Strategic learning with scenarios

Since the oil shocks upset the business world in the 1970s, the use of multiple scenario analysis has been increasingly propagated as an approach to deal effectively with the many long-run uncertainties that surround business organisations. Since its introduction, the scenario approach has undergone some considerable changes and it is now claimed fulfils a diverse range of functions. Newly-added functions include the stretching of managers' mental models and the triggering and acceleration of processes of organisational learning. Although these functions currently get most of the attention in academic and management journals in recent years, a satisfying explanation of how scenarios fulfil these functions is still missing in the scenario literature. The scenario methodology seems to tell only part of the story suggesting that construing and using scenarios ‘simply’ consists of sequentially completing several distinct phases. If multiple scenario analysis really is able to fulfil the wide range of functions ascribed to it another, more dynamic process has to be hidden behind the rather static phase model. The scenario literature does not give any insight into this latter process. This article aims to increase the understanding of multiple scenario analysis by unravelling some of the mysteries surrounding it. For this purpose, the role of scenarios in strategic management is studied from a cognitive perspective. It appears that scenarios can deal effectively with several bottlenecks that potentially hinder organisational learning on a strategic level in organisations.