BACKGROUND INFORMATION
Risk of compliance management in healthcare industry
The conflict of interest within the pharmaceutical industry has been extensively examined through research and debates among policymakers, socialists, researchers, and healthcare professionals Historically, healthcare professionals relied on drug promotions and advertisements for prescribing medications However, recent FDA regulations on "Directed Print Advertisements and Promotional Labeling for Prescription Drugs" have restricted the information available for these promotions, leading to a shift in how prescriptions are informed.
Pharmaceutical companies are now permitted to transfer valuable knowledge to healthcare professionals (HCPs), leading to an increased reliance on these companies for funding continuing medical education (CME) This financial support enhances HCPs' knowledge and skills in healthcare CMEs can be organized flexibly and utilize various learning methods, including seminars, symposiums, expert information forums, and online learning systems This shift is significantly influencing the relationship between pharmaceutical companies and HCPs.
Previous research indicates that healthcare professionals (HCPs) exhibit a bias in prescribing and advising treatment methods after collaborating with pharmaceutical companies or receiving financial sponsorship, despite claiming that these interactions do not influence their decisions.
The pharmaceutical industry faces interest conflicts due to the differing priorities of its stakeholders Healthcare professionals (HCPs) primarily focus on improving patient care and quality of life, while pharmaceutical companies prioritize shareholder profits This divergence creates tension between the goals of HCPs and the profit-driven motives of the industry.
Changes in regulations, laws, or business policies within an industry may not significantly impact a company's management objectives, which focus on promoting products, increasing market share, and generating higher profits.
To address conflicts of interest, prescribing biases, and inappropriate financial incentives, regulations must be established and enforced at both the governmental and institutional levels The reputation of pharmaceutical companies is their most valuable asset, given the unique nature of the industry where the end user is not the consumer, and product quality is difficult to assess Physicians rely on information provided by these companies, including past research and the company's reputation, alongside their own scientific knowledge and judgment, to make treatment decisions for patients Therefore, pharmaceutical companies must adhere strictly to compliance regulations and laws to safeguard their operations and maintain trust in their products.
11 vulnerable reputation, which is easy to damage by the complexity of market, competition and stakeholders.
Overview of MSD Vietnam
1.2.1 MSD’s background and management structure
Established in 1995 as a representative office of MSD Hongkong Company Limited, MSD Vietnam focuses on specialized treatments for cardiovascular issues, diabetes, vaccines, and infectious diseases The company operates through four core business segments: Primary Care (PC), Hospital (HS), Vaccine (VV), and Tender, each offering distinct products tailored to various diseases and enhancing the quality of human life.
Figure 1 Product lines of MSD
In the management structure of MSD Vietnam, not all support functions fall under the Chief of Representative Office (Managing Director - MD) Specifically, only the Compliance Manager, Director of Human Resources, and Director of Finance report directly to the MD Other support functions are managed by the regional board and report to the regional person-in-charge Alongside four Business Units and the commercial department, the compliance department is recognized as a key function within the organization.
The compliance manager plays a crucial role in ensuring smooth business operations by overseeing all compliance matters, including adherence to commercial regulations and legal issues in interactions with external stakeholders In addition to reporting to the Managing Director, the compliance manager must also report to the Regional Compliance Director to maintain transparency and consistency across the company's global network This position requires a strong independence from business operations, achieved through close collaboration and ongoing discussions.
Figure 2 Board of Management chart
As the leader in market about ethics and integrity, MSD commits to the highest standard of transparency in all segments as well as in all interaction with stakeholders
Operation policies and code of conducts were established consistently with recommendations of Pharmaceutical Research and Manufactures of America (PhRMA), International Federation of Pharmaceutical Manufactures & Associations (IFPMA) &
The Foreign Corrupt Practices Act (FCPA) of 1977 emphasizes the importance of companies in managing their interactions with healthcare professionals (HCPs) by strictly prohibiting employees and business partners from offering any benefits that are not scientifically justified.
Support functions tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
MSD prioritizes patient benefits over personal relationships or impressions of healthcare professionals (HCPs) regarding drug promotion The company strictly prohibits drug promotion without appropriate cautionary guidance for consumers All scientific information provided to HCPs, including both the advantages and disadvantages of products, must be derived from research conducted by reputable universities or scientific laboratories To align management perspectives with business practices, MSD implements guidance, processes, and policies focused on transparency Employees are required to meticulously track expenses related to HCP interactions, such as meals at scientific meetings and sponsored travel for educational purposes, to ensure accountability Furthermore, all scientific information must undergo rigorous scrutiny and receive approval from the medical department before dissemination to HCPs or the public Policies addressing management concerns are regularly updated to adapt to the evolving business landscape.
1.2.3 MSD’s current practice in business
In Vietnam, business law prohibits representative offices (RO) from directly producing, selling products, or providing services Consequently, the Vietnam MSD RO serves as a facilitator for its parent company located in Hong Kong to conduct business activities.
MSD Vietnam engages in comprehensive marketing activities, collaborating with healthcare professionals, hospitals, and institutions to fulfill customer orders The company coordinates logistics from Hong Kong to ensure timely delivery of products Key marketing efforts include customer meetings and sponsorships for Continuing Medical Education (CME), which are central to MSD Vietnam's operations The marketing and sales teams constitute the majority of the workforce, with each business unit receiving an annual budget from the regional office, aligned with sales targets The marketing team strategically allocates funds for major events and sponsorships while designating a portion for the sales team to manage minor events.
The marketing team collaborates with various departments, including the medical, procurement, and sometimes sales teams, to co-organize events In contrast, minor events managed by the sales team are solely overseen by the salesman, who is responsible for planning, contacting, booking, organizing, and claiming expenses for the company.
Salespeople can easily invite customers to meetings at restaurants, where they can deliver their speeches during meal times However, this informal setting presents several compliance risks, including the potential for healthcare professionals (HCPs) to consume alcohol, the absence of scientific discussions, and the inclusion of entertainment or unnecessary expenses Additionally, with a maximum of 25 attendees allowed and no pre-booking requirements, event organizers have the flexibility to schedule meetings at their convenience Consequently, this type of event is considered the most risky for a company's reputation and operations.
Sponsor for hospital/Healthcare Institution
Sale team (Medical representative- MR)
Minor events Less than 25 attendees tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
PROBLEM IDENTIFICATION
Symptoms analysis
This section focuses on three key symptoms: a high frequency of risk activities, recurring noncompliance findings, and a designation of "high risk in compliance" during audit assessments.
2.1.1 High frequency of risk activities
Small meetings are traditional approach to reach HCPs in Vietnam According to current practice of doing marketing activities, small meetings – meetings with less than
The article discusses the participation of 25 invitees, as previously outlined in section 1.2, who are not professionally engaged It emphasizes the importance of their involvement in the context of the latest developments and updates related to the topic.
In Vietnam, particularly in major cities like Ho Chi Minh and Hanoi, healthcare professionals (HCPs) and healthcare organizations (HCOs) face significant work pressure due to economic challenges and disparities in qualifications between urban and rural areas Many HCPs prefer small meetings held in private rooms at restaurants or hospital meeting rooms, as they are often busy and lack time for lengthy lectures or formal gatherings during the workday Additionally, customers from other provinces may favor small meetings due to cultural tendencies to hesitate in sharing knowledge and the difficulties associated with travel Consequently, small meetings, including group discussions and presentations, have become a popular method for engaging customers, utilized not only by our company but also by competitors in the market.
Small meetings pose significant reputational risks for pharmaceutical companies due to their unique characteristics When meals or hospitality are provided to healthcare professionals (HCPs) without substantial scientific justification, they may be perceived as bribery or corruption Given the limited number of HCPs involved, resources allocated for these meetings are minimal, necessitating that salespeople manage every aspect of the process Initially, salespeople must propose a plan and obtain managerial approval, ensuring that the meeting topic aligns with the company's current business strategy and that invitees possess relevant expertise All expenses and meeting details must be documented in the system for oversight, and salespeople must guarantee that the meeting proceeds as intended During the meetings, entertainment or non-scientific activities are prohibited, and all elements must adhere to policy limits regarding budget and duration Consequently, the extensive control required makes small meetings riskier than other marketing activities.
MSD facilitates small meetings that offer advantages to both customers and the company; however, it does not endorse this potentially risky approach Data indicates that Vietnam ranks among the top three countries with the highest number of small downloads related to academic theses.
Vietnam holds the lowest number of meetings per capita compared to countries like China and India, which is unreasonable given its population size Additionally, it has the fewest average attendees per event, leading to increased organizational costs and decreased resource efficiency This trend raises significant concerns regarding the risk level of conducting business in Vietnam.
Figure 4 Number of promotion activities vs population
Figure 5 Average number of attendees per meeting
India China Vietnam Thailand Myanmar Korea
Number of meetings & Population in countries
India China Vietnam Thailand Myanmar Korea
The average number of attendees per meeting is crucial for effective engagement Download the latest thesis materials to enhance your understanding For further inquiries, please contact us at vbhtj mk gmail.com regarding the master's thesis.
2.1.2 Repeated type of noncompliance findings
Since February 2017, compliance issues have been consistently reported in monthly meetings, with the spot-check team identifying problems that were previously uncovered only through document reviews The most frequent issue has shifted from fake signatures of healthcare professionals on attendance lists to low-quality lectures that are either too brief or lack relevant discussions Additionally, alcohol consumption during meetings has become a significant concern Other recurring issues include irrelevant attendees, last-minute cancellations, and expenses per attendee exceeding policy limits.
Compliance findings Repeated months (from 1 st
Low quality lectures 13 Spot-check
Last minute cancellation 12 Spot-check
Over-spend per attendees 5 Spot-check
Between January 1, 2017, and July 31, 2018, findings were reported over 19 months The issue of "low quality lectures" was identified in 13 of those months through spot-checks Additionally, the problem of "last minute cancellations," where events were canceled just before they were scheduled to occur, was noted by various salespeople in 12 months Despite efforts to educate and coach the sales team, other serious issues persisted across multiple months.
2.1.3 Being determined as “high risk in compliance” in audit’s assessment tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Vietnam has been classified as level 3 in the risk evaluation scheme, which assesses the frequency of risk cases and the effectiveness of their resolution This classification is part of a four-level risk rating system used globally, focusing on compliance control processes, adherence to ethics and compliance policies, and the implementation of action plans to address compliance issues and mitigate risks A global compliance team is responsible for providing guidance, oversight, and evaluation of compliance risks across all countries where MSD operates.
Table 2 Scheme of risk definition
Level 1 Low - All potential risks are recognized and there are effective risk controlling tools and the likelihood for risks to happen is low and under organization’s risk acceptance
Level 2 Medium - Majority of potential risks are recognized and/or there are effective risk controlling tools and the likelihood for risks to happen is medium and under organization’s risk acceptance
Level 3 – current rating High - Some of potential risks are recognized and/or there are less effective risk controlling tools and the likelihood for risks to happen is high and/or over organization’s risk acceptance
Level 4 Very High – Very rare of potential risks are recognized and there is no effective risk controlling tools and the likelihood tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
20 for risks to happen is high and over organization’s risk acceptance
Problem definition
The initial cause-effect map identified five potential issues based on a literature framework and interviews with specialists: the absence of an effective compliance training program, inappropriate compliance policies, high job pressure, a weak ethical culture, and poor recruitment decisions.
Corporate violations often stem from a combination of factors, including capitalist culture, high-risk business environments, organizational dynamics, conflicts of interest, and low self-control Weak employee cognition and a lack of belief in the legitimacy and fairness of compliance programs can adversely affect organizational culture and self-control, ultimately resulting in negative attitudes and non-compliance behaviors.
Ineffective compliance training is a key factor contributing to the lack of awareness about regulations, as highlighted by Trevino and her colleagues This deficiency not only diminishes employees' willingness to seek compliance advice and report violations but also undermines their commitment to the organization Further research by Weaver and Trevino reinforces these findings.
In 2001, it was noted that a lack of cooperation from HR in compliance management can lead to intentional compliance violations The collaboration with the HR department is crucial for fostering a culture of fairness and compliance among employees Additionally, Weeks and Nantel highlighted that poor communication regarding policies can result in policy violations, negatively impacting sales performance and job satisfaction Furthermore, Herrath and Rao emphasized the significance of peer behavior and subjective norms in influencing compliance within organizations.
Salesperson non-compliance behavior can be influenced by knowledge sharing and a compliance perspective within the sales team, guiding employee actions Self-regulation, as explored by Braithwaite in 1982 and Gray in 2006, serves as a long-term management strategy that can lead to either compliance violations or a strong ethical culture within a company Gray emphasized the importance of individual responsibility in fostering this shift.
“This regulatory shift has resulted in a diffusion of responsibility for safety risks as workers have increasingly become individually responsible for enforcing regulation as well as a target of regulation.” (8)
Hu's research highlights the crucial role of top management in fostering a company's compliance culture and influencing employees' ethical behavior Without active involvement from top management in enforcing corporate policies, initiatives may be perceived as additional tasks rather than integral to the organization's operations, undermining their legitimacy Furthermore, the participation of top management signals a commitment to clear objectives, encouraging adherence to rules among all organizational members.
The relationship between top management and individual behavior is crucial for organizational success Effective leadership influences employee performance and engagement, fostering a positive work environment Understanding this dynamic can enhance productivity and drive overall business growth.
I conducted in-depth interviews with two compliance officers, Mr Huy from our company and Mr Kha from a competitor, along with a financial specialist, Ms Tu, a sales manager, Ms Tram, and a process controller, Ms Truc, to identify the root causes of the company's current issues These interviews took place in a coffee house during lunchtime, where participants were encouraged to share their perspectives and experiences related to compliance violations The questions from the questionnaire were adapted in order to align with the natural flow of the discussions.
Table 3 Brief profiles of interviewees
Mr Huy Compliance specialist, has worked at MSD for 4 year, 3 years experience as auditor at EY Co., Ltd
Mr Kha is a compliance specialist with five years of experience at Roche, the largest pharmaceutical company by revenue He also has one year of experience as a compliance officer at MSD and two years as an auditor at Grant Thornton Co., Ltd.
Ms Tu Financial specialist, has worked at MSD for 3 year, 5 years experience as risk consultant at Deloitte Co., Ltd
Ms Tram Sale manager, has worked at MSD for 4 years, 3 years experience as medical representative at AstraZeneca (pharmaceutical company – ranked at 11 th by revenue)
Ms Truc Process specialist, has worked at Maritime for 3 years, 2 years experience as Process specialist at FE Credit
Inappropriate global management policies contribute to frequent customer interactions through risky methods, as noted by financial expert Ms Tu, a former KPMG consultant and event spot-checker for our main competitor, Sanofi Unlike us, other market rivals successfully avoid this issue by implementing strict policies on the minimum number of attendees Despite having a robust control process, we must reevaluate our strategies to align with industry standards.
The market outlook is optimistic due to the implementation of substantial requirements and standards Our flexible policies enable salespeople to schedule meetings at their convenience It is recommended to increase the attendee limit per event to 30 or more, rather than the current limit of 8, as this change would significantly reduce the number of small meetings, thereby lowering management costs and associated risks.
Ms Tram has same perspective in this symptom and added that beside unstrictly policies, mindset about effectiveness of salesperson may be different from management
Salespeople often find it more effective and comfortable to provide information in smaller meetings rather than larger groups, as these settings offer greater benefits However, Mr Huy from the compliance department, who previously worked at Ernst & Young, points out that salespeople may not fully recognize the compliance risks associated with small meetings This oversight stems from a lack of practical training, which fails to equip salespeople with the awareness of potential risks they encounter when engaging frequently with high-risk customers.
Ms Tu identified two scenarios contributing to repeated noncompliance issues and a high ratio of findings to meetings: intentional and unintentional breaches Unintentional violations stem from ineffective training, while intentional breaches are linked to employees' low ethical standards and inadequate negotiation and communication skills with healthcare professionals (HCPs) She emphasized that noncompliance among HCPs is a natural human tendency that can arise in any business context.
In Vietnam, healthcare professionals (HCPs) are well-educated individuals who actively participate in professional development events This enables them to comprehend company compliance policies and prioritize their reputation and image in the eyes of the public and their patients Consequently, sales representatives with a strong understanding of these policies can effectively communicate with HCPs and refuse to engage in inappropriate benefits or noncompliant interactions.
Salespeople who engage in unethical behavior and deliberately violate our regulations do not align with our organizational culture and standards Consequently, the recruitment process serves as the initial control mechanism to prevent the inclusion of individuals with unethical practices in our company.
Problem justification
Jusitfy the existence of problems: Updated cause-effect map
Comprehensive compliance management and a strong ethical culture significantly enhance the effectiveness of controlling and preventing noncompliance actions As a leader in compliance within the pharmaceutical industry, MSD prioritizes integrity and transparency, establishing a robust compliance system that upholds the highest standards in business operations, employee conduct, and stakeholder interactions.
MSD Vietnam and MSD Global uphold a strong commitment to ethical business practices, operating under the principle of "No rationale with fraud." They adopt a proactive approach to prevent, investigate, and address fraudulent activities This ethical culture is deeply embedded in all decision-making processes, influencing both individual and organizational actions.
The effectiveness of a salesperson's activities and adherence to working methods are crucial for managers assessing performance In organizational terms, significant decisions in MSD involve collaboration among various departments, including finance, medical affairs, and compliance In specific cases, the General Director and Compliance Director serve as the final approval authorities, with the General Director outlining business goals and customer engagement strategies Meanwhile, the Compliance Director evaluates relevant regulations, potential risks, and scenarios that could harm the organization's reputation.
Companies may encounter various restrictions when engaging in certain activities Executive managers play a crucial role in balancing the costs and benefits associated with these activities Their goal is to develop solutions that promote business growth while ensuring compliance with regulations.
The issue of "inappropriate compliance policies" must be thoroughly examined and critiqued to ensure ongoing consideration Notably, while various issues have been raised by different salespeople, a significant 2/3 of them have never been involved in any breaches, according to the owner's report from Finding.
Maintaining a company's image is crucial, and the effectiveness of its policies and processes plays a significant role in this regard Additionally, a company's ability to address challenges is essential As part of the global MSD family, MSD Vietnam must adhere to operational standards, a clear vision, and effective business processes While local laws and market characteristics influence each MSD branch's practices, they cannot justify compromising the compliance and integrity values established by MSD Global Consequently, all countries within the group are required to respect and commit to a unified set of global standards and policies.
Therefore, this potential problem should be eliminated according to company’s actual situation
High job pressure is a significant challenge in sales careers, primarily due to the demanding nature of the role and the need to manage external stakeholders In many organizations, sales positions are uniquely structured, with income largely dependent on performance Additionally, a positive work environment, as reflected in employer rankings, and competitive compensation and benefits packages offered by companies like MSD help mitigate these pressures Ultimately, two key issues identified in company practices are the lack of effective compliance training programs and poor recruitment decisions.
Figure 8 Updated cause-effect map tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
Justify the importance of solving problems
The question "Is a gift just ever a gift?" highlights the complexities of conflict of interest (COI) in the pharmaceutical industry, as discussed by Wazana and various studies The relationship between companies and their customers is scrutinized and regulated by public perception and government policies Consequently, any form of promotion, gifts, or personal benefits aimed at attracting customers is strictly prohibited.
Avoiding conflicts of interest in the pharmaceutical industry is essential for enhancing a company's reputation and ensuring sustainable market development Prioritizing the focus on violations in business processes is crucial, rather than concentrating on various internal processes, which can significantly harm an organization's operational costs This is supported by research on compliance management in the pharmaceutical sector.
Kharbili (22) emphasizes the critical nature of compliance in business processes, as they govern all value-adding activities within a company Therefore, it is essential to focus on compliance management in interactions between the company and its external stakeholders Studies have highlighted the detrimental effects of employee non-compliance, which are also reflected in management guidelines A country that fails to maintain integrity and low-risk business practices can severely damage a company's reputation and image, potentially leading to the implementation of restrictive operational strategies or even the decision to withdraw from that market entirely by executive management.
The potential decision by the executive manager to cease operations in the local market highlights a critical list of issues that require urgent attention A significant concern is the impact of poor recruitment decisions, which can lead to fraud and intentional non-compliance, albeit infrequently As Mr Kha noted in his interview, the repercussions of fraud are substantial and often beyond the company's control, typically stemming from personal gain For example, a salesperson may misuse funds intended for scientific meetings with healthcare professionals (HCPs) to provide financial incentives instead Although such incidents are rare, they can severely damage the company's reputation and create a negative perception among customers.
The issue of making wrong decisions in recruitment has significant consequences, yet the report writer lacks the necessary knowledge and practical experience in this area While efforts to enhance recruitment and pay may raise compliance awareness among a limited group of new hires, they fail to address the critical senior employees and managers who currently drive the company's key business operations Consequently, we will concentrate on the next problem, identified as the primary source of systematic issues and low employee awareness.
Unintentional noncompliance can occur within organizations due to various subjective and objective factors, leading to systematic breaches that compromise risk management during customer interactions In fields involving conflicts of interest, particularly those affecting human health, it is crucial to avoid inappropriate appearances and behaviors Employees unaware of restricted activities may inadvertently engage in noncompliance, which can resemble intentional misconduct The absence of effective training programs not only diminishes employee awareness but also affects job satisfaction A robust training program is essential for fostering a culture of compliance and reinforcing employees' trust in management By enhancing training initiatives, companies can improve compliance, boost employee commitment, and elevate overall business performance.
Figure 9 Final cause-effect map
Causes of centralize problem
An effective training program is hindered by three main issues: the lack of involvement from various functions, the absence of real case discussions during training, and the failure to implement evaluation tools alongside training sessions These shortcomings reflect the current practices in training programs.
3.3.1 No involvement of all employees
The company's compliance training program now consists of two main sessions: an orientation for new hires and a biannual update session During these sessions, compliance policies are presented in a traditional and unengaging manner by a compliance officer, making it challenging for new employees to ask questions or seek further clarification.
Adequate awareness of compliance is crucial for recognizing potential risks, a point highlighted by Mr Huy in his interview Currently, this awareness is lacking in employees' mindsets, which underscores the need for effective solutions to address this issue.
Ineffective training programs often stem from several key factors, including a lack of involvement from all organizational members, insufficient discussion of real case scenarios, and the absence of evaluation tools These issues are prevalent in current company practices and significantly hinder the effectiveness of training initiatives.
High violation ratios in activities, as noted by sales manager Ms Tram, stem from a lack of real case discussions in training, which are essential for raising employee awareness and managing risks Effective compliance training requires open discussions about daily tasks and challenges, fostering two-way communication The ethical culture within an organization relies on the strong commitment of all stakeholders, significantly impacting business performance Without the involvement of relevant parties in managing, discussing, and decision-making processes, compliance efforts may lack effectiveness and become vulnerable in a competitive business environment.
Frequent and rationally designed assessments, when integrated with other training program elements, can effectively enhance training content and evaluate its effectiveness This approach helps identify real-world issues that may negatively impact a company's business.
Ms Tu emphasizes the importance of repeated training and testing to prevent knowledge from fading in individuals' minds Testing serves not only to evaluate a learner's understanding but also to assess the effectiveness of training strategies within an organization's culture Consequently, conducting assessments before and after training enables trainers to identify their students' needs and bridge the gaps between trainers and learners.
36 deep analysis by interviews and literature framework in next section will finally come up with solutions to enhance the effectiveness of training program
Figure 10 Causes of centralize problem
ALTERNATIVE SOLUTIONS
Interview result
Interviews were conducted to explore solutions for improving the effectiveness of compliance training, focusing on both company practices and personal insights from interviewees Currently, orientation training serves as a vital tool for conveying the organization's key messages on important topics The compliance sessions cover essential principles for interacting with healthcare professionals (HCPs) and provide an overview of the processes involved.
No involvement of all employees (included executive manager & other functions)
No evaluation tools applied tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
The promotion event introduces 37 new initiatives for newcomers, encouraging employees to seek advice or additional training from their managers or senior colleagues during team meetings Compliance knowledge will be enhanced through work-related discussions and when issues arise Biannual compliance refreshment meetings are held for all business units (BUs), where the compliance department updates knowledge on specific topics requested by each BU These sessions highlight popular findings among employees, concluding with an open discussion between the compliance officer and sales personnel.
All interviewees concurred that the current training program lacks a comprehensive approach to enhance employee compliance awareness While basic elements have been established and a responsible person assigned, there is insufficient connection between the various stages of the process Ms Tram emphasized the need for frequent discussions of real case studies and guidance for making correct decisions Currently, the training content during compliance refreshment sessions primarily includes written standard operating procedures (SOPs) relevant to the topic, along with necessary process guidance and key messages.
To ensure compliance and bridge the gap between the sales team, management, and company leaders, it is essential to engage in ongoing debates and examinations among various departments, including compliance, sales, executive management, and finance Mr Kha emphasized the importance of regularly updating practical solutions that all parties agree upon, adapting to the dynamic nature of business This approach not only clarifies the challenges faced by sales personnel and controllers but also provides necessary support when needed Additionally, fostering cooperation among different functions during compliance training enhances the commitment to seriously implement policies.
Collaboration within a company can significantly influence individual behavior, particularly in the context of training development Mr Huy emphasizes that all employees, including executive management and non-sales departments, should participate in compliance training, each focusing on different aspects This inclusive approach ensures that training content is relevant and effective for all levels of the organization.
Huy emphasized the importance of raising awareness of potential risks before issues arise, highlighting the need to understand both "how to do right" and "why to do right." Ms Truc supported this view, suggesting that training programs should focus on critical stages currently lacking control over potential risks Instead of cramming compliance requirements into short sessions, trainers should analyze data and observations to identify key points for greater benefits She also stressed the significance of employees' ability to recognize risks and voice concerns, which can foster a strong compliance culture through self-control Additionally, Ms Tu pointed out the absence of measurement tools to evaluate training effectiveness, advocating for tests and surveys to quickly assess short-term improvements in employee understanding This approach would enable immediate adjustments to training content and help categorize employees based on their compliance awareness, allowing targeted efforts for improvement.
Literature framework
Training in researches by specialist or scientist in Operation Management field was emphasized as an principal element in a comprehensive compliance program
Effective training serves as a vital link between an organization's leaders and employees, fostering a strong ethical culture through individual self-control According to Cairns and Yarker's research on compliance in interactions with healthcare professionals, it is essential for compliance training to be delivered by a dedicated team.
Effective training programs should incorporate a clear evaluation system alongside compulsory assessments to ensure responsibility in training Key business ethics topics addressed in training include breaches of confidence, falsifying records, conflicts of interest, substance abuse, misuse of organizational assets, discrimination, and sexual harassment To improve educational effectiveness, companies can utilize electronic learning tools and online assessments, tailoring programs to meet individual needs Verschoor emphasizes the importance of customizing training content to align with specific business practices for maximum impact Training teams should prioritize risks associated with particular business areas, focusing on daily applications and employee responsibilities rather than exceptional cases Additionally, some researchers advocate for personalized learning tasks, allowing learners to select topics of interest and understand the consequences of their actions Beyond mandatory training, incorporating surveys and interviews for feedback, as well as categorizing classes by knowledge level and job type, can further enhance the learning experience.
“If employees can participate in the initiation and implementation of a code, then the values, commitments, and beliefs of the company become a catalyst for the code’s creation.”(28)
According to guideline 30, the compliance training team must ensure high-quality education and continuous communication regarding essential knowledge, which includes legal policies and the development of a code of ethics as part of the training program It is recommended to incorporate case studies from both external organizations and within the company to evaluate employees' understanding of real-world scenarios Regardless of whether written policies or best practices are shared, employees should deeply understand four principal ideas.
1 “An ethical requirement in decision’s components
2 Tools to address ethical issues tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
3 Understanding of ethical situation’s ambiguity because of their very nature (no completely correct decision which can be debated both outside and inside the organization)
4 Awareness of importance of wrong ethical decision in creating ethical culture within the firm.” (31)
A key aspect of the study is the importance of documenting the required knowledge levels in personnel files Companies should provide employees with adequate time to familiarize themselves with the compliance program and standards before taking mandatory tests The frequency and quantity of compliance training sessions significantly contribute to their effectiveness Research by Puhakainen & Siponen indicates that a one-time training course is insufficient; instead, compliance training should be an ongoing process For a compliance training program to be effective, it requires strong support from top management, including management reviews, encouragement, and active involvement in the training initiatives.
Employees must understand the definition of compliance, relevant policies, and processes through consistent reminders from leadership and regular discussions It is essential to instill a pervasive sense of compliance throughout the organization A significant challenge in managing an ethics program is integrating ethics into the organization's culture The influence of managers and colleagues plays a crucial role in the successful implementation of compliance initiatives.
To ensure consistent compliance awareness within an organization, it is essential to enhance training at all levels, including senior management and the board of directors Research by Ferrell highlights the importance of including all employees in training programs Most policy violations arise not from a desire to undermine the company, but rather due to two key factors: the opportunity to violate policies and the influence of peers and supervisors.
Employees often prioritize corporate objectives over compliance and ethical standards, leading to conflicts between individual, organizational, and societal values that can result in rule violations The ambiguity in decision-making highlights the need for top management involvement and open discussions to address these issues effectively Implementing comprehensive training programs is essential to guide employees in aligning their actions with both ethical standards and corporate goals.
Ethical training should be regarded as a fundamental business function, fostering open discussions within the organization An effective training program lasting 2 to 3 hours can enhance employee engagement and create a collaborative environment Additionally, addressing ethical issues in conjunction with other business activities, such as quarterly strategy kick-off meetings or team performance discussions, provides suitable opportunities to identify compliance concerns and align them with specific business goals.
An issue or situation that can endure open discussion among various groups, both within and outside the organization, and remain unblemished, assures that the correct decision has been made.
An effective training program goes beyond mere legal compliance or risk management; it serves as a vital tool for communicating the company's vision Its primary goal is to educate employees and foster a mindset that encourages them to take responsibility for enhancing the corporate ethical culture By promoting ethical understanding, the program empowers employees to make informed decisions that align with the organization's values.
Effective training requires the complete commitment of the entire organization and a robust infrastructure to ensure managerial support for success It serves to both inform and motivate employees, fostering a clear understanding of requirements while inspiring them to achieve compliance and implementation targets.
Proposed solutions: Building comprehensive training program
Solutions “building comprehensive training program” to increase the effectiveness of compliance training should be built by 4 basic elements of a project: who, where, when, how
The program aims to engage all levels of the organization, emphasizing that a compliance culture can only be fostered through the active participation of every member While the current focus is on junior-level salespeople, it is essential for managers to also be involved in this initiative to ensure its success.
Effective compliance sessions should involve open discussions that include both executive management and relevant internal functions to ensure proper operational alignment within the company Leaders participating in compliance training have the responsibility to foster ethical discussions, represent top management perspectives, model compliance behavior, and engage employees by instilling belief in the ethical values promoted by executives Additionally, the involvement of various functions is crucial for the success of the training program, as diverse viewpoints can help navigate decision-making ambiguities It is important to note that the compliance team relies on data provided by different teams responsible for each stage of the process, rather than independently gathering issues or examining operations.
Salespeople can enhance their performance by understanding operational methods and addressing issues that arise, allowing them to minimize common mistakes and mitigate risks in their daily activities Key functions such as finance, supply chain, and procurement should participate in compliance sessions to ensure alignment and collaboration with the sales team.
The environment in which training occurs is as crucial as the methods employed in the program During the initial orientation phase of a comprehensive training program, it is essential to discuss Standard Operating Procedures (SOPs) alongside a brief overview of the working process and relevant real-life examples Additionally, providing compliance knowledge through valuable discussions can significantly enhance employees' awareness of compliance issues According to Mr Kha, addressing compliance matters in the context of business strategy can facilitate the development of best practices that benefit both the organization and compliance protection.
In addition to official compliance training during orientation, it is essential to incorporate compliance perspectives in strategy meetings, biannual business meetings, and business performance kick-off meetings This approach ensures that compliance is integrated into all aspects of the business.
43 ethical culture would be established among company in all activities that compliance involves
4.3.3 When? a continuous process, time to familiar with principal policies, monthly short discussion, quarterly update (29) An ethic culture could only be built by the frequency that ethical topics were discussed between relevant stakeholders Obviously, increasing awareness of all members in an organization is a continuous process with large amounts of knowledge and information updated, changed, repeated regularly (29) Current practice is now including orientation in first 2 months and updated session in business meeting quarterly, this density is not meet the requirement for creating a compliance climate due to the dynamic growth of business and the impact of repeated messages on people behaviour After orientation, monthly short discussion with team should be conducted with noted issues or only hot message reminded This message should be also sent from top management monthly via email to all employees Besides, in coordination with the updated content of training, assessment should be conducted every 6 months on the scale of company In a different perspective of time requirement in training program, it is necessary to allow employees having time to be familiar with regulation before actual practice on working and on testing knowledge (30) It should be a minimum time requirement as 2 months to internalize the vast majority of compliance knowledge before working or interacting with HCPs Testing for new joiners, by this rationale, should be applied to ensure the quality of understanding after 2 months being trained and educated
This article covers four key topics essential for conducting an effective training program: the use of measurement tools, the necessity of updating content, a focus on addressing raised risks, and the importance of enhancing the ability to identify potential risks.
To effectively assess outcomes, it is essential to implement both pre-test and post-test measurement tools These evaluations provide valuable insights into the progress and effectiveness of the educational program.
44 compliance understanding before and after program launched, as suggested by Ms Tu
Tests should align with training content and vary in difficulty, comparing pre-test and post-test results Annual and quarterly tests are recommended for the entire company, covering all compliance topics with technology tools Testing outcomes can serve as a key performance indicator (KPI) for individuals and teams, motivating employees to enhance their compliance knowledge Based on individual educational needs and knowledge levels, test results should help categorize salespeople into groups that balance theory and practice Training content must be tailored and delivered at appropriate times, with groups formed by experience level or specific compliance issues, such as meeting control, planning, documentation, systematic control, and payment processes While allowing salespeople to choose topics of interest can be beneficial, it requires a balance between democratic choice and structured guidance Employees should have the flexibility to arrange their training plans to prioritize sessions that are most relevant to their work To improve the ability to identify potential risks, employees need a comprehensive understanding of various scenarios they may encounter A list of potential risks associated with different promotional activities should be created to highlight possible issues and the behaviors that could lead to them By recognizing future scenarios, employees can enhance their risk identification skills and engage in rational discussions about guidance among legal, compliance, and business teams.
To enhance employees' ability to identify potential risks, it is essential to focus on high-risk activities, thereby maximizing the effectiveness of the company's limited resources Data collected from monthly reports and annual self-assessments can help identify the most risky practices within the operational process.
Figure 11 Key criteria in training program
Considering factors
The compliance team currently consists of three members, with two based in the Ho Chi Minh City office and one in Hanoi Additionally, the Compliance Ambassador Team (CAT), made up of ten representatives from various Business Units, is dedicated to fostering compliance development within the organization The primary responsibilities of the compliance team include training, monitoring, testing, creating guidelines, consulting, and managing compliance cases The CAT, composed of managers from the sales and marketing departments, plays a crucial role in supporting the compliance team during biannual business meetings and as needed Typically, the compliance team allocates one hour for each session during these meetings, along with two hours of preparation beforehand.
•All levels of sales team
•Discussion and brief describe of process in orientation training
•In business meeting: strategy discussion, business performance
•Monthly message from the top
•Time to be familiar: 2 months tot nghiep down load thyj uyi pl aluan van full moi nhat z z vbhtj mk gmail.com Luan van retey thac si cdeg jg hg
The training program incurs no additional costs for physical training and speakers, but opportunity costs arise from the time employees spend in training sessions This time could otherwise be used for customer interactions and sales strategy discussions Additionally, expenses for refreshments and awards contribute to the overall operational budget The estimated total cost for the training program is 16 million VND for each six-month cycle, amounting to 32 million VND for a full year.
Cost plan (for 6 months) x 1.000 VND
Cycle 1 Cycle 2 Cycle 3 Cycle 4 Cycle 5 Cycle 6
Table 4 Cost estimated for bi-annual training plan
Action plan
By consideration between benefits of recommended solutions and cost discussion, action plan would be built in the base of 4 criteria: who, where, when & how
The implementation of a comprehensive project is structured quarterly and repeated annually, with an action plan that incorporates predicted elements and allows for adjustments as needed Prior to launching the program, the compliance committee must approve the program's overview, timeline, and approach Additionally, a summary report on compliance awareness should highlight key findings, significant issues, and challenges encountered during the process.
In December, the compliance team will assess the compliance process and employee expectations regarding compliance management This evaluation will inform the development of general training and an initial test, concentrating on high-risk activities and employee concerns during the first three weeks of the month.
In December 2018, the program overview and initiation will be presented to the executive board to ensure alignment and secure support from organizational leaders All preparations, including announcements and clarifications, must be finalized by this time The program is set to launch during the compliance session of the national meeting in the first week of January 2019, featuring general training for all employees followed by an initial test In the second week of January 2019, the compliance team will evaluate test results to identify key knowledge areas for improvement and determine how to group employees for further training, subsequently presenting their findings to the executive board for approval.
In January 2019, the CAT team will distribute test results and group lists to business unit leaders, who will encourage their teams to participate in upcoming training sessions Employees will have two weeks to prepare and register for training courses, each lasting approximately three hours The training, led by the compliance manager in early February, will utilize resources from quarterly business meetings In March, an update on compliance will address current business issues, serving as additional support for teams facing compliance challenges In April, a periodic test will be conducted, featuring specific questions and case studies for each group, followed by a process of scoring, analysis, group division, and further training based on the previous quarter's outcomes.
In July, marking the start of the second half of the year, the compliance team will conduct a general training session for all employees during the second cycle meeting, which will include participation from the executive board of management This training will address various topics that require attention and updates.
All parties, including managers and employees, will engage in discussions about compliance awareness, regardless of their current understanding of the topic Training sessions will be organized in groups, coinciding with cycle meeting activities This initiative will be an ongoing process, with additional steps planned for the first half of the year The program will include artwork and a specific timeline to enhance employees' compliance awareness, with potential modifications to be made as needed.
Figure 12 Proposed solutions for key criteria in training program
-Testing to devide employees into groups by level of awareness
-Test's content should be designed on the compliance background of company and should be focused on popular issues gathered from recent business practice.
-Re-designing training content for each groups from the perspective of compliance and business
-Focus on risky activites at particular business team
-Reminding on real cases and potential risks
1st week in Dec 2018: collecting data and analysing
3rd week in Dec 2018: designing initial test
1st week in Jan 2019: general training and initially testing
2nd week in Feb 2019: analysing data and desgining training contents
3rd week in Jan 2019: Test result and groups will be announced, employees register for schedule 1st week in Feb 2019: 1st training session 3nd week in Feb 2019: testing
4nd week in Feb 2019: test result announced
-Compliance manager -Compliance officer -CAT team
The article discusses a meeting with the executive manager and the compliance committee, focusing on the national meeting regarding the latest updates on graduation requirements Additionally, it mentions the availability of resources for downloading essential documents related to thesis submissions and master's degree requirements.
Figure 13 Action plan for improvement of training program
Compliance manager and executive manager
•Analysing data and designing training content for each group
•with discussion and concurrence with executive manager
•Test result and list of groups announced
•In formal strategy meeting quarterly
•PIC: compliance officer & business managers
•In team meeting in which compliance issue raised
•In orientation, in business meeting monthy
•FOLLOWING ACTIONS in 2nd QUARTER WILL
BY THE SAME SCHEDULED IN 1st QUARTER
Compliance manager and executive manager
•Analysing data and designing training content for each group
•with discussion and concurrence with executive manager
•Test result and list of groups announced
•In formal strategy meeting quarterly
•PIC: compliance officer & business managers
•In team meeting in which compliance issue raised
•In orientation, in business meeting monthy
•FOLLOWING ACTIONS in 4th QUARTER WILL
The scheduled content for the 3rd quarter includes the latest updates on downloading thesis materials For further inquiries, please contact via email at vbhtj mk gmail.com regarding the master's thesis.
Ms Tu - Financial specialist, has worked at MSD for 3 year, 5 years experience as risk consultant at Deloitte Co., Ltd
In this interview, we aim to explore your insights on compliance management, drawing from your experiences across various organizations Specifically, we would like to understand your perspective on the high level of interactions with customers that our organization categorizes as high risk.
Interviewee: In my experience, my previous company did not face with this issue The issue that salesperson interacted so much with high risk customers is particular for this company
Interviewer: So you think what is the main reason?
Interviewee: I think the reason is simply our policies allow that
Interviewer: Can you please specific how our policies generate this issue?
In my previous company, meetings required a minimum of 30 customers, while our current company permits meetings with just 8 customers When I inquired about this policy, my manager explained that it follows global guidelines, and sales managers are comfortable with this flexibility.
Salespeople have the flexibility to conduct meetings with a varying number of attendees due to our adaptable policies However, they often prefer to hold meetings with a limited number of participants.
The interviewee expresses confusion about the reasoning behind a decision, suggesting it may stem from the company's understanding of their customers, as only a limited number of clients are able to attend the meeting.
Interviewer: Do you think this issue is because our social or traditional norms, that customers would like to join in small meetings to avoid a formal discussion with their colleagues?
Customers from my previous company, primarily doctors from major hospitals, do not experience discomfort during large meetings In fact, we have successfully hosted events with 100 to 150 attendees, all participating without any issues.
Interviewer: So customers also would like to join big meetings, why our salesperson do not hold big meetings for lower cost management?
Interviewee: I think this is a question you can raise with board of management to update our policies Because policies always go after business so there is no requirement for a
“always” comprehensive policies If it is not appropriate, it should be enhanced to cover current business risk
Interviewer: But why while our company so prouds of our integrity and compliance system, we still have to face with this type of risk?
Our compliance system is robust, featuring specific requirements for salespeople at each "checking gate" to ensure adherence We pay close attention to details in interactions with healthcare professionals (HCPs) to mitigate risks Our clear approval system for meetings, combined with professional expense management, allows us to track all payments made for HCP interactions However, some of our policies have yet to align with the current business flow.
Interviewer: So do you agree that this issue will raise more risk for business?
Interviewee: Yes, because we can not check all events if they happen so frequently because of the limit resource
Interviewer: About intentional breach, what is the reason you think?
The interviewee identifies two primary reasons for the issue at hand, emphasizing that the first reason is the compromise of the salesperson.
Interviewer: Do you think it is a particular characteristic of Vietnamese?