UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Huu Quynh Phuong LOW INTRINSIC MOTIVATION– PROBLEM OF ESNETWORKS VIETNAM CO. MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Nguyen Huu Quynh Phuong LOW INTRINSIC MOTIVATION– PROBLEM OF ESNETWORKS VIETNAM CO. MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: TRAN HA MINH QUAN .PhD Ho Chi Minh City – Year 2018 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Executive summary Vietnam has recently been regarded as a prospective destination of foreign investment presented with its high-speed development. In which Japan is the leading economic partner of Vietnam, the leader in ODA, the second largest foreign investor, the third largest tourism destination and the forth major trading partner of Vietnam. As one of the leading. However, there are potentially existing problems in the company which may reduce the competition edge of organization and harm to its culture. This research was commissioned to examine what problem in Esnetworks Vietnam Co., the causes leading to problem are and to suggest the validated solutions to deal with problem, which are in line with company’s policy and resources. Method of the analysis is combination between theory-informed and validated data, collected through interview and survey to identify and confirm existence of the problem as well as causes and alternative solutions. From the general diagnosis of potential problem at Esnetworks Vietnam Co., findings suggest the existence of low intrinsic motivation as the main problem. The study examines 03 main Departments within the Company especially Business Avisory Department. Low intrinsic motivation is analyzed in terms of its existence, antecedents, consequences, and solutions are proposed to tackle such a problem. Finally, this report indicates organization of actions to deal with problem in the lead time of one year and limited budget approved by the company. 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Recommendations discussed focus on two main causes of low intrinsic motivation within the Company, which are job characteristic and Compensation and Benefits. The report also investigated three accordant solutions: - Conduct clear job description - Provide ideal working environment - Complete the system of compensation and benefits Total estimated cost to implement these 3 solutions is approximately 253 mil VND, which is in line with company’s approved budget of 255 mil VND while benefit brought is 453 mil VND. Since there is limitation of time and resources constrain as well as research exist such as the current company conditions data did not provide enough information and only sample of interviews are performed. However, the report provides diversified and validated data in conjunction with theory to propose meaningful suggestion for Esnetworks Vietnam Co. to strengthen its personnel resources and organization behaviors. 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. The Company background Firstly established in Vietnam in 2008 with initial name is Flagship, Es Networks Vietnam Co. (herein after referred as “Es Networks VN” or “The Company”) is 100% directly invested by Es Networks Japan Co. As described in the Figure 1, the Company focuses on three segments: market entry, accounting/tax/labor, M&A and other services. With an aim of establishment, Es Networks Vietnam’s main vision is to provide professional consulting services such as accounting, investment and Human Resource services for Japanese clients who have investment activities in Vietnam. The Company provides consulting service for all procedures and problems from establishment to termination the operation of the clients. 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Business lines of Es Network Vietnam Currently, Es Networks VN has two offices in Ho Chi Minh City and Ha Noi City with around 56 employees. Given the short history of operation from establishment, Es Networks VN owns the qualified employees who committed to provide the completed services, the Company gains clients’ belief, therefore, its clients portfolio is expanded by days. Even that the market of consulting companies is became more competitive nowadays, the board of management and all of employees are building Es Networks VN’s position more and more stable especially in Japanese segment. Today, due to the investment stipulating policy of Vietnamese government, Vietnam becomes more and more attractive investment destination for foreign investors, in which Japanese investors are not exception. In advance of thinking about operation and generating profit, those investors have to carry out procedures in compliance with the Vietnamese law, tax regulations and other administrative procedures. For which, many consulting firms are launched. Particularly, in segment of consulting firms that serving for Japanese investors, except the leading position of companies from Big 4 group (PWC, Ernst and Young, Deloitte and KPMG), there are a big competition from second tier companies, in which the big rivals of Es Networks VN are KT accounting Vietnam, AGS Vietnam and I-Glocal Co. In which, I-Glocal Co. is considered as the biggest rival. The Company structure 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. Organization chart of Es Network Vietnam As mentioned above, Es Networks VN currently provides consulting services, the company consists of three departments: Business Advisory Department (hereinafter referred to as “BA Dept.”), Accounting Department (hereinafter referred to as “AC Dept.”) and Administration Department (hereinafter referred to as “AD Dept. Each Department has its own function. The AC Dept. specializes in providing the accounting services such as: tax compliance, tax advisory, booking accounting books and financing advisory.’s main duties are seeking and directly accessing the clients, the department with Japanese experts and other Vietnamese experts that can use Japanese language excellently always play the role of listening, explaining and providing alternatives directly for Japanese clients. Furthermore, BA Dept. also providing Human Resource services including applying for visa, work permit, calculating payroll and declaration of 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com personal income tax for Japanese clients. Finally, AD Dept. comprises director, manager, human resource team and internal accounting team that is in charge of maintaining the relationship with clients, authorities, internal human resources, financing, and further general management. The Profit and Loss Summary of Es Network Vietnam In 2015, Es Networks VN generated profit of 4,714 billion VND which is counted about 57. From 2015 to 2016 the operating profit increased 1.202 times while the increase of that from 2016 to 2017 is up to 2. In general, the Company is steady growth but it is still not reach its target over the years. However, the different amount of profit between actual and target is insignificant. Moreover, the target amount of sale and profit increases rapidly over the years. This means the Company is trying to expand its market, hence, the number of clients are raised by years. However, the staffs of the Company just raise a little bit and the current staffs are now facing with the problem of overload. PROBLEM SYMPTOMS In order to have an overview about the backlog issues within the company, we conducted the initial interviews with 02 staffs of BA Dept. and AC Dept. and 03 managers of 03 departments. The detail of these initial interview is displayed in Appendix 1. Due to 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com the nature of work, AC Dept. undertakes the accounting job for clients which is considered as the specialized job. Therefore, they may have precise idea and judgment. is the non- profit department which is responsible for the internal operations and support other departments hence, they can stand on the management point of view to provide unbiased judgments in the general way. In addition, the BA Dept. is the department that generates the highest profit for the Company. The jobs in BA Dept. are also much more distinctive with the others while its job content changes depend on the request of the clients. As the most important Departments of the Company which has to communicate with other teams while working, the manager and staff here can provide multidimensional outlook about the Company. The study applies qualitative questions to investigate the interviewee’s point of view about the problems existing in the Company. The turnover rate status From the interview with HR managers of the Company, the most prominent symptoms that mentioned by many interviewers that currently the Company has high turnover rate. In general, the turnover rates fluctuated over time. In 2017, the turnover rate was 27% while in year 2016, such amount reached 20%. The table is collected base on criteria by gender, age and departments of the Company. According to the table, there is no significant upward or downward trend of gender in turnover rate is apparent. This means turnover rates in the Company does not depend on the gender, the one rate for women was essentially the same as that for men. The table below shows the turnover rate from 2015 to 2017: 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com 2015 2016 2017 Gender (%) Male 45 47 49 Female 55 53 51 Age (%) Under the age of 32 70 75 80 32 and above the age of 32 30 25 20 Department (%) Administration Department 20 25 25 Accounting Department 20 20 15 Business Advisory Department 60 55 60 Turnover rates (%) 15 20 27 Table 2. Turnover rate of Es Network Vietnam from 2015 to 2017 As stated in the above table, younger employees had higher turnover. The HR manager believes that the younger ones are willing to take risk and challenge in their job, from which they can gain more knowledge and experience for their future career, hence, they quite easy to move and out the Company. On the other hand, middle-aged employees who are from 32 year olds and above had lower turnover, probably because the middle-aged employees has the tendency to stick with stable job, they conceive the important of their job. Moreover, they afraid to change the working environment as starting the interview and make acquaintance of new job, new colleague and new working style at their age. Finally, those with different job characteristic suffer higher turnover. For example, in year 2017, the turnover rate for those with Administration Department was 25%; for those with Accounting Department was 15%; while such rates of Business Advisory Department was up to 60%. This pattern may arise because of job characteristic. The specific of Business Advisory Department requires that employees must to take the time to research and update 10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com new regulations of the laws. The employee may work under high pressure during long time. While employees from other department may do with stable job during working here. Over workload The Company receives many complaints of employees regarding to the over workload. Some employees experience a heavy workload for many reasons, including tight deadlines, projects increase in the peak season that have caused staff shortages and unplanned company growth that has created more work for the same staff. It can be difficult to manage an overworked staff, and even the most dedicated employees often reach their breaking points. The staffs face with the difficulties of work-life balance because it’s an activity that needs to be maintained over time. Moreover, there is bad meeting due to unsuitable reason for the meeting, poor agenda or none at all, the meeting "creeps" its way into a several-hour ordeal, staff unprepared, and/or no contribution. The staffs intend to keep silence during the meeting although they are offered for contribution requirement from supervisor. Their managers do not receive any active feedback regarding to work overload status or aspiration. Thus, there is no any improvement or effective ways to change working style or encourage employee motivation. This may lead to waste time and deflate energy for the participants. Low compensation and benefits According to interview with Mrs. Doan Thi Nhu Truc, a staff of BA Dept. for her experience during working time at The Company. She is disappointed about benefit policy 11 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.
