A priori aggregation multicriteria optimization of family business vitality through Likert scaling with price evaluation

¹ VSB-TU Ostrava, Faculty of Economics, Department of Management, Sokolska trida 33, 702 00 Ostrava, Czech Republic
² VSB-TU Ostrava, Faculty of Civil Engineering, Department of Mathematics, Ludvika Podeste 1875/17, 708 00 Ostrava, Czech Republic

^* Corresponding author: lucia.orlovova@vsb.cz

Abstract

Research background: In this work, we are dealing with the problem of the optimal decision for increasing the vitality of family business. This type of business is the global topic since the companies owned by the family members with the equity capital shared with family are widespread all around the world and belongs to the one of the most popular types. The field of family businesses is characterized by specific properties and therefore, we suggest the measure of the vitality based on Likert scaling. The variants of the possible improvement are weighted by the required time and money.

Purpose of the article: By solving the presented corresponding optimization problem, we manage to obtain optimal investment to the improvement of vitality measured by Likert scaling. The proposed methodology aims to avoid the influence of emotional aspect of decision making and rather find the optimality based on financial and time costs.

Methods: In our contribution, we propose and compare two different formulations: the problem with constrained budget and the multicriteria formulation of the problem of the vitality maximization with costs minimization using the aggregation with a priori known coefficients. The corresponding integer linear programming problem with linear constraints is solved in Microsoft Excel.

Findings & Value added: We examine, compare, and discuss the proposed methodologies on the selected practical benchmark.