HYPOTHETICAL PROPOSAL FOR ESTABLISHING AN ORGANIZATION FOR OPERATIONS

 

HYPOTHETICAL PROPOSAL FOR ESTABLISHING AN ORGANIZATION FOR OPERATIONS

"PRODUCTION - BUSINESS - SERVICES"

I/ INTRODUCTION

First of all, the look at a current context of industry organizations around the world today:

The global economic situation is changing too rapidly, and as a result some industries are growing quickly while others are contracting (reducing the scale of operations, including staffing).

Therefore, layoffs in large organizations often occur with the purpose of streamlining the organization.

The reason is that the organizational structure has developed in line with long-term strategy and for some other special reasons. It is no longer suitable for the current economic situation.

II/ ORGANIZATIONAL STRUCTURE

In my opinion, it should not be organized into separate departments. The organization’s operations must be based on mutual understanding and communication so that the overall work runs smoothly.

And the most important thing is: Avoid creating multiple centers of power and factionalism. The structure should be Lean - Compact - Effective.

There should only be a department directly under the Director (no Deputy Director position).

It may be named the General Affairs Department or given another name depending on the industry organization.

The heads of the departments are all members of the Standing Council, operating based on the Delphi method and simultaneously submitting the voting results for decision-making issues to the Director.

Therefore, all issues that arise are to be resolved by the Standing Council before being submitted to the Director.

The General Affairs Department includes the following units:

1/ Administrative - Organizational Unit:

In addition to handling clerical and archival work and tracking attendance for indirect labors, the important task is to design training programs for employees and workers.

Receive staffing needs from the departments, submit them to the Standing Council for approval, and announce recruitment.

In particular, the Head of the Unit must also serve as the Director’s Secretary.

2/ Finance - Accounting Unit:

In addition to accounting management tasks, it must also coordinate with the planning unit (production and distribution) to calculate cost prices and prepare financial plans (monthly - quarterly - annual). Warehouse release and receipt orders must be confirmed by the head of accounting.

3/ Planning - Statistics - Sales Unit:

Prepare production and service distribution plans according to orders. Production or distribution orders must be accompanied by the relevant order. Warehouse release and receipt orders must also have the approval signature of the Accounting Unit.

The Statistics Team must monitor all generated data, compare it with the plan, and report daily.

DETAILED DUTIES OF THE UNITS

1. ADMINISTRATIVE - ORGANIZATIONAL UNIT

• Record and issue documents: When issuing a document, keep one copy and send an email to the Department Heads to notify them.
• Receive daily attendance reports from indirect labor and production workshops.
• Implement training plans for employees and workers to improve skill levels and technical proficiency. Organize periodic skill tests to motivate workers’ advancement; indirect employees are encouraged to continue learning to improve their qualifications and may apply for higher positions when needed.
• Regarding recruitment of workers and employees: when the application meets the requirements, notify the requesting department and schedule an interview.
• The Director’s Secretary must monitor the progress of all departments and report to the Director by email at the end of each day. Receive feedback and arrange the proposed work schedule for the Director (15 minutes before the workday begins), while also reminding departments that are not keeping up with progress.
• The Security Team is directly under the Administrative Unit and may use a timeclock or electronic card system to report daily to the supervising unit.

2.      ACCOUNTING - FINANCE UNIT

• Receipts and expenditures must be accompanied by clear and compliant original documents.
• The cost of products and services must fully reflect all expenses, including depreciation.
• Coordinate with relevant departments to determine raw material norms and management costs per unit of product or service.
• Submit to the Director for approval the direct reward rate for employees when raw material norms are saved; the remaining portion is allocated to the production stage to reduce product cost.
• Before profit distribution, the depreciation reserve and accumulated reserve must be fully secured, along with the training fund and the fund for innovation and new product research (at a reasonable ratio in each stage).
• The Logistics Team is directly under the Accounting Unit (it is advisable to sign monthly, quarterly, or annual transport contracts. It is not recommended to establish a separate transport team, as it wastes resources).

3.      PLANNING - STATISTICS - SALES UNIT

• Monitor the implementation of the approved plan. If any changes arise outside the plan, the Standing Council must be convened to make adjustments. If the adjustment is minor and does not significantly affect the main plan, the Council may decide on the revision without submitting it to the Director.
• The raw material purchasing team must procure goods according to the contract standards, avoiding situations in which receiving staff take commissions and accept materials that do not meet standards, causing production losses or unusable inventory and creating phantom stock. Do not rush to speculate on the market; buying raw materials before having a contract can cause losses when prices fall.
• Product development and improvement: Costs must be commensurate with the effectiveness achieved, and the department’s critique and self-critique meetings must be useful for management and for improving productivity or product quality. Therefore, the costs of after-hours meetings and the research team must be covered by the product improvement and development fund.
• The logistics team is monitored by one person; transport contracts must closely follow the plan, with clear responsibility and compensation for violations.

Important points to note before operations begin:

• If capital is contributed by shareholders, the fixed capital and working capital must be clearly defined, along with any required withdrawal period.
• Establish an accumulated reserve and regular repair fund (if there are fixed assets), a product improvement and development fund, an immediate reward fund, and a doubtful-debt reserve fund (which may be 5% or more).
• The cost of products or services must include all contributing factors in full. Annual depreciation must decrease according to the recovered proportion.
• Profit distribution depends on the nature of the industry organization, with priority given to reserving funds in the item noted in the second bullet point above.

                                                                                                        Issued by Louis Nguyen

                                                                                                                 dated 5/14/2026