Online from: 2008
Subject Area: Strategy
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|Title:||Scenario planning for service quality: a Monte Carlo simulation study|
|Author(s):||Anand Prakash, (ITM-BIT Collaborative Research Programme, Navi Mumbai, India), Sanjay Kumar Jha, (Department of Production Engineering, Birla Institute of Technology, Jharkhand, India), Rajendra Prasad Mohanty, (Siksha O Anusandhan University, Bhubaneswar, India)|
|Citation:||Anand Prakash, Sanjay Kumar Jha, Rajendra Prasad Mohanty, (2012) "Scenario planning for service quality: a Monte Carlo simulation study", Journal of Strategy and Management, Vol. 5 Iss: 3, pp.331 - 352|
|Keywords:||Corporate strategy, Customer services quality, Gap analysis, Life insurance, Monte Carlo simulation, Scenario planning|
|Article type:||Research paper|
|DOI:||10.1108/17554251211247599 (Permanent URL)|
|Publisher:||Emerald Group Publishing Limited|
|Acknowledgements:||The authors express sincere thanks to Professor Nicholas O’Regan, Editor, Journal of Strategy and Management for his insightful comments and suggestions. The authors are also grateful to the anonymous reviewers for their valuable review and would also like to sincerely thank the Palisade Corporation (www.palisade.com), the maker of decision analysis software @Risk, which has been used for carrying out Monte Carlo simulations presented in this paper.|
Purpose – The purpose of this paper is to propose the idea of linking the use of the Monte Carlo simulation with scenario planning to assist strategy makers in formulating strategy in the face of uncertainty relating to service quality gaps for life insurance business, where discontinuities always remain for need-based selling.
Design/methodology/approach – The paper reviews briefly some applications of scenario planning. Scenario planning emphasizes the development of a strategic plan that is robust across different scenarios. The paper provides considerable evidence to suggest a new strategic approach using Monte Carlo simulation for making scenario planning.
Findings – The paper highlights which particular service quality gap attribute as risk impacts most and least for the possibility of occurrences as best case, worst case, and most likely case.
Research limitations/implications – This study suffers from methodological limitations associated with convenience sampling and anonymous survey-based research.
Practical implications – The approach using Monte Carlo simulation increases the credibility of the scenario to an acceptable level, so that it will be used by managers and other decision makers.
Social implications – The paper provides a thorough documentation on scenario planning upon studying the impact of risk and uncertainty in service quality gap for making rational decisions in management of services such that managers make better justification and communication for their arguments.
Originality/value – The paper offers empirical understanding of the application of Monte Carlo simulation to scenario planning and identifies key drivers which impact most and least on service quality gap.
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