BANKING ACADEMY, HANOI BTEC HND IN BUSINESS (FINANCE)

ASSIGNMENT COVER SHEET

NAME OF STUDENT REGISTRATION NO. UNIT TITLE ASSIGNMENT TITLE ASSIGNMENT NO NAME OF ASSESSOR SUBMISSION DEADLINE

Hong Tr Ly Selena (F03B) F03 - 101

Unit 3: Business Environment Multinationals in Vietnam Environment 1 of 2 Ms. Mary Eloisa Esmenda 17 November 2010

I, hereby confirm that this assignment is my own work and not copied or plagiarized from any source. I have referenced the sources from which information is obtained by me for this assignment.

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Unit Outcomes
Outcome Evidence for the criteria Feedback Assessors decision Internal Verification

Identify the mission, objectives and responsibilitie s of an organization within its environment (1)

Identify the mission, values and key objectives of an organization and assess the influence of stakeholders

Evaluate the extent to which an organization achieves the objectives of three stakeholders Explain the responsibilities of an organization and strategies employed to meet them Explain how economic systems attempt to allocate and make effective use of resources

Investigate the economic, social and global environment in which organisations operate (2)

Discuss the impact of social welfare and industrial policy initiatives on organisations and the wider community Evaluate the impact of macro economic policy measures and the influence of the global economy on UK-based organisations and stakeholders M1 D1 M2 D2

Merit grades awarded Distinction grades awarded

M3 D3

Outcome

Evidence for the criteria

Feedback

Assessors decision

Internal Verification

Comments by Assessor - Common Skills

A B C D E F G

Assignment
( ) Well-structured; Reference is done properly / should be done (if any) Overall, youve Areas for improvement:

ASSESSOR SIGNATURE NAME:..........................................................................................

DATE

(Oral feedback was also provided) STUDENT SIGNATURE NAME : .............................................................................

FOR INTERNAL USE ONLY VERIFIED YES NO DATE NAME : ........................................................................... : ...........................................................................

DATE

VERIFIED BY : ...........................................................................

COMMON SKILLS & COMPETENCIES ASSESSED (indicated by X)

A. MANAGING & DEVELOPING SELF
1. Managing own roles & responsibilities 2. Manage own time in achieving objectives 3. Undertakes personal and career development 4. Transfer skills gained to new/changing situations & contexts

D. MANAGING TASKS & SOLVING PROBLEMS

X X

12. Use information sources 13. Deal with a combination of routine & non-routine tasks 14. Identify & solve routine & non-routine problems

B. WORKING WITH & RELATING TO OTHERS

5. Treat others beliefs and opinions with respect 6. Relate & interact effectively with individuals & groups 7. Work effectively as a team member

E. APPLYING NUMERACY
15. Applying numerical skills and techniques

F. APPLYING TECHNOLOGY
16. Use a range of technological equipment and systems

C. COMMUNICATING
8. Receive and respond to a variety of information 9. Present information in a variety of visual forms 10. Communicate in writing 11. Participate in oral & no-verbal communication

X X

G. APPLYING DESIGN AND CREATIVITY

17. Applying a range of skills and techniques to develop a variety of ideas in the creation of new / modified products, services or situations 18. Use a range of thought processes

. (VIETNAM ECONOMIC SYSTEM & THE CASE OF UNILEVER)

In a case study of: UNILEVER Vietnam Corp.

Prepared for: Ms. Mary Eloisa Tejares Esmenda (Lecturer) Unit 4: Business Environments Banking Academy, Hanoi BTEC HND in Business (Finance)

Prepared by: HONG TR LY - Selena Registration No.: ITP F03-101 (F03B)

17th November, 2010

TABLE OF CONTENTS
CONTENTS EXECUTIVE SUMMARY INTRODUCTION 1 I. Mission, values and objectives of Unilever, influences of the stakeholders II. Evaluate the extent to which Unilever achieves the objectives of three stakeholders. III. The responsibility of Unilever and strategies employed to meet responsibilities of stakeholders. INTRODUCTION 2 I. How economic systems attempt to allocate and make effective use of resources available within the country. II. The impact of social welfare and industrial policy initiatives on selected organizations and the wider community III. The impact of macro-economic policy and the influence of global economy on Unilever . and stakeholders CONCLUSION REFERENCE

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13 15 18 19 23 26 29 30

EXECUTIVE SUMMARY

Vietnam is one of the countries which has the fastest economic growth in Asia. The recent integration allows multinational corporations to develop significantly. Unilever is the largest manufacturer which plays an important role in Vietnams economy. The purpose of this report is to provide readers with clearly identification of the mission, objectives and responsibilities of Unilever within Vietnam. Besides, it also mentions and investigates the economic status in Vietnam that influences Unilevers operation.

INTRODUCTION

The economy of Vietnam has seen rapid growth and gradually integrated with other economies in the region and around the world. The economic growth rate of Vietnam achieved 5.3% in 2009 and is targeted to reach 6.5% in 2010. Joining WTO in 2007, Vietnam accepts to face with more competition and difficulties. Among Asia countries, Vietnam is known as one of the most dynamic markets, which has attracted more and more foreign investment in almost every sector of the economy. Nowadays, Vietnam has been opening the door to increased trade and investment in the country. Thanks to the integration, the economy of Vietnam has been turbocharged and trade barriers between Vietnam and other countries have been removed. In addition, Vietnam is a potential market with an abundant labor force adding a million people per year and diversified natural resources. This facilitates the development of multinational corporations (MNCs) in Vietnam. MNCs have contributed a lot to the socioeconomic development of Vietnam. Many of the worlds largest MNCs are increasingly focusing on Vietnam as the next emerging economy in the Asia Pacific region. Nevertheless, MNCs have to suffer lots of difficulties while investing in Vietnam. Despite the economic growth, per capita retail sales of Vietnam are among the lowest in Asia. Moreover, it is not easy for MNCs to access to Vietnam because of some regulations like economic needs test. Starting operation in 1995, Unilever is one of the biggest MNCs investing in Vietnam. After fifteen years, Unilever Vietnam has created thousands of jobs and contributed to the improvement of technology. Many social and community programs have been held throughout the country by Unilever Vietnam. The most important thing is that this company has helped raising living standard of Vietnamese people by providing many the worlds top brands such as Omo, Lux, Lifebuoy, Dove, Close-up, Sunsilk, Clear, Ponds, Vim, Lipton, Knorr . More than $120 millions have been invested in two companies in Vietnam, including Unilever Vietnam JV Company, specializing in Home and Personal Care brands, and Unilever Vietnam Company Ltd. specializing in Oral Care products and Foods and Tea-based Beverages.

UNILEVER VIETNAM
I. MISSION, VALUES AND OBJECTIVES OF UNILEVER

Every organization and firm should identify an inspiring vision, a briefly mission as well as several specific values and objectives. They would help the firms operate fluently and gradually develop. Established in the late 19th century, Unilever now becomes one of the biggest household goods manufacturers in the world and Unilever also create its own mission statement, values and objectives. 1. Mission: According to Mintzberg, 2004 (in BPP Professional education, 2004, p.27), mission describes the organizations basic function in society; in terms of the products and services it produces for its clients. An ideal mission statement should meet the standard of brevity, flexibility and distinctiveness and also answer the question Why does the organization exist?. There is some confusion about the different between vision and mission of an organization. In fact, a mission statement focuses on a companys present state while a vision statement focuses on a companys future. The mission statement of Unilever is To add vitality to life. We meet everyday needs for nutrition; hygiene and personal care with brands that help people feel good, look good and get more out of life. With this concise statement, Unilever expresses the desire to take care of every single household by providing hundreds of products divided into three broad product categories: Foods, House Care, and Personal Care. Customers must have been accustomed to brands such as Lipton, Knorr, Sunlight, Omo, Pond's, Sunsilk, and so on. Millions of people around the world use these products everyday as their daily necessaries. People find it easy to understand and remember the mission of Unilever because the statement is very brief and all the words are simple. This mission statement is also flexible, expressing the idea in general but not trite and hollow. The consumer trends shape the way Unilever works and the products it makes. The statement is like a promise from Unilever to meet everyday needs of every single person. Vitality is spirit of every business activities of Unilever. This makes Unilever stand out from other household goods manufacturers. Determining such an ambitious mission, Unilever has to try the best in order not only to build up the brand but also to compete with other business rivals. 2. Values:

Values of a company are the goals or aims of the organization will have an ideology based on beliefs, values and attitudes (BPP Professional Education, 2004, p.26). They reflect the operations, code of behavior, the management of people and the dealings with other organizations of the company. Unilever has set its value as We aim to be a trusted corporate citizen wherever we operate in the world, respected for the values and standards by which we behave. This is the principle that governs the way Unilever does it business. This company aims to win the trust of customers and they have done it. The proof is that the products of Unilever are now widely used by millions customers from more than 170 countries. Unilevers value is very clear that easily effects the thoughts and actions of employees. The values are expressed in the Corporate Purpose. Unilever defines the essence of the company would contribute to its long term success which requires "the highest standards of corporate behavior towards everyone we work with, the communities we touch and the environment on which we have an impact" (http://www.unilever.com/sustainability/strategy/values/). The Code of Business Principles sets the standards within which the company works and it is regularly reviewed to ensure that it catches up with the needs of today's business environment. Business Partner Code focuses on safety at work, labor standards and the environment while Sustainable Agriculture Code shows the interaction among economic growth, environmental preservation and social development. These values push all the employees to dedicate all their effort for the development of the company. Unilever has applied its values step by step to achieve their mission.

3. Objectives: Objectives are the aims to be achieved and the desired end results (BPP Professional Education, p.26, 2004). To be simple, objectives are specific goals. While goals are general and not quantified, objectives are specified with quantities and used as standard for measuring the performance of the organizations. Unilever has planned several objectives, three of which are mentioned below. Objective 1: to achieve the accumulated budget of over VND 200 billion from 2004 to 2009

In this objective, Unilever specify the expected amount of accumulated budget of over VND 200 billion. There are more and more people choosing Unilevers products. This means that the profit of this company is rising continuously. The accumulated budget is supposed to increase so it is not difficult for Unilever to achieve VND 200 billion in fiveyear period, from 2004 to 2009. In conclusion, the first objective of Unilever meets the standard of SMART. Objective 2: Reach 40% vesting of shares from 2007 to 2009 The specific percentage of vesting of shares that Unilever estimated to obtain is 40%. Unilever can achieve it easily because the profit of Unilever is soaring annually. This means the dividend income of shareholders also increases. Therefore, this objective is attainable and results-orientated. Unilever also set the time-bounded so this objective satisfies all criterions in SMART. Objective 3: Operating margin of over 15% by 2010 after normal restructuring According to the annual report 2009, Unilever targets to raise the operating margin over 15% by 2010. This objective is very specific and measurable because it shows the exact percentage (15%) that the company expects to achieve. Unilever would find it easy to attain this objective, especially in Vietnams market thanks to the significant rise in population and economy every year and. Therefore, this objective is also achievable and realistic with the planned time-bounded 2010.

4. The influence of stakeholders: Stakeholders in an organization have very different degrees of power and potential to contribute, or importance, to achieving an objective (BPP Professional Education, 2004, p.42). They are divided into three groups, including internal stakeholders, connected stakeholders and external stakeholders. The influence of them on the organization is not the same, based on the different interests/ aspiration and power of each stakeholder. Stakeholders mapping is used to identify the impact of stakeholders. In order to fulfill this map, the following questions should be answered: Who are they?, What do they want and what will they accept?, How satisfied are they?, How much power

do they possess?, What sort of power do they possess?, How compatible are their interests? and What conflicts exist?.

Figure 1: Stakeholder mapping (Source: BPP Professional Education, p.42, 2004)

STAKE TYPES HOLDERS KEY PLAYERS Internal Stakeholders Connected Stakeholders Management Employees Shareholders Customers Central External Stakeholders Government Local Authorities Table 1: The influence of stakeholders X X X X KEEP SATISFIED KEEP INFORMED MINIMAL EFFORT STAKEHOLDER MAPPING

As can be seen from the table above, there are four levels in which the stakeholders influence on the company, named as key player, keep satisfied, keep informed and minimal effort. When it comes to the internal stakeholders, both management and employee are key players. In Unilever and almost every other organization, the management is the most powerful people who take control and responsibility of the organization. Additionally, it is them who decide the strategies of the company so they have high aspirations with the activities of the firm. Although employees do not have much power as the management, they are still deeply involved in the operation of the organization. They do not make the strategies but they are the people who perform and make the mission of the firm come true. For example, Unilevers management sets up a plan and asks their employees to follow. They will have high interest in what their employees are doing to assess their work. On the other hand, the obligation of the employees is to obey what is planned by the management. Therefore, they will have a strong desire to complete their work to be deserved with the payment and reward. Moreover, employees directly perform the operation so their influence is very high. In terms of connected stakeholders, shareholders and customers are considered to be the key players. While the shareholders have no power in running the business or making any strategy for the organization, they still have high influence and interest in the operation. They invest the money in the company so they are desire to know whether their money make profit or not. Shareholders are also the people who make the decision of how much money would be invested in the firm. Therefore, the influence of these people is not low. Customers are regarded as key players because they have the highest interest in the quality of the products which they choose. Nowadays, apart from Unilever, there are a lot of household goods manufacturers such as P&G and Nestle. Unilever has to produce their products with high quality in order to keep their old customers as well as attract the new ones. It is the customers who decide the success of a business. The organization should consider every feedback, suggestion or even complaints of the customers because they would help the company operate better. The external stakeholders consist of central government and local authorities. While the central government is considered as keep satisfied, local authorities are regarded as keep informed. Unilever is an MNC so it is very important to satisfy the policies of every host countries. The central government decides which law and tax rate

would be applied on the organization. Hence, the influence of central government is high but the success of the company is not what they care about. On the contrary, local authorities are interested to that Unilever will create more jobs for their citizen, therefore the unemployment rate will be reduced and the living standard of the neighbor will be increased. However, they do not influence much on the operation of the company.

II.

EVALUATE THE EXTENT TO WHICH UNILEVER ACHIEVES THE OBJECTIVES OF THREE STAKEHOLDERS Achieved/

Types

Stakeholder

Objectives Not achieved High Salary Achieved Achieved Achieved Achieved Achieved Achieved Achieved Achieved Not achieved

Internal Stakeholder

Employees

Bonus/ reward Job Securities High quality

Connected Stakeholder

Customers

Sales Promotion Good Price Create more jobs

External Stakeholders

Local Authorities

Social Campaigns Environment

Table 2: Assessment of the extent to which Unilever achieves the objectives of the stakeholders For the internal stakeholders, the most important objective of employees is to get high salary, bonus (reward) and have job securities. The average salary of employees in Unilever Vietnam is VND 6 millions per month. It is quite high and above the general average salary. Nevertheless, the levels of salary are not the same in every case. They depend on the location of the company as well as the position of the employee. In addition, employees are paid bonus when they work for extra shifts and if the business runs well,

financial and moral presents will be given to employees as rewards. Unilever annually organize holiday, sport and entertainment activities for employees. In some special occasions such as International Labor Day (May 1st) and New Year Holiday, employees also receive some bonus added in their salaries. Unilever especially takes care of health and safety at work of all employees. Every worker in Unilever is required to wear safety working clothing and use safety equipment when they are on duty. Thanks to this, the amount of accidents reduces significantly by 8% from 2008 to 2009. They also have health examination every year to ensure that everyone is healthy enough to meet the requirement of jobs. It cannot be denied that Unilever has achieved their objectives for the employees at the high extent. As far as the connected stakeholders concern, it is necessary for customers to buy high quality goods at reasonable prices as well as receive sales promotion from suppliers. Unilever has been succeed in providing customers with good products in variety of famous brands such as Omo, Lipton, P/S, Lifebuoy, Viso, and so on. By providing such qualified products, Unilever has won the trust of millions people from all over the world. Some Unilever brands were awarded at the Brand Forum-Nielsen Best brand Award 2009, including Sunsilk, Lux, Close-up, Clear,... Although Unilever is one of the largest manufacturers, the products are produced not only for the first-classed people but also the commoners. Vietnam is a middle-classed country and almost customers are commoners. Unilever has produced goods at the prices which are fit with the commoners pockets. With only some dozen thousand to hundred VND, customers can buy their favorite products of Unilever. Therefore, the prices are reasonable that suitable for almost everybodys earnings. Besides, Unilever provide customers sale promotion such as sale off, buy one get one campaign,... customers. The three objectives which the local authorities set out have been highly achieved by Unilever. The objectives are identified as creating more jobs, doing social campaigns and protecting the environment. Unilever Vietnam has created jobs for more than 7,500 people. Additional, this organization also takes part in a lot of social program as the exclusive sponsor. For example, Lifebuoy take the initiative of a campaign which encourages people, especially children, to wash their hands with soap before the meal and after personal hygiene. Omo started the campaign to donate old white clothes for poor students while P/S guided the campaign to protect the smile of Vietnam. These first two Unilever has also attained what were planned for the

objectives have been achieved successfully under the strategies of Unilever. However, this company has failed to protect the environment. Some factories have eliminated the smoke and sewage into the air and rivers, which makes the environment populated.

RESPONSIBILITY OF UNILEVER AND STRATEGIES EMPLOYED TO MEET THEM

Specific Responsibilities of Unilever Social Responsibilities Environment Responsibilities Ethic and Business Management Responsibilities Raising the living standard Reduce the using of plastic Obey the law Improve the material and spiritual life for employees Propagate the image of Unilever

Strategies Employed

Start social campaigns Public new pack design Punctually pay taxation Give reward and organize extracurricular activities Broadcast advertising

Public Relations and Corporate Image

(press, radio, television, internet, magazine...)

Table 3: Responsibilities of Unilever and strategies employed to meet them Unilever has not only attained the objectives of stakeholders but also some responsibilities, including social, environment responsibilities, ethic and business, management responsibilities, public relations and corporate image. This company has carried out several strategies to achieve these responsibilities. The first responsibility is social responsibilities. Unilever has done the charity as well as started many social campaigns. The company considers them to be one of the most important strategies, not only to contribute to the social development but also to promote the image of the organization. Unilever sets up a budget for charity, which is taken from the annual profit of the company. In 2004, Omo gave out 500 scholarships to the poor students in Ho Chi Minh City during the campaign called Omo white shirts light up the

future. Lifebuoy gave out 84 scholarships were given to poor children who tried their best and got high result in study in July, 2010. In the period of 2002 to 2005, Unilever sponsored VND 1,5 billion for the campaign named For the childrens eyes. Apart from that, Unilever annually raises fund to help the victims of agent orange and natural calamities such as hurricane, flood,... This company also contributes to build houses for wounded soldiers, mothers of soldiers who died in the war... as well as build more schools for children in remote areas. Until now, Unilever Vietnam has spent over VND 200 billion on a series of social programs across the country. Secondly, Unilever has done strategy using advanced computing and manufacturing technology to design lightweight packs for new and existing products to fulfill the environmental responsibilities. The designs of Unilevers products pay attention not only to the attractiveness but also the weight optimization. By reducing the weight of a bottle of Vaseline hand lotion by between 4 and 15% since 2003, Unilever has saved 45 tones of plastic. There is also a decrease in packaging weight across the laundry products like Comfort. On average, the weight of 6 and 3 liter bottles has been reduced by 10 and 15% respectively since 2003. Another responsibility of Unilever is ethics and business responsibility. Annual reports of Unilever show that the taxation rate of this company is rising gradually year by year. However, Unilever always pays taxation punctually. The next responsibility belongs to management responsibility. Unilever commits to provide employees with the best working and resting regulations. Apart from salary, employees also receive bonus and reward from the company, especially on special occasions. Extracurricular activities are held regularly for all employees at Unilever. Health and safety at work are considered a priority. The last responsibility is public relations and corporate image. Thanks to the development of media, it is easy for Unilever and other company to promote their images to the public. Using many different medium to marketing, Unilever has diffused the products to almost every country in the world. This company carries out both above the line and below the line marketing campaign. A lot of Unilevers product advertisements are now being shown on the television all day long. The pictures of those products are also printed on many magazine and newspapers. Contrary to above the line, below the line is an indirect marketing campaign. By doing personal selling

(such as sale promotion), Unilever has taken a long step in Vietnams market in a short period of time.

INTRODUCTION
Vietnam is a densely populated developing country whose economy has been recovering from the war. After the economic reform Renovation policy in 1986, the Vietnamese government commits to economic liberalization and international integration. State owned enterprise was established in Vietnam. However, they did show the weaknesses like backward technology and small scale business. This required Vietnamese

government to adopt economic policies to make the economy prosper, one of which is privatization. The number of privatized enterprises has increased pronouncedly. In 2004, Vietnam privatized 715 enterprises and at the end of 2004, there were 2.242 privatized enterprises (Civillawinfor, 2008). Since the economic reform Renovation in the mid-1980s, Vietnams economy has been expanding and it is expected to continue on that upward way in spite of current economic restraints. In spite of the 1997 Asian economic crisis, the Vietnams economy had much more immunity to this crisis than many neighboring economies, primarily because Vietnam did not have a stock market or an internationally traded currency at that time. Vietnams economy develops step by step and has achieved some success. A sustained growth rate of around 8% for over 15 years shows great progression. It is one of many reasons for the increasing number of foreign investors. In 2007, Vietnam received over US $20 billion of foreign direct investment (FDI). FDI is recorded to increase by 70%, compared with the data in 2006. In the same year, more than 1,500 new projects are carried out in Vietnam. In 2007, Vietnam joined WTO, which has given a strong boost to Vietnams trade. Despite the economic success, Vietnam is still a poor country with a low living standard, especially in the remote mountainous areas. Therefore, Vietnam has to try their best to achieve the target of becoming an industrialized country by the year 2020.

I. ECONOMIC SYSTEM IN VIETNAM AND HOW ECONOMIC SYSTEMS ATTEMPT TO ALLOCATE AND MAKE EFFECTIVE USE OF RESOURCES AVAILABLE WITHIN THE COUNTRY 1. Vietnams economic system: Economic system is the organized way in which a state or nation allocates its resources and apportions goods and services in the national community

(businessdictionary.com, 2009). There are three kinds of economic systems, named as Free Market Economy, Command Economy and Mixed Economy. A free market economy, also known as market economy or capitalism, has no government control over factors of production. In this type of economy, most decisions are taken through the operation of the market mechanism. Supply and demand and the ability to pay influence decision making (BPP Professional Education, 2004, p.135). A command economy does not have a private sector as all resources are owned by the government. It is one in which the fundamental economy questions; what, how, and for whom to produce, are answered by reference to state determined priorities rather than the interaction of supply and demand in the market economy (BPP Professional Education, 2004, p.140). Finally, a mixed economy has both private and public sectors. In this type of economy, individual have the freedom to set up their own business. According to the features of economic systems and the specific case of Vietnam, Vietnam has a mixed economic system. In 1986, Vietnamese government started to launch Renovation and the private enterprises have had more chance to open up their business. Therefore, the number of private enterprises is raising everyday. However, the government still takes control of some sensitive products such as electricity, petroleum, water,... and some public sectors are made up of government owned and controlled such as education, health, defense, public transport,... Although there is more freedom for the enterprises to be privatized, the existence of governments intervention cannot be denied. For example, when Vietnam suffered the influences from the global economic crisis in 2009, the government did give out economic stimulus packages to stabilize the domestic economy.

2. How economic systems attempt to allocate and make effective use of resources available within the country All societies have available quantities of productive resources which are called factors of production (or resources). They are divided into three main groups: Labor, Land and natural resources, and Capital. Labor includes all types of physical and mental power of human beings, which ranges from the raw labor power to the highly specific services ((BPP Professional Education, 2004, p.131). Land and natural resources refers to mineral

deposits, water, fish from the sea, climate and terrain. Capital mentions the economys stock of physical assets such as machinery, plant, premises and offices, and also the social infrastructure. a. The allocation of labor resources and the effectiveness of allocation

Kinds of economic activity Agriculture and forestry Fishing Mining and quarrying Manufacturing Electricity. gas and water supply Construction Wholesale and retail trade; repair of motor vehicles. motor cycles and personal and household goods Hotels. Restaurant Transport. storage and communications Financial intermediation Scientific activities and technology Real estate. renting and business activities Public administration and defense; compulsory social security Education and training Health and social work Recreational. cultural and sporting activities Activities of Party and of membership organizations Community. social and personal service activities and private household with employed persons

2008 (%) 48.9 3.7 1.0 14.0 0.5 5.3 11.0 1.7 2.5 0.5 0.1 0.5 3.8 2.9 0.8 0.3 0.5 2.0

2009 (%) 48.2 3.7 1.0 14.3 0.5 5.6 11.0 1.7 2.5 0.5 0.1 0.5 3.8 2.9 0.8 0.3 0.4 2.0

Table 4: Labor Structure in 2008 and 2009 With the population of more than 86 million, Vietnam is ranked at 13th in population. In 2009, there are 47,743,600 Vietnamese people in the labor force, increasing by about 3% compared with the previous year. As can be seen from the table above, the labor force is disposed unequally. Most of people in labor force belong to agriculture and forestry sector, accounted for 48.9% in 2008, decreasing to 48.2% in 2009. The second highest proportion is manufacturing (14.0% in 2008) which increased by 3 % in the following year. The lowest ratio is the labor

force in scientific activities and technology. This proportion remained at 0.1% from 2008 to 2009. In general, agriculture and forestry sector accounted for the greatest ratio. It is easy to understand because Vietnam is an agricultural country. However, with the trend of the global economy, the Vietnam economy has seen the changes in the mechanism of labor, increase the number of labor in building industry sector and service sector, and the decrease the number of labor in agro-forestry and fishery sector. The allocation use of labor in Vietnam is not effective, showing by the unemployment rate. According to General Statistics Office, unemployment rate in whole country has decreased from 5.31% to 4.6% from 2005 to 2009. Despite this fact, it is still an alarming number so that Vietnamese government should pay more attention to reduce it. There is also a difference between labor proportions in urban and rural areas. b. The allocation of land and natural resources and the effectiveness of allocation Countries are differently endowed with land of varying quality and also with resources like oil, coal and other mineral deposits, water, fish from the sea, the climate and terrain. Land resource of Vietnam is divided into three groups: agricultural land, nonagricultural land and unused land. Vietnam has 24,134,900 ha of natural land, including 23,277,500 ha used land (96.45%) and 857,400 ha unused land (3.55%). In used land, land for agriculture is 21,637,100 ha (92.95%), and non agriculture is 1,640,400 ha (7.05%). Vietnam has been wasting a lot of land resource which could be useful to grow provisions. Besides land, Vietnam has profuse source of water. However, the amount of water and minerals that has been exploited just accounts for a small ratio. Vietnamese government should carry out more strategies to make effective use of natural resources.

c. The allocation of capital and the effectiveness of allocation

Number of projects Total 1988 1989 1990 1991 12575 37 67 107 152 Registered capital (Mill. USD) (*) 194429.5 341.7 525.5 735.0 1291.5 Implementation capital (Mill. USD) 66945.5

328.8

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Prel. 2009

196 274 372 415 372 349 285 327 391 555 808 791 811 970 987 1544 1557 1208

2208.5 3037.4 4188.4 6937.2 10164.1 5590.7 5099.9 2565.4 2838.9 3142.8 2998.8 3191.2 4547.6 6839.8 12004.0 21347.8 71726.0 23107.3

574.9 1017.5 2040.6 2556.0 2714.0 3115.0 2367.4 2334.9 2413.5 2450.5 2591.0 2650.0 2852.5 3308.8 4100.1 8030.0 11500.0 10000.0

Table 5: Foreign direct investment projects licensed in period 1988 - 2008 Since Vietnam launched the reform Renovation, there are many foreign capital investments (FDI) and official development aids (ODA) which have been invested in Vietnam. The problem here is how to use them effectively and how to distribute them reasonably among sectors of the economy. In 2008, FDI hit a record high of more than USD 64 billion, triple the capital in 2007. Despite a number of difficulties of financial crisis, FDI in 2009 reached nearly USD 21.5 billion and it is expected to reach USD 22-25 billion in 2010. The flow of FDI into the country still remains high; however, this is not the core issue. The most important issue is how to use this capital more effectively. FDI inflows are mainly distributed to real estate industry, hotels, and restaurants (63%). There is growing concern about a number of projects designed to build golf courses, steel and cement plants, seaports, airports and industrial zones. The most important thing is how to develop them in harmony with long-term plans for local economic growth. Vietnam needs to come up with specific sanctions to ensure local agencies follow an overall plan and not grant licenses for infeasible projects or those which cause a negative impact on the environment and the socio-economic development. ODA made up of averagely 15% GDP of Vietnam. About 20% of ODA is nonrefundable aid, remain is confessional loan with favorable interest rate. ODA capital was used effectively in economic management, infrastructure & area development. However,

55% of the total committed ODA has been disbursed so far => lower than the average of ASEAN.

II. THE IMPACT OF SOCIAL WELFARE AND INDUSTRIAL POLICY INITIATIVES ON UNILEVER AND THE WIDER COMMUNITY There are two policies that have an impact on Unilever and the wider community, named as social welfare policy and industrial policy. Social Welfare Policy consist of action or procedures, that are on the part of government and institution, striving to promote the basic well-being of individuals such as financial, employment, physical and mental health care, etc. Social welfare policy seeks to protect and directly improve peoples standard of living (BPP Professional Education, 2004, p.158). The Government industrial policy might either hamper or promote the growth of new industries and it allows the government to take an active role to support investment, encourage a faster rate of economic growth in industry, and to stop the decline of manufacturing sector (BPP Professional Education, 2004, p.155).

1. Vietnam Welfare policy and its impact on Unilever and the wider community According to BPP Professional Education (2004), social welfare seeks to protect and directly improve peoples standards of living. In Vietnam, the welfare policy has been applied for everybody, especially disabled people, wounded soldiers, and the victims of dioxin. There are about 5 million Vietnamese, accounted for more than 6% of the population, are disabled. These people are treated equally to other normal ones. Vietnamese government lays down a strategy to build schools for disabled children so that they can have a chance to gain the knowledge like every student. Social health care and insurance system are two of the most significant strategies of Vietnam welfare policy. Thanks to this strategy, people, especially the poor in remote areas, can have better health service. Periodically, Vietnamese government appoints

doctors and nurses to remote mountainous areas for a campaign which provides free health care service for the poor. They also examine and deliver medicine to people for free. Insurance strategy supports people when they have got an accident or come down with diseases. However, there are some weak points in the health care system for the labor force. Employees may suffer from industrial diseases which cannot be cured at the local hospital. Lack of modern equipment and medicine are also the problems that should be paid attention to. The social welfare policy of Vietnam has impacted positively on Unilever. Employees of Unilever have medical check-up periodically in order to detect diseases as soon as possible. Workers have to face with the high risk of getting injured when they are working. The insurance strategy allows injured employees to get lump-sum payment and rehabilitation tools. Female workers receive special regulations when they are pregnant or giving birth. These welfare policies have helped the community raise the living standard, filling the gap between other classes in the society. However, Vietnam should adopt these strategies in a stricter way to ensure that everybody can receive the effect of them. 2. Vietnam Industrial Policy and its impact on Unilever and the wider community Vietnam carries out not only Welfare policy but also Industrial policy. An industrial policy is any government regulation or law that encourages the ongoing operation of, or investment in, a particular industry (Babylon.com, 2009). There are many specific Industrial policies; one of which is related to innovation. In the agricultural, it is required to grow new varieties which have high productivity. Therefore, the government invests capital in doing research on new kinds of plants and cattle. In industry, each company has to find the way to ameliorate technology in order to gain higher productivity, save time and energy. In the case of Unilever, innovation policy pushes this company to produce more and more high quality goods as well as improve the technology, invest more capital in advanced equipment... In fact, Unilever has made a lot of progressive products. For example, Surf Excel is a laundry detergent which helps washing clothes by hand in short time and it also helps us save water. Unilever has found the way to make ice cream healthier for people but still tasty. It is thanks to a new ice cream ingredient discovered by Unilever's ice cream scientists. The mysterious ingredient is called ice structuring protein.

It helps reduce the fat, sugar and calories as well as add more fruit. Now, people can eat ice cream without worrying about their shapes. By combining ISP with stabilizers, Unilever has produced a kind of ice cream which does not melt so easily. It must be great news for small children and for hot countries. Unilever also applies pioneering technology to create a unique sensual shape for Magnum ice cream with almond pieces smothered in chocolate and caramel sauce. In addition, the packs of products are usually changed in order to attract customers and reduce the materials. To the wider community, innovation policy encourages every sector to be more creative in their work to produce largest amount of goods with least amount of material and fuel in the shortest time. In fact, all every industries have tried their best to follow this important policy.

III.

THE IMPACT OF MACRO-ECONOMY POLICY MEASURES AND INFLUENCE OF THE GLOBAL ECONOMY 1. The impact of macro-economic policy Macroeconomic policy is known as the government policy aimed at the aggregate economy, usually to promote the macro goals of full employment, stability, and growth. Common macroeconomic policies are fiscal and monetary (Economic Glossary, nd). There are two common macro-economic policies: fiscal policy and monetary policy. Fiscal policy involves the use of government spending, taxation and borrowing to influence both the pattern of economic activity and also the level and growth of aggregate demand, output and employment (tutor2u, nd). Monetary policy directly affects cash flow and the economy of the country, monetary policy affects economic activity through the

four points that interest rates, exchange rates and control money supply, control over bank lending and credit (BPP Professional Education, Business Environment, 2004, p.151). These are two important policies of macroeconomic policy in Vietnam. They are an effective tool which helps the government guide the whole economy. It is obvious that fiscal policy affects every business. Fiscal policy involves taxation, government spending, borrowing and repaying debt. There are 4 types of taxes: income tax, profit tax (corporation tax), Value Added Tax (VAT), import tariff and quota. These taxes are collected in different methods (direct or indirect) such as on individual earnings, on savings, on business profits.... From May 1st to December 31st 2009, many tax rates in Vietnam were reduced. Corporate income tax will reduce 30%, VAT reduce 50%. The tax on products made of aluminum decrease from 3% to 0% (Finance Ministers circular 115/2010/TT-BTC). Vietnamese government also reduces the tax on toys which help improve the intelligent from 20% to 10%. A VAT of 10% applies on consumption goods, 5% applies on goods and services involve in agricultural production, education, health care (Government, 2008). However, this level of tax is still higher than many countries in the world. Fiscal policy impacts Unilever directly. Annually, Unilever has to pay corporate income tax for government. In the year ending December 2009, Unilever paid about VND 25 billion for corporation income tax. The corporation tax is fixed at 25% profit of the company. Unilever has also pay VAT for purchasing raw materials to produce, accounted for 1,257 million by the year 2009 (Unilever Financial report, 2009). (This amount of tax mentioned here is paid for all Unilever companies around the world). The stakeholders, including shareholders, management, and employees, have to pay income tax. The level of tax they have to pay depends on the level of salary they receive. In Vietnam, the lowest salary level at which employees have to pay income tax is VND 4 million per month. Vietnam was experiencing an economic crisis in 2009. Thanks to monetary policy, the whole economy of Vietnam escaped from being ruin. At that time, the State Bank of Vietnam had to subsidize the interest rates, postponed the time pay taxes in order to disburse. In the second quarter of 2009, GDP increased by 4,5% and reached 5,8% in the third quarter. In 2010, Vietnam government change the exchange rate between VND and

USD to 13%, 3% higher than that in the same period of 2009. This helps maintain the balance of the whole economy and subdue the inflation. Unilever has always wanted to expand the business. This means that the company needs to borrow more money from the bank. Now, the interest rate is higher. Therefore, Unilever has to pay more money to invest into the business. Not every material Unilever uses is available in the host coungtries. Sometimes the company has to import raw materials from abroad. The exchange rate rising also means that more money would be paid. Monetary policy also strongly impacts on the stakeholders. While the interest rate stays at high level, stakeholders would rather keep money in the bank than investing into business. It could be not good for the operation of the company.

2. The impact of Global Economy The economy is now dealing with the consequences of 2009 financial crisis. The depression started in the United States and then led to others countries. According to VOA news, East Asia has been hardest hit. In February, exports from China fell twenty-six percent from a year ago. The World Bank estimates that up to three trillion dollars of public and private loans in developing countries must be repaid this year. Some nations have enough foreign currency reserves, but others will struggle to find new financing to pay their existing debts (Mario Ritter, 2009).

When it comes to Vietnam, in the first quarter of the year 2009, the impacts of crisis became obvious when the GDP only increased by 3.1%. In the first eight months, the export rate of Vietnam was only 14.2% and the import rate was worse less than 28.2%. Accumulated foreign currency significantly decreased from USD 23 billion (2008) to USD 16.5 billion (August, 2009).

Growth rate and investment rate of Vietnam in the period from 1997 to 2009 As can be seen from the chart above, growth rate of Vietnam in the first quarter of 2009 is lowest in the period from 1997 to 2009 (only 3.1%). The rate of investment was only 36%, 8% less than the previous year. Although it was not a great depression, it still took Vietnam a long time to recover. Because Unilever plays a part in Vietnams economy, global economy crisis has great influence on Unilever and its stakeholder. The company has to narrow the business, cut down the expense and even the workforce. Stakeholders find it difficult to decide whether invest money or not.

CONCLUSION

In this report, the mission, values, and objectives of Unilever are identified. It is shown that Unilever create a concise mission and the company is trying their best to achieve it. In fact, Unilever has succeeded in attaining the objectives for the three stakeholders. This report also clarified the objectives of Unilevers stakeholders and the responsibilities of Unilever. Unilever should be proud of what they have done because they have achieved almost every objective and fulfilled the responsibilities. Vietnamese government has adopted many strategies in order to transfer the economy from planned economy to market economy. However, at this time, Vietnam is still a mixed economy. Although Vietnam has a rich resource of labor, land, natural resource and capital, sometimes this country has not used them effectively. Furthermore, the social welfare, industrial policies as well as the fiscal and monetary policies of Vietnam government has positive impacts on Unilever. However, with the recession on the Global economy, Unilevers operation has to face with a lot of challenge in order to survive in the economy and become the strongest brand.

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