Business multicriteria performance analysis: a tutorial

Purpose – The business performances of firms are measured on a set of indicators (Financial Ratio Analysis Indicators or Balanced Scorecard Key Performance Indicators). Traditional benchmark analysis considers a set of criteria, though it generally synthesizes all the results, taking into consideration only an aggregate performance criterion (reductio ad unum approach). This methodology has many disadvantages, both theoretical and empirical. The purpose of this paper is to illustrate the advantages, in terms of greater flexibility and realism, related to the application of a multicriteria methodology.Design/methodology/approach – The paper uses a tutorial approach. An exemplification of an outranking multicriteria methodology (ELECTRE type) is described.Findings – The main findings of the paper can be summarized as: first, the evaluation of a business performance cannot generally be conducted by means of a unique criterion as in the traditional monocriterion benchmark analysis; second, when the evaluation...

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