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ACCA Strategic Professional · Strategic Business Leader · Environmental issues

A strategy director at Norwick Telecom says, 'We have written four scenarios, so we can now predict what will happen to our market.' Which response best reflects the proper purpose of scenarios?

The director is wrong because scenarios are plausible alternative stories, not predictions. Their purpose is to challenge assumptions, broaden management thinking and help test and prepare strategies for several possible futures rather than to forecast one expected outcome.

  1. ACorrect, because scenarios are forecasts of the most probable outcome
  2. BIncorrect, because scenarios are plausible alternative stories used to challenge assumptions and prepare, not to predict a single outcomeCorrect
  3. CCorrect, provided each scenario is given a probability above 50%
  4. DIncorrect, because scenarios should include only the worst-case outcome

Explanation

Scenarios describe plausible, different futures to broaden thinking, challenge mental models and test strategies. They are not predictions. Probabilities cannot all exceed 50%, and using only the worst case would defeat the purpose of exploring a range of futures.

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