Ensuring of Increase of the Enterprises’ Business Activity as a Factor

in the Region’s Sustainable Development

Rinat Khusnutdinov

and Natalia Meshkova

Moscow State University of Civil Engineering, Moscow, Russia

Lugansk Vladimir Dahl State University, Lugansk, Ukraine

Keywords: Business Activity, Region, Sustainable Development.

Abstract: The article examines the content of the main processes at an industrial enterprise, on which the implementation

of management tasks and functions to ensure and increase the business activity of enterprises depends, which

is the basis of the strategy for the sustainable development of the regional economy, since their activities have

a major impact on all elements of the country's sustainable development. The content of the functions of

managing the business activity of the enterprise is justified by the management tasks, for which the potential

opportunities for implementation in the context of each management function are determined. The process of

performing the tasks of managing the business activity of the enterprise, which occurs on the basis of the

implementation of management functions, ensuring the potential capabilities of the enterprise and identifying

the state of business activity according to the evaluation criteria, is considered.

1 INTRODUCTION

The successfulness of the state’s sustainable

development in general and of the region’s

sustainable development in particular is directly

related to the growth of the industrial production. The

industrial complex is the foundation of the state’s

economic development. The active part of the fixed

capital is created here, and the creation, promotion

and application of the latest technological techniques

and management methods are ensured. They are the

most important elements of the sustainable

development

(Park et al., 2014)

The functioning of the enterprises depends on

many factors in the stable economy. The main ones

are legislation, competition and the ability to the

continuous development of the enterprise itself. It

should be noted that these factors change during the

crisis or during the other difficult situations. It creates

both the certain threats and the certain new

opportunities, which need to be considered in time

and to direct the company’s activities in the right

direction. Understanding the consequences of the

variability of the environment in which they operate

is a priority for the enterprises. Thus, it is necessary

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to respond to these changes in time by making the

effective management decisions. The crisis for the

company can be not only a state of shock,

complications, volatile financial and economic

situation, but also a significant incentive to make

appropriate changes and transformations.

Such conditions of existence of the enterprises

lead to the significance, specificity and individuality

of their management decisions. It should be noted that

the managers’ responsibility for the results of the

economic activity, financial and economic condition

of the enterprise and its market position increases in

the conditions of market competition

(De Clercq et al.,

2010)

Nowadays one of the most important

characteristics of the enterprise is its business activity

and incentives (

Vera-Baquero et al., 2016)

In order to stimulate the activity of the industrial

enterprises, it is necessary to develop the consistent

steps to implement this task both at the state level and

at the micro level directly. These steps should include

the following tasks:

 renewal of the production facilities in

accordance with the world requirements for

234

Khusnutdinov, R. and Meshkova, N.

Ensuring of Increase of the Enterprises’ Business Activity as a Factor in the Region’s Sustainable Development.

DOI: 10.5220/0010588702340240

In Proceedings of the International Scientiﬁc and Practical Conference on Sustainable Development of Regional Infrastructure (ISSDRI 2021), pages 234-240

ISBN: 978-989-758-519-7

resource efficiency, environmental orientation,

productivity, etc.;

 search for the investment resources for the

implementation of technical re-equipment of

the business entity, the introduction of the

innovative technologies;

 providing markets for products in the

competitive business conditions.

Thus, stimulating the business activity of the

industrial enterprises creates conditions for the

economic growth in the country, brings entrepreneurs

to the profitable level of development and contributes

to the solution of the immediate social issues (Silka,

2016).

The business partners’ financial position has a

direct impact on the development of the business

activity of the industrial enterprises. It determines the

state of the material resources; it creates the need for

funds to be borrowed. Thus, it generates the material

resources flows for the implementation of the

production activities, and it generates the cash

resources flows to ensure settlement operations on

both the payable accounts and the receivable accounts

(Burovtsev et al., 2018).

A set of the management actions, decisions,

measures of management of the industrial enterprises

should stimulate business activity. Such scientists as

M.P. Voinarenko and T.G. Rzayeva believe that the

management of the business activity is the effective

use of the financial and production resources

(Voinarenko, 2011). It is necessary to disagree with this

statement, which narrows the importance of the

business activity for the development of the

enterprise. Business activity is associated not only

with the state of the resources of the economic

entities, but also with the state of profitability and

stability of functioning in the changing economic

environment in the market conditions.

І.М. Tikhonova believes that business activity

increasing is possible based on the self-organization:

the powers distribution between the enterprise’s

departments while reducing the costs (Tikhonova,

2010). This organizational approach has a right to

exist undoubtedly, but it does not reveal the essence

of the process of business activity’s activating or

stimulating.

2 METHODOLOGY

Implementation of the main tasks of business

management of the industrial enterprise to ensure, to

intensify and to stimulate the business activity

involves the development and implementation of the

new approaches to management. They will contribute

to the growth of the financial and economic activities

of the enterprise while maintaining the stability of the

situation, i.e., they will allow achieving the goal of

business activity management (Safronova et al., 2018).

Summarizing the content of each of the tasks of

business activity management in the process of

substantiation of the scientific and methodological

approach for the active management of the business

entity, it should be noted their purpose to improve the

management of the research process. The content of

the management tasks for the main processes

occurring in the industrial enterprises is presented in

the concentrated form in table 1.

The differences between the tasks to be solved in

the process of managing the enterprise’s business

activity are noticed from the information of table 3.

They are especially traced to the process of selling

products, as well as to the task of ensuring the

enterprise’s business activity on the one hand and the

activation and stimulation of the business activity on

the other hand.

Table 1: The content of the main processes according to the

tasks of the industrial enterprise’s business activity.

Name of

processes

The content of the processes taking place

in the enterprise according to the

mana

ement tasks:

ensuring activation

stimulatio

Industrial Achieving

the pre-

crisis level

roduction

Reorganization

modernization

Upgrading

of the

production

facilities

Implemen

ting

Achieving

pre-crisis

sales

Developmen

t of the main

sales

channels

Ensuring

the

market for

products

sales

Investmen

Carried out

to the

limited

extent

Development of the

investment resources

Innovative Adaptation of the

innovations

Thus, ensuring the business activity of the

industrial enterprise involves:

firstly, access to the pre-crisis indicators of the

development (the volume of production and sales, the

state of receivables and payables, the financial result

from the operating activities, profitability of

production);

secondly, consolidation of the acceptable

positions achieved in the post-crisis period:

stabilization of production, establishment of markets,

ensuring uniformity and balance of cash inflows and

Ensuring of Increase of the Enterprises’ Business Activity as a Factor in the Region’s Sustainable Development

235

outflows and material resources, gaining profits in the

dynamics of several important periods (Komlev et al.,

2017).

The activation of the industrial enterprise

requires:

 reorganization, modernization of production to

increase the competitiveness;

 growth of production capacity simultaneously

with the development of the main supply

channels of the manufactured products;

 development of the investment resources and

adherence to the innovative path of the

development.

 The important task is to create the conditions

for stimulating business activity of the

enterprises both at the state level to raise social

living standards and directly at the level of

management staff of the enterprises to develop

the effective measures to increase the

efficiency of the financial and economic

activities (Shchepkina et al., 2020)

3 RESULTS AND DISCUSSIONS

In order to improve the management of the industrial

enterprise’s business activity, the emphasis is on the

implementation of each of the management tasks.

Since the implementation of management tasks is

based on the implementation of management

functions, the success of which allows achieving the

goal of managing the business activity of the

enterprise, the content of the functions for each task

is disclosed in table 2.

Table 2: The process of realization of the main tasks of the enterprise’s business activity management.

Name of

functions

The content of the mana

ement functions accordin

to the main tasks:

ensurin

activation stimulation

Analysis

Comparison of the

production volumes and

sales in pre-crisis and

post-crisis periods;

analysis of the causes and

factors of their reduction

Determining the volume of

production and sales that can be

obtained as a result of changes

in the production and sales

policy; assessment of the future

growth in terms of output in

kind and value

Estimation of production volumes as a

result of fixed assets renewal; analysis of

the market for products to ensure the full

sale of products

Planning

Drawing up the

production plan reflecting

the production growth;

drawing up the plan

for the manufactured

roducts sales

Development of the production

plans in the increased volumes;

substantiation of the capacity of

the main sales channels in the

form of the product sales plan

Drawing up the production plan taking

into account its growth; product sales

planning in terms of the new sales

channels and in terms of the established

sales links

Organization

Coordination of the

production and sales

processes at the enterprise

Coordination of the production

processes with the sales,

investment, innovation, financial

processes

Coordination of the production processes

with the marketing, investment,

innovation, financial processes

Accounting

Accounting of the

volumes of production

and sales, production

costs, sales costs

Implementation of the production and sales, innovation costs, investment

resources, operating costs accounting

Control

Control over the

achievement of the

planned tasks, product

quality control

Control over the introduction of

the innovative technologies,

control over the return of the

invested resources

Control over the sale of products in the

new areas of sales, control over the

movement of the investment and

innovation resources

Regulation

Regulation of the debt

management processes,

especially those which

arose during the crisis

Regulation of the innovation

implementation processes into

the production activities

Regulation of the recipient enterprise's

investment management processes and

operating activities (especially in the sales

process)

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236

Disclosure of the content of the business activity

management functions is carried out taking into

account the essence of the main processes as it can be

seen from the information of table 2. They are

characteristic of each task of managing the business

activity of the industrial enterprise during the

management period. It should be emphasized that the

content of the management functions is disclosed in

the main areas of implementation of the process of

managing the business activity of the industrial

enterprise. For example, according to the main

positions of accounting, according to the main

directions of application of control efforts. According

to the author’s position, it is necessary to concentrate

management levers, methods, resources, etc.

The basis for the implementation of business

activity management is the operating process of the

enterprise. Thus, its condition determines the content

of functions, tasks and goals of business activity

management. All the tasks of business activity

management are characterized by the increase in

production and sales, but at the different rates and at

the different percentages for each task. To ensure the

state of business activity, the volume of production

must be pre-crisis at least. To intensify the state of

business activity, the value of output must increase to

the level that is supported by the capacity of the

updated production equipment. To stimulate the

business situation, the increasing level of production

is limited by the abilities to sell products in the

competitive environment (Khusnutdinov et al., 2020).

The potential possibilities of the enterprise are

defined in the process of the task’s realization of the

business activity management of the industrial

enterprise according to the management functions.

They must be taken into account to ensure the timely

achievement of the expected state (required level) of

the business activity, taking into account the impact

of the risks. The argumentation of the enterprise’s

potential capabilities are presented in table 3. It is

possible when achieving the required state of the

business activity and implementing the management

functions and tasks.

Таble 3: Determining the potential capabilities of the enterprise to implement the tasks of business activity management.

Name of

functions

Determining the potential of the enterprise according

to the main tasks of mana

ement:

ensurin

activation stimulation

Analysis

Analysis of the opportunities

according to the production

and sales renewing in post-

crisis conditions

Analysis of the financial, material,

labor opportunities according to the

implementation of the

transformations in the production

and sales spheres

Analysis of the technical

capabilities in the required

volumes production; analysis of

the market opportunities

according to the product sales

Planning

Assessment of the company’s

potential according to the time

plans implementation

Assessment of the ability to sell

products that are manufactured in

accordance with the technical and

technological level of

transformations

Assessment of the potential

opportunities of the product sales

according to the new areas sales in

the required volumes

Organization

Analysis of the ability to

coordinate the main operating

processes for maximum effect

Analysis of the ability to coordinate

the resource capabilities of the

enterprise to maximize the revenue

Assessment of the marketing

potential which will ensure the

timely sale of products in the

increased volumes

Accounting

Identification of the potential opportunities according to the actual values of the income, profits, debts

indicators

Control

Control over the maintenance

of the pre-crisis volume of

production and sales

Control over the development and

return of the resources invested in the

production modernization

Control over the implementation

of the innovations, establishing

close relationships with the

customers

Regulation

Assessment of the financial

potential for the break-even

point

Analysis of the innovation potential

according to the transformation of

the new ideas into the innovative

products

Assessment of the investment

attractiveness of the enterprise

Ensuring of Increase of the Enterprises’ Business Activity as a Factor in the Region’s Sustainable Development

237

According to the information given in table 3, it

can be stated that the main type of the enterprise

potential, on which it is necessary to concentrate

management decisions in the process of managing the

enterprise’s business activity in the post-crisis period

is the production potential. However, the other types

of potential (marketing, financial, etc.) also occupy

the important place in the process of performing tasks

and functions of business management. For example,

in the implementation of such a management function

as organization (Akimova, 2017).

It is important to assess the state of business

activity in the performance of management functions

in the process of implementing tasks to improve the

management of business activity of the industrial

enterprises. It will identify the deviations from the

acceptable criteria for the financial and economic

activities and it will be possible to take measures to

adjust management decisions (Kamenik, 2018).

To perform the tasks of business management, the

necessary conditions are the implementation of

management functions, the achievement of

evaluation criteria and consideration of potential

opportunities to ensure the business activity of the

business entity.

Achieving the studied objectives of the industrial

enterprise’s business management is through the

performance of management functions at the certain

stages. Development of the stages according to the

tasks realization of management allows allocating the

certain sequence of the actions for achievement of the

necessary condition of the industrial enterprise’s

business activity.

Thus, the essence of the certain stages of

management tasks according to ensuring, enhancing

and stimulating the entity’s business activity is as

follows:

1) the comprehensive analysis of the state of the

enterprise’s business activity;

it is carried out on the basis of the turnover

indicators, turnover duration indicators and other

evaluation indicators. The causes and factors that

inhibit the development of business activity are

defined at this stage. The task of management to

achieve the required state of business activity in

accordance with the conditions of operation and

development of the enterprise is set out.

2) assessment of the main processes of the

financial and economic activity of the enterprise;

the degree of readiness to perform processes

(production, sales, investment, innovation processes)

is assessed in accordance with the tasks of business

activity management. Process assessment is needed to

identify problem areas that slow down business

management tasks.

3) performance of the management functions of

the enterprise’s business activity;

it occurs throughout the tasks period of business

management till specific task implementing. The

achievement of the purpose of the enterprise’s

business activity management is provided based on

the management functions according to concerning

growth of the activity volumes and maintenance of

the steady position.

4) forming of the potential opportunities

according to the implementation of the management

tasks;

the potential opportunities are determined in the

process of carrying out the operational activities in

order to achieve the planned volume of production by

technology, technical means, financial resources and

other types of resources; the potential opportunities

for the product sales are defined by the competitive

advantages, the effectiveness of marketing activities.

Forming of the enterprise’s potential opportunities

promotes counteraction to the external threats in the

long run, it provides the enterprise’s competitiveness.

In general, the set of the stages is presented in Fig.

1. The main tasks of the enterprise’s business activity

management are implemented here.

According to the stages shown in Fig.1, it is seen

that the state of business activity is checked by the

evaluation criteria after studying the main processes

of the financial and economic activities of the

economic entities, after analysing the potential

capabilities of the enterprise in the process of

business activity management:

а) if the state of the enterprise’s business activity

does not meet the necessary criteria, this task of

business activity management is not fulfilled; so there

is a need to make adjustments to the main operational

processes of the enterprise, as well as to review the

volume, timing, operating conditions of investment

and innovation resources according to the business

activity management tasks; the performance of

business management functions after making

adjustments is in accordance with the changes;

ISSDRI 2021 - International Scientiﬁc and Practical Conference on Sustainable Development of Regional Infrastructure

238

б) if the state of the enterprise’s business activity

is satisfactory, namely: it meets the evaluation criteria

and provides an acceptable financial position, then

this task of the business activity management is

considered fully realized, so there is a need to

maintain the achieved state of business activity.

Figure 1: Stages of implementation of the main tasks of the

industrial enterprise’s business activity management.

4 CONCLUSIONS

The competitive advantages of the enterprise should

be create, ensure, generate, which strengthen the

company’s position in the market conditions and

indicate the perfection of the business management in

general. The main stages of the industrial enterprises’

business activity management (stages 2, 3, 4) are

performed.

Creating the competitive advantages in the

process of the enterprise’s business activity

management becomes important in the post-crisis

environment and involves the following points:

 assessment of performance indicators of

competing companies according to the

available sources of information, their

comparison with the performance indicators of

the enterprise which is being studied;

 identifying potential opportunities for the

market cooperation or developing the strategy

for the development of the financial and

economic activities that eliminates the

influence of competitors on business results

through diversification, re-profiling, creating

innovative products with the significant

competitive advantages;

 analysis of the resource base for the processes

carried out at the enterprise, as the state of the

resources determines the level of the

enterprise’s competitiveness; it determines the

state of technical, technological, material,

financial, labor, organizational and information

resources for the production process.

The substantiated approaches to ensuring and

improving the business activity of the industrial

enterprise will contribute to the growth of the

financial results, thus strengthening the stability and

solvency in terms of risk will improve the

management of business activity and increase the

efficiency of business management in general.

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Stage 1. Comprehensive analysis of the state of the

enterprise’s business activity

Stage 2. Assessment of the main processes

of the enterprise’s financial

and economic activity

Stage 3. Execution of the management

functions of the enterprise’s

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