An Integrated Fuzzy Cognitive Map Approach in Modelling Factors of Management Quality in Banking Performance

Based on the literature review and interviews with experts, this study identifies 11 factors that can effectively capture the management quality dimension of the capital adequacy, asset quality, management quality, earnings, liquidity and sensitivity to market risk (CAMELS) framework in evaluating t...

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Bibliographic Details
Published inGlobal business review Vol. 21; no. 3; pp. 763 - 779
Main Authors Chatterjee, Debmallya, Dhaigude, Amol S.
Format Journal Article
LanguageEnglish
Published New Delhi, India SAGE Publications 01.06.2020
SAGE PUBLICATIONS, INC
Subjects
Banking
Cognition
Cognitive models
Literature reviews
Management
Morale
Quality
MICMAC
Banking performance
fuzzy cognitive map
simulation
management quality
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Summary:Based on the literature review and interviews with experts, this study identifies 11 factors that can effectively capture the management quality dimension of the capital adequacy, asset quality, management quality, earnings, liquidity and sensitivity to market risk (CAMELS) framework in evaluating the performance of banking institutions. It further models these factors using the integrated fuzzy cognitive map (FCM) and Matrice d’Impacts Croisés Multiplication Appliquée a UN Classement (MICMAC) approach. A scenario analysis is then conducted on the proposed model to study the interrelationships between these factors in a dynamic setting. The results suggest that of all the 11 factors identified, the ‘internal control system’ is the most influential factor in determining management soundness, whereas ‘business per employee’ is the most sensitive in which any impact on employee morale could impact business performance. The managerial and practical implications of our study are also discussed.
ISSN:0972-1509
0973-0664
DOI:10.1177/0972150918778964