PRINCE Analysis Essay ⋆ Business Essay Examples ⋆ EssayEmpire

The PRINCE model was designed in 1969 by William D. Coplin and Michael K. O’Leary as an analytical system for forecasting decision outcomes. Initially built as a Programmed International Computer Environment (PRINCE), it was first used in an American foreign policy simulation run on mainframe computers. In their book Everyman’s PRINCE, Coplin and O’Leary demonstrated applications in family decisions, neighborhood policy development, city politics, national economics, and international business. In Power Persuasion, they describe how to use the system to achieve personal and business goals in corporate settings. Beginning in 1979, the PRINCE forecasting method has been used as a basis for projecting 18-month and 5-year political risk as a part of the Political Risk Services (PRS) risk model. PRINCE is used to project the probabilities of primary, secondary, and tertiary “regimes” (governments) for which risk is forecast for 12 political variables in the PRS system.

Beginning with a theoretical projection by the chief analyst of the likely outcome of the decision, PRINCE analysis involves the systematic use of expert data to build a projection matrix. Experts providing the basic data input are generally expected to have language capability, roughly 20 years experience in the country or region, 5 years of residence in the country, and to be giving continuous attention to the country. Academic analysts, former foreign service and intelligence officers, corporate executives, reporters, and others with this experience are generally the experts being used. They are asked to provide data for five variables that make up the PRINCE matrix (see example below).

Actors or players involved in the decision in some way. These actors may be individuals, groups, or ministries within the government, or opponents of the government, as well as individuals or groups within the society as a whole, such as businesses, unions, or ethnic organizations. Actors may also include foreign individuals or institutions, such as the International Monetary Fund or foreign governments. The number of actors may vary from country to country and may vary between 18-month and 5 year forecasts. The actors are simply listed down the left column of the matrix. Determining who the actors are is a research project in and of itself and involves a thorough understanding of the society and how it works.
Orientation or position on the issue. This indicates whether, in the expert’s view, each actor supports or opposes the outcome being forecast. Support for the outcome is indicated by a + (plus) sign, opposition by a – (minus) sign. This is a simple dichotomous declaration. If an actor is neutral, there is no point in including the actor in the matrix configuration.
Certainty of the position. For group players, certainty is a function of the extent to which there is consensus of support or opposition among the membership. Certainty is measured on a scale ranging from 1 (little certainty) to 5 (extremely high certainty). Individuals likewise can be uncertain in varying degrees on a decision, but this is more difficult for the expert to determine. Where a group vote or poll can determine group uncertainty, for individuals, competing or even contradictory statements might be the indicator. The expert will have had to read the actor’s views carefully.
Power. This indicates the degree to which each player can exert influence, directly or indirectly, to support or oppose a particular outcome relative to all other players. A player’s power can have a variety of bases, and the exercising of power takes many forms. Power may be based on such factors as group size, monetary contributions, physical resources, institutional or personal authority, prestige, political skill, or dedication to the cause (“little old ladies in tennis shoes” as in the 1960 Kennedy election). Power is measured on the same scale as Certainty, ranging from 1 (little power) to 5 (extremely high power).
Priority or salience on the issue. This indicates the importance attached to supporting or opposing a particular position, relative to all other concerns facing that player. For example, while a group may want to have President Evans reelected, it may be more important to them to gain a majority in the country’s parliament, and they may choose to use their resources there instead of in the presidential race. Salience is measured on a scale ranging from 1 (little importance) to 5 (extremely high importance).

The variable scores are multiplied and totaled in positive and negative columns, and the positive scores are weighed against the absolute total on decision strength to determine the probability of the outcome initially theorized. PRS rounds the probabilities to the nearest 5 percent (so, the figure of 61 percent in the example would be rounded to 60 percent).

The PRINCE model for the 18-month projection is a relatively simple multiplicative model, which weighs certainty, power, and salience equally. The five-year forecast involves building on the 18-month forecast, adding national and global forces as actors. One of the strengths of the model is that it can be easily modified by changing the scales or adding variables according to an alternative theory. However, over the last 40 years, the PRINCE model as it stands has proven to be consistent and useful in the PRS political risk forecasting process.

Bibliography:

William D. Coplin and Michael Kent O’Leary, Everyman’s PRINCE: A Guide to Understanding Your Political Problems (Duxbury Press, 1976);
William D. Coplin and Michael Kent O’Leary, with Carole Gould, Power Persuasion: A Surefire System to Get Ahead in Business (Addison-Wesley, 1985);
Llewellyn D. Howell and Brad Chaddick, “Models of Political Risk for Foreign Investment and Trade: An Assessment of Three Approaches,” Columbia Journal of World Business (v.29/4, 1994);
Political Risk Services, “The Prince Model,” in The Handbook of Country and Political Risk Analysis, Llewellyn D. Howell, ed. (PRS Group, 2001);
PRS Group, www.prsgroup.com (cited March 2009).

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