In this paper a framework is proposed for the formulation of an HE institutional strategy. The proposed hybrid model is based on two operational research (OR) methodologies named multiple criteria decision making (MCDM) and resource allocation. The Analytic Hierarchy Process (AHP) is a technique linked to MCDM that helps to address issues related to formulation of a model which represents different factors and alternatives, assess their priorities, and provide a decision-making mechanism. Then a resource allocation approach called the „Knapsack method‟ is used to incorporate derived global priorities of strategic options from the AHP technique in order to optimise different types of resources. The proposed model is dynamic in that it adapts to changing economic and environmental conditions and hence has the capability to provide „what-if‟ analysis. The framework is applied in the context of strategic decision making for a business school and involves key stakeholders who have responsibilities for strategic functions within the HEI and the school.