UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Thi Duyen Anh MANAGEMENT CAPABILITY IN VAN HUNG XUAN COMPANY MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business - Nguyen Thi Duyen Anh POOR MANAGEMENT CAPABILITY IN VAN HUNG XUAN COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr Tran Phuong Thao Ho Chi Minh City – Year of 2019 Table of Content Order Page Executive summary CHAPTER PROBLEM IDENTIFICATION 1.1 Problem context 1.1.1 Introduction the company 1.1.2 Symptoms 1.2 Problem analysist 1.2.1 Situation analysis 12.2 Initial Cause – Effect Map 17 1.2.3 Updated Cause – Effect Map 19 1.3 Problem identification 22 1.3.1 Main problem validation 22 1.3.1.1 Lacking of human resource team 22 1.3.1.2 Poor management capability 23 1.3.1 Lack of sales and marketing team 24 Main problem validation 25 1.4 Potential causes 27 1.4 Consequence of Problem 27 1.4.1 The low job performance 27 1.4.2 Low productivity of employees 27 1.4 Reduce business growth 28 Final Cause – Effect Map 30 1.3.2 1.4 CHAPTER ALTERNATIVE SOLUTIONS 30 2.1 Cause Validation 30 2.1.1 Possible causes 30 2.1.1.1 Poor management skill 31 2.1.1.2 Lacking of business strategy 32 Define business component 33 2.2 Main cause 35 2.2.1 The Fish bone diagram 38 2.2.2 Define business strategy component 39 2.3 Alternative solution 39 2.3.1 Online Business Marketing 39 2.3.2 Services Diversification 41 2.3.3 Market Development 41 2.4 Solution selection 44 2.5 Action plan 45 CHAPTER SUPPORTING INFORMATION 45 Appendix 45 Reference 64 Executive summary Vietnam is a country that has gradually been drawing to foreign investors as one of prospective destinations in Asian region It is attracted for the young people who want to start-up the company in the integrated phase Van Hung Xuan company is established in following towards the growth of industrialized and modernized country and it has been improving to reach the achievement of the high performance However, the most difficult for young company as Van Hung Xuan has been facing in the case of employees leave the job High leavers in company is considered as the initial problem in the company In order to follow that, company will find some causes to understand what factors with regard to employees want to stay or leave their jobs The analyzed methodology used to find out the causes and effects leading to recognize the potential problem in the thesis that is qualitative data collection method through in-depth interviews as primary data Additional, the secondary data is collected materials of leavers from office department to have diagnosis of potential problem at Van Hung Xuan Company Moreover, problem scope can work with office department, teaching and translating departments in company in which it is typically analyzed data on translating function to find out the potential reasons are come from the diagnosis of highest turnover rate and the issues are supported to understand what roost causes leading to difficulties that has been happened in company From the finding out diagnosis of potential problems exist in Van Hung Xuan Company, findings provide the existence of poor management capability plays a main problem The scope of problems is argued with evidences for providing through interviews from qualitative method Poor management capability is analyzed in terms of its existence, consequences and solution are suggested to resolve such a problem Finally, this thesis will indicate the action plan in the time and budget that are proposed to settle the problem aiming to reduce the obstacles in Translating function in Van Hung Xuan Company CHAPTER PROBLEM IDENTIFICATION 1.1 Problem context 1.1.1 Introduction the company Company Van Hung Xuan has established in 2011 with tax code: 0310832022, its head office is located at 274 Le Co, An Lac Ward, Binh Tan District, HCM, Vietnam and it owns 01 branch in Binh Tan District as well It is represented by Mr Nguyen Van Duc by law with two billion for charter capital It started up with 04 employees and peak of 2015 and 2016 with 16 employees who was working in Van Hung Xuan company including in head office and 01 branch in HCMC, Vietnam The company provides the teaching languages and translating services for companies, there are two main segments: corporate customers and individual customers With the strategy to expand the market, Van Hung Xuan will have a plan to promote the network of clients for translating and teaching languages functions from 2019, it creates of a huge human source to run this business plan Director Branch Head Office Teaching languages Department Office Department Translating Department Teaching languages Departm Figure Van Hung Xuan Company organizational structure In Van Hung Xuan Company, there are Head office and Branch with core functions: there are 01 office department including in Accounting department, 01 translating department and teaching department In teaching languages functions, they are divided into small divisions: teaching Vietnamese for foreigners and teaching English for children in head office and in branch in which the translating business is playing the key role in company 1.2.2 Symptoms The translating function is born in 2011 and it has been playing the via role in business operation in Van Hung Xuan Company It was difficult to recruit and keep the talent employees who could follow the high requirements from clients in the first phase There were only 04 employees including in 01 managers cum translator, 01 Chief Accountant cum translator who has managed the general affairs, 02 translators From the phases of 2011 to 2013, the internal materials are reported that the number of employees has not changed and the revenues of translating function has gained from 180.000.000 vnd to 225.000.000 vnd for each year The two main languages of English and Chinese has been serviced to target of individual customers and corporate ones The beginning of 2014, manager has planned to recruit the 04 additional new employees to service for the number of clients and they have kept the job until the end of 2016 The peak of 2017, the translating business operation has been downturn leading to lacking to source job to assign among employees means that translating function has faced the employees who want to leave the job with many reasons in relating to salary and benefits, weak source of clients, and weak management On the basis of internal materials are shown from Office department, the number of employees who left the company has been increasing in 2017 The below table is shown the number of employees who quitted their jobs are more significant in 2017: Number of employees in Translating Function Year/ Position Ord Manager cum translator Chief accountant cum translator Translator Total 2014 2015 2016 2017 06 first months of 2018 Total of Left employees Total of employees Left Total of employees Left Total of employe Left Total of employees Left 1 1 1 1 1 6 8 Table 1: Number of employees in Translating Function in Van Hung Xuan company As above table of employees at company from 2011-2018, the number of employees leaving continued toward increasing from 2017 However, the other positions still keep their jobs and unchanged The turnover rate is shown in below: Graph 1: Turnover rate of employees in Van Hung Xuan Company from 2011-2018 As above mentioned, Van Hung Xuan company has faced the problems in relating to high turnover rate of staffs in which translating functions reached to 63% in 2017 and it seems difficult for company to seek the potential clients as well as the talent employees who will be dedicate their competences into the growth of business In this function, high turnover rate of leavers has significantly affected to the negative attitude of current employees and their job performance Moreover, the high of leavers are also affected too much to revenue of company as reported materials from human resource department Especially, the revenue of company has fallen sharply in 2017 that has started from losses of potential clients leading to poor source of assigned job among employees In a result, it is said that the correlation between turnover rate and low revenue are affecting to sharply growth of business operation in company From the internal documents are provided to present the revenues in translating Function from 2014 – 2018 in below: 13 Agarwal R, Prasad J A conceptual and operational definition of personal innovativeness in the domain of information technology Information systems research 199 8;9(2):204-15 14 Baden-Fuller C, Haefliger S Business models and technological innovation Long range planning 2013;46(6):419-26 15 Webster Jr FE The changing role of marketing in the corporation The Journal of Marketing 1992:1-17 16 Vatanasombut B, Stylianou AC, Igbaria M How to retain online customers Communications of the ACM 2004;47(6):64-70 17 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Kim WC, Mauborgne R Knowing a winning business idea when you see one Harvard business review 2000;78(5):129-38 32 Uden L How to promote competitive advantages for SMEs: issues, ideas and innovation Journal of Business systems, governance and ethics 2007;2(2):1-15 33 Recognize HDSE The convergence of good ideas: how serial entrepreneurs recognize innovative business ideas? 1996 34 Thompson JL, Martin F Strategic management: Awareness & change: Cengage Learning EMEA; 2010 35 Johne A Successful market innovation European Journal of Innovation Management 1999;2(1):6-11 67 70 71 Acknowledgements First of all, I would like to extend my sincere gratitude to my advisor – Dr Tran Phuong Thao – who always support and give her invaluable guidance, positive criticism and continuous encouragement throughout the process of research study to complete this thesis Her total faith and confidence in myself were the main inspiration for measure during the crucial phase of my academic undertaking the Master of Business Program at ISB – International School of Business | University of Economics Ho Chi Minh City, Viet Nam – in which my sincerely thanks are also extended to Rector of ISB and All of Professors for their supports, advises and comments during my academic program Next, I wish to express my deep gratitude to Board of Managers in Van Hung Xuan Company for providing the valuable information and measures documents during my research study I would also thank to all of people who provided the necessary information and assistance to fulfill my thesis Especially for my students from Vietnamese Classes, English Classes undertaking me at these classes as a main teacher, thanks to the clients of Van Hung Xuan Company, my friends, classmates and ISB administrative clerks as well Finally, I want to message to my beloved parents who took a lots of hardship to instill me as the principles and values of my life They always provide the best for me and I am only eternally indebted to all of them The words fail from me to express the depth of my gratitude and love to them both Sai Gon, the year of 2019 Student: Nguyen Thi Duyen Anh From the Master of Business Program at ISB ... 2017 Individual Customers first months of 2018 Total Graph Revenues in Translating functions in Van Hung Xuan Company In summary, the symptoms are found in Van Hung Xuan Company including in Decrease... translating business is playing the key role in company 1.2.2 Symptoms The translating function is born in 2011 and it has been playing the via role in business operation in Van Hung Xuan Company. .. been happened in company From the finding out diagnosis of potential problems exist in Van Hung Xuan Company, findings provide the existence of poor management capability plays a main problem The