THE AHP IMPLEMENTATION IN STRATEGIC MANAGEMENT PROCESS – A CASE STUDY OF DECISION MAKING IN POLISH LOCAL ADMINISTRATION

Modern economy requires continuous improvement of the management process. This applies
not only to business, but also to public administration. It is necessary to search for methods,
improving the quality of management, including optimization of decision-making processes. One
of such decision support methods is the Analytic Hierarchy Process (AHP), proposed by
American mathematician, T.L. Saaty in the 70’s. Since then, this method has been widely used in
practice. This paper reports the process of building and analyzing the AHP model, which supports
a local government (District Office) in identifying priority factors of strategic management. The
implementation took place in one of the districts of Southern Poland, Nowy Targ. The model
refers to strategic management of local development understood as changes in an endogenous
potential of the region. It is built by four main criteria: potential of society, potential of the
economy, potential of the environment, and potential of institutions (local government). Each
criterion consists of several influencing factors (subcriteria). The surveyed group involved 14
decision makers employed in the District Office in Nowy Targ. All of them were responsible for
making key decisions in planning and implementation of district strategies. The AIP
(Aggregation of Individual Priorities) procedure was used to aggregate individual AHP results.
The priorities show that the most important factors influencing local development at the district
level are Entrepreneurship, Tourist attractions, Demographic potential, Innovation in business,
Clean environment and Competencies of the local government employees. These aspects should
be the main directions for strategic interventions in the years 2015-2022.

Full text (pdf)

[1] Aghion Ph., Howitt P.W., The Endogenous Growth Theory, MIT Press,
Cambridge 1998.
[2] Annoni P., Dijkstra L., EU Regional Competitiveness Index 2013, Publications
Office of the European Union Luxembourg 2013.
[3] Barbier E.B., The concept of sustainable economic development, Environmental
Conservation, 14(02), 1987, p. 101-110.
[4] Bhalla A.S., Ajit S., Fluitman A.G., Science and technology indicators and
socio-economic development, World Development, 13(2), 1985, p. 177-190.
[5] Central Statistic Office, Area and population in the territorial profile in 2015,
CSO, Methodology, Standards and Registers Department Warsaw 2015.
[6] Dess G., Miller A., Strategic Management, McGraw-Hill, New York 1993,
[7] Diener E., Eunkook S., Measuring quality of life: Economic, social, and
subjective indicators, Social Indicators Research, 40(1-2), 1997, p. 189-216.
[8] Filipiak B., Efektywność w zarządzaniu finansami samorządowymi. Skutek
kryzysu czy obiektywna konieczność?, Zeszyty Naukowe, Polskie Towarzystwo
Ekonomiczne, (10), 2011, p. 223-236.
[9] Galor O., Weil D.N., Population, Technology and Growth, American Economic
Review, 90(4), 2000, p. 806-828.
[10] Gierszewska G., Romanowska M., Analiza strategiczna przedsiębiorstwa,
Polskie Wydawnictwo Ekonomiczne, Warsaw1997.
[11] Ginevičius R., Podvezko V., Evaluating the changes in economic and social
development of Lithuanian counties by multiple criteria methods, Technological
and Economic Development of Economy, (3), 2009, p. 418-436.
[12] Kompa K., Budowa mierników agregatowych do oceny poziomu rozwoju
społeczno-gospodarczego, Zeszyty Naukowe SGGW Ekonomika i Organizacja
Gospodarki Żywnościowej, 74, 2009.
[13] Krupski R., Zarządzanie strategiczne. Koncepcje – metody, Akademia
Ekonomiczna we Wrocławiu, Wrocław 2007, p. 97.
[14] Lucas R.E., On the Mechanics of Economic Development, Journal of Monetary
Economics, 22, 1988, p. 3–42.
[15] Parilament, District Act, Parliment, Warsaw 1998.
[16] Parilament, Municipality Act, Parliment, Warsaw 1990.
[17] Parilament, Voivodship Act, Parliment, Warsaw 1998.
[18] Parliament, Public Financial Act, Parliament, Warsaw 2009.
[19] Podvezko V., Application of AHP technique. Journal of Business Economics
and Management, (2), 2009, p. 181-189.
[20] Prusak A., Stefanów P., Badania nad właściwościami operacyjnymi metody
AHP, Folia Oeconomica Cracoviensia, 52, 2011, 87–104.
[21] Prusak A., Strojny J., Stefanów P., Analityczny Proces Hierarchiczny (AHP) na
skróty – kluczowe pojęcia i literatura, Humanities and Social Sciences, (4),
2014, p. 179-192.
[22] Prusak, A., Stefanów, P., AHP - analityczny proces hierarchiczny. Budowa i
analiza modeli decyzyjnych krok po kroku (1st ed.), C.H. Beck, Warsaw 2014
[23] Ptaszek P., Adamus W., Modele rozwoju gmin w ujęciu wielokryterialnego
procesu decyzyjnego, Studia Regionalne i Lokalne, 49(3), 2012, p. 85-106.
[24] Rabelo S., Long-Run Policy Analysis and Long-Run Growth, Journal of Political
Economy, 99, 1991, p. 500-521.
[25] Romer P.M., The Origins of Endogenous Growth, Journal of Economic
Perspectives, 8, 1994, p. 3–22.
[26] Saaty T.L., Fundamentals of Decision Making and Priority Theory with the
Analytic Hierarchy Process (2nd ed.), RWS Publications, Pittsburg 2000.
[27] Saaty T.L., Relative Measurement and Its Generalization in Decision Making.
Why Pairwise Comparisons are Central in Mathematics for the Measurement of
Intangible Factors The Analytic Hierarchy/Network Process, RACSAM
(Revista de La Real Academia de Ciencias Exactes, Fisicas Y Naturales. Serie
A. Matematicas), 102(2), 2008, p. 251–318.
[28] Strojny J., Innowacyjne zarządzanie regionem, powiatem i gminą, Rzeszow
University of Technology, Rzeszow 2012.
[29] Tokarski T., Matematyczne modele wzrostu gospodarczego (ujęcie
neoklasyczne), Wydawnictwo UJ, Krakow 2009.
[30] Vaidya O.S., Kumar S., Analytic hierarchy process: An overview of
applications, European Journal of Operational Research, 169(1), 2006, 1–29.
[31] Vyas S., Kumaranayake L., Constructing socio-economic status indices: how to
use principal components analysis, Health Policy and Planning 21(6), 2006, p.
459-468.