Effect Scenario Use on the Detection of Weak Signals of Shifts in Organizational Environments

Scenario planning is widely used as a strategy process to help organizations prepare for unpredictable shifts in their environments. The process, arguably, influences managerial perception and interpretation of environmental changes. However, objective evidence of such influence is limited. Using a behavioral experiment, this study finds support for scenario planning’s effectiveness in detecting weak signals of important changes in the organizational environment. Countervailing this positive detection benefit, the study also suggests that the strategy process may not be as effective for the negative dismissal benefit or ruling out irrelevant developments.