The concept of an innovation-oriented industrial corporation: essence, definition, objectives and basic principles of functioning
Муминова Э. А. The concept of an innovation-oriented industrial corporation: essence, definition, objectives and basic principles of functioning // Молодой ученый. 2016. №25. С. 330-332.
As the academician of Russian Academy of Science V. M.Polterovich states “modern system with a broad definition has to include almost all the economic institutions”. To determine the nature and functions of the national innovation system theory of systems should be addressed. YU. P. Surmin, author of the widely cited textbook, writes: ”Isolation and construction of the system is carried out as follows: the aim is put, that must be provided by system; defined function (or functions), which provides the implementation of function. The aim is a condition at which trend movement of the object is aimed. The goal is usually caused by a problem situation, which can not be resolved in cash.
The results of the analysis of problems of innovative development show that it is necessary to clarify and supplement the theoretical and methodological assumptions of the theory of organization of modern corporations in terms of the latest scientific achievements in the field of system -integration theory, theory of resources, formation of a strategic competitive advantage, theory of routines. Moreover, strong influence on theoretical and applied research on the formation of tools and mechanisms of improving the management of the modern corporation has actual practice of successful development of modern industrial corporations that have changed the structure of assets, policy formation costs, investment, and provision of balanced growth of the main financial parameters.
In private industrial corporation maximization of the utility takes place in the related market economy economic system to the same extent as that of maximizing profits or income of owners of the corporation; public industrial corporations owned by regional corporations may aim to improve the utility of all citizens by providing collective services and even the failure of their own profit; private corporations attempt to maximize their usefulness by means of achieved income.
We believe that, along with the problems of the organization of production [1, p 52] studyobjectof theory of firm [2, p 78]can be represented as the sum of all economic decisions that are taken within the corporation. [3, p 141]
These include the decision on goal-setting of corporation (for example, profit maximization, the optimal supply of goods, achievement of economic domination, etc.), the structure of the company (e.g.,cost-effective choice of legal form, choice of the optimal placement) on investments and financing, decisions on the development of the production program, on the choice of production technology or marketing policies. Production as a combination of factors of production is determined, first of all, by values which are independent of the historically given economic system. They can be called indifferent to the system of factors. [4, p 74] Secondly, production has impact the circumstances, which are derived from the empirically given economic system, which he calls caused by system variables.
Indifferent to the system factors are, first of all, the factors of production. Thus, in every industrial corporation (irrespective of whether it is a market, planning or other types of economic systems) factors of labour, capital goods and raw materials are combined, this combination occurs in each case on the basis of purely formal principle of profitability (economic principle). [5, p 112]
Although depending on the type of economic system setting foals of the corporation may be different, for example, the corporation market system tends to get the most profit and the corporation planning system tries to perform a specific production plan, any one of these goals is realized on the basis of profitability.
The principle of profitability, along with a system of production factors is the quantity that determines the company and independent of the economic system. Third indifferent to the system factor is the financial balance of the corporation. Production can only exist if it makes the payments in a timely manner. This applies to the corporation market system, in which it maintains it financial equilibrium, and the planning system in which financial balance can be achieved by means of subsidies. Thus, the conventional, classical approach of theory of firm considers it as a closed system with deterministic objectives stable over a long period of time. [6, p 62]
Current stage of the revolutionary development of social production dictates withdraw from the classical theory of the firm, the basic concept of which is that company’s success is determined by a rational organization of production and improvement of the rational organization of production and improvement of the organizational structure, by reducing costs through optimal resource utilization. All this causes to clarification of the concept of “corporation” on the basis of generalization of the practice of production over the last 30–40 years, as described in the works of domestic and foreign scientists.
At the end of XX-beginning of XXI century, industrialized countries have carried out large-scale organizational restructuring associated with the implementation of a new paradigm for the development of resources and quality management. This paradigm occurred on the basis of generalization of world practice, in particular, by such scholars as: R. Nelson and G. Kleiner., E. Popov., V. Kondratyev. [7, p 82] The main thesis of this theory: a modern corporation is a multi-layer structure within which the integration takes place in space and time flow of material, financial, labor, information and other resources. Thus the term “resource” is significantly expanded and complemented by the concepts of “key competencies”, “dynamic capabilities”, “routines”. Expansion of the concept of “resource” leads to clarification of the concept of “factor of production”, i.e. land, labor, capital is supplemented by a factor “human capital”, as proven by the practice of so-called new business in the structure of assets, in which intangible articles prevail.
Consequently, economy of corporation can no longer perceived as the optimal use of only limited material resources, since the formation of the new value and competitive advantage moves to intellectual capital and innovation, and this means in particular that it is necessary to properly form the production costs due to a new meaning of the concept “Resource”. The main elements of the corporation are “human capital”----“entrepreneurship”----“advanced technology”----“routines”.
Semantically, the term “corporation” as the most advanced in qualitative terms the concept of “corporation” in our view, should be seen not only as a large integrated structures, but also as a carrier and a conductor of new production and information technologies, as well as the implementation of advanced management methods. [8, p 88] This is due to the fact that large corporations have innovative, financial, production and human resources.
Currently, assets of domestic corporations understated, investment unattractiveness, lack of working capital, obsolete technology cannot solve the problem of innovative development. this raises the question, what properties should have a management system be rebuilt or improved, which structures, elements and processes should be touched, and how to follow the concept of change of development of the national economy
Obviously, the creation of corporations, the concentration of capital, production capacity occurs in industries of technological breakthrough, producing entrepreneurial rents, in certain historical period. In the capitalistic system, there is one distinct advantage-it is the historical experience of the implementation of innovation, resource support for innovative development. That is, the emergence and of new technological order, new technologies based on the previous structure, which is reaching the limit of effectiveness ends and technological advances offered by this time fundamentally new solutions in the field of basic technologies. The was an evolutionary development of organizational and resource conditions for change of orders. Role of corporations in the course of this objective is to concentrate resources for the implementation of new technologies and new product development. Along with the development of practical achievements, complexity of business economics, corporations and accumulated problems of its scientific understanding.
First and foremost configuration and competence as the possession of assets, mainly determines the result of competition and the competitiveness of corporations. We support the statement of D.Tisza that the modern corporation focused on providing physical and social infrastructure, as well as the allocation of resources in order to transform knowledge into competence.
In today’s economy the role and weight of the individual assets are significantly changed. Tangible assets, as the main source of income of the corporation, have become less significant. Increased competition has identified innovation as a mechanism of development and competitiveness on the basis of human capital. Modern markets led to an increase in competition in the market of intermediate products, which contributed to the process of destruction of the vertically integrated corporations.
We cannot deny that creation of new knowledge in the form of autonomous or “specialized” innovation does not require a complex organization and is acceptable for small organizational forms. However, for the commercialization of new technologies, carrying out innovation on a constant “industrial” basis require a complex organization. New challenges require new organizational forms, understanding the nature of knowledge and competence as a strategic asset. As a consequence, under the pressure of globalization, communications, human and information technology resources and knowledge, human capital, intangible assets become major element of corporate assets, new forms of cooperation in the field of research and development, implementation and funding of innovative projects, such as the concept of “open innovation” strategic alliances. For example, such changes have taken place in a number of Western corporations-the ratio of tangible and intangible assets has changed in the ratio of about 10–30 % in the share of 70–90 % of the material and intangible assets. Moreover, the basic business processes of corporations change, the strategy of generation of added value also changes. Traditional structures aimed at production and sales structures are giving way to providing a variety of warranty, after-sales maintenance and repair of sold goods.
As can be concluded from the modern corporation can be considered a repository of knowledge-knowledge, embedded in business and routine business processes. The knowledge base includes technological competence and knowledge of customer needs and ability of suppliers. This competence may be competitive advantage to the extent that they are difficult to be simulated. The ability of firms to identify and explore new opportunities to reconfigure their knowledge as assets, competencies and complementary assets to select organizational forms, optimally allocate resources, all this determines the dynamic capabilities of the company.
The success of the corporation is expressed in competitive advantage, the company’s position depends on innovation. That is innovation-oriented corporation characterized by the level of innovation activity-an integrated feature of its innovative activity, including susceptibility to innovation, degree of intensity of the action undertaken by the transformation of innovations and their timeliness, ability to develop and apply modern methods of planning and organization of production. Innovation-oriented corporations are characterized by a constant willingness to update the main elements of the innovation system-their knowledge, technological equipment, search for key competences and dynamic capabilities.
Based on the aforesaid, under the innovation-oriented corporation we will understand such a corporation which, having a high potential for innovation, with core competencies, with the ability to rapidly generate ideas, bring them to mass production, and implementing innovations, receives rent and average industry profit on a long period of time. In such corporation, which has the above classification features, in fact, factors of production are determined by different and priorities of impact on innovation process are set.
With this understanding of the corporation it is necessary to address theoretical and procedural problems of instrumental studies of innovative processes in modern corporations.
From these facts, we may conclude that he proposed model for analyzing the above problems of the economy of innovative corporations shows that industrial innovation, economic and financial aspects must be considered as a complex and multidimensional system compared to the economy of traditional corporation. Analysis of effectiveness of activity of established corporations, survey of the views of experts and authoritative analysis of scientific publications on industrial innovation and investment, as well as studies done with our participation, show that the creation of domestic competitive innovation -driven corporation, is possible only the basis of evidence-based methodologies and techniques of organization of production systems.
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