System Related Changes: The Focus on the Government and the Parliament of Ukraine.

posted Feb 10, 2016, 1:47 PM by Oleksiy Fesenko   [ updated Mar 8, 2016, 2:48 PM ]

        Today Ukraine is in a state of transition and the Ukrainians are facing the continuous miscommunication, burnout, especially frustrating were the fights in the Parliament of Ukraine. By changing the system, the country can choose the smooth transition. Changing the system is like changing a quality of wine or Vodka in Ukraine. For example, the trademark of Ukrainian “Khlebny Dar” grain Vodka (Ukrainian Business, 2016) featured the mission for furthering the rich national traditions of the modern alcoholic beverages and promoting the cultural context to vodka-drinking. Everything in the production of vodka matters, from the quality of grain and special spring water to the context of the vodka drinking. Everything in the governance matters according to Waterman is system, structure, style, staff, skills, strategy and superordinate goals (1980 p.17).


At Loggerheads Around the Focus.


        There is a challenge, how to refrain from embracing the entire McKinsey 7S Framework. The thing is in improving the ability to focus on the dominant dimensions of the highest importance for the Ukraine at the moment. Once the government eliminated the critical dimension it should be ready to refocusing to the next challenge.

        Not surprisingly, one of the critical dimensions for Ukraine now is ‘Strategy’. For the banking sector and the investors as IMF, the ‘Strategy’ is the ‘System’.

        According to the Michael Porter’s Generic Strategies, the strategies can be focused and unfocused. The Government of Ukraine is really in the center of the focus of Ukrainians.  There are many ways to focus and un-focus on the government:


Back to Square One: Focusing.


        One of the ways of focusing the strategy by the Government and the Parliament is to increase the social responsibility often referred to as “corporate social responsibility” or ‘corporate citizenship’. There are different ways to the focus the policies:

-    Meeting the requirements of IMF, and the international commitments;

-    Meeting commitments to the people, the electorate;

-    Fighting the different types of the discrimination;

-    Create conditions that the businesses should practice the sustainable practices;

-   Manage the resettled people by providing housing, farmland, jobs, finding the third party resources for the support projects;

-    Maintain the level of the minimum salary level, raise local income levels;

-    Support to the community through the projects covering education, culture,

-    Electronic government;

-    Global leadership in one of the sectors (education, R&D, etc.)

-    Infrastructure, sport, health, culture, business, etc.


Unfocusing: Reading Between the Lines.


         There are also the moral ways to un-focus the policies:

-    To scale down the decision-making capabilities to the regions;

-    To create the free trade zones, decentralize and increase freedom for the investors


.The Boldfaced Lie: Unfocusing.


        The amoral policies to avoid responsibility for the unfulfilled commitments can have the following consequences:

-    Wars, the internal conflicts;

-    Fighting in the Parliament.


Bad Taste in the Ukrainian’s Mouths: Stuck in the Middle.


    Ways to stuck in the middle between the focusing and unfocusing:

-    Non-stop change without even the small wins;

-    Imitation of the foreign experience without taking into consideration of the local specifics;

-   Substituting the correctness by the populistic ideas, history by the blindness, justice by the bureaucracy and corruption, human rights by the unclear laws and bribes;

-    Supplying the low-quality products under the guise of the internal difficulties;

-    Preventing in reaching the international market to the home suppliers, because one’s own environment was not capable of facing the challenge the global market;

-    Running inflation and taking the loans without understanding how to repay in the future;

-   Setting the high taxes including on the freelancers, while allowing the outflows of the capital to offshores;

-    Decreasing the political competition by creating the portfolios of the voters through the compensation policies;

-    Challenging the suppliers though the high tariffs;


Morality Issue: Costs an Arm and a Leg.


        The country can incur the different costs as a result of the immoral policies and the conflict with the community:

- Revolutions and the internal military conflicts;

- Force majeure actions impacting the businesses activities;

- Security concerns, including penalties on the contracts, increasing security expenses - guards, transportation, patrols, block posts and reduced mobility;

- Cost for trading and management of the guards, military, talent pool goes to army instead of the business;

- Project alteration, relocation of facilities, offices, legal concerns, contracts redesign;

- Migration of people from the places of conflicts;

- Risk concerns entail the insurance risk, the banking collapse, decreasing bank ratings, additional training, and legal expense;

- Damage of property, through explosions, mines in the area, destruction of the residential and business premises;

- Negative growth rate of GDP, closed factories, relocation or temporary shutdown of operations, lost opportunity for innovation and development, decrease of motivation of the employees, indifference, obstacles to supply on time, incoherent regulations;

- Depreciation of the property, land, inability to repay loans or debt, absence of development programs and incentives, damage to the share price;

- Delays in taking the necessary legislation, delays due to the security concerns or risk management, remediation of the broken relations, arrests of people, fatalities, burnout, low discipline, and damage to morale, post-traumatic syndrome, compensation costs, and default of synergies between the opposing opinions.

- Government and brand: loss of the competitive edge, and the loss of trust.


Abandoning the Baptism of Fire.


        According to Waterman (1980), the arithmetic increase in a number of the participants increases the number of the interactions in geometric progression. Is the number of the member of the parliament the albatross around the necks of the Ukrainians - 421 people deputies? Some smaller fractions have almost no conflicts. Why? What are the ways to decrease the number of interactions and increase the efficiencies?  By the way, federalization is one of the solutions as the empowered regional governments would process the smaller number of interactions by operating very efficiently.

 

        Very likely the solution is in the introduction of the electronic government, reduction of the numbers of the number of the members of the parliament or introducing of the bicameral parliament system.

        The less painful and efficient approach can be in managing change through a systematic approach by operating the 7S categories instead of biting the bullet of the multiple personal interactions.

 

References

Ukrainian Business. (2016). Alcohol Traditions, OOO Trademark "Khlebny Dar". Retrieved fromhttp://ukrbizness.org/kievskaya-oblast/predpriyatiya/item/alkogolnye-traditsii-ooo-torgovaya-marka-khlebnyj-dar

 Waterman Jr., R, Peters, T, & Phillips, J (1980), 'STRUCTURE IS NOT ORGANIZATION',Business Horizons, 23, 3, p. 14.



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