Environmental Assessment on Energy and Sustainability by Data Envelopment Analysis

24DISPOSABILITY UNIFICATION

24.1 INTRODUCTION

To measure the level of “corporate sustainability” of organizations in the private sector, this chapter ¹ discusses how to unify natural and managerial disposability concepts under radial and non‐radial measurements. See Chapter 15 for a description of corporate sustainability. The proposed approach provides us four unified efficiency measures related to natural disposability and/or managerial disposability. These unified efficiency measures serve as a computational basis for identifying a new type of scale efficiency measures, none of which has been discussed in previous chapters, including Chapter 18.

After theoretically discussing the proposed scale efficiency measures, this chapter applies the proposed approach to examine the level of corporate sustainability among petroleum firms in the United States. The petroleum firms are generally classified into two categories. One of the two categories includes a group of “integrated companies,” which have a large supply chain for spanning both upstream and downstream functions in the US petroleum industry. The other category includes “independent companies” that focus on the upstream function in their business operations.

As an application of the proposed approach, this chapter examines whether the integrated companies outperform the independent companies, because a large supply chain incorporated into the former group provides them with a scale merit in their operations and gives a business ...