Developing a Fuzzy Logic Decision Support System for Strategic Planning in Industrial Organizations

Abstract

Internal – External (IE), Strategic Position and Action Evaluation (SPACE), Boston Consulting Group (BCG), and Grand Strategy matrices are important tools in generating and evaluating alternative output strategies which is the most important step in the formulation stage in strategic management process. Managers need to make difficult and important decisions on the basis of imprecise information and incomplete knowledge and select the right strategic position or alternative output strategies. Managers found it difficult to make the right decision when the values that resulted from the internal and external audits of an organization's environment fall in the middle or on the sharp edges in these matrices. It is found that each matrix depends on some factors that represent the internal and external environment of an organization and neglect the others. A systematic approach that incorporates fuzzy set theory in conjunction with strategic planning is proposed to assist managers in reaching the best alternative output set of strategies. The four matrices are combined by relations in order to integrate more than two fuzzy factors in selecting the best alternative output strategies. This make the suggested strategic plan robust and help organizations with limited resources to neglect alternative output strategies that do not depend on the four matrices jointly. The implementation of the developed Fuzzy Logic Decision Support System (FLDSS) is done using MATLAB fuzzy logic tools and the relations between these matrices are entered as rules in the Graphical User Interface (GUI) screens. The model was validated by a case study on a Jordanian company, and the results were satisfactory.