Measuring the Managerial Efficiency of Bank Branches: A Three-Stage DEA Analysis (In Melli Bank of Iran)

Document Type : Original Article

Authors

1 Associate professor, Faculty of Management and accounting, University of Allameh Tabatabaei, Tehran, Iran.

2 Professor, Faculty of Management and accounting, University of Allameh Tabatabaei, Tehran, Iran

3 MSc, Faculty of Management and accounting, University of Allameh Tabatabaei, Tehran, Iran.

Abstract

The main purpose of this study is assessment of management performance of branches of the Bank Melli of Iran (BMI) using a three-stage Data Envelope Analysis (DEA). This study examined the effects of environmental variables on the performance of the bank branches. In this study, the performance of 93 branches were studied during 1390 and 1391 by input-based approach and assuming variable returns to scale. To estimate the effective performance three inputs: deposits, loans and facilities granted and one output to check the profit and loss was used. Then branches productivity was calculated using the Malm Quist productivity Index. The data collected through the annual reports of banks and were analyzed by using Lingo and Eviwes. Results After adjustment for environmental factors and statistical disorders and comparing with performance obtained before adjusting inputs show that environmental variables have a significant influence on effectiveness of the bank branches. Results show that after adjusting inputs, performance of units increased from 29 units to 33 units in 1390 and from 26 units to 52 units in 1391. According to the research results, we can conclude that in many cases lack of managers' effectiveness, is partly because of influence of environmental and uncontrollable factors effecting on their performance and performance of the branches should not be fully linked to their individual merit.

Keywords

References

[1]     Azarnoshan H. (2010) "Performance evaluation of Iranian banks in attracting savings and loan granted by the DEA"; Master's thesis Higher Institute of Banking, pp. 139-140.
[2]     Shyu J., Chiang T. (2012) "Measuring the true managerial efficiency of bank branches in Taiwan: Athree-stage DEA analysis"; Expert System with Applications 39, pp.11494-11502.
[3]     Tavata A. (2011) "Ranking branches of Bank Mellat, taking into account population density environment variable fuzzy logic based on data envelopment analysis"; Master's thesis Higher Institute of Banking, pp. 111-112.
[4]     Abtahi H., Kazemi B., (2003) Efficiency; Tehran, Institute for Trade Studies and Research.
[5]     Emami A,. (2011) Efficiency and productivity from an economic perspective; Seal, Allameh Tabatabai University Press.
[6]     Shayan A. (2009) Select suitable suppliers in case of undesirable outputs using data envelopment analysis; Master's Thesis, pp. 120-121
[7]     Ahmadpour H. (2001) "Performance evaluation of commercial banks in Iran, Bank Saderat Case Study of Mazandaran", No: 5, pp. 11-12.
[8]     Charnes A., Cooper W. W., Rhodes E. (1978) "Measuring the efficiency of decision making units"; European Journal of Operational Research, 2: 429–444.
[9]     Azizi H,. Jahed R. (2015) "Choose suppliers in volume discount environments in the presence of both cardinal and ordinal data using DEA"; Management Researches in Iran, No:3
[10]  Tone K., Seiford L., Cooper W. (2007) Data envelopment Analysis; Second Edition, Springer Science.
[11]  Azar A., Gholamrezaei D. (2001) "Ranking the provinces of DEA"; Iran Journal of Economic Research, the Eighth Year.
[12]  Adel A,. Khosravani F., Jalali R. (2011) "Using data envelopment analysis to determine the most efficient and inefficient portfolio of companies in the Tehran Stock Exchange"; Management Researches in Iran, No.1.
[13]  Colli T. (1996) A guide to frontier version 4.1, A computer for stochastic frontier production and cost function, University of New England, Armidule, pp. 3-10.
[14]  Emami Mybodi A. (2005) Measurement principles of efficiency and productivity; The Second Edition, Tehran: Institute for Trade Studies and Research.
[15]  Fare R., Grosskopf S., Norris M., Zhang Z. (1994) "Productivity growth, technical progress, and efficiency changes in industrialized countries"; American Economic Review, 84: 66–83.
[16]  Shyu J.,.Chiang T. (2012) "Measuring the true managerial efficiency of bank branches in Taiwan: Athree-stage DEA analysis"; Expert System with Applications 39, pp. 11494-11502.

Files

Share

How to cite

Statistics