SUSTAINABLE BUSINESS DEVELOPMENT PERSPECTIVES

Change management at enterprises: basic elements for ukrainian enterprises

Raisa Hrinchenko ^1, Oleksandr Litvinov ²

^{1, 2} Odessa national economic university, Department of business economics and business organization, Odessa, Ukraine

https://doi.org/10.5817/CZ.MUNI.P280-0197-2022-6

Abstract

Military actions on the territory of Ukraine, the consequences of limiting the activities of economic entities in wartime require a new approach to enterprise management, which would be able to respond flexibly and adapt to changes in operating conditions, seek ways and sources of resumption to meet the urgent needs of the state and further accelerating the recovery of the national economy. This paper examines the theoretical approaches to change management in enterprises and considers the basic elements of change management . Drawing on a mixed-methods design, the paper examines algorithm of the change management formation. The paper explains basic elements and goals of the change management for Ukrainians` enterprises. The paper contributes to change management by explicating the components of the change management system. It is proposed to present the general management system of adaptation of the enterprise as a cyclical movement. The management system of enterprise adaptation to change is a combination, of a system of principles, functions, tools, methods and tools of the most successful, effective management concepts, formed separately for each of the four components: organizational and economic, legal, technological and social, based on analysis and assessment of the preconditions for the formation of such a system using an integrated approach to analysis and evaluation. The change management system is based on a combination of elements of system, functional and process approaches, which allows the company to combine techniques and management methods for the components of the components of the change management system.

Keywords : changes, management, enterprises, adaptation, system.

1 Introduction

Negative phenomena in the structure of the modern Ukrainian economy requires Ukrainian enterprises to implement and use effective management systems that will create the basis for improving the efficiency of activities aimed at developing all sectors of the economy and improving living standards in the country.

The scientific basis for the possible development of modern enterprises is the formation of theoretical and methodological basis for creating a management system for adaptation to changes in their activities, substantiation on a scientific basis of principles, factors, methods and tools of management, taking into account market conditions.

The effective operation of any enterprise must take into account modern components of the world in the formation of management systems. These components are the basis for the formation of a management system for adaptation of enterprises to change, which should be based on the assessment of the prerequisites for such adaptation, taking into account all options for possible changes. It is the simplification and generalization of the procedure for assessing the prerequisites for adaptation, the availability of opportunities for various types of change, gives the company one of the main advantages in today's business world - time. The time that the company can spend not on the analysis and evaluation of its capabilities, but on the formation of a management system and its implementation. Time gives benefits.

2 Methods

Any enterprise is an open system that connects activities outside and within the enterprise. Considering the spheres of activity of modern enterprises, it should be noted that in recent years there has been an intensive increase in the volume of activity in the non-productive sphere. However, in such conditions it becomes especially important to solve the problems of enterprises in the manufacturing sector.

One of the main problems in the study of the environment of the enterprise is the lack of a systematic approach to the collection and analysis of information in modern enterprises. Research is conducted on individual components of the operating environment, does not take into account the relationships between the action of factors and does not form a comprehensive approach to the formation of a management system for adaptation to change.

The change is a possible movement of any elements of the system. Such a movement can have a positive or negative effect on the company, it can be predictable or unpredictable, controlled or uncontrolled, etc.

Changes accompany the activities of the enterprise at all stages of its life cycle.

Changes affect the level of fitting people to their jobs (Caldwell, 2011,2017). People are attracted to jobs that align with their values (Arieli S. et al., 2016; Knafo A. et al., 2004; Sagiv L., 2002; Schneider et al., 1995). Change recipients are likely to view a change initiative that changes work to the degree that it corresponds to the opposite values in the value structure negatively because it has negative consequences for the attainment of their values (Långstedt et al., 2021) .

After the pandemic eases, longer-term strategic changes may be needed to navigate the competitive landscape arising in the ‘New Normal’ which has resulted from technological, socio-political, and institutional changes ( Ahlstrom D.   et al., 2020 ).

This New Normal is unlikely to be a static equilibrium, because the pandemic shock has triggered another unexpected dynamic (Hitt et al., 2020) .

Organizational hybridity, which is an integration of different strategies, logics, and structural forms (e.g., structural flexibility) to manage complex problems, may be required to manage resources and stakeholders more effectively in the post-pandemic era. Additionally, firms need the agility to design and implement strategic changes effectively, which requires fluidity, speed, and mindsets that encourage innovative thinking and resilience (Hitt et al., 2020) . . 

The influence of groups of environmental factors on the preconditions for change at the enterprises that detected:

- environmental factors: cyclical factors and chaotic factors (macro-environment and micro-environment factors)

- factors of the internal environment.

Thus, the main groups of factors influencing the preconditions for changes in the activities of any enterprise were identified. It was observed that the external and internal environment of the enterprise may depend on the objective and subjective processes occurring in the economy.

In the modern scientific literature there are two classes of mechanisms for changing the system ( Мельник Л., 2005; Чорнобай Л., 2013).

1) adaptive mechanisms - characterize the changes that allow the system to adapt to the dynamic changes of external and internal factors without losing system integrity;

2) bifurcation mechanisms - characterize the changes in which the organization as a system does not maintain integrity and while maintaining acquires a new quality.

Considering and interpreting the concept of "change", modern scientific schools do this in three main ways:

• external changes,

• internal changes,

• administrative changes.

Thus, modern enterprises need to take into account the levels of management of external, internal and administrative change. However, the possibilities and effects of the bifurcation mechanism of system change should always be taken into account, although this approach somewhat narrows the issue of detecting changes.

Some scholars identify "change" and "development." In our opinion, the concept of "development" has positive consequences for the enterprise. And the concept of "change" can have both positive and negative consequences for the enterprise. Therefore, the concept of "change" is somewhat broader than the concept of "development".

Generalization and systematization of theoretical developments in the field of classification of existing types of changes are presented in table 1.

That is, during the operation of the enterprise is faced with both predictable and unpredictable changes. Such predictable and unpredictable changes can occur both in the external and internal environment, positively or negatively affecting the activities of the enterprise. Management functions can cause changes related to planning, organization, motivation, control and coordination, which is inversely related to the emergence and response to changes in the external and internal environment of the enterprise.

3 Results

Taking into account the main features of change in the formation of a management system for adaptation to change is the key to their clear understanding, timely detection and development of measures for effective adaptation. However, a significant number of signs of possible changes create obstacles to the formation of a simplified and unified approach to the analysis of such changes. It should be emphasized that in the study of environmental factors of enterprises should be given primary attention to the analysis of cyclical and chaotic factors of the macro- and meso-environment of the enterprise.

Significant among the signs of possible changes for the purposes of adaptation of the enterprise, in our opinion, are: the level of impact of change, the emergence of changes in management functions, the scope of change and the mechanism of change. These signs of change are the basis for further research and formation of a management system for adaptation of enterprises to change.

The adaptation of the enterprise to change, as one of the main subsystems of the overall management system of the enterprise, is a complex system with its own components and relationships between elements of the system. It consists of combination of system, process and functional approaches to management.

Within the system approach, the change management system is considered to be a combination of management and control systems through the relationships that accompany the management activities in this system and the mechanism for managing adaptation to change.

Table 1

Classification of changes in the enterprise

Source : ( Гринько Т et al., 2013; Кузьмін О. et al., 2017; Кучеренко В. et al., 2010, 2013; Мильнер Б. et al., 2008; Kuzmin O. et al., 2021).

In the context of the process approach, the management system of adaptation to change is seen as one that forms and regulates management measures for business processes of the enterprise.

Summing up the research in this case, it is necessary to generalize and systematize the existing possibilities of using methods of economic and mathematical modelling for the needs of forming a management system for adaptation of enterprises to change (Table 2).

Table 2

Economic and mathematical methods and models for the components of the management system of adaptation of enterprises to change

It is revealed that economic-mathematical methods and models by components of the management system of adaptation of enterprises to change can be divided into three main groups:

- methods of analysis and evaluation (empirical and statistical),

- data analysis models,

- business models.

That is, the formation of the unit for assessing the prerequisites for the formation of a management system for adaptation of the enterprise to change should be carried out in three main stages:

- analysis and evaluation of information by empirical and statistical methods;

- modelling of data analysis to identify projected trends and directions of development of components of the management system of adaptation of the enterprise to change;

- formation of business models for the components of the management system of adaptation of the enterprise to change.

The existing economic and mathematical methods and models for identifying the prerequisites for the formation of a management system for adapting enterprises to change were studied and systematized; the existing approaches to the formation of business models of the management system of enterprise adaptation to changes in the main components are studied and systematized. Such systematization made it possible to formulate an economic and mathematical basis for the formation of a methodological approach to assess the prerequisites for the formation of management systems for adaptation of enterprises to change and development of models for system components as one of the possible elements of instrumental support.

In determining the basic economic and mathematical models and methods suitable for the formation of components of the management system of adaptation to change, should take into account a combination of systemic, process and functional approaches to enterprise management.

4 Discussion

It is proposed to present the general management system of adaptation of the enterprise as a cyclical movement, consisting of the following stages:

- analysis and assessment of the conditions of the enterprise in the external (including the study of cyclical factors) and internal environment of its operation;

- identification of weaknesses and bottlenecks in the operation of the enterprise;

- identification of strengths and capabilities of the enterprise;

- forecasting the directions of enterprise development;

- formation of the mechanism of reaction of the enterprise to possible negative changes in the external and internal environment of functioning;

- formation of innovative approaches to enterprise management under the existing and projected conditions of enterprise operation;

- development and implementation of mechanisms for managing the adaptation of the enterprise to changes at the level of organizational and economic, legal, technological and social components;

- monitoring and control over the main stages and elements of the management system of adaptation of the enterprise to change;

- adjusting the management system of adaptation of the enterprise to changes with changing operating conditions.

The management system of enterprise adaptation to change is a combination, of a system of principles, functions, tools, methods and tools of the most successful, effective management concepts, formed separately for each of the four components: organizational and economic, legal, technological and social, based on analysis and assessment of the preconditions for the formation of such a system using an integrated approach to analysis and evaluation.

The change management system is based on a combination of elements of system, functional and process approaches, which allows the company to combine techniques and management methods for the components of the components of the change management system.

It is revealed that the use of modern theoretical and empirical economic-mathematical models of the management system of adaptation of enterprises to changes within the system itself can be justified only by the specifics of a particular enterprise. The use of theoretically sound models allows the selection of components for the functioning of the enterprise and building on their basis an empirically sound model. This approach allows the company to take a comprehensive approach to the formation of a management system for adaptation to change, using the world's theoretical achievements in this field and taking into account its own practical differences.

The combination of several approaches to the formation of economic and mathematical models of enterprise management system of adaptation to change will give enterprises the opportunity to form a truly effective management system of adaptation to change, which will take into account the prerequisites in the environment.

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Corresponding author

Dr. Raisa Hrinchenko

Odessa national economic university, Department of business economics and business organization

Preobrazhenskaya str. 8, 65000 Odessa, Ukraine

raya11@ukr.net