Probing organizational efficiency
International Journal of Organizational Analysis
ISSN: 1934-8835
Article publication date: 6 May 2014
Abstract
Purpose
In investigating the performance of multidivisional organizations, ability to account for each division's importance and contribution enhances the deftness of resource allocation and targeting desired outcomes. With this motivation, the author aims to introduce network data envelopment analysis (NDEA) from operations research in this conceptual article and discuss how two articles from this journal can be extended using this approach.
Design/methodology/approach
NDEA was first developed to deliver a more in-depth understanding of underlying sources of operational inefficiency. Thus, NDEA can be viewed as a peer benchmarking method useful in comparing performance of organizations and identifying divisional inefficiencies that may detract from overall performance. NDEA's ability to capture interactions among multiple variables in an objective manner based on actual observed data rather than sample averages is one of its key advantages.
Findings
The author discusses how NDEA can be applied in organisational analysis by examining two articles from this journal. Briefly commenting on one of the cases here, the author shows that a network can be defined as the interacting divisions of cultural norms and structural forms. The potential improvements (i.e. horizontal re-alignment) indicated by NDEA can guide management on the extent organisational alignment that could be changed in reaching strategic aims. The author's theoretical model is conducive to assessing the amount and direction of change from the proposed alignment model in a multi-criteria framework – characteristics embraced by NDEA.
Practical implications
Given the hierarchical nature of organizations where employees are nested in work groups or teams, groups nested in departments or divisions, and divisions nested in organizations, application of NDEA at various levels of analysis is feasible.
Originality/value
NDEA's ability to account for each division's importance or assign desired weights in what-if analyses adds to flexibility in managerial decision-making regarding allocation of resources, or re-alignment of processes and targeting of desired outcomes. Such a method that does not assume independence among multiple performance measures provides additional assurance to those concerned about shortcomings of additive scales in complex organizations.
Keywords
Acknowledgements
The author extends his special thanks to Neal Ashkanasy and Garry Gelade for reading various drafts of this paper. Their collegiality is appreciated.
Citation
Kemal Avkiran, N. (2014), "Probing organizational efficiency", International Journal of Organizational Analysis, Vol. 22 No. 2, pp. 149-160. https://doi.org/10.1108/IJOA-05-2012-0590
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited