THE MANAGERIAL DECISION AS A CENTRAL FUNCTION OF MANAGING THE SOCIALIST ECONOMY UNDER THE CONDITIONS OF THE SCIENTIFIC AND TECHNOLOGICAL REVOLUTION

S. L. SALIN

Production under the conditions of the scientific and technological revolution is distinguished by complexity, diversity, and dynamism; it requires more advanced methods of management. Scientific management of the economy, as of socialist society as a whole, becomes, to an even greater degree than ever before, a powerful organizing factor that sets in motion enormous material, labor, and natural resources.

The improvement of the system of economic management is one of the key questions of our party’s economic policy. “What is at issue, in essence,” it is said in the Report of the CPSU Central Committee to the Twenty-Fourth Congress of the Communist Party of the Soviet Union, “is how we can better organize the activity of society in accelerating economic and social development, ensure the fullest possible use of existing opportunities, and unite still more closely hundreds of thousands of collectives and tens of millions of working people around the chief aims of party policy. Consequently, questions of management concern not only a narrow circle of leaders and specialists, but all party, soviet, and economic organizations, all collectives of working people. This means that improving management is an important component of all the party’s activity in directing the economy.”¹

Management arose with the appearance of the division of labor. “All directly social or communal labor,” K. Marx pointed out, “when carried on on a comparatively large scale, requires, to a greater or lesser extent, management.”²

Management exists in every society; however, its aims, principles, and limits depend on the economic and political foundations prevailing in one or another socio-economic formation.

K. Marx profoundly revealed the character and nature of management in capitalist society. “The management of the capitalist,” wrote K. Marx, “is not only a special function arising from the very nature of the social labor process and belonging to that process; it is at the same time a function of exploitation of a social labor process and, as such, is conditioned by the inevitable antagonism between the exploiter and the raw material of his exploitation.”³

Therefore, under capitalism the objective tendency toward a constant increase in the role of management intensifies the contradictions inherent in this system, since the organization of production within individual enterprises and their associations is in constant contradiction with the anarchy of all capitalist production as a whole. And, as noted in the Program of the CPSU, no “attempts at state regulation of the capitalist economy are capable of eliminating competition and the anarchy of production; they cannot ensure the planned development of the economy on the scale of society, for the basis of production remains capitalist property and the exploitation of wage labor.”

It is another matter under socialism. Social ownership of the means of production eliminates the contradictions characteristic of the capitalist economic system, within which some owners stand opposed to others. And the tendency toward an increase in the role of management coincides with the planned character of the socialist economy, with the regularity of its proportional development. Only socialist production relations form the objective basis for the rational organization of the management of social production, for the constant improvement of the forms and methods of management with due regard to the growing importance of this function in raising the efficiency of social production.

From the first days of Soviet power, V. I. Lenin placed in the foreground the problems of organizing and managing the economy, indicating that this task becomes the principal one as soon as political power passes into the hands of the working people. “The task of administering the state, which has now come to the fore before Soviet power,” wrote V. I. Lenin, “has the further peculiarity that what is involved now—and perhaps for the first time in the modern history of civilized peoples—is such administration in which the economy, and not politics, acquires predominant importance. Usually the word ‘administration’ is associated precisely and above all with activity that is predominantly, or even purely, political. Meanwhile, the very foundations, the very essence of Soviet power, as also the very essence of the transition from capitalist society to socialist society, consist in the fact that political tasks occupy a subordinate place in relation to economic tasks.”⁴

On the basis of an analysis and generalization of the experience of the first steps in building socialism, V. I. Lenin created the foundations of the theory of managing socialist society and developed the principles and basic methods of organizing management.

Following Lenin’s directives, our party has always regarded the improvement of economic management as one of the important components of its activity.

Relying on the possibility of knowing economic laws, it acts upon the concrete forms of their manifestation and, on this basis, accelerates the entire process of social reproduction and actively influences the improvement of the system of economic relations in production in order to raise its efficiency.

Thus, management, being an objective necessity, appears as an active subjective factor of communist construction.

All that has been said above explains to a considerable degree the increased interest of researchers in recent years in the theoretical questions of improving management. The improvement of the management system itself—

⁴ V. I. Lenin, Collected Works, vol. 36, p. 130.

management is a dynamic process of solving the problems posed by life.

The published works cover a wide range of questions concerning the methodology of management, the scientific organization of managerial labor, and the technology of management.

The management of production, as a purposeful influence on groups of people for the organization and coordination of their activity in the process of producing material goods, and of their distribution and consumption, is carried out continuously. It cannot be expressed in any episodically repeated actions between which a break is possible, whether functional, structural, or temporal.

Management is a cyclical process with a definite sequence of actions that are relatively independent and at the same time interconnected, mutually conditioning one another. In these actions the very content of management, its internal “technology,” is revealed.

At present several different approaches to revealing the content of management and its functions have taken shape. Here are some points of view on the question of which functions management includes:

1. The elaboration and adoption of a managerial decision; organization; regulation; accounting and control.

2. The implementation of a decision adopted on the basis of processed information; organization of the work of the collective in solving the assigned task; control over the course of fulfillment of the indicated task.

3. Preparation and adoption of a managerial decision; organization; accounting and control; regulation and correction.

4. Collection of information; its evaluation; formulation of the problem; preparation of a draft decision; adoption of the decision; organization; current control; regulation; verification of implementation; evaluation of results.

5. Adoption of a decision; organization of its implementation; verification of implementation.

6. Survey (cognition) of the situation, which consists in obtaining and perceiving information; preparation of the decision; adoption of the decision; communication of assignments to the executors; control of implementation of the adopted decision.

7. Collection of information about the object; processing of information; elaboration of decisions; communication of the program to the executors; control over the fulfillment of this program.

8. Forecasting; planning; collection and analysis of information; preparation and adoption of the managerial decision; organization, regulation, and coordination; control and evaluation of the results of actions.

9. The choice and definition of the goals of social development (adoption of a managerial decision); elaboration of a system of measures ensuring the achievement of the established goals, including measures to coordinate the interests of workers and production collectives with the interests of society as a whole; organization of accounting for the implementation of managerial decisions; control of the implementation of decisions and, in connection with this, correction of assignments when conditions change; regulation of social processes that prevents and eliminates deviations from their normal development; analysis of the achieved level of development of society, identification of new needs, unused reserves, and elaboration of new decisions.^5

From the examples cited it is evident that the majority of authors quite rightly single out the most important, typical, and stable managerial—

^5 M. I. Bor, Fundamentals of Planning the National Economy of the USSR, “Economics,” 1971, p. 5.

...actions that reveal the dynamic nature of the management process. However, the absence of a common opinion on the question of the functions of management, and at times assertions (especially by cyberneticians and philosophers) that artificially exaggerate the importance of one aspect of the management process, make it difficult to study the deep processes of management in their integrity.

In our view, the process of management can be represented by the following sequence of its actions:

determination of goals and tasks. This is achieved by studying needs, interests, incentives, and so forth; obtaining the necessary information;

development of a managerial decision and communicating it to the executors. This function includes the following stages:

1. Collection of information on the given task.
2. Analysis of the information obtained (resources and possibilities).
3. Search for a solution to the given task.
4. Evaluation of all variants of the solution and selection of the best (optimal) one among them.
5. Coordination of the proposed decision.
6. Adoption of the decision, its formulation in the form of a document.
7. Communication of the adopted decision to the executors.

Organization of the implementation of the adopted managerial decision. This is carried out by forming the managed and managing systems; by applying all levers—economic, administrative, moral; by developing creative initiative, socialist competition, and so on.

Monitoring the implementation of the decision and its adjustment when conditions change.

Analysis and evaluation of the achieved level of development of production, identification of new needs and possibilities for the adoption of new strategic goals and tasks.

Among the named functions of management, the development of a decision occupies the most important place. And this is not only because the decision expresses, in the most vivid form, the creative process of cognition and goal-setting, people’s conscious behavior and their various motives, thoughts, and actions. A decision contains the main “charge” of social management, possessing the greatest power of influence on the managing and managed systems, the social environment, and on the will, consciousness, and activity of people⁴.

In the literature, a decision is quite often reduced to a psychological, volitional act or to a legal document having directive significance. Such definitions reflect a specific and, to a certain extent, one-sided approach to the decision by representatives of the corresponding sciences. Management, however, approaches the analysis of the essence of the decision broadly and comprehensively, considering it in motion, as a constituent part of the process of management, its main function, aimed at overcoming the contradictions that arise in the development of the economy—above all in the form of clashes of different interests, discrepancies in the movement of individual elements of the economic system, and so forth.

A managerial decision, being a combination of knowledge and will, contains within itself a subjective element, for every decision is made by people. However, it will be objective insofar as it takes into account all the objectively operating economic laws and factors at the given moment. The more fully a decision takes into account and reflects

the action of objectively existing connections and laws, the more objective this decision will be, the closer it will be to reality. The less the action of one or another economic law is taken into account in a managerial decision, the more subjective that decision will be.

A managerial decision, containing the setting of goals and tasks, as well as the determination of the means for carrying them out, flows from the urgent needs of social life in the interests of preserving, developing, and improving the system or its individual links in accordance with the objective regularities and progressive tendencies inherent in them. It, like information, permeates the entire management cycle. Therefore the preparation and adoption of decisions is one of the most important and most complex elements of the management process. A successful decision, chosen with due regard for the action of the whole system of economic laws, for the features of the given production, its condition and tendencies of development, serves as a powerful factor in raising production efficiency. Conversely, an erroneous or untimely decision may cause great losses in one or another link of production, which, under the present system of multifaceted and close ties among them, will adversely affect many links and lead to a reduction in the efficiency of production as a whole.

The variety of managerial decisions constantly present in the practice of production management dictates the need for their classification, in order to choose correctly the type of decision when solving a particular problem under particular conditions.

The choice of a criterion of classification, i.e., of certain essential features of decisions as the basis for classification, depends above all on the degree to which they are known and on those practical goals which a given classification is actually intended to serve. Any classification or typification must meet the interests and needs of practical life, for in the final analysis practice predetermines the character and direction of classification.

What, then, are the essential features objectively inherent in every managerial decision?

Every managerial decision necessarily presupposes the presence of a subject and an object of management, their interconnection and interaction, and the setting of goals and tasks carried out over a definite period of time.

Hence it seems possible to classify managerial decisions in the field of economics according to the following basic features:

1. By the subject of management: decisions of a single manager and of a collegial body;

2. By the degree of coverage of the object of management: general, partial, local;

3. By the place and role they occupy in the functioning of the managed object: basic and derivative (non-basic);

4. By the volume and orientation of the instructions and recommendations contained in the decision: those containing a general goal and specific, detailed ones;

5. By the duration of action, scale, and character of the goals: strategic, tactical (operational);

6. By the stages of the management cycle: initial (basic), operational-regulatory, corrective, and decisions connected with the performance of accounting and control functions;

7. By the degree of readiness (maturation): preliminary and final;

1. By the degree of completeness of the information available to the subject of management, decisions may be made under conditions of certainty or uncertainty;

2. By the nature of the available information: programmable and nonprogrammable.

3. By form: written and oral decisions, as well as decisions used in ASU (coded or ciphered).

The usefulness of the classifications given is easily revealed and confirmed in management practice, when much depends precisely on the ability to choose the most correct type of decision, to take into account the nature of the relations being regulated, the specific conditions, etc.

The classifications presented encompass the most general and, at the same time, special features of managerial decisions and, together with this, express a systemic approach to understanding the entire complex of decisions.

The quality of a managerial decision is characterized by a whole series of specific attributes (properties). Among them, we first of all single out the following:

scientific substantiation of the decision, i.e., the degree of its linkage with those regularities, laws, and tendencies that are inherent in the movement of the managed system;

stability of the decision, arising from the setting of real goals and tasks provided with the corresponding resources and conditions for their fulfillment;

comprehensiveness of the decision, a balanced coordination of all its directives in terms of timing, real possibilities, and resources;

timeliness of the decision;

effectiveness of the decision. It must rely on the power of the working people and place personal responsibility on specific managers and executors for the nonfulfillment of the planned measures.

Improving all qualitative characteristics means optimizing it.

A vivid example of managerial decisions that meet the listed requirements and principles of their direct formulation is provided by the documents and resolutions of the party and the government, in particular, those of recent years on questions of increasing the efficiency of social production.

During the period that has passed from the Twenty-Third to the Twenty-Fourth Congress, a great deal of work was carried out in our country under the leadership of the Communist Party of the Soviet Union, aimed at bringing the forms and methods of managing the national economy into conformity with the objective requirements of the development of the socialist economy at the given historical stage. The most important measure was the economic reform, which is being implemented pursuant to the resolution of the September (1965) Plenum of the Central Committee of the CPSU “On improving industrial management, perfecting planning, and strengthening the economic stimulation of industrial production.” As a further development of the Leninist principles of managing the national economy, this reform, as the results of the eighth five-year plan showed, had a positive effect on increasing production efficiency. At the same time, the accumulated experience makes it possible to identify problems that did not receive a sufficiently effective solution in the course of the reform’s implementation.

The Twenty-Fourth Congress of the CPSU defined the main directions and concrete paths for the further improvement of the system of economic management and the development of the economic reform in the form of a single set of measures, including the improvement of planning, improvement of the structure and functions of management bodies, the introduction of automated management systems, improvement of the system of work with personnel and [[unclear: continuation cut off at bottom of page]]

the organization of their continuing education, the development of democracy in the sphere of production management, the encouragement of working people’s participation in management, and others. Thus, the decisions of the Twenty-Fourth Congress of the CPSU contain a coherent, theoretically substantiated, consistent program of measures aimed at enhancing the role of management in the process of production.

At the present time, special attention is being given to an integrated, systems approach in the process of formulating managerial decisions.

“An increasingly important factor,” it is stated in the Report of the Central Committee of the CPSU to the Twenty-Fourth Congress of the Communist Party of the Soviet Union, “is becoming the integrated approach to planning and to the adoption of major national-economic decisions.”

The founders of the systems approach to the study of economic phenomena are K. Marx and F. Engels. It was they who comprehensively substantiated the thesis of the dialectical unity of the material world, of the interaction and mutual conditioning of all processes of social life.

A distinctive feature of the theoretical and practical activity of V. I. Lenin was likewise the systems approach to solving the problems of managing the national economy. It was precisely the systems approach that was made the basis for developing the decisions of party congresses and plenums of the Party’s Central Committee.

The systems approach to the study of problems of management and, in particular, to the formulation of managerial decisions, requires a comprehensive study of all elements of the object of management, of all internal and external links of the system, and not of some one part of it.

“In the sphere of social phenomena,” wrote V. I. Lenin, “there is no method more widespread and more untenable than the snatching out of individual little facts.... Facts, if taken in their entirety, in their connection, are not only a ‘stubborn’ thing, but also an unquestionably conclusive thing.... It is necessary to take not individual facts, but the entire aggregate of facts relating to the question under consideration, without a single exception...”^7

To ensure a systems approach means to consider the problem as a system, i.e., as an aggregate of interconnected elements forming a single whole.

The systems approach is a definite order of analysis, of thinking. The following elements of the systems approach may be distinguished:

the systems approach presupposes that any object of analysis (management) is decomposed into subsystems until primary stable elements are formed;

the interrelations among these elements, their mutual influence and conditioning, are considered;

systems are considered in motion, in development;

all elements and interrelations are in dialectical unity and contradiction;

the combinations of elements and the dependencies among them have the most varied, multivariant character.

The central point of the systems approach is the analysis of the effectiveness of different variants on the basis of comparing costs and results.

Thus, at the present stage, under the conditions of the scientific and technological revolution, an integrated, systems approach makes it possible to reduce the level of complexity of the system under consideration and contributes to the formulation of optimal decisions in the practice of managing the socialist economy.

^7 V. I. Lenin, Collected Works, vol. 30, pp. 350–351.

1. Materials of the Twenty-Fourth Congress of the CPSU. Moscow, Politizdat, 1971, p. 80. ↩

2. K. Marx and F. Engels, Works, vol. 23, p. [[unclear: page number]]. ↩

3. K. Marx and F. Engels, Works, vol. 23, p. 343. ↩

4. See: Yu. A. Tikhomirov, The Managerial Decision. Moscow, “Nauka,” 1972, p. 5. ↩