Quantitative model of strategic performance

Economics and management


Ershov D. M.

Moscow Aviation Institute (National Research University), 4, Volokolamskoe shosse, Moscow, А-80, GSP-3, 125993, Russia

e-mail: dmitreyyershov@mail.ru


The paper proposes a new quantitative model of strategic performance (QMSP) which is considerably extended in comparison with the original model proposed by M. Hell, S. Vidačić, and Z. Garača. Within the scope of original model linear optimization problem was formulated to find the optimal resource allocation and evaluate strategic performance corresponding to this allocation. In this problem the criterion function was the total level of main strategic objectives’ accomplishment while constraints were dictated by the structure of cause-consequence relationships between strategic objectives and limitations on resource amounts. Objectives and activities were suggested to be linked with one-to-one(zero)relationships. For an objective to reach x percent accomplishment level, corresponding activity has to be implemented the same percent.
We propose to extend the original QMSP so as to take into account three additional conditions which seem reasonable for us:

  1. Implementation of one strategic activity can influence reaching the set of objectives
  2. Strategic activities are divided into two groups. The first group is formed byproject activities. If an activity is of project type then it have to be implemented completely (all necessary resources must be spent to its implementation) or not be implemented at all. The second group is formed by process activities. If an activity is of process type then it can be implemented partly depending on resource amounts spent to implementation of this activity (all activities in original model are process activities).
  3. For each objective several alternative activities (groups of activities) can be specified. Optimization process must enable choosing only one activity (group of activities) which should be implemented.
To find optimal resource allocation considering new conditions the optimization problem containing binary and continuous variables is formulated. This problem (initially it isn’t linear) can be transformed to mixed 0-1 linear problem and solved with branch-and-bounds method or with some heuristic (metaheuristic) algorithm.
The new QMSPE was proved to be more suitable for evaluation of aerospace enterprise’s strategic performance. It was applied within strategic planning process of “ESTO-Vacuum”(this company produces vacuum equipment for production of avionics)and demonstrated its high potential as a planning instrument.


quantitative model for enterprise’s strategic performance evaluation, problem of optimal resource allocation, , strategic planning, balanced scorecard


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