounding the construction skills debate. The analysis of this collective map promotes a better understanding of the issue in the wider context, the consequence of possible future events and actions, and of the pre-requisition required for certain events/desired outcomes to take place. The main benefit that could be derived from the method is the opportunity to help facilitate and encourage debate and discussion amongst key stakeholders regarding scenario theme, in this case skills improvement within construction. Due to its flexibility and adaptability, the method could potentially be applied to other areas requiring longer range planning and which contain multiple stakeholder perspectives.     

Scenario types and techniques: Towards a user's guide

Various scenario typologies have been suggested in attempts to make the field of futures studies easier to overview. Our typology is based on the scenario user's need to know what will happen, what can happen, and/or how a predefined target can be achieved. We discuss the applicability of various generating, integrating and consistency techniques for developing scenarios that provide the required knowledge. The paper is intended as a step towards a guide as to how scenarios can be developed and used.     

To boldly go where no man has gone before: integrating cognitive and physical features in scenario studies

A recent surge in the literature shows that scenario studies are very much back in vogue. The revival of the scenario approach to strategic planning, however, also shows that the method has developed rather one-sidedly both in theory and practice. The dominant trend in scenario thinking is that scenario construction is used primarily as a cognitive exercise, involving mental processes only. In this paper we aim to complement this development by arguing for a more integrated approach, involving both cognitive and “physical” features. Such an approach combines more traditional cognitive elements of scenario studies with, for example, organizational experiments, deliberately made small mistakes, and external corporate ventures. Moreover, we introduce a typology of scenario studies based on two salient assumptions that characterize the field.     

Directions in scenario planning literature - A review of the past decades

This paper provides a systematized overview of patterns in the scenario planning literature published in the last decades. Recently, scenario planning has enjoyed a revival, apparent in the ‘boom’ in published research on the matter. Consequently, a major issue that needs to be addressed is how to organize the literature along precise lines. A number of reviews that describe the current status of the body of literature and knowledge on scenario planning have made attempts to respond to such requirements. These studies agree that systematizing the existing literature is a necessary step in developing the field. This paper aims to contribute to this purpose. The review of the academic literature here conducted is thought to be useful for both academics and practitioners. For researchers, this systematic overview will be constructive not only in providing an analysis of the directions of published research but also in setting up a research agenda for the future. For managers and practitioners, it provides a clear outline of firm-related articles and discusses their contribution from a managerial point of view. It also raises awareness with regard to future analytical methods, and in particular, to scenario planning and its potential contribution to the competitiveness of firms. The research was carried out under the research Project Enterprise of the Future of the University of Aveiro.     

First steps: towards purposeful activities in scenario thinking and future studies

In this paper, we contribute to the understanding of the field of scenario development and future studies, which has been a key debate in Futures over the past three of four years. Our contribution is less on the philosophical issues surrounding future studies, but more on the hurdles faced by those interested in practising in the area of scenario planning and future studies. The issues presented and discussed in this article arise from a number of action learning research projects that we have conducted with small and medium sized enterprises (SMEs) in Scotland, who have embraced scenario development for the first time as part of their strategic management and learning process.Our contribution is targeted at identifying and understanding the hurdles to be overcome when (such) organisations consider adopting scenario development or future studies. The contribution is designed to first, help those in the field of scenario development and future studies be mindful of these hurdles and to build a trusting relationship between the scenario practioner and the client, and secondly, help those managers willing to engage in such activities to better understand the purpose of such work.First we identify three key hurdles: (a) organisational culture (i.e. tacit assumptions on scenario development and future studies); (b) “client” state of mind; (c) fear of engaging with the outside/fear of the future. We argue that these hurdles are a serious threat to the relevance and effectiveness of futures work. We argue that these hurdles need to be better understood as a basis for improving the impact and contribution that scenario development and future studies can make.Later in this article we propose a framework to help understand the purpose of scenario development or future studies work. This framework can be used at the outset of any engagement or study, to help the “client” to identify the purpose of such work and to understand its role and scope. We argue that this framework contributes to more purposeful, relevant and actionable scenario development and future studies in the future.Unless you changed something in the minds of managers, a scenario project had failed (Harvard Bus. Rev. 63(6) (1985) 139). Going one-step further, we would argue that unless something tangible happens as the result of the scenario development and future studies work, we have wasted our time.     

The world in 2050 and the New Welfare scenario

The PASHMINA (paradigm shifts modeling and innovative approaches) project grew out of the need to improve our understanding of the paradigm shift in the energy-transport-landuse nexus and, more broadly, in world development. In envisioning the world at 2050, we envisaged future growth in four possible directions: growth without limits, growth within limits, stagnation, and New Welfare. The scenario considered as preferable reflects a transition toward a New Welfare, characterized by a high level of cooperation, heightened concern for the environment and for social welfare, and an increased share of immaterial consumption. This scenario is based on the recognition that the development of new technologies – although relevant – turns out to be insufficient to resolve the issue of resource scarcity alone. Important behavioral changes are also needed. In the New Welfare scenario, GDP as a measure of growth becomes obsolete and needs to be replaced with ways of measuring progress that are more reflective of natural, human, and social capital. The New Welfare scenario also charts a pathway toward a low-carbon future, with an overall reduction in energy consumption, density, and intensity, and a greatly reduced reliance on fossil fuels. A new, smart electric grid facilitates active demand management and decentralized production of power. Natural gas or even small nuclear plants tackle problems associated with the intermittency of renewable energy sources. Among other likely shifts under this scenario is a re-conceptualization of production, from short-lived to longer-lasting goods and from private to open source knowledge products and services; growth in recycling and zero-waste processes; and a shift from profit-driven business to entrepreneurship that seeks to satisfy social needs and build local capital. The world undergoes a transition from unequal growth to prosperity in a multi-polar, globally interdependent world. New global democracy networks and institutions are created, and constitutions extend beyond the protection of human rights to the recognition of “nature rights.” Citizens’ income is tied to the social welfare-oriented duties and participatory governance. This scenario further leaves room to new forms of self-regulation of common resources. Actions necessary for the shift to the New Welfare paradigm include the adoption of new metrics for measuring progress, measures to increase public acceptance of technological and societal change, the creation of new global and local institutions devoted to sustainable management of shared environmental resources, sustainable production and consumption patterns, and a low-carbon energy and transport systems.     

Choosing diverse sets of plausible scenarios in multidimensional exploratory futures techniques

Morphological analysis allows any number of dimensions to be retained when framing future conditions, and techniques within morphological analysis determine which combinations of those dimensions represent plausible futures. However, even a relatively low number of dimensions in future conditions can lead to hundreds or even thousands of plausible future scenarios. Creating highly diverse but conceivable visions of the future in which to explore decision-making, exploratory futures techniques rely on the selection of a small number of plausible scenarios from the larger set. In this paper we describe a new method for finding maximally diverse sets containing a small number of plausible scenarios from a multi-dimensional morphological analysis. It is based on a mathematical optimization of diversity that is robust to the uncertainty in the framing of future factors and states and in what stakeholders might consider diverse combinations of those factors and states. We also describe implementation of the method as a software tool and its performance in recent exploratory scenario development by CGIAR and partners for regional environmental change, food security and livelihoods.     

Pitfalls and remedies in testing the calibration quality of rating systems

Testing calibration quality by means of backtesting is an integral part in the validation of credit rating systems. Against this background this paper provides a comprehensive overview of existing testing procedures. We study the procedures’ deficiencies theoretically and illustrate their impact empirically. Based on the insights gained therefrom, we develop enhanced hybrid testing procedures which turn out to be superior to the commonly applied methods. We also propose computationally efficient algorithms for our calibration tests. Finally, we are able to demonstrate empirically that our method outperforms existing tests in a scenario analysis using rating data of Moody’s.     

Navigating in the Midst of More Uncertainty and Risk

With the steady increase in the variety and scale of uncertainties and risks, the challenges for today's executives have become ever more complex and daunting. One powerful tool for navigating among different risks and uncertainties is scenario planning. From its early days of use within Shell, scenario planning has evolved in ways that make it better suited to the tasks of identifying, analyzing, and managing various financial risks across different industries. During the last ten years, Morgan Stanley has also been using scenario planning to gain a better understanding of key risks and uncertainties facing the financial services industry, ranging from the consequences of possible changes in the dollar to the emergence of hedge funds and the remarkable growth of China and India. In discussing the benefits of scenario planning, the authors note its potential to help management in a number of ways:

• ? By challenging conventional thinking and current assumptions about its industry and world;
• ? By identifying key signals or potential direction changes ahead of time, which is especially important when lead times to invest, hedge, or change assets are limiting factors;
• ? By identifying and assessing the value of strategic or “real” options—options to invest in new opportunities or limit downside risks that may suddenly open up or disappear, and that man‐ agement must be prepared to “exercise” quickly and decisively;
• ? By reinforcing the recognition that value added comes not just from better strategic thinking and planning, but from the role of risk management in helping companies take advantage of new opportunities;
• ? By encouraging more cross‐divisional and firm‐wide conversations about strategic choices and options, thereby creating a shared understanding of and greater consensus about chosen strategies; and
• ? By forcing them to go beyond the limits of typical three‐to‐five year forecasting limitations to think hard about longer‐term strategic choices.

     

Multi-scale narratives from an IA perspective: Part I. European and Mediterranean scenario development

Desertification in the Northern Mediterranean region can be effectively managed only through an understanding of the principal ecological, socio-cultural and economic drivers. Scenarios can play an important role in the understanding of such a complex system. Following the fundamentals of Integrated Assessment, narrative storylines were developed that are qualitative, participatory, and highly integrated. Multi-scale long-term (2030) storylines were developed for Europe, the Northern Mediterranean, and for four local cases. This paper discusses the methodology and results of the process of developing European and Mediterranean scenarios. In Part II, the local scenario development by means of scenario workshops is elaborated upon. European and Mediterranean scenarios were based on a set of three existing European scenarios, that were adapted to fit the specific issues in the Mediterranean region, using the so-called Factor-Actor-Sector (FAS) framework. Resulting scenarios were Convulsive Change (disruptive climate change); Big is Beautiful (oversized EU and powerful multinationals); and Knowledge is King (technological development and mass migration). It proved possible to use and enrich a set of existing European scenarios and to translate them to fit the Mediterranean region. A possible use of this type of narrative storylines is further illustrated in Part II.     

The contribution of scenario analysis to the front-end of new product development

The front-end of new product development involves the identification and analysis of product or service opportunities, idea generation, and the selection of new product and service concepts. It is often referred to as non-routine, dynamic, and highly uncertain. Authors have made attempts to improve the manageability of this phase by proposing several methods and techniques. This paper explores the possible contribution of scenario analysis to increase the quality and effectiveness of the front-end of new product development process by linking a set of functions of scenario analysis as is recognized in the literature as possible solutions to various front-end problems. Two case studies are used to explore if and how the scenario analysis functions contribute to the front-end of new product development process in an empirical setting.     

Scenario planning interventions in organizations: An analysis of the causes of success and failure

This paper presents a case analysis of a successful scenario intervention in an organization. This intervention is compared and contrasted with an unsuccessful one reported in Hodgkinson and Wright [Confronting strategic inertia in a top management team: learning from failure, Organization Studies 23 (2002)949-977]. We demonstrate that analysis of the answers given by workshop participants in a pre-intervention interview can be helpful in determining the receptiveness of an organization to a subsequent scenario intervention. We theorize that strategic inertia-characterized by coping patterns of bolstering failing strategy, procrastination (over a strategic dilemma) and buck-passing (the responsibility for the dilemma's resolution), can be caused by the psychological attenuation of the perceived level of environmental threat to the organization, culminating in unconflicted adherence to the currently followed strategy. We contend that the expression of such coping behaviour is antithetical to a subsequent successful scenario exercise since, if the exercise fails to identify an unconflicted strategic alternative, the sharp focus of the scenarios on futures unfavourable to business-as-usual strategy will re-activate the cognitive stress-reduction mechanisms. Strategic inertia will thus be reinforced. We conclude with a review of the implications of our diagnosis for reflective practitioners.Our paper is divided into four sections. In Section 1, we overview writings on inertia in strategic decision making. We pay especial attention to identifying potential causes of inertia. Next, we present Janis and Mann's [Decision Making, Free Press, New York, 1979] views of the psychological processes invoked by conflicted decisions and analyse the relevance of this laboratory-based theory to provide a psychological explanation of strategic inertia. Finally, we briefly describe the scenario intervention process and argue that it contains the potential to overcome strategic inertia. In Section 2, we review an already-published study of an unsuccessful scenario planning intervention, which illustrates the operation of components of Janis and Mann's model. Next, in Section 3, we focus on our own case investigation of a successful scenario planning intervention. The early part of this section documents the “success”, whilst the latter part analyses the causes of the success—again using the components of Janis and Mann's model. We conclude in Section 4, where we compare and contrast the application of Janis and Mann's model to both cases and we demonstrate that application of the model to pre-intervention interview data can aid the practitioner determine, at the outset, whether or not the organizational context will be receptive to the intervention.     

The futures of family businesses and the development of corporate social responsibility

Existing theoretical and empirical research on the diffusion of social responsibility in family businesses (FBs) has largely focused on the differences in corporate social responsibility (CSR) activities between family firms and nonfamily firms. But the differences in CSR activities and perceptions among different types of family businesses has not yet been researched, even if there are important differences in family businesses. Drawing on the evolution of CSR approach from positive to post positive and to Habermasian approach, and integrating it with a view of family firms as systems made of three different subsystems that over the course of time can be differently preponderant, we identify a typology of family firms. Our typology supports a fine-tuned understanding of the dynamics of CSR and family businesses in different configurations and facilitates envisioning the futures of family businesses in the development of CSR through the different types but also beyond. With this work we contribute to the literature by suggesting that patterns of CSR can be conceived by drawing on the evolving political conception of CSR. Specifically, we show that family firms can represent an ideal laboratory to depict the possible evolution of family firms CSR behaviors and test the tenets of the Habermasian approaches in addition to other approaches.     

Using scenarios to explore UK upland futures

Uplands around the world are facing significant social, economic and environmental changes, and decision-makers need to better understand what the future may hold if they are to adapt and maintain upland goods and services. This paper draws together all major research comprising eight studies that have used scenarios to describe possible futures for UK uplands. The paper evaluates which scenarios are perceived by stakeholders to be most likely and desirable, and assesses the benefits and drawbacks of the scenario methods used in UK uplands to date. Stakeholders agreed that the most desirable and likely scenario would be a continuation of hill farming (albeit at reduced levels) based on cross-compliance with environmental measures. The least desirable scenario is a withdrawal of government financial support for hill farming. Although this was deemed by stakeholders to be the least likely scenario, the loss of government support warrants close attention due to its potential implications for the local economy. Stakeholders noted that the environmental implications of this scenario are much less clear-cut. As such, there is an urgent need to understand the full implications of this scenario, so that upland stakeholders can adequately prepare, and policy-makers can better evaluate the likely implications of different policy options. The paper concludes that in future, upland scenario research needs to: (1) better integrate in-depth and representative participation from stakeholders during both scenario development and evaluation; and (2) make more effective use of visualisation techniques and simulation models.     

Evaluating the use of an integrated forest land-use planning approach in addressing forest ecosystem services conflicting demands: Experience within an Irish forest landscape

There is an increasing demand for genuine public participation in Sustainable Forest Management (SFM) planning to address the various demands for forests to deliver a range of ecosystem services. However, as of yet, there are few developed and tested mechanisms to help authorities and stakeholders with diverse interests to effectively work together to reach a common goal. Integrated Forest Land-Use Planning (IFLUP) is an approach that has the potential to accommodate multi-stakeholders’ demands in the field of SFM planning. In this paper an IFLUP framework process that facilitates stakeholder participation in future-oriented SFM planning is explored. This framework combines scenario analysis and stakeholder collaborative learning. Its application in a case study area in the West of Ireland is outlined and its effectiveness in accommodating conflicting stakeholder demands on forest ecosystem services as well as its potential opportunities and challenges are evaluated.Based on the results and participants evaluation feedback of the IFLUP workshop outcomes, there was a shared view that the IFLUP approach has potential to address conflicting societal demands on forest ecosystem services within local forest landscapes. Likewise, collaborative learning process helps build trust and respect among stakeholder groups as well as improving the legitimacy and acceptance of SFM planning outcomes.     

Does the tea market require a futures contract? Evidence from the Sri Lankan tea market

Tea is one of the most popular beverages in the world. Its consumption exceeds the consumption of milk, coffee and orange juice. Despite its importance, tea has not been considered a commodity on financial markets and there is still no futures contract on tea. This study adds to the current literature by providing an overview of the development of the world’s oldest and largely unknown tea market. In addition, this study examines the issue of whether it is feasible to introduce a tea futures contract that would be advantageous for tea market participants. In conclusion, this analysis indicates that introducing a successful tea futures contract is viable but challenging under the existing market structure.     

Reconstructing “behavioural accounting”

This paper adopts a critical stance towards behavioural accounting research methodology. It is argued that most accountants have based their behavioural research on the natural scientific approach, a paradigm whose relevance and suitability for conducting social research has been increasingly questioned in recent years. The author discusses some alternatives to the positivistic research methodology of the natural sciences as a way of developing social science and the implications these have for providing a coherent theoretical and methodological perspective for future “behavioural accounting” research.It is the contention of this paper that the study of the behavioural aspects of accounting has largely failed to develop into a coherent theoretical or practical body of knowledge. In an attempt to overcome this state of affairs, there is an increasing trend to employ organizational and sociological theory as a basis for research, as opposed to psychology and social psychology which informed earlier conceptual thinking and research. While accountants may see this conceptual development as an advancement in that it locates accounting processes in their organizational and social contexts, the way in which it is being conducted is criticized in this paper because, like psychology, it is characterized by an essentially positivistic methodology.This article will first provide a broad overview of the relationship between accounting research and the behavioural sciences. From that overview it will be argued that accounting researchers are unlikely to make much progress by borrowing behavioural scientific concepts unless they develop a deeper understanding of the philosophical underpinnings of these concepts and the competing schools of methodological thought which exist within the behavioural sciences. In an attempt to fill this apparent gap in understanding, the paper will discuss the scientific approach of the natural sciences, why it is felt to be inappropriate for the behavioural sciences and what alternatives exist.     

Perceptions of the relationship between scenario planning and firm performance: A qualitative study

This paper presents research findings from the application of scenario planning in multinational firms that operate in competitive industries. We use exclusive and not publicly available data to investigate the link between scenario planning and firm performance from a qualitative perspective. The focus was primarily on firms that had real-life experiences with this strategic tool. Our research suggests that scenario planning is interwoven in how strategy is formulated and that it has a major influence on decisions taken by management. We also found that none of the firms reported formal efforts of assessing the success rate of scenario planning. Participants report that this is due to difficulties in measuring qualitative and quantitative outcomes and because standardized assessment tools are not readily available for this kind of strategic intervention. Overall, participants generally regarded scenario planning as an effective intervention with a positive contribution to the firms’ performance. When pressed for more detail, participants revealed that scenario planning techniques were useful in exploring the business environment and future risks, isolating trends, understanding interdependent forces, and considering the implications of strategic decision-making.     

Purposes and paradigms of management accounting: beyond economic reductionism

Neo-classical economics does not of itself provide an adequate explanation of current management accounting practice and research. Ideas from several other disciplines have been used in an attempt to facilitate a more complete understanding of management accounting. There now exists a multiplicity of ‘ways of seeing’ management accounting which adds richness to the literature. This paper first describes a number of the current theoretical-paradigmatic approaches, and then offers a typology for understanding them. It is suggested that each of these schools has different insights to offer the study of management accounting and that attempts to privilege one school over another should be avoided. Management accounting is seen as fulfilling a multiplicity of purposes which can only be understood by analysing the actions of the management accounting actors involved.