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ЕКОНОМ1КА: реали часу
№6(l6), 2014
ECONOMICS: time realities
ТРАНСФОРМАЦ1Я ТА РОЗВИТОК ЕКОНОМ1ЧНИХ СИСТЕМ
TRANSFORMATION AND ECONOMIC SYSTEMS DEVELOPMENT
UDC 330.341.1:69
INSTITUTIONAL INFLUENCE ON THE INNOVATIVE DEVELOPMENT OF
BUILDING SECTOR
V.F. Semenov, DEcon, Professor O.D. Chekulayeva Odessa Public Academy of Building and Architecture, Odessa, Ukraine
Семенов В. Ф. Чекулаева О.Д. /нституцшний вплив на тновацшний розвиток будгвелъноi сферы.
У статп обгрунтовано необхщнють шституцшного регулювання шновацшного розвитку бущвельнсн сфери, визначеш продуктов!, виробнич1 та технолопчш особливост1 останньо1. Показан! шституци безпосе-редньо1 та опосередковано1 участ1 у регулюванш шновацшного розвитку буд1вництва. Запропоновано полшшення шституцшного регулювання шновацшного розвитку буд1вельно1 сфери шляхом вживання заход1в державно-приватного партнерства.
Ключовг слова: шновацшний розвиток, буд1вельна сфера, шституцшний вплив
Семенов В. Ф., Чекулаева Е.Д. Институциональное влияние на инновационное развитие строительной сферы.
В статье обосновано необходимость институционального регулирования строительной сферы, определены ее продуктовые, производственные и технологические особенности. Показаны институции непосредственной и опосредованной участия в регулировании инновационного развития строительства. Предложено улучшение институционального регулирования инновационного развития строительной сферы путем принятия мер государственно-частного партнерства.
Ключевые слова: инновационное развитие, строительная сфера, институциональное влияние
Semenov V.F. Chekulayeva O.D. Institutional influence on the innovative development of building sector.
The article substantiated to use the term building industry, defined its products, industrial and technological features. Designated institutions directly and indirectly involved in the regulation of innovative construction. Proposed improvement of institutional regulation of innovative building sector through measures of public-private partnership.
Keywords: innovation development, building industry, institutional influence
The presence of institutes and mechanisms of institutional influence to the innovation markets allows drawing a conclusion about creation certain terms for innovative development of national economy spheres, including building sphere in Ukraine.
The complex of macroeconomic changes and crisis phenomena in an economy that are the characteristic for Ukraine determine complication the socio-economic processes motion and influence to building sphere and organizational forms of management development. Realization economic reforms' problems were reflected on a contradictory economic situation, that is characterized by absence the stable socio-economic increase, presence of structural disproportion, intensifying of social, economic and ecological problems.
Among reasons of economic crisis it is distinguished grant character to the budget, insufficient financing of the government programs and budgetary sphere, falling of demand on many types of products, low level of consumers' solvency and also saturation the imported commodities market [1].
In this case the primary objective of government politic must be innovative development, increasing of efficiency and competitiveness of building enterprises on foreign and internal markets. Motive forces of progress are concentrated exactly in innovative development but scientific going near innovative activity in the building sphere of national economy, while does not yet have the generally accepted looks, and quicker characterized by some conceptual scopes development and deepening of existent knowledge last in that.
In particular, it is suggested to examine the systems of innovative development in the process of transition in a dynamics, where a transition is understood as a process of gradual transformation one complex of institutes to another, as a process of object
changing, conception or system from one state to other, when more attention we should follow to already existent institutes and structures less - to the quality changes in a structure and mutual relations between organizations.
In Ukraine the institutes of innovative development adjusting of building sphere are formed and operate on an improper level, institutional system is weak, its elements are functioned, for example, higher educational establishments, academic and branch scientific structures, administrative structures both in the central public organs and in regions. There is a problem that these elements are not organized by system, confined modern tool of co-operation and do not provide effectiveness. In Ukraine, though slowly but the new elements of difficult case innovative development model are formed on different hierarchical levels [2].
Analyze of researches and publications
Both domestic and foreign scientists are going for problems' developing of using in companies the strategic planning. The most significant of research papers: O.A. Bogomolov, L.C. Balabanov, V.S. Pono-marenko, O.M. Yastremsky, R. Ackoff, D. Hussey, G. Mcburg, B. Karlof, etc.
The aim of the study is the revelation of the theoretical aspects of using the strategic planning and its basic techniques. The goal is to study methods of strategic planning in the organization.
Exposition of basic material of research
Strategic planning is the process of managerial decision-making regarding strategic foresight, adaptation of the company to the external environment and the allocation of resources. Strategic planning is the process of identifying the main goals of the organization, needed resources to achieve them and policies for the acquisition and use of these
Management by objectives System approach that allows you to focus activities of companies to achievement goals.
In turn the strategic planning process as a specific type of activity consists of several iterative stages:
— the initiation and coordination of the strategic planning process;
— the definition of official powers and duties of the organization;
resources. Strategic planning provides an opportunity to test the values of the organization, its current status and the environment, factors associated with achieving the desired future. Needs in strategic planning are not for those organizations that exist in a static world, which is absurd. Because our environment is constantly changing in all aspects of our lives - demographic, economic, cultural, etc. Thus strategic planning is a reaction and a process of adaptation to changes, as well as a means of creating the organization's future in the context of these changes. This is a major challenge for all organizations of different sizes and types. It is the most effective instrument for development responsibility and competence of the personnel at the same time. In the end, this is the basic prerequisite for the successful operation of any group of people seeking to achieve common organizational goals [2].
T.M. Sorochan [3] notes that strategic planning is the process of providing direction and content for daily activities. V.V. Glushchenko [4] notes that strategic planning is one of the main functions of strategic management. It is the process of managerial decision-making regarding strategic foresight (strategies), distribution of resources, adaptation of the company to the external environment, internal organization. Strategic planning provides the basis for all management decisions, functions, organization, motivation and control, focused on the development of strategic plans. The strategic planning process provides the basis for management members of the organization.
Implementation and application of strategic planning includes the following components: tools, stages, techniques, and exactly the strategic planning process. In turn present the instruments of strategic planning on fig. 1.
Reengineering of business processes It is creating and supporting the continuous improvement system of business results.
— the mission statement and values of the organization;
— the analysis of the external and internal environment of the organization;
— the definition of effective strategic vision for the organization;
Fig. 1. The tools of strategic planning [5]
— the developing an effective implementation plan,
evaluation the strategy;
— the strategic planning process [6].
M.D. Vinogradsky [7] notes that strategic planning is defined as the managerial process of creating and maintaining the strategic fit between the goals of the company, its potential and opportunities in marketing. It is based on a clearly formulated program statement of the company, definition the co-goals and tasks, healthy business portfolio and growth strategy.
Features of strategic planning on companies are choosing the actual methods of planning. The methodology of strategic planning is the particular way, technique of solve any problem of planning. In scientific literature there are 2 groups of techniques of strategic planning, which differ from each other. Suppose in fig. 2 the first group of strategic planning methods [8].
In contrast to the presented in fig. 2 methodologies in international practice there is a second group of matrix and portfolio techniques of strategic planning: Boston consulting group matrix (matrix BCG), the "attractiveness-competitive", the Arthur D. Little matrix (ADL/LC). Also in strategic planning we use a variety of techniques for strategic analysis, the main of which is the SWOT analysis.
Matrix portfolio analysis BCG, one of the most famous and simple, designed in the 60-ies of XX century, the Boston consulting group. It considers only two factors: relative market share and market growth rate. The BCG matrix defines four basic positions in which there may be businesses that have been recognized marketing names: "question marks", "stars", "cash cow", "dog" (fig. 3) [10, 11]. Matrix MC Kinsey is a multi-factorial matrix. It was proposed by advisory campaign "McKin-sey" and the General Electric Company in the United States (fig. 4).
Basically these matrixes are based on a pair of strategically important variables such as market size, the growth rate of the industry, competitive status. In contrast to the two-factor BCG matrix, the matrix "MC-Kinsey/DE" is more detailed version and already multi-factorial model. Matrix "MC-Kinsey/DE" reflects a more flexible approach to strategy formation. For example, if the competitive status of the company is weak and the market forecasts do not include rapid growth, it will not mean that this activity is necessary to leave: it may be happen that risk will decrease but company activity's efficiency will increase to another, more promising sphere, then there will appear the so-called synergistic effect [14].
Methods of strategic planning
The method of вirect
engineering and economic calculations Determine the this type of production needs of the market and its production
Expert Based on indirect and incomplete information, experience experts Balance Used to ensure consistency of interrelated indicators System analyze and synthesis Decomposition of phenomena into constituent parts and determining the key issues of future development
i
Socio-economic analysis Economic- Test the programs' execution
Comprehensive study of the socio-economic reality, knowledge of the internal connections of phenomena with the aim of determining the progressive development trends mathematical methods Solve issues such as identifying optimal output given the labor and material resources Detect errors made in the process of strategic planning, given the opportunities that were not previously considered or newly emerging
Unity, centralism and
autonomy method Provide affiliates the
greatest possible freedom in economic activity, but within the overall strategy of the company
Unity and complex forecasts,
programs and plans Сoordination and integration departments' and branches' plans to one plan based on an overall strategy for company
Fig. 2. Methods of strategic planning
Matrix ADL as Mac Kinsey is also essentially the improved variant of the BCG matrix while in contrast it is a multi-factorial. The approach Arthur DLL's firm to portfolio analysis is based on the concept of industry life cycle which represents the model changes over time a number of market variables:
sales, profit, competition, etc. In accordance with it every industry goes through the life cycle development of four phases: the birth (adoption), growth and development, saturation, decline. These phases of the industry life cycle make up the Y-axis of the matrix ADL. The X-axis reflects the competitive position of
company which can be: weak, strong, tolerant, competitive position results in a matrix powerful and leading. The combination of data about ADL (fig. 5) [15]. the four phases of industry life cycle and the five
Fig. 3. Methods of strategic planning
High
<u
sj «
« «
Middle
Low
1 2 3
Selective Raise Agressive Raise
4 5 6
7 8 9
Reinvesting Low activity
Low Middle High Competitiveness of company
Fig. 4. Methods of strategic planning
Matrix ADL opens a wider range of strategies. It is useful for the product life cycle which is very short and if time does not apply appropriate strategies it can achieve its goals.
"Possibilities of goods-markets" matrix often used in the definition of portfolio strategy to specify in which specific business sectors of the company it will be in the future (fig. 6).
Y
¿Í
M
■a <u <u c
o c
ca £
P-
C
Low
Low <—
Profitability
Competition risk
High
High —►
Phases of industry life cycle weak strong tolerant powerful leading
Decline 1 2 3 4 5
saturation 6 7 8 9 10
Growth and 11 12 13 14 15
development
Birth (adoption) 16 17 18 19 20
X
Fig. 5. Arthur D. Little matrix (ADL/LC) [11]
Each square of the matrix identifies some general strategy:
— strategy "improve what you are already doing" -focus on markets and products that exist;
— market development strategy - find new markets for manufactured goods;
— strategy new product development - involves the company's growth on due to new good production, which will be implemented on the existing market;
— diversification strategy - applied in cases when the company cannot continue to develop in this market with this product within the industry [18].
Exist
Market
New
x №
y ©
tu £
Strategy "improve what you are already doing" Market development strategy
Strategy new product development Diversification strategy
Fig. 6. "Possibilities of goods-markets" matrix [17]
Adopting such a strategy the company direct own forces to developing new products and finding new markets so it is very risky. To reduce the risk the company can by expanding spheres of activity in the area associated with the main activity of the company, and in a completely separate business areas.
After analyzing 2 groups of strategic planning techniques we can conclude the need of strategic planning in company following next conditions:
— encourage company management to think long-term;
— better coordination of the organization;
— establishment of indexes for follow-up;
— establishing an effective system of potential personnel management in company;
— focus on finding alternative ways to achieve goals, that is permissible purposes under certain goals and existing constraints;
Трансформащя та розвиток економiчних систем
Transformation and economic systems development
— allocation of responsibility not only between areas activity but also between current and future activities.
Conclusions
Strategic planning in company is one of the most important conditions for its successful functioning. Without such a plan the company will go into the unknown direction by not systematic influences and internal decisions of managers. Strategic planning includes these plans. It is necessary to coordinate all the processes in company. It is making for each decision in company were taken with a clear reference to a particular purpose, developed based on the results of strategic planning.
So after reviewing the literature we can note nobody in the scientific literature defined best practices of strategic planning. All the above methods are quite effective but to ensure that the company operated and profitable, one must use the methods in the following way. In beginning of the company development it is necessity of combination two methods of the first group, except socio-economic and
systems analysis and synthesis, as they are based in the comprehensive study of the socio-economic reality, knowledge of the internal phenomena connections, its decomposition into constituent parts and determine based on this, the key issues of future development. During company growing it is effective to use portfolio methods of the second group like the matrix "product-market" because it will indicate in which specific business sectors the company should operate in the future. To ensure the company status we recommend to use MC Kinsey matrix next that determines the capacity of the market and its growth, intensity of competition, the input and output barriers, seasonality and cyclical fluctuations, capital needs, the impact of social, ecological factors, as well as state regulation.
Therefore the strategic planning process takes the main place in strategic management system. Most of the west and east companies use strategic planning to change itself to get out of hopeless situations formed in company.
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ЕКОНОМ1КА: реалп часу
№6(16), 2014
ECONOMICS: time realities
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Надано до редакци 28.09.14
Семенов Василь Федорович / Vasil F. Semenov
Чекулаева Олена Дмитр1вна / Olena D. Chekulayeva
Посилання на статтю / Reference a Journal Article:
Institutional influence on the innovative development of building sector [Електронний ресурс] / V.F. Semenov, O.D. Chekulayeva // ЕкономКа: реали часу. Науковий журнал. — 2014. — № 6 (16). — С. 143-149. — Режим доступу до журн.: http://economics.opu.ua/files/archive/2014/n6.html
