STAT1060 Business Decision Making
Task:
Perform a value analysis of a fellow student (not enrolled in this course) who is currently looking for a job. The analysis should help your client to understand better the multiple values that are involved in the choice among alternative jobs and the tradeoffs among those pertinent values. The specifics of the analysis are your choice, but you should consider at least the following components: a value tree, importance weights, multi-attribute utility analysis and some form of sensitivity analysis.
An article is posted on Canvas that you may find useful. Ralph Keeney presents a method for value analysis that is as fundamental as you can get. You need not go as deep as Keeney does, but reading this Sloan Management Review article may give you some ideas about how to improve your value analysis--and the piece is well worth reading for its longer-term value. Begin by constructing a value tree for your client. The tree should contain all the important (to your client) attributes of a job. They should be structured in a hierarchy. Finally, they should be fine-grained or specific enough that each one can be evaluated by your client on a numerical scale.
There are many ways of executing the details of the importance weights. One of the simplest (yet still effective) approaches is to: (a) have your client identify the single most important job attribute (e.g., salary, post-MBA professional development, nearness to family, (b) temporarily give that attribute. (c) instruct your client to assign points to every other attribute (e.g., reputation of the hiring organization) so that the ratio of another attribute's points to 100 parallels the ratio of the two importance weights (If salary is worth 100 importance points. how many importance points is the organization's reputation worth? If 40 points, then salary is worth 2.5 times reputation.); (d) sum all attributes' importance weights (1); and for each attribute, take the importance weight it was originally assigned, multiply it by 100, and divide by T. The result should be a valid set of importance weights that add to are "normalized" to 100 points). If there is any concern about validity, you can check, either at stage C or when you're done, by asking your client to provide ratios of importance weights and comparing those to the ratios of the actual weights. For instance, if the weights of Attribute2 and Attribute 12 are 10 and 5 respectively, then their ratio should be 2:1. Checking several pairs should either verify the validity of what you already have, or point you to the necessary adjustments. Once the weights have been determined, the values of the attributes for each job also need to be transformed into numbers. One simple way to assign numerical values is to let the realistically best value of each attribute receive points (the maximum possible).
