Performance Evaluation of Select State-Level Public Sector Enterprises-An Integrated AHP-VIKOR Approach

Abstract

Public Sector Enterprises are the backbone of a developing economy.  These enterprises are established to play a dual role in the economy, bringing economic growth and social development. Thus, periodic evaluation of the performance of these enterprises is significant for the success of the enterprises as well as for the economic plans as both are interdependent. The common practice of judging the performance of public enterprises based on financial performance cannot justify its performance due to its multiple conflicting objectives. Thus, focusing on the multi-dimensional performance evaluation approach for public sector enterprises is imperative. The present study contributes in this context with a two-staged integrated MCDM-based methodology to evaluate the performance of State-level public sector enterprises.  In the first stage, the AHP analysis is applied to generate criteria weights and in the second stage, the VIKOR analysis is carried out using the criteria weights for comparative performance analysis to rank the enterprises based on their performance. The study illustrates the methodology with a notional example of select state-level public sector enterprises. The AHP-VIKOR duo is found effective in the performance-based ranking of the firms and augments the objectivity of the concept of performance evaluation.