Evaluating the performance of cooperative companies in Rasht city using the Data Envelopment Analysis (DEA) model.

Academic Thesis for Master's Degree

Field: Business Management, Major: Financial Management

Abstract

One of the concerns of managers of organizations is their awareness of the performance of the systems under their management. The main goal of this research is to find the efficiency values ??of each of the cooperative companies in Rasht city and to identify the reasons for the inefficiency of the investigated cooperative companies by using data envelopment analysis technique. Finally, we are trying to provide logical solutions to improve the performance of cooperative companies and provide a suitable strategy using this technique.

Efficiency of each unit of cooperative companies is considered as a dependent variable and input and output indicators are considered as independent variables. This research is conducted at the level of cooperative companies in Rasht city and of course it can be implemented in cooperative companies. The type and method of research is descriptive analysis, and the method of collecting information is library and field. The data collection tool was the documents available in the cooperative companies of Rasht city, and finally, the data related to the indicators were solved using the selected model under DEA-SOLVER software and the outputs were analyzed. Key words: data coverage analysis (DEA), efficiency, performance evaluation, ranking, balance sheet. Chapter 1: Overview of the research: Introduction 1-1

Today, due to the increasing complexities of the environment, the limitation of resources and production facilities, and the rapid growth of costs, the issue of increasing the efficiency and productivity of all institutions has become the focus of managers' attention, and it justifies the necessity of applying scientific and managerial principles in this sector. One of the most important principles is efficiency measurement. Performance evaluation and subsequent ranking of organizational units is done by traditional methods using financial ratios and common financial indicators, which has challenged the issue of performance evaluation. Data coverage analysis is a technique that uses all the observations collected to measure efficiency. In fact, this method optimizes each of the observations by using multiple inputs and outputs at the same time, in contrast to traditional methods (Mehrgan, 2013).

Therefore, in the present research, with the aim of investigating and understanding the data coverage analysis model and evaluating the efficiency and productivity of cooperative companies using the said analysis model, after reviewing the relevant subject literature from among the entire statistical population of cooperative companies, 21 heterogeneous companies in cooperative companies that have accounts (balance sheets) and profit and loss statements from 1/1/90 for two years until 12/29/91 were selected. Then, by collecting the necessary information, the efficiency and productivity of the cooperative companies were evaluated and their ranking was done, and at the end, suggestions were presented for the managers. New methods in meeting efficiency direct us to a new method with a comprehensive approach called Data Envelopment Analysis (DEA).

In this chapter, after the introduction, the research problem and the importance and necessity of the research are discussed. Also, the objectives of the research, the main and secondary questions (hypotheses), the conceptual model of the research, the scope of the research including the thematic, temporal and spatial scope, and finally the key words of the research are presented. The presence or absence of an effective performance evaluation system has direct links with the life and death of the organization. Cooperatives are organizations that should be formed independently and away from the support and supervision of the government and continue their work, or it is necessary to be under the protection umbrella of the government. But this support was not permanent, it was only as long as the governments insisted on their decision to achieve political and economic goals. Based on the cooperative philosophy, the creation and expansion of cooperatives should only be done by the people, that is, the members should continue their lives. Every cooperative company is committed to providing services to the relevant members. In this regard, it is very important to identify the indicators that affect the performance and measure the efficiency of each company and to know their strengths and weaknesses.

Data Envelopment Analysis (DEA) is a method to compare and evaluate the relative efficiency of decision-making units, each of which has several similar inputs and outputs, such as schools, universities, banks, etc. (Kleine, 2001). In this research, using the data envelopment analysis tool, we will evaluate the performance and determine the efficiency and ranking of several companies in the cooperative. Determining the resources that become the inefficient inventory of inefficient companies, as well as making decisions and providing solutions for inefficient companies to be placed on the border of efficiency or to increase their ranking in the present research.

In this regard, the main problem of the research is: What is the functional status of the cooperative companies of Rasht city in terms of efficiency? Data is a non-parametric technique for measuring the relative efficiency of a set of homogeneous decision-making units. The relative term is because efficiency is the result of comparing decision making units with each other. A variety of models that are used to analyze the concept of efficiency and to evaluate the relative efficiency of decision-making units in data coverage analysis. CCR (Charnes, Cooper and Rhodes (1978)), BCC (Banker, Charnes and Cooper (1984)), collective model, Andersen-Petersen (1993) model and SBM model (Toon (1999)) can be mentioned, which in the present research, after collecting the indicators and defining the decision-making units, the appropriate model was chosen.

1-3 Necessity and importance of the research

Performance evaluation as one of the most essential subsets of the task of control is one of the four elements of organization and management knowledge in organizations, which measures and assesses the current situation so that it can be used as a basis for deciding whether to continue, adjust, or prevent the work that is being done. The performance evaluation system of organizations is an important control mechanism in line with the general policies and policies of the organization and provides important and vital information to the managers regarding the suitability and compatibility of the efficiency of the units with the programs. Research

The basic purpose of this research is to evaluate the performance of cooperative companies in Rasht using the DEA model. In this regard, the sub-goals of the research that are considered are:

Knowledge of the effective indicators on the performance of cooperative companies in Rasht city and determine their efficiency and inefficiency, as well as their strengths and weaknesses, as well as the ranking of cooperative companies in Rasht city

Identify model cooperative companies as efficient cooperatives, know the impact of effective indicators on efficiency and planning in order to optimally use all the potentials available in the field of service delivery. Providing decisions or solutions for inefficient companies. 1-5 research questions Main question What is the operational status of cooperative companies in Rasht city in terms of efficiency? Sub-question What are the indicators affecting the performance of cooperative companies in Rasht city? are inefficient, and what are the strengths of efficient cooperative companies and the weaknesses of inefficient companies?

How can the performance of cooperative companies in Rasht city be evaluated by presenting a mathematical model?

1-6 hypotheses

Given the nature of the research to evaluate the performance of cooperative companies in Rasht city using DEA technique, no hypothesis is defined for it.

1-7 conceptual model

Each conceptual model is a starting point and a basis for conducting studies and research, in such a way that it specifies the desired variables and the relationships between them (Edwards et al, 2000). This means that it can be stated that ideally, a conceptual model is the same as a mental map (Masstricht school of management, 2001).