CC BY
6UDC: 658:330.3(477)
JEL Classification: D20; M20
Volodymyr Rossokha,
doctor of economic sciences, professor, chief researcher of the department of management organization, public management and administration of the National Research Center "Institute of Agrarian Economy", Kyiv,
Ukraine, https//orcid. org/0000-0002-9208-8948.
Mykhailo Kryvun,
graduate student of the Department of Economics and Law of the National University of Food Technologies, Kyiv, Ukraine, https://orcid.org/0000-0002-9631-5837 DOI: 10.24412/2520-6990-2022-22145-26-36 ORGANIZATIONAL AND ECONOMIC MECHANISM OF BUSINESS DEVELOPMENT IN
UKRAINE
Abstract.
The article examines the theory of mechanisms in economic phenomena and processes and outlines their regulatory role. Nature, system essence, functions, and conceptual model of the organizational and economic mechanism are substantiated. The structural components of the organizational and financial subsystem of the mechanism have been established. The levers and tools of the influence of the managerial and economic mechanism on entrepreneurial activity for the performance of tasks and the achievement of goals have been studied. The category of organizational and economic mechanisms is defined.
Keywords: mechanism, relations, levers, instruments, system, regulation, activity.
Formulation of the problem. The use of the term "mechanism" was initiated by the founders of the mechanism philosophical current, who relied on exclusively rational laws of the construction of the universe, adhered to the mechanistic concept of the world and united in a philosophical scientific school called "mechanism." Later, this concept was also used in the natural sciences. Since any mechanism is a set of interdependent and interacting elements of the system, parts (aggregates) in the presence, on the one hand, of internal orderliness and coherence between them, and on the other hand of differentiation and relative autonomy, the production system is also a kind of "mechanism" with a certain degree of its perfection, aimed at solving its deep internal contradictions.
In the economic system, the term "mechanism" was used for the first time by K. Marx in the first volume of "Capital" to characterize the processes of production functioning, considered as an "economic mechanism" [1, p. 72]. Various stages of the economic development of society required an adequate mechanism. However, the problem of knowledgeable and active use of the mechanism of the production system as a practical task was outlined only in the 20th century. In scientific usage, the expressions "mechanism of social production", "state economic mechanism", and "mechanism of the production system" are commonplace.
The terms used are an abstraction of social relations embodied in the category called "organizational and economic mechanism."However, for a long time, this category was not a special subject of scientific research, so its economic essence and content remain insufficiently studied, contradictory, and improperly substantiated. When discussing this subject area, problems arise regarding the unambiguous interpretation, mission, formation, and regularities of the functioning of the organizational and economic mechanism, and, accordingly, the ways and means of its improvement.
Analysis of recent research and publications. The domestic scientific school actively researches the
processes related to the formation of the organizational and economic mechanism in the 60s of the last century. In the 70-the 80s of the XX century. Its content is determined by transformational processes in the economy and is considered based on the action of regularities of the reflection of processes and phenomena, as well as the management of the state, industry, region, and enterprise, especially in the field of planning, simulation and organization.
L. Abalkin, P. Bunin, I. Lukinov,
O. Onyshchenko, B. Paskhaver, A. Chukhno, and others made a significant contribution to the development of the theory of the "organizational-economic mechanism" in the period of the planned-centralized economy and the administrative-command system of management. As follows, L. Abalkin defines the peculiarity of the mechanism of the production system in the reflection of processes and phenomena characteristic of this or that object at a certain stage of its development and considers this mechanism from the standpoint of social establishments as a surface layer of production relations, a connection of socio-economic relations with other links of the formation [2; 3, p. 8]. E. Vagina and M. Pokydchenko highlight the problems of the mechanism of the production system in dynamics [4], N. Petrakov, and others. Investigate the mechanism in the system of optimal functioning of the economy [5], A. Chuhno etc. are working out ways to improve it [6], P. Bunich etc. outline the mechanism of economic management [7], F. Gumerov etc. reveal the content and determine the supreme directions of its development [8]. E. Minaev and others paid attention to the organizational and economic mechanism of the enterprise, its concept, and practical aspects [9], and efficiency by V. Kashin and V. Ionov [10].
The analysis of publications devoted to the organizational and economic mechanism of this period shows the absence of a single methodology for its research and formation. In the process of development of social production and scientific circulation of the term
"organizational and economic mechanism", views on its interpretation change, become diverse, and sometimes contradictory.
The formation of the organizational and economic mechanism in the 90s of the 20th - the beginning of the 21st century is related to such aspects of macro and microeconomics as public accounting relations (Sa-bluk P., Malik M., Oliynyk V.) , financing, insurance, taxation, management, and regulation (Demy-anenko M., Stetsyuk P., Aleksiychuk V ., Navrot-sky S., Mocherny S.) [11; 12].
In the economic encyclopedia, the organizational and economic mechanism is defined as a system of basic forms, processes, and levers of using economic laws, resolving contradictions of the social method of production, a realization of property, as well as comprehensive development of a person and coordination of his interests with the importance of the collective, society. It is formed by the interaction of individual links, parties, and such elements of the economic system as productive forces, technical-economic and organizational-economic, and production relations (or relations of economic ownership) [13, p. 269-270].
According to the A. Chuhno's definition, the mechanism is an organic component of the economic system; the functional side of industrial relations; a way of organizing and managing production with its inherent forms, methods and means that implement socioeconomic, organizational-economic and scientific-technological principles and relations in the interests of meeting the needs of each business entity and society in general [14].
In this context, the term "mechanism" is used as an activity regulator. At the macro-level, the mechanism regulates the functioning, reproduction, and development of the national economy, at the meso-level - industries, and at the micro-level - enterprises. It is a means of solving tasks or solving problems of production, distribution, exchange, consumption and reproduction.
The purpose of the article is the methodological substantiation of the system essence and the construction of a conceptual model of the organizational and economical mechanism with an outline of the content of its organizational and economic subsystems as organizational and economic mechanisms.
An overview of the main material. Predominantly, the organizational and economic mechanism is outlined in a system of objective relations, expresses the essential features of economic life, conditioned by relations that open up with the knowledge of categories and laws and the principles and methods established by them, which characterize the behavior of people in financial life. In this sense, the mechanism is considerably broader in the scope of economic laws and specific forms of their manifestation, since it covers, in addition to the basic ones, superstructure relations, which include political, legal, moral, and ethical ones that actively influence the basis.
The nature of the organizational and economic mechanism is based on the economic interests of vari-
ous social groups as one of the main forms of manifestation of industrial relations, providing space for the development of society. The formation of the mechanism is based on the consideration of interests, influence on them, the management of interests, and through interests, the realization of interests, the totality of which is the driving force of social progress [15].
The interpretation of the organizational and economic mechanism as a special formation or organization of elements and connections that ensure the development of a certain object has become generally accepted. At the macro level, in the system of this mechanism, its spheres such as legislative, executive, economical, financial, economic management, self-management, and others are distinguished as independent objects. Simultaneously, each of these spheres (systems) includes a set of elements (subsystems) that form a certain order, the structure of the arrangement in the act, and the action of the system in general. Thus, all constructive subsystems of the construction of the organizational and economic mechanism, functioning independently and purposefully in the system, achieve unity and act as a single entity.
The essence of the organizational and economic mechanism is manifested in the process of the dialectical unity of its content and form. The content is defined by the system of industrial relations making these components, and the form is defined by the system of organizational implementation corresponding to it. The dialectical relationship between the content and the form of the mechanism is manifested in its functions arising from the tasks implemented in its system, namely [16]:
- bringing the levels of development of productive forces and industrial relations into the line with each other under the requirements of economic laws (cost, competition, demand/supply, market equilibrium, etc.) , knowledge and use of these laws;
- harmonization of social and personal importance and implementation of the interests of the individual, collective, social and professional groups to resolve socio-economic contradictions that go beyond economic laws;
- stimulation of scientific-technological and socio-economic progress with a focus on compliance with ecological principles of development;
- decentralization of state administration, demarcation of competencies and powers of state authorities and self-government, implementation of mechanisms and procedures of public participation in solving problems and strategic and tactical tasks.
Thus, the organizational and economic mechanism, according to the definition of Yu. Luzan creates conditions for the effective use of the potential of economic growth, ensuring harmony of interests and justice, the ecological and social direction of economic development, and the establishment of democracy based on the construction of civil society [17, p. 14].
The structure of the organizational and economic mechanism as a complete system includes organizational and financial subsystems (Fig. 1).
Organizational and economic mechanism
Organizational subsystem Economic subsystem
International relations Productive powers -
Social and legal relations Industrial relations (economic property relations)
Technical and organizational relations A set of forms and types of economic activity
Fig. 1. Conceptual model of the organizational and economic mechanism Source: the author's development.
The organizational subsystem includes international relations formed in the process of Ukraine's membership in international organizations and worldwide cooperation; socio-legal relations aimed at satisfying the legitimate interests of society, labor groups, companies, and enterprises, which need to be regulated by law; technical and organizational relations related to specialization, cooperation, combination and concentration of production, development of horizontal communications in the process of innovations and affect the organization of work, the structure, and forms of employment, the formation of the internal labor market. The economic subsystem is characterized by productive forces that produce material goods; industrial rela-
tions arising in the process of social production, distribution, exchange, consumption, and reproduction of material goods; a set of forms (private, collective, state) and types of economic activity that ensure the processes of production of material goods.
In the organizational subsystem, a mechanism is formed, which includes a set of levers and regulators of economic life and can change over time and the requirements of the internal and external environment. Levers and tools of influence on economic activity ensure an organized, purposeful, coordinated interaction of the elements of the organizational mechanism system with the aim of achieving the set goals and objectives (Fig. 2).
Fig. 2. Model of the organizational mechanism
Source: the author's development.
The main organizational lever of the market system is market self-regulation, in the process of which the proportions of development are formed by market methods subject to market signals about changes in the situation. The free market contributes to a more efficient distribution of resources, but it can respond merely to those common needs that are revealed through solvent demand, which does not ensure the production of socially necessary goods and the preservation of natural sources, and causes the instability of development with its inherent aggravation of social tensions in society and inflationary processes.
To reduce administrative pressure, market self-regulation is also carried out by market representatives themselves. Business entities establish their norms/standards/rules of activity and monitor their compliance by all members of the organization, sanctioning violations [18].
The institutional environment is formed by official and unofficial rules and procedures for their implementation, which increase the efficiency and stability of the market system. Official Rules (formal institutions) are provided with legislative and forceful promotion of legal authorities (supporting institutions), while unofficial rules (contracts and voluntarily accepted codes of conduct) are supported by established traditions, norms of behavior, and ethics and acquire the status of informal (interned) institutions. Formal institutions include normative legal acts (laws, resolutions, decrees, orders), establish norms, regulations, and restrictions, and regulate relations between business entities. Informal societies are formed by self-governing institutions - associations, unions, unions of commodity producers, and consulting centers [19, p. 285].
The key function of institutions consists in harmonizing economic relations and managing them, providing signals (generating information) about the needs of society in combination with the simultaneous resolution of emerging problems, and maintaining the balanced interests of all market participants. State institutions regulate relations between the state, business entities, and consumers of products, and ensure budget filling, subsidies, standardization and environmental control at the legislative level [20].
Disadvantages of market self-regulation determine the expediency of state intervention in business processes. State regulation is carried out by effecting significant changes in the conditions of market functioning in the type of direct (state orders, financing of targeted complex programs) and indirect (taxes, subsidies, prices) influence, carried out by legal (legislative acts, social norms, national norms, and standards), administrative (decrees, resolutions, orders that allow, prohibit, limit and regulate) and economic (indicative planning) methods and means of the power of the state in the form of legislative and executive bodies on the sphere of entrepreneurship and market infrastructure to generate or ensure conditions for their activity following the national politics In this way, nation intervention in the economy is reduced to the creation of appropriate situations for the functioning of the market.
The information environment includes a set of technical and software means of storing, processing,
and transmitting information, as well as organizational, economic, and cultural conditions for the implementation of informatization processes. The concept of information is presented in philosophy as a form of reflection of the real world, one of the attributes of matter that reflects its structure.
Manifestations of the information environment are characterized by an increase in the role of information and knowledge in the life of society; the growth of the number of people employed in IT, communications and the production of information goods and services, the strengthening of informatization and the importance of IT in business and social processes and relations.
Created by a collection of information, information infrastructure, and entities that collect, form, distribute and use information, the information space ensures effective information interaction of people, access to global information resources, and satisfaction of consumer needs regarding information products and services. The world of information around an individual becomes the sphere of his information activity.
The properties of the information environment are defined by the information content of any given information space and its constant and long-term storage, as well as variable, projective and communicative orientation and its mass replication. The functional information environment provides operational information exchange, storage of information for further usage in the system of knowledge reproduction, maintenance of information and processing of consumer requests, cognitive assistance in transforming information into user understanding, use of information architecture for search availability of information in the accumulated volume [21].
The internal information environment, the information resources of which are related to the information space of enterprises and organizations, serves to unite divisions and business units. Its structure is determined by information, knowledge and people who are in a state of informational interaction. Extensive informatization in the system of organizational and production factors, which are accompanied by the creation, accumulation and use of information, become a defining information technology method of activity.
Informatization in all spheres of social life, elec-tronification, digitization and robotization of production and everyday entity, on the one hand, frees a person from the producing process itself, places him alongside it, and on the other hand, increases the requirements for the educational and qualification level of the employed, the intellectual capacity of production, labor and product.
The rapid growth of information resources and the emergence of the latest technologies cause fundamental changes in the activities of enterprises and their business processes. The information space of deployment and flow of information sciences, permanent interaction of the processes of production and consumption of information unites people, integrates different types of human activity and economic subjects into a single socio-cultural and informational environment through the
implementation of interactive and mobile communication, the actualization of interests and socialization of relations in various spheres.
The external information environment, the organizational tools of which are information networks and digital technologies, includes a set of relationships that arise during the formation and use of information resources based on the creation, collection, processing, accumulation, storage, search, distribution and provision of documented information to the consumer, as well as the creation and the usage of IT and means of their support, information protection, rights of subjects participating in information science and informatization.
In the conditions of economic globalization and European integration, powerful flows of information consolidate the information environment, contribute to the establishment of "rules of the game" on the world stage and intensification of interactions, and serve as a source of a transformation and control of geopolitical relations and competition, greening of production, standardization of product quality and safety offers.
The innovative environment is formed as a result of innovative activities, the conduct of fundamental and applied research by research institutions and organizations and the accumulation of scientific results, the attributes of which are new or improved products, new or modified technologies, more effective types of organization, specialization, cooperation, concentration, diversification of production, financing and lending, methods of labor organization, management of economic processes, forecasting of dynamics, etc.
However, by themselves, the issues of research project, created scientific and technical inventions, knowledge bases of new technologies, scientific works, patents and licenses do not automatically flow into the innovation process and therefore are not a sufficient condition for innovative development. A necessary stage of innovative activity represents the transference of inventions and technologies by the organizational structure, which forms a portfolio of offers and orders for scientific developments, carries out the commercialization of science-intensive products, their continuous improvement on the way to the market, evaluation with the determination of the share of remuneration to author groups in the form of royalties, capitalization and withdrawal in the kind of current technologies to the market and transfer to the sphere of production [22].
Despite this, notwithstanding with the presence of appropriate structures that contribute to the implementation of developments in production, scientific and technical inventions may remain inactive until the necessary economic conditions for their application appear. Limitations of financial resources for investments can remain the limiting factors of the innovation process. At the same time, the intensification of investing activities also does not always cover the modern sphere and ensure innovative investment. Under the condition of an extensive path of development, investments reproduce the existing technological base without transformations (modernization).
Although investing and innovation processes are closely related, riskier changes with uncertain outcomes do not respond as instantly to changing profitability conditions as investments. To give investing activity an innovative focus, additional measures are needed, based on the private interest of technological renewal of production to increase its competitiveness and bring a new product to the market to obtain the maximum profit from its sale.
The investment market is in close contact with self-regulating and regulatory factors. State regulation of financings ensures the balance of demand and supply of investment goods. It is aimed, first of all, at correcting the behavior of subjects of investment relations and involves direct management of state investments, control over investment activities and requirement of factors influencing investments. Accordingly, such a model of regulation of the investing sphere is formed, in which what the market cannot provide, the state supplies [23].
Activation of investment activity is carried out with the help of budgetary and credit-monetary levers of state influence. The dynamics and level of interest rates becomes the object of conducting credit and monetary policy. The direct influence of the policy is carried out according to the scheme: money supply - interest rate — investments — national (business) income.
The management environment of the organizational mechanism is arranged depending on the forms and scales of management and under the influence of internal and external factors. In joint-stock corporations, created due to the pooling of capital with the separation of capital-property from capital-function, the management environment is defined by corporate governance and requires efficient control. They also include limited-liability corporations with a strict separation of owners and managers.
The procedure for the creation and operation of joint-stock companies and their legal status, rights and obligations of shareholders is determined by the legislation of Ukraine [24]. The international standard "Principles of corporate government of the OECD" considers collective governance as including complex relations between the company's board, its board of directors, shareholders, and other interested parties (stakeholders) [25, p. 11].
The innovative approach to management in a joint-stock company is based on the fact that shareholders move away from the presentation of entrepreneurial functions, and hired professional managers to take on the performance of current tasks that go beyond the scope of a leased employee, carry out proactive business activities at their own risk, perform duties an entrepreneur.
In state-owned joint-stock companies, the range of issues of independent management decision-making is significantly limited. The state as a shareholder performs the macroeconomic function of regulatory influence to ensure national interests, the needs of public production and the country's population, and the micro-economic business of a shareholder-owner of corporate rights, related to economic action, control over reproduction and effective use of its property.
The purpose of corporate governance depends on the goals of the social system, the stages of the administration process, the types of management activities, the objects of management - common rights, the corporation as an official entity and the current activities of production units. From the point of view of the effectiveness of corporate management directly by the company as an enterprise, actions in the interests of the owners cannot always be justified. Norms and procedures of owners' relationships and their influence on management become necessary and extremely significant elements of it [26].
According to S. Puffer, D. McCarthy, "Corporate governance is one of those terms that everyone understands in their way, but at the same time, everyone agrees that good corporate governance requires severe moral behavior of managers, members of the board of directors and shareholders" [27, with. 48]. It should be based on the concept of social responsibility for the decisions and activities of them to shareholders, landlords, employees, and suppliers, consumers of products, financial intermediaries and territorial communities.
However, a fundamental division of functions in the field of corporate management of joint-stock companies is extremely rare. Customarily, it extends the scope of its influence to the entire enterprise management system, including control over business processes, strategic administration, values, etc. Executive bodies of joint-stock companies owned by the majority shareowners are typically wholly managed, which does not ensure their independence and leads to ignoring the rights of minority shareholders and concerned parties. Not always socially responsible corporate business is in addition in compliance with economic, labor, antimo-nopoly and tax legislation and the principles of sustainable development.
The improvement of the corporate governance system in the conditions of globalization is considered a necessary tool for the development of the capital market, a stable institution of responsible shared governance, the growth of business value in the long term and a source of the economic advance of countries.
Business management (enterprise management) is carried out in the production and scientific sphere to ensure the organization, coordination and regulation of
the making process, and in the socio-economic sphere to regulate the relations between the participants of the production means in conditions of division of labor and cooperation, the formation of them among managers and executors of technological processes and production tasks.
However, the integrity and viability of the business as an extended system are ensured thanks to the elements from which it is arranged. The totality of these elements constitutes the internal environment of the enterprise. It is designed and created taking into account the specifics of the activity, the circle of consumers, market conditions, business positions, etc. When arranging the internal environment, the management system must ensure that the characteristics of its most important components accompany the conditions of the external environment in which the enterprise operates.
The enterprise management process is considered an infinite chain of management decisions. The effectiveness of economic management depends on the successful use of the main functions of management (planning, organization, motivation, control) and other opportunities and approaches to the science of management, especially system analysis, economic and mathematical modeling, planning methods, the creation of communication links, the formation of social and psychological climate.
The process of developing management solutions includes several separate stages, each of which is based on the performance of certain types of work, considering numerous factors. With the increasing complexity of management in conditions of uncertainty and mobility of external factors, empirical decision-making methods, including expert assessments, carry out a significant role. Particular attention is devoted to methods of developing solutions and adequate management of problems. To overcome the problems associated with decision-making in complex situations, the concept of modeling management decisions that affect the effectiveness of decision-making is becoming widespread.
In the economic subsystem of the effective mechanism, an economic mechanism is established with levers and tools to influence on the functioning of the economic system, ensuring the development of productive forces and production relations of a set of forms and types of economic activity (Fig. 3).
Economic mechanism
Economic levers Economic instruments
Expenses/resources Financial, material, labor
V. ^
Manufacturing of goods/services Distribution, exchange, consumption
Incomes of various types Sources of various types of income
32_ECONOMIC SCIENCES / «€©LL©(MUM"J©UrMaL» #221141), 2022
Fig. 3. Model of the economic mechanism
Source: the author's development.
The economic leverage of costs/resources is based on the business nature of costs, caused by the limitation (scarcity) of resources, that is, access to resources at the market price and excess cash. The rarity of production supplies requires consideration of alternative options for their use and the search for the most efficient method of producing prices to obtain maximum profit. Therefore, the economic essence of production costs is based on alternative possibilities of profitable use of limited production supplies.
Costs are divided into constant costs, the cost of which does not be based on changes in the volume of production, variable costs, the value of which depends on the quantity of producing and marginal costs, which represent additional (variable) costs for each other unit of production. Such a division establishes a cause-and-effect relationship in production. Increased costs of one resource with a constant number of other production resources and production technology from a certain moment lead to the manifestation of the law of diminishing marginal productivity or increasing opportunity costs put differently, causing a decrease in production growth.
The effect of diminishing returns on costs (production efficiency) is caused by a violation of the proper ratio between the used resources, which occurs when the costs of some resources increase for a fixed (given) amount of others, incomplete use of available producing resources and an excessive amount of material stock.
Such negative economic consequences are typical for the short-term period of production under the condition of quantitative and qualitative changes of only certain factors of producing. When the entire production process is changed under the influence of material-technological and socio-economic progress, the law of diminishing marginal productivity practically does not manifest itself.
Managing the ultimate costs of the enterprise, which includes fixed and variable costs, determine the average production costs per unit of production, compare them with the market price of the product to make the profit (loss) of production, as well as analyze the dynamics of costs. A decrease in regular prices is ensured by increasing production volumes, enterprise sizes, or the effect of scale.
The relationship between the volume of production and the level of its average costs, which is accompanied by the saving of resources, serves to determine the optimal size of the enterprise and to establish trends in the growth of average costs with a more isolated increase in the scale of production.
Nonproduction costs consist of transaction costs. They are multidimensional, related to the functioning of the market, arise in the process of searching for information about suppliers and buyers, conducting negotiations, concluding and executing market agreements (contracts) , transferring and protecting property rights, and include spending money, time and psycho-physical energy.
Various costs are incurred in the process of production of material and spiritual goods and their appropriation in all spheres of the social picture, which includes the organic unity of production, distribution, exchange and consumption [13, p. 471]. The leading place among the phases of reproduction belongs to production, which is characterized by economic relations between people and is a labor means with a finished technological cycle and the result of a genuine good obtained. Based on production, a simple, narrowed, or expanded reproduction and renewal of the elements of the economic system is constantly carried out. The impetus for the development of production is provided by needs, which constantly change along with production. Satisfying some needs invariably leads to the appearance of others, modernization and improvement of production technologies, methods of provision and expansion of the product range.
Production is characterized by the presence of contradictions regarding needs, economic importance, and competition, which remains the driving forces of its development. Untimely resolution of these contradictions aggravates problems, reduces the effectiveness of activities, and restrains the process of development, and achievement of an aim or goals, the basis of which are needs and interests.
The essence of economic interests comes down to the specifically directed satisfaction of perceived requirements in resources and means of producing, items of personal consumption and conditions of functioning of business entities. They reflect the objective motivating motives of economic activity, determined by the place in the system of social production, division of labor and financial property relations. Economic interests encourage the formation of a system of material incentives for making concerning the receipt and distribution of income based on the results of live and physical labor.
Relations between people, manifested in the sphere of distribution, are formed in the process of appropriation of the produced product (service) by different categories of workers in the type of business income, rent, taxes to the state, payments, remuneration of employees, etc. Distribution in the economic process links production with consumption and determines the shares of the manufactured product for its appropriation and further use. Indirectly, distribution continues the producing process, stimulates labor, develops opportunities and establishes the proportions of development. The material content of distribution is determined by production conditions and labor results.
Simultaneously, distribution relations affect production by distinguishing deductions for various costs to produce a product, including wages, taxes and fees, interest on credit, dividend payments and enterprise development. In the process of distribution, funds for using up, replacement and collection are created, and contradictions arise regarding the renewal and expansion
of producing, wages of employees and profits of enterprise owners, concerning accumulation and consumption.
Relations in the field of exchange, the beginning of which is on top laid by production, arise in the process of buying and selling goods and services. With the help of exchange, the goods move to the consumer. Exchange contributes to satisfying needs, finding unused opportunities for their satisfaction and offering new products. Objects of exchange include land, money, and valuables. There is, in addition, an exchange of activities, skills, experience, information, etc.
Externally separated from production, exchange mediates the previous phases with the consumption of manufactured products. It seems to complete the producing process and at the same time maintains it, is intertwined with distribution and is directly related to the satisfaction of needs. The core elements of exchange include capital circulation, the proportionality of reproduction, optimization of production and product structure, market and its infrastructure, financial and credit relations and money circulation. Accelerating the turnover of resources and timely delivery of products as intended increases the role of exchange in the economic system.
According to the law of importance, an exchange is characterized by the appropriation of approximately the identical amount of profit for an equal amount of capital. The non-equivalence of exchange, revealed in the process of buying and selling goods, leads to the overflow of capital from the sphere of low profitability to the sphere of high. However, the operation of the law of value does not mean the exchange in each specific case is carried out according to value. The cost, as a monetary expression of value, obtain not inevitably its exact measure, usually, it spontaneously deviates from the importance of goods. Pricing does not fully meet the requirements of the law of value because there are other laws affecting exchange in the market. But in the conditions of competition, these deviations cannot be significant and last over time, and therefore value fluctuations around the use practically do not violate the law of value.
However, the manifestation of the law of value due to spontaneous price fluctuations affects the development of commodity production, forces commodity producers to improve the organization of work, to introduce progressive technologies. As a result, the level of development of productive forces increases, the means of production and labor force are distributed among various industries, and proportionality is achieved between economic spheres.
The final phase of social reproduction represents the relations between production and non-production (social, individual, personal) use, where the produced product is acquired by the ultimate consumer. As the ultimate goal and generalizing factor of production, consumption accumulates the effectiveness of other phases of social reproduction. At the same time, consumption as distribution and exchange also depends on production and affects production, restores needs for its results, stimulates the appearance of new products and
makes it impossible to release an outdated range of products of enterprises.
The socio-reproductive process, which includes production, distribution, exchange and consumption, a system of commodity-money relations between economically separated commodity producers and consumers, ensures final consumption and receipt of expected income by all market operators. According to the rules of the Tax Code of Ukraine, the sources of income of enterprises obtain income from operational activities (from the sale of goods, performance of work, and provision of services) and other revenue (in the form of dividends, from rental/leasing operations, etc.) [28].
For the aggregated economic units of the macroeconomics as a totality and the basis that unites the "economy of firms", the economic mechanism sets the rules of the "economic game", orienting the activity and behavior of economic entities in the direction of the realization of the established goals. It acts on market components (production and consumption) and the interface sphere that connects them and regulates economic relations between subjects through the interaction of supply and demand.
The definition of an economic mechanism as a strategic game based on the interaction between economic issues, a description of how business subjects can act and what a set of their actions will lead to, belongs to the laureates of the Nobel Prize in Economics (2007) Leo Hurwitz, Roger Myerson, Eric Maskin for his "fundamental contribution to the theory of economic mechanisms". The economic mechanism, according to Leo Hurwitz, defines a set of choices of economic subjects, each of which is associated with some result. In this sense, the mechanism arranges a system of incentives and approaches the concept of "economic institution" [29]. However, the institute cannot represent a separate mechanism but represent a complex set of economic mechanisms.
At the same instant, L. Hurwitz focuses attention on the importance of integrating economic hypothesis and the theory of institutions for solving the problems of institutional design of reforms: the effective design of superstructures of existing institutions, current institutions, rules and mechanisms of coercion, and compliance with these regulations, must contain at its core an analysis of people's behavior in within certain incentives or mechanisms. Traditionally close to the perception of economists, such a part of the institutional structure as an economic mechanism is unsustainable without reliance on social institutions of a deeper level.
As follows, the economic mechanism endures a way of ensuring the implementation of the requirements of objective economic laws in the process of subjective human activity. Its levers and tools, which combine objective and subjective factors in economic activity, make it possible to obtain options for choosing the optimal solution in the process of purposeful development and are more effective than coercion.
Conclusions. The organizational and economic mechanism expresses the peculiarities of economic life and includes, in addition to the fundamental ones, superstructure relations. Its nature is based on economic
importance as a form of manifestation of industrial relations in the development of society. Accordingly, the formation of the economic process is based on consideration of interests, influence on interests, the management of interests, and through interests and realization of interests as a driving force of social growth.
The organizational and economic mechanism represents a combination of elements and connections that arrange an exact order, the structure of the system in action and the action of the system in general, independently and purposefully functioning in the system achieve unity, act as a unique entity and ensure the development of a certain object.
The essence of the organizational and economic mechanism is manifested in the process of the dialectical unity of its content, which is outlined by the arrangement of industrial relations and the form, which is determined by the corresponding system of the organizational embodiment. The dialectical relationship between the content and the form of the mechanism is manifested in its functions arising from the tasks implemented in its structure.
The structure of the organizational-economic mechanism as a proper system includes organizational and economic subsystems that generate conditions for the effective use of the potential of the economic process, ensuring harmony of interests and justice, the ecological and social direction of economic development, and the establishment of democracy based on the construction of civil society.
In the organizational subsystem, a mechanism is produced, which includes a set of levers and regulators of economic life and can change over time and the requirements of the internal and external environment. Levers and tools of influence on economic activity ensure an organized, purposeful, coordinated interaction of the elements of the organizational mechanism system to achieve the established goals and objectives.
In the economic subsystem of the economic mechanism, an economic mechanism is produced with levers and tools to influence on the functioning of the economic system, ensuring the development of productive forces and production relations of a set of forms and types of economic activity. The economic mechanism represents a way of ensuring the implementation of the requirements of objective economic laws in the process of subjective human work. Its levers and tools, which combine objective and subjective factors in economic activity, make it possible to determine options for preferring the optimal solution in the process of purposeful development and are more effective than coercion.
As follows, the organizational and economic mechanism comprises a system of interdependent organizational and economic levers and tools of influence on the functioning of the economy, which in their interconnection and interaction ensure economic development, as well as an integral organizational and economic component of production that affects the performance of its separate functions and operations, the use of a set of resources and methods of their combination for the implementation of the process, which is in a state of waiting for regulatory measures and management actions aimed at profitable entrepreneurship.
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