Decision Support & Executive Information Systems: - The Strategic Choice Approach An Example of Soft Operational Research Amare Michael Desta

What does Soft OR Mean? n Not soft headed, irrational or lacking in rigour; n But interpretative, qualitative and an alternative to quantitative methods.

Rational Comprehensive Planning – A Hard Decision Making Paradigm n Identify your goal or objective; n Identify your possible courses of action; n Predict the consequences of your possible actions; n Evaluate the consequences of your possible actions; n Select the action that best achieves your objective or goal.

Hard v Soft Analytical Characteristics Hard n Data available n Single objective and optimisation n People are passive n Attempts to abolish uncertainty Soft n Data Unavailable n Multiple objectives and non-optimisation n People are active subjects n Accepts uncertainty and encourages flexibility

Contribution of Soft OR n Some approaches view organisations as machines that can be fine tuned; n Soft OR views organisations as groups of humans each with their own interests and motivations; n Soft OR contributes to understanding the dynamics upon which organisations work.

Contribution of Soft OR n Soft OR techniques allow a common understanding of perspectives, roles, worldviews and their interrelationships; n They make these perspectives explicit, so that they can be understood by others, discussed and acted upon.

Common Characteristics of Soft OR Techniques n Do not claim to be able to define what is true; n They try to interpret, define, explore, use (and possibly change) various perspectives in the organisation; n They enhance learning, understanding and debate.

Hard v Soft OR Hard OR is: Tangible Tangible Easy to explain Easy to explain Easy to use Easy to use Soft OR is: Rather intangible Harder to explain Harder to use

Problem Structuring Methods n Primary focus is usually on the people involved with the problem; n Secondary focus will be on the problem itself; n This can change our view of what we mean by a successful intervention.

Origins of the Approach More empirical than theoretical; More empirical than theoretical; Describes some methods for dealing with complex decision problems; Describes some methods for dealing with complex decision problems; Based on observations of how managers cope with dilemmas; Based on observations of how managers cope with dilemmas; A mixture of practical and intuitive methods; A mixture of practical and intuitive methods; Recognises the importance of uncertainty, and responses to types of uncertainty. Recognises the importance of uncertainty, and responses to types of uncertainty.

How do we respond to this choice? Uncertainty about guiding values Uncertainty about our working environment Uncertainty about related agendas We need clearer policies We need more information We need broader perspectives UV UE UR

Shape Design Compare Choose Issues Problem Focus Range of Strategies Preferences And Uncertainties Decisions Progress Package

Crime is a real problem in this country. We are spending more and more on locking up increasing numbers of people in prisons, yet crime goes on rising. Many of those in prison are there for reasons connected with medical problems (e.g. drug addiction, mental illness) yet when they come out these problems are unresolved and so they go straight back to crime. Perhaps the answer is longer prison sentences.

Dynamics of Strategic Choice Shaping Mode n Decision areas are described as questions – areas where alternative courses of action are possible; n The decisions are then presented on a decision graph.

Build more Prisons? Improve prison Medical care Increase rewards For informing? Impose longer Sentences?

Identify Problem Focus n Select three or four decision areas; n Usually these are important, urgent and/or connected; n Add any factors as necessary to the uncertainty list.

Example Problem Focus n Build more prisons? n Impose longer sentences? n Increase rewards for informing? n Can we find more sites to build more prisons (UE)?

Dynamics of Strategic Choice Designing Mode For each problem focus we: n List a small number actions in each area; n List incompatible options; n List all feasible decision schemes by selecting an action from each area.

Example Option Graph Lines Show Incompatibilities Build More Prisons? Increase Rewards For Informing? Impose Longer Sentences? No Yes Five More Yes Ten More No Yes NoYes

Feasible Decision Schemes Scheme Build more prisons? Longer sentences? Increase reward for informing? ANoNoNo BYes Five more YesYes CYes Ten more YesYes

Uncertainty List The list of uncertainties now has two more factors: 1. Can we find sites for more prisons (UE)? 2. Will ten prisons be too many (UE)? 3. Will Government/legal profession support longer sentences (UV)?

Dynamics of Strategic Choice Comparing Mode In this mode we compare the decision schemes using: 1. Identifying comparison areas; 2. Within each area assign a value to each scheme.

Example Comparison Areas We can compare each scheme in terms of: 1. Capital cost (£ millions); 2. Running costs (£ millions); 3. Acceptability to government (1–10 scale in which 1 is not acceptable) ; 4. Acceptability to the public (1-10 scale).

Comparison of Schemes ABC Capital Cost Running Cost Gov. View 359 Public View 531

Comparison Schemes In comparing schemes we must always be aware of the uncertainty areas. In comparing schemes A and B we must consider the uncertainties associated with scheme B.

Dynamics of Strategic Choice Choosing Mode We construct a commitment package which consists of: 1. Decisions taken now; 2. Explorations to reduce uncertainty; 3. Decisions to be deferred until later; 4. Contingency plans.

Example Commitment Package n Decisions taken now – none; n Explorations -identify sites for 5 prisons; -consult government/legal agencies over longer sentences; n Decisions deferred – final decision on scheme B; n Contingency plans – none.

Conclusions Technology Provides a set of tools to facilitate and structure communication. The way that discussion sessions are structured and run is important.

Conclusions (Contd…) Organisation The emphasis is on temporary groupings of staff that cut across organisational boundaries. Process Emphasis is on flexibility rather than strict adherence to procedures.

Conclusions (Contd…) Products The process can produce not only visible products like agreed actions and policy changes, but also invisible products in the form of changed perceptions and views of participants.

Next week n Soft Systems approach - Examples n SSM Methodology n And the CATWOE approach