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Solutions to improve poor financial function at pg company

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

DANG THI VY NGOC

SOLUTIONS TO IMPROVE POOR FINANCIAL
FUNCTION AT PG COMPANY

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2021


UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

DANG THI VY NGOC

SOLUTIONS TO IMPROVE POOR FINANCIAL
FUNCTION AT PG COMPANY

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR. DOAN ANH TUAN

Ho Chi Minh City – Year 2021


Table of Contents


Abstract ................................................................................................................................. 5
1.

Company overview..................................................................................................... 6
1.1.

Industry overview ................................................................................................... 6

1.2.

Company profile ..................................................................................................... 6

1.3.

Organization structure ............................................................................................. 8

1.4.

Mission, Vision and Values .................................................................................... 9

1.5.

Accounting Department .......................................................................................... 9

2.

Symptoms ................................................................................................................. 10
2.1.

Negative cash flow in operating activities ............................................................ 10


2.2.

Very long collection period .................................................................................. 12

2.3.

High debt ratio ...................................................................................................... 14

3.

Problem identification .............................................................................................. 15
3.1.

Potential problems ................................................................................................ 15

3.1.1.

Unclear sales objective ..................................................................................... 16

3.1.2.

Recruiting issue ................................................................................................. 17

3.1.3.

Poor financial function ...................................................................................... 18

3.2.


Validating problems .............................................................................................. 19

3.2.1.

Sales head’s perspectives .................................................................................. 21

3.2.2.

Human resource head and Recruiting manager’s perspectives ........................ 23

3.2.3.

Chief accountant’s perspectives........................................................................ 24

3.2.4.

Vice Director’s perspectives ............................................................................. 24

3.3.

The importance of main problem .......................................................................... 25

4.

Cause exploration ..................................................................................................... 27

4.1.

Potential causes ........................................................................................................ 27


4.1.1.

Lack of financial control.................................................................................... 28

4.1.2.

Unskilled employees.......................................................................................... 28

4.1.3.

Lack of teamwork ............................................................................................. 29

4.1.4.

Ineffective task allocation ................................................................................. 29

4.2.

Validating causes .................................................................................................. 30

1


5.

Alternative solutions................................................................................................. 31
5.1.

Solution 1: Create budgeting process ................................................................... 32


5.2.

Solution 2: Execute training programs ................................................................. 43

5.3.

Outcome expectation and measurement ............................................................... 46

6.

Supporting information ............................................................................................ 46
6.1.

Interviewees’ Demographic .................................................................................. 46

6.2.

Interview Guide .................................................................................................... 47

Reference ............................................................................................................................ 49
Appendices ......................................................................................................................... 53
Appendix 1: Accounting Department’s internal information ......................................... 53
Appendix 2: Transcript summary ................................................................................... 54

2


List of abbreviations

AR


Accounts Receivable

AP

Accounts Payable

BOD

Board of directors

CFO

Chief finance officer

CEO

Chief Executive Officer

CF

Cash flow

F&A Department

Finance and Accounting Department

HR

Human resource


KPI

Key indicators performance

PIC

Person in charge

P&L

Profit and loss

SBU

Strategic business unit

3


List of figures
Figure 1. PG's Organization Structure ................................................................................. 8
Figure 2. PG's mission, vision and values ........................................................................... 9
Figure 3. Accounting Department Structure ..................................................................... 10
Figure 4. Net cash provided by operating activities .......................................................... 11
Figure 5. Comparation between PG and industry about collection period ....................... 13
Figure 6. Dept ratio of PG and Industry ............................................................................ 14
Figure 7. PG’s sales performance (percentage) ................................................................. 22
Figure 8. Project chart ....................................................................................................... 34
Figure 9. Format for bottom-up budgeting ........................................................................ 37

Figure 10. Format for bottom-up profit & loss statement ................................................. 41
Figure 11. Format for top-down budgeting ....................................................................... 42

List of diagrams
Diagram 1. Initial cause and effect map of Accounting Department ................................ 16
Diagram 2. Official cause and effect map of Accounting Department ............................. 27
Diagram 3. Updated cause - effect map of Accounting Department ................................ 27
Diagram 4. Fish bone analysis diagram of the poor finance function problem ................ 31
Diagram 5. Suggestions for dealing with validated causes ............................................... 32

List of tables
Table 1. Cash Flow in operating activities ........................................................................ 11
Table 2. PG and Industry's collection period (days) ......................................................... 13
Table 3. Dept ratio of PG company and Industry.............................................................. 14
Table 4. PG's sales objectives dashboard .......................................................................... 22
Table 5. Roles and responsibilities of participants in budgeting plan ............................... 35
Table 6. Project management plan to run the budgeting process ...................................... 40
Table 7. Plan to execute training program......................................................................... 45
Table 8. Interviewees’ Demographic ................................................................................ 47
4


Abstract
In recent years, the board of directors of PG business has recognized that the firm is
experiencing several financial management challenges. This study was then carried out at
PG, starting at data gathering and the discovery of three symptoms in PG's finance
department: negative cash flow in operating activities, very long collection period and high
debt ratio. After gathering more evidence from literature, in-depth interviews, and internal
data sources; the study discovered that the firm is now experiencing issues with poor
financial function. In the long term, this will pose numerous challenges in managing and

expanding the business. As a result, this research focuses on presenting the entire process
of identifying symptoms, severe problems that need to be addressed in the company, and
ultimately providing solutions to assist the organization in achieving more sustainable
development.

5


1. Company overview
1.1. Industry overview
Electronic products have progressively gained popularity in the Vietnamese market,
which is diverse in categories, with numerous items of audio-visual equipment,
entertainment, communication services, public services, jobs, or household electronics. The
variety of forms, product quality, origin, and pricing of these items provide customers with
a wide range of options for selecting and satisfying their requirements. Furthermore, the
majority of people's economic lives have substantially improved, making access to hightech items no longer unique, and the introduction of new technologies has resulted in items
that attract an increasing number of customers, increasing their purchasing power. Major
and big companies and corporations in this industry are Nguyen Kim Trading Joint Stock
Company, The Gioi Di Dong, FPT, Tran Anh Digital World Joint Stock Company, TIE
Joint Stock Company, etc. The electronic products market in Vietnam is a fertile ground
for manufacturers and distributors; and when there are many major, well-known
distributors constantly extending the chain of stores, the rivalry is no longer only in pricing
but also in the service offered to clients.
1.2. Company profile
PG Co., Ltd was established in 2007 in the field of civil electronics, car audio,
cinema system and smart home system, Household Appliances and Kitchen Equipment. PG
is committed to deliver to customers a modern and convenient lifestyle with many highend quality products that promote efficiency and integrated designs originating from Italy,
Turkey, Europe and the United States.
Products are represented and distributed by PG in Vietnam: Harman Kardon, JBL,
JBL Pro, AKG, Wharfedale, TEAC, VV... PG specializes in importing and distributing

products for home audio equipment, supporting music devices for iPhone, iPod, iPad and
car audio equipment.
In addition to distribute audio products, PG also operates in the field of electronics
and household appliances with product lines such as Hitachi LED/ LCD TVs, washing
machines, dryers, gas stoves, hoods, Ariston refrigerator.
6


PG's headquarter is located in Ho Chi Minh City and the company has many offices,
agents and galleries throughout Vietnam. PG owns a team of experienced staff and mission
to always provide customers with the best quality speakers and headphones, as well as the
best after-sales and customer care services.
The most important thing that distinguishes PG is always investing time in training
its employees to ensure they are equipped with the best, most professional skills. The
company's next marketing strategy will focus more on customer experience, try to
understand customers more and more to create demand and serve customers better and
better.
With a system of stores and agents nationwide with enthusiastic and regularly
trained staff, PG has quickly won the trust of customers and partners that are expressed by
the number of Customers are constantly increasing in time.
Below is brief information about the company:
• Good track record with 15 years in electronics distribution and 10 years in Home
Appliances distribution
• Product Brands: Ariston, Beko, Harman Kardon, JBL, Innity, AKG, Teac, Luxman,
Wharfedale, Lexicon...
• Products Lines: White goods, Home Appliances, Home Audio and Visual, Car
Audio, Lifestyles.
• Employees: Over 1300 staffs, experienced in both Sales and Technical
• Headquarter is in Ho Chi Minh and 100 branches and dealers which is spreading
nationwide


7


1.3. Organization structure

Figure 1. PG's Organization Structure
Source: PG’s internal information
The structure of PG is quite clear. All activities of the company are mainly run by
Mr. D – General Director and Mr. L - Deputy director. The company has a large number of
employees and the number is increasing in recent years for the purpose of developing and
expanding market share. Most employees at the management level have more than 7-yearexperience in electronic industry and over 5 years working at PG. Personnel management
method of the company always aims to the following criteria:
• 2-way communications
• Operate effectively - Process information faster - Save time - Increase
benefits
• Information exchange and working environment, easy for employees

8


1.4. Mission, Vision and Values

Figure 2. PG's mission, vision and values
Source: PG’s internal information
PG always focuses on developing its staff to give customers the best experience,
whenever they come to PG. In addition, the Company also seeks partners to provide quality
products, to ensure the source of goods that the company brings to customers is genuine
products, high quality and convenience for life.
1.5. Accounting Department

According to the structure of PG, the current accounting department only focuses
mainly on basic accounting functions such as payroll, tax preparing, purchasing, treasury;
for the daily activities of a business. Meanwhile, with PG's current growth rate and its vision
in the coming years, the accounting department or F&A department needs to further
improve the functions of cash flow management, financial planning, and demand
calculation of using cash, etc. to help the company operate more efficiently. In addition, the
absence of budget planning functions will directly cause many negative impacts on the
performance of commercial enterprises in general, and PG in particular; which will be
elaborated more specifically in this research.

9


Figure 3. The structure of Accounting Department
Source: PG’s internal information
2. Symptoms
After analyzing historical data from the company's internal reports, it was found that
currently, there are following potential symptoms happened at PG: (i) Negative cash flow
in operating activities, (ii) Very long collection period and (iii) High debt ratio. The
symptoms that are happening in the accounting department will be analyzed in more detail
in the following sections.
2.1. Negative cash flow in operating activities
Negative cash flows happen when a business has more money going out than money
comes. That means the company cannot cover its costs from sales. A business cannot
sustain a negative cash flow in the long run. Over time, the enterprise's funds may be
depleted if the company's cash are not enough to cover the costs. In other words, a negative
cash flow means a business is at a loss. It reflects a bad timing of income and expense. A
company can make a net profit and still have a negative cash flow. Expenses payable by
the company are due before the customer pays the debt to the business.
Cash reserves allow businesses to fund acquisitions and other obligations without

incurring the high costs associated with raising external capital (1). On the other hand, the
company will find it difficult to reinvest cash into its business when there is negative cash
flow in the long run and leads to cash shortage. Therefore, negative cash flow makes it
10


difficult to develop a business. Moreover, the existence of a business is threatened when
cash flows are negative, because the business can fall into an insolvency situation when
there is not enough money to pay suppliers, employees and creditors or when the company
need to invest money to finance operating expenses and debt settlement. This also affects
the company's credit rating (2). After a while, businesses will lose trust with suppliers and
lenders.
The table below shows the cash flow in operating activities results of PG over the
past four years:
Table 1. Cash Flow in operating activities

Net cash provided by operating
activities (million)

2017

2018

2019

2020

(750,633)

(6,995,558)


(38,736,131)

(175,855,482)

Net cash provided by operating activities

(750,633)

(6,995,558)

2017

2018

-

2019
(38,736,131)

2020

(50,000,000)
(100,000,000)
(150,000,000)

(175,855,482)

(200,000,000)


Figure 4. Net cash provided by operating activities
Source: PG’s internal report
As can be clearly seen from the above statistics table, especially in the period 2017
- 2018, PG's cash flow dropped sharply from -750,633 million to -6,995,558 million. The
cash flow continued to decline sharply in the following years, and severely decreased to 175,855,482 in 2020. At the end of 2020, PG Company continued to face negative cash
flow situation and had to use a lot of cash from borrowing. It is clear that the net cash flow

11


from operation activities has been negative for the past four years. This means that the main
business of PG was not providing enough money to pay for its business activities such as
payments to suppliers for goods and services, and to employees. This situation clearly
shows that the company is having problems managing cash flow.
In summary, based on the information from PG’s internal report, the negative cash
flow is identified as the first symptom that should be considered at Company PG. If this
situation continues for a long time, it can lead to very serious consequences, one of which
is the bankruptcy of the company.
2.2. Very long collection period
The amount of time it takes a business to receive payments owed by its customer or
counterparty to its account receivables (AR) is known as collection period. Receivables
management is an important method for reducing payment risk. As a result, it is an essential
aspect of every company's financial management (2).
The formula for calculating the collection period is to divide the balance of the
Accounts receivable by the total net sales in the period and multiply by the number of days
in the period.
𝐂𝐨𝐥𝐥𝐞𝐜𝐭𝐢𝐨𝐧 𝐩𝐞𝐫𝐢𝐨𝐝 =

𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬 𝐫𝐞𝐜𝐞𝐢𝐯𝐚𝐛𝐥𝐞
𝐱 𝟑𝟔𝟓

𝐍𝐞𝐭 𝐬𝐚𝐥𝐞𝐬

This ratio, if increased, represents a decrease in the ability of recovery dept from
customer, reducing the cash flow of the business, thereby reducing the payment of the
enterprise's debts and vice versa. This is needed for the company to maintain a level of
liquidity, allows the company to pay costs on time and potentially make larger purchases.
Moreover, average collection periods are also important for planning an efficient plan to
cover future costs and schedule for further growth.
The data about the PG and the industry’s collection period are summarized in the
table below:

12


Table 2. PG and Industry's collection period
Index
(days)
PG

2018

2019

2020

282.7

264.9

281.1


Industry

74.5

37.0

41.8

300.0
250.0
200.0

150.0
100.0
50.0
2018

2019
PG

2020

Industry

Figure 5. Comparation between PG and industry about collection period
Source: PG’s internal report and consolidated by author
The ratio usually analyzed by financial analysts in the company's financial
statements to analyze corporate liquidity. A very long collection period is not a good sign
for the company in the long run. This means that company's customers are occupying

capital for quite a long time. This could lead to a cash crisis if the company needs a large
of money to deal with its liabilities.
Through the above data, it can be seen that the PG collection period is very long
compared to the industry average. This also shows that PG company is facing many
difficulties in managing debt collection from customers.
To summary, this was identified as the second possible symptom that could lead to
more serious ongoing problems at PG as mentioned above and should be carefully
considered.

13


2.3. High debt ratio
The debt ratio is used to compare a company's total liabilities to shareholders' equity
or the company's total assets and is often used to gauge the degree of leverage the company
is using.
𝑫𝒆𝒃𝒕 𝒓𝒂𝒕𝒊𝒐 =

𝑻𝒐𝒕𝒂𝒍 𝒍𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔 𝑻𝒐𝒕𝒂𝒍 𝒍𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔
=
𝑻𝒐𝒕𝒂𝒍 𝒂𝒔𝒔𝒆𝒕𝒔
𝑻𝒐𝒕𝒂𝒍 𝒆𝒒𝒖𝒊𝒕𝒚

The debt ratio will be assessed differently if only focusing on long-term debt because
the risk associated with long-term debt is different from short-term liabilities and other debt.
However, in this study, the debt ratio is being calculated using the formula above.
Table 3. Dept ratio of PG company and Industry
Index

2018


2019

2020

Dept ratio

76%

74%

74%

Industry

61%

47%

45%

Dept ratio
100%
80%

76%

74%

74%


61%
60%

47%

45%

40%
20%
0%
2018

2019
Dept ratio

2020

Industry

Figure 6. Dept ratio of PG and Industry
Source: PG’s internal report and consolidated by author
According to internal PG records, the company's debt ratio has been between 74 and
76 percent during the last three years. When comparing the debt ratio of PG and the
industry, it is clear that PG's debt ratio is greater than the industry average for all three
14


collected years. While the industry's borrowing level gradually decreased over the years
from 61% in 2018 to 45% in 2020, PG's debt ratio remained almost the same and slightly

decreased only 2%. Especially in 2020, PG's debt ratio was 1.6 times higher than the debt
ratio of companies in the industry. This high ratio will bring many risks for the company,
such as: a firm could be put at risk of default on its loans, and that is not to mention the case
if interest rates suddenly rise. Moreover, a company with a high debt ratio can also lead to
more costly borrowing and more easily go into crisis if the economic situation changes.
Overall, a higher debt ratio tends to indicate a company is riskier to its shareholders.
Therefore, high dept ratio of PG is an issue that should be considered to adjust for the longterm development of the Company.
3. Problem identification
3.1. Potential problems
The chart below presents a summary of three potential problems causing the three
main symptoms outlined above: unclear business objective, recruiting issue, and poor
financial function. The specific analysis will be presented in detail below.

15


Diagram 1. Initial cause and effect map of Accounting Department
3.1.1. Unclear sales objective
The main reason for the cash flow was negative according to Ms. C - Chief
accountant - was because bad business results in low sales. That is, as analyzed above,
negative cash flow can occur when a company's real income is lower than what it actually
spends on its business operations. Through the interview with Ms. C, the business situation
of PG Company was not good. Ms. C shared:
“… the consulting staff has not worked effectively, the company has hired many
employees, but the business situation has not increased sharply while the company has to
pay more for staff hiring. Part of the reason is also because the consultants have to do too
many tasks at the same time, they do not have division of work and detailed goals…”
It can be seen that in business setting clear and specific sales objectives is extremely
important for the whole company in general or in particular the sales staff can aim to
achieve.

16


3.1.2. Recruiting issue
Recruiting issue is mentioned because it is seen as a potential problem leading to
lack of skilled staff in the marketing field. According to Mr. L - Deputy Director: “… the
reason that the company has a bad business situation is not only because the sales team is
not operating effectively, but also because the marketing department is weak. The current
marketing department of the company lacks in-depth knowledge and has not kept up with
the market about methods to bring products to consumers. This has made the company lag
behind other competitors…”. In this 4.0 era, the business situation of the corporate not only
stops in traditional forms of marketing but also needs to expand and update more consumer
trends, make as many consumers access the product as possible, it is necessary to hit hard
on customers' needs.
Mr. L also shared:
“… talking about the marketing team, up to now the company is looking for
personnel with better skills, but this audience on the market seems scarce, or maybe
Companies need to pay higher wages to attract human resources. This needs to be
understood more carefully with the HR department about the process, recruitment method,
finding potential candidates, whether the salary of the HR department is in line with market
benchmarks, is attractive enough for potential candidate yet. Moreover, if the current
employees are not working effectively, what plans does the company have to train,
reevaluate ... "
Through discussion with Mr. L as well as Ms. C, it can be seen that the two main
reasons for low sales numbers are that the company has not given a clear and specific goal
in the business and the company is having problems in recruiting talented and highly skilled
human resources.

17



3.1.3. Poor financial function
This section focuses on explaining why the poor financial function is potentially
causing all three symptoms mentioned above, including: negative cash flow in operating
activities, very long collection period and high debt ratio.
One of the reasons PG company has negative cash flow is because the company
allows customers to pay late. As mentioned above, the negative cash flow is because the
company actually spent more money than the company actually made. With PG company,
the problem is that the customer buys goods and pays late, leading to the company having
positive profits but having difficulty managing the cash flow. This is because the company
has a poor collection policy, the process of collecting money from customer was not
standardized, and ultimately because the company is not properly allocating the work.
This was explained in details through an interview with Mr. L – Vice director - as
follows:
“… In addition to the reason that the business situation is not good, leading to low
sales volume, at the same time, with sold products, customers will pay late. Late payments
here have many causes. Part of it can be said that the debt collection policy of the Company
is not strict, there is no high commitment to partners as well as customers. In case if the
customer pays the money not on time, the company is flexible, can extend the debt for
wholesale customers, who has a long-term relationship with the company. The second
reason can be mentioned, I think that the Company has not developed a standardized debt
collection process. Sometimes, the negotiation of the payment time, the time of receiving
goods is mainly for the consultant to discuss with the head of the department and then make
it depending on the customer and the potential level of the order. Finally, because the
company does not allocate work properly, the sales teams are doing all tasks related to
consulting, negotiating and preparing the contract, and finally, the person who monitors
the payment process and reminds customers complete payment ... "
Summarize Mr. L’s opinions, PG company is facing with the situation of not strict
debt collection policy, lack of a standardized process for debt collection; and accompanied
by these two problems is the unreasonable division of work in the sales consulting

18


department. This shows that these are signs of poor AR management. A commercial
company needs a dedicated debt collection function to specialize in these tasks and support
the business more smoothly.
Unintentionally, PG Company's poor bargaining power resulted in the company
having to import more inventories than necessary to get a preferential price without having
business and financial plan, according to the sharing of Ms. C. This is also one of the main
reasons why the company has a high debt ratio due to lack of cash. This can be seen as a
lack of financial management ability in short- and long-term financial planning.
Both Mr. L and Ms. C all agreed that the company was falling into a poor financial
function, because the accounting department at PG company focused mainly on recording
transactions and spending, paying for business activities of the Company. PG Company has
almost no financial function to focus on financial data analysis, control and planning for
the future. Mr. L shared:
“… the accounting department only prepares financial statements for the company
when requested by Mr. D - General Director, and these numbers are usually limited to
financial statements, no further analysis yet…”
Through the analysis presented above and obtained information, it can be concluded
that the poor financial function is considered one of the potential problems of the PG
company at the time of research.
3.2. Validating problems
The vision of the entrepreneur as a crucial driving factor in the development of the
new enterprise (3). This is also necessary in order to motivate the staff; they know what
they will achieve after a period of hard work and enthusiasm. In addition, it also makes the
work oriented clearly and wastes less time. Furthermore, clear sales objectives are also a
measure to determine the level of success or failure of an organization in general and each
employee in particular. Chen et al (4) also indicated that goal orientation positively affects
sales performance of new products. Therefore, without clear sales objectives, it is difficult

for businesses to develop projects and measure performance throughout the operation.

19


Recruiting and retaining highly qualified workers may be a cost-effective way to
gain long-term competitive advantages, with a quality staff possibly being a prerequisite
for successful organization (5). Enterprises are only as good as their employees'
capabilities. Hiring the wrong person can cost a company more than money. When the
organization hires the right people, the owner will be able to focus on running the business,
rather than spending a lot of time controlling whether the employee completes the job on
time and on schedule or not. In addition, hiring the right people, in other words, hiring
someone capable of doing the position the company is looking for right now, can reduce
the number of employers to hire in the future when the company is further development
(6).
The last problem is considered to cause all three symptoms of PG company, which
is poor financial function. When it comes to financial functions it includes but is not limited
to ensuring sufficient capital at reasonable costs, ensuring safety of funds, ensuring the
efficient and profitable use of cash, and ensuring that financial funds are not in an idle state.
Laura Zoni and Federico Pippo (7) also stressed the importance of providing an absolute
finance role in order to support how much capital it needs to invest and run the business,
boost cash flow, and better execute efficient management when running a business. From
there, the company will be able to easily identify sources to mobilize finance so that it can
choose a source of finance that best suits the business needs and the company's capabilities.
One of the undesirable outcomes of poor financial management is that it can lead to heavy
debt burdens. This means the company is not managing the cash flow well, leading to high
debt. It is exactly what happened at PG. In other words, stronger financial controls can help
reduce costs across the organization, especially when there is a lack of cash and help the
company not fall into high debt relative to its existing assets. Creditors would charge high
interest rates to compensate for the increased company risk, making it increasingly difficult

to attract new loan for investment reasons (8). Asselbergh et al (9) concluded that
wholesalers who sell on credit which face financial difficulties as a result of delaying
payments from customers and failing to concentrate on initiatives to enhance collection
functions.
20


Additionally, financial functions also include Liquidity Decisions - Liquidity means
a company has enough money to cover expenses when due and has enough cash in reserve
to respond to emergencies unforeseen. To do this, a company needs to manage accounts
receivables well. Account receivable management is a key component of financial
management, according to Philip Leitch and Dawne Lamminmaki's research (10), and the
average collection period is determined by how the company manages its accounts
receivable. Furthermore, Don Atwell (11) believed that in any situation - whether beginning
a company or having been in business for a long time - collecting accounts receivable is
often a key factor in achieving success, particularly in difficult times.
In conclusion, the research papers verified that all three of these issues might lead to
the current situation of PG. Therefore, the potential problems need to be validated in further
depth through discussions with PG company leaders and internal data in the next part.
3.2.1. Sales head’s perspectives
Regarding the unclear sales objectives, the results from the discussion with the
Director of the Sales and Marketing Department will be presented below.
Have discussed with Ms. S - Sales and marketing director, Ms. S shared:
“…During the monthly meetings between management, I am also aware that the
company's cash flow is negative, as the Sales Director, I also agree that recently, has been
affected generally by Covid pandemic on the whole market, so the company's sales have
decreased compared to the previous months and the same period of previous years.
However, it is not because that the sales team has not worked effectively. PG Company not
only focuses on the wholesale segment - selling by orders, but also selling directly at the
storefront, competing with The Gioi Di Dong, electronic brands. Therefore, this can be

considered as the general situation of the electronics and household industries. In the past
the company was still operating the same way, the consulting staff did many different jobs
to optimize the use of personnel for the company, and no problem happened. In addition,
the consulting staff also has low rate of resignation or dissatisfaction in the company
because they have to handle many jobs at the same time…”

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In addition, Ms. S also shares the table below, this is the set target for sales
consultants and these numbers are measured and reevaluated annually. It can be seen that
PG company has built a clear business goal and measured that target on a yearly basis, so
the problem of unclear sales objectives has not been identified as the main problem the
company are facing, which causes cash flow to be negative.
Table 4. PG's sales objectives dashboard
Sales
Sales objectives
Achieved sales’s
target (%)

2017
583,967,836

2018
692,413,878

2019
817,964,126

2020

738,621,461

657,793,184

671,563,011

796,275,959

940,658,744

89%

103%

103%

79%

2020

79%

2019

103%

2018

103%


2017

89%
0%

20%

40%

60%

80%

100%

120%

Figure 7. PG’s sales performance (percentage)
Source: PG’s internal data
Ms. S concurred that recruiting is a problem that the organization should address.
However, according to Ms. S, this problem may be solved by scheduling training sessions
for existing workers, who already have expertise and understanding of the organization.
Regarding poor financial management, Ms. S also stated that, from her own
perspective, she believes that if this problem can be resolved, the firm will have more
benefits in management. Because of the importance of financial management and planning
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for the organization is essential. It not only assists the organization in avoiding excessive
risks, but also in having a clear path and goals which are showed by data.

3.2.2. Human resource head and Recruiting manager’s perspectives
Ms. H is currently the HR head at the company with more than seven years of
experience in the human resources and Mr. R is Recruiting manager with four years of
experience and service at PG.
Ms. H and Mr. R believed that the defined business objectives are not a serious
corporate concern after the explanation from the sales department. Perhaps the sales staff
has not always concentrated on updating that figure on a daily or monthly basis. However,
the sales manager presents this amount every year and informs the BOD if there is a
discrepancy.
Regarding the recruitment of human resources, Ms. H shared:
“… I think the problem is not only with the recruitment team but because of the
company's operational structure. In terms of recruitment, it includes a lot of impact factors.
If the company wants to recruit high-quality and highly skilled employees, it must also pay
commensurate salary and staff benefits, professional training courses, career development
orientation, ... If there is only limited funding for a position and the manager does not have
plans, do not present projects, and requirements to develop the staff, the HR department is
also very difficult to manage all without cooperation from others ... "
In addition, the head of the recruitment department - Mr. R also shares:
“… As the company’s policy, the current recruitment department is only in charge
of about 60% of the recruitment process, the rest relied on the specialized department that
will be consider and select potential candidates. Therefore, to deal with this problem, it is
necessary to have cooperation from other teams...”
Through the sharing of two HR staff, it can be seen that dealing with recruitment
issue can face many difficulties and needs to be considered more carefully through
conversations with higher senior management to clarify if it can be chose as main problem
or not.

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