JEL L26, M21, O31, I23

INTEGRATING PROJECT MANAGEMENT STRATEGIES INTO A VARIETY OF FACETS OF PUBLIC LEADERSHIP PROCESSES

№41, 22.01.2023

Экономические науки

Тарасова Анна Николаевна

Лобаева Ксения Александровна

Ключевые слова: DEVELOPMENT STRATEGY; BUSINESS ENVIRONMENT; PUBLIC INITIATIVES; SUSTAINABLE REGION.

1 Introduction

The favorable nature of the development of regional infrastructure provides obvious advantages for a positive decision regarding the creation and development of a business. Thus, a repaired road is access roads for a manufacturing enterprise or a shopping center, the development of engineering infrastructure is a guarantee of the possibility of developing business in territories that were previously unattractive for business, etc.

To facilitate the partnership between government and business, a certain political will of local authorities is required to take on the functions of a generator of ideas and a battery of managerial energy to build a mechanism for interaction. A number of regions are experiencing a severe crisis associated with structural changes in the national economy as a whole. Therefore, while implementing the strategic management of the development of the business environment of the region one should take into account the following characteristic features:

— a region is a complex system. The research methodology embraces system analysis, with all the ensuing consequences: a large number of complex interrelated cause-and-effect relationships between the factors considered in the description of a complex system, the result of which is not always obvious when decisions are made; the need to study stochastic systems under conditions of uncertainty, and ambiguity;
– full-fledged participants in the business environment of the region are the citizens inhabiting it, therefore, while studying the development system of the business environment of the territory, it is essential to carefully examine the psychological (related to the interests of people, etc.) and cultural (related to the values and confessions represented in the territory) factors. When making decisions, it is necessary to take into account the long-term interests of the society. The development of the region as a whole should be intended to ensuring the conditions for the reproduction of human life;
– the business environment of the region is a dynamic system. It is crucial to study the dynamics of the system development, to analyze the growth processes, taking into account the general life cycle of the region and its parts (population, enterprises, housing stock, etc.), adaptive evolution;
– the region is an adaptive self-regulating (self-governing) system. Management goes through internal organizational processes of self-regulation and relies on changing the laws and methods of internal management. The business environment of the region is an object of managerial influence, thence, while implementing the strategies for its development, regional and local governments are the key actors in achieving the goals set, both from the standpoint of professional training and from the standpoint of value judgment;
— there is a conflict between the goals of strategic, long-term planning and short-term decisions; the condition for normal development in the system is the maintenance of economic equilibrium (balance of resources in the system).

Strategic management of the development of the business environment of the region incorporates providing for several scenarios for the implementation of the strategy (strategic alternatives), which are dependent on the predicted changes in external conditions within certain boundaries. Assessing the likelihood and size of such changes in the external environment and, supplying for possible adjustments to the strategy in the process of its implementation, much will rely upon which scenario is being implemented. The adopted strategy should serve as the basis for the development of both long-term and operational decisions to manage the strategic development of the region’s business environment.

2 Rethinking the concept of regional development and its business environment

There are clear benefits from the introduction of systems of regional strategic socio-economic development, which include both the federal level and the subjects of the federation. The national level establishes general principles that make it possible to solve the problems of the regions. The regional level forms a detailed consideration of its own potential and challenges. Regions are also able to contribute their accumulated knowledge and skills in the field of stimulating the development of their own business environment. Comprehensive programs of socio-economic development, which are basic in strategic management serve the aim of achieving maximum interaction, integration convergence of regions, concentration of the resources on solving national problems, and often amplify strategic management with exclusive economic development of the region, when it is associated with a full range of strategic management functions. At the regional level, programs address issues of priority development of specialization, financial stabilization, infrastructure, etc. However, programs implementation practice proves that they often do not correspond with each other, they do not clearly identify sectoral and territorial priorities, which leads to the dispersion of limited financial resources. Moreover, self-financing of regional development programs is insufficient.

3 The main shortcomings in strategic management implementation

The business environment of the region is an object of strategic management of regional development. However, it has been poorly studied due to being a relatively new subject of strategic management influence. This left a certain imprint while designing effective system for developing the business environment:

– uncertainty in the approach to managing the socio-economic development of the region and its business environment. The development of a unified approach to managing the socio-economic development of the region and its business environment will make it possible to form a toolkit of social, political, and economic systems that will be necessary when developing strategies;
– lack of organizational support for the process of strategic management. First of all, this process needs to be provided with specialists, to establish interaction between the structural divisions of regional bodies, to involve public organizations and business structures in making strategic decisions in the field of regional development;
– lack of a strategic vision of the future state of the region through the development of its business environment. To do this, we can create a group that will develop a vision for the future of the region. It is crucial that proposals be considered, evaluated and discussed by all parties involved. The practice of involving focus groups in the assessment and analysis of management decisions in a commercial environment can be successfully implemented at the level of developing regional development solutions;
– the desire to get results in the shortest possible time. The term for developing a strategy is determined not only by the time required for its substantive filling and approval. It takes time to develop and implement a system of strategic management of the development of the region and its business environment, in particular, with the help of which not only the development strategy, but also many other documents, as well as tools and technologies for organizing the process of implementing the strategy will become a reality;
– lack of monitoring of the current state of the business environment in the region. Quite often there is no monitoring of the external socio-economic environment of the region. Special methods of systemic, economic, social analysis are not used enough.

The formation of a mechanism for the strategic management of the development of the business environment of the region is a complex process, that requires a systematic approach to solving problems, certain principles, applying of the right methodology and taking into account the main shortcomings of the organization of strategic management of the development of regions.

4 Influence of innovation and business activity on the social development of the region

A modern resident of the region in matters of consumption of services of local governments behaves like a typical consumer in a market system. The concept of competition has long been relevant in the management of the development of the region. The expectations that society and authorities today correlate with an able-bodied citizen often do not coincide with his idea of the trajectory of life development that seems to be attractive (Fig. 1). A modern inhabitant of a territory has the right to decide whether it makes sense to keep the place of residence and invest economic and
labor activity in the formation of the economy of the region, or whether it is more attractive to realize these opportunities on the area of another territorial community. A problem for regional development is the migration of the active population, who chooses regions of residence that are more comfortable in every sense. A resident of the territory may well retain registration in the territory of the former region, performing labor functions, and therefore, creating employment, paying income tax and creating a product, in the territory that has been chosen.

Fig. 1 Dilemma of personal development for a resident of the region

Furthermore, elderly relatives and children of citizens often remain in the territory of the source region, in need of organizing social protection, providing social benefits due to their age and state guarantees. For the economic development of the territory, such a process can be threatening and negative in terms of the use of the human capital.

Leveling the threats requires systematic work by the regional authorities to change not only the current economic situation in the region, but also to adjust the values and attitudes of members of the regional community to assessing the comfort of the region for living and active economic development activities.

The quality of life of a person (individual or society) is an estimated category of a person’s life, which is characterized by the following components:

— life potential (what is inherent in a person, health, genetic predisposition);
— the potential of life (which is inherent in the implementation of a person’s activities, attitudes towards the formation and development of personality through education, professional self-realization);
— living conditions (what is inherent in the conditions of the habitat — the territory: the availability of material and intangible benefits). In other words, the quality of life as a category describes the parameters of tools, resources and environment in relation to some objective or subjective standard formed in the mind of a citizen. Lack of attention to shaping the values is tantamount to non-recognition of the leading role of consumers in the development of the economy.

Fig. 2 The role of the resource potential of the region in the process of strategic development

The diagram presented in Fig. 2 reflects the role of the region’s resource potential in the process of its development. This scheme presents the issue of the development of the region as some kind of metaphorical scales, on the scale of which two volumes of collected information about the life of the region for a certain period are set. One aggregates planned information, estimated characteristics, standards, etc., the other shows results. Comparison of the presented results entails the movement of managerial influences either in the area of expanding the horizons of development (if the development of the ‘region’, ‘territory’ system is recognized), or in the area of studying and eliminating the causes of the discrepancy between the expected and achieved results. In the case when the vital activity of the region is recognized as development, and when this fact is not recognized, the strategic goals of the region are adjusted. The described scheme is enlarged in nature, retreating from the positions of the versatility of the described processes.

The business environment of the region is a set of conditions and participants essential for the development of regional business through meeting the needs of consumers living in the region (Konovalova et al., 2018). The peculiarities of the business environment of the region as an object of strategic management are that it is extremely heterogeneous, the motives of its participants change flexibly under the influence of external factors, and they are poorly studied at the regional level.

The following skills are important in the strategic management of the business environment of the region:

— the ability to identify the problem, which will allow to establish long-term directions for the socio-economic development of the region as a whole and its business environment in particular (Chiniara & Bentein, 2018);
— awareness of the need and skill to identify the necessary changes in the system of formation and development of the business environment as an object of management, to formulate the goals of this area of activity (Gordon & Pollack, 2018). Identifying long-term goals will determine what the region should do over a long period of time. Short-term goals relate to the results that management intends to achieve in the near future;
— the selection of basic, including alternative options, strategies for the development of the business environment with the projection of the probability of obtaining the expected results and the possibility of negative trends (threats);
– the skill of effective implementation of strategies for the development of the business environment of the region, which consists in launching the strategy and obtaining the necessary socio-economic results in the planned time (Pilkienė et al., 2018). The implementation of this skill may require the leadership of the region to:

a. improve the structure of management of the socio-economic development of the region, able to successfully use the strategy for developing the business environment in the interests of the general economic and social strengthening of the competitive position of the territory,
b. develop a competent financial plan, create appropriate motivation for the citizens of the region, create a culture management and business climate, an internal support system for internal leadership;

– the skill of managing changes (Ershadi et al., 2022). The situations are likely to change over the time, thus, there is a need for prompt, flexible adjustment of actions.

5 Model for strategy building to manage the development of business environment

The general model of the strategic approach to managing the development of the business environment of the region (Mergel et al., 2021) can be represented as a diagram in Figure 3.

Among the five generally accepted blocks of strategy formation presented in Fig.3, two enlarged groups can be distinguished, conditionally distinguished in the figure by dotted contours: blocks of strategy formation and blocks of strategy implementation and control. The blocks of strategy formation lay the foundation for the implementation of the next block. Otherwise, this group can be called a block of planning and forecasting. The effectiveness of subsequent management actions largely depends on the effectiveness of its implementation.

Fig. 3 General model of a strategic approach to managing the development of the business environment

Considering that the implementation of each block, both at the level of a single element of the strategic management system, the development of the business environment of the territory, and at the level of the entire system is associated with significant economic costs, the effective implementation of the sequence of steps of the first group of blocks is a necessary and sufficient condition for efficient implementation of the entire model (Scott-Young et al., 2019).

In strategic management, analytical work is of great importance. In the context of the formation of a strategy for the development of the business environment of the region, the main areas of analytical research should include the following steps (Denicol et al., 2019; Cetin & Kinik, 2015):

1. study the state and current prospects for the development of the region itself and its business environment in particular;
2. study socio-economic trends in the development of interregional partnerships with adjacent areas and regions;
3. formulate the mission and the goals of the region in relation to the development of its business environment;
4. develop strategic alternatives and select basic strategies for the development of the business environment in the region;
5. analyze the internal environment of the region;
6. evaluate the effectiveness and control over the implementation of the development strategy for the business environment of the region by territories united in enlarged systems of intersubject interaction (federal districts, for example);
7. consider the existing organizational, legal, regulatory and methodological foundations for the development of the business environment in the region;
8. study of the interests of all potential stakeholders in the system of formation and development of the business environment of the region in order to identify contradictions and hidden motives.

Considering the region as a complex socio-economic system, it is possible to use the methods of studying system analysis. From the standpoint of a systematic approach, the region can be considered, on the one hand, as a complex system, and on the other hand, as a subsystem of the socio-economic complex of the country as a whole. From the point of view of a complex system, the regional socio-economic system should be characterized as an object of management (Dansereau et al., 2013; Pilkienė et al., 2019). Thus, we are determining the structure, elements and complex of relationships and interactions that arise in the process of functioning and developing of the regional business environment.

Fig.4 The research logic while implementing a strategic approach to management

For the strategic management of the development of the business environment of the region as a socio-economic system, we should take into account all the components of the latter: social, environmental and economic (Pham & Kim, 2019). Meanwhile, finding out the current position of the region in the context of global trends in the development of the business environment should be considered by determining ‘where are we now?’ (how much do we capture general trends? have we studied all aspects of the phenomenon? are there any clearly expressed features in the process of development of the object of study on our territory?), then moving to ‘where do we want to be?’, designing ‘how do we get there?’, and finally, assessing ‘have we got where we designed?’ (Fig. 2).

6 Principles of strategic management for developing the business environment in the region

The strategy for the development of the business environment of the region relies on the theory of program-target management. It provides for the setting of strategic and tactical goals, as well as criteria for their achievement — quantitative indicators that determine the measure or composition of the assessment of the achievement of the goal in comparison with other possible options for the development of the business environment of the region (Müller & Turner, 2010). The use of the program-target method while implementing the strategy creates essential prerequisites for achieving the intended strategic goals at the lowest cost, overcoming departmental barriers, uniting the interests of enterprises and organizations of various forms of ownership, business entities, government and administration, and the population in order to solve the problems of developing the business environment in the region. Successful socio-economic regional systems are always ready to freely manipulate their resources, using them in new ways, introducing innovations and, as a result, decisively restructuring their structure. Such socio-economic systems of territories have both a mechanism of internal reflection (introspection and self-assessment) and a mechanism of self-determination in the external environment, orienting their strategic attitudes towards development rather than growth and competition (Tarasova et al., 2019; Tabassi et al., 2016).

The formation of a strategic management system for the development of the business environment in the region is a complex process, the implementation of which requires the implementation of certain principles (Wright & Quick, 2011), the main of which, according to scientists and practitioners, are given in Table 1.

The strategic management of the development of the business environment of the region can be carried out using a wide range of various strategies, programs, specific actions and one-time management decisions. The function of developing the business environment is becoming increasingly important in modern conditions (Tonysheva & Chumlyakova, 2016). It acquires special significance in the transition period, when the traditional issues of socio-economic development are joined by the formation and development of market infrastructure and overcoming the crisis phenomena that accompany the transition of the economy from one state to another.

7 Conclusion

Purposeful actions of the regional administration to develop the business environment of the region is a significant function of the regional authorities, which allows solving the problems of the crisis and dramatic structural changes in the economy. Numerous studies confirm that the self-development of regions involves the partnership of the population, authorities and business owners (Shao, 2018).

This partnership can directly relate to the usual functions of regional government, such as the functioning of educational institutions, medical care, and maintenance of roads, housing stock and engineering infrastructure for the supply of electricity, water and heat. The activation of such a partnership also plays an important role in the mutual strengthening of entrepreneurial activity outside its zones of action.

The development of the region depends on the provision of a given territorial entity with the necessary strategic resources, one of which is developed human capital, which includes the entrepreneurial abilities of the population of the region, recognized by economists as a factor in the development of production and economy. Entrepreneurial abilities are a set of qualities, skills, and abilities of a person that allow him to find and use the best combination of resources for the production, sale of goods, make reasonable consistent decisions, create and apply innovations, take acceptable, justified risk. It is man, as the ultimate consumer of goods materialized through a complex of regional economic systems, who selects the immediate environment of his habitat. At the same time, it should be noted that a person as a single element and society (society) as a whole form both the beginning and the end of the chain of economic and social development through the ‘preference – rejection’ system. The functioning of this system has been established for centuries and is undergoing quite perceptible changes. The desired assumptions make it possible to formulate a definition of a new evaluation category of human activity and the socio-economic system — the concept of ‘social attractiveness of the region’. Social attractiveness of the region is the level of satisfaction of this territorial entity for human life with the aim of its full reproduction. Under the reproduction of personality in the context of social attractiveness, we mean not only the ability to meet a person’s needs for nutrition, treatment, security and education, family creation and social orientation, but also the need to release personal potential. This category is close in its meaning to the categories of ‘standard of living’ and ‘quality of life’, however, its purpose is to assess comprehensively the attractiveness of territories. The removal of this category beyond the concept of investment attractiveness is justified by the versatility of the issue of studying the processes taking place in the social sphere of the region.

The strategy of socio-economic development of the region, aimed at maintaining regional economic complexes, has been the foundation for making all decisions taken by the authorities. Additionally, the economic situation in the world dictates the need for a well-thought-out set of measures and actions to implement the strategy of sustainable development of the society ensuring the dynamic development of the socio-economic potential of the country and its regions, which also increases the responsibility of the authorities for decisions made in the socio-economic domain. Strategic management of the development of the region in modern political and economic conditions consists in the purposeful activity of all interested subjects of management, authorities and administration of the region to achieve the planned development milestones based on effective adaptation to changing parameters of the external environment.

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