Recently, the applicability of data envelopment analysis (DEA) has generated wide interest among scholars and practitioners in evaluating relative performance of organizations. Conventional applications of DEA presume the homogeneity of organizational...
Recently, the applicability of data envelopment analysis (DEA) has generated wide interest among scholars and practitioners in evaluating relative performance of organizations. Conventional applications of DEA presume the homogeneity of organizational characteristics and environments across organizations. However, these organizations vary substantially in regard to factors, which may have a positive or negative influence on the performance of the organization. In this study, we introduce a four-stage approach to measuring organizational efficiency that incorporates the potential effects of operating conditions. We illustrate this approach by using data from the general hospitals in metropoliten areas in Korea.