Concept of fractal organization of organic business systems

Abstract

Purpose. The purpose of the article is determining the possibilities of fractal approach, as the one that enables not only flexibility and viability, but also, management efficiency improvement, new competencies of the company formation, self-renewal ability formation and conflicts of interest between structural subdivisions in complex vertically integrated structures elimination, to the organization of implementation of organic business entities. Methodology / approach. The methodological basis of the research is general scientific and specific methods of economic phenomena and processes cognition. Therefore, the following methods have been applied: logical generalization (in determining the properties and benefits of agricultural business systems of the fractal type); comparison (when the practice of functioning of properties of organic products is analyzed); abstract-logical (when features of the functioning of network structures in fractally organized business systems are designed); monographic (in the study of the recent concepts of the functioning of fractal organized business systems); graphic (for visual presentation of the cooperation network of vertically integrated structure members); heuristic (when formulating conclusions and generalizations, as well as when justifying the directions for future research of the business system). Results. The essence of fractal business organization and the properties of fractal type business systems have been identified which include heterarchy, structure complexity, self-organization, self-optimization, openness, as well as autonomy and elements. The fractally organized business systems benefits in agribusiness compared with agrarian business systems with a traditional structure and management system have been determined. The existence of objective prerequisites for organic farms fractalization has been substantiated, which is already inherent in some of fractally organized business systems properties. The properties and features of fractally organized business systems of network structures functioning have been defined. Originality / scientific novelty. For the first time the substantiation of fractal type business systems formation in agriculture is proved, organic production in particular (previously expediency of fractal type business systems was studied only for industrial enterprises use). In particular, potential subjects of fractalization in organic production are identified, which include complex diversified agricultural business systems; the properties and advantages of fractally organized organic farms are identified and formalized, that are defined for a single fractal as well as a business system in general; the network structure of fractally organized organic farms is substantiated, particularly the relationship structure, network interaction rules, properties and values of fractally organized business structures in organic farming. In addition, the identification and formalization of the factors that affect Ukrainian organic production development got further development. Practical value / implications. To ensure the fulfillment of obligations by all parties as well as maintaining the basic principles of fractal organization in the field of goal-setting the function of the institutional environment is proposed. As PE “Gallex-Agro” is the vivid example of interconnections network that corresponds to the features of fractal business systems design, vertically integrated structure of member’s interaction network is designed at its case.

Keywords

• fractal system
• fractal
• organic production
• agrarian business system
• vertically integrated system