The integrated use of scenario planning in strategic management by South African-based multinational companies.
Date
2014-07-23
Authors
Nel, Coenrad Marais
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Abstract
ABSTRACT
Dealing with the uncertainties of the global business environment has become a
challenge for companies. This is especially the case for multinational
companies operating in a number of geographical areas, each having their
driving forces and uncertainties to consider during the strategic planning
process of the company. Increased global uncertainty led to companies
understanding the importance of identifying and mitigating against these
uncertainties. This research report aims to establish whether multinational
companies based in South Africa utilise scenario planning as an integral part of
their strategic management framework.
The research was conducted in the form of interviews with thirty (30)
respondents from multinational companies based in South Africa, consisting of
ten (10) open-ended questions to gain an understanding of whether each
company has a formal strategic management framework in place; to understand
what the process of this framework involves, as well as to ascertain whether
scenario planning forms an integral part of this framework.
The analysis of the interview data established that all the respondents identify
the importance of dealing with uncertainties in their business environments. The
majority of the respondents utilise the PESTLE and Porter’s Five Forces models
to identify uncertainties within the external and internal business environment of
the companies. The companies further rely on external experts such as
economists to assist them with understanding current and emerging trends
within the global, regional and local business environments. Respondents also
rely on their risk management processes and sensitivity analyses of their
financial plans in an attempt to understand and mitigate against uncertainties.
The research established that only three (3) of the thirty (30) respondents use
scenario planning as an integral part of their strategic management framework.
The research report therefore concluded that multinational companies based in
South Africa do not utilise scenario planning as an integral part of their strategic
management framework.
Description
MBA Thesis 2011
Keywords
International business enterprises, Strategic planning .