Setting benchmarks and evaluating balanced scorecards with data envelopment analysis

doi:10.1108/14635770310477762

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Benchmarking: An International Journal

ISSN: 1463-5771

Online from: 1994

Subject Area: Managing Quality

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Setting benchmarks and evaluating balanced scorecards with data envelopment analysis

Document Information:
Title:	Setting benchmarks and evaluating balanced scorecards with data envelopment analysis
Author(s):	Robert C. Rickards, (The Leipzig Graduate School of Management, Handelshochschule Leipzig, Leipzig, Germany and Hochschule Harz, Wernigerode, Germany)
Citation:	Robert C. Rickards, (2003) "Setting benchmarks and evaluating balanced scorecards with data envelopment analysis", Benchmarking: An International Journal, Vol. 10 Iss: 3, pp.226 - 245
Keywords:	Benchmarking, Control, Data envelopment analysis, Performance measurement, Strategic management
Article type:	General review
DOI:	10.1108/14635770310477762 (Permanent URL)
Publisher:	MCB UP Ltd
Abstract:	Balanced scorecards are having a major impact on executives’ strategic decision making by encouraging their use of future-oriented, non-monetary success indicators. This article explains how to create a balanced scorecard with a reasonable number of indicators, set appropriate benchmarks for them, and evaluate overall management performance against those benchmarks. In doing so, it relies heavily on a controlling tool that is new to the business sector: data envelopment analysis. After discussing the theoretical foundations of this nonparametric optimization procedure and defining several key terms, the article presents a practical example. The example assesses management's performance from several perspectives, paying particular attention to implications of the analytic results for a firm's strategic and operational controlling. The article also offers an overview of various models for data envelopment analysis, describes limits to its use, and concludes with a summary of key findings.