Improving performance evaluation based on the balanced scorecard with data envelopment analysis and game theory approaches: a case study

Abstract

Purpose

This paper aims to propose an integrated use of balanced scorecard (BSC), data envelopment analysis (DEA) and game theory approach as an enhanced performance measurement technique to determine and rank the importance of manufacturing indicators of a steel company as a real case study.

Design/methodology/approach

An efficiency change ratio is defined to examine the characteristic function of each coalition which is super-additive. Then, the Shapley value index is used as the solution of the cooperative game to determine the importance of the BSC indicators of the company and rank order them.

Findings

The results reveal that “profitability rate” is the most important BSC indicator, whereas “customer satisfaction” is the least significant one. The ranking order of the importance of all BSC indicators makes it possible for the senior managers of the organization to realize the importance of each index separately and to improve the profitability and the number of customers by presenting programs according to the budget and time constraints.

Originality/value

The main contribution of this paper lies in the adoption of a game theory approach to performance measurement in the industrial sector that determines and ranks the importance of manufacturing indicators.

Citation

Abedian, M., Shirouyehzad, H. and Davoodi, S.M.R. (2024), "Improving performance evaluation based on the balanced scorecard with data envelopment analysis and game theory approaches: a case study", Journal of Modelling in Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JM2-08-2023-0185