Objectives-oriented optimisation-based planning and management of decision alternatives

Abstract

This study develops a novel objectives-oriented optimisation-based approach to effective planning and management of a set of decision alternatives implemented for achieving a hierarchy of objectives in a multi-level management or organisational structure. A new objectives-oriented evaluation model is developed based on a multiattribute decision making (MADM) technique to measure the relationship between different levels of objectives and to evaluate the decision alternatives in terms of their relative importance or contribution to higher-level organisation objectives. New optimisation-based models are developed for selecting, planning or assigning decision alternatives by maximising their total contribution to the organisation objectives. These methodological developments are applied to three application areas under various planning and management decision settings. In the application development for the strategic evaluation, planning, and selection of best practices, an objectives-oriented evaluation model is developed by integrating the MADM technique and the balanced scorecard framework. The evaluation model can be used to (a) prioritise a large set of best practices for achieving the higher-level organisation objectives and lower-level business unit objectives, (b) categorise best practices as strategic maps of implementation for the whole organisation and individual business units, and (c) perform strategic planning of best practices from multiple perspectives of an organisation in a balanced manner. An optimisation-based selection model is developed to select a minimum set of best practices for meeting the goal-achievement requirements specified for each organisation objective and for each business unit. In the application development for the management of implementing critical success factors (CSFs) for ERP projects, an objectives-oriented evaluation model is developed to (a) measure the relationship between objectives of a three-level hierarchy, and (b) evaluate the contribution of the CSFs to the organisation objectives. Three optimisation-based planning models are developed to (a) obtain a set of optimal implementation weights for CSFs by maximising the total implementation benefit of the organisation, and (b) set an overall management priority of the CSFs for the whole organisation by considering the varying management preferences of the individual departments. In the application development for project assignment and performance evaluation, an objective-oriented preference-based assignment process with an optimisation model are developed to (a) assign a project to a project manager who is expected to perform best and contribute most to the organisation objectives, and (b) maximise the total weighted contribution value of all projects to the organisation objectives by incorporating the projects’ expected contribution and the project managers’ expected performance. The efficiency-based evaluation process with two data envelopment analysis models are developed to (a) measure the relative performance efficiency of completed projects and of project managers based on their expected and actual performances, (b) provide relative performance efficiency rankings of projects and of project managers, and (c) identify how inefficient projects and project managers can be improved. With the development of the objectives-oriented optimisation-based approach and three application areas, this study makes significant conceptual and methodological contributions. The objectives-oriented evaluation model provides a formal methodology for measuring the relationship between objectives in a multi-level hierarchy. This objectives-oriented evaluation facilitates objectives focused business planning and management. The optimisation-based planning model provides a novel methodology for maximising the total contribution of decision alternatives by integrating management preferences of an organisation and its business units. This optimisation-based planning enables effective implementation management of decision alternatives at all management levels of an organisation. In managing assignment and performance evaluation of projects, the performance-based approach represents a novel conceptual and methodological framework. This framework provides project-based organisations with a proactive and transparent mechanism for managing the assignment and performance evaluation of projects and project managers. The objectives-oriented optimisation-based approach has general application for a multi-level hierarchy of objectives under any organisational settings. It is applicable for planning and managing a given set of business processes or activities under various decision contexts.