Interactive management control via analytic hierarchy process: an empirical study in a public university hospital

Abstract

This paper describes an application of analytic hierarchy process (AHP) to enhance interactive budgeting in one of the biggest public university hospitals in Italy. AHP improved budget allocation facilitating elicitation and formalisation of units' needs. Furthermore, AHP facilitated vertical communication among managers and stakeholders, as it allowed multilevel hierarchical representation of hospital needs, and horizontal communication among staff of the same hospital, as it allowed units' need prioritisation and standardisation, with a scientific multi-criteria approach, without using complex mathematics. Finally, AHP allowed traceability of a complex decision-making process (as budget allocation), this aspect being of paramount importance in public sectors, where managers are called to respond to many different stakeholders about their choices.