Abstract
In the area of business performance evaluation, we should pay attention to innovative approaches to performance measurement. They include the application of a matrix model. This concept was initially used for addressing the efficiency of input and output transformations. However, the terms ‘efficiency’ and ‘performance’ are closely linked. Some authors even assign them the same meaning. Based on the above-mentioned, a linear programming model for addressing the problems of input and output transformations can also be applied for business performance measurement. The benefit of this paper is the measurement of business performance applying a matrix model. One of the significant outcomes of such matrix model is the formation of new indicators, which can be beneficial in business performance measurement. Another positive aspect of this approach is the creation of a network of indicators assessing business efficiency, effectiveness and performance. There are strong links between indicators in a network, which can be mathematically described. Based on the knowledge, the management of a business can focus on those functional areas, which are preconditioned for business performance and efficiency improvement.
Highlights
The measurement of business performance is nowadays a very actual problem
In addition to measuring performance with the use of financial indicators, we focus on business performance measurement applying a set of non-financial indicators which are based on experiments from the early 80s, when Peters and Waterman (1982) proposed eight factors that lead to business success and Rockart (1981) and Chung (1987) suggested critical success factors
In accordance with the research objective, we proposed the hypothesis: H: We suppose that the results of the performance measured by the EVA indicator are identical with the results of efficiency measured with the use of model of input and output transformations
Summary
The measurement of business performance is nowadays a very actual problem. There is a decrease in use of conventional profitability indicators as synthetic measures of business performance. Due to the changes in the economic environment, new tendencies arise. These tendencies originate in the areas with the most developed capital markets and are linked to the shift of top indicators of performance measurement towards maximization of shareholder value. The result of this is the use of so-called value criteria for business performance measurement
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