Critical Evaluation of the Paper - Case Study Example

?Critical Evaluation of the Paper The paper attempts to look at a novel approach in understanding the potential difficulties that lie ahead while planning for the future. The planning horizon is taken to be several years instead of a short-term orientation. One key construct that the author wishes to emphasize is the uncertainty inherent in the business environment. The unexpected changes in the global economy could stem from many angles such as technology, market demand, de-regulation and the rise of emerging nations. While strengthening the need for an objective evaluation of possible scenarios, the author cautions against the use of mere mathematical or computational tools in arriving at a vision for the organization. The author lists down a series of simple steps that would help any organization understand its positioning in the environment and also quotes examples from two different firms. He attempts to bridge the gap between theory and practice. Towards this end, the author draws upon several situations in the world economy where the organizational actors were unable to predict the future turn of events. Besides, he draws upon quotes from eminent thinkers, politicians and visionaries whose crystal-ball gazing efforts were proved totally wrong. In our critical evaluation, we assess the author’s contribution to the new business approach and also point out certain deficiencies that could have been addressed better. To understand the motivation behind the author’s work, we need to look at the title first. It hints at an organizational vision and the complex, yet critical facet of planning, which is the leader’s cognition. However, the author wishes to incorporate a series of reasonably well-defined and easy-to-understand steps which could possibly complement the leader’s thinking. Additionally, the motivation behind this writing could be several insights gleaned through studies from the two firms – Interpublic and Anglo American Corporation. Viewed through a different lens, we can also see the author’s attempt to effortlessly move from theory to practice and back. This can be accomplished if practice dictates theoretical constructs that can be tested in different firms and industries. Another criterion that could enable this movement is the deconstruction of a complex subject into a well-ordered sequence. The author has been able to fulfill this through his 10-step procedure for strategic thinking. Has the author been able to meet his stated purpose through this paper? We would provide a balanced approach that hints towards the affirmative, yet there are some gaps that have not been addressed. To illustrate, let us look at Schoemaker (1995 p.26) where he says that his purpose is to provide a systematic methodology that would fashion a bridge between theory and practice. Whilst agreeing that the author has definitely provided a systematic methodology, there is no evidence of academic theory that can be tested against practice. In fact, the author makes no effort to state the key tenets of theory with regard to scenario planning. On the contrary, the paper abounds with several thoughtful instances drawn from practice, where organizational actors and organizations faced critical situations. Extending the answer to our question further, we also find that the author has omitted to explain the validity of his methodology to the context of the broader environment. In other words, we do not know whether the insights gained from these two companies are sufficient to provide an all-encompassing answer with regard to scenario planning. We have evidence mainly from industry. There are two firms where the author has studied scenario planning. He has probably adopted the role of a facilitator or consultant in these two firms. Hence we can say that the author draws more upon primary research to enhance the credibility of his arguments. Notably, the author also makes select references to past events that transpired such as the attack of Pearl Harbor by the Japanese, the vast penetration of personal computers and the use of the air force in naval operations that were completely unexpected by the visionaries of that age. There is a subtle point here. These are not examples of past research, they are past events. This goes towards strengthening our stance that the author’s findings are based largely upon his observations from industry – the practitioner’s perspective. What theoretical perspective did the author address? At a broader level, the author’s interest area is in strategic planning. Effectively, it indicates planning for a medium to long term horizon, which could range from seven to ten years or more. Within the confines of strategic planning, the author adopts the perspective of organizational planning in the face of uncertainty. The emphasis is on uncertainty in the external environment. The author contends that certain exigencies in the external environment could be predicted with a larger degree of certainty, yet there could be unseen and unknown factors that could prevail upon firms, upsetting their apparently thought-through future strategies. To mitigate the environmental uncertainty, the author comes up with a reasonably well-defined, general purpose methodology that can be executed by firms in different industries. What are the possible gaps and contradictions in this paper? Were there any deficiencies in the line of reasoning? Were some critical factors ignored by the author? In our last section, we attempt to answer these questions. The author begins with a systematic methodology (p. 28). Effectively we begin to think that there can be a structure to scenario planning and by extension to strategic thinking. Now, we move to Schoemaker (1995 p. 36) where he advocates that a firm begin the process intuitively, heuristically or statistically. Don’t we see a clear sign of self-contradiction in the author’s stance? Clearly, the answer is in the affirmative. Arguably, one cannot use intuition or heuristics alone without recourse to some statistical tools (or any other quantitative techniques). Moving back to the 10-point agenda, in his tenth point, he argues that the process could be iterative and the whole exercise could be a combination of art and science. This point negates the strength of his methodology partially. If the last step says that the further steps are conditional, then the whole methodology hinges on an infinite nested loop akin to a computer program. Effectively, he has tried to give us an algorithm that is vague especially towards the last steps. Any researcher would be questioned regarding the generalizability of his research findings. Schoemaker (p. 37) in his efforts to validate and extend the general applicability selected students from the MBA program. They were asked to respond on operational metrics. Additionally, they were asked to give an estimate along with their perceived degree of confidence. Clearly, there is a vast difference between testing the responses to perceptions of a near term event and testing the validity of long term strategic thinking. The example given does not merit the case. The proof of concept has not been established by Schoemaker through this juvenile exercise. Organizations, while charting out their growth plans invariably look behind to pride themselves on their achievements. This could be a major hurdle to their visionary thinking. Possibly, this aspect has not been addressed by Schoemaker. He has assumed that all organizations need to be forward thinking and their leaders need to orient their efforts towards future horizons. Yet, researchers also need to understand bottlenecks that could cramp the thinking and action of the top management team. Path dependency could thus be a debilitating factor in the onward progress of organizations. The author has rightly addressed the role of biases in playing out scenario building. What has been left unaddressed is the set of people whose biases could hinder the development of strategic planning. The author has earlier hinted at leader-figures whose statements hinted at their omniscience, such as Ken Olson & Frank Knox (p. 26) whose prognoses were ultimately way off the mark; what could have enhanced the paper is the inclusion of biases in considering strategic, scenario planning activities. For example, while discussing biases, (p. 38) the author’s central argument would have been strengthened if he affirmed that biases in top management thinking could adversely affect the organization’s future. The US automobile industry in the late 1960s and thereafter (p. 26, see box) implicitly had their leaders gloating about the unchallenged supremacy of their products, thereby ignoring the impending Japanese threat. History tells us what transpired in subsequent decades. The bias inherent in top management thinking can be seen amongst the political leaders also who, in their overconfidence failed to see looming threats ahead. A keen practitioner would be eager to understand aspects of strategic thinking from this paper. This topic sadly has been left unaddressed to some extent. Towards the latter part of the paper, the author implicitly discusses the role of brainstorming while talking about intuition (p. 36) which is merely a small subset of the larger paradigm termed as strategic thinking. The author has rightly addressed the role of biases which cloud thinking and planning. Yet this subtle and complex topic could have been integrated better into this paper. To conclude, we can say that the paper has addressed some key tenets of scenario planning through the use of strong industry examples. Where the paper could have gained strength is by incorporating the larger domain of strategic thinking in its exposition. Besides, the author started out with claims of being able to bridge the gap between theory and practice; yet we are left confused and in the dark, seeking the theories behind scenario planning. Suffice it to say that we have understood critical concepts and ideas that worked in the realm of scenario planning. A better integration of key concepts could have strengthened the underlying foundations of this lively and intellectual paper. Reference List Schoemaker, PJ 1995, ‘Scenario planning: A tool for strategic thinking’, Sloan Management Review, Winter, pp. 25-40 Read More