Local-Group Behavior of the Business Community and the Institutional Environment of the Region

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 257-265

J. Environ. Treat. Tech.

ISSN: 2309-1185

Journal weblink: ttp://www.jett.dormaj.com

Local-Group Behavior of the Business Community

and the Institutional Environment of the Region

Andrey G. Tutygin , Lyudmila A. Chizhova

PhD (Physics and Mathematics), Associate Professor, Head of the Laboratory of Modeling of Socio-Economic Systems, the Federal center for

integrated Arctic research named after Academician N.P. Laverov, Russian Academy of Sciences, Arkhangelsk, Russia

PhD (Econ.), Associate Professor, Senior Researcher of the Laboratory of Modeling of Socio-Economic Systems, the Federal center for integrated

Arctic research named after Academician N.P. Laverov, Russian Academy of Sciences, Arkhangelsk, Russia

Received: 22/08/2019

Accepted: 26/11/2019

Published: 20/02/2020

Abstract

The paper analyzes the problems of local-group behavior of business agents in the institutional environment of the region. As a

research hypothesis, it is assumed that local groups of economic agents often form independent attitudes beyond the general trends of

institutional nature, reacting to them in the mode of reflection. The study was carried out using the methods of historical, logical,

structural analysis, system approach, organizational and mathematical models. The article considers the existing approaches to the

concept of institutional environments of business, institutions, their functions and limitations, and establishes a fundamental

difference between the external and institutional environments. Various issues related to the quality of institutions and factors of their

impact on the business community of the region are discussed, in particular, the influence of these factors on the manifestations of

competition and the shadow economy is noted. The main part of the study is devoted to the formation of local business communities,

their interaction in the existing institutional conditions and constraints, as well as their identification in various systems of indicators.

It is proposed to consider the individual groups of business agents localized on certain characteristics and criteria as “business

populations”, the behavior of which is formed both at individual and group levels. At the same time, the problem of similarity of

agents belonging to certain local groups is required to address by a model approach based on the use of different metrics and

population classifications. The proposed approach is illustrated by a virtual example. As a result of creating an institutional graph, a

second-level model for horizontal network cooperation for local groups of business agents can be developed in the future. The

authors come to the reasoned opinion that local-group entrepreneurial behavior has independent categorical features, spiral character

of development in the institutional environment and does not copy both the general trend of development of the whole community

and the individual behavior of business agents. However, the latter has a certain influence on the formation of local groups’ behavior

in the current conditions of institutional constraints.

Keywords: Regional business community, institutional environment, business agents, local groups, behavior modeling

economic stereotypes prevailing at that time (5). This forced

Introduction

us to turn to the works of the founders of behavioral

economics (7, 8), as well as to get acquainted with the basics

of agent-based models (9, 10, 11, 12, 13, 14) and to conduct a

serious revision of methodological tools used in the studies

The authors, together with colleagues, have been actively

involved in the implementation of various projects in the

field of entrepreneurship development, as well as studying

the business community and its issues in the Northern regions

of Russia. These studies often covered not only socially and

economically accepted topics of a regional or investment

nature (1, 2, 3, 4), but also various behavioral aspects (5, 6).

At the same time, obtained model and expert assessments (6),

the results of observations of the business community and its

behavior, its reactions to various institutional changes and

prohibitions often did not fit into the “Procrustean bed” of

(

15).

The problem discussed in this paper is that the dynamics

of behavioral processes occurring in the business community

is in systemic contradiction with the institutional

environment, although this contradiction is often

inconspicuous. In the context of territorial heterogeneity of

the institutional environment in the regions of Russia there

are various, including inefficient trajectories of behavior of

business agents and their communities. This is particularly

evident in regions with complex socio-economic and

territorial conditions.

Corresponding author: Andrey G. Tutygin, Russian

Academy of Sciences, Arkhangelsk, Russia. E-mail:

andgt64@yandex.ru

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 257-265

The object of research is the regional business

community. The subject of research is the behavior of

business agents and their local groups in certain conditions

and constraints of institutional environment of the region.

The scientific value of the study lies in the reasonable

conclusions obtained by the authors that local-group

entrepreneurial behavior has independent categorical

features, spiral character of development in the institutional

environment and does not copy both the general trend of

development of the whole community and the individual

behavior of business agents.

The relevance of the research issue is due to the fact that

local groups of economic agents form independent behavioral

attitudes beyond the general trends of institutional nature,

reacting to them in the mode of reflection. In this regard, the

researches aimed at studying the processes of formation of

local business communities, interaction in the existing

institutional conditions and constraints, identification in

various systems of features are relevant.

The third stage of the study was the search for solutions

to two problems (localization of agents in groups and

evaluation of relationships within groups and between

groups) using methods of organizational and mathematical

models. Historical and economic analysis of the development

of domestic entrepreneurship allowed identifying the most

important conditions for business development in Russia,

drawing parallels between the historical reforms of the late

XIX – early XX century and modern Russian programs of

support and development of entrepreneurship. At the final

stage, the analysis of foreign and domestic studies of group

behavior, the methods of logical, structural and system

analysis helped to formulate authors’ perspective on the

local-group behavior of the business community, the

institutional environment of the region; to summarize the

results of all stages of the study and confirm the hypothesis.

Results

.1 Institutional environment of the region

Novelty. The authors consider the individual groups of

business agents localized according to certain criteria and

characteristics as “business populations”, the behavior of

which is formed both at individual and group levels. At the

same time, the problem of similarity of agents belonging to

certain local groups is required to address by a model

approach based on the use of different metrics and population

classifications. The article can be useful for economists,

entrepreneurs and a wide range of people interested in the

issues of behavioral economics, mathematical and economic

modeling, and business development institutions.

Formal and informal established norms of interaction

between economic agents are common interpretation of

institutions in a broad sense (16). However, the current

terminology of this area of investigation is still in its

formative stage and it is far from logical conclusion.

Currently, there are several approaches to the definition of

“

Institute” in both social and economic sciences. So, G.B.

Kleiner understands the institution as a system of interrelated

relatively stable (in relation to fluctuations in the behavior or

interests of individual subjects and their groups), as well as

continuing to operate for a significant period of time formal

and informal rules governing decision-making, activities and

interaction of socio-economic entities and their groups (17).

Generalizing different points of view, it is possible to

conclude that the concept of “institution” means rules,

systems of rules, norms, restrictions, habits, customs,

mentality, organization, balance, framework, etc.

As a research hypothesis, it is assumed that local groups

of economic agents often form independent attitudes beyond

the general trends of institutional nature, reacting to them in

the mode of reflection.

Materials and methods

The paper collected and systematized theoretical and

Institutions perform different functions in the socio-

economic system. For example, the following functions of

the institutional environment are distinguished in the paper

(18): transactional, stimulating, restrictive and behavioral.

Each of these functions emphasizes only one side of

qualitative determinacy of institutional environment. All

functions are in a complex relationship with each other and

with system-wide responsibilities, which leads to their

contradiction, unity and interdependence in some situations.

The effectiveness of functioning of business entities

depends on the institutional environment, which is a system

of legally fixed and informal rules that form the conditions of

their activities. It should be noted that the institutional

environment is perceived differently by entrepreneurs and

non-entrepreneurs. In this regard, the results of the studies of

I.A. Petrovskaya and V.A. Titov, who confirm the

assumption of differences in the perception of institutional

environment by these groups, and also assert differences in

the values of individual levels, depending on entrepreneurial

activity and presence of entrepreneurial intentions (19).

Thus, within the framework of this study, the institutional

environment will be understood as a system of restrictive

conditions generated by various institutions in relation to the

business community. These restrictions may be regulatory,

practical material of domestic and foreign authors on the

issues described above. The study was carried out in four

stages:

) Institutional environment of the region;

) Business community and local groups;

) Model cooperative network of local groups;

)

Local-group behavior and institutional

environment.

The methods of dialectics, logical and system analysis are

used in the research on the institutional environment of the

region. The review of theoretical approaches to the concept

of “Institute”, functions of institutions in the socio-economic

system, the concept of institutional environment for the

business community of the region.

At the second stage, using the methods of logical and

system analysis, the authors came to the conclusion that the

business community of the region should be understood as a

system of local groups and their communications under the

influence of internal and external factors. An approach to the

formation of local groups of entrepreneurs on the basis of the

criterion of “proximity” of business agents’ profiles formed

on a certain combination of parameters. The proposed

approach is illustrated by a virtual example.

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 257-265

administrative,

infrastructural.

territorial,

socio-economic,

and

community and in interaction with the external environment,

this approach requires a certain level of detail, in which the

number of estimated influencing factors increases

dramatically. Therefore, to identify and analyze any

foreseeable set of factors becomes quite problematic. At the

same time, localizing certain groups of business agents

according to certain criteria, it is possible to consider them as

certain “business population” whose behavior is formed both

at the individual and group levels. Thus, we will understand

the business community as a system of local groups and their

communications.

There is no doubt that the business community as a

system category is not a homogeneous formation both on

structural and process characteristics. By virtue of its

openness and dynamism, the community, on the one hand, is

in a state of continuous internal reformatting, on the other

hand, it is highly exposed to external and institutional

influences.

As shown, in the work (24), the formation of the

community of entrepreneurs depends significantly on socio-

psychological aspects of individuals and their social maturity.

The author draws attention to the significant correlation

between the level of business development and the types of

motives of intra-group integration, which is schematically

presented in table 1. But by paying scrupulous attention to

the fact that despite the initial systematization in table 1,

there are a lot of blank fields. But this does not mean that, for

example, a group of entrepreneurs united with protective

goals cannot have an average or high level of business

development, and all socially active entrepreneurs are

successful businessmen everywhere. On the other hand, there

is no contradiction with the results presented in (24).

Therefore, “anomalous” cases outside general logic of table 1

are of some interest. For example, business agents with a

high and medium level of development, engaged in a certain

economic niche, feeling a serious threat outside their local

system, can unite in order to protect and confront it. Such

phenomena can be observed quite often in the regions of

Russia, for example, in connection with the emergence of

large federal and transnational networks in the areas of trade,

construction, transport, communications, housing and

communal services, etc.

It should also be noted that the degree of impact of

institutional environment on business is inversely related to

its size. Thus, in the studies of A.Yu. Kokovikhin and his

colleagues (20), it is shown that the quality of the work of

small-sized business institutions has a greater impact than

that of medium-sized and large-scale business formats.

Effective institutions contribute to economic growth by

ensuring that the additional costs are significantly less than

the potential benefits of business agents, and vice versa, the

low efficiency of institutions leads to a decrease in business

activity. N.Z. Solodilova, R.I. Malikov and K.E. Grishin note

that for formal institutions efficiency is determined by the

nature of their interpretation and application by economic

agents in the process of interaction (21).

Currently, there is a low quality of institutional support

for business in most regions of Russia, as evidenced by the

current trend of behavior of economic agents, based on

unilateralism at the expense of other participants in economic

interaction. Various forms of unfair competition and shadow

economic activity lead to certain problems of partnership and

socially responsible business relations in the Russian

business environment (22). Therefore, the formation of the

institutional environment of the region, as well as the

institutional configuration of the regional system of

entrepreneurship should be the object of management and

application of targeted mechanisms of influence by various

state and municipal authorities.

The study (23) is of significant interest from the point of

view of determining a sufficient degree of regulation of

relations between institutions, in which the author proposes

to determine this degree not by the number of institutions, but

by the degree of development of economic, legal, social and

political factors. In this case, the result of interaction of

factors (institutions), that ultimately determine the economic,

legal and socio-political behavior of economic entities, is the

structure of the institutional graph.

.2 Business community and local groups

Business community as a first hypothesis can be

considered as a kind of association of economic entities with

certain connections between them. However, when

considering certain processes that occur both in the

Table 1: The correlation of motives of intra-group integration and business development (by E.V. Shvenk).

Types of motives intra-group integration

Association of

Levels of business

development

representatives of

socially responsible

business

Protective Association

Cooperation

Image Partnership

Low level of affiliate

behavior, active social

position

High

Teamwork preference, high attention to reputation,

tolerance

Average or above

Individualization, self-

Low

orientation, pragmatism,

material and protective needs

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 257-265

It should be noted that according to the survey conducted

in May 2018 by the Analytical center of the National Agency

for financial research, the lifetime of business in Russia

averages 4.8 years for individual entrepreneurs and 5.8 years

for legal entities. At the same time, 53% of businesses for

individual entrepreneurs and 39% for legal entities are closed

under the age of 3 (25).

The defensive mechanism of the business community

may also arise for reasons of administrative and fiscal nature:

an increase in the tax burden, carrying out unpopular

administrative reforms, the introduction of certain restrictive

measures and sanctions. By the way, the latter often have a

pronounced institutional character. As for image partnership

or socially active position, they can also be forced for a

number of reasons, dictated by certain political, religious,

ethnic and other motives.

It is obvious that life is much more diverse and

multidimensional than formalized statistical dependencies.

The formation, even if virtual, of different business

communities and groups naturally leads to the question of

proximity or significant differences between individual

business entities in different groups and communities. At the

same time, a model approach for the study of various

connections, including causal nature, and dependencies, both

direct and inverse, should be conceptually based on

fundamental principles of system analysis, one of which is

W.R. Ashby’s law of requisite variety (26). To describe such

multivariate schemes, the methodology of a “morphological

box” proposed by F. Zwicky (27) is used. Local groups will

be formed on the basis of the criterion of “proximity” of

business agent profiles, both individual and group, formed on

a certain set of indicators. The fragment of the morphological

matrix (two-dimensional “morphological box”) for the

formation of such profiles is given in table 2.

is defined on 푆 , then for profiles 푋 = (푥 , 푥 , … , 푥 ) and 푌 =

푖

푛

(푦 , 푦 , … , 푦 ), the “distance” can be expressed by the

푛

corresponding

퐹(푚 (푥 , 푦 ), … , 푚 (푥 , 푦 )). If weight coefficients 푤 (ꢀ =

functional 휌(푋, 푌) =

푛

푖

ꢁ,ꢂ, … , ꢃ) are assigned to the features, then 휌(푋, 푌) =

푛

푖ꢄ1

∗ ∗

푤 ∙ 푚 (푥 ,푦 ), where 푚_푖is the metric value

푖

푖 푖 푖

∑

normalized by segment [0, 1]. It should be noted that for

some specific targets the authors used p-metrics, Hamming

and Mahalanobis distances (6). The latter seems in this case

the most successful, since it takes into account the covariance

of features. The criterion for significant differences of agents

will be excess of a threshold value: 휌 푋, 푌 > 휀_푡_ℎ_푟_푒_푠_ℎ_표_푙_푑.

The proposed approach is illustrated by the following

example (table 3), and the threshold will be 휀_푡_ℎ_푟_푒_푠_ℎ_표_푙_푑= 0,5.

This assessment is often used as an “entry boundary” in the

formation of various classes in fuzzy set theory (28). More

generally, for such assessments, it is possible to use the mean

value of the fuzzy number A, which is calculated by the

formula:

(

)

푁

∑

푎 휇(푎 )

푖 푖

푖ꢄ1

푁

휀(퐴) =

∑

휇(푎_푖)

푖ꢄ1

where μ is the membership function of the fuzzy set, a is

an interval established by expert determination. In our

example 휌(푋, 푌) = 0,7ꢂ > 0,5, so the profiles of agents X

and Y differ significantly and in this feature system they

should be assigned to different local groups. It is possible to

introduce into consideration the third agent Z with the

following profile: territory – “rural area”, property status –

“

mixed”, business – “public catering”, financial condition –

satisfactory”, age of the owner 45 years. Then:

∗

푚 (푋, 푍) = 0,8; 푚 (푌, 푍) = 0;

Thus, if n of different characteristics are taken into

account in the matrix, the profile of each business agent can

be formally represented by the vector (푥 , 푥 , … , 푥 ) ∈ 푆 ×

∗

푚 (푋, 푍) = 푚 (푌, 푍) = 0,5;

∗

푚 (푋, 푍) = 0; 푚 (푌, 푍) = 0,7;

푛

∗

푚 (푋, 푍) = 0; 푚 (푌, 푍) = 0,ꢅ;

푆 … × 푆 , where 푆 is the set of values (not only numeric,

∗

푛

푖

∗

푚 (푋, 푍) = 0; 푚 (푌, 푍) = 0,ꢇ.

but also verbal) of the corresponding i trait. If the metric 푚_푖

ꢆ

Table 2: The fragment of the morphological matrix of business agent profiles

Characteristic Value

Indicators

Territorial

Small

Medium-sized urban City of regional

towns,

working

settlements

Countryside, rural

areas

Megapolis

agglomeration

significance

Property

Business

Financial condition

Fixed assets are in ownership

Industrial production

Favorable

Mixed

Agriculture

Fixed assets are under lease

Construction

Satisfactory

Services

Unstable

Trade

Age of owners

Under 35 years

From 36 to 50 years

50+

(beneficiaries)

Table 3: An example of characteristics of business agent profiles

∗

Indicators

Territorial

Weigh w

0.30

0.25

0.20

Profile X

Urban agglomeration

Fixed assets are under lease

Catering services

Profile Y

푚 (푋, 푌)

0.8

1.0

0.7

0.4

Rural area

Property

Business

Fixed assets are in ownership

Agriculture

Unstable

50+

Financial condition

Age of owners

0.15

Satisfactory

0.10

Between 30 and 40 years of age

0.3

(beneficiaries)

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 257-265

Table 4: Harrington’s verbal-numerical scale

Description of gradations

The numerical value

Very high

High

Moderate

Low

0.80 … 1.00

0.63 … 0.80

0.37 … 0.63

0.20 … 0.37

0.00 … 0.20

Very low

The distance 휌(푋, 푍) = 0,ꢇ65, and 휌(푌, 푍) = 0,ꢇ55 are

not significantly different, while the threshold criterion of Z

close to X and to Y.

additional features. It would be quite natural to use

coefficients and indices of structural differences (V. M.

Ryabtseva, A. Salai, K. Gateva, etc.) to estimate the

differences that appear over time in the structure of local

groups.

It should be noted that the absence of any acceptable

training samples, as well as information about the distribution

law of corresponding random variables do not allow using

the method of discriminant analysis in such cases. At the

same time, numerical characteristics and scales are proposed

to be selected either on the basis of available empirical

information or using the methods of expert assessments (32,

33).

Further modeling procedure can be carried out by

searching for pairs in the graph, the vertices of which

correspond to the agents. In this case, local groups are formed

around the most “distant” from each other vertices. The thus

sorted agents form local groups, the “distances” between

which can be considered as “distances” between the centers

of groups.

The profiles are shown in table 3, clearly describe the

business agents that do not have explicit prerequisites for

entry into the same local group, since they differ significantly

in key characteristics, first of all, territorial, property and

industry, although their proximity, not included in the list of

elements, is possible, based on kinship, ethnic, mental,

religious, etc. However, it is conceivable that there will be

economic contacts between a local farmer (profile Y) and a

foodservice entrepreneur (profile X), which may later form

the basis of a sustainable cooperative relationship for their

businesses. Moreover, experience has shown the emergence

and successful development of communication between

business agents belonging to various regional local groups; it

quite often turns into a system of inter-group cooperative

relations. In the future, the safety and sustainability of these

links will largely depend on environmental factors,

institutional conditions and constraints, as well as other

external and internal causes.

A meaningful example with agent Z means the presence

of a tolerant (reflexive and symmetric, but not necessarily

transitive) connection and the possibility of cooperation

between local groups, which include agents X and Y. This

situation often occurs, for example, in biological

classification in the study of populations and can be solved

by applying different similarity coefficients (Jaccard,

Sorensen, Braun-Blanquet, Szymkiewicz-Simpson, Koch,

etc.) (29). Thus, for two groups A and B, which include,

respectively, the number of agents |퐴| and |퐵|, the most

commonly used Jaccard index is calculated by the formula:

퐴 ∩ 퐵|

퐾 (퐴, 퐵) =

퐽

퐴| + |퐵| − |퐴 ∩ 퐵|

However, including the features of some studied

communities, it is acceptable to use the coefficients of

Szymkiewicz-Simpson KSS, Braun-Blanquet KBB and Ochiai

K :

퐴 ∩ 퐵|

|퐴 ∩ 퐵|

^퐾ꢈꢈ

^,^퐾ꢉꢉ

^,^퐾푂

푚ꢀꢃ(|퐴|, |퐵|)

푚푎푥(|퐴|, |퐵|)

√

|퐴| ∙ |퐵|

Such well-known psychological phenomena of group

behavior as “composition effect”, “leadership avoidance”,

positive risk shift” by R. Stoner, “Groupthink” by I. Janis

“

and a number of others (30, 31) require special attention and

consideration. Returning to the above coefficients, it is

possible to note that all of them take values from 0 to 1, and

are equal to 1 if 퐴 = 퐵, and are equal to 0 when 퐴 ∩ 퐵 = ∅.

Therefore, the degree of generality (similarity) of groups can

be estimated, for example, on the Harrington’s scale (32)

(

table 4).

If the similarity of the two local groups is high enough,

then there is a reason to combine them into a new group 퐴 ∪

퐵, the number of agents in which will be |(퐴 ∪ 퐵)\(퐴 ∩ 퐵)|.

In the case of several local groups 퐴 , 퐴 , … , 퐴 , L. Koch’s

.3 Modeling of cooperative network of local groups

From the point of view of organizational modeling, the

ꢊ

problem of forming a cooperative network includes two

interrelated tasks:

coefficient is similarly used which also takes values from 0 to

and it is calculated by the formula:

localization (distribution) of agents into groups;

evaluation of relationships within groups and between

groups.

ꢊ

푖ꢄ1

|퐴 | − |⋃^ꢊ^퐴푖^|

푖

푖ꢄ1

∑

퐾(퐴 , 퐴 , … , 퐴_ꢊ) =

푚 − ꢁ) ∙ ꢋ⋃^ꢊ퐴_푖ꢋ

(

The solution of the first problem is based on the

푖ꢄ1

representation of a weighted directed graph G, the vertices of

which correspond to the agents, and the arcs – to the relations

between them, in the form of s disjoint subgraphs G :

It makes sense to consider the above indicators not only

in statics, but also in dynamics. At the same time, it may be

necessary to expand the morphological matrix by adding

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 257-265

퐺 = ⋃^푠퐺 , ⋂ 퐺 = ∅

푠

each G

group, a local functional 푓 (푥, 푦) is constructed,

푖ꢄ1

푖

푖ꢄ1

푖

increasing monotonically for each of the variables. 퐹 (푥, 푦) =

푖

훼ꢍ

1ꢔ훼ꢍ

In the case of intersecting subgraphs (the groups

considered above may have common agents), a cut of the

digraph G should be made considering this circumstance,

which will take the form:

퐴 ∙ 푥 ∙ 푦

, 0 ≤ ꢕ ≤ ꢁ can be used as such a functional.

푖

The positive parameter A represents the upper (possibly

expert) assessment of the potential of i-group. Then the

general functional of the system represented by the digraph G

(

considering its cutting) can be represented as:

퐺 = (⋃_푖_≠_푗(퐺 \퐺 )) ∪ (⋃ (퐺 ∩ 퐺 ))

푖

푗

푘≠푙

푘

푙

훼ꢍ 1ꢔ훼ꢍ

푓 (푥 , 푦 ) = ꢌ 퐴 ∙ ꢌ^푥푖푗 ^∙^푦푖푗

푖 푖푗 푖푗 푖

퐹 = ꢌ

ꢌ

Figure 1 shows how two intersecting components G

and

, produce three already disjoint components: 퐺 \퐺 , 퐺 \

푖

푗

푖

푗

푖

푗

퐺 и 퐺 ∩ 퐺 after cutting.

푖

푗

Thus, to a certain extent, the problem of building an

effective cooperative network can be considered as an

optimization task with the functional F.

At the same time, it should be noted that it is not always

relevant to use real coordinates in such tasks. Thus, in the

work (35), devoted to the modeling of individual and group

behavior of subjects of mass communication, the authors

proceed from the fact that the mental space has a non-

Archimedean structure and, therefore, suggest the use of p-

adic coordinate systems.

In the general case, the cutting of a weighted digraph

with the minimum connected subgraphs with constraints on

the total weight of the vertices is performed as follows (34).

The minimal connectivity of a subgraph is determined from

inequalities:

푠

퐽ꢍ

ꢏ푑

ꢌ

ꢎ (푢 + 푣 ) ≤ 퐿_푖

푖푗

푖ꢄ1

푗ꢄ1

푠

퐽ꢍ

When assessing intergroup relations, it is appropriate to

use alternative forms of systems based on the principles of

self-organization, adaptation, autonomy of individual

components with “soft” links between them (36), but this

discussion is beyond the scope of this work.

ꢊ푖푛

ꢊꢏꢓ

ꢎ ꢒ ≤ 퐷

푖푗 푖푗

푖ꢐꢑ

퐷

≤ ꢌ

ꢌ

푖ꢐꢑ

푖ꢄ1

푗ꢄ1

where ^ꢎ푖푗 ∈ {0, ꢁ} – Boolean variables, uij and vij

respectively, the number of incoming and outgoing external

arcs of the j-vertex of the subgraph G, J is the number of

3.4 Local-group behavior and institutional environment

The previous historical and economic analysis of the

development of Russian entrepreneurship (37) revealed the

main tendencies in the formation and development of the

business community of the late XIX-early XX century. The

most striking transformations of that historical period were

the reforms of S.Yu. Witte, P.A. Stolypin and the New

Economic Policy (NEP), whose analysis suggested that the

ꢏ푑

vertices, 퐿_푖– a valid number of external arcs of the

ꢊ푖푛 ꢊꢏꢓ

and 퐷_푖_ꢐ_ꢑ– minimum and maximum

푖ꢐꢑ

subgraph G

, 퐷

permissible total weight of the vertices of the i-subgraph; dij

is the weight of j-vertex of the subgraph G. The structure of

the cut digraph in the first approximation can be taken as a

basis for the construction of a cooperative network. The

relative autonomy of each component is achieved by a

minimum number of external connections and influences.

most

important

conditions

for

development

entrepreneurship in Russia were: the formation of individual

property; the implementation of competent monetary and

investment policy of the state; the creation of new

organizational forms of management (trusts, syndicates,

cooperatives).

When evaluating intra-group relations within

component, intra-group coordinates (xij,yij) are introduced for

each j-vertex j, where xij is an assessment of potential of the j-

agent, yij is an assessment of its contribution to some group

result, 푥 , 푦 ∈ [0,ꢁ]. These assessments can be obtained,

푖푗 푖푗

for example, using analytic hierarchy process, which is based

on a pairwise comparison of all objects (32, 33). Next, for

Figure 1: The digraph partition

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 257-265

It is noteworthy that these conditions currently remain

relevant to ensure the functioning and development of small

and medium-sized businesses. But, their mechanical transfer

to modern realities contains certain threats. Often, the

initiators and developers of Russian programs of support and

development of entrepreneurship at various federal, regional,

municipal levels maintain those approaches and tools that

have been successfully tested in past historical periods. For

example, there are obvious parallels between the already

mentioned “Stolypin” decree of November 9, 1906 and the

law on the “Far Eastern hectare” that appeared 110 years

later. Another example is the system of financial support for

small businesses through specialized banks, credit

reactions of agents that create models of expectation, models

of action. Despite the fact that “institutions” force” subjects

to behave uniformly and create repeated cycles of behavior in

similar situations, applying punishment for deviant actions”

(42), this uniformity is doubtful. The explanation for this is

the fact that both the business community as a whole and its

local groups and individual representatives should be

considered in the active phase and not in the statics of

existing institutions. Being active participants of system

processes, business agents in many respects form institutional

conditions in which then they also should function. Thus, it is

necessary to talk here not about the cyclical nature of

development, but about its spiral character. At the same time,

the general behavioral trend of the business community is

projected onto local groups mainly due to time-delayed

reflection.

Local groups consisting of individual business agents at

certain stages of development can be considered as new

agents of a higher level of self-organization with common

trajectories of behavior, which corresponds to such a

systemic pattern as emergence. This allows defining a new

hierarchical level in the structure of behavioral attitudes of

the business community, which, in turn, comes into systemic

conflict with existing institutional constraints. To a large

extent, this is due to advanced development of individual

local subsystems of the business community in relation to

more inert institutions.

cooperatives

and

microfinance

organizations

entrepreneurial type, which is being recreated in modern

Russia, in many respects resembling its historical

predecessors (37).

Considering the fact that entrepreneurship in modern

Russia as a legalized activity began to revive only in the late

1980s, that is, three generations after the famous events of

1917, it is possible to state the “break” of historical trends in

the mentality of people. This fact had been decisive in

developing the trajectories of the business community, its

individual groups and representatives.

In current researches, group behavior is understood as

coordinated actions of a group of people aimed at preserving

and increasing the total resources (material, economic and

spiritual benefits) (38). The analysis of the works of different

authors (39, 40, 41) makes it possible to conclude that the

group behavior of business agents has its own distinctive

features and does not repeat the individual behavior of

entrepreneurs, but the latter has a certain influence on the

formation of the group’s behavior. An individual business

agent is instinctively predisposed to become a member of the

group if he feels the reasons for group formation, for

example, as noted above, in the presence of a serious external

threat. The processes of group formation and opposition are

examples of group behavior. The behavior of business

entities or business agents is considered in the context of

dynamics of relations that have developed in the business

environment.

Conclusion

As a result of the study, the authors come to the

following conclusions.

The institutional environment, being, on the one hand, a

part of the external environment to the business

community, is not identical to it. In addition, the

institutional environment is more inert than the local

business communities, which generates certain systemic

contradictions.

None of the existing systematization of business

communities does not fully reflect (and it is impossible to

do) all the variety of factors involved in their formation.

At the same time, the use of a local-group approach

allows, at least in the first approximation, to simulate the

behavior of business agents not on individual trajectories,

but taking into account both their internal community and

external conditions and constraints, including

institutional nature.

Under the trajectory of the business community’s

behavior as a whole, and for its individual groups, the

movement of agents in a certain space of factors and signs of

different nature and originating from the external

environment and formed within

a certain system is

understood. At the same time, influencing factors can have

both general, global character, and local sources of origin.

The territorial and historical features and mentality of the

population occupy an important place here, which often have

a pronounced regional character. These features include, first

of all, the natural territorial localization of economic entities,

corresponding to the nature of settlement, greatly

undeveloped infrastructure and networks, as well as historical

lifestyle and traditional activities.

The localization approach to the formation of business

communities does not imply their segregation, but on the

contrary, can become the basis for the emergence of

effective cooperation ties.

From the point of view of the system-process approach,

the local-group behavior of the business community is an

independent category, has its own distinctive features, it

does not copy both the general trend of development and

the individual behavior of business agents. However, the

latter has a certain influence on the formation of the

behavior of local groups in the current conditions of

institutional constraints.

Agreeing in general with the opinion of O.S. Sukharev

(

42) that “in order to understand the economic reality and

trends in the development of national economies, it is

necessary to know the laws of the functioning of basic

institutions that structure information about the behavioral

Direction for further research is the development of the

trajectory of local business communities with the further

Journal of Environmental Treatment Techniques

2020, Volume 8, Issue 1, Pages: 257-265

possibility of its deployment in a horizontally-cooperated

network of such local communities as new economic agents.

This approach can be implemented within the framework of

the concept of development of local economies as “points of

growth” in the creation of a single cooperative network of

groups of economic entities in the regions of Russia with

complex economic and territorial conditions.

11. Heath B. A Survey of Agent-Based Modeling Practices (January

998 to July 2008) / B. Heath, R. Hill, F. Ciarallo, Journal of

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