200000
150000
100000
50000
0
2006 2007 2008 2009 2010 2011
- According to this statistic, enterprises in Vietnam join in mostly micro businesses and
small businesses. It is shown by number of enterprise each year in four types of business.
Almost all enterprises tend to increase. Namely, it increases from 125092 to 324619 for 6 years.
But remarkably, micro businesses and small businesses still accounted for the largest number
and fastest speech. It shows that business organizations in Vietnam are quite simple. Because
Vietnam which is a developing country, has limited capital and poor quality labor. So, they just
have capital enough for simple enterprise. Mostly either individuals or family establishes small
business. Beside, number of enterprise of medium-sized and large size are roughly the same,
and the number of increase not significant.
- Each size of enterprise already has the different business purposes, objectives and supply
of goods and services. Firstly, Each enterprise is established for purposes and is not the same.
Purposes will start an enterprise, and it is end result in certain time. Each enterprise often has
short-term purpose and long-term purpose. For example, large business is established with
some purposes. For short-term purpose, enterprises will want to be profit maximization during
each operating cycle. For long-term purpose, maybe is become leading enterprise in country
and increase competitiveness in market. Because a large enterprise that will have many
opportunities to advance position, have abundant labor and capital resources. Moreover, some
large business also notice development of diversity works and social responsibilities. It shows
this enterprise have purposes for society. Beside, small business and medium-sized business
have different to large business. Both operate under simple system, maybe is family,
relationship, friend, ... So, main purpose is profit and profitability. On the other hand, both have
effort to become the core of local businesses. Because large business located in center
economic of country, small business and medium-sized business spread over local areas. It will
contribute economic output in that area. Secondly, objectives are plans to obtain result to
achieve purpose. That is specific way which sets for the businessman carrying out. For instance,
large business set the requirement in activities which may provide products or services to obtain
profit. Objectives of large business toward national and global purposes. Similarly, small
business and medium-sized business also have specific objectives to achieve purposes. Such
as, qualities, customer, services, have own objectives. Thirdly, that is supply of goods and
services. Each enterprise operates on the own field, so it has own supply of goods and services.
For example, large enterprises are normally factories, offices. So, it may provide a large
number of product and diversity services such as, companies produce shoes (Nike, Adidas,
Vans ...) which are provided in all the world. It also shows widely supply market of large
business. For small business and medium-sized business, supply markets of them are more
limited than large business. Both often supply products and services for local, maybe supply
large service business such as, many cultivations and breeding companies in local provide their
product for the supermarket. To sum up, some difference about purposes, objectives and supply
of goods and services can help to understand clearly size of enterprise.
2.2 Primary sector, secondary sector, tertiary sector
o Definition of primary sector, secondary sector and tertiary sector
Industrial structures are combination of different types of industrial sector. The production
of goods and services are almost like a chain because it has collaboration together. Frankly, the
production of one industry will supply for other higher industries. Base on basic principles, it
is classified becoming three sectors such as, primary sector, secondary sector, tertiary sector.
Firstly, primary is an industrial sector which exploited materials from nature, cultivation and
aquaculture. Base on this exploited, it will create basic materials to provide for the secondary
sector to produce or processing. Beside, some of them can provide directly to tertiary sector.
For example, type of seafood are caught or farmed, type of grains are farmed. Secondly,
secondary sector convert materials to products, goods. It produces a competed product as food,
building materials. As mentioned above, secondary sector will receive material from the
primary sector to produce. Such as, canned food, freeze food, furniture, building materials
Thirdly, tertiary sector will receive the product from both sector above and supply goods and
services for markets and customers. It consists of various services such as, retail, distribution,
carriage, export. For example, supermarket can take products from secondary sector such as,
canned food, freeze food, furniture, clothes, and from the primary sector such as, vegetable,
fruit, meat,.
INDUSTRIAL STUCTURE
2008
20.41
42.51
37.08
2013
18.38
43.31
38.31
(Source: author)
According example above, we can see clearly about relations between prices and quantities
of apple demand. If price of apple is 10 thousands for 1 kg, the average purchase quantities
will be 5 kg. But, when this price raise 30 thousands for 1 kg, the average purchase quantities
fall to 1 kg. That show that apple market is at different prices, demand and ability of buyer are
also different.
If market is fluctuations, so market demand are fluctuations too. Then, the demand curve
will shift to express a change of demanded quantities of buyer at all prices. Some factors will
affect to change of demand curve shifter. It includes the price of goods, number of buyer, the
price of other goods, incomes, tastes and expectations. On the price of goods, it is shown clearly
in demand curve. When prices raise, demand quantities will fall and opposite. In demand chart,
shift will move along the demand curve. For example, if the price of Aquafina clean water
increase suddenly from $0.22 to $0.31 for a bottle. It will lead to amount of individuals or
family that will cut down consumption or change to other brand such as, Lavie, Water maxx,
Dakai... Then, quantities of clean water on demand schedule will fall. But, if prices are not
change, it will happen some other cases. On the number of buyer, that is the more people join
in market, the more quantities increase. Then, demand curve will move to right. For example,
people usually travel in holiday at different place, then, quantities of goods and services such
as, hotel, restaurant, resort.. that will increase. In opposite, if amount of people leave market,
the quantities will fall. The demand curve will move left. On income factor, when income of
customers raise, demand of customer for necessary items raise too. But, it depends on specified
type of goods and services. It makes difference in demand curve. For normal goods, customers
will buy more when income raises. The demand curve will move right. Conversely, when their
income raises, they buy less inferior goods. The demand curve of inferior goods will move left.
For example, when my income raises. I will go shopping clothes in the supermarket, shopping
mall, .. but, I will buy clothes in sale market or pavement when my income falls. On the prices
of other goods, demands of goods depend on not only itself but also related goods. That are
complements and substitutes. Complement goods are type of goods which must use
concurrently with others to have effective. So, when price of complements increase which lead
to decrease price of mainly goods, and demand curve will move to left. But, it is true when
phenomenon happens long time. For example, gas and gas stove. When prices of gas raise, so
it makes demand of using gas stove decrease. On the other hands, substitutes is type of good
that can replace to use for other goods, and both have useful the same. When price of a mainly
good increase, so demand of substitute good increase too. Then, demand curve will move right.
For example, chicken and beef. When price of beef raise, they will use chicken to replace. But,
in some case, they are going to use vegetable to replace beef. On the tastes, tastes also have
effect for demand of customer. Tastes level of each person have different. It could be priority
of customer for goods and services. When a type of goods or services have large number of
people like, so demand of it will raise. Demand will move right. In contrast, some goods and
services are not preferred, demand of it will fall. Demand curve will move left. Finally,
expectations are plans about price in the future. For plans, when the price of any good will have
plan to raise, so demand of its good will raise. The demand curve will move right, and opposite
case. For example, nowadays, land is increasingly more and more valuable, so people buy it
more and more. In other case, when people anticipate salary which will raise, demand of them
will raise. We will see clearly shifts from different factors via the image below.
(Source: Author)
Secondly, it mentions supply. If demand is willing buyer for buying at specified price,
supply will be willing seller for supplying goods and services. The quantities of goods and
services are available to supply for market at specified price. In law of supply, the soled
quantities also relate its price. Unlike inversely proportional of law of demand, law of supply
have direct proportion. If price of goods and services raises, quantities of supply will raise.
Because producer supply more at high price to raise revenue. In contrast, if price of goods and
services fall, quantities of supply will fall. As demand schedule, supply schedule also show
relation of prices and quantities of goods and services that producer produce and supply for
market. Supply curve which expresses this relation is upward from left to right to show direct
proportion. We will see clearly in the image about supply schedule and supply curve below.
(Source: Author)
When prices of egg in market is 2 thousands for an egg, supplier will supply 2000 eggs for
market. But, when price of egg raise to 5 thousand for an egg, supplier will supply 5000 eggs
for market. The higher price of eggs are, the more quantities of egg supply for market. That
shows direct proportion between prices and supplied quantities.
Like the demand curve, supply curve also shift to show a change of supplied quantities of
goods at all prices in period time. The supply curve will be affect by market factor. When
supply curve are affected by market factor, so there are two sides happening. Supply curve will
move right when quantities of supply raise, and supply curve will move left when quantities of
supply fall at all price. On market, change of price of supplied goods and services will not
make move supply curve. It just move along supply curve. Beside, one of factor make supply
curve move is input price. That is labor resources, price of materials, cost of operated machine,..
those input factors will affect to prices and quantities that suppliers are willing to supply for
market. If prices of input fall, profit ability will higher, so supplier will produce and supply
more. Then, supply curve will move right.. For example, if price of oil fall, quantities of oil
and gas will be more on market. On technology, changes of technology and production
techniques will be strong impact on cost of production of goods. The more technology
develops, the lower prices are. Because, develop of modern technology always help to save
time and effort of labors. So, cost of production goods will fall, and supplier will supply goods
more at different prices. Supply curve will move right. For example, smart phone usually sale
in period time, but demand of customer constantly increase. That result of develop technology
make quantities of supply increase rapidly. On number of suppliers, quantities of goods are
supply not only a supplier but also a lot of supplier. So, the more people join in market, the
more quantities of goods supply. Supply curve will move right. But, if suppliers leave the
market, quantities of goods will fall. Supply curve will move left. For example, on pork market.
When swine flu happens, some suppliers are in flu area, so they cannot supply. Perhaps they
must leave pork market and switch to different market. Then, quantities of supplied pork in
market will fall. On expectations, that is predictions of suppliers in the future, but it will affect
to quantities and price of supply current. If positive expectations are, supply current will fall.
If negative expectations are, supply current will raise. For example, on pork market above, if
suppliers are notified before swine flu happens. They will supply pork more for market to avoid
damage. Then, quantities of supplied pork in market will raise rapid. It makes supply curve
move right. We will see clearly shifts from different factors to supply via image below.
As mentioned, market is a meeting place between buyers and sellers, so absolutely there are
collaborations among them. In other word, demand and supply will regulate by market, and
they will meet in a point equilibrium. So, what is equilibrium market? That is quantities of
good of demand and supply are equal at a specified price. Equilibrium price is the price at
which the quantity supplied and quantity demanded equal. Equilibrium quantity is quantity
supplied and quantity demanded at equilibrium price. Meanwhile, the intersection between the
supply curve and the demand curve is the equilibrium point.
In equilibrium status, market will not have shortage, surplus, and pressure to change prices.
Market switch equilibrium status to other status. Meanwhile, supply curve or demand curve
and both will shift to right or left. There are 3 cases. When demand curve shift, equilibrium
point will move along in supply curve. When supply curve shift, equilibrium will move along
in demand curve. When both demand and supply curve shift together, it appears new
equilibrium point that depend on speed shifts of demand and supply. Beside equilibrium status,
market also have shortage and surplus status. They are caused by factors that affect to demand
and supply in equilibrium price. Then, market could not timely regulate, so it makes surplus or
shortage. Surplus happens when price market is greater than equilibrium price, so it leads to
supply that is greater than demand. Shortage happens when price market is smaller than
equilibrium price, so supply is smaller than demand.
Elasticity of demand for goods are measured by a certain variable (price, income, cross-
price..) that indicate change degree in quantities of demanded goods to respond another
variable. There are 3 cases in elasticity of demand. It includes price elasticity of demand,
income, and cross-price. Firstly, price elasticity of demand is the degree of change in quantity
of demand when price changes. It is measured by the percent proportion between the
percentage change in demand compare to the percentage change in price. Demand will be
considered elasticity if quantity of demand change great that elasticity is greater than 1.
Demand will be considered inelasticity if quantity off demand change small that elasticity is
smaller than 1. The price elasticity of demand is calculated by the formula below.
Resources are all factors to produce goods and services. In other word, it is factor
production. There are 4 mainly factors in resource such as, capital, labor, land and business
ability. Scarcity in resources is nature that do not have ability enough to produce goods and
services to satisfy for people. Because desire and demand of people are always unlimited,
resources are limited. It is mainly reason to cause scarce resources in society. So, how to
organization do to meet business goals in scarce resource. It depends on productivity functions
of organization.
Production function includes input factors such as, capital, labor, natural resources,
technology Firstly, Physical capital (K) are input property. It is important for starting
organization and growing economic. Such as, factories, offices, machines, tools .. The scarcity
in physical capital is small scale, outdated tools and machines... Secondly it is human capital
(H). A long time ago, human capital are considered quantities of labor join in production and
quantities of hour that they do. Nowadays, human capital is not only quantities but also
qualities. Human capital includes labors that have skills, knowledge, creativity, ability work
with machines, The scarcity in human capital are shown via example such as, skills and level
of labor may not be high, the ability to receive knowledge are weak, the creativities are not
high, and the abilities to work with operated machine are not enough. Thirdly, natural resources
(R) is from nature such as, land, river, mine, ocean,.. they are exploited to facilitate increase
quantities of production rapidly. There are a lot of valuable and rare resources that could not
replace or create by others. That is scarcity in natural resources. Finally, technology knowledge
(A) is more and more stronger to grow modern economics. That is establishment technology
that are needed to know and understand such as, principle, experiences, method, process,.. next
to, it is necessary to apply this knowledge in practice to create high productivity. But, efficient
of technology application may not be high or have not been the most effective, and applications
are not suitable. That is scarcity in technology knowledge. The production function is described
below.
Y = A F(K,L,N,H)
According function above, organizations need to collaborate input factors to produce goods
and services. Meanwhile, input factors must depend on technology in produce process.
Therefore, organizations need to realize and find solutions to solve scarcity problem.
Organization need to have certain resources and decide to distribute resource suitable. It is
necessary to know how to use these resources to achieve high effective and avoid damage.
Organizations must notice to abundant and diversity demand of consumers. Especially, it must
be looked at quantities and qualities. Organization need to have suitable production structures
such as, how much product, what time to produce to supply for market. Because, it depends on
mentality, taste, and habit,.. of customers. Next to, organization need to use right resource to
produce. Application production method must be suitable level of labor and technology of each
organization. Organization must find and select the resources, technology level, methods and
production management to achieve the highest productivity and quality with the lowest cost.
Furthermore, it is necessary to know objects who use goods and services supplied.
2.4 Stakeholders and responsibilities to meet different stakeholders interests and
expectations divided into three groups:
Table 3. Responsibilities of stakeholders
Hoa Phat enterprise is established in 1992. Company is in the field of building materials
and furniture such as steel production, coke production, and iron ores, Enterprise plays role
of parents company, partnerships,.. Hoa Phat is a reputed brand in the country and the largest
market share in the field of furniture office in Vietnam.. So, Hoa Phat Group has a large
correlative of stakeholder. It includes internal stakeholders (employees, managers, and
owners), connected stakeholder (shareholders, customers, suppliers, and financers) and
external stakeholder (government and community). Each stakeholder has own expectation for
enterprise.
Evaluations
Internal Employees are stakeholders which has the most members. Perhaps,
stakeholders main expectation for them when coming Hoa Phat company is salary.
Employees Hoa Phat is one of the top company in the country. So, they have
Managers expectations which are stable income. Beside, Hoa Phat is a large group,
so promotion opportunities of salary and position are very high. Next to,
Owners
they always expect to bonus mode in the month, years or at projects.
They look forward to working in good environment such as, leadership
team, boss, justice and effective work. Moreover, Hoa Phat group is a
working place which produce building materials, It is affected to
health. So, safety is one of expectation of them. They also need to be
paid insurance for dangerous. Like employees, managers work for
enterprise to mainly expect salary. Working in large group as PVEP,
managers also are paid a large amount of money. For a manager, they
also expect to show their managed ability. They want to work with
individual performance, and not subject to the pressure of higher
position. As Hoa Phat group working environment, managers also
expect bonus money for projects. Beside, safely is also one of
expectation of them. Owners will always care about profit and revenue
of own enterprise. For Hoa Phat, it is one of the top company in
Vietnam, they expect the company is more and more developing to new
position in market. Especially, there is widely effect in the world.
Shareholders returns, be honest. As large Hoa Phat group, shareholders always want
to raise own their share to participate in mainly activities to control
Customers
company. Customers who want business to produce the products
Suppliers
suitable with demand and condition of them. Hoa Phat company do
Financiers
business on a lot of fields such as building material, furniture, animal
feed,.. Customers in the certain field will have different expectation. But
general speaking, they always buy product with low prices and high
qualities. Supplier who want enterprise to buy their product constantly.
They want enterprise must be fair payment and on time. Payments are
on time for them to have cost to continue next activities. For Hoa Phat
company which do business on a lot of fields. There are a lot of suppliers
to meet the needs of organization. So, suppliers absolutely believe and
want to supply for reputed this company. One of expectation create
reputation on market for own brand. Because partner is a large company,
they expect to create attention for other organization about their
products. Last, that is financier. For large business as Hoa phat,
Financiers obtain reputation and be famous.
Government group contributed VND 3,435 billion to the state budget in 2016, an
increase of 24% compared to 2015 and is among the Top 30 Enterprises
Community
to Pay Corporate Income Taxes in Vietnam. For community, Hoa Phat
always devotes billions of VND to carry out programs of humanitarian
meaning, showing the practical responsibility of enterprises to the
community.
(Source: http://hoaphat.com) The program funds the cost of cardiac
surgery for patients in difficult circumstances. In 2016, the program has
successfully supported 16 poor patients with the total cost of nearly 500
million VND.
(Source: author)
o Evaluating the business ethics of an organization
The more developed society becomes, the more complex business do. Main purpose of
business is profit. But, how to create profit is a remarkable problem nowadays. It will not true
if we think that all organization do business suitable with law. One more aspect than the law
of organization is ethics of an organization. Ethics of an organization which like ethics of
people, show beautiful inside such as civilized lifestyle, the way to communicate or behave
If organization adhere to ethics of business, organization will have the best future. Ethics of an
organization are divided some types of subjects such as ethics for customers, society, suppliers,
competitors, Ethics of organization will depend on a standard which includes honesty,
respect, fairness. Firstly, on honesty, organization must make balance between profits and
ethics. For customers, do not use deceitful tricks, cunning for profit. Because it will cause bad
effect for customers. All product that supply for market must be checked about quality.
Nowadays, there are a lot of products that use fake materials, dirty materials,.. For example,
some small areas of China usually produce toxic products which exports illegally for Vietnam.
Organization must have suitable price due to input factors. It should not sell with too high
prices meanwhile input prices are cheaper. Organizations also are honest with government and
law. It must pay business tax on time, or in accordance with the amount specified and no illegal
business, illegal trafficking in goods. For suppliers, it also must be payment on time by time in
the contract. Secondly, organizations must be respect to stakeholders. For customers,
organization must be respect about demand, taste and mentally of customers. For suppliers,
organization must be respect to the rules in the contract. If market is fluctuations, organizations
should not behave which price pressure or payment not on time. For competitors, organizations
must respect to advantages of competitors. It must not reuse the brand or use brand of
competitors to compare. Furthermore, organization must always be responsible for society.
Advantages of organizations must always come along advantages of society to impulse
development of society. Ethics of an organization are necessary for society nowadays because
it is one of those factors which decide survival of organizations. Nevertheless, ethics of
organizations are not high, and awareness about its are quite ambiguous. So, it is necessary to
have solutions to improve its. In my opinion, improve ethics of organization via media
information. Universities, colleges of economics also need to include business ethics into their
education program. There are the encouragements for right ethics. Even though, there are
severe punishments for illegal trade.
o Why does an organization try to build public relation and corporate image?
An organization wants survival long time, it must have public relation and corporate
image. Public relation is activities to create good relation for society. It is a communication to
raise good awareness of social to their organization. It also creates corporate image about
reputation, belief. An organization tries to build public relation to understand demands,
mentally of customers. Then, organization will have the most suitable techniques. Public
relation will create impression, belief of customers. Due to its, corporate image will become
more and more beautiful. Public relation are not only interact directly to customers but also
pay cost cheaper than other advertising. Therefore, public relation and corporate image are
important for an organization. It also decides revenue, even though, survival of those
organization.