Economic and Social Development 30th International Scientific Conference on Economic and Social Development
Book of Proceedings
To make effective managerial decisions, business needs development guidelines. It is shown, on the example of the Russian raw material sector, that traditional approaches to performance indicators have shortcomings. Part of the proposed models does not reach the set goals in practice. The issues of evolving management on the basis of the criterion of development and the validity of investors' choice remain unresolved. Business needs a system that allows obtaining objective data (both resultant and advanced) about the object as a whole and the risks for individual sites. The specifics of doing business in the raw material sector require correction of valuation methods. Based on the practice of using the cost concept by Russian raw materials companies, the author gives recommendations for developing an effective business management system, building a decision making system with the respect to the company's corporate strategy and strategies for competing business units. Analysis of the experience of raw materials companies allows us to state that the success of the activity can be achieved not only by the use of effective technology and new technologies, but also by the adoption of managerial decisions:
• the company's strategy is decomposed into a system of long-term and short-term target standards;
• the main criterion is detailed, responsibility for achieving its components is distributed;
• the strategy is translated into the language of concrete measures through plans and budgets;
• target indicators as a means of expressing the intentions of the company are based on key factors and correspond to the level of management, short-term target standards are tied to long-term ones. The importance of taking into account the specific features of doing business in the raw materials sector (the company's security in proven reserves, etc.) is demonstrated. Analysis of independent rating agencies, which reduces information asymmetry, is needed while assessing the attractiveness of an asset. The investment attractiveness of the raw material assets is largely determined by the fundamental factors of growth (the level of reserves, volumes of extraction and transportation, operating efficiency, the amount of capital expenditure). Their significance varies over time, but the role as a foundation remains.