Demonstrates the application of data envelopment analysis (DEA) in examining the efficiency of bank branches relative to other branches. Shows that accounting variables can be complemented by non‐accounting variables controllable by management. The process of generating and interpreting relative efficiency scores and potential improvements is discussed in a language that will be particularly appreciated by managers, consultants and novice researchers. The theory needed to use DEA and the key model design considerations are addressed. The discussion includes such issues as appropriate sample size, strengths and weaknesses of DEA, analysis options, and an application checklist. DEA can be applied to benchmarking best practice branches. Management can use DEA to test the established knowledge of branches and initiate investigations when contradictions arise.
A 17‐item scale emerges following the study to develop an instrument for
measuring customer service quality at trading bank branches, with a
focus on retail banking. The conceptual framework addresses the
psychometric shortcomings of the existing work in service quality
research. A robust research design takes the study through multiple
stages of development where the construct is pretested and piloted; in
the main survey stage, data collection methods are triangulated,
returning 791 completed questionnaires. Analysis of instrument
reliability, dimensionality and validity present gratifying results; for
example, scale alpha is recorded at 0.9249. The instrument can be
applied as part of branch performance measurement, as well as help
diagnose problems in delivery of service, and segment the bank′s
customer base for healthier decision making in marketing.
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