On the Application of Analytic Hierarchy Process in Institution-Wide Strategic Planning

By Jolayemi, Joel K. | Academy of Strategic Management Journal, April 2012 | Go to article overview

On the Application of Analytic Hierarchy Process in Institution-Wide Strategic Planning


Jolayemi, Joel K., Academy of Strategic Management Journal


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. …

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