Quản lý tài chính góp phần nâng cao năng lực cạnh tranh của các tập đoàn kinh tế việt nam tta

Chương 1 CƠ CHẾ QUẢN LÝ TÀI CHÍNH VÀ VẤN ĐỀ NÂNG CAO NĂNG LỰC CẠNH TRANH CỦA TẬP ĐOÀN KINH TẾ PAGE 1 PREFACE 1 The necessity of the dissertation The 10th National Congress of Representatives of the Co[.]

1 The necessity of the dissertation

The 10Xth National Congress of Representatives of the Communist Party ofVietnam has emphasized on: promoting the establishment of some powerful strongState economic groups and Corporations which operate in variety of many sectors andfields, of which, with focused major sectors and multi-ownership in ; whichcontrolling role falls on the State ownership have many owners, in which, the Stateownership plays controlling role… To putFor these State economic groups andCorporations into practical operations with high achieved effectiveness, many issuesare to be handled, listing from choosing suitable models for corporations; to completethe state management policy system for economic groups, training and improvingcapacity of the managing staff…

Of the above-mentioned issues, there includes financial management mechanismfor the economic groups It can be said in a imaginary manner that the financialmanagement mechanism is like the circulating system of the economic groups If theblood vessel operates in a regular manner, then it can bring blood to breed the body Incontrast, if blood vessel stops, the body will break down and enterprise will gobankrupt

On realizing this importance, there have been many research works on thefinancial management mechanism in the economic groups in view of theory, practicalassessment as well as experience summary

In general, those research works have been completed for a long time However,most of them have not linked the financial management mechanism to the issue ofincreasing the competitiveness of the State Economic Groups At present, operationsituations of the economic groups have witnessed many changes under the impacts ofnew contexts In order to continue on completing the financial managementmechanism for the State Economic Groups under new contexts, it is necessary to offerstructured researches from view of theory and practice This has facilitated me to

choose the topic named “Financial management to contribute to increasing the competitiveness of the Vietnamese Economic Groups” as the one to protect my doctor

dissertation

2 Objectives of research

The dissertation focuses on the major following objectives:

- To analyze the theory and practice in term of the competitiveness of theeconomic groups under the context of globalization, open-door and integration into the

regional and international economy Simultaneously, to represent theoretical issues onthe financial management mechanism for the economic groups; to analyzetheoretically impacts of the financial management mechanism in increasing thecompetitiveness of the economic groups

- To analyze current situations on the State financial management mechanismapplied to financial activities in the State economic groups in Viet Nam (mostly based

on Decree No.09/2009/ND-CP of the Government)

- To research and offer the solutions to innovate and complete the State financialmanagement mechanism for the State economic groups in the context of carrying outthe guidelines on restructuring enterprises

3 Object and Scope of Research

Object of research of this dissertation is theoretical and practical issues on thecompetitiveness of the State economic groups in Viet Nam and the State financialmanagement mechanism applied to the economic groups

Scope of research of this dissertation is to only focus on researching the Statefinancial management mechanism for the State economic groups but not to furtherresearch the internal management mechanism of each State economic group.Researching practices in adopting the financial management mechanism into the Stateeconomic groups in Viet Nam was carried out from 2006 to 2010

However, to consider and assess in a comprehensive manner, the dissertation hassurveyed and researched relevant issues, international experience in managing themultinational groups in order to consider and apply them selectively and suitably tothe conditions in Vietnam

4 Method of research

The dissertation has used the method of dialectical materialism, historicalmaterialism in combination with that of summary, team divisions, statistics, analysis,using tables and diagrams to be the one for researching the dissertation

5 Scientific and practical meaning of the dissertation

To supply methodological knowledge in term of the competitiveness andfinancial management mechanism in the economic groups in general, contributing toincreasing the awareness of the society for the process of establishment, developmentand operation of the economic groups in view of competitiveness and impacts of thefinancial management mechanism on the competitiveness

To offer suggestions for the policy makers as well as managers in the economicgroups in terms of the method of planning the financial management mechanism aswell as operating this mechanism in practice, by analyzing the current situations inoperating the financial management mechanism in the State economic groups in VietNam over the last time At the same time, to suggest solutions to complete thefinancial management mechanism in the Vietnamese State economic groups under thenew context Especially, the dissertation has also left some pages to researchspecifically the financial management mechanism in the PetroVietnam - a powerfuleconomic group which has been making its great contributions to the nationaleconomy and finance from view of assessment of real situations as well as proposal ofsolutions.

6 Structure of this dissertation

This dissertation comprises three chapters, practically:

Chapter 1: The financial management mechanism for increasing the competitiveness of the economic groups

Chapter 2: The current situations in the State financial management mechanism for increasing the competitiveness of the Vietnamese economic groups Chapter 3: The completion of the State financial management mechanism to increase the competitiveness for the Vietnamese economic groups

CHAPTER 1THE FINANCIAL MANAGEMENT MECHANISM FOR INCREASING

THE COMPETITIVENESS OF THE ECONOMIC GROUPS

1.1 Overview of competitiveness

1.1.1 Brief on the economic group

1.1.1.1 Definition of the economic group

There are many approaches to the economic group In term of definition, upon

summarizing all approaches, the dissertation has defined that: “Economic group is a

collection of many companies with their independent legal entity operating in one or many different sectors, within one or more countries, voluntary to combine together based on some certain principles and modes to increase its competitiveness in the market and maximize the profits”

1.1.1.2 Characteristics of the economic group

 Organization: includes many companies with their independent legal entity,voluntary to combine together to achieve the overall objective of increasing thecompetitiveness and maximize the profits

 Have diversified combinations: in term of capital, technology, businessproduction, products and services supply,

 Scope of operation is diversified: do business in main sectors and theirsupplementary ones, invest into sectors which little relate to man sectors

 Often have big scope of capital, laborers, assets, turnovers…

 Often have center for research & development (R&D)

 Be organized and managed according to clear orders

 Forms of establishment are diversified

1.1.1.3 Structure of the economic group

Depending on conditions and characteristics of establishment of the economicgroups in each country, their structures are different accordingly However, commonstructure of one economic group includes:

Holding company does not have its legal entity

Subsidiary and affiliated companies have their legal entities, voluntary to jointogether

1.1.2 Competitiveness of the economic group

1.1.2.1Definition

Up to now, there has not been any recognized standard concept about thecompetitiveness of the economic group In term of definition of competitiveness of theeconomic groups, there are many different approaches Drawing from reasonablecores, the dissertation believes that: “Competitiveness of the economic group is therepresentations of its real capacity and advantages as compared to its competitors insatisfying to customers’ demands to the best to gain the maximum profits throughexploiting and using its internal and external advantages to produce out many newattractive products with their quality and competitive prices to attract customers andimprove its position as compared to that of other competitors”

1.1.2.2 Criteria on assessing the competitiveness of the economic group

The economic group is defined as an enterprise of great scope, thus itscompetitiveness has some certain similarities with that of enterprises of great scope.Based on this, it is possible to consider criteria on assessing the competitiveness ofenterprises of great scope as the one to assess that of the economic group Specifically,

we can rely on the following 8 criteria:

Scope and method of using capital and assets of the economic groups

Great scope of capital and assets of the economic groups is an important premisefor them to easily implement their competition strategies However, scope of capitaland assets is not the decisive element for the increased competitiveness, but it is themethod of using capital and assets within the economic groups Effective investment

of capital and use of assets in conformity with the real requirements of businessactivities is just the element to determine the increased competitiveness

Capacity of researching market and choosing target market

This is considered as one of the important criteria The economic group which iscapable of researching market and choosing target market just can plan its strategy incompetition, product distribution, research & development (R&D) Thus, capacity ofresearching market and choosing target market is considered as one of the criteria forconsidering and assessing the competiveness capacity of the economic group

Competition strategy in accordance with facts and advantageous potentials of the economic group

Competition strategy is the product of process of researching customers’demands, weaknesses and strengths of the competitors to map out the businessproduction plan to create new products to satisfy customers’ requirements and takeadvantage of market share Thereby, to increase profits in the business productionprocess

Suitable product distribution target

Distribution target in accordance with the diversified form and channel ofdistribution, with care to customers not only increases capacity of customers attractionbut also acts as condition for increasing the turnover, decreasing costs and increasingprofit - the decisive element for increasing the competitiveness of the economicgroups

Management and operation capacity of the economic group

Effective management and operation capacity of the economic group is the

basis for increasing its competitiveness The management and operation capacity ofthe economic group is clearly represented in planning strategies and carrying out them

in practice in a quick and active manner The management and operation capacity ofthe economic group depends on its leaders staff ranging from the Chairman of Board

of Directors, General Director and Director within the organization system of theeconomic group

Scope and trends of investment, research and development (R&D)

In the context of violent competition, market scramble and customers attraction,

this is the decisive criteria for the existence and survival of the economic group.

Aware of this, most economic groups in the world have established centers fortechnology research and transfer

Technology level

Technology level is regarded as the decisive element for increasing thecompetitiveness of the economic groups because the economic groups which havemodern technologies and control new technologies just can produce out good product,with plentiful models, high quality and reasonable price From then on, to attractcustomers, occupy market share, increase turnover and profits

Human resources

In summary, it can be assured that high quality human resource is the mostdecisive element for increasing the competitiveness of the economic groups Today,most economic groups in the work have strategic policy on human resources in theeconomic groups

In brief, the 8 criteria as mentioned above are closely interlocked to one another

To analyze and assess the competitiveness of the economic groups, it is necessary toconsider all of these criteria

1.1.2.3 Factors to control the competitiveness of the economic groups

The competitiveness of the economic groups is controlled by many internal andexternal factors Specifically:

External factors:

- Globalization, open-door, integration

- Current social and economic situations

- The State’s macroeconomic policies

Internal factors:

- Scope of financial resources and using method

- Capacity of operating and managing science and technology levels

- Human resources

- …

Of the above factors, the one in financial management mechanism for theeconomic groups plays a crucial role This factor determines operations of thefinancial resources in the economic groups to serve the competition strategies of theeconomic groups

1.2 The financial management mechanism and its impacts on increasing the competitiveness of the economic groups

When researching the financial management mechanism in the economic

groups, it should research financial activities within them Movements of the financialresources in the economic groups determine the establishment and implementation ofthe finance management mechanism

1.2.1 Financial activities in the economic group

Depending on the nature of business production activities, managementactivities in the economic groups are diversified However, on brief view, the financialactivities in the economic groups include:

- Mobilization on financial resources

- Distribution and use of financial resources and assets

- Profit distribution

- Financial inspection and supervision…

These activities form the basis for establishing and executing the financialmanagement mechanism in the economic groups

1.2.2 Financial management mechanism for the economic group

1.2.2.1 Definition of financial management mechanism:

In general, depending on characteristics of each country, the economic groupshave their different forms of ownership, the state and non-state economic groups.Thus, in theoretical part, the dissertation has only researched the definition of the

financial management mechanism in general without researching it further within theeconomic groups or the State’s financial management mechanism applied to theeconomic groups.

In fact, depending on purposes of researching in term of theory, the domestic andforeign scholars have offered many approaches to the management mechanism in theeconomic groups as represented in Chapter 1 of this dissertation Form viewpoint of

the dissertation’s author, it can be understood that the financial management

mechanism is regulations on how to organize and carry out financial activities of the economic groups These regulations can be promulgated by the State and the economic groups; however, their implementation is within responsibility of the economic groups

This approach shows that the financial management mechanism is the subjectiveproduct of human Positive or passive effects of the financial management mechanism

on the economic groups will depend on objective awareness of the process ofoperating financial category within the economic groups

1.2.2.2 Contents on the financial management mechanism in the economic groups

Combined to financial activities in the economic groups, the managementmechanism applied to the economic groups includes:

Regulations on capital mobilization.

Using capital in the economic groups is carried out by many methods, forms andchannels Depending on the State economic and financial management mechanism andbenefits gained by the economic groups, suitable methods and forms of mobilizationchannels will be chosen Requirement placed on capital mobilization in the economicgroups is to ensure to increase financial resources for operations in the economicgroups and stabilize the macroeconomic goals of the State

Regulations on capital, assets management and use in the economic groups

Regulations on capital, assets management and use in the economic groupsmust ensure to: preserve and develop capital, assets and ensure to increase theeffectiveness and efficiency of capital mobilization; orient capital and assets intobusiness and production activities to benefit the economic groups and the entireeconomy

Regulations on turnovers, expenses and profits management

These regulations must grasp thoroughly the principles:

- To increase the self-autonomy and self-responsibility for the economic groups

- To ensure savings, increase turnovers and decrease expenses

- To ensure fair and equality; to promote positive elements and solve aspects ofbenefits in a harmonious manner: the state, groups and laborers.

- To consider long-term benefits and widening of scope of business production,increasing of the competitiveness to be the core

Regulations on inspection and supervision on financial activities in the economic groups

Inspection and supervision are not only the function of economy and financemanagement of the State but also the responsibility of each economic group.Regulations on inspection and supervision must ensure the requirement of increasingthe effectiveness of self-inspection and supervision of the finance within the economicgroups and to pay crucial attention to inspecting, inspecting and supervising thefinance from the outside

Additionally, in the role of management, at the holding company of the economicgroups, there are also regulations on the finance management in the process ofresearching and developing, merging, splitting and dissolving member companies…

1.2.2.3 Elements to control the establishment and implementation of the financial management mechanism for the economic groups

To enable to establish and operate the financial management mechanism for theeconomic groups, it needs to further analyze and clearly indicate the internal andexternal elements that affect the financial management mechanism Specifically:

- Globalization and integration

All above elements are analyzed in relatively specific manner in this dissertation

1.3 Impacts of the financial management mechanism on increasing the competiveness of the economic groups

It is possible to see impacts of the financial management mechanism onincreasing the competiveness of the economic groups from two points of view.

Creation of financial resources and implementation of the competition target

This impact is represented clearly in regulations on mobilization of humanresources in the economic groups

Management and adjustment on the competition target

This impact is represented through regulations on management and use of capital,assets, turnovers, expenses, profits and their distribution as well as those on financialinspection and supervision All of these are analyzed and interpreted carefully inChapter 1 of this dissertation

1.4 Criteria for assessing the usefulness of the financial management mechanism for the economic groups

To be able to assets the utility of the financial management mechanism for theeconomic groups exactly, the dissertation has further analyzed the following fourcriteria:

Firstly, to ensure and develop financial resources and asset values in the

economic groups

Secondly, to ensure to promote the autonomy and self-responsibility for the

finance of the economic groups

Thirdly, to increase the effectiveness of using the financial resources and assets

for the economic groups

Fourthly, to suit to the requirement of carrying out the State macroeconomic and

macro-financial policies

1.5 Experience in establishing and carrying out the State financial management mechanism applied to the economic groups in some nations and the experience lesson for Vietnam

Each nation has its unique financial management mechanism characterized by theorganization and operation models of the economic groups However, the mostcommon characteristics of the financial management mechanism applied to theeconomic groups in some nations mentioned in this dissertation (Chine, South ofKorea,…) creates favorable conditions for promoting the autonomy and self-responsibility of the economic groups At the same time, for paying importantattention to checking and supervising the finance from the State-owned agencies toclearly indicate the function of State management as compared to the one of capitalownership

Vietnam can draw the lessons from the above experiences

CHAPTER 2THE CURRENT SITUATIONS IN THE STATE FINANCIAL MANAGEMENT MECHANISM FOR INCREASE OF THE

COMPETITIVENESS OF THE VIETNAMESE ECONOMIC GROUPS

2.1 Current situations of the competitiveness of the economic groups

2.1.1 Overview of the state economic groups in Vietnam

The state economic groups in Vietnam can be seen from following aspects:

2.1.1.1 Legal foundations for establishing the state economic groups in Vietnam

The state economic groups in Vietnam have emerged from the guidelines onarranging and innovating the enterprises promulgated by the Party and State

The 3rd Conference of the Party Central Committee Course IX have guided totransfer some Corporation 91 of the State with sufficient conditions into the stateeconomic groups, as a pilot

Following this guideline, the Enterprise Law promulgated by the NationalAssembly in 2005 has some articles which regulate the establishment of the stateeconomic groups In 2007, the Government promulgated Decree No.139/2007/ND-CPdated September 5th, 2007 innovating, arranging and capitalizing the state-ownedenterprises, of which, one article regulates the establishment of the state economicgroups

Thus, although there has not been any independent Law on the economic groups.However, establishment of the economic groups has been initiated from the guidelines

of the Party and instituted by some certain legal documents of the National Assemblyand Government

2.1.1.2 Organization models of the economic groups

Except for the Finance Insurance Group, most of the state economic groups are

organized according to the model of holding and subsidiary companies The holdingcompany is the state one which is commonly established from the Corporations 91.Subsidiary companies are organized under very various legal forms from the completelegal entities to joint stock companies and independent financing companies within theeconomic groups In general, the organization model of the state economic groups inVietnam is very complex

2.1.1.3 Investment activities

In general, the Party’s guidelines and legal documents of the National Assemblyand the Government all regulate that the state economic groups are permitted tooperate in many sectors and fields, of which, main sectors Therefore, since theestablishment, the investment activities of the state economic groups are verydiversified, including, investment into main sectors and fields, investment intosupplementary sectors and fields and sensitive ones out of their strengths such asfinance, bank, insurance, stock and real estate In some recent years, investment intosensitive sectors and fields out of strengths is becoming a trend of the State economicgroups, which worries the state–owned agencies because while the financial resourcesremain limited, investment into risky sectors can cause capital loss and loweffectiveness

2.1.1.4 Contributions of the state economic groups to the social-economic development process

Although there are some certain limitations, especially the effectiveness in usingthe State capital and assets, the activities carried out by the state economic groups havemade much important contribution to the national social-economic developmentprocess as assessed by the State Specifically:

The state economic groups are important tools for carrying out the statemacroeconomic policies, contributing to curbing inflation and promoting the economicgrowth

To attract laborers, create jobs and increase income for laborers

To contribute to ensuring collections for the State budget

All of these contributions are proved with clear and specific data by the dissertation

2.1.2 Current situations of the competitiveness of the state economic groups in Vietnam

Since their establishments, the state economic groups have made much importantcontributions However, the research shows that the competitiveness of state economicgroups is absolutely limited, and to some extents, it is low in comparison to that of theregional economic groups This is proven through some of following criteria:

Scope of capital is small and its use effectiveness is lower

Most of the Vietnamese state economic groups have their scope of capital of10,000 billion dong Of the twelve state economic groups, only seven have scope ofcapital of more than 10,000 billion dong This number seems to be great as compared

to the domestic enterprises, but it is very lower as compared to the regional economic

groups Restricted capital resource is a big difficulty for the economic groups to realizetheir business and competition targets Scope of capital is small but its useeffectiveness of the state economic groups is lower Based on the inspection results

carried out by the Central Institute for Economic Management, the ICOR coefficient

of the state-owned enterprises and economic groups is 10 whereas the non-state-ownedenterprise is 4 and FDI enterprises is 6

Market research activities have not been paid due attention to by the stateeconomic groups This is represented through operation results of state economicgroups

Although turnover of the state economic groups is higher in the following yearthan in the previous year, the growth speed is not considerable Turnover of the twelvestate economic groups is shown in the following data table:

Calculation unit: Billion dong

Source: Ministry of Planning and Investment

Capacity of developing the product strategy remains limited

Product distribution network has not been wide in not only the foreign marketbut also the domestic market

Expenses spent on research and development remain restricted

According to a research material of the Central Institute for Economic

Management, investment rate into research & development between the state andenterprises in other countries is ¼ whereas in Vietnam this rate is 5/1 This means 5 forthe State and 1 for enterprises In fact, the rate the State has invested into science andtechnology is 0.5% GDP whereas it is 0.1% GDP for enterprise, of which, theeconomic groups in some recent years

Technological level is lower At present, the technological level of theVietnamese economic groups is equal to that of the Thailand and Malaysian economicgroups 30 years ago

Quality of the human resources is low

Based on the assessment, among the Vietnamese economic groups, only 40%laborers have been trained Most of them are unskilled ones Most leaders in theeconomic groups are originally political officers, so their qualification in economicand financial management remains restricted

This situation shows that the competiveness of the state economic groups inVietnam still have many limitations

Limitations on the competiveness of the economic groups are originated frommany objective and subjective reasons Among them, some come from the financialmanagement mechanism of the State for the state economic groups

2.2 Current situations in the financial management mechanism of the State for the state economic groups in the 2006-2010 period

2.2.1 Process of establishing the financial management mechanism of the State for the state economic group

Since being established, the Government and Ministry of Finance havepromulgated many documents in financial management for the state economic groups

Of which, two important documents regulate specifically the financial management instate economic groups Those are: Decree No.199/2004/ND-CP dated 3/12/2004 andDecree No.09/2009/NĐ-CP dated 05/2/2009 of the Government The Decrees andguideline Circulars of the Ministry of Finance focus on: mobilizing capital; managingand using capital and assets; managing turnover, expenses and profit; supervising thefinance in the economic groups

2.2.2 Consideration and assessment of the State regulations on the financial management in the State economic groups

2.2.2.1 Mechanism in capital mobilization in the economic groups

After briefing the State regulations on management and capital mobilization inthe State economic groups, indicating their positive values, combining them toresearching their implementation in the state economic groups, the dissertation hasfurther analyzed and indicated weaknesses and shortcomings of regulations on capitalmobilization of the state economic groups These limitations and shortcomingsinclude:

Have not promoted the activeness of the affiliated companies in the groups interm of capital mobilization Although the affiliated companies are the ones which areindependent legal entities and entitled to take active in mobilizing capital, allguidelines and plans on capital mobilization must be approved by the holdingcompany The subdivision and decentralization, especially right to invest, purchase,transfer, rent and mort in the economic groups has not been particularly regulated

The mechanism in balancing capital between the holding company andsubsidiary companies, among subsidiary companies themselves has not been regulated

in details, which causes difficulty in mobilizing the financial resources within theeconomic groups