Development of corporate culture at thaco group phát triển văn hóa doanh nghiệp tại thaco group

Objectives The thesis's research objectives include systematizing some basic theoretical issues on corporate culture and development of corporate culture; evaluating the results of deve

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

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ĐỖ THỊ LAN ANH

DEVELOPMENT OF CORPORATE CULTURE

AT THACO GROUP

PHÁT TRIỂN VĂN HÓA DOANH NGHIỆP

TẠI THACO GROUP

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2020

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

ĐỖ THỊ LAN ANH

DEVELOPMENT OF CORPORATE CULTURE

AT THACO GROUP

PHÁT TRIỂN VĂN HÓA DOANH NGHIỆP

TẠI THACO GROUP

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS TS NGUYỄN NGỌC THẮNG

HÀ NỘI - 2020

i

DECLARATION

The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article

The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration

Date………

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TABLE OF CONTENTS

DECLARATION i

LIST OF TABLES v

LIST OF CHARTS AND FIGURES vi

BACKGROUND 1

CHAPTER 1: THEORETICAL FRAMEWORK ON CORPORATE CULTURE DEVELOPMENT 5

1.1 Overview about the study on corporate culture development 5

1.1.1 Situation of foreign study 5

1.1.2 Situation of domestic study 8

1.2 General concept on corporate culture 9

1.2.1 General concept on culture and business culture 9

1.2.2 Concept on corporate culture 10

1.2.3 Identity of corporate culture 11

1.2.4 Brandname 12

1.3 Necessity to design and develop corporate culture 13

1.3.1 For enterprise: 13

1.3.2 For the society 14

1.4 Characteristics of corporate culture 14

1.4.1 Visual characteristics of corporate culture 15

1.4.2 Non - visual characteristics of corporate culture 17

1.5 Constituents of corporate culture 19

1.5.1 Management and business philosophy 19

1.5.2 Personal and organization motives 19

1.5.3 Procedures and regulations 19

1.5.4 Information exchange system 20

1.5.5 Movement, rituals, etiquettes 20

1.6 Benefits of corporate culture development 20

1.6.1 For enterprise 20

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1.6.2 For non-enterprise: 21

1.6.3 For branding of products and services 22

1.7 Steps of corporate culture development 22

CHAPTER 2: RESEARCH METHODOLOGY 24

2.1 Methodology 24

2.2 Research procedure 24

2.3 Data collection sources 25

2.3.1 Primary data source 25

2.3.2 Secondary data source 25

2.4 Data collection method and tools 25

2.4.1 Data collection method 25

2.4.2 Data collection tools 25

2.5 Data analysis and processing method 27

2.5.1 Primary data processing method 27

2.5.2 Statistics and comparison methodology 28

2.5.3 Descriptive statistics methodology 28

2.5.4 Analysis and synthesis method 28

CHAPTER 3: EXISTING STATUS OF CORPORATE CULTURE DEVELOPMENT IN THACO GROUP 30

3.1 Overview about Truong Hai Automobile Joint Stock Company (THACO) 30

3.1.1 History of development of Truong Hai Automobile Joint Stock Company 31

3.1.2 Organizational structure in Truong Hai Automobile Joint Stock Company (THACO) 33

3.1.3 THACO's value chain 35

3.1.4 Evaluate human resources characteristics in THACO 36

3.1.5 Evaluate the operation performance in the period of 2015 - 2018 39

3.2 Existing status of corporate culture in THACO through visual characteristics 40

3.2.1 Available cultural values of THACO 40

“3.2.2 Corporate culture development through 8 T principles in THACO 41

3.2.3 Corporate culture development through THACO song 42

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3.2.4 Cultural development through Code of Conduct in THACO 42

3.2.5 Corporate culture development through THACO HR evaluation culture 43

3.2.6 Corporate culture development through THACO typical publication magazine 47

3.2.7 Corporate culture development in other charity activities 47

3.3 Existing status of corporate culture in THACO through non-visual characteristics 48 3.3.1 Corporate culture development through converting THACO culture into action by each member 48

3.3.2 Corporate culture development through emphasis level in THACO 51

3.3.3 Corporate culture development through working environment in THACO 52

3.3.4 Corporate culture development through cultural rituals and expression in THACO 52

3.3.5 Corporate culture development through Culture - leadership style in THACO 55 3.4 Evaluation of corporate culture development in THACO group 56

3.4.1 Achievements 57

3.4.2 Shortcomings 57

CHAPTER 4: SOLUTIONS FOR CORPORATE CULTURE DEVELOPMENT IN THACO 60

4.1 ThACO’s development and operation orientation to 2020 60

4.2 Corporate culture development solution in THACO 64

4.2.1 Improve working capacity of the Culture - Communications Board 64

4.2.2 Improve and raise the awareness on corporate culture for the employees 66 4.2.3 Perfect the annual HR evaluation procedure 67

4.2.4 Design the behavior culture manual, governance regulation and rule system in THACO 69

4.2.5 Design and develop THACO brand 69

4.2.6 Set up corporate culture development procedure in THACO 70

4.3 Some recommendations 70

CONCLUSIONS 74 APPENDIX

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LIST OF TABLES

Table 1.1 Characteristics of corporate culture 14

Table 2.1: Summary of questionnaire structure for official study 27

Table 3.1: Statistics of THACO employee gender and age updated on October 2018 36

Table 3.2: Statistics of THACO employee qualification, updated on October 2018 37

Table 3.3: Some business performance in the period of 2015 – 2018 39

Table 3.4: HR evaluation table in THACO 43

Table 3.5: Applicable standard criteria table of THACO 44

Table 3.6: General evaluation on corporate culture of THACO members 50

Table 3.7: Survey table on members’ awareness on corporate culture 53

Table 3.8: Influence of leadership style on THACO members 55

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LIST OF CHARTS AND FIGURES

Figure 3.1 THACO market share revenue in 2018 32

Figure 3.2: Standard logo of THACO 36

Figure 3.3: Evaluation of labor age percent in THACO updated on October 2018 37

Figure 3.4: Available qualification of THACO staff, updated on October 2018 38

Figure 3.5: HR evaluation procedure in THACO 44

Figure 3.6: Sequence of approving the annual HR evaluation results 46

Figure 4.1: THACO's operation and development orientation to 2020 60

Figure 4.2: THACO development mission to 2020 62

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BACKGROUND

1 Necessity of the study

With response to the international and regional economic integration development trends, Vietnamese enterprises and organizations are put under increasingly high pressure not only from the foreign counter-partners but also cut-throat competition even in each agency and organization The Vietnamese and international practice proved that a positive cultural environment is a reliable background to successfully compete and create the sustainable development for the organization and enterprise However, in such globalization trend, the cultural assimilation is tended to increase In order to prevent from becoming a cultural consistency, each organization is required to maintain and uphold its own culture Culture decides the survival of an organization and helps it further develops out

of the starting point of founders Culture is also recorded as an intangible asset of such organization Culture helps the organization to reduce the conflict, coordinate and control, motivate the employees and enhance the competitive advantages By reducing the conflict, culture cements the organization’s members who may be unified in terms of understanding, evaluation, and selection and action orientation When the organization is faced with conflict tends, members are unified by the culture When a complicated decision is required, culture helps the organization to narrow down the options to be considered, motivate the employees so that they may master their job objectives and orientation, creating the good relationship between the employees and a convenient and healthy working environment

Organization culture plays an important role not only for improvement of comprehensive work performance but also an important solution to successfully improve the competitiveness Culture creates the differences and distinguishes among organizations

Corporate culture may be regarded as one of valuable intangible asset of each enterprise Corporate culture may create trust for each person working in such environment, a link among the members of the enterprise, creating the voice between the members and improving the enterprise’s competitiveness Therefore,

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corporate culture may be regarded as an important mechanism in managing human resources Meanwhile corporate culture is really merged into the objectives of each member, then, they may consider the enterprise’s objectives as their personal objectives That is why culture-based management may drive the enterprise’s long-term development

To become the universal industrial Group and Vietnamese Brandname to be recognized as the regional leading position in ASEAN, THACO is required to make ceaseless efforts to develop its internal force, renovate the thinking and action, and improve the quality and scale of the staff In order to do these, one of important tools to manage and govern the Company is THACO culture

By always submerging the idea that the staff is the important resources to create the success and sustainable development, THACO culture is oriented toward developing a qualified staff with strong will, positive working attitude, high creativeness and high sense of qualification improvement to be able to work in a discipline and contribute to the Company's development As a result, they become the person useful for the society and the Country

With awareness of significance of corporate culture on enterprise’s success and the sustainable future of the Group, creating a reliable premise to extend to the

region and the world, “Development of corporate culture in Thaco Group”

(THACO) topic is selected as the author’s graduation thesis

2 Objectives

The thesis's research objectives include systematizing some basic theoretical issues on corporate culture and development of corporate culture; evaluating the results of developing Thaco Group to be cemented with the Group's development and growth, proposing some possible solutions to successfully develop Thaco Group's corporate culture

By analyzing and comparing the theories with the practice by constituents of organization culture; Analyzing the concerned concepts, phenomenon of objective and non-objective corporate culture; viewpoints and development of corporate culture; evaluating the existing conditions of maintaining and developing the

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corporate culture at Thaco Group, awareness of achievements and obtained values; Analyzing the shortcomings and its root causes; Analyzing the available characteristics of the unit; accordingly, suggesting the development orientations for the corporate culture, giving out the proper development method and progress, convincing and feasible solutions and recommendations on corporate culture development for the local unit

3 Subjects of research

Subjects of the research are the corporate culture, including: Factors affecting the corporate culture, characteristics and forms of corporate culture, levels of corporate culture The respondents include officials and employees of THACO

4 Scope of research:

4.1 Scope of space:

Thaco Group’s branches extend nationwide, including 3 Branches, namely: The North, the Central and the South, general office in Ho Chi Minh City and Hanoi office Questionnaire is launched in Showrooms, branches and subsidiaries of Thaco Group

4.2 Scope of time:

The scope of space is launched at Thaco Group

Regarding the scope of time, secondary data collected from key period of 2013

- 2018 is used herein The secondary data is used to forecast Thaco Group’s development up to 2022 Primary data was collected in 2018 via questionnaires The solutions on perfecting the corporate culture to 2022 are proposed by the study

5 Research methodology

A series of methodologies are applied by the thesis:

Statistics methodology: Thaco Group’s data summary is related to corporate

culture development

Analytic method: The reports on Thaco Group's culture development and

implemented solutions are analyzed

Method of listing, comparing and evaluating the sociology survey method:

Questionnaire uses 3 question types, including closed questions (Yes or No, not go

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in-depth into the feelings of the respondent as predetermined below that the respondent only marks the questions that he/she agrees), opening questions (the question enables the respondent to specify his specific viewpoints into the questionnaire) and combined questions

Number of questionnaires: 300

Respondents: Leaders, official and employees of Thaco Group Respondents shall be collected, selected and named in the list (300 respondents) before official launch is initiated Secondary data is collected from the previous studies Data collection is initiated within Thaco Group by accessing and collecting the 5-recent-year data and information from Thaco Group's Board of Culture Communications and Board of Planning and Finance

Data processing and analysis method: statistics methodology, analytic method,

comparison methodology are applied to clarify the theories The theoretical review

is combined with the general practice to clarify the basic contents hereof Moreover, the thesis is also inherited and developed from the related studies’ findings to clarify the main topics of the thesis

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CHAPTER 1: THEORETICAL FRAMEWORK ON CORPORATE

CULTURE DEVELOPMENT

1.1 Overview about the study on corporate culture development

Corporate culture or company culture has been widely studied and announced in the world and in Vietnam by many researchers Approaches to the corporate culture are varied by each researcher

1.1.1 Situation of foreign study

Corporate culture in the world is generally characterized by 2 different research orientations The first orientation is to approach under the perspective of ongoing business administrators (micro-approach), focusing on searching and looking for the management nature of the cultural factors in business administration The second one is to approach from the perspective of the cultural factors’ impact on business administration (macro approach), focusing on the cultural factors’ impact on businesses, especially for businesses with a multicultural or organizational environment

a Three-tier corporate culture model of Schein

Three-criteria-based evaluation method of corporate culture is applied by Schein's research model, concretely: Tangible structure, announced value and general concepts, implications The evaluation method of corporate culture is considered to be more practical than the theoretical value of that of the competitive value framework That is the three-tier corporate culture model (Schien 1999) Schein’s model is focused on three levels of culture that are the three evaluation criteria of culture, from practice, implications to invisibility:

- Level 1 (Practice): Provide specific evidence such as folk stories, protocols, stories and symbols

- Level 2 (Standard value): Explain the strategy, purpose and philosophy to guide the thinking and behavior in the enterprise

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- Level 3 (General implication assumption): Including the basic assumptions, awareness, value, trust and especially from the founder or the leaders of the Company

Advantages: Evaluation method under E Schein model is relatively simple and easy to perform, suitable with the enterprise with restricted time and budget for understanding its own culture By using this model, the leader is facilitated to effectively identify, in particular, the cultural elements of the business, and analyze the relationships between tangible and cultural values which are deeply originated from the business initiated by the company Similarly, the leaders find the cultural elements to be changed to be well matched with the Company’s ever-changing environment in accordance with new competitive conditions and new regulations

b Studies launched by Recardo and Jolly

Recardo and Jolly (Recardo & Jolly, 1997) unveiled that, when the corporate culture is mentioned, it often covers the system of values and beliefs that are understood and shared by members of an organization A culture helps to shape and define members' behaviors and organizational policies Corporate culture is measured by 8 aspects, concretely:

- Communication: Quantity and forms of communication, what information is

communicated and by which way, open communicative system must be provided

- Training and development: The administrators’ commitment to offer the

great development and organizational opportunities that new skills are enabled to be applied for the practice Moreover, training programs are provided to successfully satisfy the employee's current or future development needs

- Bonus and recognition: The rewarded behaviors and the applicable bonuses,

employees to be rewarded individually or collectively, promotion criteria, and the degree to which the organization provides feedback on the job satisfaction level

- Decision making: Decision making is related to the questions such as how

the decision is made and how the conflicts are handled Decisions are quick or slow The organization is high ranking Decision making is characterized by concentrating

or decentralizing

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- Risk acceptance: Creativeness and renovation are highly appreciated and

rewarded Risk acceptance is encouraged and welcome with the new ideas Employees are punished or motivated to test the new ideas

- Plan orientation: Planning is short term or long term, and future planning is

applied, which visions, strategies and objectives are shared with the employees To which extent, the employees make commitment to fulfill the enterprise’s strategy and other organization objectives

- Group work: This aspect relates to the issues, including significance, form

and effectiveness of group work in the organization It includes the significance of cooperation among various departments, trust between the functions or units, and mutual support for work performance

- Governance policies: This aspect measures fairness and consistency with the

implemented policies, the impact of member governance styles and the governance level that provides a safe work environment

c The Denison model (1990)

The Denison model is based on 200 years of research on how corporate culture affects the performance of businesses Denison's research has found a link between the organizational culture evaluation score and the key performance results

of the business such as profitability (ROE, ROA, ROI), growth (sales growth rate) , market share), quality, innovation, employee and customer satisfaction

This model aims to analyze and evaluate the constituent factors and influence

on corporate culture including 4 main feature frames, each characteristic frame is assessed through 3 scales, each scale consists of 5 similar variables corresponding

to 60 questions in the Denison questionnaire

Based on the model, we can see the correlation between the cultural factors

of the model and important data about the organization's activities For example, a high score in a Stable region tends to show the strongest relationship with profitability, while a Flexible area has a strong relationship with performance such

as innovation and customer satisfaction Hay cultural factors that exhibit Outward-Focusing tend to have strong relationships with the overall development of

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the organization while factors related to Introverted are related to performance measures such as performance, quality and employee satisfaction

1.1.2 Situation of domestic study

a According to the study released by Asso.Prof.Dr Do Minh Cuong

Presented in the course books “Business culture and philosophy” of the National Political Publishing House, published in 2001, the definition on corporate culture is released by focusing on in-depth research of business philosophy issues (Do Minh Cuong, 2011)

b According to the study of Nguyen Anh Tuan, M.A and Nguyen Phuong Mai, M.A

Research objectives and contents: Analyze the mutual interaction between the enterprise's cultural environment and the selection and implementation of strategies initiated by Vietnamese enterprises in the ever-changing economic period Offer the possible recommendations for Vietnamese enterprises to successfully develop a corporate culture in accordance with the strategic orientation and good match with the changing environments Main findings: Specify the impact of economic and social characteristics in the transition period to the issue of awareness and how to develop the corporate culture and business strategy Determine the existing conditions of corporate culture that is compatible with the strategy of Vietnamese corporate culture Put forward some recommendations and set up the corporate culture that is compatible with the business strategy Training results of the study: References for Strategy Management and Corporate Culture (Nguyen Anh Tuan and Nguyen Phuong Mai, 2011)

c According to the study of Nguyen Viet Loc, M.A

Entrepreneurship is recognized as the core values categorized as the qualities, capabilities and moral qualities that must be obtained and pursued by the entrepreneurs By inheriting the studies on entrepreneurship and entrepreneurship culture, a cultural value system of Vietnamese entrepreneurs has been designed and developed in accordance with the core factors of entrepreneurship, including: Great business aspiration; Capacity to search, create, master business opportunities;

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Independence, determination, confidence; Dare to do, dare to take responsibility; Flexibility, activeness; Always application of new ideas, methods and solutions to solve new problems; Business ethics and corporate social responsibility It is also given out hereof to measure and simulate such factors to facilitate the evaluation and orientation of Vietnamese enterprises’ cultural values in the context of international economic integration nowadays (Nguyen Viet Loc, 2011)

1.2 General concept on corporate culture

1.2.1 General concept on culture and business culture

The history of development has proved that culture is the most important factor

to distinguish the nations, regions or groups of persons, including individuals, etc

"Culture affirms the development, demonstrates the power of society and the people

it represents.” Rabin Dranath Tagore, the Indian famous writer (1861-1941) affirms that: “responsibilities of each nation are to clearly show the world its unique identity He thought that if a people does not bring anything to the world, it shall be

so bad, it shall be worse than perdition and not be forgiven by the history” “”

Terms “culture” is originated from Latin language, i.e., “Cultus” refers to cultivation, care of trees Then, “cultus” is extended to the social fields, implicated for spiritual care, education and human training towards a better orientation

To the widest scope of research: “Culture is the master of spiritual and physical values created by the persons during survival and development” “Physical values may refer to: beauty spots, pagodas, temples, historical relics as well as the traditional cultural products For example, Vietnam is recorded with: Bat Trang ceramic village, Dong Ho picture or historical relics such as: Hoang Thanh Thang Long, Temple of Literature The spiritual values are demonstrated in the living habits, folk songs, “hat xam”, adoration, and especially Vietnamese Xoan singing recognized by UNESCO as an intangible cultural heritage representing the humanity.”

To the narrower scope of research: “Culture refers to the activities and spiritual value of the human beings” To this extent, Scientific culture such as mathematics, physics, chemistry, culture and concerned industries, etc., and art culture such as

Another famous cultural researcher, Federic Mayor, UNESCO's Chief

Executive Officer (1987 -1999), gave out a specific definition, concretely: "Culture reflects and demonstrates generally and vividly all aspects of life (of each individual and community) that took place in the past as well as happen in the present, over the centuries It constitutes a system of traditional values, aesthetics and lifestyle which each ethnic group asserts its own identity.” Through the

aforesaid investigations, a concept on culture may be drawn out as follows:

“Culture refers to all spiritual and physical values created by the human beings during survival and development”

“1990s witnessed the appearance of term of business culture and corporate culture Business culture appeared before the corporate culture Such two concepts are simultaneously used and mutually supported to each other.”

Therefore, corporate culture is the expression of business culture at corporate level hence, it is concluded that corporate culture is a phenomenon and part of the business culture

1.2.2 Concept on corporate culture

Each organization is supported by certain standards of moral values, typical images, anecdotes, idiosyncrasies and typical styles that are recognized, implemented, complied and communicated by all members by time It is acted as the reliable basis for the organization members to follow and create the important influence on routine behaviors of every member

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Corporate culture is construed as: “a system of meanings, values, key trusts, awareness and thinking method to be agreed by the organization members, widely affecting the member’s action manners”

The question is that: What is corporate culture? Corporate culture is characterized by various definitions and understandings The scholar Georges de

Saite Marie – a French expert on SMEs defined that: “Corporate culture refers to collection of values, symbols, legend, protocols, prohibitions, physiology and moral viewpoints to create the reliable background of the enterprise” It is possible to see

that the concept only summaries the constituents of corporate culture, rather than

mutual relation inside the enterprise

A relatively popular definition on “Corporate Culture” of the scholar Edgar H Schein, an US expert, recorded with many years in studying the culture is shown as

follows: “Corporate culture is the collection of rules and procedures acquired by the enterprise members during problem solving, adapted from outside and internally consisted in the enterprise.” “Such rules and procedures are the triggers

for the members to select the action method, analyze and make proper decisions without hesitating about the meanings of such rules and procedures It is considered

to be correct from the beginning.”

In short, even it is defined differently from time to time, it is possible to reach

an agreement on corporate culture definition, concretely: “Corporate culture refers

to a system of value, concepts and behavior rules to be internally shared by the enterprise, governing the feeling, thinking and how to act of members during pursuing and fulfilling the general objectives, creating an unique identity of each enterprise.”

1.2.3 Identity of corporate culture

Identity is characterized by corporate culture philosophy, unique phenomenon

of style, action, behavior of organization, reflecting the selected values and philosophy Organization's cultural identify is clearly demonstrated by organization members’ behavior It is also the sign to show the consistency in terms of awareness, key philosophy values of the company.”

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“Corporate culture identity is not long-lasting; it may be varied by following characteristics:

 “Cultural identity may be created: Persons who may create the cultural

values and identities are founders Since its inception, the organization’s missions and individual's cultural identity values are specified

 “Cultural identity may be formed by strengthening: In such cases, leaders

find the way to protect and preserve the prevailing moral and cultural values They may be very successful outstanding characters in some fields, or they may undertake the position and responsibilities for preserving and enhancing the created cultural identity Therefore, operating philosophy culture is deeply submerged in the consistent culture

 “Cultural identity may be formed by integration: Leaders often apply the

leading and integrating style, attentively listen and find the best way to successfully integrate, act as a bridge to connect, regulate, motivate and share with other persons Thence, leadership philosophy and style are deeply characterized by integration culture.”

 “Cultural identity may be changed: Changes in culture may be required

when the fundamental changes are recorded in the organization such as industrialization or technology, foreign culture integration (cross-culture), changes

in senior managers Pressure of such changes requires to take the great and fundamental changes in terms of leadership style, philosophy and action guidelines When the culture is changed, leadership philosophy and style are deeply characterized by adapt culture.”

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Brandname “is a collection of customer’s feelings on a company, a product or service in all material aspects: Description of identification, values, properties and identities Brandname binds the consumers through brandname -consumer relation

In terms of identification, Brandname is a name or signal to identify a product

A successful brandname is the milestone for a product with sustainable competitive advantages BMW, Coca Cola, etc., are the typical examples on corporate brandname, while Louis Vuiton, GUCCI, Dove, etc., are typical examples of product brandname Hence, it is possible to understand that: “Brandname is a non-physical component but essential to an enterprise Once the products are qualified with the levels that are almost indistinguishable by nature, characteristics and benefits, brandname is the only factor that makes the difference between the products and the brands, demonstrating the great trust and safety ”

1.3 Necessity to design and develop corporate culture

Such style for the enterprise is as important as “water and air” for the people It is easy to realize a style of a successful enterprise Such style is often foot printed with an extremely strong impression to the outsiders and great pride of the enterprise members Corporate culture creates the behavior patterns, widely accepted and complied

by the members, demonstrating the good harmony within the business in general, as well as making decisions in specific cases Such patterns are general standards and values to commend the good behaviors and criticize the bad behaviors, thence, the persons may know what should to do and what should not to do

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Corporate culture enhances the work motivation, facilitating the loyalty, engagement, creativeness and devotion of the staff

1.3.2 For the society

Entrepreneurs in particular and interested persons concerning the economic growth in general acknowledge the special role of corporate culture in economy development Culture itself is always implicitly submerged with humanism values; therefore, corporate culture always requires businesses to closely cement to business efficiency with humanity in business: Efficiency cannot be obtained at any cost that humanism values are ignored Simultaneously, production and business activities of each enterprise are oriented towards improvement of the community, ethnicity spirit, and businesses are encouraged to join the social activities such as poverty reduction, relief for natural disaster victims, charitable activities, etc If cultural elements are unavailable, the society will have to bear the extremely serious consequences, especially exhaustion of natural resources, discharge problems, and environmental pollution caused by production

1.4 Characteristics of corporate culture

Corporate culture is demonstrated through typical signs, phenomenon and characteristics Characteristics refer to anything which may be used to demonstrate the contents of corporate culture, key philosophy, value and trusts, how to aware and critical thinking to help the members during their awareness to correctly reflect the awareness of the members and entire organizations

Characteristics are used to represent the contents of corporate culture, so-called

as visual symbols Such symbols facilitate the easy seeing and hearing Non-visual characteristics are specific signs to be demonstrated in the members’ awareness level on corporate culture

Table 1.1 Characteristics of corporate culture

CHARACTERISTICS

- Interior and exterior architecture - History of development and tradition

- Vision, mission and core values

- Trust value and attitude

- Business philosophy

- Personal and organization motives

Source: Collection by the author in the 2018 study

1.4.1 Visual characteristics of corporate culture

a Architecture characteristics

Particular architecture includes office’s exterior and interior architecture used as the company’s logo and images to create the familiar and good will impression of the Company

Architecture design is widely interested by the organizations because:

- Exterior architecture may significantly affect the human behaviors in terms of how to communicate, react and perform the works For example: church architecture gives a strong, powerful impression; The pagoda creates an impression

of transparency and continuity; The library impresses highly and intellectually

- Architectural works may be considered as a “mascot” denoting a certain meaning or value of an organization or society For example, France's Eiffel Tower, China's Great Wall, Temple of Literature, One Pillar Pagoda, etc., has become an image and symbol of a national and local spiritual value

- Structural design may be regarded as a symbol of the organization's strategic motto

- Architectural works become an organic part of the company's products

- Each architecture is submerged with historical values associated with the availability and growth of the organization

b Rituals, etiquettes

One of characteristics of corporate culture is rituals and etiquettes These are carefully planned and prepared activities in the form of activities, official socio-cultural events, serious and emotional activities that are carried out periodically or

c Symbol, logo

Another tool of corporate culture characteristics is the symbol The architectural works, rituals, anecdotes and logo contain the logo’s characteristics through physical and tangible values Such characteristics aims to convey a potential value and meaning to the receiver in various manners The most important thing of branding is to select the name, logo, package design and various attributes to identify a product and distinguish it with others

Another symbol is the logo or creative masterpiece to be designed to demonstrate the image of an organization or a business in the popular artistic language Although logo is a very simple demonstration, it is assigned with a great significance Hence, it is remarkably focused by organizations and businesses Nowadays, logos of the world's leading brands such as Coca-Cola, Microsoft, Toyota, etc., have been received with the worldwide special attention and influence

A brand's logo must be developed with specific cultural meaning and submerged with the culture identity Brand logo must be well matched with the various culture or languages

d Short stories, anecdotes, typical samples

Short stories are stories which are often developed from typical events in terms

of values and philosophy of corporate culture reminded and disseminated to new members by the organization In the stories, the typical samples are often mentioned They are ideal pattern in terms of behavior suitable with the standards and corporate culture values Typical samples may be personified into myths with the qualities and characteristics of many good examples or expectations of values and beliefs in the organization Stories aim to maintain the vitality of the organization's original values and help to unify the awareness of all members

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Model characters embody the values and lasting power of the business These are the enterprise’s core figures, facilitating to create a distinctive image of the business, making the outstanding results simpler, promoting many classes of employees to follow, strengthen and promote the cultural environment in the enterprise

a company's business and operational philosophy Therefore, it must be closely linked with the mission statement of the organization or company to thoroughly understand their implicit meaning For example the slogan of Vietjet Airway:

“Enjoy Flying”; Heineken: “It could only be Heineken”; Trung Nguyen Coffee:

“Explore creative inspiration”

f Typical publication

Typical publications are the official data which may help the stakeholders to thoroughly understand the cultural structure of an organization It may be the mission statement, annual report, advertisement booklet, brochure about the organization, company, traditional yellow book, periodic or special publications, advertisement documents on products and company, user’s manual, warranty instructions, etc

Strength of corporate culture is characterized by consent of organization members regarding the significance of specific values In case of consent, corporate culture cements the members and generates the powerful strength to develop a strong culture for the organization

1.4.2 Non - visual characteristics of corporate culture

a Ideal/mission

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Ideal means applying the theories into practice Corporate culture is interpreted towards this orientation to emphasize the motive, meanings, lofty, basic and profound values to help people to sympathize, feel and be touched by things and phenomena Ideal is formed from people trust, values and feelings

b Value, trust and attitude

In nature, value is the concept related to moral standard and unveiled what should be done Honesty, consistency and opening are highly appreciated by the individuals and organizations, assuming that they should act persistently and frankly

Trust refers to a concept covering the matter how it should be correctly conducted In practice, it is difficult to separate this concept because trust always contains values Values are considered as the reliable trust in how to perform or certain status Leader trust is gradually transformed into collective trust through the values However, it is possible to appear the difficulties due to information barriers Attitude is the bonder of trust and value through feelings Attitude is defined as

a empirical thinking habit to react in a consistent or unwanted way to things and phenomena

In short, trust and attitudes are the enterprise's spiritual values, a system of values and principles shared and spread among employees Such values are formed from characters and expectation of the leaders, facilitating the staff's contribution during business, often accumulated, amended and adjusted by time with history of development of enterprise

c History of development and cultural tradition

The history of development and tradition of an organization are symbols of the values and philosophies that are selected during the operation respected and preserved by many generations of the organization; they are used by the organization to demonstrate the key values and the action motto to be persisted The practice unveiled that organizations with a long history of development and

a traditional tradition are often more difficult to change in organization than new, young organizations, not clearly defining the style or cultural characteristics The

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traditions, customs and cultural factors that have shaped and appeared in the history are both a support and valuable lessons for the next generation of staff to follow However, it may also become "psychology barrier" which is not easy to overcome

in building and developing new cultural characteristics Because these values are rigid, the fear of change restricts the creation and expansion of the business’s production perspectives

In short, these are very close phenomenon which is perceived and ceaselessly developed with valuable and meaningful traditions of each business

1.5 Constituents of corporate culture

1.5.1 Management and business philosophy

This is the utmost and most important layer of corporate culture, including the most fundamental management and business philosophies The prerequisite for the successful corporate culture development is the commitment of the enterprise's highest leaders Because the most important part, the heart and the mind of the business is in the innermost layer of culture, it is the business philosophy, the enterprise's management motto and only the highest leaders of the enterprise may be able to influence such core cultural class Therefore, business leaders play a key role in building and developing corporate culture Leadership is the one who creates the foundation of the enterprise, forming and nurturing the environment and standardizing, selecting people who are suitable for the cultural value system and an example and motivation for employees

1.5.2 Personal and organization motives

The second important factor layer of corporate culture is the motives to accelerate the actions of individuals and general motivation environment of the organization Such motivation factors shall be demonstrated by daily behaviors of the enterprise’s members

1.5.3 Procedures and regulations

Procedures, regulations and policies help the enterprise to operate stable in accordance with the standard This component facilitates the enterprises to successfully satisfy the increasingly high requirements on quality, products and

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services of enterprises, contributing to creating stability and improving the efficiency of businesses with efforts to the highest satisfaction of customers and the society

1.5.4 Information exchange system

This is the fourth constituting layer of the corporate culture to satisfy the diversified, multi-dimensional, accurate and timely management information demand This system must ensure that any required information necessary for the enterprises is collected, conveyed, stored and processed Any members of the enterprises may easily access and use the required information for the daily activities as well as the planning and orienting the strategies

1.5.5 Movement, rituals, etiquettes

This is the floating culture constituent, reflecting the life and livings of the enterprise Although it does not directly affect the business performance, its influence on every activity of the enterprise is relatively high It effectively disseminates the company’s policies and guidelines, creating the company’s difference against its rivals, a good image prior to the community, facilitating the branding Therefore, in order to successfully create the enterprise’s identity and good competitiveness, the entrepreneurs, senior managers, leaders and other administrators must involve into the organization's culture development

1.6 Benefits of corporate culture development

1.6.1 For enterprise

Corporate culture is an intangible asset of enterprise, recorded with high importance in the enterprise’s development, the reliable background, objectives, motives and regulating system of the development Corporate culture helps the organization to reduce the conflict, coordinate and control, motivate the employees and enhance the competitive advantages

a Reduce conflicts among members, between individuals and collectives

Corporate culture is the good bonder to cement the enterprise’s members It helps the members to unify the understanding, evaluation, selection and orientation

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for action When the organization is faced with conflict tends, members are unified

by the culture

b Coordinate and control

Corporate culture coordinates and controls the personal behaviors through stories, legends, standards, procedures, sequences, rules, etc Corporate culture facilitates the good orientation for the enterprise in all material aspects such as leadership style, business culture, quality culture and organizational culture When a complicated decision must be made, the corporate culture shall narrow down the scale of options to be considered

c Motivate the employees

Corporate culture is not rigid regulations, hindering the creativity of members

On the contrary, the general concepts on corporate value and good relationships among employees that corporate culture offers shall create a comfortable and healthy working environment, promoting the employee’s innovation and creativity Thanks to corporate culture, the employees clearly understand the objectives, orientations and nature of work, making them feel to undertake a meaningful tasks and proud to be a member of enterprise This is much meaningful when “brain drain” is popular Income salary is just a part of work motivation When income reaches a certain level, people are willing to trade off a lower income to work in a harmonious, comfortable environment, well respected by colleagues

1.6.2 For non-enterprise:

Corporate culture is the enterprise's identity, attractiveness with customers, partners, creating a brand for businesses to help distinguish them from other enterprises Corporate culture also enhances the external relations and acts as the factors to attract the customers and partners for the enterprise Concretely:

- The customers shall feel peace in mind and proud when the enterprise's products and services are used

- The partners shall give more trust when transactions are made with the enterprise and preference prices may be offered They shall support the enterprise to overcome the difficulties and maintain the commitments

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- The regulators and the Government shall trust more when enterprises with good corporate culture are contacted Accordingly, the great support may be received from the regulators and the Government during business

1.6.3 For branding of products and services

Corporate culture development is also recorded as to setup the brandname for the enterprise and its offerings

Product brandname creates the product quality position Enterprise's brandname helps the consumers to evaluate the enterprise’s prestige and moral

Therefore, the above roles of corporate culture shall help the enterprise to grow

and obtain sustainable development to ultimately offer profit to the enterprise - the decisive factor of survival of an enterprise It is possible to say that when everything

is lost, the corporate culture is remained, then the enterprise still has the opportunities to survive and develop Vice versa, if the culture is lost, the enterprise shall not survive The enterprise’s success or failure is closely cemented with the corporate culture’s unique identities

1.7 Steps of corporate culture development

The ways of developing company may vary by culture of each country.Generally, the purpose of developing corporate culture is to ensure that the employees feel happy, speed up and improve the productivity and engagement with the company In order to develop the corporate culture, four steps may be conducted:

Step 1: Determine values concerned by stakeholders

Such stakeholders include shareholders or owners, senior managers, employees, customers and other related parties Thence, identify the options and changes to form the most suitable cultural model to satisfy the great concern of the subjects

Step 2: Re-evaluate the available corporate culture model or setup new

corporate culture contents, including core values, business philosophy; Code of Conducts, legal document system; characteristics such as brand identifier, organizational structure, rituals, festivals, stories, legends on enterprises; architectural structure, interior, product system, technology, etc

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Step 3: Identify the barriers or change requirements Barriers may be ignorance,

local features, fear of changes, etc Demands must be changed such as internal dispute or changes in technology It is required to specify to prepare the proper action plans

Step 4: Prepare implementation and application plan

There is a famous saying: “Sow a thought, and you reap an act Sow an act, and you reap a habit Sow a habit, and you reap a character Sow a character, and you reap a destiny.” It is similar to corporate culture development Development of values is only the first step to create the enterprise’s ideology Action programs must be regularly repeated to become a voluntary habit, an action similar to the conditional reaction It is required to supervise and follow up to improve such characteristics in accordance with the enterprise's core values to create the unique identity of the enterprise

Development of corporate culture is a long time process, requiring a great effort

of every one The achievement is the enterprise’s success

Conclusions: According to the contents and structure on corporate culture, the

Research Methodology is moved to analyze and evaluate the corporate culture

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CHAPTER 2: RESEARCH METHODOLOGY

2.1 Methodology

Dialectic materialism methodology is applied during the study

This method requires to study the corporate culture development in Thaco to closely adhere to the practice to setup, maintain and develop the corporate culture in Thaco; consider Thaco’s corporate culture structure in the relation with the general cultural values and specific cultural values, creating the outstanding cultural identities of Thaco; consider the corporate culture identities of Thaco in the close relation with the national culture, origin of the enterprise and its business environment

Application of the dialectic materialism method requires to propose the solutions to develop the corporate culture in Thaco in the integration period originated from the existing condition of the Group’s corporate culture, especially the requirements on recovering shortcomings discovered during maintaining and upholding the specific culture straits of Thaco in the new period

2.2 Research procedure

Research procedure is characterized by following steps:

Step 1: Read and analyze the related studies to inherit and specify the gap for further study

Step 2: Identify the research issues

Step 3: Collect and systematize the theoretical issues to setup the research model

Step 4: Setup the research methodology

Step 5: Apply the research methodologies to collect the primary and secondary data, use the proper tools to handle and analyze the data, and evaluate the existing conditions of the enterprise

Step 6: Refer to the corporate analysis and evaluation released by the enterprise

to propose the solutions to successfully develop the enterprise’s culture

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2.3 Data collection sources

Data may be classified by various methods, depending on the researcher’s method and purpose In order to collect the data for Thaco Group’s corporate culture development research, two main data sources are applied, including primary and secondary data sources

2.3.1 Primary data source

Primary data is collected by consulting the officials and employees related to Thaco Group's corporate culture

2.3.2 Secondary data source

Secondary data source to be collected and researched is the available information, including the references related to the corporate culture topics; organizational behaviors of the researchers and scholars in the world

2.4 Data collection method and tools

2.4.1 Data collection method

Data is collected by surveying and investigating in accordance with the questionnaire designed to directly deliver to Thaco Group’s officials and employees

in 3 regions: The North, the Central and the South Total 300 questionnaires were delivered and collected

2.4.2 Data collection tools

Data collection tools are questionnaire used to consult the subjects, in which:

- Question form is the (close) question with question and answer types to be available for the respondent to select

- Detailed contents of questionnaire (appendix 1) include 2 main sections: Section 1: Design to collect general information about the respondents

Section 2: Design to include the questions to review the knowledge and awareness on corporate culture of officials and employees, working in Thaco Group

Contents of the questionnaire focus on the employees’ awareness on corporate culture and existing corporate culture in Thaco Group, thence, unveil Thaco Group’s corporate culture practice and give out the solutions to perfect the

26 corporate culture

information

(CC)

Factors of corporate culture Visual characteristics Non-visual characteristics Management and leaders on corporate culture development

Solutions for corporate culture development

Source: Collection by the author in the 2018 study

Questionnaire design phases:

Questionnaire is designed and tested through some phases to ensure the required information to serve for the data analysis Questions on corporate culture aspects are based on previous studies related to the corporate culture

- Phase 1: Design the crude questionnaire in accordance with the information

to be collected in the theoretical model and related previous theories

- Phase 2: Evaluate the questionnaires by examining the understanding about the questions Evaluation is conducted by directly delivering it to the officials and employees to verify their understanding and response to the questions

Phase 3: Adjust the contents of questions and complete the questionnaire, then directly deliver to Misa employees to collect information

2.5 Data analysis and processing method

2.5.1 Primary data processing method

According to the documents on corporate culture in Thaco acquired during a long-time working years thereof, the author shall understand and draw out the lessons on factors governing the establishment, development and specific features

of Thaco’s corporate culture; analyze the success, restrictions and shortcomings of

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maintaining and developing the local corporate culture for the Group’s production and business, especially the foreign markets; then, propose the solutions to maintain and develop the corporate culture in Thaco in the coming time

2.5.2 Statistics and comparison methodology

Statistics and comparison methodology is initiated after all data has been collected via questionnaires and collected documents This method is applied to release the statistics tables on Thaco Group's business figures, statistics on respondent viewpoints about evaluating and feeling Thaco Group’s corporate culture; compare with other telecom companies to illustrate the relation between the business efficiency with maintaining and developing Thaco- specific corporate culture; also, analyze the existing conditions of advantages, disadvantages in maintaining and developing such specific cultural straits, acting as the premise to propose the methods for Thaco corporate culture development in the coming time

2.5.3 Descriptive statistics methodology

This method is applied to describe the panorama of related research in Chapter 1; describe the research subjects with specific phenomenon of corporate culture in Thaco; describe the survey results via the questionnaire; describe the business performance of the enterprise; then, analyze the existing condition on maintaining and developing Thaco-specific corporate culture

2.5.4 Analysis and synthesis method

This method is applied to present the study contents In order to analyze the information and data, following methods are applied herein:

+ Descriptive statistics methodology: To be launched in Chapter 1 when overview of the study is related to the thesis This method is also applied in Chapter

3 to analyze the existing condition of Thaco’s corporate culture development with general expression and specific straits Furthermore, it also aims to find out the shortcomings of maintaining and developing these specific cultural straits in the context that the international integration is increasingly developed

+ Descriptive statistics methodology: This method is applied to compare the Group’s business performance by years in the relation with the maintenance and

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development of Thaco Group’s specific corporate culture; compare the revaluation

of the questionnaire (survey) respondents regarding feeling about corporate culture

in Thaco Group to unveil the strengths and restrictions of maintaining and developing such specific features Accordingly, it is systematized and proposals on future corporate culture development in Thaco Group are put forward

Conclusions: The analysis basis in Chapters 3 & 4 is based on the Literature

Review and Research Methodology as follows: Analyze and evaluate Thaco Group characteristics in accordance with the contents and structure of corporate culture, existing corporate culture in Thaco Group Then, work out the steps to perfect Thaco Group’s corporate culture

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CHAPTER 3: EXISTING STATUS OF CORPORATE CULTURE

DEVELOPMENT IN THACO GROUP

3.1 Overview about Truong Hai Automobile Joint Stock Company (THACO)

Truong Hai Automobile Joint Stock Company was incorporated on 29 April

1007, based its registered office at No 19, Street 2A, Bien Hoa 2 Industrial Park, Dong Nai Province The founder is Mr Tran Ba Duong, currently Chairman of Board of Directors of THACO

Thaco’s main business activities cover manufacturing, assembly, distribution, supply of automobile spare part repair and maintenance services: Including manufacturing and trading in commercial vehicles (trucks and bus); manufacturing and trading in tourism vehicles from Kia (Korea), Mazda (Japan), Peugeot (Europe)

Currently, Thaco is the unique company in Vietnam involving in complete manufacturing and assembly of 3 models: Tourism vehicles, trucks and bus with localization percent of 16% - 50%, offering the diversified and qualified automobile products with reasonable price

Thaco aims to maintain its local leading position in automobile manufacturing, assembly and distribution in Vietnam, conduct market expansion to ASEAN, enhance the international cooperation to select the proper technology, increasing the localization percent, joining the global value chain, creating the reliable background

to develop to establish the universal industrial group, improving the competitiveness

to obtain the regional leading position Currently, the Company’s transaction offices are described as follows:

o General Office in Ho Chi Minh City

 80 Nguyen Van Troi, Ward 8, Phu Nhuan District, HCMC

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Long Bien, Hanoi

o Chu Lai - Truong Hai Complex

 Hamlet 4, Tam Hiep commune, Nui Thanh district, Quang Nam province

3.1.1 History of development of Truong Hai Automobile Joint Stock Company

Truong Hai Automobile Joint Stock Company is recorded with specific development milestones as follows:

29 April 1997: Establish Truong Hai Automobile Co., Ltd The Company mainly involves in import of used vehicles and sales to the market and provide the materials and spare parts for automobile repair

“5 October 1999, the Company established its first Branch located at No 2A Ngo Gia Tu, Gia Lam (now Long Bien) - Hanoi with 10 employees This is the strategic breakthrough for Thaco to gradually occupy and lead the automobile fields

in Vietnam

“In 2003, the Company invested into Chu Lai Open Economic Zone, Nui Thanh District, Quang Nam Province with total initial investment capital up to VND 600 billion to construct the modern automobile assembly plan, covering an area of 36.8

ha, named Chu Lai - Truong Hai Automobile Manufacturing and Assembly Co., Ltd

In December 2008, the Company inaugurated TRUONG HAI STAR 2 vessel with 288 TEU, put THACO-KIA into official operation

On 4 October 2010, Chu Lai Truong Hai Vocational Training College opened the first course in the school year 2010 - 2011 with 408 students, including elementary, intermediate and college classes.”

“In 2005, thanks to the impressive growth step, THACO sold 70,421 vehicles, fulfilling 38.6% VAMA market share Total revenue in 2015 was VND 45,846 billion (US$ 2 billion), increasing 89% against 2014, paying VND 13,856 billion to the State budget.”

“Since 2015, the company has archived a series of success in manufacturing, trading, assembly, distribution, sales and after-sales service in parallel with culture development, improvement in the difficult phases The 2018 report submitted by

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VAMA unveiled that revenue of entire VAMA was 276,187 vehicles THACO continued leading Vietnamese automobile market with revenue of 96,127 vehicles, accounting for 34.7% of market share

Figure 3.1 THACO market share revenue in 2018

Some achievements obtained in the past:

Since its inception, THACO was honor to receive a series of Certificate of Merits and prizes at all levels to delight its great contribution and achievements in manufacturing, business, social community activities, national development and protection:

2015

 Emulation flag includes: The flag awarded in 2005 by the Government; the first prize awarded by the People’s Committee of Dong Nai (the excellent Emulation Unit for 5 consecutive years)

 The prize includes: “2015 Vietnam Golden Star Award” (5th consecutive time to be named in TOP 10; “Vietnam Famous brandname Winner”); “2015 Vietnamese Powerful brandname”, etc