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SCA METHOD APPLIED TO SMALL FAMILY-OWNED FIRM

SCA METHOD APPLIED TO SMALL FAMILY-OWNED FIRM. Guilherme Luiz Antunes Major Mischel Carmen Neyra Belderrain ALIO-INFORMS Joint International Meeting June 6 - 9, 2010 Buenos Aires, Argentina. Motivation. Good decision-making is crucial to success in any business

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SCA METHOD APPLIED TO SMALL FAMILY-OWNED FIRM

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  1. SCA METHOD APPLIED TO SMALL FAMILY-OWNED FIRM Guilherme Luiz Antunes Major Mischel Carmen Neyra Belderrain ALIO-INFORMS Joint International Meeting June 6 - 9, 2010 Buenos Aires, Argentina

  2. Motivation • Good decision-making is crucial to success in any business • It’s difficult to deal with ill-structured problems • Ill-structured problems are common in the daily life of organizations • Small family-owned business seeking to better structure its decision-making process ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  3. Objective Strategic Choice Approach (SCA) is applied to the problem of defining future guidelines of a small family-owned firm. ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  4. Ill-StructuredProblems Ill-structured problems are characterized by: • Multiple actors • Multiple perspectives • Conflicting interests • Important intangible aspects • Relevant uncertainty ALIO-INFORMS Joint International Meeting June 6 -9,2010 Buenos Aires , Argentina

  5. Problem Structuring Methods • PMS are used to deal with ill-structured problems • They are characterized by • able to conciliate multiple different perspectives • accessible to all decision-makers, so the problem structuring becomes a participative process • an iterative process • able to provide partial solutions or local improvements ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  6. Problem Structuring Methods Some PSM: • Strategic Options Development and Analysis (SODA) • Soft Systems Methodology (SSM) • Strategic Choice Approach (SCA) ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  7. Strategic Choice Approach Focused on managing uncertainties and complexity of real-time problems • Sources of uncertainty: • Uncertainty about working Environment (UE) • Uncertainty about guiding Values (UV) • Uncertainty about Related decisions (IR) • Decision-making is subject to daily life pressure and urgencies (not an isolated process) ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  8. Strategic Choice Approach Clearer objectives IA More info IV Pressure for decision Current problem Modified problem IR Time More coordination ALIO-INFORMS Joint International Meeting June 6 -9,2010 Buenos Aires , Argentina

  9. Strategic Choice Approach • Complementary modes of decision-making activity: • Shaping mode: definition of what will be decided and how are these decisions related to each other • Designing mode: generation of alternatives/courses of action and analysis of the compatibility of these courses of action if taken together • Comparing mode: comparison of different set of alternatives and identification of the most promissing ones • Choosing mode: listing of uncertainties, identification of exploratory options and building of commitment package. ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  10. Strategic Choice Approach Multiple input Multiple output Choosing mode Shaping mode Designing mode Comparing mode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  11. Case study • Thefirm: • Family-owned business • Small firm (600-1200 meals/day) • Location: Pontes e Lacerda – MT Pontes e Lacerda ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  12. Shapingmode Shaping mode: • Define decisionareas • Identifydecision links • Build a decisiongraph • Ifthegraph is toocomplicated, rearrangepositions • Emphasizeurgentand more relevantdecisionareas • Define thedecisionfocus ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  13. Shapingmode Decision areas • Description of any situation in which different courses of action are believed to be possible ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  14. Shaping mode ALIO-INFORMS Joint International Meeting June 6 -9,2010 Buenos Aires , Argentina

  15. Shaping mode • Decision Link • Indicates that it may be different to analyse the decision areas together or one-by-one • Decision Graph • Graphic representation of decision areas (circles) and of decision links (lines) • Decision Focus • Decision areas thought to be the most relevant and which, in a first moment, will be kept in the decision process ALIO-INFORMS Joint International Meeting June 6 -9,2010 Buenos Aires , Argentina

  16. Shapingmode • Case Study decision graph ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  17. Shapingmode • Rearranged graph • Clustereddecisionareas: • Blue: New Business/Real-state • Green: HumanResources • Red: Equipment • Classified decision areas • Established decision focus Decisionfocus Undefinedalternatives Importantconsequences Urgent Highlyconnected to otherareas ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  18. Designingmode Designingmode: • Identifydecisionoptions in eachdecisionarea • Identifyincompabilityamongdecisionoptions (optionbars) • Build thedecisionschemes ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  19. Designingmode • Decision Options • Any course of action, related to a decison area, thought to be feasible ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  20. Designingmode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  21. Designingmode • Option bar • Graphic representation of the incompatibility between two distinct decision options related to two different decision areas Optionbars Uncertainoptionbars ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  22. Designingmode • Decision Scheme • Combinação de opções viáveis, cada uma delas tomada de uma área de decisão dentro do foco do problema ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  23. Designingmode • Decision Scheme • Set offeasibledecisionoptionseachcomingfrom a differentdecisionareawithinthedecisionfocus. • INFOEL • NOVASLIC • POLCONT Esquema A Esquema B Esquema C Esquema D Esquema E Esquema F Esquema G Esquema H ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  24. Comparingmode Comparing mode you: • Define thecomparisonareas • Define theassessmentmethod for eachcomparisonarea (e.g. profits , employeesatisfaction rate, etc.) • Assesscoursesofactionrelative to theirflexibility • Build a shortlistofdecisionschemes (choosethemostpromissingones) • Makerelativeassessmentsoftheshortlistedschemes • Makeadvantagecomparisons • Assesstheoverall advantage balance ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  25. Comparing mode Comparison area • Area of concern in which it is believed to be relevant to consider the possible outcomes of the different courses of action ALIO-INFORMS Joint International Meeting June 6 -9,2010 Buenos Aires , Argentina

  26. Comparingmode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  27. Comparingmode • Pre-selection of decision schemes • Selection of most promissing decision schemes ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  28. Comparingmode • RelativeAssessment • Comparisonofthedifferenceoftheoutcomesoftwodecisonschemesregardingonespecificcomparisonarea ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  29. Comparingmode • Relative Assessments and Advantage Comparison E S C M N M C S E Scheme C Scheme B E: Extreme S: Significant C: Considerable M: Marginal N: Negligible ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  30. Comparingmode • Balanço Geral de Vantagens • Condensação em um único índice da comparação de vantagens em todas as áreas de comparação E S C M N M C S E ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  31. Comparingmode E S C M N M C S E ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  32. Comparingmode E S C M N M C S E ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  33. Choosingmode Choosing mode: • Indentifyuncertaintyareas • Classifythemaccording to theirnature – UE, UR and UV • Assesstheimportanceoftheuncertaintyareas • Findexploratoryoptions to investigatetheuncertaintyareas • Define actionscheme for themosturgentdecisionareas • Establish a commitment packagedefiningcoursesofactionsandfurtherexploratoryoptions to betaken ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  34. Choosingmode • Uncertainty area • Any source of uncertainty that affects the final decison ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  35. Choosingmode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  36. Choosingmode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  37. Choosingmode • Exploratory Option • Actionsfor decreasingtheuncertaintylevel ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  38. Choosingmode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  39. Choosingmode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  40. Choosingmode Commitment Package • Definingcoursesofactionsandfurtherexploratoryoptions to betaken ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  41. Choosingmode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  42. Choosingmode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  43. Choosingmode ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  44. Conclusions • The results showed that the SCA is easy to apply and able to deal with uncertainty, even in complex problems, contributing to the decision group process. ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  45. References • FRANCO, L.A.; CUSHMAN, M.; ROSENHEAD, J. (2002). Project review and learning in the construction industry: Embedding a problem structuring method within a partnership context. European Journal of Operational Research, 2004, v.152, p.586-601 • FRIEND, J. K & Hickling, A. Planning under pressure: the strategic choice approach. Oxford: Pergamon, 1ª reimpressão. 1988. 338 p. • GOMES, M. C. Os fundamentos do strategicchoice approach no contexto de transformação das organizações.In: ENCONTRO NACIONAL DE ENGENHARIA DE PRODUÇÃO, 17., 1997 . Disponível em <http://www.abepro.org.br/biblioteca/ENEGEP1997_T5106.PDF>. Acesso em 29 de maio de 2009 • PINHEIRO, P.R.; SOUZA, G. G. C.; CASTRO, A. K. A. Estruturação do problema multicritério para a produção de jornal. Pesquisa Operacional, 2008, v.28, n.2, p. 203-216. ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  46. References • STERNADT, J. M. A utilização da abordagem "strategicchoice" para o aperfeiçoamento de um centro de prestação de serviços. 1997.87 f. Dissertação (Mestrado em Engenharia). Departamento de Engenharia de Produção, Universidade Federal de Santa Catarina, Florianópolis. 1997 • VON WINTERFELDT, D,. FASOLO, B. Structuring decision problems: A case study and reflections for practitioners. European Journal of Operational Research, 2009, v.199, p.857-866 • MINGERS, J.; ROSENHEAD, J. Problem structuring methods in action. European Journal of Operational Research, 2004, v.152, p.530-554 • UNIVERSITY OF CAMBRIDGE. Institute for Manufacturing. Strategic Options Development and Analysis. Disponível em http://www.ifm.eng.cam.ac.uk/dstools/con trol/soda.html. Acesso em: 25/10/2009. ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

  47. References • KRUJIF, J. Problem structuring in interactive decision-making processes; How interaction, problem perceptions and knowledge contribute to a joint formulation of a problem and solutions. 2007. Faculty of Civil Engineering, Department Water Engineering and Management, University of Twente, Enchede, 2007. ALIO-INFORMS JointInternational Meeting June 6 -9,2010 Buenos Aires , Argentina

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