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A Combined DEA-BSC methodology for evaluating organizational efficiency  

Kim Bum-Soo (Citigroup Capital Korea)
Chang Tai-Woo (ETRI)
Shin Ki-Tae (Daejin University)
Park Jin-Woo (Seoul National University)
Publication Information
Journal of Korean Society of Industrial and Systems Engineering / v.28, no.2, 2005 , pp. 18-26 More about this Journal
Abstract
The balanced scorecard(BSC) overcomes the limit of traditional financial statement that focuses on only financial performance. BSC is widely used in government and industry because of the clear representation of the relationship and logic between the key performance indicators(KPI) of 4 perspectives - financial, customer, internal process, and loaming and growth. However, traditional BSC does not consider evaluating the difference between the results measured by BSC. By using relatively small number of inputs and outputs In comparing decision-making units, data envelopment analysis(DEA) can aggregate multiple performance measures. In this research, we propose a methodology named CDB(Combined DEA and BSC) to evaluate the performance of organization considering financial and non-financial perspectives. CDB uses KPI of cause-and-effect relationship on BSC as inputs and outputs of DEA method. In addition, this research proposes a method of converting the KPI of BSC to the input and output variables of DEA, and enhancing discrimination power using the limit number of variables. We illustrate the methodology by giving an example of evaluating aquisition-unit efficiency in a supply chain.
Keywords
Balanced Scorecard(BSC); Data Envelopment Analysis(DEA); Organizational Efficiency Evaluation;
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