Prioritizing the agility strategies using the Fuzzy

273

Prioritizing the agility strategies using the Fuzzy

Analytic Hierarchy Process (FAHP) (case study:

Hospitals)

Seyed Faramarz Ghorani PhD student of product management and Operations, University

of Allameh Tabataba'i, Faculty of Management, Tehran, Iran

Dr. Maghsoud Amiri Professor, Department of Industrial Management, University of

Allameh Tabataba'i, Faculty of Management, Tehran, Iran

Dr. Laya Olfat Associate Professor, Department of Industrial Management,

University of Allameh Tabataba'i, Faculty of Management, Tehran, Iran

Dr. Abolfazl Kazazi Associate Professor, Department of Industrial Management,

University of Allameh Tabataba'i, Faculty of Management, Tehran, Iran.

Abstract: This study aims at identifying and prioritizing the agility strategies of organization

through the Fuzzy Analytic Hierarchy Process (FAHP). This research is applied in terms of

investigated objectives, has the descriptive-analytical type in terms of data analysis, and uses the

survey method for data collection. The statistical sample consists of 223 top and middle managers in

active hospitals of medical science universities affiliated to the Ministry of Health and Medical

Education in Tehran Province. In this study, the descriptive statistics including the demographic

data of statistical sample such as the tables of frequency distribution, descriptive charts, etc are

utilized for data analysis, and also the inferential statistics by FAHP applied for weighting the

options. At the first stage, the agility indices of organization are prioritized through the Fuzzy

Analytic Hierarchy Process (FAHP). The results indicate that the competence is the most important

criterion of organizational agility. At the next stage, the strategies are prioritized in each dimension

of agility in the organization. The final weight matrix is obtained from multiplying these two

matrices by each other. The results indicate that human resource management strategy is the most

important strategy of organizational agility

Keywords: Organizational agility, strategy, Fuzzy Analytic Hierarchy Process (FAHP), human

resources management, information and technology management, change management, knowledge

management

1. Introduction

The contemporary manufacturing organizations have been faced with major challenges in

terms of two aspects. On the one hand, the new philosophies and technologies of

manufacturing are emerging and this will cause the obsolescence of former practices. (Olfat,

Prioritizing the agility strategies using the Fuzzy Analytic Hierarchy Process

Ghorani et al/ Argos Special Issue2, 2015/pp. 273-287

274

2009) On the other hand, the customers have become emboldened in demands for new

products and service in the short time (Ho, Lau, Lee & Ip, 2005). Nowadays, the agility is

considered as a powerful competitive tool for all organizations in a changing and turbulent

environment. The concept of agility is introduced by Iacocca Foundation researchers (1991)

and has been taken into account by researchers and industrial communities after the first

introduction. So far, numerous publications are produced for this subject in an attempt to

provide a definition of agility. According to the common accepted definitions, the agility is

the ability of organization to respond quickly and effectively to changes in market demand

with the aim of finding the customer needs in terms of price, features, quality, quantity,

and delivery. The agile companies quickly and effectively respond to changing markets.

Furthermore, the agility affects the organizational capabilities for production and delivery

of new products at productive cost. The reduced production costs, increased customer

satisfaction, eliminated non-value added activities, and increased competition are among

the advantages which can be achieved through the agility strategy.

This identification of organizational capabilities to cope with the environmental changes

and the effort to improve these capabilities by establishing the appropriate strategies are

the first steps in achieving he desired level of agility. (Molavi, 2013) At the beginning of the

twenty-first century, the world has been faced with major changes and challenges receiving

from different directions to manufacturing organizations, and thus it has made taking the

urgent measures in accordance with the new competitive environment inevitable for

organizations. In this regard, the new system of production, called the agile manufacturing,

has emerged in operations management with the same aim in recent years. (Crocitto &

Youssef, 2003) Enabling the organization to respond quickly to demand changes is the

extract of agility strategy. (Christopher, 2000) An agile organization quickly responds to the

market demands according to the existing changes. (Ramesh & Devadasan, 2007)

An agile organization should be able to identify the environmental changes and consider

them as the agents of growth and development. Generally, the agile concepts consist of

three main parts including the drivers, capabilities, and enablers of agility. The drivers are

considered as the starting points of agility and are the factors which induce the

achievement of agility. The agility capabilities are the necessary abilities to cope with the

drivers, and the enablers are the factors which lead to the development and improvement of

agility capabilities in the organization. (Zhang & Sharifi, 2007) The agility drivers are the

business environment changes and pressures which enforce the organizations to review the

strategy and modify or adjust it in order to take into serious account the agility

(Hillegersberg, 2006).

According to a classification introduced by Zhang & Sharifi, these capabilities cover seven

main elements which are considered as the bases for maintaining and developing the

agility. These elements are as follows: The accountability, competence, flexibility, speed,

focus on customer, pre-action, and participation. The agility strategies include the IT and

technology management, human resource management (HRM), knowledge management

(KM), and change management (CM). (Zhang & Sharifi, 2007).

The agility approach, which has been proposed and developed in less than a decade, is an

informed comprehensive response to the changing needs of competitive markets and



275

achievement of success in opportunities. Naturally, the organizations seek the effectiveness

and this depends on the identification of environment as well as understanding the resulted

effects in the environment and the necessary adjustments in mechanisms of monitoring and

operational feedback. The custom production rather than the mass production is one of the

natural-progressive response of organizations and the manufacturing and service

companies have attracted to agility approach. (McDonald, 2002) The agility has two main

parts: 1- Response to changes (unexpected and unpredicted) and 2- Utilization of changes

and taking advantage of them as an opportunity. (Dove, 1993).

Molavi (2013) provided a method for prioritizing the agility strategies using the TOPSIS

technique and the Fuzzy Inference System (FIS). The obtained results of research indicate

the superior role of information and technology management than other strategies in

improving the agility of studied industry and accountability to its environmental needs.

Abdollahi (2013) provided an upgraded model of organizational agility with an approach of

Aligned Balanced Scorecard (BSC). In this paper, the Aligned Balanced Scorecard (BSC) is

utilized to determine the perspectives in four dimensions in order to specify the strategy

which is one of the dimensions of enablers in organizational agility model, and then the

enablers of agility, which cause appropriate response to agility drivers, are improved, and

finally the organization becomes more agile. Investigating the agility literature, interviews

with industry managers and experimental surveys, Zhang & Sharifi (2007) introduced a

primary conceptual model and designed a methodology for achieving the agility in

manufacturing organizations. This conceptual model consists of three main principles as

follows: The drivers, capabilities, and enablers of agility. Zhang & Sharifi (2000) have

classified the enablers of agility into 4 categories of strategic capabilities as follows:

- Accountability: The ability to identify the changes, respond quickly to them in the

form of reaction or pre-action, and returning again to the appropriate mode against

the changes.

- Competence: This is the ability of an extensive list of capabilities which equips a

company with the efficiency and effectiveness in achieving its goals.

- Flexibility: The ability to perform different tasks and achieve different objectives

with the same facilities.

- Speed: The ability to perform tasks and operations in the shortest possible time.

Each of these capabilities separately exist in studies by other researchers such as Giachetti,

Martinez et al (2003), Christopher (2000), and Swafford et al (2006). Based on the

classification above, these researchers have provided the scales for measuring the agility.

According to the above-mentioned cases, the main research question is as follows: How are

the agility strategies of organization prioritized by Fuzzy Analytic Hierarchy Process in

hospital?

2. Materials and methods

This research is applied in terms of objective and has the descriptive-analytical type

according to the data analysis, and utilizes the survey method in terms of data collection

method. Both library and survey methods are utilized for data collection in this research.

The first stage includes the theoretical principles and research literature, and the

background of studies conducted in this field as well as identification of factors affecting the



276

organizational agility through the library method. Utilizing the theoretical review, research

background and literature, the second stage designs a questionnaire to achieve the research

objectives and then the necessary data is collected by referring to required data. Therefore,

the data collection tools of this study are summarized as follows:

- Book

- Relevant articles

- Research projects

- Questionnaire

The statistical population of this study consists of the senior and junior managers in active

hospitals of medical universities affiliated to the Ministry of Health and Medical Education

in Tehran Province. According to the conducted studies, there are 506 senior and middle

managers active at the medical universities affiliated to the Ministry of Health and Medical

Education in Tehran Province. The sample size is determined equal to 218 according to

Morgan Table. To ensure it, 230 questionnaires were designed and distributed among the

statistical population. After collecting the questionnaires, 223 questionnaires had the

capability of analysis.

The descriptive statistics including the demographic data of statistical sample such as the

frequency distribution tables, descriptive charts and etc are utilized for data analysis in

this study, and also the inferential statistics through FAHP is used for weighting the

options.

The research model is as follows:

Figure 1. Research model



277

3. Findings

3-1- Ranking the indices of organizational agility

In this section, we are seeking to rank and determine the importance factors of

organizational agility indices through the Fuzzy Analytic Hierarchy Process (FAHP).

The valuation of criteria is done through the pairwise comparison and giving the scores

which are the triangular fuzzy numbers and indicate the priority or importance of two

criteria. Therefore, the decision maker compares the indices and uses the triangular fuzzy

numbers for pairwise comparison. Using the range of 1 to 9, the pairwise comparison

matrix can be established in the form of triangular fuzzy numbers. In other words, the

decision maker expresses his preferences by pairwise comparison of elements at each level

with higher levels through the fuzzy method.

AHP is the multi-criteria decision-making process and there are at least three different

levels in each model, so that there the elements of each level are connected together. The

"target" is the first level and is associated with the decision making purpose of processing

model. The second level is related to the criteria and it investigates the most important

criteria in which the decision making process are involved. The third level is related to the

options in which the elements, which are selected and degreed according to the priority, are

assigned. The fuzzy numbers corresponding to the preferences of pairwise comparisons are

shown among the variables shown in the following table.

Table 1. Fuzzy numbers corresponding to the preferences in the pairwise comparisons

Linguistic expression to determine

the priority Triangular fuzzy

number

Full (4, 4.5, 5)

Extremely high (3.5, 4, 4.5)

Very high (3, 3.5, 4)

High (2.5, 3, 3.5)

Relatively high (2, 2.5, 3)

Relatively low (1.5, 2, 2.5)

Low (1, 1.5, 2)

Relatively equal (0.5, 1, 1.5)

Equal (1, 1, 1)

For introduction to Fuzzy Analytic Hierarchy Process, weighting the options from the

perspective of one of the respondents is done step by step, and then the results of Expert

Choice 11 are presented according to 5 respondents.

First responder has completed the table for prioritizing the agility indices of organization in

the questionnaire as follows:

The way of converting the tables extracted from the questionnaire into the fuzzy matrices

in AHP method is as follows. The following table shows weighting the factors by one of the

respondents:



278

Table 2. Determining the importance of agility indices

Agility indices Competence Accountability Speed Flexibility

Competence 1 3 3 4

Accountability 1.3 1 2 3

Speed 1.3 1.2 1 3

Flexibility 1.4 1.3 1.3 1

It is observed that the data of triangle below (the elements under the main diagonal) is the

reverse symmetry of data in triangle above (the elements above the main diagonal). For

instance, the competence index is times more important than the accountability or the

accountability is one-third important then the competence from the perspective of this

respondent. Now, we should convert the numbers and elements of matrix to fuzzy numbers

according to the equivalent in the table of "fuzzy numbers corresponding to priorities".

Therefore, the pairwise comparison matrix of factors from the perspective of first

respondent is according to the following fuzzy form:

Table 3. Fuzzy pairwise comparison matrix for main factors from the perspective of first respondent

Agility indices Competence Accountability Speed Flexibility

Competence (1,1,1) (1, 1.5, 2) (1, 1.5, 2) (1.5, 2, 2.5)

Accountability (0.5, 2.3, 1) (1,1,1) (0.5, 1, 1.5) (1, 1.5, 2)

Speed (0.5, 2.3, 1) (2.3, 1, 2) (1,1,1) (1, 1.5, 2)

Flexibility (0.4, 0.5, 2.3) (0.5, 2.3, 1) (0.5, 2.3, 1) (1,1,1)

The relative and final weights should be calculated after preparing the pairwise comparison

matrix (the respondents' preferences obtained from the questionnaire) in the fuzzy form.

Various methods are provided by researchers for this purpose including the Extent Analysis

Method by Chang and this research utilizes this method.

First step) The SK value, which is a triangular fuzzy number, is calculated for each row of

pairwise comparison matrix prepared as follows.

After responding the tables of factor preferences by respondents, the coefficients of each

pairwise comparison matrix are first calculated (sk). The sk value is a triangle number

which is calculated as follows:

(1)

1

*

1 1 1

n

i

m

i

n

i

ijkjK MMS

Where, K indicates the numbers of row and i and j are the options and criteria respectively.



279

Second step) After SK calculation in EA method, their magnitude degrees should be

measured. Generally, if M1 and M2 are two triangular fuzzy numbers, the magnitude

degree of M1 to M2, which is shown by V(M1M2), is defined as follows:

(2) 1)( 21 MMV M1M2

Otherwise, )*()( 2121 MMhgtMMV

Also we have:

(3)

)()()(

1221

2121

mmlu

lummhgt

The magnitude of a triangular fuzzy number from k triangular fuzzy number is also

obtained from the following equation:

(4)

kk mmvmmvmimmmv 12121 (),...,(),...,(

Third step) We calculates the weights of indices in pairwise comparison matrix in EA

method as follows.

(5)

iknkssvxw kii ,,...,2,1,(min)(

(6)

iknkssvxw kii ,,...,2,1,(min)(

(7)

tcnwcwcww )(),...,(),( 21

And this is the vector of non-normed fuzzy AHP coefficients.

Fourth step) The values obtained from in the previous step of non-normed weight are the

criteria of hierarchy analysis table. Therefore, the normed weights of criteria (indices) are

obtained from the following formula.



280

(8)

i

ij

W

WW

txxxw ,...),,(

The obtained weights are the relative importance coefficients for each index (criteria) based

on fuzzy AHP (by EA method) and determine the best option of decision making from the

decision making criteria.

Table 4: Total row values of indices

Agility indices Total row values of main

factors

Competence (4.5, 6, 7.5)

Accountability (3, 4.16, 5.5)

Speed (3.16, 4.16, 6)

Flexibility (2.4, 2.82, 3.66)

Sum (13.06, 17.14, 22.66)

Sk calculation: Sk is calculated for each row of pairwise comparison matrix prepared

according to the above-mentioned method:

Calculating the magnitude of s compared to each other.



281

Calculating the weights of indices in pairwise comparison matrix:

{ } { }

{ } { }

{ } { }

{ } { }

Finally, the non-normed weight vector of indices is as follows:

(9)

[

]

1. Normalizing the weight vector obtained from the third step and measuring the

weight vector of criteria.

(10) ∑

Therefore, the final weight and prioritization of main four factors of SWOT matrix are

according to the following tables from the perspective of a respondent and by FAHP

method:

Table 5. Prioritizing the indices of agility according to the FAHP method

Index (criteria) Weight Priority

Competence 0.37 1

Accountability 0.25 3

Speed 0.26 2

Flexibility 0.12 4

It is shown that the sum of importance coefficients is exactly equal to 1 indicating the

full accuracy of calculations.



282

Expert Choice software output chart with respect to the final prioritization of agility

indices for all respondents is as follows:

Figure 2. Final prioritization of indices

According to the output of software, the inconsistency rate is equal to 0.06, and since it

is below 0.1, the reliability of data above is confirmed. According to the findings above,

the final matrix for ranking the agility indices is as follows:

(11)

3-2- Ranking the strategies based on the first criterion of organizational agility

(competence)

Like the previous steps, we rank the agility strategies on the basis of competence agility

index in this step. The Expert choice software output is as follows:

Figure 3. Ranking the strategies based on the first criterion of organizational agility (competence)



283

According to the software output, the inconsistence rate is equal to 0.09, and since the

inconsistence rate is below, the reliability of data above is confirmed.

3-3- Ranking the strategies based on the second criterion of organizational agility

(accountability)

Figure 4. Ranking the strategies based on the second criterion of organizational agility (accountability)

3-4- Ranking the strategies based on the third criterion of organizational agility (speed)

The output of Expert choice software for ranking the strategies based on the speed

agility criterion is as follows:

Figure 5. Ranking the strategies based on the third criterion of organizational agility (speed)

3-5- Ranking the strategies based on the fourth criterion of organizational agility

(flexibility)

The output of Expert choice software for ranking the strategies based on the flexibility

agility criterion is as follows:



284

Figure 6. Ranking the strategies based on the fourth criterion of organizational agility (flexibility)

3-6- Final prioritization of organizational agility strategies based on each variable

The above steps are summed up in the following table:

Table 6. Prioritizing the strategies based on each criterion of agility

Strategy criterion Competence Accountability Speed Flexibility

Information and technology (IT) management

0.154 0.137 0.093 0.161

Human resource Management (HRM)

0.494 0.515 0.473 0.501

Knowledge management (KM)

0.270 0.273 0.267 0.261

Change management (CM)

0.082 0.075 0.167 0.078

Now, the prioritization of criteria or W matrix (final weight) for strategies is obtained

based on four mentioned criteria by integrating and multiplying the obtained above

matrix by final matrix. Finally, the final rank and weight are as follows:

(12)



285

Table 7. Prioritization and final weight of organizational agility strategies

Organizational agility strategies

Final weight Rank

Information and technology management

0.146 3

Human resource management

0.498 1

Knowledge management 0.269 2

Change management 0.087 4

According to the obtained results, the human resource management has obtained the

first rank, and the second rank is given to the knowledge management, the third one to

information technology management, and the fourth one to change management from

the agility strategies of organization.

4- Conclusion

The new needs of business environment always create the new competition ways which

become inclusive depending on the theoretical strength and intensity of need in the

organizations. The aim of this study is to identify and prioritize the organizational

agility strategies. This research provides the scientific, precise and targeted

infrastructure for mid-term and long-term planning in line with making the hospitals

agile with the aim of improving the agility and preparing them for entry into the global

markets. By development and implementation of programs, which promote the effective

structures on agility, it can be hoped that the path towards the agility will be shorter

and more reliable, and the correction of deviations from the program will be controllable

more clearly. The agility is one the most important factors of survival and progress in

companies in today's dynamic environment. The change and uncertainty is the basic

characteristic of this environment. We should investigate how the companies should

operate in such this environment in order to obtain the maximum benefit from the

changes and develop while maintaining their situation in the environment. The

management science has also been faced with the changes based on this principle.

Either in public or private sector, the management is responsible for proper utilization

of production factors in line with three goals, the organization, employees and

government. Therefore, playing the role of management is very complex and difficult in

this era.

According to the obtained results, the human resource management strategy is the most

efficient strategy in the field of agility strategies of organization. The managers' lack of

familiarity and belief in incredible important elements such as the employment,

training and performance evaluation in this area is the main cause of failure in human

resource measures in local organizations and particularly the hospitals. The

implementation of favoritism instead of criteria, the lack of meritocracy, the inefficient

education, and lack of payment system based on the performance are the other causes

which have weakened this field according to the experts. The managers' failure to



286

develop and implement the programs based on the strategy is the most important factor

in insignificant relationship between this structure and agility structure. On the other

hand, the companies, which have developed the systematic strategy, think less about

the evaluation and review of their strategies while facing with the extensive current

turbulence of market and economy. In this regard, the more they adhere to

implementation of developed strategies, the less they achieve positive results. According

to the study by Tseng et al (2011), from twelve considered enablers, the human resource

management is known as the most important enablers of agility, and the results of this

study are consistent with this finding. An organization has essentially a collection of

elegance to respond to the changes in the environment. The agile hospital is concerned

more about the change, uncertainty and unpredictability of environment and tries to

show the correct response in this situation. Therefore, the agile organization needs the

existing potential capacities and adaption for facing with these changes and uncertainty

in the environment. These capabilities include 4 major elements. The accountability is

the ability of identifying the changes and responding quickly to them in order to solve

them. The competence is the ability to achieve effectively the goals and missions of

organization. The flexibility is the ability to process different processes and achieve

various objectives with the same features. The speed is the ability to perform tasks in

the shortest possible time. Using these 4 principles, a methodology is created for

combining them in the form of a relevant and integrated system. According to the

obtained results, the competence is the most important criterion of organizational

agility. Therefore, it can be concluded that the enrichment and development of job as

well as the self-decision-making will create the agility for employees.



287

References:

1. Olfat, Laya; Zanjirchi, Seyed-Mahmoud (2009), A model for organizational agility in

the electronics industry of Iran; Quarterly Journal of Management Sciences in Iran,

Issue 13, Spring 2009, pp. 47-74.

2. Molavi, Behnam; Esmaeilian, Majid; Ansari, Reza (2013) Providing a method for

prioritizing the agility strategies of organization using TOPSIS technique and Fuzzy

Inference System (FIS); Industrial Management, Vol. 5, No. 1, Spring and Summer.

3. Christopher, M.G. (2000). The agile supply chain: competing in volatile markets.

Industrial Marketing Management 29(1), 37-44.

4. Christopher, M.G. (2000). The agile supply chain: competing in volatile markets.

Industrial Marketing Management 29(1), 37-44.

5. Dove R. Lean and Agile: Synergy, Contrast, and Emerging Structure. Paper

Presented at the Proceedings of Defense Manufacturing Conference 1993.

6. Giachetti, R.E., Martinez, L.D., Saenz, O.A. & Chen, C.S. (2003). Analysis of the

structural measures of flexibility & agility using a measurement theoretical

framework. International Journal of Production Economics 86 (1), 47-62.

7. Hillegersberg, J.V., Oosterhout, M.V. & Waarts, E. (2006). Change factors requiring

agility and implications for IT. European Journal of Information Systems, 15, 132-

145.

8. Ho, G.T.S., Lau, H.C.W., Lee, C.K.M. & Ip, A.W.H. (2005). An intelligent forward

quality enhancement system to achieve product customization. Industrial

Management & Data Systems, 105(3), 384-406

9. Mcdonald R, Ho MD. Principles and Practice in Reporting Structural Equation

Modeling. Psychological Report 2002; 7(1): 64-82.

10. Ramesh, G. & Devadasan, S.R. (2007). Literature review on the agile manufacturing

criteria, Journal of Manufacturing Technology Management 18(2), 182-201.

11. Swafford, P.M., Ghosh, S. & Murthy, N.N. (2006). A framework for assessing value

chain agility. International Journal of Operations &Production Management 26(2),

118-140.

12. Zhang, D.Z. & Sharifi, H. (2007). Towards theory building in agile manufacturing

strategy -a taxonomical approach. IEEE Transactions on Engineering Management,

54(2), 351-370.

Documents

Prioritizing the agility strategies using the Fuzzy