Branch banking network assessment using DEA: A benchmarking analysis—A note

This paper presents a benchmarking analysis of the branches and regional banks of a large French banking group. The analysis focuses on operational performance. Starting from an ‘individual’ diagnosis at branch level, a ‘network’ diagnosis is developed at regional bank level. The aim of the paper is to develop (i) operational performance indicators from the inefficiency score and (ii) a benchmarking procedure adapted to the network structure of the banking group under study. The banking group comprises 1611 branches that form 16 regional groups. The branches operate in six different business environments. A method is therefore required (a) to aggregate the inefficiency scores of individual branches to evaluate the regional groups and (b) to integrate the differences in environment into the evaluation procedure. Inefficiency scores are calculated using the data envelopment analysis (DEA) approach. This is based on the principle of comparison; once identified, the best practices are used to construct the efficiency frontier. Each entity is then positioned relative to that frontier. The model proposed in this paper determines one efficiency frontier for each type of environment. The results reveal that 30% of branches are efficient. Special emphasis is placed on quantifying productivity gains at regional bank level and on practicing intra- and inter-regional bank benchmarking.     

The effect of benchmarked performance measures and strategic analysis on auditors’ risk assessments and mental models

As the audit environment becomes more demanding and complex, so does the set of analytical tools available to an auditor. The purpose of this paper is to examine the effect of two complex audit technologies commonly used by auditors, benchmarking of performance measures and strategic analysis, on the risk judgments of auditors carrying out the initial planning of an audit. We conduct an experiment that utilizes a Balanced Scorecard for organizing and evaluating analytical evidence about the performance of business units within a large client. Our first principal finding is that external benchmarking can cause an auditor to focus on performance measures that are unique to a business unit and disregard performance measures that are common to multiple business units but not benchmarked. However, our second finding is that an in-depth strategic analysis completed prior to assessing a client’s business risk or risk of material misstatement allows an auditor to incorporate more information from performance measures in risk assessments regardless of whether the performance measures are benchmarked. Strategic analysis facilitates a more balanced and accurate assessment of the risks across the business units being evaluated. We also provide evidence that the latter result occurs because in-depth strategic analysis allows auditors to develop a more complete mental model of a client, which has been a long time belief of advocates of business risk audit methodologies and consistent with current and emerging auditing standards on risk assessment.     

The Attitudes of British National Health Service Managers and Clinicians Towards the Introduction of Benchmarking

This paper describes an empirical study, conducted in three acute hospitals, of the attitudes of central managers, medical managers and clinicians towards the adoption of benchmarking. Benchmarking was portrayed in The New NHS White Paper (1997) as an important means of improving efficiency over the next decade. The present paper examines the context of change and nature of benchmarking. Findings are presented in seven sections including: the understanding which respondents had of benchmarking; their willingness to be involved in benchmarking; the existence of strategies and policies for implementing benchmarking; the relevance of existing costing information; and the role of networks in facilitating benchmarking. The study concludes that the process of change adopted contradicted most of the factors associated with creating receptivity to change. Also, that the publication of the National Reference Costs seemed to have more relevance to resource planning at central National Health Service Management Executive level, than to effecting improvements at operational level in acute hospitals.     

The Implementation and Use of Benchmarking in Local Government: A Case Study of the Translation of a Management Accounting Innovation

Benchmarking is a management accounting innovation (MAI) that can be used for performance measurement and management in both the private and the public sectors. Although public sector accounting researchers have reported some success with the use of benchmarking, frequently charged problems exist in implementing and using this management technique. To look beyond the technical and institutional explanations, this paper takes a translation approach and presents a case study of a local government benchmarking network. We conclude that there is a link between benchmarking implementation problems and initiators’ failure to build a strong network of benchmarking allies. Implementation is facilitated if actors, other than the initiators, recognize the possibility of making benchmarking more relevant and less cost focused. However, even when a network of actors has a favourable attitude towards benchmarking, benchmarking may still appear as an unruly ‘actant’. Furthermore, the perception of implementation failure and success is heterogeneous and connected to various actors’ adoption of benchmarking. We also conclude that there is a connection between the use of benchmarking and 1) actors’ possibilities to use benchmarking in the struggle for resources and 2) the perception of benchmarking information as ‘factual’ or ‘factual enough’. However, the perception of benchmarking information as ‘factual’ or ‘factual enough’ seems not only a matter of correct or incorrect ratios but also of whether such information serves actors’ interests. A final conclusion is that the use of benchmarking increases when actors other than the initiators complement the original idea and ‘counter interest’ the initiators.     

Operational risk quantified with spectral risk measures: a refined closed-form approximation

The quantification of operational risk has become an important issue as a result of the new capital charges required by the Basel Capital Accord (Basel II) to cover the potential losses of this type of risk. In this paper, we investigate second-order approximation of operational risk quantified with spectral risk measures (OpSRMs) within the theory of second-order regular variation (2RV) and second-order subexponentiality. The result shows that asymptotically two cases (the fast convergence case and the slow convergence) arise depending on the range of the second-order parameter. We also show that the second-order approximation under 2RV is asymptotically equivalent to the slow convergence case. A number of Monte Carlo simulations for a range of empirically relevant frequency and severity distributions are employed to illustrate the performance of our second-order results. The simulation results indicate that our second-order approximations tend to reduce the estimation errors to a great degree, especially for the fast convergence case, and are able to capture the sub-extremal behavior of OpSRMs better than the first-order approximation. Our asymptotic results have implications for the regulation of financial institutions, and may provide further insights into the measurement and management of operational risk.     

Delivering the goods at TNT: the role of the performance measurement system

This paper explores the characteristics of the performance measurement system atTNT (UK) Ltd.which facilitate the translation of strategy into action.TNTis a successful and growing service organization and a market leader in the overnight distribution of parcels within the U.K. The performance measurement system and how it is used atTNTare described in detail. The authors then draw on the management accounting literature to provide an analysis framework which answers three central questions for performance measurement systems: whatdimensionsof performance to measure, how to setstandardsfor those measures and whatrewardsare to be associated with the achievement of those standards. The performance measurement system atTNTis appraised against this framework. AtTNTthere are five properties of the performance measurement system which have facilitated the translating of strategy into action. Three of these relate to the framework above; the company measures the right things in that dimensions are consistent with corporate strategy, it provides standards for performance through internal benchmarking, and adopts a mixture of financial and non-financial based rewards. In addition, however, there are two further properties of the system; the use of league tables to report the relative performance of the depots, and the presence of a strong corporate champion who drives the message and importance of the performance measurement system from the centre to the depots.     

Performance information in the Irish public sector: a comparison with the UK

Public sector organizations (PSOs) are expected to account for not only the monies spent but what has been achieved with this money. Therefore, performance reporting has become a key issue for PSOs. In a comparable sample of PSOs in the UK and Ireland with an operational focus, it was found that UK PSOs provide substantially more performance information. Irish PSOs are particularly hesitant about producing performance targets. A key lesson from this paper is that the establishment of performance targets must be driven by the political system.     

Benchmarking and Learning in Public Healthcare: Properties and Effects

This research investigates the effects of learning‐oriented benchmarking in public healthcare settings. Benchmarking is a widely adopted yet little explored accounting practice that is part of the paradigm of New Public Management. Extant studies are directed towards mandated coercive benchmarking applications. The present study analyses voluntary benchmarking in a public setting that is oriented towards learning. The study contributes by showing how benchmarking can be mobilised for learning and offers evidence of the effects of such benchmarking for performance outcomes. It concludes that benchmarking can enable learning in public settings but that this requires actors to invest in ensuring that benchmark data are directed towards improvement.     

Asymmetric benchmarking of pay in firms

This paper examines whether asymmetric benchmarking of pay exists for vice presidents (VPs). Using ExecuComp data for 1992–2007, we find that companies reward VPs for good luck but do not penalize them for bad luck. However, asymmetric benchmarking of VP pay is mitigated by governance, CEO power, gender, and industry factors. The presence of asymmetric benchmarking of pay could suggest that managers are involved in skimming, or it could mean that firms insulate managers from poor firm performance to prevent them from accessing outside opportunities. We find that unlike CEOs, asymmetric benchmarking of pay for VPs is not consistent with the skimming hypothesis.     

Factors influencing the role of management accounting in the development of performance measures within organizational change programs

Many companies are undergoing organizational changes encompassing innovative approaches to organizing production processes, restructuring work practices and developing new planning and control mechanisms. This paper explores the role that management accounting played in the development of performance measurement systems within five organizations implementing change programs. The major case study is of a large manufacturing firm undertaking changes which included the development of team structures, the adoption of a customer-focused strategy and the implementation of new performance measurement systems. In this company, a lack of integration of operational performance measures with strategic priorities contributed to poor integration of team activities with overall strategy. The paper proposes five interrelated factors that may help explain the extent to which management accountants contribute to the development of integrated performance measures and change programs. Case evidence drawn from a further four firms is presented to provide some validation of conclusions drawn from the primary case study.     

Toward adaptive decision support for assessing infrastructure system resilience using hidden performance measures

The understanding of resilience is an emerging topic within the study of risks affecting distributed infrastructure systems. Although recent studies have explored the quantification of system resilience, there has been limited research aimed at understanding the role of multiple performance measures, spatiotemporal heterogeneities, and modeling uncertainties within the assessment of resilience and associated decision-making. Under real-world conditions, there is an increased burden on analysts for translating observed system data (including human and electronic sensor observations) into system performance estimates that may not be directly observable. This paper addresses these issues using a scenario-based risk modeling approach to understand: (1) resilience of complex systems, often in cases of hidden (not readily observable) measures of performance, (2) resilience sensitivity to modeling uncertainties in event and system characteristics, and (3) resilience sensitivity to the measurement of performance across multiple operational perspectives. The methods in this paper integrate uncertainty-driven risk and probabilistic modeling within a multi-state Markov-based approach. This study contributes to the state-of-the-art by developing methodologies for assessing community perceptions of infrastructure system resilience using observable factors and inferring possibly hidden performance measures for facilitating adaptive decision-support. The methods are demonstrated with hypothetical spatiotemporal data across multiple system performance dimensions. The analysis results are useful for infrastructure security analysts, system decision-makers, and the general public.     

Benchmarking as a Tool for the Modernisation of Local Government

This paper examines benchmarking as a tool of the modernisation process in local government and the contradictory tensions in the Best Value scheme are explored. Benchmarking is shown to encapsulate the dichotomous nature of a modernising philosophy which espouses innovation and local solutions alongside the government's centralising tendencies. One consequence is the advancement of 'compulsory' and 'defensive' modes of benchmarking with local authorities benchmarking for external accountability reasons; issues of tangible improvement are secondary concerns. These tensions are viewed as irreconcilable, the implication is that local government will need to carefully manage and evaluate its benchmarking activities.     

互联网金融背景下中国寿险公司经营绩效评价研究

以2013年保费收入行业前十的寿险公司作为研究样本,对它们的经营状况进行横向和纵向的比较分析,并运用建立的经营绩效评价体系,对经营绩效进行综合评价。评价结果表明,泰康人寿2013年在偿债能力、盈利能力、运营效率和成长能力表现欠佳,但是互联网运营能力排名第一,从而提升了其经营绩效的综合排名。基于综合评价结果,泰康人寿需要从两方面进一步改善其经营状况：第一,从提升短期流动性、注重寿险业务发展和控制综合费用支出入手,改善传统的经营指标;第二,通过优化页面设计、调整在线客服时长和完善产品结构来保持其互联网运营优势。     

国有商业银行柜面业务操作风险研究

当前,国有商业银行完成股改上市后面临的操作风险中,柜面业务操作风险是非常重要的方面.某国有商业银行10年发生的107个经济案件中,基本都涉及柜面业务.柜面业务操作风险控制不好,就可能带来声誉影响、管理影响和发展影响.本文通过阐述操作风险的概念、表现形式、特点和特征,柜面业务操作风险点及表现形式和国有商业银行强化柜面操作风险防范的具体措施等,特别是提出的建立健全柜面业务操作风险管理体制、完善柜面业务操作风险内部控制制度建设、实行科学的柜面业务操作风险管理办法、创新操作风险防范手段、加强操作风险文化建设等5项具体措施,对柜面业务操作风险的防范研究进行了有益探讨.     

Benchmarking the information society in the long range

In this paper, a model for Information Society (IS) benchmarking in the long range is proposed. This model, called EOR, aims to support and integrate (1) the development of future visions about the IS/Information Technology (IT) industry, (2) detection of obstacles to IS/IT diffusion, (3) detection of recommendations for IS/IT diffusion, and (4) benchmarking processes focused on the IS/IT field. The EOR is based on a Delphi-Cross-Impact approach. In this work, the key principles and issues of EOR implementation are analyzed and an application of the EOR to a technology foresight process is reported.     

The ‘ladder of success’ in healthcare: the UK national reference costing index

Relative performance evaluation (RPE) is a form of benchmarking that operates through ranking institutions in comparative league tables. This paper explores issues raised by the introduction of RPE to benchmark UK hospital costs (termed ‘reference’ costs for this purpose). These reference costs are aggregated into a comparative cost index—thereby creating a ‘ladder of success’.The ‘ladder of success’ has the potentiality both to enhance the purchasing role and to provide a comparative database for hospitals to improve their performances. Yet this research found that several problems confound its use for benchmarking: the absence of a referent (or standard) against which ‘reference’ costs can be compared; the non-comparability of many hospitals featuring in the index; and the lack of standardisation in costing practices.In terms of refining and developing the index to enhance its usefulness, there are several possibilities: distinguishing between direct and indirect costs; introducing benchmarking ‘cluster groups’; pinpointing an acceptable range of target costs; and reducing the scope of clinical activities included. However, if any of these alternatives were adopted, the power of a single comprehensive measure that attaches one—and only one—number to each trust would be lost. The issue is that in making the index more meaningful, political leverage over the UK trusts would be reduced. Hence, despite all its associated problems, this research concludes that the ‘ladder of success’ looks likely to continue in its present form.     

Data Envelopment Analysis: A Practical Tool to Measure Performance

This paper describes a productivity method, data envelopment analysis (DEA), and how it can be used to measure performance using multiple performance measures. DEA compares organisations or parts of organisations that share common goals and use similar resources to produce similar products, and calculates the technical efficiency with which firms convert bundles of inputs into bundles of outputs. DEA has been used in both public and private settings, and the paper describes some of its applications within Australasia. A case study of New Zealand dairy farms is used to demonstrate the benchmarking capability of DEA. While built upon solid theoretical foundations, DEA is essentially a practical tool that can be used by academics for research as well as by managers and practitioners for improved performance measurement and accountability.     

The balance on the balanced scorecard a critical analysis of some of its assumptions

In recent years academic scholars have given increasing attention to the importance of strategic measurement systems including both non-financial and financial measures. One of the approaches adopted is that of the balanced scorecard. It is distinct from other strategic measurement systems in that it is more than an ad hoc collection of financial and non-financial measures. It contains outcome measures and the performance drivers of outcomes, linked together in cause-and-effect relationships, and thus aims to be a feed-forward control system. Furthermore, the balanced scorecard is intended not only as a strategic measurement system but also as a strategic control system which can align departmental and personal goals to overall strategy. This paper first examines the extent to which there is a cause-and-effect relationship among the four areas of measurement suggested (the financial, customer, internal-business-process and learning and growth perspectives). The paper then examines whether the balanced scorecard can link strategy to operational metrics which managers can understand and influence. Finally, it discusses and suggests some improvements to the balanced scorecard.     

Synthesizing enterprise data to strategically align performance: The intentionality of strategy surrogation

Strategic performance measurement systems (SPMS) are employed by senior management as a means of translating strategy into performance measures. Recent research suggests that this translation can lead managers to focus on personal performance measures as opposed to overall organizational strategy—a phenomenon referred to as strategy surrogation. Emerging technologies are increasingly used to operationalize SPMS via smart phone/tablet/laptop formats that inherently promote the use of small subsets of performance measures and have the potential to exacerbate strategy surrogation effects. This study explores executive managers' motivations in deploying dashboards and the resulting effect on operational managers' focus on associated performance measures. An exploratory cross-sectional field study is conducted with 27 executive to mid-level managers to establish a theoretical model explaining how and why organizations deploy dashboards and why managers use dashboards to facilitate their activities and decisions. Despite concerns over the propensity of managers to focus on performance measures and lose sight of strategic objectives (i.e. strategy surrogation), the interview data indicate that executive management intentionally designs dashboards to achieve strategy surrogation. The impact of this intentional surrogation appears to arise through operational managers' beliefs that dashboard measures align with organizational strategy and lead to improved managerial and organizational performance. However, this relationship between perceived alignment of performance measures and managerial and organizational performance is mediated by dashboard quality and information quality. These findings have important implications as the effects of SPMS on strategy surrogation are further explored by researchers, and as system designers consider the side effects of emerging technologies on effective strategic performance measurement.     

Developing Financial Accountability in British Acute Hospitals

This paper explains the process of defining, measuring and costing health service outputs (Health Resource Groups – HRGs). It identifies why the introduction of HRGs became necessary and how they were rolled out and became mandatory. The steps followed to achieve national uniformity are explained. Evidence is provided on the extent to which HRGs have been adopted and on the wider roles they may fulfil, such as benchmarking. The possible implications for resource allocation and the power of clinicians are discussed. Finally, attention is turned to the possible consequences of costed HRGs, as a means of achieving detailed financial accountability at operational level and to alternative means of control.