FORMATION OF A SYSTEM OF SUSTAINABLE DEVELOPMENT OF ENTERPRISES

• Main Author: N. Vasiutkina
• Format: Article
• Language: English
• Published: LLC "CPC "Business Perspectives" 2014-06-01
• Series: Економіка розвитку
• Subjects: strategic corporate governance; management system; interaction of subsystems
• Online Access: http://www.ed.ksue.edu.ua/ER/knt/ee142_70/e142vas.pdf

The article identifies the components of the system for managing sustainable development of an enterprise. The system of sustainable development of an enterprise is formed owing to two subsystems: of strategic and corporate governance. The externally oriented subsystem of strategic governance is aimed at correlation of the formed external environment and key internal objectives of an enterprise – the mission as a general vector of its development in the external environment and hierarchically structured system and subordinate objectives of the enterprise, that simultaneously serve as reference points for the implementation of financial and economic activity of an enterprise and as a criteria/indicators of its effectiveness. The main objects that are influenced by the strategic management subsystem are the mission of the company, the hierarchy of its key objectives/performance results and elements of the environment. The instrument of coordination at the level of strategic management is a set of strategies (corporate, competitive, product and marketing, functional, growth strategies, etc.) that will help to achieve the goals set to the enterprise in the most optimal way. Internally oriented subsystem of corporate governance is directed to creating and forcing the mechanism of the agreed direction of available resources and competencies to achieving the set goals and providing the necessary performance at all levels of the hierarchy of the development of the company potential – material, energy and information. The objects that are influenced by the corporate governance subsystem are some of its internal objectives – resources and competences. The instruments of coordination of resources and competences with the objectives and expected results of modern enterprises are: the system of internal corporate planning of activities (e.g., based on the concept of BSC); organizational structure of the company with the distribution of rights, responsibilities and authorities, the business model of the company and the sum of its primary and secondary business processes, the enterprise budgets subsystem, the subsystem of calendar planning and implementation of the planned activities. The system of strategic management forms the upper, externally oriented level of the management hierarchy of an enterprise, and the system of the corporate governance creates a lower, internally oriented level of the management hierarchy. Sustainable development of an enterprise gets possible by the coordination of the internal and external levels of the management hierarchy that takes place at the level of formation of the goals of an enterprise and determination of the needed resources and competencies to achieve those goals. Complete coordination of all the links that are built in the system is effected through functioning of the information provision subsystem and the control and adaptive subsystem. Stability and sustainability, continual development takes place in the frames of the determined subsystems and by means of their common activity and formation of the subsystem of the dynamic management of the potential development.