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Extended Performance Evaluation Based on DEA

A Multidimensional Point of View


Ludmila Neumann

This study introduces new methodological developments of Data Envelopment Analysis (DEA) that satisfy the demands of business practice and provide a multidimensional point of view on the evaluation of organizational performance. The author extends the focus of performance evaluation based on DEA, which is originally placed on efficiency, to effectiveness and balance. Such a multidimensional point of view provides different insights into organizational performance, which by complementing each other have several implications for managerial decision making.

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6 Conclusions


6 Conclusions

6.1 Summary and conclusions

Performance evaluation has become part of the business’ and research’s daily life, leading to numerous possibilities to evaluate performance. While practitioners usually refer to accounting based measurement systems, scientists rather focus on new approaches on performance evaluation. The disadvantage of – in organizations widely used – accounting based measurement systems is their inability to consider multiple performance measures defined in different units of measurement for the evaluation of organizational performance. Taking multiple measures in consideration, however, is critical for organizations to evaluate themselves in today’s multi-facet business environment. By looking into the vast amount of approaches available for performance evaluation, one sticks out as able to meet the challenge in aggregating all relevant performance measures – independent of their units of measurement – into a single comprehensive efficiency score: the data envelopment analysis (DEA).

After being introduced into the scientific community in 1978, DEA has been researched and enhanced a lot from a scientific perspective. However, the importance of DEA within international research cannot be seen as an indicator for its acceptance or use in business practice. Practitioners often do not realize the usefulness of applying DEA. Further, the need to familiarize themselves with the mathematical background of DEA inhibits the attractiveness of DEA for practitioners.

In order to close the gap between DEA research and its recognition and utilization in business practice, the practitioners’ requirements should be given more attention within the scientific research. Therefore, the aim of this...

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