Tài liệu The influence of corporate culture of vietnamese companies a study of corporation fpt

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THE INFLUENCE OF CORPORATE CULTURE OF VIETNAMESE COMPANIES: A STUDY OF CORPORATION FPT BY NGUYEN KHANH LY LY Graduation Project Submitted to the Department of Business Studies, HELP University College, in Partial Fulfillment of the Requirements for the Degree of Bachelor of Business (Accounting) Hons APRIL 2011 i Declaration of Originality and Word Count –––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––– DECLARATION I hereby declare that the graduation project is based on my original work except for quotations and citations which have been duly acknowledged. I also declare that it has not been previously or concurrently submitted for any other course/degree at HELP University College or other institutions. The word count is 16,195 words. Nguyen Khanh Ly Ly ii ACKNOWLEDGEMENTS First and foremost, I would like to convey my special thanks to Ms. Dao Thi Thu Giang, my supervisor, for her guidance, suggestions and encouragement during the writing of my thesis. Without her help, this thesis would not have been able to be completed. Secondly, I would like to express my gratitude to all lecturers at International School Vietnam University for their teaching dedication and support. All knowledge and skills that I gained during my study have laid the foundation for me to accomplish my thesis as well as to pursuit further education in the future. Thirdly, I would like to sincerely thank all the employees and leaders in FPT corporation), especially the members of FPT Software, FPT University, for their comments and data provision for their suggestion to complete this thesis. Last but not least, my sincere thank goes to my parents and my friends for their constant assistance and encouragement during my preparation for this thesis. Hanoi, April, 2011 Nguyen Khanh Ly Ly iii ABSTRACT THE INFLUENCE OF CORPORATE CULTURE OF VIETNAMESE COMPANIES: A STUDY OF CORPORATION FPT By NGUYEN KHANH LY LY April 2011 Supervisor: Dr. Dao Thi Thu Giang Corporate culture has many definitions as it is heavily influenced by the industry in which it operates, geographical location, history, employee personalities, etc. Some formal definitions have arisen, but essentially a corporate culture has several key elements: it offers a clear corporate vision; it is supported by corporate values consistent with the aims of the company and aligned with the personal values of organization members; a high value is placed on employees at all levels and there is extensive employee interaction across many levels; and the culture is adaptable, adjusting to external conditions, and consistent, treating all employees equally and fairly. That is the motivation for the researcher to conduct the survey about the influence of corporate culture of Vietnamese companies. The objective of this study is to access the understanding of Vietnamese companies on the topics of corporate culture, and FPT is typical example. By conducting the research, the research is able to show that the understanding of corporate culture concepts and its importance in companies. The readers have little basic knowledge of corporate culture. Besides that, from analyzing, evaluating and finding the author found out the strong as well as the week points to draw lessons for Vietnam companies. iv TABLE OF CONTENTS Page Declaration ................................................................................................................... ii Acknowledgements .................................................................................................... iii Abstract ....................................................................................................................... iv Table of contents ......................................................................................................... v List of figures and tables ........................................................................................... ix List of abbreviations ................................................................................................. xv CHAPTER 1 INTRODUCTION ............................................................................... 1 1.1 Study background ................................................................................................. 1 1.2 The objectives of the study ................................................................................... 2 1.3 The research question ........................................................................................... 2 1.4 Design of the study ................................................................................................ 2 CHAPTER 2 LITERATURE REVIEW ................................................................... 4 2.1 Definition of corporate culture and its elements ................................................ 4 2.1.1 Definition of Culture .................................................................................. 4 2.1.2 Definition of corporate culture ................................................................... 4 2.1.3 Elements affecting corporate culture .......................................................... 6 2.1.3.1 National culture ................................................................................... 6 2.1.3.2 Role of leadership ............................................................................... 6 2.1.3.3 Affections of business environment.................................................... 7 2.2 The model of Edgar H. Schein ............................................................................. 8 2.2.1 Artifact ....................................................................................... 10 2.2.1.1 Mission Statement.................................................................. 10 2.2.1.2 Architecture .......................................................................... 11 2.2.1.3 Narrative .............................................................................. 11 2.2.1.4 Language .............................................................................. 12 2.2.1.5 Ceremonies ........................................................................... 12 2.2.1.6 Norms of behavior ................................................................. 13 2.2.1.7 Symbol ................................................................................. 13 v 2.2.2 Espoused value ............................................................................ 14 2.2.2.1 Vision .................................................................................. 14 2.2.2.2 Mission ................................................................................ 15 2.2.2.3 Core Value............................................................................ 16 2.2.3 Basic Underlying Assumptions ................................................................ 16 2.2.3.1 People’s relationship with natural environment........................... 17 2.2.3.2 The temporal focus of human life ............................................. 17 2.2.3.3 The innate character of human nature ........................................ 18 2.2.3.4 The modality of human activity ................................................ 18 2.2.3.5 The modality of a person’s relationships to others ....................... 19 2.3 The model of Geert Hofstede ............................................................................. 19 2.3.1 Process – oriented versus Result oriented ......................................... 19 2.3.2 Job – oriented versus Employee – oriented ....................................... 20 2.3.3 Professional versus Parochial ......................................................... 21 2.3.4 Opened versus Closed ................................................................... 21 2.3.5 Tight versus Loose ........................................................................ 22 2.3.6 Pragmatic versus Normative ........................................................... 23 CHAPTER 3 METHODOLOGY ............................................................................ 24 3.1 Research methodology .......................................................................................... 24 3.2 Research tools: Primary data:................................................................................ 25 3.2.1 Observation. .............................................................................................. 25 3.2.2 Interview ................................................................................................... 25 3.2.3 Sampling ................................................................................................... 26 3.3 Limitations of thesis .............................................................................................. 27 CHAPTER 4 ANALYSIS ......................................................................................... 28 4.1 The history of forming corporate culture in FPT .................................................. 28 4.1.1 The process of building corporate culture in FPT ............................... 29 4.1.2 Key Ideology ............................................................................................ 29 4.1.3 STCo culture ............................................................................................. 30 vi 4.1.4 Gen FPT .................................................................................................... 31 4.1.5 FPT Spirit ................................................................................................. 32 4.2 Analyzing FPT corporate culture ...................................................................... 32 4.2.1 Performance of FPT corporate culture according to the model of Edgar H. Schein................................................................................................................. 32 4.2.1.1 Artifact .............................................................................................. 32 a. Mission Statement .............................................................................. 32 b. Architecture ........................................................................................ 33 c. Narrative............................................................................................. 35 d. Language ............................................................................................ 36 e. Ceremonies ......................................................................................... 37 f. Norms of behavior ............................................................................... 39 g. Symbol ................................................................................................ 39 4.2.1.2 Espoused value.................................................................................. 42 a. Vision .................................................................................................. 42 b. Mission ............................................................................................... 43 c. Core Value .......................................................................................... 44 4.2.1.3 Basic Underlying Assumptions......................................................... 45 a. People’s relationship with natural environment ................................ 45 b. The temporal focus of human life ....................................................... 46 c. The innate character of human nature ............................................... 46 e. The modality of a person’s relationships to others ............................ 47 4.2.2 Performance of FPT Corporation culture according to the model of Geert Hofsteed ............................................................................................................. 47 4.2.2.1 Process – oriented versus Result oriented ......................................... 47 4.2.2.2 Job – oriented versus Employee – oriented ...................................... 48 4.2.2.3 Professional versus Parochial ........................................................... 49 4.2.2.4 Opened versus Closed ....................................................................... 49 4.2.2.5 Tight versus Loose ............................................................................ 50 4.2.2.6 Pragmatic versus Normative ............................................................. 50 4.3 The valuation of FPT corporate culture and the experienced lessons from building FPT corporate culture for Vietnam enterprises ..................................... 51 4.3.1 Evaluating FPT corporate culture ............................................................. 51 4.3.1.1 Risks coming from inside ................................................................. 51 vii 4.3.1.2 Risks coming from outside ............................................................... 52 4.3.1.3 Achievements .................................................................................... 53 4.3.2 Awareness of corporate culture in Vietnam enterprises (Actual situations of corporate culture in Vietnam) ........................................................................ 53 4.3.3 The necessary of building corporate culture in Vietnam and the roles of CC in business ................................................................................................... 57 4.3.3.1 The necessary of building corporate culture in Vietnam .................. 57 4.3.3.2 The roles of corporate culture in business ........................................ 58 4.3.4 The useful lessons for leaders in Vietnam enterprises.............................. 59 4.3.4.1 Improvement on awareness of corporate culture .............................. 59 4.3.4.2 Building corporate culture for long term target ................................ 59 4.3.4.3 Preserving and promoting corporate culture ..................................... 60 CHAPTER 5 CONCLUSION .................................................................................. 62 5.1 Conclusion............................................................................................................ 62 5.2 Recommendation ................................................................................................. 63 REFERENCES .......................................................................................................... 64 APPENDIX ................................................................................................................ 66 APPENDIX 1 OPEN-ENDED QUESTIONS OF INTERVIEW .......................... 66 APPENDIX 2 OPEN-ENDED QUESTIONS OF INTERVIEW .......................... 67 viii LIST OF FIGURES AND TABLES Firgure 2.1 Elements of corporate culture ................................................................ 9 Figure 4.1 Mission statement of FPT ...................................................................... 33 Figure 4.2 FPT Pham Hung building ...................................................................... 34 Figure 4.3 – 4.4. Settings in one FPT working room .............................................. 35 Firgure 4.5- 4.6. Ceremonies in FPT ....................................................................... 38 Firgure 4.7 Men are given flowers in FPT .............................................................. 38 Firgure 4.8 – 4.9 Colors of FPT from outside to inside ......................................... 41 Figure 4.10 – 4.11. Dressing code in FPT ................................................................ 41 Table 1: Evaluation scale of fpt corporation culture by hofstede model ............. 51 Table 2: Awareness of the concept of enterprise culture....................................... 54 Table 3: Perceptions of the role of business culture............................................... 55 ix LIST OF ABBREVIATIONS CC Corporate Culture CMMI Capability Maturity Model Integration Dr Doctor FPT Food Processing Technology ISO International Organization for Standardization PhD Doctor of Philosophy VCCI Vietnam Chamber of Commerce and Industry WTO World Trade Organization x CHAPTER 1 INTRODUCTION 1.1 Study background Corporate culture has plays important role in the business world in the last three decades since it plays an important part in managing a corporate and driving it to success. CC exists in every corporation and creates huge influences on the corporation’s activities and manners of employees. CC is one the main issues that Vietnam should care about these particular areas. According to the director of the Institute of Labor Science and Social Affairs, Nguyen Huu Dung, “Vietnam needs to work out a clear roadmap for the CC for local businesses in line with its economic development and international integration” CC is one of the focus areas that are not always fully understood and are not optimally utilized either in an organization. However, it seems that few people have a thorough understanding of what CC is and what corporate culture covers; people, therefore, have not found the effective way to manage a company and comprehend the exact way in which a company operates. In Vietnam, after “Doi moi”, a few businesses have built themselves a strong culture. The aim of this study is to assess the influence of CC in Vietnamese companies. And with the purpose of study is to help companies to build their own separate culture, contributing to improve the image of Vietnam enterprises in the eyes of international friends, the author would like to analyze the model of CC of FPT Company in Vietnam as an example for other companies to follow. 1 1.2 The objectives of the study - The main objectives of this study is to have a throughout understanding of corporate culture. The first aim of this project is to provide a theoretical framework for understanding the completed concept of corporate culture and other relevant components under this area. - The second objective of this project is to evaluate the influence of CC in Vietnam. From analyzing, evaluating and finding the author hope to find out the strong as well as the week points to draw lessons for Vietnam companies when they begin to build and develop their own culture. 1.3 The research question The study aims at addressing five following specific questions: What is the corporate culture and what are the models to approach it? - What is the real corporate culture in Vietnam? - How does corporate culture affect inside or outside of companies in Vietnam on doing the corporate culture? - How is corporate culture in working environment and what are the strengths and weaknesses? - What lessons can be drawn for Vietnamese enterprises to build up corporate culture? 1.4 Design of the study With the aim to identify the CC of FPT, the author uses the method of crosssectional study design which is used to decide what we would like to study, to identify the study population (mentioned below), and to select a sample (mentioned below), and contact the respondents at one time. The purpose of this method is to catch the detail figure of corporate culture at FPT at the present time of the study and 2 then to draw lessons for Vietnam enterprise in building and developing their own corporate culture. 1.5 Structure of the thesis Beside the introduction and conclusion parts, the preferable structure of the thesis is split into five chapters: Chapter 1: Introduction (provides an introduction outlines to follow in the thesis). Chapter 2: Literature review (provides an introduction into corporate culture, its elements and models approach corporate culture). Chapter 3: Methodology (provides methodology of corporate culture). Chapter 4: Analysis (discusses the corporate culture in FPT and lists the experienced lessons from building FPT corporate culture for Vietnam enterprises). Chapter 5: Conclusion. 3 CHAPTER 2 LITERATURE REVIEW 2.1 Definition of corporate culture and its elements 2.1.1 Definition of Culture For a long time, culture has played an important role in life of human beings. Nowadays in particular, in the age of modern civilization when the human factor has been considered as the engine as well as the objective of all social reforms, culture has become an inevitable part and been regarded as the measure to assess every activity and a thorough understanding of culture, together with its role in social life, therefore, it is being paid much attention to. Culture is a difficult concept to define. The author should review some definitions which are commonly accepted in the world to understand the definite on of culture and its features. The first widely accepted definition of culture is one made by the American anthropologist Edward.B.Taylor, in which culture is “that complex whole which includes knowledge, belief, art, morals, law, custom, and any other capabilities and habits acquired by man as a member of society.” In the philosophy of MarxismLeninism, culture is defined as “the collection of physical and mental values created by human and means and methods that human use to transform the nature, society and educate people”. 2.1.2 Definition of corporate culture Due to the development of society and the increasing integration between nations, the issue of culture has gradually won the interest of public. After a series of processes in which anthologists conducted more research and implement deeper 4 studies on culture, they have classified culture into many smaller categories such as: national culture, business culture, organizational culture, corporate culture and et cetera. Since 1980s, studying about corporate culture has been carried out from America and been built and developed strongly by Japanese. This trend emerged as the owners of corporations realized that they needed to change the approach to their corporations. Before that, the only way they could do to run their business was to rely on complex structures and dogmatic mechanisms, causing them many challenges in managing business, particularly in the depression. Since they realized the new approach from the view of corporate culture, however, they find out many other methods to acknowledge how a corporation activates and changes to be adaptive to the new environment to survive and develop. Corporate culture is generally understood as “the system of shared beliefs, values and standards of solving problems, which is created in the forming and developing process of a corporation and demonstrated through physical and nonphysical forms and behaviors of its members.” (Schein H.Edgar 1992, page 32) A different definition which follows the metaphor of Dr. Phan Quoc Viet President and CEO of Tam Viet Group: “If enterprise is a computer, corporate culture is the operating system" (Phan Quoc Viet, 2008) There are many ways of approaching corporate culture, among which the model of Edgar Schein – an America professor published in the book Organizational Culture and Leadership in 1992 has been used widely. Or the model of Geert Hofstede expressed in the book Culture and Organization in 1991. In this thesis, these models are used to analyze elements of CC. 5 2.1.3 Elements affecting corporate culture 2.1.3.1 National culture The definition of National culture covers almost all other culture definitions. Normally, when referring to the definition of culture in every country, it is implied that it is national culture (such as Vietnam culture, Japanese culture, Chinese culture) Like all things that are born under a certain environment, countries belong to the world, organizations belong to society, family members belonging to their ethnic, culture and business of each is also part of national culture. In the growing process of corporate, national culture always has impacted (direct or indirect) on many different aspects of the culture of the corporate. That explains why there is a difference between West and East corporate cultures, the corporate culture of Islam nations and corporate culture of those countries by Christians or Buddhists, and so on. National corporation affects the formation and development by creating characteristics expressing the features such as leadership style, the degree of power decentralization in the enterprise, equality... 2.1.3.2 Role of leadership "The leaders of an organization are the people who are responsible for formulating and implementing the strategy – they are the ones deciding what they are going to do and then actually figuring out how they are going to do it", says Mr Keim (1961). "Culture is all about the values an organization subscribes to, which then creates norms throughout the organization. And you cannot get (strategy) done without changing culture, so leaders need to understand culture. They need to know how to assess it and how to influence it”, says Mr Kinicki (1978). That kind of reputation - and that kind of culture - cannot be built overnight. But Southwest has shown that it can be built. All it takes, say Keim and Kinicki (1961), 6 is brilliant leadership. The main founders or leaders succeed and their advisors help create its own unique culture for the business. One researcher had to say that "If the leader is a great person, his ideas can be absorbed in the entire culture of the business. But if leadership is a stupid man, all direct trust can not exist. CC thrives on the basis of faith” Also on that point, researchers have confirmed that: "Corporate culture affected by many factors which specific individuals are the founders." The characters or the key founders with visionary capabilities and their aspirations have identified a vision and mission for the business. 2.1.3.3 Affections of business environment. The business environment of corporation is all factors affecting to a company’s activities. There are two sorts of environment: Internal environment and external environment. The internal one includes human resources, finance, engineering; technology of the firms. CC is in that list, also. The other includes two sorts: macro environment and micro environment. The first one is built by natural infrastructure, economy, technology, culture- society, politics law, union, the political forces, social and international environment. The others include supplier, customer, competitors, potential opponent, replacement product, labor market. The influence of the environment to corporate culture inside, especially industry factors is significant. This will be visible when using the model of Hofstede mentioned above is used. Businesses apply any pair dimensions will depend on their work. For the external environment: in the various environmental laws, CC is also different. As in Vietnam, a prominent character in the long-term business is very good at their law. This is because of some gaps and ambiguity in our business law. 7 Also, in different economic fields, businesses should focus on a certain number of activities. In the technology area that is research and development, and in commercial areas such as art sales, production is continuous improvement and cost reduction. Thus, business fields decide which business activities must be implemented to achieve success. 2.2 The model of Edgar H. Schein There are many aspects or components of corporate culture identified by researchers such as tangible entities; language in the form of funny stories, metaphor, stories, anecdotes, myths, behavior patterns in as rituals, ceremonies, anniversaries, standard behavior, the hero, icon and actions symbolic, beliefs, values and attitudes, ethics rules, artifacts, history. Despite the list above are divided into groups, but there are overlaps. In 2004, Edgar H. Schein PhD. gave out the way of division CC into different classes arranged in order of complexity and depth to feel the cultural value of the business. We can say that this is the nice approach going from phenomena to the nature of culture through its constituent parts: 8 Firgure 2.1 Elements of corporate culture ARTIFACTS Mission statement Architecture Symbol Language Narrative Ceremonies Behaviors ESPOUSED VALUES Vision Mission Core values ASSUMPTIONS Human and Environment Focus of human life Perspective of human innate Motivation of human activity Relations among people (Source: about the dynamic of HR, http://dynamicsofhr.wordpress.com/2009/12/) As can be seen from figure 2.1 (figure 2.1 in Chapter 2), there are three levels of corporate culture. The highest one and also the visible part of the iceberg is artifact. At the surface, they are visible artifacts and observable behaviors – mission statement, architecture, narratives, language, ceremonies, and norms of behavior and symbols that are shared. All of them are tangible and audible results of activity that are grounded in values and assumptions. The second level which the author can hardly observe is espoused values. Espoused values are the rules, the values announced in public and the staff must to try their best to carry out. These are values that leaders of a corporation set up and hope their employees will obey but need time to prove it is right or wrong. They include vision, mission, and core value which play a key role to create CC The third level and also the most difficult to recognize is the underlying assumptions. This is what all the members in the corporation think are right to do and 9 take it for granted. Basic underlying assumptions are cognitive maps such as the way things are done in a corporation and are taken for granted. If someone violates a basic underlying assumption by using a different process to achieve an outcome, coworkers may respond with surprise, even shock and say things like “But we are always done it this way.” 2.2.1 Artifact 2.2.1.1 Mission Statement According to Daft (2009, page 26) “a mission statement communicates to current and prospective employees, customers, investors, suppliers, and competitors what the organization stands for and what it is trying to achieve” It is a way to measure the organization’s productivity and success, and an organization’s mission statement shows authority to internal and external stakeholders. Actually, many companies also use them to encourage their employees to follow the leader's visions. As such, the mission statement can often give the author insight to the CC. It may be quite difficult to keep in mind all activities or products of one corporate, on the contrary, it is possibly easy to remember its mission statement. For instance, the following are some examples of mission statements from real enterprises: 3M "To solve unsolved problems innovatively", Merck "To preserve and improve human life.” Wal-Mart "To give ordinary folk the chance to buy the same thing as rich people.” Walt Disney "To make people happy." These are the “one-liners”, but each is supported by a set of values that set the performance standards and direct the implementation of the mission. Hence, it is true that mission statements are considered as one of the unique signs of corporate. The clear statement of the organizational mission builds the CC among employees and between it and clients. 10
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