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Vol. 1, No. 2, 2015

DEVELOPMENT MANAGEMENT  
OF TERRITORIAL ECONOMIC SYSTEMS UNDER INTEGRATION 

AND CONVERGENCE CONDITIONS 
Lesya GAZUDA1,

Uzhgorod National University, Ukraine

Abstract. The purpose of the paper is to define managerial approaches to activation of development of territorial 
economic systems under conditions of integration and convergence. Methodology. The study is based on gener-
alisation and substantiation of approaches to the process of development of territorial economic systems under 
integration and convergence processes. The importance of developing reasonable methods, principles and func-
tions of management, both from the side of central and local administrations, aiming to increase the efficiency 
of adjustment of territorial economic systems development, improvement of organizational forms in territorial 
management, including bordering rural territories is underlined. Practical implications. The need to use goal-orient-
ed-program and value-regulatory approaches to manage development of territorial economic systems under inte-
gration and convergence is substantiated. Here, the goal-oriented-program approach provides for the use of the 
system of methods and principles, which will ensure the orientation of managerial activity of respective regulatory 
bodies at implementation of different programs and achieving the goals of development of the system taking into 
consideration its quantitative and qualitative changes. The value-regulatory approach will be directed at creating 
new (positive) values related to managerial activity within the dimension of certain rules and norms given by the 
respective scale of values in social development. The need in development of managerial tools ultimately basing 
on planning as a function of management of the territorial system’s development, as well as developing plans and 
programs for fulfilment of perspective development of the mentioned system is substantiated. The author’s view 
is expressed concerning the process of development management of territorial economic system, which is consid-
ered as the task-oriented process of influence on its strengthening, developing positive qualitative and quantitative 
changes in it, which will lead to converting such system into a brand new state due to increasing its life-sustaining 
activity and potential. Value/originality. Developing effective managerial approaches is caused by the necessity 
to regulate integration and convergence processes of development of territorial economic systems according to 
existing potential, economic and natural conditions of certain territory that will favor their balanced growth. The 
efficiency of management in the process of development of territorial economic systems will depend on stage wise 
development of managerial approaches with the use of effective managerial tools. The stage wise development of 
managerial approaches is based on historical, current and perspective assessment of the level of development of 
territorial economic system in terms of its matching to the features of integration and convergence processes, on 
defining outer functional preconditions and outlining the purposes of development of territorial economic system, 
developing plans and programs of perspective development, their implementation and managing the results. 

Key words: managerial approaches, territorial economic systems, state and local executive bodies, integration, 
convergence, bordering rural territories. 

JEL Classification: R58, P10, F15

Corresponding author:
1Department of Economy of Enterprise, Uzhgorod National University.
E-mail: lesyagazuda@gmail.com

1. Introduction
Reasonable managerial approaches are essential for 

solving complex problems of perspective development 
of territorial economic systems under conditions of 
intensification of integration and convergence processes. 
Differentiation in development of certain territorial 
systems causes the need in studying specific approaches 

in managing them, ultimately basing on taking into 
consideration the potential of the territory and possibilities 
of its development in future. 

Substantial contribution in the study of processes of 
managing territorial economic systems has been made 
by native and foreign scholars Gazuda (2014); Gerasym- 
chuk, L.  Kovalska  (2010); Butko (2007), Storonyanska, 



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Vol. 1, No. 2, 2015
Shultz  (2013), Lall, S. Yilmaz (2001); Spilimbergo, 
N. Xingyuan Che (2012) and others.

2. Function of management in maintaining 
development of territorial economic system

Management as a function is implemented through 
implementation of the number of managerial actions, 
that is functions of management (basic functions were 
substantiated by Henri Fayol), in particular through planning, 
organizing, commanding, coordination and control, which 
are supplemented in the course of development with such 
functions of management as motivating, directing, research, 
assessment, decision making etc. Considering management 
as a function is connected with development of the structure, 
content of all kinds of managerial activities, including their 
interrelation in space and time (Porshneva, Rumyanceva, 
Salomatyna, 1999). 

Compared to functional approach to management, the 
process approach is determined by uniting all kinds of 
economic activity in one certain territorial system and is 
aimed at solving important problems in interrelation of 
each element in the system. 

The development of territorial economic system is 
determined by managerial interrelation between the 
subject and the object of management in the sphere of 
production, exchange, allocation and consumption, which 
is supported with a range of additional elements of the 
system, as financial, institutional, regulative, informational, 
trading etc. At this, development management of 
territorial systems requires working out of reasonable 
methods, principles, functions of management both 
from the side of the state and local governments, where 
(Vysoczkyj O. Y., Vysoczka, Y. P. and Sharov, 2008): public 
administration as a kind of state activity, is determined 
by execution of managerial organizational influence 
by means of using powers of executive bodies through 
making for implementing and keeping the laws, execution 
of managerial functions with the aim to provide complex 
social, economic, cultural development of the state and 
certain territories, as well as implementing state policies 
in certain sectors of public life, making for execution of 
citizen rights and freedoms. 

Timely state interference in development of those 
systems, the economies of which are in danger (or danger 
is considered as possible), should be a general objective 
of development management of territorial economic 
systems. Each of the types of development of territorial 
economic systems requires effective management from 
the side of central and local bodies, adequate selection 
of instruments of management and its implementation, 
ultimately at bordering rural territories. While considering 
development at an object of managing territorial 
economic system, regulative management means 
managerial influence within defined goals and objectives 
of management corresponding to defined priorities. 

We mean development management of territorial 
economic system as a straightforward process of influencing 

strengthening of it, providing qualitative and quantitative 
positive changes in it, leading to transforming of such 
system in the new state due increasing its sustainability and 
increase of its potential.

Management development of territorial economic 
systems under integration and convergence requires 
the use of goal-oriented-program approach and value-
regulatory approach. 

Goal-oriented-program approach provides for the use of 
the system of methods and principles, which presuppose 
directing managerial activities of certain governmental 
bodies at implementation of different programs and 
reaching development goals of the system taking into 
consideration quantitative and qualitative changes in it. 
Value-regulatory approach to development management 
of territorial economic systems is directed at creating new 
(positive) values, related to the activity within certain 
rules and norms given by certain scale of values (Kuzmin, 
2012). Thus, certain goals are defined at the primary stage 
of development of territorial system, which will further 
determine existing rules and norms of behavior for all 
subjects of such system. 

3. Managerial tools for maintaining effective 
operation of territorial economic system

Currently there are certain contradictions as to the 
problem of what processes of management may arise in 
future within structural transformations of territorial 
economic systems, as to the selection of methods of work, 
which will provide for management in such systems, 
and improvement of organizational forms of territorial 
management. Theses contradictions have resulted in some 
problems of development of territorial economic systems, 
in particular: 
- Development disparities of certain systems, resulting 
in divergent processes and disintegration of common 
economic space of the state;
- Low specialization level of economy of the territory 
because of ineffective use of advantages of territorial 
division of labour and resource potential; 
- Imperfect structure of economy of the territory, 
overwhelming share of primary sector as a Soviet heritage 
and because of imperfect allocation of productive forces. 

Given the mentioned, we consider that the development 
management of territorial economic systems is aimed at 
formation of integration and convergence processes in 
such systems according to given potential and economic 
and natural conditions at certain territory, promoting 
their balanced development. At this, the efficiency of 
development management of territorial economic systems 
depends on stagewise development of approaches, based on 
the use of effective instruments of management. The stages of 
this managerial process are as follows: historical, current and 
perspective assessment of the development level of territorial 
economic system with respect of its correspondence 
with features of integration and convergence processes, 
defining existing conditions for functioning of the territorial 



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system, objectives of such functioning and development, 
working on plans and programs of such development, their 
implementing and results management.

The first stage of management is analysis and assessment 
of development level of territorial economic system 
with respect of its correspondence with features of 
integration and convergence processes. Such assessment 
provides for development level assessment of territorial 
economic system using the range of individual and 
generalized indicators; analysis of the asymmetry and 
convergence levels of bordering rural territories. That 
will allow substantiating conclusions concerning the 
level of integration/convergence of analyzed territories, 
developing measures aimed at stimulation of integration 
and convergence processes and deciding on the most 
effective directions of interterritorial integration. 

The study of given conditions of operation of the system, 
that is assessment of the environment and factors, which 
are influencing the development of territorial economic 
system, is the another important stage of management. 
Vibrant development of economic processes, taking 
place within territorial systems, requires flexible system 
of management, its adapting to changeable conditions of 
external and internal environment. 

Adapting is an essential element for providing life 
activity of open economic system. Therefore, not taking 
into consideration of this principle counters territorial 
economic system to vibrant external environment that will 
lead to systemic economic crisis in future [Goncharov., 
Martynov, 2014). It has to be mentioned, that different 
factors are not of the similar decisive influence for all 
territorial systems. For example, in one territorial systems 
factors will have decisive influence, while for development 
of other territorial systems they will have minor impact. 
Thus, the availability of natural resources (mineral and raw 
materials) will decide the specialization of the economy 
of the territory, the structure of its economy, but for 
other territorial systems different factors like geopolitical 
location, transport infrastructure and natural conditions 
will have a decisive impact. 

Developing plans and programs is the next stage in 
development management of territorial economic systems. 
The program of development of territorial economic systems 
is a complex of economic and organizational measures 
directed at reaching balanced development of territories. 
Implementing them will help to switch to integration and 
convergence model. Developing programs for supporting 
territories with low development level, working out of 
clear course for forming, studying, approving, financing 
and control of implementing programs is an important 
instrument for providing integration and convergence 
processes. Such programs will concern territories requiring 
financial assistance in form of direct state investments and 
budget transfers, provide for introduction of special regimes 
of investments and innovative activities for economic 
entities, which are implementing projects within the 
priority areas of economic activity of the territory. In such 

case, territories have to keep to reasonable and effective 
approach in the use of their resource potential, stimulate 
their population to high-productive activity, while the state 
in its turn, will take control these processes and manage 
them in an effective way. This will allow economic subjects 
at certain territory to concentrate their efforts and resources 
ultimately at priority types of activity, which will form the 
“core” if integration buildup. 

Plans and programs of development of territorial 
economic systems need to be implemented in the form of 
certain managerial influence. Taking into consideration the 
multipurpose pattern of operation of such systems, it has to 
be noticed, that in the course of management, a high number 
of objectives, which differ in parameters, time horizon, 
content are being set and gained. Particular managerial 
influence has to balance divergent guidelines, create 
conditions to soften “bottlenecks” and problems arising 
in the process of achieving objectives and organization of 
process for executing tasks, which were defined.

At this, the special approach is important to the 
development of the process of managing the results, as a 
system of management, which should be based on certain 
style of thinking and behavior oriented at reaching the 
expected results (Shershnyova, 2004). Defined above 
respective objectives are being the key results of operation 
and development of territorial economic system.

The mentioned process includes three stages, they are 
as follows: the stage for identification of results, at which 
orientation of the results and the system of required 
measures are defined for national economy, economy of 
territories, for people; stage of situational management, 
where the system of development factors of territorial 
system is formed and the styles, methods, technologies of 
management as tools of managerial activity are defined; 
the stage of results control providing for assessment 
according to directions of its implementation and working 
on respective conclusions. 

Development of the process of management of territorial 
economic systems under integration and convergence 
conditions causes the need to select managerial tools, 
methods, functions of the system of management 
and of the system, aimed at providing their effective 
implementation. At this case, the effective development 
of territorial economic systems requires keeping to the 
following principles of management: 
- Balance of social, economic and ecological components, 
which in complex will provide sustainable development of 
economic system. Transformational structural changes in 
development of the economy of the territory and the state of 
environment, as well as economic interests of development 
of the system and society should be balanced; 
- Complexity, that provides for development of the 
optimal structure of the economic complex of territorial 
system, specialization of the territorial economy, increasing 
efficiency; 
- Unity, that means integration of all economic entities 
and resources (elements of the system), into one economic 



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space of territorial system; integration of all territorial 
systems into the economic space of the country as a whole; 
- Priority principle, according to which the provision 
of effective development for territorial economic system 
requires taking into account the priorities of development 
of the territory, interests of economic entities, territorial 
community and interests of the country as a whole; 
- Versatility, providing for adequate reacting to 
unforeseeable endogenous changes within the operated 
system and exogenous changes, caused by external factors; 
- Efficiency, providing for productivity in the life of 
territorial economic system with optimized use of its 
resource potential. 

4. Functionality of development management 
of territorial economic system

Functionality of the process of managing development 
of territorial economic systems is determined by certain 
methods and functions of this process. Among the 
methods for management of territorial economic systems, 
the following must be outlined: territorial forecasting, 
financial, and money and credit methods. 

Forecasting of development of the territories is a 
prognosis of the situation, which is possible in future 
depending on the implementation of the measures by the 
state authorities, efficiency of state and local management. 
Territorial forecasting, which is conducted on the base of 
historical and current analysis of development of territorial 
economic systems, allows to define the future level and 
depth of the processes of convergence and integration, 
activate the role of the state in development of those 
territories, where such processes are underdeveloped. 
The state bodies are able to regulate integration and 
convergence processes by decreasing the levels of 
differentiation of territorial development, allocating funds 
at territories, which are perspective from the point of 
supporting integration processes in the country as a whole. 

Planning of territorial development is a complex 
of measures undertaken with considering resources, 
executors, time limits needed for the implementation of 
measures aiming provision of integration and convergence 
processes of territorial economic systems. Working out the 
programs of development for the territories gives them 
necessary targets, allows to define dominating tendencies, 
their place in interterritorial and international labour 
division. Implementation of such programs provides 
background for integration of the territories into a united 
economic space of the state, rapprochement of the levels of 

their development as a pre-requisite of their convergence. 
Among the economic methods for regulating 

development of territorial and economic systems, financial 
and money and credit methods are to be mentioned 
first. They provide for giving one-time, temporary and 
constant subsidies, bailouts, tax exemptions for reducing 
production costs of goods, services in struggling territories, 
aiming to allocate own investment resources and increase 
the attractiveness of getting them from external sources 
(Butko, 2013; Larina, Kisel’nikov, 1999; Artemov, 2002).

Development management of territorial economic 
system is characterized in the systemic way by the functions 
of management, i.e. respective types of managerial influence 
referring to all managerial structures of the region. 

Planning as a function of development management 
of territorial economic system, consists of systematized 
efforts of state and local bodies of management, aimed at 
working out the development strategy of the territory, its 
formalization in form of strategic, current and operative 
planning documents, supporting execution of these plans. 
The basic conditions for planning of territorial economic 
systems are as follows: 
- Need to provide urgent response to changes of 
conditions, factors, resources, which influence the 
development of territorial economic system by means of 
modelling them; 
- Need in uniting resources, concentration of productions 
for the purpose of creating integration buildups; 
- Increasing the involvement of territorial economic 
systems into international division of labour, 
internationalization of business; 
- Need to decrease the territorial differentiation levels as 
preconditions for convergence processes. 

5. Conclusions
Development management of territorial economic 

systems under integration and convergence processes 
determines the need to use goal-oriented-program and 
value-regulatory approaches, involvement of managerial 
tools of influence on processes of integration and 
convergence. That will allow to increase and speed-up 
development processes of studied economic systems, 
including bordering rural territories, based on taking 
into consideration their given natural and human 
potential, uniting interests and efforts of the state, local 
communities, empowered bodies, aiming to provide 
balanced development of territorial economic systems of 
the state and its regions.

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Леся ГАЗУДА
УПРАВЛЕНИЕ РАЗВИТИЕМ ТЕРРИТОРИАЛЬНЫХ ЭКОНОМИЧЕСКИХ СИСТЕМ В УСЛОВИЯХ 
ИНТЕГРАЦИИ И КОНВЕРГЕНЦИИ
Аннотация. Целью работы является выявление управленческих подходов к активизации развития террито-
риальных экономических систем в условиях интеграционно- конвергенционных процессов. Методология. 
Исследование основано на обобщении и обосновании подходов к процессу регулирования развития тер-
риториальных экономических систем в условиях интеграции и конвергенции. Определены важность раз-
работки взвешенных методов, принципов, функций управления как со стороны центральных, так и местных 
органов исполнительной власти с целью повышения эффективности регулирования развития территори-
альных экономических систем, совершенствования организационных форм территориального управления, 
в частности сельских приграничных территорий. Практические последствия. Обоснована необходимость 
использования программно-целевого и нормативно-ценностного подходов к управлению развитием терри-
ториальных экономических систем в процессе интеграции и конвергенции. Где, программно-целевой под-
ход будет предусматривать использование системы методов и принципов, которые должны обеспечивать 
ориентацию управленческой деятельности соответствующих органов управления на выполнение различных 
программ и достижения целей развития системы с учетом количественных и качественных изменений, про-
исходящих в ней, а нормативно-ценностный метод будет направляться на создание новых (положительных) 
ценностей связанных с управленческой деятельностью в плоскости определенных правил и норм, задавае-
мых соответствующей шкалой ценностей общественного развития. При этом оговорена необходимость фор-
мирования управленческого инструментария, прежде всего на основе планирования как функции управле-
ния процессом развития территориальной системы, так и разработке планов и программ с целью реализации 
перспективного развития данной системы. Подано свое видение процесса управления развитием террито-
риальной экономической системы, под которым будем понимать целенаправленный процесс воздействия 
на ее укрепление и обеспечение в ней позитивных качественных и количественных сдвигов, приводящий 
к переводу такой системы в новое состояние из-за повышения ее жизнедеятельности и увеличение потен-
циала. Значение/оригинальность. Формирование эффективных управленческих подходов обуславливается 
необходимостью регулирования интеграционно-конвергенционных процессов развития территориальных 
экономических систем в соответствии с имеющимся потенциалом экономических и природных условий, 
которые сложились на определенной территории, что будет способствовать обеспечению их сбалансиро-
ванного роста. Обеспечение эффективности управления в процессе развития территориальных экономиче-
ских систем будет зависеть от поэтапного формирования управленческих подходов на основе применения 
результативного управленческого инструментария. Поэтапность формирования управленческих подходов 
базируется на ретроспективной, текущей и перспективной оценке уровня развития территориальной эко-
номической системы через призму соответствия признакам интеграционно-конвергенционных процессов, 
определения объективных функциональных предпосылок и очерчивания целей развития территориальной 
системы, разработке планов и программ перспективного роста, их реализации и управления по результатам.