JPRS ID: 9340 USSR REPORT CYBERNETICS, COMPUTERS AND AUTOMATION TECHNOLOGY

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JPRS L/9657
10 April 1981
- Translation -
ORGANIZATION QF TtiE MANAGEMENT
OF CIVIL AVIATION ENTERPRISES
By
Valeriy Kl.ement'yevich Chirkov
FBIS FOREIGN BROADCAST INFORMATION SERVICE
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JPRS L/9657
10 April. 19 81
ORGANIZATION OF THE MANAGEMENT
- OF CIVIL AVIATION ENTERPRISES
Moscow ORGANIZATSIYA UPRAVLENIVA PREDPRIYATIYAMI GRAZHDANSKOY AVIATSII
in Russian 1980 (signed to press 20 May 80) pp 1-74
[Summary, introduction and chapters 1-4 from the book "Organization of
the Management of Civil Aviation Enterprises" by Valeriy Klement'yevich
Ch~.rkov, Izdatel'stvo Transport, 1,900 copies, 118 pages, UDC 629.7.
338.984.0~~3(022)]
CONTENTS
_ Summary 1
Introduction 2
(haptEr I. Methodological Bases of the Organization of N1~nagement of
Civil Aviation Enterprises 7
1. Content of the Organization of Management 8
2. Principles and Organization of Management in the Various Stages
of the USSR's Economic Development 10
3. Directions for Improvement of the Organization of Management
of Civil Aviatiun Enterprises 16
(h apter II. Organizational Structure of the Administration and
Management of Civil Aviation Enterlpxises 23
1. Structur~: and Functions of the Bodies by Which Civi1 ,
- Aviatio~ Is Administered 23
2. Organizational Structure of the Management of Civil
Aviation Enterprises 31
3. Structure of Civil Aviation Associations 38
Chapter III. Methods of Managing Civi1 Aviation Enterprises 43
1. Economic Methocs of Management of Enterprises 44
2. The Organizational-and-Command, Social and Psychological
Methods of Managing Enterprises 48
Qzapter IU. 1he Process of Managing Civil Avjation Enterprises 57
1. Structure of the Management Process 57
2. T~chnology of the Management Process 62
3. Optimization of Management Decisions 7p
4. Use of Computers in the Process of Manaaing Civil Aviation
Enterprises
- a - [II - USSR - FOUO]
[III - USSR - 3(id FOUO)
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:iu~nary
The book examines the bases of the organization of adi~iinistration and man-
agement, measures to improve the master scheme of management and practical
experience in improving organizational structures for management of civil
aviation en terprise~. The organizationa3: structure of the first republic
_ production associations in the civil aviation industry is set forth. The
problems ia organization of the work of personnel of management components
of enterprises, of f~srnishing equipment used in management and administra-
_ tion to work stations and of evaluating management performance are dis-
cussed. A system of indicators for comprehensive assessment of the effec-
tiveness of inechanizing administrative work and calculation of the effi-
ciency of introducing a computerized management system are present~d.
T1ze book is intended for those whose work concerns the problem of organiz- -
ing, planning and managing production at civil aviation enterprises. It
- can be usEd by teachers and students in the higher educational institutions
of civil aviation.
Twenty-six illustrations and 5 tables.
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Introduction
In defining the main lines of the national economy's development in the
near future and over the long range the 25Ch CPSU Congress emphasized that
one of the key problems in the socialist economy's development has to do
with basic changes in the styie, forms and methods of economic activity and
of the management and admini~stration of the national economy.
In order to solve these pxoblems the party has been pointing out two direc-
ti.ons for making social product~!on more intensive and efficient: speeding
- up scientific-technical progre;ss and improving management.
Scientific-technical progress is br.inging about organic qualitative ad-
vances in the instruments and sub~ects of labor, in production technology,
and in the organization of planning and managenent. Ensuring intensifica-
tion of production, introducing scientific-technical advances and solving -
the complex social problems are related to the quality of the organization _
of management of the economy. For that reason the Communist Party and So-
v~et Government are paying much attention to the various aspects of the or- ~
- ganization of management of all sectors of the economy.
Measures to improve management being carried out in our country are a fur-
ther development of Lenin's conception of maaagement under the contemporary -
conditions of the construction of communism. A r.umber of factors are now
" dictating enhancement of the role of management of the nationsl economy. -
First, the scale of the national economy has grown, its structure has be-
come more complex, and relations between sectors and indusCries have ex-
panded. Second, the scientific-technical revolution has brought into being
industries and production groupings that before did not exist: for exam-
ple, nuclear power plants and production o� nuclear power plant equipment.
Third, the dynamic development of scientific-technical progress necessi-
tates the speediest introduction of scientif ic advances into production.
Thanks to the closer relationship between science and production the time
_ between the discovery or invention and its practical realization has been
- greatly reduced. At presenz it does not exceed 4-5 years, whereas it took
27 years, say, to put the automobile into production and 14 years for the
~ airplane.
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The objective necessity of a very rapid rise in the efficiency of social
production through its intensification imposes requirements with respect to
greater responsiveness in the management of the enterprises and sectors of
the national economy. The example of educating the new man can be used to
- demonstrate the importance to the state of solving socioeconomic problems. -
Given the steady rise in the technical and cultural sophistication of the
workers, and above all the improved skill and political and business matu-
rity of the organizers of production, solving socioeconomic problems has an
essential impact on the need to improve management.
The process of economic integration of the socialist countries is vigorous
under present conditions. That fact pravides a motive for formulating an
economic po~icy of our coLntry that takes that process into account.
Tt is not only the scale of the national economy and the number of entities
making it up that accounts for the complexity of the economic systeff and
its management, but also the fact that in each of these entities a large
worker collective is employed, and every member of that collective has his
own will, interests and desires, which have to be unified and directed into
a single channel so that they promote the development of production. ~
In the years of the lOth Five-Year Plan considerable work was done to im- -
prove management of the national economy, and this was manifested in the
performance of the industrial sector, transportation, and successes in ag-
riculture and other sectors of tk~e economy. But these achievements cannot
be looked upon as a one-time action which can solve all the problems.
There is a need for an ongoing systematic effort conducted so as to take
into account the systems approach, and individual measures being carried
out in this direction are in need of additional work and revision. All
measures to improve management are being implemented in stages; having in- ~
corporated the experience that has been gained, they have been carried over -
into the current 5-year period as well.
At the 25~h CPSU Congress a program was drafted for comprehensive improve-
ment of management of the economy; its purpose is to bring the entire sy~-
tem of economic activity into line with our cuuntry's present level of de-
velopment. Here again organization, i.e., further improvement of inan-
agement of the economy in the broadest sense of the word, is becoming the
decisive link."*
In the party documents for the lOth and subsequent 5-year plans the tasic is -
set of strengthening the combined effect of the plan, of economic instru- -
ments and incentives, and of the entire system of management on development
oE production, on raising eff iciency and improving product quality and the
- task of improving management of all sectors of the economy for the sake of
fuller utilization of' the advantages and potential of advanced socialism.
*"Materialy XXV s"yezda KPSS" [Proceedings of the 25th CPSU CongressJ,
Moscow, Politizdat, 1976, p 58.
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The new scale and conditions of economic development are. imposing growing
requirements as to the organization of management and as t~ the technical
leval of production. The need has arisen to bring management and planning
methods into conformity with the present level of the productive forces.
It is at solving this key problem that the decree of the CPSU Central Com-
- mittee and USSR Council of Ministers entitled "On Improving Planning and
Strengthening the Influence of the Economic Mechanism on Increasing Produc-
tion Efficiency and Work Quality" was aimed. Successful improvement of
planning and of the economic mechanism, as well as of the style and methods
of operation depends in large part on the condirion of the organizational
_ structure of management.
Transportation has great importance to the country's economic development,
to ensuring the continuous production process of social production and to
accomplishment of economic relations among enterprises, sectors and indus-
tries, regions within the country and countries. By delivering products to
consumers transportation completes the production process for some enter-
prises and renews it for others. Transportation is a sphere of physical
production and performs important functions in Che process of social repro-
- duction. In just the years of the Ninth Five-Year Plan and the first years
of the ~.Oth the freight and passenger traffic of the transportation system
grew approximately 40 percent. Civil aviation plays an important role in
providing transportation service to the country's economy and population.
It has a share of 28 percent in total passenger traffic, which is approxi-
mately 1.5-fold more than highway transportation, almost 19-fold more than
river transpartation and 54-fold more than the passenger traffic of mari-
- time transportation.
Summing up the performance of civil aviation in the Ninth Five-Year Plan,
B. P. ~ugayev, minister of civil aviation, observed: a new step has
- been taken toward fuller satisfaction of the needs of the Soviet people for
air service."*
By contrast with the other sectors of physical production, air transporta-
tion has its own peculiarities which mu~t be taken into account in organiz-
ing the management of civil aviation enterprises.
The development of civil aviation is having a vigorous influence on the ge-
ographic location of the productive forces in the country and on creation
of new regional industrial complexes. In the context of a socialist econ-
omy, as the many problems of increasing the operating efficiency of air
transportation are being solved, the question arises of that sort of orga-
nization of management which is best capable of fitting into the socialist
social system and system of government. This organizational system of man-
� agement must create the conditions most favorable for further development
of the country's economic potential and for raising production efficiency
' and intensifying production through scientific-technical progress.
* Bugayev, B. P., "K novym vysotam" [To New Heights], Moscow, Znaniye,
1976, p 8.
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Progress of Soviet science and technology is guaranteeing a continuous de-
velopment of civil aviation. It possesses a large network of operating and
repair enterprises and a network of air terminals, pro3ect planning and
construction organizations, and scientific and educational institutions.
Such an extensive network of civil aviation enter.prises necessitates con-
tinuous improvement of management, and this process must take place in line
with the ~levelopment of social production and the new problem~ as they
~ arise.
It is taken for granted that there are three directions in improving the
organization of management of civil aviation enterprises: bolstering theo-
retical research on management problems, improving the practice of organiz-
ing management, and organizing the work of management personnel.
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_ ,
Chapter I. Methodological Bases of the Organization of Management of Civil
Aviation Enterprises
The methodology of management as the sum total of inethods and techniques of
influencing the production process and participants in it constitutes an
interrelated system. Correct combination of the elements af this system
~argely determines the efficiency of social production. Together with the
- system of management organization and management techniques, this interre-
_ lated methodological system ensures sc~entific management of social produc-
tion.
The methods of supervision in the economy cannot remain unaltered. The
more complicated the economic organism, the more flexible management must
be. The content of production management is examination of the relations _
among participants in social production.
These relations occur among individual persons--members of the enterprise's
production collective (interpersonal relations), among enterprises of the
sector or industry, among sectors or industries (intersystem relations),
and between the enterprise and the individual (mixed relations).
Management science, then, studies relations specific to each of the manage-
_ ment agencies in their interaction and ascertains the patterns of these in-
teractions. ~
Management has been and is an inseparable element of the production process
in whicl~ large numbers of people participate through their joint labor.
It arises out of social labor as one of its separate functions and is
called upon to organize, systematize and supervise the labor process as a
whole.
By contrast with socialist management, capitalist management is used for
exploitation and is governed by the tasks of exploitation. "The capital-
~ ist's management is not only a separat e function arising out of the very
nature of the social process of work and pertaining to the latter, it is at
_ the same time a function of exploitation of the social process of work...."*
* Marx, K., "Kapital," Vol 1, Moscow, Gospolitizdat, 1967, p 343.
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It is very important to the de.velopment of management science in the con-
temporary context to ascertain the organizational forms and tl:e content of
the methods and theoretical principles of managing each sectc,~ of the econ-
omy.
l. Content of the Organization of Management
Management is def ined as the method of purposive influence on whatever is
being managed. In its most general form it may be defined as the alignment
of a system, i.e., bringing it into alignment with a particular ebjective
law operative in a given environment. .
In a~l cases management is called upon to promote higher efficiency of man-
agement systems and ultimately higher efficiency of social production. In
any case, the goal of management can be achieved if what is being managed
is in an organized state. For example, a piece of transportation equipment
cannot be driven if it has not been serviced and maintained and has not
been adjusted in accordance with its purpose. Management, then, is insep-
arably bound up with organization, and organization comprises the founda-
tion of the management system. By~ "organization" we mean a particular or-
der of rel.ations among all the aspects of management, an order resulting
from the system's goal and purpose and from the interaction, location and
- cosubordination of the elements of the system. This order is furnished by
the pr.ocess that makes the elements of the system interconnected instead of
chaotic. Interaction of the elements is determined by the cosubordination
of the levels of management.
Organization of the management system provides for the interlinked ~nd co-
ordinated work of the entire collective and f~r occurrence of the produc-
tion process at a given pace. But this order may break down, whereupon de-
partures from the established course of production occur and the need
arises for management, that is, for the activity which reestablishes order
and the proportions which were upset. In such cases management is charac-
terized by a coordination of actions, while organization is characterized
by subordination of relations.
But reestablishing the flow of production does not mean full identity with
the previous sCate. Production undergoes change and growth. New propor-
tions and new assignments are therefore needed. All of this must also be
regulated by management, which is closely interlinked with the new organi-
zation it sets up. When the transportation process is organized in a
straightforward way, less of the work has to be done by operations manage-
ment. But it does not follow from this that the better the course of the
production process is organized, the less need there is for management.
' Consequently, management preserves and moreover improves organiaation. So,
organization is mostly the statics of production, while management is its
dynamics. When production is very highly organize.d and when the growth of
scientific-technical progress is rapid, management's role is not dimin-
ished, but is on the contrary enhanced.
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- The elements making up the organization of management are the following: ~
the structure, the process, the methods and the hardware of management.
The organization of production itself lies at the basis of the management
dtructure.
Structure is the system of interrelated managed and managing components
(Figure 1) that ensure achievement of thE goals and functions of manage-
ment. In civil aviation the components being managed are work stations,
teams, sections, shops, enterprises and associat ions. �
CvcmeMa ' ~
~ ynpa~~e HuA ypPABAAfOlL(AA CNCTEMA ( 5)
~b1Ctl1C20 /~pOBf/A
ynpaBnpeMaR
cucme~+a ~ ~ I
- C vc meA+a �
~/npaBneHUa ynPABl/Af0!/.~AA CNCTEMA (5~
CpeaHe2o -
~3~,voeHA
SlnpaBnAen~�rr I ~ ,SinpaBnne~+aR
cvcmen~a (2J~ cucmeti,a(2
Cucmen+a ~ ~ CuC777BMQ -
- ynp�9neNUR ~ I ynpaBneHUp
NU30B020 I I Nt190B020
~~}~'/POBNA ' ~ 3/pOBf/A ~4 _
ylIPABAA/0!L/AA 5~ ~5 ~ ~Jl1PAB!!A/OL[(AA
CNC TEMA CNC TEMA
r i ~ ~2~ r i
S//7PABJ7AEMAA S~l7PABAAEMAA
CNC TEMA CNCTEI~9A
Figure 1. Structure of the management system: = interactions with the en-
vironment; - management action; communication of informa- .
tion.
Key: 1. Top-level system of management -
2. System being managed
3. Middle-level system of management
4. Lower-level system of management
5.. Managing system -
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The management structure is a hierarchy (that is, it consists of ranks).
These ranks and levels are as follows in our case: top level--mi~istry of
civil aviation, middle level--the association or administration, and the
- lower level--the enterprise.
Operations performed in accordance with a particular technology comprise
the basis of the process of management. The composition and differentia-
tion of the operations are based on the functional division of labor of
management personnel. The process of management is analogous in importance
to the technological process of production performed by production collec-
tives. ~
The methods af management comprise the sum total of procedures and tech- ,
- niques for exerting a purposive influence on workers and on work collec-
tives to ensure achievement of eff icient operation of the entity being man-
aged. The methods of management stand in a mutual relationship to the goal ,
of management, and the principles of management are implemented by means of '
those methods.
Management hardware consists of business and office machines used to mecha-
nize the work done by individual members of the management staff, to mecha- '
nize work in particular sections of the operation of the management staff,
calculatiug mactiines, punched card machines, computer equipment and commu-
nications equipment.
2. Principles and Organization of Management in the Various Stages of the
USSR's Economic Development
The founders of Marxism, K. Marx and F. Engels, offered in their work on
the problems of scientific communism a general picture of the patterns of
development of the socioeconomic formation and did not set themse]~ves the
task of actually working out the system and the forms and methods of the
organization and management of social production under the conditions of
socialism. '
The first Marxist who did not only theoretical work, but also practical ,
work on the problem of the organization and management of social production
was V. I. Lenin.
Immediately following the victory of the Great October Socialist Revolution
V. I. Lenin advanc:ed the task of creating a socialist organization for man-
' agement of the national economy. He considered this t~ be a basic task for
a social3.st state.
The tremendous amount of practical work which V. I. Lenin did as the head
of the world's first Soviet state and the resolution of the complex prob-
lems of administration of a socialist national economy by the state sug-
= gested specif ic principles which have had fundamental importance to shaping
the scientific principles of management.
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Lenin's theoretical r~search in the field of management was reflected in a ,
number of his writin~s in the postrevolutionary period.
I. �Lenin emphasized that the gaals of management under socialism ari~e
- out of the basic economic law of socialism and are inseparably bound up
' with er~suring the complete well-being and free rounded development of all -
- members of society. He launched the task of gr~dually involving the work-
ers in administratinn of the state. It is well known that in the last
- years of his life he returned again and again to work on the problems of
management and to organizing more straightforward operation of the machin-
- ery of government. V. I. Len in's last articles and sp eeches contained ad-
vice on how to improve administration and management of the country and of
its economy.
The organizational forms of management, the structure of management agen-
cies and the methods of managerial work have undergone changes. But the
basic principles of managing a socialist economy still remain as they were
worked out by V. I. Lenin.
Democratic Centralism. This principle reflects the need for centralized
direction along with broad involvement of the workers in managing produc-
tion processes.
L':.ity of Political and Economic Leadership. This principle is based on an
outlook that assumes that economics and politics are inseparably b~und up
with one another. The leader or manager must examine any particular pro-
duction problem from the standpoint of the state, from the standpoint of
performing the basic tasks of sccialist society.
Conformity to Plan. The requirements of this principle are realized by the
Communist Party and socialist state through planning. The objective basis
for planning is the economic law of the planned and proportional develop-
ment of the naeional economy.
One-Man, Management. The principle of one-man management, of auL-hority, of
unity of wi11 in management emphasizes the personal responsibility of the
leader or manager in any particular manage.~nent unit for the job assigned ~
him.
Combination of Sectoral and Regional Administration. This principle makes
it necessary for the principles of sectoral and regional administratian to
be combined in the management of enterprises and for the tasks of manage-
ment to be correctly distributed between sectoral and regional authorities.
The Systems Approach to Management. This means that the entire thing being
managed is regarded as a system, i.e., as a sum total of elements that
shape the complex unified who3.e with a particular internal organization.
Management based on the systems approach makes it possible for the adminis-
trator or manager at any level to assess the situation as a whole and to
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n~ake a decision only after taking into consideration a11 the circumstances
and possible r_onsequences for the thing being managed as a unified system.
The Scientific Nature of Management presupposes fuller knowledge and use of
_ Che operation of the laws of social development in the practical conduct of
- economic activity so as to take into account contemporary tendencies in de- -
' velopment ot economics, science, and technology, and the social peculiari-
- ties of society.
Mater.ial Incentives. This principle makes it possible to achieve higher
efficiency in the development of social production in a planned way.
_ Participation of the Masses in Management and Control presupposes combina-
- tion of planned guidance by the state with participation of the broad -
masses of workers in management and with development of soci~i~ initiative
and control at the local level.
Sociali.st Competition is a specific variety of the socialist organization
- of production that stands in fundamental opposition to the ~ystem of capi-
talist competition. In stating the importance of this principle in con-
crete terms V. I. Lenin pointed out its important tasks. They include the
following: ensuring the public nature of the competition and comparability
of the performances of the competing work collectives; dissemination of
progressive know-how among work collectives. -
Selection of Personnel. Management is done by people, as is any activity.
In the selection of personnel, then, it is particularly important to take _
into account the manager's ability to work with people and to know their
~ interests and needs.
The principles of scientific management we have enumerated constitute a
complete system. These principles are manifested in complex form in the
practical activity of managing enterprises. For instance, the principle of -
democratic socialism is displayed in combination with the principle of one-
man management, the principle of one-man management is combined with the
_ principle of participation of the masses in management and control. In
various bodies of manag~ment the group principle has its organizational
forms for embodying the participation of the masses in self-management and
control. -
Tmprovement of the organization of management on the basis of Lenin's prin- _
ciples has always been and remains at the center of attention of the party _
and Soviet Government. For instance, the organizational structural for
management of social production in our country is being shaped by combining
the sectoral and regional principles. But in the various stages of bui~'d-
_ ing socialism one of these principles figured as the leading one. In the -
initial stage of building socialism, in the period of the New Economic Pol-
icy and collectivization of agriculture, the regional principle of adminis-
" tering the industrial sector and transportation predominated.
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Thanks to development of socialist industry in the period between 1932 and
- 1946 preference was given to the sectoral principle of administration. The
sectoral principle of administration and management was retained over the
10 years that followed.
Beginni.ng in 1957 preference was given to the regional principle of orga-
nizing administration. The resolute change of direction toward intensive
- methods of economic development and the growing scale of production neces-
sitated a transition to the sectoral principle of administration. In 1965,
then the sovnarkhozes were abolished, and sectoral ministries were reinsti-
tuted on a new basis that took into account the requirements of the eco-
nomic reform. The decision of the September (1965) Plenum of the CPSU Cen-
tral Committee marked the beginning of major transformations in organiza-
tion of administration of the national economy. To be specific, there was
further development of combination of the principles of centralized and -
sectoral administration with nroad initiative of the workers and also of
unified state planning with cost accounting and with expanded operational
independence of enterprises.
In accordance with the decree of the CPSU Central Committee and USSR Coun-
cil of Ministers dated 2 March 1973 and entitled "On Certain Measures To
Further Improve Management of the Industrial Sector," a decision was made
to work out master schemes for management of industries so as to take into
account the past experience of the existing associations and combines and
in order to increase the level of concentration of production.
The master schemes were drafted in order to meet the following needs:
i. the need to increase the level of concentration of production by con-
_ solidating enterprises and by forming production associations (combines);
ii. the need to improve the middle tier of management by setting up indus-
trial associations;
iii. the need to eliminate the excessive number of levels in managing an
industry and to bring the agencies responsible for managing the economy
_ eloser to production;
iv. the need to develop the industry's scientific-technical capability
_ through organizational incorporation of scientific and project planning or-
ganizations in unif ied production complexes in the economy;
- v. the need to create conditions for raising production eff iciency and im-
proving the quality of products produced.
The organization of the management of production is being improved simulta-
neously with a two-tier or three-tier system (two-level and three-level)
depending on the peculiarities of particular industries. In the f irst case
the ministry is in direct communication with the associations and enter-
prises. In the latter cuse this communication takes place through the
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all-union production associations of the industry to which the enterprises
are in turn subordinate.
- The two-tier system of administration is effective when the number of large
enterprises and productic~n associations in the industry is comparatively -
small. For example, the master scheme of management in the motor vehicle
industry calls for a two-tier system.
As a rule the all-union or republic association figures as the middle tier
in the three-tier system. Such associations are given the functions of the
former sectoral administrations of the ministry.
The USSR Ministry of Civil Aviation is the principal agency for administra-
tion of air transportation. This nationwide transportation ministry fur-
nishes the guidance for all civil aviation enterprises and institutions '
throughout the USSR.
Within the ministry there are civil aviation administrations and associa-
tions (UGA), which are located in the union republics and in the krays and
oblasts of the RSFSR, operating and repair enterprises, construction and
installation organizations, higher and secondary educational institutions
and scientific research institutes. Civil aviation administrations are a
variety of associations, figuring simultaneously as enterprises (with re-
spect to supervision of the operation of civil aviation) and also as agen-
cies for economic administration (with respect to the operating enterprises
making them up, air travel agencies, cluster computer centers and other
production enterprises).
In the period of the further construction of communism civil aviation has
been developir.g on an altogether new technical basis. In the interest of
maximum satisfaction of the growing needs of the public and the economy for
air service extensive use is being made of jet aviation equipment (more
than 97 percent of all traffic is performed by airplanes with gas-turbine
engines), computerized systems are being introduced for management of the
industry, administrations and associations, and enterprises and ticket
agencies, as are systems f or computerizing control of air traffic.
In advanced socialist society improvement of management is a planned pro-
cess, an integral part of the party's entire activity to guide the economy.
As the scale of the economy has grown and as production relations have be-
come more complicated, it has become neces~ary to bring the methods of man-
agement and planning into line with the present level of development of the
productive forces. The decree of the CPSU Central Committee and USSR Coun=
cil of Ministers entitled "On Improving Planning and Strengthening the In-
F.luence of the Economic Mechanism on Increasing Production Efficiency and
Work Quality" was published in 1979 to implement the decisions of the 25th
CPSU Congress and the principles of the new USSR Constitution. This decree -
is comprehensive in its solution of the problems of administering our coun-
try's economy, including transportation.
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Gross social product and :~ational income are created in transportation en-
terprises. In 1976 they earned about 15.7 billion rubles of profit, which '
was 14.8 percetit of totaJ_ profit for the national economy. ~
The present stage of development of air transportation is characterized by
the fact that it has taken a solid secon3 place (after rail transportation)
in the total intercity passenger traffic of all branches of transportation. ,
The growing volumes, expansion of the domain in which air service is used
in the economy, formation of large transportation junctions, and the in-
creasing complexity of sectoral and regional production connections neces-
~ sitate ongoing improvement of organization of the management of all civil ~
aviation enterprises. A large effort is being conducted in civil aviation ~
aimed at improving the forms and methods of the industry's management on
the basis of consistent development of Lenin's principles of the organiza-
- tion of management. The all-union state industrial association Aviaremont,
the association Aviatekhsnab, the construction-and-installation production
association Aviastroy, and a number of republic production associations
have been organized.
Cluster data processing and computer centers have been created in a number
of civil aviation administrations, the organization of production associa-
tions is still going on, and a number of other m~asures are being carried
out.
The present stage in building the organization of the industry's management
presented the task of intensifying the entire system of ~anagement by using -
the progressive achievements of science and technology. To be specific, it
is envisaged that measures will be worked out to save on labor in the ad-
ministrative apparatus; to make work more eff icient in the administrative
apparatus; to make extensive use of scientific methods of management; and
, to use equipment to mechanize and automate information processes.
An important problem confronting organization of the management of air
transportation, then, is to create a system capable of operating jointly
with the agencies for management of the other branches of transportation.
The problem of improving organization of the management of operation of all
- branches of transportation has great importance in connection with develop- _
ment of a unified transportation system. -
This kind of unified coordinating system for the organization of management _
is indispensable both at the level of the country's entire unified trans-
portation system and also at thP level of the areas where the different
branches of transportation come into contact and intersect (transportatian ,
junctions). As far as civil aviation ente.rprises are concerned, in order
to solve this problem efforts will have to be made to improve the mechanism
of administration through planning and economic instruments and the organi-
zational mechanism of management.
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The improvement of planning is the toundation for all ~~asures to improve
the organization of management of civil aviation enterprises.
Tiie following are basic among the measures directed toward improv ing the
mechanism of economic planning:
i. improvement of the system of plans--long-range, 5-year and annual;
ii. drafting the comprehensive program for development of enterpr i ses and
the industry so as to take into account the plans of administrative re-
gions;
" iii. the development and application of scientifically sound methods of
drafting plans.
The central task in improving the mechanism of economic planning is to in-
crease the efficiency of operation of all enterprises in the indus try on
the basis of faster scientific-technical progress.
_ Improving the organizational mechanism of management presupposes that a
number of ineasures will be taken to develop the structure and func t ions of
the administrative apparatus of the ministry, the administrations, the as-
sociations and the enterprises under the new conditions for the conduct of
economic activity.
3. Directions for Improvement of the Organization of Management of Civil
Aviation Enterprises
The constant improvement of transportation equipment, introduction of the
most up-to-date aircraft, the incr?ase in the volume of traff ic, and also
the need to improve the effectiveness of performance of civil aviat ion en-
terprises necessitate ongoing improvement of the organization of manage-
ment. The system for utilizing plant and equipment and labor resources and
also the eff iciency of the transportation process depend on the level of
improvement of the organization of management.
The main goal in improving the organization of managemen*. of civil aviaCion
enterprises is to increase the economic efficiency of management and the
responsiveness and optimality of the decisions made and to strengthen its
influence on the final results of the production and economic perf o rmance
- of the industry. This content as to its goal has also predetermined the
~orientation of. measures to improve the organization of management. The
main ones are as follows:
i. identification and improvement of unused organizational potent i al at
every level and in every step in the procedure;
ii, identification of potential for saving on labor;
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~
_ I
_ iii. raising labor productivity and the efficiency of labor; ~
- iv, raising the scientific-technical level of decisions related to improv- ~
- ing management; .
v. improvement of the qualifications of personnel. ~
- These directions make it possible to identify more thoroughly and exten-
sively the unused potential of management agencies and then to employ it. _
In the enterprise unused organizational potential is identified and im-
proved by improving ~he management structure and by applying management as
- a process in the utilization of the subjects and implements of labor (Fig-
ure 2). This potential may take the following form: unused time, labor,
physical and financial resources, a change in the sequence of the techno-
logical operations of management or the content ~.f these operations and or-
ganizational forms of management so as to incorporate cooperation in work
(division of labor by functions, by occupations and by skills), or a change
in the use of management hardware and methods.
This unused potential is classified as either current or future depending
on the possibility of employing it. Current potential is activated in the
existing organization of management without additional capital investments.
For instance, altering the ~ob duties of personnel in the management system
in accordance with redistribution and the c~ntent of the technological op-
erations of management does not require any capital outlays at all.
Future potential requires sizable capital outlays for its activation, a
fundamental change in management methods, the application of new technolog-
ical means of management and other measures. For example, use of new man-
agement hardware such as a computer or in-plant communication equipment ne-
cessitate the training of specialists and the reconstruction or construc-
tion of new buildings.
Organizational potential is quantitative and qualitative in nature. For
; example, improvement of working conditions tends to improve the responsive-
ness of the taking of management decisions, i.e., it improves the quality
of management. Organizational potential is identified in the process of
surveying and analyzing the performance of the management staff.
Identification of Potential for Saving on Labor of the management staff is
mainly achieved by eliminating needs for work time, by centralizing a num-
ber of production management functions, by reducing the number of steps and
tiers in the management system (concentration of management), by improving
the skill pattern of management personnel, specifically by altering propor- -
tions among supervisors, specialists and technical operatives; by expanding
- work specialization (differentiation of operations in the process of man-
. agement with respect to professicnal complexity); by improving work disci-
plin~ and through other measures. Utilizing the potential for saving on
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live labor is the principal source of reducing tlie size of the management
staff . '
' PesepB~~ j Pe~epBa~ uc- ~ PesepBb~ ,
nona~oBa -
Qnnapama 1~ I vcnonasoBaNUA ~4~
( 2 ) ( H r~A npea~we-
ynpaBneHUrr r i apydr~u mpy8�
~ moB mpr~aa !
1 ~ i ~15~ .
CoBepu~eHCmBoBaHUe i ~5~ ~
~ cmumr pa6oma~
. , ~ .
/IoBb~raeHUe x,~na- ~ ~
mypa~ ynpaBneHUa i ~6) i ~ .
~ ~-CoBepu~eNCmBoBaHUe ~ �e .
0
~ npouaBodcmBeHNOU cmpyxmypa~ i ~
0
~ CoBepu~eNCmBoBaHr~e ~ ~
q oD2aHU3at{uvHHOU cmpyxmr,/pb~ ~ -
~ ~ ~
~ i a
' CoBeprueHCmBoBaHUe I 9 b
~ mexNOnozuvecxux nporlec~oB ~ 0. ,
R � '
~ CoBepureNCmBo- CoBepuleacmBoBa~ ~
'Z BaHUe nremoaoB I (14) (10 Hue ,~+emodoB
- b ynpaBneHUA ~ ynpaBnexvrr ~
~ ~ k
a, CoBe~rueHcmBo- ~(11) (12 -
~ BHedpeHUe C
~ B.?HLC O,p2QNtL- NOBOfL TnCXHi1X11 V
oayuu r-rpyda ~ ' ~ q
I C
MexaHU~auvA mpyda
~ I (14~1 ABmoMamv~ar{uA
- , ~ I m~3~da Y
~
~
Figure 2. Potential for improving organization of the managemen~ of civil
aviatior. enterprises.
Key: 1. Current activation of potential
2. Unused potential of the management staff
3. Potential for utilizing sub~ects of labor
4. Potential for utilizing the implements of labor _
5. Improvement of operating procedures
6. Improvement of management standards
7. Improvement of the production structure
8. Improvement of the organizational structure
9. Improvement of technological processes
10. Improvement of management methods
11. Improvement of the organization of work
12. Introduction of new technology
13. Mechanization of labor
14. Automation of labor
_ 15. Future activation of potential
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Raising Labor Productivity and the Efficiency of Labor of management per-
sonnel is achieved by various means, the main ones being the following:
_ specialization of management personnel in the functions they perform, im-
provement of the s tructure of management agencies, improvement of manage-
rnent methods, the drafting of rules and standards governing work operations
and management procedures (Figure 3). Important potential for raising la-
bor productivity of the management staff lies in the "psychological cli-
mate" of the management staff.
r i r- I
PesepBb~ ~ Pe~eyBa~ Docma ~ Pe,~epBa~
3xorio,?~uu ~ npou~Boaumena- ~ s~~exmuBHacmu (g~
_ ~1~ I~ruBo2a mp,~da ~ 4 ocmu mpqaa ~ mpy8�
~ � I I
~ .ycmpQHeHUe ' ~ /IoBb~rueHUe ~ ynr~vru>HUe
~2) nomepe ~ xBanu~uxar{uu ~ ~+amepuanaNO-m.exHU- (9) ,
padovezo BpeMeHU ( 5 xadpoB ~ vecxoeo cH�d~reHrta
I i
yny~u~eNUe I 6~ noBb~zueHUe I CoBepr~reHCinBoBatiue
(3) cmpyxmr,~pa~ nep- I nuvHOU I nnaNUpoBaHUrr (10~ ~
coHana ynpaBneHUa I omBemcmBeHnocmu I npousBodcmBa.
I I
~ CoBeprueHCmBoBaNUe ~ CovemaHUe ompocneBoPo
(7~ xoHmpvnA.~a uCnon- ( u~ meppumopuanaHOZO (11)
~ HeHUen+ pa6oma~ ~ acnexmoB 3/npaBneHUp
I
, ~ ynyvu~eHUe r~cnvBiu mpyBa (12.~
� BHeapeHUe mexHUVecxux cpeacmB (13 )
_ ~
/IoBa~utt~vue xoHyeHmpat/uu mpyd�~COxpau{eHLe ypoBrieu (14)
u 3BeHaeB ynp�BneNUA
I ~ _
Figure 3. Potential for raising the labor productivity of management per-
sonnel in management of civil aviation enterprises. -
Key: 1. Potential for saving on live labor
2. Eliminution of work ti.me losses
3. Improvement of the composition of management personnel
4. Potential for raising labor productivity -
_ 5. Improving the skills of personnel
6. Enhancement of personal responsibility
7. Improved followup on execution
8. Unused potential for work efficiency
9. Improvement of material and technical supply
10. Improvement of production planning
11. Combiuation of sectoral and regional aspects of administration
- and management
12. Improvement of working conditions
13. Introduct ion of hardware
14. Improvement of the concentration of work and reduction of the
levels and tiers in msnagement -
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It is a specific peculiarity of the labor productivity and work eff iciency
of management personnel that they cannot be measured directly. The work of
this category of personnel is creative in nature and in practice is evalu- -
ated dn the basis of the final production performance of whatever it is
they manage.
Raising the Scientific-Technical Level of Decisions Related to ]:mprovement
of Ma.nagement. An imporCant potential for ma.king management systems more
_ efficient and for optimalizing them is to reduce outlays for performance of
work in advance of projects and for introduction and operation of the man-
_ agement system. To be specif ic, an effort must be made to reduce the spe-
cific number of researchers and designers of the management system and to _
` reduce the growth rate of this personnel, to increase the number of scien- .
tific and design developments introduced, to r~ake the study and design of
= the management system more comprehensive, to achieve the proper proportion
in the scheduling of expenditures to conduct research and design pr~jects
in the field of management and to increase the economic efficiency of im-
provement of the management system. `
On the whole the scientific-technical level of management is related first
to the development of management science and economic practice.
Improve~ent of the Skills of Personnel. Skill constitutes the sum total of
various kinds of knowledge and experience. Experience in management of
civil aviation enterprises has shown that the efficiency with which trans-
portation equipment is used depends direc~~iy on the lev~l of skills of su-
pervisory personnel. In civil aviation the command and supervisory pe*:son-
nel receive their education, training and characterbuilding in the educa-
tional institutions of the industry, which every year graduate and retrain
- thousands of specialists in management for all the enterprises in the in-
dustry.
Research conducted in our country and abroad has shown that improvement of
the organization of management guarantees exceptional production efficiency
and leads to the attainment of valuable economic results. High efficiency
of managerial activity of management agencies is achieved simultaneous~y
with improved organization of management.
Experience in improving the organization of the management of enterprises
indicates the need to observe the following principles:
1. Improveznent of management is composite in its nature and is manifested
in the organic unity of political, technical, economic, organizational, so-
cial and ecological aspects in the search for an effective solution to the
problem which has been set. When specific problems are being solved in im- -
proving the organization of management specific combinations of the various
aspects are frequently combined. For instance, whereas in the Ninth Five-
Year Plan e~:onomic tasks (boosting the efficiency of social production as a
whole) were combined with sociopolitical tasks (convergence of the urban
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_ and rural standard of living), in the lOth economic tasks were combined
with ~ocial tasks.
2. The target-program character of the decisions taken to improve the or-
ganization of management. The program approach pays p~rticular attention
to ma~or national economic problems encompassing the activity of transpor-
tation ministries and ministries related to them. The importance of the
pro~ram approacii is that it makes it possible to identify first of all the
largest potential for raising production efficiency and quickly activate
it.
The target approach provides for the enterprise's plans to be oriented to- ~
ward attainment of ~-Lgh final results.
' 3. The planned character of the efforts to improve the orgv~ization of
plannin.g. A goal-oriented, stage-by-stage and prflperly argaziized effort
with clear instructions as to the "what" and the "who," as to "which re-
sources" and "by what date" serves as a pledge for successful performance
of ineasures to improve the organization of planning.
We have already pointed out that improvement of the organization of manage-
- ment in air transportation is clcsely bound up with the production stru~-
- ture of civil aviation enterprises. For instance, at small and medium-size
operating and industrial (repair and construction) enterprises it is not
possible to organizP efficient services for economic statistics and general
administration, ar~d it is difficult to er?sure the labor productivity and
- work efficiency of production ~nd administrative personnel and thereby to
create an effective system for the organization of management. Concentra-
tion of production ca_pacities and labor and financial resources on the
other hand makes it ~:^~sible to realize the following advantages in the do-
main of improving the o~ganization of administration:
i. reduction of the amount of administrative work by creating consolidated
and specialized subdivisions of the administrative apparatus;
ii. centralization of many functions of management and administration in
specialized services;
iii. extensive u~e of recent and the latest hardware used in management
and administration;
iv. reduction of the relative share of the costs of maintaining the admin-
istrative apparatus;
v. good conditions for improvement of the qualifications of administrative
personnel.
The experience o�r' the civil aviation ministry and other sectors of ~he
economy demonstrates that concentration through combination of interrelated
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groupings, creation of transportation production associations from small
3nd medium-size enterprises, and the formation of large operating, repair,
. supply and construction-and-installation organizations in the industry ~
makes it possible to reduce t:te costs of maintaining the administrative ap-
paratus.
The grouping of a number of enterprises with respect to concentration of `
manpower has ~hown that at large enterprises the relative share of the ad-
ministrative work force is 1.6-fold lower than at small enterprises (Ta-
ble 1).
Table 1. Number of Administrative Personnel as a Function of the Character
of Production
Relative Share of Administra-
tive Work Force in T~tal Pr.o- _
duQtion Personnel, %
~ BreakdoFm
Engineering
and Technical
- Personnel Employees Total
Large-scale (1,000 workers or more) 14.4 5.2 19.6 -
Medium-size (between 100 and 1,000
workers) 15.5 5.4 20.9 -
Small (under 100 workers) 25.8 5.8 31.6
In practice the problem of improving the organization of the system for ad-
ministration of transport can be salved by creating large specialized
transport enterprises or transport production associations of the regional -
type. Such enterprises and associations should first meet the needs of
their respective economic region or industrial zone.
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Chapter II. Organizational Structure of the Administration and I~.anagement
of Civil Aviation Enterprises
The vertical and horizontal connections among the various economic entities
in the industry (enterprises, shaps, flight groups, services and adminis-
trations) constitute a ramified system. These connections are being estab-
lished in accordance with the existing production structure and so as to
take in~o account differentiation of the administrative work and functions
performed in the process of management. This interrelationship of produc-
tion, economic and administrative components, ensuring as it does the goals
of production and management, constitutes the organizational structure of ~
administration and management.
The organizational structure of management reflects t;he operative economic
laws of socialism and the peculiarities of air transportation as a branch
of the national economy. It is manifested in the structure, functions and
methods of management and administration.
1. Structure and Functions of the Bodies by Which Civil Aviation Is Admin-
istered
The unified transportation system plays an important role in the national
economy. Its unity is determined first of all by state ownership of trans-
portation and by the overall system whereby it is planned and administered.
The unity of the transportation system is ensured by the existence of a
definite hierarchy of administrative agencies. Without this ramified hier-
archical system the uninterrupted functioning of the transportation process
could not be accomplished. The strictly hierarchical cosubordination is
established in the structure of the administrative agencies.
Under socialism administration and management are performed by the social-
ist state, public organizations, every citizen of the country and the Com-
munist Party--the unifying and leading force of social production. All the
functions of administering social production are performed by the system of
government administrative agencies of the USSR Council of Ministers (Fig-
ure 4).
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,
. ~
(1) COBET MNHHCTPOB CCCP .
~ (2) OpzaHa~ ompacneQozo ynpaBneHU~
~3~ Op2aHbi,ynpaBnA~ryue . Op2aHa~,ynpaBnArou~ie ~4~ ;
Off11fCCJl7BCNH6/M 17pOL3B0aCTl1BOM t/C17FlOL3B0(~CT77BCHN07I C~lCpOIL
- OpzuHa~ 3/npaBnesrup npoMa~rr~neHHOCma~+v ,
~5~ Op2aHb~ Op2aHa~ ~npaQneHUAmpaHCnopmonrrtcBA~alo (7) ; �
r~np�BneHUA Op2aHa~ ynpaBneHLn cmpoumenacmeoM ' ~
npouaBoBcrnBon+
Opzar+a~ r~np�BneNUA eenacxun~ xooAUCmBo~w (g~
(3:0) MuHVCmepcmBo rrymeu coodryeHUACCCP
MvNUCmepcmBo s aaro'QHCxou aBvar/uU CCCP
(11) P -
(12) MvHUCmepcmBo nropcxoto q~noma CCCP
(13) Mu~vucmepcmBo cBa3u CCCR,
Figure 4. Chart of agencies for administration of transportation.
Key: l. USSR Council of Ministers '
- 2. Agencies for administration of sectors
3. Agencies administering social production
4. Agencies admif~istering the nonproduction sphere ~
5. Agencies administering production
6. Agencies for administering tihe industrial sector
7. Agencies for administering transportation and communications
8. Agencies for administration of construction ;
9. Agencies for administration of agriculture
10. USSR Ministry of Railways
11. USSR Ministry of Civil Aviation ~
12. USSR Ministry of Maritime Fleet
13. USSR Ministry of Communications
The organs of public organi2ations ordinarily participate in administration
and only at times do they figure as agencies for management of production
(personnel selection and assignment). Party organs have leadership and
monitoring functions.
USSR Gosplan performs the principal functions of ma~agi.ng the unified
transportation system of the USSR. It plans and coordinates the develop-
ment of all the branches of transportation, including the transport of com- -
mon and private carriers.
The structure of the system for ~dministration of transportation is built "
on the sectoral principle. This principle makes it possible to conduct a _
uniform technical. and economic policy in each separate branch of transpor-
tation. The agencies for sectoral administration of the various branches -
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of transportation are all-union ministries: the ministries of railways,
maritime fleet and civil aviation. They direct the rail, maritime and air
transportation, respectively, within the country. These agencies have
their own specific nature and are narrowly specialized and extraterritorial
- administrative agencies.
Air transportation is directly managed by the Ministry of Civil Aviation. -
The ministry's organizational structure takes into account the size and pe.;
- culiarities of air transportation. A coliegium has been set up in the min~
istry to resolve the basic issues in the industry's development and to ex,;;
amine and implement in practice the most important orders, regulations and~~
instructions. The members of the collegium are subject to approval by the.
USSR Council of Ministers. In conformity with organization of the trans-'.,
portation process administrations, associations, enterprises and organiza=
tions are set up in the industry with their appurtenant administrative ap-
paratus.
In all cases the administrative apparatus consists of relatively separate
components--administrative agencies (divisions, traff ic control services,
bureaus, and so on). The syszem of components within the production units
is set up at the various levels of suhordination corresponding to the lev-
els of organization of the transportation process or the organizational
structure of the association (enter.prise). The levels of subordination -
comprise the hierarchy of management, and the system of administrative
- agencies their organizational ~tructure.
- The principal task of administrative agencies, regardless of the organiza-
tional structure of the association or enterprise, is to ensur2 unhindered
" interaction of all the component structural parts of the enterprise in or-
der to achieve the best xesults at the lowest cost.
The peculiarities of the civil aviation enterprise are reflected not only
- in the structure, but also in the functions performed by its management
components. For instance, in management of the transportation process a
large number of diverse actions are performed. Consequently, managerial
work is divided into specialized operations--the functions of the manage-
ment components, by which are meant the objectively conditioned forms which
purposive influence on the production process takes. Among the functions
of the management components are th~ forecasting and planning of production
activity, operational management of the flow of the transportation process
and of labor, physical and financial resources, etc.
In practice all functions performed by adma.nistrative agencies or manage-
ment components come down to "who does what" or "should do what" in the
process of administration or management. The work performed by individual
participants, or, put differently, the function they perform, is not always
identical to the function of the management component. In small enter-
prises the individual participant may perform a portion of a management
function or may do all the work pertaining to one or several management
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functions. At large enterprises the individual participant as a rule per-
forms a portion of such a function or, less frequently, performs one man--
agement function in its entirety.
- The size of the group performing a particular function and comprising the -
structural subdivision of the administrative agency or management component
is determined as a function of the number of participants performing each
management function.
Planning, organization, regulation and monitoring are distinguished as the
basic functions of administrative agencies or management components charac-
terizing the content of administrative or managerial work.
Planning is the most important function of agencies for administration of
civil aviation enterprises. Ta describe the planning functions we might
say that it is the effort to project a future state of whatever is being ~ ~
managed. Planning, incidentally, is a stage of preliminary management or a -
stage in which the future parameters of what is being managed are deter-
mined. In this sense the planning function is closely bound up with state-
ment of the goal ~f management action and with drafting the program for
achieving it. The result of the planning function is the writing up of a ;
specific plan, which serves as the basis for the subsequent functioning of
the entire system.
Planning is a complicated process conditioned above all by the complexity
of production and the dynamic nature of its structure. It consists of sev-
eral interrelated parts, and they make it a continuous process. Such parCs
are forecasting, modeling and programming. '
Specialized planning agencies have been set up in our country at all levels
of administration and management of social production to perform the func-
tions of planning. The system of planning agencies includes USSR Gosplan,
which is the central planning agency, the gosplans of the union republics
and local planning agencies. -
_ In the system of the Ministry of Civil Aviation the planning function is
performed by G1avPEU [Main Economic Planning Administration] and the eco-
nomic planning divisions of the industry's administrations, associations
and enterprises. The scope of their planning activity varies and depends
_ on the content of the tasks they perform.
Organization is a function inherent in the activity of every component of
administration or management. The task of organization is inseparable from
the task of managing production. Management without organization is just
as unthinkable as organization without managerial activity to maintain or
alter it.
Selection and formation of the structure of the production facility or bod-
ies of management and definition of the connections between the facilities
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and the bodies of managemenC and their interaction determine the content of
the organization function.
Regulation as a function of the bodies of management is expected to make
production activity orderly, to identify and eliminate maladjustments, and
often to find a more optimum solution under the conditions that have come
about. Incidentally, regulation is aimed at maintaining the required rela-
tianship between the various components of the body of management or admin-
istrative agency.
It is in the process of regulation that personnel is trained, that technol-
ogy and gear are improved, that managerial orders are issued, that cost-ac-
counting indicators are read and assessments made, and the participants
given bonuses and awards. Thus the task of the regulation function is to _
improve organizational and economic relations among production units.
Monitoring. The task of this function lies in observing and checking to
see that the actual flow and development of the production process conforms
to the plan drafted previously. In performing this function the adminis-
trative agency or management component registers the qualitative and quan-
titative parameters of the flow of production, monitors the operating reli-
ability of aircraft, equipment, technological accessories, and so on.
These functions of the bodies of management may differ from one another
with respect to the management activity and the purpose intended, but
thro~sghout the entire structure of administration and management all deci-
sion~uaking processes are invariant, that is, they go through the same se-
quence. For example, in management of the flow of the transportation or
production process the functions of management are always performed: plan-
ning, organization, regulation and monitoring. It is equally important
that the process of management is invariant not only with respect to func-
tions, but also with respect to modes of execution, that is, it does not
- change for differing degrees of inechanization and automation of the work of
administration or management.
The process of creating a body of management begins with a definition of _
_ its tasks in conformity with the list of managemen~ functions and its dif- _
ferentiation. The legal basis of its creation is a legal enactment stating
that by decision of some government or public institution a unit is thereby
created in the entire system of management of the enterprise.
Creation of a body of management presupposes a clear-cut definition of its
~urisdiction: the kind of management function it performs and the limits -
of its activity and responsibility. The limits of its jurisdiction must
moreover be so defined that other bodies do not duplicate the activity of
the newly created body. In all cases jurisdiction is defined by the body _
of law (regulations, bylaws, instructions, and so on). When a new body is
being created or improved it is worth remembering that this body of manage-
ment may not have its own goals. It must always perform functions (ane or
- several) reflecting the goals which production sets for management.
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~
The next stage in setting up a body of management, once its tasks and func-
tions have been defined, is Co establish its structure. The personnel of
the body of management must be organ3.zed in a particular way, i.e., the op-
timum number of inembers must be found. They must all be distributed among
_ the structural subdivisions, and their qualifications must be defined so
that the personnel guarantees performance of Che tasks which are the re-
sponsibility of that body of management. "For us," M. I. Kalinin pointed
- out, "organizational structure is noz an end in itself, but only a means by -
which maximum results are achieved in carrying out the political and eco-
nomic decisions of the party and government."*
The structural subdivisions that exist in an administrative agency or body
_ of management can be divided into sectoral, functional and auxiliary subdi-
visions. General coardination of the activity of these subdivisions is
provided by the top level of management, which administers all the struc-
- tural subdivisions of the body or agency. This top level consists of the
following: the senior official of the body or agency, his dQputies, the
chief engineer and other members of the management staff.
_ A sectoral structural subdivision manages the individual production units
of the entity being managed. These subdivisions are at the same time line
- units. The functional structural subdivision performs some one management
- function. For instance, the economic planning division performs the �unc-
_ tion of planning with respect to assigned indicators.
_ An auxiliary structural subdivision ensures the uninterrupted operation of
all groups of the administrative agency or management component: the ar- -
chives, the office, document reproduction, etc.
Tasks are distributed among the structural subdivisions on the basis of the
established jurisdiction of the body of management in accordance with the
organizational structure set forth in regulations concerning the body and
its subdivisions.
NIltruda [Scientific Research Institu[e for Labor] has worked out instruc-
tions concerning methods of designing organizational structures for admin-
istration and management.** In these instructions the size of the body of ~
management is the sole factor that shapes its structure. But that is not
always the case. In practice one first defines the tasks and functions of
the body of management and then determines the staff size.
* Kalinin, M. I., "Voprosy sovetskogo stroitel'stva" [Problems of Soviet
Construction], Moscow, Gospolitizdat, 1958, p 566.
"Metvdicheskiye ukazaniya po razrabotke ukrupnennykh normativov chislen- -
nosti i topovykh struktur apparata upravleniya promyshlennykh predpriyatiy"
[Instructions as to tlie Mettiod of Working Out Consolidated Standards Gov- -
erning the Staff Size and Standard Structures of the Administrative Appara-
tus of Industrial Enterprises], Moscow, NIItruda, 1966, p 76.
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The following sequence is typical of the scientifically sound approach to
forming organizational structures of administration and management: -
i. selection of the base for projecting the structure of management re-
flecting the character of activity of the entity being managed. On the ba-
- sis of this one shapes the functions of management, areas of work, methods
of performance, and so on; ~
ii. selection [of a method] for designing the management structure. In
practice the computational graph method is widely used. It is based on
comp.utation of standard numbers of personnel as a function of management
functions performed and subsequent graphic representation of the internal
and external connections of the body of management;
iii. selection of a management system. Of all the types of structures
that exist management systems combining line and functional structures have
become widespread in civil aviation enterprises. A matrix structure is
used in the context of computerized systems of enterprise management;
iv, efficiency of the projected structure of the body of management. This
is defined as the benefit from the outlays made to improve the bodies of
management and to mechanize and automate work in administration and manage-
ment. The benefit is calculated not only as of the moment of planning, but
also to take into account the future development of the body of management.
The work of designing organizational structures of management components
may be done for an enterprise under construction or being designed, as well
as for one that is in operation. In the latter case the design process
must be preceded by improvement of the existing system of management. In
every case the search for ways of improving the system must be aimed at
finding the optimum variant of the structure. It is indispensable in this
connection to take into account the existing situation and scientific-prac-
tical advances that have taken place in this field.
The structure of the entity being managed is designed in three stages. In
the first stage the organizational chart of all the bodies of management is
compiled. The chart must be so prepared as to allow for notation of the -
functions performed by each body and by individual persons within it, and
it also must vividly represent ti,e existing scheme of mutual relations in
- the intrastructural hierarchy of the body of management. Such a chart
makes it possible to portray the existing situation, to identify shortcom-
ings and to ascertain the future structure. In general the chart answers
the question "how?" but does not answer the question "why?"
An answer to the second question ~.s provided by an analysis of the chart,
whose purpose is to discover actual participation and to establish that
each function and communication line is indispensable to performance of the
enterprise's ultimate goal.
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In the second stage recommendations are drafted for improvement of the
structure of management so as to take into account possibilities for mecha-
nizing and computerizing the work of administration and management. Com-
puterization has a constructive effect on the structure of the bodies of
management by altering the technology for performance of managerial opera-
tions. This change mainly pertains to redistribution of administrative _
functions between human beings and machines. It is also well known that
creation of a ASU [computerized management system] disciplines the person-
nel of the bodies of management.
In the third stage the staff size of the administrative apparatus is justi-
fied. An important direction for determining the staff size is to work out
scientif ically sound allowances for performance of each administrative or
management operation.
Work norm setting is based on a study of work time expenditures. To that
end administrative personnel must systematically study the structure of
their work time and work time studies should be prepared of jobs by the
workers themselves and by others.
An analysis of the activity of the bodies of management of a number of en-
terprises has shown that there are cases when the number of line personnel
is not sufficient, and moreover the actual work of line personnel is orga-
nized in one shift (the first). In such cases the absence of standards
governing staff siae is having an adverse effect on the quality of deci-
sions made. According to data of MIU imeni S. Ordzhonikidze [Moscow Insti-
tute of Administration and Management], the staff size of bodies of manage-
ment of the same type at the industrial enterprises surveyed ranged from 4
to 35 persons. Moreover, work time expenditures of personnel of the admin-
istrative apparatus done by the workers themselves indicate that directors
_ of planning and traffic contr.~l divisions (bureaucl and economic statisti-
cians oE shops spend about 40 percent of their time on functions uutside
their specific realm.
- There is another shortcoming in existing structural schemes of management
_ and administration--a very wide variation in the number of subordinates per
supervisor. It was established at the enterprises surveyed that the actual
number of subordinates was as follows: from 7 to 21 for the director, from
5 to 17 for the chief. engineer and from 9 to 15 for the shop head, and so
on. When we take into account that according to computations of NIltruda a
single supervisor is able to effectively supervise and work with no more
~ than 5 or 6 subordinates, then these figures show how large is the overload
on certain members of the management staif.
The full extent of the functions of managing civil aviation enterprises is
performed by the system consisting of the bodies of management. Their
makeup, forms of specialization and interconnections are determined by the
structure of the management system. The most frequent bodies of management
are groups of persons performing one or several management functions and
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bringing them together within a group, a bureau, a division, or the like,
and less frequently the bodies of management will be represented by indi-
viduals.
2. Organizational Structure of the Management of Civil Aviation Enter-
prises -
Standard management schemes are the basis for the structure of management
of civil aviation enterprises. Each such scheme includes the list ax~d dif-
ferentiation of the functions of the bodies and individuals in the manage-
ment system and a definition of the rights, duties and responsibilities of
members of management bodies. All these and other documents are set forth
in regulations and structural subdivisions and job instructions for par-
ticipants.
The principal problems arising in working out the structure of a system for
management qf an enterprise are the following:
i, establishing correct mutual relationships among management entities,
which involves defining the goals and conditions of their work and incen-
tives pertaining to them;
ii. distri.bution of responsibility among the individual members of the
body of management; -
iii. selection of specific management schemes and a~equence of management
actions in decisionmaking.
The structure of the system for administration of the industry is built up
on the sectoral principle, which makes it possible to conduct a single
technical and economic policy in air transportation. Management of civil
aviation enterprises is structured on the basis of combination of the re-
gional, sectoral (production) and functional principles of management. For _
example, the ministry's main administrations manage the respective services
of regional administrations, associations and enterprises under the sec-
toral principle. The functional principle is manifested in the work done
on matters of planning, financing, recordkeeping, and so on.
' Thanks to measures taken in the industry to improve management the previ-
ously existing organizational structure of administration and management
has undergone changes. The associations Aviaremont, Aviatekhsnab and Avia-
stroy and republic production associations have come into being (Figure 5).
An important characteristic of the management structure at civil aviation
enterprises is the linkage of its elements. Official, functional and pro-
duction links are distinguished. Official linkage is in the vertical di-
rection and follows the hierarchical structure of management whereby the
body (entity) of management at the lower level bears full official depen-
dence on the superior body (entity) of management. -
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(1~ MNNNCTP /"PA.W,IfANCKON ABNAI~/1N ~
(2) Konne2up MvNrrcmepcmBa nonrou~HUx ~rur~ucmpa (3~ ~
~4) ~JnpaBnerrvA MvrrucmepcmBa �h1ocmoAmenaHa~e omBena~ ~5~ ~
, MuHUCmepcrosa
~O~ TeppumopuanaHb~e ynpaBneHUA ~6iC0~llJrOlYflA
zpa~raaHCxou aBuar/uu zpa,~rda~vcxou aBLat/uu ~
~ .
Figure 5. Organizational structure of the Ministry of Civil Aviation fol-
lowing organization of associations.
Key: 1. Civil aviation minister
2. Ministry collegium
3. Assistant minister ~
4. Administrations of the ministry
5. Independent divisions of the ministry
6. Regional civil aviation administrations ;
7. Civil aviation associations
Functional linkage is manifested in the process of the performance of func-
tional duties by individual members of a management body. In this case the
superior body (entity) of management may give advice or recommendation to
the inferior body (entity) of mana~ement. '
Production linkage is manifested at the level of a single management body
in performance of one and the same management function. In this case the
linkage of the management actions comprising a single management function
is referred to as production linkage. '
~
Another characteristic of the organizational structure of management is its Y
elements. As a function of the degree of direct participation of the ele-
ment in the production process and of the functions it performs the ele-
ments of civil aviation enterprises are subdivided into line and functional
or staff elements.
I~ine units perform the basic production and managerial work. An example of
line units might be production shops, central traffic control services,
laboratories for inspection of special equipment, etc. _
By contrast with the line units, functional or staff units study separate ~
lines of activity of the enterprise and act in the role of advisory or man-
aging bodies. Auxiliary shops are among the functional production units,
and the planning division, bookkeeping department, production and other di-
visions are among the functional management units.
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i
Combinations of elements and of links among elements comprise the organiza-
Cional chart oC the structure of management. The simplest organizational
structural chart of management covers two levels--the managing level and
the level being managed, and it is referred to as a one-step management
structure. The group of management steps subordinate to an element at one
level comprises the general level of the management hierarchy (Figure 6).
Increasing the number of levels is extremely undesirable, since this makes
the management system sluggish, makes communication among the elements of
the system more complicated and results in other adverse phenomena. That
- is why it is an urgent task to reduce the number of levels of management..
. _
~1~ ynpaBnarou(aa KoMdHBup o63eduNeHHO2o aBvaompao'~ (2)
cm~neHa
_ Odu{uu ypoBeHa r~np~rBnexua (3)
(4~ S/npaBnAeMaA ,
crr~yneHa AemHa~e A3ponopm ABuaquoNHO- . .
� ompAda~ mexHUyecxcrw ~a~cc
-----------~j------~.~--=---
Figure 6. One-step structure for management of an operating civil aviation
enterprise.
Key: 1. Managing leve3
2. Commander of the unified aviation group
3. General level of management
4. Level managed
5. Flight ~roups
6. Airport
7. Aviation equipment facility
Accordingly, operational, industrial, supply and construction-and-installa-
tion associations are being created in a planned way in civil aviation. In
- this industry there are several republic operational associations which are
referred to as RPO GA [republic production asscciations in civil aviation]
(Figure 7).
RPO G.'~ were created from the administrative apparatus of the republic civil -
aviation administration and its enterprises and organizations. All its ac-
tivity is performed in accordance with the "Regulation on the Socialist
State Production Enterprise," approved by the USSR Council of Ministers on
4 October 1965.
The Al1-Union State Industrial Association for Repair of Aviation Equipment
Aviaremont (V/0 Aviaremont) can serve as an example of an industrial asso-
ciation in civil aviation. It is an independent structural subdivision
subordinate to and reporting ta the Ministry of Civil Aviation. Its compo-
nents include plants for repair of aviation equ~.pment and for manufacture
- of equipment to mechanize work in civil aviation enterprises. -
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(j) OPrAHM9A!/NONNAA CTPyKTyPA P/IO /'A
, 2
,7aMecmu- 3aMecmu- 3an~ecmu- 9aMecmrt- Nava,ns-
mena no mena no mena nn 9xe- mena no Hux~
npou~BoB- nemHOU nnycmar/rirt cmpou- ruma6a . ~
_ crosy paaome a~uamexHUxu menbcmBy � P/70 ~
C7) 8 9 ;
AZeHmcm4o Cny~?rda topiove- ,
� AemHa~e ABLayucHiro-
B03a3/u!7/bfX ' CM~l~70V1VblX
'C006u{eHUU ompABa~ mexHUVecxaA ,,~~mepua~oe
daaa
Cnykr~a Cn,~.?r6a cner~a~- (12)
(11) nepcBo3on mompaHCnopma :
1 ` 5
- Cnyarda NHarerrepHO- Omden
(13) n,4HX aeu~rre- a~var~'uoHHaA xanu~ianaNOao (16)
HuA cny,rr6a cmpoumenacm~a ;
(17) /7punucHa~e a3ponopmb~ Ceti?ocmoRmenaHa~e om8e~a~ (18) ,
- /l~aHOBo- OmBe~ mpqBa Omde~r ~
1 2 N 9X0110MtlVCC- tl3QpQ60171NOfl ~21~
xrlu om6en n~ama~ xc6po~ ~
Figure 7. Organizational structure of a republic production association in~ :
civil aviation (consolidated). ~
Key: 1. Organizational structure of the RPO GA
2. Deputy for production
3. Deputy for flight operation ~
4. Deputy for operation of aviation equipment
5. Deputy for construction ;
6. RPO chief of staff
7. Air travel agency
8. Flight groups
9. Aviation equipment facility
10. Fuel and lubricant service ~
11. Traffic service
12. Special air transport service
13. Administration for use of aircraft in the national economy
14. Transport service
- 15. Aviation engineering service
16. Capital construction division
- 17. Airport components
18. Independent division
19. Economic planning division
20. Labor and wages division
- 21. Personnel division
The administration of V/0 Aviaremont manages these plants and acts as a su-
perior authority with respect to them. Certain plants have retained their
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juridical independence, but the provisions of the r~gulation on the social-
ist enterprise extends even to them. The board of directors is the col-
legial body of management in the association (Figure 8).
~1~ CoBem aupexmopoB B/o �ABHAPEMOHT" '
~2) NavanmHVx o6ae8vNeHUA 3aMecmumena NavQr,aHUxa odaeau.veHUA (3)
(4) ,~vpexmopa 3aBoaoB /IpeacmaBumena !~K npo~coro3a ~(5)
Figu~e 8. Structure of the board of directors of the association.
Key: 1. Board of directors of the V/0 Aviaremont
2. ~hief of the association
3. Deputy chief of the association
4. Plant directors
5. Representative of the central committee of the trade union
Along with the operational and industrial associations, the following have
also been created in the industry:
- i. the association Aviatekhsnab, which plans, organizes and manages the ~
acquisition and movement of all aircraft equipment in the industry. Within
it there are several divisions: for the sale of aircraft equipment, auto- _
motive equipment and processing equipment used in the trade sector, for ag-
gregate deliveries, for capital construction, etc.;
ii. the construction-and-installation production association Aviaremont,
in which there are several construction-and-installation organizations as
well as a number of functional divisions: the producrcion division, the
technical division, tl~e planning division, etc.
The possibility of setting up a production association to operate and ser-
vice the computerized management systems operating in the industry is under
consideration for the sake of a further rise in the industry's operating
efficiency. In addition, an exploration is being made of the potential
that could be utilized by organizing sppcialized aircraft equipment facili-
ties for repairing particular types of aircraft and of other measures aimed
at improving the organizational structure of management of civil aviation
enterprises.
In working out an organizational structure for management of an association
or enterprise it is important to utilize the principles of optimum combina-
tion of centralization and decentralization of management. The following
basic organizational structural schemes of management of civil aviation en-
_ terprises are distinguished depending on the respective priorities given to -
these two principles.
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The Line Structure of management is characterized by the fact that all man-
agement functions are performed by a single person, and each worker car�ries
out the orders of only one supervisor, i.e., all lower-level subordinate
management entities carry out the instructions of the superior body. This
concentration of authority has an essential impact on the operational effi-
= ciency of management as a whole. A single vertical line of authority and a
direct channel for vigorous influence on subordinates are created with this
management structure (Figure 9). The advantage of this type of structure
lies in its simplicity, its reliability, the absence of contradiction be-
tweern the taking and performance of the management decision, economic effi-
- ciency and the reinforcement of the principle of one-man management. It is
the shortcoming of the line organizational structure of management that the
supervisor cannot be a specialist in everything and cover all aspects of
the activity of the association or enterprise. In this serise the orders
issued by its management are not the most effective. The specialists
called upon by the manager to perform specific management functions do not -
bear direct responsibility for the taking of decisions and for the results
of production.
,Zjupexmop(xoMaHdup) ~1~
npednpuAmvA "
Hava~aHUx r{ex� (2)
� HavanaHUxqvacmxa (3)
- P~6ovue (4) -
Figure 9. Line structure of management. ~
Key: 1. Director (commander) of the enterprise
2. Shop chief
3. Section chief
4. Workers
The Functional Structure of management subdivides the entire work of man-
agement into separate management functions which are performed by various
specialists (Figure ].0).
The complexity and scale of operations made it necessary to specialize the
management functions. Specialists with particular qualifications who have
a thorough knowledge of one or several specific functions or actions in the
management of production emerged within the bodies of management. In the
functional structure the supervisor specializes in the performance of one
management function and is responsible for its performance. For example,
the top management of the economic planning division can influence section
chiefs (foremen) in order to attain the most efficient economic indicators
of the section's performance, and the shop chief can control progress in
_ carrying out the production program, enforcement of work discipline, and so
on. The advantage of this structure is that management is highly special-
ized and the decisions taken are thoroughly worked out and substantiated.
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Management becomes more effective in this structure, since there is a spe-
cialist who knows the specific f ield (operations, service and maintenance,
repair, and so on) and who makes more competent decisions. The functional
- services are more responsive to the individual representing the managementi _
_ staff (recognizing his knowledge, his ability to get along with people, his
ability to get things done, and so on). The shortcoming of the functional
structure is the large number of divisions and channels along which manage-
ment commands are transmitted.
~1~ . ,l~ripexmop(xoMaHaup)
. npednpvamup .
Hav�nbHUx HQVanaHUx
' ~2~ r~exa nnaHOBo-sxoNOniu- (3)
vecxo2o omaena
(4) Texr,onoz yavanaHUx
uexa ~vacmxa(niacmep) ~5~
(6) Pa6avue
Figure 10. Functional structure of management.
Key: l. Director (commander) of the enterprise
2. Shop chief
= 3. Chief of the economic planning division _
4. Shop process engineer
5. Section chief (foreman) _
6. Workers
The Line-Functional Structure of management is based on combination of line
and functional units, but this means forming complex management systems.
The line and functional structures of management are comb ined to guarantee
that the problems are resolved speedily and competently. In this structure
the staff services work out policy, strategy, methods of attaining the
goals and perf orming the tasks of the unit that is being managed, while the
line units act as participants performing those tasks. ~
The instructions which the functional bodies issue to lower-level line bod-
ies have the status of recommendations. In this structur e functional link-
age is widely used.
The matrix structure, in which duties pertaining to management functions
and actions concerning the specif ic unit being managed are distributed
within the functional units, is an extension of the development of combined
management structures (Figure 11). It should be mentioned among the short-
comings of the matrix structure of management that within the line units
linkages of dual subordination occur and tend to make the line-functional
structure more complicated.
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{1) j;upeK~nop(xon~aHaup)npeanpunmvA . � ,
HavanaHUx ~2 Havana.HUx HayanaHUx Ha~anaHUx
r{exa 1 r~exa 2 r~eza d r/exa 4
(4 ~ ~
OpzaH yvacmo%~ S/vacmox yvacmox
ynpaBreHUa Ba~nycxa Barn3rcxci Bamr>cxa . . '
u3aencten~ 1 u3de~,un 1 u~ae~urr 1 ~ us~'enuir 1' '
~~~~~~i~ ~ ~J~~~ ~~J .
. ~4
~ Op2aH ~ .S~~acmox y~acmox y~acmox
ynpaBne~+UA Ba~n~cxa Ba~n,r~cara Bamycxa
u~aenuens 2 usaenua 2 u~Benu~r 2 u.~aenuR 2
--------L-----1--------. , '
- Figure 11. Matrix structure of management: - official linkage; func- '
tional linkage.
= Key: 1. Director (commander) of the enterprise ~
2. Shop chief '
3. Body of management for product
4. Section for manufacture of product ;
Combining the different structures is the most realistic way of achieving ;
flexibility and responsiveness of management systems. Experience has ;
proven that the effective organizational structure of management is the one
that relieves the highest management unit to the greatest degree from set-
tling the everyday matters that arise in current conduct of business so
that it can concentrate its attention on the main directions which are �
strategic for the industry. Creation of a new link in the hierarchy of
economic management--the association�--is in this case a necessary condi-
tion. '
3. Structure of Civil Aviation Associations ;
Tlie transportation process is the point of departure and the decisive fac-
tor in organizing management in a transportation enterprise. It comprises
the sum total of interrelated basic, auxiliary and service processes con-
tributing to the movement of freight and passengers. The transportation -
process necessitates division of labor among worker collectives and a cor- -
responding distribution among them of transportation equipment, operational
equipment, machines, and so on.
~ A particular structure of management is formed in order to ensure effi-
- cient functioning of the transportation process and management of work col-
lectives. Associations are an example of a progressive new structural form
= of socialist production. The first associations, or, as they were then
called, firms, came into being in 1961. Having emerged in light industry,
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the production associations soon became widespread in many industries. In
1968 the first associaCion was set up in highway transport, and in 1969 the
_ first association came into being in civil aviation--the construction-and-
installation production association Aviastray.
All civil aviation associations have certain differences from transporta-
tion enterprises both in the nature of the regional organization of produc- -
tion and also in its structure. At the same time tY.e associations also
have a number of features in common with enterprises. For instance, the
association is a multiplant enterprise.
In the language of political economy the association and enterprise should
be regarded a: phenomena of the same order. In our discussion that follows,
theaa, associations and enterprises will be referred to as enterprises. -
The transition by and large to a three-tier system of management in civil
_ aviation calls for abolishing the regional administrations. The production
associations become the largest production and economic units in the indus-
- try. With respect to their functions and rights they differ fundamentally _
from the administrations being abolished.
The production association is not restricted in its activity to administra- -
tive functions, but is an economic organization which operates on the basis
of cos t accounting, has financial independence and bears th.e full extent of
responsibility for the results of the production and economic performance
of all the production units making up the association. Transport associa-
tions better suit the requirements of the scientific-technical revolution -
than separate enterprises, technical improvement of production and special-
ization of labor take place i.n them f aster, and they also have the follow-
ing inherent peculiarities.
First, associations figure as a new form of economic organization in which
the principal economic planning and scientific-technical functions in man- -
agement of the transportation process have been centralized. Second, the
responsiveness of management of the transportation process is enhanced when
associati.ons are set up.
At present ther.e are about 10 associations in operation withix~ the Ministry
of Civil Aviation. Each association represents a complex unifying previ- -
ously separate enterprises and their physical, labor and financial re-
scurces on a new economic b asis. The basic principles in organizing asso-
_ ciati~ns in civil aviation were the following:
_ i. the sectoral unity of enterprises whose pro~uction process is charac-
terized by the technological kinship and by similarity of the product pro-
di.~c~d. This principle has been entirely adhered to in setting up all the
exist~~ng associations in civil aviation;
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ii, industrial cooperation of enterprises based on development of techno-
logical specialization has been applied to a limited 2xtent in setting up
_ associaeions in the industry. The reason for this is that civil aviation
enterprises are characterized by a closed production cycle;
iii. combining the production of enterprises in the different branches of '
transportation. The creation of associations on the basis of this princi-
ple will off er a comprehensive solution to the problem of ineeting the _
transportation need of the economy and the public. This principl.e is under
study and has not yet been applied in air transport.
Centralization of management functions and the productive and economic re-
lations taking shape in the association constitute important and decisive
characteristics determining organization of management of the association.
Three types of association are distinguished on the basis of these charac-
teristics.
_ The first is the association with a central (head) enterprise and branches
(filialy) which are part of the association (Figure 12). The staff for ;
managing the association is at the same time the body for management of the
central enterprise. The functional bodies of management are centralized to
the greatest degree within the management staff. The republic production
associations of civil aviation have been set up on the basis of this kind
of organizational structure.
A/1/IAPAT f1/1PAB71EHNA /'OAOBHO/'0 /IPE,Ij/7PNATHA ( 2 )
~Z~ronoBHOe /1pou~BoacmBeHHa~e noapn~aeneHUn (3j
npednpvpmue ' 4 _
6
AemHb~e Asponopm AB7LQt{t10NN0-
omppda~ mexHUVecx�p d�sd
(7) ~vnuanb~ /Ipou3BoBcmBeH- Apou,~BoBcmBeH- /Ipou3BodcmBaN-
Na~e eduHUUa~ Ha~e eBuNUr~a~ Ha~e eduNUua~
Figure 12. Consolidated organizationaZ structure of the first type of as-
sociation.
Key: 1. Head enterprise
2. Management apparatus at the head enterprise
3. Production subdivisions
- 4. Flight groups
5. Airport
6. Aircraft technical facility
7. Branches
8. Production units -
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The secand is the association with a central (head) enterprise (the other
enterprises within the association are aff iliates [filialy]) (Figure 13).
The management of Che association centralizes all management functions, but
it is separate. Al1 the association's enterpri;ses have their own manage-
ment apparatus.
y
~ A/I/IAPAT J//1PABJlENNA
o Q r0A0BH0/'0 /1Pf,Ijl7PHATNA ~ 2 ~
~Q
~1) ~
npou~aoac~B~,~Hb,~ ~3~
~ ~ noBpa~aeneHUfr
.A
~ Annapam yn~aBneHUa
(4) ~ rPunuano~? ~5)
a
~ .
~
!/ex !(ex qex
Figure 13. Consolidated organizational structure of the second type of as- ~
sociation.
Key: 1. Head enterprise
2. Management apparatus of the ~ead enterprise
3. Production subdivisicns
4. Affiliates
5. Management apparatus of the affiliate
. 6, Shop
The third is the association without a central (head) enterprise. All the
enterprises making up the association are affiliates (filialy). The asso-
ciation's management staff centralizes all management functions and is sep-
arate from the bodies of management of the affiliates. The V/0 Aviaremont
- was shaped on the basis of this kind of organizational structure.
An analysis of the activity of the associations which have been set up in-
dicates a number of peculiarities in the functioning of the mechanism
within the industry.
1. Enterprises making up an association figure as branches with respect to
- the central (head) enterprise, and if there is no central (head) enter-
prise--with respect to the association's body of management.
2. The enterprises making up the association do not have economic and ju-
ridical independence. The central (head) enterprise is an exception.
3. The economic mechanism of the enterprises is being converted to inter- -
nal cost accosnting.
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4. At the enterprises making up the association there are no functional
subdivisions for planning, accounting, monitoring, personnel training, etc.
They are all centralized ~n the headquarters of the association.
5. The association's headquarters is at the same time the body for manage-
ment of the central (head) enterprise. In certain cases there may be an
exception when the headquarters of the association is set up separate from
the bodies of management of the central (head) enterprise.
6. Creation of a centralized operations service--this is the principal or-
ganizational measure in organizing management of the association. The op-
erations service is responsible for performance of the entire. set of opera- -
tions related to organizing the transportation process: conclusion of con-
tracts, traffic planning, and followup on progress in fulfillment of con-
tractual obligations. ,
7. Subsequent centralization of the association's functional subdivisions.
8. Creation of a computerized man~gement system within the association.
The use of computers and scientific methods of planning and management are
effective means of increasing the productive and economic performance of
all structural units of the association. ~
Experience with the performance of the industrial associations indicate~
that they are achieving a systematic improvement in the quality of the ,
product produced and of rise in production efficiency at a faster pace :
(than industrial enterprises as a whole). For instance, the average annual
growth rates of the volume of production for the associations have been ap-
proximately 9.6 percent, whereas for the entire industrial sector this in-
_ dicator is 7.8 percent; the rise of labor productivity in the associations
has been 7.9 percent, while for the industrial sector as a whole it is 6.3
percent.*
~ The new conditions that have arisen in c~nnection with formation of the as- ~
sociations necessirate improvement of the other elements in the integral
structure for management of civil aviation enterprises. Whereas in the '
first stage work was done to set up the associations in the industry, in
the next stage an important role is given to uptimizing the methods and the
- process of management of civil aviation enterprises. -
~ Taksir, K. I., "Upravleniye promyshlennosti SSSR v sovremennykh uslovi-
yakh" [Management of the Industrial Sector of the USSR Under Present Condi--
tions], Moscow, Vysshaya Shkola, 1972, p 278.
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Chapter III. Methods of Managing Civil Aviation Enterprises
The way in which the goal of management is achigved is called the manage-
ment method. Each method is characterized by its content, its orientation
and its organizational farm (Figure 14).
~ (1) Memoa ynpaBneHUrr ~
_ (2) ~opMa peanv,~at~uu (3~ HanpeBneHHOCma CvaepxraNUe (4)
(,5) EauHOHavanue 8 Ma~epvan3HaA 9xoHOn~uyecxoe (11}
~ ( /lcuxono2uaecxoe (12)
~6~ ~ KOAAC21lQ1)bHaA COl/tLQABHQIT
. � COt/1tRAbNOe ~9~
~ (13)
(7 KonnexmuBHaA npuH3rBumenaHarr TexNUaecxoe
Figure 14. Characteristics of the management method.
Key: 1. Management method 8. Financial
2. Organizational form 9. Social
3. Orientation 10. Coercive
4. Content 11. Economic
5. One-man management 12. Psychological
6. Management by committee 13. Technical
7. Collective management
The content of the manag~nent method has to do with meeting the require- -
_ ments of ob~ective laws. Orientation in its general form is determined by
the characteristics of those motives by which the operative is guided. The _
organizational form of the method is manifesCed in the modes or procedures
by which it is carried out.
The economic, organization-and-command, social and psychological methods of
management have become widespread as the management of civil aviation en-
terprises has been organized.
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1. Economic Methods of Management of Enterprises
Improvement of the economic mechanism of the industry's enterprises neces-
sitates introduction of effective methods of management capable of enhanc-
�ing the role of cost accounting, economic instruments and incentives for
increasing production efficiency. An important role is to be played here
by economic methods, by which we mean economic accounting, which is based
on deliberate use of the encire system of production relations and the eco- ;
nomic laws of socialism and on the f inancial motivation and accountability -
- of personnel for the consequences of the decisions they make. The content
_ of economic methods comprises the entire sum total of socialist production -
relations, economic instruments are the tools for carrying them out, and
the enterprise is the entity whi~h is managed.
- In the entire set of the system of economic methods of managing the enter-
prises of the industry we should distinguish direct economic accounting
(pryamoy ekonomicheskiy raschet) and full cost accounting (polnyy khoz-
yaystvennyy raschet) (Figure ~5).
Direct Economic Accounting is based on social relations and direct distri-
bution of all resources. This method is used in managing economic and pro-
duction processes and also to determine the social efficiency of production -
in the process of conducting a unified policy for the scientific-technical -
development of the industry and to achieve future socioeconomic and other -
goals. Electronic computers are used to employ the method of direct eco-
nomic accounting at enterprises.
The analytical, normative and balance methods of computation have become
widespread in conducting economic analyses of the performance of enter-
prises based on direct economic accounting.
The analytical method consists of determining the directions that are con- -
ducive to a planned rise in production efficiency on the basis of evalua-
tior~ of enterprise performance and the unused potential revealed. At the
same time this method makes it possible to assess qualitative changes in
enterprise operation and at the same time to identify the progressive and
undesirable tendencies in their changes.
Experience in using the analytical method at civil aviation enterprises
suggests the following procedure governing its use. Analyses are made of
fulfillment of the production program, of labor indicators (labor produc-
tivity, staff size, the wage fund), of financial indicators (proceeds, in-
come and profit), and also of economic incentive funds.
In the final stage of conducting the analysis a plan of organizational and
technical measures is drafted according to the results of enterprise per-
formance. The plan presents specif ic proposals for correcting the short-
- comings discovered, and the economic eff iciency and anticipated annual sav-
ing are calculated For each proposal.
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3xoHOMU~ecxue MemoBa~ u pa~aa2u r~npaBneHUp npoasBoacmBoM
(2) MemoBa~ _ ,
. ~
~3 /I~DAMOZ[ 9flOf/OMtLVeCXILt! /IOllf/bflL X09A11C7T7B2HNb1tL ~
pac*~em pacvem
Pbly�2fl ~5~
AHanumu+~ecxrru,~+emot7 OmpacneBou L(eHa (8)
(9) HopMamuBHa~u Mc~moB
%)pu6b~nb . (12~
(10) 6anaHCOBb~u n~emoa 3aBoacxou,
npousBoa-
(13.) 3xcnepuMeHmanaHa~uMemoa cmBe~Ha~u Kpeavm (14)
(15) npoaHOaupoBaNUe yacmuaHa~u (16)
(17) MoBenupoBaHUe KoMnnexcHa~u (18)
Figure 15. Classification of economic methods of managem~nt.
Key: l. Economic methods and instrumentis for management of production
2. Methods
3. Direct economic accounting
_ 4. Full cost accounting ~
5. Instruments
6. Analy~ical method
7. Sectorwide and industrywide
8. Price
9. Plormative method
10. Balance method
11. Plantwide and in the production unit
12. Prof it
13. Experimental method
- 14. Credit
15. Forecasting
16. Partial
17. Modeling
18. Comprehensive
~wo varieties of the analytical methods can be used at enterprises in the -
industry: the partial (special-topic) and the comprehensive. The partial
metliod has to do with solving specific local problems in the production and
~ ecoriomic performance of the enterprise. For example, in analyzing the
level of utilizatior, of f ixed capital the comprehensive study of ~his mat-
ter is set up, possib~e consequences of the decisions prepared are eluci-
dated, and tlieir impact on performance of subdivisions and the enterprise
as a whole is evaluated.
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Comprehensive analysis is applied in solving major production and economic
problems facing the enterprise or association. For example, a comprehen-
sive analysis includes an assessment of enterprise performanc~, determina-
- tion of its growth potential and the drafti.ng of multiannual and annual
plans, measures related to reconstruction of the enterprise, and so on.
These analytical methods of management make use of a common system of plan-
ning, reporting and analytical indicators to evaluate past, current or an-
ticipated changes in the production and economic performance of enterprises ~
and associations. The assignment for the new planning period is determined
on the basis of the results of the economic analysis conducted.
The normative method or the method of technical-and-economic substantiation
is aimed at determining the quantitative scale of the planning target. The
- principal task of this method is to work out a mechanism for substantiation
of economic decisions. -
In the course of the analysis a determination is made of the factors inhib-
iting and promoting development and attainment of the goals which have been
- set for production, and the method itself makes it possible to describe and -
quantitatively evaluate how efficiently the entity being managed is per-
forming. The technical-and-economic norm--the basis of comparison--is the
sole quantitative scale used to evaluate economic decisions. -
The most widespread basis of comparison at the enterprises of the industry
is the planned level of indicators and data from past years. The shortcom-
ing of this basis is that it is obj ective. To eliminate this shortcoming
- it is advisable to use the standard level of indicators, since on the one
- hand they are common to groups of production units, and on the other they
orient production toward the most progressive and advanced standards for
utilization of production resources.
The methods of mathematical economics and electronic computers are an ef-
fective means of improving technical-and-economic norms at enterprises.
_ Their use makes it possible to build models of the optimum state of the en-
tity being managed and of technical-and-economic norms at which optimum
utilization of all resources can be achieved.
= The balance method makes it possible to link together the balances of con-
sumption and accumulation, of income and expenditures, and of the national
economy's freight traffic and passenger traffic within the country's uni-
fied transportation system. This method has been widely applied at enter-
prises in the Lndustry because of its simplicity.
The experimental method is used in devising the optimum and economically
efficient vari~ints of the plan. This method has come into wide use in the
conduct of scientific and design projects in the industry. Forecasting and
modeling are among the experimental methods.
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Scientific forecasting is the initial basis for carrying out the process of
plannirig, but it is no substitute for it. A graphic representation of the
future state of the entity being managed can be obtained by modeling (re-
producing) the behavior of the entity being managed. In this case modeling
- is a method that makes it possible to analyze the impact of various fa;,tor5
on the economic model of the entity being managed, to observe future si*.u-
ations and to conduct scientific experiments.
Full Cost Accounting is based on a measuring of costs against the results
achieved. The following are among the basic principles for organizing cost
accounting at enterprises of civil aviation: independence in economic ac-
tivity and operations; the pay-as-you-go principle and p~ofitability; and
economic motivation and financial control.
The principles of cost accounti.ng have been introduced in all structural
units of the Ministry of Civil Aviation. The experxence of introducing it
is most interesting at repair enterprises, where plantwide (internal) cost .
accounting has become widespread. In the industry's operational enter-
prises cost accounting within the production unit is being used more and
more.
The multisector activity of enterprises has an influence on the specif ic
nature of cost accounting in tne industry. For example, operational enter-
prises not only do the work of commercial handling and technical servicing
of airplanes and helicopters and carry the mail, cargo aud passengers, but
they also do work related to the use of aircraft in the national economy.
Assignment of internal cost accounting indicators is accordingly a power of
the enterprises themselves, and the list of indicators which are planned--
production, labor and financial--is a standard list.
On the basis of the performance of enterprises st.ructuring their operation
on the principles of cost accounting it is advisable to recommend one or
two production, labor ~nd financial indicators and between one and three -
- qualitative indicators for each of the subdivisions to be used for purposes
of awarding bonuses on the basis of results in plan fulfillment. Targets
for the total amount of income and expenditures are assigned to subdivi-
sions in order to determine the degree of their impact on the profitability
of the enterprise's operatian. Specific selection of the indicators is de-
termined by the nature of the work done by the specific subdivision and the.
possible influence they might have on the level of that indicator.
For most basic production subdivisions (flight groups, aircraft equipment
- facilities, fuel and lubricant services, special automotive transport,
etc.) the number of operational or standard ton-kilometers of the section
is recommended for assignment as a production target.
For other subdivisions it is advisable to assign the volume of the sec-
tion's passenger traff ic (traffic department, management apparatus), -
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operational passenger turnover (stewards service), the volume of capital
construction (capital construction division), the amount of technical ser-
- vicing and maintenance in converted units (aircraft equipment facility),
_ and so on.
Breaking down the plans of the subdivision to shifts, sections, crews and
individual operatives is a pledge for successful introduction of internal
cost accounting at civil aviation enterprises.
Improvement of the mechanism of economic management also affects the high- '
est body of management in the industry. The typical features of cost ac-
counting in the industry are the following: conversion of the industry to
the pay-as-you-go principle; profit as the principal source for expansion
of reproduction; material incentives of the ministry staff For fulfillment
of the targets for the industry's performance.
In the present stage of development of civil aviation cost-accounting meth-
ods of management are effective because they are not restricted to the ~
sphere of microeconomic relations, and in a planned way they penetrate into
economic relations and linkages all the way to the top levels of the indus-
trywide hierarchy for management of air transportation. As ~ost-accounting
methods improve, the top level of economic management f igures no longer as
an administrative level, but as a system for economi.c guidance equipped i
with an arsenal of economic instruments.
Among the economic instruments used in planned management of civil aviation
' enterprises are prices, profit and credit. The price makes it possible to
_ stimulate higher production efficiency and faster scientific-technical
progress. Profit is an important indicator in evaluating enterprise per-
formance and the source for formation of economic incentive funds. Credit
is an essential tactor in raising production efficiency. Credit is in-
volved in building up nearly 50 percent of working capital; it is also in-
volved in making more than 75 percent of payments for goods and services.
2. The Organizational-and-Co~nmand, Social and Psychological Methods of
Managing Enterprises
Through the bodies ~f management of the regional administrations, associa-
tions and enterprises the Ministry of Civil Aviation exercises an organiza-
tional-and-commar~d influence on production. To that end heads of economic
entities, crew chiefs, shop heads, plant directors, and commanders of avia-
_ tion enterprises perform the role of organizers (administrators) of produc-
tion. The activity of these managers involves the use of organizational
and command meChods of management in various forms. .
_ The Purpose of the Organizational riethod of Management is to work out. a de-
cision in accordance with accepted economic standards, to designate those
who are to carry it out and to fix the date for implementation of the deci-
sion. In practice this method is manifested in the form of organizational
actions.
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An organizational management action has an influence on the qualitative
state of the entity being managed both in time and also in space, as well ~
as on Che quantitative relationship among the elements in production. The~~
- targeCs of the organizational action are the functions and structure of the
entity being managed.
An organizational impact is exerted in the following sequence:
i, statement of the purpose of the action;
ii. analysis of the possible directions, ways and methods of attaining tt1~
goal;
iii. selection and modeling of the specific direction and method of at-
taining the goal;
iv. issuance of the specific instruction in accordance with the organiza--.
tional chart for attainment of the goal that has been worked out;
_ v. followup on progress in carrying out the specific instruction;
vi. adjustment of the process of organizational impact in all stages of
the practical performance of the specif ic instruction.
When fundamentally new directions for attainment of a goal are worked out,
in addition to modeling it is recommended that expert evaluations be used,
which will make it possible to anticipate the consequences of the organiza--
tional impacts on the entity being managed.
The content of the organizational management action is not the same at ev-
ery level of management. But in all cases it is put in legal form. The
organizational methods of managing the enterprises in the industry can be
further subdivided into two types: adoption of organizational regulations
and assignment of organizational standards. -
Use of the method of adoptiizg organizational regulations exerts an impact
on the management system in order to establish its organizational structure
and the limits of its juridical independence. -
Performance of scientific management is unthinkable without technical regu-
lation of management actions. This form of management is an organizational
action subject to standards. The spher e of its influence, which is based
on the method of setting organizational standards, is determined by the
system of technical performance standards, phyf~ical standards, and design
and process documentation. In view of the fact that the system being man- -
aged and the managing system cons~itute a unified economic organism, it is
quite natural that each of them should advance its own requirements as to -
the scale of the organizational impact. For instance, the systeffi being
managed requires observance of production norms (such as partial completion
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of production, the size of the optimum lot in product manufacturing) and
economic standards (for example, consumption of physical resources, rate of
delivery of freight and passengers, utilization of aircraft, output-capital
ratio, etc.).
The managing system has in turn its own standards such as its int ernal set
of procedures, standards governing staff size, deadlines for resolving pro-
_ duction problems, etc. ~
Use of the organizational impacts of adopting regulations and ass igning
standards in con~unction with one another imparts a systematic and objec-
tive nature to the management process and nothing is left to chance.
The Command Method of Management. The organizational impact will not be
fully r ealized unless it is supplemented by the impact of a command; com-
mand methods, which are an active form of management, are aimed at correct-
ing departures from fulf illment of the established goals that occur in the -
course of production.
If the methods of organizational influence reflect the statics of produc-
tion, the command methods reflect its dynamics. Thus command methods elab-
orate the organizational measures in accordance with the actual s tate of
affairs in production.
The tas k of the command method is to ensure straightforward actions by the
body of management aimed at organizing the smooth operation of all the en-
terprise's subdivisions. Depending on the. functional tasks of the body of
management and its powers and duties all command methods of management can
_ be divided into those which implement and those which embody commands.
The act ivity of implementation arises when there is an external impact on _
the body of management. This external impact may be the order of a minis-
ter, a decree of Gosplan or the republic council of ministers or the USSR
Council of Ministers, and so on. i-
By contrast with implementation, command activity arises on the initiative
of the enterprise's own management or that of the association when it be-
comes objectively necessary to coordinate or regulate the flow of the pro-
duction process. One of the reasons for exerting an impact through a com-
mand may be a progressive initiative in the collective, the initiative of '
' individuals in the bodies of management, and so on.
The combined use of these methods in management practice constitutes an im-
portant potential of the bodies of management for increasing the effective-
ness of production managemenC.
Social management has certain specif ic features Chat distinguish it from
economic management. They are manif~sted above all in that the people us-
- ing equ ipmenC and technology and relations among them, including social
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relations, are the target of socia]. management. Thus management of social
relations signifies management of people.
Work collectives are managed in accordance with the policy of the party and
state by the administration of enterprises, which relies in its practical
activity on party, trade union and other public organizations. lhe purport
of social management lies in the following: _
First, each man's role and his place in the work collective are defined.
At the same time the scope of the rights and responsibilities is outlined '
for performance of the functional duties he is responsible for. The role
of the member of the collective is set forth in legal regulations, flow
charts, bylaws, statutes and instructions. Second, each person studies his
own social role, his functions, rights and duties. Third, each person per- r
forms his social role. This is achieved thanks to the adequate level of
general and occupational training, discipline and responsibility, and also
thanks to operation of the system of moral and material incentives. -
~ Sociological methods of management are distinguished from social planning
in the overall context of social methods of management.
The Sociological Method is used to manage the following as a function of
the target of research:
i. large-scale phenomena such as personnel turnover, vocational training,
seasonal movement of manpower, the gattern of occurrence of rejects, and so -
on;
ii. group processes--purposive orientation in the activity of a collectiv-
ity of people;
iii. intragroup pnenomena--socialist competition, political education,
etc.;
iv. behavior of the subordinate as an individual.
The management of large-scale phenomena ultimately has the regulating im-
pacz on the volume, structure and direction of vocational retraining of _
personnel on a large scale. At the enterprises of the industry measures
are being taken toward purposive orientation of parsonal interests, to man-
age the placement of personnel, toward rational location of shops, services
_ and div isi ons (Figure 16).
Authoritarian, liberal and democratic methods of management have become
widespread in managing group processes (the production collective). The
- principle of democratic centralism is the basic principle governing manage-
ment in all these methods. The a~ithoritarian method of managemenC is char-
acterized by the fact that full responsibility for the performance of the
collective is concentrated in the m~nager, he r~stricts the responsibility
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of his subordinates, and he makes decisions alone for which he bears sole ,
responsibility. ,
~ . ~11 CO!{HAAbHb/E MET0~6/ y/IPABAEHHA `
. ~
i
(2~ Cor/rronozu*~ecxue Memoaai ' Cor{vanaHOe nnaHUpoBakr~e (3)
Memod ' MemoB ynp�B-
t,~npaBneNUr+ ' MemoB Memoa neHUR npous-
ynpaB~exun ynyaeneHUn
xpynHa~nru Zyynnan~u nuvHOCm,brv BodcmBeHHOU ;
o6a exman~u axmuBNOCmaw
8 -
PauuoHanaHOe pa~- ABmopu- BHyu~e- Cor~uanaHO- '
Me.WeHUe npon~fa~ut- mapNa~u ~rue ucmopvyecnan
neHHa~x xoMnnexcoB npeenrcmBeHHOCma
L(e.neBaROpueHma- '~neBoe (15)
(12)' yup nuvHOCmNa~x OpLe~- nvBegeHUe
uHmepecoB nu6e- muP3/~o-
panaHa~u u{ue
ycno~un /lponazaHaa ~16~
t Opz~HUaauUGHNO-nna- v uzumar{up
(17) NoBoe pacnpeaeneHUe 19
mp,~aoBa~x pecypcoB 20
,?eMO- ' Cc{~uanaHO-
xpamu- ~Jdear- npovsBodcmBeH- (21)
(18) PaccmaHOBxa xaapoB vecxuu BeHUp Hap axmuBHOCm6
Figure 16. Classification of social methods of management. .
_ Key: 1. Social methods of management ;
2. Sociological methods
3. Social planning
4. Method of managing large-scale facilities
5. Method of managing groups "
6. Method of managing the individual
7. Method of managing productive activity
8. Optimum location of industrial complexes ,
9. Authoritarian
I0. Suggestion
11. Sociohistorical continuity .
12. Purposive orientation of personal interests '
, 13. Liberal
14. Conditions which furnish orientation
15. Roleplaying
16. Propaganda and agitation
17. Planned organizational distribution of labor resources
18. Assi~nment of personnel
19. Democratic
20. Conviction
21. Socially productive activity
!
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'rhe granting of freedom of action to subordinates is typical of the liberal
method. Only punctuality and the quality of the results obtained are moni-
tor.ed. This method is applicab le to subordinates psychologically cut off.
- This method of management is counterindicatPd with respect to subordinates
- oriented toward the collective, and at times it is even harmful, since it �
does not provide ongoing and current followup on the part of the manager.
Broad involvement of the working masses in management is inherent in the -
= democratic method. The manager distributes responsibility for the perfor=
mance of subordinate production units among individual operatives or grcups
of them. -
Use of each of these three methods is determined by the importance of the -
task which has been set for the p.roduct~.on collective, by the competence of
the management staff and by other factors.
Among the methods of managing phenomena within groups such as increasing -
- productive activity of all members or of an individual member of the col-
lective, occupational training, and the staging of socialist competition,
- management by roleplaying, mana~ement by social continuity and the method
of propaganda and agitation are distinguished from one another.
As a method of management social planning is an effective system for social
_ development of the collective. In performing the task of increasing pro-
_ duction eff iciency, civil aviation enterprises compile multiannual compre-
hensive plans for the technical, organizational and social development of -
collectives. To be specific, such a plan provides for solving the follow-
ing social problems of the collective: the meaningfulness of work, the
cultural and technical level of the collective, consciousness, work activ- _
ity, etc.
' The conversion of civil aviation enterprises to the new conditions of plan-
_ ning and economic incentives is bringing about a substantial increase not -
only in economic independence, but also in the social role of the enter-
� prises. For instance, in its public life every enterprise iigures as a
; unity of two aspects. On the one hand it is a praduction unit, while on _
- the other it is a social collectivity in which socioeconomic relations tak-
ing place in our society are manifested.
The makeup of the comprehensive multiannual plan may vary as a function of
the enterprise's size and specif ic nature, but its pr:.ncipal directions are
the following: development of production; improvement of the technical
base; organization of p~�oduction, of work axid oL management; employee fa-
cilities in the workplace; and the collective's social development. ~xpe-
rience in drafting comprehensive plans at transportation enterprises shows
that any of these directions could play tlie leading role in a particular
stage depending on the specific conditions.
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The plan for social development must include realistically attainable tar- _
gets, based f irst of all on the given enterpris~e's capabilities. It is ad-
visable for a small transportation collective to carry out certain measurPs
in cooperation with related enterprises. A number of problems in social
life, home life and optimum leisure time can be solved jointly with rayon,
city and oblast organizations. That is why certain propositions and tar-
gets in the plar~ must be coordinated with the respective organizations and
achieved by united effort.
Projects to carry out the measures of the social plan are included in the
operations schedules of the respective divisions and shops, which must bEar _
the same responsibility for their performance as for fulfillment of plans
- for technical and economic development.
Psychological Methods of Management are widely used in selection, training
and assignment of personnel, in shaping work collectives, in their stimula-
tion, and in establishing the necessary style of leadership.
- Since management is in essence a form of leadership of inen, a knowledge of
- psychology, especially social, engineering and industrial psychology, is an
important factor for raising labor productivity and the individual's self-
expression. -
Personal motivation is an exceedingly important psychological factor in the
worker's conscious attitude toward his work. Personal motivation can be
_ represented in the form of three main components: the material interest,
- the interest in creativity and learning, and the interest~in human rela- ~
tions. All of these interests of the individual should be considered in
relation to one another. Only in this case can one count on the ind ividu-
al's favorable reaction in terms of his conscious attitude taward work.
Work ability is a f3ctor determining the efficiency of the worker's work
activity. We should point out that work ability is not a stable character-
istic of the human organism. It varies from one phase to another in the
work process (Figure 17).* Four principal phases can be identified in the -
dynamic pattern of work ability. The first--the phase of coming to work--
is characterized by rising work ability. The second--the phase of stable
- work ability--is characterized by mutual adjustment of the rhythm and pace
of the various psychophysiological processes. The third--a phase of unsta-
ble work ability--is characterized by �luctuations in work ability. The
fourth--the ohase of progressiv2 decline of work ability--is characterized
by disruption of the pace and rhythm of the various psychophysiological
processes.
- ~ Sliorin, V. G., "Pravovyye i sotsial'no-psikhologicheskiye aspekty uprav-
leniya" [Legal and Social-Psychological Aspects of Management), Moscow,
Znaniye, 1972, 316 pages.
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. I II i ~ 8
~
~
.x ~
o .n
~ c~
Time worked
Figure 17. Dynamic pattern of work ability.
The length of each of the four phases depends on the character of the work
and the level of the worker's training. In principle the more complicated
;he work and the less prepared the worker, the longer the first phase and
the shorter the second phase.
One of the factors affecting efficiency of the activlty of a small group of
people who have come together in space and time and are jointly performing
a particular activity is the size of that group. If we plot the dependence
of the efficiency of group activity on the size of the group on a graph,
then it will take the form of a parabola (Figure 18).
~
U
~ ~ ~ ' I
~rl b0 ~i
I \
W O cd
No of inembers of team
Figure 18. Dependence of the efficiency of group activity on the siza of
_ the group.
- As the size of the group increases, its efficiency at the outset rises to a
certain level. When a certain critical value is reached, the size of the
group ceases to have a favorable effect on the eff iciency of its activ:~ty,
and then as the size increases further, efficiency drops. The specific
values are determined by the character of the task and the skill of the
workers enlisted to perform it.
The methods of social psychology and the methods of psychological motiva-
tion have a leading place among the psychological methods. The method of
social psychology studies and manages phenomena conditioned by joint human
activity. ~omething that has come to be called the "psychological climate"
comes about under the conditions of joint activity. The psychological cli-
mate in a collective is noticeably affected by the attention the supervisor
pays to subordinates, his concern about their needs. It has been noted
that psychological factors have an essential influence on such characteris-
tics of the work collective as the level of organization (harmony), collec-
tive initiative or creative "potential," the size of the collective, etc.
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_ The method of psychological motivation is based on a knowledge of the laws
of human motivation. It is accordingly a very important attribute of the -
superv isor to be able to understand the motives and interests involved in
the act ivity of his subordinates, to present them with specific tasks, and
to discover each one's potential. ~
Method and manner play an operative role in the overall management chain of '
"goal--principle--method--manner." The basic features of the mode of pro-
duction are expressed in them. At the same time the use of inethods in the
practical activity of bodies of management is a very important task con-
fronting supervisors and operatives. The ability to master them makes man-
- agement more effective.
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Chapter IV. The Process of Managing Civil Aviation Enterprises -
- The production process is the organizing principle of the management pro-
cess. In the transportation sector both the production process and the
process of managemant are cyclical in nature. The length of the cycle and
the frequency of recurrence of the production process have a definite im-
pact on the structure of management and on the process whereby the bodies
of management take shape.
In the process of the management's activity a large number of diverse ac-
_ tions are performed which are classified as management functions. The con-
tent of management actions may vary from one transportation enterprise to
the other, but the list of them remains the same. At al.l enterprises and -
organizations in the transportation sector the functions performed are
those of planning, operations management, material and technical supply,
and so on, but the content of these functions varies and is characteristic -
of each specific entity being managed.
1. Structure of the Management Process
In its general form the process of management performed by any body of man-
agement is characterized at any level by its content, its organization and
the technological sequence in which each management action is performed.
The content of management action is determined by the purpose and level of
the body of management. The purpose is in turn largely determined by the
functions of management, which are based on the division of managerial la-
bor. At various levels of management of civil aviation enterprises the _
same functions are performed (for example, the planning of material and
technical supply) in the management of different entities. For example,
the Ministry of Civil Aviation manages civil aviation associations and re-
gional administrations, and the republic production association and re-
gional administration manage the associated aviation groups and airports.
The associated aviation groups in turn manage the flight groups and squad-
rons.
Combination of the economic, production, technical and social aspects makes
it possible to view the process of management as an integral system in _
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which Lenin's principles of scientific management are observed. Each of
these aspects characterizes the process of management from its respective _
_ aspect. For instance, the economic aspect looks upon the process from the
standpoint of attainment of the most effective results of production, of -
maximizing or minimizing particular economic indicators characterizing the
enterprise's productive and economic performance. The following are among
such indicators for operations enterpri~es in civil aviation (associations,
administrations, associated groups, etc.):
i. with respect to traffic--section passenger volume;
ii. with respect to use of aircraft in the national economy--productive
fli.ght in hours ;
iii. with respect to iabor--labor productivity and the total wage fund;
iv. with respect to finance--total income, profit, profitability, and so
on.
The economic indicators for industrial enterprises (repair plants) are the
following:
i.~caith respect to production--volume of sales and products list; -
ii. with respect to labor--productivity and the total wage fund; '
iii, with respect to finance--total profit and profitability.
The productive aspect considers the process from the standpoint of the
- clear-cut and unhampered interaction of all subdivisions of the Qnterprise,
and the technical from the standpoint of the organization of the technolog-
ical process of producing the product. And finally, the social aspect of
the process of management studies the process from the sta~ndpoint of the
- state and develonment of socl.alist relations. ~
Organization of the process of management consists of arranging all of the
functions of management in a strict time sequence and of their performance
_ by participants in that process. Thanks to research done by GosNII ERAT GA
[State Scientific Research Institute of Civil Aviation for Experimental
Work on Aviation Technology] it has been recommended that enterprises in
the industry construct organizational charts of the management process.
They make it possible to view as a whole the entire entity being managed
. and to ascertain the actual participants in the manageu,ent process and the
sequence in which management functions are performed. The network shown in _
Figure 19 is an example of such a chart. Networks (models) have become
widespread at civil aviation enterprises in management of the production
processes of technical servicing and repair of aircraft, since it takes
little time and small material costs to work them out and use them in prac-
tice.
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(s Pa52Z4~a ~
b4
~a~C~Qos~~~ 2 ~d~ a,~,~d s ~h~ o . ) t ~ -
0
eti
- . 6a~d~"~ o o Q43~~a~ ( f) � Om~E~u
a, b~a Cdaya caMOnema 3KUna- B mpan~
! (b) ~ ~ ,~e 4 xceM
~O pyo , a Y ~~fi~pana 'Q
ccPd~ 6oQ~a`~ + .
~b)~od�~,~'� 3 ~e) P~",Opd 6 G4~4~~'~b ~i~
Figure 19. Network chart for servicing an aircraft arriving at an airport
(consolidated).
Key: a. Towing the aircraft
b. Placing the chocks "
c. Placement of the boarding stairs
d. Unloading the mail
e. Disembarkation of passengers
_ f. Crew's delivery of the aircraft
g. Unloading the baggage -
h. Cleaning baggage compartment
i. Cleaning passenger compartment of the aircraft
j. Removal of the boarding stairs
The following basic conditiAns must be observed in drawing up organiza-
tional charts:
i. the scale and dimensions should be chosen so that the entire chart can
be scanned; ~
ii. flows of documents for each management function should be reflected;
iii. flowlines of management functions should be shown for each entity be-
ing managed and each participant performing a management function;
iv. the notation should be brief and reduced to the minimum;
v. minimum number of breaks and intersections of lines reflecting the
flows of documents.
The method of constructing the organizational charts is as follows: '
i. all entities and participants in the system being managed and the man-
aging system in the entire system of management are determined;
ii. structural subdivisions of the management systems are distributed
among ~the levels of management;
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iii. the flowlines of management functions and flows of documents for each
management function are ascertained;
iv. an evaluation is made of the level of interaction of structural subdi-
' visions with respect to each management function and of the sequence of
performance of management actions.
The technology of the management procesa is characterized by the makeup of
operations and work items involved in the makeup of the specific management
function (management action) and by the sequence of their performance. A
technological description of the management process is the initial element
in organizing the entire process of management. Development of the tech-
nology of the management process is preceded by organizational work to dis-
triQUte performance of the various work items and operations among specific
participants. During this preparatory work it is advisable to work out an
organizational chart of the technology of performance of the specific man-
agement function (Figure 20). Participants, the work they perform and the
sequence of execution should be indicated on this chart. The requirements
they must meet remain the same as for the organizational charts of the man-
agement process.
Aside from its i~iherent characteristics, each management process also has
its own spec~.fic peculiarities, which are manifested in the fact that it is
not aimed directly at the creation of values, but indirectly, through orga-
nization of the work of inembers of the body of management. The content of
_ the management process varies as a function of the body of management, its -
level and its purpose.
The actual content of the management process is determined by the character
of the production process of the entity being managed. Moreover, it is in-
fluenced by organization of the process of management in the superior body
with wh.ich there is interaction in the process of the functioning of the
entity being managed. The content of the management process of the Minis-
- try of Civil Aviation is as follows:
i. planning development of the industry as an integral part of the na-
' tional economy, the rates of development of production and the rates of la-
bor productivity on the basis of scientific-technical progress toward the
end of fuller satisfaction of the need of the national economy and the pub-
1ic for the carrying of cargo, mail and passengers and also for the opera-
tions of the use of aircraft in the national economy;
ii. the planning and introduction of the most recent advances of science
and technology, of sirplanes and helicopters, and of equipment to mechanize
loading and unloading operaCions;
iii. p1~:nnl.ng the optimum use of capital investments and the rise of their
efficiency, construction times and deadlines for activation of production
capacities and fixed capital;
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iv. maaagement of the utilization of fixed capital and labor, physical and
financial reaources;
' v. moaitoring fulfillment of the targets of the state plan and observance
of atate discipline and other management actiono.
2 cmovHUxu u nomDe~umenu uH~opMar{uu
� BuBar /1pou~Boa-
fLH~OpMQL(LONHb1X PQ~OyCC � CMC7/Nblf~ C777BENH0- NQyQnb-
CDO~1LfC?/Ut~ MBCT770 Macmep aucnem- � Hux qeza
vepcxuu -
~3) (4.) 5)omaen
~~iacm~ra~ux ~ ~ .
CMeHHOe ~aBaHUe ~ ~ ' ~
~8~ pad'vyen~y, o-
~g~ y~em vH8uBu8yana- 0,,,~ _ ~ ~
Nou Ba~padomxu
yyem c~a~~onHeHUA ~ _ _ ~ ~ ! ~
(lo) cn>eHHOto 3aaat~ulr ~
(11) Hr~QnpMar~uaopado- � �
. me o~apyaoBaHUp
Figure 20. Organizational chart of management of an entity: o formation
of information; o use for formation of production information;
- interconnection of flows of information; = oral informa-
tion; documentary information.
Key: Z. Types of communication of information
2. Sources and users of information
3. Work station
4. Shif t f oreman
5. Production scheduling division
6. Shop chief
7. Section's plan-schedule
8. Worker's shifz assignment
9. Recording individual output
10. Recording performance of the shift assignment
11. Information on the operation of equipment
The entire l~st of management actions in the process of management of a -
- transportation industry at the ministry level are performed by the sectoral
and functional bodies of management. In connection with the current cre-
ation of transportation production associations, a portion of management
actions of a sectoral nature are being transferred to the management appa-
ratus of those associations. The content of the management process at the _
association level is as follows:
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i
i. planning, management and �ollowup on performance of the plan in ton- ~
- kilometers and also with respect to the composition of cargo and passenger
departures; ~
ii. planning, management and followup of the operation of aircraft in or-
der to attain the highest qualitative indic~tors of its utilization at all
enterprises which are part of the association (above all utilization of
carrying capacity, the productivity of flights and reduction of the costs
_ of shipment);
iii. planning, management and followup on the .operation of transportation
equipmenC of the unified transportation junctions and other management ac-
tions. ~
The content of the management process at the level of transportation enter-
prises is aimed at accomplishing the entire program of ineasures to draft
production plans, to organize their fulfillment, to keep records and to -
analyze enterprise performance.
- 2. Technology of the Management Process
The technology of the management process reveals the content of management -
activity and comprises the interrelated group of relevant measures aimed at
attainment of the goals which have been set. This set of ineasures can be
divided into two groups: management decisions and management actions.
- By management decisions we mean the internal activity of inembers of the
bodies of management aimed at resolving a particular situation (production,
economic, organizational or social sitiiation). The management action is an _
external action of inembers of the body of management and is manifested in
the form of a command, an order, and so on. -
Thus the tec~I-inology of the management process means the process of activity ~
of management personnel in preparing and making decisions and in organizing
execution of decisions once made.
The decision is the principal form of management activity; it reflects the -
content of the work of the member of management and the process whereby he
exerts an impact on the production and management collectives. Every deci-
sion, its content and form, are related to the occurrence of a spe~ific
- problem faced by the management. As a function of the character of the
pr~blem the decision may have 1.ong-range or current orientation (Figure 21).
Long-range decisions determine the main lines of development of the system
being managed over a length period of time (for example, specialization of
aviation equipment facilities with respect to types of equipment they ser-
vice).
~ Current decisions are aimed at attainment of the most immediate goals and
at solving specific problems, as well as at handling operational measures
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through immediate intervention in the course of development of the situa-
tion being managed.
. (1~ ynpaBneHaecxoe peu~eHrre . ~
2
ypoBeHa Xapaxmep Codep.?raHUe noaXOa
npuNRmo2o npuHpmozo peureHUa x euleNUw I
peureNUn peureNUR p
NapoBNOxossri- /IepcnexmriB- 3xoHOMUVecxoe CmaHdapm-~
CTTIBeI/Nb/71 Hblll ~/p/~ ~
i
� (11 Op2a~u3a-
uuoHHOe
OrnpacneBou ~
~ Texyu{uu TexHUVecxoe HecmaH;
BHympunpnu~- (onepamuB- ~ dapmNau
BOBC117Be71Hbltl , Hb)1!) COI~T/QTibNOC~ ,5~ (717BD,DyCCXILU
Figure 21. Classification of management decisions.
Key: 1. Management decision
2. Decisionmaking level
3. Character of decision made
4. Content of decision
5. Approach to decisionmaking
6. National economic
7. Long-range
8. Economic
9. Standard
10. Sectorwide
11. Organizational
12. Within the production entity
13. Current (operational)
14. Technical
15. Social
16. Nonstandard (creative)
The social relaeions of people in the production process are the principal
target of the economic decisions of management made in civil aviation en-
terprises. When the people making the decisions carry them out, they exert
a vigorous impact on the specific forms of those relations, they alter them
within certain limits so that those relations actively promote the develop-
ment and growth of the productive forces and the fullest satisfaction of
the needs of the national economy and the public for transportation ser-
vices.
In the practice of managing civil aviation enterprises decisionmaking meth-
ods based on knowledge, practical experience and intuition of the manager
- were used for a long time and are still in use. This approach to decision-
making yielded favorable results up to a certain point. The situation is
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changing at ttie present time. As the scale has increased and the organiza-
t~on and managem~nt of the transportation process have become. more complex,
- it has become obvious that the approach to decisionmaking had to be put on
a scientif ic basis. At certain enterprises (Vnukovo, Domodedovo and Boris-
pol') various mathematical methods, models and electronic computers have .
- been successfully applied in the process of managing the technical mainte- ~
nance and service of aircraft and planning the operations of apron teams, '
material and technical supply, the repair of aircraft and performance of
other functions of management.
~
In the process of scientif ic management the laws of material dialectics,
- the theory of automatic control and probability, the methods of operation '
research and logical analysis are also used in practice.
The knowledge and use af the dialectical method make it possible for the
manager to objectively evaluate the production situation, to understand the ~
nature of events taking place, to establish the relation~hip between events ~
and the production situation, and to analyze and forecast the direction ~
i
events wi11 take in their development.
- Mathematical methods and the use of computers make it possible to mechanize ~
and automate the process oF working out a decision and, most important, to ~
arrive at the optimum decision.
Neither an ordinary system nor a computerized system can take into account -
the psychophysiological attributes of inembers of the management staff such '
as psychological reaction, the interactions of the members of the collec- '
tive, etc. But even here we should say that regardless of which system is ;
making the decision, success ultimately depends on the supervisor, that is,
_ a man. Only a supervisor who has a good knowledge of the various aspects ;
of the production process, who p~ossesses the necessary knowledge and skills, '
who knows how to use camputers and to think creatively can successfully ~
manage present-day production.
The decisionmaking process is a process of creative human thought based on
the scientii:ic foundations of management and intuition. This circumstance
makes it more difficult to formalize the decisionmaking process. It is
possible, then, to offer only an idealized representation (scheme), since '
the specif ic processes quite often depart from it (Figure 22).
i
The decisionmaking process consists of a great number of operations whereby
an exploration is made for the best action among the alternatives. The
principal and most widespread operations are as follows. -
1. Identification of the problem situation. In order to discover the
problem, to~observe the deviation of the behavior of the system being man-
aged from the planned f low of production, and the discrepancy within the
system being managed and its external relations one must conduct a punctual
analysis of the relevant information. Once the discrepancy has been
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detected, one undertakes to describe the problem and t~ determine the
causes of this deviation. Such causes may be as follows: unproductive
idle time of transp ortation equipment, insufficient capacity of the shops
of the repair enterprise, tardy delivery of fuels and lubricants, etc.
(lj nPOy3BO,~creo .
- 2 Bb~ABneHUe
' npodnen~~ou cumr~at/uu
r~~---~
~ lIAQS~ ~
11pe8Bapr~menaNaa I nped- I -
ypop~+ynupoBxa 3aaavu npuAmuA I
r�- (3 L--r---J
_ ~ PecypCar ~ (5 ~Pope+upoBaHie r~eneu
1 nped-, I
~ npunmua I
t___ _J Ba~dop xpumepuAOr~eHxu
3yv~exmUB~rocmu peueeHUrr -
To~Hafr~opMynupo8xa3a'Ba~u
~9~ Paspa~amNa Bo.~MOarNa~x 9apuaHmoB perueNUASaBayu
' COCmlLBnef/LC MOdCnt! CtlCT17CMb7 C 3/VCmOM
B03MON(Nb1X BQpIIaHJl10B
ConocmaBneNU~ u or~eHxa BapuaHmvB peuteHUa
no Bs~dpaHr~on+y xpuine,au~o (11)
/IpuNnmue pevreHUrr (12)
(13 .~oppexmupoBxa perueHUR
Figure 22. Block diagram of the decisionmaking process.
Key: l. Production -
2. Identif.ication of the problem situation
3. Preliminary statement of the problem
4. Enterprise plan -
5. Statement of goals
6. Resources of the enterprise
7. Selection of criterion for evaluation of the effectiveness of the
decision -
8. Precise statement of the problem
9. Development of possible alternative solutions for the problem
10. Compilation of a model of the system taking into account the pos-
sible alternatives
11. Comparison of the alternatives and their evaluation with respect -
to the criterion chosen _
12. Decisionmaking
13. Adjustment of the decision
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The problem may be stated in the form of the task of correcting the causes
that have been discovered or of carrying out instructions of superior orga- ,
nizations. In identifying the problem .*.he member of management must evalu-
ate its importance on the basis of the particular strategy adopted for man- ~
aging the industry, the association and the enterprise.
Several problems may arise in analyzing the state of the system bzing man-
aged. In this case it is indispensable to establish the order (priority)
- of their solution by performing the following operations: ranking the
problems by importance and the urgency of dealing with them; definition of ~
the specif ic tasks in solving each problem; identification of the general
taska covering sev~ral problems; determination of the cr~teria and con-
_ straint: pertaining to the problem being solved; and organization of a team ~
to work out the decision.
2. Preliminary statement of the problem. The search for the most rational !
ways of. solving the problem is preceded by a stating of the problem. Revi- '
- sions of the statement of the problem are made in the proc~ss of making the ~
management decision. AI1 problems are classified as either tactical or ~
_ strategic depending on the causes giving rise to the discrepancy in the
- flow of production (between the pla.i and actuality) and making it necessary ~
to solve the problem. Tactical problems arise because random departures
have occurred (breakage, lac~ of replacement parts or materials of some
kind, and so on). The time for solving such problems is limited.
- Strategic problems are related to correction of shortcomings that exist in
~ production (regular overconsumption of fuel, higher growth rates of the av-
~ erage wage than for labor productivity, etc.). If the problem is to be ~
stated precisely, a proper study must be made of the situation and the rea-
sons for its occurrence on the basis of information already available, and
a dPtermination must be made as to which of the workers was directly in-
volved in the section where the undesirable situation came about, and the _
consequences of the impact which solving the problem will have on the flow =
of production must be determined.
3. Statement of goals. The purposiveness of the decisions being prepared
for adoption must follow from a definite management strategy. In this con-
nection the best results are achieved in the cases when the goal which has
been set and also the problem ensure realization of the principle: what is
advantageous to society must also be advantageous to the work collective ~
and to the individual worker.
A multiple-objective problem may arise in the statement of the objective.
Some of this set of ob~ectives may be contradictory. For instance, in
solving the problem ot reducing production costs, it is not possible to
_ omit such objectives as raising product qua~.ity, improving working condi-
tions, etc. Thus there may be objectives which need to be achieved and ob- '
~ectives which need to be preserved (constraints). In such a situation one
must first optimize decisions with respect to the several "main" objectives
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- by stating definite constraints pertaining to them. For example, we might
state improvement of the q�iality of the product of transportation as an ob-
jective, but the cost of the product cannot be allowed to rise without
li:nit. In such cases a criterion of the effectiveness of attaining the
_ goal has to be established.
4. Selection of criterion for evaluation of the effectiveness of the deci-
sion. One must have success criteria to objectively compare the different
alternative decisions and to improve their qualiCy. The main rea~on why it
is a complicated matter to select a criterion. for evaluation of the effec-
tiveness of the decision is that a managemen':, decision is the product of
creative work and is influenced by the following factors:
a. the personal attributes of the person making the decision (professional
training, general level of education and political ideology, and so on);
b, organization of information support in the process of preparing the de-
cision (for example, on the state of resources);
c. organization of preparation of the decision (individual and group);
d. adequacy of equipment and possibility of using and applying mathemati-
cal methods;
e. period of time in which the decision must be prepared, and so on.
Even this list shows how complicated it is to work out a criterion for
evaluating the variant of the decision that has been chosen. Aside from
r these factors, there are also a number of mandatory requirements which cri-
teria must meet. They include the scientific soundness of the decision,
compatibility of all the principal elements of management, punctuality of
decisionmaking, completeness of content and form of expression. The re-
- quirement of scientific soundness presupposes that tendencies in develop-
ment of economics will be taken into account in preparing the solution and
that scientific methods of optimization and up-to-date equipment will be
used. The reyuirement of strict consistency with the principal ~lements of
management lies in the unity between the tasks stated in che decisions and
the methods of. carrying them out. The decision which is taken must be car-
ried out in the ini.tial stage of the discrepancy which has come about in
~ ttie f low of production, which will make it possible to reduce the conse-
quences of this tindesirable occurrence. The essence of the requirement of
punctuality of decisionmaking is manif ested her.e. The completeness of con-
tent of the management decision is determined above all by the specific na-
ture of the probl.em to be solved and by the level at which the decision is
being taken. The need to solve the problem is substantiated in the con-
tent, and the :~pecif.ic actions are defined, those who are to take them are
designated, and deadlines are fi~:ed. The manner of expression of a deci-
sion is manifested in its form (order, command, verbal instruction, and so
on).
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5. Precise statement of the problem. At length the problem is stated on
- the basis of additional data obtained as a result of the situation that has
come about, an analysis of the possible methods of resolving it, the objec- -
tives which have been established and the eriteria that have been adopted
for evaluation of the effectiveness of the decision taken. The preliminary
statement of the problem may be amended as a resuZt of subsequent studies; '
in particular the statement and formalization of the problem may be revised
in the process of stating the objectives. If the decisionmaking task is so
complex that it cannot be formalized by any of the known and accessible
methods, then the individual's heuristic abilities play a definite role in
such a situation.
6. Development of possible alternative solutions for the problem. The
search for the most rational ways of solving the problem is conducted by ,
developing alternarive decisions. The preliminary alternatives usually
come into bein~ Fvtix~ Zn the stage af selecting the criterion for evaluation .
of the effectiveness er. ciecisians and in stating the problem. But when the ~
problem has been definitively stated, all possible variants should be reex- -
amined so as to take into account the fuller information description of the
entity being managed and decisionmaking methods.
Such methods as comparative analysis, forecasting, mathematical-economic
modeling, the target-program approach, and so on, have a special place
among these methods. In spite of the great capabilities of mathematical
methods, their use is often restricted in working out alternative decisions
in real economic practice. The primary reason for this is that management _
- personnel have not had adequate mathematical training and the bodies of
management do not have sufficicnt equipment.
From among the set of alternative variants which are possible one is left
with several which are the mosC realistic both from the standpoint of tech-
_ nical and organizational realization and also in view of the outlays re-
_ quired.
7. Compilation of a model of the system taking into account the possible
alternatives. The decision taxen is checked on the actual system so as to
take into acco~~rit its characteristics. For example, a number of possible
variants ~f deployment are analyzed when newly acquired aircraft are being -
distributed. Here the important characteristics of the system in which the
aircraft is to be placed are the following: the traffic capacity of ground
installations (the runways of the airport), specialization of the aviation
_ equipment facility, and the qualifications of personnel. -
_ Wlien this approacl~ is taken to composing the model, one is oriented toward
a ce~-tain set of interrelated characteristics. In any case one models the
possibility and consequences of the decision taken with respect to a spe-
ciEic variant. Mathematical models and computers are widely used in the
process of modeling.
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Their use makes it possible to find the optimum variant of the decision in
a sufficiently short period of time.
8. Comparison of the alternatives and their evaluation with respect to the
criterion chosen. Each variant of the decision states the principal direc~ -
tions for achieving the goal, those who are to carry it out, the resources,
incentives and completion dates. At the same time the possible results in -
the production and economic activity of the enterprise from carrying out
the particular variant are substantiated and the benefit anticipated from
its introduction is determined. ThP benefit is calculated with respect Co
the single criterion or set of criteria selected previously. -
9. Decisionmaking. The decision is one of the alternatives of actions to
attain the goal that has been set. Selection of the alternative--o� a man-
ner or method of attaining the goal that has been set--is determined by
- criteria, indicators or the conclusion of the manager. The manager bears
personal responsibility for the effectiveness of the decision which is
taken. The manager "passes" the entire set of possible variants of the de-
cision one after the other through each spe~if ic criterion. The result is
a decision that best suits the specific criterion.
When making a decision that is based on logical judgments and intuition the
manager checks once again the correctness of the sequence of logical opera-
tions and makes certain that everything has been taken into account and
provided for in the process of making the decision.
10. Adjustment of the decision. It should be remembered in modeling the
decision that it is optimum for the model, but since the model is a repre-
sentation of the real system with certain suppositions, thP decision may _
prove not to be optimal for the system itself. This discrepancy between =
_ the model and the system means that in the process of the operation of the
system being managed there may be a need to intervene in the flow of pro-
_ duction, i.e., a need to correct the decision ~revio.usly taken. -
For a substantial portion of management processes the scheme expressing the
sequence of decisionmaking (Figure 22) is applicable only in general f orm.
Moreover, attention must be paid to the fact that in certain cases there
will be little opportunity to apply the principle of selecting a variant of -
the decision from among several alternatives. For example, the lack of im- -
portant information may exclude the possibility of setting up several al-
ternatives, and in spite of his knowledge of the methods for scientific so-
lution of the problem, the manager will be forced to resort to the method
of trial and error or to use his own experience.
~ An important means of improving the effectiveness of the decisions taken is
to optimize them, which complicates the management process, but at the same
time makes it possible to seek out the most expedient decision.
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3. Optimization of Management Decisions
_ The essence of the optimization problem is to choose from among a certain
set of variants those whose results best suit the objectives which have
- been set. The problem of selecting optimum solutions for any particular
problem moreover has its specific peculiarities.
In most optimiz~tion problems it is an important organizing principle to
take into account the dynamics of production processes, i.e., changes in
time of a number of characteristics of the entity being ma.naged as well as
the imgact of the solution chosen over a certain period after it is applied
in the system being managed. The natural method of describing and solving
optimization problems--mathematical-economic modeling--arises out of the
very nature of these problems. '
The following are among the most important principles for setting up and
solving optimization problems:
i. the national economic approach to evaluating the effectiveness of the
various possible solutions. This means that in selecting a variant for
solving a production problem one must take into account not only those
costs and results achieved within the enterprise, but also those outside
it;
" ii. arriving at the most efficient variant for utilization of limited re-
sources, which gives rise to the problem of seeking an optimum solution;
iii. use uf a formalized description of the variants of the solutions by
means of various kinds of mathematical-economic models.
In the process of management optimum decisions should not be chosen by us-
ing experience or intuitive conceptions of the manager, but on the basis of
strict scientific calculation. For this purpose the initial problem must
be appropr.iatel~ formalized, i.e., described by means of. mathematical equa-
- tions. This is done by building a model of the problem in which connec-
tions reflecting the management process being described are set up a*_?si ex-
pressed quantitatively. In building a model one takes into account the in-
fluence of external factors, which take the form of constraints in the for-
malization. Thus the mathematical model of a real management process is an
abstract entity which has been formally described. The complexity and di- .
versity of functioning of real processes do not allow an absolutely ade-
quate model to be built for them or for any one method to be used.
Ttie method of linear programming has become widespread in civil aviation.
, The essence of this method of optimizing the variant of the decision can be
e:cplained in the following example. Let us suppose that an enterprise re-
" pairs two products, two models of aircraft. Four groups of production
eq~.~ipment (capacities of production shops) are used to repair the Product.
The output of une unit of product A assures the en:.erprise a profit of
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2,000 rubles, and one unit of product B 3,000 rubles. The operating time
of each g~oup of equipment and the labor intensiveness of manufacturing
each type of product are characterized by the figures given in Table 2.
Table 2. Distribution of Product Manufacturing Among Groups of Equipment
Group of Labor Intensiveness of
Production Manufacturing Product, hrs Operating Time
Equipment A B of Equipment, hrs
I 72 72 360
- II 48 96 432
III 96 0 384
IV 24 48 192
We have to prepare that variant of the solution for manufacturing the prod-
ucts A and B which would ensure maximum profit Z.
Denoting the amount of the products A and B manufactured as X1 and X2, re-
spectively, we can write in mathematical equations the conditions reflect-
ing the maximum operating capacity of the equipment of each group:
72X, 72Xz < 360;
48X, 96X,~ 432,
(1)
96a', C 384;
24X, 48X'Z 192. �
In real conditions the actual total time to manufacture products of both
types on any group of equipment may be greater than the available operating
- time of that equipment. It is quite permissible, then, to write the in-
equality:
.l', 0 and ' U. (2~ -
Moreover, it is natural to assume that the amount of the product manufac-
tured (prepared) may not be a negative number. It follows from these as-
sumptions that no variant of the decisions we make may be negative. A cer-
ta~n prof it expressed by the inequality below corresponds to each possible
- solution for organizing manufacture of the products X1 and X2
, 2.Y, 3.Y2 > Z. ( 3 )
Thus the problem of composing a variant of the decision for organizing man-
ufacture of the products has come down to the following linear programming
problem, to maximize the linear form (1) in the context of the linear con-
straint (2) and (3). In any case we need to find that solution of a system
of m+ n+ 1 linear equalities (1), (3), at which the linear form (3)
takes the greatest value. Here m is the number of groups of equipment; n--
the number of different products being manufactured.
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In our example the greatest possible prof it is .
Z = 288,000 rubles.
In general form the mathematical model ~f the problem for optimizing man-
agement solutions aimed at improving utilization of production capacities .
can be formulated as follows. Let us assume that the enterprise or shop
- repair.ing (manufacturing) n products has m groups of manufacturing equip- ~
ment. We know th~ standard times for repairing (manufacturing) each prod-
uct on each group of processing equipment and the available operating time
of each group of equipment. Assume that we also know that of all n prod-
ucts to be repaired 1 products are in the greatest demand. We need to make _
a decision (compile a plan) whereby the output of the product in demand
will be as large as possible. We adopt the following notation: i--number
designating the group of equipment: k= 1, n; ~--number designating the
product: j= 1, n; ai~--standard repair time of the j-th product un the
i-th group of equipment; bi--actual time available for operation of the
i-th group of equipment; X~--planned number of units of the j-th product in ~
the variant of the decision we are seeking.
The time required to repair aZl X1, X2, Xn products on the i-th group . _
of equipment will be equal to the sum
_ '
alt Xi [l12 X2 . . . (llrt Xn'
which must not exceed the a�railable operating time of the i-th group of
equipment, i.e., must be s bi. Having composed analogous conditions for
all the groups of equipment, we obtain a system of linear inequalities:
a,~ X~ a1z XL -i- Q~R a'~ ~ bt; / ;
d21 Xi a22 X2 ~ . . . + (l2n Xn ~ fj2~ `4/
amt Xt amz X2'+" ...+(l~ ~i'n' G bm.
We take into account that in compiling a repair program one usually knows ~
the need for each product. If qj is the required number of units of the
j-th product, then this requirement is written in the form of a system of _
inequalities: -
X~ > q~;
X3 9ti ~5~
xn ~ qu� 1
II we denote t11e products in the greatest demand by the numbers jl, j2,
jn, the total number of. the product can be expressed by the sum '
f = X~i ~'ja . . = Xi~ , ~6)
_ ; _
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Our objective is to compile a production progra~n so that the sum (6) has
- the greatest value while fulfilling all other conditions. Then we need to
solve the system of linear inequalities (4) ,(5) and (6) and to find that
variant at which expression (6) will have the greatest value. We should
note that in planning output in money terms B an analogous problem arises,
but one in which an additional condition is taken into account, a condition
written in this form
p~ X~ ~-1': ~'2 . . . pn ~'n ~ B~ ~7 ~ -
_ in which P~ is the wholesale price of the j-th product; j= 1, n is the
product. _
Ultimately we f ind the solution to the systems of linear equations (4), (5)
and (7) at which the linear form (6) takes its greatest value.
In the practical operation of the operations enterprises of civil aviation
one must frequently solve the problem of optimizing the volume of traffic
and operating costs, or, as it is referred to, the transportation problem.
From the standpoint of its mathematical description it differs little from
the linear programming problem examined above. In essence the transporta-
tion problem is a special linear programming problem. ~ -
By contrast with optimization of solutions described by linear expressions,
the problems of nonlinear programming contain ob~ective functions and a
system of constraints written in nonlinear expressions. In this case the
general variant of the management decision can be formulated as a problem
of minimizing the function
f~X� XZ,.,,, X~) ~g~
under the conditions:
~X~ ~ X~, . , X~) < 0;
~a ~X~, X~, . , . , X,~ < 0~
, (9)
~4~ ~X~ ~ X3, , . . , X�) < 0.
and Xf>0;-j-l,n.
As in linear programming any nonnegative solution of the system of inequal-
ities (9) will be a permissible variant of the solution, but the optimum
variant will be when the objective function (8) assumes its minimum possi-
ble value.
In various aspects of the practical activity of bodies for management of -
enterprises it is frequently advisable not to make management decisi~~ns im-
mediately, but to make them gradually, step by step. Multistep solutions
of this kind can be optimized using the method of dynamic programming.
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One of the typical problems of dynamic programming which has come into use
in air transport is the problem of resource allocation, and it is that we
shall take up.
There is a given amount of resources X which we must allocate between two ~
enterprises. The amount of Y.invasted in the first enterprise makes it
possible to obtain the income A(Y) in 1 year (or some other period of time),
and at the same time the capital invested decreases by the end of the year -
- to fhe quantity C(Y). Correspondingly, the share of X- Y invested in the
second enterprise yields the income B(X - Y) ;nd decreases the value
,q(X - Y). At the end of every year the remaining capital is again allo-
cated between the enterprises. There is no new capital coming in. We need
to find the solution whereby the greatest total income over the period N ,
years is obtained in each stage through appropriate allocation of the re-
sources.
The process of optimizing the management decision consists of the follow-
ing. In the first stage (year) the initial ~mount of resources X is di- '
vided into Y and (X - Y), and the income is computed
A(Y) + B(X - Y). ~
In accordance with the principle of optimality,* whatever the first alloca- ;
- tion Y, in the remaining N- 1 stages the remainder of capital ;
C(Y) + A(X - Y)
must be put to the best use, and over N- 1 year income will be '
FN-~.IC ( Y~ + D (X - Y)l ~ ,
Then the ircome over the N years from the initial allocation of resources ~
can be expressed by the sum
- A~~-I-S(X-}7.~ F~,_,[C(Yl-'rD(X-Y)~. ,
We still have to select the allocation Y, which may vary from zero to X so
that this sum takes its greatest value. Thus we get the functional. equa-
t ion
FN(X)~max(A~Y)-I 6(X-1~-4-F.,~_~(C(Y+,IIfX-Y))} for N= 2, 3,
~ years.
We will clariLy these principles of the method of dynamic programming with
a practical example. We need to find the optimum variant of a decision on
Optimum behavior has the characteristic that whatever the original state
and solution at the initial moment, the subsequent solution must be optimum
with respect to the results of the decision.
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allocation of X resources between two enterprises of an association over 3
years (N = 3). The initial data are these:
A(Y)=0,8Y; ~6(X-Y)=p,5(X-Y); C(Yj-0,3Y;
~ D (X --r 37 = ~~6 (X - Y).
At the outset of the process we have X resources. In the first stage a
. certain allocation Y determines the income A(Y) + S(X - Y) and the aLLount
. of resources X1 = C(Y) + A(X - Y) at the beginning of the second year. The
resources X1 are again allocated, i.e., divided into the parts Y1 and
X1 - Y1, which determines the income A(Y1) + S(X1 - Y1) for the second year
and the amount of resources X2 - C(Y1) + A(X1 - Y1). At the beginning of
the third year the amount X2 is again divided into Y2 and X2 - Y2 and we
get the income A(Y2) + B(X2 - Y2) for the third year. We need to indicate
the optimum decisionmaking strategy for the successive all^cation Y, Y1; Y2
that brings about the best result.
The process of dynamic programming unfolds from the end toward the begin-
ning, i.e., we tirst find the choice Y2, and then Y1 and thereafter Y.
In accordance with the principle of optimality, whatever decisions are made
with respect to Y and Y1 in the first two stages, and whatever amount of
resources X2 is obtained as a consequence by the beginning of the third
stage, we must use them in the best way and obtain the largest possible in-
come for the last year:
Fi(X2) = max{A(Y2) +.5(X2-Y~)} when 0