The flexibility of competitive strategy to minimize costs of united corporate structures in an uncertain market environment

Abstract

Future economic activity always contains an element or elements of uncertainty. The notion of uncertainty in the competitive strategy of a united corporate structure (hereinafter referred to as UCS) in economics entails a new state of doing business when the results of economic activity (e.g., cost values) exceed the limits of given constraints. At the same time, the accounting side of business management of the UCS does not allow it to return to the previous constraints. This, therefore, emphasizes the task of creating a new branch of management for a particular process, where the result is innovative economic solutions. The paper proposes a scientific and methodological approach to finding cost management solutions in conditions of uncertainty. The approach follows principle of a closed-loop system with feedback, which, unlike others, entails a continuous comparison by subtracting the control criteria of the pre-determined and actual competitive advantages. The choice of counter-strategy is based on the obtained value and the sign of the subtraction. A set of factors contribute to determining the transition of cost changes under uncertainty and the formation of flexible management of UCS costs. These factors include production features, new types of integration, the law of learning, production and technological capacity, customer preferences, time factors for changes in storage and delivery costs, the production cycle, institutional factors of government policies for economic growth, outputs of a new product, scale of production and scale costs, interaction with suppliers, globalization of markets, and others. The paper develops a structural model of control and management of the total cost of 1t of production in the accounting and flexible areas of management, which is implemented in practice as a control software system.