Hyperknowledge and Expert Systems: A Case Study of Knowledge Formation Processes

Transcription

1 Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences Hyperknowedge and Expert Systems: A Case Study of Knowedge Formation Processes Pirkko Waden and Christer Carsson Institute for Advanced Management Systems Research (IAMSR) Abe Akademi University, DataCity A 3208,20520 Bibo, Finand Abstract Strategic management is defined as the system of action programs which form sustainabe competitive advantages for a corporation, its divisions and its business units in a strategic panning period. We have deveoped a system caed Woodstrat to serve as a support system for these action program activities on both the corporate, the divisiona and the business unit eves. The system is moduar and is buit around the ogic of strategic management. The innovation in Woodstrat is that these modues are inked together so that essentia competitive eements interact to form the strategic management context. The intermoduar inks are based on expert knowedge on strategic management; and user-deveoped expert knowedge is aso used to guide the users trough the process of working out sustainabe competitive advantages. The process is made user-supportive with a hyperknowedge user interface. 1. Introduction Among managers strategic management is normay understood to cover both the strategic panning process and the impementation of its resuts. It is an integrated program of means by which a firm secures and sustains competitive advantages [I]. This invoves understanding and transforming some proper and consistent seection of strategic management concepts into specific strategic action programs. In our specific context, the Finnish forestry industry, this transates in to working out how to position strategic business units of a corporation such that the corporation can buid and sustain competitive advantages in a very tough European market. Strategic management has been the focus of much controversy [2], [3], [4] during the ast few years. The first issue is that much of the information and knowedge used by senior managers in strategic management, but aso in topeve panning and decision making, is characterised by the unfortunate anomay that numerica precision and reevance for strategic decisions tend to become conficting considerations (51. There is a more genera probem behind this observation: imprecision is the basis for richer, more meaningfu and better information [6], [7]. The second issue is the ongoing controversy between various schoos of thought in strategic management [3]; one of the dominating schoos seems to argue against the use of computer-supported systems (cf. Mintzberg [3]) which are described to produce information which ack in richness, is too aggregated, is ate and unreiabe. hard information is often imited in scope, acking richness and often faiing to encompass important noneconomic and nonquantitative factors; much hard information is too aggregated for effective use in strategy making; much hard information arrives too ate to be of use in strategy making; a surprising amount of hard information is unreiabe; In his criticism of the Mintzberg approach to strategic management Ansoff [2] describes this as aimed at an impicit strategy formation, which amounts to strategy and capabiities being aowed to evove organicaty, through tria and error, and thus without any expicit strategy formuation. This emergent strategy approach reies on the interaction of peope in an organisation to eventuay come up with a joint strategy. Nevertheess, strategic management is done in practice, quite successfuy. In our experience the process is often compex and time consuming, and there are a number of moments which coud be made more effective and with better quaity if some support system technoogy woud be appied. This beief is stated despite the Mintzberg observation [3] that nothing much coud be gained with computer support. As a starting point, we need to construct a conceptua skeeton: strategic management is the process through which a company for a chosen panning period (i) defines its operationa context, (ii) outines and decides upon its /W $4.00 Q 1996 IEEE 73

2 Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences -!J95 shtegic goas and ong-term objectives, (iii) expores and decides upon ita strengths, weaknesses, opportunities and threats, (iv) formuates ita sustainabe competitive advantages and (v) deveops a program of actions, which expoit its competitive advantages and ensure profitabiity, financia baance, adaptabiity to sudden changes and a sound deveopment of its capita structure. In order to show that it coud be done, we have constructed a hybrid object-oriented expert and hyperknowedge system to serve as a support system for the strategic management process. We wi show that the hybrid system aows both systematic modeing and adaptive, interactive earning by combining Mint&erg s criticism of strategic panning with the ideas of cognitive mapping and hyperknowedge (section 2); then we wi demonstrate that the system is usefu as a support system for strategic management (section 3), and finay summa&e the knowedge formation processes we have seen taking pace among tbe managers who have worked with the system in a series of studies in This paper is a continuation of previousy pubished research work (cf. PI, [91, WI, N-1, WI). - - The assumption of quantifiation: the strategy making process can be driven by hard data, and qmmtitative aggregates of detaied facts about the organisation and its environment. The assumption ofpredetermination: this emphasises the (wrong) beief that management needs prepanned actions in order to act wisey; this is possibe ony if the context for strategy making is stabe, or at east predictabe, the process itsef as we as its consequences (strategies) can he predetermined. Having outined his path of attack Mintzberg then commits himsef to deveop arguments contrary to each assumption, and thus to show that the rationaity assumed in strategic panning is a grand faacy : because anuysis is not synthesis, strategic panning is not strategy formation. The Mintzberg description of strategic panning is - with some simpification - a process in which the four asaumptions are used to formuate some basic scenarios which then is inked with a standard, numerica panning framework, i.e. something ike the foowing construct (cf. fig. 1): 2. The Mintzberg faacy, strategy formation and cognitive mapping The Ansoff-Mint&erg controversy may seem academic and without interest for the construction of support systems in strategic management; unfortunatey enough this is not the case - the doubt the controversy has created about the usefuness of computer support reappears as resistance to the use of any kind of knowedge based suppoti systems. The ony remedy seems to be to take issue with the key arguments and show that they are wrong; there is aso a bonus to be gained in the process - we can verify that the support system we have constructed wi avoid most of the common pitfas in the discussion. In a recent book Mintzberg [3] expands his criticism of the most commony used approaches to strategic panning. He finds a number a imitations and probems with strategic panning per se, which he summarises as the foowing key assumptions (cf. [3], pp ): The assumption of formaisation which states that the strategy making process can be programmed by the use of systems. This amounts to a genera assumption that anaysis can provide synthesis, which Mintzberg finds to be a major eap of faith. The assumption of detachment: if a strategic panning system does the thinking then thought is assumed to be detached from action, strategy from operations, ostensibe thinkers from rea doers, and strategists from the objects of their strategies. Fig. 1: Strategic panning fmmework. An aternative strategy formation process woud be one in which a strategy emerges as a resut of working through and articuating strategic visions, which are derived from quaitative beief systems. The notion of an emerging strategy coud be described in the terms of fig. 2; we have tried this notion in a series of studies with the Woodstrat in : (i) in interactive mode1 buiding seminars with the managers, in which the basic ogic of the system was formed; (ii) in studies of the knowedge bases used for actua strategic panning, and (iii) in workshops with the managers, in which they buit their strategic pans.

3 Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences Fig. 2: Strategy formation process. The managers have visions of how to create and articuate sustainabe competitive advantages, which converges as a synthesis of visions of a market position (MP) competitive position (CP), productivity (PRO), investments (INV) and cost effectiveness (CES); the visions are enhanced or restricted by facts about the context, which identify the market potentia (EXT), key competitive factors (by SWOT), the competitors (COMP) and the set of possibe strategies (STRAT); the visions and the facts are combined to generate options and form strategic action programs which are defined both for the strategic business unit (SBU) and corporate (CORP) eves; finay, the visions and the strategic action programs are evauated in terms of profitabiity and capita structure (specified as an income estimate (INC), a baance estimate (BAL) and financing (FIN)) which represent stakehoder interests. This description is quite cose to Eden s [16] formuation of the process, but there is aso a major difference between Eden and Mintzberg: the atter proves the faacies of strategic panning by quoting various sources, and stating that they have obvious errors, in order to show that strategic panning must fai; the former shows a practica way to cope with compexity in an ordery and systematic fashion, and proceed to demonstrate that quaitative beief systems can both be anaysed and synthesised; he, furthermore, demonstrates that this can be done with computer support. In our work with the Woodstrut aso we have seen that modern information technoogy makes it possibe for ine managers to use forma procedures to fonn nove strategies for their key products in their most important market segments; this in rea time and in anticipation of strategic moves by their key competitors. Coin Eden [16] describes cognitive maps as actionoriented representations of the word. They are buit on the premise that assertions about strategic issues shoud have consequences and impications; these are buit on quaitative beief systems, which may differ between the members of an organisation participating in a strategy formation process. Every strategy is constrained and enhanced by a network of other strategies, which makes for a compex and i-structured context. Cognitive maps - when formaised with computer-supported toos - can be used to show and simuate the interaction and the interdependencies of mutipe beief systems. There is a technoogy avaiabe to accompish this - it has been caed hyperknowedge. The idea of creating a hyperknowedge environment is a fairy recent one (cf. [13], [14], [15]). Chang et a [13] introduced it with a cognitive metaphor,... a decision maker cognitivey possesses many diverse and interreated pieces of know- edge (i.e. concepts)... which appears cose to our metaphor of the strategy formation process (cf. fig.2). There are some usefu characteristics of a hyperknowedge environment (cf. []): (i) the user can navigate through and work with diverse concepts; (ii) concepts can be different epistemoogicay, (iii) concepts can be organised in cognitive maps, (iv) the concepts can be made interreated and interdependent, (v) reations can be structured or dynamic, and (vi) reations can change with or adapt to the context. There are aso a coupe of probems with hyperknowedge (cf. [12]): (vii) it has turned out to be too informa and unstructured for handing compex probems, and (viii) users get ost in a conceptuay over- rich environment, i.e. they ose touch with the task they try to accompish. Some ways to hande these probems have been shown in [], and have been incorporated in the knowedge-based support system discussed here. 3. Woodstrat The Woodstrat was deveoped as a series of prototypes in ; after the first versions with a Lisp-based expert systems she proved to be too infexibe, the next versions were buit with Toobook, which introduced the notion of Izyperknowfedge. The present fu-scae system was buit as a hybrid system in Visua Basic in which the features of the Lisp and Toobook versions were rebuit as objects. With Visua Basic it was possibe to fuy expoit the graphica user interface (GUI) technoogy; we have used mutipe-document interface (MDI), object inking and embedding (OLE), dynamic data exchange (DDE), effective graphics and the possibiities to add custom contros by caing procedures in dynamic-ink ibraries (DLLs). The finished appication is an.exe fie that uses a runtime DLL. Let us work through the Woodstrut system step by step: Business Unit I is one of the SBUs (the name and a the figures are fictitious); it is operating in severa countries, with we-defined product groups and specified customer segments. Markets and segments differ for different prod- 75

4 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences uct groups, and their importance varies over the panning period; the 1993 voumes and prices are used as starting points (the two sma input boxes in the ower eft hand corner, cf. fig. 3) in order to caibrate the estimates to be given. The strategic Market Position (MP) is detennined hierarchicay: segments are defined for each product group and product groups are seected for each country; for each segment demand and price deveopment estimates are made and consoidated to product group and country eves. The weighted average of the growth and price deveopment estimates update the Net saes ine in the income statement (cf. fig 7) through functiona inks when the CEO-button is activated. In this way the market visions are formuated and immediatey evauated in terms of the income statement. Fig. 4 : Competitive Position Fig. 3: Market position. The Woo&rat is supported with a fairy extensive database of country specific economic indicators and reated forecasts, and market and segment specific forecasts on the deveopment of price and demand eves. We found out that this heps the SBU managers to caibrate their assessments of growth and price deveopments. The Competitive Position (CP) is activated (with ogica inks) from the same eve as the MP, and the MP and CP are worked out in parae. The CP is determined in terms of critica success factors (these are SBU-specific and were determined successivey in a series of seminars with the managers) by assessing the reative changes to the previous year, and as changes to the CP worked out for the previous year. This process is one of reassessing visions on MP when evauated against critica success factors and the reative strengths of the competitors. cf the principes shown in fig. 2. Fii. 5: Competitors Three seected competitors are evauated on the same critica success factors; as this is a benchmarking approach, quite a ot of time was used to seect good competitors; CSF and CP averages were determined for the competitors; the reative difference in competitive positions is cacuated and transferred with ogica inks to the CP, where it is used as a basis for assessing reative strategic CPs. There are functiona inks to MP, which are used to cacuate an estimated deveopment in voumes and prices; this function is ony vountary as the SPU managers can aways make their own estimates and thus override the suggested deveopment. This process anchors visions of reative CPs to facts (as they are known) about competitors. A summary of reative strategic CPs and the expected deveopment of the studied markets is shown in a summary graph (cf. fig. 6), which now is the first summarised, visua consequence of the MP and CP visions. 76 Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) BEST COPY AVAILABLE

5 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences Tota Saes I50 IQ0 IQ!!fi!z I* W-B Q I s Year Market Deveopment /+ghfzt 1: 1994 I ) 199s Fig. 6: Market Graph The third eement, the Production Position (PR0)2, estimates productivity as a consequence of the MPs and the CPs. Production som is detemrined and transferred from the growth and price deveopment specified in the MP; productivity is determined as a weighted average of severa factors - abour, raw materia, eectricity, steam and technoogy. The productivity factors are updated from corresponding cost ines of the income statement (cf. fig 7) through functiona, knowedge based inks. The productivity and profitabiity measures are numerica consequences of key success factors of the MP and CP visions. The CEO Report is activated from the summary eve of MP. Functiona, knowedge based inks from the MP and a modue for raw materia costs update the revenue and cost ines of the projected income statement (cf. fig. 7), which is inked with the baance sheet, the statement of funds and the key ratios; a these modues update each others with ogica, knowedge based inks in a way which foows proper accounting principes. Most of the ines are further specified in more detais, but the summary reports are mosty sufficient for strategic panning purposes. Fig. 7: Income Statement The main benefit with the automatic inking of the modues of the CEO Report is that the managers do not have to interrupt their work on strategic assessments in order to check on the profitabiity and the financing - a task which is hard on non-speciaists. The inks have aso turned out to be major time-savers. As Return on Net Assets (RONA) is a forestry industry standard, a graphica simuation modue for RONA aows the managers to quicky find critica saes or operating cost eves for reaching target eves of the RONA (cf. fig. 8): Fig. 8: RONA Simuation A feature which won much approva among the SBUmanagers were the integrated modues for simuating investment aternatives and corresponding aternative financia modes, which showed their impacts on cash fows and key ratios (cf. fig. 9, 10). cf the principes shown in fig. 2. Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) 77 BEST COPY AVAILABLE

6 Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences Fig. 9: Investment Pan competitors; the resuts were used to estabish reative competitive positions; these positions were then used to estabish a new set of reference points for the estimates of price and voume deveopments; iv. the price and voume estimates were reiterated with the proposed product mix (PM) combinations, which are essentia for estimating the use of raw materia (a major cost factor) and production capacity; V. the MP, CP and PM modues are then used to determine the net saes and variabe costs of the income statement in the CEO modue; when worked out with a compete set of variabe and fixed costs the resuting profit is either satisfactory or nonsatisfactory; in the atter case it triggers reiterations of the MP, CP and PM modues; if satisfactory it is further evauated in terms of the capita structure, the use of funds and key ratios; reiterations can be triggered on a number of reference points; vi. the CP detennines the need for investments; the corresponding modue triggers the financing of these investments; reiterations are triggered by reference points in the income statement, the capita structure, the use of funds and key ratios; vii. the MP and the CEO modues update and trigger the determination of the productivity index; reference points induce reiterations of investments and of the MP and CP modues; There are a number of minor processes aso incuded in the system, but the major processes shown in (i) - (vii) represent the strategy fonnation process. Fig. 10: Financing Pan Woodstrut is used for strategy formation, which was seen in the use of the various modues: i. the database of exxterna data served as an instrument to estabish reference points for growth and price estimates; ii. the MP modue served both anaysis and synthesis; it was first used to buid estimates of price and voume deveopments for specific product groups in specific market segments; then it was used to get a feeing for the expected deveopment in a product group or in a country; then the estimates were reiterated unti some acceptabe eves were reached;... III. the CP modue was used for simiar anaysis / synthesis iterations in the same countries, product groups and market segments, but the iterations were now in terms of critica success factors; reference points for these were estabished with anaogous iterations of the critica success factors for three key 4. Experiences of strategy formation with Woodstrat. The Woodstrat was run in 9 SBUs in a series of seminars this spring3 in sessions which invoved about 40 managers in a 2-month period and cuminated in presentations given by the COOS of the SBUs to the corporate board. In these presentations they used Woodstrut to demonstrate their strategic soutions and to show the interna ogic of their pans. As we had incuded an on-ine Memo function in the system and had charged the mangers with continuousy commenting on their assessments and concusions in a modues, we coud foow their reasoning. The most effective management team coected 15 pages of information in their Memo. 3 The system has now been used in an additiona 8 SBUs with more than 40 managers participating. 78 Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) BEST COPY AVAILABLE

7 Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences In the foowing we have briefy summarked some of the experiences we coected from the SBUs; a more detaied report on the findings wi be forthcoming. Market Position. compared with SBUs from other divisions our assessments of market and competitive positions are made more in depth;. market information wi from now on be updated by the marketing managers with assistance from the internationa saes offices; the Woods&at system wi be in a continuous use;. working through the MP took about 70% of the tota panning time; we have never discussed the markets as thoroughy before; The MP modue heped in determining the expected voume and price deveopment in key market segments. The managers were abe to determine their expected market deveopment in more detai than ever before, and aso found out that they now have a basis for quick and systematic evauations of unexpected changes in both voumes and prices. The rather abstract visions buiding described by Mintzberg turned out to be very practica and precise, and to serve as a basis for strategy formation. The CP modue was one of the key modues from the very beginning. In most SBUs it was found out that: (i) the management team does not know their key competitors as we as they wouid ike to know them; (ii) they are not too we aware of what their critica success factors are, and what impact various eves of these might have on their success in various market segments, and (iii) they wert not too sure about bow they coud improve on these factors or how this improvement woud work out in a chosen panning interva. The CP modue offered a possibiity to work out a impications of the various factors systematicay, and it offered a good basis for expaining their competitive soutions and defending their requirements for investments in a manner much more persuasive than before. The CP modue required quite a ot of work, which fet tedious from time to time, but it was probaby the most rewarding of a the modues. Competitive Position. the probem is to get the information about our competitors;. it required a ot of work, and it was difiicut because our competitor information is not sufficient;. we woud ike to have a possibiity to change the critica success factors, as we intend to change our product mix during the panning period; The hyperknowedge environment made the evauations of reative CPs fast and efficient. A summary of the cornments showed the basic probem to be the ack of sufficient knowedge of the competitors (which in our mind was surprisingy good). The gradua assessment of reative competitive positions worked very we despite the fact that the assessments were basicay anaytica; the supporting discussion in the Memo showed systematic and consistent reasoning about (i) the abiities of the competitors and (ii) the possibiities to deveop critica success factors through investments and increased productivity. CEO Report. working through it took about 10% of the tota panning time, very straight-forward;. we think the CEO was (in a technica sense) the most compex part of the system;. a few more inks coud be added; interest costs shoud be activated for reservations, for ong-term investments and for corporate overbead costs paid in advance; The users were quite famiiar with buiding the eements of the CEO Report as this part of the strategy formation process has been routine for a number of years. The contribution of Woodstiat was that the knowedge based inks made operations more precise and much faster than before; a required operations were fuy automated and a good seection of graphics objects heped to produce effective and usefu summary reports. The investments modue, with an integrated financing modue, was buit to hep the SBU managers work out their investment proposas. It was found to save quite a ot of time as compex and detaied investment pans, with a number of aternatives schedued for a number of years, and their impact on financing, key ratios, capita structure, etc. coud be evauated. 79

8 Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences Investments. maintenance investments shoud he taken as defaut, as they have to be made anyway;. there shoud be a possibiity to run simuations on strategic investments;. there shoud be a possibiity to see a summary of ai the investments per year; The investments modue, and its interinked financing modue, was technicay more advanced than the other modues; it seems that investment anaysis was intuitivey understood by ony a seect few, but that Woouktrat made the ogic quite cean for a SBU managers. Production Position. advantages: no additiona work is needed in order to get the productivity; ai cost factors are inked from existing data in the CEO Report, generay very difficut to measure; abour and energy are important factors, raw materia is standard;. there shoud be a possibiity for benchmarking; the figures are more or ess abstract; At some point we amost beieved that the determination ofproductivity is a form of back magic, as nobody seems to be abe to come up with a reasonabe method. Finay, we buit and tried out our own version of the productivity measures, and they seemed to work. Productivity is an abstract and compex measure, and the idea was to gain some insight into the effects of the MP and CP visions of changes in productivity. There are knowedge based inks to simpify the cacuations, and (as we found in the Memos) the users turned out to gain an intuitive understanding of the reations between market deveopments and the productivity. Externa Data I reaiised that the SBUs have not used the externa data as tnuch as tbey shoud have; some of the SBUs are very optimistic about their competitive position, which does not seem merited with the market information avaiabe;. we did not use the externa data very much, there is sti not too much specific information avaiabe about the pup business;. we woud ike to have the possibiity to do our own forecasts in the externa database; The Externa data modue was buit to be easiy acc..ssibe and to give a benchmarking basis for estimates of the expected deveopment of demand and prices. It worked basicay as expected, but there was a further demand for better depth of knowedge and more industry-specific information. Tbe byperknowedge environment with quick access to data, and the possibiity to browse back and forth between various databases pmved to be timesaving and to promote the benchmarking p- we wrnted to get started. It may be a point of interest to note that the Mintzberg description of the imitationa of bati information in strategy making simpy is incorrect for this type of environment. Memo I used the memo as a report-generator, I woud ike to have two memos; one for my interna continuous use and the other as a forma presentation and as a check -ist; I reay used the memo; 15 written pages, it took a ot of time; I used it aways when there was a change in either market or competitive positions; if you do not use the memo, ater you do not have a chance to remember the reasoning behind your decisions; The Memo modue turned out to be an exciting too for us, the system deveopers, as it dispayed ai the insights the users gained in their discussions of the various aiternatives. It aso showed their concusions on various items and their evauation of their competitors. A number of factors were not known too we and the Memo was used to register those points were foow-up studies of the competitors were required; a number of questions and ideas were forwarded to saes offhs in Europe for verification and foow up studies. The Memo reveaed that we were foowing Q strategy formation process (as described in section 3), which was carried out by the management teams of the nine SBUs. Now with these insights as a basis it is interesting to foiow-up on Mintzberg s discussion of strategic panning: (i) the assumption offormaisution appears to be carrect, i.e. the strategy making process can he programmed by the use of a system; (ii) the assumptions of detachment appears to be incorrect; the strategic panning was done by the SBU management teams; (iii) the assumption of quuntifrcation seems to be correct, i.e. the management teams favoured bard data and systematic aggregates as far as possibe; knowiedge was not generaiised to the extent described by Mintzherg; this was mainy due to the technoogy we had impemented in the system, which aowed 80

9 Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences the users to work with knowedge on many eves of aggregation simwtaneousiy; (iv) the assumption of predetermination is not necessary, nor is it reevant; an interactive support system, with routines for continuous updates of a centra knowedge eements, aows the user to quicky adapt to and find out usefu and reevant responses to a quicky changing and unpredictabe environment. If we foow the criteria estabished by Popper [17], i.e. one fase premise nueifies the concusion, we have shown that Mint&erg is wrong about the grand faacy. 5. Concusions Woodstrut is a hybrid of an object-oriented expert system and a byperknowedge support system, and is thus constructed to provide both advanced eve knowedge support in strategic management and an environment for inking assessments of quaitative factors with systematic quantitative evauations of their consequences. It turned out that the technoogy used in Woodstrut is instrumenta for continuous anaysis and synthesis processes, which can be made to interact both in a ogica / causa and a tempora setting. As a by-product this actuay shows that Mintzberg s main argument for estabiisbing the grand faacy of strategic panning - because anaysis is not synthesis, strategic panning is not strategy formation - cannot be correct. Woudsfrut is a support system for strategy formation. Tbe inks between the ogica eements of the system foiow an intuitive, interna ogic which has graduay emerged tbrougb interactive work with the SBUmanagers. This has created the foundations for a quick and effective user acceptance. Woodmat appears to have a number of usefu features as reported by the users: I am very peased with the system, it reay is a working system; athough I aso have (paper) documents of the SBU pans, I work ony with the Woodstrat system; I have got very positive feedback from the CEO on the computer-based presentation of the division s and the SBUs strategic pans; perhaps I ought to aow the SBUs to carry out group and division consoiidations - this I beieve woud generate interna competition to attain divisiona goas and objectives; senior VP Woodstrat compared to my od way? - I worked more thoroughy and I used more time than normay; next year the work wi be accompished in much ess time as I now have a fairy compete basis as a starting point; COO of a pup mi athough I bave for severa years done strategic penning my way, after having used the Wood&at system I woud not change back for anything; COO of a buiding materias unit the fina version which we presented to the corporate executive board took us 1,5 day to finish (pmparatory work done) ; our group - six peope - worked as a team and found the system very usefu for teamwork; COO of a pup mi the sydtem guides tbe user to focus on important issues which eiminates unnecessary work; COO of a saw mi the support system imprisoned us; the drawback was that we concentrated too much on detais in the MP and CP; COO of a saw mi we bad our basic visions and missions in mind, and found out through Woodstrut that our visions of cbiorine free pup changed; there exists - after a - a demand big enough for the new product we bad discussed; COO of a pup mi the panning process was rea team work; COO of a buiding materias unit Thus strategy formation seems to be a process in which anaysis becomes synthesis through the intervention of Woodstrat - a knowedge-based support system. References Day, George, Weik, Barton and Wensey, Robin, (ed.) The Interface of Marketing and Strategy, Jay Press Inc., Greenwich (1990) Ansoff, H. Igor, Critique of Henry Mint&erg s The Design Schoo: Reconsidering the Basic Premises of Strategic Management, Strategic Management Journa, Vo 12 (1991), Minkberg, Henry, The Rise and Fa of Strategic Panning, Prentice Ha (1994) Mintzberg, Henry, Patterns in Strategy Formation, Management Science, Vo 24, No. 9, (1978) Carisson, Christer, Approximate Reasoning Through Fuzzy MCDM-Methods, Operationa Research 87, Esevier, Am- sterdam (1988), Gougen, M., On Fuzzy Robot Panning, Memo No 1 on AI, UCLA, Los Angees (1974) Rockart, John F. and DeLong, David W., Executive Suppr Systems, Dow Jones-Irwin, Homewood (1988) Waden, Pirkko and Carsson, Christer, Enhancing Strategic Market Management with Knowedge-Based Systems, HICSS-26 Proceedings, IEEE Computer Society Press, Los Aamitos,

10 Proceedings of the 28th Hawaii Internationa Conference on System Sciences (HICSS '95) Proceedings of the 28th Annua Hawaii Internationa Conference on System Sciences Carssoa, Christer, Expert Systems as Conceptua Frameworks and Management Support Systems for Strategic Management, Internutiona Journa of Information Resource Management, Vo2, No. 4 (1991), Carsson, Christer, New Instruments for Management Research, Hwnan Systems Management, Vo 10, No. 3 (1991), Carsson, Christer Knowedge Formation in Strategic Management, IfXCSS-27 Proceedings, IEEE Computer Society Press, Los Aamitos, Waden, Pirkko and Catsson, Christer, Strategic Management with a Hyperknowedge Support System, HiCSY-27 Proceedings, IEEE Computer Society Press, Los Aamitos, Chang, Ai-Mei, Hosappe, Cyde W. and Whinston, Andrew B., Mode Management ssuea and Directiona, kision Sumrt Systems, Vo9 (1993), Lange, Danny B., Object-Grieated Hypennodeing of Hypertext Supported Information Sptemq HICZZ&M Proceedings, IEEE Computer Society Press, Loa AJamitoa, Cershman, Anatoe and Got&man, Bdward, Use of Hypermedia for Corporate ffiowedge Dissemination, HICSS-26 Proceedings, IEEE Computer Society Press, Lee Aemitos, Eden, Coin, Strategy Deveopment and Impementation- Cognitive Mapping for Group Support, in Hendry and Johnson (eds): Strategic Thinking: Leadership aad the hknagement of Chauge, (1993) 17. Popper, Kar, The Iogic of Scientific Discovery, Harper & Row, New York (1959). 82