Benchmarking universities' efficiency indicators in the presence of internal heterogeneity

Abstract

When benchmarking its performance, a university is usually considered as a single strategic unit. According to the evidence, however, lower levels within an organisation (such as faculties, departments and schools) play a significant role in institutional governance, affecting the overall performance. In this article, an empirical analysis was carried out to obtain the teaching efficiency scores of the different schools belonging to 12 universities within one Italian region. In this perspective, the efficiency of a university can be viewed as the ‘distribution’ of the scores for each of its sub-units. The results show how the ‘ranking’ of efficient universities varies when they are analysed according to the different sub-units that compose them; moreover, the average efficiency scores seem to be greatly affected by the subject mix. The implication for management is that it is better to implement benchmarking exercises for the different schools within a university and not at the institutional level only.

Keywords:

• Efficiency
• subject mix
• internal heterogeneity
• performance

Acknowledgements

We wish to thank the Lombardy Regional Government for supporting this research through a research grant (Research project: 2010, The role of regional governments in financing and regulating higher education). The content of this article reflects the ideas of the authors, which are not necessarily those of the Lombardy Regional Government.

A preliminary version of this article was presented at a seminar at Politecnico di Milano; we are grateful to the participants for their valuable comments. We are also grateful to two anonymous referees, whose comments helped us to improve the article. We are solely responsible for any errors it may contain.

Notes

1. As a further factor, Lombardy is the most advanced region in Italy, for its economic development and for its research work and universities. The population is 10 million, and there are 12 universities in the region (Agasisti et al. 2011). Many authors (Cooke, Uranga, and Etzebarria 1997; Porter 1998; Lechner and Dowling 1999) underline that the local level is where most connections between the various players in the field of innovation take place.

2. This section only contains brief notes about DEA, and any reader interested in the subject should refer to Zhu (2003).