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  <front>
    <article-meta>
      <title-group>
        <article-title>Reforming Economic Mechanisms in Leading Strategic Enterprises of Uzbekistan</article-title>
        <subtitle>Reformasi Mekanisme Ekonomi di Perusahaan Strategis Utama Uzbekistan</subtitle>
      </title-group>
      <contrib-group content-type="author">
        <contrib id="person-b1776ec6e1e5d77a5da8cbea2f7e11a5" contrib-type="person" equal-contrib="no" corresp="no" deceased="no">
          <name>
            <surname>Hanis</surname>
            <given-names>Priyanka Anisa</given-names>
          </name>
          <email>hadiah@umsida.ac.id</email>
          <xref ref-type="aff" rid="aff-1" />
        </contrib>
        <contrib id="person-fc138492c510f64c14eb277843487847" contrib-type="person" equal-contrib="no" corresp="no" deceased="no">
          <name>
            <surname>Fitriyah</surname>
            <given-names>Hadiah</given-names>
          </name>
          <email>hadiah@umsida.ac.id</email>
          <xref ref-type="aff" rid="aff-2" />
        </contrib>
      </contrib-group>
      <aff id="aff-1">
        <country>Indonesia</country>
      </aff>
      <aff id="aff-2">
        <country>Indonesia</country>
      </aff>
      <history>
        <date date-type="received" iso-8601-date="2024-10-25">
          <day>25</day>
          <month>10</month>
          <year>2024</year>
        </date>
      </history>
      <abstract />
    </article-meta>
  </front>
  <body id="body">
    <sec id="heading-de965f1ef733042424c07bfcff267449">
      <title>
        <bold id="_bold-5">Introduction</bold>
      </title>
      <p id="paragraph-de824cc144fe3daf32a0241d2200c25f">The sustainable development of any national economy depends on its structural structure, the level of inter-sectoral coherence and the efficiency of large enterprises operating in strategic sectors. Enterprises that have a dominant position in economic sectors are the main source of the country's industrial power, export potential, scientific and technical potential and budget revenues. Their effective activity not only ensures economic growth, but also plays a decisive role in creating new jobs, stimulating regional development and increasing competitiveness [1].</p>
      <p id="_paragraph-11">The comprehensive reforms implemented in Uzbekistan in recent years, in particular, measures to liberalize the economy, reduce state participation, develop the private sector and improve the investment climate, pose new challenges for these large enterprises. That is, their management system must be not only effective, but also flexible, adaptable to market mechanisms and able to actively operate in a competitive environment. This creates the need to reconsider economic mechanisms, restructure them based on modern requirements [2].</p>
      <p id="_paragraph-12">The large-scale reforms implemented in Uzbekistan in recent years, in particular, the transformation of industries, reduction of state participation, privatization of state assets, and extensive attraction of foreign investment, pose new challenges for these large enterprises. In particular, it is more important than ever to introduce economic mechanisms that can act independently in market conditions, are profit-oriented, and have competitive management models [3].</p>
      <p id="_paragraph-13">Factors such as ineffective management systems, problems with cost management, low innovation activity, slow digitalization processes, and insufficient strategic planning are hindering the sustainable growth of large enterprises. This, in turn, negatively affects the development of the entire industry. It is in this regard that the need to reconsider economic mechanisms and reform them based on new requirements and technological approaches is becoming an urgent issue.</p>
      <p id="_paragraph-14">Also, rapid changes in the world market, global economic crises, geopolitical risks, and dynamic changes in supply and demand require an active, proactive, and innovative approach to managing the activities of strategically important enterprises. In such conditions, standard and inertial management mechanisms are ineffective. It is necessary to develop and implement economic mechanisms that are adaptable to new conditions, increase economic efficiency, facilitate digital transformation, resource redistribution, and strategic decision-making [4].</p>
      <p id="_paragraph-15">Therefore, the scientific study of the issue of improving economic mechanisms in enterprises that have a dominant position in economic sectors is relevant not only theoretically, but also practically. This will not only help find solutions to the above-mentioned problems, but also contribute to the formation of a sustainable growth trajectory of the national economy [5].</p>
    </sec>
    <sec id="heading-e67e9d05686e32c0c26276cffd8764ab">
      <title>
        <bold id="_bold-6">Review of Relevant Literature</bold>
      </title>
      <p id="paragraph-815d02f063ed84c5f85b0250751436b3">The issue of managing the activities of enterprises that have a dominant position in economic sectors and improving their economic mechanisms has been widely discussed in world and local scientific literature. Research in this area is mainly focused on strategic management, effective use of resources, increasing competitiveness, and improving corporate governance systems.</p>
      <p id="_paragraph-17">One of the world's leading economists, Michael Porter, in his book "Competitive Advantage," identifies strategic management, cost control, and the creation of differentiating capabilities as key factors in achieving competitive advantage. He argues that large enterprises can optimize internal processes and maintain competitiveness by implementing a "value chain" model [6]. This idea is also of practical importance for Uzbek industrial enterprises, but has not yet been fully implemented in practice.</p>
      <p id="_paragraph-18">Peter Drucker defines management as "a practice directed towards goals" and considers the reallocation of resources, the attraction of innovations, and the development of management models focused on results to be essential for any commercial organization. He emphasizes that the future of an enterprise can only be assessed on the basis of modern economic mechanisms, including indicators such as KPI, ROI, and EVA. However, the fact that these indicators have not yet been fully implemented in many large enterprises in Uzbekistan gives grounds for a critical assessment of the situation [7].</p>
      <p id="_paragraph-19">Model in reforming the activities of priority enterprises in economic sectors. In his opinion, management mechanisms in high-value-added sectors should be based on strategic forecasting and numerical analysis. However, Khojakulov's models remain more theoretical, and the mechanism for their application in practice has not been sufficiently developed.</p>
      <p id="_paragraph-20">Also, Sh. Haydarov, in his research, analyzing resource management mechanisms in large industrial enterprises, considers project management, outsourcing, and financial planning to be key factors in increasing production efficiency [8]. However, his analyses have less studied the impact of the competitive environment and the adaptive capabilities of enterprises to changes in market conditions.</p>
      <p id="_paragraph-21">J. Islamov and M. Abdullaev, in their scientific research on the corporate governance system in large enterprises in Uzbekistan, point to the need to ensure transparency and accountability in management, and to form mechanisms for making strategic decisions based on data [9]. While they emphasize the high potential of the digital platforms being introduced, they cite the lack of personnel and inertia in corporate culture as the main obstacles.</p>
      <p id="_paragraph-22">In conclusion, although the existing scientific literature contains important theoretical approaches and practical analyses on the topic, the mechanism for their implementation in local conditions, in particular, adaptation to the cross-sectoral and macroeconomic characteristics of Uzbekistan, has not been sufficiently developed. This indicates that the topic is one of the areas that requires a more in-depth study and a multidisciplinary approach [10].</p>
      <p id="_paragraph-23">Research on the economic mechanisms of enterprise management focuses not only on strategic management and resource utilization, but also on innovation management, digital transformation, and the ability to adapt to market changes.</p>
      <p id="_paragraph-24">Local researcher I. Juraev, in his scientific work on the strategic management of industrial enterprises, draws attention to the differences between the economic mechanisms of large enterprises across regional sectors. In his opinion , in strategic enterprises at the republican level, economic efficiency indicators are more often determined by the state, which prevents them from acting freely in market conditions [11]. He suggests introducing corporate independence and modern methods of budgeting to solve this problem.</p>
      <p id="_paragraph-25">In his analysis of the implementation of digital economy elements in manufacturing enterprises, M. Aripov emphasizes that delaying the integration of management mechanisms with digitalization has a negative impact on investment attraction and production efficiency. He studies the level of implementation of ERP (Enterprise Resource Planning), SCM (Supply Chain Management) and CRM (Customer Relationship Management) systems in national enterprises and criticizes the fact that in most cases these systems are imported, but not adapted to local needs [12].</p>
      <p id="_paragraph-26">International researcher H. Chandler, in his work " <italic id="_italic-4">Strategy and Structure </italic>", argues that the balance between organizational structure and management strategy is important in the development of large corporations. According to his theory, changing the structure is ineffective if the strategy does not change. This idea indicates the likelihood that formal reforms in large enterprises in Uzbekistan, that is, organizational changes, will be ineffective if they are carried out without a strategy.</p>
      <p id="_paragraph-27">Nobel laureates A.K. Sen and J. Stiglis also emphasize the importance of maintaining a balance between social efficiency and economic efficiency in large state-owned enterprises. They argue that a model that focuses solely on profit may not fully take into account the interests of society [13]. This perspective is especially relevant in the process of transforming strategically important enterprises.</p>
      <p id="_paragraph-28">Some scholars, in particular VR Galbraith, in his scientific research, advocate the need to introduce "adaptive management" models in large, diversified corporations in an era of technological change. He believes that in today's digital economy, not only static mechanisms, but also systems that allow for dynamic, rapid, and data-based management decisions will be effective [14].</p>
      <p id="_paragraph-29">A critical perspective, most of the existing scientific research has general theoretical approaches, and the mechanism for their application in practice is often insufficiently developed [15]. In particular, factors such as inter-sectoral imbalances, centralization in resource allocation, and personnel shortages in the conditions of Uzbekistan are not sufficiently taken into account. Therefore, the development of national models and reform scenarios based on existing research remains one of the urgent tasks [16].</p>
    </sec>
    <sec id="heading-df1ca47af5e6579baf693d4ff1507899">
      <title>
        <bold id="_bold-8">Research Methodology</bold>
      </title>
      <p id="_paragraph-31">The present investigation is implemented with the help of the methodology based on unifying two strands the theoretical and the empirical in order to research and enhance the economic processes that define the enterprise which functions and has occupied leading positions in the spheres of strategic plan of the Uzbekistan economy. A decision was made to use a mixture of qualitative and quantitative methods to guarantee a multidimensional aspect. The comparative analysis was used to compare the results obtained by sectors that are characterised by the varying grades of digital transformation, and statistical techniques were applied to systematically analyse the empirical information received both at the national and international level, including ERP and BI implementation indicators and World Bank Enterprise Survey. Scientific abstraction, coupled with logical thinking, was applied to the process of diagnosing the systematic issues that the enterprise management faced, and especially in matters like cost management, integration of innovation etc. The argument was organised in terms of both inductive and deductive reasoning so that in the second phase transformation of specific industry information was provided in terms of more general theoretical insights and with the objective of generalising and specifying the findings. This integration of the approaches allowed identifying the patterns of reoccurring issues, aspects that require improvement and that can be changed within the current management systems. Benchmarking practice also included the evaluation of large enterprises in Uzbekistan with the context of best practices in the world, thereby shedding light on digital infrastructure deviations, human capital preparation, and models of governance. The data source and approach triangulation was intentionally implemented in order to improve the validity and reliability of inferences, and finally the study was organised on the assumption that empirical data along with the analytic model building may serve as a solid basis on which the mechanism of economic management can be designed able to address the needs of the contemporary industrial change.</p>
    </sec>
    <sec id="heading-a6ce0a2acfe6bf5fffa9ee1bf1d61601">
      <title>
        <bold id="_bold-9">Analysis and Results</bold>
      </title>
      <p id="paragraph-a011878d1de24af1ea2531c139619d7f">The concept of economic mechanisms is not limited to financial calculations or the organization of production processes. It is a complete system, which includes such elements as strategic planning, budgeting, investment policy, resource allocation, cost optimization, innovation, corporate governance, and employee motivation. Based on the characteristics of each industry, these mechanisms are required to be variable and flexible.</p>
      <p id="_paragraph-33">However, in practice, the management methods available in these enterprises are often traditional, bureaucratic and to a certain extent inertial. This reduces their competitiveness, limits their ability to act actively in market conditions, and slows down the processes of technological innovation. World experience shows that in conditions of frequent changes in the global economic balance, large enterprises can operate effectively only on the basis of an innovative approach, digital transformation and strategic management.</p>
      <p id="_paragraph-34">Large enterprises that occupy a leading position in the economy play a decisive role in shaping the country's economic potential, social stability and foreign economic relations. In particular, these enterprises operating in such sectors as industry, energy, chemistry, mechanical engineering, transport and communications are considered the "locomotive" of the Uzbek economy. They play an important role not only in the production of products, but also in the implementation of economic policy, the introduction of innovations and the formation of the labor market. Therefore, the issue of managing these enterprises, ensuring their sustainable development and adapting them to the market environment is extremely relevant today (Table 1).</p>
      <table-wrap id="_table-figure-1">
        <label>Table 1</label>
        <caption>
          <title>Level and effectiveness of ERP and BI systems implementation</title>
          <p id="_paragraph-36" />
        </caption>
        <table id="_table-1">
          <tbody>
            <tr id="table-row-c73a4a53a2ef3ce567f21f0df1efc83e">
              <th id="table-cell-bd69cf0638232752815555b302c7757a">Networks ​</th>
              <th id="table-cell-0645bb5471d9711e3b86fbab0c8f9c8e">ERP+BI implementation (%)</th>
              <th id="table-cell-9cd236199d1eaee6145cba108d525092">Average cost savings (%)</th>
              <th id="table-cell-19e9e307b867d42e25ebfe455d859ba4">Accuracy of financial forecast (%)</th>
            </tr>
            <tr id="table-row-170e19d89088254f3c55a32903aa3eb9">
              <td id="table-cell-51b669506e40c5a8f3030b3c02d62a1f">Telecom</td>
              <td id="table-cell-3a9d70246b9304cfa6972de4e7074a38">78</td>
              <td id="table-cell-a10f5ab1d8b11556dbafeb089250c101">&gt; 12%</td>
              <td id="table-cell-dbfe2147de0fe25f76f470ef915a9d1c">90</td>
            </tr>
            <tr id="table-row-070be30a8af555483faece0824488fc2">
              <td id="table-cell-63699fd3edb430a4fbba371624f68677">Energy</td>
              <td id="table-cell-1009a88096c7e7c71f052341da039591">65</td>
              <td id="table-cell-88e90320f72c8b83521efa22b7ef728a">&gt; 12%</td>
              <td id="table-cell-ada2aa9257a6a9dd06738d2d5f686ee6">85</td>
            </tr>
            <tr id="table-row-0616209c7f7eaaa4959a780f2512e225">
              <td id="table-cell-e8d5c24fb1c9624327a5519c91040e95">Textile</td>
              <td id="table-cell-f8c6b194b6fdc76baeb57f0d767b3cb3">42</td>
              <td id="table-cell-8f81925d1ed6104524143b307bf53988">5–8%</td>
              <td id="table-cell-ff57f1712729123ca8fe232dbbe5913d">70</td>
            </tr>
            <tr id="table-row-3ff8072a047d4109a3c527abdf4bdfae">
              <td id="table-cell-8b32a98b4c6f67f580cd4256121ab676">Agriculture</td>
              <td id="table-cell-cf09570df0c53f55f7142c8b8c0a4c4a">30</td>
              <td id="table-cell-62dbf0d926dd92ec90d8198030e58df1">3–5%</td>
              <td id="table-cell-0f763eee3e5988a9450bcca54c138cc0">66</td>
            </tr>
          </tbody>
        </table>
      </table-wrap>
      <p id="_paragraph-37">According to the analysis of the data presented in the table, digital transformation in the telecommunications and energy sectors has helped to improve informed decision-making, cost control and financial planning - cost savings exceeded 12% and forecast accuracy reached 85–90%. In agriculture and textiles, however, their effectiveness is much lower due to the lack of digitalization, which indicates the need for widespread implementation of systems (Table 2).</p>
      <table-wrap id="_table-figure-2">
        <label>Table 2</label>
        <caption>
          <title>WBES (World Bank Enterprise Survey) data on the business environment</title>
          <p id="_paragraph-39" />
        </caption>
        <table id="_table-2">
          <tbody>
            <tr id="table-row-d43904ba734de544a7a6cb5d9ddbc7aa">
              <th id="table-cell-aac9bca391e9bd6499511829f92c6f83">Measurement</th>
              <th id="table-cell-927ef6b632626d9e8e4abf826c442c2a">Indicators in 50 denars</th>
              <th id="table-cell-6b2f282915bbe7de6b8d85f4fb9d9b5b">Uzbekistan results</th>
            </tr>
            <tr id="table-row-0ccae5f00528032087cb17c6b1c6af97">
              <td id="table-cell-b8fbf5e7e5a944ee630ba8f122f6ef0e">Infrastructure (electricity, internet) availability</td>
              <td id="table-cell-9ab03999fcc242c8a98bf91df46677a0">65</td>
              <td id="table-cell-e94f417077707ff16082a84b82eeb20f">52</td>
            </tr>
            <tr id="table-row-af26f3222bb1d1f2638ab6e486bca3cf">
              <td id="table-cell-b33104810c11091b12d74b010d40954a">Level of market competition</td>
              <td id="table-cell-806ed36ac064aeae67d0970366cfe91c">68</td>
              <td id="table-cell-86238cce215131e15657e3a5d15f6078">60</td>
            </tr>
            <tr id="table-row-0f509988b09f57d4636d223d181fd192">
              <td id="table-cell-53ee48a3d7fbee5476ccd1292e64e7bb">Financial services referral focus</td>
              <td id="table-cell-c36133a685287d3dab7029b41e7028b5">55</td>
              <td id="table-cell-11bda1a850d58ce9664fbe2a7795d508">45</td>
            </tr>
            <tr id="table-row-2d5b5da89ed126a6e1f0aa2c621a4b38">
              <td id="table-cell-a9280ed92036fb58ca1d7d9d1d47715f">Management practices (activity)</td>
              <td id="table-cell-37ac456a97e38485630eca8621d468db">60</td>
              <td id="table-cell-3f9386c893a427d2c9d5796a5c58ad58">50</td>
            </tr>
          </tbody>
        </table>
      </table-wrap>
      <p id="_paragraph-40">Analyzing the data presented in the table, strategic enterprises in each sector are operating at average levels in terms of infrastructure and competitive environment, but are quite ineffective in terms of access to digital systems, management and finance. This requires accelerating management and technological reforms.</p>
      <p id="_paragraph-41">Based on the analysis of the tables, the following conclusions can be drawn:</p>
      <list list-type="order" id="list-7344a09e78e2007105eba0da509350cc">
        <list-item>
          <p>cross-industry digitalization: Telecom and energy sectors are slightly ahead, while digitalization in other sectors is still in its infancy and needs to be accelerated.</p>
        </list-item>
        <list-item>
          <p>Infrastructure and Finance Approach: WBES results show that audits are leading to lower revenue trends in sectors where digital and financial systems are not implemented.</p>
        </list-item>
        <list-item>
          <p>Human resource skills: Attracting highly skilled personnel in strategic sectors and focusing on digitalization should be considered a key element for reform.</p>
        </list-item>
      </list>
      <p id="_paragraph-42">Based on the results of the research and analysis conducted, the following practical conclusions were drawn:</p>
      <p id="_paragraph-43">1. In industries where ERP and BI systems are highly effective, the level of digitalization is high: cost savings and increased forecast accuracy are clearly demonstrated.</p>
      <p id="_paragraph-44">2. WBES results related to infrastructure and management practices indicate the need for widespread adoption of digital transformation.</p>
      <p id="_paragraph-45">3. The problem of human resources is the main limitation in implementing digital mechanisms.</p>
    </sec>
    <sec id="heading-28a36a18fb16e45c2e00e649360d2242">
      <title>
        <bold id="_bold-21">Conclusion</bold>
      </title>
      <p id="paragraph-c0a830345e3fb766c956cf7273a4dec8">Effective management of the activities of large enterprises of strategic importance in the economy of Uzbekistan is a key factor in national economic stability and future development. These enterprises not only create a significant part of the country's gross domestic product, but also play a decisive role in implementing innovations, producing export-oriented products, introducing new technologies, and ensuring stable jobs in the labor market. In this regard, the issue of improving their economic management mechanisms is of not only economic, but also social and political importance.</p>
      <p id="_paragraph-47">The theoretical analysis, review of scientific literature and analysis of practical data conducted within the framework of the article show that the existing management mechanisms do not fully meet the current market requirements. In large enterprises, strategic planning, cost management, analysis of financial indicators and the use of digital platforms are often not sufficiently organized. This reduces the competitiveness of enterprises and weakens their position in foreign and domestic markets.</p>
      <p id="_paragraph-48">Based on the analyzed data, the following conclusions can be drawn:</p>
      <list list-type="order" id="list-97e466578071b5e75a5a4174567e8af1">
        <list-item>
          <p>Modernization of economic mechanisms is not a need, but a necessity. Modern management requires multidimensional and dynamic mechanisms. In particular, such functions as decision-making based on real-time information, forecasting costs and resources, optimizing value chains, and automating corporate activities are becoming key requirements. Therefore, instead of classic bureaucratic methods, large enterprises must introduce intelligent management systems that are compatible with the digital economy.</p>
        </list-item>
        <list-item>
          <p>Integration with civil society and the private sector is weak. Most strategic enterprises still operate under state influence. They have limited opportunities for corporate independence, active participation in external market relations, and financing of innovation. This indicates that a sufficiently transparent and predictable environment for foreign investors has not yet been created.</p>
        </list-item>
        <list-item>
          <p>Skills and human capital are the key factors of transformation. Human resources play a crucial role in the success of any economic mechanism. In the current situation, the lack of sufficiently qualified specialists, especially in the fields of IT, finance, logistics and business analytics, creates a risk of stalling reforms. The introduction of a system of corporate training and continuous professional development in enterprises is an urgent task.</p>
        </list-item>
        <list-item>
          <p>The importance of strategically oriented state policy. It is not right to leave the financial, technological and institutional transformation of enterprises solely to their own activities. This process should become part of state policy. It is also necessary to develop separate transformation roadmaps for sectors, improve the investment climate, and create mechanisms to regulate the internal market.</p>
        </list-item>
        <list-item>
          <p>Introducing social responsibility as part of the management model. Large enterprises can create not only economic, but also environmental and social consequences through their activities. Therefore, it is necessary to integrate the principles of corporate social responsibility (CSR) into management strategies and operate based on the principles of sustainable development.</p>
        </list-item>
      </list>
      <p id="_paragraph-49">The strategic task of today is not just to reform, but to reshape strategic enterprises in the economy of Uzbekistan. It is necessary that economic mechanisms of management are not limited to accounting and control functions, but also become a comprehensive system that includes innovation, competition, human capital and the interests of society. Only then will these enterprises become competitive, sustainable and efficient in real market conditions and have the potential to bring the national economy to a new level.</p>
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