Scenario planning for economic recovery: short‐term decision making in a recession

Abstract

Purpose

In light of the increased level of uncertainty in the economy, and the need for companies to make critical short‐term strategic and tactical decisions under these stressful conditions, the paper aims to propose that short‐term economic scenarios can help managers cope with uncertainty.

Design/methodology/approach

The paper asserts that there is no logical reason why a scenario approach must be restricted to extremely long‐term decisions; nor is there any legitimate bar to using scenario planning to make short‐term economic decisions in an uncertain, recessionary environment.

Findings

The Futures Strategy Group has developed a set of four customizable short‐term economic scenarios called the Recession/Recovery Decision Matrix ™.

Practical implications

It is precisely now, when in a painful recession management is bogged down in “the tyranny of the present,” that scenario planning is especially crucial.

Originality/value

These scenarios, which cover quite a broad range of plausible recession/recovery eventualities, allow clients to perform due diligence on short‐term, critical decisions within a brief period of time.

Citation

Marren, P.B. and Kennedy, P.J. (2010), "Scenario planning for economic recovery: short‐term decision making in a recession", Strategy & Leadership, Vol. 38 No. 1, pp. 11-16. https://doi.org/10.1108/10878571011009831