LUẬN văn THẠC sĩ development of corporate culture at thaco group phát triển văn hóa doanh nghiệp tại THACO group

THEORETICAL FRAMEWORK ON CORPORATE CULTURE

Overview about the study on corporate culture development

Corporate culture or company culture has been widely studied and announced in the world and in Vietnam by many researchers Approaches to the corporate culture are varied by each researcher

Corporate culture in the world is generally characterized by 2 different research orientations The first orientation is to approach under the perspective of ongoing business administrators (micro-approach), focusing on searching and looking for the management nature of the cultural factors in business administration The second one is to approach from the perspective of the cultural factors’ impact on business administration (macro approach), focusing on the cultural factors’ impact on businesses, especially for businesses with a multicultural or organizational environment a Three-tier corporate culture model of Schein

Three-criteria-based evaluation method of corporate culture is applied by Schein's research model, concretely: Tangible structure, announced value and general concepts, implications The evaluation method of corporate culture is considered to be more practical than the theoretical value of that of the competitive value framework That is the three-tier corporate culture model (Schien 1999)

Schein’s model is focused on three levels of culture that are the three evaluation criteria of culture, from practice, implications to invisibility:

- 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

Advantages: Evaluation method under E Schein model is relatively simple and easy to perform, suitable with the enterprise with restricted time and budget for understanding its own culture By using this model, the leader is facilitated to effectively identify, in particular, the cultural elements of the business, and analyze the relationships between tangible and cultural values which are deeply originated from the business initiated by the company Similarly, the leaders find the cultural elements to be changed to be well matched with the Company’s ever-changing environment in accordance with new competitive conditions and new regulations b Studies launched by Recardo and Jolly

Recardo and Jolly (Recardo & Jolly, 1997) unveiled that, when the corporate culture is mentioned, it often covers the system of values and beliefs that are understood and shared by members of an organization A culture helps to shape and define members' behaviors and organizational policies Corporate culture is measured by 8 aspects, concretely:

- Communication: Quantity and forms of communication, what information is communicated and by which way, open communicative system must be provided

- Training and development: The administrators’ commitment to offer the great development and organizational opportunities that new skills are enabled to be applied for the practice Moreover, training programs are provided to successfully satisfy the employee's current or future development needs

- Bonus and recognition: The rewarded behaviors and the applicable bonuses, employees to be rewarded individually or collectively, promotion criteria, and the degree to which the organization provides feedback on the job satisfaction level

- Decision making: Decision making is related to the questions such as how the decision is made and how the conflicts are handled Decisions are quick or slow

The organization is high ranking Decision making is characterized by concentrating or decentralizing

- Risk acceptance: Creativeness and renovation are highly appreciated and rewarded Risk acceptance is encouraged and welcome with the new ideas

Employees are punished or motivated to test the new ideas

- Plan orientation: Planning is short term or long term, and future planning is applied, which visions, strategies and objectives are shared with the employees To which extent, the employees make commitment to fulfill the enterprise’s strategy and other organization objectives

- Group work: This aspect relates to the issues, including significance, form and effectiveness of group work in the organization It includes the significance of cooperation among various departments, trust between the functions or units, and mutual support for work performance

- Governance policies: This aspect measures fairness and consistency with the implemented policies, the impact of member governance styles and the governance level that provides a safe work environment c The Denison model (1990)

The Denison model is based on 200 years of research on how corporate culture affects the performance of businesses Denison's research has found a link between the organizational culture evaluation score and the key performance results of the business such as profitability (ROE, ROA, ROI), growth (sales growth rate) , market share), quality, innovation, employee and customer satisfaction

This model aims to analyze and evaluate the constituent factors and influence on corporate culture including 4 main feature frames, each characteristic frame is assessed through 3 scales, each scale consists of 5 similar variables corresponding to 60 questions in the Denison questionnaire

Based on the model, we can see the correlation between the cultural factors of the model and important data about the organization's activities For example, a high score in a Stable region tends to show the strongest relationship with profitability, while a Flexible area has a strong relationship with performance such as innovation and customer satisfaction Hay cultural factors that exhibit Outward-Focusing tend to have strong relationships with the overall development of the organization while factors related to Introverted are related to performance measures such as performance, quality and employee satisfaction

1.1.2 Situation of domestic study a According to the study released by Asso.Prof.Dr Do Minh Cuong

Presented in the course books “Business culture and philosophy” of the National Political Publishing House, published in 2001, the definition on corporate culture is released by focusing on in-depth research of business philosophy issues

(Do Minh Cuong, 2011) b According to the study of Nguyen Anh Tuan, M.A and Nguyen Phuong Mai, M.A

Research objectives and contents: Analyze the mutual interaction between the enterprise's cultural environment and the selection and implementation of strategies initiated by Vietnamese enterprises in the ever-changing economic period Offer the possible recommendations for Vietnamese enterprises to successfully develop a corporate culture in accordance with the strategic orientation and good match with the changing environments Main findings: Specify the impact of economic and social characteristics in the transition period to the issue of awareness and how to develop the corporate culture and business strategy Determine the existing conditions of corporate culture that is compatible with the strategy of Vietnamese corporate culture Put forward some recommendations and set up the corporate culture that is compatible with the business strategy Training results of the study:

References for Strategy Management and Corporate Culture (Nguyen Anh Tuan and Nguyen Phuong Mai, 2011) c According to the study of Nguyen Viet Loc, M.A

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 affirms the development, demonstrates the power of society and the people it represents.” Rabin Dranath Tagore, the Indian famous writer (1861-1941) affirms that: “responsibilities of each nation are to clearly show the world its unique identity He thought that if a people does not bring anything to the world, it shall be so bad, it shall be worse than perdition and not be forgiven by the history” “”

Terms “culture” is originated from Latin language, i.e., “Cultus” refers to cultivation, care of trees Then, “cultus” is extended to the social fields, implicated for spiritual care, education and human training towards a better orientation

To the widest scope of research: “Culture is the master of spiritual and physical values created by the persons during survival and development” “Physical values may refer to: beauty spots, pagodas, temples, historical relics as well as the traditional cultural products For example, Vietnam is recorded with: Bat Trang ceramic village, Dong Ho picture or historical relics such as: Hoang Thanh Thang Long, Temple of Literature The spiritual values are demonstrated in the living habits, folk songs, “hat xam”, adoration, and especially Vietnamese Xoan singing recognized by UNESCO as an intangible cultural heritage representing the humanity.”

To the narrower scope of research: “Culture refers to the activities and spiritual value of the human beings” To this extent, Scientific culture such as mathematics, physics, chemistry, culture and concerned industries, etc., and art culture such as movies, literature, music, etc., to be considered as two main subsystems of the cultural system

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 is the remaining when everything is forgotten, the insufficiency when we have learn everything” Therefore, culture is the identity of every individual, every nation, every nation which cannot be easily forgotten However, this definition only shows the importance and extent of the culture, rather than the specific characteristics.”

Another famous cultural researcher, Federic Mayor, UNESCO's Chief Executive Officer (1987 -1999), gave out a specific definition, concretely: "Culture reflects and demonstrates generally and vividly all aspects of life (of each individual and community) that took place in the past as well as happen in the present, over the centuries It constitutes a system of traditional values, aesthetics and lifestyle which each ethnic group asserts its own identity.” Through the aforesaid investigations, a concept on culture may be drawn out as follows:

“Culture refers to all spiritual and physical values created by the human beings during survival and development”

“1990s witnessed the appearance of term of business culture and corporate culture Business culture appeared before the corporate culture Such two concepts are simultaneously used and mutually supported to each other.”

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

Each organization is supported by certain standards of moral values, typical images, anecdotes, idiosyncrasies and typical styles that are recognized, implemented, complied and communicated by all members by time It is acted as the reliable basis for the organization members to follow and create the important influence on routine behaviors of every member

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”

The question is that: What is corporate culture? Corporate culture is characterized by various definitions and understandings The scholar Georges de Saite Marie – a French expert on SMEs defined that: “Corporate culture refers to collection of values, symbols, legend, protocols, prohibitions, physiology and moral viewpoints to create the reliable background of the enterprise” It is possible to see that the concept only summaries the constituents of corporate culture, rather than mutual relation inside the enterprise

A relatively popular definition on “Corporate Culture” of the scholar Edgar H

Schein, an US expert, recorded with many years in studying the culture is shown as follows: “Corporate culture is the collection of rules and procedures acquired by the enterprise members during problem solving, adapted from outside and internally consisted in the enterprise.” “Such rules and procedures are the triggers for the members to select the action method, analyze and make proper decisions without hesitating about the meanings of such rules and procedures It is considered to be correct from the beginning.”

In short, even it is defined differently from time to time, it is possible to reach an agreement on corporate culture definition, concretely: “Corporate culture refers to a system of value, concepts and behavior rules to be internally shared by the enterprise, governing the feeling, thinking and how to act of members during pursuing and fulfilling the general objectives, creating an unique identity of each enterprise.”

Identity is characterized by corporate culture philosophy, unique phenomenon of style, action, behavior of organization, reflecting the selected values and philosophy Organization's cultural identify is clearly demonstrated by organization members’ behavior It is also the sign to show the consistency in terms of awareness, key philosophy values of the company.”

“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 may be formed by strengthening: In such cases, leaders find the way to protect and preserve the prevailing moral and cultural values They may be very successful outstanding characters in some fields, or they may undertake the position and responsibilities for preserving and enhancing the created cultural identity Therefore, operating philosophy culture is deeply submerged in the consistent culture

 “Cultural identity may be formed by integration: Leaders often apply the leading and integrating style, attentively listen and find the best way to successfully integrate, act as a bridge to connect, regulate, motivate and share with other persons

Thence, leadership philosophy and style are deeply characterized by integration culture.”

 “Cultural identity may be changed: Changes in culture may be required when the fundamental changes are recorded in the organization such as industrialization or technology, foreign culture integration (cross-culture), changes in senior managers Pressure of such changes requires to take the great and fundamental changes in terms of leadership style, philosophy and action guidelines

When the culture is changed, leadership philosophy and style are deeply characterized by adapt culture.”

Necessity to design and develop corporate culture

Corporate culture is characterized by the business identities to distinguish them from other businesses

Since its inception, the enterprise may not have a stable and specific identifiable culture “Through a long history of development, from ups and downs, through the competition and construction, cultural factors shall be formed, selected and developed as a system, creating a specific business guideline of such enterprise, distinguishing it against other enterprises and social organizations.”

Such style for the enterprise is as important as “water and air” for the people It is easy to realize a style of a successful enterprise Such style is often foot printed with an extremely strong impression to the outsiders and great pride of the enterprise members

Corporate culture creates the behavior patterns, widely accepted and complied by the members, demonstrating the good harmony within the business in general, as well as making decisions in specific cases Such patterns are general standards and values to commend the good behaviors and criticize the bad behaviors, thence, the persons may know what should to do and what should not to do

Corporate culture enhances the work motivation, facilitating the loyalty, engagement, creativeness and devotion of the staff

Entrepreneurs in particular and interested persons concerning the economic growth in general acknowledge the special role of corporate culture in economy development Culture itself is always implicitly submerged with humanism values; therefore, corporate culture always requires businesses to closely cement to business efficiency with humanity in business: Efficiency cannot be obtained at any cost that humanism values are ignored Simultaneously, production and business activities of each enterprise are oriented towards improvement of the community, ethnicity spirit, and businesses are encouraged to join the social activities such as poverty reduction, relief for natural disaster victims, charitable activities, etc If cultural elements are unavailable, the society will have to bear the extremely serious consequences, especially exhaustion of natural resources, discharge problems, and environmental pollution caused by production.

Characteristics of corporate culture

Corporate culture is demonstrated through typical signs, phenomenon and characteristics Characteristics refer to anything which may be used to demonstrate the contents of corporate culture, key philosophy, value and trusts, how to aware and critical thinking to help the members during their awareness to correctly reflect the awareness of the members and entire organizations

Characteristics are used to represent the contents of corporate culture, so-called as visual symbols Such symbols facilitate the easy seeing and hearing Non-visual characteristics are specific signs to be demonstrated in the members’ awareness level on 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:

- Exterior architecture may significantly affect the human behaviors in terms of how to communicate, react and perform the works For example: church architecture gives a strong, powerful impression; The pagoda creates an impression of transparency and continuity; The library impresses highly and intellectually

- Architectural works may be considered as a “mascot” denoting a certain meaning or value of an organization or society For example, France's Eiffel Tower, China's Great Wall, Temple of Literature, One Pillar Pagoda, etc., has become an image and symbol of a national and local spiritual value

- 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

One of characteristics of corporate culture is rituals and etiquettes These are carefully planned and prepared activities in the form of activities, official socio- cultural events, serious and emotional activities that are carried out periodically or irregularly to tighten the organizational relations and often held for the benefit of attendees

The characteristics of the ritual’s form and content not only show the values and philosophy of the corporate culture that the organization wants to emphasize, but also specific views and approaches of the managers c Symbol, logo

Another tool of corporate culture characteristics is the symbol The architectural works, rituals, anecdotes and logo contain the logo’s characteristics through physical and tangible values Such characteristics aims to convey a potential value and meaning to the receiver in various manners The most important thing of branding is to select the name, logo, package design and various attributes to identify a product and distinguish it with others

Another symbol is the logo or creative masterpiece to be designed to demonstrate the image of an organization or a business in the popular artistic language Although logo is a very simple demonstration, it is assigned with a great significance Hence, it is remarkably focused by organizations and businesses

Nowadays, logos of the world's leading brands such as Coca-Cola, Microsoft, Toyota, etc., have been received with the worldwide special attention and influence

A brand's logo must be developed with specific cultural meaning and submerged with the culture identity Brand logo must be well matched with the various culture or languages d Short stories, anecdotes, typical samples

Short stories are stories which are often developed from typical events in terms of values and philosophy of corporate culture reminded and disseminated to new members by the organization In the stories, the typical samples are often mentioned They are ideal pattern in terms of behavior suitable with the standards and corporate culture values Typical samples may be personified into myths with the qualities and characteristics of many good examples or expectations of values and beliefs in the organization Stories aim to maintain the vitality of the organization's original values and help to unify the awareness of all members

Model characters embody the values and lasting power of the business These are the enterprise’s core figures, facilitating to create a distinctive image of the business, making the outstanding results simpler, promoting many classes of employees to follow, strengthen and promote the cultural environment in the enterprise e Language, slogan

Special sayings, slogan, metaphors or a nuance of words are used to convey a specific meaning to the employees

Slogans are easy to memorize and cited not only by employees but also by customers and many others Slogans are often very brief, or characterized by simple, easy-to-remember words, so it sometimes seems to be cliché in terms of form The slogan is recorded as the most succinct expression of an organization's or a company's business and operational philosophy Therefore, it must be closely linked with the mission statement of the organization or company to thoroughly understand their implicit meaning For example the slogan of Vietjet Airway:

“Enjoy Flying”; Heineken: “It could only be Heineken”; Trung Nguyen Coffee:

“Explore creative inspiration” f Typical publication

Typical publications are the official data which may help the stakeholders to thoroughly understand the cultural structure of an organization It may be the mission statement, annual report, advertisement booklet, brochure about the organization, company, traditional yellow book, periodic or special publications, advertisement documents on products and company, user’s manual, warranty instructions, etc

Strength of corporate culture is characterized by consent of organization members regarding the significance of specific values In case of consent, corporate culture cements the members and generates the powerful strength to develop a strong culture for the organization

1.4.2 Non - visual characteristics of corporate culture a Ideal/mission

Ideal means applying the theories into practice Corporate culture is interpreted towards this orientation to emphasize the motive, meanings, lofty, basic and profound values to help people to sympathize, feel and be touched by things and phenomena Ideal is formed from people trust, values and feelings b Value, trust and attitude

Constituents of corporate culture

This is the utmost and most important layer of corporate culture, including the most fundamental management and business philosophies The prerequisite for the successful corporate culture development is the commitment of the enterprise's highest leaders Because the most important part, the heart and the mind of the business is in the innermost layer of culture, it is the business philosophy, the enterprise's management motto and only the highest leaders of the enterprise may be able to influence such core cultural class Therefore, business leaders play a key role in building and developing corporate culture Leadership is the one who creates the foundation of the enterprise, forming and nurturing the environment and standardizing, selecting people who are suitable for the cultural value system and an example and motivation for employees

The second important factor layer of corporate culture is the motives to accelerate the actions of individuals and general motivation environment of the organization Such motivation factors shall be demonstrated by daily behaviors of the enterprise’s members

Procedures, regulations and policies help the enterprise to operate stable in accordance with the standard This component facilitates the enterprises to successfully satisfy the increasingly high requirements on quality, products and services of enterprises, contributing to creating stability and improving the efficiency of businesses with efforts to the highest satisfaction of customers and the society

This is the fourth constituting layer of the corporate culture to satisfy the diversified, multi-dimensional, accurate and timely management information demand This system must ensure that any required information necessary for the enterprises is collected, conveyed, stored and processed Any members of the enterprises may easily access and use the required information for the daily activities as well as the planning and orienting the strategies

This is the floating culture constituent, reflecting the life and livings of the enterprise Although it does not directly affect the business performance, its influence on every activity of the enterprise is relatively high It effectively disseminates the company’s policies and guidelines, creating the company’s difference against its rivals, a good image prior to the community, facilitating the branding Therefore, in order to successfully create the enterprise’s identity and good competitiveness, the entrepreneurs, senior managers, leaders and other administrators must involve into the organization's culture development

Benefits of corporate culture development

Corporate culture is an intangible asset of enterprise, recorded with high importance in the enterprise’s development, the reliable background, objectives, motives and regulating system of the development Corporate culture helps the organization to reduce the conflict, coordinate and control, motivate the employees and enhance the competitive advantages a Reduce conflicts among members, between individuals and collectives

Corporate culture is the good bonder to cement the enterprise’s members It helps the members to unify the understanding, evaluation, selection and orientation for action When the organization is faced with conflict tends, members are unified by the culture b Coordinate and control

Corporate culture coordinates and controls the personal behaviors through stories, legends, standards, procedures, sequences, rules, etc Corporate culture facilitates the good orientation for the enterprise in all material aspects such as leadership style, business culture, quality culture and organizational culture When a complicated decision must be made, the corporate culture shall narrow down the scale of options to be considered c Motivate the employees

Corporate culture is not rigid regulations, hindering the creativity of members

On the contrary, the general concepts on corporate value and good relationships among employees that corporate culture offers shall create a comfortable and healthy working environment, promoting the employee’s innovation and creativity

Thanks to corporate culture, the employees clearly understand the objectives, orientations and nature of work, making them feel to undertake a meaningful tasks and proud to be a member of enterprise This is much meaningful when “brain drain” is popular Income salary is just a part of work motivation When income reaches a certain level, people are willing to trade off a lower income to work in a harmonious, comfortable environment, well respected by colleagues

Corporate culture is the enterprise's identity, attractiveness with customers, partners, creating a brand for businesses to help distinguish them from other enterprises Corporate culture also enhances the external relations and acts as the factors to attract the customers and partners for the enterprise Concretely:

- The customers shall feel peace in mind and proud when the enterprise's products and services are used

- The partners shall give more trust when transactions are made with the enterprise and preference prices may be offered They shall support the enterprise to overcome the difficulties and maintain the commitments

- The regulators and the Government shall trust more when enterprises with good corporate culture are contacted Accordingly, the great support may be received from the regulators and the Government during business

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

Therefore, the above roles of corporate culture shall help the enterprise to grow and obtain sustainable development to ultimately offer profit to the enterprise - the decisive factor of survival of an enterprise It is possible to say that when everything is lost, the corporate culture is remained, then the enterprise still has the opportunities to survive and develop Vice versa, if the culture is lost, the enterprise shall not survive The enterprise’s success or failure is closely cemented with the corporate culture’s unique identities.

Steps of corporate culture development

The ways of developing company may vary by culture of each country

Generally, the purpose of developing corporate culture is to ensure that the employees feel happy, speed up and improve the productivity and engagement with the company In order to develop the corporate culture, four steps may be conducted:

Step 1: Determine values concerned by stakeholders

Such stakeholders include shareholders or owners, senior managers, employees, customers and other related parties Thence, identify the options and changes to form the most suitable cultural model to satisfy the great concern of the subjects

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

There is a famous saying: “Sow a thought, and you reap an act Sow an act, and you reap a habit Sow a habit, and you reap a character Sow a character, and you reap a destiny.” It is similar to corporate culture development Development of values is only the first step to create the enterprise’s ideology Action programs must be regularly repeated to become a voluntary habit, an action similar to the conditional reaction It is required to supervise and follow up to improve such characteristics in accordance with the enterprise's core values to create the unique identity of the enterprise

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

This method requires to study the corporate culture development in Thaco to closely adhere to the practice to setup, maintain and develop the corporate culture in Thaco; consider Thaco’s corporate culture structure in the relation with the general cultural values and specific cultural values, creating the outstanding cultural identities of Thaco; consider the corporate culture identities of Thaco in the close relation with the national culture, origin of the enterprise and its business environment

Application of the dialectic materialism method requires to propose the solutions to develop the corporate culture in Thaco in the integration period originated from the existing condition of the Group’s corporate culture, especially the requirements on recovering shortcomings discovered during maintaining and upholding the specific culture straits of Thaco in the new period.

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 may be classified by various methods, depending on the researcher’s method and purpose In order to collect the data for Thaco Group’s corporate culture development research, two main data sources are applied, including primary and secondary data sources

Primary data is collected by consulting the officials and employees related to Thaco Group's corporate culture

Secondary data source to be collected and researched is the available information, including the references related to the corporate culture topics; organizational behaviors of the researchers and scholars in the world.

Data collection method and tools

Data is collected by surveying and investigating in accordance with the questionnaire designed to directly deliver to Thaco Group’s officials and employees in 3 regions: The North, the Central and the South Total 300 questionnaires were delivered and 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

Contents of the questionnaire focus on the employees’ awareness on corporate culture and existing corporate culture in Thaco Group, thence, unveil Thaco Group’s corporate culture practice and give out the solutions to perfect the corporate culture

Table 2.1: Summary of questionnaire structure for official study Component Variable

Gender Age Service length in the Company Corporate culture information (CC)

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:

Questionnaire is designed and tested through some phases to ensure the required information to serve for the data analysis Questions on corporate culture aspects are based on previous studies related to the corporate culture

- Phase 1: Design the crude questionnaire in accordance with the information to be collected in the theoretical model and related previous theories

- Phase 2: Evaluate the questionnaires by examining the understanding about the questions Evaluation is conducted by directly delivering it to the officials and employees to verify their understanding and response to the questions

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

According to the documents on corporate culture in Thaco acquired during a long-time working years thereof, the author shall understand and draw out the lessons on factors governing the establishment, development and specific features of Thaco’s corporate culture; analyze the success, restrictions and shortcomings of maintaining and developing the local corporate culture for the Group’s production and business, especially the foreign markets; then, propose the solutions to maintain and develop the corporate culture in Thaco in the coming time

Statistics and comparison methodology is initiated after all data has been collected via questionnaires and collected documents This method is applied to release the statistics tables on Thaco Group's business figures, statistics on respondent viewpoints about evaluating and feeling Thaco Group’s corporate culture; compare with other telecom companies to illustrate the relation between the business efficiency with maintaining and developing Thaco- specific corporate culture; also, analyze the existing conditions of advantages, disadvantages in maintaining and developing such specific cultural straits, acting as the premise to propose the methods for Thaco corporate culture development in the coming time

This method is applied to describe the panorama of related research in Chapter 1; describe the research subjects with specific phenomenon of corporate culture in Thaco; describe the survey results via the questionnaire; describe the business performance of the enterprise; then, analyze the existing condition on maintaining and developing Thaco-specific 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

3 to analyze the existing condition of Thaco’s corporate culture development with general expression and specific straits Furthermore, it also aims to find out the shortcomings of maintaining and developing these specific cultural straits in the context that the international integration is increasingly developed

+ Descriptive statistics methodology: This method is applied to compare the Group’s business performance by years in the relation with the maintenance and development of Thaco Group’s specific corporate culture; compare the revaluation of the questionnaire (survey) respondents regarding feeling about corporate culture in Thaco Group to unveil the strengths and restrictions of maintaining and developing such specific features Accordingly, it is systematized and proposals on future corporate culture development in Thaco Group are put forward

Conclusions: The analysis basis in Chapters 3 & 4 is based on the Literature

Review and Research Methodology as follows: Analyze and evaluate Thaco Group characteristics in accordance with the contents and structure of corporate culture, existing corporate culture in Thaco Group Then, work out the steps to perfect Thaco Group’s corporate culture.

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’s main business activities cover manufacturing, assembly, distribution, supply of automobile spare part repair and maintenance services: Including manufacturing and trading in commercial vehicles (trucks and bus); manufacturing and trading in tourism vehicles from Kia (Korea), Mazda (Japan), Peugeot (Europe)

Currently, Thaco is the unique company in Vietnam involving in complete manufacturing and assembly of 3 models: Tourism vehicles, trucks and bus with localization percent of 16% - 50%, offering the diversified and qualified automobile products with reasonable price

Thaco aims to maintain its local leading position in automobile manufacturing, assembly and distribution in Vietnam, conduct market expansion to ASEAN, enhance the international cooperation to select the proper technology, increasing the localization percent, joining the global value chain, creating the reliable background to develop to establish the universal industrial group, improving the competitiveness to obtain the regional leading position Currently, the Company’s transaction offices are described as follows: o 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:

29 April 1997: Establish Truong Hai Automobile Co., Ltd The Company mainly involves in import of used vehicles and sales to the market and provide the materials and spare parts for automobile repair

“5 October 1999, the Company established its first Branch located at No 2A Ngo Gia Tu, Gia Lam (now Long Bien) - Hanoi with 10 employees This is the strategic breakthrough for Thaco to gradually occupy and lead the automobile fields in Vietnam

“In 2003, the Company invested into Chu Lai Open Economic Zone, Nui Thanh District, Quang Nam Province with total initial investment capital up to VND 600 billion to construct the modern automobile assembly plan, covering an area of 36.8 ha, named 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, thanks to the impressive growth step, THACO sold 70,421 vehicles, fulfilling 38.6% VAMA market share Total revenue in 2015 was VND 45,846 billion (US$ 2 billion), increasing 89% against 2014, paying VND 13,856 billion to the State budget.”

“Since 2015, the company has archived a series of success in manufacturing, trading, assembly, distribution, sales and after-sales service in parallel with culture development, improvement in the difficult phases The 2018 report submitted by

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 inception, THACO was honor to receive a series of Certificate of Merits and prizes at all levels to delight its great contribution and achievements in manufacturing, business, social community activities, 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

 Certificate of Merits awarded by the Chairman of Vietnam Fatherland Front, Ho Chi Minh City regarding the achievement on contribution to the municipal fund “For the poor and Social Security” in 2013

 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)

Development of organizational structure and operating model plays a very important role in governing a subsidiary system nationwide Business model is developed by THACO in accordance with the structure of: “Matrix” This is acknowledged as an effective, modern management model, a good combination of online model and program - objectives to reduce the workload for the senior leaders by assigning the intermediary managers to make decisions The personal responsibilities of the leaders in the units, showroom, subsidiaries and branches in the provinces and cities are enhanced The detailed model is demonstrated in figure in Appendix 3.2 Thaco Group's 2018 organizational structure 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, holding the ownership of entire the enterprise, having rights to decide the issues under the missions and authorities prescribed by the laws and the Articles of Association of the Company

Board of Directors: The Board of Directors is voted by the General Meeting of

Shareholders, acting on behalf of the Company to decide and fulfill the rights and obligations of the Company, except for authorities of the General Meeting of Shareholders The Board of Directors is obligated to monitor and direct the Chief Executive Officer and other managers to manage the Company’s operations

Currently, the Chairman of Board of Directors is Mr Tran Ba Duong who is a founder and developer of Truong Hai Automobile Joint Stock Company He also decides the Company’s long term and medium term development strategies and plans

Supervisory Board: As selected by the General Meeting of Shareholders, the

Supervisory Board shall inspect the company’s financial activities It involves in proposal to select the independent auditor, audit fees and any issues related to activities of the independent auditors, discuss with the auditors about the nature and scope of audit before audit, inspect the consolidated financial statements of the holding company, branches, region and units on the annual, semi-annual and quarterly basis before it is submitted to the Board of Directors for considering the internal audits and feedback of the Management

Existing status of corporate culture in THACO through visual characteristics

3.2.1 Available cultural values of THACO

“To become the universal industrial Group and Vietnamese brandname is recognized as the regional leading position in ASEAN, THACO makes ceaseless efforts to develop its internal force, renovate the thinking and action, improve the quality and scale of the staff In order to do these, one of important tools to manage and govern the Company is THACO culture.”

“With specific characteristics in industrial production fields, requiring the quality and vision on sustainable development, discipline is used as the background for cultural development by THACO Disciplinary culture is considered to be the reliable background, orienting towards THACO's cultural activities Accordingly, the Company focuses and concentrates on improving the high sense of discipline, discipline action in THACO staff, orienting towards the disciplinary culture

THACO considers it as the inevitable sattus to expand the production and business and develop the company’s human resources in the context of integration

In addition to focus on discipline, THACO culture always highlights the humanism, “contribution and devotion to the society” through the products and services The Company always encourages, supports and creates favorable status for the officials and employees and subordinate units to propose and launch the initiatives and renovations in production and business activities Thanks to that, more added values shall be offered to the customers, society and the economy

Moreover, the “social responsibility” is also carried out through the community activities In 2015 alone, THACO spent VND 36 billion fo such meaningful activities, contributing to the State budget over VND 13.8 thousand billion (including over VND 10 thousand billion contributed to Quang Nam province)

“ 3.2.2 Corporate culture development through 8 T principles in THACO

The Principle of 8Ts is the gold principle, playing the important role in THACO Culture, facilitating the practice, self-discipline and completion of each THACO member This is regarded as criteria to be fulfilled by each employee to facilitate the outstanding THACO brandname for the automobile industry of Vietnam.”

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 principle of 8Ts is widely demonstrated in a series of mass media to successfully disseminate its employees so as to convey the visual information for the employees to meet, see, read, think, act, and obtain empathy to outperform the corporate culture in the workplace, every day

3.2.3 Corporate culture development through THACO song

THACO focuses on the people as the key background Each person is embedded with active working attitude, demonstrating through standard behavior to the customer, professional working style, highlighting the customer service spirit, having knowledge, and in-depth skills in each concerned field and business

Each person deeply penetrates the song meaning, demonstrating through the flag saluting every morning Monday conducted by the Company After the internal reporting activities launched by the Group and branches, all staff shall perform the ritual to sing the song “Trung Hai trust” to understand the philosophy and viewpoint of the company, and motivate the employees every new working week The song lyrics are imbued with THACO culture: “Powerful and love, business with compassion" creates the trust and respect of all employees in the entire system It also inspires the production and business

3.2.4 Cultural development through Code of Conduct in THACO

With a system of companies, branches, units, showrooms and subsidiaries like THACO, with employees of over 16,000 persons or more, the professional behavior is very essential “Behavior guideline” has been promulgated by THACO to specify the behavior standards of the officials and employees in the units to: o Ensure the integrity and responsibilities of the employees o Raise the high sense of responsibilities of employees in entire THACO system o Act as the basis for THACO units to decentralize the responsibilities within their assigned authority to handle the responsibilities during fulfilling the tasks, works and social relations o Act as the basis for the mass organizations in the Company to supervise the legal compliance of the employees and facilitate the effective fulfillment of

3.2.5 Corporate culture development through THACO HR evaluation culture

THACO-specific feature is widely recorded as the periodic and annual HR evaluation culture to be launched in the entire system HR evaluation may be flexibly changed by quarter or twice per year depending on the market development and operation performance of the Group from time to time

HR evaluation activities are regarded as an effective HR management tool, upholding the corporate culture, improving the production and business performance, creating a favorable working environment, close engagement, promotion and sustainable development of the entire Group

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

Control the fulfillment of set goals, adjust the goals in accordance with the revised production and business plan

Timely release the solutions to ensure the fulfillment of goals and improve the 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

With evaluation procedures applied to entire system to be launched in each level of the company, branch and units, individual is performed in accordance with the professional competence criteria The review is conducted in the units and regions in accordance with the Group’s detailed instructions The transparency, equality and fair are ensured Through each evaluation, it is assumed to re- determine where the system HR is located, what the advanced training demand are and the proper salary, bonus and welfare policies and regulations are designed

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,

HR, etc Such criteria is demonstrated from bottom to top, corresponding to the respective management positions to evaluate the qualification and sense of working as well as devotion of the employees to properly adjust HR, policies, treatments and develop the management system through the organization, upholding THACO- specific corporate culture

 Approve the evaluation results 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

It is possible to say that HR evaluation culture is a specific feature of THACO

Through the periodic HR evaluation, the Company determines the available human resources, updates and renovates the practical business lines from time to time

With THACO, HR evaluation culture creates a very high efficiency in production and business activities This is the unique specific feature that helps THACO to obtain the great archivements in the past 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 development is closely associated with Vietnam development

THACO production and business activities always offer the great values to Vietnamese economy Moreover, the social responsibility recently concerned and launched by THACO is highly appreciated Community activities launched by THACO includes:

 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 is mainly sponsored by THACO, creating a good playground for all high school pupils, nationwide With nearly 20-year journey, the program has created a studying and practicing movement for the high school pupils nationwide, facilitating the reliable luggage for the youth

THACO is the co-sponsor of the “Start-up Nation” Talk Show held by the Central Committee of Ho Chi Minh Communist Youth Union in coordination with the News Committee, Vietnam Television Mr Tran Ba Duong, Chairman of THACO Board of Directors, the program sponsor, unveiled that: “THACO wishes to inspire a start-up spirit and movement in the youth The new ideas are encouraged to create a reliable fulcrum to help the young people to show their business plan in the places where they know that there are persons who always attentively listen, share and support Through this program, a series of excellent start-up ideas may be released so that many entrepreneurs and our company to have opportunities to accompany with you to contribute to a future prosperity nation.”

“Community activities are actively involved by THACO members, demonstrating that THACO culture is closely associated to Vietnam national culture, i.e., “The intact leaves cover the tattered ones” Through that, the degree to transform from thinking to action of THACO members is relatively high In order to concertize the transformation of THACO culture to be action ot each system member, 300 THACO employees were surveyed regarding the corporate culture in THACO, concretely:

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 culture

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 unveiled that nearly 100% of questionnaires assumed that corporate culture is very essential for THACO development Therefore, the culture should be further designed and developed to become THACO-unique identity For THACO, corporate culture is assigned with extremely important position and roles in development of each enterprise This is because if the culture factors, languages, materials and information so-called as knowledge are unavailable in the enterprise, such enterprise shall be difficult to survive

“The questionnaires also revealed that code of conduct has been specified for THACO officials and employees Up to 95% of respondents thoroughly understood the issued codes of conduct However, 5% of respondents still ignored about such codes

82% of THACO employees successfully identified THACO culture and value

Up to 75% respondents thoroughly understood about THACO mission, vision and operation orientation 93% of respondents believed in THACO leadership guideline and 91% respondents wished to work in THACO cultural environment and long engagement 95% respondents wanted to maintain the human-centered culture for THACO development process However, up to 25% respondents failed to understand about THACO business policies and 25% of respondents failed to believe in to outperform their assigned tasks This was explained by direct labor in manufacturing and assembly division, delivery and transportation division, repair worker team in workshop, etc That means THACO needs more time to introduce the culture to be closer to them to help them understand the cultural values oriented toward by THACO or THACO’s oriented cultural values may not be suitable with the awareness and thinking of such direct labor

3.3.3 Corporate culture development through working environment in THACO

The above table unveiled that 91% of THACO employees agree and completely agree that THACO working environment is good and up to 90% of respondents assumed that members’ behavior is actively affected by THACO culture This unveiled that the working environment is a very important factor to create the corporate culture, motivating the employees 1% respondents also assumed that the working environment is not so good, particularly the work performance-based bonus policy is not consistent, misleading, causing difficulties for routine activities and working This was also worrisome because such 10% employees may leave THACO if a more attractive job opportunity and more favorable salary and bonus are offered by the rivals such as: Toyota, Ford, Honda, Hyundai, Mitshubishi, Nissan, HiNo, etc

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’s rituals and festivals are professionally held, planned in details with large volume of information to be disseminated to participants Here, the leaders of the Group, divisions and regions shall directly involve and orient all staff

Opportunities are offered to share, draw out the lesson, manage the performance and attitude of each member

An activity is specified, i.e., “funeral” support form is applied for the employees

When their relative is died, VND 10,000/person shall be automatically deducted by the salary system to setup the HR support fund Alternatively, compliment activities are initiated for illness or wedding treatment is applied in the local trade union of the member

Anecdotes in the company: Upon boarding, each new member of THACO shall be listened to the anecdotes about the history of development of the Company The company’s pride is coveyed through that so that the member may be available to make a good contribution when THACO operating philosophy, orientation and specific culture and its own corporate culture are throughly understood The members may easily access, uphold and develop their personal capacity in the rich- opportunity environment and develop with THACO

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 were abundant, including tourism vehicle and commercial vehicle repair workshop They were the direct labor, hence, they failed to master the corporate culture expressions such as selecting corporate culture as the logo and brand, accounting for 94%; Value, philosophy, viewpoint, trust and attitude towards THACO development accounted fro 84%, the company’s language and slogan accounted for 86%; however it ignored to community activities; internal reports and annual reports; THACO magazines, publications and advertisements (only accounting for 78%, 60% and 68% in total questionnaires, respectively)

It is realized that the awareness of THACO’s members about corporate culture is relatively restricted It is mainly caused by high proportion of spare part service division, tourism and commercial vehicle service workshop Hence, grasping the daily information is limited It is required to continue propagandizing, instructing and training to improve the awareness on corporate culture so that we can successfully understand and apply for the production and business activities, nationwide, where THACO is the unique automobile company in the industry effectively operating and developing 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 management shares 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 questionnaires unveiled that THACO members assumed that the senior leaders’ action is very suitable with the general strategy of the entire company when the consensus percent (%) is relatively high (92%) The Board of Management and Leaders shared with all employees about the Group’s vision, missions, operating orientation and strategy with consensus of 95% However, maintaining a constructive relation with subordinate was relatively fair, accounting for 75% The unit leaders failed to outperform the assigned task as the bright sample for the employees when the consensus was only 80% The remaining (20%) failed to trust and follow The intermediate managers were also recorded with a series of problems in terms of communication, management, control, creating good image and establishing the good working relation when the consensus was relatively low (67%

- 70%) as shown in the completed questionnaires

It is realized that THACO management may be divided into 3 levels, namely:

Level 1: Senior leaders, Group and regional leaders; Level 2: Leaders of branches and subsidiaries and level 3: Head of the division, intermediate managers in units and branches The above table unveiled that level 1 disseminated THACO trust, value and phisiology to all members to help them gain more trust Level 2: The Branches and subsidiaries also outperformed it However, some restrictions were found in some units Level 3: The Heads of the divisions and intermediate managers were relatively restricted when they failed to satisfy the management qualification, expertise and daily supervision and propaganda Hence, the engagement level in some units was still poor, adversely affecting the production and business activities

3.4 Evaluation of corporate culture development in THACO group

SOLUTIONS FOR CORPORATE CULTURE DEVELOPMENT IN

ThACO’s development and operation orientation to 2020

THACO’s development orientation towards 2020 with vision to become a Vietnamese multi-disciplinary group with 5 columns is described as follows:

Figure 4.1: THACO's operation and development orientation to 2020

 Development strategy of mechanical - automobile industry:

- Automobile manufacturing, assembly, distribution and retails in Vietnam market, orienting towards export to the regional countries

- Manufacturing of mechanical spare parts and components for automobile to increase the localization percent, satisfying the domestic and regional competitiveness after 2018

- Manufacturing and assembly of agricultural plants and other mechanical plants by manufacturing automobile components and spare parts

Multi-disciplinary industry group of Vietnam

 Development strategy of logistics industry

- Develop Chu Lai Port as Logistic Center of Chu Lai Opening Economic Zone, Quang Nam and the Central Region

- Expand the logistic activities in the North and the South to serve for retail system and external logistics business development

- Develop the transportation business to successfully satisfy the logistics demand of other retail industries such as: Supermarket, shopping malls, nationwide, etc

 Investment strategy for urban traffic infrastructure and industrial parks

- Invest in constructing traffic infrastructure and social utilities

- Involve in urban planning and development for major cities by constructing infrastructure and developing new urban areas with large scale and full commerce and service activities

- Invest and develop the real estates, commerce and service products (villas, pen-house and condominium), separate housing with average scale for relatively high and high income customers in big cities

- Invest into Industrial Parks with synchronous technical infrastructure and develop various services

- Involve in agricultural investment towards industrial management with large scale and close value chains from cultivation, harvesting, distribution, clean and safety assurance

- Provide agricultural materials, farming and harvesting plants and equipment, special cereal warehouse, special waterway means of transportation

Process and distribute the agricultural products

- Affiliate with the professional partners in the agriculture to invest into industrial park to serve for agricultural production

 Development strategy of automobile retail and consumable retail system:

- Diversify the products to fully satisfy the customer demands at a time (focus on online sales solution) Develop business model of used vehicles

- Improve the competitiveness and performance of showroom system, especially after-sales service

- Develop and trade in medium and advanced segment-based trading center systems and supermarket chains and Convenient Stores in cities and complexes invested by the company, nationwide

- Invest in developing the Trading Center, Entertainment Center, trading in office for lease, high-ranking service apartment, gradually develop premium hotel and resort business

- Develop automobile showroom in combination with other retail forms to obtain the business efficiency and optimize the land use efficiency

Figure 4.2: THACO development mission to 2020

- Offer values to the customers, the society and Vietnamese economy through THACO products, services and operations

- As the Vietnamese only manufacturer and assembler of both commercial

Responsible private group, facilitating to Vietnam economic development

Strategy: difference and tourism vehicles with various brandname from value chains from manufacturing, distribution and retails The scale advantages are optimized to develop the supporting industries, including mechanical products, components, spare parts and other business lines such as logistics, investment into industrial parks and urban areas, establishment of retail system nationwide

- Logistics is transformed from service into main business line towards expanding the products, services and infrastructure to serve for automobile industry and retails of other products

- Develop the investment and construction of industrial park into the professional service provider Focus on the loop Urban Development from planning to construction and management

- Involve in the loop agriculture business value chains from input, farming, harvesting, storage and processing technology, etc., to transportation and distribution

Invest into agricultural and river port industrial parks to serve for agricultural production

- Base on THACO automobile retail system to develop the retail industry, establish the complex centers, including automobile supermarkets, trading centers, entertainment centers and other services

- Govern under the Group model, including member corporations by each business lines

- Generally organize and arrange the operating mechanism in offices of Ho Chi Minh, Hanoi and Chu Lai to offer the professional support from the Group to units, companies and plants

- Apply the specific industrial governance methods to develop feasible governance for other disciplines

 Suitable human resources: Develop the human resources deeply penetrated with the philosophy, suitable with THACO development strategy and governance methods

- The human resources must be deeply imbued with philosophy and actively practiced for the purposes of personal perfection and development, sharing and respecting the colleagues, cementing the team and contributing to added value to the company, customers, partners and the society

- The human resources must be characterized by active working attitude, good occupational qualification competence and capacity to develop as the leader

- Human resources must demonstrate the universal capacity, able to undertake various positions, work under pressure, know how to access and grasp various works and adopt and adapt with changes, properly

 Working environment: Promotion and convenient working:

- The employees are facilitated and self aware of optimizing their personal capacities, practicing, training and developing the teamwork skills, improving the governance capacity to develop as the leader to improve the income and enjoy the treatments

- The Company and employees (especially managerial officials) are responsible for improving the governance capacity to create a favorable status and environment for effective working

- Physical facilities, equipment and IT application into work are fully provided to facilitate the high work performance.

Corporate culture development solution in THACO

4.2.1 Improve working capacity of the Culture - Communications Board 4.2.1.1 Development strategy of THACO Culture - Communications Board:

- Culture is governed under the group model by controlling the concentrated professional activities, promulgating the regulations and procedures in accordance with THACO cultural development orientations

- THACO culture orients towards practicing the employees with active working attitude, strong will, critical thinking, mastering the practice, creativeness and high sense of discipline

- Programs are designed so that the Leaders of the divisions may manage the culture in accordance with each production line and regional cultural characteristics

- Internal communication is enhanced and improved in the communication channels to convey the business philosophy, governance viewpoints and cultural messages to the employees, orienting towards disseminating THACO culture to the public

- Staff involving in culture development and management is practiced and trained to cement with practice of each Division The staff is trained to have active working attitude, discipline spirit, strong will, creative thinking, reliable profession

(Organization structure chart of the Culture and Communications Board is detailed in Appendix)

The organization chart of THACO culture board is also setup from the Group to regions, branches, provinces, cities, and subordinate showroom to develop the corporate culture in an active, interactive manner from the group to every branch to successfully convey the information from the Group to unit in the most consistently and active manner

4.2.1.2 Key tasks of the Culture and Communication Board:

- Control and manage centrally the culture activities in the offices from companies/branches in the provinces/cities/plants/units

- Support the Leaders of the divisions to manage and control the production and business activities in accordance with THACO culture orientation

- Study the essential values to be established and values to be formed during the Group’s development from each division in accordance with the mission and value” philosophy, orienting towards establishment of THACO specific expressions and human resources, concretely: Discipline, Humane, Equality, Integrity

- Develop the human resources with active working attitude, teamwork, high sense of responsibility, dedication, devotion

- Develop a dynamic, flexible, united working environment to encourage the creativeness and sharing in work so that the employees may actively improve their qualification and self-perfection

- Create favorable conditions for the employees to access to the practice of production and business activities and business lines to successfully study and apply the knowledge into practice

- Provide the technological equipment and application software to access to the online document source and culture and society publications

4.2.1.3 Specific functions and tasks during operation:

 Advise to the Management regarding the cultural development strategy under the Group model

 Launch the projects/programs on corporate culture design and development

 Organize the internal communication activities for corporate culture construction and development from the group to divisions and subordinate units

 Promulgate and disseminate the cultural documents from the group to divisions and subordinate units

 Advise the Management regarding cultural management methods of the divisions/companies/branches and units in the system

 Issue the regulations on manage the cultural activities through the divisions and units in the system

 Launch the emulation and mass organization support activities

 Design and develop the internal activities of the Group

4.2.2 Improve and raise the awareness on corporate culture for the employees

Raising the THACO member’s awareness on corporate culture involves not only propaganda but also complies with an employee training procedure to be engaged since their participation into THACO to develop a specific, particular, discipline, humane, equality, integrity corporate culture.”

“Recruitment is the basic step to set a background for developing a reliable corporate culture It aims to select the persons suitable with THACO culture, having skills and knowledge suitable with the work nature, characteristics, moral value and habits Concretely: Develop the human resources deeply penetrated with the philosophyTHACO development strategy and governance methods

“The next phase is to integrate the new members This is very essential to help them successfully integrate into completely new environment to understand THACO culture standards, grasp, launch the works and interact between the departments and divisions in the company However, in order to do so, the Managers as direct managers must select correct members with proper service length, good sample, having active working attitude, good qualification, understanding the occupation and system, mastering the leader culture, training the new members during integration Too early contact of negative former employees may adversely affect the integration.”

“Training, coaching new members with the necessary knowledge and skills for operations among divisions under each procedure have been designed in details, such as: working skills, communication skills to help new members to successfully integrate into the new working environment and establish the relationship with the Management, superior and colleagues Beyond the integration, the units conduct the review after 2 working months to continue signing the labor contract Therefore, the integration training time and review after 2 months is very important

Simultaneously, the Management must create the general values The leaders must absolutely believe in culture values and THACO mission and business philosophy to convey it to its subordinates.”

The key drive for sustainable development in THACO is human resources

Therefore, THACO must create a favorable working environment for the employees to optimize their strengths, creativeness and devotion

4.2.3 Perfect the annual HR evaluation procedure

Basically, evaluation system applied in THACO is satisfied with all requirements However, in order to enforce the HR evaluation to ensure the production and business activities, HR arrangement, screening and appointment as well as specific culture may be regarded as “THACO HR evaluation specialty”, HR board must continue thoroughly studying and constructing a HR evaluation procedure to ensure the following requirements:

In order to develop the top-to-bottom evaluations system, the company must always specify the phase-based development strategy, restructuring the competent frame system The job evaluation system is redesigned On the other hand, the evaluation criteria system on job fulfillment is decentralized to each branch and unit In other words, in addition to the evaluation standards in terms of attitude and required capacity in accordance with the competence frame specified by the Group, each branch, unit and subsidiary shall setup evaluation criteria on work performance in accordance with its specific regional characteristics, development strategy and objectives of each branch and unit in each area

To ensure the reliability, the evaluation system shall be designed by the Group’s

HR management department to ensure the accuracy, clear behavior criteria, objectiveness and restriction of bias in evaluation

Regarding the consistency and support of employees, the evaluation standards and scale have been designed to ensure consistency in evaluation results of all job titles in the unit Therefore, a great trust has been obtained from the employees regarding the equality and accuracy of evaluation results Moreover, since joining into the company, each employee has been notified about the periodic operation programs of the organization, treatments and benefits to be enjoyed when they work for the company For each employee, HR evaluation is an obligation and benefit to ensure that the labor is accurately recognized, promotion, salary and bonus are given

Regarding practicality, the job evaluation system in the branches is designed by the Group Each unit is only responsible for developing a part of work performance evaluation standard In addition to the general evaluation criteria, each employee in vertical line is applied with various specific evaluation criteria and standards

Regarding evaluation classification, the applicable evaluation system of the branches and subsidiaries demonstrate the evaluation classification but it is not clearly specified

The evaluation system has been comprehensively designed and supported with full evaluation criteria, standards, scale, templates and especially enclosed guidelines with main contents of guiding how to evaluate and apply the evaluation templates However, information recording during evaluation is largely depended on direct manager without software system, etc Therefore, evaluation accuracy or classification is depended on the direct manager’s management capacity and equal evaluation In order to recover it, it is required to focus on training the intermediate managers to improve the management, supervision and HR evaluation capacities of each division and establish the evaluation committee in each unit and region to carefully review

4.2.4 Design the behavior culture manual, governance regulation and rule system in THACO

Currently, “Code of Conducts”, detailed regulations, procedures and management regulations have been promulgated and applied to all employees

However, the rules are general and not specific due to abundant human resources of THACO and various subjects such as: Direct labor (worker, repair worker, technician, etc.), security team, driver, service men, and indirect workers: business, service, administration, HR, management, leadership Therefore, application to each subject is difficult It only accesses to the direct labor That is why THACO must further develop the code of conducts to the direct divisions by propagandizing the visual and understandable images

4.2.5 Design and develop THACO brand

“THACO brand is well known as a Vietnamese company, involving in manufacturing and supply of both tourism and commercial vehicles in Vietnam

Therefore, THACO brand must be designed and developed by such as: Domestic and international protection and defense for THACO brand ownership, image advertisement, improvement of prestige, position, market share, maintaining distribution network expansion nationwide and export

Some recommendations

The fact unveiled that culture is the spiritual background of the society, objectives and drive for the development In the economic field, corporate culture plays an important role in success of the enterprises In such in-depth international economic competition and integration, the number of new players is increasingly high, corporate culture development is much more essential

Corporate culture is not only the surfactant factor like enterprise appearance, cultural activities or spiritual cultural life for the employees, etc., it also deeply penetrates into every production and business activity with internal and external relations; between the entrepreneur with the partners, customers and competent authorities, regulators and the State management authorities In order to successfully integrate, Vietnamese economy must be modern market economy based on the knowledge, science and technology, laws, moral, production philosophy of enterprise as well as living style and behaviors of the entrepreneurs

Corporate culture is based on the business and development strategy of each enterprise, including the requirements on intelligence and knowledge into the offerings The products with high cultural contents shall be more attractive and competitive Famous enterprises and excellent entrepreneurs always spend intelligence for designing and developing their business strategy and philosophy

Development of competitiveness and profit must be complied with the social purpose not at any means, causing damages to the society, moral and environment

Many Vietnamese and foreign enterprises highlight the prestige, maintain its prestige and brand and behave responsibly with their customer They consider that sustainable development and civilized behaviors with consumers are not only action principle and business philosophy but also a decisive factor for success in the marketplace However, some enterprises and entrepreneurs still ignore the prestige, violate the laws and operate for only profit purpose, intentionally produce disqualified foods to harm the people health; many counterfeit products, frauds are initiated, resulting in a big damages incurred by the consumers, etc

In the context of increasingly in-depth international economic integration, Vietnam must focus on developing the corporate culture with high sense of respecting the laws, maintaining the prestige, business morals and healthy competition; facilitating to the community's sustainable development

Firstly, it is the business spirit in the people, encouraging the people and all economic sectors to actively find the way to get rich for themselves and the country, completely removing the bad business concept, disregarding the entrepreneurs, eliminating the reliance attitude, instead: Highlight the new factors in the business, creative idea and initiatives to improve the labor productivity, improve the competitiveness and honor the bright sample, inspire the startup spirit in the youth and business community, nationwide

Second, the State must release the regulations, policies and legal documents on corporate culture Particularly, the business community to each enterprise must not only strive to develop a powerful talent entrepreneurs, prestigious product brandname, creating the economic strengths for the country but also become the good managers with high sense of social responsibility and enthusiastic with the country and nation Corporate culture must contribute to create a good spirit, mettle and bravery of Vietnamese business in the new era Entrepreneurs must be encouraged to uphold the business culture communication in combination with new factors of cultural exchange, ensuring that the market economy is successfully launched and the enterprises with powerful culture are established and closely cemented with Vietnamese brandname to extend to the international scale

Third, corporate culture development also requires to push up the democratic, healthy, professional and modernization administration renovation This is a very urgent request for Vietnam economic development in general and corporate culture development in the enterprises in particular To do so, it is required to streamline the management apparatus to avoid overlapping, reducing the bureaucratic signs and apply the IT to handle the administrative procedures, improve the operating performance and efficiency, creating the legal corridor to obtain the simple, convenient and effective administrative management staff The cadres and civil servants must be made to be healthier to overcome the situation that some officials not only falsify the guidelines and guidelines of the Party and the State but also hinder it due to their poor and incompetent capabilities, causing troublesome for enterprises, adversely affecting production and business activities, abetting negative acts, violating the laws, destroying the country's culture and business culture

In the context of sharp globalization, cultural exchange, binding and engagement are increasingly high among the countries, then, enterprises face with specific culture development challenges so as to be well matched with their business strategy to successfully develop their fame and brandname and resources to distinguish and improve the competitiveness for the international economic integration

Corporate culture is the soul of the enterprises, creating the enterprise’s spirit and identity Corporate culture is the link of individual viewpoints to create a general viewpoint system, generating a powerful strengths for the enterprise

Thanks to corporate culture, the enterprise is empowered with the great strengths, specific identity and competitive advantages Therefore, maintaining, perfecting and developing corporate culture in Vietnam is extremely urgent and originated from the production and business practice It acts as the mission of each agency, organization and industry Powerful culture of each enterprise shall facilitate a good image for the country in the in-depth integration path with the world economy.”

Over 20 years of history of development, THACO gradually creates its own cultural identity through business philosophies, visions and operation strategies, namely: “value” philosophy, differentiation strategy, specific governance, and convenient cultural working environment Thanks to that, THACO obtains the important achievements recorded in its production and business activities

Corporate culture development is not only a slogan but also implemented in the whole accumulated specific value process, enhanced by each individual in such system

1 Đỗ Minh Cương (2001), “Văn hóa kinh doanh và triết lý kinh doanh”, Nhà xuất bản Chính trị quốc gia

2 Edgar H.Schein (2012), “Văn hóa doanh nghiệp và sự lãnh đạo”, Nhà xuất bản Tri Thức

3 Dương Thị Liễu (2008), “Bài giảng: Văn hóa kinh doanh”, Trường Đại học Kinh tế Quốc dân

4 Nguyễn Anh Tuấn và Nguyễn Phương Mai (2011), “Nghiên cứu mối quan hệ giữa văn hóa doanh nghiệp và chiến lược doanh nghiệp trong giai đoạn chuyển đổi kinh tế ở Việt Nam”, Trường Đại học Kinh tế- ĐHQGHN

5 Nguyễn Mạnh Quân (2011), Giáo trình Đạo đức kinh doanh và Văn hóa Công ty, NXB Đại học Kinh tế Quốc dân

6 Nguyễn Viết Lộc (2011), “Nhân cách doanh nhân và văn hóa kinh doanh ở Việt Nam trong

7 Công ty cổ phần ô tô Trường Hải (THACO) , Báo cáo tài chính hợp nhất 2010 – 2018

8 Đỗ Thị Phi Hoài (2009), Văn hóa doanh nghiệp, NXB Tài Chính

9 Đỗ Tiến Long, Đánh giá văn hóa doanh nghiệp trong doanh nghiệp nhỏ và vừa Việt Nam, bài viết trên tạp chí Khoa học ĐHQGHN, Kinh tế và kinh doanh, tập 31 số 1(2015)

1 Edgar H.Schein (2004), Organizational Culture and Leadership 3rd ed, Jossey-Bass

2 Recardo, R., & Jolly, J, (1997), Organizational Culture and Teams S.A.M Advance Management Journal 73

3 Denison, D R (1990), “Corporate culture and organization effectiness”, New York:

4 Denison Consulting (2005, April), “Overview of the Reliability and Validity of the Denison Organizational Culture Survey”, Ann

Website: http://thacogroup.vn/vi/Gioi-thieu/van-hoa-thaco/ http://www.vnpost.vn/vi-vn/bai-viet/chi-tiet/id/83537/key/xay-dung-van-hoadoanh-nghiep- yeu-to-quyet-dinh-su-truong-ton-cua-doanh-nghiep http://www.bemecmedia.vn/van-hoa/xay-dung-van-hoa-doanh-nghiep-thoi-hoinhap-can- phai-lam-gi.htm

APPENDIX Appendix 1: Questionnaire: Study on corporate culture in Truong Hai Automobile Joint Stock Company (THACO)