Reducing bureaucracy and encouraging a proactive attitude throughout the workplace

In recent years, Vietnam’s economy has quickly developed and integrated successfully into global business

CENTRE FRANCO-VIETNAMIEN DE FORMATION À LA GETION

**********************

GROUP ASSIGNMENT

ON ORGANIZATIONAL BEHAVIOR

Topic: Reducing bureaucracy and encouraging a proactive

attitude throughout the workplace

Instructor : Richard WARNEMINDE Done by : CFVG MBA 16A1, Group 2

Bui Thi Diem Huong

Do Thi Thu Thuy

Le Phong Tuan Mai Huu Luat

Hanoi, December 2007

CONTENT

Page PREFACE

Part I - Why bureaucracy and non-proactive are widespread in

Vietnam (especially in state owned enterprises)

1.1 Real situation of bureaucracy and non-proactive in Vietnam

1.2 Why bureaucracy and non-proactive are widespread in Vietnam

(especially in state owned enterprises)

Part II - Solution to reducing bureaucracy and making people more

proactive in Vietnamese organizations

organization culture

CONCLUSION

REFERENCE

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5 6 6

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15

In recent years, Vietnam’s economy has quickly developed and integrated successfully into global business

In November 2006, Vietnam officially became a member of World Trade Organization (WTO) This may lead to significantly positive changes to this country, but it may also make many challenges For example: unemployment, take over, competition, dependency or to lag far behind other countries

For those reasons, each domestic entity is required to rapidly innovate organizational structure and method of operation in order to adapt to more severely competitive business environment and moreover extend scope of activities worldwide It aims to reduce bad impact and catch good opportunities originated from globalization

However, after 2 decades of innovation, many organizations in Vietnam on all fields are managed and ruined under bureaucracy, especially state-owned enterprises

Therefore there is an issue which should be discussed that specify causes and propose solutions in order to come to wipe old vestige and create new structures and institutions This aims to build an dynamic business environment and help each person to promote the whole ability, to contribute to socio-economic development

in a new era

So, senior members of the Vietnamese government and top business leaders also have repeatedly publicly stated that Vietnamese organizations must improve significantly to compete internationally This has now become urgent because of Vietnam's becoming a member of the World Trade Organization (WTO) Experts state that there are two areas in particular which must be addressed:

• Individuals must be more pro-active They must show initiative, make

decisions and implement them

PART I :Why bureaucracy and non-proactive are widespread in Vietnam (especially in state owned ENTERPRISES)

1.1 Real situation of bureaucracy and non-proactive in Vietnam

The bureaucracy and non-proactive in Vietnam reflects clearly in state owned enterprises (most in structure and people) where:

• The input and output of state owned companies in Vietnam are set from top down, each state owned enterprise is a party who performs a specific function assigned by the state Vertical structure is still widely applied

• Power distance is still strong as most junior employees think that seniors have a lot of experience about work and they know all the things so there is no way or chance to change Ascription is overwhelming, people are evaluated by their working years not on actual results

1.2 Why bureaucracy and non-proactive are widespread in Vietnam (especially in state owned enterprises)

Through many studies, there are a lot of reasons but some of them are overwhelming: (structure, context, environment, commitment, perception, attitude)

• Most of state owned enterprises are structured with functional orientation (vertical designs): each individual has his/her own job and only focus of that The

word “complete” means that he/she completes one part, that individual is not

taught or trained to be responsible for the whole job

• Their perception is affected mostly by their colleagues that the managers, supervisors are always correct and right because they have plentiful of experience

of the job

• Individual only concentrates on the job assigned and not concerns about customer’s satisfaction, final result of the team work

• Definition of team work is to group in a team but work individually, in another

words, it can be said “individualism in collectivism”, individual wants feedback

about their own performance as a member of a team first and then for the whole team

• Culture of information sharing is weak in Vietnam especially in state owned enterprises where the person who has information is the one who has advantage So

if they have information, experience or valuable lessons, they keep for their own Information is considered as tangible asset and if someone else know, that means you lose

they look at the example of precedents (that a lot of people with idea speaking up are sacked or rejected) State owned enterprises which depend mostly on state budget are not usually willing to take risks from new idea reality

• The ideas which are carried out in reality are the ones that come from the top of the companies (board of managers) who stayed far from the real situation

PART II - SOLUTIONS TO REDUCING BUREAUCRACY AND MAKING PEOPLE BECOME MORE PROACTIVE IN VIETNAMESE ORGANIZATION

2.1 Why do we have to change

Why we need to change our organization, to reduce bureaucracy and to encourage employees especially managers to be more proactive?

Vietnamese students have done very well in international competitions and brought home a lot of prizes and medals but the competitiveness of Vietnamese State Owned Enterprises (SOEs) is decreasing, SOEs are loosing in international market and even in domestic one, the growth rate is rather low compared to the private and foreign sector although they get a lot of subsidies and privileges from the government The cause of the problem here is not the ability of the people but the way our organization do business, the old culture of the organization, the bureaucratic style

Vietnam joined WTO in late 2006 and the competition is being more and more fierce, a number of foreign companies in every fields are coming to VN to do business If we want to compete we have to reorganize our structure and to change our working style if we do not change and do not change immediately we can not

survive Like a legendary CEO once said: “in order to survive tomorrow we have

to learn to kill ourselves today”.

The need for Vietnamese SOEs to change is obvious and urgent but why people do not want to change and only a little progress has been made so far We should study and understand the causes in order to have the right solutions to the process

At first we should think that it is very difficult to change the culture of an organization which has existed for a long time and if we do not allocate enough thinking and resources failure is more likely than success The culture always

defends itself It is nature that companies only change when “there is a sufficient

significant emotional event threatening to bring real fear or pain” There are people

who like the current situation, the director of the SOE, who has a lot of power and privileges with very little responsibility He or she can make money irrespective of the balance sheet of the company He (in fact) does not have to be responsible for the company’s result and does not have to worry about losing his job Many managers and workers may think the same because they are having stable job, and they still think that the government will continue to support them so the threat of failing the competition or going bankrupt is somewhere far in the future

One of the cause that people do not want to change is that Vietnam has come out from thousand of years in the feudal regime , where the king and the mandarins had power and privileges over the other and people think that makes sense, the power distance is rather high, most people accept that some one has more power than other as a matter of course People normally think of themselves first (high individualistic) and their interest is placed above that of the organization’s and generally Vietnamese people often consider short-term perspective only that is why Vietnamese employees are not proactive SOEs can not do the way they have been doing, the need to change is very urgent but there are too many obstacles, how do we overcome this?

There are two main difficulties in implementing change in organizational culture :

to design a new system which is better than the old one and to attempt people accept and embrace the new system And everyone agree that the second task is much more difficult Often people at the top are the most reluctant to change The first and also the very important thing is perception Everyone must realize the

need to change We have to create a common vision for the company What will the company be like in the next 5 or 10 or 20 years, what is our goals: revenue, profit, what is our strategy, core values, management philosophy etc Every one must contribute to creating the company’ vision and let they see what they benefit

if the company get the goals And because they join together to create so they will try to do to fulfill their plan We should invite a lecturer (or by the CEO) to talk about the modern organization: what it is like, what its strength is and talk about some successful companies in the world, especially in VN with the same situation which applied the new model, and some other companies failed because of the old structure, bureaucracy, and not proactive This will give everyone in the company brief information about how companies organize and operate, at least everyone will understand that there are more way to do a business besides our own one But

to make them change their way of thinking by doing this is not enough

2.3. Overcome perception challenges

To overcome this we should understand the nature of fear, identify the specific reaction and apply appropriate tools to get people go ahead

Is that the people afraid of change? psychologists state that this is not true People want new things in life , they like wearing new clothes every days , new cars, visiting new places which are different from where they live They do not expect

to see the same thing everyday and the change in everyday life is considered good But why are they afraid of change in the work place? The answer is that most of us are afraid of the unknown They fear that the new system will involve loss, they may lose their power, their prestige, their current relationship, their ability and experience they have learned to do the job They may lose their privileges or even the job itself, they do not known what they will be faced tomorrow

If we are threatened with the change we will do what we can to stop the change or

at least slow it down But if we know that the change will bring us a lot of good things : salary increase, promotion, recognition etc we will support the change But only if there is clear evidence of positive personal benefit people will only consider the negative aspects of change So in order to start a change we have to understand the resistant of change and try to overcome this

The change of organization culture from a bureaucracy to a modern organization must start from the top manager and the external pressure plays an important role The threat from competitors, losing of market share or the reduction of profit will push the organization to change in order to survive, but without the internal motive the organizational change can not be effective and proactive To change from a SOE to a JSC (Joint Stock Company) is an positive step to reduce bureaucracy and make employees especially managers to be more proactive After creating a common vision for the company, all departments will together set the detail goals for each section and in order to reach those goals we must make a clear action plan Now the company has a common goal and each department has its own targets and responsible for those targets because the people closest to the problem can solve it best so each department would do what are needed to reach their goal They will think and discuss what should be Eliminated, Reduced, Raised, and Created to meet their goal that they are responsible for And the reward system must be changed so that employees are paid according to their performance, to what they make for the company not according to seniority or their position only All managers are responsible for his department’s targets and challenged by the CEO, other department and stakeholders Once all employees especially managers have a common vision, and are allowed to make their own targets according to the company vision, they are also responsible for and paid

depend on their performance they will try harder to reach their goal and be more

The organization change is a long and hard process and it can be successful only when all the employees understand and execute the change But the perception is a very complex cognitive process and every one has his own filter A person perceives something according to his taste, intelligence and experience etc How can we check whether all people in the organization understand and support the change? We have to learn to identify the reaction to change which can be broken

down into 6 specific behaviors ( according to Doug Howardell ) :

1 Flight

2 Fight

3 Doubt

4 Explore

5 Accept

6 Embrace

Each of the actions has specific behaviors and what we have to do is to observe the actions, classify them and then apply appropriate tool to get people to go through the continuum of behaviors The first reaction is normally Flight People who resist change through Flight often miss the meeting, they find some excuses to not show up, or even if they come, they may come late and at the meeting they do not pay attention They often have a plan of their own but they do not reveal

The second reaction is Fight They will resist at any time possible, they explain why the new process won’t work and they may find other people with the same thinking The implementation of the change may be delayed or destroyed if one or some important managers are in the first 2 positions