Assessing Organizational Effectiveness in Complex Environments

Michael Epstein

Managing Director of the Centre for Integrative Medicine

College of Medicine

University of Saskatchewan

Saskatoon, SK

Abstract

Developing metrics for assessing the effectiveness of complex organizations is difficult in the best of circumstances. The task is particularly challenging in the education and health care sectors, which are characterized by (1) multiple stakeholders with diverse interests; (2) ambiguity with respect to organizational objectives; (3) many variables that are difficult to quantify; and (4) dynamic tension between long-term and short-term performance. Under these circumstances, conventional measures of performance such as profitability, return on investment, shareholder equity, and production efficiency may be inadequate. Data envelopment analysis (DEA) is a linear programming-based technique that was designed to help address this problem. DEA converts multiple input and output measures into a single comprehensive measure of effectiveness. This is accomplished via the construction of an empirically based production frontier and by the identification of peer groups. Each unit is evaluated by comparison against a composite unit that is constructed as a convex combination of other units in its peer group. DEA has now been applied in a wide variety of managerial contexts. This presentation will examine the evolution of DEA in the context of historical and contemporary developments regarding strategic planning, managerial control, and performance measurement. The application of DEA will be illustrated in the context of a large public-sector agency in the United States. Some lessons and conclusions are then drawn, with respect to the assessment of organizational effectiveness in general, and the strengths and limitations of DEA in particular.

Biographical Notes

Michael Epstein holds a PhD (Information Systems) from the Massachusetts Institute of Technology (MIT Sloan School of Management). His graduate training included concentrations in decision sciences, organizational behaviour, and information technology. He has worked as Operations Researcher, Manager End User Computing, and Cost Control Director for a large consumer cooperative in Western Canada. A former Adjunct Professor of Information Systems at the University of British Columbia, he has taught graduate courses in research methods, multivariate statistics, and evidence-based decision making; and undergraduate courses in organizational behaviour, information technology and applied statistics. He spent seven years with the Centre for Information Systems Research at MIT and was recently Visiting Scholar with the UBC Institute of Health Promotion Research. Dr. Epstein has served as consultant to Health Canada, British Columbia Children~Rs Hospital, Global Child Health Society, Tamara~Rs House, Saskatoon Health Region, and many public and private organizations in Canada and the United States. Michael is the author of several commissioned reports for Health Canada. His work has appeared in Decision Sciences, Journal of Complementary and Integrative Medicine, and Canadian Family Physician. He is Managing Director of the Centre for Integrative Medicine in the College of Medicine at the University of Saskatchewan.

Feb. 2, 2006

Park Town Hotel, Birch Room

Cocktails 5:30, Dinner 6:00, Presentation 7:00

Tickets $20

For more information contact:

Kent Kostuk 244-3295 k.kostuk@fcl.ca

Winfried Grassmann 966-4898 grassman@cs.usask.ca

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