Applying a Fuzzy Analytic Hierarchy Process to Develop Competencies on Sustainability

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Proceedings-Management, Agroindustry and Tourism Industry-0010 4th_{International Conference on Humanities and Social Sciences}

April 21st_{, 2012 Faculty of Liberal Arts, Prince of Songkla University} ₁

Applying a Fuzzy Analytic Hierarchy Process to Develop

Competencies on Sustainability

Thoedtida Thipparate1 Nunticha Kongkaew, Sunantha. Ompan

1.Lecturer, Faculty of Management Sciences, Prince of Songkla University Hatyai, Songkhla, ThailandEmail: [email protected]

Abstract

While sustainability has been extensively investigated in business practices, sustainability for MBA educational field is unexplored. First, this study collected the status of sustainability initiatives integrated with MBA programs, the scope of competency of sustainability practitioners and the relevant literature on performance competencies. In addition, this study involved a quantitative and qualitative content analysis of relevant documents, textbooks and educational objectives of performance competency, which includes knowledge, skills, and attributes in three hierarchies and 30 indexes. Second, this study assessed these criteria by employing the fuzzy analytic hierarchy process (FAHP) technique to solicit opinions from experts by using questionnaires. Results showed that knowledge, skills, and attributes had weights of 37%, 35%, 28%, respectively.

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1. Introduction

Currently, students attend the MBA Sustainability Management with valuable business knowledge, soft skills and managerial competence. The sustainability management is suitable for (1) an employee or manager who aspires to implement the concept of sustainability into their organization, (2) a company or a department which starts or expands a business with ecological or social goods, (3) an expert consultant or an executive of sustainability in public administration, (4) a business consultant who would like to introduce the perspectives of sustainability management to their clients, (5) a human resource manager who focused on encouraging sustainable development in the organization, and (6) a representative of a non-governmental organization (NGO) who tries to connect the important change in the way the business developments is done using a right way (Schaltegger, 2011). The implementation of sustainability is included in the MBA program with respect to a challenge to organizational development. Normally, program education on the sustainability integrates the strengths of conducted scientific research and application. The corporate fields are incorporated within this program through a number of exercises, case studies and real-life examples, as well as lecturers and tutors. Prerequisites for a performance competency of sustainability management include rhetorical, presentation and team working skills are important. Interdisciplinary competencies are concentrated on the MBA program features seminars (Schaltegger, 2011).

To reconsider the competency associated with sustainability for practitioners which are required by students, it is imperative to redesign and develop a curriculum. There are various tools/methods proposed to create a competency model. The multi criteria decision making (MCDM) problems are encountered in real life. These problems have attracted the interest of many scholars from the multi-criteria perspective. An analytic hierarchy process (AHP) is one of approaches that deal with subjectivity includes techniques. AHP reduces complex decisions to a series of pair wise comparisons and synthesizes the results. AHP and its extensions have been utilized extensively in the selection of human resources. Steuer and Na (2003) revealed there were about 18 articles on the AHP combined with finance. Vaidya and Kumar (2006) found there were 150 articles using the AHP for general applications. For educational proposes, the AHP was used in education, engineering, government, industry, management, manufacturing, personal, political, social, and sports (Ho, 2008). The analytic

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hierarchy process concentrates on arranging complex problems according to their systems. The AHP will assist in designing a curriculum focusing on sustainability competencies. It may use a hierarchy to separate it into different hierarchies. The development of these hierarchies can help curriculum planners to analyze the complexity of a curriculum when dealing with complicated and divergent curriculum requirements (Lee et al., 1998). Therefore, in this paper, AHP was used for organizational culture selection problem due to the fact that it has been widely used in evaluating various kinds of MCDM problems in both academic researches and practices. However, due to the subjective data and the vagueness and uncertainty on judgment of the decision-maker(s), the crisp pair wise comparison in the conventional AHP seems insufficient and imprecise to capture the right judgments of decision-maker(s). The fuzzy number logic is introduced in the pair wise comparison of AHP to make up for this deficiency in the conventional AHP. This study aims to apply an intelligent approach, where both techniques; fuzzy logic and AHP are combined, which is referred to as FAHP. The FAHP is used to explore the key competencies in sustainability for MBA educational field. In the next section we will review the literature on competencies associated with sustainability and FAHP, then a proposed model will be discussed and in the final section of the paper the result will be presented.

2. Literature Review

2.1 Definition of Competency

This section is to provide conceptual definition of competency. Definition includes three types of features: characteristics, skills and knowledge. It can be seen in literature that these terms are related and are used interchangeably. Mostly, there are four categories of competencies, namely knowledge, characteristics, attitudes and skills. Individual's job and individual's performance at work have been affected by competencies (Sanchez, 2010). Sanchez (2010) mentioned that competencies can be evaluated by the accepted standards and are improved through training and development. Organizations and academic education have to design required competencies in general or specialized level. However, Mulder et. al (2009) suggested that too much generalization or too much specialization must be avoided when designing competencies in academic education. Competency's behavior is the combination of various factors consisting of personal motivation, personal characteristics,

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self-concept, knowledge and skill, and it is obvious that the extent and relationship among these terms are difficultly define (Mitchealmore & Rowley, 2010 ). Competency can be defined as the knowledge, skills, abilities, attitudes, and other characteristics that can make a person to possibly perform things skillfully, for example, to make sound decisions and take effective action (Passow, 2007). In complex and uncertain situations such as professional work, civic engagement, and personal life, the terms associated with competencies are required (Woollacot, 2009).

2.2 Competency of Sustainability

Sustainability practice is a collaborative activity that plans, deployments, checks, coordinates, assesses, monitors, evaluates and redesigns the options and services required to satisfy an individual's, group’s, or community’s socioeconomic and environmental well-being requirements, providing communication and available resources to encourage quality, cost-effective, limited resource sensitive outcomes. Complex experience and understanding of multiple concepts and theories are required for performing the work in the area of sustainable development. In addition, an ability to improvise, adapt, and innovate product and service is required to transform a global civilization or save ecosystems from trouble. The consideration of competency of sustainability practitioner is a difficult work. One of root causes of these difficulties is a multi-purpose term, competency. There are various meanings of competency related with scientific fields (Descy & Tessaring, 2001). Willard et.al (2010) had a process focusing on competencies of the sustainability professional. Importance of competency of sustainability practitioner results of a growing need to move the world towards sustainable development and sustainable practices with government and industry. One of the significant factors in growth and success, and proper understanding of the nature is competency of sustainability practitioner. Competencies of sustainability practitioners can have absolutely influence over practice. Despite the assumed importance of competency of sustainability practitioner, the debate on competencies is taking its initial steps in business administration literature. Competency of sustainability professional is the aggregation of professionals' essential traits for sustainable success, including: knowledge, skills, and attributes (Willard, 2010). According to the sustainability professional: 2010 competency survey report the following competencies can be defined for sustainability professional: (1) Knowledge: concepts, theories ideas, processes (2) Skills: process dynamics, tools, methodologies, and (3) Attributes: innate abilities

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Willard (2010) provided a model for the competencies of the sustainability professional. The model is described in a diagram composed of tiers. The order of tiers' organization has formed a chain in which competencies are placed in a final part of the chain. Knowledge, Skills and Attributes (KSAs) are presented. Moss (2011) proposed that sustainability is analogous to economics. In Structuring and Staffing Corporate Responsibility, the board of the Corporate Responsibility Officers Association (CROA) has categorized competencies into Knowledge, Skills and Attributes (KSAs). The KSA were obtained from interviews and from a review of the job descriptions of practitioners. The proposed model concentrated on the full scope of the corporate responsibility practice from sustainability through philanthropy.

2.3 Competency Approach in Masters of Business Administration Programs

Competencies of sustainability practitioners are important in business success. Definition and evaluation of competencies of sustainability practitioners must be directly concerned. A model providing a framework based on the type and level of competencies of sustainability practitioner is rarely provided the competencies that can be named in masters of business administration programs in B. A. level. Currently, the model including different types of competencies is required for the competency-based education. The implementation of this method in academic level is crucial for the education for sustainable development. University professors in different subjects have same opinion that academic programs must be consistent with society needs. However, the development of the programs must be carefully and explicitly provided. The education program should include the learning components in work place. An approach in developing competency profiles can be observed in biology programs in Netherlands. Knowledge competencies, skill competencies, and attitude competencies are included in these programs. Mulder et. al. (2009) mentioned that the objective of competency-based education has to be balanced, useful and ethical training of graduates to fit into the society.

2.4 Fuzzy Analytic Hierarchy Process

Satty creates the Analytic Hierarchy Process (AHP) in 1971 by using an analytic logic that combines inductive and deductive methods. It illustrates the process of decomposition, judgment, and the synthesis of decisive thinking in humans. Therefore, it is considered as one of the most effective decision-making methods. First, the AHP is applied to the multiple-goal decision-making method. The AHP method connects complex decision problems to a hierarchical diagram. Eigenvectors are computed using a matrix of pair comparison of each

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criterion by a nominal scale with the resulting criteria hierarchy structure. The weights of each criterion in certain hierarchies are calculated for being the reference for decision analysis.

Applying the AHP, the experts have to use their mental abilities and competencies in comparisons. The conventional AHP still cannot represent the human thinking style (Kahraman et al., 2004; Duran & Aguilo, 2008). Saaty (1990) mentioned that a number of elements in a hierarchy influences the consistency value in the evaluation process. It will be unsuitable to have more than seven elements in one hierarchy. Consequently, the weight of each element is affected and the decision making becomes unreliable. The fuzzy sets are employed to deal with the limitation of the conventional method. The human’s verbal and ambiguous descriptions can be analyzed. Therefore, analytic hierarchy process method is implemented in imprecise condition to achieve the weight of the criteria. Laarhoven and Pedrycz . (1983) presented works concerning fuzzy analytic hierarchy process method in 1983. Then some researchers such as Buckley (1985), Boender et al. (1989), Chang (1996) and many others have worked in the field of fuzzy AHP. This study applies the Chang’s approach to analyze Fuzzy analytic hierarchy process (FAHP) based on the results obtained from Taskin (2008) which revealed that the steps and computations of the Chang’s approach are easier than the other fuzzy-AHP Approaches. To apply the AHP, the analysis is performed by using the following steps: 1) define and analyze the problem; 2) construct structural hierarchical relationships; 3) design and collect questionnaires; 4) conduct a pairwise comparison matrices; 5) compute the value of fuzzy synthetic extent with respect to the designed object; 6) perform the fuzzy edition operation of the extent analysis values for a particular matrix; 7) compute the inverse of the vector; 8) calculate the degree of possibility of the extent analysis values; 9) compute the degree possibility for a convex fuzzy number.

3. Research Methodology

3.1 Establish a Hierarchical Relational Framework

Researchers must carefully identify their research problems. After performing work of the literature review, an initial questionnaire was distributed to experts including academician and practitioner. This questionnaire included three criteria and 30 sub-criteria. A hierarchy framework was constructed, containing the decision goal, the alternatives for accomplishing it, and the criteria for evaluating the alternatives.

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This study constructed a comparison matrix by comparing pairs of criteria or alternatives. The experts independently performed the pairwise comparison regarding the contribution of each criterion to the objective. Following Saaty (2008), the researcher assigned a single number drawn from the fundamental 1-9 scale of absolute numbers. In this study, the experts assessed individually by virtue of the linguistic variables of Table 1. These variables are changed to homologous triangular fuzzy numbers to integrate the individual assessments and then the final matrix is calculated. Finally, the weight of the criteria is defined by fuzzy AHP.

Table 1 Linguistic values and fuzzy numbers

Linguistic terms Triangular fuzzy numbers

Just equal (1,1,1)

Equally important (1/2,1,3/2)

Weakly more important (1,3/2,2)

Strongly more important (3/2,2,5/2)

Very Strongly more Important (2,5/2,3)

Absolutely more important (5/2,3,7/2)

3.3 Conduct Global Priorities

The local priority is converted to a global priority via additive weighting. The obtained information is used by a final decision maker as a reference when making decisions. The final step is to establish the normalized priority weights of the curriculum to identify the best alternative. These weights can be determined by first laying out the local priorities of the curriculum, with respect to each criterion in a matrix and, then, multiplying each column of vectors by the priority of the corresponding criterion. Finally, the results in each row are added to calculate the global priorities of the curriculum.

The complete evaluation procedure is shown in Figure 1. First, literature review was employed to extract independent factors associated with competency of sustainability professional (Moss, 2011) to form a hierarchical system based on the considered attributes. Second, the fuzzy integral is applied to evaluate the integrated value of attributes in each competency. Third, the fuzzy analytic hierarchy process (FAHP) is used to determine the relative weights between each factor.

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4. Result

The FAHP approach adopted in this study was used to evaluate the contrast of the perceived evaluation criteria. A survey questionnaire was conducted to investigate the relative importance of the performance competency for sustainability practitioners. The criteria and their measurement items initially were developed based on a literature review of the sustainable MBA programs; the scope of knowledge competency, skill competency, and attribute competency. The competence model for sustainability practitioners is included: (1) knowledge (C11: Economic sustainability, C12: Environmental sustainability, C13: Social sustainability, C14: Governance, C15: Stakeholder engagement, C16: Ethics, C17: Green business development, and C18: Green business implementation); (2) skills (C21: Strategy development, C22: Strategy execution, C23: Performance management, C24: Change management, C25: Communication, C26: Industry and business acumen, C27: Risk management, C28: Strategy and competition, and C29: Strategic role of sustainability); and (3) attributes (C31: Courageous, C32: Decision, C33: Ethical, C34: Innovative, C35: Logical, C36: Open minded, C37: Organized, C38: Perceptive, C39: Proactive, C310: Process-focused, C311: Qualified, C312: Self-reliant, and C313: Versatile). The relative weight of the assessment criteria was used at the second level and the weight value of the first-level facet to calculate the relative weight value of each assessment criteria facet in the whole. It was found that the important factors among knowledge are C17: Green business development (0.21), C18: Green business implementation (0.21), C12: Environmental sustainability(0.15),

Competency assessment Identification of criteria

Structure of criteria Pairwise comparison

Local weight calculation using Fuzzy AHP

Calculation of global weight of a criterion

Interaction between decision criteria associated with competencies of sustainability professional including

knowledge competency, skill competency and attribute

competency

Calculation of average weight of a criterion Figure 1 A competency assessment framework

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respectively. The important factors among skills are C28: Strategy and competition (0.21), C29: Strategic role of sustainability (0.21), and C27: Risk management (0.16). The important factors among attributes are C313: Versatile (0.16), C32: Decision (0.11), and C312: Self-reliant (0.11). The findings of this study suggested that the criteria are all comparable, and none of them can be sacrificed. Table 2 shows that, identified in this study, were some interesting findings on the importance of competency. The global and local weights are presented in Table 3.

Table 2 Competency evaluation criteria weight for the sub-criteria level

Weighted knowledge order C1: Knowledge Wt Weighted skill order C2: Skills Wt Weighted attribute order C3: Attributes Wt 1 C17: Green business development 0.21 1 C28: Strategy and competition 0.21 1 C313: Versatile 0.16 2 C18: Green business implementation 0.21 2 C29: Strategic role of sustainability 0.21 2 C32: Decision 0.11 3 C12: Environmental sustainability 0.15 3 C27: Risk management 0.16 3 C312: Self-reliant 0.11 4 C14: Governance 0.13 4 C26: Industry and business acumen 0.11 4 C34: Innovative 0.1 5 C11: Economic sustainability 0.09 5 C21: Strategy development 0.09 5 C37: Organized 0.09 6 C13: Social sustainability 0.08 6 C22: Strategy execution 0.06 6 C31: Courageous 0.07

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7 C16: Ethics 0.08 7 C25: Communication 0.06 7 C311: Qualified 0.07 8 C15: Stakeholder engagement _0.05 8 C24: Change management 0.05 8 C33: Ethical 0.06 9 C23: Performance management _0.04 9 C36: Open minded 0.06 10 C38: Perceptive 0.06 11 C310: Process-focused 0.05 12 C35: Logical 0.04 13 C39: Proactive 0.04

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Wt Criteria Local weight Global weight Rank C11 0.14 0.06 0.13 0.08 0.09 0.09 0.03 10 C12 0.14 0.13 0.13 0.17 0.16 0.15 0.06 6 C13 0.05 0.12 0.05 0.08 0.08 0.08 0.03 15 C14 0.14 0.12 0.13 0.13 0.13 0.13 0.05 8 C15 0.05 0.05 0.06 0.05 0.04 0.05 0.02 25 C16 0.07 0.09 0.08 0.07 0.07 0.08 0.03 16 C17 0.20 0.20 0.19 0.22 0.22 0.21 0.08 1 C18 0.22 0.23 0.22 0.21 0.21 0.21 0.08 2 C21 0.09 0.10 0.07 0.09 0.09 0.09 0.03 11 C22 0.06 0.09 0.05 0.06 0.07 0.06 0.02 17 C23 0.04 0.04 0.06 0.05 0.03 0.04 0.01 27 C24 0.05 0.05 0.06 0.05 0.05 0.05 0.02 26 C25 0.06 0.05 0.09 0.07 0.06 0.06 0.02 18 C26 0.10 0.10 0.12 0.10 0.10 0.11 0.04 9 C27 0.17 0.19 0.13 0.16 0.17 0.16 0.06 5 C28 0.20 0.18 0.20 0.22 0.22 0.21 0.07 3 C29 0.22 0.21 0.23 0.21 0.21 0.21 0.07 4 C31 0.10 0.03 0.10 0.06 0.06 0.07 0.02 19 C32 0.10 0.14 0.10 0.13 0.12 0.11 0.03 12 C33 0.03 0.07 0.03 0.06 0.06 0.06 0.02 20 C34 0.10 0.07 0.10 0.10 0.09 0.10 0.03 13 C35 0.03 0.03 0.05 0.04 0.03 0.04 0.01 28 C36 0.06 0.05 0.06 0.06 0.05 0.06 0.02 21 C37 0.09 0.10 0.07 0.08 0.09 0.09 0.02 22 C38 0.06 0.09 0.04 0.06 0.07 0.06 0.02 23 C39 0.04 0.03 0.06 0.04 0.04 0.04 0.01 29 C310 0.05 0.05 0.06 0.05 0.05 0.05 0.01 30 C311 0.06 0.05 0.09 0.06 0.06 0.07 0.02 24 C312 0.10 0.10 0.12 0.10 0.10 0.11 0.03 14 C313 0.17 0.19 0.13 0.16 0.17 0.16 0.05 7 1

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C11=Economic sustainability C12=Environmental sustainability C13=Social sustainability C14=Governance C15=Stakeholder engagement C16=Ethics C17=Green business development C18=Green business implementation C21=Strategy development C22=Strategy execution C23=Performance management C24=Change management C25=Communication C26=Industry and business acumen C27=Risk management C28=Strategy and competition C29=Strategic role of sustainability C31=Courageous C32=Decision C33=Ethical C34=Innovative C35=Logical C36=Open minded C37=Organized C38=Perceptive C39=Proactive C310=Process-focused C311=Qualified C312=Self-reliant C313=Versatile

5. Conclusions

This study aims to identify set of key competencies that can guide the design of programs and courses in sustainability, teaching and learning evaluations, and hiring and training faculty and staff. This study provides the competencies with the evidence by using the FAHP. This study applied the FAHP approach, and found it useful for a complex competency evaluation problem. The fuzzy analytic hierarchy process can be applied to future studies on various multi-criteria curriculum planning problems in educational areas. However, the interrelationships among the evaluation criteria in this study remained

undetermined. The correlation between their effects on the evaluation of competency has to be determined. The relationship between these criteria may affect the extent to which a better sustainable MBA programs can be planned for MBA students. Although the priority of the competency was thoroughly investigated in this study, the limitations should be addressed in future studies. First, the competency evaluation model of the three domains used in this study might not represent all domains, e.g., ability, behavior and other characteristics. Second, this study was conducted with relatively small samples, especially of the academicians and practitioners. A sample selection bias problem can be found. In conclusion, developing MBA programs based on the required competency is a challenging issue. However, there are some limitations to be considered. The participants in this study are a producer (i.e., academician) and a customer of a customer (i.e., practitioner). Voices of an internal customer (i.e., student) should be concerned. In addition, rating scale is employed in this study and the measurements of variables are successfully done by the individual opinion. The actual situation is possibly different from the actual. The after-data collection-reviews are required to validate the measurement.

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