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Abstract
This paper presents preliminary research on a new decision making tool that integrates financial and non-financial performance measures in project portfolio management via the Triple Bottom Line (TBL) and uses the Analytic Hierarchy Process (AHP) as a decision support model. This new tool evaluates and prioritizes a set of projects and creates a balanced project portfolio based upon the perspectives and priorities of decision makers. It can assist decision makers with developing and making proactive decisions which support the strategy of their organization with respect to financial, environmental and social issues, ensuring the sustainability of their organization in the future.
Keywords
Financial vs. non-financial performance measures, organizational sustainability, triple bottom line (TBL), analytic hierarchy process (AHP), project portfolio management
1. Introduction
Organizational sustainability, which is defined as building and maintaining the long-term satisfaction of stakeholders, is one of the major concerns of policy makers, and corporate and engineering managers in today's competitive, complex and dynamic business environment. Although sustainable development practices seem to be inconsistent with the short-term financial goals of an organization, it becomes apparent that they are essential practices when the long-term financial success and satisfaction of the stakeholders of the organization are considered. For instance, a study conducted by Switzerland's Bank Sarasin [1] in 2002 showed that the fluctuation in share prices of companies that adopt environmentally and socially compatible business practices is lower than the fluctuation in share prices of other companies in the same industry. In addition, recent environmental problems such as global warming and the increased awareness of society with regard to environmental and social issues compel the policy makers, and corporate and engineering managers to implement sustainable development practices in their organizations. However, one of the biggest barriers in adopting the sustainable practices in the business environment is the lack of a single and overarching management tool that will combine the three dimensions of sustainability - economic prosperity, environmental quality and social justice - with the organization's overall strategy. As opposed to the conventional management approaches, organizational sustainability management requires the integration of both financial aspects and non-financial strategic success factors, including environmental and social, into the management system of a company. For this reason, the basic motivation behind this research is to satisfy the need...