Academic journal article Iranian Journal of Management Studies

Comprehensive Performance Evaluation Using FAHP-FVIKOR Approach Based on Balanced Scorecard (BSC): A Case of Yazd's Ceramic and Tile Industry

Academic journal article Iranian Journal of Management Studies

Comprehensive Performance Evaluation Using FAHP-FVIKOR Approach Based on Balanced Scorecard (BSC): A Case of Yazd's Ceramic and Tile Industry

Article excerpt

(ProQuest: ... denotes formulae omitted.)

Introduction

Performance is referred to as one kind of measurement of the goals of an enterprise, while evaluation is referred to as the goal that an enterprise can effectively obtain during a specific period. Researchers stated that performance evaluation is an important activity of management control, used to investigate if resources are allocated efficiently; it is applied for the purpose of operational control to achieve a goal adjustment in the short-term and for strategy management and planning in the long run. As indicated by Rue and Byars (2005), performance evaluation tells us how employees define their own work, and it establishes a decision-making and communication process for improvement. Kaplan and Norton (1992) described performance evaluation as a way to review the achievements of organizations of both their financial and non-financial objectives. Performance measurement can be defined as a system by which accompany monitors its daily operations and evaluates whether the company is attaining its objectives. To fully utilize the function of performance measurement, it is suggested to set up a series of indices which properly reflect the performance of a company. These indicators can be quantifiable, or unquantifiable. For instance, an index such as lead time is viewed as a quantifiable (or financial) measure, whereas the degree of customer satisfaction is unquantifiable (or non- financial) measure (Wu et al., 2009). Therefore, a good performance management tool would help managers or operators consider across the broad organizational prospective strategies and develop them into measurable indicators (Chang et al., 2011). It can be said that to evaluate comprehensive performance, managers can use the balanced scorecard. The balanced scorecard (BSC) proposed by Kaplan and Norton (1992) is something that meets the total management purpose and is suitable for performing an overall performance evaluation. The BSC combines financial and non-financial perspectives, which can be classified into four performance constructs: the finance, the customer, the internal process, and learning and growth. These four performance constructs can help an enterprise to see more clearly which construct can contribute the most to the goal of the enterprise, so that it can have an overall deeper insight into the performance of its business operations (Wu & Chen, 2012). It is essential for the application of performance measurement that a company's tangible and intangible targets are defined in a way that is more appropriate to the requirements and objects of these targets and that its strategy is more extensively operationalized, quantified, and linked in a mutually supplementing way(Sun,2010). In the literature, there are a few fuzzy logic methods aimed at evaluating the relative performance by multi-dimensions. In the evaluation procedure, balanced scorecard approach, which is a comprehensive system evaluation and performance measurement was used as a theoretical basis and then the fuzzy Delphi technique was utilized to gain the consensus of experts in order to obtain standard indices for evaluating the performance of ceramic and tile companies. Then, FAHP is used to determine the weights of the criteria and finally fuzzy VIKOR is used to rank the companies in the ceramic and tile industry. Also, this study used balanced scorecard and fuzzy MCDM to evaluate performance of companies, thus it is comprehensive. In addition, determining the company's position besides being beneficial for companies to be able to identify their strength and weakness, has special importance for their internal and foreign customers, because they can plan better to invest in the future. Also, since a great proportion of non-oil export in Iran is related to tile and ceramic industry, and because of its main role in job creation, this industry is one of the important industries in Iran, and as half of the tile and ceramic is produced in Yazd, it can be said this research has significance value. …

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