What is the significance of corporate policy in today’s changing scenario?
Scenario planning is a tool originally used by the military. A group of analysts generate different scenarios (often in the form of games) which combine known facts about the future (such as demographics, geography, military, political and industrial information, and mineral reserves), with possible social, technical and political trends.
In the 1970s, many energy companies were surprised by the shock caused by the Middle East wars and changes within OPEC and lost billions of dollars as a result. The dramatic financial effects of these changes led at least one organization, Royal Dutch Shell, implementing scenario planning. In retrospect, it is not clear that Shell's use of scenario planning gave the company any significant long term business advantages but this could be because too much dependence was given to this management tool alone. Scenario planning is still worth considering as one of the options for predicting the future.
The scenarios in the plan should include all known facts and anticipated social changes that include plausible but unexpectedly important situations. If the scenario throws up the possibility of a major problem, action could be taken way in advance to head it off. For example, in the anticipation of avian flu, a company may decide to split key members of its workforce across different sites, even different countries, to obviate taking a huge hit at one time in one place.
Scenarios should be designed so that they can be readily adapted to changed circumstances. These simulations are then "stressed" as the games play out. Usually, particular groups of facts become more clearly important, so that the intelligence organisation can refine and repackage real information more precisely to better-serve the policy-makers' needs. Usually the games' simulated time runs hundreds of times faster than real life, so that policy-makers can experience several years of policy decisions, and their effects, in less than a day.
The obvious value of scenario planning is that it allows policy-makers to make and learn from mistakes without risking important failures in real life.
Steps In Scenario Planning
The starting point for scenario planning is to decide on the key question to be answered by the analysis. This may well determine if scenario planning is the preferred tool over the other forecasting methods. If the question is based on small changes or a very few number of elements, other more formalized methods may be more useful.
This is followed by setting the time and scope of the analysis during which consideration would be given to how quickly changes have happened in the past, and an assessment made of the degree to which it is possible to predict common trends in demographics, product life cycles etc. A usual timeframe can be 5 to 10 years.
The various stakeholders in the scenario will be identified including their interests and whether these have changed over time. This permits the mapping of the trends and driving forces, including the PESTLE factors mentioned earlier (political, economic, social, technical, legislative and environmental). It can be useful here to map the driving forces on two axes, assessing each force on an uncertain/(relatively) predictable and important/unimportant scale. All driving forces that are considered unimportant are discarded while the important and relatively predictable forces can be included in the scenario.
It is usual to limit the number of possible scenarios to between two and four and each is given a descriptive name and a written narrative, indicating key events and probabilities.
The final step is to assess the scenarios. Are they relevant for the goal? Are the internally consistent? Are they archetypical? Do they represent relatively stable outcome situations?
The term industrial relations have a broad as well as a narrow outlook. Originally, industrial relations were broadly defined to include the relationships and interactions between employers and employees. From this perspective, industrial relations cover all aspects of the employment relationship, including human resource management, employee relations, and union-management (or labor) relations. Now its meaning has become more specific and restricted. Accordingly, industrial relations pertains to the study and practice of collective bargaining, trade unionism, and labor-management relations, while human resource management is a separate, largely distinct field that deals with nonunion employment relationships and the personnel practices and policies of employers. It also includes the management of conflict between employers, workers and trade unions when it arises. Clearly, the nature of industrial relations is changing, the impetus for the same being provided by the changing scenario. In the light of this statement it is important that we look at some of these changes and understand the relevance of industrial relations within their framework. The Changing Scenario The broad trend towards decline in employment in the manufacturing sector, low union activity in sunrise sectors, decentralized collective bargaining, and direct communication with and involvement of workers can be seen as efforts at political restructuring of industrial relations. In order to ensure that we are dealing with a changing scenario a comparative study must be made wherein the current situation should be analyzed and contrasted with the scenario in the past. For this purpose some changes have been identified and the role and importance of industrial relations emphasized in each context.