| In today's economy and society, performance analyses in the banking industry attract more and more attention. However, the traditional Data Envelopment Analysis (DEA) methodology requires a consistent infrastructure and operating environment which one may deem as the "culture" in bank branch evaluation studies. Nevertheless, in reality there is a need to compare the units under different environmental conditions. Some units may have an advantageous environment which the others cannot adopt. This reality challenges the traditional methods of applying DEA theory to real-world cases.; This research evaluates productivity efficiency across several different banks' branches in the Mississauga area using DEA. It overcomes the above limitation by a mathematically handicapped DEA model developed here. This technology allows for the cultural differences these close competitors have from each other. Finding a handicapping function which can fairly assess the large Canadian banks' differences was one of the contributions of this work. The handicapping approach ensures that the bank's ability to produce financial products at the customer level is the same for all the banks. Furthermore, peer and target analyses are carried out to identify the outliers. In addition, the handicapped approach can be applied to any situation where normal DEA analysis can be used. |
