On the application of analytic hierarchy process in institution-wide strategic planning.

Author:Jolayemi, Joel K.
Position:Report
 
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INTRODUCTION

Institution-wide strategic planning (IWSP) is an institution-wide planning process by which a college or university develops its mission/vision, goals, and strategies; determine the necessary priorities, procedures and action plans and make decisions on how its resources can best be allocated in order to achieve the mission/vision.

According to Lerner (1999), strategic planning in organizations originated in the 1950s. It migrated to higher education from the corporate world about 40 years ago (Fain, 2007). Its use in higher education has exploded or become mainstreamed over the last 20 years (Dooris, 2003; Fain, 2007). There is a lot of benefits that colleges and universities can derive from IWSP. Many of these benefits have been highlighted by Fain (2007), Green et al. (1979), Lerner (1999), and Schendel & Hatten (1972).

Strategic planning in a higher institution is a complex process that involves many steps, active participation of the institution's key stakeholders, collection and analyses of quantitative and qualitative data, forecasting, prioritization of issues and plans, planning and allocation of resources and/or budgeting and budget allocations. To produce a good and high-quality strategic plan that will effectively carry an institution to its dreamed future, the performance of all these steps and activities/tasks must be based on the applications of group/management techniques, analytical methods, and quantitative techniques.

The AHP is one of the techniques that have enjoyed very little application in strategic planning, despite the fact that it has garnered enormous popularity and world-wide acclaim as a very powerful and useful planning, decision-making, and problem-solving tool. The AHP can be used effectively for selecting/prioritizing issues, goals, objectives, strategies, and action plans and for allocating resources during any strategic planning process. In literature, apart from research works by Arbel & Orger (2003), Kahraman et al. (2008), Kangas et al. (2001), Liberatore & Nydick(1997), Osuna & Aranda (2007), Saaty (1976), and Yuksel & Dagdeviren (2007), we have not come across any research on the application of AHP in strategic planning. Four of these authors--Kahraman et al. (2008), Kangas et al. (2001), Osuna & Aranda (2007), and Yuksel & Dagdeviren (2007)--focus on the application of AHP for prioritizing the SWOT factors and for evaluating and prioritizing strategic alternatives with respect to the factors during the development of basic strategic plans.

After critically reviewing the AHP and some other methods and techniques like goal programming (GP), multi-attribute utility theory (MAUT), and scoring models that are used for systematic evaluation of alternatives, Liberatore & Nydick (1997) discuss the applicability of AHP for a variety of academic planning and evaluation problems in higher education and demonstrate the applicability via two case studies/examples. One of the cases is on the ranking of research papers for research awards. The other one relates to IWSP.

The other two authors, Abel & Orger (2003) and Saaty & Roggers (1976), apply AHP for addressing special strategic problems. Abel & Orger (2003) present an application of AHP methodology to the evaluation of bank mergers and acquisitions strategy while Saaty & Roggers (1976) apply the AHP to construct a composite and likely future for higher education in the United States during the period 1985 to 2000.

While it is very important to prioritize SWOT factors as have been done by Kahraman et al. (2008), Kangas et al. (2001), Osuna & Aranda (2007, and Yuksel & Dagdeviren (2007), we are of the view that the evaluation and prioritization of the key elements of strategic plans should not be limited to the prioritization of only these factors. For any strategic plan to succeed, the relevance of its strategic objectives/goals, strategies, and action plans to the achievement of the mission or vision must be seriously evaluated. In conventional strategic planning, objectives/goals, strategies and/or action plans are developed for the main purpose of achieving an organization's mission or vision. It is the vision or mission that sets long-time and laudable objectives/goals for an organization and focuses it on the achievement of the goals or objectives. Goals/objectives, strategies, and action plans should be evaluated with respect to their importance in achieving the mission.

Among the research works that we have come across so far on the application of AHP in basic strategic planning, the work by Liberatore & Nydick (1997) is the only research in which the "AHP" is applied to prioritize actions plans via their implicit importance or relevance to objectives and strategies (AHP is put under inverted comma here because, as will be seen in the next section, what the author applied is not the real AHP). Thus, the principal objective of their paper or of their applying the "AHP" is to select and prioritize the action plans an institution must focus on in order to achieve or operationalize its mission. For this, we find their approach very interesting and see it as a novel and useful approach.

Nonetheless, as will be seen in the next section, after a closer look at their approach, we discover a lot of opportunities for making some major and innovative improvements on it in order to make it more applicable and adoptable. The improvement process has the potential of producing a new and very useful framework for the proper applications of AHP in prioritizing the goals, objectives, strategies/action plans of a strategic plan.

Hence, in this research, we will critically review Liberatore and Nydick's approach for applying AHP in IWSP. The review will highlight the inadequacies of their approach. Some of these inadequacies relate to some mistakes and errors that can be committed by ordinary strategic planners and users of AHP. Thus, highlighting the inadequacies will be very useful to strategic planners and AHP users and encourage the application of the powerful technique in strategic planning.

Although their work was published in 1997, it is still the only published work we have ever come across on the application of the AHP, or of something close to the AHP, in prioritizing objectives/goals, strategies, or action plans with respect to their importance in achieving an institution's mission or vision. This makes their research to still be very important and relevant today as it was in 1997. Therefore, a critical review of the approach will be found very useful and relevant by today's strategic planners and users of the AHP.

After critically reviewing their approach and discussing its inadequacies, we will develop a framework for applying the AHP in prioritizing strategic goals/objectives, strategies, and action plans. The development of the framework will be based on extensive modifications, expansions, and extensions of Liberatore and Nydick's approach. Instead of using a single criterion for prioritizing action plans as done in their approach, we will develop and use more than one criterion. An extended version of the institution-wide strategic plan used by Liberatore & Nydick (1997) will be used to illustrate the framework. The formulated objectives in the strategic plan used by the authors for illustrating their approach have the same set of strategies. The objectives in the strategic plan that will be used in our illustrations will have different sets of strategies. In practice, a strategic plan in which all objectives have the same set of strategies is rare to come by.

The fact that our framework will be based on extensive improvements, extensions, and expansions of Liberatore & Nydydick (1997) will make it a very useful and valuable tool for IWSP.

REVIEW OF LIBERATORE AND NYDICK'S APPROACH FOR APPLYING THE AHP IN IWSP

Liberatore and Nydick's approach is developed for any university that may wish to apply AHP to formalize its strategic planning process and reach a consensus on the action plans that will be pursued over a five-year planning horizon. Their approach is based on the MOS (mission-objective-strategy) model. Unfortunately, the process followed by the authors (see Figure 1) in doing this is actually based on the application of the tree diagram not on the AHP. In other words, they believed they were applying the AHP while, in fact, they were actually applying the tree diagram.

In strategic planning, a tree diagram is used to identify the goals to be achieved in order to achieve the mission/vision; the objectives to be achieved in order to achieve the goal; the strategies needed for achieving objectives; and the action plans for achieving strategies. On the other hand, the analytic hierarchy chart (AHC) (i.e. the AHP hierarchy chart) is made up of different levels consisting of goal/objective, criteria, sub-criteria, and alternatives (Saaty, 1980). Their "AHC" does not have a single criterion on it (see Figure 1). The only...

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