Enterprise Development Factors Control

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1 European Research Studes Journal Volume XX, Issue 2A, 2017 pp Enterprse Development Factors Control Mhal Nolaevch Pavlenov 1, Valery Glebovch Laronov 2, Pavel Mhaylovch Voronn 3, Ivan Mhaylovch Pavlenov 4 Abstract: The relevance of the topc s determned by the fact that the problem of controllng the factors of enterprse development remans understuded and needs theoretcal research and practcal testng. The man methods of the research are: emprcal; expermental and theoretcal methods. The artcle descrbes a mechansm by whch not only the enterprse laggng behnd the leaders s assessed, but also ther achevements n the research-engneerng, organzatonal, and other areas. The analyss of these delverables allows developng alternatves how to use the leaders achevements n enterprses. Hgh-qualty and objectve nformaton about achevements s essental for professonals to mae better decsons, so the mplementaton of the controllng mechansm for enterprse development factors s of great practcal mportance, frstly, for assessng the condton of the enterprse, and secondly, for the elaboraton of the enterprse development plans. The research results have been tested n a number of enterprses, and receved a postve feedbac. Keywords: Enterprse Potental, Compettveness, Expert Assessment, Analyss, Informaton 1 Correspondng author, Lobachevsy State Unversty of Nzhn Novgorod, Russa; , Nzhny Novgorod regon, Dzerzhns, street Zhuovsy, 2 af-fn-df@yandex.ru 2 Bauman Moscow State Techncal Unversty, Moscow, Russa; , st. Baumansaya 2-ya, 5, Moscow 3 Lobachevsy State Unversty of Nzhn Novgorod, Russa; , Nzhny Novgorod regon, Dzerzhns, street Zhuovsy, 2 4 Russan Presdental Academy of Natonal Economy and Publc Admnstraton, Russa; , Nzhny Novgorod regon, Dzerzhns, st. Student, 61A / st. Chernyahovsogo, 24

2 Enterprse Development Factors Control Introducton Increasng the compettveness s a ey tas of an enterprse, requrng not only the modernzaton and commssonng of new facltes, but also the formaton of an nnovatve polcy, based on an assessment of ts own achevements n comparson wth the achevements of the best enterprses n the research-engneerng, technologcal, envronmental, fnancal, maretng, and other areas. In ths regard, t requres developng a controllng mechansm that would tae nto account the experence and the achevements of the best enterprses (Pavlenov, 2009; Savtsaya, 2013; Smons, 2000; Brecova, 2016; Epfanova et al., 2015; Havlíče et al., 2013). The proposed mechansm wll gve the opportunty, tang nto consderaton the experence and the achevements of leader enterprses, to mprove the control of enterprse development factors, to ensure ts effcent operaton n the operatonal and the prospectve perod, and to ncrease ts compettveness. Today, many of the ssues related to the control of enterprse development factors reman nsuffcently developed. Ths problem remans understuded n the natonal and foregn lterature and requres theoretcal and practcal applcaton. The external envronment has a strong nfluence on the operaton of an enterprse. Envronmental factors do not only nfluence, but can also create a varety of problematc stuatons for an enterprse (Kaplan, 2000; Corcell, 1998; Kolchanova and Kolchanova, 2016; Setyawan et al., 2014; Therou, 2015; Therou et al., 2014). Early detecton and consderaton of changes n the external envronment s the most mportant tas of the enterprse management. The effectveness of solvng these tass conssts n the ablty to dentfy hazards and achevements of other enterprses and n due course to prevent them or to use them for the purposes of ts development. A control mechansm for enterprse development factors, whch does not only allow dentfyng hazards, but also assessng the achevements of other enterprses, on the bass of whch ntroducng changes n certan areas of the enterprse development, has been elaborated. 2. Research Methods An enterprse operates n the maret economy envronment, so ts performance ndcators should be compared wth those of the best enterprses. Such ndcators characterze the economc, techncal, organzatonal, manageral, and other areas of actvty (Savtsaya, 2013; Trfonov, 2013; Charles, 1992). To solve these problems, a control mechansm for enterprse factors development has been proposed The Choce of Indcators

3 M.N. Pavlenov, V.G. Laronov, P.M. Voronn, I.M. Pavlenov 1. Defnton of ndcators: The enterprse performance s evaluated wth a multtude of ndcators 1,2,...,n. To mae an expert assessment of the ndcators, an expert commsson of the enterprse s apponted, usng, for example, the followng nfluence ndcator ratng gradaton: 5-determnant; 4-essental; 3- average; 2-wea; 1-mnor; 0-none (Orlov, 2004). The enterprse can also use other gradatons to rate the ndcators. The result of the expert assessment s the matrx A, whose elements a are the grade allotted by an expert. j Accordng to the formula (1), the grade F of each ndcator s determned: F m a /m, (1) j 1 j where s the ndex of an ndcator 1,2,...,n ; j s the ndex of an expert j 1,2,...m. 2. Ranng: Accordng to the formula (1), the values of the ndcators have been determned, whch are then arranged n ascendng order. The result s a raned set of ndcators F F F,..., F (2). 1, 2 n 3. Defnng a set of ndcators: In practce, the comparson and evaluaton of a large number of ndcators does not always produce the desred results because of the analyss complexty, so the expert commsson selects the most sgnfcant ndcators. These enterprse ndcators n the process of comparng them wth those of other enterprses allow for the detecton of devatons, ther analyss, and worng out of necessary measures for ts development (Savtsaya, 2013; Charles, 1992; Pavlenov, 2007). 4. Comparatve analyss: To carry out a comparatve analyss, a database of quanttatve values of ndcators for the whole enterprse s formed F c The Selecton of Objects In the maret economy condtons, all busnesses are susceptble to changes n the nternal and external envronment. The susceptblty cause to a large extent s that busnesses do not gve enough attenton to evaluaton of changes n the external factors and mechansms of controllng them. To penetrate the maret and to ensure hgh compettveness, enterprses tend to need to create ther own products, spendng formdable resources. However, as global experence confrms, one can beneft from the experences and achevements of other busnesses, leader enterprses (Falo, 2007; Petty, 1999). 583

4 Enterprse Development Factors Control 584 The selecton of objects wth the best quanttatve and qualtatve ndcators can serve as a bass for further updatng of one s development targets. 1. Defnton of crtera: To select objects for comparson, a set of crtera {R} s formed. To determne the drectons of the enterprse development, t s necessary to dentfy problem areas, dsadvantages, crtcal development factors that pertan to dfferent areas. Statstcal nformaton s used to determne the lst of crtcal development factors, for example: second-rate products; substandard materals; low proftablty of producton; low staffng levels; low nvestment attractveness, and others (Pavlenov, 2009; Savtsaya, 2013; Kaplan, 2000; Pavlenov, 2012). It s mportant to note that n addton to the crtcal development factors, the enterprse management can nclude challengng targets n ths lst as well (to ncrease the maret share by 40% wthn a certan perod; to master manufacture of new products, whch would exceed the best world solutons, throughout a year; to ncrease the enterprse s proftablty as much as 2-3 tmes, etc.). 2. Lst of comparson objects: A lst of objects s formed out of enterprses (mmedate compettors, regonal, sectoral, and global compettors, enterprses occupyng a large maret share, etc.). The lst s dfferent for each enterprse and largely depends on ts compettve poston n the maret. Whle drawng up the lst of objects, one s to consder the man ndcators of ther performance (targets, trends, technology, fnance, management, etc.). Thus, the lst of objects {K} for selecton s drawn up, whch s beng constantly refned. 3. Evaluaton of an object: To mae an expert assessment, an expert commsson s apponted, whch evaluates enterprses wth regard to the enterprse weght mportance, usng the formula: n m a, (3) a j 1 j 1 where a j s the expert assessment j (j = 1,2,..., m), of the -th ndcator ( = 1,2,..., n), of the -th object {K}. 4. Ranng the objects: The values a are raned by descendng weghts (mportance), and a lst {K С } of comparson objects s drawn up. Experence has proven that the lst of enterprses {K С } should not exceed four to fve enterprses, snce wth a larger number of enterprses, obtanng tmely and qualty nformaton from these objects s hndered Informaton Gatherng 1. Collecton of data: Data collecton on each object n the set {K С } s carred out, and a values array FS of the ndcators s formed:

5 M.N. Pavlenov, V.G. Laronov, P.M. Voronn, I.M. Pavlenov 585 FS F1,F2,..., Fn. (4) 2. Gatherng from nternet sources: Onlne resources allow generatng a values array FI of the ndcators on some objects: FI F,F,..., F. (5) 1 2 n 3. Gatherng from publshed sources: The publshed sources can be: reports of authortes and enterprses; artcles; analytcs; publcatons; statstcs, and others. These data allow generatng a values array FO of the ndcators on some objects: FO F1,F2,..., Fn. (6) 4. Gatherng from ratng agences: Ratng agences data allow generatng a values array FR of the ndcators on some objects: FR F1,F2,..., Fn. (7) 5. Gatherng from other sources: Other sources are the nformaton receved by arrangement between the objects. Ths nformaton allows, as a result of gatherng and processng, generatng a values array FP of the ndcators on some objects: FP F1,F2,..., Fn. (8) FS F,FI 6. Database: From the data collected about the objects,fo,fr,fp an nformaton base s drawn up: {FS,FI,FO,FR,FP }, 1,2,...,K. (9) 2.4. Comparng the Indcators The nformaton collected about the objects s analyzed by varous servces of the enterprse n order to dentfy nformaton that can be used to mprove ts performance and mae recommendatons on utlzng the experence of other enterprses. The managers n charge of comparng the ndcators may be faced wth the fact that the prevously planned development measures cannot be put nto effect for certan reasons, so t s necessary to analyze these reasons. Let us consder the sequence of carryng out a comparatve analyss. 1. In the nformaton base, a values array of the enterprse ndcators {F С } s formed, whch have been defned as a result of the expert assessment, and the quanttatve values have been obtaned on the bass of ts planned, reported, and statstcal data.

6 Enterprse Development Factors Control In the nformaton base, an array of {K С } comparson objects s formed, whch are used for the comparatve analyss. 3. An object of comparson from the multtude K C s taen. Intally, to carry out the comparatve analyss, the frst object s taen,.e. =1. 4. An ndcator F from the array {F } s taen (at the frst step, =1). 5. An ndcator F from the array {F С } s taen (at the frst step, =1). 6. The devaton calculaton s made: ΔF F F. (10) 7. An array of devatons ΔF for each enterprse s created (=1,2,, K С ). 8. If devatons have been defned for the all the ndcators of the enterprse, then go to paragraph 9; otherwse, the next ndcator s taen, and then go to paragraph If devatons have been determned for all the enterprses {K C }, then go to paragraph 2.5 (assessng the ndcators). Otherwse, another enterprse s taen; then go to paragraph Assessng the Indcators An effectve use of other enterprses achevements does not always mae t possble to solve one s own problems. Thus, a blnd utlzaton of someone s experence wll unlely to produce a good result. The use of someone s experence should be approached systematcally, and, most mportantly, one should be able to adapt the results n the enterprse. In addton, t s necessary to analyze possble costs of ntroducng alteratons and the proft the enterprse wll receve from ther mplementaton. One should also avod the stuaton when research has been undertaen, the results have been analyzed, but the management lacs determnaton to fulfll them. In ths case, the cost and effort nvested to study the objects of comparson are meanngless. Analyss and evaluaton of the research results are needed, as ths maes t possble to determne the effectveness of and the need for further research and mprovements n the enterprse. It s mportant to note here that a systematc approach to the research ensures elaboratng a model of contnuous mprovement and development of all the spheres of actvty n the enterprse (Falo, 2007; Pavlenov, 2012; 2015). Herenafter, let us consder the sequence of evaluatng the performance ndcators and decson-mang. 1. In paragraph 2.4. Comparson of ndcators, the array of devatons ΔF has been formed on all the ndcators and the objects of comparson (=1,2,..., K C ; =1,2,..., n).

7 M.N. Pavlenov, V.G. Laronov, P.M. Voronn, I.M. Pavlenov 2. In accordance wth the economc content of an ndcator, the mnmum or e maxmum value ΔF among the values ΔF s defned accordng to the formula: е ΔF max(mn) ΔF. (11) e 3. The analyss of values ΔF s carred out. Accordng to the analyss fndngs, managers can develop a number of alternatve optons for the use of other enterprses achevements n the enterprse (Falo, 2007; Pavlenov, 2004; Prasanna, 1993). These optons are dscussed, coordnated, and submtted to the executve management, who shall tae a decson on ntroducng alteratons on ths p ndcator by the amount (volume) ΔF. On the bass of the changes coordnated n terms of all the ndcators, an array of coordnated changes ΔF p across the enterprse s formed. In terms of the changes ncluded n the array, related measures should be developed. 4. Acton Plan. Measures to be ncluded n the plan should be amed at solvng specfc problems, obtanng tangble results. For each measure, a document s to be produced ncludng the followng sectons: a concept; an mplementaton technology; a plan. Concept: The concept descrbes the prncples, objectves, and courses of the enterprse development, as well as the goals and objectves of a measure. Technology: Ths secton descrbes basc methods of solutons and mechansms for obtanng the desred results, as well as the delneaton of tass for dfferent servces. Plan: In ths secton, the deadlnes and budgets for the measures are set. The plan s lned to the development strategy and can nclude a number of measures amed at mplementng the coordnated changes. 5. Adjustment of plans. The developed plan n general s amed at ncreasng compettveness through changes n the current and prospectve development plans. The adopted changes requre the adjustment of the approved plans and the enterprse operaton objectves. That s the way the mechansm of consderng and evaluatng the external factors of the enterprse development s mplemented n whole. The mechansm mplementaton, based on a number of prncples allows developng measures to ensure the enterprse development, usng the experence and achevements of other enterprses. The prncple of consstency: Ths prncple means that the ndcator change affects the state of the enterprse as a whole. The prncple of comprehensveness: The ndcators affectng a partcular process must be studed comprehensvely. The prncple of functonal orentaton: The effectve development of the enterprse s supported by the system, whch controls the ndcators 587

8 Enterprse Development Factors Control 588 characterzng the functons: plannng, accountng and control, coordnaton and regulaton. The prncple of specfcty: The enterprse development control system ncludes ndcators that tae nto account the sectoral, regonal, and local specfcs. The prncple of herarchy: The analyss and assessment of the ndcators s made based on ther ranng: there are aggregated, summarzng ndcators, regulatory ones, and others. Prncple of nformaton applcaton: The control mechansm must operate wth the source nformaton that s avalable n the exstng forms and statstcal reportng. The prncple of comparablty: In the process of the mechansm mplementaton, the ndcators should be comparable n terms of ther characterstcs, methods of preparaton, unts of measurement, forms and methods of calculaton. The prncple of contnuty: In the process of obtanng new data, t s necessary to adjust the ndcators. The developed mechansm to control the enterprse development factors allows gvng scentfc credence to the system of external factors change level measurement system. 3. Practcal Results Ths mechansm has been tested n an ndustral enterprse (PI). To test the results of the research, a commsson of experts was apponted, that, out of a common set of thrty one enterprses, ncluded four leader enterprses n the lst of objects for comparson (PL-1, PL-2, PL-3, and PL-4). The comparatve analyss was made on a number of ndcators: the R&D expendture (Fgure 1), the cost of staff tranng (Fgure 2), the mplementaton of new equpment (Fgure 3). Fgure 1. The R&D expendture (as a percentage of the cost value)

9 M.N. Pavlenov, V.G. Laronov, P.M. Voronn, I.M. Pavlenov 589 Fgure 2. The cost of staff tranng Fgure 3. The mplementaton of new equpment (%) The results of the comparatve analyss have shown that the leader enterprses untl 2015 were scalng up the R&D expendture, the personnel tranng and development expenses, whose growth rates were hgher than n the enterprse under examnaton. However, n terms of the equpment upgrade level, t s only the frst enterprse that s ahead of the one n queston. Tang nto account the comparatve analyss results, proposals have been drafted to adjust the development plans. 4. Dscusson Practcal mplementaton of the enterprse development factors control mechansm requres a sgnfcant amount of nformaton from external sources, whch s assocated wth the complextes of ts lawful acquston. Settng up a montorng servce for the mechansm nformaton support becomes an mportant tas of the enterprse.

10 Enterprse Development Factors Control Concluson A control mechansm for enterprse development factors has been elaborated. Emprcal and theoretcal methods, as well as expermental methods have been used to mplement the mechansm. The proposed mechansm wll gve the opportunty, usng the achevements and the experence of leader enterprses, to mprove the enterprse management system, to enhance ts effcency and compettveness n the operatonal and the prospectve perod. The results of the study have been tested on the actual data of ndustral enterprses, and proposals for ntroducng changes nto the development plan have been drafted. References Brecova, P Famly Busness n the Czech Republc. European Research Studes Journal, 19(4), Charles, P. J Fnancal Management. Boston: IRWIN. Corcell, F Macroeconomc Polces and Development of Marets n Transton Economes. Budapest: CEU Press. Epfanova, T., Romaneno, N., Moseno, T., Svortsova, T. and Kupchnsy, A Modernzaton of Insttutonal Envronment of Entrepreneurshp n Russa for Development of Innovaton Intatve n Small Busness Structures. European Research Studes Journal, 18(3), Falo, S.G. and Ivanova N.Y Innovaton management at hgh-tech enterprses: Textboo. Moscow: Bauman MSTU Press. 255p. ISBN: Havlíče, K., Thalassnos I.E. and Bereznova, L Innovaton Management and Controllng n SMEs. European Research Studes Journal, 16(4), 57-70, Specal Issue on SMEs. Kaplan, R.S. and Norton D.P Havng Trouble wth Your Strategy? Then Map It. Harvard Busness Revew 78, 5 (September October), Kolchanova, A. and Kolchanova, P Solvng Enterprse Management Problem wth Cluster Technologes and ERP Systems (n the Context of Captal CSE System). European Research Studes Journal, 19(2), Orlov, A.I Econometrcs. (3 rd ed.). Moscow: Examen, 573 p. ISBN: Pavlenov, M.N. and Kulov A.L Methods and models of mang management decsons n economc systems. - Nzhny Novgorod: VVAGS Press. 321 p. ISBN: Pavlenov, M.N. and Maeva L.C Expert assessments of rs methods. In: Mathematcal methods and nformaton technologes n economcs, socology and educaton: Proceedngs of the XIX Internatonal Scentfc and Techncal Conference. Penza, pp ISBN: Pavlenov, M.N. and Pavlenov I.M Cross-functonal problems of the company's management and controllng role n ts development. In: Controllng of Processes: Theory, Practce: Collected Scentfc Wors. Nzhny Novgorod: VVAGS Press, 1, Pavlenov, M.N. and Smrnova N.M Predcton of enterprse s sustanable

11 M.N. Pavlenov, V.G. Laronov, P.M. Voronn, I.M. Pavlenov development. Controllng, 4, ISSN Pavlenov, M.N., Voronn P.M. and Zhuravleva, T.V The Method of Cluster Analyss Estmaton of Investment Projects. Eastern European Scentfc Journal. Dusseldorf, 3, DOI /eISSN Petty, J.W., Keown, A.J., Scott, D.F. and Martn, J.D Basc Fnancal Management. New Yor: Prentce-Hall. 872 p. Prasanna, C Fnancal Management. Theory and Practce. Thrd Edton. New Delh: Tata McGraw-Hll Publshng Company Lmted. 936 p. Savtsaya, G.V Complex analyss of economc actvtes of the enterprse. (6 th ed.) Moscow: INFRA-M, 607p. ISBN Setyawan, A,A., Dharmmesta,S.B., Purwanto, M.B., Nugroho, S.S Busness Relatonshp Framewor n Emergng Maret: A Prelmnary Study n Indonesa. Internatonal Journal of Economcs and Busness Admnstraton, 2(1), Smons, R Performance measurement & control systems for mplementng strategy: text & cases. - Prentce-Hall, 296 p. Therou, G.N Strategc Management Process and the Importance of Structured Formalty, Fnancal and Non-Fnancal Informaton. European Research Studes Journal, 18(2), Therou, G.N., Aggelds, V. and Therou, N.G The Medatng Effect of the Knowledge Management Process to the Frm s Performance: A Resource-Based Vew. Internatonal Journal of Economcs and Busness Admnstraton, 2(1), Trfonov, Yu.V., Pavlenov, I.M., and Tanchu, R.S Management of ndustral enterprse development on the bass of the use of controllng nstruments. Nzhny Novgorod: 176 p. 591