2022 Volume 10 Pages 220-238
The study investigated methodological approaches to economic crises and characterised crisis phenomena in the economy. The reasons for the development of the crisis in agriculture are considered and the prerequisites for the exit of the agro-industrial complex from the crisis are systematised. The factors of increasing the instability of the agricultural sector in the context of the global economic crisis are analysed. The study highlighted a set of circumstances that determine the negative and positive effects of the crisis, as well as the prerequisites for overcoming it. Without their consideration, it is difficult to objectively determine the probable losses and predict potential options for the development of the agro-industrial complex in Kazakhstan. Based on a comparative analysis of existing approaches to economic crises, special attention was paid to the structural crisis. A method for diagnosing crisis phenomena in the agricultural sector of Kazakhstan was developed, which constitutes a set of methods and techniques that allow establishing and studying alarming conditions in the agricultural sector to predict and prevent them in the future. It was concluded that the situation in the agricultural sector does not fall within the conventional classification of economic crises and it was proposed to supplement the methods for assessing periodic crises by including a systemic crisis.
The current economic crisis caused by the coronavirus pandemic, which has engulfed all countries of the world without exception, turned out to be deeper than all previous crises. Its influence in Kazakhstan slowed down the economic growth and affected its structure [1]. In particular, there is a trend towards an increase in the share of the service sector in the country’s GDP due to a decrease in the share of goods production [2]. Thus, the transformation of the structure of GDP in the post-crisis period will depend on how much certain industries will be affected. In these conditions, Kazakhstan faces the task of implementing high-tech modernisation of all sectors of the economy, and transition to an innovative model of economic growth [3, 4, 5].
When assessing the effectiveness of the implementation of anti-crisis actions, the fact that certain preventive measures were taken in the context of world economic (financial) crises is considered. They were focused on supporting the real sector of the economy, including agriculture. However, there are unforeseen crises that cannot be quickly identified and effectively prevented, such as the crisis in economic sectors caused by the coronavirus (COVID-19) pandemic in early 2020. Nevertheless, every enterprise should be ready for such crises, especially agricultural formations, which have many specific features of anti-crisis management than other sectors of the economy. Therefore, considering various aspects of the development of the industry, responding to new challenges of the crisis, the development of effective models of anti-crisis strategy for agricultural enterprises is an urgent issue.
Based on the study of literary sources and the opinions of practitioners directly involved in production processes, it can be concluded that the situation in the agrarian complex does not fall within the conventional classification of economic crises, and it is proposed to supplement the methods for assessing periodic crises by including a systemic crisis. Based on these considerations, it is necessary to develop a methodology for diagnosing crisis phenomena in the agricultural sector of Kazakhstan, which comprises a set of methods and techniques that allow establishing and studying alarming conditions in the agricultural sector to predict and prevent them in the future. The proposed methodology outlines conceptual approaches to assessing the crisis conditions of economic systems at the sectoral and economic levels. Diagnostics of crisis phenomena are carried out based on a comparison of the critical values of indicators describing the development of economic systems with their actual values, followed by calculation of the integral indicator of the state of the agricultural sector of the economy.
The positive trends that have emerged in recent years to overcome the consequences of the post-reform crisis in modern conditions have slowed down due to the global economic, financial, and epidemiological (coronavirus) crises and the subsequent slowdown in the country’s economic development. It is natural that these crises affected not only the sphere of monetary circulation, but also the real sector of the economy [6]. However, considering its impact on agriculture in Kazakhstan, it is impossible to draw unambiguous conclusions regarding the severity of its impact. It is necessary to highlight several circumstances that determine the negative and positive effects of the crisis, as well as the prerequisites for overcoming it, without which it is difficult to objectively determine the likely losses and predict potential options for the development of agriculture in Kazakhstan.
Recommendations for building a mechanism for advanced anti-crisis management, suggesting the creation of a system for early detection of changes in the external and internal environment, and the development of scenarios for future development, which will reduce the uncertainty in making managerial decisions. A set of proposals for the creation of a unified methodology for effective models of the anti-crisis strategy of agricultural enterprises will give a chance to rural entrepreneurs to get out of the crisis, which was declared bankrupt as a result of the use of strategic management tools; it will be possible to ensure anti-crisis stability in the long term.
The purpose of the study is, based on the investigation of the system methodology and a situational approach to the study of the phenomenon of the crisis of an agricultural enterprise, as well as the analysis of the theory and practice of anti-crisis management, to improve the concept and mechanism of developing an industry-adapted methodology for determining crisis phenomena in agricultural enterprises and the development of models of effective anti-crisis management in the agricultural sector of the economy. To achieve this purpose, the following tasks must be solved:
The concept of a crisis for scientists-economists is quite well-established and is interpreted as a sharp, abrupt change in something, that is, an unstable equilibrium caused by the equal action of oppositely directed groups of factors. But with the definition of the type of a particular crisis, significant difficulties arise, including on the part of many researchers who interpret it in different ways. The analysis of short-term cycles is given special attention in the articles of Burns [1], Kitchin [2], and Mitchell [3]. The study of medium-term cycles is based on the concepts of Marx [6]. Scientific development of theoretical and practical problems of cyclical fluctuations in macroeconomic dynamics was carried out by Kondratyev (theory of long waves) [7], Schumpeter (innovative theory of the economic cycle) [8], Samuelson [9], and Hicks (Samuelson-Hicks model) [10], Friedman (monetary theory of economic cycles and crises) [11], Sargent [12], Lucas [13], Laffer (the concept of rational expectations) [14], Fisher (debt theory) [15], et al. Contribution to the substantiation of the foundations for increasing the sustainability of the functioning of entrepreneurial structures in agriculture in Western countries in a crisis was made by Mathe [16], Pelucha and Kveton, [17], Gameiro and Martins [18]. With regard to the possibilities of rural development to support employment and social protection of the population, the works of scientists of the European Union were considered [19, 20].
The modern study of the mechanism of anti-crisis management of the economy as a whole and agricultural production in particular is covered in articles by Kuraksina [21], on overcoming the uncertainty of the institutional environment as a tool of global anti-crisis management [22], the definition of technology for the development of the mechanism of anti-crisis management of agro-industrial complex [23], a conceptual model of anti-crisis management in the agro-industrial complex [24], the impact of natural disasters and crises on agriculture and food security [25], risk management tools for agricultural producers [26, 27], the system of marketing communications in anti-crisis management of an agricultural enterprise [28], strategic anti-crisis management [29, 30], implementation of anti-crisis management activities [31], the structural crisis in the world system [32, 33], anti-crisis financial and personnel management, ensuring the effective development of Eastern European enterprises in the agricultural sector [34] etc.
Their scientific research highlights the macroeconomic foundations of the crisis in the agricultural economy. However, along with cardinal changes in the attitude towards agriculture at the state level, effective transformations in the agrarian business itself are also required. The passive expectation of changes without the development of an anti-crisis management system is not only impermissible, but also dangerous. Paying tribute to the scientific results of the works of the above scientists on the problems of stabilisation in the agrarian economy, including in the field of agriculture, many aspects of anti-crisis management in this area remain insufficiently studied. In the scientific literature, one more term can be distinguished, which is not included in the conventional classification of types of crises. This is a systemic crisis that requires a certain understanding and may include a certain set of different types of crises. Notably, there is currently no single generally accepted definition of the very concept of “systemic crisis”, in connection with which scientists put forward several interpretations at once that cover the essence of this term.
Kozenyasheva [34] defines the term “systemic crisis” as a crisis that “simultaneously covers all aspects of social life and radically changes the world economic and political system, just like other spheres of social life”. According to the author [34], an example of a systemic crisis in the economy was the crisis of the industrial economic model of development, as a result of which, at the end of the 20th century, the industrial sector began to give way to the post-industrial sector. “A systemic crisis in the economy is a rather rare phenomenon, even rarer than the Kondratyev cycles” [34]. The previous systemic crisis in the economy took place at the end of the 18th century and resulted in the agrarian sector ceding its primacy to the industrial one [34]. According to Kleiner [35], “Systemic crisis” is an all-embracing, multidimensional crisis (which corresponds to the metaphorical meaning of the word “systemic”). To implement radical changes in agriculture, an adequate management mechanism is required, which allows for significantly increasing the efficiency of agricultural production in a market economy. A management system is required both for the economy as a whole and for each enterprise separately, considering its specifics, in order to prevent their bankruptcy.
With regard to agriculture, the study allowed to improve the methodology of regular (cyclical) crises that cover all branches of agricultural production, and irregular (periodic), that is, those crises that do not give rise to a new cycle. In particular: the development of methodological approaches for the definition of an intermediate crisis, which interrupts for some time during the phase of recovery or revival of the economy, the definition of a partial crisis covering one or several spheres of social reproduction and differs from the intermediate one in that not the entire economy, but only part of it is affected, as well as an industry crisis that affects one or several related industries, may be the result of imbalances in the development of the industry, restructuring, overproduction in industries, rising prices for raw materials and other factors. In developing a strategy for anti-crisis management of an agricultural enterprise, three stages can be distinguished.
The first stage is timely, comprehensive diagnostics of the state of the enterprise. This stage includes an analysis of external factors in order to identify the causes of the crisis:
Based on the above, the methodological approaches to defining economic crises were investigated and crisis phenomena in the economy were characterised. The reasons for the development of the crisis in agriculture were considered and the prerequisites for the exit of the agro-industrial complex from the crisis were systematised. The factors of increasing the instability of the agricultural sector in the context of the global economic crisis were analysed. The study identified a set of circumstances that determine the negative and positive effects of the crisis, as well as the prerequisites for overcoming it, without which it is difficult to objectively determine the probable losses and predict potential options for the development of the agro-industrial complex. Based on a comparative analysis of existing approaches to economic crises, special attention was paid to the structural crisis.
Agriculture does not only constitute production, but also the habitat of a significant part of the population, and the level of agricultural production directly affects the state of food security of the country. This requires the timely adoption of a complex of anti-crisis measures aimed at preventing massive bankruptcies. The primary task in this area is to assess the financial condition of agricultural enterprises. This will allow not only to see the real picture of their finances, but also to more accurately determine the directions of the withdrawal of the agricultural economy of various regions from the crisis. Therefore, a necessary direction of management is the introduction of new functions of anti-crisis management, such as foresight and innovative functions.
The foresight function is implemented in the constant diagnosis of the financial condition of the enterprise and monitoring of changes in the indicators of its financial and economic activities. It lies in the need to predict changes in the financial condition of the enterprise, which allows to the timely influence of the development of the entire enterprise, preventing the appearance of undesirable consequences in its production and financial activities. The innovative function is expressed in the use of new anti-crisis management measures, in a creative approach to solving emerging problems, and in making non-standard decisions. The innovative activity of the enterprise involves the formulation of anticipatory plans for the development of the enterprise based on innovations, the introduction of new types of products and new production technologies (first of all, it is necessary to master resource-saving technologies), and the development of new markets for products.
Therewith, three approaches to improving the economy of agricultural enterprises are proposed, which can be applied depending on the level of development of an agricultural enterprise. All approaches allow preventing the bankruptcy of agricultural enterprises, making provision for various ways to achieve this goal. The first approach is to improve the existing system of anti-crisis management of agriculture, the second includes an economic mechanism for improving agricultural organisations, and the third is to develop strategic anticipatory plans for the development of agricultural enterprises. The decision on the choice of a particular approach to recovery is made by the company itself, based on its capabilities and its condition. Anti-crisis management is aimed at preventing a crisis state of an agricultural enterprise. Overcoming the crisis requires the development of special methods for managing an agricultural organisation.
At present, there is no unified system of anti-crisis management of an agricultural organisation that would reflect the specifics of agricultural production. In this regard, an attempt was made to develop a system of anti-crisis management of agricultural enterprises. The system of anti-crisis management of an agricultural enterprise is a set of interrelated elements aimed at protecting an enterprise from crisis situations, anticipating the appearance of negative trends in development and preventing bankruptcy. The sequence of development, implementation of anti-crisis management measures, and assessment of its effectiveness are presented as follows (Figure 1).
An anticipatory plan for the development of an agricultural organisation is an effective tool for planning financial, economic, production, and management measures for the rehabilitation of agricultural organisations, preventing the emergence of undesirable consequences in the activities of an enterprise and preventing bankruptcy of an enterprise. To create an effective market economic mechanism in the region and the country as a whole, new approaches to the management of agricultural enterprises are required. In the process of anti-crisis management of an agricultural enterprise, the strategic plan should take the form of an anticipatory plan, the purpose of which is financial recovery and prevention of the emergence of unwanted deviations in the activities of an agricultural enterprise. On the other hand, when an enterprise is on the verge of bankruptcy and external management has been introduced for it, the anticipatory plan takes the form of an external management plan or a plan for restoring solvency.
Approbation of the research results was performed during the implementation of the external management procedure in enterprises. Based on the practical testing of the research results, and anticipatory plan for restoring the solvency of enterprises was developed, which serves as an example of strategic planning for the development of agricultural enterprises. Thus, the current state of management suggests that it is necessary to develop measures to overcome and prevent crises in the activities of agricultural enterprises. Measures to overcome the unsatisfactory state of the enterprise are the restructuring of the enterprise’s activities and accounts payable, the development, along with the main, other types of activities, the organisation of management accounting for each type of activity and per executor, the introduction of a flexible cost rate-setting system, the creation of an effective system of incentives for employees.
Figure 1: The sequence of work on anti-crisis management of an agricultural enterprise
The main measures of anti-crisis management of agricultural production are as follows: comprehensive diagnostics of the economic state of the enterprise; optimisation of costs for agricultural production; substantiation of optimal management and production structures; improving on-farm economic relations; development and regulation of the process of economic recovery. The main task of the economic mechanism of recovery is to prevent and overcome the crisis situation at agricultural enterprises. External mechanisms for the improvement of an agricultural organisation include: state regulation of anti-crisis development; attraction of credits and loans; leasing and factoring to attract fixed assets of production; the issue of shares as a result of reorganisation procedures. Internal mechanisms are the main and most radical areas of economic recovery and crisis-free functioning of agricultural enterprises. They can be divided into three groups.
The first group includes management mechanisms, which include the creation of an effective enterprise management system, the introduction of marketing and quality service, the management’s interest in the successful operation of the enterprise, the restructuring of the enterprise, and control over the implementation of management decisions. The second group includes production mechanisms. This is more complete use of the production capacity of the enterprise; rational and full use of material, labour, financial, and natural resources; introduction of advanced experience in organising production processes in agriculture; breeding of productive animal breeds and cultivation of high-yielding crops; resource saving, including the introduction of resource-saving technologies, reduction of non-productive costs and losses, the introduction of a saving mode. The third group comprises market mechanisms: improvement of the quality and competitiveness of products, establishment of permanent markets for products, and search for new buyers.
Figure 2: The economic mechanism for improving agricultural organisations
The economic mechanism of improving agricultural enterprises in modern economic conditions should be considered as a way of interaction between external and internal mechanisms of enterprise development (Figure 2). Agriculture, due to its specificity, cannot take part in the inter-sectoral competition on an equal footing in market conditions. A relatively low-income agricultural economy, dependent on natural factors and having a pronounced seasonal, cyclical nature of reproduction, is an industry that is technologically more backward compared to industry and gives a lower return on capital invested. Therefore, the agricultural sector of Kazakhstan traditionally occupies a special position among other sectors of the economy and needs anti-crisis regulation of the state.
State regulation of the activities of agricultural enterprises is defined as the national policy aimed at protecting enterprises from crisis situations, at preventing their bankruptcy. State regulation is a system of measures of regulatory, financial, economic, and social impact on the part of the state. This study developed a system of state regulation of agricultural development, which comprises the following elements: legal, financial, economic, social, personnel regulation, and foreign economic activity (Table 1).
| Elements of state regulation | Directions |
|---|---|
| Legal | Cancellation of the Law “On Bankruptcy (Insolvency)” in relation to agricultural enterprises Development and adoption of a new Law “On the rehabilitation of agricultural enterprises” |
| Economic | Smoothing price disparities for agricultural and industrial products Debt restructuring Execution of the public procurement |
| Financial | Granting subsidies, grants, soft loans Direct payments |
| Foreign economic | Introduction of quotas and customs duties on imported food and raw materials Creation of favourable conditions for the export of agricultural products |
| Social | Implementation of targeted programmes of socio-economic development Creation of favourable infrastructure for the villages Stimulating the creation of new jobs |
| Personnel | Creation of a training system for anti-crisis managers |
In this regard, the main area of state regulation of agriculture should be as follows:
Thus, a serious improvement of the system of state support for agricultural organisations is required. The weakening of the role of state regulation and support of agriculture in Kazakhstan is one of the main reasons for the crisis in agricultural production.
The problem of diagnostics for anti-crisis management of agricultural enterprises is one of the most understudied in the Kazakh economic and management science. However, the ambiguity and diversity of the content of the crisis provide science with different grounds for developing models of economic crises and cycles. Among the many models of management systems that, together with different interpretations of the concept of agricultural enterprise management, blur the possibility of their evidence-based classification, it is difficult to find any significant general or particular models of anti-crisis management as a type of management. The absence of such models testifies to the correctness of the methodological assumption about the radical difference between the abstract object of the theory of economic science, including the theory of management, and the real object of anti-crisis management.
One of the methods of finding a way out of a crisis situation, and methods of preventing the emergence of a crisis as such, is the possibility of modelling crisis situations of economic entities. To start building a model, it is necessary to have information about the state and essence of the subject, which can become a potential carrier of a crisis situation. In the case of constructing a crisis model, the main attention is paid to the features of the control process of the object under study and the construction of a detailed list of possible solutions to the emerging problem.
In general, the construction of a model of crisis situations solves a certain range of problems. Naturally, the first of them is to identify those parameters of the development of an economic entity that will be recognised as parameters of crisis. In other words, to build a model, it is necessary to determine the state and parameters that will indicate an imbalance in development and the emergence of a potential crisis situation. Next, it is necessary to determine the structural forms of crisis and analyse the signs of crisis, noting the most significant at a particular moment. Then, it is possible to simulate processes with consideration of the real situation and the limit values of the parameters set.
The initial model-building process is based on some essential knowledge of the object property. Earlier, when developing the methodological function of the research, it was determined that the factual knowledge base is built on the interpretation of the concepts and data of anti-crisis management. Therefore, in economics, the initial model of extreme processes reproduces only the essential aspects of this property. The answer to the question of achieving a necessary and sufficient measure of conformity between the model and the original property can be found by building an additional specialised model, with the help of which attention is focused on the features of object management with a detailed method for solving a particular problem. This problem can be eliminated at the final stage of the research.
Proceeding from the essence of the problem, the model is designed to solve the following set of tasks:
Solution of this set of tasks allows highlighting the most important features and changes in the modelled object, abstracting from background phenomena, studying the structure and development trends of the object’s substantive property, and outlining preliminary solutions for managing an object in a crisis state. Figure 3 demonstrates a graphical model of a crisis state that corresponds to the initial conditions for the study of an object. In the said figure, one can see the procedural, functional, and basic changes in the existence and development of an economic entity, which constitute the initial parameters for an experimental management model. Consequently, a fundamentally important condition for assessing the signs of critical states of the enterprise is the formal subordination of the functional changes of the enterprise to the procedural.
Figure 3: Graphical model of a crisis state corresponding to the stages of the life cycle of an agricultural enterprise
The stages of the enterprise life cycle are used as procedural changes in the states of the subject, including the emergence, establishment, development, maturity, decline, and termination of the organisation’s mission. The axiom is the provision according to which the quality of critical conditions at each stage of the enterprise’s life cycle should be different due to the objective laws of development of any economic system. Therefore, the assessment of signs and the measurement of the crisis state are carried out within the boundaries corresponding to the ranges of each or selective stages of the enterprise life cycle.
The number of introduced functional parameters is determined by the complexity of the modelled process, as well as the accuracy of the reflection of the dependencies that must be obtained with the use of the model. In this regard, the following opinion is valid: it is wrong to believe that the more factors a model takes into account, the better it “works” and gives better results. The excessive complexity and cumbersomeness of the model complicates the research process. It is necessary not only to consider the real possibilities of information and mathematical support, but also to compare the costs of modelling with the effect obtained (with an increase in the complexity of the model, the increase in costs may exceed the increase in the effect).
The main process changes include the parabolic curve (conditional) of zero profitability, corresponding to the input and output values of the extreme state of the enterprise economy. It is known that the parabolic curve of zero profitability is irrational in its content, since it does not correspond to the actual values of the profitability of the enterprise and is used to record critical changes in production volumes, profits, and costs. At all stages of the life cycle of an enterprise, one can observe the periodically repeating intersection of the zero-profitability curve and the broken curve of changes in sales. The intersection points of the zero-profitability curve and the sales volume curve, and the bottom point of the sales volume curve, form a sphere that is described as a crisis zone of the enterprise economy.
The image of the crisis zone in the form of a circle, the dimensions of which are limited by the points of intersection of the curves, allows tracing the following dependencies. The lower the sales curve falls from the zero-margin curve, the larger the zone of extreme conditions. An increase in the distance between two intersection points leads to an increase in the range of possibilities for decision-making in a crisis. The sharper the angle developed by the lower critical point of sales and the intersection points of the zero-profitability curve and the falling and rising lines of the broken curve of sales, the more compressed the timeframe for making decisions on how to get the company out of the crisis becomes. With the help of a curve, the model allows to represent and record the change in the zone of crisis states from a horizontal-oval to a vertical-oval position (Figure 3). The model considers changes in the state of the enterprise. With its help, it is possible to identify the range of crisis conditions, make an assessment of the main features of this property and provide top management with information for making management decisions.
Changes in the state of enterprises constitute an objective condition for their survival and retention of competitiveness in the market. The need for change began to arise so often that its impact on the life cycle of the enterprise can be considered a sustainable trend. Therefore, in practice and research, more and more attention is paid to the analysis of methods and organisational capabilities of change management. The change management concept covers the specific problems of enterprise management, including changes in strategy, resource provision, production processes, and product sales. Implementation of the function of anti-crisis management in extreme conditions is how a particular enterprise can recognise the signs of a crisis state, identify the causes (threats) of its occurrence, assess the level and trends of its development, and finally, determine the optimal list of operational and/or strategic measures to preserve the viability of an enterprise at a certain stage of its life cycle.
In relation to the parameter under study, identification, apparently, should be performed based on some objective temporal attribute, for example, a period corresponding to the time of one economic turnover or production process. But this reason cannot correspond to the specifics of the reasons causing the development of a crisis situation. Each enterprise has its special production functions, as well as the conditions for the implementation of activities, and this limits the possibility of choosing an objective time parameter for identifying a crisis situation. Therefore, the results of this approach are not always satisfactory and induce to refer to those aspects of reality that are associated with the identification of the parameter of a crisis situation according to a subjective criterion (Figure 4).
Figure 4: The emergence and development of a crisis situation in the economy of an agricultural enterprise
Pb: breakeven point, Ten.extr and Тex.extr: time of entry and exit at the stage of an extreme situation, Tthr.extr: point of the limiting (threshold) value of the crisis state, EDen.extr. and EDex.extr: time of entry and exit at the stage of establishment and development of a crisis situation; EDthr.extr: point of limiting (threshold) value at the stage of establishment and development of a crisis situation.
Based on the researcher’s orientation towards the subjective selection criterion, a period of three months, or one quarter, can be proposed as a time parameter of a crisis situation, which corresponds to the short-term planning and reporting system of enterprises, as well as the sign of bankruptcy due to the debtor’s inability to satisfy creditors’ claims on monetary obligations. Quite logically, the question about the scientific value of the choice made arises, because the value is determined by the methodological, theoretical, and practical significance for the subjects of the economy and society. For example, for a relatively long time, fluctuations in the volume of proceeds from the sale of the company’s products amounted to ±5% of the average monthly value. If at some point, the analysis carried out by the relevant economic services, shows a drop in sales by 15%, then such a sharp change should indicate the emergence and development of a crisis situation and the need to take adequate measures in order to prevent it. With the use of a curve, Figure 4 demonstrates the emergence and development of a crisis situation.
Characterising a crisis situation, it should be noted that its features correspond to the decision-making algorithm in management. Karpychev [36] believes that in a crisis situation, management should be guided by the following:
Admittedly, the orientation of management in crisis situations, proposed by Karpychev [36], allows constructing a technological situational matrix, which includes six sequential operations:
In the above thesis, the lines of recognition of a crisis situation and a crisis state are not clearly defined. Therefore, this study attempted to provide this aspect with additional argumentation. Unlike a crisis situation, a crisis state is described by the following features: a longer period of development; a more predictable, albeit formidable, effect of crisis factors; deceleration of the growth rates of the reproductive parameters of the enterprise up to their termination. Thus, obviously, not only the time parameter but also several additional signs categorically separate the crisis situation from the crisis state. In this case, there is a division of the synthetic category “crisis” as a property of the production system into two separate parts, ordered within certain boundaries.
At first glance, the categorical distinction applied here has no value. However, this is not true. By providing an empirical basis for the object under study, it is possible to synthesise knowledge that is registered by each category. Thus, the assimilation of categories in their generality and specificity constitutes the basis (understood as the principle of modelling the process under study) for the recognition of the provisions of evaluative and regulatory functions in the management of crisis enterprises. Thus, based on these provisions, the crisis state of an enterprise can be described as a process with an economically oppressed reproductive function of a business entity, the critical period of existence of which is determined by the current legislative acts.
In the process of developing an effective anti-crisis management system, it is necessary to consistently consider the stages and principles of a systematic approach to the financial recovery of enterprises and other structures of the agro-industrial complex, including farmer households, to ensure their sustainable development. In the process of developing measures for anti-crisis management, one should proceed, first of all, from the need to determine the methods of crisis phenomena. The use of a new methodological approach will allow for the transition from a random set of fragmentary anti-crisis management measures to the development of a system of effective measures aimed at preventing and overcoming the crisis.
Carrying out an abstraction operation in the essence of one-order processes – a crisis situation and a crisis state – allows to determine the methodological prerequisites for the choice of methods and evaluation procedures used in relation to the study of the properties of production systems. Further development of the proposed approach takes into account the principle of determinism. It is based on determining the interdependence of a certain current state of the subject as a consequence of the development of a crisis situation in the past, as well as the reasons for changing the properties of the production system in the future. And it is in this connection that the methods of measuring and assessing crisis situations and states of economic agents are correlated and complementary.
The logic of the study suggests the expediency of using techniques in assessing the crisis processes, such as the “Cost-Volume-Profit Relationships” (this analysis method allows identifying the role of individual factors in the development of operating profit and ensure effective management of this process at the enterprise) and “Risk/rate of return” (the method of analysing the ratio of the level of risk and profitability allows determining the interrelation between the levels of systematic risk and profitability of the enterprise), allowing to highlight the role of individual factors in the development of crisis phenomena in the activities of the enterprise for short and long periods of functioning of the subject.
The use of these techniques allows solving a number of analytical problems, for example:
1. Determination of critical ratios of total sales revenue to costs that change situationally over a short period
The volume of sales of products in value terms, corresponding to the border of entry (entry point) of the enterprise into the crisis zone in a short period, can be expressed by a mathematical relationship [37] (Eq. 1):
| (1) |
where, S – the volume of sales of products in value terms; VС – the variable costs; FС – the fixed costs; GI – the profit.
Since variable costs are directly dependent on the volume of sales of products, then (Eq. 2):
| (2) |
where, k is the coefficient of dependence, which indicates what proportion of the price of the product falls on variable costs. Hence (Eq. 3):
| (3) |
According to the condition, the point of entry into the crisis zone corresponds to the volume at which the revenue is equal to the total costs (without profit), therefore, the formula reflecting the entry of the enterprise into the crisis zone will take the following form (Eq. 4):
| (4) |
where, Spenex – the volume of sales of products corresponding to the point of entry of the enterprise into the crisis zone; Cpenex – the variable costs for the sale of products in value terms, corresponding to the point of entry of the enterprise into the crisis zone in a short period; FС – the sum of fixed operating costs (unchanged in the period under consideration).
2. Determination of critical ratios of total sales revenue to costs that change over a long period
In a long period, one can notice the following fundamental features of the development of crisis states in comparison with a short one:
All these changes, due to the interrelation of the above factors with operating profit, significantly affect the development of a zone of economic crisis at an enterprise at certain stages of its life cycle. This can be seen on the diagram (Figure 5).
Figure 5: Development of the economic crisis of an agricultural enterprise based on the critical ratios of revenue from product sales, cost, and profit
The diagram indicates that due to the transforming conditions of operating activities, the development of the crisis state begins at the time of the intersection of the sales volume curve of the total costs Ten.extr, then increases to the point of the limiting (threshold) value of the crisis state Tthr.extr, and then, under favourable conditions, the crisis level decreases to zero value at point Tex.extr.
Under unfavourable conditions, the threshold value of the crisis level crosses the line of the catastrophic state, i.e., there is a state of complete destruction of the enterprise’s economy. The values of the economic crisis state can change up or down when the level of fixed costs changes. In this regard, it is methodologically legitimate to use indicators describing the economic sustainability of an enterprise. This primarily refers to the liquidity of the company’s assets, i.e., its ability to pay off urgent financial obligations to creditors amid falling profitability. This circumstance can be expressed by a mathematical model through the coefficient of the severity of overdue obligations (Eq. 5):
| (5) |
where, КЗov.оb – the amount of overdue obligations of the company (more than three months); КЗbankr – the minimum value of overdue obligations at which a bankruptcy case of a debtor enterprise can be initiated.
| (6) |
where, 500: the constant coefficient that equals 500 minimum wages, Wmin: the minimum wage established by legislation. If Кто≥1, then an enterprise bankruptcy case can be initiated.
The development of a crisis state in a long period represents the beginning of this process in a short period, the end of which is described by a new change in conditions. In other words, a long period of development of a crisis state can be split into several short periods with the allocation of local causes of the crisis, which allows using algorithms and indicators typical for a short period in calculations. It is necessary to determine the levels (range) of the crisis state, i.e., its boundaries, within which changes (decrease and increase) are possible in the volume of sales of products in value terms, including the values of zero profitability when entering and exiting the crisis zone and the value of the crisis threshold – the limit beyond which the performance of the enterprise’s mission is impossible. It can be assumed that the minimised value of fixed and variable costs, which constitutes a necessary condition for the sale of a product, is applicable as a threshold of crisis.
In determining the value of the crisis threshold, the study proceeds from two approaches existing in the theory of microeconomics, according to which the enterprise will incur minimal losses. The first approach involves comparing gross income and gross costs; the second is a comparison of marginal revenue and marginal cost. Both approaches are applicable not only to a competitive enterprise but also to enterprises operating in any of the three main market structures. From the standpoint of the methodology, the first approach is more acceptable, reflecting the realities of the establishment of a market economy.
For top management, the zero-profitability point is the leading motivation to stop production and liquidate the business. Maksimova [38] notes that an entrepreneur should keep in mind the following: with a complete cessation of production, their costs will be equal to fixed costs (they must pay off all their obligations, and this includes rent, credit, etc.). Therefore, if the use of variable resources (which adds variable costs to fixed costs) allows producing a certain volume of products, the proceeds from the sale which cover not only all variable costs, but at least part of fixed costs, then the entrepreneur can continue production in extreme conditions. Thus, the threshold value of the state of crisis (Sthr.ex) will be on the borderline, at which the level of the gross income of the enterprise will neither lower nor increase variable costs, i.e., its value will be identical to them.
Based on the adopted model, the study will consider the development of a crisis state with the use of the approach of Kreinina [39] in the assessment of the financial condition of the enterprise in the context of the critical volume of sales. The essence of this approach lies in the fact that it is customary to determine the minimum critical volume of sales based on the cost structure. There is no profit with a minimum volume of sales of products, and the structure of proceeds from its sales coincides with the structure of expenses, i.e., the ratio of fixed and variable costs. The crisis threshold determines the lower limit of the manoeuvre of agricultural enterprises for the choice of management decisions in unfavourable conditions of production and commercial activity. Considering this situation not from the standpoint of the rule of law, but from an economic standpoint, agricultural enterprises have reserves for getting out of the crisis.
Therewith, the specific feature of economic research is that they are complex, that is, they study social processes in different areas and with the help of different tools. Therefore, it is often difficult to identify a clearly defined area of scientific knowledge to which a particular object of research belongs. Thus, econometrics and modelling use mathematical methods of analysis, production relations are associated with humanitarian knowledge, and regulatory processes in the economy are related to the institutional and legal sphere. In other words, economic research is interdisciplinary, i.e., economic science uses other sciences as a necessary tool.
In recent years, many papers by Kazakh and foreign researchers have covered the problem of organising the anti-crisis management of an enterprise. Therewith, the problems associated with the effectiveness of anti-crisis management at agricultural enterprises, the prevention of bankruptcy, and the successful withdrawal of the enterprise from the stage of bankruptcy remain underinvestigated. The danger of a crisis always exists, and the likelihood of a crisis, its depth, and consequences will depend on the correct management, therefore it is necessary to learn to anticipate and prevent crisis situations. The main problem that hinders the efficient functioning of agricultural enterprises is ineffective management. This problem is caused by the following factors:
The prevention and overcoming of crisis phenomena in agricultural enterprises is the main goal of anti-crisis management in a market economy. The assessment of the values of the crisis state of different situations can be carried out with the use of the method of management diagnostics. As is known, management diagnostics is considered as a research activity aimed at establishing, analysing, and assessing the problems of development and increasing the efficiency of the organisation’s management system, and identifying the main directions of their solution [40]. It makes provision for a set of sequential procedures to obtain reliable information about the range of changes in the economic activity of the enterprise.
First of all, it is necessary to establish assessment standards for the functional parameters of the enterprise. They correspond to the estimated and analytical indicators, embodied for the purpose of the socio-economic development of the enterprise. These are, first of all, such indicators expressing the main reproductive parameters of the enterprise as the volume of production and sales of products; cost of production; profit (loss) and production profitability; time parameters, as well as indicators describing the economic stability of the enterprise [41]. With in-depth diagnostics, assessment standards can take a more detailed form, i.e., include a greater number of indicators reflecting the characteristics of the studied property of the subject. In this case, the centre of gravity of assessments can be transferred to such sectors of crisis zones, based on which the initial model is built. In the classical comparison of actual and planned indicators at each stage of the life cycle of an enterprise, deviations are identified, including limit ones. Limit deviations should be understood as the values of indicators that register the zone of crisis states of the enterprise. The crisis situation in the economy can be described as a time-limited process of intensive change (deterioration) of the reproductive function of an economic entity.
To achieve conceptual certainty, Mescon et al. [42] attempted to establish the relationship of the category of time to changes in the situation. The researchers suggest that the passage of time usually leads to changes in the situation. If they are significant, the situation may change so much that the criteria for making a decision will become invalid. Thus, these authors note the procedural finiteness of the situation and the possibility of the development of such a state of the object, in which the evaluation criteria will be different than for the situation. Zakirova et al. [43] believe that a crisis situation occurs when the impossibility of further reproduction in the previous schemes of action is registered formally and unambiguously, as applied to both an individual and communities. Admittedly, the problem is not so much in the completeness and unambiguity of definitions as in the adequate understanding of the object under study. Therefore, the conditionality of the discreteness of the reproductive process is important in the presence of a fact (or signs) of a crisis situation.
A crisis situation can be expressed by the following signs: suddenness and intensity of the action of factor determinants that create conditions for a specific form of development of a crisis phenomenon; the temporality of the decrease in the profitability of the enterprise; limited time range of the existence of a crisis situation. The suddenness (or low level of predictability) of crisis phenomena and situations describes the onset of unforeseen events in the external environment: changes in the political situation in the state, tax laws, prices, exchange rate fluctuations, etc. This position can be recognised as correct in essence, but it should be added that the factor of surprise is correlated with such categories of management as uncertainty and risk.
Uncertainty always increases risk, leads to difficulties in assessing the situation, loss of flexibility and adaptability to a rapidly changing environment. Furthermore, a stricter division of the boundary between the concepts of “risk” and “uncertainty” allows understanding of the differences in the driving forces of the development of a crisis situation. The “risk” category describes a situation in which the occurrence of unknown events is highly probable and can be quantified, while the “uncertainty” category suggests that the probability of such events cannot be estimated in advance. Thus, the sign of the suddenness of a crisis situation to a greater extent depends on the background restrictions of the environment, and the sign of the intensity of the development of a crisis situation – on the risks of economic activity. A crisis situation is a process, the development of which is initiated by the action of factors of both uncertainty and risk.
This study was carried out with consideration of the diversity and interconnection of crisis phenomena in economic, social, technical, and other natural processes, one way or another related to the activities of an enterprise; therefore, verification of the initial assumptions about the emergence, development, and shaping of crisis phenomena in the economy of agricultural enterprises requires systematisation of the available data on the subject of study and abstraction from related processes. The existing crisis in agriculture has common features with general economic crises but also differs from them. The systemic crisis describes and characterises the current situation to the greatest extent. As a result of a systemic crisis, the main property of the system is destroyed – its integrity, that is, the elements of the system are not uniform and do not have common properties and behaviour. Thus, the existing crisis phenomena in the agriculture of Kazakhstan completely fall under the refined concept of a systemic crisis.
Consequently, a systemic crisis as a process contains changes in the qualities of the system. As for quantitative changes (a decrease in production volumes, the number of employed populations, and a decrease in agricultural areas), they serve only as its signs, that is, a consequence of a systemic crisis. For agricultural enterprises, the development and application of an improved methodology allow determining the crisis phenomena about its real possibilities at the initial stage of the economic crisis and provides the basis for the introduction of special methods and mechanisms of enterprise management. Based on the results of diagnostic and preventive methods of various aspects of the enterprise, managers, and owners have the opportunity to start developing a reflexive model of anti-crisis management of their enterprise.
