Luận Văn Lack Of Coordination At Hbc’s Contract Department.doc

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
Tran Minh Tam
LACK OF COORDINATION AT
HBC’S CONTRACT DEPARTMENT
MASTER OF BUSINESS (HONOURS)
1

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
Tran Minh Tam
LACK OF COORDINATION AT
HBC’S CONTRACT DEPARTMENT
MASTER OF BUSINESS (HONOURS)
SUPERVISOR: Professor Doan Anh Tuan
2

LACK OF COORDINATION AT HBC’S CONTRACT
DEPARTMENT
Table of Contents
Executive Summary .............................................................................................................................. 5
1. Company Overview .......................................................................................................................... 6
1.1 Hoa Binh Construction Group J.S.C............................................................................... 6
1.2 Contract Department .............................................................................................................. 7
2. Symptoms....................................................................................................................................... 8
High and increasing Days sales outstanding. .................................................................................. 8
3. Problem identification .................................................................................................................... 10
3.1 Potential problems .................................................................................................................... 10
3.1.1 Inefficient project coordination at Site and in back office ................................................... 10
3.1.2 Lack of long-time working employees ................................................................................ 12
3.1.3 Lack of coordination within the department ........................................................................ 12
3.2 Validating problems .................................................................................................................. 15
3.2.1 Problem Validating 1: Inefficient project coordination at Site and in back office ............... 15
3.2.2 Problem Validating 2: Lack of long-time working employees ............................................ 17
3.2.3 Problem Validating 3: Lack of coordination within the department .................................... 18
3.3 The important and consequences of the problem. ................................................................. 20
4. Cause validations ............................................................................................................................ 23
4.1 Potential causes. ........................................................................................................................ 25
4.1.1 Work Overload ..................................................................................................................... 25
4.1.2 Poor Communication ........................................................................................................... 25
4.1.3 Lack of work-interaction ...................................................................................................... 26
4.2 Causes Validation...................................................................................................................... 26
4.2.1 Validating the first cause: Work Overload ........................................................................... 26
4.2.2 Validating the second cause: Poor communication ............................................................. 30
4.2.3 Validating the third cause: Lack of work-interaction within the department....................... 31
5. Alternative solutions ................................................................................................................... 34
Solution 1 – Provide orientation and internal knowledge sharing class. ...................................... 34
Solution 2 – Setting goal and specific tasks for employees in HBC E-learning System .............. 37
6 Action plan ................................................................................................................................ 40
7 Supporting information ........................................................................................................... 40
7.1 Interviewees‟ Demographic ................................................................................................. 40
7.2 Interview Guide.................................................................................................................... 40
1

References........................................................................................................................................43
Appendices.......................................................................................................................................47
Appendix 1: Definition of theoretical frameworks .......................................................................47
Appendix 2: Form of proposal......................................................................................................48
Appendix 3: Bidding results in 2019 of HBC (1st
and 2nd
quarter only)......................................52
Appendix 4: Days sales outstanding of HBC, CTD and PHC ......................................................57
Appendix 5: Transcript summary .................................................................................................58
2

LIST OF ABBREVIATIONS
HBC
DSO
EPC
CTD
PHC
UEH
UOL
QS
AR
Hoa Binh Construction Group Joint Stock Company
Days sales outstanding
Engineering, Procurement, Construction
Coteccons Construction Joint Stock Company
Phuc Hung Holdings., JSC
University of Economics Ho Chi Minh City
University of Law Ho Chi Minh City
Quality Surveyor
Account Receivable
3

LIST OF TABLES
Table 1: Data of net sales, average account receivable, account receivable turnover ratio and day sales
outstanding from January, 2015 to December, 2018 in HBC ................................................................................9
Table 2: Data of due dated value of 10 on-going biggest projects from 2015 to 2019 in HBC ...........................11
Table 3: Data of personnel in Contract Department in 2019 in HBC..................................................................12
Table 4: Data of payment in Sunshine City Saigon Project in HBC ....................................................................15
Table 5 - The assignment of the Main-contract execution of the Contract Department during the 2019 period –
quarter 1, 2...........................................................................................................................................................29
Table 6 - The assignment of the Subcontract execution of the Contract Department during the 2019 period (with
ONG = Ongoing, STO = Stop, COM = Completed) ............................................................................................29
Table 7 Estimated costs of two alternative solutions............................................................................................40
Table 8 - Action plan of two selected solutions from June 2019 to January 2020 ..............................................39
Table 9 - Interviewees’ Demographic ..................................................................................................................40
TABLE OF FIGURES
Figure 1: A part of HBC organizational structure .................................................................................................7
Figure 2: Contract Department ‘s organizational structure ..................................................................................7
Figure 3: Data of day sales outstanding from January, 2015 to December, 2018 in HBC, CTD and PHC. .........9
Figure 4: Contract Executive job’s description in executing Main Contract in HBC..........................................19
Figure 5 - The display of HBC E-learning system (http://www.el.hbcr.vn)..........................................................38
LIST OF DIAGRAMS
Diagram 1: Initial cause-effect map of Contract Department in HBC.................................................................14
Diagram 2: Updated cause-effect map of Contract Department in HBC.............................................................24
Diagram 3: Final cause-effect map of Contract Department in HBC..................................................................33
4

Executive Summary
Over the last couple of years, the development of Hoa Binh Construction
Group J.S.C has been significantly recognized in the construction industry. However,
during the difficult times ahead that construction companies are about to encounter,
constantly increasing in account receivable has been recorded as a cautious signal in
financial report of the company. This paper is about to give a full picture of how a
typical construction company struggling to find the solutions to solve the mentioned
symptom. By first, the researcher gives a short portrait of the company. Then, by
some intensive working, the author identified an apparently seen symptom before
using some techniques data including qualitative research such as focus group to
establish three potential problems, follow then by reviewing literature and further
conducted an in-depth interview in confirming the main problem and its important and
consequences. The research also gives further look at the potential causes and once
again validating them to find the main cause and sub-causes in order to give the
rightful solutions for an agency to improve.
Throughout the research, readers may find there are still some connection and
contrast in and between the literature found and the answer received from the
interviewees, as well as the difference in perception of people from the executive
level, to the deputy manager level and to the director level. The paper also pointed out
some limit of the focus group technique to get the clearer picture at the symptoms and
potential problems of the company. Furthermore, the solution is given to enhance the
effort of cure the department problem first, before having affection to the symptoms
of the company.
5

1. Company Overview
1.1 Hoa Binh Construction Group J.S.C
Having just celebrated their 30th
anniversary in operating in 2017, Hoa Binh
Construction Group J.S.C (HBC) – one of the pioneers in the construction industry, has
gained itself a valuable image in the market. HBC has been constantly awarded billions
contract over the years, especially as the role of the General contractor (EPC), Main
contractor and Design and Build Contractor. The mission of the company was once to
become the leading construction company in Vietnam, however, the company has been
expanding their mission to become one of the competent contractor in the world,
beginning in Canada, Australia and Myanmar. The company started his first sign when
allowing the Hyundai Elevator to buy stocks and get the first control of the company, the
private placement of shares to foreign partners will be completed in the second quarter of
2019. The overall of 2018 saw the company revue increase 3 times over the year of 2015
and the profit is even more impressive in figures, increase as almost 8 times over the year
of 2015.
Source: HBC‟s website (www.hbcr.vn)
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Figure 1: A part of HBC organizational structure
1.2 Contract Department
As the contractor, it could be clearly seen that companies has to compete to get
the jobs among the other competitors. When things going the right way, that means
when the HBC is awarded the contract, there has to be a department who takes the
responsibility of review, negotiate and draft the contract for signing. That being said,
such people shall own knowledge in a mixed between the construction field and the
legal one.
The Contract Department was established with the aim to (i) Review, negotiate
and draft the Main Contract with Owners/ Developers, (ii) Check the approved budget
with the approved Subcontractors before review, negotiate and draft subcontract with
Subcontractors, (iii) to coordinate with other departments in the company system to
complete the general mission of HBC.
Figure 2: Contract Department „s organizational structure
It can be seen in the Figure 2 that Contract Department is one of the four
Departments located in the Supply Division. The Contract Department is led by Mr.
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Nguyen Le Tan - the Director of the Supply Division and Mrs. Nguyen Thi Hoan -
Deputy Contract Manager.
During the operation over the last few years, some symptoms of the company
has been recorded. Therefore, this thesis will indicate those symptoms and investigate
whether there is an existence in those symptoms and the role of the Contract
Department. In other words, the purpose is to analyze the link between the causes,
effects and symptoms.
2. Symptoms
High and increasing Days sales outstanding.
For construction companies the monthly bills or draws to the Owners of the
construction projects constitute an account receivable until the bill is paid (1). It is
inevitably seen from the financial reports for over the last 04 years that the receivables
of HBC gradually increases. According to Bryk (2), in case the company needs to get
cash to meet its obligations with other parties since Owners/Developers are paying
late, it could bring up many financing charges. Incurring overdue account receivable
still has a cost. Instead of having free cash-flow to put resources into development
opportunities, purchase new machinery or establish new items, your money is tied up
on balance sheet. Keeping the account receivables too high may have seriously
affected on the cash flow of the company, and therefore the company has to delay the
payments to any suppliers or vendors as the case maybe. The Account Receivable
Turnover Ratio and days sales outstanding of HBC at the average of 2018 is 1.79 and
203.49 respectively, it means that the company collects the receivables about 1.79
times a year or once every 203 days. In other words, when HBC makes a credit sale, it
will take the company 203 days to collect the cash from that sale.
Item 2015 2016 2017 2018
Net sales (1)
5,078,027,249,288 10,766,205,824,099 16,037,264,026,609 18,201,392,136,460
Average Account
Receivable (2) 4,212,399,847,452 5,493,455,146,390 7,982,600,863,350 10,147,610,601,259
8

Account
Receivable
1.21 1.96 2.01 1.79
Turnover Ratio
(3) = (1)/(2)
Day sales
outstanding (4) = 302.78 186.24 181.68 203.49
365/(3)
(Source: HBC‟s financial report (2015, 2016, 2017, 2018)
Table 1: Data of net sales, average account receivable, account receivable turnover
ratio and day sales outstanding from January, 2015 to December, 2018 in HBC
When taking a look beyond the company boundary, it is apparently that the two
biggest rivals of HBC still keep the amount unconcernedly. This paper is making a
benchmark in DSO with CTD and PHC construction companies, two of the biggest
rivals of the company. To be specific, it could be clearly seen that the day sales
outstanding of CTD and PHC seem to increase over the 2017-2018, however it is
insignificant as it is still remained under 100 days. In contrast, HBC, at least has to
wait twice the time of the rivals to collect cash within the period of one year.
Days sales outstanding of HBC, CTD and PHC
350
300
250
Days
200
150
100
50
-
2015 2016 2017 2018
HBC 303 186 182 203
CTD 63 53 66 98
PHC 64 58 57 89
Figure 3: Data of day sales outstanding from January, 2015 to December, 2018
in HBC, CTD and PHC.
9

For a construction company by nature, when enters into contract with
Owner/Developers, it is commonly seen that there are involvements of many suppliers
and vendors. Until the company receives the payment from Owner/Developers from
such contract, the company has to pay the cost itself to their suppliers and vendors
which may be a serious case for the instability of cash flow of HBC. As a result of
those investigation, it illustrates that HBC have a High and increasing Days sales
outstanding, such signal should be also seen as a symptom which the company needs
to focus on now.
3. Problem identification
The problem identification process starting with identify potential problems
The consultant has taken a focus group method with all of the member in the Contract
Department to find out the main problem.
3.1 Potential problems
3.1.1 Inefficient project coordination at Site and in back office
A focus group was initiated by the consultant with the involvement of all of the
members in the Contract Department. This Department for a long time has not owned
a manager, therefore all of the major decisions has been made by the Director of the
Supply Division. The account receivables symptom has been raised first during the
focus group interview, Ms. Hoan – the current leader of the team, expressed her
feeling that the delay payments of Owners/Developers – these are people who spend
money on investing construction projects, Ms. Linh – an accountant specialist also
emphasizes that high receivable every years is caused by two main reasons (i) HBC
used an typical accountant according to accounting law of Vietnam, when the progress
of the construction project hit the specific miles stone such as 70% of total progress,
even the invoice has not been released, the account receivable has also been recorded
and (ii) Delay payments from Owners/ Developers from the very first projects until
now. The group has discussed a lot of projects, but according to Ms. Linh, there are
lots of projects ongoing but these are the most common ones:
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No. Project Year Year end Contract Due dated
started Price value
(billion) (billion)
1 Empire City 2017 2019 2.761 950
2 Sunshine City 2016 2018 2.366 1.366
Saigon
3 Flora Mizuki 2017 2018 1.342 800
4 Hoa Phat Dung 2017 2018 1.284 400
Quat
5 Lancaster Lincoln 2016 2018 1.265 230
6 Alma Resort 2017 2018 1.213 630
7 LIM Tower III 2017 2018 1.192 213
8 Riviera Point - 2017 2018 948 633
Phase 1B
9 Phu Huu Apartment 2017 2019 896 300
10 Song Ngoc 2016 2018 869 456
Apartment
Table 2: Data of due dated value of 10 on-going biggest projects from 2015 to 2019
in HBC
The questions then raised to everyone in the focus group to find out the reason
why the delay has occurred. Ms. Van Anh go straight into the point as the veteran
referred to the provisions in these 10 listed contracts, the date of payment is very long
(> 45 days) at least, while even-though just doing paperwork job, Ms. Lien said that
the date of submission the payment documents is always very late. Ms. Hoan
concluded by saying that these answers shall be re-checked with the signed contracts
to find all of the provisions that affect the payment time and with Ms. Linh to find out
all of the submission date is late or not, she also takes some notes from the external
factors, even though everyone did the perfect jobs according to the contract, risks may
come from the other side of the Contract. Owners/Developers are the one who
developing the Project, and there are possible plenty of reasons that may affect to their
cash flow as may lead to the shortage of finance to afford for the Contractor (i) Project
suspended by competence authority, (ii) Lack of financial source or even the
subjective factor (iii) the willing of the Owners/Developers to pay. This gets a little
deeper into the story as the payment of the servant depends a lot on the spirit of the
boss. The consultant reinforces the topic by raising the cause leading to late
submission of payment documents, the answer of Ms. Quyen said that the inefficient
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project coordination between people working at Site and in back office received the
consent by other interviewee.
Therefore, this inefficient project coordination maybe a problem of the
company as it may affect the company cash flow and increase the account receivable.
3.1.2 Lack of long-time working employees
The debate is getting hotter when the consultant goes into the tenure of the
interviewees, by asking whether the young and dynamic team has enough experience
to handle all the work and maybe one of the causes lead to the unfavorable contract
provision when negotiating, most of them remains silent. Ms Hoan expressed her
feeling that this shall be a problem that most of them has little long-time working in
the company and almost everyone graduated from Economy – Law school and majors
in Law, therefore, the knowledge in the construction industry is limited. The following
table is given by Mr. Tuyen – who is a veteran Human Resource specialist, giving
details on education and experience of each and everyone in the Department.
No. Name Education Major Year Years in Role
Join Construction
Field
1 Nguyen Thi Hoan UOL Law 2010 9 Leader
2 Tran Hong Ngoc UEH Law 2018 9 Main
Contract/
Subcontract
3 Nguyen Thi Van Anh UOL Law 2016 10+ Main
Contract
4 Tran Pham Hoang UEH Law 2018 02 Subcontract
Tung
5 Tran Thuc Quyen UOL Law 2017 05 Main
Contract/
Subcontract
6 Tran Gia Bao Tran IU BA 2018 10+ Main
Contract
7 Do Thi Lien UEH BA 2009 0 Adminstrativ
e
Table 3: Data of personnel in Contract Department in 2019 in HBC
3.1.3 Lack of coordination within the department
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The abovementioned interview continues to give another potential problem that may
be examined, about the connection between each employees within the department.
When mentioned about the unfavorable contract provisions among the pending
contracts – it means the contracts that the payment has been delayed, Ms. Hoan – who
have just been promoted to the Deputy Manager of the department since the end of
2017, said that everyone here likes to work dependently, and they are restricted to get
reference from other signed contracts as they are heavily protected under Ms. Lien‟s
custody for the confidentiality. By observation technique, the consultant can feel the
hesitation from the look of other interviewees, which has always been known as the
limit of the focus group technique. When people are sitting next to their leader, they
are shy to express what they are feeling. But the common feeling is that the interview
has been going on a very tense atmosphere and this potential problem shall be
examined by getting further into the literature review and previous researches
conducted by journalists and researchers.
The interview has given the reader and clearly picture at what could be called the
potential problems within this department towards the two mentioned symptoms, the
initial causes-effects map could be drawn as follows:
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Diagram 1: Initial cause-effect map of Contract Department in HBC
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3.2 Validating problems
To validate the foregoing potential problems, the author is about to have a
review on literature and some data gathered while working with members in the focus
group interview.
The results finding is somehow still ambiguous, the author decided to make an
in-depth interview with Mr. Nguyen Le Tan – The Director of the Supply Division,
who has more than 20 years of working in HBC to validate the second potential
problem as it related to a problem among the human factors.
3.2.1 Problem Validating 1: Inefficient project coordination at Site and in
back office
In his journal, Reeves (3) expressed that one of the fundamental causes behind
late submission of payment documents is when there are mistakes in submitting
claims. Such claims is made without sufficient supporting reports, wrongly calculated
and those submitted without using the correct procedures in contract.. When this is the
case, contractors need to resubmit the claims after making the necessary corrections
and may cause late submission of payment documents. Gather from the data of Ms.
Linh, we have another look at this potential problem (the biggest due dated value
contract Sunshine City Saigon):
Project Date Date Date Date Contract Received Due Reason
submitted submitted invoiced invoiced Price (Payment dated
Working working in (billion) 30%) value
volume to get contract (billion)
approval
in contract
Sunshine 5th day the 20-25th 15th day 30th of 2.366 709.8 946.4 Dispute
City following of the the the 2nd in
Saigon month following following month valuation
month month
Table 4: Data of payment in Sunshine City Saigon Project in HBC
The inefficient project coordination in Site and back office has clearly shown
in the Table 3, when the correct and accuracy invoice is released to the Owners/
Developers, it may take at least sixty (60) days to receive the payment, that is what
15

described in the Contract and may need some special gift to get the payment within
such time. Being delay in payment may come from the external reasons, however, for
the reasons that could be controlled by the Contractor, there shall be recognized as a
potential problems of the company.
As frequent, each of the contract will have different payment methods. As a
general and basic contract, for all the works the contractor has executed during the
month, will be summaried at the start of the following month and then getting
approved by the Owners/Developers before invoicing the approved value, this is so
called a claim process. However, delay payment caused by Owners/Developers is
when they do not execute his obligation to pay the amount or to approve the working
volume within a stipulated time in terms of the contract (3) . They actually have the
right to reject what are in their opinion is not right, with have to attach with detailed
explanation or evidence. There are cases where the investor are wrongfully
withholding the payment. Odeh et al. (4) list exactly what Ms. Hoan has expressed her
thinking in the previous part, this is sensitive but in some way very common as there
some clients who want to receive some kind of informal and secret „gifts‟ from the
contractors before releasing the payment. Another factor adding to delay installments
is when contractors disputes with the valuation of work, whether it has been defined in
the contract or result by reason of variation. This would then creates conflicts between
Owners and Contractors and which could be a reason for delay of Owners/Developers.
However, the data the author received above is somehow not sufficient enough
to prove the existence of the problem. When Mr. Tan was asked about the
coordination between the Site and the back office, he did not have the same thinking.
The director ensures that there are many factors that affect to the late submission of
the payment documents. Even though the time stipulated in the provision to ensure the
conformation of the parties in contract to the obligations, Contractor always have
difficult time submitting their invoice on time. As a contractor, it is always subject to
the Owner/ Developer‟s approval on the monthly working volume, on the calculation
table, on the invoice. It can take very long and nothing the Quality Surveyor working
16

at Site or a Contract Executive of HBC can control. More astonishingly, he surprised
the author when releasing the information that the coordination between the office and
Site of HBC is built on an extremely expensive and elaborate system that worth
billions VND. People working at Site are being practiced and trained, therefore, this
system is proved to augment the coordination between these people both in quality
and time.
3.2.2 Problem Validating 2: Lack of long-time working employees
Having a good negotiator with good skills and experience will enhance the
possibility of getting a good contract provisions. According to Bakar et al. (5), three of
the biggest factors influencing the negotation and the outcome of the contract are (i)
relationship with supplier/subcontractor, (ii) trust and (iii) skills of negotiator, as a
veteran working employee, people would be enable to get more favourable contract
provision. That being said, in contrast, if the contract is signed with risks involved
from the beginning, that could be seen as Ali (6) and Arditi et al. (7) said, as the use of
the pay when paid (back to back) clause in sub-contracts, it means that Contractor will
only pay to Subcontractor when received money from Owners/ Developers. The „pay
when paid‟ clause in contracts could cause delayed payment issues especially to the
subcontractors who might just do a minor job in the whole package work. In his
published journal, Ansah (8) also agrees that that a mechanism for avoiding or
reducing delayed payment needs to be taken in the form of contractual or statutory
rights.
When interviewing Mr. Tan about this potential problem and giving him the
details about the data of personnel in Contract Department in 2019 in HBC in Table 3,
he also thinks this is not the right problem. The veteran said that they have an
intensive recruitment process, as all of the candidates may not have a very long
working time in HBC, however, they all are not freshman. They have experience and
having worked for the construction industry over years. Not to mention, the interview
test is difficult and very competitive. They have to spend first test about the English
and IQ. Next the candidate has to answer ten different types of questions related to in
17

construction industry that requires an experienced executive to answer, there are
translation and questions about the FIDIC book too. The director ensures that people
here though working separately and dependently, are the ones who are pretty solid at
their job.
3.2.3 Problem Validating 3: Lack of coordination within the department
According to Xue et al. (9), An agent-based framework for supply chain
coordination in construction, Coordination in construction is to build the integration of
key construction business processes and key members involved in to accomplish a
collective set of tasks and to achieve mutual benefits. Furthermore, Criticisms of poor
performance are not uncommon in the construction industry, and coordination is
observed as the best solution to this problem (10). Coordination link people together
and help the company improve the performance, effective coordinating the collective
efforts of organization member enhance organization competitiveness (11). Also
according to Wen (11), managers can adopt the knowledge sharing and coordination,
and align their roles with abilities to achieve effective knowledge sharing and
coordination.
To clarify the coordination within the Contract department, the author
organizes a closed discussion with the involvement of 06 employees within this
department except Ms. Hoan, and finding out astonishingly that people usually
working dependently from the others, most of them do not admire the newly promoted
deputy manager and almost everyone hesitates to debate or discuss about things they
are unknown. Therefore, lack of sharing information and lack of given and receptive
culture may urge people to the point where they will work over the limit, or lay them
down as usual. Morever, the restrictions in access to the other contracts to get
information also may lead them to accept some unfavorable and harmful provisions
that could not be foreseen at the stage of review, comment or even when negotiate and
draft the final contract.
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Figure 4: Contract Executive job‟s description in executing Main Contract in HBC
Mr. Tan continue to express his feeling towards this potential problem. The
author is given a 30 years-anniversary book of HBC. And when looking in such book,
there are more than half of the people working in Contract Department is leaving.
Asking about this information, Mr. Tan expresses his disappointment every time
people leaving but almost his received answer is that they find a new home. When Ms.
Hoan is promoted to the Deputy General Manager at the age of 28, there are lots of
thing going through the departments. She is younger than most of them, except for
one people at that stage. And speaking of Ms. Hoan, the director seems to appreciate
and give praise for all the works she has done. Even though graduated from Law, she
equipped herself very solidly about the knowledge in construction field. But at new
role now, she encounters lots of resistance: from the older people in the department,
they used to go straight to the room of the Director for signature but now they have to
get the Deputy‟s signature prior consent, they have to carbon copy all of the emails to
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Ms. Hoan – that‟s what they are not used to, and in other aspects, when they are
absent or leaving or going late, all have to get acquainted with the new situation. The
atmosphere is very stressful, and people seem to hesitate to express themselves and
share more, leading to everyone working dependently and overlooked all of the others
favorable contract provisions that has been successfully negotiated by the others in the
department, not to mention that due to confidential, to release a single contract for
reference, they have to get through Ms. Hoan, which they do not want to do, and
increases the lack of coordination among the Contract Department even more.
3.3 The important and consequences of the problem.
The author has pointed out three potential problems and gained sufficient data
to prove the one the real problem of the business, this part is reviewing once again
each of the potential ones respectively,
Firstly, the author conducted a thorough focus group with the members among
the department and was surprisingly finding out everyone has the same think as the
inefficient Project coordination in Site and back office leading the high and increasing
DSO. From the data getting from Ms. Linh, we could see there has been on-going
projects are being delayed in payment and she also shares about that account
receivable recorded policy in HBC. The recognition of revenue according to HBC
schedule is stipulated in the 15th standard (VAS 15) on construction contracts -
immediately to the point of accounting there, although not yet collected money, is the
method that Vietnam still accepts. This is the method that the big rival of the company
such as Coteccons used to record the account receivable figure. However, for large
receivables of HBC, that it may involve risks as it was an estimate according to
schedule, customers have not yet accepted payment because they have not been
accepted, even if they are temporarily advance. However, Ms. Linh also confirms that
there have been many meetings conducted between the top managers of HBC to
discuss about the problem and Mr. Le Viet Hai the revenue recognition method will
affect the indicators on the financial statements, but avoid the distortions of
shareholders and investors about the situation of HBC. From there, the author
continued to go through all of the literature finding out that there is a link connection
20

between the process, when the documents are being delayed by the Contractor itself, it
leads to late submission of the payment documents and payment delay is the
consequence. By looking at the project information given by Ms. Hoan (Sunshine City
Saigon), the payment was delayed by the one taking responsibility to submit the approved
monthly working volume (QS) and the late submission of invoice. However, things are
different when Mr. Tan confirmed that the reason is not the one that we found. The
Director, who is familiar with many of the biggest Owners/ Developers in the
construction industry showing there are many different factors but he does not think this
is the right one and moreover, showing the list of procedures of HBC is built on the most
elaborated ISO System and being followed strictly by all of the executors.
During the focus group, one thing that the interviewees mentioned about is the
problem in the contract clauses giving effect to the delay in payment. However, even
though the author finding a link between the long-time working people usually
successful in negotiation and therefore, a good contract signing is apparently. This
potential problem is reviewed by the overall background of the member in the
departments and Mr. Tan, when they both showing the fact that the Department has
owned lots of law experiences and was recruited in a very careful way, this leading to
the fact that almost every of them can negotiate lots of type of contract themselves.
But the thing the author getting surprised that there are actually lack of coordination
between them even when interviewing, not alone working. It will always get tougher
at the time goes by, when the new and promoted Manager is not the chief manager but
just the deputy ones, and things are getting tougher when there are literature saying
that lack of coordination within the department can cause trouble in work, and Mr.
Tan also have the same idea. He realized that this is one of the problem has been
consistently repeated when signing the contract. Everyone works dependently and
does not get the best out of each other, therefore, based on the general template, there
are always a miss if people cannot learn how to avoid the unfavorable contract clauses
leading to the delay in payment and the high DSO as mentioned. The most critical
ones are consequence of the fact that problems with receivables are usually the reason
for accumulation of overdue payments and can lead to insolvency (12).
21

From a macroeconomic point of view, García‐ Teruel (13) states that level of
account receivable is affected by the economic situation. Credit collections depend on
the industry (14), and effects of negative macroeconomic shocks (15). In a worsening
economic and market conditions, some Owner/Developers cannot pay the payment on
time, causing the company increases their receivable. However, data showing that the
Sunshine City (Owner of the project above) has consistently awarded HBC many
news contract in 2019. When we taking a further look into some details in Appendix 3
we could see that Sunshine City awarded HBC in the first quarter of 2019 over 800
billion VND contract in north of Vietnam, and over 300 billion contract in the south of
Vietnam.
One of the signs that an organization lacks coordination is delay. When there is
a lack of coordination between management, labor, production and sales, delays will
result causing the organization to become ineffective. When delays become part of the
operations of the organization, customer relations will suffer for the organization.
Delays create unreliability and will alienate customers from the organization. By
controlling and properly managing work in progress, the organization can work to
prevent delays and resulting coordination problems.
Another sign of a lack of coordination within an organization is redundancy.
With redundancy, an organization will spend double the effort, material and time to
produce the same item twice. Redundancy typically results from a lack of
coordination between various departments within the organization. By implementing
control measures to reduce redundancies, an organization can work toward improving
overall coordination within the organization.
Organizations must effectively utilize information to function at an optimal
level. When this information is not readily available as needed within the
organization, the lack of information can create a cascading effect that will damage
the organization. Lack of coordination creates gaps in the acquisition and distribution
of information. This in turn makes the organization's available resources ineffective
and causes it to miss opportunities. By implementing an accountability system for the
22

information, the organization can improve coordination and minimize lost
information.
When an organization does not support coordinated efforts, innovation and
progress can become stagnant within it. This can make the organization obsolete and
unable to compete against other organizations in the same industry that have adopted a
coordinated effort to adapting new methods of producing and managing the
organization. Inflexibility also freezes many protocols that could have potentially
become productive. This happens because there is not enough coordination to gauge
the effectiveness of the new protocol.
In conclusion, from an internal point of view, the Lack of coordination within
the Department after going through focus group, literature and in-depth interview with
Mr. Tan, all showing that this is the problem the author is looking for.
4. Cause validations
In line with the previous analysis and based on literature reviews, some
potential causes of the central problem are identified in the diagram 2 which is the
updated cause- effect map of the department as below:
23

Diagram 2: Updated cause-effect map of Contract Department in HBC
24

4.1 Potential causes.
4.1.1 Work Overload
According to Qaiser et al. (16) his journal proved that work over-load, negative
affectivity, work-family conflict and family-work conflict has a positive association with
emotional exhaustion though co-worker support helps to moderate the relationship
between. Indeed, having to a lot of work to do prevent people from interaction with each
other, therefore leading to increase in stress, turnover intentions, and lower job
satisfaction (17). Also proved in his work, Farooqi et al. (18) said that the relationship of
work overload on job satisfaction and relationship of job satisfaction on employee
performance, employee engagement which is most important thing of any organization.
The working overload may come from the lack of interaction between the people
in the department as communication tactics allow management teams to coordinate
successfully without becoming overloaded and successful coordination and freedom from
overload independency influence team performance (19).
4.1.2 Poor Communication
Correspondence among colleagues could enhance collaboration in the working
environment because of it removes some uncertainty in the relationship and
misunderstanding among the co-workers (20).
It is inevitably that communication is recognized as an essential key to an effective
and solid workplace that generates the employee satisfaction, engagement and enhance
organizational performance. In other words, with communication, employees will be
more cooperative and motivated if they are given adequate opportunities (21).
What can be understood in common that communication consists of sharing and
using information while lacking of correspondence results from insufficient information,
25

managers‟ use of proper communication practices should offer an effective means to
increase cooperation and reduce employee vagueness (22).
4.1.3 Lack of work-interaction
According to Heaphy et al. (23), employees‟ bodies are influenced by ordinary
interactions and, in so doing, encourages a stronger tie between human physiology and
organizational research, social interactions has a positive affection on human and
hierarchical settings influence worker motivation and physiological creativity. Advancing
every day positive work–home interaction and day by day positive home–work
interaction activities have helped employees in dealing with their numerous of roles and
obligations, which features the significance of analyzing the positive impacts that work
and home could have on one another (24).
In his interdisciplinary research, Schmidt (25) said that interactions between
administrators from one viewpoint, and the data sources accessible in the control room
are the methods the administrators working in pairs to monitor the overall process and/or
the other‟s activity. Interactions sure does can help to monitor the other‟s activity.
4.2 Causes Validation
The validating step is conducted to identify which cause has the real effect on the
main problem that the reader has mentioned before. By first the writer doing some
literature review and interviewed the level of members in the department, before went to
the Contract Director to confirm such finding.
4.2.1 Validating the first cause: Work Overload
As it mentioned before and also has the same idea, Ali et al. (18) said that stress in
the workplace owing to various problems such as work overload, conduct of co-workers
becomes detrimental not to himself but to the organization. This stress can be reduced by
giving training, orientation, proper pay package equal employee opportunities (26).
26

Respectively, the writer went straight to the office to find if there are actually signs
of being – work overload by the employees. By confirming the cause, the writer has done
some observation techniques to have the prior picture. By observation, he could see that
the company has the working time to end at 04:30pm, and he find it interestingly that
almost everyone in the department leaves the room at such time. There is rarely working
overtime or overnight. This may be a subjective finding as it could be explained for the
high efficiency and high performance that leads to unnecessary additional working. Also
confirm the doubt, Kuschel, (27) said that there is a strong relationship between the
concept and measurement of working time and workload: work overload and working
long hours seem to be two faces of the same coin. Therefore, realized that further
interview is needed, the interview has conducted the second group interview within the
following date with the participant of all members in the Contract Department except for
the Director of course. The purpose of the meeting is to make a further looking to which
cause has been the central cause leading to the problem, by examining all of the three
above-mentioned potential causes. Most of them, except for the newbies, admitted that
there work-load is heavy and even though they are not used to working overtime, they
have to work really and extra hard during the working time. Mr. Van Anh expressed that
she felt sick and emotional exhaustion all of the time, as the consequences of working
overload. Her expression is same as a research conducted in India that said people have
work overload they can be shown with these signs like over sleepy, they become ill, not
interested in anything as a result intellectual calibre will suffer (28). Ms. Hoan disagrees
with the discussion, telling that there are three ways to know if the people is overloaded
by the job:
1. The Main contract they are handling are too much.
2. The Sub-contract they are handling are too much.
3. The Main and sub-contract they are handling are too much.
To confirm this, Haksever et al. (29) said that the level of information overload is at
its highest in situations where the contractors interact with the consultants and architect in
27

the design stage, and with subcontractors in the construction/completion stage. That being
said, the construction stage has the highest probability of information overload, followed
by the design stage (30). Most of HBC‟s contract are construction contract, over 90% of
bid winning is for construction contract, the remaining is for Design & Build Contract.
As deputy manager, Ms. Hoan takes control of assigning the job and control their
performance and make any corrections if needed. However, as we mentioned before, in
spite of being the one of the powerful people the department, most of them do not ask for
her approval during their job execution. That is how she assigns the job:
1. Assign someone a new Tender documents to follow during the pre-bidding stage
and such people go on the executing in the Contract negotiation and management
stage.
2. After receiving the proposal for Subcontract of people in the Site for e.g in the
Appendix 02, she assigns to the people who, may or may not, manages of the Main
Contract of such Subcontract to execute the job. Such manage work shall include
drafting the Subcontract, discuss and negotiation of people in Site and
Subcontractors/ Suppliers to final the Contract, prepare for signing and scanning
the Contract before sending via email to such related people which has the
authority to view and execute such contract.
3. Assign to one people a Main Contract management and the Subcontract of such or
different Main Contract.
The following table shows how the Main Assignment is divided to people of the
Departments (details of such value and more information shall be seen in Appendix 03)
STT Quarter Name Assignees
1 I Cityland Z751 Hoan
2 I Sol Villa Tung
3 I Hai Quan Shopping Mall Van Anh
4 I Vinh Long Shopping Mall Hoan
28

5 II Celadon City Van Anh
6 I,II Vincity Grand Park (4 packges) Tran
7 II Nitori Ba Ria Van Anh
8 I,II Sunshine City Saigon (Everrich 3) 3 packages Hoan
9 II Tay Ninh hanging cap Ngoc
Table 5 - The assignment of the Main-contract execution of the Contract Department
during the 2019 period – quarter 1, 2.
The following tables shows how the Subcontract Assignment is divided to people of the
Departments.
ONG STO COM TOTAL
1. HOAN 5 0 0 5
2. VAN
13 0 0 13
ANH
3. QUYEN 213 0 50 263
4. TRAN 53 0 8 61
5. NGỌC 375 2 35 412
6. TUNG 218 1 26 245
TỔNG 746 10 156 912
Table 6 - The assignment of the Subcontract execution of the Contract Department during
the 2019 period (with ONG = Ongoing, STO = Stop, COM = Completed)
Such assignments are made by Ms. Hoan and carbon copy (c.c) to the Director for
acknowledgement. The table clearly shows that the work load of members in the Department
is quite stable and average, the people who do more in the Main Contract usually do less in
the Subcontract, therefore, the work-load is seen to be balanced between people in the
department. Also, thanks to the elaborated ISO System and the power gifted for her, Ms.
Hoan shall have the authority to review all of the working time of all people in the
department, she confirms that there are lack of overtime working also. Such
29

reference shall be seen as this is not the main cause of the problem leading to the lack of
coordination problem.
4.2.2 Validating the second cause: Poor communication
Most problems that occur within the construction industry are linked to be caused
by poor communication (31). Also agreed with that idea, poor communication which is
described as an unsuccessful interaction between the project participants is common
problem in the construction industry (32). This lack of interaction may form between
people working on Site construction with back office. According to Hussain et al. (33),
managers and organizations working in the construction industry are needed to know the
causes and effect of lack communication and to take necessary activities in their projects
to enhance the communication process.
To validate this cause, Ms. Hoan has expressed her thought towards the situation, by
telling that their feeling towards each other is good, there is no hate or dislike among them.
However, due to their strong personality, the communication and the solidarity are not very
strong. There are still some vacations within the Department every year and a lot of party has
been created during the working time or after work and their communication through the
journey or commitment to the party is also fine. Even though this is a very sensitive cause to
validate, by observation, the writer still observes people in the Department involving in
different and private groups of social media group, like Ms Liên involving in a group of
different department (Material Department which sitting next to ours), Ms. Quyen, Ms. Tran
and Ms. Ngoc involving in a private group or Ms. Hoan and Mr. Tung are going very well
together in both on-work and off-work activities, while Ms. Van Anh do not want to join or
involve or get close to the others. Such different groups among the department may cause
incoherent relationship, but overall, they all actually having fun together as Ms. Hoan said.
The interview of Mr. Tan was short, but what could be summary about his thought makes the
writer feeling surprisingly, Mr. Tan was asked about the poor communication among them
and his answer was quoted that “It‟s not poor, they are still communicating with each other
very well, but when it comes to the work,
30

there were still something missing and lacking in and between them, but it is not poor
communication”.
4.2.3 Validating the third cause: Lack of work-interaction within the department
For a construction company, management of Main Contract and Subcontract are
different by nature. By value and by its importance, management of Main Contract
requires a much deeper and more experience level of the executors while for the
Subcontract, difficult only come from the side of handling and negotiating with suppliers
and subcontractors. Lack of work interaction may not cause from the way of people
interacting but the others, it may depend on the jobs assignment and by nature of the
Work. For people like Ms. Tran, Ms. Hoan, Ms. Van Anh, they rarely did the
Subcontractor Works, but for people like Mr. Tung, Ms. Quyen, Ms. Ngoc – who has less
experience than the former, did not involve in much of the Main Contract Works.
Therefore, as time goes by, people keep doing perfectly their job, it has nothing wrong,
but the lack of work-interactions happens and unintentionally leads to the lack of
coordination among these people, even though people sitting together and having good
communication between.
By having a deeper interview with Ms Hoan and Mr. Tan, the results indicate that
this is an obvious cause of the finding. In their expression, they admitted that it has
nothing wrong with the job assignment, but when people like Ms. Van Anh, Ms. Tran
received the assignment for a new Main Contract, they rarely go to the other ideas or
opinion as reference and not go through Ms. Hoan – who is the deputy managers and
much younger than them, but has much more experience than them and they also do not
look up and get what has been changes to the Subcontract procedure. (34) said that age
differences between leaders and supporters can also influence leadership efficiency. It is a
clear signal to a younger leader that an elderly fan is not synchronized with the implicit
career schedules of the organization. Such a perception of "being backward" will cause
older adherents to react negatively and reduce the perceptions of their own younger leader
(35).
31

For other young and lack of experience newcomer, they have to do the
Subcontracts time over time and does not have chance to execute the Main Contractor at
all, for e.g Ms. Quyen has to do 420 subcontracts alone during the 2018 period, which
completely limited her from approaching the knowledge about the Main Contract
execution procedure, and furthermore, leading her to quit the company at the end of May
2019. Both the deputy manager and the director still struggle to find solutions which can
balance people in the department which encourage them to interact together, leading to
share of knowledge, information and experience. Such solutions in the past is initiated by
assigning mixed between them, but the assignees from the date of assignment, continue
what they have to do before, doing it all alone without any reference of much of
interaction with people who has done something similarly or such type of contracts
before, that leads to the unfavorable clauses it may had during the contract negotiation
stage. On the other hands, due to long time working with suppliers or subcontractors, Ms.
Quyen may find it difficulty when working with such suppliers or subcontractors again if
Ms. Van Anh or Ms.Tran gives a consent to any clauses or conditions in the Subcontract
which Ms. Quyen has contrary idea against.
Based on the summarized information from the interviews and the above
validations, lack of work-interaction within the department can be identified as the main
causes of cooperative problem among employees in the department. Therefore, the
solutions that the writer is about to propose to solve this only main cause is shown or the
part below.
In short, according to all previous analysis, the final cause-effect map will be
shown as below.
32

Diagram 3: Final cause-effect map of Contract Department in HBC
33

5. Alternative solutions
Based on some intensive literature review and interview with the members of the
Departments, here are some suggested solutions that may have been analyzed to find the
real solution. These two solutions are made only to solve the lack of the work interaction
cause, not taking into account of both poor communication and work-overload problem.
Solution 1 – Provide orientation and internal knowledge sharing class.
This idea is to provide a careful and adequate orientation program for both new and
experienced members the Department.
For newcomers, they have to get used to the Subcontract first, there shall be
specimen for different types of contract including labor and material supply contract,
design contract, construction contract and so on. There shall be a data base file that
encompasses available information about every kind and character and name of each
Subcontractor, which commercial clauses have been successfully negotiated against such
Subcontractor and which ones the company has to put up with. This file shall be available
to all of the member within the department to enter and contribute, also to gather
information during their draft and negotiate the Subcontract. The benefit of this action not
only to give the newbie the overall picture of what they are going to do or execute during
their probation time, but also to ensure the experience and current executives have the
accurate reference on what they are doing. Newcomers become productive earlier if they
comprehend their work strongly based on fundamental understanding (36).
Main Contract and Subcontract are different types of Contract, but it has a lot of
things in common. First, Subcontract derives from Main Contract, without Main Contract,
the Subcontract is not needed. Secondly, all of the commercial clauses are stipulated in the
Main Contract shall be applied on a back-to-back basis to all the commercial clauses in the
Subcontract, save for some Contract that has small value or could not be applied due to
some specific reason, especially that the Subcontractors always feel unfair when applied
such on. The orientation is intended to have all of the people in the Contract Department
34

could directly and straightforwardly enter, gather and refer to information to the Main
Contract which they need, instead of now, the people who do the Subcontract has to find it
on numerous paper version to find the Main Contract, or need to ask for the scanned
version of people working in the Site who taking charge of such project to get the Main
Contract scanning file. It is ridiculously that people in the Contract Department could not
find the Main Contract themselves. Questions were raised but the answers were the same
all the time, due to its confidential. It‟s confidential, for sure, but there are ways to avoid
the expose of confidential information, such as scanning the whole version of the Main
Contract except the price pages or always make available of all terms and conditions of the
Main Contract for people who is taking charge of such Subcontract.
The first and second quarter of 2019 saw Ms. Hoan has organized 03 of the internal
knowledge sharing classes, with the class usually occurs in the Saturday with the following
contents:
1. Changes in FIDIC Redbook 1999, 2017
2. Introduce and discuss about FIDIC Yellow Book 1999 (D&B Contract)
3. Introduce and discuss about Insurance in Construction Contract.
Such class has been spontaneously organized by Ms. Hoan, and almost everyone
replied that such class has given them superior knowledge. For newcomers, this maybe too
much, but it could be note as they would have worked in the later stage of their career, for
the current ones, this could be a chance to reinforce their knowledge and experience and
also spend time for some queries, debates and discussions among the participants. Such
internal classes shall be developed and organized by other veterans in the departments such
as Mr. Tan, Ms. Van Anh, Ms. Tran, about those related topics that has been always subject
to raise:
1. Changes in FIDIC Yellow Book 2017
2. Introduce and discuss about Bank Guarantee in Construction Contract.
3. Introduce and discuss about Bill of Quantity in Construction Contract.
4. Introduce and discuss about Variations in Construction Contract.
35

5. Introduce and discuss about Payment/Retention in Construction Contract.
6. Introduce and discuss about Damages/Indemntity/Liablitiy in Construction Contract.
Such as shall be organized in a periodical time within a month, and such instructors
shall be available to receive some rewards or bonus within such a month. Rewards is every
important and can be described as “an award given to an employee on their achievement
and contribution towards their companies” (37). According to Korir et al. (38),
Organizations have a poor or non-reward management structure leading to lower
organizational performance, discourage the obligations, motivations and innovations of
staffs to work with others to fulfill their common goals. In particular, a fair distribution
system signals for o staff that the management emphasizes on staff assessment (39).
Through reward system, employees‟ motivation is improved, urges members to
work and decrease the labor turnover rate. Consequently, it could be said that if employees
are well-treated and make the most of their present work, the results would be better. Then
again, if the firm does not have any plans to implement reward for such contributed
employees, who is willing to share their time and experience toward the youngsters, it will
result in the failure of inspiring employees and retaining talented staffs, causing lack of
cooperation among remaining employees.
Accordingly, some benefits and costs of this solution could be described as below:
• Benefits:
+ To improve the performance of new and current employees.
+ To enhance communication between the members of the departments.
+ Be able to recognize and reward the talented people.
+ To ensure the consistent all of types of Contract from the Main Contract
to the Subcontract, therefore avoid unfavorable Contract Clause which
has adverse effect on the Company.
+ To enhance the ability to retain stellar employees.
+ To the data-base for the Department for reference
36

• Costs: The cost of each section organized is including Allowances for
employees involved, training is estimated as 5,500,000 VNĐ/ per session.
There are still 6 months up to the end of 2019, therefore, the estimated budget
for 6 sessions are 33,000,000 VNĐ
Solution 2 – Setting goal and specific tasks for employees in HBC E-learning System
Thanks to the highly advanced system which was opened at the end of May 2019,
HBC‟s employees not only in the Contract Department can enter into one of the most
decorated learning page of the company, the E-learning system. Where every Department
of the company is able to create contents including tips, videos, text or other form that can
bring knowledge to the others one, and also to judge member of the department. Not only
they can attend on the internal class, they could apply for the external and related to gain
knowledge for themselves and KPIs for completion much as the class. This urges the
member of the Department to equip some of the new knowledge and create an interlink
between people who are working at Site and people working in back office.
For an educational organization, it could be a must for an e-learning system build,
but for such an enterprises that focusing much on construction activities, building such
system may require billion, but it is an intensive project that becomes requirement of all
people in the company to participate. Therefore, to build on this, to create and enhance the
engagement of all people in the Contract Department to involve and achieve great results,
may become a big step of the Department that people at the top like Mr. Tan or Ms. Hoan
are looking for.
37

Figure 5 - The display of HBC E-learning system (http://www.el.hbcr.vn)
This solution is including two of the contents:
- To encourage people from the Department getting bonus and incentive for joining
and completing the other classes of the related departments with high scores and
frequently:
+ Subcontractor‟s Management Department: This Department will be the one who
hide, invite and score the bidding, therefore, they have the full understanding of how
the Subcontractors are chosen and for the commercial clauses in the bidding stage.
+ CMD Department: This Department named Cost Management Department is
taking all of the cost arising from the bidding stage and contract management stage.
To participate in such will enable the employees in the Contract Department to get
deeper under the terms of cost management and bank guarantee.
+ PMO Department: Project Management Department. This Department has a lot of
good course relating to managing the schedule and variations during the Contract
execution stage.
- To evaluate employees within the Contract Department group to create interesting
lesson together to share their knowledge to people of other departments.
38

Such lesson may not be too specific for the lesson that mentioned the Solution 1, but
it could be the interesting lesson about how to manage the Main Contract, the Subcontract,
how to have a good negotiation skill, how to identify the most important points in the
Contract. Such topics may appeal to other people of the departments. Ms. Tan and Ms.
Hoan also can judge people the way they express to the lesson, by forming them a team to
work together to achieve the results before they check and release it out.
These solutions are having something in common: to educate and enhance the
knowledge of the members in the Department, but in no way forming a solution of a
training problem, these solutions are given to increase the interaction in working between
people within the Departments. Throughout their cooperation during this solution, an
alliance will be forming between them and leading to support their work coordination with
all of people coming from the outside of the Department.
• Benefits:
+ To evaluate new and current employees.
+ To enhance interaction between the members of the departments.
+ To reward people who wants to broader their knowledge
+ To give bigger picture and recognition for the other departments about
the work done by the Contract department and vice versa.
+ To use efficiently time to train the employees
• Costs: The cost of each section organized is including depend on Ms. Tan or
Ms. Hoan evaluation.
No. Estimated costs
Types of costs First Solution (06 Second solution
sessions)
1 Allowances for employees 15.000.000 Free
involved (05 people)
39

2 Training cost (For trainer) 18.000.000 Depend on the
creative of
employees
Total expenses 33.000.000
Table 7 Estimated costs of two alternative solutions
Lots of transcript has been gained by the writer, where Mr. Tan and Mr. Hoan after
reviewing all aspect of a problem and the sole lack of interaction in work cause, has
conducted a private meeting between them and decided to request an action plan for all of
the foregoing solutions at the same time making for considering and approval for the third
and fourth quarter of 2019.
6 Action plan
Based on literature reviews, actual findings and the two solutions presented above,
the Contract department need to take actions with three steps as following:
Step 1: Provide orientation phase and internal knowledge sharing class.
Step 2: Setting goal and specific tasks for employees in HBC E-learning System
Step 3: Measurement and Evaluation
Thus, a detail action plan which takes eight months from June 2019 to January
2020 will be scheduled as table below
40

Action plan (to solve the lack of work interaction problem)
Responsi-
Time schedule
Process Objectives Actions
bilities Jun, July, Aug, Sep, Oct, Nov, Dec, Jan,
2019 2019 2019 2019 2019 2019 2019 2020
1. Provide To ensure the consistent all - Create specimen for Ms. Hoàn,
orientation phase different types of contract Ms. Van Anh,
of types of Contract from
and internal including labor and legal
knowledge the Main Contract to the material supply contract, department.
sharing class. Subcontract, therefore design contract,
construction contract based
avoid unfavorable Contract on previous contracts and
Clause which has adverse working with the legal
effect on the Company. departments to provide the
specimen of different kinds
of Contract.
Create the data-base for the Create a data base file that Ms. Liên
encompasses available
Department for reference information about each
Subcontractor and its
commercial clauses.
Maintain, update data base All
file that encompasses employee in
available information about the Contract
each Subcontractor and its department
commercial clauses.

36

Ms. Liên
- Improving the Changes in FIDIC Yellow Mr. Hoàn
performance of new and Book 2017
current employees. Introduce and discuss about Mr. Vân
- Enhancing Bank Guarantee in Anh
communication between Construction Contract.
the members of the
departments.
- Being able to recognize
Introduce and discuss about Ms. Trân
Bill of Quantity in
and reward the talented
people. Construction Contract.
- Enhancing the ability to
retain stellar employees. Introduce and discuss about Mr. Hoàn
Variations in Construction
Contract.
Introduce and discuss about Mr. Vân
Payment/Retention in Anh
Construction Contract.
Scanning the whole version
of the Main Contract except
the price pages or always
make available of all terms
and conditions of the Main
Contract for people who is
taking charge of such
Subcontract.

37

Introduce and discuss about
Damages/Indemntity/Liablitiy
in Construction Contract.
2. Setting goal and - Rewards to people who Setting specific goals and KPI
specific tasks for wants to broader their for people attending different
employees in HBC knowledge courses of other departments
E-learning System - Efficiency use of time to
train the employees
- Evaluation of new and
Teamwork to create contents
current employees. about the Main Contract
- Enhancing interaction
execution (by providing
between the members of the powerpoint slides, documents,
departments. examples, video clip
- To give bigger picture recording and tips,
and recognition for the Teamwork to create contents
other departments about the about the Subcontract
work done by the Contract execution (by providing
department and vice versa. powerpoint slides, documents,
examples, video clip
recording and tips,
Ms. Trân
Ms. Hoan
Approved
by Mr. Tan
Ms. Tran
Ms. Van
Anh
Approved
by Mr. Tan
Ms. Quyen
Ms. Ngoc
Mr. Tung
Approved
by Mr. Tan

38

3. Measurement
and Evaluation
Create contents about how to Ms. Hoan
have good negotiation skills Approved
and important note for FIDIC by Mr. Tan
Contract both in Red Book
and Yellow Book (by
providing documents,
examples, video clip
recording and tips,
To measure the effective of Check the results: Mr. Tan
these two solutions
- The course and results of
employees of the
department in creating and
attending different courses
- The data base of the
Contract department
- Theimprovementof
people within the
department
Table 8 - Action plan of two selected solutions from June 2019 to January 2020

39

7 Supporting information
7.1 Interviewees’ Demographic
No. Name Education Major Year Years in Role
Join Construction
Field
1 Nguyen Thi Hoan UOL Law 2010 9 Leader
2 Tran Hong Ngoc UEH Law 2018 9 Main
Contract/
Subcontract
3 Nguyen Thi Van Anh UOL Law 2016 10+ Main
Contract
4 Tran Pham Hoang UEH Law 2018 02 Subcontract
Tung
5 Tran Thuc Quyen UOL Law 2017 05 Main
Contract/
Subcontract
6 Tran Gia Bao Tran IU BA 2018 10+ Main
Contract
7 Do Thi Lien UEH BA 2009 0 Adminstrativ
e
Table 9 - Interviewees‟ Demographic
7.2 Interview Guide
Introduction
- Greeting and introduction.
- Explain the purpose of the interview. Information security.
- Group, job title, job description of interviewee.
Warm-up questions
1. How long have you worked at DAB?
2. What do you feel about your job at DAB?
Main body of interview
3. It has been a problem that we could see on a lot of newspaper nowadays that the
high account receivable of HBC is tremendous over years. Can you give me any of your

opinions about that?
40

4. So do you think which factors may affect the reason?
5. Late submission of payment documents are seen as the big problem, do you think
which maybe the biggest obstruction you are facing that may affect the reason?
6. You all seem very new to the job here and has lack of years working here, do you
think that because of that, you may get unfavorable contract provision when negotiating
and leading to late payment of those contracts?
7. So you are the Deputy Manager of the department, I‟m sorry to ask that whether
any Chief Manager here? So if there is none, can you tell me about the difficulty being
the Deputy one, may be in connection between the people in the department?
8. Here are some problems I think that need your confirmation, the results finding
is that the coordination between the Site and the back office may affect to the overall
high of AR as it creases that time of payment documents submission and leading to the
delay in payment of customers? What about your opinion?
9. So how do you think about the lack of long time working employees in our
department has anything to do with it? I have this data from Mr. Tuyen – HR Executive.
10. At the day I conducted a focus group, I can feel the hesitation from the look of
other interviewees. When people are sitting next to Ms. Hoan, they are shy to express
what they are feeling. The interview had been going on a very tense atmosphere. You
think that maybe a problem?
11. There were some discussion last time about the lack of corporation problem which
you all agreed as the main problem of your department now. So you do think it may
happen because of working overload?
12. So it is not coming from the working load, it may come from your lack of
communication with each other, because I know there are several of researchers have
found a link between the lack of communication leads to lack of coordination?
13. So we are still not finding a cause now. May I ask deeper into this, so Ms. Hoan how
is your department interaction during the work? Do they share or help each other? Or
their work have anything in common?

41

14. There were lots of causes have been given such as working overload, poor
communication and lack of interaction within the people in the departments? So do you
think it may be the main cause of the picture?
15. Lack of interaction means that they may not do the job done well by themselves.
Or lack of training maybe?
Thank and close

42

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46

Appendices
Appendix 1: Definition of theoretical frameworks
Accounts receivable
Accounts receivables are debts owed to the firm by customers arising from sale of goods
or services in ordinary course of business. Hence accounts receivables are asset accounts
representing amounts owed to the firm as a result of the credit sale of goods and services
in the ordinary course of business. There have been many theories proposed for trade
credit.
Accounts receivable turnover
One of ratios which reflect the productivity of accounts receivable is receivable turnover
rate. This ratio shows the relationship between credit sales and accounts receivable of a
firm. It shows the level of sales on credit per VND invested in this account and how often
receivables are received and collected during the year. It also displays the liquidity of
accounts receivable. Therefore, the higher turnover rate is the better. The receivable
turnover rate is defined as follow.
Days sales outstanding (DSO)
Days sales outstanding (DSO) is a very widely used method that is intended to help
evaluate effective of a company in collecting its trade receivables. It is a metric used to
measure the average number of days it takes a company to collect what is owed to them
after a sale has been completed. The quicker DSO reflects the faster speed of capital
reinvestment back into company. To evaluate the position of company the DSO is
compared to other companies or the industry DSO. DSO can be calculated by dividing the
amount of accounts receivable during a given period by the total value of credit sales
during the same period, and multiplying the result by the number of days in the period
measured.
47

Appendix 2: Form of proposal
48

49

50

51

Appendix 3: Bidding results in 2019 of HBC (1st
and 2nd
quarter only)
52

53

54

55

56

Appendix 4: Days sales outstanding of HBC, CTD and PHC
HBC 2015 2016 2017 2018
Net sales 5,078,027,249,288 10,766,205,824,099 16,037,264,026,609 18,201,392,136,460
Average Account
Receivable 4,212,399,847,452 5,493,455,146,390 7,982,600,863,350 10,147,610,601,259
AR Turnover Ratio 1.21 1.96 2.01 1.79
Day sales outstanding 303 186 182 203
Coteccons 2015 2016 2017 2018
Net sales 13,668,916,257,891 20,782,721,033,541 27,153,453,093,560 28,560,857,297,395
Account Receivable 2,369,033,753,865 3,046,140,103,818 4,913,671,187,241 7,698,802,177,005
AR Turnover Ratio 6 7 6 4
Day sales outstanding 63 53 66 98
Phuc Hung 2015 2016 2017 2018
Net sales 1,219,925,093,141 1,469,042,576,339 2,111,459,737,983 3,115,133,358,916
Account Receivable 213,927,462,797 233,746,991,266 327,475,170,143 757,850,071,084
AR Turnover Ratio 6 6 6 4
Day sales outstanding
57

64
Appendix 5: Transcript summary
58 57 89
1/ A focus group with people in Contract Department of HBC.
Ms. Hoan: My name is Nguyen Thi Hoan and I‟m Deputy Director of Deputy Director of Department
Department
Ms. Anh: My name is Nguyen Thi Van Anh - Contract Executive Contract Executive
Ms. Ngoc: My name is Tran Hong Ngoc - Contract Executive Contract Executive
Mr. Tung: My name is Tran Pham Hoang Tung - Contract Executive Contract Executive
Ms. Tran: My name is Tran Gia Bao Tran - Contract Executive Contract Executive Job position
Ms. Quyen: My name is Tran Thuc Quyen - Contract Executive Contract Executive
Ms. Lien: My name is Do Thi Lien - Document Control Executive Document Control Executive
Mr. Linh: My name is Nguyen Thi Ngoc Linh - Accountant Executive Accountant Executive
Mr. Tuyen: My name is Huynh Thanh Tuyen – HR Executive HR Executive
Q1: How long have you worked at DAB? Employees‟
Ms. Hoan: 09 years, Ms. Anh: 04 years, Ms. Ngoc: 01 year, Mr. Tung: tenure
6 months Ms. Tran: 01 year, Ms. Quyen: 02 years, Ms. Lien: 10 years.
Interviewer: Hello everyone, thanks for joining today in the short
interview. It will not take you very long since it is the end of the day. It
has been a problem that we could see on a lot of newspaper nowadays that
the high account receivable of HBC is tremendous over years. Can you
58

give me any of your opinions about that?
Ms Linh: Yeah, I will talk about it first since it is a problem mainly
related to the figures. From what has been recorded in book and could be
seen in financial reports I could say that there are 02 main reasons HBC
suffered from high AR and high DSO is that the company used an typical
accountant according to accounting law of Vietnam, when the progress of
the construction project hit the specific miles stone such as 70% of total
progress, even the invoice has not been released, the account receivable
has also been recorded and the second reason is delay payments from
Owners/ Developers from the very first projects until now. I could give
you short information later about list of big projects are being delay in
payment.
Ms. Hoan: I also think so too, that the delay payments of
Owners/Developers – these are people who spent money on investing
construction projects are contributing to the date of collecting cash of
HBC.
Interviewer: So do you think which factors may affect the reason?
Ms. Van Anh: I think because in these contracts that Ms. Linh will give
you later, the date of payment is very long (> 45 days) at least. Ms.
Lien: For me, I think that the date of submission the payment
Typical accountant according
to accounting law of Vietnam
Delay payments from Owners/
Developers
In contracts, the date of
payment is very long
The date of submission the
payment documents is always
very late.
59

documents is always very late.
Ms. Hoan: I think that these answers of Ms. Van Anh and Ms. Lien shall
be re-checked with the signed contracts to find all of the provisions that
affect the payment time and with Ms. Linh to find out all of the
submission date is late or not. For me I also takes some notes from the
external factors, even though everyone did the perfect jobs according to
the contract, risks may come from the other side of the Contract.
Owners/Developers are the one who developing the Project, and there are
possible plenty of reasons that may affect to their cash flow as may lead to
the shortage of finance to afford for the Contractor (i) Project suspended
by competence authority, (ii) Lack of financial source or even the
subjective factor (iii) the willing of the Owners/Developers to pay.
Interviewer: As you said, late submission of payment documents are
seen as the big problem, do you think which maybe the biggest
obstruction you are facing that may affect the reason?
Ms. Quyen: For me is the inefficient project coordination between
people working at Site and in back office.
This question is also raised to the other members of the department
and received the consent by all.
Interviewer: As I see from your information, you all seem very new to
Risks may come from the other
side of the Contract.
Owners/Developers
Little time working in the
Potential
Problem 1:
The
inefficient
project
coordination
between
people
working at
Site and in
back office.
Potential
Problem 2:
Lack of long-
time working
60

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