subject the principles of management midterm assignment

The University of Economics and Business - VNU

OUTLINE

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Abstract

The management level is a critical aspect in the management and development of the enterprise Many individuals believe that the growth of the management level of Vietnamese enterprises is not comparable with other factors and other developed nations, which is a weakness when compared to the management level of enterprises/organizations in developed countries This article will assess the strengths, weeknesses, opportunities and challenges of Vietnamese enterprises, as well as interaction with real businesses in Vietnam and throughout the world, to provide methods to enhance the management level of Vietnamese enterprises

I, INTRODUCTION

The dominance of any business apart from how much capital they have and what technology they use is determined by how the organization has people It is to form and develop the organization It is impossible not to mention the role of the manager Therefore, the level of management determines the vital role of the business It is a guideline to guide the company to achieve its goals However, when compared with developed countries, the level of governance of our country, despite having distinct advantages, still shows many shortcomings It is important that we be aware of our strengths, weaknesses, opportunities and challenges, compare them with developed countries, and then propose solutions to improve the management level of Vietnamese

I THE CONCEPT OF MANAGEMENT LEVEL

Management level is the ability of managers to guide organizations toward goal accomplishment, which can be evaluated through the effectiveness and efficiency of activities working with and through people and other organizational resources In addition, management is the process by which managers plan, organize, influence and control the performance of activities and employees in the company/enterprise to optimize work efficiency

Management include the four functions:

Planning: is the process of choosing, deciding how and indicating when the tasks must be performed to attain the organizational goals Planning is essential to getting the right things done Planning is also concerned with the success of the organization in short term and long term It includes some aspects like Strategic planning, risk

management,

Organizing: can be thought of assigning the tasks determined after the planning function to various individuals, groups or departments within the organization Tasks are organized so that the output of individuals contributes to the success of larger unit (group, department, ) which finally contributes to the success of the organization In short, organizing includes determining tasked and groupings of work

Influencing: Influencing is another of the basic functions within the management process This function—also commonly referred to as motivating, leading, directing, or actuating—is concerned primarily with the people within organizations.15 Influencing can be defined as guiding the activities of organization members in appropriate directions An appropriate direction is any direction that helps the organization move toward goal attainment The ultimate purpose of influencing is to increase productivity Human-oriented work situations usually generate higher levels of production over the long term than do task-oriented work situations because people find the latter type less satisfying

Controlling: Controlling is the management function through which managers: 1 Gather information that measures recent performance within the organization 2 Compare present performance to preestablished performance — standards 3 From this comparison, determine whether the organization should be modified to

Controlling is an ongoing process Managers continually gather information, make their comparisons, and then try to find new ways of improving production through organizational modification

HI CURRENT STATUS OF MANAGEMENT LEVEL IN VIET NAM 1 Strengths of Viet Nam enterprises

a) The Vietnam corporate spirit

The common spirit of Vietnamese businessmen is to continue to connect and develop to jointly build a prosperous country Despite facing many difficulties and challenges, entrepreneurs always show responsibility, solidarity, “mutual friendship, mutual love", especially when General Secretary Nguyen Phu Trong issued a call to many businesses People have responded and made important, valuable and practical contributions in the prevention and control of the COVID-19 epidemic Looking back over the past time,

most businesses are "stumbling" before the wave of COVID-19: losses, closures,

workers losing their jobs And now, when life returns to a normal rhythm Usually, entrepreneurs and businesses are at the forefront of the economic front Enterprises, led by entrepreneurs, have shown the spirit of joining hands to overcome difficulties and demonstrate social responsibility to the Fatherland.

Typical among those businesses is Vingroup with the mission of creating a good image and bringing Vietnamese products to the world VinFast car models introduced by VinGroup recently have been highly appreciated by international public opinion and domestic consumers with European design and technology Regarding social responsibility, VinGroup announced the transformation of Vinmec and Vinschool systems into a non-profit model, committing 100% of profits to society With the non- profitization of two fast-growing brands with sustainable profit prospects - VinGroup has affirmed the stature, prestige and social responsibility of a leading private economic group in Vietnam, following the development trend of large enterprises in the world

Solutions: : In general, entrepreneurship in Vietnam is at a high level, especially when the country faces difficulties However, the support activities of enterprises are only on the surface, not many long-term activities Enterprises should focus on building long-term corporate social responsibility strategies and activities, not only focusing on poverty alleviation but also other aspects The State should also propagate to raise the spirit of Vietnamese enterprises

2 Weaknesses of Viet Nam enterprises a) Organizational Transparency

Poor publicity and non-transparency is an important issue in corporate management in Vietnam today Owners and stockholders do not obtain essential company information in a timely, accurate, and full way Basic information ranges from total assets to an accurate assessment of the current financial position and information about past cash flows as well as information about future forecasts This makes it hard for investors and shareholders to appropriately estimate the company's present and future value Because businesses lack standard publications, it is simple to execute Internal and independent audits have not been prioritized The quality of financial statements and the level of information disclosure for listed companies, especially for unlisted joint stock companies and state-owned enterprises, are not high

Leaders and corporate leaders frequently use it for personal benefit This has serious consequences not only for the state but also for investors and shareholders Typically, Mr Trinh Van Quyet and his associates were detained for the latest instance of stock market manipulation and unlawful earnings Trinh Van Quyet directed Trinh Thi Minh Hue to borrow the identity cards of 26 individuals to set up 20 businesses and open 450 accounts at 41 securities companies to perform acts of manipulating stock prices to create supply and demand faked with 6 stock codes FLC and made illegal profits, initially estimated at 975 billion dong This has taken a particularly large toll on investors.

The solution is to tighten the legal system to protect the benefits of shareholders The legal system needs to be clearer and punish more strictly for cases of market manipulation for illicit gain, affecting not only shareholders but also the economy

About enterprises: Conduct training on qualifications and management skills for leaders and departments of the company Strictly penalize acts of taking advantage of information disturbances to benefit individuals and groups of interests

b) Organizational structure

This problem can be seen as the most prominent problem in Vietnamese enterprises today The current popular organization, management and administration of enterprises are under the centralized mechanism Power is concentrated in a few people, they are both major shareholders and members of the Board of Directors (BOD) and at the same time hold the key position in the Executive Board (Board of Directors) Business leaders are actually more in charge of operating than strategic planning and monitoring the implementation of business development strategies; the function of supervision and balance of power between the parties in the enterprise, especially between the owner and the operator, has yet to be performed The vast majority of business directors are business owners and practice "family" management, alone or some relatives take on all management functions

The reason for this is that the great majority of private corporations, family businesses, and small and medium-sized businesses prefer this business model Hereditary promotions to significant leadership posts are common They desire to wield immense influence within the company's apparatus, to misuse their power and positions in order to have complete authority to orient and steer the firm in a specific direction without encountering any difficulties due to disagreements from other members And the situation of one person holding two positions not only occurs in small companies but also in large-scale companies

For example, according to data from VNR500, Mr Vu Tien Giao From October 2012 to September 2013 held both positions as a member of the Board of Directors and General Director of LICOGI Infrastructure Construction and Development Corporation (the company ranked No 312 out of 500 largest private enterprises in Vietnam) However, this is not a new situation for Vietnamese enterprises, but this phenomenon still exists in large corporations around the world Typically, billionaire Elon Musk, he is both chairman of the board of directors, CEO and chief engineer of SpaceX Chaebol conglomerates also have hereditary status, typically Samsung, Lee Jae-yong became chairman of the board after his father, the late chairman Lee Kun-hee, passed away .

The next reason that can be mentioned is the lack of knowledge about corporate governance Corporate governance defines the rights and responsibilities among different groups and members in the company, including shareholders, the board of directors, the executive board, the supervisory board and other stakeholders of the company labor and suppliers At the same time, corporate governance also establishes principles and processes and procedures for decision-making in the company, thereby preventing abuse of power and position, minimizing risks related to or originating from related party transactions, potential conflicts of interest, and the lack of clear standards or non-compliance with disclosure and non-transparency regulations The concept of corporate governance in general has not been interested and developed by business owners; The state has not focused on propagating about the practicality of corporate governance for the Vietnamese business community

This causes business owners to be overburdened with operational tasks, leaving them with little capacity and time to devise development plans The company’s strategy has largely short-term consequences focused at rapid earnings Furthermore, the practice of promoting family members to positions of management that sometimes are not commensurate with their abilities stifles the company's growth

Solutions: On the government side, we have made significant progress in developing a legislative framework for corporate governance based on worldwide best practices; the key problem now is to ensure that local economic players understand, accept, and comply The first and most essential step is to spread and educate about corporate governance and its importance to the development of businesses and the economy The ideas and words of the corporate governance framework will describe the nature and core substance of governance As a result, the core of governance will be presented to

owners, state authorities, public workers, and corporate managers in a consistent, clear,

and accessible manner As a result, the study and development of governance manuals, textbooks, and other reference materials must be explicitly prioritized Actively and aggressively plan corporate governance training sessions Instead of only teaching business administration in schools nowadays, it is vital to examine and include corporate governance topics into teaching at colleges and training organizations

On the business side, developing corporate governance ability must be seen as one of the critical determinants determining organizational competitiveness Building a management system is the first step in strengthening corporate governance in organizations That system must include the following components: organizational structure, policies, regulations, professional processes, inspection, and control; fully define the functions and tasks of the departments, have clear assignment, assignment, and authorization, identify individual responsibilities associated with the quality of work and the performer's interests; business processes must be detailed and specific enough to guide implementation and clearly define the responsibilities of each r In addition to adhering to the purpose of building and implementing the system, it is critical to pay

close attention to monitoring, testing, and evaluation in order to continually enhance the system so that it is more and more suited to the company's real conditions

c) Strategic Management

The majority of businesses do not clearly define their existential mission, do not have long-term goals and do not define a development strategy model (over 95%) The operation of the enterprise is mainly established through short-term operating plans, most of which are monthly or even shorter plans

It can be said that short-term thinking, lack of long-term operation direction is a major feature that governs the operation of enterprises According to Vice Chairman of Ho Chi Minh City Entrepreneurs Association Tran Viet Anh, the average lifespan of a business is very short, only about 3.4 years A lot of businesses are established just for the purpose of exploiting a certain business opportunity, when that opportunity is no longer available, the business also ceases to operate

Enterprises are still focused solely on scale and revenue, and they are not yet receptive to innovation Because they believe that exported items are of high quality, few businesses invest in scientific and technological advancements to increase the quality of domestic goods

Few Vietnamese enterprises have achieved significant success on the global arena and have yet to gain international recognition The market is still strongly reliant on foreign commodities and cannot be self-sufficient in terms of material supply The mindset that imported items are good and delightful while ignoring domestic enterprises in the same industry has an impact on business potential Consider the success of Toyota, the world's largest automaker, which began when Sakichi Toyoda saw American automobiles while looking for a market for his loom The Japanese national pride drove

him to invest resources, study, and manufacture an automobile called Toyoda, which

was eventually renamed Toyota We see that they have deliberately established something of their own, a brand to be proud of with people all over the world, and that they are no longer completely reliant on foreign cars

Solutions: For effective strategic planning, businesses need experts in this field We can nominate leaders to study abroad, acquire knowledge and train their mindsets to lead the company Besides, we can also hire experts in the field of strategic planning to define

Review reduction of taxes, fees and charges; Implement Expansion Fiscal Policy Thoroughly save on recurrent expenses, especially non-business expenses of investment nature, expenditures that are not really necessary; continue to direct and review the reduction of taxes, fees and charges and adopt appropriate policies to support people and businesses to continue expanding production, business and job creation activities

The National Assembly requires the implementation of the fiscal policy of expansion, focus, ensuring efficiency, strengthening financial discipline, combating revenue loss, thoroughly thrift, and combating wastefulness; review to soon put resources that have not been effectively exploited in service of socio-economic development

Completing institutions and laws to remove difficulties for production and business This is one of the requirements of the Government in Resolution 126/NQ-CP Accordingly, the Government requires ministries, branches and localities to do well planning; review and perfect institutions and laws to remove difficulties for production and business, and well solve arising problems Thoroughly grasp the point of view of directing the macroeconomic management to be proactive, flexible, timely, creative, effective, suitable to the situation and practical requirements Control risks, promptly respond to the risk of recession and crisis; building a line of international economic cooperation and competition in the context of extensive integration

b) Attracting foreign investment

According to VnEconomy, as of early 2022, Vietnam has 395 industrial parks in 61 provinces and cities with a planned area of 123,000 hectares This is a signal that Vietnam is interested and attracted to large companies and foreign investors "Vietnam owns a strategic location in the Asia-Pacific region and is forming many logistics centers Therefore, setting up a factory in Vietnam will help us cut transportation and logistics costs when exports to other markets in the region," said ABB Group Vice President Alesandro Palin.

Vietnam offers great investment opportunities for European businesses and we are excited about the country's prospects in the medium to short term Through the EU- Vietnam Free Trade Agreement and our shared commitment to sustainable development, Vietnamese and European companies have a lot of growth potential," said President of the European Business Association Meanwhile, Korea - the largest foreign investor in Vietnam is still carrying out big plans to make Vietnam become the largest production center in many global production chains

Large investment from abroad will create favorable conditions for the whole economy in the opening period This is both an opportunity and a challenge for Vietnamese businesses, will they be able to take advantage of investments to develop, or will they be competed by foreign brands imported into our country?

Solutions: This issue depends on the vision of managers, businesses need to attract investment capital as well as create a competitive advantage when the market heats up

4 Challenges

a) The legal system of Viet Nam

On the basis of issued legal documents such as the Enterprise Law (2005); The Law on Securities (2006) can draw conclusions: the legal framework on corporate governance in Vietnam is quite complete and gradually approaches the world's corporate governance standards However, many provisions of the Law are still quite general and so far there are no guiding decrees, so businesses lack a basis for implementation The evaluation results received are low, in our opinion, mainly because members of the enterprise have little understanding of the law in general as well as issues related to corporate governance in particular Many contents of the Law are quite clear, but businesses rarely use it

Solutions:To improve this situation, the Government needs to have specific laws to guide businesses to implement and follow Each law should clearly define the scope of influence, specific conditions and situations, along with instructions for businesses to understand On the business side, leaders should strengthen the legal consulting department, actively update and improve their legal knowledge

b) Vietnamese corporate culture has not yet created a foundation for creativity and innovation

Creativity needs an environment in which employees are not afraid to make mistakes According to the survey results of a research group of 400 enterprises across Vietnam, more than 50% of surveyed enterprises said that they tolerate mistakes and failures in innovation to a moderate extent And also more than 50% of them encourage and motivate creative thinking and new ideas to a certain extent When asked about the