Such a system makes it possible to reach agreement between the various elements of the system.

Such a system makes it possible to reach agreement between the various elements of the system.

Many books have been written today about the complexity of these processes, which have already been mentioned. Interesting in this regard is the advice of David Cairns, who managed to revive the corporation “Xerox” in the 80’s, his successor Paul Aller. Passing the case, he wrote a short note in which he asked not to forget two things: to trust the premonition, because it does not fail, and to try to change the corporation as soon as possible.

It is also important to consider the location of the enterprise. Factors influencing this are given in table. 2.

Table 2. Factors of enterprise location

P / p


 The name of the factor


% of enterprises where this factor is vital


Geographical location



High level of labor productivity



Land transport



Weak trade union orientation



Stable government



Availability of highly skilled labor



Long-term financing



Energy sources



Availability of raw materials



Tax benefits



Tax credit



Availability of unskilled labor



Air transport connection



Large reserves of clean water



Rail connection



Management system at a modern enterprise

In business and politics, it is very important to determine in advance the specific meaning of terms used in everyday activities. This also applies to the concept of “management” in terms of its components, structure, although this was discussed in previous chapters of the book. The thing isthat in management there are different classifications that reflect the views of certain schools and do not coincide with each other. Therefore, businessmen using the concept of “management” can understand it differently. The management is similar to Rubik’s Cube. Its components can look different (as well as the faces of the Rubik’s Cube) depending on the approach taken

Management, like the Rubik’s Cube, cannot be broken down into independent components, as can be done, for example, with a car and its individual components. Management should and possibly be broken down into individual components, but it should be borne in mind that each of these parts contains the remaining components. For example, the idea of ​​management as a system of certain functions is quite correct: planning, organization, staffing, motivation, leadership, control.

But if you look closely at the staffing function, you can see that this function, in turn, includes planning a specific area of ​​work – personnel department, organization of this service, work motivation, unit management, personnel service, monitoring the state of personnel work.

The same will happen with other functions. In the very function of planning there is a need to clearly plan the process of developing various plans, to organize this activity, creating an appropriate structure, staffing the service with qualified professionals and so on. Therefore, it is necessary to draw the following conclusion: the main thing in the systematization of management is not to develop the best composition of the elements of the system, but not to forget about the connections between them.

It is this notion that will save practitioners from numerous errors and miscalculations when one or another element of the system forgets about integrity. After all, the effect of management in the form of synergy is not formed from individual elements, but from their interaction. Therefore, it is not a matter of which management system you choose, but how you adhere to the relationships between the elements. Numerous observations of the authors on the activities of organizations in business invariably confirm that the main problem – in the absence of these relationships.

Of course, there are many different business management systems in the world. But not all of them stood the test of time. Let’s focus on the three most common concepts:

functional management system; elemental management system; production management system.

The functional management system is based on the idea of ​​dividing management activities into specialized types of skilled labor or universal activities, the implementation of which in a certain sequence ensures the coordinated work of the entire organization. This approach to the management system is the oldest (since the time of A. Fayol) and the most common. And although in different books the composition of the functions looks somewhat different due to different levels of detail, the functional system is the most logical. This approach is shown in Fig. one.

As can be seen from this figure, the management system has primarily an input unit in which the goals of the organization are formed. The justification of these goals depends, on the one hand, on the environment (government, society, suppliers, customers, etc.) on the other hand – on the owners and employees of the organization. Before developing plans, you have to combine the interests of those who influence the organization and seek to get their piece of “meat”. Therefore, in the English language literature on business they are called “stakeholders” – persons whose services are the purpose of the organization.

Fig. 1. System approach to management.

On the other hand, the justification of goals depends on the resources available to the organization: employees, capital, capabilities of managers, technology.

After defining the goals, which often have to be repeatedly agreed, you can start planning, and then other functions: organization, staffing, management, control Normal management allows you to achieve certain results (productive outputs). They are detailed in the form of profits, services, goods, etc.

The management system covers two types of feedback. Hard communication (reproduction of the system – on the left) is carried out by target customers from the external environment. Depending on the results, employees, consumers, suppliers and other stakeholders make appropriate decisions about their relationship with the organization and influence its future. Dissatisfied employees leave the organization, and consumers stop buying products.

These target partners are not interested in management in the organization, but only the final results. Therefore, there are no links between “system reproduction” and management functions. Quite different is the “feedback” on the right. It is a flexible link within the organization: between results and individual functions, between the functions themselves, for example, between control and planning, organization and control of staffing and management, and goals. In this case, we have to take into account changes in the environment, in particular the opportunities and threats.

This system is convenient because it is universal for any organization and perfectly reflects the management process. But it is somewhat general and needs to be specified. It is useful for awareness, but somewhat difficult for practical application. Therefore, the well-known consulting firm “McKinsey” has proposed an elemental management system consisting of seven elements, the names of which begin with the letter “S”. Therefore, it was named “Model-7” S “which is shown in Fig. 2. Table 3 shows the main characteristics of each of these elements.

The proposed scheme is convenient for practical use, because any of the elements is quite clear to everyone. Particular attention should be paid to the connections between all elements. The management system is based on strategy, so this element is located at the top. The elements at the bottom (structure, style, staffing, systems) are quite obvious. As for the intermediate elements (the sum of skills and common values), they often go unnoticed by managers. However, they make it possible to implement the strategy consistently in the lower level elements.

Fig. 2. McKinsey management system model – 7 “S”.

Table 3. Characteristics of management elements.

(McKinsey-7 “S” model)

Elements of management

Characteristics of the elements


Course on the allocation of limited resources to achieve the intended goals

The sum of skills

Abilities that are inherent in the staff and the firm as a whole

Common values

The most important values ​​or fundamental concepts that are brought to the attention of all employees of the firm and determine their activities


Description of the characteristics of the organizational scheme (functional, decentralized, etc.)


The nature of business behavior and actions of leading managers to achieve the goals of the firm

Staff composition

Demographic and other characteristics of the most important categories of staff


Description of processes and established procedures (eg planning systems, quality management, etc.)


And finally, about the elements located in the “corners” and between them. They reflect the “hard” and “soft” elements of management.

“Hard” elements of management (strategy, structure, systems) reflect the formal side of the organization and are enshrined in various documents of each company.

“Soft” elements of management (sum of skills, common values, style, staff composition) reflect the informal side of the organization.

The production system (model) of management is shown in fig. 3.

Fig. 3. Production management system.

It is based on the generalization of the experience of creating management in post-socialist countries. The advantage of this model is that it combines all parts of the enterprise, which include structures, marketing and business plan, organization and logistics, financial and management accounting, finance, economics, human resources, as well as two ancillary units: communications and document flow between different blocks, as well as software and hardware platforms.

The proposed scheme is successfully used in the practice of many Russian and Ukrainian enterprises, including the joint-stock commercial bank “Nadra” (Kyiv), GF, “Mezokred” LLC “Ukr-Diamant” (Poltava) and others. Such a system makes it possible to reach agreement between the various elements of the system. For example, business planning is done by strategic planning services, and financial budgeting is done by the finance department. Often they act independently and in various forms. But only if the business plan budget formats are followed will the buy an comparison essay cheap now financial service be able to monitor and use financial indicators of the degree of implementation of the business plan. Only in this case it becomes possible to control the implementation of the project.

Let’s also pay attention to the location of the blocks: on the right – the blocks related to finance, on the left – the production processes.

By | 2021-02-17T16:25:58+00:00 June 26th, 2020|blog|0 Comments

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