An application of the AHP to bank strategic planning: the mergers and acquisitions process

Strategic planning is one of the most complex and ill-structured tasks faced by banks. It usually requires adopting a course of action from a large set of alternatives with uncertain long-term outcomes that depend, to a large extent, on unknown and turbulent environments. The Analytic Hierarchy Proc...

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Bibliographic Details
Published in:European journal of operational research 1990-09, Vol.48 (1), p.27-37
Main Authors: ARBEL, A, ORGLER, Y. E
Format: Article
Language:English
Subjects:
Acquisitions & mergers
Applied sciences
Bank management
Banking
Decision making
Decision theory
Exact sciences and technology
Hierarchies
Operational research and scientific management
Operational research. Management science
Operations research
Portfolio theory
Statistical analysis
Strategic planning
Studies
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Summary:Strategic planning is one of the most complex and ill-structured tasks faced by banks. It usually requires adopting a course of action from a large set of alternatives with uncertain long-term outcomes that depend, to a large extent, on unknown and turbulent environments. The Analytic Hierarchy Process (AHP) methodology was applied to the evaluation of bank mergers and acquisitions (M&A) strategy. The model developed was tested with the assistance of the board of directors of a billion-dollar bank holding company. It is safe to assume that the AHP methodology can be applied to other complex and ill-defined strategic issues faced by other banking institutions. Compared with existing techniques and with qualitative managerial judgment, the AHP provides a useful, simple, and powerful tool for dealing with strategic planning in banking.
ISSN:0377-2217
1872-6860
DOI:10.1016/0377-2217(90)90058-J