DEFINITIONAL-COMPARATIVE ANALYSIS EFFECTIVENESS OF A BUSINESS ENTITY’S ACTIVITIES

Abstract

The article presents the results of a definitional and comparative analysis of the concept of “effectiveness of a business entity’s activities” and its correlation with international approaches to enterprise assessment. The study proceeds from the problem that, in Ukrainian economic and auditing discourse, the term “effectiveness” is used in several close but not identical meanings: as a general characteristic of successful activity, as a ratio between resources and results, and as one of the criteria of performance audit. This creates terminological uncertainty and may narrow the analytical interpretation of enterprise performance. The relevance of the issue is strengthened by the need to align national analytical and audit terminology with the requirements of financial control and managerial accountability. Particular attention is paid to the 3E approach, within which economy, efficiency and effectiveness require a clearer Ukrainian distinction. To avoid the overlap between the general concept of effectiveness and the narrower resource-based meaning of efficiency, the translation “resource efficiency” is proposed. Based on Ukrainian and foreign sources, the article argues that the effectiveness of a business entity’s activities should not be reduced to financial performance or current business results. It is interpreted as a broader economic and analytical category that includes financial and non-financial outcomes, resources, internal processes, management, control, stakeholder value, adaptability, prerequisites for going concern and long-term resilience. The article also adapts a categorical model of business entity effectiveness, using the hierarchy of financial performance, business performance and organizational effectiveness as a conceptual basis. This model makes it possible to distinguish the outcome dimension from the organizational conditions that ensure the achievement of these outcomes. As a result, the definition of the studied category is clarified, and a further research direction is outlined: the transition from definitional ordering to the development of indicators, analytical dashboards and methodological tools for internal performance audit.