Identification of Significant Factors for Improving the Efficiency of Enterprises Based on the Construction of an Efficient Frontier

This study aims at the issues of evaluating the effectiveness of organizations and determining significant factors for its improvement. Effectiveness valuation is measured by the distance of the organization to the efficient production frontier (EPF). We consider two main approaches to the construction of EPF: Data Envelopment Analysis (DEA) and the Stochastic Frontier Analysis (SFA). We analyzed and compared these approaches, applying the developed procedures to evaluate the effectiveness of two groups of organizations from different production sectors (mechanical engineering and oil refining). We conducted 1) building empirical estimates of technological efficiency, 2) identifying factors that contribute to the technological inefficiency of the organization, 3) comparing efficiency factors and inefficiency factors for two groups of enterprises.