Evaluation of the performance of Mazandaran Bank of Agriculture branches using the technique of data coverage analysis

Academic Thesis for Master's Degree

Field: Business Management Direction: Internal

Abstract

The performance evaluation system of different organizational units is one of the main pillars of the planning process to improve activities. Designing and managing the measurement and evaluation system is one of the main concerns of strategic planning of companies. Therefore, in this research, in order to evaluate the performance, we have used the data coverage analysis method, which is used as a tool to evaluate the performance of decision-making units, and in which the inputs (personnel costs, administrative costs, the number of personnel and the average work experience of the personnel) and the outputs (the amount of facilities, the amount of deposits and the provision of services) of the organization are used to evaluate the performance of the organization. For this purpose, we have analyzed 94 branches of Agricultural Bank of Mazandaran province. The technical efficiency of the selected branches of the Agricultural Bank of Mazandaran province was estimated and then the banks were ranked based on the results. The analysis period includes 2013. The results showed that the branches of Nishtarud, Amir Kala Babol and Golugah, Amel, Sari-Erzi, Neka, Joibar, Kalardasht, Nowshehr, Khazar Blvd. Sari, Natural Resources, have an efficiency of 1. Then, for inefficient branches, branches were considered as references. The average technical efficiency of agricultural banks in Mazandaran province is estimated to be 0.738, the average managerial efficiency is 0.826 and the average efficiency is 0.888. Keywords: performance evaluation, efficiency, data coverage analysis, input, output. Work tools up to the most advanced technologies of the present age show human desire and interest to increase efficiency and productivity.

In recent decades, the increasing population growth on the one hand and the scarcity of primary resources as well as the high costs of new technologies on the other hand, have caused economic units to pay attention to the solutions for better use of existing resources.

On this basis, understanding the concept of efficiency and measuring its level in organizations and economic enterprises is essential to It seems Undoubtedly, without having a model to evaluate the activities, many available resources will be wasted and achieving organizational goals and plans will face serious problems. Therefore, it is necessary and inevitable to achieve efficient management of production inputs in order to meet increasing needs and to benefit from a systemic approach, as well as to have appropriate tools and facilities to measure the performance of various units. Among various industries, the banking industry has a special importance and position, especially in recent times; Because the performance of any economic activity requires the presence of inputs, and undoubtedly one of the most important of them is the capital input, the provision of which requires the existence of an efficient banking network for the creation and survival of economic activities. The increase in competition in the banking industry and the presence of the private sector in this arena have forced bank managers to choose the appropriate scale for providing banking services; As they have always evaluated the performance of banks and bank branches over time, there have been many changes and developments. In the traditional methods of evaluating the performance of the banking system, financial indicators are usually used. This method of performance evaluation, which is common at the level of banks, has weaknesses.

    But new methods in meeting efficiency direct us to a new method with a comprehensive approach called Data Envelopment Analysis [1] (DEA). Data envelopment analysis is a technique that uses all the collected observations to measure efficiency, in fact, this method optimizes each of the observations by comparing the efficient frontier by simultaneously using multiple inputs and multiple outputs, unlike traditional methods (Mehrgan, 2013). In this research, the data envelopment analysis method is used.

In this chapter, after the introduction, the importance and necessity of the research and also the statement of the research problem are discussed. Also, the objectives of the research include the objectives of the main objectives and secondary objectives, main and secondary questions (hypotheses), the scope of the research including the thematic, temporal and spatial scope, and finally the key words of the research and the limitations of the research are presented.

1-2 statement of the problem

Knowing that we are in the age of information and competition between organizations, and every organization seeks to create a new method for the transformation of its organization in order to surpass its competitors and maintain and gain a competitive advantage, as well as the important role that efficiency has in the development of societies; Examining all its dimensions, especially in the form of mathematical analysis, as a measure to measure performance is inevitable.

Since the heart and main artery of the country's economy is tied to banks, it is obvious that the growth and promotion and proper development of banks has increased their efficiency, which will cause the economy to flourish and help escape from financial crises. In addition to this increase in the efficiency of banks, it can be a big step in the better implementation of the plan to target subsidies.

Performance evaluation using data envelopment analysis method is used as a tool to evaluate the performance of decision-making units. In this technique, a series of organization's inputs and outputs are used to evaluate the organization's performance. Efficiency measurement has always been considered because of its importance in evaluating the performance of an organization, and in the present study, due to the researchers' emphasis on the coverage analysis of data, special attention will be paid to the selection of inputs and outputs.

     The greater independence of government organizations, which is caused by the government's decentralization process/policies, is expanding in many countries. These changes have necessitated the use of new management techniques in order to increase the performance of government organizations and also to provide tools to improve decision-making processes in the public sector. However, for evaluating the performance of public sector activities, the inappropriateness and non-use of effectiveness and efficiency indicators is a very limiting factor. The reason for this is due to the application of the concept of profit and profitability in government organizations, which cannot be easily used for the analysis of government sector issues (Hedayat Tabatabai, 1378, 15).

As Bosfon and colleagues [2] (1991) stated, profitability cannot be the only performance measure for the profitability of government organizations. They believe that factors beyond the control of government organizations affect their activities. Therefore, when it comes to evaluating the performance of public or private organizations, one should pay attention to multiple goals and the outputs/staffs of these organizations cannot always be expressed in terms of quantitative units, and to evaluate their performance, a combination of performance indicators should be analyzed. As we know, the performance evaluation system of various organizational units is one of the main pillars of the planning process to improve activities The design and management of measurement and evaluation system is one of the main concerns of strategic planning of companies. It is necessary for organizations to continuously monitor and control the performance of different departments of the company to find out which activities are being done correctly. Which activity needs improvement? And which one is done incorrectly?

    In a market-based economy, the banking system bears a very heavy responsibility and is one of the most important economic components of the country. By providing financial capital to economic sectors, banks can provide suitable conditions for investment and increase employment and national production. Even by providing credit for professionals, banks can create new job opportunities and better distribution of income at the community levels. In addition, banks protect personal and government property and internal and external exchanges by keeping cash and facilitating its transfer. Banks also play an important role in economic stability as the agent of implementing monetary policies. The threats and pressures caused by globalization and the increasing growth of non-banking financial and credit institutions in recent years have prompted banks to improve their performance in the domestic and foreign markets by establishing research centers and conducting research activities in the field of their status compared to other banks in order to survive and compete in the market.