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JOURNAL OF EASTERN EUROPEAN AND CENTRAL ASIAN RESEARCH Vol.9 No.

4 (2022)

QUALITY MANAGEMENT OF THE INTEGRATED DEVELOPMENT


OF UKRAINIAN LIGHT INDUSTRY ENTERPRISES

Kateryna Boichenko
Kyiv National Economic University named after Vadym Hetman, Ukraine

Svitlana M. Klymenko
Kyiv National Economic University named after Vadym Hetman, Ukraine

Nataliia V. Shevchuk
Kyiv National Economic University named after Vadym Hetman, Ukraine

Olena V. Terentieva
Kyiv National Economic University named after Vadym Hetman, Ukraine

ABSTRACT
This research aims to form a comprehensive methodological approach to assessing the quality of the
integrated development of Ukrainian light industry enterprises as a groundwork for effective managerial
decision-making. The methodological research toolkit includes developing an integration map, and
modelling and forecasting the results of integrated development. The proposed approach enables the
comprehensive evaluation of companies' integration parameters and modelling of their future
effectiveness. This comprehensive evaluation helps to justify the effectiveness of management decisions
and increase the quality of integrated enterprise development, as well as their performance as a whole.
Based on the formed map of enterprise integration, groups of enterprises were identified: forwards,
strikers, defenders, and outsiders. Using integrated development modelling, the potential quality level of
a 1% cost increase in integrated development and the volumes of product sales of the surveyed companies
was determined with regard to the group distribution for the period up to 2025. A considerable increase
in the efficiency of integrated development is provided for the forward companies. It has been found that
a high-quality level of the management of integrated development in light industry enterprises requires a
longer period of time compared to other groups of enterprises due to the slow pace of reducing the cost of
integrated business development.

Keywords: Integrated Development, Quality, Performance, Efficiency, Integration Map, Cost of Integration

DOI: http://dx.doi.org/10.15549/jeecar.v9i4.921

INTRODUCTION markets. Meanwhile, the evolution of


institutional, economic and other processes
Business integration is already an axiomatic
forms the prerequisites for new forms of
condition for the existence of enterprises and
cooperation . The pace of change in the 21st
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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

century has increased so intensely that it has reasons, the study focuses on the current
become impossible to transform the company's integration problem of the development
resources and business processes as rapidly as processes of light industry enterprises. Since the
before (Chang et al., 2019). Technologization, the formation of a company`s adaptive and flexible
competition for the consumer, and the structure, corporate culture, self-learning ability,
introduction of new social and environmental innovation and the introduction of modern
standards increase costs and require joint efforts. technologies currently provide for the
The transformation of markets suggests using integration of a business processes network,
utterly different business models, which in the there is an objective need to develop a
long term leads to alternative strategies and methodological toolkit for evaluating the
ways of obtaining rents (Veile et al., 2022). In this effectiveness of enterprise integrated
regard, exploring the potential benefits of development. Meanwhile, improving the
companies’ various cooperative actions is a management of business entity development
matter of scientific concern and is not a trivial based on the methodological approach we
research task. Nowadays, integration, as part of suggest is particularly relevant for Ukrainian
the development process, is defined as crucial in enterprises in the context of increasing
achieving a high quality of enterprises and competition in the domestic market,
organizational activity. To that end, the globalization and the integration of Ukraine into
improvement of management methods and tools the EU. All the above-mentioned factors have
to increase company performance, and the determined the purpose of this study, which is to
establishment of areas of the practical form a complete scientific approach for
implementation of organizational and economic evaluating the quality of Ukrainian light
mechanisms of integrated development in industrial businesses' integrated development as
enterprises is aimed at increasing company a basis for making effective management
competitiveness (Hrebennikova et al., 2021). decisions. The study has examined the formation
Thus, the efficiency of integrated development of a system of enterprise development indicators
processes of the enterprises is essentially defined based on an organic combination of principles
by quality of actions and the interactions of and instruments of internal and inter-firm
control elements, both internal and external, and integration. An integrated firm's activity has
the external integration of its development. been proven to be ensured by the operation of
Therefore, there is an objective necessity to set mechanisms of planning, organization,
up a modern methodological toolkit for motivation, and control. A collection of
evaluating not only the effectiveness but also the techniques is proposed as part of the proposed
quality of this integration in order to increase the methodological approach for the interaction of
synergistic effect The widespread adoption of internal elements and subsystems, ensuring
business technology integration completely optimal integration processes at various stages of
alters the design and management of systems, a company's development through the
both for manufacturing and sales operations, as synchronization of internal business processes
well as for overall business development. This and their consistent behavior, and the
necessitates a thorough examination and determination of the optimal management
adjustment of operating business models in all impact depending on the level of activation and
economic sectors (Bastas and Liyanage, 2019). implementation of integration processes. Based
Meanwhile, the options for integrating business on the developed integration map of the light
technologies and the speed with which they are industry enterprises, taking into consideration
implemented are primarily determined by the the conducted business diagnostics,
availability of real opportunities to quickly adapt implementing the integral indicators for the
production to changing requirements in order to economic, organizational, informational, and
maintain competitiveness while acquiring new intellectual module, and a comprehensive
technologies and bringing modern products to performance indicator, the study proposes to
market (Botelho et al., 2021). identify groups of enterprises and assess the
Our research into developing a scientific quality level of their integrated development.
approach to assessing the efficacy of integrated Based on the formed enterprise integration map,
enterprise development, particularly in the light groups of enterprises are determined as follows:
industry sector, is therefore relevant. For these forwards, strikers, defenders, and outsiders. The
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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

research suggests an approach to diagnosing the to find new ways to create value (Abbas et al.,
quality level of integrated development, which 2019). Companies must work jointly with a wide
enables a comprehensive evaluation of the range of partners to combine the underlying
parameters of companies' integration and technologies, applications, software, and services
modelling their effectiveness in the future. The to ensure an integrated solution. The need for
research provides a toolkit that can contribute to partnerships is intensified by rapidly changing
the justification of managerial decision-making technologies and growing consumer demands
focused on increasing the quality of integrated with due regard to customizing satisfaction
enterprise development and the performance of (Hedvall et al., 2019). The best approach for
their activities. companies is to intensively participate in
developing a new landscape of interactions with
partners and competitors. Many leading
LITERATURE REVIEW
companies build partnership networks and/or
Currently, one of the underlying aspects of an join existing ones. The main challenge is to
enterprise's competitiveness and performance is effectively form and manage ecosystems while
its integration into the global information using them to maximize value and gain a
landscape. The transformation processes competitive advantage (Parida and Wincent,
connected with creating an integrated business 2019).
model aimed at knowledge-intensive
Research which helped to determine the
production, integrated development and
synergistic effect of integration became
building of infrastructure for intellectualization,
particularly popular. Bashir and Farooq (2019)
and the formation of the enterprise's information
considered the synergetic effect of integrating
space become important (Asaul et al., 2019). Ogai
knowledge management, innovative business
et al. (2020) analyzed the advantages of
models, and an independent company. Khalatur
integrated development within the framework
et al. (2020), Trach et al. (2019), Novikova (2018)
of business groups, highlighting their social and
considered the synergetic effect as a result of an
economic efficiency. They explained it with the
integrated combination of several projects,
help of the integration of traditional paternalism
providing the maximum increase in the cost of
forms with the high efficiency of business
the company. Trad and Kalpić (2020) studied the
behavior of staff employed at different
evaluation of the synergetic effect because of the
organizational levels within large textile
integration of enterprises into a business
companies and their smaller satellites as well.
structure. According to Azatbek et al. (2019),
According to Downs (2018), integrative thinking
businesses should focus on measuring and
is aimed at urgent business problem-solving.
maintaining sufficient competitive strength and
Alac (2018) identified the factor of integration
intellectual growth. Ikram et al. (2018), Kaur et
activities as a basis for increasing the efficiency
al. (2019), Dykan et al. (2021) considered the
of the business decision-making process.
evaluation of the synergistic effect in the process
Imamuddin (2021) defined an integrated
of enterprise development from the perspective
enterprise as a company that pursues a new aim
of the integration of its supply chains. Handayani
in accordance with its management strategy and
and Nirwan (2019) stated that firms should pay
operations aimed not only at integrating
more attention to the integrated environment
production but also the formation of consumer
and a shared understanding of customer value
value. Ruziyeva et al. (2019) studied the
based on the findings from research of a logistics
effectiveness of business development based on
company.
enterprise architecture and investment role
analysis, the primary goal of which is to allow the According to Al Hadidi and Baghdadi (2019),
company to make strategic decisions about the traditional interaction is achieved with the
future state of operations and overall activity's details in mind, resulting in a costly
development. integration architecture that does not take into
account the semantic part of the interaction.
Complex and highly adaptive networks of
Samani et al. (2019) considered the integration
partners are established to create the artworks,
model of enterprise development in the context
while each such network is supported by its own
of a risk-based quality management system.
individual experience. The same holds true for
the complex ecosystems emerging in industries There are three main directions regarding the

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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

understanding of integrated business past. Therefore, it becomes necessary to study


development in modern literature: 1) as a integration from the perspective of a new focus,
process of becoming a single entity considering intelligent, integrated solutions; the
(restructuring, interaction, merger, sequence of goals of achieving innovative leadership and
specific steps in this context) (Hughes et al., market speed; and a shift from a rigid value chain
2020); 2) as a result of interaction with other to highly adaptive ones.
market actors (unification, system, synergetic Thus, the scientific guidelines in the field of
effect) (Eggert et al., 2018); 3) as both a process research on the integration of development are
and a result of interaction between companies multidirectional and multidimensional.
and their stakeholders (Juntunen et al., 2019). Meanwhile, the issue of assessing the quality of
Without reducing the value of all modern such a process remains insufficiently defined.
scientific works, it should be stated that the Evaluating the level of integration becomes
existing array of definitions does not precisely specifically important for light industry
clarify what the processes of substantiating the companies in Ukraine, taking into consideration
companies` interactions and mergers are. the need to increase the effectiveness of their
Resources are the starting point for decision- development as a whole. This necessitates the
making for integrated development (Hein et al., establishment of mechanisms for analysis,
2019). planning and encouraging the effectiveness of
It should be recognized that the nature of the development of light industry enterprises.
integration has changed significantly, as the Therefore, the purpose of this research is to
understanding of resources has been provide a comprehensive scientific approach for
dramatically transformed in the 21st century. In evaluating the quality of the integrated
general, integrated development can be development of Ukrainian light industrial
understood as a strategic process that optimizes businesses as a basis for making effective
the costs and benefits of all stakeholders by management decisions. And, therefore, the aim
pooling resources, leading to qualitative of the research is to propose an integrated
transformations in their functioning processes methodological approach for evaluating the
(Kiesnere and Baumgartner, 2019). This quality of light industry businesses' integrated
definition shifts the focus towards examining the development in Ukraine as a basis for effective
company's resources that are valuable to other management decisions.
participants in the cooperative process. From this
standpoint, it is not the integration process itself
METHODOLOGY
that is important, but its economic prerequisites
based on the analysis of motivation for The methodology of this study involves the
ownership and management, and the use of application of a comprehensive diagnostic tool
resources. of the companies` development level, taking
into account modelled indicators of sales
Despite the active use of the term "integration"
volumes, the level of integration and the cost of
in the research, the interpretations of integrated
a 1% increase for the groups of companies under
development are multifaceted, periodically
study by 2025. The logic of the survey is given in
fragmented, and superficial. The expansion of the
Figure 1.
characteristics and types of integration
associations, along with the described costs and For the study, 30 Ukrainian light industry
benefits related to this, is steadily growing. businesses frm various sub-sectors were chosen:
Meanwhile, the following paradox can be noted: “Gloria”, “Rosa” (Kyiv), “Strichka”, “Ovetri”
theorists often do not keep up with reality and (Dnipropetrovsk region), “Lesia”, “Arsaniya”
are forced to describe the processes that have (Zhytomyr Region), “Edelvika”, “Novovolynsk
already taken place in the markets. Nevertheless, garment factory” (Volyn region), "Teksterno"
a general and, above all, advanced understanding (Ternopil region), “Lileya”, “Volodarka” (Vinnitsa
of what is happening will enable the Region), “Goryn” (Khmelnytsky Region),
identification of effective business models for ),"Orion", "Fabryka Prut" (Chernivtsi region),
both traditional and electronic markets. “Kalyna”, “Trottola” (Lviv region), "Tysmenytsia"
Nowadays, cooperation tends to have different (Ivano- Frankivsk region), “Rivne factory of
objectives, structures, and results than in the nonwoven materials”, “Rivne-Styl” (Rivne
region), “Santa Ukraine” (Mykolaiv region) ,
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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

“Modessa” (Odesa region), "Cherkasy silk mill” (Kirovograd region).


(Cherkasy region), “Shovkova nytka”
(Zaporizhzhya region), "Bereginia”, "Desna",
"Lybid" (Chernihiv region), “Loteks”, “Svit”
(Poltava region), “Zoryanka”, “Sabina“

Stage 1 Stage 3
Formation of a sample of the studied Formation of an integration map of the
companies: surveyed companies and identification
 30 light industry enterprises were of four groups among them: forwards,
selected strikers, defenders and outsiders

Stage 2 Stage 4
Assessment of the level of companies` Modelling of integration results,
integrated development, with due regard taking into account the
to economic, organizational, innovation estimation of the cost of 1%
and information modules business integration for the
studied companies

Stage 5
Predictive modelling of integrated development, the cost of 1% of its increase and the sales volumes
of the products of the studied companies as key parameters of the quality of integration in
accordance with the group distribution until 2025

Figure 1. Stages of the research conduction


Source: formed by the authors

Development diagnostics were conducted for module; and α, β, γ, δ are the corresponding
each of them based on key performance metrics weighting coefficients of the importance of the
for the economic, organizational, inventive, and relative indicators. 𝐸𝐸𝐸𝐸𝑒𝑒𝑒𝑒𝑒𝑒 , 𝐸𝐸𝐸𝐸𝑜𝑜𝑜𝑜𝑜𝑜 , 𝐸𝐸𝐸𝐸𝑖𝑖𝑖𝑖𝑖𝑖 , 𝐸𝐸𝐸𝐸𝑖𝑖𝑖𝑖𝑖𝑖 .
information modules as of 2019. The evaluation of integrated development is
The approach and methodological toolbox for based on measures of organizational, economic,
measuring the success of an enterprise's informational, and inventive integrated module
integrated development are based on an integral performance, the effect of which is defined by
indicator, which takes into account the weighting variables (α, β, γ, δ). The hierarchy
component integration modules according to the analysis approach is used to assess their relative
formula (1): value. The essence of this strategy is the
𝐸𝐸𝐸𝐸𝑖𝑖𝑖𝑖 = 𝛼𝛼 ∙ 𝐸𝐸𝐸𝐸𝑒𝑒𝑒𝑒𝑒𝑒 + 𝛽𝛽 ∙ 𝐸𝐸𝐸𝐸𝑜𝑜𝑜𝑜𝑜𝑜 + 𝛾𝛾 ∙ 𝐸𝐸𝐸𝐸𝑖𝑖𝑖𝑖𝑖𝑖 + 𝛿𝛿 ∙ 𝐸𝐸𝐸𝐸𝑖𝑖𝑖𝑖𝑖𝑖 problem's hierarchical breakdown and the
current rating score with alternate remedies. The
(1)
creation of a set of indicators characterizing the
where 𝐸𝐸𝐸𝐸𝑖𝑖𝑖𝑖 is the effectiveness of the economic, organizational, informational, and
enterprise's integrated development; 𝐸𝐸𝐸𝐸𝑒𝑒𝑒𝑒𝑒𝑒 , innovative integrated module's development
𝐸𝐸𝐸𝐸𝑜𝑜𝑜𝑜𝑜𝑜 , 𝐸𝐸𝐸𝐸𝑖𝑖𝑖𝑖𝑖𝑖 , 𝐸𝐸𝐸𝐸𝑖𝑖𝑖𝑖𝑖𝑖 is the development efficiency in performance is expressed through an integrated
accordance with the integrated economic, assessment that considers the total number of
organizational, informational, and innovative individual indicators, indicating the level of

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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

development effectiveness in separate can get:


directions.
In order to determine the costs of the transition 20
𝑀𝑀[𝜑𝜑𝜏𝜏 (Δ𝐼𝐼𝐼𝐼𝐼𝐼)] = ∫0 (𝑖𝑖𝑖𝑖𝑖𝑖0𝜏𝜏 +
of light industry enterprises to the principles of (∆𝐼𝐼𝐼𝐼𝐼𝐼−𝑚𝑚)2
1 −
integrated development, a modeling method was 𝑖𝑖𝑖𝑖𝑖𝑖1𝜏𝜏 Δ𝐼𝐼𝐼𝐼𝐼𝐼) ∙ 𝑒𝑒 2𝜎𝜎2 𝑑𝑑Δ𝐼𝐼𝐼𝐼𝐼𝐼 =
𝜎𝜎√2𝜋𝜋
used. For 30 Ukrainian enterprises based on the (∆𝐼𝐼𝐼𝐼𝐼𝐼−𝑚𝑚)2
𝑖𝑖𝑖𝑖𝑖𝑖 20 −
developed alternative investment projects to 𝜎𝜎√2𝜋𝜋 0
∫ 𝑒𝑒 2𝜎𝜎2 𝑑𝑑Δ𝐼𝐼𝐼𝐼𝐼𝐼 +
increase the level of integration, an assessment 𝑖𝑖𝑖𝑖𝑖𝑖1𝜏𝜏 20 −
(∆𝐼𝐼𝐼𝐼𝐼𝐼−𝑚𝑚)2

of the possible increase in the level of savings as 𝜎𝜎√2𝜋𝜋 0


∫ Δ𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 2𝜎𝜎2 𝑑𝑑Δ𝐼𝐼𝐼𝐼𝐼𝐼 =
a result of integration and the average cost of 1% 20−𝑚𝑚 𝑚𝑚
𝑖𝑖𝑖𝑖𝑖𝑖0𝜏𝜏 �𝜑𝜑 � � + 𝜑𝜑 � �� +
𝜎𝜎 𝜎𝜎
of integration for the studied companies was
(∆𝐼𝐼𝐼𝐼𝐼𝐼−𝑚𝑚)2
assessed. 𝑖𝑖𝑖𝑖𝑖𝑖1𝜏𝜏 20
∫ Δ𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼

2𝜎𝜎2 𝑑𝑑Δ𝐼𝐼𝐼𝐼𝐼𝐼 (4)
𝜎𝜎√2𝜋𝜋 0
The analysis of the modeling results is based on
the fact that each level of integration has a
beneficial amount of investment. where 𝜑𝜑 (𝑦𝑦) is the Laplace integral function of
the parameter y.
Econometric analysis of the results of
simulation suggests that there is the following To find the integral
(∆𝐼𝐼𝐼𝐼𝐼𝐼−𝑚𝑚)2
correlation between the volume of production 1 20
∫ Δ𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼

2𝜎𝜎2 𝑑𝑑Δ𝐼𝐼𝐼𝐼𝐼𝐼 , we put 𝑥𝑥 =
and the level of integration for a particular option 𝜎𝜎√2𝜋𝜋 0
∆𝐼𝐼𝐼𝐼𝐼𝐼−𝑚𝑚
of investment (1): and take x for the new variable. Thus, we
𝜎𝜎
have Δ𝐼𝐼𝐼𝐼𝐼𝐼 = 𝑥𝑥𝑥𝑥 + 𝑚𝑚, while 𝑑𝑑Δ𝐼𝐼𝐼𝐼𝐼𝐼 = 𝜎𝜎𝜎𝜎𝜎𝜎 . After
replacing the variables, we get:
𝜑𝜑𝜏𝜏 (Δ𝐼𝐼𝐼𝐼𝐼𝐼) = 𝑖𝑖𝑖𝑖𝑖𝑖0𝜏𝜏 + 𝑖𝑖𝑖𝑖𝑖𝑖1𝜏𝜏 Δ𝐼𝐼𝐼𝐼𝐼𝐼 (1)

(∆𝐼𝐼𝐼𝐼𝐼𝐼−𝑚𝑚)2
1 20 −
where Δ𝐼𝐼𝐼𝐼𝐼𝐼 is the level of integration (%); ∫ Δ𝐼𝐼𝐼𝐼𝐼𝐼𝐼𝐼 2𝜎𝜎2 𝑑𝑑Δ𝐼𝐼𝐼𝐼𝐼𝐼 =
𝜎𝜎√2𝜋𝜋 0
𝜏𝜏 is the index of the investments size option, (20−𝑚𝑚)/𝜎𝜎 𝑥𝑥2
𝜎𝜎
����; ∫ (xσ + m)𝑒𝑒 2 𝑑𝑑x =
𝜏𝜏 = 1,5 𝜎𝜎√2𝜋𝜋 −𝑚𝑚/𝜎𝜎
(20−𝑚𝑚)/𝜎𝜎 𝑥𝑥2 (20−𝑚𝑚)/𝜎𝜎 𝑥𝑥
2
𝜎𝜎 𝛼𝛼
𝜑𝜑𝜏𝜏 (Δ𝐼𝐼𝐼𝐼𝐼𝐼) is the volume of output for the ∫−𝑚𝑚/𝜎𝜎
xσ𝑒𝑒 2 𝑑𝑑x + ∫−𝑚𝑚/𝜎𝜎
𝑒𝑒 2 𝑑𝑑x = -
√2𝜋𝜋 √2𝜋𝜋
investment size option 𝜏𝜏; (20−𝑚𝑚) 𝑥𝑥2
𝜎𝜎 𝑥𝑥 2 20−𝑚𝑚 𝑚𝑚
𝑖𝑖𝑖𝑖𝑖𝑖0𝜏𝜏 , 𝑖𝑖𝑖𝑖𝑖𝑖1𝜏𝜏 are parameters of an econometric 𝑚𝑚
𝜎𝜎
∫ 𝑒𝑒 2 𝑑𝑑 �− � + 𝑚𝑚 �𝜑𝜑 � � + 𝜑𝜑 � �� =
√2𝜋𝜋 − 𝜎𝜎 2 𝜎𝜎 𝜎𝜎
model for an integrated investment option. 𝜎𝜎 − 2
𝑚𝑚2

(20−𝑚𝑚)2
20−𝑚𝑚 𝑚𝑚
�𝑒𝑒
2𝜎𝜎 − 𝑒𝑒 2𝜎𝜎2 � + 𝑚𝑚 �𝜑𝜑 � � + 𝜑𝜑 � �� (5)
According to the proposed method for √2𝜋𝜋 𝜎𝜎 𝜎𝜎
constructing the integrated investment projects
for the output, the expectation of the function of
The final formula for finding the required
output volumes 𝜑𝜑𝜏𝜏 (Δ𝐼𝐼𝐼𝐼𝐼𝐼) of a random variable
expectation of output is:
Δ𝐼𝐼𝐼𝐼𝐼𝐼 with a distribution density 𝑓𝑓(Δ𝐼𝐼𝐼𝐼𝐼𝐼) which,
for the case of a normal distribution law, has the
following form (2): 𝑀𝑀𝜏𝜏 = 𝑀𝑀[𝜑𝜑(Δ𝐼𝐼𝐼𝐼𝐼𝐼)] = 𝑖𝑖𝑖𝑖𝑖𝑖0𝜏𝜏 �𝜑𝜑 �
20−𝑚𝑚
� + 𝜑𝜑 � �� +
𝑚𝑚
𝜎𝜎 𝜎𝜎
𝑚𝑚2
20−𝑚𝑚 𝑚𝑚 𝜎𝜎 −
(∆𝐼𝐼𝐼𝐼𝐼𝐼−𝑚𝑚)2 𝑖𝑖𝑖𝑖𝑖𝑖1𝜏𝜏 �𝑚𝑚 �𝜑𝜑 � � + 𝜑𝜑 � �� + �𝑒𝑒 2𝜎𝜎2 −
1 − 𝜎𝜎 𝜎𝜎 √2𝜋𝜋
𝑓𝑓(Δ𝐼𝐼𝐼𝐼𝐼𝐼) = 𝑒𝑒 2𝜎𝜎2 (2)
𝜎𝜎√2𝜋𝜋 (20−𝑚𝑚)2

where 𝑚𝑚 is the expectation of the savings level 𝑒𝑒 2𝜎𝜎2 �� (6)
as a result of integration;
𝜎𝜎 is the average deviation of the expectation of
The proposed approach to defining and
the savings level as a result of integration.
planning the consequences of enterprise
The expectation of the function of output development allows the light industry to take
volumes (3): into consideration the determinants of
+∞
𝑀𝑀[𝜑𝜑𝜏𝜏 (Δ𝐼𝐼𝐼𝐼𝐼𝐼)] = ∫−∞ 𝜑𝜑𝜏𝜏 (Δ𝐼𝐼𝐼𝐼𝐼𝐼)𝑓𝑓(Δ𝐼𝐼𝐼𝐼𝐼𝐼) 𝑑𝑑Δ𝐼𝐼𝐼𝐼𝐼𝐼 (3) integration, as well as to take measures to
improve the performance of the company to
Substituting into the real limits of integration
create a favorable investment climate for
and replacing specific mathematical models, we
business.
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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

RESULTS determination of integrated coefficients by four


A map of the integration of these companies modules (economic, organizational,
was created based on the conducted business informational, and intellectual), as well as their
diagnostics of the studied companies, integrated performance indicator (Fig. 2).

Figure 2. Map of the integration of the studied enterprises of the Ukrainian light industry
Source: author's development

The studied companies can significantly combining them according to the suggested
increase their performance by establishing group distribution and calculating the integrated
integrated relationships and business processes. development index for each firm, taking into
The peculiarity of the proposed map is account the proposed modules, an increase in
determining the direction of stimulating the level should be seen in all enterprises.
growth of both an individual enterprise and a In order to determine the quality of integration
group of potentially integrated partners since for these companies at the present stage,
less developed companies cannot impact the modelling of the coefficient of integration and,
decrease in the level of development of others respectively, the cost of increasing 1% of business
during the integration process. Meanwhile, due integration has been conducted (Fig. 3).
to integration with similar economic units, they
are able to achieve a greater level. When

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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

Figure 3. The modelled results of the integration of the investigated enterprises for 2020
Source: created by the authors

Each company has specific operational integration map: Volodarka and Kalyna –
features, reflected not only in the level of outsiders, Fabryka Prut – striker, Edelvika –
integration but also in the cost of its increase. forward. This confirms the lack of mutual
Therefore, business integration can be effective connection between the level of development
and incur low costs to increase it for one integration and the cost of its increase.
company and another; it can be quite a In order to determine the quality of integrated
comprehensive and costly process. For most of development of the studied companies in
the surveyed companies, the cost of increasing accordance with their group distribution, the
integration, compared to its current level, is in anticipation of their integrated development
the range of US$ 50,000 to 300,000. The highest (Integrity Index – INI), the cost of a 1% increase
cost of increasing integration belongs to the (Conditional value index of 1% integration – CVI
company Volodarka, with an average level of 1%) and sales volumes (Sales volume index – SVI)
integration compared to other light industry based on the indices of these indicators resulting
enterprises. This is primarily due to the from changes in investment parameters has been
development of the foreign economic activity of taken into account. In this case, we consider the
this company, particularly exports to France, high level of integrated development quality
Germany, Poland, and Slovakia. Therefore, from the moment SVI begins to exceed CVI, i.e.,
Volodarka is more focused on integrating with the growth rate of sales exceeds the cost of
foreign companies for market expansion. But increasing the level of business integration. The
since this company is a part of a group of outsider simulated results on the quality of integrated
companies, this area is not sufficiently justified. development of forwarding companies are
A similar situation is typical for Fabryka Prut, displayed in Fig. 4.
Edelvika, and Kalyna, which have close
Forward companies tend to have an increase in
cooperation with Turkish (products import) and
sales due to an increase in the level of
American and European companies (products
development; nevertheless, the cost of
export). It also should be noted that these
integration tends to decrease at the same time
companies belong to different groups on the
but at a very slow pace. A high level of integration
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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

quality is forecasted only from 2024. Taking into expansion of markets and acceleration of high-
account that these companies are the market quality integrated enterprise development.
leaders in Ukraine, they should move to
international integration. This will encourage the

Figure 4. The anticipated indices of sales volumes, level of integration, and cost of 1% of its increase for
the studied forward companies by 2025
Source: created by the authors

The anticipated results on the quality of shown in Fig. 5.


integrated development of striker companies are

Figure 5. The anticipated indices of sales volumes, level of integration, and cost of 1% increase for the
studied striker companies by 2025
Source: created by the authors

Striker companies have the opportunity to integrated development in 2.5 years. That is,
significantly increase sales as a result of the starting in 2023, companies can reach a
integration of their development. The mutually qualitatively new level of development and
reinforcing potential of these companies creates implement joint business projects in order to
a synergistic effect and promotes high-quality move a group forward and strengthen their

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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

foreign market position. are shown in Fig. 6.


The anticipated results on the quality of
integrated development of company defenders

Figure 6. The anticipated indices of sales volumes, level of integration, and cost of 1% increase for the
studied companies’ defenders by 2025
Source: created by the authors

Defender companies have low growth rates in companies can be qualitatively integrated
all indicators of integrated development quality. starting from 2024.
The main factor in this is the unstable position of The anticipated results on the quality of
most market companies, which affects the cost of integrated development of outsider companies
increasing the level of development integration. are shown in Fig. 7.
Also, it can be stated from the integration map
that not all integration modules have business
support in this group. But in general, defender

Figure 7. The anticipated indices of sales volumes, level of integration, and cost of 1% increase for the
studied outsider companies by 2025
Source: created by the authors

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Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

Even though companies are outsiders, a Tomashuk, 2021; Khanizad and Montazer, 2021).
significant increase in sales is possible due to the But at the same time, companies also have the
increase in the level of integration. Considering opportunity to improve the overall management
the high conditional cost of integration, access to level and accelerate the pace of development. Our
the high-quality level of this process is achievable study can be applied in strategic management, as
only from 2024. Meanwhile, the peculiarity of identifying the orbital level of the company's
this group of companies is the possibility of some development can provide the basis for making
companies, namely Orion, Volodarka, and informed decisions and various measures to
Zoryanka, to move to a group of defenders in optimize the development of various enterprises.
order to fill the insufficient modules of The study can become a platform to raise top
integration. management awareness of alternative options for
a business development strategy and improve
DISCUSSION strategic planning effectiveness (Zhang et al.,
2021). Furthermore, the application to the work
The advantage of this research is the proposed
of the integrated development evaluation based
methodological toolkit for diagnosing the
on the construction of the corresponding orbital
effectiveness of integrated enterprise
makes it possible to analyze the effectiveness of
development. Its application has demonstrated
the company’s development process for specific
that two critical conditions previously achieved
clusters holistically, compare alternative
by the results of other studies are required to
development paths, identify possible deviations
ensure effective enterprise development. The
in a timely manner, make adjustments, and make
conditions mentioned earlier also include an
the necessary amendments to the enterprise's
effective enterprise management quality system
activities. This feature of the study has general
(Alsawafi et al., 2021). Furthermore, the company
directions in the context of risk management
requires a high or sufficient competitiveness level
(McMaster et al., 2020).
(Tarigan et al., 2021), as well as its investment
attractiveness (Binh et al., 2020; Zholonko et al., The limitations of this study should be pointed
2021). Studies indicating that effective business out, however. In the context of integration, there
development depends on the educational and are opportunities to analyze a particular pattern,
professional potential of the staff include Alhusen but it is not certain that all enterprises will apply
and Benna (2021). The proposed methodological it equally or actively. Each company has its own
approach takes into consideration equivalent specific internal operating environment
tools in four key areas and integrates them into a supporting its business processes and
set of four clusters. capabilities.
The universality of the approach proposed in
this study is based on the fact that diagnostics do CONCLUSION AND RECOMMENDATION
not necessarily presuppose its limitation to four The theoretical contribution of this study is the
modules in the process of assessing the level of development of the integration map of light
business development. Their number may be industry enterprises based on the conducted
larger or smaller, depending on the specifics of business diagnostics, the determination of
the company and the industry in general. At the integral coefficients by four intellectual modules
same time, it is possible to transform the system (economic, organizational, informational, and
of indicators for carrying out diagnostics of the intellectual), and integral performance indicators
level of enterprise development according to the allow distinguishing groups of enterprises and
selected clusters. This enables its use in light assessing the level of quality of their integrated
industry companies, as well as in other industries. development. The contribution of the research for
Meanwhile, taking into account the business business practice consists in the proposed
goals and all stakeholders, it is feasible to create a approach enabling the comprehensive evaluation
unique set of key performance indicators of the parameters of companies' integration and
(Amankwah-Amoah, et al., 2019). modeling of their effectiveness in the future. The
The orbital technique is a feature of this study. study, therefore, can become a significant
Its implementation has demonstrated how complement to the comprehensive toolkit of
enterprises can efficiently allocate resources in business development strategy, taking into
the selected four clusters (Tomashuk and account the rapidly changing enterprise
www.ieeca.org/journal 564
Quality Management of the Integrated Development of Ukrainian… Kateryna Boichenko et al.

environment, increasing their flexibility and A limitation of this study is that the projections
adaptability to changes, and determining generated may be altered by events related to
qualitative characteristics of business process Russia's invasion of Ukraine. However, it is
integration. important to note that deviations may be both
The proposed approach to the formation of the negative and positive, as against the backdrop of
integration map of light industry enterprises the war, a significant integration of all spheres of
based on the results of business diagnostics, the Ukrainian economy into the European space
determination of integrated coefficients by is taking place. This may accelerate the formation
economic, organizational, informational, of networks of relationships with foreign
intellectual modules, and an integrated companies in the same industry.
performance indicator allows distinguishing In the future, the study can be expanded based
groups of enterprises consisting of forwards, on examining integration processes at the
strikers, defenders, and outsiders. In this case, the international level for companies from different
actual integration level results show a high countries and regions, as well as other industries.
conditional value of 1% integration for Volodarka, Future research may deepen the proposed
Fabryka Prut, Edelvika, and Kalyna. These approach by broadening the array of company
companies actively cooperate with foreign development indicators and creating software to
companies and do not focus on integrating justify alternative business integration options
Ukrainian enterprises into the domestic market. and consumer values.
Moreover, according to the map, these companies
belong to different groups, which confirms the
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