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A method for designing a strategy map using AHP and linear programming

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  • Quezada, Luis E.
  • López-Ospina, Héctor A.

Abstract

This paper presents a method to support the identification of the cause-effect relationships of strategic objectives of a strategy map of a balanced scorecard. A strategy map contains the strategic objectives of an organization, grouped into four perspectives (a) finances, (b) clients, (c) internal processes and (d) growth and learning, all of them linked through cause-effect relationships. The issue addressed in this paper is the identification of those relationships, topic in which the existing literature is scarce. A previous work was revisited, which uses the Analytic Hierarchy Process (AHP) to establish the “importance” of the arcs (relationships) of a strategy map. That work then deletes those arcs with an importance lower than a given threshold level defined by the authors. This paper goes beyond by selecting the arcs using a multi-objective linear programming model (LP). The model has two objectives (a) to minimize the number of selected relationships and (b) to maximize the total importance of the selected relationships. It is interested to see that a trade-off between both objectives is produced, so a control variable is used to incorporate the importance given to both objectives by managers. The paper also shows some applications of the method and their analysis.

Suggested Citation

  • Quezada, Luis E. & López-Ospina, Héctor A., 2014. "A method for designing a strategy map using AHP and linear programming," International Journal of Production Economics, Elsevier, vol. 158(C), pages 244-255.
    • Handle: RePEc:eee:proeco:v:158:y:2014:i:c:p:244-255
    DOI: 10.1016/j.ijpe.2014.08.008
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    References listed on IDEAS

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    Cited by:

    1. Doruk Sen & Sakir Bingol & Ozalp Vayvay, 2017. "Strategic Enterprise Management for Innovative Companies: The Last Decade of the Balanced Scorecard," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 7(1), pages 97-109, January.
    2. Sato, Yuji & Tan, Kim Hua & Tse, Ying Kei, 2015. "An integrated marginal analysis approach for build-to-order products," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 422-428.
    3. Suárez-Gargallo, Carlos & Zaragoza-Sáez, Patrocinio, 2023. "A comprehensive bibliometric study of the balanced scorecard," Evaluation and Program Planning, Elsevier, vol. 97(C).
    4. Chanthawong, Anuman & Dhakal, Shobhakar, 2016. "Stakeholders' perceptions on challenges and opportunities for biodiesel and bioethanol policy development in Thailand," Energy Policy, Elsevier, vol. 91(C), pages 189-206.
    5. Khanmohammadi, Ehsan & Malmir, Behnam & Safari, Hossein & Zandieh, Mostafa, 2019. "A new approach to strategic objectives ranking based on fuzzy logarithmic least squares method and fuzzy similarity technique," Operations Research Perspectives, Elsevier, vol. 6(C).
    6. Varmazyar, Mohsen & Dehghanbaghi, Maryam & Afkhami, Mehdi, 2016. "A novel hybrid MCDM model for performance evaluation of research and technology organizations based on BSC approach," Evaluation and Program Planning, Elsevier, vol. 58(C), pages 125-140.
    7. Ho, William & Ma, Xin, 2018. "The state-of-the-art integrations and applications of the analytic hierarchy process," European Journal of Operational Research, Elsevier, vol. 267(2), pages 399-414.
    8. Moraga, Javier A. & Quezada, Luis E. & Palominos, Pedro I. & Oddershede, Astrid M. & Silva, Hernán A., 2020. "A quantitative methodology to enhance a strategy map," International Journal of Production Economics, Elsevier, vol. 219(C), pages 43-53.

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