FDI enterprises in Vietnam have developed quality consciousness and effective work styles among their labor through long-term education and training programs. They focus on helping labor understand customer needs and how their work contributes to the enterprise. Quality results and ideas from labor are shared openly, and labor are encouraged and compensated for quality improvements. Developing group work and cooperation with unions also improves quality culture. These practices allow FDI enterprises to increase productivity and competitiveness compared to Vietnamese enterprises.

1. Contribute to the improvement of Vietnamese enterprise’s competitive capacity
Quality awareness, effective work style – the key to improving core competitive capacity for enterprises. 1
Issue number 48
Quarter 1.2008
Quality consciousness & Worker’s effective work style – The
key to improving core competitive capacity for enterprises
Phan Thu Luong, Tran Ngoc Trung
Capacity Building International - CBI
This article was presented at the International Scientific Conference
“Basic problems about business management and trade in the outlook of
Information Technology and Knowledge – based Economy”,
Vietnam Commercial University and Shute University, Hanoi, August 2006.
When having opportunities to join together, many Vietnamese enterprises said
that they didn’t understand why their productivity was so low. It was just ½
compared with Japanese enterprises and about 2/3 compared with Thailand’s
although they owned the same equipment and technologies. They couldn’t
explain why there was a big change of one’s work style when he moved from a
Vietnamese enterprise to a FDI one. He’s totally different, more effective and
creative. Many enterprises regarded the reason for that situation as they
couldn’t sell their products or the mechanism made them impossible to pay
their workers well. Therefore, it was unfair to require of the labor high
productivity, quality consciousness and effective work style.
The question is: Why is Vietnamese labor’s productivity in Foreign Direct
Investment enterprises higher than in other enterprises? What did those FDI
enterprises do to make their labor have good quality consciousness and
effective work style?
This article will mention some feasible solutions for developing quality
consciousness and effective work style in some symbolic FDI enterprises –
members of Vietnam’s Association of Foreign Invested Enterprise (VAFIE).
Reality showed that: in order to develop quality consciousness and effective
work style of Vietnamese labor, FDI enterprises focused on the following
contents:
- With the aim to have good quality consciousness, the labor must know
what their goals are and who they work for.
- Improving labor’s quality awareness is a long and continuous
education process.
Edit and performance
Tran Ngoc Trung
& partners

2. Contribute to the improvement of Vietnamese enterprise’s competitive capacity
Quality awareness, effective work style – the key to improving core competitive capacity for enterprises. 2
- Labour should be timely updated on quality’s results and expenses.
- Labour need encouraged well-timed.
- Develop a regularly renovation culture.
- The role of the board of management.
- Co-operation with the Union.
1. With the aim to have good quality consciousness, the labor must know what their goals are and who
they work for.
“What are our company’s products, and who are those for? Or what is your product, your job or section, who
is that for?” are the first topics labors are educated in FDI enterprises. Answering those questions will help
them know who their customers are, what customer’s requirements and expectations are, compared with the
company’s products and what their roles are in the whole manufacturing and business process.
Some enterprises regularly facilitate their technical, manufacturing management, administration staff as well
as sales staff to meet their customers directly. Therefore, they deeply understand their customers and
experience reality.
Information from customer such as: requirements, deliver date, complaints or losses due to various reasons
are transferred to correct people exactly, timely and fully. Indexes such as revenue, competitive reality,
advantages and disadvantages of the enterprise, role of each section are published widely every month.
Problems such as: customer dissatisfaction, sale opportunity losses are analyzed by departments concerned so
as to propose preventive measures. Moreover, it helps the labors deeply understand: it’s customers that bring
them and their company revenue and profit.
With the mode of thought orientating towards customers, each member of the organization, especially
management staff are required to change their viewpoint, from “Top  Down” to “Out  In”. Consequently,
they can’t ask the enterprise for more manpower, more well-equipped… Instead, they should manage to co-
operate with other departments in order to serve customers better. This outlook also calls for more
advantages, aids and delegation of power from senior to junior.
When labors have deep understanding with time about customers, such standpoints as: “Satisfy customer’s
requirements and expectation”, “next section is customer of previous section”, “sale department is
representative of customer”, “quality right the first time”, “constantly innovate”, “quality starts from me, my
segment” will be deeply absorbed and widely spread into the whole enterprise. As a result, the co-operation
among segments or departments, which is the base for improving the entire system or enterprise’s quality,
will be developed.
2. Improving labor’s quality awareness is a long and continuous education process
Almost every FDI enterprise’s technology is moderner than Vietnam’s, their asset value and raw and working
material per capita are high. For this reason, if their labor lack of quality understanding, the enterprises will
incur a huge loss. Furthermore, more than 70% labors of FDI enterprises come from rural area, where the
system of budget subsidiaries and backward working styles such as too much free and casual, dependent on
others or egoistic are overwhelmed while industrial production requires of obedience of principles and co-
operation. In view of that, FDI enterprises attach special importance to training and education through
developing long – term training program then dividing it into annually plans for different objects.

3. Contribute to the improvement of Vietnamese enterprise’s competitive capacity
Quality awareness, effective work style – the key to improving core competitive capacity for enterprises. 3
Picture 1: Talent development training program in a FDI enterprise
Training process sticks to developmental stages of company. The first step is good quality product, next are
saving manufacturing time and reducing waste. Training courses are developed step by step, from knowledge
and skills for particular job, analyzing and co-operating ability in order to gain the quality of
products/services/process to knowledge and co-operating ability for making a jump for quality of the entire
system, enterprise and management.
General characteristics of those training courses are short-term, feasible and realistic. Training process is
observed and evaluated through business results. “Learning attaches to practicing” makes knowledge more
deep and effective.
Topics that are commonly trained for labor include:
- Principles, guidance and procedure for doing a job.
- ISO 9000, ISO14000 quality management system.
- Quality management tools/methods such as PDCA, SPC, 5S, Kaizen, TPM, JIT
- Teamwork.
- Solving problems by cross function.
- Managing by process, managing by object.
Talent training and development
Develop talent through lots
of training program
1. Number of programs: 28
2. Number of hours: 2278
3. Number of people: 4689
Goals:
Develop skills of
management,
communication,
leadership, technology
transformation and
talent.

4. Contribute to the improvement of Vietnamese enterprise’s competitive capacity
Quality awareness, effective work style – the key to improving core competitive capacity for enterprises. 4
- Leadership skill, strategic thinking.
Some examples of investment in education and training:
- Orion Hanel Television Bulk Co. Ltd trained average 30-40 hours per person annually for 1300
people.
- Toyota Vienam company: 96 courses in 2003, 154 skill training courses in 2005, 360/total 800 labors
were trained abroad from 1996 to 2006. In addition, 182 courses in car driving, foreign languages and
computing in 2003 and 75 similar courses in 2005.
- Some other FDI enterprises brought out “developing talents through training”. 20 training programs
were taken place in 2005 with 2.300 hours and 4.700 people joined in.
Some enterprises regards education fee as a beneficial investment, not an expenditure. Reality confirmed
that. For instance:
- Inax - Giang Vo Sanitary Ware: its products are provided not only domestically but also abroad. The
company quadrupled its scale compared with the original investment within 10 years. It gained
benefit after 3 years and has been consecutively making benefit up to now.
- Orion Hanel Television Bulk Co. Ltd: real manufacturing capability grew 10% compared with theory
due to their labor’s ideas without additional investment. Export proportion is more than 70%, quality
product percentage increase 16%, substandard product (400PPM) reduced by 6 times, number of
Korean specialists reduced from 35 to 11 after 5 years, number of Vietnamese staff appointed as chief
and deputy chief of department is 15. Meanwhile, education fee just accounted for 2.4% total
Vietnamese labor expenditure or didn’t exceed 0.05% annual revenue.
- Reality showed that almost Vietnamese labor’s education in FDI enterprises is equal or upper than
high school. They are also fond of learning, quick-minded and clever – those are important
characteristics help the enterprise regularly innovate and enhance their quality.
Human resource quality improvement always starts with educating, training and making quality requirement/
expectation self-consciousness, gesture or lifestyle of the whole enterprise’s members. Once quality
consciousness becomes the entire company’s work style, it turns to quality culture.
Management quality greatly depends on co-operation. It requires of fully labor development, especially
teamwork skill. That labour capacity improving method brings them confidence, happiness at work, pride of
being a company’s member and a fine worker.
In the globalization process, increasingly intense competitiveness results in unavoidable labor dismissal.
Consequently, labor education even holds greatly humane value. It facilitates the workers to improve their
capabilities in order to easily find new jobs when they unfortunately get sack.
3. Labor should be timely updated on quality’s results and expenses
Only detailed measurement can help labor be informed, control, innovate quality and enhance their job’s
effectiveness.
Quality expenditure is the expenditure for low quality products or jobs which need to be redone, repaired or
even cancelled… They need to be observed to evaluate the efficiency of processes or sections.

5. Contribute to the improvement of Vietnamese enterprise’s competitive capacity
Quality awareness, effective work style – the key to improving core competitive capacity for enterprises. 5
Besides, the following indexes can be used to measure quality:
+ Customer’s complaint and satisfactory rate compared with competitors.
+ Value brought by quality innovation.
+ Time since receiving orders to delivering customers.
+ Time for dealing with customer’s complaint.
+ Number of time adjusting sale schedule in month.
+ Number of time losing labor safety…
In order to measure consciousness and quality of labors, these following indexes should be consulted:
+ Number of ideas/time (awareness level of quality innovation)
+ Number of ideas applied (idea quality)
+ Value brought by those ideas (idea creativity)
+ Number of group registering.
+ Work environment quality. (Clean, tidy, safe and happy)
+ Number of principle violators.
+ Number of retirement. ...
Picture 2: One of important measures for deveoping business effectiveness is to encourage and facilitate all
members to contribute their ideas to the enterprise.
4. Labor need encouraged well-timed
INNOVATIVE PROJECTS, DISCOVERY PROJECTS
GOALS:
1 Innovative project / person / month
Number of innovative
projects
Number of discovery
projects

6. Contribute to the improvement of Vietnamese enterprise’s competitive capacity
Quality awareness, effective work style – the key to improving core competitive capacity for enterprises. 6
Two most important thing are the way of compensating and its timeliness, not the value of compensation.
FDI enterprises use lots of methods of encouraging their labours:
- Delegate chief of department to compensate small ideas’s owners in order to encourage them timely.
- Board of directors monthly come to workplace of each unit with excellent achievement to directly
listen to and compensate them.
- Creat annual award ceremony for big ideas or projects.
- Creat sightseeing tour or visits to other domestic and foreign companies for labours... For instance:
Toyota delegate its member to take part in the annual Asian-Pacific Technical Skill Contest. Machino
Auto Part delegates reprsentatives of renovation groups to join anuual group general congress in
Asean area and the world. Orion Hanel send their excellent group to partnership companies to visit
and learn. When coming back, they convey their knowledge to others, then a series of ideas are
proposed.
- Take place contests between branches or units. For example: Toyota holds Fast Maintenance Service
Contest in Vietnam.
- Update enterprises’s bulletin, including both news and photos.
However according to surveys, labours regard the biggest encouragement as facilitate and help them make
their ideas come true and record their contributions to the company.
As well as the process of educating and encouraging good labours is the process of eliminating bad labours to
build up discipline. In Orion Hanel, eliminating rate in the 2nd year was 6.4% but then it reduced sharply and
in the 4th year, it was only 1.8% of the total labours.
5. Develop a regularly renovation culture.
One of the most effective methods for bring an idea into play is to help labours work in team. Many FDI
enterprises, especially Japenese one did it very good, encouraging them to work in group naturally. Group is
the ”midwife” of many renovative ideas, proposal and plan for realizing it. Group also help labours share
their knowledge with each other as well as learn through real work .
Group can act in lots of field: quality group - try to reduce substandard products renovate quality;
retrenchment group – try to reduce waste of fuel, motive force, labour, time; water and waste reprocessing
group; inter-department group – try to renovate management activity; special mission group – deal with
special tasks in order to make a jump in quality; self-managed group; interview group – timely update
company’s bulletin or newspaper. …
First, some typical group handling with renovation of reducing mistakes and waste should be developed, then
be spread. For example:
- Number of groups of Orion Hanel from 5 with 25 members in 1998 increased to 42 with 320
members in 2003. The amount of groups’s ideas applied in 2001 is 852 and 834 in 2002.
- Typically, Japanese invested companies, Toyota Vietnam, 2500 innovative ideas in 2004, more than
3000 in 2005. One idea even saved hundred of thousand dollars.
- Other FDI, there were 72 quality groups in 2004 with 1336 members, 83 acting groups in 2005 with
1635 members. They had 6500 ideas in 2004, 15000 in 2005, each day there’re average 50 ideas.

7. Contribute to the improvement of Vietnamese enterprise’s competitive capacity
Quality awareness, effective work style – the key to improving core competitive capacity for enterprises. 7
Team working is such a very positive method which helps Vietnamese labor more active and enthusiastic in
thinking, acting, renovating to satisfy customer better with lower cost.
However, number of schools teaching team working skills and activities is small. If this skill was applied in
all education grades from high school to university, it would help students a lot in their future. In addition, a
nation-wide general group meeting should be taken place to help labor easily share their experience and
honor them. Consequently, team working will be spread and bring much effectiveness to enterprises,
organizations and our country.
6. The role of the board of management.
Labors could maintain their quality conscience once their leaders from the chief to the staff all are exemplary,
respect and really believe in their abilities, treat them equally and straightly.
In particular, a leader need to:
- Combine business target with quality target. ,
- Inform the labor about business result quality situation.
- Listen, facilitate and help the labor improve quality.
- Develop a compensation system to record their achievement and encourage the labor timely.
- Make them believe that quality innovation always comes with bringing them stable job and well-paid
salary.
- Focus on training quality Vietnamese middle-rank staff to gradually replace foreign staff.
In the economic integration process, modern management methods in the world should be applied but they
must be compatible with Vietnamese culture in order to bring our labor’s knowledge into play.
7. Co-operation with the Union
In FDI enterprises, Vietnamese labours have approach to modern management and manufacturing methods
but almost of them don’t have. Consequently, quality consciousness and effective work style must be built up
at the same time.
Building and maintaining work style and habit of tidiness, cleanliness, safety and courteousness require of
time and patience. In order to achieve them, the 5S method (sàng lọc, sắp xếp, sạch sẽ, săn sóc, sẵn sàng –
which mean selecting, arranging, clean, taking care of and ready). However it should adapt to each
enterprise’s particular situation.
People quality contains not only their job quality but also their work environment quality. The company
should co-operate with the Union in education and training activities, as well as combine effective wok style
development with “industrial culture lifestyle development” activities of Union.
Labor pay attention to quality once their job and income are assured. Therefore, the company must constantly
inform the Union of their business result. The Union need to deeply understand that: in order to assure the
labor’s jobs, incomes and lives, the company must be strong in global competitiveness. For that reason,
management staff are not competitors of the Union, quality innovation is not to dismiss labor but to satisfy
customers better. When the company’s competitive capacity is increased, its labor’s jobs and incomes will
also be improved.

8. Contribute to the improvement of Vietnamese enterprise’s competitive capacity
Quality awareness, effective work style – the key to improving core competitive capacity for enterprises. 8
For example:
- Orion-Hanel Television Bulk Co.ltd, as well as the business growth, in 2003, labor’s income
increased 48% compared with it in 1996 while CPI just increased 15%. In 2004, more factories were
built, number of labors increased nearly 80%.
- Inax Giang Vo Sanitary Ware, as well as the development of the company, number of labours
increased from 280 in 2001 to 1000 in 2006, labor’s average income in 2006 increased 69%
compared with 2001’s.
The Union urge the labor to join social activities with the company such as: Human aid, environment
protection, regional pubic activities: repair road or build kindergarten… Those activities bring the labor huge
education effect.
Additionally, each member of the Union staff should upgrade their knowledge and skills in order to closely
participate with their company to attract the whole labors to gradually develop quality culture.
As a result, both the company and the Union take responsibilities to built up quality sticking to work
environment culture. When quality and effective work style take root in the labor’s conscience and become
each one’s lifestyle, it will establish a base for the enterprise’s core competitive capacity.
Picture 3: When quality and effective work style firmly lodges itself in worker’s consciousness and becomes
each one’s lifestyle, it will establish solid base for improving core competitive capacity for enterprises.
- Is there any need to hold a conference to share the above information with your colleagues/unit
more deeply? How is your plan?
Any interest, please contact:
Mr. Tran Ngoc Trung
Hotline : 84 903 40 6635
Email : quasei@fpt.vn
“One thing we can never stop is
thinking about your competitiveness”