HA NOI — Vietnamese business owners who want to restructure to improve their performance during tough times should aim to completely transform all areas of their business, from strategy to technology to human resources, said Dao Thi Thien Huong, associate director of PwC Advisory Services.
|Workers produce agricultural machinery at the State-owned Song Cong Diesel JSC. Businesses in Viet Nam often lack strategies, capital and human resources, and continue to lag behind enterprises in more developed countries. —VNA/VNS Photo Minh Dong
Huong made this statement in Ha Noi yesterday at the Viet Nam CEO Summit 2012.
Viet Nam, she said, faced significant challenges when it came to administration and management. Businesses often lack strategies, capital and human resources, and continue to lag behind enterprises in more developed countries.
"Hesitance would be the biggest barrier to the success of restructuring," she said.
Raymond Mallon, economic consultant and senior advisor of Beyond WTO Programme in Viet Nam, said the economy achieved remarkable success in recent years as the country became part of the most dynamic economic region in the world.
Growth stemmed from industrial production and services in combination with increasing value-added production and joining the regional network, Raymond said.
However, he said Viet Nam's business environment had been ranked lower than that of other countries in the region. Weak management, corruption and a shortage of infrastructure, skilled workers and technology had been big challenges for economic development.
He added that positive reform measures by the Government would help the economy sharply improve.
HSBC's deputy general director Pham Hong Hai believed that the difficulties would create momentum for restructuring.
Hai expected that restructuring of the financial market would have positive results and become a source of GDP growth.
Experts agreed that the economic meltdown and financial crisis created significant pressure for restructuring. Business leaders, therefore, should plan to make changes in the future to cope with the above difficulties.
Douglas Coulter, director of Open Minds Foundation, shared case studies from the US, Europe and mainland China to demonstrate that most companies that previously invested in several sectors have adapted to focus on their core business.
Coulter said that mapping out a strategy was the first and most important step of the restructure process.
Businesses should clarify what exactly their strength is - multi-sector or core - in order to determine whether to expand their business.
He said expanding business into other sectors could benefit enterprises by sharing risks, while focusing on a key sector could help improve turnover, saving production costs.
However, according to him, good management plays a crucial role in the expansion process. A business that fails at management will almost certainly fall into crisis.
In a situation of decreasing turnover, companies might think about dismissing employees to cut costs. But in reducing the number of employees, businesses might make restructuring more difficult since talented people are essential in the restructuring process.
Douglas said that eliminating workers might even make costs higher because businesses often retain employees with low salary and therefore low efficiency.
Le Kinh Luan, a senior consultant at Tower Watson Viet Nam, shared these sentiments. He said businesses should make changes in corporate culture and management mechanisms - such as the way bonuses are awarded - to encourage employees' potential.
The annual event organised by online newspaper VietnamNet and the Viet Nam Report Joint Stock Company welcomed about 400 participants, including leading businesses from several sectors, to share their ideas about implementing corporate restructuring. — VNS