UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ NGUYEN THANH TUNG UNPRODUCTIVE PROJECT MANAGEMENT PROCESS IN ITC-HCM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ NGUYEN THANH TUNG UNPRODUCTIVE PROJECT MANAGEMENT PROCESS IN ITC-HCM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: PhD. TRAN HA MINH QUAN Ho Chi Minh City – Year 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENT ACKNOWLEDGEMENT 4 EXECUTIVE SUMMARY 5 I.1 General information about ITC-HCM 6 1.3 Business activities 7 II.2 Interview with Admin head officer 12 2.3 Interview with departing engineers 13 2.4 Interview with current working employees 14 2.5 Initial cause-effect diagram 15 III.1 Updated cause-effect diagram 18 3.2 Cause justification and problem of interest 23 3.3 Importance of interested problem 24 3.4 Cause validation for focused problem 25 IV. PROPOSED SOLUTIONS AND ACTION PLAN 28 4.2 Action plan and requirements 29 4. SUPPORTING INFORMATION 33 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 1: Organization chart of ITC-HCM 6 Figure 2: General workflow for a typical research project and personnel 8 assignment Figure 3: Recruitment/Departure of employees in ITC-HCM since 2010 10 Figure 4: Consequences of the business symptoms 11 Figure 5: Possible causes leading to turnover actions acquired from interview 12 with Admin head officer Figure 6: Summary of causes leading to turnover actions acquired from 13 interviews with departing engineers Figure 7: Summary of potential causes of dissatisfaction acquired from 14 interviews with current employees Figure 8: General initial cause-effect diagram for turnover situation in ITC- 15 HCM Figure 9: Simplified initial cause-effect diagram for turnover situation in ITC- 16 HCM Figure 10: Updated cause-effect diagram with key determinants 18 Figure 11: Possible advantages from Productive project management 25 Figure 12: Updated cause-effect diagram with focus into interested issue 25 Figure 13: S-curve diagram for Alpha project 26 Figure 14: Final cause-effect diagram 28 Figure 15: Main tasks with time schedule for adapting ProjectManager platform 29 Figure 16: Gantt chart for adapting ProjectManager platform 29 Figure 17: Result of quantitative findings 54 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF TABLES Table 1: Combined revenues of ITC-HCM from 2015 to 2017 9 Table 2: List of budget for one-year-use of ProjectManager 30 Table 3: Budget for consultancy services to construct a clear work process for 31 project management in ITC-HCM Table 4: Interview guide with Mr.
Bac NT, Admin head officer who is in charge 33 of HR activities Table 5: Summary of findings of interview with Mr. Bac NT 34 Table 6: Interview guide with departing engineers 38 Table 7: Summary of findings of interviews with departing engineers 39 Table 8: Interview guide with current working employees 44 Table 9: Summary of findings of interviews with current employees 45 Table 10: Interview guide with senior project leader 52 Table 11: Summary of findings of interviews with senior project leader 53 Table 12: Questionnaire for quantitative research to evaluate the importance of 54 each determinant 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENT First of all, I would like to express my warmest thanks to my supervisor Dr. Tran Ha Minh Quan for his patience, encouragement, and professionalism. His clear guidance and candid evaluation for my thesis have helped me complete all qualitative and quantitative researches on time with satisfactory results as well as led me to finish my Master thesis.
I also would like to thank all lecturers in International School of Business (ISB) for courses and subjects that they had taught me and my classmates. The knowledge that I gained from the courses has widened my knowledge as well as provided me with valuable experience in practical businesses. Additionally, I would like to thank all members in thesis defense committees, for their insightful comments and evaluation. I also want to thank all ITC-HCM employees and officers who had cooperated with me during data gathering, interviews and surveys.
Last but not the least, I would like to thank all my classmates in MBUS 7 program for their cooperation, support, discussion and unforgettable moments that I have been with them in the last two years 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com EXECUTIVE SUMMARY Employee turnover places a lot of difficulties towards organizations in terms of new recruitment, training, organization, costs and so on. Voluntary turnover behaviors can be initiated by low job satisfaction, especially in state-own organizations. ITC-HCM is one of state-owned organizations located in Ho Chi Minh city and facing abnormally high turnover rate among skilled engineers. To investigate the situation as well as the main causes for engineer turnover, a number of in-depth interviews were conducted with departing employees and relevant co-workers.
The results of these interviews reveal the main causes for their departure, which involves leadership style, project management, work environment, compensation and benefits, work morale. To have broad views of the turnover situation in state-owned petroleum firms, a number of previous academic theories have been applied to make a cause-effect diagram for the turnover issue. By evaluating and verifying each cause, researcher could locate the core problems leading to the high turnover rate. Though the reasons for employees are diverse and varied from employees to employees, for the company, the most critical problems of the state-owned company is “Unproductive project management process” which involves loose management, unclear task assignments and too much reporting system.
The suggentio for improvement are 1) to apply project management technology for the company, which also enables team communication and progress tracking, and 2) to hire consultancy service to help construct more productive work process with clear measures and key performance indicators. Action plan and budget are proposed accordingly. The suggestions from researcher are expected to improve the company’s performance in order to help reduce the turnover intention accordingly. 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.1 General information about ITC-HCM Integrated Technical Center (ITC) is a subsidiary of PetroVietnam Exploration and Production Corporation (PVEP).
The company was established in September 2010 and works as main research unit for PVEP to supervise and optimize oil & gas activities for most oil fields on Vietnamese continental shelf. ITC consists of 02 offices: head office in Ho Chi Minh city and representative office in Ha Noi city. The research will focus into the Ho Chi Minh head office, which is named as ITC-HCM. Since the mother company PVEP is fully owned by the Vietnamese government, ITC-HCM, as its subsidiary, is also considered a state-owned enterprise (SOE).2 Company organization Before 2017, ITC-HCM had a total number of 41 personnel.
However, since mid- 2017, 5 engineers departed from company, making the total number of current personnel 36. The company consists of 02 main departments: Technical and General Administration. The board of directors includes 01 director and 02 vice directors, each in-charge of one department. The organization of ITC-HCM, until September 2018, is illustrated in Figure 1: Figure 1: Organization chart of ITC-HCM 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Technical department: The Technical department includes 3 sectors: Exploration, Reservoir and Production.
Each sector is supervised by head officer and vice officers. This is the main revenue-earning department for company, which focuses into researching and optimizing oil & gas activities as well as conducting outsourcing researches. The department includes 19 skilled engineers with oil-gas engineering background. Most of engineers are over 30 years old with more than 5 years working for ITC-HCM.
General Administration department: The General Administration department only supports for technical departments and board of directors with paperwork, accounting, reception activities and so on. There are 03 sectors within this department: Admin, Accounting and Commerce. Admin sector is in charge of logistics, paperwork, reception as well as other human resource activities. Commerce sector is in charge of preparing contracts and account management while Accounting sector is in charge of typical accounting activities.
The accounting sector is supervised directly by a vice director. In ITC-HCM, there are Union Division, Women Association and Ho Chi Minh Communist Youth Union like other SOEs. These organizations help to increase the engagement of employees and to protect the rights of employees.3 Business activities Main function As a research subsidiary of PVEP, ITC-HCM is in charge of supervising oil and gas activities of assigned oil-fields on Vietnamese shelf, such as block 01-02, block 02/97, block 42, and so on. Each engineer in Technical Departments is assigned to supervise specific activities in certain field(s) and annually reports to supervisors and directors about the status of those activities.
Exploration engineers are in charge of Geology & Geophysics activities, such as exploring new hydrocarbon prospects, interpreting time & depth horizons of those prospects, identifying sedimentary paleo-environments. The results from Exploration engineers will become input data for static and dynamic models of Reservoir engineers. Reservoir engineers use the input data provided from Exploration engineers to generate structural models (or static models) and dynamic models in order to calculate 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com potential hydrocarbon volume of certain oil- fields and forecast the future production volume of existing fields. Production engineers use the forecasted models from Reservoir engineers to propose detailed plans for field development and/or cost optimization for existing field operations.
Project outsourcing Besides main function as research unit for PVEP, ITC-HCM also works as research outsourcer for other oil-producing operators in Vietnam such as Cuu Long JOC, Bien Dong POC, Hoang Long - Hoan Vu JOC, etc. The typical workflow of a research project is illustrated in Figure 2 Figure 2: General workflow for a typical research project and personnel assignment Competition In this industry, ITC-HCM does not have many competing opponents. In fact, there are two other companies with similar functions, Vietnam Petroleum Institute (VPI) and NIPI. However, VPI is located in Ha Noi while NIPI in Vung Tau; both companies only conduct service projects for local companies.
Therefore, the competition from VPI and NIPI against ITC-HCM is considered relatively low and ITC-HCM is the only oil - gas research unit in Ho Chi Minh City. 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Revenues ITC-HCM receives yearly financial funding from mother company PVEP as well as revenues from outsourcing research contracts. The financial data of company is not officially announced but from interview with Admin officer of the company, total combined revenues of company from 2015 to 2017 (2018 data is not yet available) are shown in following Table 1: Table 1: Combined revenues of ITC-HCM from 2015 to 2017 Year 2015 2016 2017 Revenue 60 47 36 (billion VND) II.1 Business symptoms From its establishment in September 2010 to year 2016, ITC-HCM has been developing and increasing its human resources as well as its revenues. There were no employees leaving the company and the employee turnover rate had been 0% for many years.
However, since mid-2017, the company has encountered unprecedentedly high voluntary employee turnover as a total of 5 engineers of total 24 engineers, which takes about 21%, voluntarily left the company: three at the end of year 2017 and the other two after March 2018. All 5 engineers voluntarily asked to terminate their Indefinite Duration Contracts with the company. After the departure of those 5 engineers, the company did not hire any other replacements. 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Figure 3: Recruitment/Departure of employees in ITC-HCM since 2010 All of 5 departing employees were highly skilled engineers who used to work for Technical Department, which included 02 exploration engineers, 02 reservoir engineers and 01 production engineers.
Demographically, 5 engineers, 04 males and 01 female, were from 30-40 years old, married and had 1-2 children. They all lived in Ho Chi Minh City and near ITC-HCM’s head office in Phu My Hung, District 7.