Chương 1 CƠ CHẾ QUẢN LÝ TÀI CHÍNH VÀ VẤN ĐỀ NÂNG CAO NĂNG LỰC CẠNH TRANH CỦA TẬP ĐOÀN KINH TẾ PAGE 1 PREFACE 1 The necessity of the dissertation The 10th National Congress of Representatives of the Co[.]
1 PREFACE The necessity of the dissertation The 10Xth National Congress of Representatives of the Communist Party of Vietnam has emphasized on: promoting the establishment of some powerful strong State economic groups and Corporations which operate in variety of many sectors and fields, of which, with focused major sectors and multi-ownership in ; which controlling role falls on the State ownership have many owners, in which, the State ownership plays controlling role… To putFor these State economic groups and Corporations into practical operations with high achieved effectiveness, many issues are to be handled, listing from choosing suitable models for corporations; to complete the state management policy system for economic groups, training and improving capacity of the managing staff… Of the above-mentioned issues, there includes financial management mechanism for the economic groups It can be said in a imaginary manner that the financial management mechanism is like the circulating system of the economic groups If the blood vessel operates in a regular manner, then it can bring blood to breed the body In contrast, if blood vessel stops, the body will break down and enterprise will go bankrupt On realizing this importance, there have been many research works on the financial management mechanism in the economic groups in view of theory, practical assessment as well as experience summary In general, those research works have been completed for a long time However, most of them have not linked the financial management mechanism to the issue of increasing the competitiveness of the State Economic Groups At present, operation situations of the economic groups have witnessed many changes under the impacts of new contexts In order to continue on completing the financial management mechanism for the State Economic Groups under new contexts, it is necessary to offer structured researches from view of theory and practice This has facilitated me to choose the topic named “Financial management to contribute to increasing the competitiveness of the Vietnamese Economic Groups” as the one to protect my doctor dissertation Objectives of research The dissertation focuses on the major following objectives: - To analyze the theory and practice in term of the competitiveness of the economic groups under the context of globalization, open-door and integration into the regional and international economy Simultaneously, to represent theoretical issues on the financial management mechanism for the economic groups; to analyze theoretically impacts of the financial management mechanism in increasing the competitiveness of the economic groups - To analyze current situations on the State financial management mechanism applied to financial activities in the State economic groups in Viet Nam (mostly based on Decree No.09/2009/ND-CP of the Government) - To research and offer the solutions to innovate and complete the State financial management mechanism for the State economic groups in the context of carrying out the guidelines on restructuring enterprises Object and Scope of Research Object of research of this dissertation is theoretical and practical issues on the competitiveness of the State economic groups in Viet Nam and the State financial management mechanism applied to the economic groups Scope of research of this dissertation is to only focus on researching the State financial management mechanism for the State economic groups but not to further research the internal management mechanism of each State economic group Researching practices in adopting the financial management mechanism into the State economic groups in Viet Nam was carried out from 2006 to 2010 However, to consider and assess in a comprehensive manner, the dissertation has surveyed and researched relevant issues, international experience in managing the multinational groups in order to consider and apply them selectively and suitably to the conditions in Vietnam Method of research The dissertation has used the method of dialectical materialism, historical materialism in combination with that of summary, team divisions, statistics, analysis, using tables and diagrams to be the one for researching the dissertation Scientific and practical meaning of the dissertation To supply methodological knowledge in term of the competitiveness and financial management mechanism in the economic groups in general, contributing to increasing the awareness of the society for the process of establishment, development and operation of the economic groups in view of competitiveness and impacts of the financial management mechanism on the competitiveness To offer suggestions for the policy makers as well as managers in the economic groups in terms of the method of planning the financial management mechanism as well as operating this mechanism in practice, by analyzing the current situations in operating the financial management mechanism in the State economic groups in Viet Nam over the last time At the same time, to suggest solutions to complete the financial management mechanism in the Vietnamese State economic groups under the new context Especially, the dissertation has also left some pages to research specifically the financial management mechanism in the PetroVietnam - a powerful economic group which has been making its great contributions to the national economy and finance from view of assessment of real situations as well as proposal of solutions Structure of this dissertation This dissertation comprises three chapters, practically: Chapter 1: The financial management mechanism for increasing the competitiveness of the economic groups Chapter 2: The current situations in the State financial management mechanism for increasing the competitiveness of the Vietnamese economic groups Chapter 3: The completion of the State financial management mechanism to increase the competitiveness for the Vietnamese economic groups CHAPTER THE FINANCIAL MANAGEMENT MECHANISM FOR INCREASING THE COMPETITIVENESS OF THE ECONOMIC GROUPS 1.1 Overview of competitiveness 1.1.1 Brief on the economic group 1.1.1.1 Definition of the economic group There are many approaches to the economic group In term of definition, upon summarizing all approaches, the dissertation has defined that: “Economic group is a collection of many companies with their independent legal entity operating in one or many different sectors, within one or more countries, voluntary to combine together based on some certain principles and modes to increase its competitiveness in the market and maximize the profits” 1.1.1.2 Characteristics of the economic group Organization: includes many companies with their independent legal entity, voluntary to combine together to achieve the overall objective of increasing the competitiveness and maximize the profits Have diversified combinations: in term of capital, technology, business production, products and services supply, Scope of operation is diversified: business in main sectors and their supplementary ones, invest into sectors which little relate to man sectors Often have big scope of capital, laborers, assets, turnovers… Often have center for research & development (R&D) Be organized and managed according to clear orders Forms of establishment are diversified 1.1.1.3 Structure of the economic group Depending on conditions and characteristics of establishment of the economic groups in each country, their structures are different accordingly However, common structure of one economic group includes: Holding company does not have its legal entity Subsidiary and affiliated companies have their legal entities, voluntary to join together 1.1.2 Competitiveness of the economic group 1.1.2.1Definition Up to now, there has not been any recognized standard concept about the competitiveness of the economic group In term of definition of competitiveness of the economic groups, there are many different approaches Drawing from reasonable cores, the dissertation believes that: “Competitiveness of the economic group is the representations of its real capacity and advantages as compared to its competitors in satisfying to customers’ demands to the best to gain the maximum profits through exploiting and using its internal and external advantages to produce out many new attractive products with their quality and competitive prices to attract customers and improve its position as compared to that of other competitors” 1.1.2.2 Criteria on assessing the competitiveness of the economic group The economic group is defined as an enterprise of great scope, thus its competitiveness has some certain similarities with that of enterprises of great scope Based on this, it is possible to consider criteria on assessing the competitiveness of enterprises of great scope as the one to assess that of the economic group Specifically, we can rely on the following criteria: Scope and method of using capital and assets of the economic groups Great scope of capital and assets of the economic groups is an important premise for them to easily implement their competition strategies However, scope of capital and assets is not the decisive element for the increased competitiveness, but it is the method of using capital and assets within the economic groups Effective investment of capital and use of assets in conformity with the real requirements of business activities is just the element to determine the increased competitiveness Capacity of researching market and choosing target market This is considered as one of the important criteria The economic group which is capable of researching market and choosing target market just can plan its strategy in competition, product distribution, research & development (R&D) Thus, capacity of researching market and choosing target market is considered as one of the criteria for considering and assessing the competiveness capacity of the economic group Competition strategy in accordance with facts and advantageous potentials of the economic group Competition strategy is the product of process of researching customers’ demands, weaknesses and strengths of the competitors to map out the business production plan to create new products to satisfy customers’ requirements and take advantage of market share Thereby, to increase profits in the business production process Suitable product distribution target Distribution target in accordance with the diversified form and channel of distribution, with care to customers not only increases capacity of customers attraction but also acts as condition for increasing the turnover, decreasing costs and increasing profit - the decisive element for increasing the competitiveness of the economic groups Management and operation capacity of the economic group Effective management and operation capacity of the economic group is the basis for increasing its competitiveness The management and operation capacity of the economic group is clearly represented in planning strategies and carrying out them in practice in a quick and active manner The management and operation capacity of the economic group depends on its leaders staff ranging from the Chairman of Board of Directors, General Director and Director within the organization system of the economic group Scope and trends of investment, research and development (R&D) In the context of violent competition, market scramble and customers attraction, this is the decisive criteria for the existence and survival of the economic group Aware of this, most economic groups in the world have established centers for technology research and transfer Technology level Technology level is regarded as the decisive element for increasing the competitiveness of the economic groups because the economic groups which have modern technologies and control new technologies just can produce out good product, with plentiful models, high quality and reasonable price From then on, to attract customers, occupy market share, increase turnover and profits Human resources In summary, it can be assured that high quality human resource is the most decisive element for increasing the competitiveness of the economic groups Today, most economic groups in the work have strategic policy on human resources in the economic groups In brief, the criteria as mentioned above are closely interlocked to one another To analyze and assess the competitiveness of the economic groups, it is necessary to consider all of these criteria 1.1.2.3 Factors to control the competitiveness of the economic groups The competitiveness of the economic groups is controlled by many internal and external factors Specifically: External factors: - Globalization, open-door, integration - Current social and economic situations - The State’s macroeconomic policies Internal factors: - Scope of financial resources and using method - Capacity of operating and managing science and technology levels - Human resources -… Of the above factors, the one in financial management mechanism for the economic groups plays a crucial role This factor determines operations of the financial resources in the economic groups to serve the competition strategies of the economic groups 1.2 The financial management mechanism and its impacts on increasing the competitiveness of the economic groups When researching the financial management mechanism in the economic groups, it should research financial activities within them Movements of the financial resources in the economic groups determine the establishment and implementation of the finance management mechanism 1.2.1 Financial activities in the economic group Depending on the nature of business production activities, management activities in the economic groups are diversified However, on brief view, the financial activities in the economic groups include: - Mobilization on financial resources - Distribution and use of financial resources and assets - Profit distribution - Financial inspection and supervision… These activities form the basis for establishing and executing the financial management mechanism in the economic groups 1.2.2 Financial management mechanism for the economic group 1.2.2.1 Definition of financial management mechanism: In general, depending on characteristics of each country, the economic groups have their different forms of ownership, the state and non-state economic groups Thus, in theoretical part, the dissertation has only researched the definition of the financial management mechanism in general without researching it further within the economic groups or the State’s financial management mechanism applied to the economic groups In fact, depending on purposes of researching in term of theory, the domestic and foreign scholars have offered many approaches to the management mechanism in the economic groups as represented in Chapter of this dissertation Form viewpoint of the dissertation’s author, it can be understood that the financial management mechanism is regulations on how to organize and carry out financial activities of the economic groups These regulations can be promulgated by the State and the economic groups; however, their implementation is within responsibility of the economic groups This approach shows that the financial management mechanism is the subjective product of human Positive or passive effects of the financial management mechanism on the economic groups will depend on objective awareness of the process of operating financial category within the economic groups 1.2.2.2 Contents on the financial management mechanism in the economic groups Combined to financial activities in the economic groups, the management mechanism applied to the economic groups includes: Regulations on capital mobilization Using capital in the economic groups is carried out by many methods, forms and channels Depending on the State economic and financial management mechanism and benefits gained by the economic groups, suitable methods and forms of mobilization channels will be chosen Requirement placed on capital mobilization in the economic groups is to ensure to increase financial resources for operations in the economic groups and stabilize the macroeconomic goals of the State Regulations on capital, assets management and use in the economic groups Regulations on capital, assets management and use in the economic groups must ensure to: preserve and develop capital, assets and ensure to increase the effectiveness and efficiency of capital mobilization; orient capital and assets into business and production activities to benefit the economic groups and the entire economy Regulations on turnovers, expenses and profits management These regulations must grasp thoroughly the principles: - To increase the self-autonomy and self-responsibility for the economic groups - To ensure savings, increase turnovers and decrease expenses - To ensure fair and equality; to promote positive elements and solve aspects of benefits in a harmonious manner: the state, groups and laborers - To consider long-term benefits and widening of scope of business production, increasing of the competitiveness to be the core Regulations on inspection and supervision on financial activities in the economic groups Inspection and supervision are not only the function of economy and finance management of the State but also the responsibility of each economic group Regulations on inspection and supervision must ensure the requirement of increasing the effectiveness of self-inspection and supervision of the finance within the economic groups and to pay crucial attention to inspecting, inspecting and supervising the finance from the outside Additionally, in the role of management, at the holding company of the economic groups, there are also regulations on the finance management in the process of researching and developing, merging, splitting and dissolving member companies… 1.2.2.3 Elements to control the establishment and implementation of the financial management mechanism for the economic groups To enable to establish and operate the financial management mechanism for the economic groups, it needs to further analyze and clearly indicate the internal and external elements that affect the financial management mechanism Specifically: Internal elements - Actual operation situations and requirements placed on financial activities of the economic groups - Requirements on activities of the economic groups in the long-term External elements - The State guidelines and policies on economic and financial management, especially the macroeconomic and financial policy - Actual situations about the economy with the happenings of the economic cycle - Globalization and integration All above elements are analyzed in relatively specific manner in this dissertation 1.3 Impacts of the financial management mechanism on increasing the competiveness of the economic groups 10 It is possible to see impacts of the financial management mechanism on increasing the competiveness of the economic groups from two points of view Creation of financial resources and implementation of the competition target This impact is represented clearly in regulations on mobilization of human resources in the economic groups Management and adjustment on the competition target This impact is represented through regulations on management and use of capital, assets, turnovers, expenses, profits and their distribution as well as those on financial inspection and supervision All of these are analyzed and interpreted carefully in Chapter of this dissertation 1.4 Criteria for assessing the usefulness of the financial management mechanism for the economic groups To be able to assets the utility of the financial management mechanism for the economic groups exactly, the dissertation has further analyzed the following four criteria: Firstly, to ensure and develop financial resources and asset values in the economic groups Secondly, to ensure to promote the autonomy and self-responsibility for the finance of the economic groups Thirdly, to increase the effectiveness of using the financial resources and assets for the economic groups Fourthly, to suit to the requirement of carrying out the State macroeconomic and macro-financial policies 1.5 Experience in establishing and carrying out the State financial management mechanism applied to the economic groups in some nations and the experience lesson for Vietnam Each nation has its unique financial management mechanism characterized by the organization and operation models of the economic groups However, the most common characteristics of the financial management mechanism applied to the economic groups in some nations mentioned in this dissertation (Chine, South of Korea,…) creates favorable conditions for promoting the autonomy and selfresponsibility of the economic groups At the same time, for paying important attention to checking and supervising the finance from the State-owned agencies to clearly indicate the function of State management as compared to the one of capital ownership 17 2.2.2.3 Mechanism in turnover, expense and profit management As assessed by the economists and managers, in general, the state regulations on turnover, expense and profit management in the state economic groups are relatively strict, clear and transparent However, they still have some certain limitations, especially profit distribution between the state and economic groups in accordance with the rate between the invested capital of state and mobilized capital of the economic groups On the other side, the regulation on distribution of after-tax profit has not encouraged the laborers and managers in the economic groups in fact 2.2.2.4 Mechanism in finance supervision The outstanding limitation of this mechanism is that it has not promoted the role of self-inspection and self-supervision on the finance of the state economic groups 2.3 General assessment of the state financial management mechanism for the state economic groups 2.3.1 Achieved results In fact, there has not been any official document released by the state research and management authority considering and assessing the state financial management mechanism for the state economic groups on the spirit of Decree No.09/2009/ND-CP of the government However, through researching, the dissertation believes that the financial management mechanism in accordance with Decree No.09/2009/ND-CP has many positive values: The regulations on the state financial management mechanism for the economic groups have initially classified the right to manage and use capital, assets in the state economic groups clearly This is considered as an important result to form the legal foundation for managing capital and assets in the state economic groups The state financial management mechanism for the economic groups has paid attention to the subdivision on financial management; has created the positive position for the economic groups in using the state capital and assets; has restricted the administrative intervention of the state management authorities into the business production process The mechanism has had relatively strict regulations on outside investment activities for the economic groups This has created legal foundation for the economic groups to invest and important foundation for inspecting and supervising the investment situations of the economic groups 18 Initially, the mechanism has grasped thoroughly the thought of subdivision following the spirit of promoting the autonomy and self-responsibility of the state economic groups 2.3.2 Limitations The state financial management mechanism on the spirit of Decree No.09/2009/ ND-CP of the government has been established based on the enterprise law However, until 2010, this law has become invalid Thus, in term of legal aspect, because the state management mechanism for the economic groups has not had solid legal foundation, there will be more or less entanglements in the implementation The state financial management mechanism has regulated too many owners from the Prime Minister and Ministries to Chairmen of the Provincial People’s Committees without indicating the prime bearer of responsibility clearly The regulations in the state financial management mechanism have focused too much on preserving capital and assets but have not had regulations on using capital and assets effectively and efficiently; have not established the criteria on assessing the effectiveness of the economic and financial activities of the economic groups The issue on supervising the financial activities, especially direct and internal supervision in the economic groups have not been clearly represented in the mechanism Especially, the mechanism has not had regulations on promoting the supervision roles of the National Assembly on managing and using the state capital and assets in the economic groups The above limitations are originated from many objective and subjective reasons: Objective reason: The state financial management mechanism following the spirit of Decree No.09/2009/ND-CP was established under the condition that the domestic and internal economy were facing many difficulties, which more or less affected the planning and implementation of the mechanism Subjective reasons: the organization model of the economic groups has not been stable in fact Regulating the functions and tasks of the economic groups has not been specific In term of the management, the economic groups have concentrated on the collective thoughts; the administrative intervention of the state authorities into the economic groups has not been considerably improved, especially the organization and officers issue Apart from the above-mentioned contents, Chapter of this dissertation has also further researched the actual situations about the implementation of the financial management mechanism of the two typical state economic groups namely the PetroVietnam (PVN) and the Vietnam Shipbuilding Industry Corporation (Vinashin) 19 CHAPTER THE COMPLETION OF THE STATE FINANCIAL MANAGEMENT MECHANISM TO INCREASE THE COMPETITIVENESS FOR THE VIETNAMESE ECONOMIC GROUPS 3.1 Guidelines and orientations for developing the state economic groups in the coming time 3.1.1 Restructure of the state economic groups Restructuring the economic groups is carried out following two trends: To rearrange and reorganize the state economic groups into the middle scale ones in conformity with the resources and management capacity To apply advanced technology in the business production activities; to quickly research and carry out the modern administration method in the world within the economic groups To complete the organization and management model and operation mechanism in the economic groups To develop specific plans to exploit advantages of each state economic group; to increase the competitiveness of state economic groups in the international market 3.1.2 Innovation on the state mechanism and policies applied to the economic groups towards creating favorable conditions for the developments of the state economic groups To regulate the criteria on the state economic groups and on multi-sector, field and owner business To regulate sectors and fields the state needs to control, the level and method of control, accordingly To diversify the rights and responsibilities of the state ownership and the state administrative management, striving for reducing the administrative intervention of the management authorities into the business production activities of the economic groups To regulate the real owner of the state capital and assets 3.2 Measures to complete the state financial management mechanism for the state economic groups 3.2.1 Objectives and requirements of the finalization 3.2.1.1 Objectives 20 Completing the state financial management mechanism for the economic groups is aimed at achieving the following major objectives: To recover the limitations of the prevailing state financial management mechanism for the state economic groups, in which, to clarify the autonomy and selfresponsibility for managing and using the State capital and assets in the state economic groups more clearly To innovate the state financial management mechanism for the state economic groups powerfully towards: - Increasing the autonomy and self-responsibility for the financial activities of the groups; promulgating and executing the financial supervision mechanism in a strict and effective manner; paying special attention to supervising internally and directly; increasing the supervision role of the National Assembly in terms of the State capital and assets in the state economic groups Establishing the independent financial management mechanism for the state economic groups 3.2.1.2 Requirements: Completing the state financial management mechanism must consider the requirement on using the state capital and assets effectively, ensuring the competitiveness of the state economic groups as the basis, simultaneously, paying special attention to preserving and developing the capital and assets in the state economic groups Completing the state financial management mechanism must consider the harmonious solving of benefit aspects as the throughout red thread in the process of finalization and innovation Ensuring that the state financial management mechanism has both encouraging and binding effect in using the state capital and assets in the state economic groups 3.2.2 Solutions to complete and innovate the state financial management mechanism for the state economic groups 3.2.2.1 General solutions: Firstly, to promulgate the criteria on classification of the state economic groups This is vitally necessary for establishing and realizing the financial management mechanism for each economic group In fact, due to characteristics of the business production activities, nature and ownership levels of the state economic groups, it is impossible to establish a general financial management mechanism for all economic groups There are many criteria on classifying the state economic groups, but it should