CAPSTONE PROJECT REPORT RESTRUCTURING IN THE DEVELOPMENT STRATEGY OF VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE BÁO CÁO DỰ ÁN CAPSTONE TÁI CƠ CẤU TRONG CHIẾN LƯỢC PHÁT TRIỂN CỦA NGÂN HÀNG TMCP CÔNG THƯƠNG VIỆT NAM

CAPSTONE PROJECT REPORT RESTRUCTURING IN THE DEVELOPMENT STRATEGY OF VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE BÁO CÁO DỰ ÁN CAPSTONE TÁI CƠ CẤU TRONG CHIẾN LƯỢC PHÁT TRIỂN CỦA NGÂN HÀNG TMCP CÔNG THƯƠNG VIỆT NAM

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Program

CAPSTONE PROJECT REPORT RESTRUCTURING IN THE DEVELOPMENT STRATEGY OF

VIETNAM JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE

Group: 6 Students: Nguyen Dac Loc

Vu Thi Thanh Hang Nguyen Thi Thu Thuy Pham Huy Hoang

Class : GaMBAO01.NO1 HANOI 2009

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We would like to commit that this report’s content has not been submitted to any master programs as well as others

We also would like to add that this report is our group’s encouragement And all

results, analysis and conclusions (excluding quoted parts) belong to group.

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The capstone project report “Restructuring in the development strategy of Vietnam Joint Stock Commercial Bank for Trade and Industry” has been completed with the scientific instruction of Assoc Prof PhD Vu Tri Dung

We would like to show the truthful thanks to Assoc Prof PhD Vu Tri Dung who directly help us in completing the report

We would also like to thank all the lecturers in the Global advanced Master of Business Administration Program — Griggs University who have fervently taught, and transformed during all the course and equipped us a knowledge system in business administration for us to complete this report

We also would like to thank leaders and colleagues in Vietinbank who have supported and advocated us in the research process and completing this report

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8 The report’s restructuring

9 The planned results of reports:

10 Report’s struture:

CHAPTER I: THEORETICAL BACKGROUND - SOME ISSUES

ABOUT ORGANIZATIONAL STRUCTURE AND

RESTRUCTURING

SUMMARY

I Organizational structure

1 Primary contents of organizational structure:

2 Roles of organization in business’s organization

3 The relationship between organizational structure with some

primary problems in business

4 Typical organizational structure:

II Some specialized organizational structure model in Banking

industry

III Organization restructuring:

1 Reasons for restructuring:

2 Requirements and conditions about restructuring

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organization

CHAPTER II: STATEMENT OF BUSINESS OPERATION AND

ORGANIZATION OF VIETINBANK

SUMMARY

I Overview about Vietinbank

1 Characteristics of business operation:

1.1 Summary of establishing and developing process

1.2 Business function

1.3 Results on business operation

2 Organizational structure of Vietinbank

2.1 Organizational structure of Vietinbank before carrying out the

restructure project

2.2 The organizational structure of Vietinbank when carrying out the

restructuring project

2.3 Current organizational structure of Vietin bank

II The necessity in restructuring Vietinbank

1 Problems in current organization:

2 General introduction about new business strategy in Vietinbank:

organization

1 Defining goals of organization restructure:

2 Defining the influence of new business strategy in the current

conditions for restructuring organization:

3 The contents of the basic restructuring process:

4 Role of the Management Board in the process of restructuring the

organization and resources of consultants:

5 Define a new organizational structure

IMPLEMENTATION PLAN FOR NEW ORGANIZATIONAL

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I New organization structure:

1 Chart of new organization structure:

2 Evaluation of new organization structure

3 Advantages of the Vietinbank new organization structure:

II Anticipating basic risks and providing solutions to developm new

2 Collecting ideas, amending and finishing organization structure:

3 Preparing leadership and management human resources according

to new organization structure

4, Supports on finance and administration

5 Evaluation of result and adjustment

6 Schedule for the implementation of restructuring

PA FcoomPresson Freee’ Erabilities Management Committee

VIETINBANK Vietnam join stock commarcial bank for industry and trade

INTRODUCTION

1 Topic

PDE GaSPROCFURENG INIDEVELOMENT STRATEGY OF VIETNAM

JOINT STOCK COMMERCIAL BANK FOR INDUSTRY AND TRADE

2 Reasons to choose the topic

Organizational strutucture is the core systems of a business, a background factor

to ensure implementation of goals and strategies of its development The well- organized organizational structure will strengthen the abilities to implement planned business strategies

And on the contrary, when the organizational structure is not suitable, the business’s development will be limited and business strategies can be impossible task When there are many changes in the business environment and internal business conditions, it is necessay for business to have new business strategies or

adjust the current business strategies and restructure the organization for ensuring

the perfect implementation Banking industry in Vietnam is in the new business period — the period that Vietnam integrates fully with the world The banking industry is opening according to WTO route and forming an equal and strong competitive environment among Vietnam banks and foreign banks The internal conditions among Vietnam banks also change strongly from ownership structure, managing mechanism, resources, customer foundation, business network and so on

So Vietnam banks need to buy a business strategy and restrutureing organization in order to ensure the implementation of targets and business strategies

From 1989, Vietnam banking industry is divided into 2 levels — State banks and

Commercial bank With the characteristics about historical conditions, economic

considerably underdeveloped organizational structure compared to the growth rate

of the world banking system and industry’s business development requirements in the conditions of opening Vietnam economu In general, the insufficient organizational struture is one of the main reasons which can restrict the development strategis of Vietnam Commercial Banking system

PDE Compnss RN HE SaY BROW can be summerized in the Vietnam Commercial

Banks system as following:

The organizational structure focuses on functions, while the focus toward

the business customers and the market segment is not focused

The organization structure in multi-levels can slow the speed to make

decisions in managing and business strategies

The organization structure refers supporting functions, so the bussiness tasks are not located in the center position

The operation mechanism is severe and create conditions to develop the authorative, powerful and formalism administrative system

The organization structure is bound hardly and slow in changing and difficult to change

So, organization restructuring become a indispensable and urgent problems in Vietnam Banks in current period This is also the key requirements for Vietinbank, and so we decide to choose this topic to research and apply the knowlege in GaMBA program which contribute in building the theoretical foundation in restructuring Vietinbank

3 Research purposes:

Defining the theoretical and real foundation, systematizing the organizational structure and choosing the modern organizational structure in order to develop Banks in new business period And from that, applying these knowlege in Vietinbank

8 The report’s restructuring:

The topic only focus on restructuring Vietinbank’s organization in the business scope, and not yet solved the organizational structure problem in subsidiary companies and joint ventures of Vietinbank

9 The planned results of reports:

Contributing partly theoretical foundation to carry out the organization restructure in Vietinbank

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THEORETICAL BACKGROUND SOME ISSUES ABOUT ORGANIZATIONAL STRUCTURE AND

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PDỊ 6p0B5äif6Hal f66ctgion

1 Primary contents of organizational structure:

consideres as mostly exact in “Handbook of businessmen” which is collected and shown by Business Forum Magazine: “Organizational structure is the ways that busines allocates, arranges units, departments and individuals in roles, specific functions in order to be suitable with business’s characteristics”

According to Peter S Rose (Rose, Peter S., 1987 — “The Changing Structure of American Banking”, New York, Columbia Universtity) — on the system management perspective, organizational structure includes following three levels:

postitions and roles of each unit and individual in business

obligations of each unit and individual in business

manage the business developement, Hanoi cultural system and managing system Business will not carry out its functions efficiently if these three levels are not established rightly in order to ensure the operation thouroughly

In the organizational structure, there are two primary contents: division of labor and work mix These two contents are shown in the four main components, they are: controlling structure, bulky and light structure, centralized and decentralized

structure, formalized structure

Division of labor: The division of labor is the way to divide big problems into smaller ones for each individual The division of labor can easily lead to specialization and increase in labor productivity

Work mix: When the work is divided among staff, the combination methods are still necessary to ensure that everyone will work in agreement All big or small organizations use one or more than combination methods: normal communication, formal and standardized level system,

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PDF, Comprnssoh bự FS POM munication: this way appears in all organization and it is an important combination It shares information in the missions which need

the combination, as well as create the general thinking for staff and it is

synchronized by the map of thought as following Normal communication allows great flexibility because staffs communicate with others by information directly or

by the other plentiful channels

The combination by the formal level system: When an organization is larger, it will develop the formal level system The level system centralizes power for each individual who will use this power to decide their works and allocate resources Otherwise, works are combined by the supervision The formal level system will also combine works between business administrators basing on organization’s division of operation

The combination by the standardization: The standardization is to create general

rules in behaviors and working results The standardization is carried out by

standardizing individual targets or group targets, standardizing process and results, job descriptions

Divisions of labor and work mix are two primary factors of any organization The problems like: how to divide works? Who will decide? Which are methods paid attention to? They are related to four components of a structure

Control structure: Control structure is the report network By each structure,

organization can define organization of staff who will report to the direct management This structure also offers reporting mechanism between the management levels

The bulky and light structure: any business needs a level system The level system arrangement will decide the scale of organization and effect on efficiencies

of business operation Businesses direct to the light organization which has little levels The reason supporting for this point is the fast decision-making, reduce cost

and shorten the distances between leaders with staff and customers However, when

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Fae SORE SS Mink Ec VEASIOM the important middle management forces in managing and promoting the development of enterprises are also decreased

Concentrated and decentralized structure: In the concentrated structure, the

decision making rights belong to individual or a group who often are the leaders

Most businesses are started with the centralized structure The founders of the

business make decisions and manages business in their own ways In large businesses, the decentralized structure will take the predominance Business will share power in making decisions for individuals or groups The concentrated structure can cause the bureaucracy, volunrarist and reduce the business’s sharpness

to market The suitable decentralized structure will recover these disadvantages However, the decentralized structure requires the suitable control to avoid the over decentralization

Formalized structure: Basing in this structure, businesses standardize behaviors

by regulations, procedures and formal training and organize the relevant organization Otherwise, the formalized structure shows the standardization of the corporation mechanism in business The formalization not only increases the operation efficiencies but also makes the reduction in organization’s sharpness and staff's flexibility

In the development history of the world business, researchers has collected five

organization types which will be studied in the following part They are:

departments; Organizational structure in regions; Organizational structure in group foundation; Organizational structure in matrix

2 Roles of organization in business’s organization

V.I.Lenin had very farmous saying: “Please give me an organization, I will

innovate all the world” (Thinh, Nguyen Tat — Director Career, 2002, Hanoi, Su That Publisher)

In the business perspective, this thought is completely correct Business is the continuously mobilizing entity in its cycle of establishing, developing and declining

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FDP FE OSRRESR RRA AEE KW@IIOR and objectives In the modern management theory, the organizational structure is evaluated as one of the most important factors which decide the business’s success Organizational structure is built to carry out

business’s targets

In the real business environment, a suitable organizational structure will ensure business to operate in the organized way in order to increase the possibility to archive business’s targets and function

The business’s organizational structure requires the relative stability not the invariant On the contrary, it can be changed totally or partially when business has

business, to the changes, especially change business strategy)

3 The relationship between organizational structure with some primary

issues in business

Relationship with business strategy:

“Strategy is the direction and scope of an organisation over the long term, which achieves advantage in a changing environment through its configuration of resources and competences with the aim of fulfilling stakeholder expectations” (Gerry Johnson, Kevan Scholes, Rechard Whittington, 2008 — “Exploring

Corporate Strategy”, Essex, Prentice Hall)

“Strategy includes planning the primary and long term targets in business, at the same time, choosing the ways and procedure in acting and allocating the necessary

natural resources in order to carry out these targets” (Charles, Hill va Gareth, Jones

1995, ’Strategic management”, Washington)

Business strategy of a business can be a strategy to expand geographically, diversify products, be differentiation or centralization, merger, develop product, penetrate market, reduce or abandon, be takeover or joint venture

The busiess strategy is always built on basis of competitive advantages over business competitors in each period, the specific business conditions and the specific content of the business Business strategies are usually constructed in the

15

EDK SOMDES hie hae REO Phat is the process of planning, implementing and

evaluating

Planning process: the primary contents in this process includes:

market, technology, existent regulation, business philosophy, key competitive capacity, brand name, committments for labor)

labor, economy, legal polictical factor; technological and scientific factor;

international factor, competitors, potential competitors, substitutes, suppliers, customer segment, customer segment, industry strength From that, business defines clearly oppotunities and threats

define strengths, weakness of business

choosing plans for implementation

Strategy implementation: contents of strategy implementation includes:

necessary policies to carry out and allocate resources

together with strategic implementation

accounting, research and development, information system and so on

Strategy evaluation: contents of strategy evaluation includes:

foundation for the current strategic planning

structure) in order to be suitable with the internal and external environment

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PDE,Com ressor Hi e mpress Version

ional Structure 18 defined in the process of implementing and

evaluating and considered as the main factor to ensure the success of strategy The

organizational structure defines the rotation in human resources, financial resources, material resources, information line to carries out the business strategy The business strategy will decide the suitable organizational structure relevant to each business And to its turn, the organizational structure will become the key equipment to exploit the business strategy in the efficient way

Relationship with organizational behavior:

Organization inludes group which depend and interact each other in order to achieve the general targets Organizational behavior is the way of thinking, feeling and acting in any organization and relating to the organizations of individuals, and organizational structure of enterprises

In the modern world, the organizational structure is controlled strongly by the trends in organizational behavior such as: globalization trends, teleworking trends

which based on the advances in information technology, multi-national labor force

and new labor relationships Especially, in the value and ethnic perspective in working placecs, business culture, social responsibility, organizational behaviors have deep interaction to the ability to operate efficiently in organizational structure and the combination in organizational structure

The organizational behaviors held great influence on the establishment and operation of an organizational structure from the perspective of the its platform,

management, information technology, marketing

Under the organizational behavior perspective, business will solve the primary problems for an organizational structure as: staff's personality to make the good effects on the operation effciencies; supporting groups in the process of building and development groups to work effectively and contribute positively to the results

of the business; developing and installing the interactive procedure among individuals and sections in working; balancing effects from power system, human

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PRE COMRUSSSAT FESSiNE HOM vior, resolving conflicts and debates in organizational structure, business culture, administration on changes

To itself, orgnaniazational structure has the interaction to the organizational behaviors by the organized institutitions Each organizational structure will contribute in establishing different organizational behaviors, accepting the various existence of different organizational behaviors

When the interaction between the organizational structure and organizational behavior balance and support together, business has good foundation and solutions

to solve its own problems, to increase the businesss operation capacity and the implementaton od business targets

Organizations] structure is considered as the technique to create changes A structure can support or restrict the communication, relationships, ideas and innovation in business

Relationship with human resources management:

Human beings is the most primary factor in organization So, organization

always attachs with human resources The organizational structure always travels

with human resources management

Human resources management is the overall activities in order to attract, build,

train, develop, use and remain human resources in quantity and quality So that it is suitable with the development requirements in business

All businesses can direct to the efficient usage of human resources management

to archive the business targets This action depends on many factors, including the most important one of the organizational structure in the harmony with human resources The human resources has to be allocated in scale of specific organizational structure according to level mechanism and operation procedure Contents of human resources management are connected to the construction procedure and operation of organizational structure

According to the current management science, business targets ad staff's quality decide organizational structure A good organizational structure can only operate

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FARE GO RAR ASS Me RECs M ABI Thuan The human resources management will contribute important factors to ensure that the organization! structure will operate well and efficientlt

4 Typical organizational structure:

Managing science has collected five organizational structure as following:

Organizational structure in the simple one

Figure 1: A typical simple organization Most business starts with a primary organization, including a small number of staff who are allocated and appointed with the specific positions The organization structure is minimized Staff only carry out a reporting channel for leaders in

business Because of limited scale, staff are responsible for their work in a large

scale and inefficient ways The simple and flexible structure is under the direct control of entrepreneur to coordinate professional actitivties So, this organization is difficult to operate and ensure the business’ efficiencies in the complex conditions

of business environment

Organizational structure in functional departments

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PDE &:0'0BIS8397:bÄW Gre SHS in the consistent knowledge scope or specific functions in order to archieve targets, general tasks of busines Businesses are concentrated to combine operations in efficient ways Accordingly, the managing level of each functional section will have responsibility to report to Director Director is responsible for combining with activities in business and also the final person who take responsibility about operation results in business Standardization

of work processes is the most common form of combination used in this

organizational structure

In the small-scale enterprises, the organizational structure is not delimited into several separate functions In this pre-functional structure, a person can take the responsibilities in various positions Most business only use the organizational structure in the functional department in the consistent levels or periods

Advantages of this structure:

professional skills and improve their capacities in each functional areas

section Staff can see their own career route

functions are arranged spread in different parts of the organization

Disadvantages of this structure:

than general corporation targets

combination is weaker, even conflicts may arise highly

transfer among departments, they can not expand the knowledges and skills in business operation

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PDE Compre SOK ganiza ucture in Fegions: ree.Version

There are three types of this organization: geographicl region, service region and customers regions:

Advantages of this structure:

the addition in the available region or new area

complex and characteristics in serving customers

Disadvantages of this structure:

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PDF Com ressor Free

CR requires the Free version resources in order to allocate to organization and

it is possible for causing the inefficient resources

and tend to reduce the corporation in region

Organizational structure in group foundation

This structure uses the seft-directed group as the the primary Unit of organization Group is organized according to a specific working procedure, few regulations in working organization are appointed, rather than the targets to reach Structure hierarchy is very compact, usually no more than three management levels This structure has less formalization Daily decisions is made by group members,

not by the senior level

Figure 4: Organization structure in group

Advantages of this structure:

managing level and reduce costs

close to reality

Disadvantages of this structure:

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PDF Compres or Eree Version bccn if ’

especially in the initial period when establishing group

and steps in career promotion Leaders are also under pressure because many conflicts arise and lose the power

Organization structure in matrix

PDE Com pressor Hace version ion’s resources, creating effcient and flexible

information channel

have fast product, or take advantage of resources in oder to carry out the important project, or develop main functions of business

Disadvantages of this structure:

structure or purely area

to staffs when having two managers who have different demands and desires

There are many organizational structure, but no structure is perfect for all

businesses In reality, each busines will have to find and choose by itself In some cases, they have to create an optimal and suitble orgnaizational structure for

business

II Some specialized organizational structure model in Banking industry With some specific characteristics about establishment and development, the business environment and laws, bank’s organizational structure has it own

characteristics in each nation In some developing countries, banks have similar

significant differences Because Banking system is in the process of development Following is the traditional and specific characteristics in American banks, West

European banks, Japan Banks, and Vietnam Banks

By the research, banks in Western European, America and Japan have the functional organizational structure Business structure always tend to the customer

international business The functional structure directs to organize functions of Headquarters as internal service supply and supporting system In this structure, the

strategic works, risk management and human resources management (finance,

human resources, technology) are highly appreciated The American model with the

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FE GOmprs s That Bute C SON ares on Board of Director, instead of General shareholder council And so, the Control Board is assigned the task about bank’s operation and Board of Director The power is concentrated to the Chairman of

Board of Director cum General Director So in American bank, there are many

consulting and professional committees to solve important problems which affect

on the resources or development of banks

In the Western — European banks and Japan, power is allocated equally in the structure on General shareholder council, Board of Director, Control Board and General Director The organizational structure in Western European banks and Japan banks are similar, due to customer’s direction, according to the geographical region and functional structure which has been allocated equally in the key functions such as strategy, risk managemet and resources management and so on Vietnam Bank can be divided in two types: state-owned and joint stock In state owned banks, power is centralized on General Director Board of Director and Control Board is formal and have no real power The Control Board is the structure directly under Board of Director General Director is appointed by Governor of State Bank after receiving Prime Minister’s approval In Joint Stock Banks, the General shareholder council is the most powerful authority Board of Director is the body who manages the administration activities The Control board is the structure directly under General shareholder council and controls bank’s operation General Director is appointed by Board of Director Apart from that differences, two types

of bank are similar in organizatonal structure and function, while there focus business directs to customers, however, market segment is not paid attention The organizational structure concentrate on supporting function So the main business tasks are not located in the central positions

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PD COPRRAEA AS FSU CHRD:

Organizational restructuring is the process of organizing and rearranging business in order to create the better “situation” for business to carry out the planned targets

The general target in restructure is to achieve in “better situation” for business to operate efficientlt basing on the foundation on mission, vision and available

strategic direction in business However, in some cases, restructure is only to

archive the “operation improvement” in any perspective in organization, business

A perfect restructure program will include all the areas such as: organizational structure, human resources, managing mechanism, administration, activities and procedures; other resources of business Restructure is also exploited “locally” in one or many perspective of business (finance, human resources, sales, production

and so on) in order to improve “conditions” of that section

I Reasons for restructuring:

A business has its ownconsistent organizational structure This organizational structure is always exist, change and develop during the existence and development procedure of business

The organizational restructure start from the changes in business environment, internal conditions and the necessary requirements to change the organizational structure in order to increase the performance abilities in business Normally, the organizational restructure happens when having following reasons:

does not have suitable structure to carry out At that moment, organization will need

to add suitable structure to carry out the new function or targets which are

increased This level is restructure in small sacle For example, a commercial bank

supplements the business function about Card It is necessart to supplement a Card Department/Center in the organizational structure and establish more the operation mechanism in Retailing Banking inorder to corporate with current business

activities in this area

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PDF COMPEESH OK TARA one In business changes or current internal conditions changes to the level that it is necessary to have adjustment in business strategy Meanwhile, the old organizational structure cannot satisfy all the adjustments in this business strategy For example, Commercial Banks have bad debts in most of banches due to a staff is allowed to do all stage in the loan process while the banking business is more competitiveand and operation of enterprises contains many potential risks This condition can affect on the business efficiencies and the level of safety capital ratio according to the State Bank’regulations Meanwhile, Commercial Bank needs the restructure credit management with the mechanism in seperating the loan process into three phases: developing customer, evaluating and managing loan, risk management This level is restructure with medium scale

new and suitable organizational structure in order to carry out this strategy

Meanwhile, business will carry out the comprehensive restructure Normally, the

term of Restructuring is understood as the comprehensive restructure

2 Requirements and conditions about restructuring

Organization restructure is the transition procedure from old structure to the new one; It change the functions and missions in part of organization, operation mechanism, change level system, change control and report mechanism, allocate and rearrange the staff in the new structure

So, Organization restructure is a big project which requires process of preparation and implementation with the specific requirements and conditions Contents and requirements are as following:

Firstly, the restructuring comes from objective requirements in business operation It's normally decised bay new business strategies

development requirements, serve for business benefits and increase the performance

in business targets and functions So, structure has to be more preemient, especially

in the performance efficiencies

3Z

PD Fifa REACHES YE'SECrried out with the support of stable theoretical

foundation, ensure the responsible and authorized people can search, build and

choose a scientific organization structure In recent time, the statement has been

Administration is one of these factors

Fourthly, it is necessary to ensure the ability to change the organizational structure without any effects on the business operation, no effects on performance and security level and no conflicts which can break human resources in business Fifthly: business has to have suitbable changes, so business has to establish and carry out the Project, and have some preparation about communication, overcome the restriction or objection, have experiences and complete improvement

Sixthly: Companies should have appropriate human resources for the new organizational structure or can attract additional human resources for the new organizational structure, especially in key positions To avoid the situation not enough people to arrange the new structure or the layout does not match, or

"control" structure in humans

3 Some issues need to be noticed when Restructuring organization

We can have some problems need to pay attention when restructuring organization as following:

problem often happens when the restructuring is carried out by the new leading team or over extreme leaders When carrying out the restructuring, they tends to destroy all the good and suitable foundations for all the new period in old structure This can cause the disorder in the new busniess structure and lead to get the break

in human resources

happens when the restructuring is carried out by the old leading team or over cautionous leaders It is often disguised by the reason “preeminent inheritence, suitability in old structure” When carrying out the restructuring, they have the

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tdÀhs{0100E€8ï@Mid' thé S18 S1PShization into the deformity products This can cause the non-scientific structure and inefficient operation

create a structure which have “primary structure” and “operation mechanism” Primary structure is shown by organization model/map and function and tasks The operation mechanism is the necessary combination procedure in the structure among units or functions in order to ensure the business’s performance The establishment and strengthening mechanism will operate for employees understand what businesses require and expect from them A well-operated mechanism will make the primary structure be more efficient and encourage employees to to fulfill the business targets The operation mechanism operates brings vitality and content for primary structure of the business Usually, the restructuring is implemented in some businesses at the primary structure This will result in many difficulties in the operation of new structure The new structure is not working effectively and does not bring positive contributions to the development of the business

allocate in new organization: Due to the finiteness of enterprise’s human resources,

the construction and select a new structure must consider available human resources

of enterprise (including the resources which can be recruited in the determined period of time) Otherwise, the organizational structure is only a combination of machines not working effectively due to lack of operator This situation will lead to failure in deploying the new structure

among the structures or lacks in necessary structure of organization: Business is susceptible to this situation in designing new structure without basing on the scientific basis This situation will lead to a lack of uniform, functional deficiency,

or conflict between the structure and inefficiency

The implementation of a Restructuring project without a roadmap will lead business

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tINS&9mMe9%eEdkr S Y8Iitiop, selecting and implementing a new structure Typically, enterprise built up Restructuring Project and the Project Management Board The stages of restructuring should be complied and consider fully the involved factors The implementation of new structure follows the steps of testing deployment, synchronistic implementation and regular assessment, adjustment and improvement

changed or cannot be suitable with new organization structure.The opposition is raised from staff who fear changing, or do not see developmental opportunities, or when being changed the position due to new structure This led to internal conflicts, the confusion and difficulties in the operation of each structure, the coordination between the structure together, This situation can occur at any stage of implemention process Enterprises must have solutions to propagandize and overcome

strategy: This situation rarely happens because business strategies and the process

of implementing strategies decide the structure mode If new structure is not suitable, it will affect the implement and the success of business strategy So companies must consider strategies carefully when building up new structure and implementing the restructuring

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STATEMENT OF BUSINESS OPERATION AND THE ORGANIZATIONAL STRUCTURE OF VIETINBANK

And the and, we will focus on making clear the primary problems in the process

of restructuring in Vietinbank, and then defining the restructuring’s target, content

of restruturing, establishing Project Management Board, using the resources of consulting specialist, analysing the new busiess strategy and internal conditions which affects the process of restructuring Vietinbank’s organization

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PII(W0lbkfäB9udVRtiwexalon

1 Characteristics of business operation:

As a Commercial Bank, Vietinbank has fully characteristics of enterprise in

banking industry and the private characteristics which come from the establishing,

developing process and its internal conditions

1.1 Summary of establishing and developing process

The precedent of Vietinbank is the Vietnam Bank for Industry and Trade Vietinbank was established in 1988 It was renamed to “Vietnam Bank for Industry

and Trade” in 1990 In 1996, Vietinbank was officialy operated as State

Coporation

On September 23, 2008, Prime Minister signed the Decision approving the plan for equitization of Vietnam Bank for Industry and Trade On November 02, 2008, State Bank signed the Decision to announce the business value of Vietnam Bank for

Industry and Trade On December 25, 2008, Bank for Industry and Trade held an

aution to sell shares and carried out the transition to become joint stock bank On July 03, 2009, Sate Bank signed the Decision to establish and operate Vietnam Joint Stock Commercial Bank for Industry and Trade And Vietinbank formally operates according to the business registration No 0103038874 by Hanoi Authority of Planning and Investment on July 03, 2009

1.2 Business function

1) Capital mobilization: including receive deposit from customers in VND or foreign current, issue deposit certificates, bond, promissory note and other valuable papers in order to mobilize capital, lend from the financial institutions and state bank and other lending forms

(] Credit activity: supply loans in domestic or foreign currency; guarantee, discount, financial leasing, and other credit supply

(] Investment activity: carry out by participating in the inter-bank market and capital market Besides, Vietinbank buy shares of enterprises

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PDE (20NM:fSä0đ lượt sXAFSEQ? including domestic and international payment;

customer’s collection, revenues and expenditures in cash and checks

(] Other activities: overseas remittance, foreign exchange and gold business, fiduciary agent, insurance, securities activities, financial advisory services, e- banking services, etc

1.3 Results on business operation

Over the past 20 years of construction and development, Vietinbank has developed the model of multi-function banking with network throughout the country Vietinbank also invested in potentialcompanies

Nowadays, Vietinbank is having agent relationship with more than 800 banks and the financial institutions all over the world According to the 2008 audited financial report, Vietinbank reached the total asset of 193.590 billion dong and profit of 1.804 billion dong

From the first time, Vietinbank always operates on the creteria of safety and

sustainable development The operation result of Vietinbank is shown in the following criteria:

Business operation results in period 2006 - 2008

Unit: million VND

Asset, capital resources

RijlồfcfImpressor Free Version) (7 600.256) (2.353.568) (1.300.180)

Financial indicator

by applying the strategy of raising capital with a view to ensure business operations

in parallel with regulations

The results of capital mobilization in 2006 — 2008 of Vietinbank

and credits organizations

PIl:áa0'0iiesor Free Version

The result of credit activities in period 2006 — 2008 of Vietinbank

Unit: billion dong

Source: Prospectus of Vietinbank

Vietinbank is improving systems, policies, managements and monitoring to ensure that the loans are strictly controlled, safe and effective Vietinbank credit Strategy is to strengthen and improve credit quality Vietinbank focused on lending

to industries which play an important role in the economy, such as: Trade,

Telecommunications

Foreign currency business activities

Vietinbank identifies the key markets as the domestic market and focus on relationships with customers who have export - import business in the key areas of

the economy Vietinbank up 7% market share in domestic market Turnover of

foreign currency activities in the domestic sector increased from 2.5 billion in 2006

to 7.5 billion in 2008

In inter-bank market, Vietinbank expands business operations of foreign currency with banks and other financial institutions Total sales of trading on the interbank market in 2007 reached 344 million and reached 2.1 billion USD in 2008 Sales in the international marketreached the $ 1.2 billion in 2008

Card business operation

Vietinbank improves card activities with a variety of products, competitiveness, brand reputation and specialized style Vietinbank increases the distribution of card products and services to customers through many channels as branches (40%),

indirect distribution channels (50%) and automated distribution(10%)

Domestic card:

40