Management issues of npo in vietnam a case study of aiesec in vietnam

Proceedings the 10th students scientific research conference Management issues of NPO in Vietnam – A case study of AIESEC in Vietnam Group sciences: Nguyễn Thị Phương Thảo Lê Ngọc Thành Nguyễn Trung Long Nguyễn Quốc Bảo Class: AC2015C, IB2015E, IB2015D, IB2015E Science advisor: Msc Phạm Hương Trang 662 Proceedings the 10th students scientific research conference CHAPTER 1: INTRODUCTION 1.1 Introduction: Nowadays, the NPOs plays an important role in economic, also knows as a nonbusiness entity NPO is such a global phenomenon that people nowadays say “a NGO community”, “a NGO culture” NGOs engage in modern social activities, which is an organic part of this reality On the one hand, the non-profit organization target their activities to community and social activities Some organizations are create healthy life, rewarding environment for individuals, or to bridge the gap between social classes On the other hand, they accept big expenses in exchange for the other value that they need There are about 800 NPOs are operating in Viet Nam, out of total of 10,000 NGOs in Asia- pacific region With such development, how they can management NPOs? So that, having full and accurate knowledge of management in NGOs is essential for Vietnam, from macro level managers to local people There is a fact that NGOs and their activities are a reality in Vietnamese social life today 1.2 The necessary of topic: Today there are many NPOs in Vietnam and they are very confused in management system, which still maintains many issues needed to be solved In reality, many have been dismissed due to their lack of management knowledge In the urgency of this situation in Vietnam, studying management issues of NPOs and the solutions are quite necessary Therefore, this is such an interesting topic 1.3 The goal of topic: The goal of this research focuses on problems in management of NGOs/NPOs With a case model of AISEEC, authors hope to understand reasons why management systems of NGOs/NPOs are inefficient and if they require a separate or special management models 1.4 Research questions and methodology: 1.4.1 Research questions: Base on the objective above, this research aimed to answer these questions: Question 1: What is NPO/NGO? What are management issues of AISEEC?’ 663 Proceedings the 10th students scientific research conference Question 2: How has AISEEC responded to improve their management systems?” 1.4.2 Research Methodology: Focus case model is AIESEC – the world’s largest non-profit youth-run organization AIESEC Vietnam is 1.4.2 a Research : The procedure of this thesis includes following step: Ste p Table 1.1 Research process : Activity Define thesis title, and research issue with supervisor Confirm the approval from supervision Determine research rationale, purposes and procedure Literature review (read and summed up related previous study) Define the problems of management issue by in-depth interview Design the research by questionnaire, conduct survey to collect data and analysis Request the research content and structure Apply the thesis proposal Chapter 1: Introduction: Describe the background and the motivation of the study to find research purposes Chapter 2: Theoretical Background 10 Chapter 3: Management at AIESEC Chapter 4: Conclusion and recommendation 1.4.2 b Data collection:  Secondary data: Table 1: Secondary sources and its objective Sources Objective Textbooks and the internet Provide to the author basic philosophies and factors to measure the NPO/ INGO management issue Some documents from AIESEC’s Provide to the writer with management issue of reports, regulations, and policies admin staff, the turnover and HR policies being applied in the organization Thesis, economic newspapers, Provide the author an overview look at journals that have information related measurement of job satisfaction at some to management issue of AIESEC specific industry 664 Proceedings the 10th students scientific research conference CHAPTER 2: THEORETICAL BACKGROUND 2.1 NPO : 2.1.1 Definition of NPO: Associations, charities, cooperatives, and other voluntary organizations formed to further cultural, educational, religious, professional, or public service objectives Their startup funding is provided by their members, trustees, or others who not expect repayment, and who not share in the organization's profits or losses which are retained or absorbed Approved, incorporated, or registered NPOs are usually granted tax exemptions, and contributions to them are often tax deductible Most nongovernmental organizations (NGOs) are NPOs 2.1.2 Types of NPO :  Social relief establishments (SREs) Pursuant to the Law on Organization of the Government of December 25, 2001 and according to DECREE of Establishment and operation of social relief establishments written by Vietnamese Government in 2007, “Social Relief Establishment” means units of social work activities established for purpose of providing nursing and taking care services to social objects have special circumstances, no living conditions in the family, including: social protection institutions taking care of many groups of social protection beneficiaries, elderly care facility, mental health care facility, facilities for people with disabilities, child care facilities in special circumstances Public social relief establishments are facilities established and managed by state agencies Nonpublic social relief establishments are facilities established and managed by: political organizations, socio-political organizations, socio-political organizations - professional organizations, social organizations, socio-professional organizations, economic organizations, domestic individuals, foreign organizations and individuals, Vietnamese people residing abroad established in the territory of Vietnam  Social funs and charitable funds (Funds) 665 Proceedings the 10th students scientific research conference According to Decree No 30/2012 / ND-CP of the Vietnamese Government on the organization and operation of social funds and charity funds: "Fund" means a non-governmental organization which voluntarily sets aside a certain property for establishment or establishment through a contract, donation or will; For purposes of supporting and promoting the development of culture, education, health, physical education, sports, science, charity, humanitarian and community development "Social Fund" means a fund organized and operated for the primary purpose of supporting and promoting the development of culture, education, health, physical training and sports, science and community development purposes, not for profit purposes "Charity Fund" means a fund which is organized and operates with the main purpose to assist in overcoming difficulties caused by natural calamities, fires, serious incidents, patients suffering from serious diseases and other subjects in need of social assistance, not for profit purpose  Associations: The Association is a voluntary organization of citizens had the same trades, have the same interests, or have general purpose collection The Association works to protect and promote the rights and legitimate interests of the membership and the community The members of the mutual support in many aspects The Association can exist for many different reasons, for example to protect the animal, the environment, cultural activities, educational activities, professional activities, or sports activities The Association may raise funds from cost of the membership and the revenues from the business and service The Association also is allowed to receive funding from individuals/organizations within and outside the country  Scientific and technological organizations (STOs) According to the law on Science and technology, the individual or organization meets the required conditions might formed Scientific and technological organizations Next to the Scientific and technological organizations established by individuals, organizations in the country, the Scientific and technological organization can also be established by individuals or organizations However, we not have instructions for 666 Proceedings the 10th students scientific research conference individuals or organizations to join established Scientific and technological organizations in Vietnam Individuals/organizations could be allowed to founder members of a Scientific and technological organization but is not allowed to permanent members There are many different ways to classify the Scientific and technological organization Based on ownership structure, Scientific and technological organization is classified as a public Scientific and technological organizations, the private Scientific and technological organizations, and Scientific and technological organizations have foreign capital 2.2 INGO 2.2.1 Definition: International nongovernmental organizations (INGOs)are not-for-profit voluntary associations operating at the international, transnational, or global level, with members or participants from many countries They bring together like-minded individuals or associations of individuals to conduct a wide variety of activities across virtually all social domains, from astronomy to football to plant biology to zoo management Although the best-known INGOs focus on human rights (for example, Amnesty International), the environment (Friends of the Earth), disaster relief (the Red Cross), and the like, most INGOs are found in scientific, technical, business and industry, medical, and professional domains Sizable numbers are also active in domains such as sports and recreation, development, education, women’s rights, and many others (http://what-when-how.com/social-sciences/international-nongovernmentalorganizations-ingos-social-science/) 2.2.2 Characteristics: Most foreign NGOs implementing the project in Vietnam respect the principle of trilateral relations: local government - people - foreign NGOs, in which people are taken at the center of development and people's participation is respected at every stage of the project cycle, ensuring direct aid to the people 2.2.3 Advantages: First, the role of financial support Approximately 76.1% of INGOs hold a financial support role; over 58.2% had a technical support role and nearly 52.2% played a 667 Proceedings the 10th students scientific research conference supporting role According to the INGOs, in parallel with financial support, technical assistance and methodological support will ensure quality projects In addition, up to 41.8% and 44.8% of INGOs have the role of implementing or co-developing projects with local partners Project implementation methods and technical knowledge are the most important contributions of INGOs in Vietnam Second, supportive roles in addressing community issues INGOs are a channel to support the poor - vulnerable groups that the State has not paid much attention to In Thanh Hoa and Yen Bai, the INGOs play the role of humanitarian relief, credit, or rural infrastructure construction These are the most important and most invested activities of most of the INGO working in Vietnam Third, sharing experience role In addition, to contribute directly to the changes in people's lives, INGOs also have the role of sharing experiences, methods and techniques of developing national programs, policies and legal frameworks for related issues Many INGOs, such asOxfam International, contributed directly to the development of the 135 program of the National Committee for Ethnic Minorities and the social allowances of the Ministry of Labor, War Invalids, and Social Affairs PATH (Program for Appropriate Technology in Health) is an international non-governmental organization working in the health sector) involved in the development of the Law on HIV Prevention; Cooperative for American Remittances to Europe is a humanitarian and development aid organization, involved in the development of a national disaster preparedness and response strategy Fourth, people are diplomacy role NGOs play the role of bridging information between Vietnam and other countries in the world In fact, there is a great deal of exchanges between Vietnam and countries through staff, citizens and donors of INGOs through workshops or exchange of experiences INGOs are channels to attract more capital and expand external relations, thus enhancing Vietnam's image to the world, introducing Vietnam's open, friendly environment INGOs are not the only implementing projects, funding programs but also setting up Ethnic Minorities Working Groups In 2015, the main members of the group contributed personnel, time and funds to the group's activities Activities of the group is aimed at three main objectives: Developing a program to support the socio668 Proceedings the 10th students scientific research conference economic development of ethnic minority and mountainous areas in the 2016-2020 periods; establishing the national target program on sustainable poverty reduction for 2016-2020; Committing to promote cooperation, sharing and mobilizing resources for sustainable poverty reduction for ethnic minority communities The third objective is both the commitment and the group's recommendations for poverty reduction activities in Vietnam for 2016-2020 and the achievement of sustainable development goals by 2030 In summary, INGOs have played an important role in poverty alleviation and sustainable development in line with Vietnam's socio-economic development priorities and orientations The activities of INGOs bring many positive benefits and positive changes in the lives of Vietnam Involvement of INGOs in Vietnam's development has created a more multidimensional view of economic and social issues as well as development patterns INGOs contribute to making Vietnamese society more open and more integrated into the international community Viet Nam appreciates the help of the INGOs The level of INGOs' participation in poverty reduction and the socioeconomic development of Viet Nam are increasing Reflecting the number of INGOs operating in Vietnam is highly increasing, sectors and geographical areas of operation increasingly, a growing aid levels, the relationship between Vietnam and INGOs government has elevated to partnership 2.2.4 Disadvantages: Firstly, some agencies and units have not paid adequate attention to and still confused in performing the State management over diplomatic activities, especially the people diplomacy, including reception, management and usage of foreign non-governmental aid Secondly, aid recipients are not active and comply with timely reporting according to the reporting regime stipulated in Decree 93/2009 / ND-CP and Guiding Circular No 07/2010 / TT- BKH of the Ministry of Planning and Investment Thirdly, the aid-receiving agencies and units have not had specialized sections with full capacity and experience yet to advise the local leaders and units in mobilizing, receiving and managing the projects funded by foreign non-governmental aids 2.3 Management issues of NGO/INGO: 669 Proceedings the 10th students scientific research conference 2.3.1 Not making decisions based on mission: One Non-government organization management issue is that organizations run into is not basing their decision-making on their organization’s mission and values Making decisions solely on intuitions or spur of the moment benefits is not the best approach for nonprofits focusing on sustainability That could be understandable while human is an entity blended by elements: Logic & emotion, so every decision involves these elements We all know that, the more logic part involves, the better decision be created The pressure on the job of the leader is increasing: the promises to be made, the pursuit goal, lack of adequate rest , makes entrepreneurs today vulnerable to negative emotions attack When the emotion rules the decision making process, the decision may lead to Mission creep Mission creep is one of the most common and greatest threats in the nonprofit organization What is mission creep? According to Cambridge Dictionary, Mission creep is a change that pushes an organization past its original goals and objectives Mission creep can cause an organization to overextend their organization scale, cause processes to become ineffective, and produce a change in brand perception (both internal or external) 2.3.2 No Succession Plan Another common management issue in the nonprofit sector is the lack of a strategic succession plan What is the succession plan? Succession planning is the process of identifying and developing new leaders who will replace existing leaders in the future.Succession planning is not an issue that many organizations address in any systematic way Because many nonprofits are small (with fewer than 10 employees) and because they may be facing other organizational challenges, thinking about who the next executive director might be or what would happen if the director of finance suddenly left is not high on their priority list There are many reasons why organizations need to be thinking about succession planning The most important reason, of course, is that we rely on staff to carry out our missions, provide services and meet our organization's goals We need to think about what would happen to those services or our ability to fulfill our mission if a key staff 670 Proceedings the 10th students scientific research conference member left.Another reason to focus on succession planning is the changing realities of workplaces Not having a succession plan in place can lead to unwarranted process changes, a blurred vision, and the potential of another nonprofit management issue 2.2.3 Lack of Strategic Budgeting One of the biggest challenges in the non – government organization in general and nonprofit organization in specific and for nonprofit management is strategic budgeting Described byRoy T Meyers - Assistant Professor of Political Science, University of Maryland, Baltimore, strategic budgeting is the process of creating a long-range budget that spans a period of more than one year The intent behind this type of budgeting is to develop a plan that supports a long-range vision for the future position of an entity Budgeting can be difficult in the nonprofit industry as most organizations not have access to a lot of excess funds How your nonprofit plans and executes its budget can make or break organizational success 2.3.4 Limited Operational Time Tracking Tracking time in a nonprofit organization is invaluable The data gathered can help your organization realize how many employees and volunteers are required to achieve the mission strategically Effective time tracking can also open up the door for additional time allocation in areas of the nonprofit that needs more development Your nonprofit should also be actively tracking your volunteer time and reporting this data to them for their own personal records Having a system in place makes your organization look more professional and can increase your retention rates CHAPTER 3: MANAGEMENT AT AIESEC 3.1 Introduction of AIESEC: AIESEC is the world's largest non-profit youth-run organization It is an international non-governmental not-for-profit organization that provides young people with leadership development and cross-cultural global internship and volunteer exchange experiences across the globe, with a focus to empower young people so they can make 671 Proceedings the 10th students scientific research conference a positive impact on society The AIESEC network includes approximately 70,000 members in 127 countries and territories AIESEC in Vietnam has established in Vietnam since 2008 with the aim of develop leadership for Vietnam youth Head office of AIESEC in Vietnam is in Ho Chi Minh city, with Local committee (3 in North Vietnam, in the Middle and in the South) The main activities of AIESEC in Vietnam:  Provide information and organize the abroad internship for Vietnamese students  Provide information and organize the source of international candidates for companies and organizations have interest in Vietnam  Operate more than 800 exchanges for both incoming or outgoing youth in 2017  Organize conference (local and national) to enhance the leadership and capacity for members: national conference each year, national leadership board meeting, workshop,  Provide professional and dynamic environment for student to practice and develop skills, network,…before they graduate  Social projects with the core of 17 Sustainable Development Goals of United Nations Currently, there are 500 students are chose to be a member of AIESEC and they are not have to pay the fee and work as a volunteer The profit of AIESEC is used to maintain the operations of AIESEC in Vietnam, create the social projects and reinvest into the AIESEC-ers All the managers in the head office of AIESEC in Vietnam(in Ho Chi Minh city) are the fresh graduated students, and being the management board of AIESEC in Vietnam by voting by all the Local committee The management board will change each year due to the aim of AIESEC in create the leadership opportunities for many young people All the students work for AIESEC in Vietnam are divided into Local Committees: - AIESEC in Hanoi (North) - AIESEC in FTU Hanoi (North) - AIESEC in NEU (North) - AIESEC in Danang (Middle) 672 Proceedings the 10th students scientific research conference - AIESEC in HCMC (South) - AIESEC in FTU HCMC (South) - AIESEC in RMIT (South) - AIESEC in UEL(South) Each Local Committee will have the executive board of 7-10 students These executive board will be voted and change every year By joining in the executive board will help the AIESEC member practice their leadership and management skills 673 Proceedings the 10th students scientific research conference 3.2 Management system of AIESEC:  Structure: AIESEC International AIESEC Regional (Asia Pacific) AIESEC Regional (Europe, AIESEC in Vietnam AIESEC in Hanoi AIESEC in FTU HCMC AIESEC in FTU Hanoi AIESEC in Danang AIESEC in NEU AIESEC in UEL AIESEC in HCMC AIESEC in RMIT Table : The structure of AIESEC From Head office of AIESEC International in Rotterdam, The Netherlands, AIESEC divided their structure into Regional, then National and then Local 674 Proceedings the 10th students scientific research conference AIESEC in Vietnam has registered in Vietnam as an International Non-Governmental Organization in 2008 and growth disruptively year by year 3.3 Management Issues of AIESEC in Vietnam: With more than 10 years operating in Vietnam, beside many right ways in management and operation of AIESEC in Vietnam, there are many field that AIESEC in Vietnam still not doing it right and it may lead to many consequences During the nearest years, they have and are experiencing these biggest problems: Succession plan, project management, Financial plan  Succession plan: With the figure we collected from AIESEC, during the second quarter of 2017, the retention rate of Local Committee is quite low For example, the retention rate of UEL is 63% - Dangerous level That means AIESEC has an improper succession plan  Financial plan: Base on the number of the consolidate report of AIESEC in Vietnam in 2017, the number has shown the good signal for the growth of AIESEC in Vietnam with the surplus of VND1,320,942,178 and the number of months of reserves is 13 In this case, this is the high return of big and stable Local Committee to replace for the bad budget of others LCs 675 Proceedings the 10th students scientific research conference  Project management: AIESEC in Vietnam assign all the right to create and run the project for each Local Committee Each Local Committee will have different social projects The organizing committee of the projects of AIESEC in Vietnam are running by all the students work as volunteer in each Local Committee Hence, the quality of projects are hardly to tracking and fulfill the experience of attendees CHAPTER 4: CONCLUSION AND RECOMMENDATION Conclusion: In this article, we identified the management problems obstacle faced by NPOs/INGOs With a specific case of AIESEC - the world's largest non-profit youthrun organization It’s not only show the good sides of them, but also show the bad sides still exist in the organizations such as management problems, finance problems, especially, project management problems Therefore, we need to have a new legitimate view of the non-government organization by improving management systems and financial in the organization Recommendation: We would like to give seven elements which are solve the management issues: 2.1 Be proactive with succession planning: It can take time to find and prepare a promising candidate for a leadership role As such, don’t dawdle with this part of your plan Even if you don’t think you’ll need a replacement in the near future, prepping someone to assume an important role creates an invaluable safety net 2.2 Keep an open mind: 676 Proceedings the 10th students scientific research conference While the obvious successor may be the second in command, don’t disregard other promising employees Look for people who best display the skills necessary to thrive in higher positions, regardless of their current title 2.3 Make the vision known: Include potential managers in strategy conversations to help them acquire planning and leadership skills, as well as a broad vision of the organization and its objectives Consider sharing your succession planning with human resources and your board of directors 2.4 Offer regular feedback to protégés: When someone uses well-honed presentation skills or outperforms on a project, make note of it Keep track of these achievements in a top-performer file so you have something to reference the next time a management position opens Diligently chronicling topics like strong work and achievement will also come in handy during annual reviews 2.5 Provide training to peak performers: As you identify your top performers, offer mentoring relationships and training, which is a true article of value to help them develop new skills and refine existing ones Remember that good leaders not only need technical acumen, but also strong interpersonal skills, including standout verbal and written communication abilities, as well as tact and diplomacy 2.6 Do a trial run: A vacation is a great time to have a potential successor step in to assume some responsibilities The employee will gain experience while you learn how prepared the person is to take on a bigger role 2.7 Use your plan to develop a hiring strategy: Once you’ve identified internal employees as successors for key roles in your organization, take note of any talent gaps In this way, the succession planning process can help you identify where to focus your recruiting efforts 677 Proceedings the 10th students scientific research conference REFERENCES: AKINGBOLA, K (2013), Context and Nonprofit Human Resource Management, Administration & Society, 45(8), 974-1004 ANHEIER, H K (2014), Nonprofit Organizations: Theory, Management, Policy, 2nd edition, London, UK, Routledge EBRAHIM, A (2002), Information Struggles: The Role of Information in the Reproduction of NGO-Funder Relationships, Nonprofit and Voluntary Sector Quarterly, 31(1), 84-114 KAPLAN, R S (2001), Strategic Performance Measurement and Management in Nonprofit Organizations, Nonprofit Management and Leadership, 11(3), 353-370 KREUTZER, K., JÄGER, U (2011), Volunteering versus Managerialism: Conflict over Organizational Identity in Voluntary Associations, Nonprofit and Voluntary Sector Quarterly, 40(4), 634-661 RIDDER, H.-G., McCANDLESS, A (2010), Influences on the Architecture of Human Resource Management in Nonprofit Organizations: An Analytical Framework, Nonprofit and Voluntary Sector Quarterly, 39(1), 124-141 STONE, M M., BIGELOW, B., CRITTENDEN, W (1999), Research on Strategic Management in Nonprofit Organizations: Synthesis, Analysis, and Future Directions, Administration & Society, 31(3), 378-423 Roy T Meyers - Assistant Professor of Political Science, University of Maryland, Baltimore http://what-when-how.com/social-sciences/international-nongovernmentalorganizations-ingos-social-science http://aiesec.org/global-volunteer http://aiesec.in 678 ... Structure: AIESEC International AIESEC Regional (Asia Pacific) AIESEC Regional (Europe, AIESEC in Vietnam AIESEC in Hanoi AIESEC in FTU HCMC AIESEC in FTU Hanoi AIESEC in Danang AIESEC in NEU AIESEC in. .. disruptively year by year 3.3 Management Issues of AIESEC in Vietnam: With more than 10 years operating in Vietnam, beside many right ways in management and operation of AIESEC in Vietnam, there are many... profit of AIESEC is used to maintain the operations of AIESEC in Vietnam, create the social projects and reinvest into the AIESEC- ers All the managers in the head office of AIESEC in Vietnam (in Ho