Background - Vietnam Economic Situation

In the past few years, from 1988 up to the present, Vietnam's economy has seen a rapid transformation from a centralized command to a market economy

Chapter 1 Introduction

1.1 Background - Vietnam Economic Situation

In the past few years, from 1988 up to the present, Vietnam's economy has seen arapid transformation from a centralized command to a market economy To catch up with thepace of development in the Asia-Pacific region, the Vietnamese Government have launched

an ambitious development program to the year 2000 During a relatively short period of time,some success has been achieved in the economy: the annual economic development of thecountry reached an average of 7.8% between 1991 and 1994 and is expected to increase

to 9.5-10% in 1996 and 10-11% to the year 2005 (see Vietnam Investment Review, 7-13 August, 1995); one-digit inflation has been recorded in the years 1992-1993 and the rate of

inflation has been maintained at about 10-14% during the last two years; production hasincreased; the socio-economic situation has visibly improved and the economy has becomemore flexible and more dynamic In 1988, The Law on Foreign Investment was promulgated,followed by The Law on Foreign Technology Transfer into Vietnam in 1989 These two lawsenabled foreign businesses to enter Vietnam in the form of joint-venture and foreign directinvestment (FDI) The number of foreign investors who come to Vietnam seeking businessopportunities increases from year to year According to the Saigon Times magazine, 31

Aug 1995 (Source: State Committee of Cooperation and Investment -SCCI), 1,183 foreign

investment project licenses with a total investment capital of US$ 16,008,091,692 weregranted According to the Ministry of Planning and Investment, in 1995, foreign investment

in Vietnam increased by 30% from the previous years (The foreign Investment Story of

1995, Vietnam Economics news No 52, Dec 29/ 1995- Jan 4/ 1996, p.20) The foreign

investors come with a new way to do business and create a competitive environment Theprivate sector is growing from year to year both in size and number and is starting tochallenge the state-owned organizations Smuggling of goods remains a formidableobstacle to the local businesspersons All these factors encourage a new way to dobusiness, and a new way to manage an organization

Evaluating the achievements of Economic Renovation in Vietnam, in his article "TenYears of Economic Renovation in the Eyes of Foreigners" in an Economy and ForecastReview in the Ministry of Planning and Investment, Thai Van Long stated that Vietnam islacking competent and flexible business managers capable of steering an economicdevelopment of the country in the transformation period

In August 1995, Vietnam became a member of ASEAN and the need formanagement experts who can take part in ASEAN' activities has become an urgent issue ofthe government level Besides, in the process of joining into regional and global economicdevelopment, the need for business managers who can deal with competition locally andinternationally becomes a vital problem for all Vietnamese companies, both state-owned and

private alike (see Businessmen Face Tough Competition, Vietnam Investment Review, 31 July-6 August, 1995 p.5).

Virtually every facet of the country is being affected Education, especiallymanagement training, is becoming a national priority which constitutes a motivator and a

fundamental condition to ensure the implementation of socio-economic goals, building anddefending the country Vietnam is currently facing a critical shortage of entrepreneurs.Likewise, managers familiar with up-to-date technologies are needed for development inalmost all sectors of the economy There are particular deficiencies in the areas of

economics and business management (see Education and Human Resources Sector Analysis: Synthesis Report, October 1992).

All these explain the reasons why the Southeast Asian Ministers of EducationOrganization (SEAMEO) pays its attention to Management Training in Vietnam

1.2 Demand and Supply of Management Training

The training and recycling capable managers is an important issue of any country,any economic system, and therefore, is a regular duty For Vietnam today, this problembecomes more actual as more foreign companies open their offices and factories inVietnam, and as local companies become more market oriented The need for a newgeneration of managers who can meet new requirements of economic development isbecoming an urgent problem On the other hand, the switch from the former rigid andbureaucratic mechanism of government administration to a more responsive, flexiblemechanism in the market-oriented economy has required government officials to beretrained in order to serve their country better

Vietnam therefore urgently needs to train new managers as well as re-train, recycleexisting ones in order to meet the new requirements of the country’s economic development.The need on this issue of management training is one of the hottest issues in the country.According to Mr Le Vinh, General Secretary of the Association of Economists of Vietnam,the managers that need to be re-trained can be divided into three groups:

 The first group should consist of people who have been trained in command economics;

 The second group should be made up of managers who have had hands-on technicalexperience but who don’t have much management knowledge;

 The third group would be people who have not had any training whatsoever but theyhave just picked up what knowledge they could along the way

There were some common agreements on the huge demand for managementtraining The Vietnam Ministry of Education and Training held a seminar on MBA trainingfrom 6 to 8 July, 1995 in Vung Tau Institutions that are considered good in the field (withboth training curriculum and books available) are the SAV program, the HCM City University

of Technology, Hanoi National University of Economics, and the HCM City Open University

At undergraduate level, management training programs in Vietnam are still somehowaffected by the old theories of economics In recent years, state institutions have beenchanging their programs to adapt to new requirements of the society Courses provided aremostly in the basic theories of capitalist economies Students study management theoriespassively or theoretically The result is that graduates’ capability are not competent to therequirements from business community

1.3 Problem Statement

Up to now, the huge demand on management training is agreed commonly, but thereare only few researches on the actual demand in management skills were carried out inVietnam Some other researches also tried to find out appropriate courses and retraining,recycling forms that should be provided for existing managers in state, private economicsectors and in the public administration sectors.

In order to meet the training needs in the future, it is very important to have current,accurate information on exactly what kind of managerial training is needed by domestic andforeign businesses and Vietnamese government agencies Then, training modules can becustom-designed and targeted to fit the needs of different industries and branches By thisway, the effective use of scarce resources can be maximized and the most critical needscan be addressed first

1.4 Objectives of the study.

This study will identify the various training needs for mid-level managers in Vietnam

It will define the topical nature of courses required, the most appropriate training styles, and,somehow, the course format which is most likely to be accepted The focus of the researchwill be on key industries of the country (e.g Petroleum, Processing industries, joint-ventures) In addition, government agencies will be included in the research, to assessofficial needs for upgrading management skills in government

First stage - Preliminary study:

Current management training programs in Vietnam

Second stage

 Estimates by trainers, executives of needs at middle management level during thenext three to four years

 Assessment by mid-level managers on skills and knowledge needed to be upgraded

 Estimates on the level of support private companies are willing to provide foremployees who participate in training programs

 Pricing and promotion strategy

1.5 Methodology

The research will be conducted in Ho Chi Minh City, and Hanoi, Vietnam, the nation'stwo most developed cities in terms of trading, transportation, and communication They havebeen the most attractive spots for foreign investment in Vietnam due to better infrastructureand more active trading and processing industries

Preliminary research will be conducted in the third term break (August, 1995) with thefollowing activities in HCM City and Hanoi:

Secondary data collection of research and studies of the local and foreign institutesand centers, publications of media concerning management training need

Interviews with some officials of these centers for more information on theircurriculum and their opinions on the current needs of management skills for mid-levelmanagers at Vietnamese agencies, domestic industries, and foreign firms in Vietnam.

In the second stage, the market research will require in-depth interviews with about

20 representatives from key industries officials who are familiar with the management needs

in the government This pilot will allow us to define the needs of industries and government

in more detail before further research for a feasibility study Respondents will be chosenamong senior managers, government officials in Hanoi, Hai Phong, Ho Chi Minh City, DongNai, Vung Tau Those senior managers are the ones who have substantial experienceoperating in Vietnam and therefore are very familiar with the problems of recruiting andretraining, recycling qualified mid-level managers

The study would help to determine the magnitude of demand for the trainingservices, as well as the level of willingness to pay for training, which kind of trainingcompanies want and need and what the appropriate fees should be

During the research implementation, a pilot quantitative survey was designed to give

a better understanding of the opinions of various types of local respondents and to obtainthe necessary experience for the next step of the study

The questionnaire is then designed to reveal the most essential management skillsand the most appropriate forms of training expected by the local existing and future (MBA-students) managers

The respondents are chosen from senior students of some MBA programs such asCFVG, MBA in industrial management, from attendants of the second-undergraduatediploma at HCMC Economic University, from participants of some seminars organized bySAV and UNESCAP in Ho Chi Minh City, Hanoi and finally from the managers of somecorporations and companies in Ho Chi Minh City and Dong Nai province

Chapter 2 Literature Review

2 Managing Personnel Stress

3 Solving Problems Creatively

4 Establishing Supportive Communication

5 Gaining Power and Influence

6 Improving Employee Performance Through Motivation

7 Delegating and Decision Making

8 Managing Conflict

9 Conducting Effective Group Meeting

These nine Management Skills are selected based on the results of an extensiveSurvey of literature as well as on their own study of over 400 practicing managers in avariety of public and private organizations

They select some critical characteristics of the skills that they consider in more detail.The criteria for choosing are:

 Management skills which contain a combination of personal (e.g stress management)and interpersonal (e.g conflict resolution) skills, since both are critical prerequisites foreffective management

 Focus on proven characteristics of high- performing managers

 Only characteristics that are trainable behavioral components are assessed Topics likeleadership are not included because, in their mind, they involve too broad a range ofbehaviors

Focus on "generic" management skills because they avoid highly situationtechniques that are best suited for on-the-job training

Skills for Supervisors

THAMHAIN (1992) studies the skills needed for engineering management He saysthat there is no single formula guaranteeing success in the management of R&D orengineering programs However, research shows consistently that high- performingmanagers have specific skills in common

ACHECK's list of 42 skills (see Appendix 2) that are considered crucial for doing theirjobs effectively is shown This set of skills is organized into three categories: Leadership andpeople skills, technical skills and administrative skills

The right mixture of skills depends on the engineering task, the techniquesemployed, the people assigned and the organizational structure To be effective,engineering managers must consider all facets of getting the job done Their managing stylemust facilitate the integration of multi-disciplinary program resources for synergisticoperation The days of managers who get by with technical expertise alone, or with pureadministrative skills, is long gone (THAMHAIN, 1992)

Technical skills and administrative skills are widely accepted as trainable skills Iftrained, they can provide immediate and measurable results But what about trainingprograms that target leadership development, information giving, or personal growth?

MARGER (1962), known as the father of criterion-referenced instruction,differentiated between performance-based attributes and nonperformance-based attributes

of the objectives of training program: Performance-based objectives keep trainers on a oriented track and offer the promise of results He say that the trainers should describeperformance-based objectives so that each trainer interprets those objectives the same wayand so that they can measure how close they come to achieving them

goal-STONEAL (1992) explains that in training for performance-based objectives, weenvision a "before" and an "after" Before, employees do not know how to do their jobs orthey make errors What they expect after helps determine our objectives In other words,what can employees do after training that they could not do before?

Increasingly, organizations are asking trainers to conduct training on topics involving

"soft skills" such as time management, and personal issues such as substance abuse

In these cases, the results or changes occur over time and can't be easily quantified.For example, trainers may convey information that may have no immediate job application -such as an executive's view of the state of an industry

And for soft skills, the training may simply remind and motivate employees to do whatthey already know how to do but don't always carry out Consequently, it is difficult tomeasure the acquisition of soft skills The true test of time management, for example, is notbeing able to answer questions about time management; it is being able to manage time

Another important training topic, leadership, has to do with changing and clarifyingvalues Value issues involve changes in people's perceptions, habits, and relationships.These changes happen only gradually

Information-giving, lifestyle-changes, interpersonal skills, emotional issues, andpersonal growth require flexible training objectives, performance-based objectives and nonperformance-based objectives

SWIERCZEK (1985) lists 57 Management skills that he groups into 8 sections: 1.Communication, 2 Directing, 3 Problem-Solving, 4 Training, 5 Hiring, 6 Planning, 7.Performance Review, and 8 Decision-making (see appendix 3) The list covers non-technical skills that are important for mid-level managers

It can be seen that the skills selected in this list relate relatively closely to actions.The reason for the choice is to avoid the vague nature of need (SWIERCZEK 1985)

Society and the workplace today have become increasingly complex and diverse.Managers in organizations can play various roles according to the situation This requiresmanagers to master a variety of skills The list of skills needed for them can, therefore, belengthened

Skills for Performance Management

SHNEIER, BEATTY AND BAIRD (1986) suggest a performance ManagementSystem considered as an approach to skill identification The system is established on thisbasic notion: the job of managers is to manage the performance of their subordinates Byproviding managers with performance management perspectives, by dealing a set ofsequential activities, and by building their performance management skills, they have shownthat performance appraisal is integral to their job The eight-step performance managementcycle is briefly described as follows (see Appendix 4):

1- Choose performance appraisal measures and standards (Theme 1) Those

aspects of job performance that have an impact on success, differentiate betweensuccessful and unsuccessful performers and are at least partially within the control of theperson being rated, should be identified as performance measures A job analysis and aposition description are the basis for determining performance measures There are threepossible measures: What people achieve, What people do and What people are In otherwords, they translate into assessing results, assessing behavior, and assessing personalcharacteristics A performance could be rated something like exceptional, superior, fullysuccessful, borderline, or unacceptable

2- Communicate performance expectation (Theme 2) Once appraisal measures

have been determined and performance expectations defined for each level of performance,these performances must be communicated to those being rated

3- Plan for performance (Theme 3) Managers help subordinate to develop strategy

to meet performance expectations and secure required resources Action plans arenecessary, as are budgets and time schedules

4- Monitor, assist, and control performance (Theme 4) One popular method is

"Management by wandering around" which recognizes that managers need to be away fromtheir desks, observing performance, comparing this to their expectations, and intervening onthe ongoing process using behavior-based language to improve performance This is a key

part of performance management which managers conduct each day, all year long,

providing ongoing feedback while perhaps only giving a performance appraisal once a year

5-Performance appraisal (Theme 5) Performance observations are recalled and

judgments are made, comparing what is recalled to the rating interpretation of the standardsets of the first step to be effective, rating person must be trained how to complete forms oraddress possible errors such as "leniency' or "halo" Training programs for rating personshould emphasize such skills as communication, coaching, planning, listening, negotiating,observing, problem-solving and those skills-related to various phases of the performancemanagement style

6- Provide performance feedback (Theme 6) This is a formal report made

subsequent to appraisal Here, superiors provide a rational for their evaluation and allowrated people to participate in the discussion The most useful feedback contains facts aboutbehavior and not interference or conclusion Feedback should also be specific and shouldnot overemphasize the negative

7- Using performance results for decision-making (Theme 7) Subsequent to final

rating and performance review sessions, various decisions can be made, based on theappraisal results Decisions related to promotion, demotion, or termination; to allocation ofmonetary and other types of incentives and awards; and to a job assignment are examples

To ensure success, the results of the appraisal process must be used to affect people'sjobs, careers and rewards

8- Developing performance (Theme 8) This is the final step in the ongoing

performance management cycle The supervisor, individual, and organization each haveresponsibilities to develop and improve performance The organization might provide fundsfor furthering formal education or offer in-house training and self-assessment Thesupervisor might agree to coach a subordinate more frequently or provide an opportunity toenhance job responsibilities The individual might plan to read current technical information

or learn a new skill, etc

Executive skills

SMITH (1992) focuses on searching skills for executives pointing out the importance

of finding out what skills executives need to lead their organizations This question is basic

to succession planning and executive development Many approaches are possible but thesearch for executive skills should consider several problems

Size of organizations impacts more or less the required skills of correspondingmanagers In dealing with a small population such as the executive of a company, it istempting to use a generic sets of skills But there is some debate over the extent to whichthe executive's requirements are general or situational Complicating the task further,executives often have trouble articulating what they do that makes them successful

In order to convince the executives that the skills found are necessary and applicable

to their own situation, the researcher must demonstrate that the skill set is rooted in theorganization It is not simply a matter of identifying the skills

Increasingly sophisticated technology will demand greater skills and training Futuretechnology will entail tasks that require judgment, diagnosis, and inference Consequently,many skilled workers will be needed for entry-level jobs COHEN (1991) presents some skillemphases required for employees and managers in 1990 (See table 2.1).

Prominent characteristics of skill emphasis are the process of learning in skilldevelopment and multi-cultural and global cooperation in today business The pledgedmarket economy of Vietnam cannot stray from this trend

GEBELEIN (1989) suggests a profile of managers who find themselves influencingfellow employees over whom they have no direct job responsibility He points out that themanagers find themselves in three primary roles: initiator, expert, and facilitator

Table 2.1: Relative skill emphasis of the 1990s

Skill Area Employees Managers

Managing change and

ambiguity

adaptability versatility

Teamwork interpersonal collaboration

Thinking creativity innovation

Learning learn-how developing others

Empowerment initiative courage

Personal effectiveness self-management

and dignity

courage and integrity

Business practice honesty ethics

Future focus mission or purpose vision

Diversity culture tolerance global citizenship

The "initiator" can be responsible for a specific job and he then must initiate the issuewith his subordinates and get into a position of influence with the subordinates

The "expert" is often contacted by the subordinates for their specialized knowledge.The expert role can be seductive; pontificating on the basis of one's vast experience andvaluable expertise is a heady business

The "facilitator" is charged with helping the subordinates to solve their own problems

He may help the subordinates diagnose the problem and may teach the subordinates how

to facilitate problem-solving among employees

GEBELEIN introduces twenty skills that he considers most critical to the success ofmanagers (See table 2.2)

Table 2.2: Manager's Skill Profile

Personal - Adaptability

- Trust and integrity

- Result

- Service orientationInterpersonal - Relationship building

- ListeningAdministrative - Priority and time management

- Project managementInfluence - Leadership

- Influencing

- Organizational savvy

- Coaching and advising

Source: GEBELEIN, (Training and Development, Mach 1989)

The skills, which reflect the essential people-oriented nature, cluster around sixareas: influence, administration, communication, problem-solving, interpersonal relations,and personal factors

1- Influence Managers must know how to initiate action and mobilize others to

achieve results They have to be comfortable standing in front and getting others to follow

them (Leadership) They have to build their credibility, visibility, and involvement with

business issues They must be able to build a network of people in the organization to

support and promote ideas and projects (Influencing) They are able to help themselves to

be more successful They must be easily accessible and ready to use a tailored approach in

coaching (Coaching and advising) They have to understand politically how to make things

happen in the organizations, using whatever formal and informal channels to build a net

work of support (Organizational savvy).

2-Administrative Most managers have busy schedules, balancing commitments to a

variety people and departments Establishing priority and managing time are an essentialpart of the job Managers often work with project teams or lead the projects themselves.They should manage the situation, whether it is an hour-long conversation or a three-monthproject

3- Communication Managers must be able to speak effectively and make

presentations one-on-one or in groups The skills of informing go hand-in-hand with those ofinfluencing Conversely, they must be able to draw information when listening andcommunicate that they have absorbed what has been said

4- Problem-solving Managers generally have some knowledge or expertise that

others in the organization need Their aid would be more effective when they have a realistic

understanding of the subordinates' needs (Technical expertise) A common problem with

managers is their lack of business know-how and an appreciation of today business needs

and overall operations (Business knowledge) They are expected to help people understand

what is going on or simply to provide a solution or several alternatives after identifying a

problem (Diagnosing) They must be able to make sound decisions on a timely basis they

often face the dilemma of whether and when to make a decision or to continue gatheringinformation They have to decide when they or their subordinates should call the shots

(Decision-making).

5- Interpersonal Manager's roles involve teaching others how to solve their own

problems, helping them understand new processes and procedures and preparing them to

take over those responsibilities (Facilitating skills) They have to establish positive, sustained

relationship within their company as well as with their subordinates in an active manner,

rather than waiting for subordinates to seek human resource assistance (Relationship building) The success of managers is partly because due to their ability to gather feedback

from their subordinates who have used their services before, asking about the effectiveness

of their services and how they could be useful again Similarly, subordinates need feedback

on a problem after manager has investigated it Feedback must be respectful, as specific as

possible, and focus on solving problems, not on fixing blame (Feedback) Giving feedback

goes hand-in-hand with the manager's skill at managing conflict Constructive solutions can

be reached if the manager maintains positive relationships and allows others to save "face"

6- Personal Managers must be seen as people who are interested in helping their

subordinates, who will listen to them and who will provide them with resources and

assistance that they need to solve their problems (Service orientation) Many managers are

responsible for productivity and profitability That's why they focus on bottom line results

(Result orientation) A manager should be trusted by the subordinates in his honesty and

commitment to solve their problem while maintaining the organizational ethics and values of

the organization (Trust and integrity) Besides, they have to be adaptive to many variables.

Often they are spearheading organizational change while juggling numerous priorities,where the key to success is to stay cool in the midst of complex problems and politicalsituations

2.1.2 Need

Need and want: The first step in any training needs analysis is to differentiate

between training wants and training needs

NOWACK (1991) discriminates these two concepts as follows:

- A true training need exists when specific job tasks or behaviors are not importantand an employee's proficiency in them is low

A training want may arise when specific job tasks or behaviors are not important and

an employee's proficiency in them is low

Training need assessment aims at uncovering an employee's true training needs andweeding out training wants Employees often want training in specific areas that areirrelevant to their job or inconsistent with organizational objectives.

Four Definitions of Needs:

BRINKERHOFF (1986) extracts four definitions of need from STUFFLEBEAM's study

(STUFFLEBEAM, 1977) and indicates that different organization contexts and situations willcall for different approaches of needs, and very often, any situation will benefit from amultiple needs analysis perspective The four definitions are as follows:

1- Discrepancy: This is defined difference between an ideal normative, or expected

level of performance, and an actual level of performance Use of this definition allows formeasurable, precise, and specific need identification, but use of discrepancy definitionrequires measurability and previously established expectation level

2- Democratic: A "democratic" need, what most people prefer, select or otherwise

"vote" for, is determined by majority rule Democratic need definition can confuse wants withneeds Nevertheless, this definition builds consensus

3- Diagnostic: Diagnostic needs are defined through research and casual analysis.

When A contribute to the achievement of B, then A is needed for B This definition can help

discover true needs Furthermore, it introduces the concept of meet and unmet needs For

example we cannot completely delete stress while working The need is, then, to maintainthe current low stress level This definition allows "strength" analysis and avoids the trap ofneed analysis that searches only for deficits

4- Analytic: Analytic needs are discovered by intuition, insight expert consideration,

or even enlightenment Analytic needs lead to new level of performance and even allowassessment to virtuosity because they are not tied by definition to previously set standards,majority opinion, or established knowledge A weakness of this definition is, however, itsdependence on individual (or small group) expertise

In reality, surveys of need use the word "need" as an expression of preference anddemand and not an observable discrepancy in performance produced by lack of skill(SWIERCZEK, 1985) But from an organization perspective, the HRD function shouldoperate and be guided by policy that encourage use of all needs definition, and does notpreclude the consideration of any of them

2.2 Training Need Assessment

2.2.1 Why to do need assessment?

Fierce competition among firms is forcing managers into increasingly complex roles.They have the burgeoning responsibility for effectiveness and efficiency, sales and research,profits and growth, competition, government regulations and future markets and services.The complicated demands being placed on managers have propelled managerial needsassessment to the forefront of organizational profiles

Many companies allocate large sums of money to training and development IBM, forexample, spends more than one half billion dollars per year educating and training workers.Some money goes to train 10,000 workers for new jobs, other expenditures updatetechnical and scientific workers Still other outlays prepare workers and managers for futurechallenges If IBM is to get maximum benefit for this staggering expenditure, then effortsmust concentrate on the people and the situations that benefit the most To decide whattraining and development is needed IBM's trainers assess organizational and individualneeds (WERTHER and DAVIS, 1981).

Need assessment diagnoses problems and future challenges to be met throughtraining and development For example, changes in external environment may present anorganization with new challenges To respond effectively, employees may need training todeal with these changes The comments of one training director illustrate the impact of theexternal environment

LUDEMAN (1991), tried to measure skill for identifying training need In addition toimproving productivity, a well developed skills assessment program can help measure anddemonstrate the training need

There is only one concrete way to know, if the training programs are actually making

a difference pre- and post-management of the skills you are teaching, say NATHAN andSTANLEIGH (1991) They recommend comparing base line performance data with post-training performance data to know, whether a training program really has improvedemployee performance

PARRY (1990), emphasizes the importance of providing trainers with feedback aboutlearners who use job skills Without feedback it is impossible to know how to revise trainingprograms for maximum skill development

Customized skills assessments meet training needs Questions can be developed sothat each category of skills aligns with a training module The pre-training feedback isprovided as part of the program and helps focus employees on those areas they need toimprove Six months later, a post training assessment lets them know that their efforts toimprove worked

Knowing ahead of time, that they will receive post-training feedback increasesemployees' motivation to implement their development plans and to put to work the newskills they learned in the training program

COHEN (1990), found a significant correlation between learning and goal setting inthe training process Pre-training assessments make it easy for participants to see the areas

in which they need to improve and help them set appropriate goals

LUDEMAN uses five assessment stages for identifying training need based oncustomized skills He tries to measure skill and according to the rating criteria, skillassessments accelerate people's learning, job performance and professional development

by offering reliable feedback necessary for continuous improvement in addition to improvingproductivity A well-developed skills assessment program can help you measure anddemonstrate the worth of your human resource department

People must know, what areas are most critical to their performance and how much,

if at all, they need to improve Customized skills assessment is used in today's computertechnology to meet the need for performance that could be more aptly named "continuouspeople's improvement"

MIRABILE (1991) emphasized a simple approach to skill assessment for trainingneed Employees skills assessment can identify the logical, relevant developmental needs of

a company's work force No single approach will work in all situations for all firms But somekind of skills assessments is integral to the survival of every organization

Various developmental resources exist Each attempts to identify employees' primarydevelopmental requirements in the context of their organizations Ultimately, theseresources may be reduced to a set of tools and processes for gathering specific types ofinformation His method of quickly identifying the skills requirements of jobs and people isone approach that a savvy trainer might employ to determine its effectiveness in his ownorganization

CURETON, NEWTON, and TESOLOWSKI (1986) explain that managerial needassessments involve anticipating, researching, and evaluating the needs of managementstaff By identifying the gaps between the present and desired situations, they help to pointout the way to improve management effectiveness Many organizations have only recentlyaccepted managerial needs' assessments as valuable tools in protecting against factors thatnegatively affect managers' performance

A managerial needs assessment system can provide early warnings of thesenegative factors and facilitate organizational development The needs assessments shouldnot be performed as reactions to critical situations They should not be performed eithercontinually or in response to identified present or potential needs and problems

2.2.2 Developing the Method of Assessment

Answers to the following questions can provide the guidelines for managerial needsassessment strategy These questions can be used whether the assessment is conductedinternally or by an external consultant

 What mechanisms are currently in place to disclose business problems?

 Does documentation exist from previous needs' assessments?

 What department within the organization will be involved in the needs' assessmentprocess?

 Which employees will be involved in the process?

 What budgeted amount is available to pay for costs incurred during the needsassessment process?

 What time frame does the needs' assessments have to be conducted within?

 What is the relationship of needs' assessments to the organization's overall strategicplans and the strategic plans of its departments?

After all these strategic questions have been answered, the information can betranslated into a formal needs' assessment plan: (1) Establish the goals and objectives ofthe needs' assessments; (2) Identify specific research questions that need to be answered;(3) Examine time and cost constraints; (4) Consider various sampling strategies; and (5)Review data collection and analysis techniques.

Following are several methods, that can be effectively applied to a managerialassessment

1-Advisory Committees: Committees are established to identify training needs to

determine whether the problem might be solved via training or in a different manner, and toprioritize the needs The purpose is to provide advice only, not to make decisions Animportant side benefit of the committee approach is generation of enthusiasm from itsmembers for program participation

2- Assessment Center: The assessment centers technique usually takes several

days Participants engage in a variety of tasks, such as in a basket exercise, decisionsimulations, case analysis, psychological tests, and group discussions Trainers observeand assess candidate's behavior, report their impressions in detail and combine theirappraisals into a formal report Two kinds of conclusions typically are generated, dealingwith a person's perceived profitability and suggestions for further development

3- Attitude survey: An attitude survey is an organization pool soliciting managers'

feelings about a range of organizational and work-related issues Such a survey can haveopen-ended questions with narrative responses, or structural questions with more objectiveresponses Because the topics covered are usually general, the data gathered are moreuseful for indicating general levels of satisfaction than for generating valid conclusionsregarding specific training needs

4- Group Discussion: This technique involves a series of meetings with managers to

crystallize specific problems, analyze their probable causes, and identify areas in whichtraining could be of value Because of its limited structure, this technique is best for primaryneeds' analysis or where more rigorous analytical approaches are not feasible

5- Interviews: Some trainers individually interview managers to obtain their

perceptions of work problems and of areas in which they feel they need training Interviewsoffer high participation involvement and capacity to tailor the training solutions more directlytowards individuals However, the technique is quite costly in terms of the trainer's time

6- Behavioral Observation: Direct observation of managerial behavior can be done

with work tasks of simulated exercises, and can be conducted by either the trainer or othersupervisory personnel These methods can be time consuming, costly, and too passive.However, it is beneficial in its direct focus on job skills and behaviors

Once the plan is completed and the method of assessments is chosen,implementation of the assessment can begin

2.3 The Roles of Skill Training

2.3.1 Objectives of Training

DALTON and COSIER emphasize several traditional objectives in training programs

They are Development of Skills, Orientation of Skills, and Socialization to Organizational Values

Development of skills aims at reasonable training of employees so that their skills, at

any level, can be sufficient to meet the minimum requirements of the position If they cannotperform this fundamental skill well, it is unlikely that they can behave extraordinarily at someinstances in innovative orientation

But training encompasses a good deal more than providing skills Orientation of skills

training helps employees figure out the process in the development of their career whenthey handle a function in the organization If there are no skills orientations, employees candevelop their own skills which may not fit with the process used in the future It is difficult forthem to change their behavior or improve skills at that time

Socialization to organizational values is another objective that may be meet by

training Every employee, no matter how modest their current position, must be aware ofthese values presumably through some form of training

2.3.2 Education and Skill Training

Training is an attempt to compress experience We want to take the knowledge andskills that competent managers gain through trial and error over time and compress thatlearning into a few months (MACHER,1984)

The first stage of training an employee receives is from school But the responsibilityfor building a quality work force does not end with the school However, school must providewell-designed preparation for future work force

KEARN writes in his book Winning the Brain Race : Education's goal should be to

nurture, develop, and encourage human intelligence that produces wealth-not property, notmachines, or physical plant The simple truth is that we can't have a world-class economywithout a world-class work force, from senior scientists to stockroom clerks And we cannothave world-class schools No companies, no organizations can be better than itsemployees If wealth was once measured in gold, silver, and precious stones, it is nowmeasured in what we know

People can fulfill their management development in a training session, whether it ison-the-job learning or a formal training course Training completes and extends skillsdevelopment after education in schools

2.3.3 Business and Training

SMITH (1992) clarifies the close relationship between business strategy and trainingorientation of organizations : Like strategic planners conducting environmental scanning,program developers should identify trends and other factors that will shape a business'sfuture and examine their implications Strategic planners look at the needs of marketsegments; the program developers evaluate the needs of executives and middle managers.They imitate the methodology of strategic planners, but also give input on a major corporateasset-the strengths and the needs of top managers.

The size and complexity of business operations today have made trainingindispensable in most companies This trend results in a wider perspective in training BEDI(1991) states that no longer focusing narrowly on topics such as accountancy,salesmanship, or production, modern training program aims at grooming all-roundexecutives by ranging across many fields of expertise They focus not only on thecompany's current needs, but on the challenges likely to arise as a result of growth anddiversification

2.4 Types of Training

A training course can serve as "general management objectives" or solution-orientedobjectives General Management Training objectives usually are in human relation termsthat have direct connection to the participating managers' jobs Solution-oriented training isaimed at solving a problem or improving a situation on the line (SMITH, 1992)

Organizations often do not clarify clearly their objective in training Trainers shouldfind out which problems the organizations are facing The more situational the trainingprogram is, the more possible its success would be

Having set the goals for training, trainers will consider potential alternatives to carryout training programs THAMHAIN (1992) describes briefly 12 popular methods of training:

1 Experiential Learning- This is by far the most prevalent mode of skill development,

especially for technical managers About 25 percent of their working time is spent in learning

on the job

2 Observation of Management Practice- Rather than learning from your own work

experiences, you learn from the experiences and examples set by others This methodseems to be practiced by all project leaders Both the cost and perceived effectiveness ofthis type of training are low

3 Formal On- the- Job- Training- This includes specific training programs, often part

of a new job assignment, transfer or new hire The training usually consists of a combination

of closely supervised work assignment, briefing sessions and some courses, seminars andworkshops

4 Literature Reading- Although managers spend about 4 percent of work time for

reading professional books, journals and reports, they see the literature as an importantsource of information and knowledge which through proper on-the-job application can betransformed into skills

5 Consulting- Managers see these consulting services as effective but also costly.

They find them helpful, not only for quick problem solving, but also for experiential learningand skills building through observation and of specific techniques and practices

6 Seminar and Workshop- These could be in-plant or public offerings Both cost and

overall effectiveness of these training methods are considered to be medium

7 Coaching by Upper Management-This seems to be particularly effective in the

areas of team building, communication, interpersonal skills, and leadership

8 Professional Conferences.-The conferences are seen as vehicles for quick

updates on new management concepts

9 Formal Course (Degree Programs)-Managers find these courses an effective way

to gain knowledge and the basis for further skills development, especially in administration,communication, organization, planning, tracking and measuring of project activities

10 Special Work Group-Managers perceiver these activities as highly effective for

skill development, especially in the more intricate areas of team building, communication,leadership, and project controls

11 Formal Courses(Continuing Education)-These courses address the special needs

of those enrolled: they are geared toward particular project management application

12 Job Rotation -Often conducted as part of formal on-the-job training, job rotation

consists of a deliberate change of job content or area assignment

Each training method has it own strengths and limitations for skill development Acombination of various methods could be a good way to enhance the synergistic effect oftraining For example, classroom training in combination with reading and on-the-jobexperiential learning can be an excellent way to build skill in any category and at anyperformance level

Vietnam has recently been opened to the free market economy Its enterprisemanagers need to be familiar with new styles of management A basic stage for theirmanagement development should be performance-based skills training that can lead tomeasurable results An effort should, however, be made to quantify the soft skills to anextent as described in the performance appraisal cycle

No matter whether an organization needs training for performance- based or performance-based skills, the program should be rooted in the necessity of theorganization Furthermore, the implementation of the program must be adaptive to thesituation of the organization in teams of human resources and physical capabilities Such aprogram can thus persuade employees to attend training not only as part of theorganization's requirement but for their own career development as well

non-In Vietnam, so far, there have been few studies on Management Needs Assessment.The Institute of Economic Research has carried out an investigation on State-ownedenterprises in Ho Chi Minh City The investigation aimed at studying the Human Resourcesprofile of these enterprises, asking about the time managers have spent attending courses

related to market economy In the Ho Chi Minh City University of Economics, there weresome surveys on how students prefer the subjects taught in the University In Hanoi, thesame research was carried out by teaching staff of the Hanoi University of Technology, theHanoi University of Psychology and Humanity and the Management Training Center in theMinistry of Planning and Investment The results of this research show that there are still agreat number of managers who have either not attended any training courses or have onlyparticipated in a short course These results also show the big gaps in the knowledge andskills of the managers who were trained and experienced in the Centrally Planned Economy.The results of this research also reveal the low level of management and technical training

of the private-owned companies' managers

2.5 Strategy

2.5.1 The traditional approach

Reflecting the military root of strategy, Webster's New World Dictionary defines

strategy as "the science of planning and directing military operation" The planning themeremains an important component of most management definitions of strategy For example,Alfred Chandler of Harvard defined strategy as "the determination of the basic long-termgoals and objective of an enterprise, and the adoption of courses of action and theallocation of resources necessary for carrying out these goals." Implicit in Chandler's

definition is the idea that strategy involves a rational planning process The organization is

depicted as choosing its goals, identifying those courses of action (or strategies) that bestenable it to fulfill its goals, and allocating resources accordingly Similarly, JAMES B QUINN

of DARTMOUTH COLLEGE has defined strategy as "the pattern or plan that integrates anorganization's major goals, policies, and action sequences into a cohesive whole" Andfinally, along the same lines, WILLIAM F GLUECK defined strategy as "a unified,comprehensive, and integrated plan designed to ensure that the basic objectives of theenterprise are achieved"

` For all their appeal, planning-based definitions of strategy have recently evoked

criticism As HENRY MINTZBERG of Mc GILL UNIVERSITY has pointed out, the problemwith the planning approach is that it incorrectly assumes that an organization's strategy isalways the outcome of a rational planning process According to MINTZBERG, definitions ofstrategy that stress the role of planning ignore the fact that strategies can emerge fromwithin an organization without any formal plan That is to say, even in the absence of intent,

strategies can emerge from the grassroots of an organization MINTZBERG's point is thatstrategy is more than what a company intends or plans to do; it is also what is actually does.

With this in mind, MINTZBERG has defined strategy as " a pattern in a stream of decisions

or actions," the pattern being a product of whatever intended (planned) strategies are actually realized and of any emergent (unplanned) strategies The scheme proposed by

MINTZBERG is illustrated in Figure 2.1

MINTZBERG's argument is that emergent strategies are often successful and may

be more appropriate than intended strategies

In sum, MINTZBERG's revision of the concept of strategy suggests that strategyinvolves more than just planning a course of action It also involves the recognition thatsuccessful strategies can emerge from deep within an organization In practice, thestrategies of most organizations are probably a combination of the intended and theemergent The message for management is that it needs to recognize the process ofemergence and to intervene when appropriate, killing off bad emergent strategies butnurturing potentially good ones To make such decisions, however, managers must be able

to judge the worth of emergent strategies They must be able to think strategically

Figure 2.2 Components of strategic management process

Organization's Mission and Goals

Strategic Choice

Organizational Conflict, Politics, Organizational

Matching StrategyStructure and Controls

Feedback

2.5.3 Components of the Strategic Management Process

The components include the selection of the organizational mission and majororganizational goals (see chapter 6: SEAMEO), analysis of the components include theselection of the organizational mission and major organizational goals (see chapter 6:SEAMEO), analysis of the organization's external competitive environment and internaloperating environment, the selection of appropriate strategy ,designing of organizationalstructure and control systems to implement the organization's chosen strategy The task ofanalyzing the organization's external and internal operating environment and then selecting

an appropriate strategy is normally refereed to as strategy formulation and is beyond the limitations of this paper Strategy implementation is not a scope of this research.

2.5.4 External Analysis

Organization's external competitive environment and internal operating environment,the selection of appropriate strategy ,designing of organizational structure and controlsystems to implement the organization's chosen strategy The task of analyzing theorganization's external and internal operating environment and then selecting an

appropriate strategy is normally refereed to as strategy formulation and is beyond the limitations of this paper Strategy implementation is not a scope of this research.

The objective of external analysis is to identify strategic opportunities and threats in

the organization's operating environment Two interrelated environments should beexamined in this stage:

 The business environment in which the organization operates Analyzing thisenvironment involves an assessment of the competitive structure of the market andthe stage of business development

 The macro environment Analyzing the macro environment consists of examiningmacroeconomics, social, governmental, legal, international and technological factorsthat may affect the organization

2.5.5 Internal Analysis

The next component of the strategic management process, internal analysis, serves

to pinpoint the strengths and weaknesses of the organization Such analysis involves the

identifying the quantity and quality of resources available to the organization

2.5.6 Strategic Choice

The last step of the strategy formulation task involves generating a series of strategicalternatives, given the goals of the organization, its strengths and weaknesses, and externalopportunities and threats The process of comparing strengths, weaknesses, opportunities

and threats is normally refereed to as a SWOT analysis A SWOT analysis might generate

a series of strategic alternatives To choose among alternatives, the organization has toevaluate them against each other with respect to their ability to achieve major goals Theobjective is to select the strategy which ensures the best alignment or fit, between externalenvironmental opportunities and threats and the internal strengths and weaknesses of theorganization

2.6 Price and Value

The word value is used in a variety of ways by customers and has a number of

interpretations

Value is low price Some buyers use the word value to refer to situations where they

simply pay a relatively low price, such as when an item is on sale The focus here is purely

on what is given up monetarily When a product or service is sold at specially reduced price,such as at an inventory clearance, or when a customer receives a discount for using acoupon or takes advantage of a one-time rebate, there is a sense of getting value

Value is getting what I want in a product Other buyers look at value in terms of the

benefits they receive from the item They focus on their own subjective estimate of theusefulness or amount of need satisfaction resulting from the purchase Buyers typically enterinto a purchase decision process with specific choice criteria in mind The extend to whichthey perceive that a product or service they perform well on those criteria is one way inwhich value is defined

Value is the quality I get for the price I pay An alternative approach is to view value

as perceived quality received from a purchase divided by the price paid The buyer’s focus isaffordable quality The best value is not the highest quality item or the lowest priced item.Instead, quality is divided by price for each available alternative, and the one producing thehighest quotient represents the best value Such calculations may not be very precise, asquality is subjectively estimated in the mind of the customer

Value is what I get for what I give A final perspective is to approach value as a

trade-off between what a buyer is going to receive from the purchase and what a buyer isrequired to give up The best value is the one that provides the most benefit (in terms of thecustomer’s desired set of attributes) for the least price A product is evaluated on theseattributes The result is divided by the price of the product to produce an indicator of value

2.7 How to manage value: Focusing on the customer

Customers typically purchase many different products and services, and rarelyfamiliarize themselves with all the precise details of each items' design, production, delivery,and after-sale support Instead, their value judgments are strongly influenced by anevaluation of basic product or service attributes, such as weight, size, or convenience.These judgments can also be significantly affected by packaging, advertising, sales andservice personnel, the sales environment, brand names, price promotions, product literature,and a variety of other vehicles under management's control

Chapter 3

A profile of economic development and the need of mid – level

managers

3.1 Vietnam Economic development

In the recent five years, Vietnam has been successful in reforming its economy withtotal investment of approximately US$ 18 billion, of which the State’s capital account for 43

%, private sector account for 30 %, and the remaining from other sources, i.e ODA (OfficialDevelopment Assistance) and FDI (Foreign Direct Investment) Vietnam has concentrated

on focal construction of infrastructure and many key industries such as energy, cement andsteel, etc which play a decisive role in the national economy development Total capitalinvested in these fields were US$ 7.7 billion In the mean time, investment capital of aboutUS$ 5.4 billion has been contributed into commerce, business, light industries and buildingconstruction mostly by the economic private sector Up to June 1995, foreign capitalinvestment of US$ 4.3 billion has been poured into Vietnam focusing on hotels, offices forrent, oil and gas, light industries, and telecommunication However, there are few projects inthe infrastructure, construction, agriculture, forestry and fishery industries (Source: SCCIStatistics 1995)

For the National Development Plan of the next period up to the year 2000, Vietnamwants to increase its GDP per capita from US$ 250 to US$ 500 Vietnam needs US$ 50billion in the next five years, and Vietnam has to do more for reaching this not-an-easytarget According to statistic figures and estimation from the State Committee of Cooperationand Investment (SCCI), in the next five years, Vietnam needs about US$ 10 billion of capitalinvestment each year

For reaching its targets, Vietnam has to improve more of its legal infrastructure andprepare an adequate workforce for the economic development in the near future One of themost serious difficulties that Vietnam currently faces is its lack of an adequate number ofcompetent administrators, economists, and managers who are trained in the theory andpractice of analyzing problems in market economy system

3.2 Current status of management and mid-level managers’ capability in Vietnam.

In the process of approaching the market economy, the Vietnam government hasaccepted a policy of multi-sectors economy with 3 main economic sectors: State-, private-,and foreign investment sector

These three outstanding sectors play an important role in the country economicdevelopment A review of management status and manager’s capability in these 3 sectorswill help better assessment on management training needs in Vietnam, especially in Ho ChiMinh City

3.2.1 State owned sector.

At present, the overall investment capital of the state-owned industry has accountedfor 60% of the total investment capital of other industries After a structural reform in 1994 -

1995 for a better resource allocation and efficient operation policy as stated by thegovernment, the number of State-owned enterprises now is 6,400 units (compared to12,084 in Sept 1990) of which 800 are for public services such as electricity, water supply,post and telecommunication, transportation Even though state-owned enterprises has notperformed effectively in the recent years compared to enterprises in private sector, Mr DoQuoc Sam, the newly-promoted Minister of Ministry of Planning and Investment (PMI), stilloptimistically stated that “we will reserve most priorities for newly established State-ownedenterprises in important areas, localities, and sectors in which state-owned enterprises havenot been present yet (Source: Thoi Bao Kinh Te Saigon, Nov 23, 1995) In order todevelop and maintain the leadership of the state-owned sector, Vietnam government hasdecided to establish 18 national corporations (imitating the chaebol model in South Korea)

by merging former owned enterprises However, this merge does not help new owned corporations be better as the former successful enterprises now has to support otherineffective ones in its new corporation, and there was no preparation for this merge in terms

state-of personnel and management

3.2.2 Management in State-owned enterprises

Resulted from the management system of the centrally-planned economy,management teams in the state-owned sector are not quite appropriate for newrequirements in market economy Mr Phan Ngoc Tuong, head of the State Administrationand Personnel Office state that only 25 - 40% of Vietnam 168,000 administrative staff meeteven "standard requirements" (Murray Hiebert, Executive Search, Far Eastern EconomicReview, June 23, 1994, pp 17-20) Reasons for the state-owned-sector-managers’incompetence can be of the followings:

 Management boards in the former mechanism were appointed to their positions with noprofessional criteria Actually, there were criteria for promotion, but those were vaguecriteria in terms of management qualifications

 Management boards did not have entrepreneur spirit as they are not the real owners ofenterprises, and enterprises' assets were funded by the government Businessperformance therefore were not a critical issue to management boards at the time

 Being appointed by the government, occupation of directors and management boardswere not stable and their occupation could be changed from business management topublic management or union management That situation made them did not considermanagement as a professional career and had no investment on their managementskills and knowledge

 There were no criteria for right assessment on state-owned enterprises' businessperformance, and that restrained the development of business incentives andmanagement profession

 A research by the Science and Technology State Committee in May, 1992, reveals that

there are about 30 % of state-owned enterprises’ directors lack of management

certificates and understanding of business principles in the market economy Most of

managers in this sector are promoted from their former management position in thecentrally-planned economy Management in market economy is totally unfamiliar to theirold way of management and most of them can not speed up to catch new requirements,operations in business operations due to their old age and long time of working in theformer bureaucratic mechanism

 Another factor that should be paid attention to is that most of current mid-levelmanagers, and even executive officers have engineering background and there was nosystematically management training for these managers’ occupation yet Most of mid-level managers had not been trained on organizational structure, management andprinciples of market economy

Management skills and knowledge, therefore, in the new market oriented situationbecome an urgent need for the survival of enterprises Managers, especially mid levelmanagers, in this sector must be retrained and up-dated in management skills andknowledge for new challenges in the market economy

3.2.3 Private sector

Since the promulgation of the Foreign Investment Law in 1986, the private economicsectors have developed fast and played an important role in the economy By statisticfigures, there were 11,738 directors, entrepreneurs of proprietary, unlimited, joint-stockcompanies by the end of 1993, and 20,668 directors, entrepreneurs in 1994 (Source:Institute of Economic Research) Those entrepreneurs, directors are of differentbackgrounds and size of business Some are managers of former state-owned enterprises,others are from family business with good network relationship in trading or capital supportsfrom their relatives abroad However, enterprises in the private sector are mostly of smalland medium size To the end of 1993, there were 71% private enterprises of small size withaverage capital of VND 100 - 130 million (around US$ 9,000 - 12,000) 28% of enterprises ofmedium size and 1% of enterprises are of big size (more than 200 employees and VND 2billion in capital)

Table 3.1: Number of enterprises in Hanoi and Ho Chi Minh City

Type of In the country In Hanoi In HCM City

(Source: Survey of the Ministry of Planning and Investment, 1995)

3.2.4 Management in private enterprises

The economic reform policy has stimulated businessmen in the private sector toexpand their business range and business activities in a more open economy A lot of newenterprises has been established, and earning short-term profits became the most goal ofbusiness in this sector Due to small and medium size of business, management in theprivate sector is based mostly on family management style However, successful business

in the mean time still had been based on network relations with government and owned enterprises for easy access to government projects and business opportunities.Directors of these enterprises are usually the managers, decision-makers of businessactivities Family-management style is the most popular and it seems to be most appropriate

state-at their present situstate-ation Management boards in this sector are mostly entrepreneurs andtheir relatives, friends Their management activities therefore are similar to managementactivities of mid-level managers in big enterprises and we should count them as mid-levelmanagers on training viewpoint

Most private enterprises focus on short term business goals of earning profits intrading activities Qualified managerial staffs therefore is not yet considered an urgent need

in this sector There are some big, successful business enterprises due to personalrelationship and experiences There are no management training specifically designed forthis sector yet and its operational managers have to cover their management knowledgegap through experiences or attending evening classes, seminars, or whatever source ofknowledge from their doing business activities As competition in market become more andmore critical, the need for upgrading their management knowledge has become an obviousissue for the survival in the near future of these private enterprises

3.2.5 Foreign Invested Sector

Following the open policy, the Foreign Investment Law in Vietnam has attractedforeign direct investment into the countries for new business opportunities in the new-openmarket Up to August, 1995, there were 1,183 foreign investment projects be licensed withtotal registered capital of more than US$ 16 billions At present, there are 1,325 projects inoperation with total investment of around US$ 18.02 billions (invested capital) The growthrate of capital invested is 50 % per year in average, There are 54 countries havinginvestment in 49 of 53 provinces of Vietnam Ho Chi Minh City is the hottest spot ofinvestment with 501 investment projects and US$ 2.7 billion invested capital, Hanoi standssecond rank with 218 projects and US$ 1.95 billion invested capital, Dong Nai provincestands third rank with 142 projects and US$ 888 million More than 80% of projects andinvested capital concentrated in the three main economic zones in Vietnam In 1995, foreigninvestment in Vietnam increased by 80% over last year, and 30% on previous years.Additional capital in the first ten months of 1995 increased 2.5 times To date, six industrialzones such as Song Than (Song Be), Bien Hoa, Tuy Ha and Amata (Dong Nai), Dai Tu(Hanoi) and Nomura (Hai Phong) have been approved by the government (The Foreign

Investment Story of 1995, Vietnam Economic News, No 52, Dec 29/ 1995 - Jan 4/ 1996).

Table 3.2: Foreign Direct Investment into Vietnam classified by industry from Jan, 1988 to January, 1996

No Sector No of

projects

Investment capital (US$)

1 General Industry 770 7.79 billion

3 Agriculture and Forestry 34 305 million

5 Post and Transportation 44 1.06 billion

6 Hotel and Tourism 237 6.3 billion

8 Finance and Banking 18 250 million

9 Housing Development 26 86 million

10 Export Processing Zones 60 202 million

(Source: the Ministry of Planning and Investment, Vietnam Economic

Times, January 1996)

3.2.6 Management in foreign investment sector

Starting business operation, foreign enterprises have to find out competent localmanagers which is not an easy work at all Mr Nguyen Trung Truc, a Vietnamese-Australianmanaging director of Peregrine Capital Vietnam, claimed that he can not find out competentlocal manager for expansion of his business activities and network He said that "it was easy

to find secretaries to set up representative office four years ago, but when you move to realoperations, it's hard to get local managers The biggest problem is mid-level managers"

There was a dilemma for him When he started by recruiting older, more experienced staff from state enterprises, he found out that they had fold habits and many "hang-ups"

developed long before Hanoi abandoned command economics in the late of 1980s When

he hired young people, however he found they were amateur and easy-going, even they

had no experience "Every one has to be trained from scratch"- Truc said (Muray Hiebert,Executive Search, Far Eastern Economic Review, June 23, 1994, pp.17-20)

In such a situation of lacking competent local managers, management occupation inforeign invested enterprises was dominated by expatriates and that causes higher operationand administrative costs Foreign invested companies therefore plan to increase the number

of local managers and reduce expatriates occupation in management positions Anotheradvantage of having local manager occupations is their better communication and lessconflict between local employees and managers However, to run the business quickly andeffectively, to learn the local employees at the beginning, the expatriates are useddominantly and step-by-step they will be replaced by local managers So, one of commonrecruitment strategy of foreign invested companies is that they hire only few competentmanagers locally and young employees to run business during the first period of theiroperations This helps business operations be effective and less expensive During theoperations, they will find out from their employees the real future competent managers tosend to train further

However, as expatriates explained during the interviews, it is very difficult to recruit asuitable local managers If they are competent, in many cases, their age is too old for long-term employment In some cases, the candidates were trained in the different fields notrelating to their business.

3.3 Management Training Need

In such a situation of market-oriented economy and the country open policy in joiningthe world economic activities, the shortage of qualified personnel for management position

in every economic sectors has become an urgent problem to be solved for further economicdevelopment in the near future

Chapter 4 Management training activities and programs in Vietnam

4.1 The higher education in Vietnam

4.1.1 The education system

There are few documents studying higher education in Vietnam such as theEducation and Human Resources Sector Analysis (Synthesis Report VIE89/022), Report ofVietnam's Government at Education Aid's Conference; September 1995, Higher Education

in Vietnam: Change and Response Management training activities in Vietnam have to besomehow affected by the general country situation and we have to refer to the status-quo ofthe country education system as well

The Ministry of Education and Training (MoET) is responsible for the formulation ofeducational policies, guidance and supervision of all curriculums and administration ofhigher education institutions There are more than 100 state universities, private universitiesand colleges, and three national universities (in Hanoi, Hue and Ho Chi Minh City) Highereducation in Vietnam now lacks an integration in management at the government level, andthere are many education institutions with different curriculum All these factors makeMoET’s management role weak and training activities somewhat chaotic

Training quality at higher education is not high and do not satisfy society’srequirements in terms of graduates’ lack of practical approaches In most of the highereducation institutions in Vietnam, the majority of the staff members (in excess of 80%) haveonly bachelor degree Academic staff with doctoral or candidate degree are concentratedmainly in universities in Hanoi and Ho Chi Minh City The academic qualifications of the staffare too low to work effectively with higher education The reasons are their narrow expertise,lack of adequate and up-dated information Another reason is that they are short ofknowledge about modern educational theory and research, and about teachingmethodologies In addition, they lack necessary facilities for teaching like text books,documents, library, laboratory equipment The last reason which has big impact on teachingquality is staffs’ low salaries Lecturers therefore have to do other works for supporting familylife and have less time for preparing lectures, updating new knowledge for teaching

The country has recognized the importance of human resources development andreached a decision, issued on 14 January 1993, concerning the continuing renovation ofeducation and training This decision emphasizes that

 Education and training are driving force and basic requirement for the realization ofsocio-economic objectives;

 The general objectives of education and training are the improvement of theeducation level of population, the training of necessary manpower for development,and the creation of best conditions for the development of talents;

 Education and training should meet the demands of the national development andfollow progressive trends of life-long continuing education in contemporary time

The Decision also indicates the country’s orientation to Human ResourceDevelopment Plan, and important measures for the development of education and training

in Vietnam in the near future

4.1.2 Dilemmas Faced by Universities

The dilemmas faced by Vietnam's educational system can be viewed through ananalysis of three sets of interrelated issues which could be expressed as a hypothesis inthree statements

Vietnam higher education currently endeavors to serve the socio-economic context in

a better way The expectations and demands placed upon it are multiplied and come from awidening range of constituencies At the same time, there is relatively less support givendirectly to higher education and a limitation in funding One notable consequences of thesetwo somewhat antithetical factors is that higher education must expand and diversify itsresource base and the range of patrons who provide it with financial and other support.These three interrelated statements could be rested analytically at several levels, forinstance: at system level, at institution level, or at a sub-unit level such as disciplinedepartment, or a research center

Table 4.1 Interrelated Issues Affecting Contemporary Higher Education

Increase in Expectations and Demands

Constriction in Funding Rates and other resources

Diversification of Resource Base and Patrons

· Increased rates of participation among

school-leaver age cohort

· Deduction in youth unemployment

· Direct employability of graduates

· Increased enrollments in post-graduate

degrees

· Staff more visible at institution

· More applied research

· Narrowing of teaching profile

· More immediate contribution to

reduction of national deficit

· More direct intervention by government

· Increased demands for accountability

and more tangible performance

indicators

· More engagement of social issues

through equity and access programs

· Increased demands for recognition of

prior learning and credit transfer

· Reduced rates of recurrent funding

· Reduction in academic course andunit offerings

· Delayed or reduced maintenanceschedules

· Pressure for higher rates of facilitiesutilization

· reduced funding for capital works

· Increased obsolescence of plantsand equipment and learningresources

· Delaying in replacing staff

· Retarded salaries reviews andincreases

· Increased student/staff ratios

· Increased emphasis on vocationaland applied courses

· Devolution of management andbudget implementation

· Increased emphasis on fiscalaccountability

· Introduction of changes for serviceinternally and externally

· increased scrutiny of academic staffconditions, e.g study-leave, inquiry-based research

· Development of student fees andcharges

· Elaboration of student loans schemes

· Encouragement of contract and grantresearch

· Expansion of fee-paying academicprograms, e.g international and graduatestudents

· Development of industrial andcommercial collaborations

· Adoption of a more corporate managerialstyle in both administrative and academicareas

· Strengthening alumni network

· Development of donor base, e.g namedbuilding chairs, facilities, or bequests

· Establishment of entrepreneurial units forR&D patents, and other commercialactivities

· Fostering of international linkagesbetween institutions and academic units

· Inauguration of new learning and deliverymodes, e.g distance and open

· Greater utilization of plant and facilitiesthroughout year

· Development of continuing educationand extension programs

(Source: Higher education in Vietnam: change and response, edited by David Sloper and Le Thac Can, Institute of Southeast AsianStudies, 1995)