THEORETICAL FRAMEWORK ON CORPORATE CULTURE
Overview about the study on corporate culture development
Corporate culture, also known as company culture, has been extensively researched both globally and in Vietnam by numerous scholars Different researchers offer diverse perspectives and approaches to understanding corporate culture.
Corporate culture is generally analyzed through two distinct research orientations: the micro-approach, which emphasizes the management aspects of cultural factors from the viewpoint of business administrators, and the macro-approach, which examines the influence of cultural factors on business operations, particularly in multicultural or diverse organizational environments Additionally, Schein's three-tier corporate culture model provides a framework for understanding these dynamics.
Schein's three-criteria-based evaluation method of corporate culture emphasizes tangible structure, announced values, and general concepts, making it a more practical approach compared to the theoretical competitive value framework This model, established by Schein in 1999, focuses on three levels of culture, assessing the practical implications and the often-invisible aspects of corporate culture.
- Level 1 (Practice): Provide specific evidence such as folk stories, protocols, stories and symbols
- Level 2 (Standard value): Explain the strategy, purpose and philosophy to guide the thinking and behavior in the enterprise
- Level 3 (General implication assumption): Including the basic assumptions, awareness, value, trust and especially from the founder or the leaders of the Company
The E Schein model offers a straightforward evaluation method that is ideal for enterprises with limited time and budget to understand their organizational culture This model empowers leaders to effectively identify key cultural elements and analyze the interplay between tangible and cultural values rooted in the company's foundation Additionally, it helps leaders pinpoint necessary cultural changes to align with the evolving competitive landscape and regulatory conditions, as highlighted in studies conducted by Recardo and Jolly.
Recardo and Jolly (1997) highlighted that corporate culture encompasses the shared values and beliefs of an organization's members, significantly influencing their behaviors and the organization's policies This culture can be assessed through eight specific aspects.
- Communication: Quantity and forms of communication, what information is communicated and by which way, open communicative system must be provided
Administrators are dedicated to providing significant training and development opportunities that empower employees to apply new skills effectively By offering tailored training programs, the organization aims to meet both current and future developmental needs of its workforce.
Recognizing and rewarding employees is crucial for fostering job satisfaction, as it involves both individual and collective bonuses for desired behaviors Clear promotion criteria enhance motivation, while consistent feedback from the organization reinforces the importance of employee contributions and overall engagement.
Decision making involves understanding how choices are made and managing conflicts effectively It can occur rapidly or take time, depending on the organization's structure High-ranking organizations often exhibit distinct decision-making styles, which can either centralize authority or promote decentralization.
Embracing risk is vital for fostering creativity and innovation within the workplace Organizations that encourage risk acceptance not only reward imaginative ideas but also motivate employees to explore and test new concepts This supportive environment allows individuals to feel empowered, leading to a culture where experimentation is valued and failures are seen as opportunities for growth.
Effective planning, whether short-term or long-term, involves sharing visions, strategies, and objectives with employees This collaborative approach encourages employee commitment to achieving the organization's goals and fulfilling its strategic vision.
Effective group work is crucial for organizational success, as it fosters cooperation among different departments and builds trust between functions This collaboration enhances work performance through mutual support, highlighting the significance of teamwork in achieving common goals.
Governance policies assess the fairness and consistency of implemented practices, focusing on the influence of member governance styles and the overall governance level that ensures a safe work environment This evaluation aligns with the Denison model established in 1990, which emphasizes the importance of effective governance in fostering organizational health and safety.
The Denison model, grounded in 200 years of research, explores the impact of corporate culture on business performance It establishes a correlation between organizational culture evaluation scores and essential performance metrics, including profitability (ROE, ROA, ROI), growth (sales growth rate, market share), quality, innovation, and both employee and customer satisfaction.
This model focuses on analyzing and evaluating the key factors that influence corporate culture, encompassing four primary feature frames Each frame is assessed using three scales, with each scale comprising five related variables, resulting in a total of 60 questions derived from the Denison questionnaire.
The model illustrates the correlation between cultural factors and key organizational activities, revealing that a high score in a Stable region correlates strongly with profitability, while a Flexible area is linked to innovation and customer satisfaction Additionally, cultural factors with an Outward-Focusing orientation are associated with overall organizational development, whereas Introverted factors relate more closely to performance metrics such as quality and employee satisfaction.
1.1.2 Situation of domestic study a According to the study released by Asso.Prof.Dr Do Minh Cuong
General concept on corporate culture
1.2.1 General concept on culture and business culture
The history of development has proved that culture is the most important factor to distinguish the nations, regions or groups of persons, including individuals, etc
Culture plays a crucial role in societal development and reflects the identity of the people it embodies As noted by renowned Indian writer Rabindranath Tagore, each nation has a responsibility to showcase its unique identity to the world He warned that failing to contribute meaningfully to global culture would lead to a legacy of regret, one that history would not forgive.
The term "culture" originates from the Latin word "cultus," which means cultivation and the care of trees Over time, this concept has evolved to encompass social aspects, signifying spiritual care, education, and the development of individuals towards a more refined orientation.
Culture encompasses the spiritual and physical values developed by individuals throughout their survival and growth Physical values include beauty spots, pagodas, temples, and traditional cultural products, with notable examples in Vietnam such as Bat Trang ceramic village, Dong Ho paintings, and historical sites like Hoang Thanh Thang Long and the Temple of Literature Spiritual values are reflected in daily practices, folk songs, and traditional art forms, particularly Vietnamese Xoan singing, which UNESCO has recognized as an intangible cultural heritage of humanity.
Culture encompasses the activities and spiritual values of humanity, which can be categorized into two primary subsystems: scientific culture, including fields like mathematics, physics, and chemistry, and artistic culture, comprising movies, literature, and music.
When Culture is referred, it surely covers the very famous brief and cohesive definitions of the famous French politician Édouard Herriot (1872 – 1957), that is
Culture serves as the enduring essence of identity for individuals and nations, remaining significant even when other knowledge fades It encompasses the unique characteristics that define us, highlighting its crucial role in shaping our identities This underscores the profound importance of culture, which cannot be easily overlooked or forgotten.
Federic Mayor, former Chief Executive Officer of UNESCO from 1987 to 1999, defined culture as a vivid reflection of all aspects of life, encompassing both historical and contemporary elements He emphasized that culture embodies a system of traditional values, aesthetics, and lifestyles that help each ethnic group assert its unique identity This definition highlights the dynamic nature of culture, shaped by both past experiences and present practices over the centuries.
“Culture refers to all spiritual and physical values created by the human beings during survival and development”
The 1990s marked the emergence of the terms "business culture" and "corporate culture," with business culture preceding corporate culture These two concepts are often used interchangeably and support one another in defining organizational environments.
Therefore, corporate culture is the expression of business culture at corporate level hence, it is concluded that corporate culture is a phenomenon and part of the business culture
Every organization is built upon a foundation of moral values, distinct images, anecdotes, and unique styles that are recognized and embraced by all its members over time These elements serve as a reliable framework for members to adhere to, significantly influencing their daily behaviors and interactions within the organization.
Corporate culture is construed as: “a system of meanings, values, key trusts, awareness and thinking method to be agreed by the organization members, widely affecting the member’s action manners”
Corporate culture encompasses a diverse range of definitions, with French expert Georges de Saite Marie describing it as a collection of values, symbols, legends, protocols, prohibitions, physiological aspects, and moral viewpoints that form the foundation of an enterprise While this definition highlights the components of corporate culture, it does not address the interrelationships within the organization.
Corporate culture, as defined by scholar Edgar H Schein, is the set of rules and procedures that members of an organization acquire through problem-solving, both from external sources and internal experiences These rules and procedures guide members in selecting action methods and making decisions confidently, as they are regarded as inherently correct from the outset.
Corporate culture is a system of shared values, concepts, and behavioral rules within an organization that shapes the feelings, thoughts, and actions of its members It plays a crucial role in guiding employees as they work towards achieving the company's overarching goals, ultimately fostering a unique identity for each enterprise.
Identity is defined by the corporate culture, philosophy, and distinctive style of an organization, which is reflected in the actions and behaviors of its members The cultural identity of an organization is evident in the behavior of its employees, serving as a clear indicator of the organization's core values and philosophical consistency.
“Corporate culture identity is not long-lasting; it may be varied by following characteristics:
“Cultural identity may be created: Persons who may create the cultural values and identities are founders Since its inception, the organization’s missions and individual's cultural identity values are specified
Cultural identity is reinforced when leaders actively work to protect and uphold existing moral and cultural values These leaders can be distinguished figures in various fields or may assume roles dedicated to preserving and promoting cultural identity As a result, the philosophy of operating within a culture is intricately intertwined with its enduring traditions and values.
Cultural identity is shaped through integration, where leaders employ an inclusive and integrative approach They actively listen and seek effective methods to connect individuals, serving as a bridge that fosters regulation, motivation, and collaboration Consequently, the philosophy and style of leadership are profoundly influenced by a culture of integration.
Cultural identity within an organization can evolve due to significant factors such as industrialization, technological advancements, integration of foreign cultures, or shifts in senior management These changes create pressure that necessitates fundamental adjustments in leadership style, philosophy, and operational guidelines As the culture transforms, it profoundly influences the leadership approach, emphasizing the need for adaptability to the new cultural landscape.
Necessity to design and develop corporate culture
Corporate culture is characterized by the business identities to distinguish them from other businesses
Since its inception, an enterprise may lack a stable and identifiable culture However, over time, through various challenges and competition, cultural factors evolve and develop into a systematic framework This framework establishes unique business guidelines that differentiate the enterprise from others and social organizations.
A strong corporate style is as essential to an enterprise as water and air are to people It leaves a lasting impression on outsiders and fosters pride among employees Corporate culture establishes behavior patterns that are widely accepted and adhered to by members, promoting harmony within the organization These patterns serve as standards and values that recognize positive behaviors while discouraging negative ones, guiding individuals on what actions are appropriate and which are not.
Corporate culture enhances the work motivation, facilitating the loyalty, engagement, creativeness and devotion of the staff
Entrepreneurs and individuals interested in economic growth recognize the vital role of corporate culture in driving development Corporate culture is inherently linked to humanistic values, emphasizing that business efficiency should not come at the expense of these values Businesses are encouraged to align their operations with community improvement, promoting social activities such as poverty alleviation and disaster relief The absence of cultural elements can lead to severe consequences, including resource depletion, waste management issues, and environmental pollution.
Characteristics of corporate culture
Corporate culture is reflected in its distinct signs, phenomena, and characteristics, which encompass the core philosophies, values, and beliefs of an organization These characteristics play a crucial role in fostering awareness and critical thinking among members, enabling them to accurately embody and reflect the collective consciousness of the organization.
Corporate culture is represented through various characteristics, often referred to as visual symbols, which enhance visibility and comprehension Additionally, non-visual characteristics serve as distinct indicators, reflecting the awareness levels of members regarding the corporate culture.
Table 1.1 Characteristics of corporate culture
- Interior and exterior architecture - History of development and tradition
- Behaviors and communication of the enterprise
- Vision, mission and core values
Source: Collection by the author in the 2018 study 1.4.1 Visual characteristics of corporate culture a Architecture characteristics
Particular architecture includes office’s exterior and interior architecture used as the company’s logo and images to create the familiar and good will impression of the Company
Architecture design is widely interested by the organizations because:
The exterior architecture of buildings plays a crucial role in influencing human behavior, communication, and performance For instance, church architecture evokes a sense of strength and power, while pagodas convey feelings of transparency and continuity Additionally, libraries leave a lasting impression of intellect and knowledge.
Architectural masterpieces often serve as symbols or "mascots" that embody the values and significance of a society or organization Notable examples include France's iconic Eiffel Tower and China's renowned Great Wall, as well as cultural landmarks like the Temple of Literature and the One Pillar Pagoda, which collectively represent the spiritual heritage of their respective nations and communities.
- Structural design may be regarded as a symbol of the organization's strategic motto
- Architectural works become an organic part of the company's products
- Each architecture is submerged with historical values associated with the availability and growth of the organization b Rituals, etiquettes
Corporate culture is characterized by rituals and etiquettes, which are meticulously planned activities and events These can be official socio-cultural gatherings or emotional occasions, conducted either periodically or irregularly Such activities aim to strengthen organizational relationships and are often designed for the benefit of attendees.
The form and content of a ritual reflect the core values and philosophy of the corporate culture that an organization aims to promote, while also highlighting the unique perspectives and strategies of its management Additionally, symbols and logos play a crucial role in conveying these messages effectively.
Symbols play a crucial role in defining corporate culture, encompassing elements like architecture, rituals, anecdotes, and logos that embody tangible values These characteristics are designed to communicate significant meanings and values to the audience in diverse ways Effective branding hinges on the careful selection of a name, logo, packaging design, and other attributes that uniquely identify a product and set it apart from competitors.
A logo serves as a vital symbol representing the image of an organization or business in a visually appealing manner Despite its simplicity, a logo carries significant meaning and is a focal point for many companies Today, logos from renowned global brands like Coca-Cola, Microsoft, and Toyota attract considerable attention and influence worldwide.
A brand's logo should be thoughtfully crafted to reflect cultural significance and align with the identity of the target audience It is essential for the logo to resonate with diverse cultures and languages, ensuring a meaningful connection Incorporating short stories, anecdotes, and representative examples can further enhance the logo's cultural relevance and appeal.
Short stories serve as a means to convey the values and philosophy of corporate culture to new members within an organization These narratives often highlight exemplary behaviors that align with the organization's standards and values, personifying ideal patterns into myths that embody the desired qualities and beliefs By sharing these stories, organizations aim to preserve their foundational values and foster a unified understanding among all members.
Model characters represent the core values and enduring strength of a business, shaping a unique identity that drives exceptional results They inspire various employee groups to emulate their qualities, thereby enhancing and promoting the company culture Through effective language and memorable slogans, these figures play a crucial role in unifying the workforce and reinforcing the enterprise's mission.
Special sayings, slogan, metaphors or a nuance of words are used to convey a specific meaning to the employees
Slogans are memorable phrases that resonate with both employees and customers, often featuring simple, easy-to-remember words that may seem cliché They serve as the concise embodiment of an organization's or company's business philosophy and should align closely with the mission statement to convey their deeper meaning effectively For instance, the slogan of Vietjet Air exemplifies this connection.
“Enjoy Flying”; Heineken: “It could only be Heineken”; Trung Nguyen Coffee:
“Explore creative inspiration” f Typical publication
Official publications, such as mission statements, annual reports, brochures, and user manuals, provide stakeholders with essential insights into an organization's cultural structure These materials, including advertisement documents and special publications, serve to enhance understanding of the company’s values and offerings.
A strong corporate culture is defined by the collective agreement among organization members on the importance of specific values When there is consensus, this culture unites members and fosters the robust strength needed to cultivate a thriving organizational environment.
1.4.2 Non - visual characteristics of corporate culture a Ideal/mission
Idealism in corporate culture is about putting theories into practice, focusing on the underlying motives, meanings, and values that evoke emotions and create a sense of connection among people It is rooted in the trust, values, and feelings of individuals, ultimately shaping their attitudes and behaviors By emphasizing these core elements, organizations can foster a culture that resonates with their members and inspires them to be invested in the company's mission and vision.
Constituents of corporate culture
The core layer of corporate culture encompasses essential management and business philosophies, making the commitment of top leaders crucial for its successful development As the heart of the organization, this innermost cultural layer reflects the business philosophy and management principles that only the highest leaders can influence Consequently, business leaders are pivotal in shaping and nurturing corporate culture, establishing a strong foundation for the enterprise They create an environment that aligns with cultural values, select suitable personnel, and serve as role models and motivators for employees.
The second key layer of corporate culture involves the motivations that drive individual actions and shape the overall motivational environment within the organization These motivational factors are reflected in the daily behaviors exhibited by the members of the enterprise.
Effective procedures, regulations, and policies are essential for enterprises to maintain stability and adhere to industry standards These components enable businesses to meet the rising demands for quality in products and services, ultimately enhancing operational efficiency and ensuring high levels of customer and societal satisfaction.
The fourth layer of corporate culture is essential for meeting the diverse and timely management information needs of enterprises This system ensures that all necessary information is effectively collected, communicated, stored, and processed As a result, all members of the organization can easily access and utilize the required information for daily operations and strategic planning.
The floating culture of an enterprise plays a crucial role in shaping its identity and competitiveness, despite not directly impacting business performance It significantly influences all activities within the organization by effectively communicating company policies and guidelines, distinguishing the business from its rivals, and fostering a positive image in the community To successfully cultivate this organizational culture, it is essential for entrepreneurs, senior managers, leaders, and other administrators to actively participate in its development.
Benefits of corporate culture development
Corporate culture is a vital intangible asset for enterprises, significantly influencing their development by providing a reliable framework of objectives, motivations, and regulations It plays a crucial role in minimizing conflicts among members and between individuals and groups, fostering coordination and control within the organization Additionally, a strong corporate culture motivates employees and enhances competitive advantages, contributing to overall organizational success.
Corporate culture serves as a vital adhesive that unites members of an organization, fostering a shared understanding and guiding their evaluations, decisions, and actions In times of conflict, this cohesive culture plays a crucial role in aligning members, ensuring coordinated efforts and effective control within the enterprise.
Corporate culture plays a crucial role in guiding and regulating employee behavior through various elements such as stories, standards, and procedures It shapes essential aspects of the organization, including leadership style, business practices, quality standards, and overall organizational ethos In complex decision-making scenarios, a strong corporate culture helps streamline options, making it easier to navigate challenges Additionally, it serves to motivate employees, fostering a cohesive and productive work environment.
Corporate culture is not rigid regulations, hindering the creativity of members
A strong corporate culture fosters a positive and healthy work environment, enhancing employee innovation and creativity It helps employees grasp the company's objectives and work nature, instilling a sense of purpose and pride in their roles This is particularly significant in an era of "brain drain," where salary alone is not the sole motivator Once income reaches a certain threshold, many employees prefer a harmonious and respectful workplace over higher pay, valuing a supportive atmosphere over financial incentives.
Corporate culture serves as the identity of a business, enhancing its appeal to customers and partners while establishing a unique brand that sets it apart from competitors It plays a crucial role in strengthening external relationships and is a key factor in attracting both customers and partners to the enterprise.
- The customers shall feel peace in mind and proud when the enterprise's products and services are used
Partners should foster greater trust during transactions with the enterprise, potentially offering preferential pricing Their support is essential for helping the enterprise navigate challenges and uphold its commitments.
Enterprises that foster a strong corporate culture are more likely to gain the trust of regulators and the government This trust can lead to significant support from these entities during business operations, enhancing the overall success and stability of the enterprise.
1.6.3 For branding of products and services
Corporate culture development is also recorded as to setup the brandname for the enterprise and its offerings
Product brandname creates the product quality position Enterprise's brandname helps the consumers to evaluate the enterprise’s prestige and moral
Corporate culture plays a crucial role in the growth and sustainable development of an enterprise, ultimately driving profitability, which is vital for survival Even in challenging times, a strong corporate culture can provide opportunities for resilience and growth Conversely, the loss of corporate culture can lead to an enterprise's downfall Thus, the success or failure of a business is deeply intertwined with its unique cultural identity.
Steps of corporate culture development
Developing a company's culture can differ significantly across countries, as each culture influences employee satisfaction and productivity The primary goal of fostering a strong corporate culture is to enhance employee happiness, which in turn boosts productivity and engagement To effectively cultivate this culture, organizations can follow four essential steps.
Step 1: Determine values concerned by stakeholders
Stakeholders such as shareholders, senior managers, employees, customers, and other relevant parties play a crucial role in shaping the company's cultural model It is essential to assess various options and implement changes that align with the interests and concerns of these stakeholders to create an effective and satisfying organizational culture.
Step 2: Re-evaluate the available corporate culture model or setup new corporate culture contents, including core values, business philosophy; Code of Conducts, legal document system; characteristics such as brand identifier, organizational structure, rituals, festivals, stories, legends on enterprises; architectural structure, interior, product system, technology, etc
Step 3: Identify the barriers or change requirements Barriers may be ignorance, local features, fear of changes, etc Demands must be changed such as internal dispute or changes in technology It is required to specify to prepare the proper action plans
Step 4: Prepare implementation and application plan
The process of developing a corporate culture mirrors the famous adage: “Sow a thought, and you reap an act.” Establishing values is just the beginning of shaping an enterprise's ideology; consistent action programs are essential for these values to evolve into habitual practices Regular supervision and follow-up are crucial to enhance these characteristics, aligning them with the company's core values and ultimately fostering a distinctive identity for the organization.
Development of corporate culture is a long time process, requiring a great effort of every one The achievement is the enterprise’s success
Conclusions: According to the contents and structure on corporate culture, the
Research Methodology is moved to analyze and evaluate the corporate culture.
RESEARCH METHODOLOGY
Methodology
Dialectic materialism methodology is applied during the study
To effectively establish and enhance corporate culture at Thaco, it is essential to study its development closely This involves examining Thaco's corporate culture structure in relation to both general and specific cultural values, which contribute to its unique cultural identity Additionally, understanding Thaco's corporate culture identities in connection with national culture, the enterprise's origins, and its business environment is crucial for fostering a cohesive and distinctive corporate ethos.
To enhance corporate culture at Thaco during the integration period, it is essential to apply the dialectic materialism method This approach should focus on addressing the existing challenges within the Group's corporate culture, particularly by identifying and rectifying shortcomings that have emerged while preserving Thaco's unique cultural characteristics in this new era.
Research procedure
Research procedure is characterized by following steps:
Step 1: Read and analyze the related studies to inherit and specify the gap for further study
Step 2: Identify the research issues
Step 3: Collect and systematize the theoretical issues to setup the research model
Step 4: Setup the research methodology
Step 5: Apply the research methodologies to collect the primary and secondary data, use the proper tools to handle and analyze the data, and evaluate the existing conditions of the enterprise
Step 6: Refer to the corporate analysis and evaluation released by the enterprise to propose the solutions to successfully develop the enterprise’s culture.
Data collection sources
Data classification can vary based on the researcher's methodology and objectives For the research on Thaco Group's corporate culture development, two primary data sources were utilized: primary and secondary data.
Primary data is collected by consulting the officials and employees related to Thaco Group's corporate culture
Secondary data sources encompass existing information and references related to corporate culture and organizational behaviors studied by researchers and scholars globally.
Data collection method and tools
Data was gathered through a survey utilizing a specially designed questionnaire distributed to officials and employees of Thaco Group across three regions: the North, Central, and South A total of 300 questionnaires were distributed and successfully collected.
Data collection tools are questionnaire used to consult the subjects, in which:
- Question form is the (close) question with question and answer types to be available for the respondent to select
- Detailed contents of questionnaire (appendix 1) include 2 main sections: Section 1: Design to collect general information about the respondents
Section 2: Design to include the questions to review the knowledge and awareness on corporate culture of officials and employees, working in Thaco Group
The questionnaire aims to assess employees' awareness of the corporate culture at Thaco Group, revealing the current state of its corporate culture practices Additionally, it seeks to identify solutions for enhancing and perfecting the corporate culture within the organization.
Table 2.1: Summary of questionnaire structure for official study
Gender Age Service length in the Company Corporate culture information
Factors of corporate culture Visual characteristics Non-visual characteristics Management and leaders on corporate culture development
Solutions for corporate culture development
Source: Collection by the author in the 2018 study Questionnaire design phases:
The questionnaire undergoes multiple phases of design and testing to guarantee the collection of necessary information for data analysis The questions regarding corporate culture are formulated based on insights from prior research on the subject.
- Phase 1: Design the crude questionnaire in accordance with the information to be collected in the theoretical model and related previous theories
In Phase 2, the evaluation of the questionnaires involves assessing the respondents' comprehension of the questions This process is carried out by directly distributing the questionnaires to officials and employees, allowing for a thorough verification of their understanding and responses.
Phase 3: Adjust the contents of questions and complete the questionnaire, then directly deliver to Misa employees to collect information.
Data analysis and processing method
Based on extensive experience with Thaco's corporate culture, this article aims to identify key factors influencing its establishment and growth, while analyzing the successes and challenges faced in sustaining this culture, particularly in foreign markets The findings will lead to proposed solutions for enhancing and preserving Thaco's corporate culture in the future.
After collecting data through questionnaires and documents, we employ statistical analysis to generate tables reflecting Thaco Group's business performance and the respondents' perspectives on its corporate culture This comparison with other telecom companies highlights the correlation between business efficiency and the cultivation of Thaco's unique corporate culture Additionally, we analyze the current strengths and weaknesses in maintaining and developing this specific cultural identity, providing a foundation for proposing strategies for future growth in Thaco's corporate culture.
In Chapter 1, this method outlines the landscape of relevant research, focusing on the unique aspects of corporate culture at Thaco It details the research subjects and presents survey results obtained through questionnaires, alongside an analysis of the company's business performance Additionally, it examines the current state of maintaining and developing Thaco's distinctive corporate culture.
This method is applied to present the study contents In order to analyze the information and data, following methods are applied herein:
+ Descriptive statistics methodology: To be launched in Chapter 1 when overview of the study is related to the thesis This method is also applied in Chapter
This article analyzes the current state of Thaco's corporate culture, highlighting both general characteristics and specific traits It also seeks to identify the shortcomings in maintaining and developing these unique cultural aspects amid the growing trend of international integration.
The descriptive statistics methodology is utilized to assess Thaco Group's business performance over the years in relation to the maintenance and development of its unique corporate culture This approach involves comparing the feedback from survey respondents about their perceptions of the corporate culture, highlighting both its strengths and limitations Based on these insights, systematic proposals for the future development of Thaco Group's corporate culture are presented.
Conclusions: The analysis basis in Chapters 3 & 4 is based on the Literature
This article examines Thaco Group's corporate culture by analyzing its characteristics and existing structures It aims to evaluate the current corporate culture and propose actionable steps for its enhancement.
EXISTING STATUS OF CORPORATE CULTURE
Overview about Truong Hai Automobile Joint Stock Company (THACO)
Truong Hai Automobile Joint Stock Company was incorporated on 29 April
1007, based its registered office at No 19, Street 2A, Bien Hoa 2 Industrial Park, Dong Nai Province The founder is Mr Tran Ba Duong, currently Chairman of Board of Directors of THACO
Thaco specializes in the manufacturing, assembly, and distribution of automobiles, along with providing repair and maintenance services for spare parts Their offerings include commercial vehicles such as trucks and buses, as well as tourism vehicles from renowned brands like Kia (Korea), Mazda (Japan), and Peugeot (Europe).
Thaco is the only company in Vietnam engaged in the complete manufacturing and assembly of three vehicle models: tourism vehicles, trucks, and buses With a localization rate ranging from 16% to 50%, Thaco provides a diverse range of high-quality automobiles at competitive prices.
Thaco is focused on sustaining its leadership in automobile manufacturing, assembly, and distribution in Vietnam while expanding its market presence in ASEAN The company aims to enhance international cooperation to adopt suitable technologies, boost localization rates, and integrate into the global value chain This strategic approach is designed to build a robust foundation for developing a universal industrial group and improving competitiveness to achieve a leading position in the region Currently, Thaco operates its General Office in Ho Chi Minh City.
80 Nguyen Van Troi, Ward 8, Phu Nhuan District, HCMC o Branch No 1
No 19, Street 2A, Bien Hoa 2 Industrial Park, Dong Nai Province o Branch No 2
Lot 6, Hanoi - Dai Tu Industrial Zone, 386 Nguyen Van Linh, Sai Dong,
Long Bien, Hanoi o Chu Lai - Truong Hai Complex
Hamlet 4, Tam Hiep commune, Nui Thanh district, Quang Nam province
3.1.1 History of development of Truong Hai Automobile Joint Stock Company
Truong Hai Automobile Joint Stock Company is recorded with specific development milestones as follows:
On April 29, 1997, Truong Hai Automobile Co., Ltd was established, focusing primarily on the import of used vehicles and their sales in the market, while also supplying materials and spare parts for automobile repair.
On October 5, 1999, Thaco established its first branch at No 2A Ngo Gia Tu, Gia Lam (now Long Bien), Hanoi, starting with a team of 10 employees This pivotal move marked a strategic breakthrough for Thaco, enabling the company to gradually dominate the automobile industry in Vietnam.
In 2003, the Company made a significant investment of VND 600 billion in the Chu Lai Open Economic Zone located in Nui Thanh District, Quang Nam Province This investment was aimed at establishing a modern automobile assembly plant, which spans an area of 36.8 hectares and is known as Chu Lai - Truong Hai Automobile Manufacturing and Assembly Co., Ltd.
In December 2008, the Company inaugurated TRUONG HAI STAR 2 vessel with 288 TEU, put THACO-KIA into official operation
On 4 October 2010, Chu Lai Truong Hai Vocational Training College opened the first course in the school year 2010 - 2011 with 408 students, including elementary, intermediate and college classes.”
In 2005, THACO achieved significant growth, selling 70,421 vehicles and capturing a 38.6% market share in VAMA By 2015, the company's total revenue reached VND 45,846 billion (approximately US$ 2 billion), marking an impressive 89% increase from 2014, while contributing VND 13,856 billion to the state budget.
Since 2015, the company has achieved significant success in manufacturing, trading, assembly, distribution, sales, and after-sales service, all while fostering cultural development and navigating challenging phases The 2018 report highlighted these accomplishments.
VAMA unveiled that revenue of entire VAMA was 276,187 vehicles THACO continued leading Vietnamese automobile market with revenue of 96,127 vehicles, accounting for 34.7% of market share
Figure 3.1 THACO market share revenue in 2018 Some achievements obtained in the past:
Since its establishment, THACO has been proud to receive numerous Certificates of Merit and awards at various levels, recognizing its significant contributions and achievements in manufacturing, business, social community initiatives, and national development and protection.
Emulation flag includes: The flag awarded in 2005 by the Government; the first prize awarded by the People’s Committee of Dong Nai (the excellent Emulation Unit for 5 consecutive years)
The prize includes: “2015 Vietnam Golden Star Award” (5 th consecutive time to be named in TOP 10; “Vietnam Famous brandname Winner”); “2015 Vietnamese Powerful brandname”, etc
40/500 rank in “Top 500 VNR” voted in 2015 by VNR 500, Vietnam.net newspaper
Certificate of Merits awarded by Dong Nai provincial group regarding the excellent achievements in the union and youth movement in 2013
In 2013, the Chairman of the Vietnam Fatherland Front in Ho Chi Minh City awarded a Certificate of Merits in recognition of significant contributions to the municipal fund "For the Poor and Social Security."
TOP 1,000 highest tax payers in 2014 released by the General Department of Taxation
A series of certificates of merits and credit from 2013 onwards
3.1.2 Organizational structure in Truong Hai Automobile Joint Stock Company (THACO)
The development of an effective organizational structure and operating model is crucial for governing a nationwide subsidiary system THACO has adopted a "Matrix" business model, recognized as a modern management approach that integrates both online frameworks and program objectives This model aims to alleviate the workload of senior leaders by empowering intermediary managers to make decisions, thereby enhancing the personal responsibilities of leaders across various units, showrooms, subsidiaries, and branches in different provinces and cities For a detailed illustration of this model, refer to Figure in Appendix 3.2, which outlines Thaco Group's organizational structure as of 2018.
Below is the brief analysis on roles of components in THACO’s organizational structures:
General Meeting of Shareholders: It is the highest competent authority in
Truong Hai Automobile Joint Stock Company fully owns the enterprise and possesses the authority to make decisions on matters outlined in accordance with legal regulations and the Company's Articles of Association.
Board of Directors: The Board of Directors is voted by the General Meeting of
Shareholders represent the Company in making decisions and fulfilling its rights and obligations, while the Board of Directors is responsible for overseeing the Chief Executive Officer and management The current Chairman of the Board, Mr Tran Ba Duong, who is also a founder of Truong Hai Automobile Joint Stock Company, plays a key role in determining the Company's long-term and medium-term development strategies and plans.
Supervisory Board: As selected by the General Meeting of Shareholders, the
The Supervisory Board is responsible for overseeing the company's financial activities, which includes selecting the independent auditor and determining audit fees They engage in discussions with auditors regarding the audit's nature and scope prior to its commencement Additionally, the Board inspects the consolidated financial statements of the holding company, branches, regions, and units on an annual, semi-annual, and quarterly basis before these documents are presented to the Board of Directors for review alongside internal audits and management feedback.
The Board of Management, led by Chief Executive Officer Mr Nguyen Hung Minh as the legal representative, consists of the CEO and Deputy General Directors overseeing various company activities This Board is accountable to the Chairman of the Board of Directors and the General Meeting of Shareholders for the Group's production, business performance, and overall development strategy Each Deputy General Director is responsible for a specific division under the CEO's leadership.
Existing status of corporate culture in THACO through visual characteristics
3.2.1 Available cultural values of THACO
THACO aims to establish itself as a universal industrial group and a prominent Vietnamese brand within the ASEAN region To achieve this goal, the company is committed to enhancing its internal capabilities, fostering innovative thinking and actions, and improving the quality and scale of its workforce A key component of this strategy is the cultivation of a strong THACO culture, which serves as a vital tool for managing and governing the organization.
THACO emphasizes the importance of a disciplined culture as a foundation for its cultural development in the industrial production sector, focusing on sustainable development and quality The company prioritizes enhancing the sense of discipline among its staff, viewing it as essential for guiding cultural activities and fostering a disciplined work environment This commitment to discipline is seen as crucial for expanding production, driving business growth, and developing human resources in an increasingly integrated market.
THACO's culture emphasizes discipline and humanism, focusing on "contribution and devotion to society" through its products and services The company actively encourages and supports its employees and subordinate units to propose innovative initiatives in production and business, resulting in added value for customers, society, and the economy In 2015, THACO demonstrated its commitment to social responsibility by investing VND 36 billion in community activities and contributing over VND 13.8 trillion to the state budget, including more than VND 10 trillion to Quang Nam province.
“ 3.2.2 Corporate culture development through 8 T principles in THACO
The 8Ts Principle serves as a fundamental guideline within THACO Culture, promoting self-discipline and personal growth among its members This principle is essential for each employee to uphold, contributing to the distinguished THACO brand in Vietnam's automotive industry.
8Ts are meant as follows:
• TẬN TÂM - DEDICATION: Work wholeheartedly and responsibly with everyone and the company Be responsible for yourself, your family, colleagues, companies and products
• TRUNG THỰC - HONESTY: Be honest with yourself; Take responsibility for any mistake or failure to get the tasks done.”
• TRÍ TUỆ - INTELLIGENCE: Learn to improve your knowledge, think and act independently; Be creative in your respective fields.”
• TỰ TIN - CONFIDENCE: Act confidently for the company development; Be self-confidence in work and communication.”
• TÔN TRỌNG - RESPECT: Respect the collective, customers, supervisors and colleagues through daily behaviors.”
• TRUNG TÍN - PRESTIGE: Be loyal to the company; keep promise with colleagues and customers.”
• TẬN TÌNH - ENTHUSIASM: Listen patiently to the opinions of supervisors, colleagues, and customers; Be dedicated to work and company’s development.”
• THUẬN TIỆN - CONVENIENCE: Cultivate a favorable and effective collaboration with colleagues in the company - customers.”
The 8Ts principle effectively utilizes mass media to enhance employee communication, enabling them to meet, see, read, think, act, and develop empathy This approach fosters a strong corporate culture in the workplace, driving daily performance improvements.
3.2.3 Corporate culture development through THACO song
THACO prioritizes its people as the foundation of its success, fostering a proactive work ethic that is evident in their professional demeanor and customer service excellence Each team member possesses specialized knowledge and skills, ensuring a high standard of service and deep expertise in their respective fields.
Every Monday morning, employees participate in a flag saluting ceremony, where they sing the song “Trung Hai Trust” to internalize the company's philosophy and values This ritual, initiated by the Group and its branches, serves to motivate staff for the upcoming week The lyrics reflect THACO's culture of "Powerful and love, business with compassion," fostering trust and respect among employees while inspiring productivity and business growth.
3.2.4 Cultural development through Code of Conduct in THACO
THACO, a large organization with over 16,000 employees across various companies, branches, and subsidiaries, emphasizes the importance of professional behavior To uphold this standard, THACO has implemented a "Behavior Guideline" that outlines the expected conduct for its officials and employees This guideline aims to ensure integrity and accountability, foster a strong sense of responsibility among staff, and provide a framework for delegating responsibilities within the organization Additionally, it serves as a foundation for mass organizations within the company to monitor legal compliance and support effective task fulfillment.
3.2.5 Corporate culture development through THACO HR evaluation culture
THACO has established a robust culture of periodic and annual HR evaluations across its entire system These evaluations can be adapted to occur quarterly or biannually, reflecting the Group's market development and operational performance as needed.
HR evaluation activities serve as a vital tool for effective human resource management, reinforcing corporate culture and enhancing overall business performance They contribute to fostering a positive work environment, promoting employee engagement, and supporting the sustainable development of the entire organization.
Table 3.4: HR evaluation table in THACO
Evaluate the performance of a period and plan for the next phase
Control the fulfillment of plan goals, adjust the plan in accordance with the production and business plan
Conduct HR rotation, assignment in accordance with the structure to be well matched with the production and business plan
Review the HR rotation and assignment in accordance with the changes in financial plan and production and business plan
Determine the training demand and development objectives of each person
Develop the recruitment plan in accordance with the staffing
Manage the fulfillment of training - development objectives of each person Adjust the objectives
Screen the staffing and adjust the recruitment plan
Evaluate the work performance in the period & assign the goals to the next period
To effectively manage goal achievement, it is essential to adjust objectives in line with the updated production and business strategy Additionally, timely implementation of solutions is crucial for meeting these goals and enhancing overall work performance.
4 Consider salary & allowance in accordance with the undertaking and competition with the market
5 Review the bonus: refer to the annual evaluation and ratings
6 Design, develop and uphold the corporate culture
HR evaluation procedure in THACO
Figure 3.5: HR evaluation procedure in THACO
Evaluation procedures are implemented across all levels of the company, including branches and units, focusing on individual performance based on professional competence criteria Reviews are conducted in accordance with the Group’s detailed instructions, ensuring transparency, equality, and fairness Each evaluation aims to reassess the position of the HR system, identify advanced training needs, and establish appropriate salary, bonus, and welfare policies and regulations.
Table 3.5: Applicable standard criteria table of THACO
II GOVERNANCE COMPETENCE 1 Thinking-vision
Evaluate according to the criteria set- standards; evaluate the fulfillment of training-development objectives
Evaluate the work performance, determine the objectives, and prepare the work plan
Determine the training requirements and propose the development orientations
Share the information on unit’s operation orientation and HR demand
Evaluate the work performance and fulfillment of training objectives
Evaluate the capacity, development orientation, consider to dispatch/appoint
Consider and approve the evaluation results; proposals
Manage the evaluation to be regularly conducted at the division/unit
Manage the information: revaluation results,
HR development orientation and training plan
Follow up the fulfillment of training plan
Dispatch/appoint the approved persons
Report the HR development analysis as planned
6 Culture management (within the enterprise)
Setup specific professional competence criteria and standards by professional division and department, etc
The criteria is writen in details and specific manner to each job position in the system such as: sales advisor, chief accountant, accountqant, Sales manager, admin,
The evaluation criteria for employees at THACO are structured hierarchically, reflecting their respective management positions This approach assesses qualifications, work ethic, and commitment, enabling the organization to effectively refine HR policies and treatments By doing so, THACO aims to enhance its management system while promoting a strong corporate culture unique to the company.
Evaluation approval authority is detailed by hierarchy to ensure the equality, transparency, recognizing the efforts, screening the proper HR arrangement and training The detailed chart is shown as follows:
Figure 3.6: Sequence of approving the annual HR evaluation results
THACO has established a unique HR evaluation culture that plays a crucial role in identifying and optimizing its human resources By conducting regular HR assessments, the company effectively updates and innovates its business practices to stay aligned with evolving industry demands.
THACO's emphasis on a robust HR evaluation culture significantly enhances the efficiency of its production and business operations, distinguishing the company and contributing to its remarkable achievements over the years.
3.2.6 Corporate culture development through THACO typical publication magazine
Existing status of corporate culture in THACO through non-visual characteristics 48 1 Corporate culture development through converting THACO culture into
3.3.1 Corporate culture development through converting THACO culture into action by each member
THACO's growth is intrinsically linked to Vietnam's development, significantly contributing to the nation's economy through its production and business activities The company's recent emphasis on social responsibility has garnered widespread appreciation, with various community initiatives launched by THACO demonstrating its commitment to societal well-being.
All THACO branches initiated the program on “Lunar New Year Festival Sharing for the Poor” in each lunar New Year Festival
The program on “humanism blood donation festival” is annually held in all POSs, nationwide by THACO
The Road to Olympia Peak program, primarily sponsored by THACO, offers a valuable platform for high school students across the country With nearly two decades of experience, the initiative has fostered a culture of learning and practice among youth, equipping them with essential skills for their future.
THACO is co-sponsoring the "Start-up Nation" Talk Show in collaboration with the Central Committee of Ho Chi Minh Communist Youth Union and Vietnam Television's News Committee Mr Tran Ba Duong, Chairman of THACO's Board of Directors, expressed the company's goal to inspire a spirit of entrepreneurship among the youth He emphasized the importance of fostering new ideas and providing a supportive environment where young entrepreneurs can present their business plans The program aims to unveil outstanding start-up concepts, creating opportunities for collaboration between aspiring entrepreneurs and THACO to contribute to a prosperous future for the nation.
THACO members actively engage in community activities, reflecting a strong connection between THACO culture and Vietnamese national culture, encapsulated in the saying, “The intact leaves cover the tattered ones.” This involvement indicates a significant transformation from thought to action among THACO employees To further solidify this cultural transformation within the organization, a survey was conducted with 300 THACO employees to assess their perceptions of the corporate culture at THACO.
Table 3.6: General evaluation on corporate culture of THACO members
Completely disagree Disagree Unsure Agree Completely agree
Do you agree that corporate culture is very essential to THACO development?
2 THACO culture is clearly identified and oriented 0% 3% 15% 80% 2%
Do you thoroughly understand THACO business policies and orientations as well as customers?
4 Do you pride of being a
Do you thoroughly understand THACO mission, vision and operation orientation?
Do you believe in THACO leadership guidelines and development?
Do you want to work in
THACO due to good culture and working environment?
Members’ behavior is actively affected by
THACO applies and disseminates the clear regulations on moral standards for each member
Do you feel the good trust to outperform the assigned task?
Do you want to maintain the human-centered HR culture in THACO?
12 Do you wish to work for long time in THACO? 0% 2% 8% 80% 10%
(Source: HR survey results in THACO)
3.3.2 Corporate culture development through emphasis level in THACO
The questionnaire revealed that almost all respondents believe corporate culture is crucial for THACO's development As a result, it is essential to design and cultivate a unique corporate culture that reflects THACO's identity Corporate culture plays a vital role in the growth of the enterprise, as the absence of cultural elements, language, materials, and knowledge can hinder an organization's ability to thrive.
The survey indicated that a code of conduct is established for THACO officials and employees, with 95% of respondents demonstrating a clear understanding of these guidelines However, 5% of participants were not aware of the codes Additionally, 82% of THACO employees were able to accurately identify the company's culture and values.
A significant 75% of respondents demonstrated a clear understanding of THACO's mission, vision, and operational orientation, while 93% expressed confidence in the leadership guidelines Additionally, 91% showed a desire to work within THACO's cultural environment, indicating a strong commitment to long-term engagement An impressive 95% of respondents emphasized the importance of maintaining a human-centered culture for THACO's development However, 25% of respondents reported a lack of understanding regarding THACO's business policies, and an equal percentage doubted their ability to excel in their assigned tasks This gap in perception is particularly evident among direct labor roles in manufacturing, assembly, delivery, and repair teams Consequently, THACO must invest more time in fostering cultural awareness among these employees to align their understanding with the company's cultural values.
3.3.3 Corporate culture development through working environment in THACO
A recent survey revealed that 91% of THACO employees believe the working environment is positive, with 90% stating that the company culture significantly influences employee behavior This highlights the critical role of a supportive workplace in fostering corporate culture and motivating staff However, 1% of respondents expressed dissatisfaction, particularly with the inconsistency of performance-based bonus policies, which they find misleading and detrimental to daily operations This concern is compounded by the fact that 10% of employees may consider leaving THACO for more attractive job offers and better compensation from competitors like Toyota, Ford, Honda, Hyundai, Mitsubishi, Nissan, and Hino.
3.3.4 Corporate culture development through cultural rituals and expression in THACO
3.3.4.1 Some regular cultural rituals of THACO
The company organizes meticulously planned rituals and festivals, ensuring a wealth of information is shared with participants Leaders from various groups, divisions, and regions actively engage with and guide all staff members These events provide valuable opportunities for sharing insights, extracting lessons, and managing the performance and attitudes of each individual.
The company has implemented a "funeral support" initiative for employees, whereby VND 10,000 will be automatically deducted from their salaries to establish an HR support fund when a relative passes away Additionally, the local trade union offers complimentary activities for employees facing illness or celebrating weddings.
At THACO, new members are introduced to the company's rich history through engaging anecdotes, fostering a sense of pride and belonging This storytelling approach helps them understand the company's operating philosophy, orientation, and unique corporate culture By grasping these foundational elements, members can effectively contribute to THACO's success while enhancing their personal growth in a vibrant, opportunity-rich environment.
3.3.4.2 Awareness about corporate culture in THACO
Table 3.7: Survey table on members’ awareness on corporate culture
Through questionnaires with sizes of n = 300 for members, the following results are obtained:
No Corporate culture expression Quantity Percent
1 Interior and exterior architecture, identification,
2 Brand, logo, slogan “Reliable reach for further development”>> 282 94%
5 Internal and external communication methods of members, behavior and communication culture 234 78%
6 History of development and cultural tradition 267 89%
7 Value, philosophy, viewpoints, trust and attitude towards THACO development 252 84%
(Source: Summary by corporate culture survey findings in THACO)
The survey on THACO corporate culture unveiled that 195 out of 300 questionnaires (accounting for 65%) assumed that corporate culture expression includes all interior and exterior architecture, identification, CI;
THACO members in the North, including tourism and commercial vehicle repair workshops, comprised a significant portion of the workforce but struggled to embody the company's corporate culture Key elements such as logo and brand selection represented 94%, while values, philosophy, and trust in THACO's development accounted for 84% The company's language and slogan were recognized by 86% of members; however, community activities, internal reports, annual reports, THACO magazines, and advertisements received lower engagement, with only 78%, 60%, and 68% recognition in total questionnaires, respectively.
THACO members have a limited understanding of corporate culture, primarily due to the significant presence of the spare parts service division, tourism, and commercial vehicle service workshops, which restricts access to daily information To enhance awareness of corporate culture, it is essential to continue promoting, instructing, and training employees This initiative will enable a better understanding and application of corporate culture in THACO's production and business activities, positioning the company as a leading and effectively operating automobile business in Vietnam.
3.3.5 Corporate culture development through Culture - leadership style in THACO
Table 3.8: Influence of leadership style on THACO members
Action of senior leader group is suitable with THACO's development strategy
THACO vision, philosophy and business orientation
3 The management is respected and trusted by THACO members 0% 2% 8% 60% 30%
4 The management makes specific contributions to THACO 0% 0% 10% 55% 35%
5 THACO leaders are bright samples to follow 1% 4% 15% 65% 15%
The leaders maintain the constructive relation with the direct subordinates
The unit's leaders outperform the
HR management and improve the departments’ production and business activities
The team leaders and intermediate manager have made great efforts to reach the consents in all decisions
The team leaders and intermediate managers conveys the management values and viewpoints of the departments/company
The team leaders and intermediate managers maintain the team- building working spirit and mutual
(Source: Summary of corporate culture survey in THACO)
The survey results indicated that 92% of THACO members believe the actions of senior leaders align well with the company's overall strategy Additionally, 95% of employees acknowledged that the Board of Management and Leaders effectively communicated the Group's vision, mission, and operational strategy However, maintaining constructive relationships with subordinates was rated lower at 75% Unit leaders struggled to serve as exemplary figures for employees, achieving only 80% consensus on task performance Furthermore, 20% of employees expressed a lack of trust and willingness to follow their leaders Intermediate managers faced significant challenges in communication, management, and relationship-building, with a low consensus of 67%.
- 70%) as shown in the completed questionnaires
THACO management operates on three levels: Level 1 includes senior leaders and regional heads who instill trust and values throughout the organization; Level 2 consists of branch and subsidiary leaders who generally perform well, though some units face limitations; Level 3 involves division heads and intermediate managers who struggle with management qualifications and oversight, leading to low engagement in certain areas, which negatively impacts production and business operations.
3.4 Evaluation of corporate culture development in THACO group