Abstract:
The aim of this study is to investigate the relationship between managerial ability and firm performance. First, we introduce a new two-stage DEA model with a fuzzy multi-objective programming approach for evaluating the performance of companies listed on the Tehran Stock Exchange. In this regard, the stable operation of companies, into two sub-process, have divided, which includes the profitability (first phase) and the value, creativity (the second phase), that is, the outputs of the first stage are inputs for the second stage, which can be used to identify the status of the company's operations and potential for future growth. Second, In order to measure the ability of managers, we use the model provided by Demerging. Finally, the relationship between managerial ability and firm performance are also investigated by means of the truncated-regression model. The results show that there is a positive relationship between the ability of management and firm performance. It means that managerial ability to be significantly related to the performance of the company. In this sense, the performance of the company improves by increasing managerial ability to better use resources and consequently increase overall efficiency.
Machine summary:
Application of the Two-Stage DEA Model for Evaluating the Efficiency and Investigating the Relationship between Manage- rial Ability and Firm Performance Mohammad Reza Ravanshad, Ali Amiri*, Hojjatallah Salari, Davood Khodadadi Department of Accounting, Bandar Abbas Branch, Islamic Azad University ,Bandar Abbas, Iran ARTICLE INFO Article history: Received 30 December 2018 Accepted 05 May 2019 Keywords: ABSTRACT DEA two-step,fuzzy multi-objective, value creativity, profitability, managerial ability.
First, we introduce a new two-stage DEA model with a fuzzy multi-objective programming approach for evaluating the perfor- mance of companies listed on the Tehran Stock Exchange.
Data envelop- ment analysis is one of the types of performance measurement methods, the traditional model of data envelopment analysis uses only one general process to assess the efficiency of multiple inputs and output processes, and these models are unable to assess the performance of processes and sub- processes in the organization, so performance evaluation results may hinder the achievement of man- agerial information with value [19,20,22].
Saglam [37] in a study entitled a two-stage performance assessment of utility-scale wind farms in Texas use data envelopment analysis and Tobit models are applied to evaluate productive efficiencies of the 95 large utility-scale wind farm electricity generation in Texas, by using pre-determined three input and two output variables.
First, this paper improves some shortcom- ings in prior researches; in other words, this study employs an innovative ratio two-stage production process model, which includes profitability and value creative performance, to assess the efficiency of companies listed on the Tehran Stock Exchange.