Performance Evaluation of Organizations: An integrated Data Envelopment Analysis and Balanced Scorecard Approach

Abstract

The method that we propose in this paper tries to improve the traditional data envelopment analysis (DEA) by proposing an artificial alternative as an “ideal unit” in order to evaluate and rank the other alternatives in proportion to this ideal unit. Our approach integrates the balanced scorecard (BSC) by DEA and develops an extended DEA model. The input and output measures for the integrated DEA–BSC model are grouped in “cards” which are associated with a “BSC for organizations”. The BSC is embedded in the DEA model through a hierarchical structure of constraints that reflect the BSC balance considerations. Using a quantitative research method, we illustrate the proposed approach with an example.