ENHANCING THE ORGANIZATIONAL AND ECONOMIC MECHANISM FOR INDUSTRIAL ENTERPRISE DEVELOPMENT

Abstract

The development of industrial enterprises is fundamentally shaped by how effectively an organization coordinates its resources, including capital, labor, technology, and processes, to drive growth and productivity. This paper explores the organizational and economic mechanisms of industrial enterprises, focusing on production functions that relate inputs to output and are central to understanding firm-level efficiency. By analyzing the role of capital and labor in production, this research highlights the importance of optimizing the balance between these inputs, especially in the context of technological advancements such as automation and digitization. The study uses the Cobb–Douglas production function to assess the elasticities of capital and labor, revealing a primary reliance on labor in the production process. Further, it discusses the utility of extended models like the Constant Elasticity of Substitution (CES) and translog production functions, which allow for greater flexibility in capturing the dynamic relationship between inputs. The results emphasize the need for enterprises to improve resource utilization and focus on efficiency-enhancing strategies rather than solely expanding capital.