Transparent prioritisation, budgeting and resource allocation with multi-criteria decision analysis and decision conferencing

Lawrence Phillips () and Carlos Bana e Costa ()

Annals of Operations Research, 2007, vol. 154, issue 1, 68 pages

Abstract: Managers in both for-profit and not-for-profit organisations continually face the task of allocating resources by balancing costs, benefits and risks and gaining commitment by a wide constituency of stakeholders to those decisions. This task is complex and difficult because many options are present, benefits and risks are rarely expressed as single objectives, multiple stakeholders with different agendas compete for limited resources, individually optimal resource allocations to organisational units are rarely collectively optimal, and those dissatisfied with the decisions taken may resist implementation. We first explain three current approaches to resource allocation taken from corporate finance, operational research and decision analysis, and we identify a common mistake organisations make in allocating resources. The paper then presents a technical process, multi-criteria portfolio analysis, for balancing the conflicting elements of the problem, and a social process, decision conferencing, which engages all the key players during the modelling process, ensuring their ownership of the model and the subsequent implementation. This socio-technical process improves communication within the organisation, develops shared understanding of the portfolio and generates a sense of common purpose about those projects that will best realise the organisation’s objectives. The paper concludes with lessons we have learned from actual practice. Copyright Springer Science+Business Media, LLC 2007

Keywords: Managerial decision making; Multi-criteria decision analysis; Resource allocation; Prioritisation; Budgeting; Commons dilemma; Equity; Real-world applications; System design; Procurement; Capital planning; Capital budgeting (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (69)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10479-007-0183-3 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:154:y:2007:i:1:p:51-68:10.1007/s10479-007-0183-3

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-007-0183-3

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().