Globalization, computerization and the development of new technologies have strongly impacted all spheres of human activity at the beginning of the 21st century. The conditions of market survival demand for internal analyses of business performance as well as the analyses of competitive markets of the company as a whole, which are increasingly conducted parallel to the use of business research methodological apparatus. Given the tendency to transform business operations to electronic forms, it is reasonable to ask about the efficiency of e-business and whether, and to what extent, do such factors as technological equipment, education of employees, proper implementation of the system and many other influence the effectiveness of this system. The limitations within these factors can be overcome if entities implement e-business standards advocated by the European Union as a part of its strategy in the fields of network security, computer crime and data protection in electronic communications. The Republic of Croatia is on its path of becoming an EU member. One of the requirements placed before Croatia is the harmonization of its legislation with the acquis communautaire. This also refers to the claims towards the electronic government for the introduction of electronic signatures and harmonization of the standards and regulative related to electronic security. Croatia’s aspiration for a faster integration into the EU, enhanced the adoption of a number of strategic documents relating to e-government that govern the way in which the current state of e-business in public institutions will adapt to the requirements set by EU standards described in the Action Plan within the Strategy for the Development of E- Government in the Republic of Croatia 2009 - 2012. Moreover, in June 2010, the Croatian government introduced the Croatian Interoperability Framework which will provide for a user-oriented e-government system. Analysis of the effectiveness of such a complex system is not simple and therefore, within the framework of this doctoral dissertation analysing and assesing the efficiency of city government e-business, the author uses data envelopment analysis, as the most appropriate method which allows for the use of multiple inputs and outputs of quantitative and qualitative nature. The data envelopment analysis firstly selected units into those relatively efficient and those relatively inefficient. Later on, the efficient units were ranked using the superefficiency model (DEA) and analytic hierarchy process (AHP). The data envelopment analysis was conducted through the CCR and BCC models, and projections obtained concrete measures to improve the relative efficiency of electronic business operations each individual inefficient rated unite of city government. However, considering the e-readiness index, according to which Croatia is ranked at 54th place and which was obtained through research focused at state-level institutions, whose e-services are at a higher level of development than those at local level i.e. city governments, and in view of the obtained data and conducted analysis, it can be concluded that e-business in city governments at local level is just starting top develop and is, depending on the individual city administration, in the first two development phases. The reason for such a low level of e- business operations of most city governments in Croatia, in relation to the EU, lies, among others, in the fact that the Strategy for the Development of E-Government in the Republic of Croatia 2009 – 2012 was mainly focused on the implementation and development of e- business in state institutions, while those governments at local level were left at the initiative of the managerial personnel.