8/17/2019 SM Sample

1/12

 

INTRODUCTION

Mankind has entered the 21st century; the century began with many significant

changes in the global business environment, such as the constantly appear of the new

technologies and the close control of the regulations on the quality management. The activity

of the organizations must be linked to the global economy in order to win in the fierce and

intense competition. In this context, every organization has new opportunities to exploit as

well as facing with multiple risks, which need to prevent and limit. Therefore, in order to

adapt to the business environment and attain long-term success, the organizations must have

strategic thinking (Bonn, 2001). It means that all the business, in general, should have a long-

term vision towards flexibility which is very necessary to ensure the survival and thedevelopment of enterprises in future business environment. In addition, according to Fiol and

Lyles (1985) the business must pay particular attention to the strategic management. In

 practice, the strategic management has been implemented by many organizations for a long

time. This is an important tool that helps many organizations succeed and achieve long-term

efficiency in the development process. There are three processes related to the strategic

management; namely strategic planning, strategic implementation and strategy evaluation

(Mintzberg, 1990). This tool is used to ensure that the businesses take advantages of every

opportunity and restrict or eliminate every threat. It is believed that implementing the plan is

the most difficult part of strategic management. The aim of this essay is to analyze the

implementation process of the strategic management at Asia Commercial Joint Stock Bank.

From that point, it mentions what kinds of difficult and how the organizations could

overcome it.

STRATEGIC MANAGEMENT OVERVIEW

There are many different concepts of strategic management; however, the most

general acceptance definition is the process of studying the inside and outside environmental

situation, implements and supervises the implementation of strategic decisions in order to

achieve the objectives which set forth by businesses (Bracker, 1980). The basic content of

strategic management is divided into 3 phases; namely: strategic planning, strategic

8/17/2019 SM Sample

2/12

implementation and strategy evaluation. However, in actual operation of the organizations,

the level of emphasis on each stage of strategic management is different (Smith, Mitchell, &

Summer, 1985). It is the relative differences between companies in the same industry, the

operating companies in different sectors, and the companies of different countries. For

example, strategic management was applied in American corporate earlier than in the

Japanese company. While giant enterprises in America are mainly focused on the long-term

strategies, Japanese companies usually attach special importance to the short-term and

medium-term plans. There are numerous differences in the actual use of strategic

management in business. The reason is strategic management which is a scientific approach

to help businesses achieve a future goal by setting a direction. And there are many directions

for organizations to attain a goal; consequently, there are many differences in the actual use

of strategic management.

The first part of strategic management is strategic planning. Strategic planning

 process is aim to proposed necessary tasks of organization (Below, Morrisey, & Acomb,

1987). It also studies the main factors of the external and the internal business environment

and assists organizations to build long-term goals. In terms of the external environment, this

is a system of complex factors. The variations of these factors are beyond the control of the

 business, but strongly influence to the corporate strategy. Therefore, when analyzing the

elements of the environment, the businesses need to consider the nature of each factors and

the interaction between the factors in order to deal with the situations in a flexible manner. At

the same time, the organizations need to advance effective solutions to maximize

opportunities and limit or prevent the risks, in order to improve efficiency and reduce the loss

of the strategic management process.

The external environment includes two factors: there are macro environment and

micro environment. Regarding to the macro environment, this environment involves many

indicators such as political and legislation environment, economic environment, social and

cultural environment, and the natural environment (Osborn & Hunt, 1974). The political and

legislation environment encompasses the strategies and policies of government and the

current legal system. The states create of a business environment based on the law and state

management of the economy. The enactment of the quality legal system is the first condition

8/17/2019 SM Sample

3/12

to ensure a fair business environment for organizations. Consequently, a small change in the

legal system, such as tax, investment, and so on will affect production and business activities

of the enterprise. The problem for businesses is to understand the law and put forward timely

solutions to deal with the unexpected event relate to the law. To turn to the effects of political

environment, the government has a great role in the economy through economic policy,

fiscal, and monetary programs (Ring, Lenway, & Govekar, 1990). The government role is

not only the customers, but also could be the providers for the organizations.

As regards to the economic environment, this is a very important factor to attract the

attention of all administrators. The impacts of this factor are directly affecting the

organizations. The environment developments always contain potential opportunities and

threats. It also influences the strategy of every business. Clarida, Galı and  Gertler (1998)

noted that here are several elements of economic environment that the managers should

consider, such as the growth rate of the economy, the interest rate and the interest rate trends

in the economy, the monetary policy and the exchange rate, the tax system and tax rates, and

inflation.

About the social and cultural environment, it includes norms and values standards,

which are generally accepted and respected by society or a particular culture (Johnson,

Lenartowicz & Apud, 2006). The change of the socio-cultural factors partly a consequence of

the long-term impact of other factors. Thus it usually occurs slower than other factors. One of

the features that administrators should be noted, the impact of socio-cultural factors is often

difficult to identify compares to other factors. Moreover, the sphere of influence of the socio-

cultural factors is often extensive. Correspondingly, understanding about cultural - social will

 be very important for decision makers in the process of strategic management in the

enterprise. There are some socio-cultural factors has strong influence to the business. For

instance, that could be the concept of ethics, aesthetics, lifestyle, and career; the customs,

 practices and traditions or the interests and priorities of the society, and the level of

awareness and education of society. Noticeably, population is an important factor that affects

the cultural environment. The changes in the population will impact the cultural environment

as well as the business strategy of the organizations. The information about population will

 provides important data for managers in planning product strategy, market strategy, and

8/17/2019 SM Sample

4/12

distribution and advertising strategy. Some important aspects of population factor that the

managers should care about are: the total population of the society, the growth rate of

 population, the structure and trends of population changes, the life expectancy and fertility

rates, and the shift of population between regions.

With regard to the natural environment, it include geographical location, climate,

natural scenery; land, rivers and sea, the nature resources, water, and air. It is believed that

natural environment has vital role on human life. It is also an input of many economic

sectors, such as agriculture, mining industry tourism, and transportation. In many cases, the

natural environment becomes a very important factor to form the competitive advantage of

 products and services. However, in recent decades, humanity is witnessing the severe

degradation of the natural condition. For example, the growth of the environmental pollution,

the depletion and scarcity of natural resources, and the devastation of the ecological balance

(Pearce & Turner, 1990). In this context, the business strategy of the organizations should

save and use the natural resources efficiently. In addition, the organizations, in a way,

 prioritize the development of production which ensures the maintenance, regeneration, and

helps to strengthen the natural conditions. Finally, it should promote the research and the

development of technologies in order to protect the ecological environment as well as

minimize the impact of environmental pollution caused by the operation of the organizations.

In terms of the micro environment, it is based on the Porter’s five forces analysis,

which includes five main indicators; namely: threat of new entrants, degree of industry

rivalry, bargaining power of suppliers, bargaining power of buyers, and substitute power

(Porter, 1979). Threat of new entrants involves the companies which have the ability to

compete in the present of in the future. The presence of potential competitors also increases

the competition among the organizations in the industry. As regards the degree of industry

rivalry, the study of competitors is very important for enterprises. The adequate information

about competitor in specific market area is the foundation for organizations to identify the

mission and plan appropriate strategies. In the context of the business environment is

increasingly complex and volatile, sometimes, the organizations have to cooperate for mutual

development with competitors. But sometimes, it is important to vanquish competitors to

reduce the threat.

8/17/2019 SM Sample

5/12

The bargaining power of buyers’  indicator of the micro environment refers to the

individuals and organizations which have demand of products or offer of services (Porter,

1979). The relationship between enterprises and customers is the relationship between buyers

and sellers. Customers have a very strong influence in business strategy and decide the long-

term development of enterprises. The customer is always the top concern of the enterprise.

All the efforts of enterprises are target to customers  in order to attract customer’s attention,

stimulate customer’s  interest, and promote customers to use products or services of the

 business. When researching the business environment for strategic planning, the information

related to the customers will be analyzed by the organizations. Thereby, the managers could

identify target customers, develop policies and action plans to satisfy the needs of customers.

On the other hand, understanding about customers assists enterprise to improve the

marketing activities, consolidate long-term relationships with existing customers.

The bargaining power of suppliers implies that the enterprise or the individuals have

the capacity to produce and supply input factors, such as machinery and equipment, raw

materials, spares and replacement parts, or transportation (Porter, 1979). The quantity,

quality, variety, price, etc of the input factors are directly affect the organizational activity.

The suppliers could put pressure on the operational of organizations in some cases. For

example, the company's business is not important to the provider or the quantity purchased

 by company which has a small proportion of the supplier's output. Sometimes, the small

number of providers or the difficulty in finding alternative providers could raise the problem.

Thus, the information about suppliers is essential for the managers to create a long-term

 business strategy. The suppliers’ information has important significance for organizations to

find reliable provides. In addition, it will assist organizations to take advantages of

opportunities and have adaptation measures to prevent risks.

As regards to the substitute power, any product could be interchangeable with one

another. Therefore, it will lead to a competitive market. When the price of the main product

increases, it will encourage the use of alternative products and vice versa. In order to reduce

the pressure of substitute products, the businesses will require specific solutions. For

example, the organizations should always pay attention to the difference strategy, or put

forward solutions to improve product quality to compete with alternative products.

8/17/2019 SM Sample

6/12

The internal environment includes elements that are in the operation and directly

influenced the strategic management of the organizations. Every business has different

internal environment and it changes over time. Therefore, analyzing the internal environment

is necessary for all types of organizations, and it helps organizations recognize its strengths

and weaknesses related to competitors. At the same time, it helps administrators grasp at

opportunities in each period. In addition, analyzing the internal environment  makes the

employees understand its role and position in the operational process (Lings, 2004). Besides,

overseeing and analyzing the internal environment helps businesses improve communication

within the organization. In the process of analyzing the internal environment, the

administrators will be listed the advantages that the businesses can promote and the

weaknesses that the businesses need to diminish. Thus, in order to manage business, the

managers need timely grasp the core information about the resources in order to 

exploit

market opportunities and reduce weakness to avoid threats. The analysis of the internal

environment is done through the following steps.

Resources of an enterprise includes: human resources, physical assets, and intangible

resources. This is the decisive factor to performance of the business and decides the success

or failure in the marketplace. In each period, each resource could change over time.

Accordingly, the managers at all levels need information about existing resources to aim to

create advantages in the future.

Depending on the scale of operations, the division of the department is different. It is

consistent with the mission and the  strategies  in each period. There are several typical

departments of organizations, such as Marketing, HR, finance - accounting, research and

development, and so on. Each department has its own tasks but has close relationship with

each other. Therefore, analyzing these departments assists managers monitor the evolution of

the internal environment to fix the problems in time. Simultaneously, the managers could

identify the strengths and weaknesses in each area compared to competitors in order to have

competitive strategy and operational policies to adapt to the business environment.

8/17/2019 SM Sample

7/12

STRATEGIC IMPLEMENTATION IN ASIA COMMERCIAL JOINT STOCK BANK

Implementing the strategy is an important step of the strategic management. In

 practice, enterprises often spend too much time on selecting strategic decisions. Therefore,

according to Charan and Colvin (1999), the failure rate of strategic implementation is about

70 to 90 percent. During the implementation phase, the orientation plan will be transformed

into action. In a word, developing a strategy which is appropriate with the business

environment is very important. However, implementing the strategy  is also an important

factor to ensure the success of the strategy. Naturally, implementing strategy is the process of

transforming the planned strategy into specific actions of the organization. Strategic

implementation requires a lot of effort, co-ordination of all departments and individuals

throughout the process. Thus, it is more difficult and complex than strategic planning.

There are several principles of implementing the strategy. First of all, the business

 policy must be built to aim to implement strategic goals. Besides, in case the business

environment is not too volatility, the plans must be consistent to fulfill the strategic

objectives (Al-Mashari, Al-Mudimigh, & Zairi, 2003).

With the mission “Bring Prosperity to Customers” ( History of ACB Bank , n.d), Asia

Commercial Joint Stock Bank has chosen the diversification strategy and the differentiation

strategy. Regarding to the diversification strategy, the bank is constantly investing in the

 promotion of products and services to customers. Apart from commercials are constantly

appearing on TV, outdoor advertising, band roll, and so on. Asia Commercial Joint Stock

Bank usually organizes a lot of charitable activities, for instance, a fundraising for the poor or

for the child disability. Up to now, the organization has approximately 1,700 dealer banks

and bank branches in over 120 countries and territories ( History of ACB Bank , n.d). In

Vietnam, is is tight relationship  with all banks which are operating in Vietnam. The

enterprise is also constantly increasing market share and sales through improved products

and services. Some of the represent products and services are transfers, payment services, or

 billing services to customers. From 2001, customers can use the service ACB- iBanking with

function to retrieve information and perform a transaction.

In term of the differentiation strategy, Asia Commercial Joint Stock Bank always

takes the initiative in applying the new technologies the business. Specifically, Asia

8/17/2019 SM Sample

8/12

Commercial Joint Stock Bank was the first bank in Viet Nam that allows customers to send

money in one place and make withdrawals at any point in the system transactions nationwide

(Business Profile & Compliance, n.d.). Automatic bill payment service and salary payment

service are another typical example of the strong growth of retail products for individual

customers. And most recently, Asia Commercial Joint Stock Bank has officially launched the

services Securities-Online. That is an online service which connects investor’s deposit bank

accounts with securities investment accounts at securities firms.

There are five elements of the business strategy implementation model; namely:

Leadership, People, Culture, Systems, and Structure. With regard to the system element, the

organizational system of Asia Commercial Joint Stock Bank includes shareholders, board of

control, risk management committee, strategy committee, general manager and executive. In

addition, it also includes Central Credit Committee and department at the head office and the

 branch network ( History of ACB Bank , n.d). The advantages of this system help the division

have deep specialization. Moreover, each deputy general manager will undertake a specific

department. Thus subordinates can correctly identify the work and duty of its department.

Besides, each bureau undertakes specific functions; hence it is easier to manage.

 Nevertheless, all the departments just do its specific work. As a result, it is difficult to

coordinate among the departments. It could also lead to the failure on the achieving

organizational goals.

Regarding to the culture element of the business strategy implementation model, the

organization has a strong corporate culture, therefore the employees have a strong attachment

to each other. Culture of Asia Commercial Joint Stock Bank is expressed by the vision and

missions that businesses has defined. Corporate culture in organizations could easily

recognize through logos, slogans, brochures, decorations, and the style of staff. The

employees of Asia Commercial Joint Stock Bank are highly appreciated by the professional

style.

The chairman of Asia Commercial Joint Stock Bank is Mr. Tran Hung Huy and the

general manager is Mr. Luong Van Tu. Up to now, the organizations have total 9 deputy

general directors of the company, including Mr. Julian Fong Loong Choon coming from

Malaysia (Business Profile & Compliance, n.d.). As can be seen, the background of the top

8/17/2019 SM Sample

9/12

manager is diversity. Thus, board of directors has rich experience and sharp.  With the high

quality administrators, Asia Commercial Joint Stock Bank has a great competitive advantage

compared to other banks. This is a favorable condition for the developmental effort of the

organization. Board of directors has striven to properly implement the tasks outlined. Thanks

to this, it contributes significantly to the overall success of the enterprise. With the

outstanding performance, the board of directors has confirmed the leading role in the

operation of the bank.

Asia Commercial Joint Stock Bank has identified that the people factor is the key

issue to ensure the success of the operation enterprise. As a result, the recruitment and the

remuneration policies to attracting the best employees have been identified as a key task. In

addition, the organization not only creates good working conditions but also intends the

incentives for its staff. The incentives could be salary, bonus or giving shares to employees.

Moreover, Asia Commercial Joint Stock Bank also reserved 5% shares for key employees to

aim to attract and maintain qualified personnel (Business Profile & Compliance, n.d.).

Furthermore, the foreign partners play an important role in training the staffs.

Power structure in Asia Commercial Joint Stock Bank is equally distributed. This

helps in promoting intellectual and relation of senior personnel in the management and

development of organizations. Furthermore, the employee from the foreign bank holds most

of the positions in senior personnel. Thus, the organization could benefit from the experience

in banking and financial sector of those employees.

Board of directors in Asia Commercial Joint Stock Bank has some limitation in

making decisions based on the diversity of the director’s background. The lack consistency in

making decisions costs more time to solve the problem. Communication can also be viewed

as a difficulty, especially language barriers. In addition, looking for different ideas can make

the decision-making process become more complex and inconsistent.

In addition, the strategy of Asia Commercial Joint Stock Bank is very vague, cannot

express its own strengths and can be imitated easily by competitors.

To meet the demands of growth and development, the organization needs strategies

and standard procedures in recruiting, training and managing employees. Besides, it should

8/17/2019 SM Sample

10/12

improve the quality of human resources by deploying training program for staff as well as

strengthen the organization. In addition, the recruitment needs to be transparency and make

the targets more in line with job requirements. And it is important to build suitable

remuneration which is commensurate with the employee's contribution to the bank to

 promote job performance of employees.

Today, the quality of service is also considered one of the most important criteria to

attract customers. To improve service quality, Asia Commercial Joint Stock Bank needs to

improve the transaction procedure towards convenience and friend with customers, and make

customers feel comfortable when business with enterprise do.

Regarding to the culture factor, the organization should set up a plan to maintain

organizational character. Up to then, the employees will desire to devote to the bank and

assist enterprise to achieve the mutual goals.

CONCLUSION

In conclusion, the strategic management has been implemented by many

organizations in order to ensure the survival and the development of enterprises. This is an

important tool that helps many organizations succeed and achieve long-term efficiency in the

development process. However, it is believed that the strategic implementation is always the

most difficult step in the strategic management process. And in Asia Commercial Joint Stock

Bank, the five elements of the business strategy implementation model have been effectuated

well. Nonetheless, board of directors in Asia Commercial Joint Stock Bank has some

limitation in strategy implementation. And it is necessary for the organization to solve all the

limitation to aim to sustainable development.

8/17/2019 SM Sample

11/12

REFERENCES

Al-Mashari, M., Al-Mudimigh, A., & Zairi, M. (2003). Enterprise resource planning: a

taxonomy of critical factors. European journal of operational research, 146(2), 352-364.

Below, P. J., Morrisey, G. L., & Acomb, B. L. (1987). The executive guide to strategic planning. 

San Francisco: Jossey-Bass.

Bonn, I. (2001). Developing strategic thinking as a core competency. Management Decision,

39(1), 63-71.

Bracker, J. (1980). The historical development of the strategic management concept. Academy of

 Management Review, 5(2), 219-224.

Business Profile & Compliance. (n.d.). Retrieved October 13, 2014 from http://www.acb.com.vn

/en/index.php?option=com_content&view=article&id=73&Itemid=81

Charan, R., & Colvin, G. (1999). Why CEOs fail it’s rarely for lack of smarts or vision. Most

unsuccessful CEOs stumble because of one simple, fatal shortcoming. Fortune Magazine,

21. 

Conover, P. J. (1984). The influence of group identifications on political perception and

evaluation. The Journal of Politics, 46 (03), 760-785.

Clarida, R., Galı, J., & Gertler, M. (1998). Monetary policy rules in practice: some international

evidence. European economic review, 42(6), 1033-1067.

Fiol, C. M., & Lyles, M. A. (1985). Organizational learning. Academy of management review,

10(4), 803-813.

 History of ACB Bank . (n.d.). Retrieved October 13, 2014 from http://www.acb.com.vn/ 

Johnson, J. P., Lenartowicz, T., & Apud, S. (2006). Cross-cultural competence in international

 business: Toward a definition and a model. Journal of International Business Studies,

37 (4), 525-543.

Lings, I. N. (2004). Internal market orientation: construct and consequences. Journal of Business

Research, 57(4), 405-413.

Mintzberg, H. (1990). The design school: reconsidering the basic premises of strategic

management. Strategic management journal, 11(3), 171-195.

Osborn, R. N., & Hunt, J. G. (1974). Environment and organizational effectiveness.

 Administrative Science Quarterly, 231-246.

Porter, M. E. (1979). How competitive forces shape strategy .Boston: Harvard Business Review.

http://www.acb.com.vn/http://www.acb.com.vn/http://www.acb.com.vn/http://www.acb.com.vn/http://www.acb.com.vn/http://www.acb.com.vn/http://www.acb.com.vn/

8/17/2019 SM Sample

12/12

Pearce, D. W., & Turner, R. K. (1990). Economics of natural resources and the environment .

JHU Press.

Ring, P. S., Lenway, S. A., & Govekar, M. (1990). Management of the political imperative in

international business. Strategic Management Journal, 11(2), 141-151.

Smith, K. G., Mitchell, T. R., & Summer, C. E. (1985). Top level management priorities in

different stages of the organizational life cycle. Academy of management Journal, 28(4),

799-820.