Planning means to anticipate the most probable future development of a company. But how can a company handle the uncertainty that is immanent to planning?
The future development of a company depends on a number of side conditions. Many of them can not or only partly be influenced by the company itself; Currency exchange rates, market price development, behaviour of competitors and other stakeholder etc.
When planning data are derived, assumptions have to be made with regards to these and other parameters. Some people are rather risk averse, some are more optimistic, others might not even know about these uncertainties. But when putting together a company-wide planning, mixing these views might result in inconsistent and uncomparable data.
Scenarios are a pragmatic method to handle risk management in planning. But scenarios need to be used with care, in order not to endanger Efficiency of planning.