Ukraine
is presented in Table. 2.
Table 2 - Number of business
associations in different sectors of economy in Ukraine
|
Sectors of Economy in Ukraine |
Number of business associations, units |
|
Entrepreneur, lease, engineering |
1483 |
|
trade, repairing of cars and household goods |
189 |
|
Industry of processing |
183 |
|
Civil engineering |
99 |
|
Transport and communication |
39 |
|
Agrarian sector |
121 |
|
Financial sector |
21 |
|
Hotel and restaurant business |
13 |
|
Fish industry |
7 |
|
Other branches |
902 |
(Source : State Statistics Committee of Ukraine)
Let’s determine what factors affect
the membership in the associations of enterprises. As a rule, the association
can cover from 10-20 to 100-120 member companies, which account for 20% to 100%
of industry output. Of the total number of members only one fourth or one fifth of the companies really active in
the association. Such
"public" activity is usually rewarded by getting of their leaders’
status of the member of the Board, the Presidium or the Board of Directors
Association. The current governance structure of business associations, as a
rule, is flexible enough to allow for advancement of the status of enterprises,
if their leaders are willing to spend their time working within the business
association.
In most cases, associations have a
minimum staff (from 3-5 to 15-20 employees) and operated by membership dues,
which provide 80-100% of their main budget. In addition, some associations have
received proceeds of events (exhibitions, seminars, conferences), information
and publishing activities.
For the majority of associations
typical of the collective nature of the adoption of the most important
decisions at the board meetings, which usually meets at least once every two
months. However, still remains an important part of personality of the leader.
His reputation and personal contacts largely determine the model of a
particular association and its effectiveness. Main factors of successful
business associations: conditionally they are divided into internal and
external. Among the external factors may be:
- The presence of competition in the sector;
- Increased attention to the sector from the government;
- The availability of opportunities to support the sector in the
state;
- Formal embeddedness of associations in the decision-acceptance
system.
The internal factors of success of
business associations can be as follows:
- The organization of effective
interaction with potential partners (including the interaction with its
members);
- The ability to represent the
interests of the industry.
In terms of voluntary
membership indirect indicator of organizational effectiveness is the breadth of
associations of enterprises in the sector, the availability of expert resource
(which requires a competent staff and the ability as necessary to attract to
develop specific problems of lawyers and other experts working in the staff of
member companies), publicity, open to the media and society.
On the background of inadequate institutional embeddedness
associations in decision-making system, which affect the interests of business
and government, an important factor of success for a particular association is
the identity of its leader, using his authority and communication for the sake
of association. This personalistic model, providing conditions for the
development of associations simultaneously carries serious risks, since a
change of supervisor may change radically range of contacts available to the
association, reduced the potential and the overall quality of the association.
Consider the elements of the mechanism which the business associations were
used for building a sustainable relationship with the government.
The first element - the emphasis on the
critical importance of personal contact to maintain constant positive attitude
and the availability of a particular contact person. Exceptional assess the
importance of personal contacts and relationships led to attempts by these
contacts and to the consolidate relations. Various forms are used to secure a personal
factor. At place of the first person in the business associations are sometimes
elected the figures, who have authority not only in the business surroundings,
but also in government, science, etc..
The
second element - the establishment of symbiosis between the personal leadership
of the association and regulatory body, fairly typical is the inclusion of
government officials or deputies of various levels of power in the governing
body of the association. So many presidents of business associations are
members of the various legislatures and ex-minister of Ukraine.
Analysis of business associations also
helped to identify the tactics of their relationships with relevant government
authorities, which is called "capture the regulator". The idea is
that a business association proactively
carry out a significant part of the regulator. This situation arises when the
quality of officials is much worse than the quality of employees in the private
sector. This opens up the possibility of active participation in arrangement of
public policy in the profile sector of
the market.
In recent years, a high
level of professionalism of business associations was marked, thus improving
the efficiency of their work to solve the different range of problems. Business
associations are represented in the Council of Entrepreneurs of Ukraine at the
Cabinet of Ministers of Ukraine, in the Public Expert Council on Legislation,
the Confederation of Public Associations of Entrepreneurs' Union of the new
formation named " the Public Structure of the State Committee of Ukraine
on Regulatory Policy and Entrepreneurship in the Public Collegium” under the
Chairman of the State Customs Service of Ukraine, etc..
It is
worth noting that the extent of participation in consultative bodies is seen as
an indicator of a particular influential business association. Thus, in Odessa region
the representatives of business associations consider their valuable asset
position in the current public council under the Chairman of Regional State
Administration, where in 2011 they represent 10% of members. In addition, the
percentage of business associations in Social Collegium State Communal Business
is steadily increasing as shown in Figure 1.
Among the shortcomings of the advisory system D.C. Vishnevskiy noted
that its works has so-called dotted character from one specific reason - to
another [1].
Figure 1 - Percentage
of business associations in Public Collegiums of State Communal business
Creating the legal framework for harmonizing the interests of business
associations and the government will contribute the formation of
self-regulatory organizations (SRO). Due to the draft Law of Ukraine "About
self-regulatory organizations" such organizations are recognized as
non-profit organizations, membership-based, and combines the subjects of
entrepreneurial activity, based on the unity of the industry's production of
goods or the market of producing goods (performing works, services) combining agents
of professional work of one kind.
Currently part of the business
associations expressed its willingness to be changed into SRO. Self-regulation,
according to representatives of business associations, leading to a more rigid
discipline of the market: Protection against counterfeiting, poor quality, outstanding products, etc. It
is necessary to determine the specificity of each sector of the economy.
The relationship between business
associations and the government lies in the range between two options. The
first option can be termed as "partnership or dialogue". It focuses
on equality of the parties and it presupposes that a business association has
autonomous resources. It is worth noting that this option is often chosen not
only to describe the real state of affairs, but rather to indicate in which
direction they should develop. The second version of the "hierarchy"
implies the adoption of the current model of relations in which the state and
government officials act as masters or leaders. It is typical for the regional
business associations and those of the so-called old industries.
Desires of the business associations in relations with the government
vary widely: from leasing office space on a preferential basis to the system
changes. The latter includes:
- Active
use of expert resources associations;
- Require associations imputation of registering
the "unscrupulous manufacturers";
- Transfer
of the advisory bodies on a permanent basis;
- The
legislative confirmation of accreditation system of business associations in
government bodies;
- The
enactment of the Unions of business people;
- Coordination
with relevant business associations in projects of all government regulations
pertaining to the regulation of the respective sectors.
In addition, it is necessary to take
into account international experience of business associations, which can be
used in Ukraine. I. V. Chichmeli and I.
B. Rutkowskay emphasize that the
practice of foreign countries have developed three types of models of business
associations [7]:
- Continental (European) model;
- Asian model;
- American model.
Continental (European) model is
characterized by the fact that, the
association will often accept a potential member to the Association with the
diploma of academic education and admission process will be very formalized.
Its features are: presence of statutory
sphere of activity; clearer delineation of functions between the associations performing
different tasks, the restriction of competition and rivalry between them
logically sustained the principle of joining the smaller associations to unifying
a large structure, a high degree of formal participation in the state
apparatus, policymaking in the areas of business.
Asian model of business
associations differs by rigid hierarchy of management and lack of rotation of
officers. The essence of the Asian model - undivided power and property. There
is only rulers and the ruled. In the Asian model, there is no private property
in the European sense, it depends on the carrier power, subject to arbitrary
exactions or to be confiscated by the administration.
The American model is oriented to
support the activity of the association members, wherein a more
"open" style of leadership and a more flexible response to crisis
situations and to provide opportunities and
more pragmatic approach to solving the emerging problems an Association
of American type represent those interest groups that come together on a
voluntary basis and are not permanent, the legal status and obligations (while
these commitments are very small). Their configuration is rather fortuitous,
there was no mechanism for organizing the interests of members. The territorial
and functional features enterprise association in associations and federations
are mixed, there is no clear hierarchy of representation - the company may join
directly to the parent organization and can simultaneously arrange their
membership in it, and in the industry association [7].
Its main task the business -
associations of this type sees to protect the interests of their members in
relation to the government, but not in the design and implementation of
specific policies in conjunction with state authorities and not to provide
technical assistance and business services to their members.
Familiarization with this experience and its understanding and its
active comprehension of the Ukrainian reality may occur during participation in
international exhibitions and working relationships with colleagues.
There was a certain division of functions
between the associations of different levels:
- "Main"
unions are focused on general economic development problems of the business
(usually they are chambers of commerce);
- Trade associations engaged in the development
of standards and technical regulations;
- Effective
regional associations serve as a ground for information exchange and mutual
consideration of interests between government and business (coordinat³on and
expert Center Union of enterprises in Ukraine). Now there are regional representatives in
Dnipropetrovsk, Lviv, Odessa, Ternopil, Kharkiv regions.
Currently, the business associations
are divided into "working", "sleeping" (inactive), as well
as the so-called "pocket", which are controlled by individual large
companies or government officials and do not represent the interests of a
particular business sector. Active business associations differ by financial
and organizational stability, orientating to the needs of its members and
cooperation with the state. Therefore, in our view, one can speak of an
"active core" origin of business associations in Ukraine.
In the sector of "working"
business associations the main features of institutionalization are highlighted.
Among them:
- Functional specialization
(defined terms of the performed functions);
- Internal differentiation
(organizational structure aligned with the main areas of activity, one of the
indicators is the presence of specialized committees, commissions and working
groups);
- High levels of
"organizational maturity", continued and increased presence in the
"core" business communities;
- "Becoming routine”, when
certain practices have become familiar to the participants and accepted by them
as such ones.
At the same time "working" business associations have
expressed dissatisfaction with its proposed role of "junior partner",
whom one can invite or not invite to a dialogue based on the views of certain
officials.
To understand the trajectory of a specific business associations it
is important to have reasons for the initiators for their creation and having key
players. If they were purely private (lobbying under the guise of business
association preferences for a particular company or a small group of economic
actors, "reserve airfield" for each official), then the business
association is generally perceived as a "pocket" one. But more often
the initiators of the business associations set themselves the broader
"strategic" objectives, implementation of which provide positive
externalities.
In our view, the business associations must carry out a number of
steps to turn them into a recognized element of the interaction between
government and business, as well as between business and society. Such steps
may include:
- More active work with the
member enterprises, taking into account their interests and needs in
conjunction with an initiative from the business associations on the proposal
of new services, analytical products and joint projects;
- A higher level of cooperation
with other business associations, as "main" and the ones representing
the "adjacent" industries;
- Taking into account the public
interests and greater transparency of business associations for society.
Thus, these data will allow to
assess how under current conditions the Ukrainian business associations can be
more effectively involved into modernization of the economy and society. Stable
and constructive cooperation between business associations and government boards
can become one of the new competitive advantages of the Ukrainian economy.
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