Strategic management decision support for a firm in pursuit of the displaced ideal utilizing data envelopment analysis and entropy

A firm engaged in competition with other firms is constantly evolving as it pursues its goal of maximizing shareowner wealth. This evolution can be thought of as the firm pursuing the goal of becoming the ideal firm.; An ideal firm would be one that embodies all of the superior characteristics of the firms that are in competition with one another. Clearly, with the passage of time firms become more efficient and effective in the pursuit of their goal. So as the firms change so does the ideal firm's characteristics.; The purpose of this research is to develop a procedure and illustrate the use of data envelopment analysis (DEA) and entropy as analytical techniques in providing strategic guidance to the firm.; The information provided by the companies evaluated under this procedure will originate from the companies' annual reports. This research will use the set of the seven publicly traded Bell Holding Companies in the formation of the empirical database. The database will be used to illustrate the procedure developed in this research.; The database will contain financial and operational information concerning each firm's performance. Then this information will be linked with DEA and entropy measures and will provide a normative framework upon which each firm's decision makers can determine the direction they wish to follow in pursuit of the ideal.; The analysis will be conducted based upon the publicly available information contained in the seven companies' annual reports during the years 1984 through 1989. Additionally a qualitative dimension will be incorporated into the study to provide additional insight.; This research will present the value of DEA and entropy being linked together as a procedure to assist in the strategic management of the firm. The ability to apply these two nontraditional analytical methods in providing strategic direction to the firm will be shown to be a valuable managerial asset.