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Analysis Vinacafe Bien Hoa Company

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Introduction

An organization was established including many parts which connect together. They involve all
internal and external operations and affect to viability and growth of a business. This
assignment mentions to the understanding types, purposes, size and scope of a range of
business organizations and the relationship between different organizational functions and how
they link to organizational objectives and structure.

As an analyst of “Vinacafe Bien Hoa Company”, I will find out new investment opportunities for
my organization. Vinacafe Bien Hoa Company is a Joint Stock Company, which is famous for
producing instant coffee.

I. Different types and purposes of organizations

1. Types of an organization 

There are two types of an organization including legal structure and voluntary sector
organization.

1.1 Legal structure

a. Sole trader: is the simplest form of business structure and is relatively easy and
inexpensive to set up. As a sole trader you will be legally responsible for all
aspects of the business (Small Business Development Corporation, n.d.). You’ll
generally make all the decisions about starting and running your business and
you can employ people.
b. Partnership: involves two or more people going into business together with a
view to making a profit (Small Business Development Corporation, n.d.). It is easy
to raise up capital of company by bringing more people into business. The
partnership can combine many talents with different skills and creative ideas to
create a powerful business.

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c. Limited company: is an organization which is created with legal distinction
between the owner's finances and the business's finances.

Private company vs. state-owned company: A private company is a firm that is


privately owned and a state-owned enterprise is an entity formed by the
government for the purpose of engaging in commercial activities. (Investopedia,
2020)

Public limited company vs. unpublic company: A public limited company has
offered shared of stock to the general public and an unpublic limited company is
not listed on a stock exchange, it is only traded/exchanged via a private
arrangement with the stockholders.

Franchise: When a business wants to extend its market or increase its


geographical reach at a low cost, it may create a franchise for its product and
brand name. The franchisor is the business whose sells the right to another
business (franchisee) to operate a franchise. Franchisor may run a number of
their own businesses, but also may want to let others run the business in other
parts of the country. (BTEC FPT Slide, 2021)

2.1 Voluntary sector organization: A voluntary organization refers to purpose creating social
activities and bringing the benefit of human, which is operated without profit. The voluntary
sector organization includes:

Non-profit organization: is a business which is granted tax-exempt because it often


operates for charity and does not make profit.

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Non-government organization: A non-governmental organization (NGO) is a non-profit
group that functions independently of any government. NGOs, sometimes called civil societies,
are organized on community, national and international levels to serve a social or political goal
such as humanitarian causes or the environment. (Investopedia, 2021)

2. Purposes of an organization

2.1 Vision

A vision orients what you want your business to be at some point in the future, based on
your goals and aspirations. Having a vision will give your business a clear focus, and lead
your heading in the right direction. (Business Queensland,n.d.)

2.2 Mission

A mission statement defines what an organization is, why it exists, its reason for being.
At a minimum, your mission statement should define who your primary customers are,
identify the products and services you produce, and describe the geographical location
in which you operate. (Entrepreneur, n.d.)

2.3 Objective

A business objective is a result that a company aims to achieve. A business objective


usually follow SMART criteria including: Specific, Measurable, Achievable, Realistic,
Time bound.

3. Application in Company

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Vinacafe Bien Hoa Company is a profit organization. This is a consolidated statement of income
for the ninth month period ended 30th September 2020

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(Source: Financial Statements of Vinacafe Company,2020)

This company is shared of stock to the general public.


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(Source: CafeF, 2021)

On 29th December 2004, Vinacafe Bien Hoa company was changed from a state enterprise
transferred into a joint stock company. Vinacafe Bien Hoa sets goals, missions and core value to
bring customers the best contentment.

Mission
Vinacafé Bien Hoa will make, market and sell unique, high quality brands of beverage and food
products that satisfy consumers at home and abroad. We will do this by understanding the
needs of our consumers, customers and other stakeholders and by operating within a clearly
defined set of values.

Corporate Objective

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Our overarching corporate objective is to deliver sustained and superior financial returns to our
shareholders. We will measure our achievement of this by comparison with peer companies.

Core Value
In working to achieve our overarching objective, we will adhere to certain principles in the
conduct of our business.  Specifically, we will:

Consistently seek to adopt international best practice in all matters of corporate governance,
including corporate social responsibility.

Conduct our financial affairs with prudence, always being aware that good risk management,
asset preservation and liquidity maintenance are essential for our success.

Develop and market products [and services] to meet our customer’s needs, building our
reputation for competitive pricing, consistent product quality, good customer service, and new
product and service development.

Maintain soluble coffee products as the principal component of our business.

Invest in people, developing the capabilities of our employees, promoting excellence, rewarding
achievement and affording them the opportunity to share in our prosperity.

Respect food safety and environmental standards. (VinacafeBH, n.d.)

II. The size and scope of different types of organizations

1. Size of an organization

There are various definitions for statistical purposes, depending upon the
industry being considered, on the grounds that what is small in one industry
might be large in another. In Vietnam, organization size can be determined by
the amount of capital, revenue or the number of employees. (BTEC FPT Slide,
2021).

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Micro Small Medium Large
Organizatio Organizatio Organizatio Organizatio
n n n n

Number <= 10 <= 100 <= 200 >200


of people people people people
employe
e

Capital <= 10 <= 20 <= 100 >100


billion billion billion billion

Revenue <= 10 <= 50 <= 200 >200


billion billion billion billion

(BTEC FPT Slide, 2021)

a. Micro Businesses: refers to a small business that employs a small number of


people. Micro enterprises not only help improve the quality of life for business
owners, they also add value to the local economy. They boost purchasing power,
improve income, and also create jobs.

A micro enterprise usually operates with fewer than 10 people and is started
with a small amount of capital advanced from a bank or other organization.
These businesses serve a vital purpose in improving the quality of life for people
in developing countries, and generally provide a good or service in their
communities such as clothing and footwear production or agriculture.

b. Small-Mid Size enterprises:

Small and mid-size enterprises (SMEs) are businesses that


maintain revenues, assets or a number of employees below a certain
thereshold. Small and mid-size enterprises (SMEs) play an important role in the

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economy, employing vast numbers of people and helping to shape innovation.
Governments regularly offer incentives, including favorable tax treatment and
better access to loans, to help keep them in business.

c. Large Organizations

With such large size of organizations, management structure needs to be multi-


tiered for efficient and strong control. This leads to formulation of many
departments, management levels, designations, promotional opportunities and
salary increments. (iQualifyuk, n.d.).

2. Application in Vinacafe Company

Vinacafe Joint Stock Company is a large organization which number of employee


is over 200 people, capital is 265.791.350.000 VND and revenue in 2020 is
1.952.776.932.730 VND. (Financial Statements Vinacafe Company, 2020)

Headquarter of Vinacafe Company is located in Bien Hoa Industrial Zone 1, Dong


Nai, Vietnam. The company now accounts for more than 50% of the domestic
instant coffee market through sales agents in 64 provinces. Not only that,
Vinacafe has been present in foreign markets such as the US, China, Taiwan,
Singapore, Eastern Europe ... Vinacafe brand and origin have also been
registered in over 40 countries, creating favorable conditions for export.
Sustainable and efficient export in overseas markets. In addition to maintaining
instant coffee products, the company will produce and market unique and high
quality foods and beverages such as nutritional cereal flour, diet powder, and
children ... meet the needs of domestic and foreign consumers. (Vinacafe BH,
2010)

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III. The relationship between different organizational functions and how they link to
organizational objectives and structure

1. Various functions of an organization

The organization’s function depends on different functions like marketing, sales,


human resource management and research and finance functions.

a. Marketing department: is a role which helps a company to identify and source


potentially successful products for the marketplace they operate on and then
promote them by differentiating them from similar products. Typical marketing
function types within a larger business includes performing market research,
making marketing plan, and product development, market development, market
penetration as well as strategically taking care of advertising, distribution for
sale, pricing, after sales customer service and public relations.

b. Sales unit: is concerned with the distribution of goods. The sales organization is
in charge of appointing, ranking, supervising, paying, and empowering the sales
force, as well as organizing and managing these operations. In a summary, sales
company is concerned with the effective and productive delivery of products and
services to the final customer.

c. Human resource Department: Human resource departments are in charge of


staff recruitment, training, and dismissal in a company. Employee training
programs are held to develop their skills and inspire them. This unit must plan
ahead and determine the number and skills of workers the company will need in
the future. Failure to do so may result in either too few or too many employees
or staff with inappropriate needs.

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d. Finance Department: This unit is responsible for the control of a company's
purchases and sales, as well as cash flows, and preparing final reports, such as
profit and loss accounts and income statements. It will be in charge of estimating
employee wages and pensions, as well as coordinating the Inland Revenue's
income tax and national insurance collections. The finance department will also
be in charge of the strategic aspects of a company's financing. It will also oversee
the distribution of dividends to shareholders. (dineshbakshi, n.d.)
2. Organizational structure
An organizational structure is a framework for defining a hierarchy within a
company that requires workers to specialize in specific roles and hold specific
positions in order to achieve the company's goals. Popular organizational
structures are functional, multidivisional, project based and so on. (BTEC FPT
Slides, 2021)
a. A functional structure: is the most common way for most organize activity.
The organizational framework involves roles such as finance, marketing and
sales, human resource and so on that are directly linked to the achievement
of the organization's primary goals. (BTEC FPT Slides, 2021)

(Source Thrivingsmallbusiness, 2018)


b. A divisional structure: is built up of separate divisions on the basis of
products, services or geographical areas. Divisionalization also aids in

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overcoming the challenges that functional systems face when dealing with
diversity. Furthermore, organizations with divisional structures need
managerial authority to be delegated from the top to middle management,
as well as multi-skilled personnel with several functional skills, at least from
the lower management level upwards. (BTEC FPT Slides, 2021)

(Source Nevronoffice)
c. A project-based structure: is one in which teams are formed, completed a
project, and then dissolved. This framework is most prevalent in companies
that provide high-value goods or services, as well as those that deliver time-
sensitive events. It is such as civil engineering, information system, film,
event planning, sports, consulting, etc.

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(Source Greycampus, 2019)

3. Application in Vinacafe Company

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(Source VinacafeBH)

According to the Vinacafe Bien Hoa Company structure, it’s obviously a divisional structure. It is
divided into many blocks with their own function. The General Meeting of Shareholder is the
highest authority of the company, has the right to decide the company’s issues according to the
rights and obligations prescribed by Law and the company’s charter. The Supervisory Board
supervises the Board of Directors in the management and administration of the company.
Under the director, the deputy general director will be responsible for certain departments
such as the administrative department, the tax department, the technical department, and the
branches. The other departments such as marketing, human resources, sales department, R&D
unit and so on will be directly managed by the Board of Directors. Closely interconnected
business functions can achieve business goals more efficiently than any other business strategy.
Furthermore, the combined efforts of organizational functions will increase the company's
value and provide a competitive advantage. Company culture can be improved by ensuring
stronger interrelationship between business functions.

Conclusion

This assignment has shown the Different types, purposes, sizes and scope of organizations and
the relationship between different organizational functions and how they link to
organizational objectives and structure. It is also applied and clarified on the Vinacafe Bien
Hoa Company

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