Performance Evaluation of Public Sector Enterprises

Abstract

The public sector enterprises play a vital role in the development of the economy newlineas well as the development of the masses. The main objective of setting up public sector newlineenterprises in developing countries is to attain maximum social good and accelerate newlineeconomic growth. The success of the Indian economy in terms of growth and social newlinegain depends on the performance of public enterprises. Performance management of newlinean enterprise aims to assess and improve its performance. Thus, periodic evaluation of newlinethe performance of public sector enterprises is important for the success of the newlineenterprises as well as of the economic plans as both are interdependent. However, newlineperformance evaluation has been a challenging subject in the performance newlinemanagement of public sector enterprises due to its multiple conflicting objectives and newlinemultiple evaluating agencies with differing objectives of evaluation. Though the newlineprimary objective of these enterprises is not profit, the role of profit in public sector newlineenterprise cannot be ignored and at the same time, profitability alone cannot be used newlineto judge the performance of public sector enterprises in the presence of its multiple newlinecommercial and non-commercial objectives. This makes it imperative to focus on the newlinemulti-dimensional performance evaluation in light of the multiple objectives of public newlinesector enterprises. The present study contributes in this context with a proposed newlineframework to evaluate the overall performance of public sector enterprises using a newlinemulti-criteria decision-making approach (MCDM) with the application of the newlineAnalytical Hierarchy Process (AHP) technique. The proposed framework integrates newlinemultiple criteria to develop a unified performance evaluation model. Based on the newlineliterature the study has identified the suitable criteria and parameters under each newlinecriterion for objective performance analysis of public enterprises. The AHP analysis is newlineapplied to generate weights of the criteria and sub-criteria which is further used to newlinedevelop a model to calcu