Evaluation of the Efficiency of Enterprises by the Method of Analysis of Functioning Environment

Andrii SAKHNO; Oksana HRYVKIVSKA; Iryna SALKOVA; Lesіa KUCHER

doi:10.14505//jemt.v10.3(35).04

Andrii SAKHNO Vinnytsia Finance and Economics University, Ukraine
Oksana HRYVKIVSKA European University, Ukraine
Iryna SALKOVA Vinnytsia National Agrarian University, Ukraine
Lesіa KUCHER Kharkiv National Agrarian University named after V.V. Dokuchayev, Ukraine

DOI: https://doi.org/10.14505//jemt.v10.3(35).04

Abstract

The purpose of the research is to assess the efficiency of enterprises by the means of analysis of the functioning environment, which made it possible to identify reserves for improving the results of their economic activity. For the first time, it was proposed to use the positioning (relocation) technique of enterprise positions, although previously the method of analysis of the functioning environment was used to determine the technical inefficiency of business entities. Based on the calculated line of technical efficiency on the actual results of the enterprises, a new line of technical efficiency was constructed by moving their positions to improve the income (revenue) from sales of products and labor costs of hired workers and capital (fixed assets) in the context of maximizing profits in the environment functioning of economic entities. It is proved that improvement of the position of an enterprise allows reducing expenses not only on capital, but also on wages of hired workers. Despite the ability to reduce capital expenditures and thus increase the cost of wage labor, almost all enterprises prefer saving capital over the possibility of investing in wage earners. The results of the study can be used by managers in planning the ways to achieve profit in the context of the sustainable development strategy of the enterprise.

References

[1] Baumol, W. 1967. Business Behavior, Value and Growth. New York, Harcourt Brace.
[2] Becker, G.S. 2003. Human behavior: an economic approach. Moskow, Publishing House GU VSHE.
[3] Cesaroni, G. 2018. Industry cost efficiency in data envelopment analysis. Socio-Economic Planning Sciences, 61: 37–43. DOI: 10.1016/j.seps.2017.01.001
[4] Coase, R. 2007. Company, market and law. Moskow, Publishing House «Novoe izdatelstvo».
[5] Dudoglo, T. 2018. Non-traditional approach to assessment of efficiency of agricultural production. Agricultural and Resource Economics: International Scientific E-Journal, 4(1): 60–76. Available at: http://are-journal.com.
[6] Emrouznejad, A. and Yang, G. 2018. A survey and analysis of the first 40 years of scholarly literature in DEA: 1978–2016. Socio-Economic Planning Sciences, 61: 4–8. DOI: 10.1016/j.seps.2017.01.008
[7] Farrell, M. J. 1957. The Measurement of Productive Efficiency. Journal of Royal Statistical Society, 120(3): 253–290. DOI: 10.2307/2343100
[8] Fenyves, V., Tarnóczi, T. and Zsidó, K. 2015. Financial Performance Evaluation of Agricultural Enterprises with DEA Method. Procedia Economics and Finance, 32: 423–431. DOI: 10.1016/S2212-5671(15)01413-6
[9] Fisher, S., Dornbush, R. and Shmalenzi, R. 1995. Economics. Moskow, Publishing House Delo LTD.
[10] Holmström, B. R. 1979. Moral Hazard and Observability. Bell Journal of Economics, 10(1): 74–91. DOI:10.2307/3003320.
[11] Khezrimotlagh, D., Zhub, J., Cookd, W. D. and Tolooe, M. 2019. Data envelopment analysis and big data. European Journal of Operational Research, 274 (3): 1047–1054. DOI: 10.1016/j.ejor.2018.10.044
[12] Lulaj, E. and Iseni, E. 2018. Role of Analysis CVP (Cost-Volume-Profit) as Important Indicator for Planning and Making Decisions in the Business Environment. European Journal of Economics and Business Studies 4(2): 104–120. DOI: 10.26417/ejes.v4i2.p104-120
[13] Lynenko, А. and Konyev, V. 2017. Assessment of financial security of enterprises association participants. Agricultural and Resource Economics: International Scientific E-Journal, 3(4): 85–96. http://are-journal.com.
[14] Marjanović, I., Stanković, J. J. and Popović, Ž. 2018. Efficiency Estimation of Commercial Banks Based on Financial Performance: Input Oriented DEA CRS/VRS Models. Economic Themes, 56(2): 239–252. DOI:10.2478/ethemes-2018-0014
[15] Nikoomaram, H., Mohammadi, M. and Mahmoodi, M. 2010. Efficiency measurement of enterprises using the financial variables of performance assessment and data envelopment analysis. Applied Mathematical Sciences, 4(37): 1843–1854. http://www.m-hikari.com/ams/ams-2010/ams-37-40-2010/nikoomaramAMS37-40-2010.pdf.
[16] Oberholzer, M. 2014. A model to estimate firms accounting-based performance: a data envelopment approach. International Business & Economics Research Journal, 13(6): 1301–1314. DOI:10.19030/iber.v13i6.8921
[17] Parmacli, D., Soroka, L. and Bakhchivanji, L. 2019. Methodical bases of graduation of indicators of efficiency of realized production in agriculture. Agricultural and Resource Economics: International Scientific E-Journal, 5(1): 107–121. http://are-journal.com.
[18] Pasichnyk, T.V., Kucher, A. V. and Khirivskyi, R. P. 2015. Efficiency of agricultural enterprises of various organizational and legal forms and the size of land use. Actual Problems of Economics, 175(1): 399–405.
[19] Sevinç, A. and Eren, T. 2019. Determination of KOSGEB Support Models for Small- and Medium-Scale Enterprises by Means of Data Envelopment Analysis and Multi-Criteria Decision Making Methods. Processes 7(3): 130. DOI: 10.3390/pr7030130
[20] Smriti, T. N. and Khan, H. R. 2018. Efficiency Analysis of Manufacturing Firms Using Data Envelopment Analysis Technique. Journal of Data Science, 16(1): 69–78.
[21] Thaler, R. H. 2000. From Homo Economicus to Homo Sapiens. Journal of economic perspectives, 14(1): 133–141. DOI: 10.1257/jep.14.1.133