UNIVERSITY OF ECONOMIC HO CHI MINH CITY International School of Business ------------------------------- Ho Thi Nguyen Thien THE POOR EXPERIENCE IN MEAL COST MANAGEMENT IN AEON MALL VIET NAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2017 UNIVERSITY OF ECONOMIC HO CHI MINH CITY International School of Business ------------------------------- Ho Thi Nguyen Thien THE POOR EXPERIENCE IN MEAL COST MANAGEMENT IN AEON MALL VIET NAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr. Pham Phu Quoc Ho Chi Minh City – Year 2017 SUPERVISOR’S REPORT ON THE THESIS SUBMITTED FOR DEGREE OF MASTER of BUSINESS ADMINISTRATION The thesis title: THE POOR EXPERIENCE IN MEAL COST MANAGEMENT IN AEON MALL VIETNAM Student Name: HO THI NGUYEN THIEN Supervisor: Dr. PHAM PHU QUOC 1. General comments: Remarks on the student’s attitude: …………………………………………………………………………… …………………………………………………………………………… Remarks on the assignment’s academic quality: …………………………………………………………………………… …………………………………………………………………………… 2.
Overall assessment: Meet requirement for submitting Not meet requirement for submitting 3. Other remarks: Did the student follow the report schedule? Yes No Other…………………………. The Turnitin plagiarism percentage: Supervisor’s signature: TABLE OF CONTENTS EXCUTIVE SUMMARY .1 PART I – BACK GROUND INFORMATION .3 PART II – PROBLEM IDENTIFICATION. Theory informs and define the central problem .10 PART III – CAUSE VALIDATION.
Theory informs and determine potential causes of the problem .15 PART IV – SOLUTIONS. The money solutions. The money – free solutions. The recruitment new managers .23 PART V – ACTION PLAN.
Plan A: Retain the current managers. Plan B: Recruiting the new managers. Comparison and selecting action plan .31 APPENDIX 1: INTERVIEW GUIDE .34 APPENDIX 3: SUMMARY OF TRANSCRIPT .58 APPENDIX 5: SUMMARY OF SURVEY .60 EXCUTIVE SUMMARY According to economist Milton Friedman, the main purpose of doing business is maximizing profits for its owners. To do this, it is necessary to minimize the organization’s cost through cost management and controlling process.
If it has some issues in cost management, company’s situation will be failure to get business purpose. This thesis provides an analysis and evaluation of current problem about the poor experience in meal cost management in AEON Vietnam Co., Ltd and to recommend ways of solving this problem. The thesis draws attention to the fact that the total number of employees has trend decreasing in 6 months early of Y2017. Conversely, the average cost per person for meal is increasing.
Further investigations reveal that there are three existing problems: lack of experience to control situation, the big gap between number of order meals and the actual meals and the increasing in cost for per meal. Moreover, this thesis also finds out the factors appear to be the major causes of these problem in AEON Vietnam Co. This thesis finds the prospects of the company in its current situation are not positive. The major problems require further investigation and remedial action by management.
Based on analysis, some recommendations discussed include: how to retain experienced managers and setting up the other regulation to choose the industrial catering company. The thesis also investigates the fact that the analysis and evaluation conducted have limitations. Some of the limitations include: the information is not provided nature and the reasons cause the problem are not known clearly nor the data limitations as not enough information is provided or enough detail i. the other hidden reasons details are not known and the old employees, who leaf company already are not present to be invited the in – depth interviews.
1 PART I – BACK GROUND INFORMATION 1. Company information AEON is now one of the largest retailing groups in the world with over 179 member companies both inside and outside Japan. Founded 1758, AEON Group with its history spanning over 250 years has one of the longest histories as a retailer in Japan. During its operation, AEON Group has kept the unchanging commitment to putting “Customer First”.
AEON Group’s fundamental principles are the pursuit of prosperous and stable society and peace through the retail business. Under this corporate accountability, AEON Group has won the customer’s trust widely and expanded more businesses not only within Japan territory but also in other countries in Asia for such a long period of time. AEON Vietnam Co., Ltd has been presented in Vietnam since 2009, at first under format of Representative Office (1st Dec 2009 – 10th Jul 2012). On 7th Oct 2011, with the approval from People’s Committee of Ho Chi Minh City, AEON had set up its Vietnam Company Limited to invest for construction, organization, managements and trading of modern shopping malls, General Merchandises Stores (GMS), Supermarkets as a core business, and to carry out other business activities which links with import, export, trading, and researches.
Until now, the company has been developing with 04 the branches throughout Vietnam. There are AEON Shopping Center – Tan Phu Celadon in Ho Chi Minh City, AEON Shopping Center – Binh Duong Canary in Binh Duong Province, AEON Mall Binh Tan in Ho Chi Minh City and AEON Mall Long Bien in Ha Noi, total charter capital is 192,383,000 US Dollar and total registered investment capital: 204,648,000 US Dollars. The number of employees in entire mall is approximate 2,200. The internal structure one of the branch of company is showed in the graphic as follow: 2 General Director Head of Head of Head of Head of Head of Head of Human Sales & Legal Administration Accounting Purchasing Resources Marketing Department Department Department Department Department Department Team 1, 2, Team 1, 2, Team 1, 2, Team 1, 2, Team 1, 2, Team 1, 2, 3,…, N 3,…, N 3,…, N 3,…, N 3,…, N 3,…, N Diagram 1 – Company structure of AEON Vietnam 2.
Company symptoms Meals for company’s employees has an important role. It not only provides energy and helps them relax and increase their productivity but also is a part of employee’s benefit that employees are paid. Therefore, the service meal for employees is always paid special attention by business owners of AEON. In AEON, both of full-time and part- time employees have the right to get this benefit from company.
Everyday, supervisors are responsible for counting and reporting the number of order meals to admin. After that, leader will summary the figure and order to the industrial catering company. Based on this number, the industrial catering company will prepare meals. To control meal cost, AEON Vietnam gives the power to Administration Department to manage meal ordering progress and Accounting Department to record the meal cost.
A semi-annual, Administration Department will report the situation and result of controlling meals cost for Board of Directors and the other relavant departments. In the meeting of the 6 months early of Y2017 about the cost management in company, the Head of Administration Department already mentioned the increasing in meal cost for employees in head quarter and 3 branches in 6 months 3 of Y2017. The below table shows the situation of these months in Y2017 compared with the same period Y2016: Unit: VND AVERAGE MEAL AVERAGE MEAL DIFFERENT PERCENTAGE COST Y2017 COST Y2016 Jan 672,887.41% Table 1 – The average meal cost in 6 months early of Y2016 and Y2017 (The data was provided by AEON Vietnam’s Administration Department) Following the report of the Administration Department, it shows that AEON Vietnam has problem in 6 months of Y2017 in cost for employee’s meal. Based on the comparision with 6 months early Y2016, the meal cost of Y2017 is higher than its Y2016.
This increasing rate goes up to 87. Specifically, the total number of employees has trend decreasing in 6 months early of Y2017. Conversely, the average cost per person for meal is increasing. The chart will show this trend as below: 800,000.00 - 1 2 3 4 5 6 Chart 1 - The changing in average cost per one employee in 6 months early of Y2016 and Y2017 (The data was provided by AEON Vietnam’s Administration Department) 4 PART II – PROBLEM IDENTIFICATION 1.
Potential problems Following the information are conducted from in-depth interviews with Head of Administration Department, team leader, supervisor and accountant, who are working and have responsibility for meal cost management about the fact of meal cost management situation in AEON Celadon Tan Phu, AEON Binh Tan, Canary Binh Duong and AEON Long Bien, there are many potential problems for this symptom that cause the increasing quantity and price of meal as below: 1.1 Lack of experience to control situation: In the same period of Y2016, the situation is not like it in Y2017. In the same period of last year, the cost for meal is suitable with it’s employees. But in 6 months of Y2017, the meal cost is increasing although the number of employee trends of decreasing slightly. The average cost per person is from 529,304.
These figures are bigger than data of the same period in Y2016. The highest percentage of changing is up to 87. The current staffs do not have understanding and experiences to solve problem of Y2017 deeply. And they have not had any previous experiences to solve when the problem happend.
There are not many managers who have enough ability and experience to control the increasing meal cost. Following the view of Head of Administration Department, “the number of experienced managers in AEON is small,…the experience managers quit job more and more” and “the turnover rate is about 10% per year”. To solving this problem, the Human Resource Department has to recruit the new staffs who will be responsible for managing cost in the vacancy in company. Because of this instability, the new employees have difficulty to find and solve the current problem which happend in the company now.
The new satffs cannot catch up with the the current staffs. Futhermore, because of not using any machines to control the ordering, the process of calculating and forecasting meals for employees depends on the manual working of human absolutely. As a consequence, it cannot avoid inaccuracy management.2 The big gap between number of order meals and the actual meals: Although AEON Vietnam has the chief teams to cook the food for customers. With the professional chief teams, there are many delicious and safety food that are sold in delicatessen.
But they are not responsible for cooking the meals for AEON’s employees. The company hires the third service company to serve the industrial catering. Before the time for lunch or dinner, each of supervisor store will count and report the number of employees who will eat daily. After that, the leader of admin team will summary the number and send it for the third service company to prepare the industrial catering.
According to the Head of Administration Department of AEON Vietnam, “because of lacking of responsibility of supervisor store and the leader of admin team in checking meal’s quantity, it makes the big gap between number of order meals and the actual meals”. It is able to conclude the reason why it has the big gap between number of order meals and the actual meals is not exact number of order and actual meal’s quantity. There are not only lack of responsibility of supervisor store and the leader of admin team in head quarter and 3 branches but also changing in number of employees daily that cause the deviation of order meal’s quantity. Because of the characteristics of the supermarket and retail sector, the rate of part-time employees in AEON's labor structure is high, it is difficult to predict the number of part-time employees working in a day exactly.
These people are sometimes absent without supervisor store’s agreement. So that the quatity of part-time employees is variable.