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Define the term Scenario Planning in risk management.
Scenario planning:
It is about perceiving uncertainties for example identification of risks and the growth of pre-emptive courses of action, when the event or scenario was to arise. This is an attempt to build plausible views of a number of various possible futures for while operating in circumstances of high uncertainty. This planning is a powerful business tool. It is not about predicting the future but also exploring the future. When management can be more alert of what could occur they are more probable to be capable to deal along with it when it does. By using scenario planning can equip management to consider constructively regarding the future and to plan for that more precisely.
This is about setting up systems for monitoring what really does occur in such a way which management are capable to appreciate and respond effectively to changes which may evolve over time.
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