Strategic project selection through incorporation of stakeholder preferences using the analytical hierarchy process

The purpose of this paper is to develop a methodology that could assist decision making process to satisfy all stakeholders while achieving company objectives. A 'cost/ benefit analysis' method using Analytic Hierarchy Process (AHP) is presented. The paper is based on a real exercise in a leading packaging company. The result of the AHP analysis matched the decision taken by the company management prior to the analysis demonstrating the capability and robustness of the methodology used. By applying the methodology as a cost-benefit analysis, three main benefits have been achieved: Reduction of the time in decision-making; Ease of reaching a consensus decision for decision makers; Documentation and justification of the decisions made. In terms of research limitations and implications, this work does not provide an exhaustive list of all the factors that need to be considered apart from those identified by one UK company which perhaps limits its usefulness elsewhere. Nevertheless, it offers a methodology which different companies could follow. The proposed AHP methodology is generally applicable to many strategic options/ projects selection problem. Appraisal and selection of strategic capital-intensive projects is required by many companies. Often these projects will have several interested parties or stakeholders with multiple objectives. Companies rarely succeed in selecting a project that satisfies all interested parties. Frequently these decisions are made at the top levels of the organisational hierarchy and later imposed on to the lower levels. The proposed methodology assists the decision making process to satisfy all stakeholders while achieving company objectives.