Analysis of preferences
| Analysis of preferences |
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Analysis of preferences is a research approach consisting in classifying objects in a certain scale, which is reflected in the hierarchy of their importance. The overall objective of this approach is the multi-criteria evaluation of business, focused both on analytical and comparative studies and the selection of alternative solutions.
The basic methods of analysis of preferences in strategic management include ranking and scoring.
The basis of the analysis of preferences is the five principles:
1. Principle of hierarchy
The basis of the effectiveness of preferential methods is the possibility of a meaningful and sufficiently strict measurement of objects under study. The rating expressed in points or ranks, shows the priority of objects in the context of the formulated goals or purpose and taking into account the impact of environmental factors.
2. Principle of relativity of evaluation criteria
We are dealing here with a hierarchy of evaluation criteria analogous to the hierarchy of things, factors, systems. This is done by allowing for the possibility of existence of differences in the significance of the applicable criteria. Prioritizing the evaluation criteria is based on the preferential aspects, which in this case, the same role as the ranking of objects or things.
3. Principle of levels of acceptability
It is assumed that for each characteristic value, there are certain levels of "acceptability" are called "limits" that form a selective filter for positively or negatively qualify the object.
4. Principle of adequacy of score conversions
This principle that informs us of the need to preserve the correspondence between the characteristic values of the object and the point or rating in evaluation. Adequacy is intended to express the conversion of values corresponding to particular characteristic of the facts to specified point range. It is to avoid arbitrariness in translating values into points. This involves the adoption of a particular method of mapping the characteristic value to point value.
5. Principle of objectivity
In order to avoid the randomness and arbitrariness of ranking and scoring verification procedures should be used. In particular, this applies to objectify the relevance of assessment criteria, because assigning a particular rank or score points should be attested by a competent expert assessment, taking into account the statistical test.
References
- Bazerman, M., & Moore, D. A. (2012). Judgment in managerial decision making.
- Dasgupta, P., Sen, A., & Marglin, S. (1972). Guidelines for project evaluation. In UNIDO. Project Formulation and Evaluation (Vol. 2). United Nations. UNIDO.
- Keeney, R. L., & Raiffa, H. (1993). Decisions with multiple objectives: preferences and value trade-offs. Cambridge university press.
- Van de Walle, B. (2003). A relational analysis of decision makers' preferences. International Journal of Intelligent Systems, 18(7), 775-791.
