Yuliya Bashkevich 

Faculty: Economics

Speciality: Economics of enterprise

Theme of master's work:

Grounds of the ways of development for the industrial enterprise

Scientific adviser: Doctor of Economics, Professor Hobta Valentina 

Contents

Introduction

Overview of researches on the topic in DonNTU

Overview of researches on the topic in Ukraine and in the world

Main results

Conclusions

References

Introduction

Relevance of the topic. At the present stage of economic development of Ukraine business entities is insufficiently effective. This is evidenced by the specific weight of unprofitable enterprises, which has increased in general in Ukraine from 40,3% to 41,8% during 2010. Also they have not a stable output growth, so in 2008 the growth rate amounted to 96,9% in 2009. only 78,1%, and in 2010 an increase in industrial production by 11,2% compared to the previous period. Profitability of enterprises in Ukraine is 3,9%, which is rather low. Half of all existing assets in Ukraine is experiencing a physical (material) and economic deterioration, or a techno-economic aging. The rate of capital investments in 2009 decreased by 79,196 thousand UAH in comparison with the level of 2008 at 272 074 billion USD, that is not enough to carry the constant reproduction of fixed assets. Therefore, it is necessary to develop all possible measures concerning the development of business entities that should provide efficiency of their work.

The purpose and objectives of the study. The purpose of master's thesis is to deepen the theory and practical tools on the rationale of directions of the development of an industrial enterprise.

Achieving this goal is reached by the solving of following goals:

• The results of industrial enterprises activity in Ukraine are analyzed, trends in their development are found out and the need to further improve the theoretical foundations and methodological tools to ensure their development are identified;

• The nature of the enterprise development is specified, its ordering of classifications is done;

• Possible ways and directions of the enterprise development are analyzed;

• The methods of study areas of enterprise development are searched;

• The use of methodological approaches to the assessment of enterprise development based on identification of its potential is suggested;

• The recommendations for the management of an enterprise on the ground of value analysis are formed;

• The expected economic effect from the measures on the improvement of enterprise management is determined;

• The proposals concerning the development of industrial enterprises are formed.

The object of investigation management is processes of enterprise development in a dynamic environment.

The subject of the study is scientific and methodological basis and tools to ensure the development of industrial enterprises.

Research methods. Theoretical and methodological basis of work are the fundamental points of economic theory, scientific work and methodological development of providing domestic and foreign scientists on development management and efficiency of economic activities of enterprises.

Information base for research are legislative and regulatory acts of Ukraine on regulation of business activities of enterprises, the official State Statistics Committee of Ukraine, Donetsk Regional Department of Statistics.

The main scientific results are in strengthening the theoretical foundation and justification of practical recommendations on directions for development of industrial enterprises.

The practical value of the results. The guidelines for the justification of the directions of growth companies, the definition of the economic effect from the introduction of measures to improve the efficiency of economic entities are the results that have some practical value. On this basis, it becomes possible to form a real and objective assessment of generalizing the development of the enterprise.

Overview of researches on the topic in DonNTU

Problem of justifying the directions of development of an industrial enterprise is engaged by Evdokimov F., Kravchenko S., Krapivnitskaya S., Lysyakov V., Mizina E., Popova O., Hobta V., Shilova L., Shilova O. and others. The graduates who explore the development of the enterprise, Bushuev V., Vasylykha O., Zavorotneva E., Zaporozhets K., Kogteva O., Moroz V. and others.

Overview of researches on the topic in Ukraine and in the world

The work of both domestic and foreign scientists: Afanas'ev N., Bogatyrev I., Buriak L., Varnaly O., Vasilenko V., Vashchenko E., Vorotina V., Geyets V., Ermoshenko M., Zapasnaya L., Kononenko I., Kuzhel E., Libanova A., Maslennikova N., Pogorelov Y., Ponomarenko V., Raevnevoy O., Storozhenko A., Shablista A., Shilova O., Hobta V. etc. is devoted to the questions of the ground of an enterprise development. The study of the principles, factors, techniques and experience in implementing management systems to ensure the sustainable development of enterprises are regarded in works of such native scholars as Vasilenko A., Korshunov O., Pushkar O., Sytnik L., Stasiuk V., Trided V., Hmel F., Chernuh A. The issues to motivate the choice of resource capabilities of business entities, to develop a clear methodology for determining the effectiveness of their activities are not cleared enough in the literature and require in depth scientific exploration.

Main results

On the one hand, the improving of the national economy structure in Ukraine, is accompanied by the development of entrepreneurship, that leads to the emergence of a number of enterprises of different organizational forms, which must find its place in social production. On the other hand, this process is inevitably accompanied by the discontinuation of a number of business entities that are not able to perform complex tasks faced with them. This is followed by the unsatisfactory state of basic funds and low efficiency of their use, falling production volumes, reduced competitiveness, insufficient capital investment. This calls for deepening the theory and practical tools for improving the validation of possible directions for further development of the enterprise that can ensure the improvement of its efficiency [1].

In this paper we propose to consider the development of the company as a long-term set of processes of quantitative and qualitative changes in the enterprise that lead to an improvement of its condition by increasing the capacity of adaptation to the external environment and internal integration, thereby increasing the ability of companies to counter the negative influences of the environment and its life.

From the standpoint of the functioning of the enterprise, the essence of the development process represents an increase level of its organization, when the accumulation of information reduces uncertainty. This should be done so that all changes in the company, allowed in the dynamic market conditions to maintain and improve the profitability and stability. Features of the environment and the need for constant changes also require changes in approaches within the scope of the management of organizations [2].

In the literature there are several different approaches to the classification of the methods of management decisions. One of the most common methods of classification is shown in pic. 1.

Picture 1 — Classification of methods of management decisions

The balanced development and proper use of its potential is a prerequisite for the strategic development of the enterprise in a market. To achieve maximum growth potential with minimal is possible only with proper selection of management solutions to its capacity. Operating benefits of the enterprise, rates of changes and quality of business depend on the ability to use properly available opportunities. In this connection it comes very important to identify and quantify potential of the company, its realized and unrealized parts [3].

One of the modern tools of computerized assessment and management capacity is a graphical-analytical method of analysis, called "Square of the potential". In this method there are the following four components of the potential of the company: production, distribution and marketing, organizational structure and management, marketing, finance. The algorithm of this method is as follows:

1. The initial data are presented in the form of the matrix, which is a table. In this table the names of the indicators and their significance are recorded.

2. For each indicator, the smallest value with a glance of the sensitivity coefficient is selected and the following ranking of the definition of appropriate venue is done.

Adjusted value (EV) is calculated by formula 1:

СЗ = З * К_ч/100%                (1)

where З — the value target;

К_ч — sensitivity factor, which is calculated by the formula 2:

К_ч = 100% - Y_в                (2)

where Y_в — weighing indicator, %.

3. The total amount of places is determined.

4. The sum of places in the quantitative value of the vector, which characterizes the square of potential is converted.

The value of the vectors characterizing the square of potential is calculated on the formula 3:

В_к = 100 - (Р_j - n) * 100 / (n * (m-1))                (3)

where Р_j — the amount of places; n — the number of indicators; m — number of periods.

5. The graphical interpretation of the quantitative values of the vectors for each block. Squared potential of the company has four zones corresponding to the sections used in the system of indicators, and four vectors that create it.

6. After constructing a square of the potential of enterprise, relevant conclusions and recommendations are given.

Presented method for optimizing the capacity of the enterprise provides an opportunity to establish a cause-effect, i.e. qualitative and quantitative relationship between the particular components of the potential, to estimate the level of the development and the competitiveness and on this basis to justify, to adopt and to carry out promptly management decisions to ensure the effective functioning of the enterprise.

By turn, value analysis of costs is recognized as the immediate instrument for solving problems of company management. This method of analysis is able to create the best representation of the structure of the full cost of production companies, giving the opportunity to establish the origin of excess charges. Value analysis is the information interaction of planning and cost accounting in the implementation of the general functions of the enterprise. However, in a cost management as in a process management functions, and object-oriented action, there is diffusion due to lack of interaction management features aimed at the development costs in order to achieve the target ratio of benefits received and costs incurred related to the activities of industrial enterprises [4].

To find the most economical variants both for the consumer and the producer, the options of a practical solution with the help of the analysis should address the following objectives: general description of the research object, the object detailing on the functions, grouping functions allocated to principal, additional and unnecessary, the definition and grouping of costs in accordance with the selected functions, the calculation of the costs amounts of manufacturing products when you turn off unnecessary functions, and use of other technical and technological solutions, the development of proposals for technological and organizational improvement of production.

The economic effect of management is achieved by reducing the complexity of management functions as a result of getting rid of duplicate functions, and extra links, excessive documentation and select the most economical ways of performing the functions transferring some functions on a computer.

Effect in the management proposed to calculate the formula 4:

Э_у=Э_Д+Э_К                (4)

where Э_Д — the effect in the management of getting rid of duplicate functions;

Э_К — the effect in the management of training workers.

Effect in the management of getting rid of duplicate functions, is defined as the total cost of the function, by turn, the effect in the management of training employees is defined as the annual savings after the training department employees.

Value analysis is an effective way to identify the reserves to reduce costs, it is based on finding cheaper ways to perform the main functions (through organizational, technical, technological and other changes in production), while removing unnecessary functions.

Conclusions

The main results of theoretical and practical research is to develop a set of theoretical principles and guidelines for the justification of the directions of development of economic entities.

In the first section, developmental trends in industrial enterprises are set, the need to further improve approaches to defining the essence characteristics, trends ensure the development of the enterprise is revealed.

In the second section the theoretical principles and the basic approaches for the development of the company are improved, the use of methodological approaches to the assessment of enterprise development based on the determination of its potential are suggested.

In the third section the recommendations on business management based on the functional cost analysis are formed, the expected economic effect of the introduction of measures to improve enterprise management is determined and the proposals concerning the development of industrial enterprises are given.

Using the proposed recommendations improves the quality of management decisions on the justification of the directions of the enterprise and allows determining the economic effect of the introduction of measures to improve enterprise efficiency. It can provide further development of the enterprise by identifying potential opportunities and creating efficient methods for their use.

NOTE

At the moment of writing this abstract master's qualification work is not completed yet. Final completion is scheduled for December 2011. Full text of the work and materials on the subject of the work can be obtained from the author or his / her supervisor after this date.

References

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