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A rational road to effectiveness attainment

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  • Zervopoulos, Panagiotis
  • Vargas, Francisco
  • Cheng, Gang

Abstract

Operational effectiveness goes beyond efficiency while it incorporates exogenous variables, non-controllable by the service units. Effectiveness is a fundamental driver for the success of an operational unit within a competitive environment. In this context, we seek to identify the active units that meet both the high or technical efficiency and the perceived high quality criteria. We also aim to develop a roadmap for effectiveness for every operational unit and we consider the feasibility of the results produced by the effectiveness assessment process in the short run. The target values uncovered by comparative optimization techniques (e.g. Data Envelopment Analysis) for efficiency and effectiveness measurement generally have limited managerial implications due to production constraints, available resources, and legal status. This paper introduces a modified Quality-driven – Efficiency-adjusted Data Envelopment Analysis (MQE-DEA) model to assess effectiveness and provide a step-by-step path to achieve high quality and high efficiency in every operational unit under evaluation. The MQE-DEA model has particular applicability to the effectiveness assessment of homogenous service units in which an inverse relationship underlies the two dimensions of effectiveness embraced in this study (e.g. bank branches, restaurant chain stores, governmental one-stop-shops).

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 31202.

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Date of creation: 30 May 2011
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Handle: RePEc:pra:mprapa:31202

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Keywords: Data Envelopment Analysis (DEA); Context-dependent DEA; Effectiveness; Efficiency; Perceived Quality;

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  1. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
  2. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
  3. Seiford, Lawrence M. & Zhu, Joe, 2003. "Context-dependent data envelopment analysis--Measuring attractiveness and progress," Omega, Elsevier, vol. 31(5), pages 397-408, October.
  4. Andreas Soteriou & Stavros A. Zenios, 1999. "Operations, Quality, and Profitability in the Provision of Banking Services," Management Science, INFORMS, vol. 45(9), pages 1221-1238, September.
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