Academic journal article Academy of Strategic Management Journal

Innovatization of Planning Institutions in the System of Russian Economic Management

Academic journal article Academy of Strategic Management Journal

Innovatization of Planning Institutions in the System of Russian Economic Management

Article excerpt

INTRODUCTION

Studying innovatization of planning institutions in the system of state economic management is a fundamentally new holistic approach to the study of the dynamic collaboration among the business, authorities and society in the part of the national institutional matrix, in which institutional management traps occur. Their appearance is connected with the use of alternative institutions and the emergence of correspondent losses caused by an inefficient norm.

In the "periodic planning - continuous planning" pair, the periodic planning in the management of socio-economic objects, in particular, an enterprise and country's economy served for a long time as the only object of development in the economic science, and it's ideal form called a "formal planning" in the western management was mainly developed. The continuous planning as an alternative to the periodic planning actually existed in the form of a "vague" image formed on the noticed shortcomings of the formal planning. In this case, the term "continuous planning" was used, albeit on a small scale, but it meant: 1) operational planning representing not an adjustment but a specification of periodically devised plans of different levels, for example, planning using a rolling wave method being trendy now, 2) the same periodic planning, but with adjustment of a plan within a planning period on certain dates (for example, a 5-year planning with adjustment of a 5-year plan in planning for the following year). Only in recent years, the term "continuous planning (or its variants)" has come into general scientific use in the interpretation of a norm of planning being alternative to the periodic planning. In such interpretation, the term "continuous process of strategic development" is used, for example, in the article "From the traditional strategic planning to a continuous strategic development" by Franklin & Grant (2005). In this case, the drawbacks of studies on continuous planning are from the perspective of this study: 1) focus on planning at the levels of management of an association of enterprises (companies) and below, 2) lack of a clear definition of "continuous planning", 3) insufficient analysis of losses caused by periodic planning.

METHODS

Theoretical and methodological basis of this study is the author's position, according to which the effective innovatization of planning institutions in the economic management system is possible thanks to a dynamic replacement of periodic planning institutions by continuous planning institutions, that will provide protection against institutional traps in this sphere of collaboration among the business, authorities and society (Postalyuk, 2014).

The continuous planning is characterized as an activity that ensures timely decisions or measures. So, the above article contains, in particular, a case when Boeing made a decision after a sadly remembered event of September 11, 2001 related to the dismissal of 30,000 employees; such decision was not envisaged in the strategic plan, and at the same time it is noted that "in its essence, this decision has been a timely management response to the threat. The response, which allowed the company to save millions of dollars" (http://www.franklingrant.ru/ru/news2/data/news_06/2005_10/2005100). In fact, the same continuous planning characteristics are reflected in such result for a company as "continuous improvement", which the Western author S. Arbogast mentions in his article "Budgeting: why continuous planning is so important for the permanent success (2005) (Arbogast, 2012). In this case, the vague definition of continuous planning consists in unclear interpretation of timeliness.

The continuous planning is also characterized as an activity that responds directly to the actions of competitors' market forces. For example, as noted in the article "From the traditional strategic planning to the continuous process of strategic development" in Franklin & Grant (2005), "the nature of behavior of markets and competitors prevailing in the modern world is creating new threats and opportunities, which are not taken into account in the traditional strategic planning. …

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