Centralized Resource Planning and Yardstick Competition

Omega, Volume 41, Issue 1, January 2013, Pages 112-118 doi:10.1016/j.omega.2011.10.005

Posted: 15 Jan 2016

See all articles by Armin Varmaz

Armin Varmaz

University of Applied Sciences Bremen

Andreas Varwig

University of Applied Sciences Bremen

Date Written: February 14, 2013

Abstract

Multidivisional and decentralized firms often operate inefficiently. In most cases, central management’s instruments to influence its branches’ behavior are limited. Although relative performance evaluation has been argued to be of great use in defining incentive mechanisms, such approaches cannot be transferred easily to internal performance management. We approach this issue by changing the perspective of performance evaluation. Based on the recently introduced CRA-DEA model, we develop a new super-efficiency measure that enables to establish purposive intra-organizational incentive mechanisms. By means of a numerical example, analyzing the performance of a German retail bank, the applicability of our measure is shown and compared to standard DEA models. Centralized super-efficiency seems able to suit the specific needs of intra-organizational performance management.

Keywords: DEA, Game theory, Planning and control, Centralized resource allocation

Suggested Citation

Varmaz, Armin and Varwig, Andreas, Centralized Resource Planning and Yardstick Competition (February 14, 2013). Omega, Volume 41, Issue 1, January 2013, Pages 112-118 doi:10.1016/j.omega.2011.10.005. Available at SSRN: https://ssrn.com/abstract=2715515

Armin Varmaz (Contact Author)

University of Applied Sciences Bremen ( email )

Neustadtswall 30
Bremen, 28199
Germany

HOME PAGE: http://www.hs-bremen.de/internet/de/hsb/struktur/mitarbeiter/varmaz/

Andreas Varwig

University of Applied Sciences Bremen ( email )

Neustadtswall 30
Bremen, 28199
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
122
PlumX Metrics