A DEA-BASED TOOL FOR TRACKING BEST PRACTICE EXEMPLARS: THE CASE OF TELECOMMUNICATIONS IN EBRD COUNTRIES

Abstract

Benchmarking is a strategic management tool that can help to gain competitive advantage, but the question is how to decide the relevant practice exemplars to be used as role models. Data Envelopment Analysis (DEA) is a very helpful method for tracking corresponding benchmarks, but the question remains of how to record them when performance is fluctuating and unstable, as is the case in a transition period to an open market. To address this issue a new DEA-based tool is proposed, the Corresponding Benchmark Matrix (CBM), which helps to reveal ‘leader’ countries and the most suitable benchmarks for less successful countries. The approach is illustrated for telecommunications in 22 European Bank for Reconstruction and Development (EBRD) countries.