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Measurement of the performance of an investment bank using the operational competitiveness rating procedure

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  • Parkan, Celik
  • Wu, Ming-Lu

Abstract

The Hong Kong branch of an international investment bank hired additional staff in anticipation of increased business activity that eventually did not quite materialize and management was concerned about the effect of that decision on the bank's overall performance profile. This paper summarizes a study we carried out to address two related questions using only the available data at the time: (1) what is the direction of the overall performance trend and (2) how serious has the impact of the incremental costs of hiring additional staff been on the Bank's overall performance? The discussion in this paper focuses on the construction of the bank's performance profile using a new performance measurement method called operational competitiveness rating analysis (OCRA). The paper also includes comparisons of OCRA and data envelopment analysis (DEA) ratings and profit scores to show the validity support among the three approaches as well as underscore their differences.

Suggested Citation

  • Parkan, Celik & Wu, Ming-Lu, 1999. "Measurement of the performance of an investment bank using the operational competitiveness rating procedure," Omega, Elsevier, vol. 27(2), pages 201-217, April.
  • Handle: RePEc:eee:jomega:v:27:y:1999:i:2:p:201-217
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    References listed on IDEAS

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    1. Sudit, Ephraim F., 1995. "Productivity measurement in industrial operations," European Journal of Operational Research, Elsevier, vol. 85(3), pages 435-453, September.
    2. Fried, Harold O. & Lovell, C. A. Knox & Schmidt, Shelton S. (ed.), 1993. "The Measurement of Productive Efficiency: Techniques and Applications," OUP Catalogue, Oxford University Press, number 9780195072181.
    3. 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.
    4. Thompson, Russell G. & Langemeier, Larry N. & Lee, Chih-Tah & Lee, Euntaik & Thrall, Robert M., 1990. "The role of multiplier bounds in efficiency analysis with application to Kansas farming," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 93-108.
    5. Parkan, Celik, 1991. "The calculation of operational performance ratings," International Journal of Production Economics, Elsevier, vol. 24(1-2), pages 165-173, November.
    6. Parkan, Celik, 1996. "Measuring the performance of hotel operations," Socio-Economic Planning Sciences, Elsevier, vol. 30(4), pages 257-292, December.
    7. 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.
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    Citations

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    Cited by:

    1. Parkan, Celik, 2006. "On OCRA: Response to comments by Wang (2004)," European Journal of Operational Research, Elsevier, vol. 169(1), pages 332-337, February.
    2. repec:pal:jorsoc:v:57:y:2006:i:6:d:10.1057_palgrave.jors.2602082 is not listed on IDEAS
    3. Ülengin, Füsun & Kabak, Özgür & Önsel, Sule & Ülengin, Burç & Aktas, Emel, 2010. "A problem-structuring model for analyzing transportation-environment relationships," European Journal of Operational Research, Elsevier, vol. 200(3), pages 844-859, February.
    4. repec:eur:ejmsjr:245 is not listed on IDEAS
    5. Fethi, Meryem Duygun & Pasiouras, Fotios, 2010. "Assessing bank efficiency and performance with operational research and artificial intelligence techniques: A survey," European Journal of Operational Research, Elsevier, vol. 204(2), pages 189-198, July.
    6. Parkan, Celik & Wu, Ming-Lu, 1999. "Measuring the performance of operations of Hong Kong's manufacturing industries," European Journal of Operational Research, Elsevier, vol. 118(2), pages 235-258, October.
    7. Li, Sheng-Tun & Chou, Wei-Chien, 2014. "Power planning in ICT infrastructure: A multi-criteria operational performance evaluation approach," Omega, Elsevier, vol. 49(C), pages 134-148.
    8. Parkan, Celik, 2007. "Verifying OCRA's economic sense: Response to Agrell and West (2001)," International Journal of Production Economics, Elsevier, vol. 107(1), pages 274-278, May.
    9. Wang, Shouhong, 2006. "Comments on operational competitiveness rating analysis (OCRA)," European Journal of Operational Research, Elsevier, vol. 169(1), pages 329-331, February.
    10. Chang, Yu-Hern & Yeh, Chung-Hsing, 2001. "Evaluating airline competitiveness using multiattribute decision making," Omega, Elsevier, vol. 29(5), pages 405-415, October.
    11. Paradi, Joseph C. & Zhu, Haiyan, 2013. "A survey on bank branch efficiency and performance research with data envelopment analysis," Omega, Elsevier, vol. 41(1), pages 61-79.
    12. repec:pal:jorsoc:v:55:y:2004:i:1:d:10.1057_palgrave.jors.2601649 is not listed on IDEAS
    13. Shouhong Wang & Hai Wang, 2005. "The mystification of operational competitiveness rating analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(8), pages 535-538.

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