Bouhalleb, A., Smida, A. (2019)
Abstract
Organizational competencies such as strategic flexibility, innovation and strategic complexity result from the firm’s ability to negotiate and capitalize on uncertainty and dynamism in its environment (Neill and Rose, 2006; Sinkula, 1994). Under such conditions, firms need a flexible strategic planning in order to adapt and survive (Chakravarthy, 1997; Jarzabkowski and Balogun, 2009; Phelps et al., 2001; Titus et al., 2011; Wiltbank et al., 2006). Scenario planning is a tool for considering the future through the understanding of determinant factors and logical paths that orient strategic decision making. A large body of literature on scenario planning has focused on the widespread of this tool in companies and government (Derbyshire and Wright, 2014; Bowmen, 2015). The most cited literature presents scenario planning as an innovative activity that deals with uncertainties and thus improves strategic decisions.
While there is a wealth of literature in scenario planning (cf. Amer et al., 2013; Rawland and Sapaniol, 2017; Bowmen, 2015), research on the theory development and its benefits in practice have not yet become developed (Chermack, 2005; Derbyshire, 2016, Bouhalleb and Smida, 2018). In fact, a large body of research focuses on the description and improvement of different methods (see, for example, Amer et al., 2013; Bradfield et al., 2005). However, some progress has been made in addressing this issue, for example, Meissner and Wulf (2013), who examined its impact on biases and decision quality. Similarly, some researches have focused on scenario planning role on performance (Maarten and Chermack, 2009; Phelps et al., 2001). Yet, despite this, little is known about its effects on organizational competencies. In this paper, we address these questions and analyses the scenario planning’s effect on strategic flexibility and complexity. As such, this work is designed to contribute to areas of scenario planning and strategic orientation in three ways. Firstly, in the relation to scenario planning, this study partially fulfils the recommendations of researchers who have suggested additional studies to better understand scenario planning outcomes (Bowmen, 2015; Chermack, 2004, De Smedt et al., 2013, Visser and Chermack, 2009; Meissner and Wulf, 2013). Secondly, in the relation to strategic orientation, it seeks to achieve an in-depth understanding of scenario planning’s contribution to firm competitiveness by studying how this strategic tool shapes strategic flexibility and complexity. Thirdly, the strategic planning literature has received serious criticism based on reliance on empirical studies that investigated direct and bivariate relationships (Rudd et al., 2008). Our research addresses this criticism by investigating the mediating effect of strategic flexibility on scenario planning and strategic complexity.
The overall conclusion driving from this research is that scenario planning enhances the firm’s ability to adapt to environmental changes. This work fills the gap by providing empirical evidence on how firms may use scenario planning in order to develop flexibility and strategic complexity orientation. It is also a response to calls for examining strategic complexity antecedents (Neill and Rose, 2006). Drawing from these findings, we have proposed a framework that could serve as a guide for future works on scenario planning outcomes and benefits.
The present research findings should be treated in light of several limitations. In fact, the impact of scenario planning on organizational competencies in European firms is analyzed. The results are however, hypothetical and explorative and require further studies to generalize them. One limitation is that the study is based on collecting answers from one person per organization. We require them to transform their perceptions on seven-point scale. Further researches have to seek confirmatory and negative answers from different respondents in the same organization in order to achieve significant conclusions.
