Luận văn thạc sĩ UEH ineffective internal communication of importing process in srithai limited

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

NGUYEN THI THUY

INEFFECTIVE INTERNAL COMMUNICATION OF

IMPORTING PROCESS IN SRITHAI LIMITED

COMPANY

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: NGUYEN PHONG NGUYEN

Ho Chi Minh City – Year 2018

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Table of Contents

EXECUTIVE SUMMARY........................................................................................................3

CHAPTER 1: BACKGROUND INFORMATION....................................................................4

1.1 Company background ..................................................................................................4

1.2 Company symptoms.................................................................................................5

1.2.1 The method of scan symptom ..................................................................................5

1.2.2 Justify the importance of symptoms.....................................................................5

1.2.3 General symptoms................................................................................................6

1.2.3.1 The first symptom: Low Customer’s satisfaction ................................................6

1.2.3.2 The second symptom: Gross profit decreases ......................................................9

1.2.3.3 The third symptom: High failing projects rate ...................................................10

CHAPTER 2: PROBLEM IDENTIFICATION.......................................................................11

2.1 Methodology..............................................................................................................11

2.2 Identifying and Diagnosing Tentative Problems .......................................................11

2.2.1 The first tentative problem: Ineffective internal communication.......................14

2.2.2 The second tentative problem: Weak leadership................................................18

2.3 The real problem: Ineffective internal communication .............................................22

2.4 Problem definitions of ineffective internal communication ......................................25

2.5 Verifying the importance of ineffective internal communication .............................26

2.6 Verifying the existence of ineffective internal communication.................................27

2.7 Causes and Effects chart of real problem: Ineffective internal communication in

Srithai Vietnam company .....................................................................................................29

CHAPTER 3: ALTERNATIVES ANALYSIS AND POSSIBLE SOLUTIONS....................31

3.1 Verify causes of the real problem..............................................................................31

3.2 Main cause of the problem: weak individual leadership ...........................................34

3.3 Possible solutions.......................................................................................................37

3.3.1 Solution 1: Applying ROFO principle in office departments in Srithai Vietnam

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CHAPTER 4: ACTION PLAN FOR SOLUTION ..................................................................39

CONCLUSION ........................................................................................................................43

SUPPORTING INFORMATION ............................................................................................44

REFERENCES.........................................................................................................................75

APPENDIX ..............................................................................................................................77

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EXECUTIVE SUMMARY

The thesis writes about improving internal communication of importing process in

Srithai Company. The essay focuses on main area office departments. In specific, there

are Plastic sales department, Purchasing department and Finance department. The

main process is followed during essay is importing process related main products of

Material Handling Equipment (MHE). In specific, MHE products have been traded

since 2016 and reached high overcome in 2017. However, report of finances about net

profit of this group presented to decrease. In addition, the analyses later of customers’

satisfaction and failing project rate also showed negative. Therefore, the thesis will

focus on analyze these issues and figure out what is the main problem of these things

through the data from company and from some qualitative research. Not only that, this

thesis will evaluate and raise the most suitable solution as well as detail actions plan

for solving problem. And as finding from the research, the main problem leads to

decline bottom profit of MHE group is ineffective internal communication. This

problem does exit due to low motivation employees, weak teamwork skill, different

language and weak individual leadership. Those causes have built a bad culture for

working in company. Hence, it is suggested that company should apply ROFO

principles to encourage internal communication system in company. More than that, it

helps to build new culture, create facilitate working environment for employees.

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CHAPTER 1: BACKGROUND INFORMATION

1.1 Company background

Srithai Superware was established in Thailand in 1963. In 1996, Srithai comes to

Vietnam and becomes a joint-venture company under the name of Vietthai Industrial

Plastic Co. Ltd. located in Ho Chi Minh City. However, it has moved head office and

factory to Binh Dương provinces since 2005. Currently, it has 3 factories, 2 ones are in

the south and one is in the North Vietnam.

Srithai has more than 20 year’s experiences in Viet Nam with 46 Injection Machines

and 20 Compression Machines. The capacity is plastic 2.500 Tons/year, beverage

8.000 Tons/year, household 500 Tons/year.

Srithai is one of the leading manufacturers and distributors of three products group

below: Industrial Plastic Product, Food & Beverage Packaging and Melamine

Tableware. They do business with huge giant in plastic industry such as GS battery,

Pinaco, Suntory Pepsi, Sapporo, Jotun, etc…

The business vision of Srithai Vietnam Co. Ltd is using quality products and services

to achieve customer's complete satisfaction, thereby ensuring company profitability

and sustained market growth.

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1.2 Company symptoms

1.2.1 The method of scan symptom

The research started from researching KIP of Plastic sales department. There are five

group of products such as Original Equipment Manufacturer (OEM), Material

Handling Equipment (MHE), Paint Pail, Cinema and Promotion. This thesis focus on

Material Handling Equipment group. The main products in this group are plastic pallet

and container. Both of them are imported from Srithai Superware Thailand, Mother

company. Srithai Vietnam started to trade imported products from Mother company

from June 2015. However, it reached first customer in half of year 2016 after a year

approached. MHE group reached target in 2017, however, the data analyses show

bottom profit is lost. It raised many meetings between Sales, Purchasing and Finance

department from early year 2018 for finding reasons, corrective actions and solutions.

On the other hands, there is big gap between sales budget and actual revenue in half

year 2018. This issue is not only happened with MHE group but also another groups.

Moreover, sales budget was forecasted based on actual sales 2017 and customer

forecast in 2018. That raised two questions for board of manager. First question is why

sales forecast in 2018 is too different from actual return. Second question is plan of

quarter three and four to cover back for decreasing of revenue in first half of year

2018. Thus, the research starts from the history data such as sales report, profit report

and customer’s satisfaction survey report, references from sales, finance and ISO

department.

1.2.2 Justify the importance of symptoms

A business runs because of many purposes. Goldman et al researched that

“the business organization is a part of society and exists to serve and advance

society”(1). It could be said that the original purposes of business are continuously to

produce goods to supply for society; simultaneously, non-stop learning, improving and

driving society go advanced. On the other hands, Goldman also explored modern

theory that the primary purpose of organization is “realizing a sustained long-term

profit, thereby maximizing return on investment for shareholders and investors”(1).

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Nowadays, most of practitioners and normal people both agree that profit is the most

importance to ensure survival and development of company. The need for organization

to adapt and re-inventing itself to the forever changing business environment has

become more and more apparent in recent years. With fast pace technology changes

and disruptive innovation such as smartphones, e-commerce, and Industry 4.0, the

business environment now is most dynamic and unpredictable. Then, organizations

who can learn about these changes and be the first to re-invent itself to take advantage

of the new development will possess a competitive edge and those who are slow to

adapt or oblivious to these changes are doomed to mediocrity or, at the worst,

complete failure.

When profit of company reduces, immediately it impacts on whole activities of

enterprise. Which reasons lead to decrease profit? If business is not timely to find out

and solve it, business may not survive in non-stop changing environment today.

Otherwise, it could be said that customers are who bring value to company. Without

customer company will not survive. Therefore, many companies invest very much

money to find customers ‘need and their behaviors and make them happier. Thus,

customer ‘satisfaction rate is significantly vital to company. There are many signals to

indicate company that where it is position. Which are its strengths and weaknesses.

Most of improvements will base on customers’ behaviors.

On the other hands, Dawson also emphasized the importance of organization’s

knowledge capabilities. Its ability to process the changing competitive and market

environment. By stating that “Effective Real-time development and implementation of

strategy – which is essential for organizational success – depends completely on the

organization’s knowledge capability”(2). Thus, it can be implied that an organization

is only as good as its knowledge capabilities. Any improvement should base on

knowing clearly about knowledge capabilities of company.

1.2.3 General symptoms

1.2.3.1 The first symptom: Low Customer’s satisfaction

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Figure 1: The average customer’s satisfaction in 2017 and 2018 of importing

products group

Source: Customer’s satisfaction index report 2018, ISO department

ISO department will conduct a survey about customers’ satisfaction in middle of year.

The survey has been concentrated on four main points. First point is about quality of

products. Second point is about service after sales. Third point is delivery service.

Final point is salesman’s knowledge.

Srithai has traded import products in two years from 2016 to 2018. The survey has also

conducted for two years. The chart above shows results that customers are quite

satisfied with quality of products, after delivery service and salesman’s knowledge.

However, they have been disappointed with delivery service of company with 45%

and 50% in 2017, 2018 respectively. In specific, Srithai delivered products on time 30

orders in amount 91 ones in 2017, 10 orders in amount 38 ones in first two quarters in

2018. Most of late delivery orders are related to projects.

such as project to supply pallet to Suntory Pepsi, MM Mega Market, Nestle, Mondelez

Kinh Do and provide container to Big C, Pharmacity and Bach Hoa Xanh, etc.

Quality of product Delivery After delivery service Salesman's knowledge

2017 88% 45% 70% 70%

2018 90% 50% 80% 80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Customer satisfaction of importing products group

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