CIMA Strategic Management (E3) Practice Exam

Which of the following is a drawback of scenario planning related to the number of scenarios?

Many scenarios may not occur. Costly and inaccurate. Cultural distortion. Risk of self-fulfilling prophecy.

Correct Answer:

Many scenarios may not occur.

Explanation:

Scenario planning helps organisations explore a range of plausible futures by varying key drivers and uncertainties. The drawback tied to the number of scenarios is that having many scenarios often means many futures may never occur. This can waste time and resources, clutter the analysis, and make it harder to extract clear, actionable insights for decision-making. In practice, a small, focused set of distinct, plausible scenarios—enough to stress-test strategies without overwhelming the process—tends to be more useful. Other issues like costliness and inaccuracy, cultural distortion, or the risk of self-fulfilling prophecy are real risks in scenario work, but they relate to broader pitfalls of the method rather than the sheer number of scenarios.

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