Final exam assignment

retracted some powers from the branch managers, requiring the company's highest board's approval for critical issues such as: 1 Capital expenditures over 20,000 USD; 2 The introduction o

3 Nguyen Thuy Linh - 21070864

4, Tran Doan Duc Anh - 21070215

5 Ha Lan Huong - 22070572 Class Code: INS201903

Lecturer: PhD Pham Trung Tien

Hanoi, December 2023

Program: VNU IB, AC, MIS, BDA, BEL

Course Code: INS2019

Course Title: Business Organization and Management

Level: Undergraduate

Time allowed: 7 days

Due date: December 25, 2023

Lecturer’s Signature & full name

Acknowledge:

First of all, we would like to thank Mr Pham Trung Tien for imparting knowledge and guiding

us in Business and Organization Management in this semester You helped us have a clear view

of Business especially how to manage employees and become a successful leader, and from there, we can use all the knowledge you have to apply to this report

During our studies, we encountered many difficulties However, with the teacher's careful, detailed explanations and especially his sharing of experiences, we can understand the lesson more deeply Furthermore, you also give us a feeling of closeness between teachers and students This makes each class more comfortable and enjoyable for us Despite our best efforts, we cannot avoid shortcomings due to limited knowledge and experience We look forward to receiving your comments, reviews, and suggestions to improve this report

Once again, thank you for Mr Pham Trung Tien’s enthusiasm for students We hope you have good health and constantly inspire and inform your students

GROUP CONTRIBUTION:

1| Nguyen Thu Trang (Leader) | 21070823 | Executive summary A

Introduction Distillation and Dialogue Interpret and Implement Conclusion

2 | Do Khanh Linh 21070057 | Rank and range A

Logic and narrative

3 | Nguyen Thuy Linh 21070864 | Determing the questions A

Context External drivers (Supporter)

4 | Ha Lan Huong 22070572 | External drivers B

5| Tran Doan Duc Anh 21070215 | Name and frame B

Validation and Refinement

Table of Contents

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Declaration and Statement of Authorship Error! Bookmark not defined

PART A: INDIVIDUAL PART

Company X, a provider of business equipment, has quickly established itself as a market leader through the introduction of unique new products, the deployment of breakthrough marketing strategies, and the provision of exceptionally high-quality customer support services With annual revenues exceeding 2 billion USD, robust profit growth, and a continuously climbing stock price, the company has become an ideal destination for investors

However, the company's chairman later realized that the organizational structure that once contributed to its success was no longer suitable For years, the company was organized by function, with vice presidents overseeing finance, marketing, production, human resources, procurement, technical, and research and development As it grew, the product line expanded beyond business computers to include electronic typewriters, photocopiers, movie cameras and projectors, computerized inspection systems for machinery, and electric financial calculators Over time, the issue became apparent that the structure did not properly reflect profit responsibilities below the chairman level, was not aligned with business nature, was too foreign- driven, and overly focused on departmental barriers that prevented effective collaboration between marketing, production, and technical functions Many decisions seemed to be made at lower levels rather than from the chairman's office Thus, the chairman divided the company into

16 independent branches, both domestic and international, each fully responsible for its profits However, after this restructuring, he felt he could not adequately control these branches Significant overlaps in procurement and human resources functions emerged, with branch managers conducting operations independently of the company's policies and strategies This made it evident to the chairman that the company was fragmenting into separate parts

Witnessing some large companies struggle with branch managers’ mistakes leading to substantial

retracted some powers from the branch managers, requiring the company's highest board's approval for critical issues such as:

(1) Capital expenditures over 20,000 USD;

(2) The introduction of new products;

(3) Marketing and pricing policies and strategies;

(4) Expansion of facilities;

(5) Changes in personnel policies

Branch general managers were displeased with the loss of autonomy, openly complaining about the company's inconsistent decentralization policy Fearing for his position, the chairman sought advice from a board of advisors on what to do next

Question 1: Evaluate the pros and cons of the company’s restructured organization

Question 2: Identify the mistakes made by the chairman in the establishment of 16 independent branches

Question 3: Assess whether it was correct for the chairman to retake control (consider the five key matters that necessitate the board's approval)

PART A: Individual Part

1, TRAN DOAN DUC ANH:

Question 1: Evaluate the pros and cons of the company’s restructured organization

e Local Autonomy:

Independent branches could be more responsive to local market nuances, tailor strategies to specific regions, and acknowledge the diverse needs and preferences of customers in different markets

This local autonomy could enhance competitiveness by fostering a deeper understanding of the unique demands of each market, ultimately leading to better customer satisfaction

e Flexibility:

The restructuring allowed for quick decision-making at the local level, providing an asset in rapidly changing markets The flexibility This adaptability to diverse market conditions is crucial, especially in industries where change is constant

For instance, responding swiftly to emerging trends, adjusting production or marketing strategies

to branches could potentially result in a more agile and responsive organization, better equipped

to navigate dynamic market landscapes

- Cons:

e Loss of Control:

The chairman's realization that he could not adequately control the branches post-restructuring was a crucial issue This struggle for control and oversight was evident in the potential inconsistencies that emerged

The lack of centralized control created challenges in enforcing a unified approach to strategy This loss of control could lead to a fragmented organizational strategy and hinder the implementation of cohesive business plans

e Overlaps:

The emergence of significant overlaps in procurement and human resources functions among the independent branches highlighted inefficiencies and redundancy The lack of centralized coordination resulted in inconsistencies in policy implementation

These overlaps not only hindered operational efficiency but also suggested a need for better coordination and communication between the branches to streamline processes and eliminate redundancies Inconsistent policy implementation further exacerbated the challenges arising from overlaps

® Fragmentation:

The restructuring seemed to lead to the fragmentation of the company into separate parts This had the potential to dilute the corporate brand and make it challenging to maintain a unified corporate culture

The difficulty in sustaining a cohesive culture across the independent branches could impact employee morale and organizational identity Maintaining a unified corporate culture becomes crucial for fostering a sense of belonging and shared values among employees across the organization

Question 2: Identify the mistakes made by the chairman in the establishment of 16

- Inadequate Control Measures:

e Mistake: There were insufficient control measures in place to ensure branches adhered

to the overall corporate policies

e Recommendation: Implement clear policies, reporting structures, and performance metrics to maintain consistency

- Loss of Cohesion:

e Mistake: The decentralized structure led to a loss of cohesion and a potential dilution

of the corporate strategy

e Recommendation: Strengthen mechanisms for maintaining a unified corporate culture and strategic vision

- Inconsistent Decentralization Policy:

e Mistake: The chairman's retraction of powers signaled an inconsistency in the decentralization policy

e Recommendation: Communicate and adhere to a consistent decentralization policy to avoid confusion and dissatisfaction

Question 3: Assess whether it was correct for the chairman to retake control (consider the five

key matters that necessitate the board's approval)

- Introduction of New Products:

e Assessment: Board approval for new products ensures alignment with overall company strategy

e Recommendation: Continue to involve the board in decisions that shape the product portfolio

- Marketing and Pricing Policies:

e Assessment: Board approval in these areas ensures consistency and alignment with broader corporate goals

e Recommendation: Maintain centralized oversight for marketing and pricing strategies for unified brand positioning

- Expansion of Facilities:

e Assessment: Centralized approval for expansion ensures strategic alignment and financial feasibility

e Recommendation: Continue to involve the board in decisions related to significant facility expansions

- Changes in Personnel Policies:

e Assessment: Board oversight on personnel policies safeguards against inconsistent and potentially detrimental HR practices

e Recommendation: Keep board involvement in personnel policies to ensure fairness and alignment with corporate values

2 NGUYEN THU TRANG

Question 1: Evaluate the pros and cons of the company’s restricted organization

e Localized decision-making: Decentralization gives branch managers the freedom

to choose solutions that best suit the demands of customers and the state of the market in their area This might result in more rapid customer service and happier clients

e Flexibility and adaptability: Each branch is able to adjust its strategy in accordance with the unique market circumstances that it faces due to the reorganized organization

- Cons:

e Loss of centralized control: It might be difficult for the chairman to keep things under control and guarantee uniformity throughout branches, which could cause problems with alignment and coordination

e Overlaps and inconsistencies: Due to overlapping tasks like procurement and human resources, autonomous branches run the danger of conflicting, inefficient,

and duplicating activities

e Lack of standardization: There may be differences in customer service, product quality, and branch-to-branch adherence to corporate rules and plans in the absence of robust central monitoring

Question 2: Identify the mistakes made by the chairman in the establishment of 16

independent branches

- Lack of clear boundaries: The Chairman has not established defined guidelines and boundaries for independent branches, leading to overlap and inconsistency in personnel and operational functions The boundary between the chairman and the branch manager is also not clearly defined, causing a lack of respect from subordinates for the leader

- Inconsistent decentralization policy: The chairman lacks specific strategies or policies for identifying the risks that will be encountered in branch expansion Leading to a lack of effective control and management to ensure branch managers operate according to

company policies and strategies Furthermore, making independent decisions too quickly can be detrimental to the company’s overall operations

- Inadequate communication and coordination: The Chairman has not established effective communication channels and coordination mechanisms between branches, leading to a fragmented organization and limited cooperation

- Over delegation: The president delegates excessive authority to branch managers, leading

to loss of control and inconsistency in decision-making

Question 3: Assess whether it was correct for the chairman to retake control (consider the five

key matters that necessitate the board's approval)

Regaining control by requiring the company's highest board's approval for critical issues can have both advantages and disadvantages

e Disadvantages:

e Delays in decision-making: Requiring the company's board permission for critical issues can potentially slow down the decision-making process, which could hinder the company's ability to respond quickly to market changes

e Limited autonomy: Branch managers may feel constrained by the loss of autonomy and the need for board approval, potentially affecting their motivation and sense of ownership

e Potential bottlenecks: Ineffective or unclear instructions from the board's approval process might lead to bottlenecks and reduce operational effectiveness

In conclusion, the chairman's determination to regain control by requiring board approval for management issues reflects an attempt to remedy the mistakes resulting from the initial decentralization Because of the large number of branches, the company must ensure that all processes and operations of the branches are carried out in accordance with corporate policy

e (1) Capital expenditures over 20,000 USD: Cash flow management is needed to control a balance between branches and company strategies

e (2) The introduction of new products: Controlling the introduction of new products helps the company develop products consistent with its brand positioning, as well as its own targeted customers

e (3) Marketing and pricing policies and strategies: They must ultimately be synchronized with company standard operating procedures, so they will be able to maintain the company of providing good customer service wherever the branch may be

e (4) Expansion of facilities: The company's overall growth plan may be ensured, and superfluous expenses can be avoided by getting board’s permission for facility expansion

In addition, the expansion of facilities must also be carefully approved based on the profit, scale, and growth of that branch

e (5) Changes in personnel policies: Human resources policies also need to be carefully considered, especially for high-level positions such as branch managers The company can completely rely on this person to manage the branch The chairman can delegate management tasks to branch supervisors and focus on overall development

3 NGUYEN THUY LINH:

Question 1: Evaluate the pros and cons of the company’s restricted organization

e Overlap and Inefficiency: The appearance of obvious overlaps between the human resources and procurement departments points to inefficiencies and a lack of branch-to- branch coordination

e Fragmentation: The chairman noted that the business was dividing into independent divisions, implying a possible collapse in the company's overall strategy and cohesiveness

e¢ Complaints and Dissatisfaction: The branch general managers' complaints suggest possible problems with motivation and morale, which could affect creativity and productivity

e Ineffective Collaboration: It's possible that the initial problem of departmental barriers affecting effective collaboration was not sufficiently addressed or was even made worse

Question 2: Identify the mistakes made by the chairman in the establishment of 16

independent branches

- Lack of Clear Guidelines: Overlaps and inefficiencies resulted from the chairman's failure

to set clear guidelines for coordination and communication between the branches

- Inadequate Monitoring: Branch managers were able to act without regard to corporate policies and strategies because the chairman neglected to put in place efficient monitoring systems

- Inadequate Analysis: It's possible that the chairman did not fully consider the possible repercussions of decentralization, such as how it would affect teamwork and the

cohesiveness of the entire organization

- Abrupt Decentralization: There may not have been enough time for transitional plans or training for the new organizational model because of the abrupt transition from a functional structure to 16 separate branches

Question 3: Assess whether it was correct for the chairman to retake control (consider the

Jive key matters that necessitate the board's approval)

- Capital Expenditures: By requiring board approval before making major financial decisions, major expenditures can be made with greater care and under the company's overall strategy This centralized management helps stop careless spending

- Introduction of New Products: The company's vision, brand, and market strategy are all in line with every product thanks to centralized approval for new ones It stops products from being introduced that might not work with the overall business plan

- Marketing and Pricing Policies and Strategies: Having centralized control over these areas guarantees consistency and keeps different divisions from adopting tactics that could be detrimental to the company's reputation or overall market position

- Facility Expansion: Obtaining board approval guarantees that decisions regarding facility expansion are in line with the company’s long-term objectives and financial capacity It stops haphazard expansion attempts that might put a strain on resources

- Modifications to Personnel Policies: Centralized management of personnel policies guarantees consistency and equity amongst branches, averting problems of prejudice, unfair treatment, or uneven implementation of HR procedures

Flexibility: The ability to adjust to local market demands and situations is enhanced by independent branches This versatility can help the organization compete in a variety of marketplaces

Concentrate on Core Competencies: By decentralizing decision-making, the corporation may

be able to allow each branch to focus on its core skills and respond to market needs more efficiently

- Cons:

Loss of control: The chairman lost substantial authority over the branches, making it impossible

to ensure compliance with company-wide policies, plans, and standards

Overlaps and Inefficiencies: The appearance of major overlaps in procurement and human resources services suggests the possibility of inefficiencies and higher costs owing to duplicating operations across branches

Inconsistent Decentralization: Because of the chairman's revocation of some powers, the decentralization strategy became inconsistent, producing confusion and unhappiness among branch managers

Lack of Collaboration: The early attempt at decentralization failed to address the issue of effective collaboration between different departments, resulting in departmental walls and hampered overall corporate performance

Question 2: Identify the mistakes made by the chairman in the establishment of 16

control and fragmentation

e Failure to Address cooperation: The restructure failed to address cooperation concerns across functions such as marketing, manufacturing, and technical, resulting in

organizational silos

¢ Inconsistent Policies: The chairman's decision to withdraw some powers caused inconsistencies in the decentralization policy, leading to confusion and unhappiness among branch managers

e A lack of effective monitoring and control measures in place allowed branch managers to act independently of company rules and plans

Question 3: Assess whether it was correct for the chairman to retake control (consider the five

key matters that necessitate the board's approval)

Introduction of New Products:

Assessment: Centralized management over new product releases can help to preserve brand and overall strategy consistency

Consideration: To prevent delays in responding to market developments, an effective approval procedure should be in place It is critical to strike a balance between central control and creativity

Marketing and Pricing Policies:

Assessment: Centralized marketing and price control may assure a consistent and planned strategy

Consideration: It is critical to strike a balance between this and flexibility in order to respond to changing market conditions It is critical that central management and marketing teams communicate effectively

Expansion of Facilities:

Assessment: Requiring clearance for facility expansion can save money and assure conformity with the company's growth strategy

Consideration: To minimize inefficient resource utilization, a process should be in place to speed approvals for time-sensitive expansions while retaining strategic control

Changes in Personnel Policies:

Assessment: Centralized management over personnel policies can help to ensure consistency in

HR processes

Consideration: It is critical to strike a balance between uniform regulations and flexibility to accommodate local workforce demands It is critical to have regular communication with HR professionals across branches

5, HA LAN HUONG:

Question 1: Evaluate the pros and cons of the company’s restructured organization

The pros of the company’s restructured organization

e Profit Responsibility at Branch Level:

Assigning each branch full responsibility for its profits can enhance accountability and performance Branch managers can focus on local market needs and adapt strategies accordingly This decentralized structure can lead to faster decision-making at the local level, enabling quicker responses to market changes

¢ Flexibility and Adaptability:

The move away from a rigid functional structure allows for greater flexibility and adaptability to changes in the business environment

Local branches can tailor their approaches to specific market conditions, potentially fostering

e¢ Improved Collaboration:

Breaking down departmental barriers may encourage better collaboration between different functions such as marketing, production, and technical teams, leading to more integrated and effective operations

The cons of the company’s restructured organization

e Loss of Centralized Control:

The chairman's concern about the inability to control the branches suggests a potential drawback Loss of central control may lead to inconsistencies in policies, strategies, and overall company direction

The fragmentation of the company into independent parts may result in inefficiencies, especially

if there are significant overlaps in functions like procurement and human resources

¢ Risk of Inconsistent Decision-Making:

Decisions being made at lower levels without adequate coordination might lead to inconsistencies

in overall corporate strategy This can create challenges in maintaining a unified company vision

e Branch Manager Discontent:

The dissatisfaction among branch general managers indicates potential issues with the loss of autonomy This discontent could impact morale, employee engagement, and overall organizational culture

The chairman's retraction of powers may hinder initiative and creativity at the branch level

Question 2: Identify the mistakes made by the chairman in the establishment of 16

independent branches

- Excessive Decentralization: The chairman moved from a highly centralized structure to extreme decentralization without finding the right balance The 16 independent branches led to a loss of centralized control and challenges in coordinating company-wide strategies

- Lack of Coordination Mechanisms: The chairman failed to establish effective coordination mechanisms between the branches Overlaps in procurement and human resources functions emerged, indicating a lack of coordination and standardization of policies across branches

- Inadequate Communication Channels: The chairman did not establish effective communication channels between the branches and the central office This lack of communication contributed to the chairman's perception that he could not adequately control the branches

- Failure to Address Functional Overlaps: The chairman did not adequately address the potential for functional overlaps among the branches Overlaps in procurement and human resources functions indicate a lack of clarity in roles and responsibilities, leading

to inefficiencies

- Unclear Delegation of Authority: The chairman delegated significant authority to branch managers without establishing clear boundaries and guidelines This lack of clarity led to decisions being made independently of the company's overall policies and strategies

Question 3: Assess whether it was correct for the chairman to retake control (consider the five

key matters that necessitate the board's approval)

The chairman's decision to retake control over certain key matters, requiring the board's approval, reflects a reconsideration of the extreme decentralization implemented earlier

- Capital Expenditures over $20,000:

Assessment: Requiring board approval for significant capital expenditures can be a reasonable measure to ensure financial prudence and alignment with overall corporate strategies It helps prevent unilateral decisions that may not align with the company's financial goals

Consideration: The chairman should ensure that the approval process is efficient and does not introduce unnecessary bureaucracy that could slow down essential investments

- Introduction of New Products:

Assessment: Requiring board approval for new product introductions indicates recognition of the strategic importance of product development Centralized control over this aspect can ensure that new products align with the overall business strategy and market trends

Consideration: The chairman should balance control with the need for innovation, ensuring that the approval process does not stifle creativity or delay time-sensitive product launches

- Marketing and Pricing Policies and Strategies:

Assessment: Centralized control over marketing and pricing policies is critical for maintaining a consistent brand image and market positioning It helps prevent disjointed strategies and ensures that pricing aligns with overall business goals

Consideration: The chairman should establish clear guidelines and criteria for marketing and pricing decisions to streamline the approval process and avoid unnecessary delays

- Expansion of Facilities:

Assessment: Requiring board approval for the expansion of facilities is a prudent measure to control capital-intensive decisions It ensures that expansion aligns with the company's overall growth strategy and financial capacity

Consideration: The chairman should establish criteria for facility expansion approval and ensure that the process is efficient to support timely business expansion initiatives

- Changes in Personnel Policies:

Assessment: Centralized control over personnel policies is essential for maintaining consistency

in HR practices, ensuring compliance, and aligning with the company's values It helps prevent variations in employee treatment across different branches

Consideration: The chairman should involve HR experts and establish a streamlined approval process for personnel policy changes to address issues promptly