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Measuring the efficiency of management in nonprofit organisations.

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posted on 19.11.2015, 09:12 by Ahmad Abdul-Rahim. Mlouk
The prime purpose of this study is to explore and open up a new doorway by using a relatively new technique for measuring efficiency in nonprofit organisations (NPOs), public and private NPOs. This study employs Data Envelopment Analysis (DEA) to measure the efficiency of management in the said organisations. That is, DEA is employed to determine: the overall technical efficiency (OTE), pure technical efficiency (PTE) and scale efficiency (SE) which is derived from the above two measures. This attempt is the first of its kind to use DEA for measuring the efficiency of management in universities. It used four factors of inputs (research expenditure per FTE academic, cost per student, student/staff ratio and average 'A' Level scores) and six factors of outputs (degree results, the non-completion rate, the destination of graduates in full-time employment and in further education and training, average research output, and research income per FTE academic) to provide a single summary measure of relative efficiency for each university that included in the study. With the aid of DEA, we were able to identify those universities which are relatively efficient (about 50 % of the sample were identified as best-practice) and those which are relatively inefficient by providing the following measures for each university, OTE, PTE and SE. The study also identified the target of outputs and inputs for those relatively inefficient universities if they were to become efficient. Furthermore, peer groups are identified for inefficient universities. The latter can therefore consider strategies, policies and practices that are pursued by their peer groups, so they can adopt to become efficient. Finally, this study provides measures of the relative efficiency of a university that compared to others being evaluated. The study's most significant contributions may be summarised as that, after taking advantage of DEA's unique characteristics, we produced a set of one single summary measure of relative efficiency for the universities we have studied and it also indicates to the level(s) and area(s) of possible improvement which are needed before a relatively inefficient institution is to become efficient.


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University of Leicester

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