Management issues of NPO in Vietnam – A case study of AIESEC in Vietnam

Non- public social relief establishments are facilities established and managed by: political organizations, socio-political organizations, socio-political organizations - professional o[r]

Management issues of NPO in Vietnam – A case study of AIESEC in Vietnam

Group sciences: Nguyễn Thị Phương Thảo

Lê Ngọc Thành Nguyễn Trung Long Nguyễn Quốc Bảo Class: AC2015C, IB2015E, IB2015D,

IB2015E Science advisor: Msc Phạm Hương Trang

CHAPTER 1: INTRODUCTION 1.1 Introduction:

Nowadays, the NPOs plays an important role in economic, also knows as a non-business entity NPO is such a global phenomenon that people nowadays say “a NGO community”, “a NGO culture” NGOs engage in modern social activities, which is an organic part of this reality On the one hand, the non-profit organization target their activities to community and social activities Some organizations are create healthy life, rewarding environment for individuals, or to bridge the gap between social classes On the other hand, they accept big expenses in exchange for the other value that they need

There are about 800 NPOs are operating in Viet Nam, out of total of 10,000 NGOs in Asia- pacific region With such development, how they can management NPOs? So that, having full and accurate knowledge of management in NGOs is essential for Vietnam, from macro level managers to local people There is a fact that NGOs and their activities are a reality in Vietnamese social life today

1.2 The necessary of topic:

Today there are many NPOs in Vietnam and they are very confused in management system, which still maintains many issues needed to be solved In reality, many have been dismissed due to their lack of management knowledge In the urgency of this situation in Vietnam, studying management issues of NPOs and the solutions are quite necessary Therefore, this is such an interesting topic

1.3 The goal of topic:

The goal of this research focuses on problems in management of NGOs/NPOs With a case model of AISEEC, authors hope to understand reasons why management systems

of NGOs/NPOs are inefficient and if they require a separate or special management models

1.4 Research questions and methodology:

1.4.1 Research questions:

Base on the objective above, this research aimed to answer these questions:

Question 1: What is NPO/NGO? What are management issues of AISEEC?’

Question 2: How has AISEEC responded to improve their management systems?”

1.4.2 Research Methodology:

Focus case model is AIESEC – the world’s largest non-profit youth-run organization AIESEC Vietnam is

1.4.2 a Research :

The procedure of this thesis includes following step:

Table 1.1 Research process :

Ste

1 Define thesis title, and research issue with supervisor

2 Confirm the approval from supervision

3 Determine research rationale, purposes and procedure

4 Literature review (read and summed up related previous study)

5 Define the problems of management issue by in-depth interview

Design the research by questionnaire, conduct survey to collect data and analysis

6 Request the research content and structure

Apply the thesis proposal

7 Chapter 1: Introduction: Describe the background and the motivation of the

study to find research purposes

8 Chapter 2: Theoretical Background

9 Chapter 3: Management at AIESEC

10 Chapter 4: Conclusion and recommendation

1.4.2 b Data collection:

 Secondary data:

Table 1: Secondary sources and its objective

Textbooks and the internet Provide to the author basic philosophies and

factors to measure the NPO/ INGO management issue

Some documents from AIESEC’s

reports, regulations, and policies Provide to the writer with management issue of admin staff, the turnover and HR policies being

applied in the organization

Thesis, economic newspapers,

journals that have information related

to management issue of AIESEC

Provide the author an overview look at measurement of job satisfaction at some specific industry

CHAPTER 2: THEORETICAL BACKGROUND 2.1 NPO :

2.1.1 Definition of NPO:

Associations, charities, cooperatives, and other voluntary organizations formed to further cultural, educational, religious, professional, or public service objectives Their startup funding is provided by their members, trustees, or others who do not expect repayment, and who do not share in the organization's profits or losses which are retained or absorbed Approved, incorporated, or registered NPOs are usually granted tax exemptions, and contributions to them are often tax deductible Most non-governmental organizations (NGOs) are NPOs

2.1.2 Types of NPO :

 Social relief establishments (SREs)

Pursuant to the Law on Organization of the Government of December 25, 2001 and according to DECREE of Establishment and operation of social relief establishments written by Vietnamese Government in 2007, “Social Relief Establishment” means units of social work activities established for purpose of providing nursing and taking care services to social objects have special circumstances, no living conditions in the family, including: social protection institutions taking care of many groups of social protection beneficiaries, elderly care facility, mental health care facility, facilities for people with disabilities, child care facilities in special circumstances Public social relief establishments are facilities established and managed by state agencies Non-public social relief establishments are facilities established and managed by: political organizations, socio-political organizations, socio-political organizations - professional organizations, social organizations, socio-professional organizations, economic organizations, domestic individuals, foreign organizations and individuals, Vietnamese people residing abroad established in the territory of Vietnam

 Social funs and charitable funds (Funds)

According to Decree No 30/2012 / ND-CP of the Vietnamese Government on the organization and operation of social funds and charity funds:

"Fund" means a non-governmental organization which voluntarily sets aside a certain property for establishment or establishment through a contract, donation or will; For purposes of supporting and promoting the development of culture, education, health, physical education, sports, science, charity, humanitarian and community development

"Social Fund" means a fund organized and operated for the primary purpose of supporting and promoting the development of culture, education, health, physical training and sports, science and community development purposes, not for profit purposes

"Charity Fund" means a fund which is organized and operates with the main purpose to assist in overcoming difficulties caused by natural calamities, fires, serious incidents, patients suffering from serious diseases and other subjects in need of social assistance, not for profit purpose

 Associations:

The Association is a voluntary organization of citizens had the same trades, have the same interests, or have general purpose collection The Association works to protect and promote the rights and legitimate interests of the membership and the community The members of the mutual support in many aspects The Association can exist for many different reasons, for example to protect the animal, the environment, cultural activities, educational activities, professional activities, or sports activities The Association may raise funds from cost of the membership and the revenues from the business and service The Association also is allowed to receive funding from individuals/organizations within and outside the country

 Scientific and technological organizations (STOs)

According to the law on Science and technology, the individual or organization meets the required conditions might formed Scientific and technological organizations Next

to the Scientific and technological organizations established by individuals, organizations in the country, the Scientific and technological organization can also be established by individuals or organizations However, we do not have instructions for

individuals or organizations to join established Scientific and technological organizations in Vietnam Individuals/organizations could be allowed to founder members of a Scientific and technological organization but is not allowed to do permanent members

There are many different ways to classify the Scientific and technological organization Based on ownership structure, Scientific and technological organization

is classified as a public Scientific and technological organizations, the private Scientific and technological organizations, and Scientific and technological

2.2 INGO

2.2.1 Definition:

International nongovernmental organizations (INGOs)are not-for-profit voluntary associations operating at the international, transnational, or global level, with members

or participants from many countries They bring together like-minded individuals or associations of individuals to conduct a wide variety of activities across virtually all social domains, from astronomy to football to plant biology to zoo management Although the best-known INGOs focus on human rights (for example, Amnesty International), the environment (Friends of the Earth), disaster relief (the Red Cross), and the like, most INGOs are found in scientific, technical, business and industry, medical, and professional domains Sizable numbers are also active in domains such as sports and recreation, development, education, women’s rights, and many others

(http://what-when-how.com/social-sciences/international-nongovernmental-organizations-ingos-social-science/)

2.2.2 Characteristics:

Most foreign NGOs implementing the project in Vietnam respect the principle of trilateral relations: local government - people - foreign NGOs, in which people are taken at the center of development and people's participation is respected at every stage of the project cycle, ensuring direct aid to the people

2.2.3 Advantages:

First, the role of financial support Approximately 76.1% of INGOs hold a financial support role; over 58.2% had a technical support role and nearly 52.2% played a

supporting role According to the INGOs, in parallel with financial support, technical assistance and methodological support will ensure quality projects In addition, up to 41.8% and 44.8% of INGOs have the role of implementing or co-developing projects with local partners Project implementation methods and technical knowledge are the most important contributions of INGOs in Vietnam

Second, supportive roles in addressing community issues INGOs are a channel to support the poor - vulnerable groups that the State has not paid much attention to In Thanh Hoa and Yen Bai, the INGOs play the role of humanitarian relief, credit, or rural infrastructure construction These are the most important and most invested activities of most of the INGO working in Vietnam

Third, sharing experience role In addition, to contribute directly to the changes in people's lives, INGOs also have the role of sharing experiences, methods and techniques of developing national programs, policies and legal frameworks for related issues Many INGOs, such asOxfam International, contributed directly to the development of the 135 program of the National Committee for Ethnic Minorities and the social allowances of the Ministry of Labor, War Invalids, and Social Affairs PATH (Program for Appropriate Technology in Health) is an international non-governmental organization working in the health sector) involved in the development of the Law on HIV Prevention; Cooperative for American Remittances to Europe is a humanitarian and development aid organization, involved in the development of a national disaster preparedness and response strategy

Fourth, people are diplomacy role NGOs play the role of bridging information

between Vietnam and other countries in the world In fact, there is a great deal of exchanges between Vietnam and countries through staff, citizens and donors of INGOs through workshops or exchange of experiences INGOs are channels to attract more capital and expand external relations, thus enhancing Vietnam's image to the world, introducing Vietnam's open, friendly environment

INGOs are not the only implementing projects, funding programs but also setting up Ethnic Minorities Working Groups In 2015, the main members of the group contributed personnel, time and funds to the group's activities Activities of the group

is aimed at three main objectives: Developing a program to support the

socio-economic development of ethnic minority and mountainous areas in the 2016-2020 periods; establishing the national target program on sustainable poverty reduction for 2016-2020; Committing to promote cooperation, sharing and mobilizing resources for sustainable poverty reduction for ethnic minority communities The third objective is both the commitment and the group's recommendations for poverty reduction activities

in Vietnam for 2016-2020 and the achievement of sustainable development goals by 2030

In summary, INGOs have played an important role in poverty alleviation and sustainable development in line with Vietnam's socio-economic development priorities and orientations The activities of INGOs bring many positive benefits and positive changes in the lives of Vietnam Involvement of INGOs in Vietnam's development has created a more multidimensional view of economic and social issues as well as development patterns INGOs contribute to making Vietnamese society more open and more integrated into the international community Viet Nam appreciates the help of the INGOs The level of INGOs' participation in poverty reduction and the socio-economic development of Viet Nam are increasing Reflecting the number of INGOs operating in Vietnam is highly increasing, sectors and geographical areas of operation increasingly, a growing aid levels, the relationship between Vietnam and INGOs government has elevated to partnership

2.2.4 Disadvantages:

Firstly, some agencies and units have not paid adequate attention to and still confused

in performing the State management over diplomatic activities, especially the people diplomacy, including reception, management and usage of foreign non-governmental aid

Secondly, aid recipients are not active and comply with timely reporting according to the reporting regime stipulated in Decree 93/2009 / ND-CP and Guiding Circular No 07/2010 / TT- BKH of the Ministry of Planning and Investment

Thirdly, the aid-receiving agencies and units have not had specialized sections with full capacity and experience yet to advise the local leaders and units in mobilizing, receiving and managing the projects funded by foreign non-governmental aids

2.3 Management issues of NGO/INGO:

2.3.1 Not making decisions based on mission:

One Non-government organization management issue is that organizations run into is not basing their decision-making on their organization’s mission and values Making decisions solely on intuitions or spur of the moment benefits is not the best approach for nonprofits focusing on sustainability That could be understandable while human is

an entity blended by 2 elements: Logic & emotion, so every decision involves these elements We all know that, the more logic part involves, the better decision be created The pressure on the job of the leader is increasing: the promises to be made, the pursuit goal, lack of adequate rest , makes entrepreneurs today vulnerable to negative emotions attack When the emotion rules the decision making process, the decision may lead to Mission creep Mission creep is one of the most common and greatest threats in the nonprofit organization

What is mission creep? According to Cambridge Dictionary, Mission creep is a change that pushes an organization past its original goals and objectives Mission creep can cause an organization to overextend their organization scale, cause processes to become ineffective, and produce a change in brand perception (both internal or external)

2.3.2 No Succession Plan

Another common management issue in the nonprofit sector is the lack of a strategic succession plan

What is the succession plan? Succession planning is the process of identifying and developing new leaders who will replace existing leaders in the future.Succession planning is not an issue that many organizations address in any systematic way Because many nonprofits are small (with fewer than 10 employees) and because they may be facing other organizational challenges, thinking about who the next executive director might be or what would happen if the director of finance suddenly left is not high on their priority list

There are many reasons why organizations need to be thinking about succession planning The most important reason, of course, is that we rely on staff to carry out our missions, provide services and meet our organization's goals We need to think about what would happen to those services or our ability to fulfill our mission if a key staff

member left.Another reason to focus on succession planning is the changing realities

of workplaces

Not having a succession plan in place can lead to unwarranted process changes, a blurred vision, and the potential of another nonprofit management issue

2.2.3 Lack of Strategic Budgeting

One of the biggest challenges in the non – government organization in general and nonprofit organization in specific and for nonprofit management is strategic budgeting Described byRoy T Meyers - Assistant Professor of Political Science, University of Maryland, Baltimore, strategic budgeting is the process of creating a long-range budget that spans a period of more than one year The intent behind this type of budgeting is to develop a plan that supports a long-range vision for the future position

of an entity

Budgeting can be difficult in the nonprofit industry as most organizations do not have access to a lot of excess funds How your nonprofit plans and executes its budget can make or break organizational success

2.3.4 Limited Operational Time Tracking

Tracking time in a nonprofit organization is invaluable The data gathered can help your organization realize how many employees and volunteers are required to achieve the mission strategically Effective time tracking can also open up the door for additional time allocation in areas of the nonprofit that needs more development Your nonprofit should also be actively tracking your volunteer time and reporting this data

to them for their own personal records Having a system in place makes your organization look more professional and can increase your retention rates

CHAPTER 3: MANAGEMENT AT AIESEC 3.1 Introduction of AIESEC:

AIESEC is the world's largest non-profit youth-run organization It is an international non-governmental not-for-profit organization that provides young people with leadership development and cross-cultural global internship and volunteer exchange experiences across the globe, with a focus to empower young people so they can make