A method for building a robust strategy map using mathematical programming considering different scenarios

Year 2024, Volume: 42 Issue: 5, 1459 - 1468, 04.10.2024

Meghdad Jahromi1 Hassan Torabi

Abstract

Strategy maps have drawn serious attention from companies in recent years due to their effective performance in organizations’ success. Different approaches have been taken to build these maps in the related literature. A strategy map is focused on the cause-and-effect relationship between lag and lead objectives. On the other hand, most methods used for this purpose work based on past performance and do not pay attention to the future. In this paper, a method is presented to build a scenario-based strategy map, trying to consider all the future conditions and choose the most stable strategic objectives (goals) based on the outcome of all situations and analyse the relationships between them. The purpose of this work is to present a hybrid and at the same time practical and simple method of developing the company’s strategy map in such a way that includes strategic objectives and their relationships so that they are common in all possible future scenarios. This method considers different scenarios and strategic objectives concerning experts’ points of view about the relationship importance between strategic objectives. In the proposed method, by using the paired comparisons technique and linear programming, in the first phase, the optimal strategy map is built for each scenario, and in the second phase using a heuristic method and expert judgments, the final strategy map is built, which is the result of all the maps of the first phase. The presented method tries to consider all future scenarios and builds a map that will be more valid in the future; it is called a robust strategy map. This method was used by the strategic planning department in a real case and the final strategy map built by the proposed method was outstanding and reliable so that it is simply constructed and understandable for all stakeholders. Furthermore, it explains the strategy of the organization well.

Keywords

Balanced Scorecard, Mathematical Programming Model, Scenario Planning, Strategy Map

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