INTERNATIONAL INVESTERMENT CONSTRUCTION AND TRADING CORPORATION

BUSINESS AND the BUSINESS ENVIRONMENT INTERNATIONAL INVESTERMENT CONSTRUCTION AND TRADING CORPORATION Lecture: Daniel Vanhoutte Tutor: Nguyen Thuy Chinh Students: Pham Luu Thuy Linh – 10170428 –BBE – A1.1 Ha Noi, October 12th, 2018 Contents INTRODUCTION MAJOR FINDING Task 1: Explain the different types of ICT corporation Part I: Organization definition by describing seven factors .3 Part II: Important stakes holders in ICT and the reasons Task 2: The structure of ICT CONCLUSION 12 REFERENCES LIST 13 INTRODUCTION First and forehead, I very thankful to lecturer and tutors for helping me a lot in the process of doing this assignment In addition, based on all of the information and data from the guest speaker of ICT company, I could complete it better and on time Secondly, in this report, I will explore the definition ICT company's organization by describing seven factors, choosing and explain reasons the stakeholders are most important, and how ICT meets their expectations, and determine the relationship of functions in ICT Last but not least, about International Investment Construction and Trading Corporation (ICT), it was established approximately 20 years from March 1st ,1999 The company is focused on providing asphalt which is ranked second in the Vietnam market and investing in hydropower plants, also known as commercial electricity Other sectors that the company also wants to invest in are real estate, travel and food businesses (These are still in the formative phase) The number of employees in the past was over 400 However, after the policies change personnel and organizational structure were applied, there are more than 320 employees now MAJOR FINDING Task 1: Explain the different types of ICT corporation Part I: Organization definition by describing seven factors Legal form: Right from the name of the company pointed out that this is a private joint stock company run by the main board, no shares as well as government intervention also no foreign investment All strategic policies are derived from the board The General Manager is responsible for executing all orders or requests and moving them to lower positions including Deputy Director, departments and managers Size: ICT is a company that plans to grow nationwide Over the course of nearly 20 years, ICT has grown in depth and breadth At present, asphalt market share of ICT has expanded to 20-30% ICT has four warehouses, 40 dedicated vehicles and a liquid asphalt tank with a total consumption of nearly 100,000 tons per year Directly compete with Petrolimex as a major supplier in the Viet Nam market, ICT is increasingly asserting its position ICT is Medium-sized enterprise with more than 320 employees and net income is large (echa.europa.eu) The data was given by ICT company about their revenue in 2017: Element Asphalt business Chiem Hoa Hydropower Plant Vinh Ha Hydropower Plant Real estate (Source: ICT company) Turnover (billions Dong) 90 190 65 4,5 Mission: The company focuses on sustainable development and smart investments for social and community campaigns, respecting and applying strict laws in the business process, providing asphalt products with quality high volume Contribute to the development of transport and infrastructure in Vietnam 4 Vision: Become a leading asphalt supplier and supplier of asphalt products in Vietnam In addition, the company will develop other services to serve the community including hydropower plants, real estate, tourism and clean food Core value:  Humanity Firstly, the company has a well-known motto that applies to all system activities, especially when making important decisions to build business strategies or develop human resources “You are us We are family” For external: Company put themselves in the thoughts and needs of customers, put benefits and interests of customers, partners to the top one The more benefit customers get, the higher profit ICT gain It is win – win situation For example: In business, most of companies want to sell more their products to earn higher profits But ICT takes human as the core, the company respects its customers and partners That is why they want to provide the best product for the user to achieve the highest efficiency ICT provides high quality asphalt from top companies in Singapore and Taiwan so that contractors can better performance and high quality of roads or streets for the community For internal: People when looking into company’s structure tend to think that ICT is a family business because of the close relationship between members and the departments Employees support and interact with each other as brothers and sisters in a family Newly recruited staff will be trained by experienced staff members to improve skills suitable for each position When new employees have the capacity and responsibility to take over the position of the old Old employees can nominate themselves for higher positions As mentioned above, after 20 years of set up, ICT has more than 320 employees, the figure of employees has worked for the company for more than 10 years accounting for 70% of the total The most valuable asset of the company is labor forces At workplace, staff have enough machinery and equipment to better jobs Employees are encouraged to express their ideas and sensible methods  Stable and long-term development ICT employees are always following the ethical standards in business, not following a fraudulent way, such as issuing false VAT invoices or executing projects that may adversely affect the natural environment The main goal of ICT is to provide services to the community The benefit of individuals is also the advantage for the business For example: Hydropower plants of ICT while operating, it uses "low-tech" which will pay more cost but offer more environmentally friendly benefits Objectives: 2018 100,000 2019 150,000 2020 200,000 (Unit of measurement is tons)  Target quantity of product According to the data was given from ICT company, ICT sets the production rate to double in the next two years compared to 2018, from 100,000 tons to 200,000 tons of asphalt Overall situation in 2018: The state budget has been narrowed due to excessive public debt and political instability leading to a change of position in state agencies In the years 2016, 2017 and 2018, the projects are very narrow, the market demand is very low The reason ICT set a double output target because the 2020 market will be hot again thanks to the construction of the North-South route, opening a new road which is a milestone in Vietnam's transport system ICT wants to be a top-quality supplier for this project Compared to Petrolimex, the largest supplier of asphalt in Viet Nam, they set their output will double ICT in 2020 with 400,000 tons Because they are imported from various sources, also including China, where the product is not high quality Meanwhile, ICT only takes from the top are Singapore and Taiwan, because ICT want to confirm their brand position to social  Expanding market plan ICT not only wants to grow in the country but also wants to expand its reach into neighboring countries Laos and Cambodia are now two potential markets where ICT wants to provide asphalt products Especially, Viet Nam has a great advantage of long coastline, convenient for transporting goods Currently, the two markets are developing countries They have invested a lot of foreign capital to upgrade their infrastructure, but they cannot produce asphalt as Viet Nam They are mainly importing asphalt from Thailand, however, the product of this country when used will create smoke and odor concentration That affects the health of the workers, as well as the people living around the construction site and it has a great impact on the environment that pollutes the environment Thailand also does not have convenient transportation That is why ICT want to provide better asphalts for two country in the near future Evaluation: Whatever objectives ICT want to get in the future, the company still has the human core values that has set out from the beginning The company wants to develop and improve services for the community, to build a strong and durable brand Demonstrates responsibility for protecting and preserving society from the delivery of the best products to consumers and partners Goals: The long-term goal of ICT is to create a habit for Vietnamese people to use high-quality products and build a brand that always offers reputable products As guest speaker has compared the way to put the ICT brand on the top, maybe ICT is not number one of providing asphalt but will be the best quality asphalt supplier in Vietnam Like famous brands not only globally but also in the Vietnamese market such as Gucci, Channel or Louis Vuitton, which are known that only provide high-end items and for the elite At the same time, they also provide the best quality services and products to their customers and partners ICT also wants to be known in the mind of Vietnamese consumers in this way, providing high quality products but bringing many benefits to the community in the future Part II: Important stakes holders in ICT and the reasons (source: http://www.bbc.co.uk ) a) Important internal stakeholders in ICT Employees are one of the most important of this corporation because the core value of the company is human, keeping in touch with each other will help the company growth For the labor force, ICT prides itself on always paying a higher wage than the market, but in reality, it only has a small role ICT recognizes that the process of creating a stable career for employees is more important so in the end, they can answer the question who they are, what they have done to society and their company It also helps reduce the rate of turnover or job rotation The way ICT meets their employees’ expectations and interests: For example: The company organizes training programs for employees if they fit into higher positions As the experienced driver they have handed over the job to the new driver, nominating themselves to a higher position such as a vehicle repair technician, vehicle manager, and driver's team of different branches Then they attend training courses to expand knowledge and improve skills Other example as employees in the sales department, they usually expect the most in terms of earnings, so ICT has a mode table for calculating salaries and bonuses to get their satisfaction and feeling justice The income of a person is calculated on the basis of four main factors: Basic salary (also known as the money was paid at the end of each month), salary based on labor productivity (according to reports on staff revenue dealing with partners), soft salary (based on profit earned by the company) and bonuses (for excellent performance) The next stakeholder of ICT is the Managers They are in charge of direct management to maintain the company's operations Directors need to support and receive requests from the board and general director to effectuate ICT's vision, mission and core values in business Determine and proceed short-term and long-term goals for ICT to get more profit also to be a stable company Furthermore, ICT also applies the Herzberg theory to create the best working environment that motivates its employees It demonstrates the two basic needs of an employee: to reduce pressures, dissent to the company, and the desire for personal growth Hygiene factor is the cause of dissatisfaction in work whereas motivation factor is to give high satisfaction for job (Toolshero) Another theory ICT applied is Maslow’s hierarchy of needs (McLeod S, 2018) First of all, the first floor in the hierarchy is about the physical needs, ICT give each employee their own uniforms, they also investing and encourage employees use modern machinery and equipment in work The next floor involves ICT security, company providing free lunch on the 8th floor of the corporate building and all ICT staff will eat together to ensure their employees have safe and healthy meals that show commitment and equality To the third floor, ICT facilitates employees to participate in outdoor activities such as ICT Cup or ICT Table Tennis Cup during summer time (main website of ICT) Next floor, following through the reports on sales and operations of the employees, the company will assess the ability of each person On the 15th anniversary of its foundation and the forthcoming 20 years of ICT, there are awards ceremonies for the achievements and dedication of employees Finally, the final level allows employees to express themselves ICT is developing and wants to expand its market into many areas, which is why they have many projects and strategies for employees to join and assert their capabilities Especially, managers run the department according to company standards and rules and can express personal power At present, ICT also uses technology as a powerful tool in their workplace It helps employees and managers control, identify and write detailed reports more easily, such as bookkeeping, accounting management, customer debt management, vehicle management including GPS positioning and security camera systems at each station as well as equipment on each vehicle This has the effect of saving time and improving productivity as well as identifying and addressing issues related to data However, it also brings a big drawback is leak information security Asphalt business needs a lot of data and reports to control the appearance and risk, so this disadvantage will make the process of ICT work delayed, seriously affected b) Important external stakeholders in ICT Clients and Partners are important stakeholders but not one part of ICT corporation Specifically, for the core business of ICT is the focus on the asphalt business now, they maintain the close relationship with their partner are asphalt dealers and affiliated banks Besides that, most customers are business such as construction companies or companies’ distribution of concrete and asphalt ICT meets their partners’ expectation and interests by the way win-win relationship ICT keeps a mutually beneficial relationship They also have policies to thank customers Task 2: The structure of ICT The structure of ICT Board of Director: Known as the shareholders and important stakeholders who hold the key position and the entire shares of ICT A board of directors (B of D) is a team of individuals, create more strategy policies for general directors, manager can oversight, make better and useful decisions on major company problem (Investopedia) General Director: The director of ICT will directly present business strategies based on the needs of the board There are months when the company will be able to sell more sales a month The company cannot sell every month the same output This month the sales can be 3000 tons in the next month will be 4000 – 5000 tons Sales depend mainly on market demand For example, in the rainy season, there is no contractors for asphalts, so no one needs supplies, however, the demand for dry season is high that why ICT has no longer products available for suppliers The director of ICT especially in asphalts trading must be a visionary who are ability to assess the market in order to come up with a strategy and possible risks The director will orientation, the plan may be failed but not suffer too many losses, the interest rate also should be certain Directors of ICT take control of all that will happen in the future (ICT company) ICT has two Deputy directors working directly after General Director The Technical Director, who is responsible for handling technical malfunction issues, ensure employees have the best equipment and technology during their work (accounting for 30% of the company's operations) The Director of Internal Affairs deals with the trading, profit and direct manage human resource The director will evaluate employees and ensure that ICT give enough policies to support employees such 10 as salary and bonus, social insurance, health insurance (accounting for 70% important performance of ICT) Next about departments, ICT has adopted a functional organization approach to the entire operating apparatus of the company According to Ian Worthington and Zena Cumberpatch in the environment business book, functional organization means all of department are created based on groups of employees who have the skills and knowledge appropriate to the standards, functions and tasks of each department Activities and process related to personnel will enter the Human Resource department Similarly, for other functions, such as foreign trade, finance, sale products have a dedicated department that is responsible for all the necessary mission of each function Evaluation: This is a clear and simple way for partners and customers to learn about ICT For each individual employee in the company, they also have the opportunity to demonstrate their professional skills and personal development However, ICT is on the way to diversify products and expand the field so using this method will be an advantage in the future for the company It can be controversial during the communication process that holds the departments on the corporation and its subsidiaries The Synthetic and import-export department is the most important divisions in the ICT business It is critical in deciding the deal, regulating the company's operations Trade Department is a small part which helps the company import asphalt The main mission of this department is to secure supplies from foreign companies, buy high quality products at cheaper prices This division directly maintains partnerships with high ranking asphalt brands such as Shell of Singapore and Formosa of Taiwan In fact, Viet Nam cannot produce asphalt which is a limited source of supply, and high-quality items that are not easy to import must be traded 2-3 months in advance for Shell ICT products ICT must sign a contract about three years ago and deposit a large sum Southeast Asian countries are looking to develop very strong infrastructure and demand for asphalt is huge China now has 70% of Shell's market share, while 30% of them supply to other countries, including Vietnam The amount of asphalts is less while the demand for construction work is high like Bac Giang - Lang Son highway, inauguration of the bridge Ha Long – Bach Dang This is why the department needs to focus on successful transactions 11 In addition, Accounting and Finance department of the company's office in general and also in department of import and export They list specific metrics, direct and indirect costs, as well as revenue Then use the total revenue to subtract all expenses included in the Vat to calculate the profit of each unit At the same time, it plays the role of cross control and intimacy with the sales department About Sales Department, Sales people are often known as an easy position, just calling for advice and exchanging items However, ICT is a company of high value products that requires rigorous standards because customers and partners are big business They need a high-level to receive deals maybe between 20 and 30 billion dong Their task is to find the project and find ways to establish relationships as well as good orders Human Resource Management department will focus on recruiting suitable new members and capturing and evaluating the capabilities of all employees in the company This helps the management as well as the managers to see the potential of each employee, consider the appropriate training courses and put the good employee to the higher position The Administrative department of ICT after reviewing the personnel assessment report can calculate the appropriate salary and incentives for each position better and easier This department also considers vacation, insurance for each person in the company ICT also applied divisional structure method for their corporation and their subsidiary - Asphalt Trading company When a company diversifies its fields and markets Division structure is created when an organization has other subsidiaries and acts as a source of profit Some parts tend to operate on the basis of a product or a market, or both, as well as express their own functions (Worthington I and Cumberpatch Z) Evaluation: The main ICT benefit is that it allows for a diversity of areas that can operate independently in the production and marketing of products that are relevant to each locality and to different markets in Viet Nam However, the more difficult it is to diversify, the more difficult it is for the ICT corporation to control the small units Analyses the relationship between different organizational functions and the way ICT link to their goals and structure ICT departments are closely related to each other and process of ICT depend on each functional A detailed example: Sales people have to look for projects, they have to come to the site to thoroughly investigate the project such as how long the road will be built, contractors have who They 12 then sought to establish relationships and explore the needs of future partners If the ICT receives the agreement from the customer, the salesman sends the report to the station chief The station chief will order the depot which will receive the asphalt pumping order and operate the vehicle After receiving the command, the deputy will inform the two departments of the operation, so that they prepare asphalt as required and then transfer to the vehicle and finance department, so they can record details of the data and report Statistics to minimize risks and financial losses also provide advances to dependent drivers on the road Then they continue to command the drivers to carry product to the weighing station to weigh the car and the amount of asphalt to be exported Next to the function of the guard, they will control the number of vehicles imported and clamped in the car to avoid fraud the quantity of asphalt This is an important process and the guard should know that Protection will ensure that the driver does not take any resin for sale or other liquids to reduce the quality of the bitumen Assuming 20 tons of asphalt, only 18 tons of high – quality asphalts, and tons of waste oil will produce a defective product that affects the ICT brand The whole process is very important for experienced human resources: head, deputy, minimum accountant, guard and aliment The driver's license varies depending on market demand and weather CONCLUSION To sum up, ICT is a joint stock company and its current main business is asphalt subsidiary as well as other entities including investment in hydroelectric plants, real estate and clean food The company follows the tendency to serve the interests of the community with human core values The company's executive machine, the ICT bitumen company, adopted Maslow and Herzberg’s theories in employee management and methodologies that match the headquarter and its subsidiaries REFERENCES LIST 13 Ict.com.vn Kinh doanh nhua duong [online] Available at: http://ict.com.vn/kinh- doanh-nhua-duong.htm [Accessed 15 Oct 2018] Ict.com.vn Nha may thuy dien [online] Availble at: http://ict.com.vn/nha-may-thuy- dien.htm [Accessed 15 Oct 2018] Ict.com.vn Availble at: http://ict.com.vn/xay-dung-dan-dung-san-xuat-va-kinh-doanh- thuc-pham-sach.htm [Accessed 15 Oct 2018] Echa.europa.eu (2018) How to determine the company size category - ECHA [online] Available at: https://echa.europa.eu/support/small-and-medium-sized-enterprises- smes/how-to-determine-the-company-size-category/step-5 [Accessed 15 Oct 2018] Gartenstein, D (2018) [online] Bizfluent.com Available at: https://bizfluent.com/info- 8704286-importance-stakeholders.html [Accessed 15 Oct 2018] Toolshero (2018) Two Factor Theory of Motivation by Frederick Herzberg [online] Available at: https://www.toolshero.com/psychology/theories-of-motivation/two-factortheory-herzberg/ [Accessed 15 Oct 2018] McLeod, S (2018) Maslow's Hierarchy of Needs [online] Simply Psychology Available at: https://www.simplypsychology.org/maslow.html [Accessed 15 Oct 2018] Staff, I (2018) Board of Directors (B of D) [online] Investopedia Available at: https://www.investopedia.com/terms/b/boardofdirectors.asp [Accessed 16 Oct 2018] Worthington I and Cumberpatch Z the Business environment.5th edition p.25-p.35 14 ... how ICT meets their expectations, and determine the relationship of functions in ICT Last but not least, about International Investment Construction and Trading Corporation (ICT), it was established... they have many projects and strategies for employees to join and assert their capabilities Especially, managers run the department according to company standards and rules and can express personal... top are Singapore and Taiwan, because ICT want to confirm their brand position to social  Expanding market plan ICT not only wants to grow in the country but also wants to expand its reach into