Scenario planning: An investigation of the construct and its measurement

• DOI: http://doi.org/10.1002/for.2515
• Author: Ali Smida,Arafet Bouhalleb
• Date: 01 July 2018
• Published date: 01 July 2018

RESEARCH ARTICLE

Scenario planning: An investigation of the construct and its

measurement

Arafet Bouhalleb | Ali Smida

Management Sciences, Université Paris 13

Nord, Villetaneuse, France

Correspondence

Arafet Bouhalleb, Management Sciences,

Université Paris 13 Nord, 99 Avenue Jean

Baptiste Clément, 93430 Villetaneuse,

France.

Email: arafet.bouhalleb@univ‐paris13.fr

Abstract

Scenario‐planning academicians and practitioners have been observing for

more than three decades the importance of this method in dealing with

environmental uncertainty. However, there has been no valid scale that may

help organizational leaders to act in practice. Our review of prior studies

identifies some problems related to conceptualization, reliability, and validity

of this construct. We address these concerns by developing and validating a

measure of scenario planning based on Churchill's paradigm (Journal of

Marketing Research, 1979, 16,64–73). Our data analysis follows from a sample

of 133 managers operating in the healthcare field in France. To validate our

scale, we used three approaches: first, an exploratory factor analysis; second,

an examination of psychometric proprieties of all dimensions; and third, a

confirmatory factor analysis. The results of this study indicate that scenario

planning is a multidimensional construct composed of three dimensions:

information acquisition, knowledge dissemination, and scenario development

and strategic choices.

KEYWORDS

Churchill paradigm, reliability, scenario planning, validity

1|INTRODUCTION

Across the literature, there is universal agreement on the

importance of introducing scenario planning among firms

(Dortland, Voordijk, & Dewulf, 2014; Meissner & Wulf,

2013; Tapinos, 2012; Visser & Chermack, 2009). This con-

cept is a central topic in the strategyliterature and is associ-

ated with other topics such as learning (Bootz, 2010;

Chermack, 2005; Chermack & Van der Merwe, 2003;

Haeffner, Leone, Coons, & Chermack, 2012), innovation

(De Smedt, Borch, & Fuller, 2013; Worthington, Collins,

& Hitt, 2009), biasesand decision quality (Meissner & Wulf,

2013), and changing organizational culture (Korte &

Chermack, 2007). Furthermore,scenario planning has gen-

erally been found to positivelyimpact performance (Phelps,

Chan, & Kapsalis, 2001; Visser & Chermack, 2009).

Despite this increasing emphasis on the benefits of

scenario planning for organizations, the inadequacy of

theory development hinders managers from acting in

practice. Several authors conclude that inattention to con-

struct measurement is a major obstacle to the advance-

ment of scenario planning in practice (Chermack, 2005;

Hodgkinson & Healey, 2008; Tapinos, 2013). There is still

much debate over exactly what constitutes the concept of

scenario planning. An integrative and comprehensive

measurement of the concept is still a long way from crys-

tallizing (Chermack, 2005; Tapinos, 2013). In examining

the scenario‐planning literature, we found only one study

that attempted to describe the proposed theory using

Dubin's methodology (Chermak, 2005). Despite the

importance of that study's conclusions, additional studies

are certainly needed to address this gap.

Received: 30 April 2016 Revised: 9 September 2017 Accepted: 2 December 2017

DOI: 10.1002/for.2515

Journal of Forecasting. 2018;37:489–505. Copyright © 2018 John Wiley & Sons, Ltd.wileyonlinelibrary.com/journal/for 489

Furthermore, a principal criticism of the scenario‐

planning literature is that researchers devote more effort

to analyzing scenario planning's effects on other variables

than to conceptualizing and measuring the concept. In

fact, there is a significant lack of operationalization. There

are two main causes of this problem. The first is that

researchers choose to focus on the different methodolo-

gies of scenario planning (Amer, Daim, & Jetter, 2013;

Bradfield, Wright, Burt, Cairns, & Van Der Heijden,

2005). The second is that researchers examine relation-

ships among variables that may constitute the concept

instead of examining the definitions of the variables

themselves (Chermack, 2005).

Based on Churchill's paradigm (1979), our objective is

to address these limitations by developing a valid scale of

scenario planning. To this end, we provide the theoretical

background and the principal operationalization of the

concept and follow this with an in‐depth presentation of

the steps used to develop and validate the scale and the

assessment of psychometric proprieties.

In summary, this work is designed to contribute to the

scenario‐planning literature in different ways. First, the

development and the validation of a measurement of sce-

nario planning both enable us to illustrate the ambiguity

of the concept. Second, we demonstrate the complete pro-

cess of the validation of the scale and the definition of its

dimensions. Finally, this study responds to the recom-

mendations of researchers who have called for additional

studies to better understand scenario‐planning theory

(Chermack, 2005; Tapinos, 2013).

This paper is structured as follows. The first section

presents the conceptual background and the item genera-

tion process. The second section outlines the processes of

data collection, scale purification, and dimensionality.

The last section offers our principal results and a

discussion.

2|DIMENSIONS OF SCENARIO

PLANNING

To develop hypotheses related to the dimensions of sce-

nario planning, we first conducted an extensive review of

the conceptual and theoretical literature on scenario plan-

ning and strategic foresight (e.g., Bootz, 2010; Bradfield

et al., 2005; Bunn & Salo, 1983; Chermack, 2004, 2005;

Chermack, Lynham, & Van der Merwe, 2006; Chermack

& Van der Merwe, 2003, Chermack, Van der Merwe, &

Lynham, 2007; Haeffner et al., 2012; Korte & Chermack,

2007; Malaska, 1985; Malaska, Malmivirta, Meristo, &

Hansen, 1984; Phelps et al., 2001; Schoemaker, 1993;

Wright, Bradfield, & Cairns, 2013; Wright, Cairns, &

Goodwin, 2009). Moreover, we analyzed different

approaches to scenario planning, such as intuitive logics,

probabilistic modified trends analysis (Bradfield et al.,

2005), and the French school of “la prospective”(Godet,

1990). In reviewing these sources, a number of observa-

tions can be made, the first of which is the lack of both ade-

quate research on and theoretical development of the

scenario‐planning concept. This tool has been developed

largely by practitioners and, as such, lacks theoretical

aspects (Derbyshire, 2016; Goodwin & Wright, 2001).

Chermack (2005) comments that the state of theory devel-

opment is dismal and cannot support the “fast‐growing”

practice of scenario planning. Bowman (2015) similarly

states that “an absence of theoretical belonging has left sce-

nario‐based approaches drifting between a multitude of

frameworks.”

Second, we infer from this review that scenario plan-

ning is associated with other theories such as structuration

theory (Mackay & Tambeau, 2013), Christensen'stheoryof

disruption and system analysis (Burt, 2007), the social

practice theory(Sarpong & Maclean, 2011), and complexity

(Derbyshire, 2016; Wilkinson, Kupers, & Mangalagiu,

2013). The other observation is that the literature in this

field reveals a large number of scenario development

models and approaches. Phadnis, Caplice, Singh, and

Sheffi (2014) note that scenario planning encompasses at

least three schoolsof thought, 23 techniques for developing

scenarios and 10 approaches to using them.

Furthermore, while indicators of scenario planning

have varied widely across approaches, the most cited liter-

ature presents scenario planning as a structured and ana-

lytical process to create characterization of multiple

futures to enable stakeholders to rethink strategic deci-

sions and policies (Bowman, 2015). As such, scenarios

are constructed through actors'interpretations of their

environment. Sarpong and Maclean (2011) state that sce-

nario planning could be considered as a social practice,

where learning from the past, perception of the present,

and prediction of the future together enable us to

reperceive the organization and its environment. Typi-

cally, scenario planning consists of preparatory phase

where the purpose is to define a focal issue or decision,

to identify key factors and driving forces (Amer et al.,

2013); a development phase, where the aim is to construct

possible narratives about the future; and a use phase,

which consists of the use of scenarios to develop strate-

gies. Moreover, based on the concept of simplixity, Bow-

man (2015) argues that the complexity of thought

combined with the simplicity of action enables us to focus

on two aspects of scenario planning: the process and sce-

nario. The former is related to some practices such as

sense making, knowledge, and organizational learning.

The latter as a result of this process, which that is associ-

ated with the development and use of scenarios.

490 BOUHALLEB AND SMIDA