Performance comparison of management groups under centralised management

Abstract

In many real world data envelopment analysis (DEA) applications, there are situations where a central body manages a large number of similar units through a few distinct management groups. Each group – with a segregated geographical business area – has its own unique management style in managing its operating units while allocating resources and producing products and/or services to local customers. This paper extends the respective DEA approach of Camanho and Dyson (2006) by introducing an index for comparing the performance of the management groups under such a centralised management scenario. Our approach is capable of capturing directly the performance of the groups on the basis of their internal abilities in transforming inputs to outputs. The resulting index and its components not only satisfy circularity but also highlight the technological gap in regard to the potential technology available to each group. Real-world data from one of the global leaders in the elevator and escalator industry will be used to illustrate the proposed approach.