Journal of Administrative Management, Education and Training (JAMET) Citation:

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1 Journal of Administrative Management, Education and Training (JAMET) ISSN: Volume (12), Special Issue (5), 20, Available online at Citation: E.Booloordi, Evaluation of Rah-Shahr Company Strategy by AHP-BSC Integrated Approach, Journal of Administrative Management, Education and Training, Volume (12), Special Issue (5), 20, pp

2 Journal of Administrative Management, Education and Training (JAMET) Evaluation of Rah-Shahr Company Strategy by AHP-BSC Integrated Approach E.Booloordi ABSTRACT Every organization needs to adopt a model and methodology for evaluating their strategies. In the present study, with BSC- AHP integrated approach discussed the assessment of Rah-Shahr Company strategy. Therefore, by distributing a questionnaire to 19 questions, divided among a sample of managers and experts of Rah-Shahr Company, identify effective indicators to assess the Rah-Shahr company's strategy. After the one-sample t test, From the 19 mentioned indicators indicators were identified four perspectives in balanced score card. Then with the help of AHP method, weighted to indicators in a customer perspective, Internal processes perspective, Learning and development perspective and financial perspective. After weighing by help of AHP method, the growth rate of investment returns, profitability of projects, research and development costs, amount to maximize the benefits in comparison to the cost and amount of miss projects indicators, among the indicators rank first to fifth respectively. Then, with the help of TOPSIS to rank strategies considered were the company's management and maximum outsourcing and stick to oversee engineering strategy, was recognized the most effective strategy. Key words: Strategy Evaluation, BSC, AHP, TOPSIS Introduction Today's competitive global environment is dynamic and highly unpredictable and Decisionmaking and policy development for survival or success is more complicated. Thus, to handle this unprecedented level of change, Strategic planning and selection of appropriate and effective strategies for organizations has particular significance (Arun & Jagdish, 2003). In fact, the assumption that the future will be similar to today, is wrong. The uncertainty lies in the nature of the future and Right encounter with it is one of the most difficult activities for managers (Aerabi & Rezvani, 2007). Strategy, is the general direction the organization looking ahead to the strategic destination (Rezvani & Sahamkhodam, 2012). The strategy is not an independent process in a management process; the strategy is a logical step in a process that moves the organization of high-level mission, to the work that is done by front-line employees (Huange, 2009). 118

3 Develop a strategy to help organizations provided a creative and innovative act and in contrast shaping their future not be indifferent. This management method lets organizations that using the initial points begun and its activities shaped in such a way that is effective and not only react but also thereby determine their own destiny and build their future (Khorshidi & et al., 2013). Strategies formulation involves analyzing an organization's internal and external environment, analysis of the company's selection by analyzing the internal and external factors, and is to identify the most appropriate strategies that through assessing options based on appropriate indicators are done (Daivid, 2007). In the simplest possible assessment of outcomes associated with the strategy. In fact, there are two distinctive tasks in the evaluation strategy. Initially, the task of determining how to describe the consequences of a strategy along with its effects and another task is judging the success or failure of a strategy based on a set of standards or criteria value (Aerabi & Salehi, 2008). Strategies Assessment methods are varied. Scoring method is a method of screening strategies in which each of the strategies scored and ranked with pre-determined factors (indicators). Also, Method of decision tree evaluates and ranks strategies for coping with predetermined criteria; the difference is that in this method at each stage, some options are removed to the ultimate alternative remain. Scenario method by considering and predicting future conditions eliminated Strategy that does not match any of the positions. This method is basically qualitative and does not provide construction practices for assessment (Kazazi et al., 2011). Quantitative Strategic Planning Matrix (QSPM) by studying the feasibility and sustainability of strategic options in the face of organization environmental conditions and the current situation evaluate and prioritize strategies. Among the methods of multiple criteria decision making methods ELECTRE methods including ELECTRE I, ELECTRE II, ELECTRE III have been used to Assessment strategies (Milani et al., 2007). In fact, this approach measures the balance between internal and external criteria, short-term and long-term goals and also provides financial and nonfinancial measures (Huange, 2009). This model set aims and strategy as the organization's Operations Control Center. It does this by translating the organization's goals to successfully key indicators in four perspectives BSC done: customer perspective, Internal processes perspective, Learning and development perspective and financial perspective. This card registered relationships between current activities and long-term success (Malek akhlagh & et al., 20). Balanced Score Card is a mechanism for implementing the strategy of a business unit provides a comprehensive system of performance measurement. The balanced score card is a measurement tool that manages corporate strategies in a long period (Michalska, 2007). Since the Rah-Shar company's activities is in the field of research and planning and performance management in the fields of architecture, urbanism, obviously the company's strategy should be support the organization to achieve competitive advantage, business development and achieving development-oriented and results-oriented goals. But there are gaps in the executive space to implement the company's strategy. For example, the use of quantitative methods and scientific vacuum in decision-making organizations to create added value; and also create a balance maps between dynamics (activities) company different competitive. Right implementation strategies are another concern for company executives, too. Consideration is that the optimal strategy at the present time does not lead to optimal strategy in the future and if not paying enough attention, there will be no guarantee of future performance. In this study, with BSC- AHP integrated approach the assessment of Rah-Shahr Company strategy will be discuss. At the end, this study 119

4 Journal of Administrative Management, Education and Training (JAMET) attempts to answer the question that does evaluation of Rah-Shahr Company current strategy by AHP-BSC integrated approach is affective in effective implementation and removing the obstacles of company strategies? It should be noted that many of the right strategies developed in the Rah- Shahr company have failed in practice or even some are not executive. Also, due to the lack of correct method to evaluate strategy, Managers have been encountered with uncertainty and awareness of the correct implementation strategies. Balanced Score Card (BSC) According to Kaplan and Norton's Balanced Scorecard four perspectives, including the financial perspective, customer perspective, internal process perspective and learning and growth perspective. Organizations that use the Balanced Scorecard, must adapt it with internal processes specific environment (Khatami firoozabadi & Izadikhah, 20). The main objective of BSC is implementation of the goals and vision of the organization in action. Vision and strategy must be at the center of the management process and Balanced Score Card should be used to translate vision and strategy into four perspectives: financial, customer, internal processes and learning and growth (Kaplan and Norton, 1996). Analytical Hierarchy Process (AHP) AHP was first proposed in 1971 by Thomas L. Saaty. Its purpose was create a structure in decisionmaking that influenced by several independent factors. This method is based on paired comparisons. Decision making begins by creating a hierarchy tree. Tree hierarchy of decision, shows factors compared and evaluated competing alternatives in decision. Then, a series of paired comparisons done. These comparisons, determine the weight of each factor in order to competitor options. Finally, AHP logic combine matrix of paired comparisons with each other which achieved optimal decision (Khatami firoozabadi & Izadikhah, 20). Using analytic hierarchy process in group decision-making makes not only the benefits of group decision making techniques preserved but also Disadvantages such as speed, cost and single thought is resolved (Saaty, 1999). Research methodology This research in terms of purpose and nature is applied research, in terms of data collection is survey, and in terms of method is descriptive research. The statistical population of this research is staffs and managers of Rah-Shahr Company. For this purpose, attempting to send questionnaires to members of the sample who were non-randomly was selected. In this study, data collection tools included two questionnaires. The first questionnaire in order to identify effective indicators to assess the Rah-Shahr company's strategy was used. The response to the questions asked, is the spectrum five-item Likert. The second questionnaire was designed based on the concept of AHP techniques and by doing paired comparison while considering the interaction between dimensions and perspectives, The importance of the BSC perspectives, dimensions and components of the Rah-Shahr company's strategy will be determine. The response to the questionnaire is Saaty 9 point spectrum. 120

5 Identify factors affecting implementation strategy To identify factors affecting implementation of the company's strategy in Rah-Shahr Company, through a questionnaire of 19 questions, respondents were asked to specify how much importance is given to each one. Respondents to determine the important of indicators should be used the numbers 1, 2, 3, 4 and 5. Table 1 shows the level of importance assigned to each item with the specified average and standard deviation of each. Ro w 1 Table 1. Summary results of Questionnaire of indicators Determination Indicator The profitability of projects Scores Total Number Average 3.2 Standard Deviation T- Value Critical Level Result 2 The satisfaction of projects no 3 The loss of Projects Focusing on identifying and attracting new projects Reduced of administrative paperwork Percentage of operations with automation R & D costs Internal return rate of new projects Development of information and communication management Staff satisfaction The job promotion based on merit Staff training programs Creativity and innovation of employees in the organization Staff satisfaction of Performance Assessment System The economic value added growth no The increase in total assets The growth rate of investment returns To maximize the benefits compared to cost Decrease in receivables collection period As specified in Table 1, after computing the average and standard deviation of answers and conducting one-sample t test of 19 indicators, Only indicator as an indicator of the effective implementation of the Rah-Shahr strategy were approved. Calculate the weights of criteria and indicators Table 2 shows the result of the calculation the weights of criteria and indicators. Also, the final weight of each indicator, Multiplied by the relative weight of each indicator is obtained in the relevant criteria weight shown in this table. 121

6 Journal of Administrative Management, Education and Training (JAMET) Table 2. Final weight of the indicators influencing on evaluation strategy row criteria customer internal process learning and growth financial Weight of criteria indicators The profitability of projects The loss of Projects Focusing on identifying and attracting new projects Reduced of administrative paperwork Percentage of operations with automation R & D costs Internal return rate of new projects Development of information and communication management Staff satisfaction The job promotion based on merit Staff training programs Creativity and innovation of employees in the organization The economic value added growth The increase in total assets The growth rate of investment returns To maximize the benefits compared to cost Decrease in receivables collection period Relative Weight of indicator final Weight of indicator Evaluation Rah-Shahr proposed strategies by using of TOPSIS After extensive evaluation, the following four strategies as proposed strategies were introduced in Rah-Shahr Company: A: Diversification and development activities in the form of holding B: Investments in construction equipment C: Active participation in the construction industry and Implementation of the flagship project in manufacturing building and housing D: maximum outsourcing and stick to oversee engineering After determining the four strategies, asked four groups of decision makers, to estimate the effect of each of these four strategies on each of indicators by using numbers one to ten. Then used TOPSIS method to calculate the scores of respondents which end result is shown in Table 3. Strategy A B C D Table 3. Calculation C for each of the four proposed strategy

7 As indicated in Table 2, maximum outsourcing and stick to oversee engineering is the most effective strategy for Rah-Shahr Company. Conclusion and Suggestion Prthis study, conducted by aim of evaluating Rah-Shahr Company strategy by BSC- AHP integrated approach. Therefore, by distributing a questionnaire to 19 questions, divided among a sample of managers and experts of Rah-Shahr Company, identify effective indicators to assess the Rah-Shahr company's strategy. After the one-sample t test, From the 19 mentioned indicators indicators were identified four perspectives in balanced score card. Then with the help of AHP method, weighted to indicators in a customer perspective, Internal processes perspective, Learning and development perspective and financial perspective. After weighing by help of AHP method, the growth rate of investment returns, profitability of projects, research and development costs, amount to maximize the benefits in comparison to the cost and amount of miss projects indicators, among the indicators rank first to fifth respectively. Then, with the help of TOPSIS to rank strategies considered were the company's management and maximum outsourcing and stick to oversee engineering strategy, was recognized the most effective strategy. As it is clear, Companies performance due to macro-economic and political environment in which organizations surveyed do not have the least impact on reducing or removing them. Factors such as war, change of customs laws, tense political relations with other countries, change management and continuous changes in laws and currency fluctuations and sanctions, including those that Rah-Shahr Company do not have the least impact on them. But in many cases that the organization is concerned, we can say that the evaluation of the company's strategy can be very helpful. As the results were expressed, the growth rate of investment is considered as the main indicator in evaluating strategies. There is a fixed principle in culture of investment that capital is Elusive from risk and danger and tends toward efficiency and profits. That's why the risk-averse investors refuse to arrival of their capital to where there is a risk of their investment or uncertain horizon is about profit and principle of their capitals. Investment As a financial decision, are always two components: risk and returns that the two combinations offer various investment combinations. On the one hand, investors looking to maximize his income from investment and on the other hand are faced with uncertainty prevailing in financial markets that the latter factor, makes access to investment income uncertainty. In other words, all investment decisions based on the relationship between risk and return is done. Therefore, the identification of methods and strategies that lead to the highest rate of return on investment is required. This project profitability emerges in the second indicator of the importance of present research. Research and development department is necessary and vital part of all organizations that intend to participate actively in domestic and foreign markets and Which is set to compete in the national and international levels have undeniable importance. The structure of this department has been designed using the principles of strategic management, the organization aims to adapt to foreign conditions and increases the success rate of it. Also has the ability to perform contingency management with greater ease than other departments. Therefore, have been proposed to company management to pay more attention to the issue of research and developments. According to the financial perspective, the following proposals will be presented to Rah-Shahr Company: 123

8 Journal of Administrative Management, Education and Training (JAMET) In order to evaluate the performance of project managers in all cases, Corporate Finance units obliged to calculate and report their investment growth rate. Project internal rate of return of the changes increase the accuracy of decisions. Company moves towards projects and processes that have a higher economic value will be effective in allocation. Obligating business unit from loss of the company's to the delay in collection of receivables will increase Necessary knowledge based on activities to increase the collection of receivables. According to the customer perspective, the following proposals will be presented to Rah-Shahr Company: Awarding Retail sales commissions to staff members in accordance with the adopted projects. The business unit's obliged to submit reports on the projects that fail due to lack of participation in the tender and loses bid. According to the learning and growth perspective, the following proposals will be presented to Rah-Shahr Company: Continuous monitoring employee satisfaction Accurate educational Need assessment Rewarding the creative suggestions According to the internal process perspective, the following proposals will be presented to Rah-Shahr Company: Increased research and development costs Increase knowledge sharing among employees References Aerabi, s. m. & rezvani, h. r. (2007). Strategic coordination regarding the business and marketing strategy and organizational performance research pharmaceutical companies in Iran. Journal of Management Sciences in Iran. Vol. 2. No. 5. Aerabi, s. m. & salehi, m. (2008). Special urban strategic management. No. 3. Daivid, f. r. (2007). strategic management. Translated by: ali parsaian and seyyed mohammad aerabi. Tehran: Cultural Research publication. Kazazi, a., amiri, m. T rahbar maghsoodi, f. (2011). Assessment and prioritization strategies, using Electre III in fuzzy environment (case study: tamad company). Journal of Industrial Management Studies. Vol. 8. No. 20. Malek akhlagh, E., noe pasand asil, S. M. & jamali abbasali, k. (2011). Iran's explanation and analysis of the automotive industry to evaluate strategies to enter foreign markets. Explore Business Administration. No. 9. Rezvani, H. R. & Sahamkhodoom, M. (2012). Business strategies correspondence with environmental uncertainty (case study: Pegah of fars and sham sham companies). Explore Business Administration. Vol. 4: Khatami firooz abadi, a. & izadikhah, m.m. (20). Designing Strategic Model for evaluating the performance of the construction companies with the combination of BSC and AHP. Organizational Culture Management. Vol. 11. No Arun, S. & Jagdish N. S. (2003). Web-based marketing The coming revolution in marketing thought and strategy a Department of Marketing, University of Miami, PO Box 2487, Coral Gables, FL 324, USA. Huange, Hoa- chen, (2009). Designing a knowledge-based system for strategic planning: A balanced scorecard perspective", Expert Systems with Applications, 36(1):

9 Khorshidi, A., Mastaneh, Z., Javidkar, M., (2013). The Balanced Scorecard (BSC), as a Tool for Evaluation of Organizational Strategies, Journal of Educational and Management Studies, 3(4), Michalska, J., (2007). The usage of the Balanced Scorecard the estimation of the enterprise s effectiveness, Journal of Materials processing Technology, 2(3): Milani, A. S., Shanian, A., El-Lahham, C., (2007). Using different ELECTRE methods in strategic planning in the presence of human behavioral resistance, Journal of Applied Mathematics and Decision Sciences, Vol. 20 (3). Kaplan, R.S. and Norton, D.P. (1992). The Balanced scorecard: Measures that Drive performance. Harvard Business Review, January-February, Saaty. T.L. (1999). "Fundamentals of the analytic network process". Kobe Japan: ISAHP, August, 12. ELAHE BOOLOORDI, Ms. Student, Executive Management, Islamic Azad University of Saveh, Saveh, Iran Corresponding author: elahe_booloordi@nikran.com 125