How do you include stakeholder values in decision making? This is a crucial question for operations researchers who need to balance multiple objectives, criteria, and preferences in complex problems. In this article, you will learn some basic concepts and methods for incorporating stakeholder values in multi-criteria decision making (MCDM).
MCDM is a branch of operations research that deals with situations where there is more than one criterion to evaluate the alternatives. For example, you may want to choose a location for a new facility that minimizes cost, maximizes accessibility, and satisfies environmental standards. MCDM helps you to compare and rank the alternatives based on their performance on each criterion, as well as their overall value.
MCDM, also known as Multi Criteria Decision Analysis (MCDA), dissects a significant decision problem into smaller parts, enabling decision-makers to process and consider options more easily. Often, these types of problems require the simultaneous deliberation of multiple options beyond a human's capability and capacity to consider. Through structuring sub-problem assessments with this approach, decision-makers can aggregate different aspects into a holistic judgement.
Stakeholder values are the beliefs, preferences, and interests of the people who are affected by or involved in the decision. They reflect what matters to them and how they perceive the consequences of the alternatives. Stakeholder values can influence the definition of the criteria, the weighting of the criteria, and the evaluation of the alternatives. Ignoring stakeholder values can lead to suboptimal or unacceptable decisions, as well as conflicts and dissatisfaction among the stakeholders.
Checkland are renowned author on systems thinking,proposed selection of particular perspective in decision making and put it through a very structured and rigorous model developmental process which starts with transformation of inputs to outputs. This model is known as CATWOE. Customer: who benefit from the transformation. Actors: who facilitate the transformation of inputs to outputs Transformation: ‘inputs to output’ Worldview: what gives the transformation some meaning of existence? Owners: which the system is answerable to, has a bearing on the existence of the system Environment: what influence the system but has no control. CATWOE analysis conducted for the stakeholders in order to identify stakeholder thinking.
One way to identify stakeholder values is to conduct a stakeholder analysis. This is a process of identifying who are the relevant stakeholders, what are their roles and interests, how they are related to each other, and how they can influence or be influenced by the decision. You can use various tools and techniques, such as interviews, surveys, focus groups, brainstorming, or mapping, to collect and organize the information about the stakeholder values.
Incorporating stakeholder values in MCDM requires different methods and models, depending on the type and level of information available. Value function methods use mathematical functions to represent stakeholder preferences over criteria and alternatives, such as a utility function to measure satisfaction or a value function to measure contribution to a goal. Outranking methods use pairwise comparisons to determine the degree of preference or dominance of one alternative over another. Interactive methods involve an iterative process of communication and feedback between the decision maker and the stakeholders, or among them, to elicit and adjust values and preferences. For example, a negotiation support system can facilitate dialogue and trade-offs while a learning system can help discover and revise values.
Key steps to incorporate stakeholder values in MCDM: Identify Stakeholders: Recognize all involved parties. Define Criteria: Establish relevant decision factors. Weighting: Assign importance weights to criteria. Data Collection: Gather data for each criterion. Normalization: Scale data uniformly. Scoring: Stakeholders rate alternatives against criteria. Aggregation: Combine scores using weights. Sensitivity Analysis: Assess impact of weight changes. Decision Analysis: Use MCDM methods for choices. Feedback: Engage stakeholders for input. Communication: Share decisions and rationale. Monitoring: Continuously adapt based on feedback and change.
The results of MCDM are not definitive or objective, but rather depend on the assumptions, data, methods, and models used. Therefore, it is important to evaluate the robustness, sensitivity, and validity of the results, as well as the satisfaction and acceptance of the stakeholders. You can use various criteria and indicators, such as stability, consistency, efficiency, equity, or transparency, to assess the quality and the implications of the results. You can also use visual tools, such as graphs, charts, or maps, to present and communicate the results to the stakeholders.