Benchmarking—A Way of Finding Risk Factors in Business Performance

Jarmila Horváthová,Mária Vrábliková,Martina Mokrišová

doi:10.3390/jrfm14050221

Jarmila Horváthová, Mária Vrábliková + Show 1 more

Open Access

https://doi.org/10.3390/jrfm14050221

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Abstract

The purpose of this study was to emphasize that the Data Envelopment Analysis (DEA) method is an important benchmarking tool which provides necessary information for improving business performance. To fulfil the abovementioned goal, we used a sample of 48 Slovak companies involved in the field of heat supply. As their position in the economic and social environment of the country is essential, considerable attention should be paid to improving their performance. In addition to the DEA method, we applied the Best Value Method (BVM). We found that DEA is a highly important benchmarking tool, as it provides benchmarks for units that have problems with performance and helps us to reveal risk performance factors. The DEA method also allows us to determine target values of indicators. The originality of this paper is in its comparison of the results of the BVM and the DEA methods.

Highlights

Way of Finding Risk Factors inIn the current turbulent period, it is necessary for every company to monitor market changes, in the areas of marketing and innovation, and in the field of business performance and the application of financial indicators in its measurement
As part of our research, we focused on solving the issue of performance benchmarking, with the aim of increasing the performance of businesses
The analyzed companies are not able to pay the costs and meet limits; they go bankrupt. They could be beneficial for the state and its people, as they provide alternative options for heat production and heat supply. Since they have an important position in many Slovak districts, in this paper, we focused on the evaluation, comparison and improvement of the performance and competitiveness of these companies

Summary

Introduction

Way of Finding Risk Factors inIn the current turbulent period, it is necessary for every company to monitor market changes, in the areas of marketing and innovation, and in the field of business performance and the application of financial indicators in its measurement. Businesses are looking for different ways to increase their performance and achieve a competitive advantage over their competitors. They use different methods, techniques and indicators. Benchmarking finds the best practices for knowledge and know-how by learning from other companies, competitors and industry leaders to gain a competitive advantage in global competition (Tian and Ketsaraporn 2013). Benchmarking is part of the concept of quality management It is a method of analyzing and comparing practices and experiences in various areas of business operations (Kaczmarska 2010). This method was first used in the 1980s by the Xerox Corporation to improve its competitive position (Demjanová 2006). The first is the principle of the Chinese general Sun-c (500 BC): “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” The second principle is being the best of the best

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