Performance measurement and resource sharing among business sub-units in the presence of non-discretionary factors

Abstract

Purpose

This paper aims to apply a new approach for resource sharing and efficiency estimation of subunits in the presence of non-discretionary factors and partial impacts among inputs and outputs in the data envelopment analysis (DEA) framework.

Design/methodology/approach

First, inspired by the Imanirad et al.’s model (2013), the authors consider that each decision-making unit (DMU) may consist of several subunits, that each of which can be affected by non-discretionary inputs. After that, the Banker and Morey’s model (1996) is used for modeling non-discretionary factors. For measuring performance of several subunits, which can be considered as DMUs, the aggregate efficiency is suggested. At last, the overall efficiency is computed and compared with each other.

Findings

One of the important features of proposed model is that each output in this model applies discretionary input according to its need; therefore, the result of this study will make it easier for the managers to make better decisions. Also, it indicates that significant predictions of the development of the overall efficiency of DMUs can be based on observing the development level of subunits because of the influence of non-discretionary input. Therefore, the proposed model provides a more reasonable and encompassing measure of performance in participating non-discretionary and discretionary inputs to better efficiency. An application of the proposed model for gaining efficiency of 17 road patrols is provided.

Research limitations/implications

More non-discretionary and discretionary inputs can be taken into consideration for a better analysis. This study provides us with a framework for performance measures along with useful managerial insights. Focusing upon the right scope of operations may help out the management in improving their overall efficiency and performance. In the recent highway maintenance management systems, the environmental differences exist among patrols and other geotechnical services under the climate diverse. Further, in some cases, there might exist more than one non-discretionary factor that can have different effects on the subunits’ performance.

Practical implications

The purpose of this paper was to measure the performance of a set of the roadway maintenance crews and to analyze the impact of non-discretionary inputs on the efficiency of the roadway maintenance. The application of the proposed model, on the one hand, showed that each output in this model uses discretionary input according to its requirement, and on the other hand, the result showed that meaningful predictions of the development of the overall efficiency of DMUs can be based on observing the development level of subunits because of the impact of non-discretionary input.

Originality/value

Providing information on resource sharing by taking into account non-discretionary factors for each subunit can help managers to make better decisions to increase the efficiency.

Citation

Shakouri, R. and Salahi, M. (2022), "Performance measurement and resource sharing among business sub-units in the presence of non-discretionary factors", Journal of Modelling in Management, Vol. 17 No. 1, pp. 100-118. https://doi.org/10.1108/JM2-09-2020-0249