Periodical review policy and procedure for the smooth operation

INTRODUCTION

Theorganizationneedstoidentifytheappropriateorganizationstructureandoperatingmechanismas wellaspreparetheirnewpolicyandprocedureforthebestmanagementcontrolsystem.Ifnot,itwillim pactontheexistingoperationoftheorganization.Goodnewvisionandmissionallowstheorganizati ongrowthontherightway.Goodorganizationstructureequipstheorganizationwiththebestskilledpe rsonnelaswellas.Goodprocedurea n d policyhelpsorganizationalwayscompliantwithlawandcon sistentwithexistingpoliciesandproceduresofthecompany.Moreover,policiesandproceduresarean essentialcomponentofanyorganization.Policiesaddressimportantissues,suchaswhatconstitutesac ceptablebehaviorbyemployees.Procedures,ontheotherhand,clearlydefineasequenceo f stepstob efollowedinaconsistentmanner,suchashowtheorganizationwillrespondtoa n y policyviolations.Allthesereadinesshelpthecompaniessucceedtogaintheirgoalsandobjectives.

ABPOC as the branch of PVN

ABPOC as an operator of PVN and GP for block A&B

Sole RiskOperations (if any)Joint operation

BACKGROUNDINFORMATION

ABPetroleumoperatingcompany(ABPOC),whowasestablishedin2009,isabrancho f PetroVi etnamandanoperatorofABprojectinvestedbytwopartiesofPetroVietnam(PVN)andGazpromInt ernational(GP)forexploration,developmentandoperationofgasa n d condensateoffshoreVietn am.Inoperationperiod,ABcompanyhastwopositionsast h e operatorandPVN’sbranch.Thebelo wchartshowspotionsofABcompanyandagreementsinwhichthecompanymustcomplyduringthei roperation.

Source:CreatedbyAuthorbasedonfunctionofABCompanyFigure1:ABPOC’soperation positionchart

ABPOCisnominated,withconsentofGP,astheoperatorofPVNunderProductsharingcontracts (PSC)betweenPVNandGPtooperatetheblockA&Boffshore.ABPOCoperationsbasedoncontract sandagreementsincluding

ThemainactivitiesofABPOCasanoperatoraremanagementandconductofalljointoperations,s oleriskoperationandauthorizedoperations(ifany)inthejointoperatingagreement(JOA)aspermitte dandrequiredbythepartiesbasedonaprincipleofno- gaina n d nolosses,withinthescopeofJOAandPSCs.

SubjecttorespectivePSCsprovisions,alljointproperty(exceptpetroleum),alljointpetroleumallo catedtothecontractorandallcostsandobligationsincurredinconductofthejointoperationsshallbeow nedandbornebythepartiesinproportiontotheirrespectiveparticipatinginterestswhichatthedateare asfollows:

Jointoperationsareallpetroleumoperationincludesmanagement,maintenanceandexploiting petroleum(gasandaccompaniedcondensate).ThisoperationisinlinewiththeprovisionsofPSCand JOAforandonbehalfofalltheParties.Thecostofthisoperations h a l l bechargeabletothejointacco unt.

Authorizedoperationsaretheoperations,otherthanjointoperationswhichpartiesauthorizetheOperatortocarryoutandonParties’behalf.Currently,ABPOCisauthorizedbyParties(PVNandGP) tothemanagementofgasandcondensatesellingoperation.Foravoidanceofmisunderstanding,cost srelatingtosuchoperationsshallnotbedirectlycharge tothejointaccount,butshallbemonitoredonanotheraccount.Profitforauthorizedoperationsafterd eductingofallobligationswithgovernmentwillbetransferredtoParties’accounts.

SoleriskoperationsareoperationsandactivitiescarriedoutbylessthanallParties.Thec o s t ofwhi charechargeabletotheaccountofSoleRiskParty.Soleriskpartyisaparty whoparticipatesinthesoleriskoperations.Currentlythereisnosoleriskoperationscarriedo u t bypart ies.

Toenableoperatortomaintainthejointoperation,onorbeforethe28thdayofeachmonth,theoper atorshallfurnisheachpartywithacashcallrequesttheadvancesformonthf o l l o w i n g thenext month(“cashcallmonth”).Theamountrequestedinacashcallshallbet h e Operator’sestimateofthea mountrequiredfromeachPartytoenabletheOperatortod e f r a y thenetcashpayment,beingcashpa ymentlesscashreceipts,dueincashcallmonthunderobligationsproperlyincurredbyoperatorinconn ectionwiththejointoperations,authorizedoperationsandsoleriskoperations(ifany)separately. Thisthesisonlyfocusesonthejointoperation.

Thedevelopmentperiodstartedin2009withthemainscopesincludingfeeddesign,engineering, procurement,construction,installation,commissioning,tie-inandhook- upof0 2 drillingplatform,01processingoverheadplatform,03subseapipelinesand01floatingstor ageoffloading(FSO)

Operationperiodstartedin2013,theproductsoftheprojectincludinggasandaccompaniedconde nsate.Gasexploitingfromoilfieldafterbeingproceedatoverheadp l a t f o r m istransferredtoexportp ipelineforselling.AccompaniedcondensateafterexploitingisdirectlytransferredtoFSOforselling. Explorationperiodworksthroughtheprojecttimeto(i)provideinstructionandinformationonsei smicorgeologicaltodrillingcampaignandexploitingoperationaswella s (ii)explorenewoilfields. 1.2 Branchof P V N - ExternalServiceDivision

In2011,ABPOCwasauthorizedbyPVGAStoconducta26inchgasexportpipelinesystemfro mBDPOCplatformto2 ndNam ConSonPipelineswith3%managementfeewhicharepaidaftercomplet ionofthescopeofwork.

In2016,authorizationcontractcameintoclosingoutandmakingpayment.Inthesameyear,A BPOCwithanapprovalfromPVNestablishedanExternalServiceDivisionast h e branchofPVNw hichthemainpurposesare

(ii) Toseekforopportunitiesforexternalsupplyingservicecontracts.Companyw i l l hireitse ngineerswhichhave3weeksoffaftercompleting3weekworkingo f f s h o r e forext ernalcall-outjobs.

(iii) Tooptimizeinternalresources.Forexample,useinternalmanpowerinsteadofout- sourcingformaintenanceworks.Companywillhireitsengineerswhichh a v e 3weeks offaftercompleting3weekworkingoffshoreforinternalcall-outjobs.

SYMPTOMCONTEXT

FINANCIALSTATEMENT

IntheroleofbranchofPVN,ABhasestablishedtheexternaldivisionwhichbegant o operatesi nce2015andhaditsownfinancialreportssince2016.Lookingattheincomestatementofthedivisionfor threeyear2016,2017and2018,theyallshowthatthedivisionh a d nodirectexpenses(especiallylabor costandmaterialcost),thereportsonlypresentsindirectexpensesincludingtravellingexpense,works hopexpense,etc.AccordingtotheresearchofGunn 12o n thegoaloftaxaccounting,thereportsofthecom panymayviolatetheprincipleofmatchingofcostsandrevenues.Forthisreason,itcanbesaidthefinanc ialstatementoftheexternaldivisiondoesnotcorrectlyreflecttheactualexpensesofthedivision.

Expense(milVND) Reven ue(M ilVN D)

ACCOUNTINGDOCUMENTS

On29December2000,theMinisterofFinanceissuedDecision218withdetailedregulationsont hepreservationofaccountingdocuments 5 Anyexpensesandcostsrecordedi n accountancyneedss upportingaccountingdocuments.AccordingtoCirculars200,accountingdocumentarepapers,acco untingdocumentistheoriginaldocumentsthatillustrateatransactionhaveoccurred.O r i g i n a l rec ordswhichevidenceafinancialtransaction,suchasdebit/ creditmemos,invoices,receipts,ordersandvouchers.Anaccountingdocumentistheoriginalrecor dcontainingthedetailstosubstantiateatransactionenteredinanaccountingsystem.

Acompany'saccountingdocumentsforitsmonthlypayrollaretheemployees'timesheets.Torec ordlaborcostofthedivision,thedivisionislackingofpaperssuchasapprovedtimesheetfrommanage r.Itcausesnolaborexpenserecordedinfinancialstatementofthecompany.

Amanufacturer'sproductionrecordswillalsoincludesourcedocumentssuchasmaterialsrequis itionforms.Amaterialcostrecordswillincludessourcedocumentssuchasc a l l outrequest,materia lissueticket,invoice,purchasingcontract.TheDivisionisdifficulti n prepareappropriatepapersacc ordingtotheinventorymanagement.

AccordingtoMr.Hoàng,heisdifficultinpro-ratingcostsbetweenthecompanyand thedivision.Maintenanceworksofdivisionareconductedbycompany’soffshoreengineersf o r equ ipmentofcontractorlocatedontheplatformofABCompany.Costformaintenanceo f equipmentof contractmustbechargedtothedivision.However,engineersdonotdistinguishwhichequipmentofc ontractorandtheoperator.Theyuseconsumablestomaintainequipmentofboththecompanyandcont ractoratthesametime.Andthen,costsf o r maintainingequipmentarechargedtothecompany.Therei snodocumentrecordforthecostofthedivision.

Allassetsincludingplatform,equipment,officeandhumanofoperatorarecontributedbybothP VNandGPthereforeanyprofitafterliabilityshouldbesharedaccordingtoinvestmentpercentagerathe rthanonlytransferredtoPVN.OrelseallcostsoftheDivisionshouldbeseparatedanddeductedfromth ecostoftheOperatorasstipulatedinthepolicyasDivisionhastoseparatelymonitorandrecordtheirown expenses.Inactually,costshave notallocatedfortheDivisionsuchascostofmanpower,material,administrationalexpenses,…

- ABCompanyistheoperatorwhoishiredbyPetroVietnamandGazprom,thepartiescan changeotheroperatorifABcompanydoesnotworkunderagreements,policiesandpro ceduresassetandinitialapprovedbyparties.

- ABcompanymayfacelegalproblemswhenStateauditand3 rdparty auditcan figureoutmistakesrelatingtoproceduresandpolicieswhichthecompanydoesn o t comp lywith.

WORKCONFLICTSANDUNSATISFIEDEMPLOYEES

Pursuanttotheprocurementandcontractmanagementprocedureofthecompany,commerciala ndcontractdepartmenthasmainfunctionofpurchasingandrentalofgoodsa n d servicesand/ orotherequipmentofABCompany.Inadditiontoenteringintothecontract,thisfunctioninvolvesthe invitationofbiddertoregister,submitbidproposals,negotiationwithbidderandcontractsignature.I nexternalservicedivision,membersoftheDivisionarecurrentlyperformingthepurchasingofgoodsa ndservices(preparingbids,negotiatingwithvendors,signingthecontracts)whichisoutofresponsibil itiesasstipulatedi n theDecisionofestablishmentofexternalserviceDivision.

“Ihaveneverdonethetenderandbidbefore.Ihavenotbeentrainedontendingandbiddingbutn o w Ihav eto dothebid”

InterviewMs.CẩmshowsthattheABCompanyhascommercialandcontractdepartment(“C& C”)whichisinchargedintendingandbidding,howevertherenoC&C’semployeesappointedastheme mberofDivisionsotheyrefusetoworkjobsrelatingtotheDivision.Eventhough,thedeputyC&Cdire ctor,whomustberesponsibleforpurchasingaccordingtoprocurementpolicyofthecompany,donotre viewandsignpurchasingofDivision.

Divisionmembershavenoexperiencesinpreparingtendering/bidding/ contractdocumentforpurchasing.BeforeworkingasaplanningofficeroftheP&Pdepartmentandme mbersoftheDivision,Ms.CẩmhadworkedassecretaryforOperationdepartment.Itcausesthatpurch asingprocedureisnotcompliancewithprocurementprocedureoftheABCompany.

Theinterviewshowsthatmembersofdivisionhavedifficultiesinworking.AccordingtoMcCullo ugh 14 ,responsibilityofmanageristotraintheiremployeesforwellperformance.S t a f f s cannotbe expectedtocarryouttheworkwellwithouttraining.Trainingmustbeundertakenforoneofthefollowin greasons(i)staffsaredoingtheworksincorrectly(ii)s t a f f s cannotdotheworksatall(iii)staffscannot dotheworkwellenough.

Moreover,employees’performanceisjustgoodwhentherightpersonisassignedfort h e rightjo b,andtherightjobisdelegatedfortherightperson 15

PROBLEMIDENTIFICATION

Manpowercost

AccordingtoMs.Cẩm,thenewdivisionincludesninememberswithorganizationc h a r t asbelow.Thesepersonswillmanagethedivision’sgeneralaffairs.Relatingtothemaintenancew orks,theywillbeconductedbyalternateengineersoffshorewhoarenotincludedinthedivisionma npowerlist.

Contract&com mercialManager HR&AdminManager

Figure3:Externaldivision’sorganizationchart AllmembershavetheirownexistingaffairsasjobdescriptionsintheroleoftheOperator,beside stheyalsotakepartinnewaffairsfromthenewestablisheddivisionwhichi s externaldivision.M o n t h l y allmembersofthedivisionfillintheirtimesheetonline(Attachment3_formoftimesheet),there isarownamedOTHERPROJECTwheremembersofexternaltofillintheirtimelineforexternaldivis ion.AccordingtoMs.Cẩm,peopledonottimelinethetimeforthedivisionbecausethedivisionhasnoc learpolicyfors a l a r y paymentandtheDivisionhasnoguidanceonfillingtimesheet.Currently,sal ariesofmembersofdivisionarepaidandrecordedinmanpowerexpensesoftheOperator.

“ThemanpowercostcannotbeallocatedtotheDivisionbecauseeachmembersofthedivisionsignedlaborco ntractwiththeAB Companyin theroleasBranchofPVNwhichthebranchcan domanyj o b s otherthanthejoboftheOperator.”

“Ihaveconfused howtotimelinemytimesheet,whethermysalarypaymentiseffectedifItimelinemytimeforotherproject,whiletheDi visiondonothaveclearpolicyforsalary”

Materialcost

AccordingtoMr.Hoàng,“procurementandstockofmaterialofDivisionisreferredtot h e Operat ors’policy”thatmeanstheDivisionshouldannuallysetthematerialprocurementp l a n toclearlyhave theirownmaterialformaintainingexternalworksoftheDivision.

However,actuallytheDivisionisusingmaterialofOperatortoperformthemaintenanceworksbecau setheDivisiondoesn’thavetheirmaterialmanagementsystemandtheirclearprocurementandmateri almanagementsystem.Theycannotprocureorstoretheirownmaterial,asabovesaidtheDivisionhast ofollowOperator’spolicywhichiscomplicateda n d notsuitableforasmalldivisionlikeexternalse rvicedivision.Forthisreason,from2 0 1 6 theDivisionhascarriedoutseveralmaintenanceactivities buttheyhavenotprocureda n y materialbutborrowedfromtheOperator.Noclearpolicyformaterial managementp o l i c y betweentheOperatorandDivisioncausesallmaterialcostrecordedintoOp erator’sexpense.ThattheoffshoreworkswerenotclearlybreakdownbytheDivisionleadsengineers carriedoutthemaintenanceworksdidnotsplitorrecordactualmaterialsusedforDivision’sjobandO perator’sjob.

Policyand proceduredevelopment

P&Pmanager,memberofthedivision,thedivisionwasestablishedinJul2015butuntilbeginningof2016,thefinalizedpolicyandprocedurefort h e divisionwaspublishedwithmosttermsandconditions referredtotheexistingofpolicy ofthecompanyAccordingtoMr.TuấnAnh,themainpersoninchargeincomposingthispolicy.

Forthisreason,mosttermsinthepolicyarereferredtothecurrentpolicyoftheOperatorwhichisto ocomplicatedforthesmalldivisiontoapply.Theexistingpolicyisseto u t fortheoperator(Operator ofPVNandGP)whilethedivisionoperatesasthebranchofP V N position. a Policyandproceduredevelopmentprocess

BasedoninterviewofMr.TuấnAnh,theprocessofdevelopmenttheexistingpolicya n d proc edureoftheDivisionissummarizedasfollows:

Step1:Mr.TuấnAnh(P&Pgeneralmanager– memberoftheDivision)composedad r a f t ofthepolicyandprocedure.

Step3:Afterdepartmentshadrevisedandmodifiedtheirparts,hefinalizedandsentt h e policy andproceduretogetdirectors’approval.

Afterlisteningtothestepsofpolicyandproceduredevelopment,theauthorh a d taken themoredetailedinterviewsandknownthatduringthepolicyandproceduredevelopment: i) nomeetingwasheldbetweendepartments, ii) noteamwasestablishedtopreparethepolicyandprocedure iii) nocommentandreviseafterthefirstfinalization. b DifficultiesinapplyingthecurrentpolicyandprocedureofDivision

Otherproblemonpolicyisthatthereisnoclearpolicyrelatingtoallowancescompensatingtodi visionalpersonnelaswellasguidancefortimesheetfilling.Forthisreason,personnelhavetoworkboth exitingjobanddivisionalbusinesswithoutanyallowanceswhiletheDivisiondoesnothaveanysourc edocumenttorecordtheirlaborcost.O n anotherhand,thisunclearpolicyandprocedurecausesempl oyeesworkwithoutmotivationanddissatisfaction.

PursuanttoMs.Cẩm,thedifficultiesofthedivisionisalackofclearanddetailedp o l i c y andpr ocedureswhichcausethecostofthedivisioncannotberecorded,thecurrentcostsonlyrelatestoworks hop/entertainment.Material,equipmentanddirectmanpower costsofthedivisionaloperationtomaintainthecontract’ssystemcannotbeseparatedfromt h e exis tingcompanybusinessbecausethereisnoofficialpolicyforthedivisiontorecordt h e s e costs.

Problemdefinitionandconsequence

Thepoliciesofanorganizationaretheclear,concisestatementsoftheparametersbywhichano rganizationconductsitsbusiness.I n essence,thepoliciesaretherulesthatstaffa b i d e byastheyc arryouttheirvariousresponsibilities.

Theproceduresaretheinstructionsorstepsthatdescribehow tocompletea taskor doa job.Proceduresareimportantwhenadeviationfromtheprocesswillresultinreworkorap o o r l y doneproduct,orforahighlycomplicatedandcomplextask.Proceduresbecomeoverkillwhentheyarecr eatedforsimpletasksortasksthatcantrulybedoneeffectivelyin avarietyofwaystoachievethesameoutcome.

Policiesandproceduresareessentialforanorganizationtokeepeveryoneoperatingf r o m t hesamecoreprinciplesandcompletingtheirtasksinthewaythatassuresasound,dependableprod ucteachtime.T h e onlycautionincreatingasetofpoliciesandprocedures:becarefultoavoidoverk ill.

Policiesandprocedurescanhelppreventworkplaceincidentsbymakingsurethepropersafetyme asuresareinplace.Ifanincidentdoestakeplace,goodpoliciesandprocedureshelprighttheshipandge toperationsbacktonormalasquicklyaspossible.

Policiesprovideframeworkandstructurefortheorganization.Everycompanyhasas e t ofpoli cywhichstipulatesandcoversmanyareasofthecompany.Whenconsistently enforced,theycontributetothedevelopmentofthecompanyculture.Iftheorganizationhasstrongpoli ciesonethics,forinstance,theycanhelpinstilltheimportanceofintegrityandethicalbehaviorsinempl oyees.Policiesalsoserveasawayformanagementtocommunicatebehavioralexpectationstoemploy ees.Goodpoliciesreinforcepracticesthatb e n e f i t theworkplaceandcustomers;theydon'tarbitr arilyandunnecessarilyrestrictemployeefreedomsanddecision-making.

Anotherdefinitionofpoliciesandproceduresisthatpoliciesandproceduresaredesignedtoinf luenceanddetermineallmajordecisionsandactions,andallactivitiestakep l a c e withintheboun dariessetbythem.Proceduresarethespecificmethodsemployedtoexpresspoliciesinactioninday-to- dayoperationsoftheorganization.

Policiesandproceduresaremeanttoprovideguidanceandclaritysothatemployeesh a v e an understandingofprocessesandguidelinesfortheirwork.U n c l e a r policiesandprocedurescrea teconfusionduringimplementation.Thereisalsothepossibilitythatthep o l i c y andprocedures aretoosimple;thatis,theyaretoobroadandgeneraltosuitas p e c i f i c situation.Ifyourprocedur esarenotdirectlytothepointanddonnotofferinformationspecifictotheprocessemployeesarewo rkingon,theywillnotbeused.

Currently,theDivisionisusingassetsandhumanresourceoftheOperator.Alltheseassetsofthe operatorwereinvestedbybothPVNandGPthereforeprofitsafterliabilityshouldbesharedaccordingt oinvestmentpercentageratherthanonlytransferredtoPVN.

Operationoftheexternalsupplyservicedivisionwiththeunclearprofitsharingpolicya n d witho utapprovalfromGPwillleadnegativeimagewithGPiftheyareawareofthisoperation.GPcantermina tetheagreementforABCompanytobeanoperatorofthisprojectbecauseABCompanyhasoperatedth eprojectnotincompliancewiththeagreementoftheOperator.

Page24 Hoang TuyetMai_Thesisfor Master ofBusinessAdministration

Not enough accounting and procurement document

Initialeffectmap

Page24Hoang TuyetMai_Thesisfor Master ofBusinessAdministration

CAUSEVALIDATION

Problemduringinitial policyandproceduredevelopmentofthedivision

Somestudieshaveprovedthatanalysisandresearchareanimportantpartofp o l i c y devel opment.Thepurposeofanalysisandresearchisforissueidentificationandp o l i c y definition.A nalysisandresearchhelptoidentifywhetherlegislativeorotherexternalregulationswillimpactont hepolicyproposal.

Thisstepwillhelpthepolicymakerunderstandcurrentpolicies,exitingissues,a r e a s req uiredtoputintothepolicysoastoreducingexpenditureandneedlesstimeandconsistency.Inthecas eofthedivision,theauthorfocusestoanalysisthelackofunderstandingorcurrentpolicyandproced ureofthecompany.Itleadstotheinconsistencebetweentheexistingpolicyofthecompanyandthep olicyofthedivision.

“Thecompanyhas alotofpoliciesandprocedures,eachdepartmenthastheirownpolicies andprocedures”and

Thatthecompanyandeachdepartmenthavemanypoliciesandprocedurescausingd ifficultiesinpreparingthepolicyandprocedureoftheDivision,onlyonepersoninchargecann otunderstandallissues,requirementsandproceduresofother

Page26HoangTuyetMai_ThesisforMasterofBusinessAdministration departments.Tomakeapolicy,thepolicymakersmustunderstandthecurrentcompanyp o l i c y andprocedure.Thiswillensurethatthenewprocesswillnotquicklybecomeobsolete 12However, inthe caseoftheDivision,Mr.TuấnAnh,thepersoninchargeofdevelopinganewpolicyhavealimitedun derstandingcurrentpolicyandprocedureofthecompany.Theseissuescausedthenewpolicyofthed ivisioninconsistentwithrelatedp o l i c y ofthecompany.

Proce dur e for la bor cost:

AccordingtoMs.Cầu,legalbasisforemployeesworkingfortheOperatorcanc a r r y out worksofthedivisionisnotidentified.EmployeessignthelaborcontractswithA B Companywhois theoperatorofABproject.Itisnotcompliancewiththeparties’agreementsifABCompanyusesthes estaffsfortheirownbenefitofABCompany.Thep o l i c y makersneedtoanalysisandresearchtoc learlystipulateandguideuserstheimplementationoffillingtimesheetaswellasrecordinglaborcos t.

AccordingtoMr.Hoàng,materialutilizedfortheDivisionwaspurchasedbytheOperator atthebeginningoperationofthedivision.However,supportingdocumentsfort h e s e materialsw erenotsuppliedbecausethepolicyofthedivisiondoesnotclearlystipulateprocedureformaterialu singsoasmaterialofthedivisionwasnotrecorded.

AccordingtotheDivision’spolicy,materialandinventorymanagementisr e f e r r e d toi nventoryandmaterialoftheOperator.However,theoperatorhastheirownsystemtomanagemen toffmaterialandinventory,whiletheDivisionhasnosystem.Itl e a d s todifficultiesinmaterial andinventorymanagement.

Understandingpolicyprocessesisrelativelycomplexduetomultifaceted setofinteractingelements 16 AccordingRathe 17 ,theotherissueinpreparingpolicyandprocedure isthatthepolicyleaders,responsibleforpolicy- writingprocedurearelimitedi n theareaofunderstandingoftheissues.

AccordingtoShockley 7 ,themoredetailedandprescriptivepoliciesandpractices become,themoretheorganizationcommunicatesadistrustofstakeholders.Thepolicyoft h e Divi sionistoogeneralandnotspecificcausingdifficultiesduringthe implementation.Divisions’membersareconfusinginapplyingthepolicy.

Thatthecurrentpolicyofthedivisionisgenerallystipulatedandmuchreferredtot h e curre ntpolicyofthecompanywhichcannotbeappliedcausedifficultiesinrecodinga n d bookingexp ensefortheDivision.

AccordingtoMs.Cẩm,difficultiesofthedivisionwhenpreparingpolicyandprocedureisth attherearenocompanyinbothpositionsofOperatorandBranchlikeABCompany.Forthat,thereis nopolicyandproceduretobereferred.Therearemanyagreementswhichcompanymustbecomplie dthereforeitiseasyfortheseagreementandp o l i c y tobeconflictedeachother.Thepolicyonlystipul atesgeneraltermandalmostr e f e r r e d tothecurrentcomplicatedpolicyandprocedureofthecomp anywhicharenotsuitablefortheDivision.

ThroughtheinterviewMr.Phong,toavoidquestionsfromGP,currentlyABhasn o t infor medGPtheoperationoftheDivision.Goodcommunicationbetweenrelatingpartieswillgiveano penpolicyandclearoperationmechanismfortheDivision.Thec l e a r andtransparentinformati onwillsupporttheDivisionwhenallocatingexpenseandcost.Themorepoliciesandproceduresem poweremployeesto"dowhatisright,"themoretrustissupported 7

Mr.TuấnAnhquoted“nomeetingwasheldduringthepolicyandprocedure developmentandthereisnoteamestablishment”provethelackofcommunicationaswella s identifi cationoftheresponsibilityofpersoninchargeduringformulationprocess.

AccordingtoRandolph,Susan 2 ,firststepistodeterminewhowillinvolveand assistintheprocessbywhichtheDivisioncandefinetheresponsibilityofeachpersoninwritingthep olicy.Themoreexperiencedpersonsinvolvesinwriting,themoreeffective policyandproceduresare 7.By whichpeoplecansharetheirknowledgeandexperiencerelatingtotheirf ields.

AccordingtoMr.Hoàng,nomeetingordiscussionisheldtoreviewandcommentthep o l i c y andpr ocedure.Peoplealmostagreedwiththedraftversion.Theformulationprocesslackedofthecrossche ckbetweendepartmentscausingconflictduringtheimplementation.

Lackofperiodicalreview,updateofpolicy

AccordingtoRandolphandSusan 2the policyandprocedureshouldbereviewedp e r i o d i c a l l y andthecompanyshouldsetupaspecifiedtime(suchasannually,quarterly…).Anoutdat edprocedureisthesameasnoprocedure 12defines reviewofpolicy/ procedureasimportantasprepareanewpolicy/procedure.

“Theboardofacompanyanditsseniormanagementteamneed tobecommittedtocreatingtheappropriateculturebyregularlymonitoringandreviewingthepoliciesandprocedur es;undertakingregularandthoroughriskassessments;updatingthepoliciesandprocedurestoaddressanyfinding s;andclearlycommunicatingthesepoliciesandprocedures”

Throughtheinterview,itisknownthatthepolicyoftheDivisioniseffectivesince2016.The depthinterviewwithMs.CẩmandMr.HoangshowedthatthepolicyandprocedureoftheDivisionha venotbeenreviewedalthoughtherearesomeproblemoccurredduringtheoperationofDivision.L ackofthespecificfinancialprocedurecauses manycost,expensecannotberecordedbytheaccountingdepartment.Lackofthes p e c i f i c pr ocurementprocedurecausesmuchmaterialandequipmentcannotbeboughtf o r theDivision.L ackofhumanandresourceprocedurecausesmemberofDivisioncannottimelinetheirworkingti meandtheallowancecannotbepaid.

“Considerreviewinghiringpoliciesandpractices,performancefeedback,compensation,disciplinar yprocesses,benefits,vendorpoliciesandpractices,customer/ clientrelationships,financialreporting,mediarelations,andconfidentialityofprivateinformationtoensureth attheseorganizationalpoliciesmeettheabovecriteria.”

Developasystem toregularlyreview,modify,andupdatepoliciesandproceduresi s veryimportant.Policiesandpr oceduresshouldbereviewedp e r i o d i c a l l y b a s e d o n a s p e c i f i e d t i m e frame 2t o up datec h a n g e s a n d h a v e a p p r o p r i a t e modification.N o n e o f itemsorsectionsinDi vision’spolicyreflectsidentificationwhenandhowtoreviewthepolicy.Outdatedpoliciescan leavethecompanyatrisk.Oldpoliciesmayfailtocomplyw i t h newlawsandregulations.The ymay notaddressnewsystemsortechnology,whichc a n resultininconsistentpractices.

Inmostcompany,thereisoftennospecificcommunicationmethodforadvisingo n poli cymatters,noristherearepositorywheretheyarestored 4which causesoutofd a t e ofpolicyandconf lictduringusingthepolicyandprocedure.

Page31 Hoang TuyetMai_Thesisfor Master ofBusinessAdministration

Financial statement does not reflect adequate expenses

Problem on initial policy and procedure development

Lack of periodical review, update of the policy

Lack of communication during policy formulation process

Too general policy and procedure

Lack of analysis and research before policy development

Updatedcauseandeffectmap

Page31Hoang TuyetMai_Thesisfor Master ofBusinessAdministration

Problemo f initialp o l i c y a n d proceduredevelopmentc a n b e r e s o l v e d duringperiodicalreviewandupdateofthepolicy.Toavoidtheseproblemscontin uingtooccurduringthereviewprocess,thecompanyshouldcarefullyanalysistheissuesofthep olicya n d procedureaswellaswellcommunicationduringthereviewpolicytohaveac o m p l e t e l y policywhicharesuitableandapplicable.

Thecausesduringinitialpolicyandproceduredevelopmentareanalyzedtoseekf o r reasonscausingunclearpolicyandprocedureoftheDivision.Althoughthisperiodw a s passed,itis usefulforthereviewperiodto figureouttheseissues.Thereviewperiodi s onlyeffectiveandapplicablewhenitsolvesexistin gissuesoftheinitialdevelopmentperiodincluding:

Thep e r i o d i c a l r e v i e w o f t h e p o l i c y w i l l h e l p t h e c o m p a n y t o m o d i f y r e q u i r e d changesofthecompanyaswellasreviewandmodifyexistingissuesofthepoli cyandprocedure.Fromthis,themaincauseoftheunclearpolicyandprocedureoftheDivisioni s t o solvet h e issueo f l a c k ofperiodicalr e v i e w o f t h e p o l i c y a n d procedure.I n t h e solu tion,based on information fromliteraturereview as wellastakinginterviewstaffsofDivision,theauthorwill figure outalternativesolutionfor themaincause oftheproblemo f lackofperiodicalreviewandupdateofpolicyandprocedure.

Page33 Hoang TuyetMai_Thesisfor Master ofBusinessAdministration

Financial statement does not reflect adequate expenses

Lack of periodical review, update of the policy Unclear policy & procedure

Finalcauseandeffectmap

Page33Hoang TuyetMai_Thesisfor Master ofBusinessAdministration

SOLUTION

Improveanalysisandresearchandenhancecommunication

AccordingtoATCA,policiesandproceduresareonlyaseffectiveastheyareablet o beap plied,andthereforeknownandunderstoodbyallrelevantpersonnel,andr e g u l a r l y reviewed and/ orupdated11.Tohelpotheremployeesfromotherdepartmentse s p e c i a l l y newcomersunder standingpolicyandprocedure,itissuggestedthateachdepartmentshouldpreparepresentationsor asummarytointroduceandguideandtraint h e i r procedurestorelevantpersonnelaswellasnew comers.Thepresentationincludesinformationasbelow

- Thecontactpointforenquiries AccordingtoRandolphandSusan 2 ,theteamforpreparingpolicyandprocedureshouldbed etermined.Byworkingtogether,teammemberscanlearntowriteeffectivepoliciesandprocedures, engageinbroader,creativethinking,andsupporttheteamconcept.Mr.TuanAnhagreedthattheDi visionshouldestablishapolicywritingteamw i t h membersfromdifferentdepartmentswhounde rstandpolicyandprocedureoftheirdepartment.Theestablishmentofthepolicymakerteamwillhel pthedecisiontosolveb o t h problemsoflackofcommunicationduringpolicyformulationproces sandlackofunderstandingcurrentpolicyofthecompany.

Gettingtherightmembersinvolvedinwritingpolicyandprocedureiscrucialtosuccess.Tra cy12suggested therequiredplayersincluding

- A"champion"toprovideoverallprojectdirectionandsupport,allocateresource s,actasaliaisontoseniormanagementandmanagetheareat h e policy/ proceduremostaffects.

- Ateamthatconsistsofacross- functionalgroupofindividualsdirectlya f f e c t e d bythepolicy/ proceduretoprovidefeedbackon thepolicy/ procedure.Teammembersmayhaveknowledgeofcurrentpracticesandcoul dbetheultimateusers.Theywillbeaccountableandresponsibleformaintaini ngcomplianceforthe newpolicyandprocedure.

PursuanttothecurrentpolicyoftheDivisionandspecifyinterviewMr.TuấnAnhtoc l e a r identify responsibilitiesofwritingmembers.Theauthorsuggeststoaddtheresponsibilitiesofwritingme mbersasapartofestablishmentdecisionofthepolicymakerteamasbelow.Whentheworksandres ponsibilitiesareclear,iteffectivelyenhancesthecommunicationduringpolicyformulationproce ssduringworkingbetweenmembersofthedivision.

Writingmemberfr omdepartment Responsibilitiesinpolicywriting Coordinatingdepa rtment

C&CDept C&CDept,OPSDeptC& CDept,OPSDept

P&PDept P&PDept,OPSDeptP& PDept,OPSDept

Admin&HRDept  ToprepareSectionVI–HRand P&PDept

Finally,thesolutionforlackofcommunicationduringpolicyformulationprocessa n d lack ofunderstandingofcurrentpolicyandprocedureofthecompanywillbesolvedw h e n thedivisionis toestablishapolicymakingteamwithmembersfromvariousdepartmentswhoaredepartmentalrepr esentativesandcomprehensivelyunderstandthep o l i c y andprocedureoftheirdepartment.Thistea missuggestedtoperformthe periodicalreviewofthepolicyandprocedureofthedivisionforeffectiveimplementationo f thepolic y.

 Step3:AfterBODapprovedontheestablishmentofthepolicywritingt eam,theprojectandplanningdepartmentwillissuethedecisiontodepar tmentsfortakeaction.

Improvetoogeneralpolicyandprocedure

Currently,policyandprocedureofthedivisionmostlyarebasedontheexistingprocedurean dpolicyofthecompanywhichcausesomeconflicts.Thecurrentlypolicyist o o generalwhichneedt obemorespecifiedandclearly.Proceduresaremorelikelytoberequiredtosupportthegeneralpoli cy 3 TheDivisionshoulddevelopmoreproceduresattachedwiththegeneralpolicytoguidetheuser swhatwaytocarryoutthework.Basedo n thecurrentpolicy,theDivisionshouldreviseandimplem entseveralproceduresrelatingtofinance,humanresource,procurementandinventorymanagemen twhichare simplerthanthecurrentprocedureoftheOperator.AuthorworkedwithMr.TuấnAnha n d sugge stthesolutionsforthisissuesasbelow

Ingeneral,theexistingcommercialprocedureofthecompanyisacomplicatedprocedur ewhicharereviewedandapprovedbypartnerswhicharesuitablefortheOperator.Thedivisionsho uldimplementitsownprocurementpolicywhichisbasedont h e companypolicyandsuitablewit hdivision’scharacteristicandoperatingmechanismt o ensurealloperationincompliancewith laws,partners’agreementandcompanypolicies.Procurementpolicyshould

Ininterviewingsolutiontoreduceconflictsofresponsibilitiesonprocurementaffairs,Mr.Phongs uggestedtoreviewthepolicybyaddingprocurementprocessprocedureintothecurrentpolicyinwhi ch

Tenderplanandbiddinginvit ationdocument,awardreco mmendation,contractamen dment(>10%)reviewandapp rovalbytendercommittee

Tenderplanandbiddinginvit ationdocument,awardreco mmendation,contractamen dment(>10%)reviewandapp rovalbytendercommittee

PVN:ReviewandapprovalofTe nderplan,biddinginvitationdo cument,awardrecommendati onandcontractamendment(i fthecontractvalue>10%)

DivisionManagertofigureoutthesolutionf o r humanresourceforDivisionaswellassolutionforl aborcost.Mr.Phongagreedthatl a b o r costoftheDivisionshouldbeseparatedfromthelaborcos toftheOperator.Thep o l i c y shouldalsoregulateand

Firstofall,heagreedtoadd01C&CemployeeastheDivision’smembertol e g a l l y carryo utcommercialworkstosolvetheproblemofunsatisfiedemployees.Witht h e experiencedcomm ercialemployeewhounderstandstenderinglaw,procurementprocedureofthecompany,purchasi ngofthedivisionwillbemorecompliancewithlaws.

PolicyofDivisionwilladdregulationrelatingtoallowanceofpersonalsattendingDivisio n’saffairs.AllpersonalswhoperformDivisionworkswilltimelinetheiractualworkingtimenoton lymembersoftheDivision.Thisallowanceisthebasisforlaborcost allocationbetweentheOperatorandDivision.Thesuggestedallowancerateis30$perd a y equal tothecurrentrateofincreasingallowanceresponsibility(phụcấpgiatăngt r á c h nhiệm)oftheco mpany.Theactuallaborcostwillbecalculatedbasedonthepro-dat abasis.

Step3:BasedontheactualworkingforDivision’saffairsandtheallowancerate,accountant willallocatelaborcostintothephaseofOperatorandDivisionaccordingly.

 Policymakingteamwillbeinchargeforreviewingandmodifyingthep o l i c y in cludingprocedurerelatingtoprocurementandhumanresourcea n d compensat ion.

 Foraddingonemorecommercialmember,P&Pdepartmentneedstopreparead ecisiontoaddcommercialstaffasdivision’smember.Thisw o r k shouldbeper formedassoonaspossiblebecausethismembercanp e r f o r m currentpurchasin gworksfortheDivision.

Step1ANALYSIS:policymakingteamneedstoreviewthecurrentprocurementpolic yofthedivision,takinginterviewusersorconductameetingtoseekf o r (i)issuesthroughimple mentationanduseofthepolicy,

(ii)toogeneraltermswhichn e e d todomoredetailedinstructions,and(iii)considerlegislativeis sues

 amechanismotherthanpolicyprocess Atthisstep,aftercollectingandanalysisinformationfromusers,linemanagersaswellasdirectors,t hepolicymakingteamwilldecidewhetherthepolicyneedtobereviewedandtheywilltakeresponsibi litytoreviseandimplementation.

Step2RESEARCH:Thepolicymakingteamwillanalyzeanyrelevantinformationthat couldinformthepolicydevelopmentandreviewastowhetherarule, policy,procedureand/ orguidelineisrequiredandthedegreetowhichitaccordswithDivision’sactivities

Step3DRAFT:Thepolicymakingteamwilldraftamendmentsoftheexistingp o l i c y b asedoncollectinginformationfrominterviewing,researchfrommaterials.

Whentheyhavefinishedthedraft,thedraftwillbesubmittedtothecompany’sdirector,d ivision’smanagerandlinemanagersfortheirreviewandcomment.

Thepolicymakingteamwillberesponsibleforensuringthepolicyisregularlyreviewedandt hatthetimeframeforreviewisappropriateforaspecifictypeofpolicy.Reviewdatesshouldbeassig nedbythepolicymakingteaminconsultationwithdivision’smanager.

Periodicalreview,updateofthepolicy

Besidessolvingtheabovementionedsolutions,themainsolutionoftheunclearp o l i c y a ndprocedureoftheDivisiononlysolveswhenitisperiodicallyreviewedandupdated.Thepolicyand procedureareonlyusefulwhenitcanmodifydifficultiestof a c i l i t a t e usersaswellasupdatecha ngesthecompanyforthepolicyisappropriatewithcompany’ssituations.

Regularlyreviewingpoliciesandprocedureskeepsyourorganizationuptodatewith regulati ons,technology,andindustrybestpractices.Policyreviewensuresthatyourpoliciesareconsistenta ndeffective.

Reviewingpoliciesandproceduresisespeciallyimportantforhigh- riskorhighlyregulatedindustriessuchashealthcare,publicsafety,banking,andmore.Butorgan izationsineveryindustryshouldregularlyreviewandrevisetheircompanypolicies.

AccordingtoPapa 10there isnoclear-cutformulaonhowtoconductandcomplete thereview;howeverthereviewshouldconsideranycompliancemattersthatriseduringt h e wor kingprocessandanychangesmightrequiretorevisethepolicyandprocedure.M r TuanAnhagr eedthattheDivisionshouldaddSectionVII–Policyreviewand modificationintothecurrentpolicytoensurethattheDivision’spolicyandprocedurew i l l upd ateandmodifythepolicyandproceduresaccordingtothechanges.

AccordingtoTracey 12 ,policiesandproceduresreducetrainingtimefornew employeesbyprovidingaconsistentandfocusedapproach;thetrainerknowswhatisimportanttoc over,andtheemployeeknowswhatisimportanttolearn.

Policyandproceduresimproveproductivityandstrengthenoperationsbyprovidingauthoritativ estandards,ensuringcompliancewithregulatoryagenciesandacceleratingt h e decision- makingprocess.

TheComplianceProgramsRuleinresearchofPapa 10suggests thetwo-pronged approachinannualreviewofpolicyandprocedure.First,thepoliciesandproceduresshouldberevie wedtodetermine iftheyareadequate.Second,the reviewofpolicyandprocedureistoverifyiftheyareeffectiveinimplementation.

Allstaffsofthecompanyareabletosuggesttheideastoimproveandoptimizep o l i c y an dprocedureiftheyhaveanydifficultiesduringtheimplementation.TheAuthorinterviewedMr.Tu anAnhandresearchedstudiesandpapersbeforesuggestingtheprocessforpolicyandprocedurere view.Followingthat,Mr.TuanAnhsaidthat

“Thecompanycurrentlyhasoptimizationcardswithcontentsofinternalprocedureimprovement,saving initiative,productionoptimizationandotherideals&improvement.”

- Time:thisworkshouldbeperformedperiodically.Forthedivision,thereviewshouldb ecarriedoutannually.

First,thepreparingteamincludesmembersoftheDivisionwhoarefromvariousdepart ments.Theywillcollectalloptimizationcards(Attachment4)andmakeannualsurveyorsemi- annualsurvey,extensiveinterviews,discussionsanddeliberation 13t o verify suggestionsandtodetermineadequacyandeffectivenessofimplantationofthep o l i c y andp rocedure 10 Tobeanon- goingbasis,thewritingteamshouldincludingrequireddocumentsuchasoptimizationcards,checkl ist,interviewrecords,checklist, andminutesofmeeting 10 Duringtheevaluationoftheeffectivenessofimplementation,thewrit ingteamshouldconsiderandidentifyriskmanagementandinternalcontrolssystemsasaddresse dinitspolicyandprocedures 10 AccordingtoMs.

Cẩm,risksrelatingtoeffectivenessofimplementationofpolicyandprocedurescan i Violateprovisionsoflaws,tax,audits. ii Violateagreementsbetweenpartners iii Violatetermsincurrentpolicyandprocedureofthecompany

Thechecklisttherebyshouldaddtheaboveriskstoensuretheeffectivenessofp o l i c y an dprocedures.Theworkswillbeconductedinteamandrecordinginminutesofmeetingtofigureoutd iscussion,outcomesandresults.

Finally,issuesofpolicyandprocedureswillbecollected,writtenasareportwithcommentsandrec ommendations.Relatingandrequireddocumentsshouldbefiled.

Thewritingteamwillclearlyreportandpresentissuesrelatingtothecurrentp o l i c y andprocedurestoreviewingteam.ThereviewingteamincludesmembersoftheDivisionwhoare managersofvariousdepartments.Basedonfactorsofadequacyandeffectivenessaswellasriskma nagementandinternalcontrol,thereviewingteamwills e l e c t importanceissueswhichneedtob ereviewedandmodified.Afterdecidingtheimportantissues,thereviewingteamandwritingteam willfocusaroundrecommendationsforsolutionwhichshallbenumberedconsecutively.

Allreportsincludingissuesandrecommendationswillbesubmittedtoapprovalteamf orreviewandcomment.Basedoncommentsofapprovalteam,thewritingandreviewteamwillre viseandsubmituntilthefinalversionisapproved.

Afterthefinnalversionisapproved,thereviewteamwilllaunchthelatestandupdatedp olicyandproceduretoalluserswithremarksclearlypresentedthemodifiedissuesaccordingly.Ifther eareanynewpolicyandprocedure,thesummaryandguidelinew i l l beattachedtohelpuserseasily catchupchangesandmodification.

CONCLUSION

Literaturereview

Communicationisneithertransmissionofmessagenormessageitself.Itisthemutualexc hangeofunderstanding,originatingwiththereceiver.Communicationneedst o beeffectivein business.Communicationisessenceofmanagement.Thebasicf u n c t i o n s ofmanageme nt(Planning,Organizing,Staffing,DirectingandControlling)cannotbeperformedwellwithout effectivecommunication” 18

Policiesprovideframeworkandstructureforyourorganization.Whenconsistentlyenforced,th eycontributetothedevelopmentofyourcompanyculture.Ifyouhavestrongpoliciesonethics,forin stance,youcanhelpinstilltheimportanceofintegrityandethicalbehaviorsinemployees.Policiesa lsoserveasawayformanagementtocommunicatebehavioralexpectationstoemployees.Yourgui delinesalsoshouldconveyconsequencesf o r employeeswhoviolatecertainpolicies.Goodpolicie sreinforcepracticesthatbenefitt h e workplaceandcustomers;theydon'tarbitrarilyandunnecessaril yrestrictemployeefreedomsanddecision-making.

Account classification Approval authorities Agent practices Travel advance/expenditure

Employee compensate Statement and reports Cost reduction standard

Records vacations/holidays Employment termination Training

Employee relations Union relations Safety

Medical record Employee evaluation Management development

Procurement procedures Purchasing policies Receiving control Inspection procedure Procurement control Production planning/schedule

Capital items Property movement Lease and retails Inventories Absolute property Security

OrganizationMarketing policiesCustomer relationsDistribution policyCredit policyShipping procedureReturn goods policiesBilling procedure

Studymethod

Thisstudyusedsecondary dataandprimarydata.Secondarydatawascollect edf r o m reliablesources u c h a s previousr e s e a r c h e s f r o m o n l i n e academicw e b s i t e , d ocumentsfromgovernmentorganization,seminardocuments,trustedpapers,magazinesa n d e v e n s t a t i s t i c o f ABPOC.P r i m a r y d a t a w a s collectedbyconductinga qualitativeresearch, In-depthinterviews.

Name Positionintheco mpany Positionint hedivision Mainresponsibilities Workex perience Mr.Phong Deputydirectoroft hecompany

Ms.Cầu ChiefAccountant Member Manageandpreparefinancia lstatement 23years

Mr.Hoàng Engineer Member Toconductengineeringworkso fthedivision 21years

Ms.Cẩm Costcontroller Member Toconductadministrativework softhedivision

Interviewguide

- Greeting o Introduceabouttopic:difficultiesinimplementingpolicyandprocedureoft h e externalserviceDivision. o Interviewerintroduces o Discussioncouldbeanonymous,conversationwillberecordedandIhopeyou totallyfreetoshare

Foremployeesandusers o Howdoyoufeelaboutthepolicyandprocedureofyourcompanyandyourdivisionn ow?Safe,logical,lawful,…

Doyouhaveanydifficuliesinimplementingyourdivision’spolicyandprocedure? Why? o Haveyoueverdiscussedwithyourmanageraboutdifficultiesduringworkinga ndimplementingthepolicyandprocedure?

Doyouhaveanydifficultiesinpreparingpolicyandprocedure? o Wheredidyourefertowhenpreparingpolicyandprocedure? o Howi s t h e p o l i c y a n d procedurep r e p a r e d i n yourdivision? Whoi s t h e personi n c h a r g e ?

Foremployeesandusers o Doyouh a v e anysuggestt o i m p r o v e t h e p o l i c y a n d p r o c e d u r e o f t h e division? o ThankyourforyoursharinganddicussionFor managersandpreparingteam o Seekingf o r solutionf r o m managera n d t h e i r willingo f r e v i e w i n g a n d modificatingthepolciyandprocedure o Suggestiononsolutionforpolicyandprocedureofthedivision o Thankyouforthesharinganddiscussion.

Transcripts

5LeDuan,BenNghe,District1,HCMC Interviewer Mai

Interviewee Mrs.Cẩm–memberofexternalservicedivision,employeeofABC o m p a n y

GoodafternoonMrs.Cẩm,mynameisMai.I’mcollectinginformationform y mast erthesis.Canyouhelpmetofinishmythesis?

ThetopicwhichIwouldliketodiscusswithyouisaboutpolicyandprocedureofexte rnalservicedivision.Firstofall,canyoupleaseintroduceyourselfandyourpositioni nthecompanynow?

MynameisCẩm,IamworkingforP&Pdepartmentandmemberofexternalservice division.IhavebeenworkingforABcompanyfor6yearsa n d fortheDivisionsincei tsestablishmentin2016.Mymainaffairrelatest o reportsfortheOperatorandaffai rsrelatingtoresolvingremainingworkst o close26inchgasexportspipelines.

Thedivisionwasestablishedin2016withabout10personnelwhoarealmostline managers.Themanagerofthedivisionisdeputygeneraldirector,from2016- 2017thedivisionoperateswithoutpolicyandprocedure.Thepolicycommenced intoeffectivein2017,thecomposedp o l i c y wasreferredandbasedonthecurre ntpolicyofthecompany.

Cẩm No,Ihaven’t.Mr.TuấnAnhisthepersoninchargeofpolicypreparationo f thedivisi on.

Asyouhavesaid,thecompanyisthebranchofPVN,whatisthelegalb a s i s forthe division’soperation?Whatdoesthedivisionneedforlegalbasis?

ThecompanygotapprovalfromPVNfortheoperationofthedivision.Thebranchisa llowedtocarryoutexternalservice.However,themissionandvisionofthedivisioni snotclear.Thisleadtoinadequate.Forexample,

(1)someworkswereassignedtoinappropriatestaffswithoutexperiencer i g h t specialtyandwhowerenotconfidentincarryingoutthe works.Forexample,Ihaveneverperformedandtrainedthetenderingandc ontractworks.ButnowIhavetoworkreluctantly.

(2) Policyrelatingsalary,allowance,bonusofthedivisionisnotclear,st a f f s o fthedivisionworkwithoutcompensate.

Currently,themanagerofdivisionhaspreparedpolicyforthedivision;however,itw assometimesconfusedwhenapplyingthepolicybecausethen e w policyismostlyre ferredtocurrentpolicyofthecompanywhichsomec a s e s cannotbeapplied.

Mai Asyouhavesaid,theABcompanyisanoperatorforPVNandGP,wastheoperationof thedivisionacknowledgedandapprovedbyparties?

ThedivisionisoperatingwithpositionasbranchofPVN,thereforeABc o m p a n y hasnotannouncedtheoperationofthedivisiontoGP.Thebenefitsfromdivision willnotbesharedwithGPsotheyhavenotinformedandreportedthisoperation.Th ebenefitgainedfromthedivisioni s onlytransferredtoPVN.

ABcompanyoperateswithpositionasbranchofPVNandtheoperator;theyshoulda nnouncePVNandGPtheoperationofthedivision.Labor,materialcostsusingfort hedivisionarefromtheOperator.IfGPknowtheoperationofthedivision,thiswill beanegativeimage.Theycanchanget h e operatorbecauseABcompanydoesnot welloperatetheirprojectandassets.Thedivisionshouldsharetheseexpensesandb enefitsforbothparties.Isuggestthatprofitfromthedivisionshouldputintoafunda sthe modelofVSPhasdone.

Forthepolicy,thedivisionshouldreviewforaclearerpolicy.Therearesometermsa renotrelevantbuttheyarenotreviewedandmodified.Forexample,procurementpr ocedureofthecompanyrequiresalldocumentmustbereviewedandapprovedbyallr elativedepartments.Thisregulationd o e s notmakesense.Somedepartments,wh oseworksdonotrelatetotheoperationofthedivision,willnotsignpapersofdivision Withouttheirsignatures,thedocumentisnotcompliedwithcompany’spolicyand division’spolicy.

Thedivisionwasestablishedwithbudgetsourcedfrom3%ofauthorizationcontract fromABcompanyandPVGAS.Thedivisionisspendingfortheiroperationfromthi srevenue.Thefinalprofitafterdeductingexpenseswillb e submittedtoPVN.Thee xpensesaremostlyworkshopand entertainmentexpense.Laborandmaterialexpensesarenotrecordedbecausethei nappropriatepolicy,peopledonottimelinetheirworkingtimef o r thedivisionbuta llfortheoperator.EveryexpenseisusedtogetherwithexpensesoftheOperator.Rel ativedepartmentsarenotwillingtoseparatecostsbetweentheoperatorandthedivis ionbecausetheseexpensesaresmall.

Inmyopinion,weshouldreferthemodelofVSPdoing.Theyhavepolicyrelatingtola bor,salary,allowanceforpersonnelworkingforthisdivision.F o r example,salaryi scompensatedbasedonworkinghour,timesheet.Ifn o t , peopleareafraidtotimeli nefordivisionbecausetheyareworriedthisallocationofworkingtimemayimpact ontheirsalary.However,theclearp o l i c y isrequiredfordepartmenttoapply.

Actually,personnelworkingforthedivisionwillhaveallowancefordivision’swor ks.Foroffshoreengineers,theyhavethreeweeksoff,thedivisioncanhiretheseengi neerstocarryoutthemaintenanceworkforexternalservicesofthedivision.Compe nsationfortheseengineerscanbeb a s e d onhourrate.

Mai Thankyouverymuchforyoursharing.Ihopethisinformationisenoughf o r mywr iting.

Ms.Cẩm You’rewelcome.Ihopeyoucancompleteyourmasterthesiswiththisinformation.

5LeDuan,BenNghe,District1,HCMC Interviewer Mai

GoodafternoonMrHoàng,MynameisMai.I’mcollectinginformationform y mast erthesis.Canyouhelpmetofinishmythesis?

ThetopicwhichIwouldliketodiscusswithyouisaboutpolicyandprocedureofexte rnalservicedivision.Firstofall,canyoupleaseintroduceyourselfandyourpositioni nthecompanynow?

HelloMai,mynameisHoàng,IhavebeenworkingforBDPOC9yearsasan QA/ QCengineerforBienDong1Project.Nowmymainresponsibilityi s tofollowthefi nalizationofBD1ProjectandmonitorexternalservicesoftheexternalserviceDivis ion.

Affairsofexternalservicedivisionincludes(1)maintenanceandrepairfor2 6 ” ga sexportpipelineand(2)engineeringanddesignservicefor26”gasexportpipelines forSouthwestgastransportationcompany.

YesIworkinengineeringarea,Iamacontractpointforengineeringworksa n d carr youtthepurchasingmaterial,equipmentandservicesfortheDivision.Incasedetaile dengineering,Iwillrequiresupportsfromoperationdepartment.Orrelatingprepari ngcontracts,IwillaskforsupportsfromC&CdepartmentbecauseIhavenoexperie nceinpreparingb i d s andcontracts.But

Mr.Hoàng Yes,wehave.Thepolicyisstipulatedscopeofworkofthedivision,f i n a n c i a l iss ues,purchasing,….

Mr.Hoàng Beforepreparingpolicy,thedivisionhasreferredtosimilarpolicyofothercompani es.Mr.TuấnAnhisthepersoninchargeofpreparingpolicywith supportsof2membersoftheDivision(Ms.Cẩm&Mr.Hoàng).Wed r a f t e d the policyandsendouttorelevantdepartmentfortheirreview.T h e n wecollectedan dfinalizedthepolicytosubmitfordirector’sapproval.

Yes,ofcourse,becauseweneedtoreviseanddevelopthenewownpolicyf o r thed ivisionreferredfromothercompany’spoliciesandourcurrentp o l i c y oftheOpera tor.Allformandtemplateneedtobesuitablydesignedf o r thedivision.Currently,t heDivision’spolicyismostlyreferredtothecurrentpolicyofthecompanyforproced uresrelatingtoprocurement,i n v e n t o r y management,staffstandardbenefit,

….D u r i n g theoperation,ift h e policyhasanyirrelevances,thepolicywillbemodi fied.

Mr.Hoàng Thepolicywaspreparedin2015andpublishedin2016.Actuallyweintendto modifyt hepolicybutithasnotbeenmodifiedanytimeuntilnow?

Thepolicywillmodifycontentsincludinginvestmentlicense,etc.Therea r e se veralotherissuesneedtobemodifiedbutthesolutionhasnotbeenfinalized.Fore xample:laborandHRpolicy.

Normally,astheOperator’sprocedure,weneedtofillinthetimesheetforpresenthou rsworkingfordifferentworks.However,Ihaveconfusedhowt o timelinemytimesh eet,whethermysalarypaymentiseffectedifItimelinemytimeforotherproject,whil etheDivisiondonothaveclearp o l i c y forsalary.

Mr.Hoàng Wehavesomedifficultiesinrecordingmaterialcostduetoincorrectly applythepolicy.Externalservicesaretogethercarriedoutwithothermaintenancew orkoftheOperator.Itcausesdifficultiesinseparaterelativec o s t relatingtomateri al,equipment.Weawarethatthematerialcostwasn o t correctlyrecorded.Butthesy stemontheplatformislinkedandmixedso wecannotseparatetheareaofmaintenan ceworks.

Mai Thankyouverymuchforyoursharingandyourinformation.IhopethatIw i l l well finishmythesis.

5LeDuan,BenNghe,District1,HCMC Interviewer Mai

ThetopicwhichIwouldliketodiscusswith youisaboutpolicyandprocedureofext ernalservicedivision.Firstofa l l , canyoupleaseintroduceyourselfandyourposi tioninthecompanyn o w ?

HelloMai,mynameisTuấnAnh,I’mP&PGeneralManagerandamemberofexter nalservicedivision.Relatingtotheexternalservicedivision,myresponsibilityisge neralmanagementoftwocurrentexternalservicecontractsandseekingfornewcont racts.Besides,Iamresponsiblea s acontactpointofpreparingpolicyandproceduret obeguidelinesfortheoperationofthedivision.

Tobeabletomakeapolicy,Iworkedwiththedivisionmanagertoseekforo u r divisi onvisionandmission.ThenIlookedforreferredpoliciesofcompanieswhichhaveth esamemodelofexternalserviceasourcompany( f o r exampleVSP).ThenIneede dtoreadanddeeplyunderstandallcurrentproceduresandpoliciesofthecompanyfora voidingconflictsbetweenpolicies.However,youknewthattherewerealotofproce duresandpoliciesw h i c h onlypeopleinchargecouldunderstand,Ihadmanydiff icultiesinthisstep.Basedonreferredinformation,Idraftedthepolicyandsenditoutto relativedepartmentsforyourreview.ForexampleFADDeptt o reviewfinance,C& CDepttoreviewprocurement,HRDeptt o reviewH R legalbasisfortheoperationof division,labor,compensation,…

IcannotbeawarethelegaloperationoftheDivisionagainsttheOperatora s wellasth efutureoftheDivision.Inourcompany,wedon’thavelegislationdepartmenttoco nsultuslegalissues.Thepolicywillbereviseda n d completedduringtheoperatio nofthedivision.

Mr.T.Anh No,wedidnothaveateam,Iamthemainpolicymakerwithsupportsfrom2members forpaperworks

Mr.T.Anh No,wedidnothaveameetingbecauseIhadsentmydrafttorelevantdepartmentfort heirreview.

No,theyarenotexperiencedbutthedivisiondoesnothaveanycommercialemplo yeessothesememberswilldopurchasingworks.Theyc a n getadvicefromcom mercialandcontractdepartment.

Yes,wedo.Itisbetterforthedivisionwhenwehaveanexperiencedcommercialemp loyeewhounderstandsbiddinglaws,procurementproceduretocarryoutpurchasing works.

InterviewswithMr.Phong,Ms.Cầu,andotherrelativepersonswereduringworkingandn o t base dontheinterviewguide.

Transcript:interviewMr.PhongDivision’smanageranddeputygeneraldirectoroft h e compa ny

Mr.Phong No,wehasnotinformedbecausetheoperationofthisdivisionisoperatedunderthepo sitionofthebranchofPetroVietnam.

Mr.Phong Weshouldsharetheseexpensesbutnowwestilllookingforappropriateb a s i c forc ostsharing.Especially,laborcostandothergeneralcosts.

Accordingtoprocurementprocedureofthecompanywherethedivisionispursuantt o,allpurchasingworksneedtoreviewandapprovebycommercialdeputydirectoroft hecompanywhoisnotmemberofthedivision.Howisyourdivisiondealingwiththisi ssue?

Itisreallyinconvenientbecausesheisnotmemberofthedivision,shedoesn o t muc hunderstandoperationofthedivision.Whenthedivisionhaveap l a n toreviewthep olicy,wewillrevisethisissueinwhichpurchasingworksofthedivisionwillberevie wedandapprovedbydivisionmanagera n d directorsdependingoncontractvalue of2000USD.Contractvalueabove2000USDwillbeapprovedbybothdivision’sm anageranddirectoro f thecompany.Contractvalueunder2000USDwillbesolelyap provedbydivision’smanager.

Transcript:interviewMs.Cầu–Memberofthedivision,Chiefaccountantofthecompany

Weneedsupportingdocumenttobackupforourcostbookingandweconcernlegisla tiveissuesonrecordingtheseexpenses.Currently,wecannotr e c o r d laborcost becauseallemployeesofthecompanyevenmembersofthedivisionaresigninglabor contractwithABCompanytoconductworksoftheOperator.Manpowerlikeassetsa ndequipmentofABc o m p a n y areoccupiedbybothPVNandGazprom.Itdoesnot makesensewhenthetheOperatoruseassetsofbothpartiestogainbenefitsforone party.

Currently,thepolicygenerallystipulatesandguideslaborcostrecordingaspursuant topolicyofthecompany.Sothatwecannotrecordlaborcostoft h e Division.Wene eddecisionsandevidenceforcostallocationfortheOperatorandtheDivisionandcl earlyguidancehowtorecordthiscost.Forexample:thesememberswillbepaidasinc reasingresponsibilityallowance.Orlaborcostwillbeseparatedandrecordedaslab orcostafterdeductingtheirlaborcostfromtheOperator’scost.

Ms.Cầu Currently,wealsocannotrecordmaterialcostsduetothereissupportingdocumentsu chasinvoice,materialissueticket,deliveryticket,contracts,…

Attachment 1 :Financialrepor ts year 2016, 2017 and Q2/2018

Page69 Hoang TuyetMai_Thesisfor Master ofBusinessAdministration

CHỈTIÊU Ngânsách Luỹkếtừđầunămđ ế n cuốiquýtrước Quýbáocáo Luỹkếtừđầunăm

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Page70Hoang TuyetMai_Thesisfor Master ofBusinessAdministration

CHỈTIÊU Ngânsách Luỹkếtừđầunămđ ế n cuốiquýtrước Quýbáocáo Luỹkếtừđầunăm

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Attachment 3: Form of working hour(base for laborcost allocation)

O f fsh o Name Dep AD AE BD BE #P GENERAL

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