Abstract
The paper deals with analysis of the forest business sector in Slovakia and the evaluation of profitability and efficiency of forest contractors, with special focus on mountain and lowland regions. Evaluation of profitability was done by using selected indicators of financial analyses for a period of five years. Data envelopment analyses (DEA) was used as non-parametric approach for the assessment of efficiency. The sample size was 153 forest contractors. Data for 2012–2016 were processed. Results of the evaluation show that the profitability of Slovak forest contractors in the mountain regions is higher than the profitability of forest contractors in lowland regions. The results of the efficiency analysis were different due to the nature of the method; where relative efficiency was evaluated, the efficiency of single contractors was compared with the most efficient contractors from the lowland regions. Most of the evaluated units were, according to results of the efficiency analysis scale, ineffective, which implies that it may be beneficial for most contractors to reduce their turnover and thereby increase their relative efficiency. The results of the financial analysis also suggests that contractors have obsolete technical and technological equipment.
Highlights
Competitive pressure and current globalization are forcing enterprises to reduce costs and increase efficiency of all production activities
Operate in the field of decreasing return to scale and only 3.4% of them operate in the field of increasing return to scale. This implies that it would be beneficial for most contractors to reduce their turnover and thereby increase their relative efficiency
Most of the evaluated units were according to results of the efficiency analysis scale ineffective, which implies that it would be beneficial for most contractors to reduce their turnover and thereby increase their relative efficiency
Summary
Competitive pressure and current globalization are forcing enterprises to reduce costs and increase efficiency of all production activities. Requirements to increase efficiency in all sectors is leading even profit and non-profit organizations to cease to carry out some activities internally. Specialized organizations providing management services have been established. They specialize in the services and are able to perform them more efficiently and in higher quality. Outsourcing means a relationship of a company with external service provider for activities that would otherwise have been performed in-house, by own employees. Activities previously performed internally are transferred to an independent organization. Business community has been interested in outsourcing more and more mainly due to increased importance of outsourcing task as a strategic management tool
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