MEIHO UNIVERSITY Graduate Institute of Business and Management MASTERS THESIS Suggested Capital Mobilization Project for Purchasing New Vehicles in order to Conduct the Driving Training Operation at the Driving Test Centers – Ho Chi Minh City College of Transportation In partial fulfillment of the requirements for the degree of Masters of Business Administration Advisor: Dr. Chih-Shing Tau Co-advisor: Dr. Nguyen Van Hoa Graduate Student: Nguyen Thi Thuy Ngan December, 2010 ACKNOWLEDGMENTS I owe a great many thanks to a great many people who helped and supported me during the writing of this thesis. First of all, a deepest gratefulness to my supervisor, Dr.
Chih-Shing Tau, whose encouragement, guidance and support from the initial to the final level enabled me to carry out this thesis. I also wish to thank to Nguyen Van Hoa for his kindness on evaluating my thesis as a second supervisor and his willingness to help me whenever I need. Then I am indebted to thank Mr. Nguyen Trong Diep, my boss as well as my classmate, and many of my colleagues to support me and encourage me to complete this task so that I will not procrastinate in doing it.
I would like to express my deep sense of gratitude to all experts, especially to Mr. Duong Tu Luc, Mrs. Truong Thi Huong Viet, Mrs. Le Minh Thu, Mr.
Nguyen Minh Tri, and Mr. Quach Hong Ha, for their valuable advice on in some stages of my research. Special thanks go to my friends who had always directly and indirectly supported me as well as offered me much of valuable instructions, suggestions and advice during my study process. Above all, a special thank to my husband, my sons for the great love and encouragement for me throughout the 2-year EMBA course.
My deepest thanks go to my parents and parents-in-law who helped me to look after my sons while I was studying and injured after a serious accident. Lastly, I offer my regards and blessings to all of those who supported me in any respect during the completion of the study. I Suggested Capital Mobilization Project for Purchasing New Vehicles in order to Conduct the Driving Training Operation at the Driving Test Centers– Ho Chi Minh City College of Transportation ABSTRACT Socializing education, health, cultural activities is an important and long-term method in economic, social development strategy of Vietnam. To perform socializing policy, the government encourages public career departments to implement to mobilize capital by contributing shares, contributed capital from worker in the departments, mobilizing other cooperated capital resources via cooperation, association with enterprises, economic organization, financial organization, domestic and abroad individuals to invest in building material facilities.
HCM City College of Transportation is a state school; it has a driving-training center and a driving-test center to teach driving and serving the test to issue driving license. Because the requirement of learning driving will continue to increase therefore the college has advocated to mobilize capitals to purchase driving-school cars in order to increase driving- training flow. Hence, the capital mobilization project for the driving test center is very important. The research aimed at seeking out solutions for optimal capital mobilization project for purchasing new vehicles in order to conduct the driving training operation at the Driving Test Centers– Ho Chi Minh City College of Transportation.
The In-depth interview was conducted with interviewees are academic experts and experts in transportation, education, finance. They are now the senior managers; experts have a lot of experiences in the domain of learning and work to find out effectively capital mobilization project. Their responses were analyzed to get the answers for the research questions. Keywords: Driving Test Centers, Capital Mobilization Project, Capital Loan from Bank, Capital from Staff Members, Capital Budget.
II Suggested Capital Mobilization Project for Purchasing New Vehicles in order to Conduct the Driving Training Operation at the Driving Test Centers – Ho Chi Minh City College of Transportation Contents ACKNOWLEDGMENTS. VI Chapter1 Introduction .1 Background and Motivation .2 Research Purposes, Objectives and Questions .3 Research Scope and Limitations.5 Definition of Terms. 7 Chapter2 Literature Review.1 General Theory of Production Investment Capital .3 The role of business production capital.2 Structure of Business Production Capital .3 Forms of Capital Mobilizing.1 Provision resource from internal of enterprise.2 Provision resource from external.4 Factors Influence the Ability of Corporate Capital Mobilization.1 Real financial situation of enterprise.5 The Basis for Determining Investment Requirement That Needs to Be Mobilized.3 Financial leverage ratios. 22 Chapter 3 Research Methodology.2 In-depth interview.3 Participants of in-depth interview.4 Design the questions.2 Reliability and Validity.
29 Chapter 4 Research Results and Analysis.1 Status of Driving Test Centers and the Needs to Learn Driving .1 Status of the driving test centers.2 Demand of society to learn driving.3 Preliminary survey about contributed ability.2 Regulations on Raising Capital.3 Evaluating Selection of Feasible Plan .4 Select the Most Feasible Plan .1 Estimates of revenue – expenditure of investment plan to supplement driving cars by raising capital from staffs of center.2 estimates of revenue – expenditure of investment plan to supplement driving cars by capital loans from bank.3 The opinions of experts. 42 Chapter 5 Implications, Conclusions and Recommendations.1 Status of facilities (driving car) of driving test centers and supply and demand on learning of society.2 Find out the options for raising capital for driving test centers.3 Evaluation and selection of optimal capital mobilization for driving test centers.2 Solution to Implement Optimal Plan for Raising Capital for Center .1 Exploring the possibility of raising capital.2 Process of investment plans to supplement driving the car for the driving test centers with raising capital from officer of center.3 Limitations of Research Topics. Summary of Interviewees’ Biography. Presents theIncrease in Training Scale of 5 Years From 2006 to 2010.
Waiting Time of Students to Learn Driving in Some Driving Center. Estimated Revenue - Expenditure of Investment Plan to Supplement Driving Cars by Raising Capital from Staffs of Center. Specific Content of Basic Expenses - Expenditure of Investment Plan to Supplement Driving Cars by Raising Capital from Staffs of Center. Estimated Revenue - Expenditure of Investment Plan to Supplement Driving Cars by Capital Loan from Bank.
Specific Content of Basic Expenses - Expenditure of Investment Plan to Supplement Driving Cars by Capital Loan from Bank. Presents the General Opinions of Three Experts. Presents the General Opinions of Two Experts. Compares the Feasibility of Two Options.
The Basic Steps for Research Methodology. Capital Mobilization Diagram. Capital Mobilization Diagram - Phase 1. Capital Mobilization Diagram - Phase 2.
Capital Mobilization Diagram - Phase 3. 12 VI Suggested Capital Mobilization Project for Purchasing New Vehicles in order to Conduct the Driving Training Operation at the Driving Test Centers – Ho Chi Minh City College of Transportation Chapter1 Introduction This chapter displays: (1) Background and Motivation, (2) Research purposes, Objectives and Questions, (3) Research scope and Limitations, (4) Research procedure, (5) Definition of some keywords.1 Background and Motivation Socializing education, health, cultural activities is an important and long-term method in economic, social development strategy of Vietnam. “Socialization is expansion of investment sources, exploitation of human, material and financial potentiality in society. Promoting and using resources of community effectively to create good conditions in order for education, health, cultural activities to grow faster, have better quality are a long-term policy, are a precept to perform the social policy of the Party and State; this is not a temporary method that means palliative in the short-term because the State is lack of expense for these activities.
When the community has high income, the State budget is abundant, we still implement socialization, because education, medical and culture are long-term achievements of the community, they will develop increasingly with huge resource of the whole population”. (No 90/cp resolution of the Government (August 21st 1997) on direction and socializing policy of education, health, cultural activities) To perform socializing policy, the government encourages public career departments to implement to mobilize capital by contributing shares, contributed capital from workers in the departments, mobilizing other cooperated capital resources via cooperation, 1 association with enterprises, economic organization, financial organization, domestic and abroad individuals to invest in building material facilities. For transportation business, performance of policy to step up tasks that socialize driving-training assignment, attract human resource within social from organizations, individuals to invest, establish new driving-training centers to meet increasing driving- learning requirement of the community. In 2008-2009, Driving-training centers have developed both quantity and training scale of every center.
There were 49 new driving- training centers (4th quarter of 2007: 8; 2008: 25 and 2009: 16) in 21 provinces, cities, increasing the number of car driving-training centers of the whole country from 168 to 217 with total training flow currently of 100.000 trainees, increasing by 69% compared to September 2007. Socialization policy for driving-training in Ho Chi Minh City has also deployed strongly; during 2 years 2008 and 2009, there were 8 new driving-training centers, increasing the number of driving-training centers in the city from 26 to 34 (among them, there were 19 public schools), with investment in material facilities, transports and teachers of driving-training schools, it has enhanced the total training flow currently of 18.000 trainees, increasing by 80% compared to the beginning of year 2008. Financial resource to perform is the capital of the owner, career capital, shareholders’ capital, banks’ loan capital. As for public schools, the capital that staffs, workers, teachers contribute in many different forms has contributed considerably to the development of the school.
The importance of the topic: According to No 1327/QD-TTg resolution (August 24th 2009) of the Prime Minister in approving road transportation development programming of Vietnam until 2020 and orientation until 2030, the amount of cars with many different categories until 2020 will be 2.8 – 3 millions, therefore the requirement of learning driving will continue to increase, anticipatively until 2020 there will be about 6 million people having car driving license, addition to the requirement in compensating for 4% retired people. Within next 11 years, the whole country needs to train, test to award driving license to about 4.8 million people, average of every year is 430.000 people, while training ability is only 300.000 people per 2 year (achieve the rate of 69.80% compared to the demand), it leads to waiting situation in a long time to learn driving car in Ho Chi Minh City and some of South Provinces as Dong Nai, Dong Thap because training competence increases slowly compared to driving-learning demand. HCM City College of Transportation is a state school; it has a driving-training center to teach driving with current training flow of 540 trainees; since 2004 the college has advocated to mobilize capitals to purchase driving-school cars in order to increase driving-training flow, but due to many reasons, the center has not completed that avocation. Until 2005, driving-test center of the college started operating with main objective of organizing, serving the test to issue driving license.
Until now because of severe competition of other driving-test centers, the amount of candidates who come to the Center to take exam have reduced. From reasons above, the college has commissioned to train driving to the driving- test center with specific target: • In first phase 2010 – 2011: Every year, the center must train minimum 1,000 trainees. To meet that data, the Center needs 25 tourist cars or 10 touring cars, 12 trucks; investment capital is about 7,000 million VND. • In next years, the center needs to continues to invest with the aim of training minimum 4,000 trainees every year (the Center needs 100 touring cars or 10 touring cars, 12 trucks; investment capital is about 28,000 million VND).
The capital mobilization project for the Driving Test Centers is very important because: • Solve expense difficulties: HCM City College of Transportation is an achievement unit having revenue, in 2009: o Total revenue is 36,800 thousand VND (including achievement revenue of 24,000 million VND, service revenue of 10,000 million VND, and state budget of 2,800 million VND).