INNOVATIVE ECONOMICS AND MANAGEMENT

3

Authors: MAIA GELASHVILI

The establishment and development of market relations is impossible without the successful operation of the commercial banking system, since it plays an intermediary role between the creditors and the debtors and practically defines the vector of its development and officially plays the role of the implementer of monetary policy. Worldwide experience in banking practice reveals that adoption of new types of financial reporting, which, in turn, along with the transparency of banking activities considers the development of risk management and corporate governance of banks, comprehensive analytical and complex assessment of the opportunities, should be taken into account in the process of the functioning of the banking system in Georgia. The main problem of commercial banks is the credit portfolio risk analysis and assessment in the critical conditions; banks have to develop an effective credit risk management system. Successful realization of a bank’s commercial objectives is impossible without a fundamental reorganization of its risk management system. Credit risk management field related to physical and legal entities, requires a particular change. Improvement of Commercial Bank's risk management system should be tailored to each category of customer, however the development of interest rate, market and operational risk management systems should be considered as well, that is a main task of banks. The main goal of operational risks should be elimination of drawbacks that are associated with simultaneous removal of the surplus control mechanism. The work shall be based on: • Deeper inventory of expected operational risks; • Assessment of expected economic outcomes of operational risks; • Economic analysis of the control system; • Qualitative modernization in regard to market risks considering financial risks. Accordingly, the processes associated with the credit risk require adoption of fundamental changes: 1. Development of a system for each client which will allow the client to openly assess the expected level of the credit risk; 2. In case of commercial lending commercial priorities coherent to risk assessment; 3. In the decision making process to increase the role of the function, when the credit is developed by several persons reviewing the risk management. We conditer a number of measures that should be taken for the operation of changes of commercial banks and its effective development. In particular : a) to introduce new types of financial statements, it will significantly contribute to the decision-making process and to the usage of new products by the customers, as well as raising public awareness and increase the confidence to the banks; b) the reforms that reduces the risk for creditors and depositors will improve the commercial bank’s activity transparency.

4

Authors: BADRI GECHABA, GELA MAMULADZE,

Role of innovations and innovative development in economy of modern EU is defined by lack of additional comparative advantages in the power industry and limited possibilities of additional attraction foreign investments in economy. Role of an innovative factor in economy development in EU increased in the last two decades significantly. Thus, it is necessary to recognize that further opportunities for growth are doubtful and limited. In the article the analysis of the main tendencies of development of innovative economy of the European Union at supranational level is carried out. The main results of formation of innovative economy, and also problem of further realization of innovative capacity of EU are shown. The author considers that realization of strategy of innovative development of EU’ economy will provide the European economy to an overcoming from the developed debt, financial and economic crisis.

4

Authors: NANA SHONIA, NANA SHENGELIA

On the national insurance market liability insurance is characterized by low demand, in spite of the idea implied under the insurance product. Liability insurance is an essential attribute of the financial and insurance system and it is difficult to imagine a modern, highly developed country without it. It can be said that along with the development of the socio-economic system of a developing country the insurance, and in particular, liability insurance, should become more accessible to people. It should not be a burden for the society, but should give the customers the feeling of peace and security. Therefore, it is necessary that the insurance premium for the policyholder was smaller than a potential loss or damage. Georgia experiences a number of problems in liability insurance like in many other types of insurance business in general. It should be noted that the following problems, as a result of which the society will feel more secure, can only be solved by the state. However, it is necessary to carry out the relevant actions with the insurance companies involved. It is possible to divide the problems of liability insurance into several closely related categories, namely: at present on the national market there is a liability insurance product for physicians, but survey has shown that the product is used only by 0.3%. So, we believe that it is necessary to make the product mandatory with the assistance of insurers and medical institutions. They can protect professional liability of each physician against the accidental risks. It is possible to implement an appropriate scheme through a specially designed program where medical institutions and insurance companies will serve as the mediators between the state and a physician. In addition, we consider it necessary to note that, like in any other relations it is necessary to maintain the element of competitiveness between the state and insurance companies, which will make the insurers take care of their clients in order to attract new customers and keep the old one. As a rule, the information about any innovation that should be provided to the civic society needs to be correctly, timely and purposefully disseminated. Preferably, the traditional media and the Internet media should take responsibility to periodically and comprehensively disseminate the information about the social-economic aspects of liability insurance as a well-informed society is an educated civil society. This is directly proportional to the socio-economic progress of liability insurance in Georgia.

4

Authors: EVGENI BARATASHVILI, TAMAR LAGVILAVA, MANANA BERUASHVILI

Clusters are usually formed within the next three programs the subject of one of the initiative, including: Own small businesses, local authorities and / or large corporations. Clusters integration process itself Continue from property assets and their management control. It can be done in two ways. The first way can be found in the production and sale of goods, is expanding the company's internal sources. The second ways suggests to expand business to other companies or to buy assets at the expense of being a classic form of integration. of overseas experience to the Clusters integration process would be advisable to try to use in the Georgian reality and consolidation efforts in the field of innovative small enterprise development.

4

Authors: NAZI GVARAMIA, NANULI DZIMTCEISHVILI

Key questions of accounting and audit regulations, exists in Georgia nowadays and correspondingly, legal changes, executed towards the above said direction is given in this scientific thesis. The task of this thesis is to present the audit role and possibility of accounting in modern management system, and it is not covered only by the registration of economical operations, but it is also the necessary instrument of financial information, linking ring among the economical activity and the entities, who make the decisions, which have the great meaning in functioning of economical subjects in order to make correct management discussions. Practical realization of a problem, made in our country was done by the Georgian professional accountants and audit federation (BUF), which was created in April 1998 on the result of confluence of Georgian accountant club and Georgian accountant association. On the way of accounting activity’s improvement, important step was taken by the mutual force of Georgian professional accountants and audit’s federation and USA international development agency (USAID), which has the law “about accounting and calculation”, adopted by the parliament, by which, the Joint stock companies, from January 1, 2000, Limited liability companies and cooperatives are making the accounting and calculations from January 1, 2011 in compliance with the international accounting standards. Due to it, the aim of this research is to represent the experience, existed in the sphere of accounting and audit of Georgia, criteria of accounting professional acknowledgment and correspondingly on the base of legal bases of changes, executed on the modern stage. World known practice of accounting activity reveals, that role of international accounting standards and the meaning, is gradually increased and it is said by increasing of world economical globalization, which means the participation of world’s capital in separate countries’ economy. Follow from this, interested investors, creditors and etc. need timely and hopeful information in return for the invested capital about get a possible economical profit, getting of such information is not possible without foreseeing of international standards principles of accountant in national calculation system.. For nowadays, sharing of international experience in accounting is very urgent and correspondingly its introduction in accounting and calculation sphere. Follow from this, world known concepts, settled in the modern accounting and audit sphere is discussed in this scientific research, including, the experience of European countries and USA towards the abovementioned direction.

4

Authors: ZURAB MUSHKUDIANI, NANA SHONIA

The objective of this paper is to examine the interaction of the new model of IFRS 9 with supervisory rules. It discusses potential implications for financial stability. We assess whether the IFRS 9 expected credit loss model better reflects credit quality of financial assets and whether it reduces the pro cyclicality of loan loss allowances as compared to the IAS 39. By benchmarking the IAS 39 and IFRS 9 models, we find that the expected credit loss model of IFRS 9 includes a significantly larger set of information relevant for identifying future expected credit losses. IFRS 9 requires earlier and larger impairment allowances, which will limit the possibility of distributing, overstated profits in the form of dividends and bonuses. Above these, it will reduce the build-ups of loss overhangs and the overstatement of regulatory capital in boom periods, which in turn, will mitigate capital inadequacy concerns in a downturn. IFRS 9 can mitigate the amplifying effect of the incurred loss approach on pro cyclicality and enhance financial stability.

4

Authors: Manana Vasadze, Tsiuri Duruli, Ia Mosashvili

The Technology of Hotel Guest Service procedure is the core factor that affects not only the quality of service in general terms, but also it affects hotel income and management process. For the same type of Hotels the technological procedures – transactions - are typical. Meanwhile there are different approaches to hotels differing by location, standard of service, type of guests, size of the hotel. Four phases constituting the guest cycle are shown in Figure 1. In each phase of the cycle there are certain standard transactions which occur between the guest and the hotel. Different transactions and services are shown. They are involved in the different phases of the guest cycle. These are listed below: • reservations • check-in and registration • uniform service and baggage handling • telephone calls and messages • handling guest accounts • check-out and bill settlement The Four phases of the guest cycle and the various transactions and services within each phase are explained and identified. The First Phase is connected with Reservations. Reservations can be booked in a number of different ways, including through a local reservations clerk, or through a nationally centralized reservations system, or through Global Distribution Systems The Second Phase – is associated with a greeting and registration. A doorman or a porter is a position in most medium to large hotels. It is individual of great importance to the reputation of a hotel. Registration or check-in transaction is provided by room clerk. If the guest has booked a reservation in advance the reservation information must be verified. Room assignment, Issuing Keys and Baggage handling are accompanying transactions of the second phase. Most hotels require guest to pay for their room in cash at check-in or guarantee payment through a credit card. After registration a room assignment is made or key card is issued. The Third Phase is an Occupancy or Communication Phase. Traditionally messages, mail and other valuable information about restaurants, theatres, and tourist attractions are provided. The Forth Phase – recording all guest charges and issuing the final statement at guest check-out. A copy of the statement is picked up at departure. This Phase includes several transactions as follows: bill settlement, baggage handling and, in most cases, it includes an additional service -transfer to the airport. Most Hotels know through experience that they will incur some no-show reservations. To combat this loss of income overbooking of rooms is a relatively common practice. Apart of overbooking the hotels may cater for guests with no advance reservation which means that the First Phase in the Guest Cycle is annulated.

5

Authors: ANZOR ABRALAVA

Today, in financial and economic crisis conditions, effective means represents mobilization of organization’s internal resources, development of innovative processes, creation and implementation of new social technologies of human resources management, which will be directed to minimal material costs to possible to achieve the maximum effect. It will arise the demand of development development of innovative processes. The introduction of innovation represents a result of innovative process, which implements the transformation of scientific knowledge in innovation. The main difference between the innovation process from innovative activity, is expressed to ending mandatory innovation. So, to get the results, which is suitable for practical implementation. In innovation practice, there are several models of innovation process: for describe its internal structure: from simple model of innovative chain to the among-function and multi institutional structure’s interaction model. When the organization becomes wider innovative system’s (WIS) element

5

Authors: VAKHTANG DATASHVILI, MAKA BUGHULASHBILI

Historically, management consulting grew with the rise of management. Nowadays with the knowledge democratized and more and more information available for everybody the role of management consulting is growing. Applying for management consulting services is increasing trend among companies which try to solve existing organizational problems through getting deep, functional expertise and feasible recommendations in the form of strategy consulting, operational consulting, marketing consulting, financial consulting and so on. Therefore management consulting is considered as one of the most rapidly grown interesting, intellectually stimulating and financially rewording work available in the professional services market. Management consulting includes a wide range of activities and most management consulting firms define their practices in different manner, either according to professional area of expertise, such as competitive analysis, corporate strategy, operations management, or human resources, or they view the process as the sequence of phases like entry, contracting, diagnosis, data collection, feedback, implementation, or according consulting purposes. The aim of this article is to clarify and analyze fundamental purposes of management consulting, because when there is clarity about the activities and the purpose both parties the consulting service provider and the company which needs these kind of service are more likely to be involved in the engagement process more satisfactory.

5

Authors: YEVHEN ROMANENKO, IRYNA CHAPLAY

This paper puts forward providing of practical recommendations in order to solve public administration-related tasks in various areas of the society functioning and, as a result, augment the spiritual values and national wealth of Ukraine

6

Authors: NATALIA VDOVENKO

It is theoretically proved and empirically confirmed that among the main segments of the livestock products plays an important role in the fish production with all infrastructure. On a global scale aquaculture is a young industry of agrarian sector of economy. The volume of aquaculture production over the last 50 years grew to 55.1 million tons in 2009 and 58.3 million tons in 2010, and to 66.6 million tonnes in 2012. Studies have shown that if current rates of development, it is projected that by 2030, half of the produced fish and other aquatic biological resources will be of artificial origin. Proved the mechanism of realization of state policy in the sphere of fisheries and fish industry, protection, use and reproduction of water living resources, fisheries management, safe navigation of vessels fleet fisheries. Proven that government regulation of fisheries, formed on similar principles of the current legislation of Ukraine, and in other branches of agriculture. However, the paper notes that the fisheries sector has its own technological features that determine the specificity and production and organizational structure of the industry, represented by companies specializing in the production, cultivation, processing of fish. The work proves that the calculations, over the past 10 years indicate a significant budgetary allocations aimed at financing the spawning-nursery fisheries, hatchery, nursery, plant-eating fish hatcheries ordinary fish, sturgeon and trout plants. They have a tendency to a gradual increase from 33.9 million USD (including costs of fisheries regulation) to 116,4 million USD per year. Also noted that the current system of budget financing of fisheries is being substantially improved. Earlier, the public expenditure was carried out on one item of expenditure on the reproduction and protection of water live resources and fishery regulation. Today there are separate articles for the organization of activities of bodies of fish protection and reproduction. Justified to achieve the increase of competitiveness of aquaculture production, it is necessary to create conditions for the effective operation of the Law of Ukraine "On fishery, industrial fishing and protection of aquatic bioresources". Undoubtedly also to fulfill the tasks set in the current and developed with the help of the author of "State target economic program of fishery development for 2012-2016". This will enable to accelerate the process of raising effective ownership in the enterprise sector and to create necessary mechanisms for internal and external investors. Systematic suggestions for improving the methodological tools of regulation of economic activities in fisheries. In pespective necessary to Refine the technique of counting fish at all stages of development to determine aggregate supply and the method of determining the fair value of material for breeding of aquaculture and commercial fish given the prices of the active market. Asked to summarize methodological approaches to the formation of a competitive system of regulation of the agricultural sector at the level of international standards and to substantiate scientifically balanced distribution of functions, powers and responsibilities between the regulatory bodies in the field of fisheries to achieve consistency and effectiveness of economic processes.

9

Authors: MERAB VANISHVILI, LEVAN KALATOZISHVILI

In the article, the latest literary sources and rich factual materials, is consistently analyzed and assessed the level of competition in the banking sector. The study established and economic life has been confirmed that the banking market competition has some specific features, making it different from other markets konkurentsiebisa it. One important difference is that the bank's money market operation, the liquid goods, which can not be replaced by other goods. The second major feature is related to the banking sector and financial capital mobility. It is concluded that the Georgian economy has a low level of debt servicing burden of each borrower is too hard, leading to higher interest rates and shorter maturities determined. Accordingly, the reduction of interest rates is desirable not only for the overall economic development, but also a necessary prerequisite for the further growth of banks.