Strategic Alignment Process and Decision Support Systems: Theory and Case Studies PDF
Preview Strategic Alignment Process and Decision Support Systems: Theory and Case Studies
i Strategic Alignment Process and Decision Support Systems: Theory and Case Studies Tamio Shimizu University of São Paulo, Brazil Marly Monteiro de Carvalho University of São Paulo, Brazil Fernando Jose Barbin Laurindo University of São Paulo, Brazil IRM Press Publisher of innovative scholarly and professional information technology titles in the cyberage Hershey • London • Melbourne • Singapore ii Acquisitions Editor: Michelle Potter Development Editor: Kristin Roth Senior Managing Editor: Amanda Appicello Managing Editor: Jennifer Neidig Copy Editor: Nicole Dean Typesetter: Cindy Consonery Cover Design: Lisa Tosheff Printed at: Integrated Book Technology Published in the United States of America by IRM Press (an imprint of Idea Group Inc.) 701 E. Chocolate Avenue, Suite 200 Hershey PA 17033-1240 Tel: 717-533-8845 Fax: 717-533-8661 E-mail: [email protected] Web site: http://www.irm-press.com and in the United Kingdom by IRM Press (an imprint of Idea Group Inc.) 3 Henrietta Street Covent Garden London WC2E 8LU Tel: 44 20 7240 0856 Fax: 44 20 7379 0609 Web site: http://www.eurospanonline.com Copyright © 2006 by Idea Group Inc. All rights reserved. No part of this book may be reproduced, stored or distributed in any form or by any means, electronic or mechanical, including photocopying, without written permission from the publisher. Product or company names used in this book are for identification purposes only. Inclusion of the names of the products or companies does not indicate a claim of ownership by IGI of the trademark or registered trademark. Library of Congress Cataloging-in-Publication Data Shimizu, Tamio, 1938- Strategic alignment process and decision support systems : theory and case studies / Tamio Shimizu, Marly Monteiro de Carvalho and Fernando Jose Barbin Laurindo. p. cm. Summary: "This book deals with strategic organizational decision-making providing techniques for improving the intelligence of actions by organizational decision-makers"--Provided by publisher. Includes bibliographical references and index. ISBN 1-59140-976-4 (hardcover) -- ISBN 1-59140-977-2 (softcover) -- ISBN 1-59140-978-0 (ebook) 1. Strategic planning. 2. Decision making. 3. Management information systems. I. Carvalho, Marly Monteiro de, 1965- II. Laurindo, Fernando José Barbin. III. Title. HD30.28.S4323 2006 658.4'012--dc22 2005023878 British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. All work contributed to this book is new, previously-unpublished material. Each chapter is assigned to at least 2-3 expert reviewers and is subject to a blind, peer review by these reviewers. The views expressed in this book are those of the authors, but not necessarily of the publisher. iii Dedication The authors dedicate this book to: To our parents, Fuminobu, Sotoe, Maria do Carmo, Lenny, and Sylvio (allin memoriam) and Mauro for their example and dedication. To the wives and husband, Sumie, Margarida, and João Alexandre, and daughter and sons, Alice Maria, Luiz Fernando, Lucas and Diogo, sources of inspiration, who fulfill our lives with motivation and joy. iv Strategic Alignment Process and Decision Support Systems: Theory and Case Studies Table of Contents Preface................................................................................................x Chapter I. Concepts And History Of Strategy In Organizations ..........................1 The Rise of Strategic Thinking...........................................................1 Investigating the Concept of Strategy.................................................5 The Alignment of Forces to Build a Good Strategy. Can a Good Strategy Be Replicated or is There a Formula for a Good Strategy?. 16 Characteristics and Elements of Competitive Strategy .......................20 Case Studies: Strategy and Decisions in Perspective .........................22 Questions for Reflection and Discussion...........................................28 References .................................................................................... 29 Chapter II. Developing Strategies For Competitive Advantage.......................... 32 Understanding the Competitive Environment..................................... 32 Industry Analysis............................................................................ 33 Taking a Look Inside the Industry....................................................39 Internal Analysis of the Company to Adequate Positioning ................ 45 Case Study: Strategy and Decisions in Perspective...........................53 Questions for Discussion and Reflection...........................................53 References .................................................................................... 59 Chapter III. An Overview Of Value Chains, Supply Chains And Strategic Alliances Issues ................................................................................ 61 Introduction................................................................................... 61 How to Define the Term Chains ...................................................... 62 Location: The Role of Clusters in Competitiveness............................ 68 Decision-Making Tool Applied to Environment Analysis.................... 74 Case Study: Strategy and Decisions in Perspective............................ 76 Questions for Discussion and Reflection...........................................78 References .................................................................................... 78 Chapter IV. Aligning Strategy With Organizational Structures And Project Deployment....................................................................................... 82 Introduction................................................................................... 82 The Project Concept...................................................................... 83 Organizational Structures and the Project.........................................84 Maturity Models............................................................................91 Case Study: Strategy and Decisions in Perspective............................ 98 Questions for Discussion and Reflection......................................... 101 References .................................................................................. 102 Chapter V. Alignment Of Organizational Strategy With Information Technology Strategy........................................................................................... 106 Introduction................................................................................. 106 Conceptualizing Information Technology ........................................ 108 The (cid:179)Productivity Paradox(cid:180) .......................................................... 108 The Efficiency and Effectiveness of Information Technology Applications............................................................................ 110 Critical Success Factors (CSF)......................................................111 The Strategic Role of IT Applications............................................. 113 Strategic Alignment....................................................................... 117 Routes to a Strategic Role for IT................................................... 122 Case Studies: Strategy and Decisions in Perspective ...................... 130 Questions for Reflection and Discussion......................................... 134 References .................................................................................. 136 Chapter VI. Performance Measurement Systems.............................................. 140 Introduction................................................................................. 140 Building a Rapid Strategic Process ................................................ 140 Strategic Performance Measurement and Monitoring ...................... 143 Implementing the BSC.................................................................. 149 Case Study: Strategy and Decisions in Perspective......................... 153 Questions for Discussion and Reflection......................................... 155 References .................................................................................. 156 Chapter VII. Strategies For The New Economy And Dynamic Competitive Environment.................................................................................... 158 Introduction................................................................................. 158 Seeking to Understand the New Economy..................................... 159 The Electronic Markets ................................................................ 161 The Internet as a New Strategic Agent........................................... 163 The Appearance of Virtual Organizations ....................................... 165 Virtual Chains of Production.......................................................... 168 Revolution or Evolution: That is the Question.................................. 175 Final Considerations and Perspectives ........................................... 180 Case Studies: Strategy and Decisions in Perspective ....................... 181 Questions for Reflection and Discussion......................................... 185 References .................................................................................. 186 Chapter VIII. An Overview Of The Decision-Making Process In Organizations . 189 Introduction: Situations and Facts that Affect Organizations............. 189 Rational Concepts Adopted.......................................................... 196 Classification of Decision-Making Situations................................... 198 Example: Selection of Used Cars................................................... 204 How Decision-Making Process is Analyzed in the Literature............ 206 Conclusions................................................................................. 207 Case Studies: Strategy and Decisions in Perspective ...................... 208 Questions for Reflection and Discussion......................................... 209 Exercises..................................................................................... 210 References .................................................................................. 211 Chapter IX. The Structuring Of The Strategic-Decision-Making Process ......... 213 Introduction: A Systematic Procedure for Structuring the Decision-Making Process........................................................ 213 Building the Model....................................................................... 215 Basic Structures of Decisions Problems ......................................... 219 Additional Problems That Must Be Considered in Structuring a Strategic-Decision-Model........................................................ 232 Conclusions................................................................................. 235 Case Studies: Strategy and Decisions in Perspective ....................... 236 Questions for Reflection and Discussion......................................... 237 Exercises..................................................................................... 238 References .................................................................................. 239 Chapter X. The Nature Of Strategic-Decision-Making Models ....................... 241 Decision with Multiple Criteria and Multiple Scenarios .................... 241 Optimal Decisions........................................................................ 249 Multi-Criteria or Multi-Objectives Decision Analysis....................... 256 Decision Based on Fuzzy Possibility Theory.................................. 261 Case Studies: Strategy and Decisions in Perspective ...................... 265 Conclusions................................................................................. 267 Questions for Reflection and Discussion......................................... 268 Exercises..................................................................................... 268 References .................................................................................. 270 Chapter XI. The Role Of Simulation And Modern Business Games.................. 272 Probabilistic or Stochastic Process ................................................ 272 Using Simulation to Compare Multiple-Stage Strategic Decisions..... 273 Business Game Simulates Competition Among Companies .............. 279 Continuous System Simulation....................................................... 285 Case Study: Strategy and Decisions in Perspective......................... 288 Conclusions................................................................................. 291 Questions for Discussion and Reflection......................................... 292 Exercises..................................................................................... 293 References .................................................................................. 293 Chapter XII. Decision Based On Organizational Knowledge, Decision Support Systems, Expert System And Business Intelligence....................... 295 Introduction................................................................................. 295 The Framework for Strategic Decision Making............................... 296 Exploiting Solutions Using Expert Systems .................................... 298 Fuzzy Expert System.................................................................... 300 Decision Support Systems (DSS).................................................. 301 Exploring New Organizational Knowledge Using Business Intelligence (BI) and Data Mining Techniques ............................ 309 Market Basket Analysis: Mining Association Rules.......................... 313 Comparing MIS, DSS, ES, and KDD........................................... 316 Case Study: Strategy and Decisions in Perspective......................... 317 Conclusions................................................................................. 318 Questions for Discussion and Reflection......................................... 319 Exercises..................................................................................... 319 References .................................................................................. 320 Chapter XIII. Group Decision And Negotiation In Strategic-Decision-Making.... 322 Introduction................................................................................. 322 Individual and Group Behavioral Models ....................................... 323 Methodologies Used in Group-Decision-Making........................... 327 Decisions that Depend on the Behavior of Persons......................... 333 The Impact of Psychological Types................................................ 335 Negotiation Model....................................................................... 338 The General Multi-Objective and Multiple-Decision Problem .......... 339 Case Study: Strategy and Decisions in Perspective.......................... 343 Conclusion: What Constitutes a Good Strategic Decision?............... 346 Questions for Discussion and Reflection......................................... 347 Exercises..................................................................................... 349 References .................................................................................. 349 About The Authors........................................................................... 352 Index............................................................................................... 354
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