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Method of strategic planning and management decisions making considering the life cycle theory
Репозитарій Національного Авіаційного Університету
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| Title |
Method of strategic planning and management decisions making considering the life cycle theory
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| Creator |
Смерічевський, Сергій Францович
Smerichevskyi, Serhii Frantsovych Князєва, Тетяна В'ячеславівна Kniazieva, Tetiana Viacheslavivna Колбушкин, Юрий Петрович Kolbushkin, Yurii Petrovych |
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| Subject |
life cycle
portfolio analysis strategic areas of management financial results management decisions efficiency |
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| Description |
It is important to note a significant contribution tothe development of the strategic planning theory and practice of such foreign experts as I. Ansoff, M. Weber,H.-L. Gantt, M.-H. Mescon, F.-W. Taylor, H. Fayol and others; domestic scientists-economists: O. Amosha,V. Heiets, B. Danylyshyn, M. Dolyshnyi, M. Melnikova, A. Muzychenko, O. Povagny, etc. To the theme of lifecycles theory, many works of domestic and foreign authors are devoted: I. K. Adizes, L. Greiner, D. Katz,R.-F. Kahn, H. Lippitt, T. Malaya, O. Minochkina, Yu. Shambel. Most of the work focuses either on thecommon use of the life cycles theory and forecasting or on the application of the life cycles theory in thesystem of strategic planning and management. At the same time, the issue of strategic planning integratedstudy of the life cycles theory and the uncontrolled external conditions accounting remain insufficientlystudied despite a large number of works in this area. From the point of view of practical implementation among the most actual and complicated tasks, thefollowing can be named: 1. Application of the life cyclestheory in quantitative prediction of the economicsystems development. 2. Identification of factors that determine the stage of the system’s lifecycle and key factors that influence the development of the system at each stage of the life cycle, management of the life cycle system. 3. Instruments for determining the stages of the development of the system life cycle. 4.Accounting for uncontrolled and controlled factors in the formation of a system development strategy based on the life cycle theory. 5. Adjustment of the life cycles of the system elements (for example, when forming an optimal market portfolio that consists of the organization strategic business units). The purpose of the research is to reason the strategic planning methodology under an undefined external environment with the consideration of the life cycle theory. The scientific novelty of the research is to improve strategic planning in conditions of undefined external environment taking into account the life cycle theory of the object that includes: the definition of key criteria for the product life cycle assessment, the definition of the scope of limits for the solvable problem, the definition of parameters of models stability, forming models for analysis, the mechanism of step-by-step adjustment and assessment of strategic decisions effectiveness on strategies. The methodology assumes a certain sequence of the product lifecycle study in retrospect and at the current moment. Then the shortand long-term strategies modelling and development of options for their implementation are made. The life cycles theory has been applied in relation to different systems and processes: countries, regions, industries, types of activities, enterprises and organizations, technologies, strategic business units, manufactured products, etc. There are over 1.5 thousands of different types of economic life cycles ofsystems. Among the most famous are Greiner Growth Phases, Joseph Kitchin inventory cycles, Jaglar’s machinery and equipment investment cycles, Kuznets Cycles, Kondratiev Cycles. The following issues are considered in the research: the theoretical aspects of strategic planning and management at the modern stage are discussed, the necessity of taking into account the stages of life cycles in strategic planning is reasoned, method of strategic planning of the life cycle stages is improved, an algorithm of strategic planning under conditions of an indefinite external environment and accounting uncontrolled factors is formulated. Economic history and modern economic practice indicate that the rise and fall of business activity at the mega- and macro-levels are largely conditioned by two factors: scientific discoveries in the production means; great (sharp) changes in the political superstructure and economic relations of the states. The analysis of micro-level cyclic fluctuations is carried out on the basis of life cycle product models, the organization’s life cycle, the technology life cycle, etc. From the practical point of view, the applicability of the life cycles theory in the strategic planning of businessentities is especially interesting. The subject of the study is a set of theoretical and methodological aspects of development strategy formed for objects (country, region, branch, enterprise) on the basis of the life cycles theory under the external environment uncertainty. The methodology of strategic planning under the external environment uncertainty with the consideration of the life cycle theory includes: the definition of key criteria for assessing the product lifecycle, the definition of the limits scope for the solvable problem, the definition of parameters of models stability, the formation of models for analysis, setting the problem under uncertainty, the mechanism of step-by-step adjustment, and effectiveness assessment of strategic decisions based on strategies, the algorithm for the integrated assessment of the strategies effectiveness taking into account the uncertainty factors. Strategic planning is not characterized by temporal intervals but by a set of strategies, each of which is determined by the ways of achieving the main object objectives. For a rapid analysis of the product life cycle, the external indicators are used, such as: the growth rate of the product market, the relative growth rate of the product (compared to the growth rate of the entire market of the region or country), the firm market share, the firm relative market share (compared to the market share of leading competitor), and internal indicators, such as: the dynamics of enterprise revenue by product, the dynamics of company profits by product, the dynamics of enterprise profitability by product, the dynamics of enterprise investment. For each indicator that describes the enterprise performance, the directions of change are taken: α – growth, const – constant or β – decrease. The methodology involves a certain sequence of studying the product life cycle in retrospect and at the current moment, then the modelling and development of options for short- and long-term strategies implementation are made. Results of the survey are to substantiate the methodology of strategic planning under conditions of external environment uncertainty with the consideration of the life cycle theory. Practical implications: the possibilities of using life-cycle models allow: 1. reasonably predicting sales and plan production program; 2. determining the basic strategies at different stages of development; 3. determining the sequence of stages of enterprise development; 4. ensuring harmonious interaction of organizational characteristics with the external environment factors that influence the process of organizational development. Increasing the sustainability of the organization’s development can be achieved by re-establishment of dynamic changes in the plan in terms of using effective methods for forecasting with the consideration of the life cycle theory. It is necessary to take into account the interconnection between all levels of life cycles: industry, technology, enterprises, product; ensuring the competitive advantage of the organization. Using the theory of optimal solutions making in uncertain conditions under the analysis of long-term projects allows transferring qualitative factors into quantitative indicators that can be used in the future to bring investment projects to the same kind and choose the best. In conditions of increased uncertainty of the external environment, it is necessary to develop the theory of enterprise management, taking into account its life cycle, as well as the life cycle of its separate elements and processes at all levels. Combination of strategic management with the life cycles theory will increase the objectivity and effectiveness of taken management decisions. The accounting of the organization life cycles in strategic planning allows choosing an effective strategy. |
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| Date |
2020-05-28T05:36:57Z
2020-05-28T05:36:57Z 2017 |
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| Type |
Article
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| Identifier |
S.Smerichevskyi, T.Kniazieva, Y.Kolbushkin. Method of strategic planning and management decisions making considering the life cycle theory // Baltic Journal of Economic Studies, Volume 3 Number 5. Riga: Publishing House “Baltija Publishing”, 2017, 175-182 pages.
http://er.nau.edu.ua/handle/NAU/43056 10.30525/2256-0742/2017-3-5-175-182 |
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| Language |
en
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| Format |
application/pdf
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| Publisher |
Riga: Publishing House “Baltija Publishing”
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