Evaluation Based On Entropy -TOPSIS Law Corporate Sector Performance

The modern enterprise has becoming more and more big and developing really fast, which has determined the high degree of separation from owners to managers. It also created a long principal-agent relationship chain at the same time. When the organizational goal goes from the top of organizational structure to low layers of principal-agent relationship, from owners to senior managers to middle managers to low level managers to employees, the importance of department has becoming more and more important. The department is a hub to connect the strategic objectives and the implementation of the strategy, also the bridge of senior managers and employees. Therefore, it’s helpful to gradually form a self-motivation cycle that building a departmental performance evaluation as the center of internal performance evaluation system. This system aim to effectively reduce the cost of regulation, strengthen linkages within department.In this paper, department performance evaluation was under the background of the enterprise life cycle theory, and the large or medium-sized traditional manufacturing enterprises were picked up as the research objective. In this study structure, an enterprise was formed by production department, sales department, finance department and administration department.Through description and analysis of the interaction between the departments, we carefully researched how department performance’s collection could emerge the overall performance in macro. To explain this, this article building a simplified model to descript the relationship of the rate of department investment return and the rate of overall investment return. Combined with profit-sharing plan, we used the simplified model to measure each of department’s contribution to overall profits, production activities and auxiliary production activities included. So we can work out an integrated solutions based on department performance evaluation, which aimed to minimize the principal-agent costs.The integrated solution is composed by department performance evaluation and profit-sharing plan. The overall performance of the enterprise has decomposition down as sector performance and employee performance. It’s a comprehensive framework to achieve the organization’s strategic objectives, while performance evaluation as the core of the profit-sharing plan to evaluate the operating results.In practice, there is also a complete process to apply it. Firstly, get the indicators of department’s contribution rate through the department’s contribution rate model. Secondly, combined with the four part of the Balanced Score Card, such as financial, internal business processes, customer, learning and development, to build up a five-level indicators evaluation system. Each of those five-level indicators has a few of secondary indicators. What’s more, using entropy weight-TOPSIS method as a tool to empower and evaluate the results of the pros and cons of various departments. According to the evaluation results, it could quantized the contribution of each department. Therefore, we get a reasonable basic to execute profit-sharing plan.This study uses a combination of normative and empirical theory, and also practice test at X Stainless Steel Products Co., Ltd. of Jiangmen City, and gives the corresponding management recommendations.