Corporate leaders tend to make assumptions such as:
- The strategy formulated will indeed work.
- Competitors will continue to behave in the same way.
- Retaining customer loyalty is not going to be problematic.
- Failure to incorporate long-term issues.
Scenario Planning will examine the external and internal driving forces for the purpose of formulating the different consistent and plausible scenarios that the organization can face in the future. It will strive to visualize peoples’ mental models and their decision making process. It can help managers recognize, consider and reflect on the uncertainties they are likely to face by identifying trends and uncertainties. A manager can construct scenarios to overcome the usual errors in decision-making, overconfidence and tunnel vision.