Assessment of the effectiveness of management decisions based on the program for ensuring sustainable development of the enterprise

Sustainable development of an enterprise (business organization) is considered as the quality of its functioning when it is able to maintain its economic integrity and independence and achieve goals in conditions of objectively existing periods of growth, maturity and decline in accordance with its life cycle.

From a formal point of view, within the framework of systemic representations, sustainable development and increasing the efficiency of managerial decisions are based on the interaction of processes to ensure local stability of the system in question during each individual period of its functioning and the formation of development goals. An objective assessment of the effectiveness of management decisions involves the application of a certain concept of ensuring the sustainable development of economic systems in practice. And this, in turn, requires achieving a state of high-level equilibrium of the system. It is clear that the methods for evaluating the effectiveness of managerial decisions, like the enterprises themselves, differ in terms of development and degree of sustainability. It is advisable to distinguish three initial equilibrium levels: nonequilibrium state, low-level and high-level equilibrium, designating them respectively as levels C, B and A.

Level C - these are unsatisfactory enterprises (systematically unprofitable or experiencing serious difficulties). They are characterized by violations of production processes and the inability to organize a normal reproduction process. Reproduction is not ensured due to irretrievable loss of resources. The primary task here is, first of all, a comprehensive and objective assessment of the effectiveness of management decisions, establishing simple reproduction by improving the organization of production and management within the framework of the adopted production strategy (production program); the main criterion is the optimization of costs and production volumes in the current period. The process of improving the existing structure has its limits, therefore, if it is impossible to obtain satisfactory results in the short term, more profound changes should be made using system design processes.

Satisfactory operating enterprises are represented at level B (โ€œmiddle peasantโ€, which has stable performance within a small deviation from the break-even level). They are characterized by a situation where income covers expenses, simple reproduction takes place. The task is to ensure expanded reproduction by selecting and optimizing the production program for the medium term, and conducting priority measures to improve production; the criterion is the optimization of costs and revenues in the medium term.

Enterprises with good performance indicators (industry leaders) are represented at level A. They are characterized by the most favorable state of internal processes, the main efforts are aimed at analyzing development prospects and choosing a long-term strategy. This involves the development, evaluation and selection of development programs on an alternative basis, the selection criterion is capital growth and the strengthening of a market position in the long term, the implementation method is constant monitoring and evaluation of the effectiveness of management decisions in the current mode.

Given the low level of efficiency of a number of enterprises, their transition to sustainable development is impossible without a rehabilitation stage, i.e. without developing and implementing a set of measures aimed at their financial recovery, ensuring the release of competitive products (services) and increasing the efficiency of functioning, which is objectively preceded by an adequate assessment of the effectiveness of management decisions. Changes in the rehabilitation process are usually associated with restructuring. The objects of restructuring in an enterprise can be: legal form, management system, production, enterprise property, personnel, finances. In addition to the objects, it is advisable to identify the levels of the required restructuring, which have a certain relationship with the initial level of economic stability of the enterprise.

In the case of diagnosing the initial state as a nonequilibrium or low-level equilibrium, the enterprise restructuring program should include additional measures to eliminate the unstable state and transfer to the level of high-level equilibrium. Because of this, the recommended program of measures has a common basis that implements the proposed concept of ensuring sustainable development of the economic system and, thus, is mandatory for all business entities, regardless of their condition, and expansion, taking into account the specifics of enterprises and their level of development. In the case of diagnosing a state of disequilibrium, the enterprise restructuring program should include blocks of measures of all three levels (A, B, C), focused on different planning horizons, but having a single point of reference - the present moment. The structure of the groups of events depending on the initial state of the enterprise:

Content of restructuring activities

Baseline levels

Horizon planning

sustainability Long-term Short-term Medium-term

C block 1 (T1) block 1 (T2) block 1 (TK)

block 2 (T1) block 2 (T2)

block 3 (T1)

In block 1 (T1) block 1 (T2) block 1 (TK)

block 2 (T1) block 2 (T2)

A block 1 (T1) block 1 (T2) block 1 (TK)

Despite the fact that the organizational measures of Block 3 (T1) belong to the sphere of current activity, they at the same time prepare the basis for the start of work on a deeper restructuring of the enterprise. Thus, the program of measures to ensure sustainable development includes activities that focus on different planning horizons, but having a single point of reference - the present moment. One of the main difficulties in implementing the indicated measures is overcoming the psychological barrier of the enterprise management by the beginning of medium-term and even more long-term changes, since the current confusion takes all its time and energy.

The result of the restructuring should be the formation, regardless of the initial level of stability of the enterprise at the time of the beginning of the changes. Thus, the program is a multi-level system for the development of adaptive behavior of an enterprise in a competitive environment, aimed at achieving entrepreneurial success.


All Articles