CC BY
8UDC: 330.46
HORIZONS AND CONFIGURATION OF SYSTEM MANAGEMENT IN
NEW ECONOMIC REALITY
Pochinok P.A., student Russian State Social University, Moscow, Russia E-mail: [email protected] Supervisor: Gumerov M.F., Ph.D. Econ. Sciences, Lecturer Russian State Social University, Moscow, Russia E-mail: [email protected]
Abstract. The article is devoted to exploring modern theories and concepts provided with system economics and system management. For better understanding of its gist we analyze its theory's evolution from the beginning (L. Bertalanfy) till the latest ideas (Y. Kornai, G.B. Kleiner). As a result of this analysis we come to conclusion that modern paradigm of system management should be accompanied with the principles of behavioral economics. It means that four types of economical systems - environment, object, process and project - should be markedfrom the position of the way which allows manager to accept information about them. Each type of system is characterized by the qualities of basic managerial functions - producing, administrating, entrepreneurship and integration. In the final of this article we offer new approach to decision making based on models which include indicators of basic managerial functions. This approach can be a base of new paradigm which allows improving process of management in modern conditions.
Key words: system economics, system management, economical system, decision making, managerial functions
1. INTRODUCTION
Nowadays the problems in national economy demand new approaches to management of economic systems. First of all, there should be new approaches to decision making, because it is a base of managerial processes. In modern literature there is a standard technology of decision making which includes collecting of basic information, creating mathematical model of managed system and its internal surrounding, and finally - decision making itself. The main problem here is the absence of exact algorithm which allows to transfer from basic amount of information to formalized model. The details of these processes depend on manager's professional experience and intuition. Besides there is the other problem: in many cases manager hasn't enough time to create a formalized model and his decision is a result of unformalized mental process. First of all, this problem is actual for operational management.
So, the top aim of the present article is creating new approach to decision making in management. It should unite the best advantages of present approaches in this field and be acceptable for all three stages of management - strategic, tactical and operational.
For reaching this aim we establish the following tasks in the exploration:
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- Comparing present approaches to decision making from the positions of utility on different stages of management;
- Creating an approach to basic formalized description of decision's problem field for easier process of mathematical modeling;
- Defining the direction of using new approach in practice.
2. METHODS
For deciding the tasks of the present exploration we use the method of comparative analysis. The objects of comparison are three main streams of modern management science. The firsts one expects operations analysis as a base of decision-making. According to this approach every economic system is described by a group of internal and external indicators. And the equations which connects them form a base for decision-making. The second one is a system approach. According to it economic system is always a result of connecting four types of subsystems which have different limits in space and time. These sub-systems are environment (unlimited both in space in time), object (limited in space and unlimited in time), process (limited in time and unlimited in space) and project (limited both in space and time) [7, 8]. According to this approach managerial decision depends on connections between sub-systems in a managed system. The third
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approach is provided with behavioral economics. According to it each decision is a result of mental process in human subjects acting in economic systems. These mental process form abilities of human subjects realize basic managerial functions which influence on the economic systems' resultativeness and effectiveness in two time periods. These functions are producing (provides resultativeness in short-term period), administrating (effectiveness in short-term period), entrepreneurship (resultativeness in long-term period) and integration (effectiveness in long-term period) [2, 3, 5, 6, 9, 10].
These three approaches are compared from the Table 1. Comparative characteristics of modern approaches to management and decision-making [1, 2, 5, 8]
following positions:
• The basic principles of managerial processes and decision-making;
• Introduction of managed economic system;
• Using mathematical modeling;
• Stage of management which is more complement to the approach.
3. RESULTS
Results of comparing modern approaches to management and decision-making from the positions established in the previous part are in tab. 1.
Approach Basic principles of managerial processes and decision-making Introduction of managed economic system Using mathematical modeling Stage of management which is more complement to the approach
Operations analysis Principles of cybernetics, which expect informational communications between the elements as a base of management in big systems Systems of mathematical equations Approach is based on highly developed mathematical apparatus Tactical management
System approach Increasing amount of information in a system leads to lower entropy Conglomerate of 4 types of systems with different limits in space and time The only type of models used here is a modified form of production functions Strategic management
Behavioral economics Decision depends on how human subjects accept basic information about managed system Result of combining 4 basic managerial functions provided with resultativeness and effectiveness of managed system Mathematical apparatus of the approach is in the initial stage of development Operational management
The results of comparison show that common base of all three approaches is provided with the informational processes. In all conceptions they're accepted as a base of decision-making. It allows to establish the following bases of new generalized approach to decision-making in management.
1. Decision-making first of all is an informational process which leads to increasing the amount of information in managed system. Increased amount of information changes entropy in managed system. Further it changes connections between the elements of managed system and its internal surrounding. As a result, there is a new exchange of
resources between these elements. So managerial decision should be taken in account as an event which reorganizes exchange of resources in a system and its surrounding. They're should be modeled as a whole mega-system so as to make fuller model.
2. The elements of mega-system are divided in 4 groups according to the principles of system approach. However, we don't take in account physical limits of the elements in space and time because in most of cases it is difficult to identify them. According to the principle that information is a base of decision-making we offer to divide the elements in groups taking in account characteristic of
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information about them. These in information can be connected with decision directly and indirectly, and it can be used for current decision only or for several decisions. So, environment system (a) unites the elements which's' information is connected indirectly with several decisions; the information about object system (S) is provided directly with several decisions; project system (y) is provided directly with current decision only; process system (P) is provided indirectly with current decision only.
3. The processes of exchanging resources in mega-system are divided in 4 types which are provided with basic managerial functions. Function of producing (P) in each element provides sending its resources to other elements in a short-term period. Administrating (A) provides back receiving of resources by an element in a short-term period. Entrepreneurship (E) provides sending an element's resources to other elements in a long-term period. Integration (I) provides back receiving of resources by an element in a short-term period. All four types of exchanging resources are realized in four systems
f f Dbd nbd nbd nbd nad JPVa ,rs ,ty ,ra
S \bd
a d a
f ( Abd Abd Abd Abd A
b d b d b d b d a d JE^a ,tS ,hY
a
b d b d b d b d a d JI (1a ,lS , 'y ,,la ,
included to big mega-system. So, there are 16 processes of exchanging resources; further they're signed by the letters of managerial functions provided with them, low indexes are provided with system where these processes are realized (e.g., Pa — sending resources of environment system to other systems).
4. Managerial decision is described by 4 parameters which characterize changes in 4 processes of exchanging resources (further they're signed as d (decision) with low index of process changed by the certain parameter — dr, dA, dE, d)
5. Changes in mega-system caused by decision are described by a system of 4 mathematical equations. Each equation describes certain type of exchanging resources (P, A, E or I) and connects its indicators in 4 types of systems before decision (higher index bd) and after decision (higher index ad), as well as parameter of changing certain process of exchanging). Connections between parameters of changing d connect the mathematical system of equations as a whole.
psad,pYad,p$clldP[dAldEldI]) = 0 ^s >'^<a > dA[dp, dE, dj]) = 0
' E'g1' Eaad, Ead' dE [dp, dA, dj]) = 0 ( ) is d'ia c'ia c'dj[dP'dA'dE]) = o
V
Finding unknown parameters d gives the parameters of managerial decision. The details of this methodic are in publication [4]. CONCLUSION
Here we offer the basic ideas of new approach to decision making in management. They demand further development and finding the directions of their practical utility. This exploration is expected to be rather perspective because this new approach may cover all three stages of management and be a base of creting general theory of management in economic systems. References
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[7] Kleiner G.B. (2013) What economy needed in Russia and for what aim? Voprosi ekonomiki, no 10, pp. 4-27.
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