Reference to Under the table fees burden businesses written by Pham Huyen on Vietnamnet

Last update 25/11/2012 10:00:00 (GMT+7)

Under the table fees burden businesses

VietNamNet Bridge – Sixty three percent of enterprises said they always have to pay under the table fee to state officials in order to expedite their administrative procedures.

The government inspectors and the World Bank have held a press conference releasing the result of the social survey on embezzlement. The survey has found out that most businesses have to pave their way with underground fees and gifts to state officials.

The survey was conducted in February – April of 2012 on 2601 people, 1058 enterprises in 10 provinces and cities, including Hanoi and HCM City, and 1901 officials from five ministries.

Envelops and gifts make businesses’ success

Money and gifts have become the popular means for enterprises and people to expedite their works when they have to deal with state officials.

The polled enterprises and people said that state officials always put difficulties for them, which force them to give bribery in order to have the works done more quickly.

Businessmen not only have to pay underground fees on the spot, but they also have to maintain long term relations with state officials by giving gifts regularly on special occasions.

Inspectors have found out that 63 percent of businesses said state officials deliberately drag out works, while 29 percent of people said they give briberies because if they don’t, their works cannot go smoothly.

Among the polled state officials, 22 percent of officials said they once saw their colleagues deliberately putting big difficulties for businessmen and people to clamor for underground fees.

37 percent of people said they would give money immediately if they get troubles at state agencies, while 59 percent of businesses said they would only give briberies if they do not have other choices to have their works fulfilled.

Paying unofficial fees to expedite works has become a popular unwritten rule in the Vietnamese community. 63 percent of enterprises and 53 percent of people have confirmed this.

Giving briberies make business worse

It seems that underground fee and presents to state officials can help lubricate the governments, thus helping speed up the process of dealing with paper procedures.

A lot of people said they gave briberies on their own initiative before the state officials claimed for “fees.” When asked why they did this, they said that they simply did the thing that everyone does every day. In many cases, giving money was considered just the thanksgiving behavior.

Especially, some people paid underground money even if it was not really necessary. They said that they would rather spend money than spending time waiting and following complicated procedures.

Most businesses also said they would be ready to pay money, if this is necessary for their works.

However, ironically, briberies do not help improve business result. Enterprises wrongly think that the money they spend to expedite works would be offset by the better business results.

The surveyors have found that if businesses do not give briberies for one year, their business would be improved by 0.13 percent, but if they give briberies, the business result would be better by 0.03 only. In other words, businesses would have better business performance if they say “no” to briberies.

The finding has raised a hope that businesses and people can obtain their goals by other ways than giving briberies. In other words, they can find alternative methods to have better business results, while no need to waste money on briberies.

Press agencies have been playing a very important role in the fight against corruption. More than 80 percent of businesses and state officials said in many cases, newspapers, not competent agencies, discovered embezzlement cases first.

Pham Huyen

Unexpected Expenses or Hidden Costs

Unexpected Expenses or Hidden Costs

 

According to management performance’s specialist asserted Human resources management should be the most important followed is a financial management

 

While CFO draws up a financial planning for fiscal-year, an issue will be able to arise then organization not controlling that are an unexpected expenses or hidden costs

 

Now we are analyzing the article above-mentioned

 

As a resulted on statistic data of mine with the examined carefully from fifty businesses, it could be derived from an unexpected expense or hidden costs generated annually and which is from fifteen to thirty percent of total expenses. 

 

This issues also a difficult for every businessman; let’s make to walk around it

 

Firstly, I affirmed that the costly administrative must be autopsy or analyzed

 

It has a lot of items to spend and among of them as if administrative wage-fund, a rate of banking loans, transaction or dealing fees, and lubricant fees

 

Secondly, generated out of control costly from supply chains or competitive costs and advertising costs

 

Thirdly, exceeding overhaul expenses and a lot of repair expenditures regularly for machineries, production lines, equipments & assets   

 

How is the resolve it?

 

Due to necessary to restructure human resources (continued)

This article will be

 Running on a short-term planning

 

This article does not discussion the reason why businessmen preferred a short-term planning

 

A short-term planning will be very hard to manage from senior manager as follow:

 

·         Not training & prepared to replace some junior leaders or teams leader for long-term

·         Capital sources:  a short-term & small will be a lot of thorny for action plan

·         A lot more the matters as such produce, customer, competitive advantage, supply chains but should be stopped here temporarily  

 

Role of managers with a performance

 

-          Managing Director or CEO must be managed professionally for administrative, financial, marketing development, supply chains & manufacture. They will be set up action plan for every stage from strategic organizational. So, it’s difficult to draw up for short-term strategies, and also will not be able to recruit a good manager or CEO

-          Floating & fixed capital will be more seriously for operation while it’s not capacity cost to replace production line or improved continuously

 

 According to Robert Kreitner in Organizational Behavior 

Organizational Effectiveness through Continuous Improvement

THE 4P CYCLE OF CONTINUOUS IMPROVEMENT

• People

1. skill development
2. motivation
3. teamwork
4. personal development and learning
5. readiness to change and adopt
6. increased personal responsibility for organizational outcomes
7. greater self-management
8. decreased stress

• Processes

1. technological advancement
2. faster produce development and production cycle times
3. system flexibility
4. learner and more effective administration
5. improved communication and information flow
6. organizational learning
7. participative and ethical decision making

• Productivity

1. reduced waste
2. reduced rework
3. more efficiency use of material, human, financial, and informational resources

• Product

1. greater customer satisfaction
2. better quality goods and services

 

Due to Necessary to Restructure Human Resources

Due to Necessary to Restructure Human Resources




What reason for restructured human resources?

Almost, due to ineffective management in their organizational



Analyzing a little matter from the above-mentioned



- Until the present time, majority private business has progressed a short-term planning

- As mentioned before, almost private enterprises started with medium or small-sized enterprise and managed in a manner of family as if nepotism style.



- During businessmen spreading out has revealed some shortcoming in organic due to any particular trait as follow



Owner-control firms/Owner of a business



• Majority started with medium and small-sized

• Expanding to rapidly and associated or not corporate with foreign invested, almost keeping method nepotism style

• Their way of thinking is subjective, theirs talent have been incomparable

• They used to in disregard to opinions of team leaders & managers


To be continued

 

Making a Brief Professional of mine

                                                       To Make A Brief

I returned from military service in1984 with a military rank as the chief of squad, during I was on service I was working as money affairs management of company. It’s first rank of management at that time.

I anticipated in a training course with regards to double-entry bookkeeping of Co-operative Union in 1984. (Presently, VINHLONG city, VINHLONG province)

December 1984, I started from participated in the team of financial inspective for the special circumstances and annually. At that time, I was checking various industries such as trading & processing wooden product, producing paper, printing industry, plastic product, tobacco industry, handicrafts. Apart from handicrafts industry, other almost was to the bad. Main point was the ineffective management conducing to the high costs and not controllable. Analyzed reports indicated that the hidden costs are the chief culprit.

January 1985, I was appointed as administer specialist of the handicrafts industry. At the same time, I was a responsible for guiding to draw the balance sheet (as entering in the account) and approved it every month from thirty-six private and co-operative businesses in the areas.

During I was working on I realized that the norm of administrative costly is unreasonable and loophole. On the other hand an important thing to bring a lot of controversy at that time which is the stipulated for administer to fixed assets & liquid assets, in my viewed which was a good regulation in spite of subsidized age, this issue will be mentioned another heading

February 1989, I was responsible for analyzing industries statistics data and reported to People’s Committee according to period a haft and annually. Based on statistics data and exchanges with businessmen from staple industries to predict a tendency development in the upcoming, then I have chance analyzed and studying staple industries as building materials, handicrafts export, processing foodstuff, mechanical, weaving and sewing, services.       

 

In order to analyze and predicted for economic prospects, I was a lot of exchanges with majority the staple industries at that time. At any ages always have multi-side difficulties and advantages. Therefore, spending at that time has given the mass of accumulation of mine



Consultation from a management ineffectively

Consultation from a management ineffectively

The reason for consultation


- a few well-known foreign experts cited majority firms in vietnam are operating ineffectively “ratio return capital and lucrative ability”

- the crisis on the global still tougher time

- The Particular traits of organic business in vietnam under eying of foreign expert: almost operating on an organizational small and medium sized and starting with the style of a family firm

- Financial crisis on the global, public debt crisis in European impact into Vietnamese economic negatively, due to US and EU reducing import from Vietnam, although reducing prices

- Input costs and wages increasingly making to suffer

- Lack of capital and not access to the bank loans



“Placing blame on workforces who are only responsible for 15% of mistakes where the system designed by management is responsible for 85% of (mistakes) the unintended consequences” (cited in the eight lesser categories of obstacles of Deming’s 14 points)



Explain the managerial significance of Deming’s 85-15 rule



Deming claimed that about 85 percent of organizational failures are due to system breakdowns involving factors such as management, machinery, or work rules. He believed the workers themselves are responsible for failures only about 15 percent of the time consequently, Deming criticized the standard practice of blaming and punishing individuals for what are typically system failures beyond their immediate control



Therefore, in a manner of speaking to improve the effective management is mentioned to the role of managerial leadership