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Author:     Andrew Horder, Principal Consultant, Business Strategy Solutions Ltd 08/07/2008
Attached:  Multiple Criteria Decision.pdf
 

In business, very few of our serious decisions are truly simple. Almost by definition, if it’s a serious decision, it will probably have implications beyond the immediate effect, and it will almost certainly affect more than just us. Most business decisions will affect a number of different stakeholders – from customers through to suppliers, staff and investors. And each of those will have their own set of criteria for selecting amongst alternatives.

The preferred option for investors may well be very different from what the staff would select. And suppliers would probably go for something different again. So how can we pick the right choice, taking into account the needs and wants of all the groups? And which group should be given the most importance?

Even if we ignore all the rest, and just select based on our own criteria, the chances are that even those will have clashes – is turnover more important than profit? Is innovation more important than market share? Is colour more important than quality even? How will we pick the choice that best matches all of the differing criteria?

So what is needed is a methodology that can measure each option against a number of criteria, and come up with a measure so that each option that can be simply compared and rated. It also needs to take into account the relative importance – to our business - of all of the criteria, whether ours or stakeholders’.
 
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