Scenario planning and its role in financial performance: a survey study of a sample of private commercial banks

Abstract

Scenario planning constitutes an important alternative to traditional planning methods, which is gaining increasing interest day by day. Perhaps the most important thing that distinguishes scenario planning is the continuous challenge to decision-makers that there are different scenarios for the future and not just one scenario, which is preferred by the bank. The research problem revolves around the relative failure of previous methods to influence the level of financial performance of commercial banks, which prompted researchers to search for modern methods to do so, so they resorted to scenarios. However, the problem lies in the failure of these scenarios to reach the desired goal sometimes. Also, the financial performance of private commercial banks may be marred by some decline at times. The research aims mainly to diagnose and determine the extent of the impact of scenario planning on the financial performance of Iraqi private commercial banks and to know the nature of the relationship between scenario planning and the extent of its impact as an independent variable in raising the efficiency of the financial performance of Iraqi private commercial banks. The researcher relied on the descriptive analytical approach by collecting and analyzing the necessary data, as this approach focuses on surveying the opinions of a sample of leaders in Iraqi private commercial banks and their orientations, providing a description of the reality of the variables, and analyzing the statistical results of the research variables. The research concluded that the adoption of scenario planning by private commercial banks has an impact on raising the efficiency of financial performance by developing new working methods and methods that contribute to developing the internal work environment of banks, which has a direct impact on financial performance. The researcher recommended moving away from traditional planning, which may hinder the achievement of the institution's goals and its failure to respond to environmental changes, which in turn negatively affects its financial performance. Adopting a flexible organizational structure capable of responding to environmental changes and developing new work systems that enhance and develop banks' financial performance.