Ebook: Advances in Multiple Criteria Decision Making and Human Systems Management: Knowledge and Wisdom

A human being should be able to change a diaper, plan an invasion, butcher a hog, con a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insect.

(Robert A. Heinlein)

Motto of Milan Zeleny

This volume, edited as a Festschrift in honor of Prof. Milan Zeleny, reflects and emulates his unmistakable legacy: the essential multidimensionality of human and social affairs. There are many levels of this multidimensionality presented in this volume: 1. Multidisciplinarity of contributed papers, 2. Multinationality of their authors, extending even to the editors and the publisher, 3. Multicultural and multilevel exposition, ranging from empirical studies to philosophical foundations. Generally, these papers can be divided into three parts: Multiple Criteria Decision Making; Social and Human System Management; and Information, Knowledge and Wisdom Management.

Just going through some keywords in the titles of individual contributions to this volume, represents an adventure in multidimensionality: multi-value decision making, multicriteria communication, multi-objective EMI, multicriteria analysis of OECD, digest wisdom, enlightenment, collaborate for win-win, value focused management, highly intelligent nation, KM pragmatism, human ideals, outsourcing risks, mobile technology, intelligent knowledge, purposeful coordination of action, high technology R&D, de novo programming, continuous innovation, competence set analysis, knowledge sharing, wisdom shaped management, socio-technical enablers, informed intent – such new words promise fresh insights, affirm that a new era has arrived, and invite the reader to the challenges of integration and synthesis, to knowledge and wisdom.

It is the recognition of multidimensionality in decision making, economics, optimization, systems, cybernetics and the pursuit of knowledge that bear the stamp of specific Zeleny's contributions. His life-long dedication to multidimensionality has produced an ultimate multidimensional being, living in academic “multiverse”, functioning in a boundaryless world of all continents, cultures and countries. He has lost all respect for nonpermeable boundaries and artificially imposed limits when he crossed the first such border in 1967: from his native Czechoslovakia (now non-existent) to his beloved United States of America.

To this volume we have invited top researchers and scientists from an amazing variety of countries, ranging from the U.S.A., China, Korea, New Zealand, Singapore and Taiwan, to England, Greece, Finland, Israel, Italy, Poland, Portugal, Sweden and Slovakia. Even so, it is only a small sample of all the countries Milan has visited and worked in. He has become a truly global professor, with ongoing appointments on four continents, expanding his activities into a growing circle of areas, cultures, countries and friends.

Together with multidimensionality comes naturally integration, cooperation and systems – the other side of the coin of recognized and appreciated multidimensionality.

Finally, with any integrative and collaborative efforts come knowledge and wisdom, the other natural pursuits of people who integrate and collaborate across all boundaries, real, self-imposed or virtual. Knowledge and wisdom are the pursuits he is trying to mold into respectable academic areas, moving beyond their metaphorical or habitual traditions of usage.

It all ads up to human systems management as the transdisciplinary expression of humane pursuits of human interests through systems. It is no coincidence that his brainchild, the journal of Human Systems Management, is celebrating its first 25 years, while Milan celebrates 65 years of his still accelerating quest for the new, the unknown and the original in social systems. Reading through the titles of his publications, one can see that there is very little coincidence in Milan's work: it all unfolds from many different starting directions, evolves and begins to “come together” in the end – as if all has been carefully designed and crafted, all planned. It probably was, although assembling his impressive body of knowledge and wisdom has been executed spontaneously and with apparent ease.

Nobody ever saw Milan working. He is always enjoying life, enjoying good food and drink, going to interesting places and cherishing the ever-evolving company of even more interesting men and women from all around the globe. As he escaped the ever-tightening borders of the ever-diminishing Czechoslovakia, he has continued “escaping” ever since: always ahead of the curve, pushing the envelope, outside the box.

Milan has contributed to so many fields and areas, that most of us, being specialists, do not know the true extent of his work. He is certainly not a one-topic man: he has become known to many non-intersecting groups and societies, often he himself being their sole intersection. Just consider: artificial life, autopoiesis and tradeoffs-free resource allocation. His contributions to all those multiple fields are always original, fundamental and controversial, yet immediately recognizable for their emphasis on multidimensionality, contextual dependency, dynamics and pragmatic utility.

Zeleny clearly abhors the “mainstream” of anything; he avoids it like a vacuum: mainstream thinking, mainstream research, mainstream values, mainstream life. He escaped the “mainstream” long time ago and shows no intentions of returning. He even escapes the fields he himself established or founded – as soon as they show the deadly signs of becoming “mainstream”. Mainstream thinking, he says, invites mediocrity, routine, copy and self-approval: perhaps useful and necessary to some, but so unexciting, boring and unchallenging to boundary-crossing seekers. The very definition of “mainstream” implies: within the boundaries, accepted by majority, mass behavior with no individuality, no surprises and certainly no inner rewards.

So, in this Festschrift we also honor a challenge. What are we to think of a man who initiated, introduced or contributed to not only multiple criteria decision making, multiple criteria simplex method, linear multiobjective programming, de novo programming, eight concepts of optimality, compromise programming, knowledge-based fuzzy sets, knowledge management, self-producing social systems, spontaneous social orders, high technology management, theory of the displaced ideal, conflict dissolution, multidimensional radar diagrams, osmotic growths, inorganic precipitates, etc., but also historical studies on Trentowski's Cybernetyka, Bogdanov's Tectology, Leduc's Synthetic Biology and Smuts' Holism, as well as original contributions to management, strategy, systems sciences, cybernetics, autopoiesis, artificial life, game theory, APL simulations, social judgment theory, economics of interactions, tradeoffs-free economics, and so on.

How do we honor such a student, teacher and man?

It seems to us that only through a book like this one: a book that is as diverse and as multidimensional as the man and his work.

Finally, we would like to express our sincere thanks to Yong Shi's doctoral students at the Chinese Academy of Sciences, Xingsen Li, Rong Liu and Zhongbin Ouyang for their hard work on the formation of this book. We also acknowledge grants from National Natural Science Foundation of China (#70621001, #70531040, #70501030, #70472074), 973 Project #2004CB720103, Ministry of Science and Technology, China, and BHP Billiton Co., Australia for their support in the preparation of the book.

Yong Shi, Beijing, China

David L. Olson, Lincoln, Nebraska, USA

Antonie Stam, Columbia, Missouri, USA

This paper analyses the birth of the Euro as a phenomenon in which the decision-makers, who are not necessarily the electors of the countries involved, reach the decision to create a new monetary regime – new inasmuch as it incorporates new rules of behavior between nations, inducing changes in the weight attributable to different goals of economic and monetary policy. The paper is based on the assumption that decision-making processes on the matter of monetary policy are influenced both by the hegemonic lines of thinking in a given historical period and by the political role played by the major powers. The process of European economic integration is thus retraced and reinterpreted in terms of the conflict between multi-objective preference functions, thereby enabling the emphasis to be placed on the nature of the fundamental steps in said process of integration.

Telecommunication networks have been and are in a process of extremely rapid evolution reflecting the interaction between a fast pace of technological progress and a complex socio-economic environment. This justifies the interest in using multicriteria modelling and analysis in decision processes associated with various phases of network planning and design, particularly concerning the development of routing models of multidimensional nature. Based on an overview of evolutions in telecommunication network technologies and services we begin by identifying the motivating factors for the increasing interest in multicriteria routing models. An overview of a significant number of contributions on this area is presented followed by a description of a novel bi-level hierarchical multicriteria routing optimisation model for multiservice communication networks and its application to a video traffic routing problem. Finally we outline some conclusions and future trends.

In high technology firms, merger and acquisition (M&A) already has become the major strategy for enriching product portfolios, entering new markets, and thus enhancing the core competences in research and development (R&D). R&D human resource (HR) is the most critical factor to develop the competitive advantage and the post-merger R&D performance of knowledge-based labor intensive high technology firms, in general, and the IC design houses and IC design service companies in particular. However, little literature has discussed how the post-merger R&D human resources should be optimized so as to achieve the best R&D performance and thus, final success of the merger. Meanwhile, traditional literature on R&D resource optimization has focused mainly on optimizing existing resources, which is not realistic in the real world where external R&D human resources can be leveraged. Thus, this research will develop an analytic framework to best utilize the post-merger R&D human resources and achieve the best performance by optimizing internal resources and leveraging external resources by using the De Novo programming proposed by Professor Milan Zeleny. An empirical study of optimizing the post-combination R&D human resources in a merger of an integrated circuit (IC) design service company by a professional semiconductor foundry company is given as an illustration for the analytic procedures. The results demonstrate that the de Novo programming can best optimize the post-merger R&D human resources in merger and can be applied to other M&A cases.

One of the great contributions to science by Dr. Zeleny has been his insight that in many real life decision situations it is important to design an optimal system, rather than optimizing a given system. In his honor, we offer a small example of the use of de novo programming.

Game theory in its several variants can be viewed as a major contribution to multi-agent modeling, with widespread applications in economics and the other social sciences. One development of classical game theory, Generalized Game Theory (GGT), entails its extension and generalization through the formulation of the mathematical theory of rules and rule complexes and a systematic grounding in contemporary social sciences. Social theory concepts such as norm, value, belief, role, social relationship, and institution as well as game can be defined in a uniform way in terms of rules and rule complexes. Such a conceptual toolbox enables us to model social interaction taking into account economic, socio psychological, and cultural aspects as well as incomplete or imprecise or even false information.

The article presents foundation and applications of GGT, among others: (1) GGT provides a cultural/institutional basis for the conceptualization and analysis of games in their social context, showing precisely the ways in which the social norms, values, institutions, and social relationships come into play in shaping and regulating game processes. (2) It formulates the concept of judgment as the basis of action determination. (3) GGT distinguishes between open and closed games. The structure of a closed game is fixed; in open games, actors have the capacity to transform game components such as the role components or the general “rules of the game”. Rule formation and re-formation is, therefore, a function of interaction processes. (4) GGT reconceptualizes the notion of “game solution as well as equilibrium. Some “solutions” envisioned or proposed by actors with different frameworks and interests are likely to be contradictory or incompatible. Under some conditions, however, players may arrive at “common solutions” which are the basis of game equilibria. (5) The theory distinguishes different types of game equilibria, such as instrumental, normative, social and so forth. (6) While GGT readily and systematically incorporates the principle that human actors have bounded factual knowledge and computational capability, it emphasizes their extraordinary social knowledge ability and competence: in particular, their knowledge of diverse cultural forms and institutions such as family, market, government, business or work organization, and hospitals, among others, which they bring to bear in their social relationships and game interactions.

In concluding, the paper provides a scheme comparing and contrasting GGT and classical game theory on a number of central theoretical dimensions.

Although the evaluation problem of socio-economic development of countries has been extensively studied, there is still a huge debate among the economists about the assessment of this concept. Thereby, a large number of quantitative macroeconomic indicators and alternative methodological approaches have been proposed in order to analyze and compare economic and human development. The accordance between citizens' prosperity and development of a country's economy is an interesting issue that may be discussed in the framework of multicriteria analysis. The main objective of the presented study is to compare economic development and social welfare and explore how countries' performance on these dimensions is related. For this reason, a large number of macroeconomic indicators have been assessed as evaluation criteria for either economic development or social welfare. The evaluation methodology is based on the multicriteria method PROMETHEE II, where a large number of scenarios for different distribution of criteria weights is examined. The presented pilot application refers to the thirty (30) member countries of Organization for Economic Co-operation and Development (OECD), for which several macroeconomic data for the period 1990–2002 have been collected. The most important results are presented through a series of relative comparison diagrams. These diagrams analyze the performance of a country in comparison to other countries' performance. Additionally, they present the evolution of social welfare and economic development performance during the examined time period. The results provided seem to justify the perception that economic development and social welfare are strongly related, although they are not always in complete accordance.

The goal of the firm is to maximize shareholder value. While most firms devote their main efforts to exploit financial value drivers such as mergers and acquisitions, not enough attention is being paid to managerial value drivers like reducing time to market, increasing throughput, or improving logistics, operations and supply chain management, although these managerial drivers have a much greater potential for value creation. This paper focuses on managerial value drivers and presents Value Focused Management (VFM), which is a methodology for enhancing the organization value by identifying its value drivers, quantifying their estimated contribution, and prioritizing them according to their relative value creation potential and difficulty of implementation. VFM combines Value Based Management (VBM) with the Theory of Constraints (TOC) along with practices such as the focusing matrix, and provides managers with a structured process that includes a focused diagnosis of the organization, followed by a comprehensive implementation plan which helps them direct their efforts towards the most promising value drivers. VFM has been successfully implemented in dozens of organizations worldwide. This paper analyzes a case study of a supermarket chain which demonstrates VFM's potential as an effective practical methodology to guide companies in their ongoing quest to increase shareholder value.

There are four risks under a principal-agent system, namely, information asymmetry, responsibility non-equivalence, incentive incompatibility and contract incompleteness. The paper starts from introducing the four problems and based on the principal-agent theory it puts forward an analysis framework for outsourcing risks. It comprehensively analyses the risk factors in outsourcing, aiming at providing some reference for the enterprises to make wise outsourcing decisions.

When the short message service (SMS), was first initiated in 1992 nobody could foresee its tremendous popularity. Simple in design, easy to adapt and effortless to employ it rapidly became a profitable, matchless, globally used mobile service – one, which changed the lives of European teenagers. Ever since the quest for the next mobile service “killer application” has continued. Year after year the mobile service markets produce new services and applications that due to complexity or lack of relevance fail to meet the consumers' expectations. Nevertheless, the future growth of mobile telephony revenues is expected to rely on mobile services. The use of mobile services is expected (or hoped) to be a significant part of the revenues to be generated by 3G mobile networks. This may yet be true but the adoption of new mobile services has been much slower than expected, especially in Europe. Several reasons have been suggested for the slow adoption rate, ranging from cultural to business models. In this paper we are focusing on the Finnish market, where there are several reasons to suggest that a rapid adoption could take place, including a relatively long history of mobile services, low costs, positive attitudes to the use of high technology and rather a good supply of mobile services. We will discuss three mobile services that commonly have been described as promising and innovative: mobile games, mobile television and snapshots with mobile phones, in an attempt to understand their potential for becoming successful services. If we for a moment forget the quest for “the mobile killer applications” – the dream of quickly making lots of money with a new technology – there is no way to deny that the mobile technology has had and continues to have a profound impact on our everyday routines. Things become easier to manage, time-consuming routines a bit faster to handle and there are a number of things we are able to accomplish which have not been possible before – or which we have not even thought to be possible.

Professor Milan Zeleny first visited us in 1978 when he was working on building breakthrough theories for multiple criteria decision making, which had a significant impact on management science research in Finland for the next 1–2 decades. Then he started Human Systems Management, a journal devoted to the integration of knowledge, management and systems which is different from many other research journals as it blazes the trail for innovative thought, less tested theories and models, and serves as a platform for a critical re-examination of established truths and results which are not questioned anymore. We have had the opportunity over the years to test our new insights and first systems constructs in Human Systems Management and we have been encouraged to continue work on improved and better constructs through the constructive criticism we got, which is one of the trademarks of Human Systems Management.

Professor Milan Zeleny is not unlike his journal – he has always been at the forefront of new ideas, new theories, new systems constructs in management science (and a number of other areas of research). He is critical, he is questioning your premises and he is arguing with you about your conclusions, but he is very knowledgeable and he is generous with his ideas and his advice. He is always challenging his friends and collaborators to take one more step and find insight which is there, but not yet seen – until you have had one of the discussion sessions with Milan.

We salute a visionary researcher and a great scientist on his birthday and we wish for many more birthdays to come!

This paper develops a conceptual framework for understanding how the individually driven intentions emerge into collective action. While real action is the concern of practicing business it seems to have received insufficient attention from the research community. A wealth of models has yet to explicate how intentions, strategies, visions, and missions get enacted. The majority of management literature has taken the collective perspective. This paper argues for a reversed causation starting with the individual – called supervenience, where the collective is a function of its parts. People create venture, people innovate, people act.

In this article we introduce the concepts of competence analysis as an extension of habitual domain theory. Specifically, we discuss the cores of habitual domains; learning processes to build competence; classification of decision problems in terms of competence set; decision quality, confidence, risk taking and ignorance; and effective decision making. Further decomposition of competence set analysis and many research topics are also provided.

Singapore is a small nation with a very high population density. One of her key priorities for survival is to nurture a well-educated and continuous learning work force that can function competitively in a knowledge-intensive economy and fast-changing environment. In this respect, effective information and knowledge strategies are highly significant. To achieve this vision, Singapore has mapped out and exploited several different IT/ICT strategic plans/policies and integrated them systematically into the national education system. It is recognized that the continuous and strategic exploitation of appropriate ICT in education is inevitable for continuous and effective knowledge structure updating at all levels (individual, organization, community) through a smoother learning dynamic. As the world activities become more knowledge focused, the ability to provide higher levels education for a larger proportion of the population is a critical factor for all organizations/nations to survive. In addition, it is equally crucial for every one in the work force to be supported by a comfortable lifelong learning environment. Concurrently, it must be noted that the education (learning and knowledge acquisition) dynamic of human beings is highly complex and nonlinear. This study on information and knowledge strategies reveals that ICT and education (encompassing e-learning, e-library and e-landscape), and intelligence and collective intelligence are closely associated. The effective strategies must encompass an emergent component. The integration between human learning and ICT is synergic in the current environment. The output can be affected by the butterfly effect.

This paper, taking a pragmatic perspective, reflects on the current situation in our knowledge management (KM) research community and suggests a possible way forward.

There has been a continuing pursuit of wisdom since the beginning of human beings. Knowledge is a base of wisdom and takes various forms. The rapid development of data technology, such as data mining application and Internet growth, generates a large volume of knowledge for the business community at both individual and organizational levels. How to manage such knowledge and update wisdom is a challenging problem and is a bottleneck of further applying data mining. This paper explores the framework of management platforms for knowledge of human beings, knowledge of data mining and knowledge from data mining. After integrating them together, this paper proposes a concept of “Intelligent knowledge” (IK) towards wisdom. Intelligent knowledge consists of two parts: knowledge entity and meta-data. IK develops at a knowledge management platform in an Internet environment. Such a knowledge management system supported by a Man-Computer Cooperative method can effectively help users to obtain useful knowledge. Meanwhile, IK can self-manage in the knowledge management platform so that users can find and utilize the knowledge efficiently. Through IK, an organization may gradually reach a stage of business wise.

In the global era of hypercompetition, telecommunications and accelerated information/knowledge sharing, the innovation process has to become a systemic property of a company and its organization. All individuals work in and are part of some key corporate processes; all of these processes are subject to both continuous and often discontinuous improvement. That means that continuous (quantitative) and discontinuous (qualitative) innovation drives must be embodied in each individual and embedded in the system of their daily interaction and work. An effective and company-wide innovation cycle is the prerequisite for maintaining strategic competitiveness in a fast-moving, turbulent era. The whole company, with all its employees, whether production or service oriented, must become an Innovation Factory.

Recently, the need for knowledge management has been drastically increasing in order for organizations to meet the high level of dynamic, complex business change and uncertainty. Particularly, knowledge sharing has been recognized as a critical process through which organizational knowledge can be utilized. For successful knowledge sharing, however, companies need to capitalize on various enablers. In light of this, the objective of this paper is to provide a better understanding of how these enablers can affect knowledge sharing intention and behavior. For this purpose, this paper thus proposes a theoretical framework to investigate these enablers from a socio-technical perspective. A field study involving 164 users reveals that social enablers such as trust and reward mechanism are more important for facilitating knowledge sharing than technical support in isolation.

Model analysis in system dynamics (SD) entails articulating exactly how the structure of circular, feedback relations among variables in a system determines its performance through time. This article combines human games with SD to show the use and benefits of model analysis with the pathway participation metric (PPM) implemented in the Digest®software. Four SD game models depict Markovian paradoxical games with two players or groups that choose between collegiality and discord tactics as the means of conflict resolution in business and civil litigation. Paradoxical self-referential games are non-constant sum (one player's loss is not automatically the other's payoff) conflicts, where the two players or groups compete with dynamic (i.e., time varying) probabilities of collaboration. Their game is paradoxical because both parties can either win or lose simultaneously. It becomes self-referential when the payoff or 'tempting' parameters, and the prior discord and loss coefficients depend explicitly on the participants' collaboration probabilities. Large subsets of initial discord tactics converge on a fixed-point attractor to sustain collaboration equilibria. Games end once the point attractor has absorbed all dynamics, leaving the system in a stable, negative feedback state.