I.

Introduction

It is well acknowledged that the modifications aid firms in expanding and achieving
success. This article will offer some comparisons to help readers better appreciate how
changes impact both a company's operations and strategy. To further understand how
these aspects affect an organization's behavior, both internal and external change
drivers will be evaluated. Lewin's change model, SWOT, force field, and PEST
analysis are all used in this article to examine the change drivers.

The given company’s organizational structure consists of 4 departments which are:

Marketing and Logistics, Administration and Personnel, Production and Finance, with
300 workers working at 15 production lines. They are divided into two categories:
workers and supervisors. According to Investopedia, medium businesses have from
100 to 499 employees, therefore it can be determined that the company is medium-
sized, with the production in electrical produce industry.

II. Analysis

1. The two changes within the company

According to the recent reports from the marketing department of the company, there
is a significant increase in home construction in many northern provinces, and as a
result, the demand for electrical products also rises greatly. However, normal products
are not as preferred as high quality ones. Understanding this situation, the General
Director confirms that it is time the company changed its business strategy.
The first change is that the company should upgrade the production quality, by
renovating the production system, replacing the old facilities with the new and
modern ones. There are 15 production lines and three hundred workers and 30
supervisors, meaning that there are 20 workers and 2 supervisors per production line.
However, when the production system is upgraded, the human resources requirement
is also reduced, since the new production line requires only 15 workers and 1
supervisor. Most importantly, new production facilities allow producing products with
larger capacity and much fewer faults.
The second change is in the new policy for skilled staff. Dai An Industrial Zone
consists of 50 other companies, and they are now recruiting new workers for their
factories, and this is surely a competitive feature that the company needs to keep an
eye on. To reduce turnover rates and be as competitive, the company needs to develop
a new policy to retain skilled personnel.

Upgrading the
New policy for skilled
Comparison production system
personnel (Change B)
(Change A)

Both changes are made based on external factors

affecting the business.
For Change A, there is a construction boom in many
provinces in the North, leading to an increase in
customer’s demand for high quality electrical
products. Therefore, the company needs to renovate its
production system so that the product quality is
assured, as well as not having to employ too many
Similarities
staff for the new production line, since it only takes up
15 workers and 1 supervisor per line.
Change B is caused by the influence of competitors.
They offer higher wages and other appealing
benefits, which attracts skillful and expert workers,
unfortunately in the given company as well. In order to
prevent turnover rates from increasing, the company
has to develop a new policy.

Differences Involved Production Administration and

departments Administration and Personnel
Personnel Finance
Finance
 Marketing and Logistics

Operations Satisfying customers’ The Administration and

needs is the main Personnel Department is
objective of this surely responsible for
alteration. Therefore, implementing a new
company’s renewing the policy to retain the
production system has a company’s employees,
great impact on the and necessarily beat the
product quality as well as competitors’ attraction.
the Production Human resources
department. It will have to managers should care
take care of most of the about salary increase,
upgrading process, since competitive benefits and a
there is a lot of new clearer prospect for the
technology and facilities employee’s career. The
that need to be checked Finance Department will
for their standards. This take care of the wage rise,
new production line has a or offer some more
benefit of not requiring a appealing rewards for the
big number of workers, workers.
however, workers will
have to participate in an
intensive one-week
training program, due to
some new functions that
they have to be skillful at
to avoid any unwanted
errors. The Department of
Administration and
Personnel will be in
 charge of this. In addition,
the Finance Department
will be responsible for
calculating and balancing
the money spent on
purchasing new facilities,
upgrading the system and
training the workers.
Lastly, in order for the
latest high quality
products to be known and
used widely, the
Marketing and Logistics
Department will need to
develop and enhance the
promotion and marketing
campaigns well, so that
the products’ sale is
guaranteed.

Strategy Businesses are forced by Determining which

the workforce reduction to employees are talented
create methods for and deserving of
determining which incentives in addition to
employees can quickly coming up with effective
adopt new technologies retention measures like a
and which employees raise or promotion is very
cannot or for them. important. Based on their
Moreover, if the business productivity and job
wants to get consumers’ outcomes as determined
attention and sell goods, it by routine inspection or
 must create innovative, customer feedback,
alluring marketing skilled individuals can be
strategies for brand-new, recognized.
high-quality products.

2. External factors affect company’s decisions

a. PEST analysis
Political
Vietnam is a one-party political system governed by the Communist Party. The
political system is significantly influenced by the Vietnam People's Army. Though it
is guaranteed by the constitution, freedom of speech, opinion, and expression is not
always effectively upheld in reality. Vietnam's thriving civil society and social media
are subject to growing limitations that impact both unofficial participants (like
bloggers) and officially recognized nongovernmental organizations.
According to the law, employees are only disciplined when they violate the company's
labor regulations. Article 125 of the 2019 Labor Code stipulates the dismissal:
employees who commit theft, disclose business secrets, commit acts of causing
serious damage to the property or interests of the employer. labor abuse, sexual
harassment in the workplace, recidivism while being disciplined, voluntarily quitting
work beyond the prescribed time limit (Nhung, 2021). If the employees do not fall into
any of the mentioned activities, they cannot be fired. This may be a barrier for change
A, which will be discussed later in this report.
Economical
In a period of 18 years, from 2002 to 2020, Vietnam’s GDP has increased 3,6 times,
reaching 3.700 USD. Poverty rate dropped down from more than 14% in 2010 to only
3,8% in 2020. The strong economic foundation helped Vietnam overcome the
pandemic crisis. Infrastructure accessibility for people has considerably increased.
Compared to 14% in 1993, 99.4% of the population utilizes electricity for lights as of
2019. By setting more ambitious growth goals, Vietnam hopes to achieve high income
status by 2045. The economy must expand at an average yearly pace to do this. 5.5%
annually over the following 25 years. While promising to cut methane emissions by
30%, halt deforestation by 2030, and achieve net carbon emissions of zero by 2030,
Vietnam is also striving for a greener, more equitable growth.
Utilizing power is another crucial aspect of how citizens' lives are reflected. In
Vietnam, a significant amount of power is introduced from the national grid to each
family and area. In 2020, 99.5% of families utilized electricity on a daily basis, with
hardly any notable differences between urban and rural areas, as well as across regions
and communities. In several places, this number has really reached 100% for a long
time, according to statistics (Tổng cục thống kê, 2021). The usage of durable goods is a
criteria that demonstrates whether or not the household has invested in the tools,
equipment, and resources needed for everyday living. Statistics show that 99.9% of
families countrywide have durable items. In metropolitan areas, some economic
zones, and households with income levels of two or higher, this percentage has
reached 100%. This emphasizes the importance of enhancing the quality of the
electrical products, and that the company should upgrade the production system since
the needs for durable electrical goods are very high.

Social
Socio-culture significantly influences customer consumption habits, behaviors, and
preferences in addition to how a firm develops its internal culture and interacts with
the outside world. Socio cultural elements influence how firms respond to client
requirements and the overall demand for the goods and services they offer.
According to the findings of the yearly census, there are now 21 million young people
living in Vietnam, making up nearly a quarter of the country's total population. They
are geographically dispersed and a significant portion of the country's consumer
market. People aged from 20 to 34 are very sensitive to the up to date products,
therefore it is essential to know their insights so as to develop the products better.
Young individuals frequently have an enthused, fast, sensitive, hopeful, and
entrepreneurial attitude, and they constantly desire for new things and new
information (Thinh, 2021). They are really innovative consumers. Their consumer
psychology demands the enjoyment of beauty and is influenced by fashion, the times,
and emerging trends. New items are frequently discovered, enjoyed, and spread by
young people. Their altered purchasing habits frequently have a significant impact on
individuals around them, resulting in a trend in consumer behavior. Young people
frequently purchase goods in keeping with the fashion of the day and the advancement
of modern science and technology. They are well-informed, socially connected, and
exposed to a variety of informational resources. Therefore, people take initiative when
selecting consumer items. They select things that are appropriate for their working and
functioning environment while yet being stylish, trendy, and functional (Thinh, 2021).
Consumers in their middle years make up a sizable portion of the population (35%).
Since the majority of them are married, the obligations and responsibilities they bear
for the family and society are enormous. They frequently serve as the family's head,
making them highly significant consumers who buy products not just for themselves
but also for the entire family. Consumers in their middle years frequently make
important decisions about both everyday home items and worthy durable goods, with
reasonable prices. When people reach middle age and have to take care of their
families, as well as other concerns, they are more likely to deliberate before making
purchases than when they were younger. thoroughly examined, therefore being
rational plays a big part.
A look into the main age groups that are still increasing in numbers and playing an
important role in consuming goods has deeply emphasized the need to upgrade the
production system, so as to have higher quality products to satisfy customers’ rising
demands: an appealing product in packaging, convenient in usage, durable in quality,
and reasonable in price.

Technological
Vietnam is emerging as a new digital power in Southeast Asia, according to the
csis.org page of the Center for Strategic and International Studies (CSIS, USA), which
was published on February 17 2022. With the building of contemporary research and
development centers in both the public and private sectors as a fundamental mission
purpose, Viet Nam, particularly Hanoi, has set a target to hasten the development of
science and technology for the years 2021 to 2030 (Việt Nam News, 2022).
Technology and innovation, according to Le Xuan Dinh, deputy minister of science
and technology, are crucial for increasing the productivity, product quality, and
competitiveness of Vietnamese businesses as well as for their growth. As the globe
approaches the Fourth Industrial Revolution, socio-economic conditions in the nation
and technology are crucial.
The majority of electrical equipment used in our nation today is imported from other
countries by a variety of different producers of industrial equipment. The operation,
repair, and maintenance of industrial electrical equipment are highly challenging
because of the varied requirements. On the other hand, a reason why industrial
electrical equipment cannot fully utilize its features and potential is due to the
diversity of kinds and technical standards. The primary factor propelling the growth of
the industrial electrical equipment sector is actual demand. Electrical equipment must
always advance to stay up with the trend as the industry as a whole changes. Industrial
electrical equipment must outperform conventional electrical items in terms of speed,
quality, and price in order to draw in consumers. The most important trends for the
electrical equipment industry are: product superiority (overcoming the drawbacks of
traditional electrical equipment), diversity of models (made from good materials with
smart design), more economical (energy saving, environmentally friendly) and has a
variety of functions. The given company in the context should really take these into
considerations and come up with better production systems to achieve these up-to-date
standards.

b. SWOT Analysis
Internal Strengths Weaknesses
 Qualified employees Very few core competencies,
 Sufficient labor leading to average product
force quality, and employees easily
 Well-organized being scouted by other
production process competitors
 Very few to no signs
 of losses or failures
that heavily affect
the company’s sales
Opportunities Threats
 Customer demand:  Competitive industry
high  If the company cannot
External
 Development of keep pace, it will lose
technologies: chance the advantage in this
to innovate products product competition

The company has a qualified labor force, with 300 workers in total, there is
no difficulty in meeting the requirements for human resources. Moreover, the
staff are quite well-trained to work with well assembled production lines. The
company does not seem to have any loss in history, so this can be a
significant strength, holding a lot of potential for the company to develop
further. However, the business lacks core competencies. This prevents the
company from being appealing and attractive in such a very competitive
industry. The salary of the workers is 8.5 million VND, while that of the
supervisors is 11 million VND a month, and these salary levels can be easily
beaten by other companies that offer higher ones. The external factors,
containing opportunities and threats, show that the rising in customer demand
(due to the home construction boom) is helping the company to innovate their
products, to make it more appealing to other companies’ goods, so that they
can attract more and more customers, however, simultaneously, if the
company cannot come up with adequately good products, they might lose
their chance to gain sales and maintain their customers, as well as employees.

3. Force Field Analysis

The score of each force is graded using Likert scale, with 1-very low, 2-low, 3-
average, 4-high and 5-very high
 Driving Forces Score Change Strategy Score Restraining Forces

Human Resource
Excellent output 5 5
Management

Competitive
5 3 Finance
demand

Change A: Upgrading the

High customer
4 production system 3 Competitors
demand

Support from Adaptability of

3 3
facilities vendor workers

TOTAL 17 14 TOTAL

a. Driving forces
Excellent output
Enhancing a company's reputation, maintaining current customers, attracting new
ones, expanding markets, and setting the groundwork for a company's long-term
success are all necessary to improve product quality. Quality has emerged as a
crucial instrument for competition at a time when customers are less focused just
on price. Through process optimization, innovation, and improvement as well as a
reduction in waste from defective or repaired items, improving product quality
necessitates boosting product usefulness, satisfying consumer demands, and
lowering cost per product unit. Therefore, in order to maintain, attract, and please
consumers, product providers and distributors must act swiftly and conveniently
using smart devices and new technologies to sell, pay, and connect with customers
to satisfy their demands. Businesses are constantly looking for technological
solutions to increase efficiency and run more smoothly at all levels of production
and operations. Thus, this force is given a rating of 5, which means the company’s
decision is mostly made based on this force.

Competitive demand
There are 50 companies in Dai An Industrial zone, and many of them are electrical
product businesses. The company faces a lot of competitive rivals, and the
consumers also have to deal with competitive choices. The firm pays great
attention to client demands and adjusts to satisfy those needs, notably the need for
electrical items, in order to obtain the benefits that differentiate the company from
its competitors and draw in more customers. The firm has made the decision to
improve the manufacturing process via the use of modern technologies in order to
provide clients electrical items of greater quality. This enables companies to
produce goods with fewer defects without paying excessive labor expenses. On the
other hand, firms must have clear and acceptable processes and strategies to
identify personnel who should be maintained to continue working. Training people
to get familiar with new technology on the production line is not cheap. Long-term
speaking, technological advancements require ongoing updating and adaptation by
businesses; otherwise, rival firms would progressively advance in sophistication
and ease of acquisition. entice new clients. Customers may only utilize this
company's products once, and they are not entitled to a refund if the item does not
satisfy their demands. Uniqueness defines the success of the products, if there is
not any special feature on this product, customers will not pay attention to it for
long enough, thus the danger of competitors arises. Therefore, this force is given a
4 for its highly driven effect.

b. Restraining forces
Human Resource Management
The new production line will only require 15 workers and 1 supervisor, compared
to the previous old system where there were 20 workers and 3 supervisors per line.
Choosing the upgrading strategy means the company has to cut down on labor
forces.
According to the law, employees are only disciplined when they violate the company's
labour regulations. The details have been mentioned earlier in this report. The
company cannot fire anyone they want to just simply because they need to cut down
on workers, and this can be a problematic issue.

The company needs to reduce the number of employees, but they have to make sure
they can keep the best and most skilful employees to join the training program before
working with the new production line. Moreover, other competitors around are
offering a better salary level, higher than what the company pays the workers.
Changing to a new production line can lower the input costs, therefore the company
can utilize this cost to compensate for the cut off staff or to pay workers more. It is a
very difficult situation, thus the 5 given on the table.

Finance

Upgrading the whole system will take a lot of time, effort and especially money.
Financially speaking, the finance department will have to take care from it, but every
decision made is based on the Directors’ confirmation. So, the company, which has
already struggled, will have to take care of calculating and paying the bills to the
vendor of the production facilities. Being so greatly influenced by competitors, it is
necessary for the company to invest in the Personnel department and the Production
department as well. Fortunately, the situation is under control, while the vendor of
production facilities has approached the Director, so it is likely that the Director asks
him for sponsorship or fund raising activities to be able to afford all of those
production line. Therefore, this force gets a 5.

c. Barriers
The biggest restraining force, as mentioned, is Human Resource, because it is not easy
to cut down on staff quantity, but at the same time cannot hire all of them. The Labor
Law and the talent of employees are barriers to the change. In order to minimize the
disadvantages while changing, since the labor force and the law is unchangeablem, the
company can probably distribute the non-qualified old employees to other
departments instead of running for the production line, or if the number gets too big,
then the company should collaborate with other businesses to send them to a new
place. The employees are transitted there for a “business trip”, and they can stay there
working for the new place.

Reducing hours worked and earnings at each level of reduced labor; urging
management to cut wages by 10% to 20% while compensating workers for lost wages
can help with the financial problem. For the firm to be able to advance further in the
future, this is a step backward. Reduce the hours and pay a little bit more with the
assistance of the workforce so that the business can modernize. The employees that
are retained by the firm will receive a considerably better wage following the upgrade
since the company will have a new stream of money with less input and higher output.

d. Decision

The score is 17 vs 14, a not so significant gap, but the driving forces still have bigger
influences on the decision making process of the company. It shows that the change is
suitable and required if the company wants to create a competency, to be different
from all the other rivals and can catch customers’ attention. The change itself has
already been a crucial innovation, but what makes the success of its adaptation into
the company’s working system is the characteristics of the managers. Since there will
be a lot of new implementation, the managers must use every communication tools to
reach every worker, make sure all of the staff understand how the new system works.
Moreover, during training period, managers should assure the staff that they will be
taught to be more adaptable to the changes in the organization, and also out there in
the business market. This will help the company to choose a better leadership style
that suits the current situation the most.
 4. Action plan

a/ Leadership style:

There are 6 types of leadership style according to Daniel Goleman, which are:
Coercive, Authoritative, Affiliative, Democratic, Pacesetting, and Coaching. In the
current situation, it is believed that Affiliative leadership style will suit the company’s
environment the most. An affiliative style of leadership prioritizes people. Instead of
ordering, commanding employees, affiliative leadership focuses on creating a
peaceful, or even harmonious working environment (Sands, 2022). After deciding on the
changing strategy, it must be very unencouraged and difficult for staff to keep a lively
spirit. The Production department employees will be exhausted from training to use
the new production line correctly, and is stressed from avoiding the most minor errors,
since the output has to be of high quality. The Administration and Personnel
department also struggles from the cut down on staff and how to deal with that
problem. That is when the leaders show up and create a special bond among all of the
workers together, in order to have a better workplace where people corporate without
any force. Affiliative leadership style has been proved to be very helpful during
challenging situations, and if the leader can apply this style well enough, he or she can
motivate and push the employees through the tough period.

b/ Process of change
 Lewin’s change model

 Unfreezing stage: This is where everything begins. The company starts to

realize the need to change its business strategy, since there is a home
construction boom and the customer demand is increasing significantly. It is
clear that they want high quality products, not just normal goods that can easily
be found. The company decides to upgrade the production system, in order to
produce goods with as fewest faults as possible. However, many people
hesitate, are afraid of changing and risks, which makes the unfreezing stage
much more difficult. Employees cannot change their mind all on their owns
since they fail to see the bigger picture, what can only be seen by managers.
Leaders have to ensure and encourage their staff to be ready for changes, as
well as understand the current situation of the real business market of this
industry, how competitive it is, and how changing can benefit the employee
him/herself. They can communicate face-to-face, via messages, or during a
meeting. There are a lot of concerns but the more the leaders care and try to
 find ways to solve those problems, the more the readiness is enhanced, since
the employees now gain trusts for the company.
 Changing stage: The idea is there, but implementing it is another story.
Employees that have low level of adaptability will very quickly find
themselves being overwhelmed and confused in the new system. It can be very
hard for them to get used to it at first, but with the support of the managers,
things should get easier gradually. Being an affiliative leadership helps to
understand the struggle that employees are having better than questioning them
and blaming them for not performing well enough. Assisting them to adapt
better is very important, moreover, good management and leadership skills can
also help employees to have a better view on the values and long-term benefits
of changes.
 Refreezing stage: The last stage of the changing process makes sure that these
changes do not last temporarily, but rather permanently (until the next new
change). Once the organization has gained its familiarity with the new system,
it is time the managers refreeze the process. It helps strengthen the value of this
change, the smoothness that the new system has, and the development in
employees communication and working skills.

III. Conclusion

It is important for businesses to stay up-to-dated with the latest trends in the industry,
so that they can come up with suitable strategies at the right time. This report has done
some comparisons and analyses to prove how a change can be very perfect and needed
to be implement immediately for the business’ benefits. Both internal and external
drivers were carefully evaluated, through PEST, SWOT and a Force Field analysis,
and Lewin’s change model.
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