Abstract

The aim of the article. Exemplified by the large Ukrainian mining companies, the article substantiates the need of improving management organizational structures (MOSs) to enhance the implementation efficiency of strategies developed. The purpose of the research is to improve the management organizational structure of a company to enhance the latter’s strategic efficiency, taking into account the industry specifics, marketing characteristics, information support, and relevant capacity for diversification. Within the MOS of a company, the creation of strategic business divisions (SBDs) has been suggested, which makes it possible to achieve a certain level of decentralization of decision-making and performing particular functions as per areas of activity. An SBD is a company’s separate line of production and business, constituting part of its core or auxiliary activities and focusing on the commercial production (or rendering commercial services) and having its own competitors and markets. The results of the analysis. The functions of a strategic management department, operating within the company management system, include coordinating information flow between the company divisions when fulfilling programs and projects, as well as monitoring implementation of strategies. A distinctive feature of this structure is that, when assigning functional responsibilities and powers, it is recommended that the level of personnel’s specialization in one area of management activity be lowered while ensuring their versatility of training and expanding their responsibilities. In its structure, an SBD may have one or more profit centers (PC) representing production shops and stations that are part of the overall manufacturing process chain or a related (similar in purpose) production. The authors of the article have suggested an SBD formation structure in the context of an ore processing company. In order to enhance the efficiency of the processes of strategic management and development of scientifically proven investment programs and projects, it is recommended that the marketing functions be expanded through appropriate restructuring and creation of a marketing and sales department. The authors have come up with a functional direction of marketing activity in the context of today’s strategic orientation of ore mining companies towards the domestic market. The strategic activity is associated with a lot of information coming from external and internal sources and being processed at the company. In order to enhance the efficiency of the strategic management’s information support, it is proposed to set up, within the company’s Information Center, an information subsystem for strategic management, which would make it possible to collect, to process and to distribute the relevant bodies of information. The strategic information gathered, which matches the quality level set, can be used as analytical and predictive tools for developing strategic alternatives, choosing strategies and monitoring their implementation. Conclusions and directions of further researches. The present MOS makes it possible to avoid the disadvantages of other strategic-type structures, e. g.: dual subordination, duplication of the same-purpose functions and services when implementing different projects, difficulties in forming and managing project teams. The advantages of this organizational structure are: a high level of decentralization of production divisions as per areas of activity; the absence of centralized administration of financial resources’ distribution; the possibility of downsizing central management personnel by reducing the number of their functions. In further research, it is advisable to focus attention on ensuring compliance of the organizational structure with implementation peculiarities of strategies being adopted by the company.

Keywords: management organizational structure, strategic management, strategic business division, strategic information, profit center

JEL Classification: M11, L72.

Cite as: Varava, L., Arutyunyan A. & Varava, A. (2016). Strategic aspects of management organizational structure improvement in the context of ore mining companies. Marketing and Management of Innovations, 4, 243-255. https://doi.org/10.21272/mmi.2016.4-21

This work is licensed under a Creative Commons Attribution 4.0 International License

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