Stakeholder value analysis from a decision analysis theory perspective

The previous section explored the different stakeholders present in car parking literature and found that some groups seem to dominate more than others. It also found a connotation of discord in the literature possibly as a result of different stakeholder objectives and value motivations. This study carries this insight forward by introducing Stakeholder Value Analysis (SVA) which maintains that all decisions require subjective judgments which can be estimated.

The objective of this section is to articulate a theory of values as the central issue in stakeholder decision making and to outline a process for eliciting such values. This will provide justification for concentrating on values and will also justify the subsequent methods employed.

First, individuals make their decisions based on a number of attributes, usually assessed either jointly or separately (Hsee, 2000). How important an attribute is to an individual and how easy or hard it is to evaluate also bears impact on an individual’s preference choices (González-Vallejo and Moran 2001). In this context attributes can take many forms. For instance, children will use a range of sensory attributes when selecting which chocolate bar to buy, such as melting quality, sweetness of taste or texture. Notably, when compared with the attributes used by chocolate industry experts, while the number of attributes agreed on is the same for both groups, some of the meanings behind their descriptions can differ (Sune, et al, 2002). Subsequently, individuals may apply their own meaningful and somewhat sophisticated approach to help them decide something’s value.

Second, is the term utility, which usually refers to an attribute’s weighting and helps to establish how much an attribute is valued. In other words the extent to which an individual prefers an attribute relative to how much they do not prefer another attribute. This can provide useful insights into either predicting the choice preferences of individuals or into understanding how individuals ought to make their choices (Fishburn, 1968).

Moreover, decisions can take an economic approach where the utility is the value and the decision is the outcome with the greatest utility (Bazerman, 1998). Where utility theory is based on the concept that humans display mostly rational behavior, psychological approaches may argue that this is unrealistic and that a gap exists in individual behaviour between the normative and descriptive, as reflected in the decisions made (Stanovich and West 2000).

This aside, according to Mendoza and Prabhu (2009), stakeholder values and preferences should be focused on prior to using alternatives in order to achieve them. This is because the

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values are considered to be more fundamental than the alternatives, so it is the values of the stakeholders at hand that should determine the set of alternatives to be considered in any particular study, rather than the other way round. This approach ensures that the values are not framed by a pre-selected set of alternatives which results in the values retaining a more fundamental nature. This is in line with the theory of SVA, as proposed by this section.

Earl and Clift (1999) describe Stakeholder Value Analysis (SVA) as a method that can capture the total stakeholder value from within a particular environment. It aims to elicit stakeholder preferences from various combinations of attributes, presented as alternative sets (usually via discrete choices) by following a particular process whereby the structure is described by figure 1.

The process is adapted (as recommended by earl and Clift, 1999) to suit this study (see figure1) and involves three key parts; 1) SVA inputs, such as stakeholder objectives and values and an understanding of the dilemmas they may face; 2) Multi Attribute Decision Environment (MADE), which outlines the environment from where decision attributes emerge and a decision making, or preference model is constructed, and; 3) SVA outputs, where the analysis is carefully interpreted to feed back to the stakeholders to modify the model, if required. In short, the SVA theory argues that attributes are a key means to achieving the fundamental values of stakeholders (Earl and Clift, 1999).

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Return to stakeholders to seek clarification

Seek clarificationReturn to stakeholders to seek clarification

Figure 1 Stakeholder value Analysis. Source: Earl and Clift (1999) adapted Clarification

Stakeholder values Decision options Stakeholder

objectives

2. Value design 1. Stakeholder identification

3. Trade off value model

5. Option creation

6. Stakeholder value maximised decision 4. Analysis

Stakeholder Value Analysis Inputs

Stakeholder Value Analysis Outputs Multi Attribute Decision Environment

MADE

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The six steps presented in figure 1 which are applicable to SVA are given below.

Step one, stakeholder identification: the identification of the relevant stakeholders involved in the decision making process

Step two, value design: establish stakeholder values for use in the choice set alternatives Step three, create trade-off model: ensure the attributes are communicable to all stakeholders involved, despite stakeholder’s different preferences and values

Step four, perform analysis Step five, clarification

Step six, stakeholder’s value maximised decision: stakeholder value established

These steps help to support and progress this study towards achieving its aim, by providing a theoretical structure to the process.

Also described are that compounding these features are certain characteristics, such as:

High stakes – the difference in perceived desirability between alternatives can be enormous, for example, economic costs / environmental costs

Complicated structure – features such as those given above can make appraising alternatives more difficult

No overall experts – due to the breadth of concerns involved, there are no overall experts, often only experts in particular disciplines

Need to justify decisions – decisions are often required to be justified to other parties such as regulatory bodies, the public, or oneself

Such characteristics when coupled with the multiple features of the environment (discussed above) would imply that complexity in decision making is unavoidable. In which case, employing a structure of decision making analysis, which Keeney (1982) describes as, “A formalisation of common sense for decision problems which are too complex for informal use of common sense,”

(p806) is required. In order to achieve a formalisation of common sense, determining preferences (values) to decision makers, through the use of trade-offs, whereby value is derived from the potential benefits an alternative can bring despite the potential losses, by presenting

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them with a range of different alternatives, is prescribed. The starting point for which, as agreed by both Keeney (1982) and Earl and Clift (1999) is to communicate directly with the decision makers, or stakeholders themselves.

Research proposition 11: Stakeholder Value Analysis suggests that when establishing stakeholder values, the process should first determine what value means to them before the attributes are identified, validated and tested.

Stakeholder value analysis, a decision analysis theory perspective, summary

This study adopts SVA as an appropriate pathway to follow in order to capture, estimate and validate stakeholder values of car parking and addresses the following research gap.

The research gap can be expressed in four parts:

First, the bulk of car parking literature apparently focuses on looking at how to modify the behaviour of individual users. In doing so, it makes an assumption that car parking problems can only be resolved by them. This is not the case.

Second, how the attributes used to represent car parking are derived is not correct. This is because they are typically predetermined prior to acquiring knowledge of how the stakeholders value car parking.

Third, the link between stakeholders and how they value car parking is nowhere made explicit in the literature.

Fourth, the literature is most attentive towards individual car parking users to the exclusion of other affected groups.

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