The strategic organizational use of neural networks: An exploratory study

The management of emerging technologies in organizations will continue to be a topic of increasing importance. One such emerging technology is neural networks, a \u27brain metaphor\u27 of information processing. For particular decision problems, neural networks can provide significant benefits. In this study, technical and managerial issues surrounding the implementation of a neural network in a organizational decision setting are investigated. The study has three main emphases. First, an exploratory experimental study was undertaken which studied the effects of a number of technical implementation factors on accuracy of a trained neural network. Results indicated that the composition of the training set and the evaluation set can significantly effect the actual and perceived decision making accuracy of a neural network. Other factors found not to be significant still provided additional managerial guidelines in proper usage of neural networks. A second major area of the study was to present a decision support framework illustrating further important issues that must be considered in appropriately using a neural network in decision support. The importance of using a multiplicity of trained networks to assist the decision making process was shown, and the important benefits derived from undertaking a detailed sensitivity analysis of the networks illustrated. The first two study objectives were accomplished using a realistic new product opportunity screening decision setting. Therefore, a final point of the study was to show how a neural network approach provides improved managerial decision support for product screening than past approaches. The entire study illustrated that the proper use of neural information processing in an organization can provide significant organizational benefits