SUGESTIONS FOR IMPROVEMENT OF STAFF MOTIVATION AT INVESTIP

ACKNOWLEDGMENT

This project is written and completed based on the requirements of the Master in
Management Program conducted by Solvay Business School of Belgium and the
National Economics University (“NEU”) of Vietnam.
I would like to express my deep and sincere gratitude to my supervisor, Dao Thi
Thanh Lam, Ph.D. Her wide knowledge and logical way of thinking have been of
great value for me. Her understanding, encouragement and personal guidance
have provided me with a good basis for the final project.
It is a pleasure to thank staff of NEU’s Faculty of International Education for
their guidance and supports who made this project possible.
I owe my deepest gratitude to my colleagues at INVESTIP’s Intellectual Property
Department (“INVESTIP-IPD”) who support me to fulfill questionnaires, to
take part in my interviews and exchange information.
Importantly, I am indebted to my family for the great supports and encourages
during my study period of MBM program.


EXECUTIVE SUMMARY

INVESTIP is one of the leading consulting firms in Vietnam, of which the main
service is intellectual property consultancy. Human resource is the most valuable
asset that decides the survival, success or failure of the company. In four recent
years, the high turnover rate of employees at INVESTIP-IPD is increased from
18% in 2007 to 23% in 2010.
With the desire to find out the key de-motivators influencing staff motivation that
lead to the current human resource practice, the author chooses and writes this
project with title “SUGGESTIONS FOR IMPROVEMENT OF STAFF
MOTIVATION AT INVESTIP”. This research aims at clarifying the practice
and making some solutions to these problems.
Definition of motivation and three motivation theories consisting of Equity

theory of John Stacey Adams, Maslow’s Hierarchy of Needs and Two-factor
theory of Herzberg were used as theoretical foundation of this project.
The research was conducted by the combination of quantitative and qualitative
methods. Qualitative study was conducted through 8 in-depth interviews with 4
existing employees in INVESTIP and 4 employees who have left this company.
The quantitative study wais based on questionnaires of 48 existing employees
of INVESTIP-IPD. According to the survey results, it is found that the reason
why employees’ motivation in INVESTIP-IPD is not good is mainly affected
by the following problems: lacking competitiveness in salary, allowance and
other benefits, little chance of training and career development, lacking of
appraisal performance system; unsatisfactory recognition of unsatisfactory
achievement, low quality of supervision, inconvenient working conditions,
and lacking of interesting and challenging in job, and a big difference between
employees and employers in IP job.
From the research findings, the author suggests that to improve staff motivation,
it is necessary to take the following actions: establishing a performance appraisal
system, improving reward and recognition system, creating more interesting and
challenging job, improving quality of supervision, improving working
conditions, and developing training and career, and changing management
people.
The author hopes the suggestions made in this project would contribute to the
improvement of the staff motivation at INVESTIP in general and INVESTIPIPD in particular, helping the company to attract talents and retain its good
2


employees.

3

TABLE OF CONTENT

1

LIST OF TABLES

Table 1.1. Research Methodology...................Error: Reference source not found
Table 2.1: The combination of hygiene and motivation factors...................Error:
Reference source not found
Table 32.12. ....................................INVESTIP’s aging structure in 2010 (person)
........................................................Error: Reference source not found
Table 32.23. .......................................INVESTIP’s professional structure (person)
........................................................Error: Reference source not found
Table 4.1. The average scores of important level of each hygiene and motivation factor
........................................................Error: Reference source not found
Table 4.2. The current satisfaction level of employees (person, n=48)........Error:
Reference source not found
Table 4.3. The satisfaction level of working conditions (person, n=48).......Error:
Reference source not found
Table 4.4. The satisfaction level of supervision (person, n=48)...................Error:
Reference source not found
Table 4.5. The satisfaction level of salary (person, n=48)...........Error: Reference
source not found
Table 4.6. Salary grades at INVESTIP-IPD (VND).........Error: Reference source
not found
Table 4.7. Salary grades of INVESTIP-IPD in comparison with IP companies
........................................................Error: Reference source not found
Table 4.8. The satisfaction level of interpersonal relations (person, n=48)
........................................................Error: Reference source not found

4


Table 4.9. The satisfaction level of policies and administration (person, n=48)
........................................................Error: Reference source not found
Table 4.10. The satisfaction level of work itself (score)................Error: Reference
source not found
Table 4.11. The satisfaction level of responsibility (person, n=48)................Error:
Reference source not found
Table 4.12. The satisfaction level of achievement (person, n=48).................Error:
Reference source not found
Table 4.13. The satisfaction level of recognition (person, n=48)...................Error:
Reference source not found
Table 4.14. The satisfaction level of advancement (person, n=48)................Error:
Reference source not found
Table 4.15. The satisfaction level of growth possibility (person, n=48).........Error:
Reference source not found

LIST OF FIGURES
II.1.2.2.1. Hygiene Factors and Dissatisfaction at Work................................17

5


LIST OF ABBREVIATIONS

NEU
IP
IPD
INVESTIP-IPD

NOIP
HRM
PA
AD

National Economics Universtiy
Intellectual Property
Intellectual Property Department
INVESTIP’s Intellectual Property Department
National Office of Intellectual Property
Human Resource Management
Performance Appraisal
Administration Department

CHAPTER I
INTRODUCTION
6


I.1. Rationales of the project
Human Resource Management (“HRM”) is one of the most important activities
in business operations of everya company because the development or downturn
of the company deeply depends on the labor force. A company with good
performance partly reflects the effective management of its human resource. In
the context of the economic crisis and high production costs, effective
management of human resource shall make a substantial contributions to strong
development of the company. If the company has almost all motivated employees
who enthusiastically dedicate their time and energy to their work, it means that
the future of this company shall be very bright.
INVESTIP has been one of the leading consulting firms in Vietnam focusing

mainly on intellectual property consultancy services. The top-ten rank of this
company is taken part by many employees of great talent. However, despite the
turnover rate of INVESTIP has been increasingly since 2007 from 18% in
2007 to 23% (mainly in IP department) in 2010, and almost employees do not
satisfy with the current motivation of this company. The high rate of resignation
and lacking of employee motivation have created a challenge to this company,
especially the Human ResourceAdministration Department (“AD”) during the
period.
Many employees who are working in INVESTIP revealed that they are searching
better job opportunities in other companies and will change to new jobs upon
available, even if they have to break down their labor contracts. In other words,
they have no mental attachment to INVESTIP while they are still in this
company. Whenever an employee leaves the company (psychology), the
remainders are usually dispirited and they are influenced to seek another job as
the soonest. The low working spirit of employees has adversely affected tos
their work performance, theirthe service quality of this company, therefore, has
not been ensured and the business productivity of the company has been reduced
as a result.
What is the root of these problems? What should be done to brighten the picture
of INVESTIP? It is possible that lacking motivation is the main cause for high
turnover and low working spirit of employees. Therefore, in this circumstance,
the author as the former employee of the company, decides to choose the topic
“SUGESTIONS FOR IMPROVEMENT OF STAFF MOTIVATION AT
INVESTIP” for the final project with the hope to apply knowledge obtaining
from the course to analysis these issues.
I.2. Research objectives
7


The objectives of this research are to find out the key de-motivation and

motivation factors in INVESTIP and then make suggestions to enhance staff
motivation at this company.
I.3. Research questions
In order to fulfill the previously mentioned objectives, the following questions
shall be answered:
• How is the current staff motivation at INVESTIP?
• What are the key de-motivators and motivators at INVESTIP?
• How to improve staff motivation at this company?
I.4. Scope of research
- With regard to theoretical foundation, the project will review a number of
motivation theories which will be used as the guidelines to identify the key staff
motivators at INVESTIP. The theories include Equity theory of John Stacey
Adams, Maslow’s Hierarchy of Needs and Two-factor theory of Herzberg.
- As to the survey sample, this project focuses on Intellectual Property
Department (“IPD”) only because it is the key section contributing up to 90% of
the whole INVESTIP revenue. In addition, 54 employees of IPD including nonexecutive level and executive level make up 69% of the total number employees
of the company.
- The project is analyzed based on the information and situation of INVESTIP
collected between 2007 and 2010.
I.5. Limitation of research
- The project is conducted based on the current motivation problems of the
company, the recommendations in this thesis will therefore only can be applied
and suitable for INVESTIP-IPD in the current point of time. In the long term,
continuous research and analysis are needed to respond to the fast changes in the
company’s internal and external environment. Besides, it is unable to apply these
suggestions to other IP agencies or law firms because of different situations and
environments.
- Due to the limited access to the company financial data, this research cannot
show the close relationships between found de-motivators and business
performance in some recent years.

I.6. Research methodology

8


I.6.1. Research process
The author uses both quantitative and qualitative studies in this project. The
research process is performed gradually in accordance with the following:
Figure 1.1. Research Process

Stage 1: Collect secondary
data, analyze and indentify
the researched problems

Background on
employee
motivation

Overview
INVESTIP
requirement on
employee

Stage 2: Collect secondary
data

motivation
Stage 3: Perform in-depth
interview

Suggestions

Stage 4: Design questionnaire
Current status
of motivation
Stage 5: Implement survey

Stage 6: Analyze the
researched results

Source: Supervisor’s guidance and Author’s implementation, 2011
I.56.2. Data collection
Both secondary data and primary data are used for this research.
I.56.2.1. The primary data
TThe primary data was collected from January to February 2011. In order to
collect this data, the author used quantitative and qualitative methods to analyze
the current INVESTIP employee motivation and identify the de-motivation
9


factors.
Table 1.1. Research Methodology
Data
collecting
methods

Respondent/Interviewee
and Positions

Number

 - 1 supervisor left the firm

In-depth
 - 3 employees of IPD left the interview
firm

Interview

48

Questionnaire Respondents’
assessment
(e-mail)
about
the
practice
of
employee
motivation

 - 1 Head of Administration

DepartmentAD
method
 - 2 existing supervisors at (survey)
IPD
IPD

Information

8

 - 3 current employees of IPD

 - 46 existing employees at Quantitative

Instrument

Interviewees’
opinions
and
(telephone,
yahoo
chat assessments
and face-to- about the key
motivation and
face)
the
demotivation

Source: Author’s analysis (2011)
I.56.2.1.1. In-depth interview
a.I. The sample size
The sample size was 8 interviewees in which 4 interviewees are current
employees and the rest left the company during the period of 2007-2010.

b.ii. The sample method
All interviewees were willing to answer the questions. 4 out of 8 were
interviewed on yahoo messengers, 2 employees were interviewed on telephones

and the remainders were interviewed face by face.
c.All interviewees were pleased to answer the questions. 4 out of 8 were
interviewed on yahoo messengers, 2 employees were interviewed on telephones
and the remainders were interviewed face by face.
iii. In-depth interview questions

- Interview questions for the current employees: consist of 10 questions that
10


focuses on what are their motivations on their current work, the interviewees’
comments on salary, administration policies, work itself, working conditions and
appraisal performancerelation between employees and employers.
- Interview questions for employees left the firm: consist of 9 questions that focus
on why the interviewee left the firm and their comments on salary, administration
policies, work itself, working conditions and appraisal performanceand
interpersonal relations..
I.56.2.1.2. Survey method
aI. The sample size
The sample size was 48 employees account for 89% of the INVESTIP-IPD
employees.
bii. The sample method
The questionnaires were sent to 54 IP employees of INVESTIP-IPD covering
both non-executive and executive levels in which 48 valid responses were
received by e-mails.
ciii. The questionnaire design
The questionnaire consists of 51 questions of multiple choices that are divided
into two main parts. The first part is the Assessment on the importance of the key
de-motivation and motivation factors and the second part is the Appreciation of
the satisfaction of de-motivation and motivation factors. Thisese questionnaires

wereas designed based on the issues found from of in-depth interviews and the
two factors theory of Herzberg to answer the two first research questions “How
is the current staff motivation at INVESTIP?” and “What are the key demotivators and motivators at INVESTIP?”. Following are the factors based on
which the author designed the questionnaires:
- Physical working conditions: equipments and facilities for working such as
office stationery, telephone, computer, air quality, indoor climate, space, lighting,
ventilation and other environmental characters.
- Supervision: on this research, the category includes the fairness or unfairness of the
supervisors, the feedback and recommendations of supervisors to the work performance.
- Salary, allowance and other benefits: on this research, the category includes the
current salary, allowance, benefits, salary range, and duration for salary increase.
- Interpersonal relations: on this research, the category includes the relations
between colleagues, between staff and supervisors, and the working atmosphere.
- Company policies and administration: on this research, the category includes the
business regulations, administration policies and the performance of appraisal policy.
11


- The work itself: on this research, the category focuses on the interesting or
boring work, the reasonable or unreasonable assignment of work.
- Work itself: on this research, the category focuses on the interesting or boring
work, the reasonable or unreasonable assignment of work.
- Responsibility: on this research, the category focuses on the responsibility or
irresponsibility to work, freely making decision or dependently making decision.
- Recognition: on this research, the category focuses on the supervisors’
recognition and colleagues’ recognition in the employees’ effort in the work.
I.7. Structure of final projectthesis
Chapter I: Introduction
In this chapter, the author presented the rationales, research objectives, research
questions, research methodology, scope of research, limitation of research and

thesis project structure.
Chapter II: Motivation theoretical framework
The first part of thisThis chapter will present the main ideas of the motivation
theories as mentioned above, as well as create a link between these theories and
the motivation of INVESTIP case.
Chapter III: Overview of INVESTIP
This chapter e second part will provide brief information of INVESTIP and its
HRM practices.
Chapter IV: Understandings current employee motivation at INVESTIP-IPD
This is the most important chapter of this project, this chapter will present more
details the factors of theories in more details. Based on the research results, the
author shall make deep analysis of de-motivation factors and motivation factors.
Chapter V: Suggestions for improvement of staff motivation at INVESTIP-IPD
In this chapter, the author will recommend some solutions to improve staff
motivation at INVESTIP in general and in INVESTIP-IPD in particular based on
findings in the chapter IV.

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13


CHAPTER II
MOTIVATION THEORETICAL FRAMEWORK

II.1. Motivation theoretical framework on employee motivation
II.1.1. Definition of Motivation
II.1.1.1 Motivation-definition
There are variety ways to define concepts on motivation such as “motivation is a

dynamic process, it is not something a person is born with or without but rather
something that can be enhanced or developed”1 or “motivation is the driving
force behind all actions of an organism”2. However, in this project, the author
chooses the motivation definition of Stephen Robbins to be the theoretical
framework for this research.
According to Stephen Robbins, “motivation is the process that account for an
individual’s intensity, direction, and persistence of effort toward attaining a
goal”3. In this project, the author will narrow the focus to organizational goal s
instead of any goal in order to reflect the singular interests in work-related
behavior. There are three key elements in this definition, which are intensity,
direction and persistence. Intensity refers to how hard a person tries, which
stands in the focus when people talk about motivation. However, high
intensity will not lead to the favorable job performance outcomes unless the
effort is channeled in a direction that benefits the organization. Finally,
motivation has a persistence dimension, which measures how long a person
can maintain his or her effort. From the definition, the author can clearly
understand how motivation in an organization is. In other words, motivation
concerns:


What urge people to initiate actions;



What influence their choice of action; and



Why they persist in doing it over time.

The definition of Stephen P. Robbins will be an indicator for author during the
process of research.
II.1.1.2. Satisfaction-definition
1

Kleinginna, P., Jr., & Kleinginna A. (1981a). A categorized list of motivation definitions, with
suggestions for a consensual definition. Motivation and Emotion, 5, 264
2
Source: Definition from website: />3
Stephen P. Robbins, “Organizational Behavior”, Person Educational International, 10th Edition, 2003, p 155

14


According to Susan Heathfield, a Human Resources expert “Employee
satisfaction is the terminology used to describe whether employees are happy
and contented and fulfilling their desires and needs at work. Employee
satisfaction is a factor in employee motivation, employee goal achievement, and
positive employee morale in the workplace”4. Although “satisfaction” and
“motivation” are not identical, they are confusingly similar in appraising
employee feeling when they are happy, contented or fulfilling their desires and
needs at work. It may be stated that “motivation reflects satisfaction”. In fact,
the concept “satisfaction” is more popular and more understandable for readers.
For these reasons, the author uses the terminology “satisfaction” instead of
“motivation” in the designed questionnaires to help respondents choose proper
answers that are close to their opinions about the problems mentioned in this
research.
II.1.1.2. The importance of Employee Motivation
Why we do care employee motivation? There is an old saying “You can take a
horse to the water but you cannot force it to drink. It will drink only if it’s

thirsty”. It is the same with people. They will do what they want to do or
otherwise motivated to do. Whether it is to excel on the workshop floor or in
the “ivory tower”, they must be motivated or driven to it, either by themselves
or through external stimulus. Motivation is considered the key to performance
improvement. It is one of the most frequently researched topics in
organizational behavior.
Improving productivity is of high concern for every organization. Improving
productivity means improving employees’ performance. The employees’
performance is determined by 3 following factors: opportunity, abilities and
motivation
In short, Performance = f (opportunity) (ability) (motivation)5
Therefore, motivation of employees in an organization is very important for
improving productivity of such organization. There exist a number of motivation
theories introduced since 1950s. In this research, the author will focus on some
theories because the author believes that they would help identify the key
motivators and de-motivators at a professional service firm like INVESTIP.
II.1.2. Theories of Employee Motivation
II.1.2.1. The Equity Theory of John Stacey Adams
4

Susan M. Heathfield, />owSource: www.accel-team.com: “Employee motivation, the organizational environment and
productivity)
5

15


Equity theory of John Stacey Adams attempts to explain relational satisfaction in
terms of perceptions of fair/unfair distributions of resources within interpersonal
relationships. Equity theory is considered as one of the justice theories. The

belief is that people value fair treatment which causes them to be motivated to
keep the fairness maintained within the relationships of their co-workers and the
organization. The structure of equity in the workplace is based on the ratio of
inputs to outcomes. Inputs are the contributions made by the employee for the
organization.
An individual will consider that he is treated fairly if he perceives the ratio of his
inputs to his outcomes to be equivalent to those around him. Thus, all else being
equal, it would be acceptable for a more senior colleague to receive higher
compensation, since the value of his experience (an input) is higher. The way
people base their experience with satisfaction for their job is to make
comparisons with themselves to the people they work with. If an employee
notices that another person is getting more recognition and rewards for their
contributions, even when both have done the same amount and quality of work, it
would persuade the employee to be dissatisfied. This dissatisfaction would result
in the employee feeling underappreciated and perhaps worthless. This is in direct
contrast with the idea of equity theory, the idea is to have the rewards (outcomes)
be directly related with the quality and quantity of the employees contributions
(inputs). If both employees were perhaps rewarded the same, it would help the
workforce realize that the organization is fair, observant, and appreciative. This
can be illustrated by the following equation:
=6
Therefore, in order to understand how an employee satisfies with his/her job in
comparison with another one, the theory will be very valuable for the author in
analyzing the satisfaction level of employees in the case of INVESTIP.
II.1.2.2. Maslow’s Hierarchy of Needs
Psychologist Abraham Maslow first introduced his concept of a hierarchy of
needs in his 1943 paper "A Theory of Human Motivation" and his subsequent
book, Motivation and Personality. This hierarchy suggests that people are
motivated to fulfill basic needs before moving on to other needs.
Maslow’s hierarchy of needs is most often displayed as a pyramid. The lowest

levels of the pyramid are made up of the most basic needs, while the more
complex needs are located at the top of the pyramid. Needs at the bottom of the
pyramid are basic physical requirements including the need for food, water, sleep
6

Adams, J.S. 1965. Inequity in social exchange. Adv. Exp. Soc. Psychol

16


and warmth. Once these lower-level needs have been met, people can move on to
the next level of needs, which are for safety and security. As people progress up
the pyramid, needs become increasingly psychological and social. Soon, the need
for love, friendship and intimacy become important. Further up the pyramid, the
need for personal esteem and feelings of accomplishment take priority. Maslow
emphasized the importance of self-actualization, which is a process of growing
and developing as a person to achieve individual potential.
Figure 2.1. The Maslow’s Hierarchy of Needs
SelfActualization
Personal, growth,
fulfillment

Esteem
Achievement, status,
responsibility, reputation

Belongingness
Family, affection, relationship,
work group, etc

Safety
Protection, security, order, law, limits,
stability, etc.

Physiological
Basic life needs: air, food, drink, shelter, warmth, sex,
sleep, etc

Source: Abraham Maslow's Hierarchy of Needs Theory
As a result, for suitable workplace motivation, it is important that leadership
understands the active needs for increasing individual employee motivation.
II.1.2.3. The Two Factor Theory of Herzberg
Frederick Herzberg is one of the most well known writers on employee
motivation. He did the motivation-hygiene theory in the late 1950s and early
1960s but it is still relevant today. Motivating employees is an ongoing challenge
and no one has come forward with any evidence to refute Herzberg, so his ideas
are still worth looking at. The reason for the two factors was Herzberg’s
recognition that there is one set of factors that leads to employee satisfaction at
work and another that leads to dissatisfaction.
II.1.2.2.1. Hygiene Factors and Dissatisfaction at Work
This set of factors refers mainly to working conditions. They are contextual
aspects of the working environment and not intrinsic to the work itself or
determined by how employees work. These factors include lighting, noise levels,
17


room temperature and safety. But they also include wages, where pay is not
based on actual performance but is hourly or monthly. Employee benefits or
conditions within the workplace, including organizational culture and leadership
style, are considered hygiene factors. Typical hygiene factors are as follows:

Company policy and administration, quality of supervision, salary, interpersonal
relations-supervision and working conditions.
II.1.2.2.2. Motivation Factors and Satisfaction at Work
The distinguishing feature of motivation factors is that employees can only get
them by the way they work, unlike hygiene factors are just there regardless of how
hard anyone works. This set of factors includes recognition, bonuses, and a sense
of achievement and intrinsic enjoyment of the work itself. Being given extra
responsibility and career advancement are also motivation factors in Herzberg’s
theory. Presumably, these factors motivate employees to work harder because they
can see a direct connection between their efforts and an outcome that they feel is
worth striving for. The typical motivation factors include the following:
Achievement, recognition for achievement, work itself (interesting and
challenging job), responsibility for task, advancement to higher level tasks and
growth
II.1.2.2.3. The combination of hygiene factors and motivation factors
The combination of hygiene and motivation factors can result in four possible
scenarios:
Table 2.1. The combination of hygiene and motivation factors

Hygiene factors

Motivation factors

Low

High

Low
High
The

worst
situation, Employees are motivated but
unmotivated employees have they have many complaints. A
a lot of complaints
situation where the job is
exciting and challenging but
salaries and work conditions are
not matched with
Employees have a few The best situation, employees are
complaints but they are not highly motivated and have few
highly motivated.
complaints.
Source: Federic. Herzberg (2008)

II.1.3. The relevance and indicators of the three motivation theories to the
case of INVESTIP
18


Among many motivation theories can be applied to analyze the case of
INVESTIP, the author choose three theories of motivation: the Equity Theory of
J. Stacy, Maslow’s Hierarchy of Needs and Two Factor Theory of Herzberg to do
the research “improving improvement of the staff motivation at INVESTIP”
because due to the following reasons:
The Equity Theory of John Stacey Adams called personal efforts and rewards and
other similar 'give and take' issues at work respectively 'inputs' and 'outputs'.
Inputs are logically what we give or put into our work. Outputs are everything we
take out in return.These terms help emphasise that what employees put into their
work includes many factors besides working hours, and that what people receive
from their work includes many things aside from money. Thus, applying this

theory will be very helpful for the author in the process of researching this
project. The theory implicates equity between individual efforts spent and what
reward they received from the organization, the equity among individuals, among
units, departments, position, especially the equity compared with the market.
With regard to Maslow’s hierarchy of Needs: Although Maslow only focuses on
motivation of individuals, this theory is still valuable to apply in researching staff
motivation at INVESTIP because an organization’s existing and development are
subject to the contribution of many individuals. Maslow has set up a hierarchy of
five levels of basic needs. Beyond these needs, higher levels of needs exist.
These include needs for understanding, esthetic appreciation and purely spiritual
needs. In the levels of the five basic needs, the person does not feel the second
need until the demands of the first have been satisfied, nor the third until the
second has been satisfied, and so on. Therefore, the application of this theory will
help they author to understand more clearly about the needs and need levels of
the INVESTIP’s employees.
As to the Two factor theory of Herzberg, Herzberg was the first to show that
satisfaction and dissatisfaction at work nearly always arose from different
factors, and were not simply opposing reactions to the same factors, as had
always previously been (and still now by the unenlightened) believed. Although
the problems of Herzberg were researched so many years ago and some issues
are no longer suitable to the current situations, the applicability of this theory is
still popular and effective in researching employee motivation. For this reason,
the author mainly applies this theory to the project with the aspiration to clarify
the current motivation of INVESTIP and then give suggestions to improving the
employee motivation.

19


CHAPTER III

OVERVIEW OF INVESTIP

This chapter presents a brief introduction of INVESTIP, its vision, mission
statement, strategies, positioning, clients, competition, organizational structure,
human resource characteristics, business performance and HRM practices.
III.1. INVESTIP at a glance
INVESTIP was established in 1988 as a joint-stock company. The firm currently
employs a total number of 78 staffs in which 54 employees, including nonexecutive level and executive level, belong to IPD and are the main labor force of
this company.
INVESTIP prides of being one of the first professional agencies in Vietnam
specializing in IP matters for both domestic and oversea clients. The firm has been
achieving a year–to-year growth in terms of reputation, revenue, and labour force. It
is one of the five leading IP agencies in Vietnam (the other four firms are
INVENCO, PHAM & ASSOCIATE, VISION & ASSOCIATE and VCCI). The firm
had recognized an average revenue growth rate of 10% from 2000 to 2007.
III.2. Scope of business
As a professional consulting IP firm, the core business of INVESTIP, like the other
firms, is providing a full range of IP services in Vietnam and other countries.
Besides, the firm also provides consultancy services on investment and business.
Setting up and developing project services are also a small part of INVESTIP
service portfolio which has been provided to its clients. The services of this
company consist of consultancy services in: intellectual property, establishing and
developing project and investment and business consultancy services.
III.3. Clients
The major clients of IPD are IP agencies and law firms in all over the world who
represent their clients in their countries to protect their IP rights in Vietnam and
elsewhere. Parts of its clients are Vietnamese companies and individuals in
various industries who directly contact and request INVESTIP to act on their
20

behalf in Vietnam. Up to now, IPD has 2,300 clients in total. Although the
number of Vietnamese clients is bigger than the number of foreign clients,
revenue of this company is mainly received from the foreign clients, accounting
for 70%. Thus, in order to develop the target market, the company needs a
qualified labor force to provide the best advice to these clients. The below figure
illustrates the structure of INVESTIP-IPD’s client portfolio based on the number
of clients across IP services provided by INVESTIP.
Figure 3.1. Client Segmentation

Source: INVESTIP’s SoftIP (September 2010)
III.4. Competition
IP consulting market has observed a tough completion in the past five years.
Besides the 17 long-standing agencies which were established by 2000, there are
many tens of small local IP agencies which have been formed since 2000 and
some international law firms that have recently provided IP services in Vietnam.
The market in fact can be divided into two different sub-markets based on the
different target clients:
Market 1, where major players are the long-standing agencies and foreign
law firms


Market 2, where small local firms compete to gain clients who are mainly
local small and medium sized companies.


INVESTIP-IPD focuses on both sub-markets. All players appear to be nearly
equal in various aspects, especially in the first market. It is hard to determine
which firm is the dominant market leader. Overall, they share relatively the same
amount of the market cake and reputation. Nevertheless, one firm may be

21


stronger than another in a particular business line or in a submarket.
III.5. Vision
 To be the leaders in the chosen market
 To be one of the five in term of reputation
III.6. Mission
“For the prosperous of clients and clients’ success are our success”
III.7. Strategy




To go side by side with clients
Clients are always served in a fair competitive business environment
where clients feel free to make decisions for their future businesses.
Have a professional, flexible and creative team of advisory



Connect our business services with humanitarian, social and environmental
activities



Ready to cooperate, share with partners in business for mutual
development.



Have belief of clients and partners to remain good reputation

III.8. Positioning
The positioning of INVESTIP is “human resource”.
III.9. INVESTIP organizational structure
Figure 3.2. INVESTIP’s organizational structure
Board of Directors

Board of managers

Accounting Dept.
Intellectual Property Dept.

Administrationve Dept.

Investment Consulting Dept.

Trademark Division

Patent Division

22

Developing Project Dept.


Source: INVESTIP (September 2010)
Comments on the organizational structure:

INVESTIP’s structure is of a centralization type of organization which is
reflected in the role of leadership of the Board of Directors, where the most
important decisions on the firm’s business and operation come from. The Board
of Directors, as the top executive committee, acts as the firm’s strategy and
policy maker and the final decision maker on important businesses and
operational issues such as marketing strategies, business plans, schedule of fees,
compensation and staff benefits, etc.
The majority of the staff force are professional employees who are directly
involved in provision of services to the clients. They are young, well-educated and
trained and career minded who look for a career development and learning curve
prospective with the firm. This characteristic should be well taken into account by
the top and line management when designing staff related policies and programs.
III.10. Human resource characteristics
Table 32.2. INVESTIP’s aging structure in 2010 (person)
Department

Number

Intellectual Property
Investment Consulting
Developing Project
Administration
Accounting
The management
Total

54
7
6
5

3
3
78

Age
18-25
9
3
2
1
1
0
16

Age
26-30
21
3
2
3
1
0
3330

Age
31-40
18
1
2
1

1
2
25

Age
41-50
3
0
0
0
0
1
4

Age
>51
3
0
0
0
0
0
3

Source: Administration Department, INVESTIP, 2010
In accordance with the employee static data from INVESTIP’s report, it is revealed that
the employees of this firm are quite young in which 63% is under 30 years of age, 32%
is between 30-40 years of ages and the upper age of 40 years is only 8%. The author is
aware of the enthusiasm of almost young staff which is in inverse proportion to the
older of their ages. As for the staffs under 25 years old who have just graduated from

universities, they are willing to work hard as well as take pressure job. The young staffs
are ready to face challenges on career and wish to learn as much professional skills and
knowledge as possible. For the older staffs who have good professional skills,
experience, high aware of their own values, inspiration of promotion, higher training,
the current positions or jobs are not suitable or not their expectation.
All employees of IPD were well educated from good universities in Vietnam and
oversea, some of whom have MA degrees or PhD degrees.
23


Table 32.3. INVESTIP’s professional structure (person)
Department
IP Dept.
Business advisory
Project
Admin Dept.
Accounting
The management
Total

High-school
University
Higher
graduate
graduated
graduated
54
0
45
9

7
0
5
2
6
0
6
0
5
2
3
0
3
0
3
0
3
0
1
2
78
2
63
13
Source: Administration Department, INVESTIP, 2010

Number

76 out of 78 staffs of this firm graduated from reputation universities in Vietnam
and oversea accounting for 97%. They therefore have high demand on fair

appraisal and compensation as well as succeed in their objects and obtain
achievement.
Besides, similar to other companies in the field of legal consultancy services,
human resource of INVESTIP has special characteristics other than that of other
industries such as manufacturing, marketing or unskilled labor. Being lawyers or
law experts, they have a good knowledge of law, legal procedure, and deeply
understand legal business activities. These employees are also high responsible
for their job. Especially, they need to be respected by colleague and supervisors
and need to be developed in their career and life.
Due to the education background and occupational characteristics, employees in
the field of IP services in general and INVESTIP in particular, are often smart,
professional and respect themselves. Therefore, their needs are not only
biological, safety, love, affection, belongingness but esteem and self-actualization
as well.
III.11. Business performance
Since the date of establishment, INVESTIP always got high growth rate in all
areas of operations. In the context of increasing competition in the IP consulting
sectors, INVESTIP has developed steadily and continued to be the top IP
agencies in Vietnam. Thanks to the sound business operations as well as
management and marketing efforts, INVESTIP achieved significant revenue
growth with good results that is mainly focused on IP services. The number of IP
cases on behalf of clients with the Vietnam NOIP is increasing.

24


However, during the past four years (from 2007 to date), the benefits grow
slowly because of decreasing numbers new IP applicants/owners and some
traditional customers’ transfer to other IP agencies. As estimated, the growth rate
of this company has been reduced from 10% in 2007 to 6% in 2010. According

to the Notice of paying dividend of INVESTIP on November 22, 2010, the
earning per share of the year 2010 was sharply decreased from 18% in 2009 to
6% in 2010. This gives a signal for the regression of this company.
Surprisingly, when considering the growth rate and turnover rate, they author
find that the trends of these rates are in the opposite direction as below:
Figure 3.3. The relation between growth rate and turn-over rate

Source: unofficial information collected from interview (estimated growth rate)
There are many reasons lead to the low growth rate of INVESTIP during the past
4 years such as economic crisis and fiercer competition. However, the author
believes that one of the main roots of this problem is the high turn-over rate and
low mental commitment of employees.
III.12. HRM practices at INVESTIP
“Human forceresource” is the positioning of INVESTIP. In order to attain this
goal, the Human Resource ManagementHRM has tried their best to do the
following activities:


Establish a favorable environment and equal playground for all staff to
develop their carrier and capability;



Consider the expectations and needs of employees;



Create a professional working environment and modern working mechanism;



Create good conditions for all employees to develop their capacities

25