THESIS mba BUILDING BUSINESS STRATEGY AT THE HANOI COMPANY PROFESSION OF AUDITING AND ACCOUNTING FOR STAGE 2015 TO 2020 CONTENT Acknowledgement Executive summary Introduction Chapter 1: The theoretical foundation of building business strategy in 10 enterprises 11 1.1 Conception of business strategy 11 Concept of business strategy 12 1.1.2 Process of managing business strategy 14 1.1.1 1.2 Content of building business strategy of enterprise 1.2.1 Defining a vision, determining strategic targets and enterprise’s tasks 1.2.2 SWOT analysis tool 14-15 16-21 22 1.3 Deployment of business strategies 1.3.1 Targets, conditions of business environment and selected strategy 1.3.2 Organizing an apparatus for implementation 1.3.3 Allocating and adjusting resources 1.3.4 Building a plan for deployment 1.4 Summary and evaluation 1.5 The necessity of finishing the establishment of business strategies 1.6 Methods of studying and applying the strategies 22 22 23 23 24 25 25 25 Chapter 2: The real situation of establishing and implementing business strategies of Hanoi Company Profession of Auditing and Accounting Ltd – CPA Hanoi 2.1 An introduction of CPA Hanoi 26 2.1.1 Overview 26 2.1.2 Organizing structure 27 2.2 Analysis of business activities of CPA Hanoi in 2006, 2007 and 2008 2.3 SWOT analysis of CPA Hanoi 28-32 2.4 Analyzing some matters of establishing and implementing business strategies in CPA Hanoi 33-47 48 2.4.1 Identifying the goals of business strategies of CPA Hanoi 2.4.2 Selecting business strategies 48 2.4.2.1 Determining the major services for the customers 48 2.4.2.2 Segmenting market and selecting targeted market 48 2.4.2.3 Building material bases and enhancing financial capacity 2.4.2.4 Managing human resource 49-51 52 2.4.2.5 Building suitable organizing structure with the services provided in the future 53 2.4.3 Carrying out business strategies 53 2.4.3.1 Concentrating on major services 53 2.4.3.2 Formulating marketing plan 53 2.4.3.3 Personnel management 54 2.5 Achievements 54 2.5.1 Results of common targets 55 2.5.2 Targeted clients 55 2.5.3 Personnel management 55-56 2.5.4 Building material bases 56-58 2.6 Analysis of shortcomings in the process of establishing and 58 implementing the business strategies in CPA Hanoi over the past 59 years 2.6.1 Shortcomings in identifying the strategic target 59 2.6.2 The process of establishing the business strategies 59 2.6.3 The process of deploying the business strategies 2.7 Analysis of reasons for the shortcomings 59-62 63 Chapter 3: Recommendations, solutions and conclusion 3.1 Summarizing the shortcomings of the strategies’ establishment and 64 deployment mentioned in Chapter 3.2 Recommendations 64 3.2.1 Strategy-building process 64-71 3.2.2 Recommendations during the process of implementing business 72 strategies 3.2.2.1 Developing customers by effective marketing strategy 72-79 3.2.2.2 Building up a reasonable organizing structure 80-81 3.2.2.3 Effectively improving personnel management policy 3.2.2.4 Completing criteria to evaluate and monitor 82 quality of the 83 company’s services 3.2.2.5 Changing the structure of paid-in capital 84 3.2.2.6 Enhancing financial capacity 84 3.2.2.7 Integration and Globalization Strategy 85 3.2.2.8 Other services development 85 3.3 Solutions 85-86 3.3.1 Effective Marketing 86 3.3.2 Human Resource Management 87-88 3.3.3 Completing organizing structure of headquarter, branches and representative offices 89 90-91 3.3.4 Finance 92 3.4 Foundations for implementing recommendations and solutions 3.5 Roadmap for implementing strategies 3.6 Limitations and orientation of studying in the future Conclusion 93 References 94-95 96- 105 Appendix DATA ANALYSIS SHEET Sheet 2.1 Summarizing criteria by balance sheet Sheet 2.2 Criteria of business statement (Currency: VND) Sheet 2.3 The situation of clients, turnover of each service Sheet 2.4 The situation of clients, turnover paid by each kind of client Sheet 2.5 The situation of CPA Hanoi Staffs Sheet 2.6 The analysis of basic financial criteria Sheet 2.7 The staffs’ situation at Auditing Company 114 until December 31st, 2008: Sheet 2.8 The income situation of Auditing Company 114 according to the structure of services Sheet 2.9 The client situation of Auditing Company 114, according to kinds of client Sheet 2.10 Analyzing respective criteria of competitors in 2008 Sheet 2.11 Analyzing the turnover of competitors Sheet 2.12 Analyzing other criteria of competitors Sheet 2.13 Summarizing the market segment and targeted market selection Sheet 2.14 Analyzing each kind of client Sheet 2.15 Analyzing changes in the staff Sheet 2.16 Analyzing staffs who were recruited over past years (2007, 2008 and 2009) Sheet 2.17 Analyzing changes in the number of clients Sheet 2.18 Analyzing changes in the number of each separated client Sheet 3.1 Summarizing recommendations and solutions USED TABLES Table 1.1 Strategy managing process Table 1.2 Enterprises’ tasks Table 1.3 Analysis of macro factors Table 1.4 Analysis of departmental environment Table 1.5 SWOT matrix Table 1.6 Mc Kinsey matrix Table 1.7 Model 3c for assessment Table 1.8 Implementing business strategy Table 1.9 Strategy analysis Table 3.1 Mc Kinsey matrix Table 3.2 SWOT matrix Table 3.3 Model of service steps Table 3.4 Model 3c for price-fixing Table 3.5 Defining position Table 3.6 Personal behaviors in organization Table 3.7 Cooperation in business activities Table 3.8 Organizing structure Table 3.9 The process of quality management APPENDIX Appendix 01: Basic information of organizing structure, services and clients of CPA Hanoi Appendix 02: Criteria and process of personnel recruitment of CPA Hanoi Appendix 03: Criteria and procedure of auditing service quality assessment ABBREVIATION WTO – World Trade Organization GDP - Gross Domestic Products SBU - Stony Brook University PESNT –Politic, Economics, Society, Nature, and Technology SWOT - Strengths, Weaknesses, Opportunities and Threats CPA HANOI –Company Profession of Accounting and Auditing Ltd VACPA - Vietnam Association of Certified Public Accountants CPA - Certificate of Public Accountant VAA - Vietnam Automation Association Acknowledgement Our great attitude goes to many supporters and supervisors in the process of completing this assignment before completing the MBA program (GAMBA) which is carried out by the cooperation between Hanoi National University and GRIGGS University of the US We would like to express our appreciation to Dr Mc Gough, and Associated Professor Ngo Kim Thanh for their instructions and guidelines of advanced strategic management, the completion of this study cannot come to an end without their support We are deeply indebted to teachers of GAMBA program who help us improve the knowledge of business management in enterprises We appreciate the idea for organizing this semester that is conducted by ETC center of Hanoi National University and GRIGGS University Also, we would like to thank board of directors and departmental directors of CPA Hanoi for their enthusiastic encouragement when we collected the information about the company to fulfill this assignment EXECUTIVE SUMMARY Hanoi Company Profession of Auditing and Accounting Ltd is one of the best auditing companies in Vietnam Thanks to great experiences on auditing field over 10 past years, CPA Hanoi has enjoyed its stable position in domestic auditing market in Vietnam Its reputation is realized by many enterprises and trusted by state owned offices In fact, many new auditing companies have been founded in recent years, so the auditing market becomes more and more competitive Because CPA Hanoi is one of few enterprises which are allowed to list their shares on the Vietnamese stock market, we choose CPA Hanoi to carry out our study on business strategy We hope that this study will contribute to maintain its current achievement and develop more stably in the future Hanoi Company Profession of Auditing and Accounting Ltd possesses more strong points than other companies with the same scale However, in the changing continuously and strongly competitive market economy, the company needs to establish duly business strategy, additionally, it is required that the company fulfils proposed strategies in order to reach the business goals In the process of carrying out the study, we applied models of PESNT and competitors to analyze both external and internal environment of this CPA Hanoi After comparing its current business strategy with the coming business environment, we implemented the SWOT analysis to identify the company’s strategic goals and emphasize on some of its businesses like marketing strategy, organizing structure, personnel management, and financial capacity On that basis, we defined shortcomings and strong points, opportunities and threats In terms of business strategy, we analyzed major factors of services generally and auditing particularly, then we suggested different strategies to develop its market such as central growth strategy, market segment, and the suitable ways to access each group of client Because of the invisibility of services, the application of competitive strategies must be flexible; we should not concentrate on only one specific business strategy In this assignment, we mention clearly a strategy for auditing activities At the end of this assignment, we used a number of tables to collect and identify recommendations, solutions so that the strategy can be implemented We hope that all information mentioned in this report will be applied in the business activities of CPA Hanoi 10 Building up the training months Board of directors and program for employees at chiefs all departments level: head of of professional department, group leader, employees Setting the reasonable 03 weeks income and salary policy Department of administration, organization, Setting the criteria of effective 01 months accounting Board of directors evaluating employees Changing owner structure months Board of directors and by allowing bigger number department of shareholders investing organization more in company Building up Board of directors and and months completing the regulations department of monitoring quality in monitoring company Expanding the headquarter months Renting of of quality another company 3.6 Limitations and orientation of studying in the future: Setting the business strategy is a significantly important because it covers all the operations of company In the process of carrying out this project, we have the following limitations: The time of carrying project is relatively short 90 Although all the group members have tried their best to finish the project, the time for carrying the project is under-expectation due to the specific characteristic of profession at the end of the year The content is quite big The elements which should be deeply concerned and analyzed in setting strategies are: system and organizing structure, resources, customers, owners, employees, growth, globalization and leading However, because of the limited time, we just focused on analyzing some elements such as organizing structure, owners, customers, employees and resources, which are considered as most important elements and need to be implemented in next period The project is useful and making a contribution into the company’s success, therefore the writers should broaden to study rest elements in CPA HANOI Company and giving the more comprehensive recommendations in terms of business strategies CONCLUSION According to Johnson & Scholes: “Strategy is an organization’s orientation and scale in long term so that the organization gains competitive advantages through identifying exactly its resources in specific situation in order to meet the demands of market and satisfy the expectation of concerned parties.” A business strategy creates values of enterprises and maintains the enterprises’ stability It is important for enterprises to consider carefully their business goals and current capacity before building a relevant strategy in order to ensure the business goals However, the strategy’s content must identify some points like kinds of client, 91 segments of the market, customers’ demands, and the main capacity by analyzing SWOT Then, enterprises can define another strategy to gain competitive advantages such as dominating costs, or being outstanding through steps as well as strategic central growth To be sure about the success of formulated strategy, enterprises need a specific and clear roadmap to carry out it in each stage At the same time, they must always plan to examine and evaluate the implementation to find out shortcomings, and then fix them in time On the other hand, enterprises need to understand themselves and investigate other ones so that they can gain the achievements in any situation By studying the strategic management and other subjects in MBA course, we are equipped an overall and basic knowledge of managing an enterprise Therefore, we can apply modern theories and advanced management model in our enterprises for the goal of success in business In the process of doing this research, we make naturally some mistakes, so we expect to receive the comments from lecturers and our colleague so that this research becomes useful to enterprises in reality THANK YOU VERY MUCH! REFERENCES Prof Ngo Kim Thanh (2009) lectures on strategic management Author Le The Gioi, Nguyen Thanh Liem, Tran Huu Hai (2009), Strategic Management, Statistical Publishing House; Le Thi Bich Ngoc (2007), strategic management, curriculum institutes of technology and Telecommunications Nguyen Huu Than (2008), HR Management, Publishing labor - Social Jonson, G., Scholes, K (1999) Exploring Corporate Strategy, 5th Ed Europe Prentice Hall 92 Michael Port, (2009), translated by Xuan Hong, Determine position, publishers house and cultural information J Bertin (1999) as Art Director, the National Political Publishing Janice and WILLIAM J REALS ELLIC MORIN (2007), Driving the career high way, Copyright @ 2007 by Thomas Nelson, America Griggs University (2009), Lecture Management Personnel 10 Griggs University (2009), lecture held management behavior 11 Youth Newspaper Online 12 Congress, (XI on May 20, 2005), Law on State Audit 13 Government, (Decree No 105/2004/ND-CP dated March 30, 2004 and Decree No 133/2005/ND-CP dated October 31, 2004), the independent audit; 14 Ministry of Finance (Circular No 64/2004/TT-BTC on June 29, 2004), guiding some articles of Decree No 105/2004/ND-CP dated March 30, 2004 Government is of independent; 15 Ministry of Planning and Investment (2009), Web 16 Government (Decree No 101/2005/ND-CP dated August 3, 2005), Valuation; 17 Ministry of Finance, (Circular No 17/2006/TT-BTC on March 13, 2006) on Valuation; 18 Company CPA HANOI, (2006), Regulation on organization and operation of the company audit and accounting Hanoi; 19 Company CPA HANOI, (2009), Term of internal control 20 Company CPA HANOI - document management strategy and business 21 Company CPA HANOI (2006, 2007.2008), assessment report performance 22 The auditors practicing Vietnam (2009) documents the meeting director of the company audit in 2006.2007 and 2008 23 The auditors practicing Vietnam (2009) Website 24 National Association (2003) Ordinance on price 25 TTXVN.VOVNews, (November 23, 2009) 93 26 VNA / vietnam +, (November 17, 2009) Appendix 01: Information on the organizational structure, services and major customers of the company CPA HANOI: Organizational structure of management - Founding Board Member: Mr Nguyen Ngoc Tinh - Chairman of the Board Mr Le Van Do - Members 94 Nguyen Duc Loi - Members - Board of Directors: Mr Nguyen Ngoc Tinh - General Director Mr Le Van Do - Deputy General Manager Mr Ta Xuan Thau - Deputy General Manager - Branch in Ho Chi Minh: Mr Su Tung Quang - Director of Branch - Hai Phong Branch: Mr To Dinh Hoai - Branch Manager - Representative Office in Vinh Phuc: Nguyen Thi Huong - Head Office - Representative Office in Hue: Mr Le Van Tuan - Head Office - Representative Office in Nghe An Mr Le Van Hanh - Head Office - Representative office in Dak Lak: Bui Duy Nghi - Head Office - Audit Office 1: Tran Thi Ninh - Manager - Consulting: Nguyen Thi Phan - Manager - Department approved audit: Mr Nguyen Manh Thang - Manager - Public Audit construction & TDG: Tran Ngoc Huan - Head Office - Administrative General: Nguyen Thi Gam - Manager Other services provided: 2.1 Scope of audit: 95 - Audit of annual financial statements for various types of business - Audit of financial statements of the projects by international organizations funded - Audit settlement construction works completed - Audit work - Audit compliance - Audit for special purpose 2.2 Field Appraisal of assets - Valuation of property - Valuation of machinery and equipment - Valuation of goods and materials - Determine the value of enterprises to privatize, merge, split, dissolution, bankruptcy, trade 2.3 Scope of financial advice: - Consult set of financial regulations - Management consulting salary and personnel - Consulting Construction plans for equitization, merger, dissolution and separation 2.4 Scope tax advice: - Help set up the declaration of VAT, tax TNDN monthly - Consult the VAT tax, annual tax TNDN - Consultant to answer and apply tax laws for businesses - Consultancy for preparing documents for tax exemptions - Consultant report tax 2.5 Accounting consultants: - Recording and keeping bookkeeping business - Consultant selection form of book-entries and organizational structure of accounting - Consultant report accounting - Consultant selection accounting software - Consult the conversion of financial statements under international accounting 96 standards - Service control reviews of financial statements 2.6 Training services: - Training on accounting, auditing - Training and update financial policies and tax for businesses - Training programs general accounting, chief accountant, and accounting practice The main customers of the company: - Enterprises with foreign investment - Joint Stock Company and limited companies - State Enterprises - Cooperatives - Other state agencies, administrative and industrial units, political organizations and mass society - Projects by international funding organizations in Vietnam Appendix 2: Standards and regulations in recruitment company CPA HANOI Standard recruiting professional: Construction company standards for professional staff as follows: University degree sector including: National Economic University, Institute of Finance, College of Business, University building, Faculty of Economics and University of Technology Foreign language English C or above; Using computer proficiency and certificates of B or higher; From a moral, honest, careful, understanding large, pore professional accounting and auditing; Acceptable conditions of employment mobility, high strength and work overtime when necessary, working under the regime of labor contract; Prioritize those with practical experience and in accordance with the specialized fields of activity of the Company; Professional staff to work long-term commitment (minimum of years) 97 Recruitment process: a Recruited: Source of recruitment: For professional staff that is subject to team assistant auditor recruitment source is mainly graduates of universities in the country For the position of leader or deputy head office is the source of recruiting the staff working at the company and working time from four years or an employee with experience working in the auditing company in the country Recruitment Announcement: Implementation report on the recruitment of mass media such as the Internet, newspaper workers, newspaper New Hanoi, Via introduced at the university as the national economy, the Institute of Finance , Academy Bank Regulations for receiving Application: Application that candidates should attend include: job application; curriculum vitae certified by the agency or local old residence; copy of degree school; copy of certificate of foreign languages, informatics and other certificates or transcripts for new students graduated; photos 4x6 Department in charge of personnel and training will make Prequalification documents: These documents will be invalid types such as incomplete records, the candidates have intermediate or college, the candidates have degree but not the right specialized regulations Make a list of the Board of Directors for approval and notify candidates attended the exam b Jobs: For the vacancy as leader, Chief Deputy Director of the Board direct interview and review the staff have experience working in companies ranging from years or working at the company Other audit For the position to recruit as an assistant auditor then must go through three round as follows: + Round 1: Thi wrote 02 subjects: * Mon specialized accounting and auditing, tax: Time 180 minutes 98 * Mon English or other foreign languages: time 120 minutes + Round 2: apply to candidates qualify first * Thi wrote two subjects: Mon specialized test time 60 minutes; Mon foreign language majors and 40 minutes; * Practice Informatics: 15 minutes Interviews with direct individual + Round 3: Applicable to candidates qualify 2: Interview before the council directly employed, Many candidates answered the same question before the council recruitment Test scores of the round are recorded in writing and notify the applicant in the period from to days after completion of the competition - The winning team candidates must comply with the following regulations: + Make a decision to receive paper or call In the shortest time (maximum 01 months), new employee must complete the personal profile Employees who work elsewhere must have original documents, books labor, insurance, and decided to transfer or terminate the employment contract + Join initial meeting to introduce the company: organizational structure, functional responsibilities, the key staff and receive specific tasks + Administrative Office's professional collaboration with seating gives us new employees to staff members in the room and vice versa; + Administrative prepare the necessary documents such as internal regulations of the company, information about professional, stationery to play for new employees and guide new staff research documents + Head of professional planning studies examine the documents of new employees and monitoring processes involved in training on probation for two new employees + Head of professional auditors assigned to directly observe and help new employees learn and work in the time trial from to months + After the completion of phase training new employees must report harvest has studied these documents do, Chief professional eligibility check will be sent for the 99 work at clients + List of new employees must be sent to show for protecting and monitoring the observance of common rules and hours worked - For other employees: + Administrative clerical staff: must be trained through the school, at least from the primary up, have a record clear backgrounds and have a certain number of criteria such as a professional fit, form, agility and ability to handle the job well Forms of employment: in the narrow range through the introduction or announcement on the media + Staff interpreter: Must be a graduate of foreign language majors regular English system, which records resume clear and must meet certain specific criteria such as the ability to convey, the ability to listen and translate direct a fluent, capable of using computers, good health Forms of employment: Announcement of the mass media Candidates must attend three tests: Done writing, interview practice English and computers + Staff security: As a record of clear backgrounds, have good health, not questions of social evils, are loyal, frank, have high sense of responsibility Candidates often preferred the home of the members of the Board of Directors or know the company and guaranteed in writing - Employment contract: Apprenticeship contract: From to months: Depending on the new employees have graduated or experience from a year or more Contract official: there are two categories: labor contracts with duration from to years and contracts not specify the time limit + Division personnel prepared the contract, directors and employees signed the contract, if trade unions have seen the president of the company union 100 Appendix 03: Criteria and procedures for evaluating the quality of audit services Criteria for evaluating the quality of audit services: Assess the quality of service than the often difficult to assess the quality of products Factors should be evaluated tangible goods and selecting appropriate criteria for each subject assessed Based on the audit standards of Vietnam and international audit standards for 101 quality control auditing CPA HANOI companies have specific criteria for each content and elements to assess quality audit services as follows: The object to evaluate the quality criteria to evaluate (Standard) Assessing potential customers - The popular prestige of customers-customers of the Board of Directors-The stability of the financial situation of customers of the ability-to: personnel, knowledge of field work of clients Evaluation process of audit planning - Planning a proper set-model-Sufficient information correct order-plan-approved Design or common to all the members of the audit team before current Evaluation audit - audit profile was created full-prescribed documents on fileHaving considered the control of management-The audit evidence is convincing as the high Papers recorded complete and correct forms - are stored properly Reviews audit group - professional requirements: qualified and experience needed to implement work-Assignment of duties: suit individual capacity, duration of the fund-See also the opinions of specialists- Independence of individual members to clients Overall evaluation of customer satisfaction in five levels: from = absolutely no response to = complete response - The popular-price-audit fee relationshippersonal experience in the field operation of customer-There are many experts in many different fields-Scale build-operate and foreign language ability of staff experience in Vietnam and internationally -In addition the company has also identified factors that determine the quality of service should be considered and maintenance such as: - Reliability; ability to respond quickly; There Capabilities good; The accessibility; courteous gesture; ability to communicate; trust; Understanding customers; tangible factors such as equipment work, working offices, staff uniforms 102 Procedures for quality management in the company CPA HANOI: 2.1 Procedures for evaluating customers: - The assessment must be conducted under the responsibility of a member of the Board of Directors - Required to conduct assessment before any commitment to customers - The assessment is done through: Probe for assigning a member of the Board of Directors for appropriate evaluation Perform surveys: Assess the ability of the company before the requirements of potential customers to: Person in charge of evaluating comments made on the basis of the information collected to accept or reject this customer save the review: 2.2 Procedures for checking documents: b.1 Select records from the list of customers of the company: b.2 Choose who will participate in assessment: b.3 Meetings between those in charge of inspection: B.4 Perform quality control records the plan set out: B.5 Draft report of the inspection: b.6 Submit reports to the department in charge of quality control b.7 Review reports by the person in charge of quality control b.8 Collect and synthesize data in this report fish b.9 Meeting between the departments responsible for quality control and other members of the Board of Directors b.10 Person in charge of quality control department draft assessment report quality, b.11 Storage materials testing b.12 Monitoring activities 2.3 Procedures for evaluating the satisfaction of customers: 103 b.1 The person in charge of quality control department made the assessment or part of the work mandated by the manager or auditor in charge has been involved in quality assessment b.2 The assessment of the mid year (May school year in June) b.3 Evaluation through a questionnaire b.4 Evaluating at least two years through direct mail or exchange Results achieved will be considered for each customer to know the extent of their satisfaction The results are recorded and transferred to the person in charge of customer records to the level of satisfaction in this 2.4 The internal management procedures such as: - Personnel Management: recruitment, training expertise, increase rewards, distributed work groups - Document Management: parts of documents, letters, circulate and store documents May control procedures: Level control are the responsibility of the Board of Directors, can be viewed as a level to ensure safety This level may be the first step or the last step and includes first is the establishment of the department of quality control, then always make sure that this department works Yourself checking the quality management department is also in the quality control procedures as through meetings between the Board of Directors and the person in charge of quality control department board of directors can check the activities of this department 104