Basic types of organizational structures of management: firm

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2020-07-03 02:48:08

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The Establishment of market principles of  the economy never takes place without the intervention of the state in the formation of institutions, which defines the basic  types of organizational structures of management. In addition to the degree of conformity between the imported institutions and the existing institutional environment, an important factor in the success of the implementation of institutions are becoming  designing of organizational structures of management of the state.

However, the state, carrying out the regulation policy, developing main types of organizational structures of management, too deeply involved in ineffective institutional forms associated with property ownership, entrepreneurial activity, aggregate demand, borrowing under state guarantees, and on the contrary, the role of the state is extremely lacking in the formation processes of creation of economic space, in the rule of law of enterprises, companies, natural monopolies, protecting the rights of the owner, the formation mechanism of competition.

Another area of institutional change is the reaction of economic agents on what types of organizational structures of management may lead to changes in external conditions  of economic activity, and cause adjustment of the relevant institutions and replace some of it. New types of organizational management structures and ongoing institutional changes are the reactions of the demand agents on the specific product - institutions. The benefits of such changes are the possibility to reduce transaction costs in the case of the creation of the coordinating institutions (the inviolability of private property, stable money, free pricing, absence of restrictions on the movement of capital, etc.) or to get the rent, provided that a distribution of institutions (a restriction of competition, establish entry barriers to the market, the introduction of import duties, the multiplicity of exchange rates, etc.).

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The Mechanism of interaction between institutions and firms is realized through all kinds of organizational structures of management  and institutional changes, representing a complex process of improving institutional system, obnovleniyami institutional model, the transformation of old institutions and new. In this process, gradually disappearing inefficient institutions are replaced by new. In this process is the institutionalization of the firm. Some economists defines institutionalization as “the process of formation and consolidation of an ordered set of formal and informal regulations of activities of market agents (institutions) and their continuous reproduction of the firm”.

The aim of the institutionalization of firms in transition economic period is to provide sustainability to the activities of the firm by reducing uncertainty and risk that defines the role of institutions in the activities of the company. Features of formation of the company allow to allocate three stages: "deinstitutionalization” - “adaptation” - “adulthood”. The main tasks associated with the influence of firms on the formation of the elements of the institutional environment, should be considered: the formation of a legislative and regulatory framework, making it a complex and consistent character. Thus, adapting to the constraints posed by the environment, the company modifies these restrictions. Consideration of the Genesis of the company during the transition period of formation of economy of market type allows to draw a conclusion that institutionalization is the formation of firm-level institutions and the impact of the firm on the formation of foreign institutions. The process of institutionalization of the company increases the efficiency of the company and its competitiveness which ultimately leads to sustainable economic development.


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Alin Trodden - author of the article, editor
"Hi, I'm Alin Trodden. I write texts, read books, and look for impressions. And I'm not bad at telling you about it. I am always happy to participate in interesting projects."

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