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102001 12 HA ANH DUC ULC A1

Business Management 1 (Đại học Kinh tế Quốc dân)

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 I. Introduction

The purpose of this research is to learn more about the company's changes, such as what
drives them, what consequences they have, and how they affect day-to-day operations. A
company's strategy and approach to dealing with change in operation may be informed by
an in-depth research and evaluation of changes, change drivers, and the external and
internal surroundings. A company can better coordinate and control changes if its
employees have a firm grasp of what's driving them. In addition, this paper offers
suggestions on how the company's decision-makers and executives should approach
leading and managing change.

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II. Change analysis
1. Company introduction
The company manufactures electrical equipment such as light bulbs, terminal
boxes, etc. The company's location is in Dai An industrial park in Hai Duong
province. The company has about 400 people divided into 4 main departments
in the company's apparatus including administration and personnel, marketing
and logistics, finance, and production.
2. Changes and drivers of changes

Similarity
According to the context, there will be two changes in the company including
upgrading the production line and a new policy for employees at the company.
Both of these changes are externally influenced. The company needs to
upgrade its production line because there is currently a boom in housing
construction in the North. As for the new policy for employees, it needs to be
changed because other companies in Dai An Industrial Park are offering a 20%
better salary offer to the company.

Differences

- Upgrading the production line

Upgrading the production line is a necessary change because the existing
production line is old and cannot produce the expected good quality
products. Currently, the demand for electrical equipment is increasing in the
Northern region, which has caused the company to need to change in terms
of technology to be able to improve the production facility, which will
help the company produce many high quality products and be able to
compete with other companies in the market. So that, it is from the
market's demand factor. Considering the need for the company to make

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preparations for this shift, we shall refer to it as a planned change in
strategy.
The advantage of the change in the line is that it will help the company
produce 50% more products before the change as well as reduce the
number of products that do not meet the standards. Moreover, the new
production line only needs 15 workers and 1 supervisor, which will help
the company save a large amount of salary. On the disadvantage side,
with the upgrade of the entire production line, the company not only has to
spend a large amount of money to be able to replace the equipment, but
also has to temporarily stop production, which will make the financial
capacity less. the company's capital decreased significantly. In addition, the
training sessions that will need to invite experts to guide the staff will also
cost a lot of money. With the upgrade of equipment in the production
process, the production line will need less people, which will lead to staff
reductions, which can lead to complaints from employees who are laid
off. This change will have a direct impact on the administration and
personnel, finance, and production departments.

Upgrading the Department What to do

- Hold a meeting for all
production line
employees to announce the
change.
Administration and
- Organize training courses
personnel
for employees
- Planning for fired employees
due to change
Finance - Assess the financial position
of the company
- Prepare cost reports to upgrade
production lines
- Make a financial contingency

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 plan to ensure a smooth
production line upgrade
- Arranging and redistributing
personnel in the production line
under the downsizing plan
Production
- Monitor and evaluate
the effectiveness of the
new
production line

- New policies for skilled personnel

The second change is a change in the company's approach to retaining
its skilled worker for the long term. If it wants to keep its staff and cut
down on turnover, it will need to pay them more. Because of increased
competition for talent in the Dai An industrial park, the company have been
forced to raise pay. So, competitors are the driver that creates the change
Also, employees have been influenced by job offers from other businesses.
People moan about their present pay when looking for a new job when
their compensation increases. This is an immediate adaptive change that
has to be implemented today to keep talented individuals from leaving the
company. The new rules will have far-reaching effects on organizations,
therefore it's imperative that managers at all levels assess the situation and
implement effective measures to keep their most valuable employees. New
benefits may include increased compensation or other incentives for
employees. The management and human resources and the accounting
departments would be affected by this change. The company's bottom line
would suffer if salaries are raised.

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 Department What to do
- Evaluate and review
employee's situation after
Administration
notification
and personnel
- Discuss to come up with new
New policies for salary policies.
- Provide a new financial plan
skilled personel
after the change
- Convince leaders by
Finance
demonstrating the
effectiveness and
importance
of new policies

III. Internal and external analysis

1. Internal analysis

According to Decree 39/2018/ND-CP of the Government, the company is considered as a

large-scale enterprise (1), because the company has more than 330 employees. A large
enterprise is an enterprise with a total company capital of VND 100 billion or more and a
workforce of 300 or more people. The significance of large corporations cannot be
overstated due to their enormous impact on the nation's GDP. The state will favor big
enterprises and give them with benefits that small and medium-sized businesses do not
enjoy due to the substantial contributions that large businesses make to the national
economy. Furthermore, the goods manufactured by a large corporation. Since the goods
they manufacture are so vital to the economy, these companies also have a high degree of
competitiveness. The firm, however, will remain a popular option for low- and medium-
income consumers because to its high standards of quality and low prices (2). The
company's strength also lies on the abilities of its employees and management. The vast
majority of employees has exceptional skill and flexibility (3). All managers exhibit skill
and leadership while on the job. This helps maintain the company's high standards of
efficiency and quality in manufacturing. Dai An industrial park's proximity to both

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suppliers and ports makes it an ideal location for the company's headquarters (4).
Reasonable rates for both power and water make Dai An an attractive location for
manufacturing.

However, there are still several challenges that the business must overcome. The firm
has been having technological issues since it was initially established and launched
several years ago. The age of the manufacturing line prevents it from running at peak
efficiency (5), which has serious implications for the final product quality. The quality of
the company's products is poor, and they do not satisfy the demands of the market
(6). Moreover, the plant has a lot of competent employees, but they have trouble
adopting new technologies (7). Employees who are used to using outdated tools may be
negatively impacted by the introduction of new technologies. As a result, despite the fact
that they are highly qualified individuals, their expertise will be useless at their new
workplace. Moreover, upgrading the production line will reduce the staff, from which
some workers will have a fear of expelling (8) which leads to under-productivity. Last
but not least, the director of the firm has to have a talk with the owner about getting
money to update the manufacturing line. However, the company's financial resources
are restricted (9) and should be utilized sparingly because the change in manufacturing
process will cost lots of money.

2. External

2.1 PEST

Politic

The Communist Party of Vietnam is the only political party in Vietnam. The Party's
leadership role in establishing a socialist-oriented market economy in Vietnam is evident
throughout the congresses. direction, objectives, goals, and solutions to grow the socialist-
oriented market economy at each stage of the country's development. Vietnam has a one-
party system, which provides political stability (10), which is always a huge advantage
when compared to other countries throughout the world. Prior to the Covid-19 pandemic,

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it might be said that Vietnam performed an outstanding job of disease prevention,
maintaining non-negative economic progress in the face of difficulty. (Hoa, T., 2020)

According to Thuy Han (2022), the minimum wage of Hai Duong, notably in Cam Giang
district, is just 3.640.000 VND, while the salary offered by the company is 8,500,000
dong, more than double the prescribed rate. This has opened up a fantastic opportunity
thanks to a ready supply of labor. According to article 125 of the Labor Code 2019,
enterprises can dismiss employees in cases where they do actions that affect the business
operations, assets and interests of the company, for example theft, corruption, disclosure
of secrets to rival companies, etc. (Chi, Q., 2022). Moreover, when employees voluntarily
quit their jobs for 5 working days within a period of 20 to 30 days, they will also be
disciplined by dismissing them. waste. However, the company is planning to upgrade the
equipment in the production line, so the reduction of labor will take place and this is
unreasonable because the contract does not mention this. Employees have the right to sue
the company in order to receive legitimate benefits. According to Clause 1, Article 49 of
the Labor Code 2012, due to the company's reduction of personnel on the issue of
changing the technological structure in the production process, employees who have
worked regularly for 12 months or more can completely receive unemployment benefits
while they are unemployed.(Toan, T., 2019)

Economic

As a whole, the economy was relatively stable; inflation was contained; economic growth
was on the upswing; and the economy's primary balances were protected, despite the
challenging environment. In a period of nine months, the consumer price index (CPI)
averaged a 2.73 percent rise, while gross domestic product (GDP) growth peaked at 8.83
percent. From the indications, the consumption of clients is growing (11). To keep its
rapid economic development rate among the country's top groups in the first half of 2022,
Hai Duong overcame several obstacles. Despite being impacted by the epidemic and raw
material costs, Hai Duong's economic growth in the first half of the year reached 11.8%,
placing 6th in the nation and 2nd in the Red River Delta (behind Bac Ninh province). In
particular, the electrical equipments industry in Hai Duong has been developing in recent

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years. Significantly, the percentage of prodcuing the electrical equipments
increased by 53.9% according to the annual report of February of Hai Duong.
(thongkehd.gov.vn, n.d.).

Social

The current population of Vietnam is 99,272,385 people according to the latest figures
from the United Nations. With such a large population, the company has a lot of choices
in recruiting its workforce. It can be seen that the larger the population, the more
consumption increases and the more products are sold, the larger the company's
revenue (12). Currently, the trend of building houses in the North is booming. The
company's opportunity will be a production line upgrade that will enable them to have
high-quality products in bulk. In terms of challenges, the company will have to face the
fact that other companies will also bring many new products to the market. Customers
will choose products with high quality and from famous brands.

Technology

The marketing team reports that there has been an increase in consumer interest in electric
equipment. Due to this, the firm is aiming to modernize and enhance the manufacturing
system to boost production efficiency and meet customer expectations. Each business has
the opportunity to increase the quality and quantity of its workers' output via technological
progress. Both employee morale and output are likely to rise as a direct result of this shift.

Historically, progress in important industrial areas and disciplines, increased product

competitiveness, and satisfied customer demand have all resulted from advances in
scientific knowledge and their practical application. The need of both the home market
and the international market. In spite of this, industrialization, socialization, and economic
progress will have negative effects on enviroment (13). Climate change, air, water, and
soil pollution, health issues, extinction of certain species, and more will all result from
industrialisation.

2.2 Porter’s Five Force

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Threat of new entrants

According to Ms. Oanh (2020), a large enterprise is an enterprise with a total company
capital of VND 100 billion or more and a workforce of 300 or more people. Although
there are many new companies in the electrical, lighting or electronic equipment industry,
it is extremely difficult to compete with famous companies with prestige and product
quality. . There are 450 people in the production department, so it proves that this is a
large company with strong financial potential.

➔ Threat of new entrants is

low Power of suppliers

Plastic and metal are the two main raw materials to create finished products in the
electrical equipment industry. Metals, especially copper, act as conductors for all of the
company's products, such as sockets and terminal boxes. Originally only the second best
conductive metal, but because of its low cost, copper is the most preferred in power
transmission. Many people know the use of copper as a turning conductor, but besides
that, this golden metal is also used to manufacture and manufacture computers, televisions,
and mobile phones with applications such as links. electronics, printed circuit boards,
semiconductors, electromagnets, heat sinks, vacuum tubes, etc. In addition, copper also
plays an important role in the design style of the fire protection system network.Therefore,
to ensure the safety factor, the quality of the raw materials needs to be ensured, so the
suppliers must offer the best materials so that the company can produce high-quality
products. Equipment costs will be established by the supplier. In such a case, the supplier
has far more influence than usual, and the organization must defer to it.

➔ Power of suppliers is

high Power of buyers

Businesses and individuals are the two main groups of customers who need to use
electrical equipment. Regarding businesses, they often have a need to install a large
system in a crowded working environment. They often look very carefully at the contract
for the installation as well as the quality of the product. Not only that, since they often ask
for

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large quantities, they will need a reasonable price so that they can balance their finances,
for example, the lamps need to be of good quality and at a reasonable price when buying.
bulk. Installation requirements are also extremely strict to ensure the safety of workers at
the enterprise. As for individuals, most of them will want cheap and high-quality products.
There are groups of customers who want products with high aesthetics or with diverse and
intelligent functions, so the company needs to have a variety of product samples for them
to refer to. Therefore, the company needs to understand the consumption trends of
customers to be able to bring good quality products.

➔ Power of buyer is

high Threat of substitutions

In the electrical equipment market, there are many different types of products from big
brands to small brands. Electrical devices on the market today are completely
interchangeable. These items are mostly used in all construction projects from small to
large, not to mention other personal purposes. To create an advantage over many other
brands, businesses need to launch many products with differences such as function or
design that will attract customers. To be able to compete with other companies in the
electrical equipment industry, the company needs to come up with breakthrough products
to be able to compete directly with large firms as well as startups. Moreover, there is a risk
of the company's products being supplanted by rivals offering similar or better quality if it
does not invest in modernizing its production line to provide such goods to its customers.

➔ Threat of substitutions is

high Competitive rivalry

The worldwide market for technical equipment is growing quickly as a direct result of
Vietnam's fast technological progress. Therefore, there is intense rivalry among
businesses operating in this market (10). Large corporations like as Hoang Phong, Dang
Quang, and DHL are among the numerous that produce electrical goods. In addition, there
are a great number of multinational corporations that boast both substantial financial
resources and cutting-edge technological capabilities. There are a plethora of additional
businesses

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operating in this sector. There is intense rivalry because of the current state of affairs.
Therefore, the quality of the items must be the company's first priority. Furthermore, the
price of the items should be of paramount importance due to the abundance of companies
operating in the same sector as the firm and providing products that are comparable to
those supplied by the company. From there, it can be seen that this market is extremely
competitive because if the products of the company is not quality enough, the
revenue of its will decrease (14). Therefore, the quality of the items must be the
company's first priority. Furthermore, the price of the items should be of paramount
importance due to the abundance of companies operating in the same sector as the firm
and providing products that are comparable to those supplied by the company.

➔ Competitive rivalry is high

IV. SWOT
This section will detail the company's prospects and threats for future
competitiveness and survival, as well as its strengths and weaknesses, after an
analysis of the company's external and internal surroundings.

Strengths Weaknesses
- A large-scale enterprise (1) - The product line doesn’t
- The price is suitable for the budget response the demand because it’s
of Vietnamese customers (2) old. (5)
- Having skilled workforce (3) - The quality of products is not good
- Having good location (4) enough (6)
- Employees have trouble with
adopting new technologies (7)
- Restricted financial (8)
- Employees fear of expel
which leads under-
productivity (9)
Opportunities Threats
- Stable political enviroment (10) - Customers' requirements for
- The consumption of clients quality as well as price are
is growing (11) increasingly strict (12)
- There are many potential customer - Harm to enviroment (13)

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 (12) - Revenue could be decrease
because of competitors (14)

V. Force Field
1. Force field analysis

When it comes to mutual change management initiatives inside a company, the dynamic
domain analysis approach is a useful decision-making tool. Kurt Lewin (1890-1947), a
pionner of psychological research, developed a technique called consensus analysis that
helps managers foresee difficulties by identifying and analyzing the level of agreement
that exists around a change or the execution of a suggested solution. Lewin contends that
we need not worry about every issue in a system that is guaranteed to continue in a
transient equilibrium. (asq.org, n.d.). From SWOT analysis, it can be given the driving
forces and restraining forces. Both forces will be graded on a Likert scale from 1 to 5, with
5 being the higgest influence and 1 the lowest. The green color presents for “Driving
Forces” and red color presents for “Restraining Forces”.

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Driving forces

It has already been shown that the corporation does not have an especially large financial
reserve. Consequently, the business must develop a strategy to improve profit, which
will lead to a rise in the company's total revenue. There are a lot of rivals in today's
industry, and they come from all over the country and the globe, so the firm has to beef
up its human and financial resources to keep up. Using the money generated by outdated
technology may keep the business afloat temporarily, but in the long run, the company's
wares will no longer be competitive, leading to a decline in earnings. As a result, the
whole organization will feel the effects. Final score for this criterion is 5.

The pressure from consumers is also a major factor that has the corporation making
changes. Customers are buying and using the items for their intended purposes, driving
sustained growth in product demand. The electrical equipment market today has many
interchangeable products such as light bulbs or sockets. This is the motivation for the
company to offer products that are different from other brands by taking advantage of
technology in the production process The rating for this aspect is a 4.

The business will be placed under intense pressure if a foreign competitor enters the
market, since these firms are often quite big and have access to extensive financial
resources and cutting-edge technical infrastructure. Multinational firms are able to raise
their profit margins as a result of increased output from their manufacturing lines at
lower overall costs. The company's bottom line will take a hit in both the short and long
term as a result of the dwindling number of clients and the possibility that none will
remain. The repercussions will be felt across the firm as a result. Final score for this
consideration is 4. In short term, the company needs to develop many breakthrough
products as well as multi-use to be able to serve customers and businesses. In long term,
rival companies become stronger, the company will find it difficult to compete in the
market.

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Modern consumers want items that serve several purposes and are easier to use than
their predecessors. Additionally, shoppers want electronic devices with the lowest
electric cost to cut down on their energy use and associated costs. As a result, we give
this aspect a 3.

Restraining force

There are factors that encourage or impede a corporation from altering its production line,
and there are also those that encourage or hinder it from doing so. Both of these elements
have a role in determining how the manufacturing line is shifted.

In order to increase its total level of profitability, the corporation has to begin by
enhancing its production line. The corporation should nevertheless give the move serious
consideration, since it might lead to wasted effort and resources. As an added downside,
the business does not often get a large sum of money. Therefore, the firm should carefully
analyze the move, since there is a risk that it will not be beneficial. The corporation stands
to lose a lot of money if the new manufacturing line doesn't work out, despite the fact that
a lot of time and effort went into making it happen. Though it may have only a slight
effect now, a company's lack of capital will prevent it from making future improvements
or alterations to its operations. Which means the corporation as a whole may become
irrelevant and fail in the not-too-distant future. In the end, we give this aspect a 5.

Furthermore, owing to the fact that the new production line only needs 15 individuals for
each manufacturing line, the implementation of the new line will result in the termination
of a specific number of workers. Ex-employees may harbor resentment if they were
treated unfairly or were terminated, creating a potential issue for the firm in the form of
complaints and potential damage to its image. As a result, the corporation may see a drop
in earnings. For this reason, we give it a score of 3.

Time and money will need to be invested in the training program for workers, and the
growth may be delayed by obstacles like the workforce not being able to comprehend the
information being taught, which poses a risk to the business. Furthermore, the company's
operations may not be compatible with the new technology, leading to a variety of
undesirable consequences for the company's resources (both time and money). If workers

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are unable to learn how to use the new technology, the firm will suffer in the immediate
future, but it will be able to hire replacement personnel. Conversely, it would be a waste of
resources for the corporation to hire new employees to replace all the departing ones.
Human Resources at the organization will be impacted as a result. 4 is assigned to this
criterion.

With changes in the production process, environmental factors also need to be paid
attention to by regulations on waste. If the company violates these laws, the suspension of
the production line is inevitable. A 3 is assigned to this criterion.

According to the force field model above, it is easy to see that the total score of driving
forces is 16 and the total score of restraining forces is only 15, which means there is a
difference of 1 point. From there, the company should quickly implement a plan to
improve the production system so that it can have more advantages over competitors.
Even so, restraining forces also made it difficult for the company. To be able to implement
technological change in the production process, the company should put in place a plan to
minimize restraining forces, which means risk.

2. Barrier

To upgrade the entire production line, there will be 2 main hurdles that the company
needs to overcome. The availability of funding is a significant limitation on the
company's ability to implement a line-shift in production. The fact that something exists
is a major barrier. Costs linked with logistics, storage, and other similar areas are among
the many that the company must cover while having limited funds. Therefore, the
institution faces a formidable obstacle in implementing change due to its low financial
resources.

The second obstacle is the transition of workers to the new manufacturing line.
Production workers will be overworked and stressed out by the introduction of cutting-
edge technology. The firm must address two key issues to break over this barrier.
Employees' aversion to change is preventing the new manufacturing line from reaching
its full potential. Employee productivity will decrease as a result of the transition to the
new
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manufacturing line, which they will not fully grasp. Another reason why new technology
isn't being adopted is because workers who have been using outdated tools for a long time
have a mental association with those tools.

VI. Action plan and leadership approach

1. Action plan

By applying the Lewin model, the company can create an action plan to be able to carry
out the upgrade of the production line as planned. This model consists of three phrases,
including unfreeze, change and unfreeze. .For Lewin, the change process entailed
creating a perception that change was needed, then progressing to the desired level of new
behavior, and finally, reinforcing that new behavior as a norm.

In the unfreeze phrase, the company's general director needs to understand the
company's current position in order to be able to come up with options for change. Some
researchs must be conducted to ascertain the issue the firm would experience in their
manufacturing line, namely, not producing enough to meet market demand. In other
words, the firm is in danger of slipping behind the competition. The company needs to
give notice to all workers as well as supervisors so that they are aware of the current
situation of the company and have time to think if this change is right for them. are not.
The change in the production line will cut the staff in the production department, which
will make employees fear that they are not able to adapt to this change. Not only that, it is
possible that some employees will take the initiative to take leave so that they can find a
place that is more suitable for themselves. If the number of employees is not enough, the
company will still have time to be able to hire more workers to be able to continue
operating this change. Moreover, the company needs to put in place a training plan as
well as instructions so that the workers can understand and know how to operate the
equipment in the new production line. The purpose of this initiative is to train employees
about the new technology and its functional adaptations. The company should prepare
plans to deal with any problems that may arise in case the change plan does not go as
expected.

The change process will take place after the unfreeze phrase ends. The new production
line system suggested by a supplier will require higher skills while it will require less

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labor. Significantly, each production line will cut off 5 workers and 1 supervisor.
Because of these changes, the workers will be confused at work because they know they
could lose their jobs because of the new technology. This will hurt not only the
company's reputation but also its profits. Also, the company might need some time from
the staff to train them. Employees should be given a lot of training on how to use the
new machine, which the company should do. This will make sure that the workers know
what they are doing. Since the company doesn't have a lot of money, it's important for the
business to think carefully about how likely it is that the change will work and how much
it will cost to make the change. To save money, the company needs a strict plan for how
to use its time. Also, the company needs to think carefully about the extra cost, which is a
very important part of its analysis. Also, changing the production system could take
some time. To avoid wasting time, the company needs to come up with a plan for how
long it will take to change.

The next stage is the refreeze phrase, which will rearrange the company's systems and
make the change part of the company's normal operations. The firm should plan for the
most efficient and regular operating feasible. To ensure there are no mistakes made by
workers in the refreeze phase, which follows the modification phase, management should
continue to train them often. A manager's responsibility also includes keeping tabs on
personnel during each step of the transition to new technologies. This is done so that there
are no surprises throughout the working process. Additionally, there will be employees
who are unable to adjust to the new technology and hence decide to leave their positions.
As a result, the company has to actively seek and attract new employees. Therefore, the
organization should have a policy in place for new employees, such as not overloading
them with work at first so that they can get used to the culture of the company.

2. Leadership approach

To be able to effectively implement corporate change, leaders need to adopt the right
leadership styles. The right application of leadership not only leads to better management,
but also improves the quality of communication and productivity. Tranformational
leadership often depends on individuals who are able to complete the work on their own

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when there is a given direction, and are especially concerned about rewards and
punishments. And vice versa will find ways to inspire and encourage employees to give
ideas to build the organization.(wgu.edu, 2021) Managers in company should give a
compensation for workers when they finish the given job so that they will try their best,
which increase the productivity. With trust and inspiration, employees will feel confident
and comfortable during the company transition.

Situational leadership is known as a situation-based management approach - including

the importance of the task to be performed, the available capacity and readiness of the
person in charge of that task. (online.stu.edu, 2014). People are prone to making mistakes
at the start of a change, which can lead to minor to major production issues. As a result,
managers must constantly be willing and able to adopt a variety of leadership
approaches, such as being rigorous and harsh or compassionate and motivational,
depending on the situation.

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5, 2022).

Chi, Q. (2022) Hậu quả Người Lao động phải Chịu Khi TỰ BỎ việc không có LÝ do - tổng liên
đoàn Lao động Việt Nam. Available at: http://congdoan.vn/tin-tuc/quan-he-lao-dong-505/hau-
qua-nguoi-lao-dong-phai-chiu-khi-tu-bo-viec-khong-co-ly-do-635408.tld (Accessed: November
24, 2022).

Đại An Việt Nam – Công ty Cổ phần Đại An. Available at: https://daianvietnam.com/ (Accessed:
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