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ACTUALIZATION OF PROCESS MANAGEMENT IN THE CONTEXT OF THE POST-WAR TRANSFORMATION OF THE UKRAINIAN ECONOMY
Bashuk I.,
Postgraduate at the Department of Business Economics and Entrepreneurship
Shvydanenko H.
Ph.D. in Economics, Professor at the Department of Business Economics and Entrepreneurship
Kyiv National Economic University named after Vadym Hetman
DOI: 10.5281/zenodo.7275900
Abstract
The article reveals the relevance of enterprise management based on the process approach, with due regard to the post-war reconstruction of the business environment. An analytical comparison of the economies of Ukraine and developing countries has been carried out. The required prerequisites for the expanded reproduction of the post-war economy, primarily owing to the national industrial complex, have been identified.
Keywords: transformation, restoration, revival, process approach, business process.
Nowadays, Ukraine in general and the business environment in particular, tend to have complex political, economic and social conditions resulting from the full-scale military invasion of the Russian Federation on the territory of Ukraine. Therefore, it is particularly critical for enterprises to form such internal prerequisites and management tools that would enable their full adaptability manifesting in a quick and adequate response to any external challenges. This purpose requires to form and use such methods and tools of adaptation to changes in market conditions, which would adequately meet the modern needs of the war and postwar state, the revival of the business environment due to the possibility of preventive decision-making in response to possible or existing changes in the external environment.
In our view, a modern process approach to enterprise management can serve as such a tool characterizing it as a set of interconnected business processes.
Moreover, in order to better understand the possibilities and effectiveness of the process approach to management, it is appropriate to analyze the modern prerequisites of the business environment for changes owing to its use.
From a macroeconomic perspective, the most justified and vital key indicator is the value added at purchasing power parity, which is generated by the country's economic complex. Comparisons of countries show that the national economy, considering this driver, produces goods with a significantly lower value added (Figure 1).
Proportion of the value added by purchasing power parity,
coefficient
19%
17%
12%
2,8
Ukraine
Coefficient 1
% of the manufacturing industry in GDP
Turkey 2,8
Poland 3,2
12% 19% 17%
Figure 1. Value added at purchasing power parity
20%
3,5
I
Slovakia
3,5
20%
1
The main reason for this is the fact that, in comparison with other countries, Ukraine has a low share of the processing manufacturing branch and a moderately developed logistics infrastructure, however, possesses a higher share of agriculture. At the same time, as can be seen from the figure, there is no direct correlation between the influence of the share of processing manufacturing and the GDP. The level of the indicator of final consumption goods has a greater impact on the GDP value: Poland (58%); Romania (62%); Slovakia (54%); Ukraine (40%).
In addition, the level of gross accumulation of fixed capital in Ukraine is 5 times lower than, for example, in Poland, which does not allow to achieve the optimal degree of economic reproduction. This is the situation, that does not ensure the formation of the required prerequisites for the expanded reproduction, primarily, of the national industrial complex, with due regard to the horrific consequences of the military aggression of the Russian Federation.
We see the restoration of Ukraine, which is virtually an economic revival, through socio-economic transformation for the purpose of achieving EU standards.
It should be taken into account that the exponential law of science development becomes effective presently. It is necessary to keep up with technological changes. Nowadays the definition of "technological singularity" is being actively discussed in the scientific environment. Although the term is hypothetical, the objective need for the reconstruction of Ukraine's economy on a new industrial platform is obvious. In this regard, a large-scale comprehensive program of priority regions development is required, with the provision of priority investment support to territories that enable the rapid restoration of existing or the formation of new industrial complexes based on innovative solutions and technologies. In other words, there is an urgent need to justify the objective necessity of creating an attractive investment climate to raise funding for the development and implementation of projects, which are aimed at the enterprises' reconstruction, as well as the creation of new business structures of processing manufacturing. Moreover, it is essential to choose an approach to
management, which will depend on the goals set for enterprise managers and the peculiarities of the business structure's operations. It is impossible to single out a particular approach to management as universal and the only one appropriate for use, since, depending on a certain situation, each of the approaches will have different efficiency.
The national industrial complex obviously requires a large-scale, radical transformation. This primarily applies to the resulting component of ensuring the predicted level of its functioning effectiveness. During the reconstruction process, it is advisable to direct project efforts to the formation of national full-fledged clusters and business structures with a completed production cycle of high-tech goods for both domestic consumption and export. The production of goods with a high share of value-added, as well as its scaling, is the only possible strategic priority in the medium and long term. The manufacturing of products that meet international (European) standards in terms of quality parameters, including technical and environmental ones, enables the formation of the required prerequisites to access the markets of the European Union and G-7 countries.
Under modern conditions, we consider it to be objectively necessary to use a process approach, with due regard to its adaptability and the possibility of full management of the enterprise through the use of a fairly flexible management tool - business processes, the modelling of which provides several competitive advantages, defined as follows:
- increase in the level of enterprise performance, due to the determination of a structured order of activities execution, since the identified elements of activities can be managed by setting their parameters and ensuring their execution optimally;
- flexibility, since the business process is a dynamic unit of the business structure that can quickly adapt to changes in operating conditions, as a component of internal and external relations, for which turbulence is a stable situation. Since changes are characterized by continuity, flexible business processes can adapt to new dynamic opportunities caused by the operating conditions of the business environment and use them effectively;
- transparency and speed, since the process model helps to determine the informational content of the work, to regulate, and fix the order of its execution, which consequently enables the creation of information support for business automation.
Using the process approach, with due regard to integration into modern international business chains of production, allows implementation projects aimed at the modernization of industrial processing manufacturing.
A balanced national industrial complex should be precisely based on ensuring deeper processing of raw materials. In the post-war period, a well-founded and purposeful state policy is needed, which should provide for the production, primarily, of finished goods using domestic resources. The successful experience of other
countries suggests that processing raw materials into finished goods creates the possibility of receiving three times as large foreign exchange earnings as during its export sale. An example could be the high efficiency of sunflower and corn processing. The economic feasibility of manufacturing goods with a significant share of value added is demonstrated by one of the numerous examples of comparing the volumes of food exports of Ukraine and Canada. These indicators are comparable in terms of volume, but in terms of cost, we get 2.4 times less for each ton. If calculated on the entire volume, the difference reaches more than $33 billion. USA per year. It is clear that Canada exports mainly finished products. The indicator of the number of innovative technologies exported on an annual basis per capita in USD is quite important (Table 1):
Table 1
Export of innovative products per capita, USD
Export of innovative products per capita, USD
2000 1500 1000 500 0
1700
1
20
200
400
1 200
400 400
Country Ukraine the Vietnam Poland Philippines
China Slovakia Malaysia
It should be noted that the high level of Malaysian export value is based on the production of modern microelectronic products.
Building an innovative economic system that would permeate all business structures and ensure the European level of innovativeness of the national economy will be a priority over the long run, first of all, in the post-war period during its restoration and development.
A significant aspect is the presence of strategic directions for the restoration of the national economy for the period from 2023, made publicly available at the government level. More than 7% annual GDP growth is particularly envisaged. For this purpose, the successful implementation of 850 projects is required, and financial resources shall amount to more than $750 billion.
The forecast is quite optimistic and requires an in-depth and comprehensive understanding and effective implementation in today's exceptionally complex economic reality.
The post-war economic revival forecast must certainly contain radical changes connected with increasing the country's defence capabilities and generating competitive advantages at the international level.
The issue of the relevance and essentiality of the Marshall Plan for rebuilding the Ukrainian economy is on the agenda right now. In due time, the Marshall Plan for the reconstruction of the economic complex of Germany consisted of two components: food aid, and also, crediting the equipment supply for the recovery of industry and the agricultural sector. Ukraine's own vision should provide for structural reconstruction and transition to a technological economy, primarily in terms of the industrial complex, considering particular aspects
of the other countries' positive experience. This hypothesis is confirmed by the real path of South Korea, whose post-war economic policy had to take into consideration, firstly, the destruction of more than 50% of the industrial complex and infrastructure; secondly, the country's budget, which was based on foreign aid (more than half of the funds); third, the population standard of living was equivalent to the poorest African countries, and the significant financial aid of the United States did not result in development.
It seems doubtful that the accession to power of Park Chung-hee, who, after the military coup in 1961, proclaimed the main growth trigger based on two beliefs: the first - honesty, the second - devotion to the idea of the absence of alternative economic development of the country. In its turn, this suggested forced industrialization, as well as GDP growth rates of more than seven percent. According to American experts, the plan was regarded as fantastic, and therefore, was unsuitable for funding. But the reality exceeded all expectations. The five-year period (1962-1966) ended with an average annual economic growth of 7.8% and was characterized by accelerated rates of industrialization, primarily in terms of the metallurgical industry with full-cycle products.
This experience suggests that we must independently form a dominant, triggering paradigm of national revival based on economic growth under the standards of the European Union.
In order to better understand the directions of restoration and further development of the country's economy, it is appropriate to analyse the sectorial structure of the economies of countries that are at the stage of development, that is, neighbouring countries with transition economies (Table 2).
Table 2
Ranking of countries by place in the GDP structure by sectorial orientation in the pre-war period
№ Country Slovakia Turkey Poland Ukraine
1. Manufacturing industry 1 2 3 4
2. Agriculture, forestry, and fishing 3 2 2 1
3. Construction 1 3 2 4
4. Mining industry and electricity supply 3 3 2 1
5. Trade, transport 4 2 2 3
6. Professional scientific and technical activities, administrative services 2 3 3 1
Source. Adapted from the data of the State Statistics Service, OECD (Organization for Economic Cooperation and Development)
The ranking was carried out based on the following collected statistical data:
- Ukraine has the lowest level of the share of processing manufacturing, which amounts to 68.2% of the level of Poland, 61% of the level of Turkey, and 58% of the level of Slovakia;
- the share of agriculture, forestry and fishing in Ukraine is 4.04 times higher than the level reached in Poland, 1.74 times the level of Turkey and 3.37 times higher than the level of Slovakia;
- the share of construction reaches 20% of the level of Poland and Turkey, and 25% of the level of Slovakia;
- the share of the mining industry in Ukraine is two times higher than in Poland and Turkey, and 3.33 times higher than in Slovakia;
- trade and transport as a share of national GDP amounts to 87% of the level of this indicator in Poland and Turkey, and 1.1 times higher than the level of Slovakia;
- concerning professional, scientific, technical activities, and administrative services delivery, Poland exceeds Ukraine by 2.33 times, Turkey by 1.67 times, and Slovakia by 2.67 times;
- Ukraine ranks first in terms of taxes, subsidizing and other services and exceeds Poland by 1.13 times, Turkey by 1.19 times, and Slovakia by 1.1 times.
Our country has an exceptionally high potential for ensuring food security, ranking fifth globally.
The experience of different successfully developing countries shows that each of them has formed its own toolkit for achieving the strategic goal, but some common features are likely to be distinguished: putting into practice a long-term strategy (five to ten years), as well as unique models of revival and purposeful use of funds. The implementation of the process approach in the modernization of the industrial complex of Ukraine, under the conditions of post-war revival, can be a priority part of the Ukrainian model, ensuring the purposeful, effective and transparent management of business entities, and consequently, efficient use of resources and obtaining predictable results.
Conclusions. The concentration of efforts to form and dynamically develop the modern industrial sector with high-tech finished goods is objectively vital. Over the next 10 years (2023-2033), the share of the processing industry in GDP is envisaged to double, reaching 18%, in particular, the share of high- and mediumtech products in the processing industry is predicted to approach 30%. Such indicators can be achieved through the revival of the country's open, diversified
economy, highly integrated into the international market space. At the same time, management through a process approach can ensure the timely detection of problematic areas, and owing to the developed models of business processes - their quick adjustment, which in the future will lead to an improvement in the efficiency of resource redistribution among enterprises participating in business processes.
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SERVICE STRATEGIES INFLUENCE ON THE QUALITY OF BEAUTY INDUSTRY COMPANIES
THAT INCREASE COMPETITIVE ADVANTAGE
Rafkhat L.
Doctoral student of Business Administration, Almaty Management University Almaty, Kazakhstan DOI: 10.5281/zenodo.7275906
Abstract
The modern standard of living puts forward new requirements for the health, appearance of a person, as well as for the level of service offered. One of the global trends of the modern economy is the dynamic growth of the services market. The service sector has a very noticeable impact on the level and quality of life of the society. The structure of the domestic market of services is undergoing significant changes, the role of service industries is constantly increasing, work in companies that provide services is becoming more and more prestigious, meeting the requirements of international and European standards.
Keywords: service, quality, beauty industry, service strategy, competitive advantage.
The problems of the service are quite typical for any complex case. High-quality service requires highly qualified employees, and significant funds must be spent on training these personnel. We need a special type of employee — a highly qualified all-rounder with extraordinary psychological and personal qualities, since we are talking about constant contact with consumers.
Today, marketing is successfully used in the service sector, but previously it was almost not used in the service of everyday life. Marketing is a process designed to help others evaluate services, evaluate what is being done for customers, and how it is being done. The main goal of service marketing is to help the client appreciate the organization's services, and the most difficult aspect of service marketing is to create favorable conditions for the provision of these services. The intangible nature of the services, their elusiveness, or their immaterial nature means that they cannot be demonstrated, seen, or tried before receiving these services (Wangnanon, W. and Saomoung, S. 2012). In any service activity, the buyer is to some extent a participant in this process. The quality of the service depends quite significantly on who provides it. When organizing service activities, it is necessary to take into account the needs of customers. The consumer's perception of the services is important. In the competition and competition for "their" consumer, manufacturers inevitably come to the system of service provision. "The purpose of such a system is to ensure the protection of intellectual property, increase competitiveness, achieve scientific priority and world recognition, and turn scientific achievements into an innovative product» (Suneeta & Koranne, 2014).
The quality customer service program helps the company retain customers and thereby reduce marketing costs. As you know, good service costs money, but annual campaigns to attract customers cost much more.
The service has a multiplier effect: it multiplies the results achieved by advertising, marketing, and sales. At the heart of this multiplier effect is a positive attitude towards the company, which is created by customers through high-quality personal service and motivates them to recommend the company to other people.
In the beauty industry, understanding the issues of «clientology», customer service quality, and knowledge of the laws and principles of customer service are of particular importance. Providing high-quality services requires significant costs, but the practice of advanced service companies proves that they will pay off many times by increasing customer satisfaction, maintaining and growing the customer base, increasing sales and profits (Khristianto, Kertahadi, & Suyadi, 2012).
Behind the success of most service companies (beauty salons, hairdressers and studios) is the commitment to effectively implement the service strategy in the strategy of enterprises. Successful implementation of the professional strategy of the service, its sales, contribute to an increase in profit and profitability exponentially, while minimizing advertising and marketing.
The service of the salon business requires constant and unflagging attention. Customer service programs should change with changing customer needs and requests. Managers and ordinary employees of beauty industry enterprises should become creators and inventors of the service (come up with new ideas and implement them) (Na-Nan, & Chalermthanakijkosol, 2011).
Today's leaders in the beauty industry need to set the task of treating customer service as a long-term strategy on a par with other business strategies. The service strategy requires the unflagging commitment of the management and the support of the staff for a long time, if the need to increase the loyalty of customers of beauty salons is ensured.
