Data envelopment analysis and performance management

4th International Symposium of DEA, 5th-6th September 2004, Birmingham (UK)

Centralised or decentralised? Strategic implications of resource allocation models

This paper examines the strategic implications of resource allocation models (RAMs). Four interrelated aspects of resource allocation are discussed: degree of centralisation, locus of strategic direction, cross-subsidy, and locus of control. The paper begins with a theoretical overview of these concepts, locating the study in the contexts of both strategic management literature and the university. The concepts are then examined empirically, drawing upon a longitudinal study of three UK universities, Warwick, London School of Economics and Political Science (LSE), and Oxford Brookes. Findings suggest that RAMs are historically and culturally situated within the context of each university and this is associated with different patterns of strategic direction and forms of strategic control. As such, the RAM in use may be less a matter of best practice than one of internal fit. The paper concludes with some implications for theory and practice by discussing the potential trajectories of each type of RAM.

Top teams and strategy in a UK university

This paper reports on the results of an in-depth study of how a top management team (TMT) puts strategy into practice in a UK university. A study of the top team in Warwick University was conducted to analyse how strategy was formulated and implemented. The results suggest that a combination of two broad theoretical lenses provide useful analytical insight. These are strategy as practice and strategy as process. The main elements of this university’s strategy result from an interplay of localized routines and patterns of action within an organizational context, which both produces and is a product of such actions. The TMT itself was found to be clearly identifiable and stable in composition. The team exhibited identifiable patterns of strategic thinking and acting. However, the role of organizational structure was also found to be a key influence on the actions and processes of the TMT with strong central control tendencies in the team being counterbalanced by devolved operational control to individual departments. The data also reveal inter-relationships between organizational structures and the TMT in four key areas: direction-setting, monitoring and control, the allocation of resources, and processes of interaction. The overall conclusion is that to understand how strategy is practised, analysis needs to focus on how patterns of action are associated with the characteristics of both the team and the wider organization. The nature and characteristics of these patterns can be related to how strategy is put into practice.

The impact of performance measurement in strategic planning

Purpose – To investigate the impact of performance measurement in strategic planning process. Design/methodology/approach – A large scale survey was conducted online with Warwick Business School alumni. The questionnaire was based on the Strategic Development Process model by Dyson. The questionnaire was designed to map the current practice of strategic planning and to determine its most influential factors on the effectiveness of the process. All questions were close ended and a seven-point Likert scale used. The independent variables were grouped into four meaningful factors by factor analysis (Varimax, coefficient of rotation 0.4). The factors produced were used to build regression models (stepwise) for the five assessments of strategic planning process. Regression models were developed for the totality of the responses, comparing SMEs and large organizations and comparing organizations operating in slowly and rapidly changing environments. Findings – The results indicate that performance measurement stands as one of the four main factors characterising the current practice of strategic planning. This research has determined that complexity coming from organizational size and rate of change in the sector creates variation in the impact of performance measurement in strategic planning. Large organizations and organizations operating in rapidly changing environments make greater use of performance measurement. Research limitations/implications – This research is based on subjective data, therefore the conclusions do not concern the impact of strategic planning process' elements on the organizational performance achievements, but on the success/effectiveness of the strategic planning process itself. Practical implications – This research raises a series of questions about the use and potential impact of performance measurement, especially in the categories of organizations that are not significantly influenced by its utilisation. It contributes to the field of performance measurement impact. Originality/value – This research fills in the gap literature concerning the lack of large scale surveys on strategic development processes and performance measurement. It also contributes in the literature of this field by providing empirical evidences on the impact of performance measurement upon the strategic planning process.

Malmquist indexes using a geometric distance function (GDF)

Traditional approaches to calculate total factor productivity change through Malmquist indexes rely on distance functions. In this paper we show that the use of distance functions as a means to calculate total factor productivity change may introduce some bias in the analysis, and therefore we propose a procedure that calculates total factor productivity change through observed values only. Our total factor productivity change is then decomposed into efficiency change, technological change, and a residual effect. This decomposition makes use of a non-oriented measure in order to avoid problems associated with the traditional use of radial oriented measures, especially when variable returns to scale technologies are to be compared.

Introduction to the theory and application of data envelopment analysis:a foundation text with integrated software

The book aims to introduce the reader to DEA in the most accessible manner possible. It is specifically aimed at those who have had no prior exposure to DEA and wish to learn its essentials, how it works, its key uses, and the mechanics of using it. The latter will include using DEA software. Students on degree or training courses will find the book especially helpful. The same is true of practitioners engaging in comparative efficiency assessments and performance management within their organisation. Examples are used throughout the book to help the reader consolidate the concepts covered. Table of content: List of Tables. List of Figures. Preface. Abbreviations. 1. Introduction to Performance Measurement. 2. Definitions of Efficiency and Related Measures. 3. Data Envelopment Analysis Under Constant Returns to Scale: Basic Principles. 4. Data Envelopment Analysis under Constant Returns to Scale: General Models. 5. Using Data Envelopment Analysis in Practice. 6. Data Envelopment Analysis under Variable Returns to Scale. 7. Assessing Policy Effectiveness and Productivity Change Using DEA. 8. Incorporating Value Judgements in DEA Assessments. 9. Extensions to Basic DEA Models. 10. A Limited User Guide for Warwick DEA Software. Author Index. Topic Index. References.