scenario planning

An assessment of the outcomes of various courses of action in a range of potential settings or circumstances. Scenario planning is a means of assessing alternative actions in decision-making processes, organizational *planning, and *risk assessment. The range of risk scenarios that a *multinational corporation may consider when deciding to establish a remote *branch in a foreign country may include (i) *market risks, (ii) cultural risks, (iii) a change of political regime, (iv) the danger of an economic *recession, (v) the effects of a natural catastrophe (like an earthquake), and (vi) and the impact of changes in local *Generally Accepted Accounting Principles. For each scenario, a review of potential risks and *rewards could lead to either *quantitative or *qualitative risk assessments (or a combination of both) used to determine the corporation’s strategies. Scenario planning requires imaginative and wide-ranging thinking, and brainstorming activities are frequently employed to tease ideas from participants in the process.

Auditor's dictionary. 2014.

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