Evaluating the efficiencies of university faculties : adjusted data envelopment analysis

Bobe, Belete 2009, Evaluating the efficiencies of university faculties : adjusted data envelopment analysis, in AFAANZ 2009 : Accounting and Finance Association of Australia and New Zealand Annual Conference, AFAANZ, Adelaide, S. Aust., pp. 1-26.

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Title Evaluating the efficiencies of university faculties : adjusted data envelopment analysis
Author(s) Bobe, BeleteORCID iD for Bobe, Belete orcid.org/0000-0002-8331-4456
Conference name Accounting and Finance Association of Australia and New Zealand. Conference (2009 : Adelaide, South Australia)
Conference location Adelaide, South Australia
Conference dates 5-7 July 2009
Title of proceedings AFAANZ 2009 : Accounting and Finance Association of Australia and New Zealand Annual Conference
Editor(s) [Unknown]
Publication date 2009
Conference series Accounting and Finance Association of Australia and New Zealand Conference
Start page 1
End page 26
Total pages 26
Publisher AFAANZ
Place of publication Adelaide, S. Aust.
Keyword(s) DEA
data adjustment
management accounting
performance measurement
higher education
Summary Efficiency measurement is at the heart of most management accounting functions. Data envelopment analysis (DEA) is a linear programming technique used to measure relative efficiency of organisational units referred in DEA literature as decision making units (DMUs). Universities are complex organisations involving multiple inputs and outputs (Abbott & Doucouliagos, 2008). There is no agreement in identifying and measuring the inputs and outputs of higher education institutes (Avkiran, 2001). Hence, accurate efficiency measurement in such complex institutes needs rigorous research.

Prior DEA studies have investigated the application of the technique at university (Avkiran, 2001; Abbott & Doucouliagos, 2003; Abbott & Doucouliagos, 2008) or department/school (Beasley, 1990; Sinuany-Stern, Mehrez & Barboy, 1994) levels. The organisational unit that has control and hence the responsibility over inputs and outputs is the most appropriate decision making unit (DMU) for DEA to provide useful managerial information. In the current study, DEA has been applied at faculty level for two reasons. First, in the case university, as with most other universities, inputs and outputs are more accurately identified with faculties than departments/schools. Second, efficiency results at university level are highly aggregated and do not provide detail managerial information.

Prior DEA time series studies have used input and output cost and income data without adjusting for changes in time value of money. This study examines the effects of adjusting financial data for changes in dollar values without proportional changes in the quantity of the inputs and the outputs. The study is carried out mainly from management accounting perspective. It is mainly focused on the use of the DEA efficiency information for managerial decision purposes. It is not intended to contribute to the theoretical development of the linear programming model. It takes the view that one does not need to be a mechanic to be a good car driver.

The results suggest that adjusting financial input and output data in time series analysis change efficiency values, rankings, reference set as well as projection amounts. The findings also suggest that the case University could have saved close to $10 million per year if all faculties had operated efficiently. However, it is also recognised that quantitative performance measures have their own limitations and should be used cautiously.
Language eng
Field of Research 150105 Management Accounting
Socio Economic Objective 970115 Expanding Knowledge in Commerce, Management, Tourism and Services
HERDC Research category E1 Full written paper - refereed
Copyright notice ©2009, AFAANZ
Persistent URL http://hdl.handle.net/10536/DRO/DU:30021333

Document type: Conference Paper
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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