Contens for presentation

Subject: Principles of Management

Lecturer: Ms. QUYNH HUONG

Group’s Members:
- Lê Mai Ly (Leader)
- Trịnh Quỳnh Trang
- Trần Quốc Trung
- Nguyễn Sơn Tùng
- Nguyễn Quang Tùng
- Nguyễn Viết Tường

I. INTRODUCTION
1. History
Officially incorporated as a private limited company in August 2000 under
the name of Tanhoa, and with expansion to another entity named LeGroup in
December 2004, LeGroup history is however traced back from LeGroup
Cooperative, which was established in late 70s. At that time in Vietnam, this was
the common form of business incorporation. Developed from a small unit that was
hired to plate product for other manufactory, LeGroup has become a stable
company with almost 500 employees in 2008.
The company slogan “Reaching the summit, Meeting customer's satisfaction!”
shows the attempt of the company in the way to improve and expand their
business and bring the best goods and services to their customers
Besides being supplier for other manufactory, Legroup has diversified
product to satisfy replacing need of domestic customers with recognized brand
name: Legroup. Company always try to improve product quality, decrease price
and promotes after-sales service for customers.
 2. Scope of the company
The company is located in Lot 15 Quang Minh Industrial Park, Melinh District,
Hanoi. Quang Minh Industrial Park gathers many factories and plants so this
location is 5 kilometers far from NoiBai Airport so it is suitable for manufacturing
and trading.
Their factory and office’s size is 17000 quarter meters and they have the
numbers of 500 people working in Regroup. With this figures, this company is
considered as a medium company.

3. Equipments and Machines

LeGroup spend amount of their capital purchasing equipments and machines
from developed countries such as Japan and Germany to produce high quality
products.
Their equipments and machines include machine centers, sophisticated wire-
cut electrical discharge molding equipment to make dies and jigs for tooling
workshop, mechanical machines, Superb welding technique is one of our
company’s strengths of expertise, with Robotic Mic welding, Tig welding, Spot
welding equipment for welding workshop and last but not least, quality control
equipments.

4. Products
The main products of LeGroup are: Mufflers, Steel Rims, Nuts, Bolts and
Fasteners. These products are the materials to assemble motorbike or cars
LeGroup has a very big market, including foreign and domestic market.
Many big companies or corporations have chosen LeGroup as a strategic partner
and supplier like Toyota Vietnam, Honda Vietnam, Piaggio Vietnam… With
credibility from customers and partner, LeGroup has built up its own position in
Vietnam market.
Headquarters: With headquarters in Hanoi, Vietnam, LeGroup has developed
a large distribution network and marketing agents in more than 30 provinces from
North to Southern region of Vietnam.
The company's “inland” export market has been developed with increasing
numbers of customers who use LeGroup's products for their final products to
export to other markets outside Vietnam.
Branches: Associate agents in Hochiminh City take charge of the whole
Southern region for LeGroup's products.
Main customers: Piaggio (Italy), VAP (a subsidiary of Honda Vietnam),
SYM (Taiwan) and over 500 other customers.
Associates: Has tight cooperation with Tokyo Metropolitan Small Business
Center in Japan for different trading and manufacturing contracts.

5. Recent Outstanding Activities

Since April 2010, LeGroup is selected to participate in CBI (www.cbi.nt)
(Centre for Promotion of Imports from developing countries), an agency of
Ministry of Foreign Affairs, The Netherlands, in the program called Export
Coaching Program (ECP) for Automotive Parts. The participation in CBI allows
LeGroup to access to various marketing events and activities to expand its market
to European countries.
LeGroup is selected to supply parts to Piaggio Vietnam for its newest model, to
introduce to the market in 2010: Liberty. Piaggio Vietnam is expecting this model
to be sold in local market of Vietnam, as well as for exporting to other markets.

6. Achievement
 In each company, the rewards or ceritificate are also important because they
make the image of the company become strong and the reputation of the company
will raise highly
With the effort in their business, LeGroup achieved many trophies about their
quality, their distribution and also the certificates. Some achievement of company
can be listed such as Golden Medal ISO, Golden Lotus Trophies and much other
success.

II. MOTIVATION POLICIES

As can be seen, motivation is always one of the most important key in

managing in particular and in running business in general. In fact, employees are
motivated not only by financial reward but also by a range of social factors, such
as, praise, a sense of belonging, feelings of achievement, pride in one’s work and
so on. Therefore, the Maslow’s hierarchy of needs is still applied in motivating
employees in the current situation of 21st century, as well as LeGroup.
According to the theory of Maslow in human relations approach, LeGroup’s
motivation policies did satisfy the three main basic levels of needs, in terms of
Physiological and Safety and Belonging. First of all, mention to the Physiological
levels, LeGroup apply a system of monetary incentives. In detail, the basic salary
for employees is divided into many types, which is related to positions and the
levels of each position in this corporation. When dividing into many types of
salaries, LeGroup would like to make their staff feel fairly because in some
positions, the workers have to work harder so they deserve to get higher basic
salaries. Besides, Le Group also establishes competitive wage and promotion
program except the base pay. For instance, they made the three basic standards of
evaluation, namely, A, B and C in order to promote the attitude of employees at
work. An example of this is the standard A, which is the increase of 20% in salary
for employees who do not have any faults in their tasks. Moreover, in order to
increase the responsibilities of employees, this corporation uses the method of
decreasing the monthly wage for people who have bad performances or break the
two basic principles in producing.
Additionally, Le Group also consider carefully about the next level need of
Safety in order to make their employees satisfied. For example, they did set up a
system of days-off and holidays for employees around a year. According to Le
Group’s policies, there are many types of vacations that they distinguish for their
employees, for instance, maternity leave, absent without leave, and so on.
Furthermore, those vacations significantly belong to two main types, namely,
unpaid and paid holiday. Especially, Le Group also establishes a holiday on
summer for the whole employees of this company, which is the chance for them to
travel with their family, relatives and colleagues at the same time. On the other
hand, the corporation supports in insurance is also the other policy in motivating
employees perform their tasks effectively. Every worker has to buy body
insurance and healthy insurance but they just need to pay 30% of the insurance fee
when the rest are paid by the company.
Although esteem needs and selfactualisation needs are not showed clearly
in the policies of LeGroup, we could see that they still have some effective ways
to make their employees satfisfactory, especially higher level staff. For example,
the company allow the staff to join training courses which are sponspored by the
big companies in developed countries such as Japan, Taiwan. This activity
absolutely make the employees work harder and put their more effort into work in
order to have the experiences in a foreign country.
From the point, there is no doubt that Le Group did well in the way of fulfill the
first two levels of needs in the Maslow’s theory. In fact, the policies in motivation
of this corporation seem to be right because their main workforce is workers.
Furthermore, it is still assumed that some methods are still applied for motivating
higher positions in the structure of Le Group Corporation. On the other hand,
LeGroup should have the policies which concern to the specific needs such as
accomodation and transportation. They can help the workers find the place to stay
or have the bus for the employees if they live far from the company.

III. MANAGEMENT LAYERS

As many other enterprises, Legroup’s top authority is belong to one person,

who is the Executive Director. Legroup management structure is a type of
functional departmentation (or functional structure). It groups together people who
do the similar tasks. Legroup is a manufacturing enterprise so the core group is the
Production Department, which is under control of the General Director and the
Director of Production. The supporting groups are groups which do other tasks
that help the Production Department, including Human Resource, Training, Sales,
and Finance. In the Production Department, there are sub-departments and small
groups. It can be seen that Legroup’s management structure has a flat span of
control. It means that there is a small number of hierarchical levels, or in other
words, there are many subordinates immediately reporting to a superior official.
This structure has its own advantages and disadvantages.
For the advantages, specialist skills are concentrated into the same
department, and employees in the department can become experts in the work that
they do. Specialization might improve efficiency, because specialists are able to do
their work more quickly than non-specialists. Specialization can also improve the
quality of the work that is done. Functional specialists can be capable of achieving
more than non-specialists. The act of delegation helps Legroup to have more
opportunity for delegation and speed up communication between the top managers
and the staffs (the vertical communication).
 For the disadvantages, the top manager has the task of co-coordinating the
work of all the different departments, which sometimes becomes overloaded. The
completion of a project depends on the work of several different departments, and
no single function or functional manager has responsibility for the entire project.
For example, the Sales Department collects the market’s data and analyzes it.
Then the data is sent to the New Model Group, which has the same function as the
R&D Department in other companies. After researching and developing new
product concept, the New Model Group makes some reports and sends them to the
Planning Manager. The Planning manager will contact to the Financial
Department to have an aggrement to buy new materials. At the same time, the
Training Group starts to train staffs about the new product concept. Then the
Mechanical Group starts to produce new products. This type of structure
encourages the development of bureaucracy. However, each department might
develop its own culture and communicate between departments (the horizontal
communication) might be poor. For example, scientists in the Quality Control
Group might find it very difficult to communicate with accountants.

IV. TYPES OF CONTROL

Control is the management function that involves monitoring activities to
ensure that they are being accompleted as planned and correcting any significant
deviations (Robbins, Decenzo and Coulter-Fundamentals of management). In
organizations, control is important in many ways because it allows you to have a
handle the growth or lack there of within your business or organization. Control
will allow you to slow down unnecessary and unruly growth that will affect badly
in your business in the long run.
Understanding the important of the control, LeGroup company set up a
controlling process to let all the staff in the company follow and carry out. The
process has four clearly steps. In the first step, the company buid up the control
system. This first step is very important because it leads all the following steps.
After the first step, they identify their abilities including 4 Ms. 4 Ms stands for
Man, Machines, Materials and Methods. When the company know what they have
and what they still lack of, they will know exactly what they have to control and
find the way to know how to control. The third step is that the company set their
goals. These goals have to be based on their system and abilities. Lastly, the last
step shows what the company control and the methods they use to control their
business operation. In the last step, four things the company concern are Planning,
Execution, Evaluation and Improvement. Each of them link closely and supports
to each other.
One of the outstanding method LeGroup use to control their company’s
activities is Kaizen- Lean Manufacturing. Kaizen is found by Japanese and defined
as “change for the better” or “improvement”. As the General Director of LeGroup-
Mr. Le Tuan said “ Even if you just think to change something including littliest
things to help you more comfortable or convenient, you also could say that is
Kaizen”. Kaizen is associated with different aspects and they are: Eliminating
wastes, Improving Efficiencies, Improving Processes and Improving Morale . In
fact, these days, many manufacturing company use this method to control and
improve their business. Therefore, LeGroup manufacturing and trading company
is not an exception.
The company use Kaizen as one of the most important program which widely
in the whole company. First of all, the managers in the company set their goal
when they apply Kaizen. The goal of the company claim that they try to reduce the
cost to improve the productivity and control effectively and easily. The company
set up the specific goals for each department or group. We can see it clearly on the
table below
Table 1. Expected reducing cost for each group in 2011
Group Expected reducing cost in 2011
Mechandising 15%
Welding 12%
Plating 12%
 QC
Assembling
Office Work 5%

With the specific goals, the company try to reach their goals by training their
employees to increase their awareness about “ Change for the better”. Each
department or group is received a Kaizen form. This form was created to make the
employees easy to follow, easy to do and become widely movement in the whole
company. In this form, the staff in the company just need to write briefly what
they think to do to reduce the cost and increasing productivity, for instance,
decreasing the materials which need to be used in production. The company also
have the various types of rewards for who have “Kaizen” ideas. These rewards are
divided into 9 progressive level from C2 to A1.
After a few years applying Kaizen method, the productivity of the company
increased significantly and also the employees were more intersting in their jobs
and always found the way to make their work more effectively and efficiently.
Therefore, we could claim that LeGroup have been successful when they use
Kaizen as their main control method.