Much has been written about theory and practice in the law, and the tension between practitioners and theorists. Judges do not cite theoretical articles often; they rarely "apply" theories to particular cases. These arguments are not revisited. Instead the Essay explores the working and interaction of theory and practice, practitioners and theorists. The Essay starts with a story about solving a legal issue using our intellectual tools - theory, practice, and their progenies: experience and "gut." Next the Essay elaborates on the nature of theory, practice, experience and "gut." The third part of the Essay discusses theories that are helpful to practitioners and those that are less helpful. The Essay concludes that practitioners theorize, and theorists practice. They use these intellectual tools differently because the goals and orientations of theorists and practitioners, and the constraints under which they act, differ. Theory, practice, experience and "gut" help us think, remember, decide and create. They complement each other like the two sides of the same coin: distinct but inseparable.

Of Theory and Practice

The term servitization has been used in recent years to describe a growing service orientation among product manufacturers, who are increasingly moving from simply selling products to offering supportive services tailored to the product (Baines et al. 2009; Wise and Baumgartner 1999; Vandermerwe and Rada 1988). These services range from traditional product-related services such as maintenance, repair, and training to advanced customer-oriented services (Lay 2014; Oliva and Kallenberg 2003; Mathieu 2001). Advanced services typically take the form of product-service systems (PSS), or physical products bundled with intangible services in a customized manner to fulfill highly individual customer needs (Tukker and Tischner 2006; Goedkoop et al. 1999). These innovative, individualized product-service bundles increase the value delivered to the customer and hence increase the competitiveness of the provider (Boyt and Harvey 1997). The move toward servitization has coincided with a rising trend toward digitalization, with manufacturers equipping products with intelligent digital systems that allow the products to operate independently of human intervention and communicate with other machines. As a logical consequence of the confluence of servitization with this trend toward intelligent machines, an increasing number of manufacturers are using digital systems to support their services (Minister and Meiren 2011), creating totally new industrial product-service offerings, such as comprehensive remote services that bring digital and physical systems together to pave the way for, for instance, availability guarantees. These new kinds of offerings may in turn lead to far-reaching reconfigurations of the mechanisms of value creation in manufacturing. Thus, manufacturers cannot afford to ignore these emerging forces, which have the power to completely reshape the industrial landscape. Companies that do not keep up with these developments may find themselves threatened with extinction in the near future, as competitors with more customized, responsive offerings gain advantage. Three practical case studies from our joint research projects on servitization show how companies can combine digital systems with PSS to harvest value and build competitive advantage. Services Innovation and Digitalization Previous studies of servitization have assumed that manufacturers move from product manufacturer to solution provider along a defined transformation path (Gebauer, Fleisch, and Friedli 2005; Gebauer 2004). This transition path is typically described as taking place in stages, with each stage offering different potentials for differentiation (see, for example, Matthyssens and Vandenbempt 2010; Gebauer, Bravo-Sanchez, and Fleisch 2008; Matthyssens and Vandenbempt 2008; Penttinen and Palmer 2007; Oliva and Kallenberg 2003; More 2001). At the end of the path, manufacturers offer innovative PSS, such as availability guarantees or build-operate-transfer (BOT) models, which increase customer value on the one hand and create competitive advantage for the provider on the other (Brady, Davies, and Gann 2005; Boyt and Harvey 1997). While PSS have been widely discussed--see Velamuri, Neyer, and Moslein (2011) for a review of the literature--the effect of the digital revolution on this servitization pathway has been less well explored. Most articles have dealt with the new challenges and impacts of digitalized services, focusing on how they differ from more traditional product-related services. What is missing in the literature is a comprehensive framework bringing together the emerging trends of servitization and digitalization in one conceptual structure. The integration of digitalization with services innovation has important implications for services. For instance, because digital services can be provided independent of manufacturer and customer location, traditional service characteristics like perishability and inseparability do not apply to digital service creation (Holtbriigge, Holzmuller, and von Wangenheim 2007). …

Digitalized Product-Service Systems in Manufacturing Firms: A Case Study Analysis: Linking Digital Systems with Physical Products to Create Novel Product-Service Bundles That Provide Services Independently and Proactively Can Enable Advanced Services and Promote Growth

As leading technology companies embrace biometrics, artificial intelligence (AI), drones, and other exciting digital technologies, senior business executives at many other companies feel pressured to do the same. But if they are to maximize the value from investment in new technologies, business leaders first must make sure that their companies have a great digital strategy.

1 How to Develop a Great Digital Strategy

One of the major problems faced by modern social development – is social systems controllability decrease. This is largely due to the unsuitability of the old management model, functioning by trial and error method, to the new social realities which requires a much more accurate and evidence-based approach. Socially important decisions based on subjectivism lead to the destabilization of society, deterioration of living conditions and quality of life. With the increasing complexity of the social world, the support of sustainable social development and societal systems security can only be based on scientific knowledge with the usage of the methods of strategic community planning. The authors suggest using the new parameters for the development of methodology of strategic community planning that are relevant to the modern stage of social development. The given article contains the proposals of methodology of strategic community planning development. As a strategic goal one put forward the formation of a genuine social state in Russia. An approximate range of tasks for each of the subsystems of society is suggested. DOI: 10.5901/mjss.2015.v6n3s6p357

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New Approaches to the Development of Methodology of Strategic Community Planning

Innovation capacity building plays a central role in the growth dynamics of successful developing countries. However, no dedicated studies on ontological modeling of economic processes related to innovative activity at macro level were found. The application of semantic web technologies enables a unified, flexible structure and integrates not only quantitative but, more importantly, qualitative indicators and creates conditions for machine processing in the future. This paper presents the rationale for the selected domain modeling method for the subsequent construction of automated search information system; the ontology for innovative activity and economic potential is developed in context of the RF macroeconomics. An approach and search algorithms for economic data sources and data collection were developed under this study and casting data to the ontology structure of innovative activity and economic potential was performed. The relevance and scientific novelty of the study is determined by the problem domain, as well as the application of semantic web technologies to data collection from distributed heterogeneous sources, including those semi-structured and unstructured.

Innovation activity data processing and aggregation based on ontological modelling

The main direction of the current economic development is found in a transition of the most civilized countries to a new stage of creating an innovative society, i.e. building the economy based mainly on offering, spreading and using of knowledge. The specific functioning of innovation clusters allowing to create new technologies, implement deep technological modernization and innovative industry development based on personal or adopt technologies, as well as to train personnel for work in the conditions of the current industrial and technological formation, is characterized by the three components: the fundamental, practice-oriented science, innovative industry, and developing education. Along with that, nowadays there is a need to take firm measures not only to revive the innovative activity, but also to make a breakthrough in this area. Therefore, it is necessary to provide the state-of-the-art mechanisms to increase the innovative activity of domestic high-tech innovative economy based on the cluster approach, cluster initiatives. Keywords: innovation, cluster, disadvantages, creation, advantages, economy JEL Classifications: A11, A10, O30

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Innovation Clusters: Advantages and Disadvantages

Currently, economic growth economic entities more and more dependent on enterprise adaptation to the changing needs of the market environment to the products manufactured by the company. In these circumstances, it is important to understand and determine what should be the methodology of construction of the control system based on an innovative approach. During the formation of the mechanism of management of the company needs to follow a number of methodological principles of management of development of the enterprise. The proposed conceptual methodological principles of formation of the system of management of development of the enterprise with the purpose of increase of efficiency of functioning and quality of production. System conceptual methodological principles of formation of the system of effective management of enterprise development, according to the authors, should be based on the following research approaches: integration, task, system, complex, situational, economic, synergistic. The synergetic approach to managing effective enterprise development based on the principles of self-organization and self-development systems, openness of the enterprise for innovation and transformation. DOI: 10.5901/mjss.2015.v6n3s4p25

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The System of the Methodological Principles of Management of Enterprise Development

The article explores the main problems and features of one of the most relevant phenomena today - digital transformation, which implies fundamental changes in the activities of organizations based on the use of digital technologies. The paper reviews sources on the problems of building a digital economy and moving a business to the digital level. The purpose of this study is to identify the main difficulties for the restructuring of organizations' processes on a digital format, as well as the formation of the theoretical and conceptual foundations of digital business transformation in the face of uncertainty and variability of the modern business environment. Using the methods of analysis, generalization, comparison, synthesis, deduction, induction, the essence of digital transformation is studied, Russia's positions among other countries in terms of readiness for the digital economy are analyzed, problems and barriers that impede the process of digital transformation for Russian and foreign companies are formulated. Based on the use of a systematic approach, methods of scientific abstraction, economic modelling, the work identifies the main functional areas of change, presents a loop of digital business transformation that reflects its main stages, necessary components and changes, and describes key segments of new digital business models of companies. The results can be used to conduct further theoretical and methodological and practice-oriented research in the field of digital business transformation, and can also be used by design teams of organizations to analyze the problems of switching to a digital format, develop a digital transformation strategy and rebuild a business model.

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Problems of business processes transformation in the context of building digital economy

Entering the era of the "knowledge economy", where the main sources of well-being and leading factors of production are innovation and creativity (intellectual) the achievements of people led to survival in modern conditions only those businesses that are flexible in responding to market demands, create and organize the production of competitive products provide an efficient restructuring of internal control, that is developing. In modern conditions, innovation has become a major factor in improving the efficiency of industrial enterprises, making it impossible to use the old management approaches. Industrial enterprise can be considered innovative and promising to develop, if the trends of this development are due to the comprehensive implementation of all types of innovation: product and process. The increase of complexity management in its development should precede the development of production, only then it can be effective. Improving the system of management of the effective development of industrial enterprises is one of the main problems of Russian economic development. Central to the effective management of industrial enterprises becomes the adequacy of the used instrumentation control conditions in the socio-economic system in which social production functions. This will provide an improved process for the management of the enterprise to achieve its effective development. On the basis of generalization of the results of theoretical research and practice the basic problems of management of modern industrial enterprises, highlighted the assumptions of the new market-based management concept, identified the characteristics of the new managerial paradigm inherent to Russian enterprises and adequate to the new economy. DOI: 10.5901/mjss.2015.v6n3s4p91

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Features of the Modern System of Management of Development of Enterprises

Under present-day conditions of significant national currency fluctuations in the Russian Federation, a search for effective methods of foreign exchange risk management in the banking system is being updated. In this regard, development of a mathematical model for optimizing the asset and liability structure in Russian banks with allowance for the foreign exchange risk was the goal of the research. Using a method of regression analysis, a mathematical model has been developed to optimize the balance sheet structure of the banking system based on determining the dependence of net profit on asset and liability figures of the balance sheet, whereby the profit and profitability of banking in foreign currency is maximized. This mathematical optimization model was based on the permissible foreign exchange risk level standards in banking. Statutory financial reporting data of the Russian banking system in the aggregate denominated in foreign exchange (in ruble equivalent) for the period from 01.10.2010 to 01.02.2019 and disaggregated by months were used. The model results for the last three years were compared with the actual data. The model results can help optimize efficient allocation of resources and improve banking foreign exchange risk management policies.

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Karine A. Barmuta

Papers

Innovation Clusters: Advantages and Disadvantages

The System of the Methodological Principles of Management of Enterprise Development

Problems of business processes transformation in the context of building digital economy

Features of the Modern System of Management of Development of Enterprises

Mathematical model of optimizing the balance sheet structure of the Russian banking system with allowance for the foreign exchange risk levels