Some solutions to improve the organizational structure in giang nguyen ltd co

Manufacturing and marketing situation of Giang Nguyen Ltd., Co in some recent years ...7 1.1.3.. Solutions to improve Giang Nguyen’s organizational structure ...32 4.1.1.. Consult the or

National Economic University

English For Business Department Faculty of Foreign languages

Giang Thi My Trang

National Economic University

English For Business Department

Faculty of Foreign languages

Giang Thi My Trang

I verily owe this study to Mrs Nguyen Phuong Hoai, my supervisor.Her comments gave me insights that I did not get from my books in my university!Her kindness and understanding were palpable even though we have had muchtime to discuss

I have indeed come a long way to complete this study – I met withmany setbacks However, thanks to Mrs Hoai I have chances to reconsider andcorrect all gaps in before handing in the final draft

I also am very grateful to all my lecturers in Foreign LanguageDepartment during my last semester in university Thanks to your all devotion Itogether with all students certainly collect lots of experiences after thisinternership

Table of contents

ACKNOWLEDGEMENT 1

EXECUTIVE SUMAR 4

INTRODUCTION 5

CHAPTER 1: A SKETCHY INTRODUCTION OF GIANG NGUYEN LTD.,CO 6

1.1 An overview of Giang Nguyen Ltd., Co 6

1.1.1 History & developing process 6

1.1.2 Manufacturing and marketing situation of Giang Nguyen Ltd., Co in some recent years 7

1.1.3 Interaction between economic - technological characteristics and its organizational structure 9

1.1.4 Reality of Giang Nguyen’s organizational structure 11

1.2 Conclusion 14

CHAPTER 2: LITERATURE REVIEW 15

2.1 Organizations and management 15

2.2 Organizational structure and design 17

2.2.1 Work specialization 15

2.2.2 Departmentalization 18

2.2.3 Chain of command 19

2.2.4 Span of control 19

2.2.5 Centralization and decentralization 20

2.2.6 Formalization 21

2.2.7 Organizational design decisions 22

2.2.8 Common organizational designs 24

CHAPTER 3: ANALYSIS AND FINDINGS 26

3.1 Findings of the recent organizational design 26

3.1.1 Low work specialization at Manufacturing Department 27

3.1.2 Centralization at Board of Manager 28

3.1.3 Low Formalization at Sales Department 29

3.2 Conclusion 30

CHAPTER 4: RECOMMENDATIONS 32

4.1 Solutions to improve Giang Nguyen’s organizational structure 32

4.1.1 Focus on specializing works at Manufacturing Department 32

4.1.2 Strengthen administrative labour at Broad of manager 33

4.1.3 Renormalize at Sales department 34

4.2 Other recommendations 35

4.3 Conclusion 36

Conclusion 37

Reference 38

Executive Summary

An organizational structure is the foundation of sustainable development ofany economic institution The management process, however, is influencedcontinuously by environmental uncertainty such as political, technological, socio-cultural and economic changes Therefore, in order to response simultaneously tounpredictable environment, particularly to the recent Vietnamese economy,reinforcing the organizational structure is related to survival

Giang Nguyen Ltd.,Co has been dealing with a dozen of hazards comingfrom external factors as well as internal ones Whereas, this company has neverreconsidered their organizational so that there are much of unsolved stuffs which

is restricting the company’s development even an alarming to the survival of thiscompany

The staff in some crucial departments were interviewed to dig up the reality

of S2M in Giang Nguyen Ltd.,Co Consult the organizational structure of othercompanies which are running in the same field for working out possibilities ofsimilarity that is a merely own weak point of Giang Nguyen Ltd.,Co

The study shows that constraints of the structure are preventing theoperation smoothly in Giang Nguyen Ltd.,Co as well as some remarkableachievements previously On the other hand, some factors, namely personnel,marketing and technology are also valued in a combination with the organizationalstructure

The study concludes that the company is suggested reorganizing thestructure in cautious consideration ahead because the organizational structurecontributes all of activities in per institute They must find out not only problemsconcerning management from the high position’s views but also from the lowerones who are directly coping with

Consequences of the global crisis (2007-2010) have been affecting overalleconomy of all over the world in general and in each economic institutionparticularly The significance of an organizational structure is being put in aconsideration than ever before Some people are of the opinion that it is apermanent set in any organization Actually it, in contrast, is one of changeablefactors relied on internal and external interaction Obviously, the organizationalstructure of a company should be required to concord to these varying factors.Moreover, when the technology evolution is booming exponentially, reorganizingthe structure is becoming more essential to an economic institution

The revenue problem as well as the up springing of rivalries have put lots

of pressure on Giang Nguyen Ltd.,Co during the recent years Although thestructure created some considerable achievements for many years ago, it is alsoexposing a few of alarming gaps in order to reinforce the stability of this company

in unpredictable environment Moreover, remaining an obsolete structure hasnarrowed most of its operations

The research questions will guide the study are: whether can Giang NguyenLtd.,Co survive and develop if it remains the current organizational structure?Which factors in the structure are hampering the company’s operation? And howcan the company deal with this obstacle?

The methodology of this study is observing and analyzing in order tounderline the reality of the structure in Giang Nguyen Ltd.,Co Therefore, someannual reports will be collected from the crucial departments in this company.Interviewing some staff in all departments is to find out their daily troubles andtheir own views about Giang Nguyen’s organizational structure

Chapter 1

A sketchy introduction of Giang Nguyen Ltd., Co:

Chapter one sets the context for which the study is motivated It provides anoverview of Giang Nguyen Ltd.,Co as well as its organizational structure Itfinally identifies and discusses the problem statement and research question.s

1.1 An overview of Giang Nguyen Ltd., Co

1.1.1 History & developing process

Giang Nguyen Ltd., Co has officially run in March 28, 1999 and receivedbusiness registration certificate in August 16th, 2000 as a limited liabilitycompany with two members and over No: 0102000998

Transaction name: Giang Nguyen Company Limited

Shorten name: Giang Nguyen Ltd., Co

Address of head office: No.64, Trieu Khuc Street, Thanh Xuan Distric, HaNoi City

Giang Nguyen Ltd., Co is one of the well-known companies supplyingkinds of accessories for some garment & textile factories in Hanoi With initialcharter capital: 4 billion VND, the company is trying continuously to widen arange of customers as well as diversifying its marketing Moreover, the companyhas been affirming gradually its stage in the Vietnamese market over 10 yearsalthough there was a hard period of time which reinforced its strength Here aresome notable milestones:

Year Strategic Partner Events

2000 20 Garment & Textile factory, 19-5

Garment factory and Ha Noi Textile &

Garment factory

machines producing textile labels

2003 continued buying a 4 colors printing machine

for printed labels on all typical materials

2006 Representative of Itochu cooperation in

garment. enlarged manufacturing shop in another place

2008 imported a Germany printing machine for

printing workshop

2010 tend to relocate all company in the suburban

of Hanoi so as to tighten the organizational problems

1.1.2 Manufacturing and marketing situation of Giang Nguyen Ltd., Co in some recent years

Although the company registered a wide range of business scope: produce

and trade the products of cotton, cloth, fibre, clothing ancillary materials; print,print out the brand, bag and services related to printing (according to the rules ofcurrent laws); Trade of printing ink, dye, chemicals (except the chemicals whichare banned by the Government); Produce and trade constructional materials;Exporting, importing some goods and so on

Only some of these above scopes have been focused on the long- terminvestments such as almost kinds of accessories together with clothes, printedproducts on most materials

Thanks to owning a relatively cheap labor, lots of Vietnamese garmentcompanies have contracted with foreign partners from many developed countriessuch as Japan, America and Europe As the result of the development of garmentindustry, a mess of domestic suppliers have been mushrooming in order to meetthe huge demands of garment accessories In fact, the more benefits an economicfield makes, the more new companies are established It also means that the pie ofbeing a main supplier of any garment factories is smaller and smaller GiangNguyen Ltd., Co is coping with its own stage in the field

The decreasing marketing share has caused directly the manufacturingsituation in the company in some recent years indeed The characters of producing

as well as consumption are clearly different from other fields becausemanufacturing process after receiving an order of customer Thus, pushingconsumption stage or marketing a new range of products are completelyunnecessary for this typical of the company

Table 1: Annual report from the accounting department of Giang Nguyen

budget 378.851 397.961 414.904 377.806 300.8414.Operating capital 2.167.981 2.300.711 2.300.992 2.378.704 2.401.237

5 Fixed capital 2.590.705 2.904.761 2.904.671 3.290.756 3.502.751 6.Working capital 458.900 721.832 821.467 740.001 602.495

(Source: accounting department)

The table shows the revenue of the company considerably dropped in fiveyears (2005- 2009) because it was partly affected by a post- crisis The rate ofrevenue had got a positively increasing trend but it dramatically plummeted afterthe collapse of financial market All fields of social life have not avoided of thecrisis’ consequences including global garment industry It is one of main reasonsthat this industry in Vietnam has suffered from a lots of pressures such as: cuttinglabors, remaining familiar orders, offering the most reasonable price Depending

on orders from garment factories crucially the company’s revenue also fell rapidlythrough each quarter especially in 2009 which was regarded as the hardest periodfor almost companies

It is obvious that manufacturing process is being restricted to prepare a longstep after the economic crisis Nonetheless, the number of rivalries is increasingalthough it has been an extremely difficult stage The majority of the company’sorders has been reduced the quantity depriving from the demands of consumptioncompletely at the lowest rate ever

Choose Fabric

Try making

Produce

CheckPack

DeliverSample

to find new orders and proceed these as customers’ demand Thus thischaracteristic also influences how to form the company’s organizational structure

Although the company owns its typical products: textile labels & printing

on all materials, for example, papers or plastic lines, its competitors are not onlyspecialists in the same products but also produce its merely main one ( textile label

or printing product on more plentiful of material than Giang Nguyen Ltd., Co.).Moreover, this is the competition of whom can input the cheapest materials at thesuitable quality as the market of paper, ink pot or fabric are fluctuatingunpredictably relying on the up and down of world market

1.1.3.2 Manufacturing process

It depends on each order or customer’s demand so that the manufacturingprocess is different However, it is divided in two processes: one is textile labeland the other is sticker or printing product

* Several stages in the production of a textile label:

* The manufacturing process of a printing product:

Note: the stage making a special film can be skipped for a printing product whosematerial is paper or produced directly by a computer instead of printingmechanizes

Even though these above processes are quite simple in comparison withothers products, it needs cooperating in a logical order in steps from designing topacking before sending to customers The company tries to improve andmodernize manufacturing stages as well as invest a modern product line in order toreduce labor fee and push up the company’s productivity

1.1.3.3 Labors

The company is responsible for 34 employees in a good condition andhaving full of right according to the labor law of Vietnamese Governmentreleased The employees working for Giang Nguyen have their own characters.For instance, more than 40% of this labor force here is under 24 years old.However, another part of these employees has been entirely trained for apermanent period so that they are a core force Nevertheless, they are loyal anddetermined to devote their capacities for the sustainable development of thecompany Each labor has a correct view of the company mission before becoming

a member of the company

1.1.4 Reality of Giang Nguyen’s organizational structure

1.1.4.1 Outline of the organizational structure

Sample or

Choose material

Try making

1st

Send a layout to customer

Produce

CheckPack

Deliver

Make a special film

Printing workshop

Textile workshop

1.1.4.2 Board of management

The director is a person who has the highest power and responsibility for allactivities He has to decide lots of strategies, productive actions and others as well.Buying new machines or facilities for office is also the director’s responsibility Infact, technology plays an important role connected with manufacturing field sothat selecting a new machine depends on many factors such as which market thecompany wants to launch or invest on its main market to increase productivity The company’s leader is able to choose what the proper organizing system

is because he must ensure all departments to operate in a right way In addition,the director has to sign all documents relating with contracts, complimentary orpunishment, appraisal and so on He also has got responsibility for delegating whoshould be in training classes or recruiting and dismissing employees in accordancewith the labor law of Vietnam government

1.1.4.3 Functions and responsibility of each department

Accounting Department

The department is responsible for all fields of expenditures such aselectricity, water, salary for employees, official actions, etc It has to collect allpapers relating money which other departments spend per months and draws the

expenditure plan each month Together with the director, this department solves allissues about taxes, invoice or required documents in report and export Moreover,cooperating with the sales department it synthesizes the revenue of a month andrequests the sales department to explain the long debts if there is Comparing alldata from the manufacturing department about orders it has to confirm the inputand output of products.

Sales Department

Planning the monthly, quarterly or even yearly schedule is one of theresponsibilities for this department It always figures out potential customers andtakes care of loyal ones in order to the certainty of producing Being the supervisor

of the quality of the output reduces mistakes after delivering to customers.Spontaneously, remaining a long relationship with huge partners and satisfyingtheir feedback are other tasks of the department

This dept usually trains and cultivates professional competence to staff in

It charges for all facilities in this department and accepting for absent letters of itsstaff, as well

Designing Department

Its duty is addressed on its department’s name although it is not simple tomake a design until proceeding This department has to confirm the accuracy ofsample meeting the customer’s request Issuing a soft disk programmed in advance

is an essential step before proceeding This department signs a confirmation thattheir design is completely suitable for the sample

Manufacturing Department

 Textile workshop

It operates in the textile field so that all stages in the production of making

a textile label is checked here The leader of employees in this department chargesthe assessments, materials and other machines using for production Ensuring therate of manufacturing process is on schedule relevant to the demand from the salesdepartment The quality of products is examined finally so that it may be the mostcrucial step when finding which stage is responsible for faulted products

 Printing workshop

This workshop is relatively different from the other because its finalproducts are dependent nearly on ink and paper Satin is sometimes chosen for this

kind of printing products Each department has to entirely charge their facilitiessupporting in their tasks and this one is too Sending a report of weekly or monthlyoperation is one of the leader’s duties Comparing and contrasting all data of itscomplete orders with sales and accounting department

Besides, the leader of workshop has also responsibility for participation ofemployees in this dept and feedback to higher positions about producing situation

it is time to reconsider the efficiency of this structure

 How can the company deal with this obstacle?

These above questions are put for the future vision of the company Thecomprehensive situation is referred when the real peril is turning up after the

corollary of global crisis The amount of demand will have to be appealed becauseVietnamese garment industry still exists after a pause However, there is not acertainty that Giang Nguyen Ltd., Co or it rivalries can survive in the recentlyviolent challenge Addressing constraints in the organizational structure of thecompany and recommending feasible solutions are the crucial parts of the study

1.2.4 Methodology and method of data collection

There are a number of methods for data collecting includingdocumentation, archival records, interviews, direct observation, participantobservation and physical artifacts – Yin (Opokhu and Khan 2004) But it depends

on which problem the study concentrates I chose some general types severing thestudy such as collecting data form the company’s departments, conservation anddirect observation Additionally, analytical method is also applied throughout thestudy so as to figure out real obstacles, which the company is coping with, relatingwith the organizational structure All the study’s purpose will focus on fingeringout the answers for three research questions

Chapter 2

Theoretical framework of Organizational Structure

This chapter collates pertinent concepts, theories and findings fromprevious works upon which study will be anchored It will explore concepts andtheories on organization and management as a strategic tool in assessment aorganizational structure of a company to map out a relevant model that orient thatcompany to a sustainable development.

2.1 Organizations and management

2.1.1 Organization

An organization is a deliberate arrangement of people to accomplish somespecific purpose So, all government agencies, Coca Cola group, yourneighborhood video store or the local football team are organizations because theyshare three common characteristics: a distinct purpose, people and deliberatestructure

First, each organization has a distinct purpose This purpose is typicallyexpressed in terms of a goal or a set of goals that organization hopes toaccomplish

Second, each organization is composed of people One person workingalone is not an organization, and it takes people to perform the work that isnecessary for the organization to achieve its goals

Third, all organization develop some deliberate structure so that theirmembers can do their work that structure may be open and flexible, with no clearand precise delineations of job duties or stick adherence to explicit jobarrangements – in the other words, it may be a simple network of loose workrelationships – or structure may be more traditional, with clearly and carefullydefined rules, regulations and job descriptions, and some members’ workrelationships are clarified

Because the world around an organization has changed and is continuing tochange, the societal, economic, global and technological changes have created anenvironment in which successful organizations must embrace new way of gettingtheir work done Here are listing some differences between a traditional view and

a contemporary view of organizations

Traditional organization New organization

 Work at organization facility

during specific hours

Another definition of management is the process of administering andcoordinating resources effectively and efficiently and in an effort to achieve thegoals of the organization, Management: Challenges in the 21st century, 2001

However, management can be defined in the other meaningful way: theterm management refers to the process of coordinating work activities so that theyare completed efficiently and effectively with and through other people Theprocess represents the ongoing functions or primary activities engaged in bymanagers These functions are typically called planning, organizing, leading andcontrolling To some extent, I totally agree with the third definition of Stephen P

Robins, Management, 1943 and this will be the theme through the study.

2.2 Organizational structure and design:

Organizing is defined as the process of creating an organization’s structure.That process is important and serves many purposes The challenge for managers

is to design an organizational structure that allows employees to effectively andefficiently do their works while accomplishing organizational goals andobjectives

 Divides work to be done into specific jobs and departments

 Assigns tasks and responsibilities associated with individual jobs

 Coordinates diverse organizational tasks

 Clusters jobs into units

 Establishes relationships among individuals, groups anddepartments

 Establishes formal lines of authority

 Allocates and deploys organizational resources

An organizational structure is the formal framework by which jobs tasks are

divided, grouped and coordinated Just as humans have skeletons that define theirshape, organization’s structures that defines their

When managers develop or change an organization’s structure, they are engaged

in organizational design, a process that involves decisions about six key

elements: work specialization, departmentalization, chain of command, span ofcontrol, centralization and decentralization, and formalization

2.2.1 Work specialization

Today we use the term of work specialization to describe the degree towhich tasks in an organization are divided into separate jobs The essence of workspecialization is that an entire job is not done by one individual but instead isbroken down into steps, and each step is completed by a different person.Individual employees specialize in doing part of an activity rather than the entireactivity

To classify this theory, Adam Smith in The Wealth of Nations in 1776

compared productivity between 10 employees who do specialized tasks with thesame quantity of employees when each person worked separately and had toperform each task Finally, he concluded that division of labour, the breakdown of

jobs into narrow and repetitive tasks, increased productivity by increasing eachworker’s skill and dexterity by saving time lost in changing tasks, and by creatinglabour-saving inventions and machinery

2.2.2 Departmentalization

Does your university or college have an office of student service? Does ithave an educational media department? If you are employed, does yourorganization have an advertising department or regional sales divisions? Once jobshave been divided up through work specialization, they then have to be groupedback together so that common tasks can be coordinated The basis by which jobsare grouped together is called departmentalization Every organization will haveits own specific way of classifying and grouping work activities

 Functional departmentalization groups jobs by functions performed.This approach can be used in all types of organizations, although thefunctions change to reflect the organization’s objectives and workactivities The major advantage of this type of grouping is obtainingefficiencies form putting similar specialties and people with commonskills, knowledge and orientations together into common units

 Product departmentalization groups jobs by product line In thisapproach, each major product area is placed under the authority of amanager who is a specialist in, and is responsible for, everything having

to do with that product line

 Geographic departmentalization groups jobs on the basis of territory orgeography, perhaps Asia Pacific, European and US regions Each ofthese regions is, in effect, a department organized around geography If

an organization’s customers are scattered over a large geographic area,this form of departmentalization can be valuable

 Process departmentalization groups jobs on the basis of product orcustomer flow In this approach, work activities follow a naturalprocessing flow of products or even of customers For example, at awood cabinet manufacturing plant in southern New South Wales,production is organized around six departments: sawing, planning and