Fuzzy Cognitive Strategic Maps
This paper presents the application of a Fuzzy Cognitive Map (FCM) based theoretical framework and its associated modeling and simulation tool to Strategy Maps (SMs). Existing limitations of SMs are presented in a literature survey. The need for scenario
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Fuzzy Cognitive Strategic Maps M. Glykas
Abstract This paper presents the application of a Fuzzy Cognitive Map (FCM) based theoretical framework and its associated modeling and simulation tool to Strategy Maps (SMs). Existing limitations of SMs are presented in a literature survey. The need for scenario based SMs with inherited ability to change scenarios dynamically as well as the missing element of time are highlighted and discussed upon. FCMs are presented as an alternative to overcome these shortfalls with the introduction of fuzziness in their weights and the robust calculation mechanism. An FCM tool is presented that allows simulation of SMs as well as interconnection of nodes (performance measures) in different SMs which enable the creation of SM hierarchies. An augmented FCM calculation mechanism that allows this type of interlinking is also presented. The resulting methodology and tool are applied to two Banks and the results of these case studies are presented.
1 Introduction to Strategy Maps and the Balanced Scorecard Strategy maps (SMs) represent visually relationships among the key components of an organization’s strategy [17]. We could argue that SMs describe strategy in a picture; they are powerful tools which show how value is created through cause and effect relationships. Kaplan and Norton argue that they create “the missing link between strategy formulation and strategy execution” [38]. Strategy maps are particularly helpful for: • Promoting understanding and clarity of strategy M. Glykas (B) Department of Financial and Management Engineering, University of the Aegean, Chios, Greece e-mail: [email protected] M. Glykas Aegean Technopolis, The Technology Park of the Aegean Region, Chios, Greece E. I. Papageorgiou (ed.), Fuzzy Cognitive Maps for Applied Sciences and Engineering, Intelligent Systems Reference Library 54, DOI: 10.1007/978-3-642-39739-4_17, © Springer-Verlag Berlin Heidelberg 2014
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Encouraging greater engagement and commitment to strategy Ensuring alignment of resources Identifying gaps or blind spots Making more effective and efficient use of resources Aligning remuneration with strategy—particularly in the soft areas and where objectives have a duration > 12 months
A strategy map describes how an organization creates value by connecting strategic objectives in explicit cause and effect relationships. They provide an excellent snapshot of strategy and are supported by measurable objectives and initiatives. Strategy maps enable organizations to [49]: • • • • • • • •
Describe strategy in a single picture Clarify strategies and communicate them to employees Identify the key internal processes which drive success Align investments in people, technology and organizational capital for maximum impact Expose gaps in strategies so that early corrective action can be taken Identify explicit customer value propositions Map the critical internal processes for creating and delivering the value proposition Align human resources, information technology and organi
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