1
VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY
INTERNATIONAL UNIVERSITY School of Business
PRINCIPLES OF MANAGEMENT
Instructor: Ngo Hoai Son Title:
ANALYSIS OF ORGANIZATION OF VINGROUP JOINT STOCK COMPANY Prepared by: Group 8 STUDENT NAME STUDENT ID Table of Contents Introduction 3
Corporate Milestones in brief 3
Vision, mission, core values, ecosystem 3
Financial and operational highlights 4
Organizational Strategy 4 Mission of organization 4 Definition of the strategy 8 Assessment of the strategy 10 Control 14 Type of control 14 2 Operational controls 15 Financial controls 17
Conclusion 21 References 22 3 Introduction
In recent decades, Vietnam has witnessed a variety of truly remarkable transformations
in all fields, especially the urban appearance. With the emergence of modern buildings and
largescale housing constructions, the infrastructures of the metropolitan areas in Vietnam are
currently comparable to those of other countries all over the world. One of the biggest names in
the business community of Vietnam - Vingroup Joint Stock Company (Vingroup JSC) - has
enormously contributed to bring about those profound transformations. With a view to leading the
market and developing, this large enterprise aims to become one of the most appreciated companies
in both Vietnam and the region.
Vingroup JSC, which is the biggest corporation in Vietnam, was founded by property
developer and entrepreneur Phạm Nhật Vượng. The company was formerly known as a corporation
producing dried foods - Technocom and was founded in 1993 in Ukraine. Owning the famous
instant noodles brand Mivana, Technocom is honored as the pioneer that paved the way for fast
food market in Ukraine. Seven years later, the company started operations in Vietnam and the
managers drew up a whole new business strategy by launching two key brands Vinpearl JSC (range
of hotels, resorts, amusement parks) and Vincom JSC (shopping malls). In 2012, these two brands
were merged to form Vingroup Joint Stock Company. Vingroup's immense network of commercial
activities spans excellent sites across Vietnam. Vision
By imposing a strategic vision aimed at guaranteeing the living standards of customers and
earning international reputation of Vietnamese brands, Vingroup has always come up with
innovations to build an ecosystem of high-quality products and services. Mission
Since establishment, the company has expressed its determination to undertake the mission
of preserving the startup spirit. The company not only offers products and services anticipating the
latest trends but also demonstrates its social responsibility and national pride. Additionally, an
explicit goal is to foster stable relationships with shareholders and partners by upholding the spirit
of cooperation and companionship. Core Values
Vingroup makes the effort to embrace 6 core values: credibility, integrity, creativity, speed, quality, and compassion. Ecosystem
Vingroup has become a conglomerate with a wide range of operations which are divided
into three main sectors: technology, industrials and services. 4
Financial and Operational Highlights
At the present, Vingroup along with its subsidiary companies operates in 63 of Vietnam’s
cities and provinces with key locations are Hanoi, Ho Chi Minh City, Hai Phong, Khanh Hoa and Kien Giang.
The key highlights section of Vingroup’s earnings presentation in 2019 revealed the robust
operating performance across Vingroup’s core business segment with the emergence of brand-new
branches of subsidiary companies.
Vingroup also plays an essential part of the domestic economy: -
Vingroup’s listed entities accounts for 23.0% of total market capitalization on the Exchange. -
Vingroup’s consolidated revenue accounts for 2.2% of Vietnam’s Total GDP. -
Vingroup is the largest private Vietnamese employer which coordinates 75,800 employees.
Organizational Strategy
Mission of organization
An organization's mission outlines its purpose for being in society. Michael Hammer, a
strategy consultant, feels that a mission statement should indicate what the strategy is attempting
to accomplish (John, 2013). This strategy will help the business to answer the question such as
"Why you are here?", "Why is your company's success?", "What makes you different?" etc. A
mission statement clarifies why a company exists and how it plans to serve its primary stakeholders.
The most commonly stated stakeholders are customers, employees, and investors. Furthermore, 5
some external stakeholders, including suppliers, local communities, society, and the government,
who do not work for the company but are impacted in some manner by its choices and actions, can
also be discussed in an organization's mission statement (University of Minnesota, 2010).
Vingroup is a forerunner in creating world-class national brands in technology and
manufacturing, paving the way for new consumer trends and experiences. This business dedicates
to making its technology and industrial goods available to the rest of the world. Vingroup is always
innovating, creating long-term high-quality product and service ecosystems to better the lives of
Vietnamese people and boost the worldwide prominence of Vietnamese businesses by supporting
their mission is “TO CREATE A BETTER LIFE FOR THE VIETNAMESE PEOPLE” (Vingroup
JSC). They analyze the strategic constituencies in an organization's mission statement using the
four external stakeholders: customers, employees, shareholders and business partners, and society.
- Customers: Vingroup gives a wide range of services and products that are both global and
geographically distinct. Vingroup's goods and services recognize and predict market trends.
One of Vingroup's essential development strategies is to match the growing middle-high
class's income to suit the various development demands of clients. Because they value their
customers and always take customers as the center, putting customers' interests and desires first;
strives to bring customers the perfect products - services; considers customer satisfaction a measure
of success. Vingroup takes care of customers by volunteering, clearly understands the mission of
service, and only undertakes the task when capable. They provide world-class products and
services with international quality and local understanding identity; unique and highly creative. In
addition to the outstanding quality value, each product - service contains cultural messages to
maximize the legitimate needs of customers. In order to conduct the messages, they had told in the
best way, in addition to preparing thoughtful and attractive products, and equally important job is
to identify the area most likely to attract customers. They have to ask themselves many questions
such as “Who is the ideal customer to use your service?”, “Who will have to find you?” It can be
seen that they are very proactive in finding customers therefore their clients are assured when investing in their business.
There will be an example of how Vingroup exploits customers to show how they treat and
bring trust to customers. If only in terms of tourism and resort development, Vingroup has also
demonstrated its superiority in customer care. They divide their customers into five main groups.
The first is a source of loyal customers. Vingroup has built a dedicated community of
residents. Looking across from North to South, there are many urban areas of Vingroup. For
instance, Hanoi has Vinhomes Riverside, Park Hill, Vinhomes Green Bay, etc. Ho Chi Minh has:
Vinhomes Central Park, Vinhomes Ba Son, etc. Or in Hai Phong, there is Vinhomes Imperia. The
residents here do not need to go anywhere to enjoy the necessary services; they just stay in the
residential area of Vingroup, all are satisfied. They stay at Vinhomes, go to Vinmart supermarket,
send their children to Vinschool, take their family to see a doctor in Vinmec, eat VinEco vegetables,
beautify Vincharm, shop at VinDS fashion, e-commerce in Adayroi .com, etc. Of course, when
going on vacation, Vinpearl will be a priority for them.
The second customer group is the source of foreign visitors. They have clear strategies and
have a long-term orientation to exploit this source of customers. Such as opening direct charter 6
flights from Russia, Japan, Korea, China, and Eastern European countries to Vietnam to bring the
delegation directly to Vinpearl or linking with agencies to open overnight offices abroad to
introduce and attract visitors to Vinpearl systems nationwide. The second and third other groups
are referral customers and returning customers, respectively. Although these are only two small
groups of customers, they still receive a warm welcome from this business. This is the key that retains Vingroup's customers.
The next one is the group of online marketing customers by linking with a series of travel
booking sites: Agoda.com, Booking.com, etc. Vingroup constantly expands its room distribution
system and brings more customers both in Vietnam and abroad to Vinpearl again. With this form,
Vingroup also helps customers quickly access the business's services and achieve the needs of
finding their own resort. Online marketing is helpful for other domestic groups and foreign tourists
in finding their next destination.
Finally, the source of customers to buy vouchers. The psychology of customers will often
prefer to choose the cheap and good for them. They are always looking for ways to source sales,
attractive coupons from online companies. Because of grasping this customer's psychology,
Vingroup officially opened and cooperated with agent systems to directly distribute resort vouchers
to customers who have the desire and need for vacation travel in 2017.
According to Mr. Nguyen Viet Quang - General Director, Vingroup drastically builds a
service culture of "customer-centered"; The Group promotes its predictive ability to meet customer
needs by self-researching, inventing, and designing products. It can be clear that with the initiative
and constantly deploying to find new sources of customers, Vingroup brings customers from home
to abroad with really great services as the mission they set out from the beginning.
- Employees: Vingroup offers a professional, dynamic, innovative, and courteous work
environment in which all workers have an equal chance to achieve their full potential.
Vingroup, as a successful firm, has always regarded human capital as the most important
factor and precious asset that has contributed to the company's huge success. The purpose of
Vingroup's employee training program is to provide a professional working environment that
allows workers to optimize their talents and possibilities for career advancement. As a consequence,
people are willing to devote themselves to a workplace that values and respects their commitment to their jobs.
Vingroup's human resources strategy prioritizes employee well-being at all times, which is
the golden key to retaining long-term employees. When working at Vingroup, employees will work
8 hours/day, 5.5 days/week (for Administrative Division - Office), and 6 days/week (for
Service Division). All Vingroup employees are entitled to a leave of absence according to the Labor
Law provisions and are fully insured. Employees of Vingroup are guaranteed complete and modern
working equipment and allowances such as lunch, transportation, phone, and a staff shuttle.
Additionally, Vingroup employees receive additional benefits from the company, including giving
gifts on special occasions such as birthdays, births, and marriages; organizing vacation and travel
activities for employees; establishing a fund to support difficult employees; and establishing a
mutual fund with interest-free loans. Moreover, Vingroup has an incentive program for top performers. 7
In addition to the high standards set for the group's workers, Vingroup strives to provide
chances for its human resources to be driven not only by their enthusiasm for work but also by
their enthusiasm for their cultural activities and community in order to encourage sportsmanship
and wellbeing. Vingroup supports the "Healthy Body – Happy Spirit – Nimble Mind" campaign in
addition to its fundamental principles of credibility, integrity, creativity, speed, quality, and
humanity. Every Friday, the firm hosts a "Healthy Living Festival," where employees may
participate in active leisure activities like Flash-mob or active sports, including volleyball, football, and tennis. -
Shareholders and Business Partners: By focusing on the production of long-term
value, Vingroup maintains a spirit of cooperation and sense of community with its shareholders and partners.
With the determination to accompany Vietnamese enterprises and improve the position of
Vietnamese goods in the market, Vingroup decided to implement the Program "Accompanying,
supporting and promoting domestic production" on May 12, 2016. Accordingly, the Group will
mobilize maximum resources to implement three total solutions: Support for the contemporary
retail system to increase the consumption of Vietnamese goods; Promote production and
consumption of domestic goods; Directly engaged in production in several consumer goods
industries. Specifically, Vingroup will develop a trade discount policy with solid incentives for
Vietnamese small and medium enterprises to consume goods through the Group's retail system.
Particularly for fresh food products, Vingroup is committed to distributing clean and safe products
at a price equal to the supplier's selling price within one year. Besides, depending on each business's
actual situation and potential, Vingroup will have additional policies to support presence and
promotions. Because they promote the spirit of cooperation and development, commitment to
become the "No. 1 Companion" of partners and shareholders, always increases attractive and
sustainable investment values.
Parallel to output assistance, Vingroup promotes coordination with industry associations,
agencies, and departments to research and deploy solutions to support Vietnamese businesses. On
that basis, the parties will jointly establish a methodical quality ground for Vietnamese enterprises
to build trust and ensure sustainable competition for Vietnamese goods in the domestic market to
bring Vietnamese brands to the international market.
Vingroup will also support small and medium-sized enterprises in need by participating in
capital contribution or consulting on technology, management, quality control, marketing, product
consumption, etc., in order to invest in expanding production and upgrading quality, optimizing
competitiveness against imported goods. With the clean food industry, through the joint venture
models associated with VinMart and VinEco, Vingroup is ready to buy packages, organize the
distribution system, and control quality to ensure a clean and safe food source. -
Society: By matching its corporate aims with community values, Vingroup displays
social responsibility and national pride.
Considering the "green" idea as a critical aspect of the manufacturing and business
processes and the creation of projects, Vingroup not only does its best to preserve and protect the 8
environment, but it also focuses on fostering this understanding in consumers and the community.
Hence, they may work together to create and maintain a healthy environment.
The Group's corporate culture is based on pioneering objectives, with pride in the
Vietnamese people's intellectual principles, bravery, and humanistic traditions. This culture is
expressed not just in employee welfare policies but also in activities that benefit the social communities.
Thien Tam Fund, established in 2006, with all operating costs sponsored by Vingroup and
benefactors, is Vingroup leader support. With priority given to helping families in difficult
circumstances and families with meritorious services to the revolution such as: Serving the heroic
Vietnamese Mother; Caring for policy families and families in challenging circumstances;
Assisting poor students; Promoting economic development in impoverished areas; Supporting
people affected by natural disasters, etc.
The Vietnam Football Talent Development and Investment Fund (PVF) was established in
December 2008. It has since grown into an effective and professional model for training young
football players and contributing to the development of generations of genuinely talented, ethical,
and culturally conscious players for the country's match.
The Center for Nursing, Career Guidance, and Young Talent Development, located in the
Buddhist cultural complex of Phat Tich, was inaugurated in July 2010 by Thien Tam Foundation
in collaboration with the Buddhist Church of Vietnam (Bac Ninh). This location is for lonely and
defenseless older people and orphans, policy beneficiaries from all across the nation, maybe
nurtured. As a result, there will be long-term sound effects, such as sharing a portion of the state's
troubles in functioning society and encouraging, teaching, and training children to become essential community members.
Define the strategy of the organization
The strategy is described as an organization's long-term leadership. Considering and
implementing action routes and distributing the resources required to carry out these goals, as
well as defining long-term priorities and goals for an undertaking. There are two advantages to
this. Firstly, an organization's long-term strategy may involve both deliberate, rational, and
gradual strategic trends. Secondly, both strategies that emphasize disparities, competitiveness,
and strategies that consider positions of collaboration and even imitation may be included in the
longer-term path. (Whittington et al., 2017).
There are three levels of strategy in organizations: corporate-level strategy, business-level
strategy, and functional strategy. (John R. Schermerhorn, JR.)
A corporate methodology sets long-haul bearing for the absolute undertaking. The
motivation behind the corporate technique is to set course and guide asset distributions for the
whole undertaking. It distinguishes how huge and complex associations can contend across
numerous enterprises and markets. Vingroup Joint Stock has an income of $4.2B, with more than
50,000 representatives, has practical experience in marketing, land, retail, training, café, and
accommodation organizations in a wide space of Vietnam. 9
A business strategy distinguishes how a division or key specialty unit will contend in its
item or administration area. There are six key parts of a business procedure. They incorporate
vision and business objectives, core values, SWOT analysis, tactics, resource allocation plan, measurement.
The business plan is meant to assist one firm in achieving its goals. With a clear vision for
the firm's path, the corporation may generate clear directions in the business plan for what must
be done and who oversees it. Vingroup aims to become one of the most respected companies not
only in Vietnam but also in the region by improving product quality and service levels in real
estate development, retail operations, and hospitality improving the quality of life for the
Vietnamese people and raising the nation's reputation in the world.
According to the organization's basic principles, the business strategy instructs top-level
executives as well as departments on what should and should not be done. Vingroup is
committed to six essential values: credibility, integrity, creativity, speed, quality, and compassion.
SWOT stands for strengths, weaknesses, opportunities, and threats. This analysis is
incorporated in every business plan since it helps the organization to rely on and use its strengths.
It also alerts the firm about any flaws or risks. Regarding prospects, Vingroup has a wide range
of stunning locales to pick from for its real estate business. People's desire for tourism is growing
by the day, making it simple to reach out to potential clients. The number of visitors visiting
Vietnam is also increasing. Next, Vingroup faces several local and foreign competitors, including
FPT, Sun Group, Kappell Land, Kumho, and Parkson... The business market has been delayed
owing to the effects of the COVID epidemic on Vingroup's company and manufacturing, which
will make it unprofitable to pay interest.
Many company strategies define the operational aspects of how work should be
completed to enhance efficiency. A business strategy specifies where to obtain the resources
needed to accomplish the plan, how the resources will be divided, and who will oversee doing
so. Finally, the business plan contains a method to track the company's output, assessing how it is
performing concerning the objectives that were set before the plan's implementation.
The utilization of organizational resources to accomplish business strategy is guided by
functional strategy. This strategy level focuses on activities within a certain functional area, such
as marketing, manufacturing, finance, or human resources. Functional-level strategies often
concentrate on management techniques that aim to increase operational efficiency, product
quality, customer service, or innovativeness.
Vinfast's marketing approach focuses on social media, which has many Vietnamese users.
The seeding rate on social media receives up to 90% of good comments. Furthermore, 80% of
individuals are aware of Vinfast and are anticipating the company's entry into the domestic
market. Vinfast's marketing approach is to understand communication and client demands, as
well as to use powerful media sources to boost their reputation.
Vingroup Chairman Pham Nhat Vuong stated that the firm is actively adopting a Five
Principles strategy, which seeks to overcome management and human resource issues to focus on large-scale investment plans.
The Five Principles method incorporates the following elements: 10 -
Centralization means that each leader must be the nucleus. -
Standardization: everything in both the northern and southern areas must be put to a single standard. -
Simplification refers to the removal of burdensome titles, methods, and rules. -
Automation refers to the use of information technology in management. -
Sharing: Vuong believes that as a conglomerate, Vingroup should do things
jointly as much as feasible to maximize labor productivity and management quality.
Following the BCG matrix, there are four strategic types: Dogs, Stars, Question Marks,
and Cash Cows. Each type comes with a recommended core or master strategy-growth, stability,
or retrenchment. Among the core or master strategies just illustrated in the BCG matrix, growth
strategies seek to expand the size and scope of operations. The goal is to increase things such as
total revenue, product or service lines, and operating locations. Growth is a common and popular
business strategy. Since Vingroup focus on different business areas such as real estates, retail,
education, technology..., growing through diversification is the best way for the corporation to grow.
Assess the strategy of the organization
Understanding the strategic assessment context
The philosophy of the strategic management process is to come up with and implement a
strategy that grants sustainable competitive advantage to outdo competitors. Simple as it may
sound, this process covers the organization’s vision for both present and future objectives while
reviewing the past. After going through the chronological steps of strategic analysis and strategy
formulation, the organization come to the implementation step. Strategic assessment refers to the
final step in strategic management that deals with an organization’s long-term goal. This involves
the development and application of corrective actions to strategic objectives if necessary. The
concept of strategic assessment is somewhat complicated. The process includes evaluating result
and implementing adjustments while constantly review both internal and external environments.
This is when strategic control is put into practice. Top managers ensure good strategies are
practised whereas poor ones are scrapped or modified. Strategic assessment in general not only
cover performance appraisal but also the evaluation of key factors in long-term objectives.
The process aims to answer these 3 questions: -
Does the strategic objective fit in with the current situation of the organization? -
Do strategies fit in with the current situation of the organization? -
Do existing results confirm nor deny any strategic assumptions?
The process of strategic assessment requires the using of data analytics from upper managers of
an organization. Nonetheless, managers need to overcome these challenges regarding the process of assessment. -
Making the business strategy unique -
Diferentiating values and goals 11 -
Avoiding conflict within organization -
Adapting to changes from the external environment Evaluating strategy a.
Review existing materials
It is essential to recognise the good work that has been done in the past. Many people will
have invested time and energy in previous strategies and often taken ownership. To keep these
people engaged and motivated, their work must be recognised as important. Furthermore, there
will almost certainly be strategies that need to be continued, objectives that have not been
fulfilled and initiatives that need to be completed. All of these things need to be reviewed and
considered when revisiting a strategy. b. Conducting research (1) PEST Analysis
There is no doubt that business environment is an influential aspect of any business since
it can pose as a threat and, on the contrary, appear as opportunities for industries. A remarkable
manager can not only identify business opportunities by evaluating the environment but also
copes with ongoing changes, whether it be changes in trend and pattern or new government
politics. Sharp focus on these changes will undoubtably ensure your business succeeds. PEST
Analysis is then created to scan the business environment.
This is a simple but effective tool that is widely used to analyze the Political, Economic,
Socio-Cultural and Technological changes. Anticipating how environmental influences impact
future businesses, avoiding potential threats and identifying actions that helps you exploit any
opportunities are some of the reasons that greatly demonstrates why PEST Analysis is useful.
The diagram defines and analyzes the key factors of change in the external market
climate and discusses preparations for the introduction of a new product, project, or service.
These can be used in the strategic projects, project plans, campaign strategy, product creation,
planning and analysis reports. This tool aims to evaluate the outside world from different points
of view and provide a full evaluation when taking into account some concept or strategy, to see if
a project is better placed than its rivals and to react more effectively to changes. Understanding
these conditions minimizes risks and maximizes opportunities. - Political and legal
Vietnam is highly appreciated for its level of political stability, creating a premise for
economic development. In addition, there are preferential policies on taxes and interest rates
for Vietnamese businesses, which operate effectively with respect to real estate
investment. Vingroup will be exempt from tax for 4 years and will receive a preferential tax rate
of 10% within 15 years for its subsidiary Vinfast - Economic
In 2019, economic growth was good, labor productivity and quality of growth continued
to improve, macroeconomic stability was solid. GDP growth rate is estimated at 6.8%,
achieving high targets according to the National Assembly's resolution. The scale of GDP
increased to about 266.5 billion USD, an average of 2,778 USD / person (Thoi bao Tai chinh 12
Viet Nam, 2019). The State Bank of Vietnam has lowered the refinancing interest rate twice
from 6% to 4.5% / year in March and May, the rediscount interest rate from 4% to 3% / year in
2019. In the context of falling oil prices. strong, weakening consumer demand along with efforts
to cut 10% of electricity prices, Vietnam's inflation is forecast to be below 4% (Tap chi tai
chinh, 2020). The global Covid-19 pandemic had a strong influence on the world economy in
general and Vietnam in particular, making public debt companies, delaying production, unable
to deal with partners to import. whether input, even bankruptcy. 90 million people in Vietnam
have lost their jobs and suspended their businesses. According to Dr. Can and the authors of the
BIDV Training and Research Institute, the disease was controlled in the second quarter but was
negatively affected by the total supply and demand from outside; Vietnam's GDP growth rate
will decrease by 2.58%, reaching 4.07-4.20% in 2020 (Can and BIDV, 2020) - Socio-Cultural
Vietnam is experiencing a drop of birth rates in the recent years, to be more precise, 2020 sees a
2.18% decline in birth rates compared to that of 2019. With the rapid shrinking family size,
Vietnamese consumers are in need of convenience and this contributes vastly to the number of
convenience store. After only five years, the number of convenience stores in Vietnam has risen
more than ten times from approximately 500 stores to over 5000 stores nationwide. Vingroup, for
instance, has seized this opportunity and invested in their chains of convenience stores. Thus,
Vinmart+ makes up the single biggest share of stores with over 55% while their competitor, Bach
Hoa Xanh, only accounts for the percentage of convenience shops with only 20%. - Technological
The everchanging technology in Vietnam provides Vingroup with accessibility to a more
effective production and better quality. However, this requires imported technology and a large
sum of capital from the Group. (2) Porter’s five forces. - Potential competitors
Vingroup's real estate is segmented at a high level, so this is a new segment, so the
identification of competitors is very small. In order for a company to grow or fail, a high-end
real estate company is determined by factors such as large company size, high capital
mobilization capacity, effective management force, high R&D investment. The product must be
of high quality - comfortable, short project completion time, unique architecture,
environmentally friendly, large market, high-class customers, and prestigious brands. Currently,
Vingroup is leading in the field of high-end real estate business, which has made Vingroup a
high position, and a prestigious brand name for customers and rivals. Competitors in Vingroup's
highend real estate segment such as Kappell Land, Kumho, and Parkson, FPT, FLC are strong
financial enterprises, so they compete very strongly with Vingroup, so Vingroup must improve
its service quality, and create a unique brand for the product on the market. -
Threat of new entrants to industry
The high-end segment of real estate is a market with a lot of potentials as well as high
growth so there are still many investors who want to invest in this field, especially foreign 13
investors because they have talent. The firm is strong and experienced in this area, such as
Sheldon Adelson in the Casino chain. High competitiveness with potential competitors. - Bargaining power of suppliers
In real estate, suppliers are very important in the completion of projects and operations of
the company. For raw material suppliers, due to the situation of the Covid 19 epidemic causing
great economic losses, all of the current materials are low cost, if Vingroup signed the supply
contracts on the occasion of This will be a great advantage for Vingroup. On the other hand,
financial suppliers in Vietnam's stock market are currently very bleak due to the Covid 19
pandemic, so the ability of financial advances is sharply reduced. -
The threat of substitute products
Because the target customer of Vingroup is high-income customers, and high-end real
estate products that are difficult to have new product lines to replace so the threat of replacement is very low for Vingroup. - Bargaining power of buyers
Given the fact that purchasing behaviour is constantly changing throughout the year and
Vietnamese buyers developing biases toward premium products has created challenges for
managers at Vingroup. Rural areas unexpectedly become the potential buyers of pricey
merchandise since people tend to believe that the possessing of premium products could raise
their social classes as well as their confidence despite actually being financially unsuccessful.
While the high-income customers tend to give attention to the quality of goods and services. This
undoubtedly put Vingroup under a lot of pressure to improve the design, positioning and raw materials. Control Type of control
Controlling can be defined as the process of measuring performance and taking actions to
guarantee that intended outcomes are achieved. Vingroup has ensured that it takes place and
follows Control process’s spirit, which means that the right things happen at the right time, in the
correct way. This important proceeding includes input-throughput-output cycle containing three
phrases: Feedforward, Concurrent, Feedback controls.
Feedforward controls are performed before beginning a work activity. They ensure that the
goals are clear, the necessary instructions are established, and the correct resources are available
to accomplish the objectives. This phrase of the cycle is apparently demonstrated in the process of
achieving the Vingroup’s annual Economic Optimization for Sustainable Growth. With a view to
accomplishing, Vingroup has implemented concrete programs and action plans for years in effort
to attain the Group’s sustainability strategy for 2023. The Group’s explicit objectives are
maintaining its leading position in specific segments as well as contributing sustainably to the
economy which are based on the dedication to corporate social responsibility. The Group considers
that the action of adhering to environmental and social procurement standards in project
development, including its selection of suppliers is one of suitable ways of growth. On that basis, 14
several criteria must be met by Vingroup’s suppliers. The track record of potential business partners
in these areas is thoroughly examined. Not only the supplier selection but also the sustainability of
new project and development is deliberated before being put into action. Analysis is carried out to
research and evaluate the risks that possibly occur, and effects on society and environment are
measured throughout periods of the procedure. Specifically, to minimize the impact on the
environment, green structures and energy-saving constructions are prioritized.
Vingroup tries to standardize all the processes and deliverables to monitor workflow
operations and make sure the right things are being done. In these concurrent controls, the Group
believes that the standardization will boost productivity, deliver performance breakthroughs, and
minimize issues. Moreover, focusing on the work process, confronting, and solving problems while
they arise are parts of this phrase of control. In every sector, the Group has always considered the
proceeding to be guided and observed precisely so that the set objectives will be fulfilled in full
effect. In terms of feedback controls, the Group lays great emphasis on postaction evaluation,
which assists in customer service perspective and work satisfaction analysis. To embrace discipline
and professionalism, six core values are strived to be upheld including Integrity, which mentioned
putting the interests of our customers first. The Group is dedicated to offering high-quality goods
and services while also incorporating sustainability into its client relationships. In order to perform
after-sales programs and surveys to improve service level quality, the Group creates customer data
confidentiality rules to assist ensure customer and partner privacy. The entrepreneurial mindset has
served as Vingroup’s basis throughout its lengthy history. They have continuously listened to its
customers, fostered creativity, welcomed change, and generated opportunities via cooperation.
These approaches have aided the corporation’s expansion, success, and have gained customer trust
and achieved top market shares by encouraging the application of technology in management and operations.
Vingroup cherishes a contemporary, productive, and professional work environment in
which corporate demands are matched with employee needs and goals as a good way of motivating
individuals or groups to improve their own self-discipline in work. As a result of internal control,
all employees consider Vin’s working ecology as a shared home. The Group manages and promotes
staff based on their work efficiency, offering deserving opportunity for every employee so that all
can develop their competencies to their fullest potential. Employees can take part in programs that
are appropriate to their aspirations, and to gain experience in different jobs through rotations and
job postings, to acquire practical knowledge about business operations and to advance individuals’
self-development. Besides, emphasizing empowerment and training the next generation of leaders,
particularly young talent, is taken seriously in order to prepare them for future managerial responsibilities.
In regard to external control, the Group routinely organized seminars for all members of
management and personnel to convey knowledge about risks and legal changes. Since employees
have access to a comprehensive informational database and rely on smooth workflows, a coherent
operational framework provides that staff and facility growth is supported. For the reason that
Vingroup is a pioneer in Real estate development and Hospitality, it is committed to providing a
healthy workplace culture for staff. And striving to improve employee knowledge of protecting 15
environment, combating global warming, and managing waste treatment systems at Vingroup
facilities are a part of the continuous operations. Furthermore, they also appreciate the
contributions from all individuals, regardless of country, age, sexuality, or academic level and
promise to treat them as its most asset. Vingroup has efficiently developed its own unique culture
through a diversity of social and teamwork activities, which greatly contribute to their progress of
earning general acclaim. In 2020, Vingroup is one of eight companies that are honored as
Outstanding Enterprises for Employees by the Prime Minister of Vietnam, an award given every
three years based on assessments by the Vietnam General Confederation of Labor, the Ministry of
Labor, Invalids, and Social Affairs, and the Vietnam Chamber of Commerce and Industry. This
honor expresses society’s admiration for Vingroup’s sustainable growth strategy and demonstrates
Vingroup’s commitment to provide employees with an ideal work environment with competitive benefits. Operational Controls
The control system of an organization can be defined as the combination of activities,
measures, plans, opinions, rules, policies, and efforts of all members to ensure that the organization
operates effectively and efficiently with the aim of accomplishing its goal. In other words, control
is all about how to make sure things go right for the organization even as they have to deal with
lots of complexities. Therefore, it is undeniable that this is one of the basic elements determining
one company's success. In the case of Vingroup, its control system, especially the operational and
financial control is the decisive factor that makes this corporation leads the way in the field of management.
Operational control includes power and authority over intermediate-term operations.
Specifically, this kind of control system is designed to ensure that day-to-day performances are
strictly consistent with carefully organized plans and projects are effectively implemented.
Eventually, the organizational objective can be achieved. It is the main tool of mid-level
management for taking corrective actions when things go wrong. Errors in operational control
might mean failing to accomplish tasks on time. For example, if salespeople are not trained on
time, sales revenue may fall. The operational control also has the responsibility of checking internal
sources of information such as production levels or the choice of equipment.
In Vingroup, when performance does not meet standards, managers enforce corrective
actions, which may include training, discipline, motivation, or termination. In terms of training,
the corporation holds award competitions and training campaigns such as "Good People, Good
Deeds," "Efficiency, Profitability," and "12-Hour Transformation for Success". These campaigns
entertain, enhance spirit, morale and reinforce its core values "Credibility - Integrity - Creativity -
Speed - Quality - Humanity" while helping employees to improve their qualification and work
more efficiently with better performance. In terms of discipline, Vingroup is loyal to the principle
of severe and strict management. According to Pham Nhat Vuong, if employees accomplish a goal
with good performance, they will have a reward, but if they unmeet the corporation's standards,
they will be severely disciplined. On the other hand, the motivation strategy in Vingroup is 16
attractive since the corporation realize that it is associated with better job result, job satisfaction,
and dedication. Their motivation strategy includes high salary, enjoyable team building, annual
vacation, attractive welfare when using Vingroup's service, and so on. When it comes to
termination, Vingroup has a yearly examination to evaluate whether the employee devotes to their
work or not and is uncompromising to cut down the workforce if need.
Vingroup's mid-level management, which includes general managers, branch managers,
and department managers, is responsible for operational control. Specifically, they are required to: -
Review and improve organizational effectiveness by designing training,
discipline,motivation, and termination plans, -
Supervise employees' productivity and performance. -
Build a highly motivated workplace and creating innovative approaches forimprovement. -
Evaluate the job result of all employees. -
Ensure high levels of productivity are maintained. -
Uphold standards of excellence and soaring quality. -
Provide guidance and feedback to help others improve specific knowledge andqualification. -
Design plans base on the latest corporation's objectives to manage all
operationalaspects, which consist of distribution, consumer service, workforce
development, administration, and sales. -
Identify areas of improvement and suggest modifications. -
Address consumers' problems immediately.
From Vingroup’s perspective, it can be said without question that operational control plays
an indispensable role in making its successful workplace. First and foremost, this kind of control
helps draw employers' attention to the organizational objectives so that employers can better define
it. As a result, they can make the best use of resources without wasting or misusing it and facilitate
suitable measures to take corrective action and achieve the objective of their organization.
Furthermore, having attention means employers will better understand what happened in the past
and where modification can be effective. Secondly, employee morale may be improved when
workers notice that the manager is paying attention and knows what is going on. This better morale
can lead to better productivity, and better controls can lead to more freedom and responsibility for employees.
According to Vingroup's 2020 management report, Vingroup has followed a
hierarchyoriented control system. When carrying out a new project, the higher level of
management will organize some supervision sessions and carefully monitor the implementatio n
process of the lower level of management to make sure that everything sticks to their plans. In
addition to this specific feature, Vingroup's operational control is frequently modified to suited to
the everchanging economic situation. In the year 2020, when the world witnessed a catastrophic
pandemic on an unprecedented scale, Vingroup chose to invest in optimizing existing fields and
apply the austerity measures to strictly manage its expenses. Specifically, Vingroup had various 17
activities such as investing in new real estate projects, at the same time, exploiting completed real
estate, and gradually expanding the fields of education, tourism, health, technology, and heavy
industry. Thanks to the right decisions in managing the operational control system, Vingroup has
succeeded in maintaining its pace of development in a tumultuous year.
Furthermore, in the past year, Vingroup was also honored as one of the pioneering
enterprises in sponsoring activities for epidemic control and prevention thanks to its operational
control. Particularly, Vingroup’s ventilator production project has played a significant role in
minimizing the negative impact of Covid-19 on our country. On March 30, 2020, the board of
management convened an emergency meeting and assigned the main responsibilities to some
relevant units: Automotive Research and Design Institute 1, Automotive Research and Design
Institute 2, Institute for Research and Design of Smart Home Devices, Institute for Research and
Design of Telecommunication Equipment, Institute for Research and Design of Smart Battery,
VinFast Automobile Factory, and VinSmart Electronic Equipment Factory. After only one day, the
units have found a multitude of partners willing to share the design and relevant information
necessary for the corporation to begin its implementation. Right after that, Vingroup signed a
license contract with the American company Medtronic to use their design for the PB 560 Invasive
Ventilator, and at the same time carried on the research of a Non-Invasive Ventilator based on the
design developed and shared with the community by MIT - a prestigious university in the USA.
The supply of components is divided into two groups: those that the corporation can purchase on
the market and the other including what Vingroup must manufacture by themselves, or cooperate
with manufacturing partners because of their exhausted production capacity. One day after having
enough components, VinFast finished all types of ventilators and transferred them to the Ministry
of Health and the Ministry of Science and Technology for evaluation and quality certification
before being put into use at every medical facility across the country. Thanks to the contribution
of Vingroup, the Covid-19 pandemic was successfully brought under control. Thereby, it is
undeniable that with the comprehensive operational control Vingroup can improve the productivity
of its corporation and eventually, make its projects complete and put into use faster than other corporations. Financial Controls
As with the information from the textbook Management 12th edition (p.230), financial
control is all about measurement, and there are numerous ways to measure and track financial
performance for control purposes. The company's balance sheet and income statement for the
analysis using financial controls. Managers should be able to use information from balance sheets
and income statements to understand a firm’s financial performance. Financial controls of this
nature often involve measures of liquidity (includes current ratio and quick ratio), leverage (debt
ratio), asset management (asset turnover and inventory turnover), and profitability (net margin,
return on assets and return on equity). The Board of Directors of Vingroup use the aforementioned
documents, tools and ratios to make historical comparisons, set financial targets or goals and point 18
out the quality of Vingroup’s financial performance. Consequently, Vingroup can concentrate on
what they can do better to develop their firm.
The financial report of Vingroup is in VND and is made and displayed in accordance with
the Vietnamese Accounting Standards and Regime. Board of Directors of Vingroup is responsible
for presenting the audited consolidated and separate financial statements every 6 months,
presenting the unaudited consolidated and separate financial statements quarterly. These financial
statements include the statistics from this company and its subsidiaries (collectively referred to as
“the Group”). The Company’s fiscal year commences on 1st January and ends on 31st December every year.
About the responsibilities of Vingroup’s Board of Directors for the consolidated
financial statements, the Board of Directors is responsible for guaranteeing that the annual
consolidated financial statements truly and fairly reflect the consolidated financial status,
consolidated results of operations and consolidated cash flows of the Group during the year. For
the preparation those consolidated financial statements, Board of Directors is required to: -
Select appropriate accounting policies and apply them systematically -
Build rational and prudent judgements and approximations -
State whether the accounting standards applicable to the Group are followed
and all material deviations from these standards should be listed and explained in the
consolidated financial statements -
Prepare consolidated financial statements in accordance with operational
principles unless it is inappropriate to presume that the Group will continue its business
The board of directors is also responsible for the correctness of the bookkeeping. It is
additionally responsible for assuring the assets of the Group and hence for taking reasonable
measures to prevent and detect fraud and other irregularities.
About the Independent Audit Report,
Every six months, the auditor of Ernst & Young Vietnam Limited Liability Company will
audit the accompanying consolidated and separate financial statements of Vingroup and its
subsidiaries. These financial statements include: the balance sheet, the income statement and the
cash flow statement with the notes thereto.
Board of Director’s responsibilities
The board of directors of the company is responsible for the preparation and proper
presentation of the group's consolidated financial statements in accordance with the Vietnamese
Accounting Standards, Vietnamese Enterprise Accounting System, and the statutory relevant
requirements of preparation and honest presentation of the consolidated financial statements that
have no major errors due to fraud or errors.
Auditor’s responsibilities
Auditors are responsible for precising their point of view about the consolidated financial
statement with the justification of statistics on financial statements. They conduct the audit in
conformity with Vietnamese Standards on Auditing. Those standards necessitate the auditors to
follow the ethical requirements, plan and implement the audit to obtain reasonable guarantee to 19
access whether there are material misrepresentations in the group's consolidated financial statements.
The auditors’ work includes performing procedures to get audit proof regarding to the
amounts and disclosures within the consolidated financial statements. The procedures are selected
rely upon to the auditors’ judgement, including the assessment of the risks of fabric statement in
the consolidated financial statement due to inner fraud or error. In creating those risk assessments,
auditors contemplate the internal control of the Group which is relevant to the honesty and fairness
in reporting and presenting so as to build up audit procedures that are applicable.
According to Vingroup, the Audited Consolidated Financial Statements includes the
consolidated balance sheet, the consolidated income statement, the consolidated cash flow statement.
The Consolidated Balance Sheet includes the following resources: -
Current Assets include cash and cash equivalent, short-term investments; current
accounts receivable, inventories, and other current assets (tax, prepaid expenses, etc.) -
Non-Current Assets include long-term receivables, fixed assets (tangible and
intangible), investment properties, long-term assets in progress; long-term investments, and other
long-term assets (prepaid expenses, tax, goodwill, etc.) -
Liabilities: 2 main types of liabilities
+ Current liabilities (short-term liabilities) include statutory obligations; payables to
employees; short-term trade payables, accrued expenses, unearned revenues, etc.
+ Non-current liabilities (long-term liabilities) include deferred tax liabilities, long-term
accrued expenses, unearned revenues, provisions, etc. -
Owner’s Equity includes capitals, owner shares, undistributed earnings, and funds
belonging to owner’s equity, etc.
The Consolidated Income Statement includes the following items: revenues, cost of
goods sold and services rendered, gross profit, deferred tax, earnings per share, and other expenses.
The Consolidated Cash Flow Statement includes the report about cash flows from
operating, investing and financing activites. 1.
Cash flows from operating activities
Profit before tax include depreciation of fixed assets, foreign exchange losses, profits,
interest expenses and provisions
Operating profit before changes in working capital include increase or decrease in
receivables, inventories, payables, and other expenses
- Net cash flows from operating activites 2.
Cash flows from investing activities includes expenses for shopping and
construction; earnings from many types of assets, debt instruments and interest, dividends, etc.
- Net cash flows used in investing activities 3.
Cash flows from financing activities include earnings from capital contribution
and issuance of shares, expenses on capital redemption, drawdown and repayment of borrowings, etc. 20
- Net cash flows from financing activites
This section might be influenced by the exchange rate fluctuation. Conclusion
In brief, Vingroup has witnessed prominent achievements as they have suitable methods to
implement an effective organizational strategy. Prominently, the process of tackling difficulties is
highly appreciated due to the Group’s imposing a tight control. The Group has created and applied
many clear-sighted strategies, which continuously make its operational control system more
complete. Moreover, the fact that Vietnam’s largest multidisciplinary private corporation provides
its workforce with great working conditions and environment helps the company to employ happy
staff for advancing productivity and task efficiency. Vingroup’s corporate governance not only sets
missions for its businesses but also has a mission to contribute to the country's development in the
future, which are based on the objectives of sustainable development. Furthermore, staff and
customer-oriented policies make the Group is becoming more and more successful and pose a
promising future for the corporation, brings it to a higher position in the market economy not only
in the region but also in the world.