Abstract
This paper presents an integration of balanced score card (BSE) with two-stage data envelopment analysis (DEA). The proposed model of this paper uses different financial and non-financial perspectives to evaluate the performance of decision making units in different BSC stages. At each stage, a two-stage DEA method is implemented to measure the relative efficiency of decision making units and the results are monitored using the cause and effect relationships. An empirical study for a banking sector is also performed using the method developed in this paper and the results are briefly analyzed.
Highlights
During the past few decades, there have been tremendous changes on traditional performance measurement (Charnes et al, 1978; Charnes et al, 1994)
Kaplan and Norton (1992) are believed to be the first who introduced the idea of balanced score card (BSC)
The model uses the outputs of the learning perspective as an input for the internal process and a two-stage BSC-data envelopment analysis (DEA) is implemented in this stage
Summary
During the past few decades, there have been tremendous changes on traditional performance measurement (Charnes et al, 1978; Charnes et al, 1994). The new methods for measuring the performance of different organizations mainly focus on non-financial figures. BSC is a method to study the competency and the weakness of an organization through a systematic approach which rely on five different perspectives of financial outlook, process, customers, learning and human resources. DEA methods are traditionally used for non-for-profit organizations where similar units are operating with different input/output and there is basically no revenue. Governmental agencies such as schools, hospitals, public libraries are examples of these cases. The implementation of an integrated BSC-DEA is given in section 4 for a case study of banking industry.
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