BUSINESS CONSULTING DEVELOPMENT IN UKRAINE: THE PROBLEM OF RENT-SEEKING AND ITS SOLUTION

Author

, associate professor, Kharkiv, Pushinska, 77
ORCID ID: 0000-0002-6914-0971

In heading

Economic theory of law;

Signed print

23.11.2018

Issues number

2018 - № 4 (35)

Page

124-135

Type of articles

Scientific article

Code UDK

338.467

ISSN print

2411-5584

Abstract

Problem setting. Existence of a non-market component in the structure of competition and expansion of rent-seeking in Ukraine lead to the distortion of a competitive policy of some consulting firms and the content of some consultations provided.
Recent research and publication analysis. N. K. Amelina, Yu. M. Atamanchuk, I. I. Vinnikova, B. S. Huzar, I. V. Dovba, T. H. Dudar, V. Yu. Klevianyk, O. V. Klenin, I. S. Klymenko, K. V. Kovalska, Ye. A. Kuznietsov, O. S. Marchenko, S. V. Marchuk, O. M. Taranukha, I. I. Cherleniak, O. V. Shupylo, et al. examine peculiarities of consulting in Ukraine and issues of its development. A competitive policy, tactics of some consulting firms, and some advising are distorted due to expansion of rent-seeking. Therefore, the article is aimed at researching these deformations.
Paper objective. The paper objective is to characterize issues of development of business consulting in Ukraine related to expansion of rent-seeking and usage of non-market methods of competition and to propose ways for overcoming these issues.
Paper main body. Over the past ten years, the market of consulting services in European countries has extremely increased. Its pace of growth is four times higher than a pace of the GDP growth. In Ukraine, the sphere of business consulting is also potentially able to show high-paced growth. Existence of non-market methods of competition as well as expansion of rent-seeking result in emergence of a set of issues.
Particularly, consulting firms, which try to compete by using market methods, sometimes lose a battle to organizations applying non-market methods and competitive quasiadvantages. In addition, sometimes there is a need to take into account non-market and corruptive components in the process of preparation of recommendations. Under such conditions, considerable experience of western business consulting appears to be not always useful. Hence, some of the Ukrainian firms should waste resources to develop own methodology.
To tackle rent-seeking and non-market methods of competition, the author propose: to ensure restraining activity of economic industries and functions of public administration, which generates illicit and non-market incomes; to deregulate the economy; to implement anti-corruption reforms of governmental bodies, initially law enforcement agencies; to provide real government accountability to the people of Ukraine.
Conclusions. The formation of market conjuncture being inherent to developed countries is the main pre-condition for development of the Ukrainian business consulting sector along the lines of the mentioned countries. In terms of current economic conjuncture, the consulting firms should focus on those spheres and directions of activity that are least influenced by non-market methods of completion and corruption.
Short abstract for an article
Abstract. The author has disclosed distortions, which affect a competitive policy of some consulting firms and the content of some consultations due to expansion of nonmarket methods of competition and rent-seeking. The author has proposed a complex of measures used to tackle rent-seeking and non-market methods of competition in order to develop business consulting being able to learn from the best western experience and to adhere to standards of the law-governed economy.

Keywords

business consulting, rent-seeking, competitive advantages, system of revenue formation, tackle corruption.

Reviewer

External reviewer

Article in PDF

124-135

Bibliography

1. Atamanchuk, Y. M., Huzar, B. S., & Shupylo, O. V. (2015). Problemy formuvannia ta funktsionuvannia rynku konsaltynhovykh posluh v Ukraini [Problems of the formation and functioning of the consulting services market in Ukraine]. Visnyk Kyivskoho instytutu biznesu ta tekhnolohii – Bulletin of the Kiev Institute of Business and Technology, 3(28), 3-7. Retrieved from http://nbuv.gov.ua/UJRN/Vkib_2015_3_3 [in Ukrainian].
2. Vinnikova, I. I., & Marchuk, S. V. (2016). Osoblyvosti rozvytku rynku konsaltynhovykh posluh v Ukraini [Features of the development of consulting services market in Ukraine]. Molodyi vchenyi – Young scientist, 7, 16-21. Retrieved from http://nbuv.gov.ua/UJRN/molv_2016_7_7 [in Ukrainian].
3. Dudar, T. H. (2016). Napriamy rozvytku konsaltynhu v systemi pidpryiemnytskoi diialnosti [Directions of development of consulting in the entrepreneurship]. Problemy innovatsiino-investytsiinoho rozvytku. Seriia: Ekonomika ta menedzhment – The problems of innovation and investment-driven development. Series: Economics and Management, 9, 79-84. Retrieved from http://nbuv.gov.ua/UJRN/Piir_2016_9_12 [in Ukrainian].
4. Klenin, O. V. (2016). Osoblyvosti formuvannia zmistu instytutu konsaltynhu v Ukraini [Features of formation the content of institute of consulting in Ukraine]. Ekonomichnyi prostir – Economic scope, 116, 133-146. Retrieved from http://nbuv.gov.ua/UJRN/ecpros_2016_116_13 [in Ukrainian].
5. Kovalska, K. V. (2014). Osoblyvosti i tendentsii rozvytku rynku konsaltynhovykh posluh v Ukraini [Features and trends in the market of consulting services in Ukraine]. Efektyvna ekonomika – Efficient economy, 6. Retrieved from http://nbuv.gov.ua/UJRN/efek_2014_6_6 [in Ukrainian].
6. Kuznietsov, E. A. (2016). Upravlinskyi konsaltynh v systemi innovatsiinoho rozvytku ekonomiky i menedzhmentu [Managerial consulting in the system of innovative economic and management development]. Rynkova ekonomika: suchasna teoriia i praktyka upravlinnia – Market economy: modern management theory and practice,15(1), 9-22. Retrieved from http://nbuv.gov.ua/UJRN/rectpu_2016_15_1_3 [in Ukrainian].
7. Taranukha, O. M., Klymenko, I. S., & Amelina, N. K. (2017). Tendentsii rozvytku rynku konsaltynhovykh posluh v Ukraini [Development trends of market of consulting services in Ukraine]. Ekonomika ta upravlinnia na transporti – Economics and management on transport, 4, 129–135. Retrieved from http://nbuv.gov.ua/UJRN/eut_2017_4_18 [in Ukrainian].
8. Cherleniak, I. I., Dovba, I. V., & Klevianyk, V. Yu. (2017). Vyklyky ta bariery rozvytku natsionalnoho konsaltynhovoho biznesu [Challenges and development barriers of national consulting business]. Naukovyi visnyk Mukachivskoho derzhavnoho universytetu. Ser.: Ekonomika – Scientific Bulletin of Mukachevo State University. Series "Economy", 2, 57-67. Retrieved from http://nbuv.gov.ua/UJRN/nvmdue_2017_2_11 [in Ukrainian].
9. Marchenko, O. S. (2016). Destruktsii natsionalnoho rynku yurydychnykh posluh: zmist ta naslidky dlia formuvannia pravovoi ekonomiky [Destruction of the national market of legal services: contents and consequences of legal economy formation]. Ekonomichna teoriia ta pravo – Economic Theory and Law, 2(25), 57-66. Retrieved from http://econtlaw.nlu.edu.ua/деструкції-національного-ринку-юрид/ [in Ukrainian].
10. Ievtushenko, N. O. (2017). Yevropeiskyi rynok konsaltynhovykh posluh: osoblyvosti i perspektyvy rozvytku [European consulting market: features and prospects of development]. Ekonomika. Menedzhment. Biznes – Economics. Management. Business, 4, 63-72. Retrieved from http://nbuv.gov.ua/UJRN/ecmebi_2017_4_11 [in Ukrainian].
11. Official site of PwC Ukraine (2018). PwC Global Economic Crime and Fraud Survey 2018: Ukrainian findings. Retrieved from https://www.pwc.com/ua/uk/survey/2018/economic-crime-survey.html.
12. Vsemirnyiy bank obvinil tri ukrainskie kompanii v korruptsii [The World Bank has accused three Ukrainian companies of corruption]. (n.d.). Retrieved October 21, 2018, from https://delo.ua/business/vsemirnyj-bank-obvinil-tri-ukrainskie-kompanii-vkorrupcii-319535/ [in Russian].
13. Ormotsadze, M., & Kravchenko, D. (2016, February 05). Odyn den u Deloitte: shcho shukala Heneralna prokuratura [One day at Deloitte: What was the Prosecutor General’s Office looking for]. Retrieved from http://forbes.net.ua/ua/business/1410416-odin-den-u-deloitte-shcho-shukala-generalna-prokuratura [in Ukrainian].
14. Khlimonenko, B. (2015, March 02). Audyt rozbratu: khto lobiiuie «velyku chetvirku» [Audit of discord: who lobbies the "big four"]. Retrieved from http://forbes.net.ua/ua/business/1389510-audit-rozbratu-hto-lobiyue-veliku-chetvirku [in Ukrainian].
15. Dolmetsch, C. (2018, July 02). PwC Ordered to Pay $625 Million in Damages Over Bank’s Audit. Retrieved from https://www.bloomberg.com/news/articles/2018‑07‑02/pwc-ordered-to-pay-625-million-to-fdic-over-alabama-bank-audit.

19.11.2018