Lecture 2

Purposes, Size and

Scope of business
organization
 Contents

I. Purposes of business organization

II. Size of business organization
III. Scope of business organization
 In-class activity

Pick up 1 company (regardless the nationality) and explain the following

requirements:
1. Finding out the Vision, Mission, Value (find out and cite)
2. Objectives: Economic and Social objectives
3. Some business activities in the past or present to prove the company
keeps on track with the objectives, vision, mission and value
4. Size of the company: analyze the capital and employees
5. Scope of the company: analyze the target customer and geographic
markets
I. Purposes of business
organization
What is this? from GREENWICH
Example of our FPT education
 Vision, Mission
and Planning
• Vision statement
– Setting out the strategic intentions
– Can take many forms
• Mission statement
– Outlining the specific role that the organization plans to fulfill over the
long term.
• Planning
– Plans should outline the fulfilment of the organization’s mission
– Evaluation and screening
– Implementation

8
 Goals and
Objectives

• Goals
– Intentions behind decisions or actions, the states of mind that drive
organizations to do what that do
– Applying to shorter time frame, still non-specific and not quantified
– Operational and non-operational goals

• Objectives
– Setting out more specifically the goals of the organization, the aims to be
achieved and the desired results.
– Primary and secondary objectives

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 Corporate
objectives
1. ECONOMIC objectives:
2. SOCIAL
–Profit maximization objectives
–Product development
= Responsibilities of
–Diversification organization
–Brand name
 1. ECONOMIC objectives in NEAR FUTURE

Profit maximization
 Keys: “con số, % tăng”
Product development
 Keys: “nâng cấp, đầu tư thêm, đổi mới, công nghệ”
Diversification
Keys: “đầu tư mới, hợp tác, đa dạng hóa, lĩnh vực mới, mở rộng …”

Brand name
 Keys: “thương hiệu, giá trị thương hiệu, nổi tiếng, phổ biến, yêu thích,
marrketing…”
 2. SOCIAL objectives in
NEAR FUTURE

= Responsibilities of organization

Keys: từ thiện, quỹ, chương trình miễn

phí, ủng hộ, xanh, môi trường
 Corporate objectives

• Trade-off between objectives

– Some objectives might be achieved at the
expense of others
 Social responsibilities

The social responsibility of an organization

may be defined as the obligations has
towards the people and the environment in
which the company operate.
 Different types of responsibilities

Duty or obligation in order to indicate that they oblige

us in the strictest sense, is the responsibility not to
cause harm to others.

To prevent harm even in those cases where one is

not the cause.

To do good (Volunteer and charitable work)

Measuring Objectives
 Measuring objectives ?

The balanced scorecard: (Thẻ điểm cân bằng)

• Set of measures that gives top managers a fast but
comprehensive view of the business
• Helping managers to look at business from four
perspectives
–Financial perspectives
–Customer perspective
–Internal business processes
–Innovation and learning
http://quantri.vn/dict/details/9806-dinh-nghia-khai-niem-the-diem-can-bang-
Example of
Balanced
scorecard
II. Size of business
organization
 Organizations by size
• There are various definitions for statistical purposes, depending
upon the industry being considered, on the grounds that what is
small in one industry might be large in another.
• In Vietnam, organization size can be determined by the amount
of capital, revenue or the number of employees
• The EU in 1994 recommended to its members that they use ‘less
than 250 employees’ as the definition of a small to medium-sized
enterprise (SME)
Organizations by size in UK
Organizations by size in Vietnam

• According to General Statistics

office of Vietnam, in 2017, there
are more than 10,000 large firms,
which is 29% more than 2012
• Compare to 2012, the number of
small and medium size firm
increase 23.6% and 21.2%
respectively.
• The number of micro size firm
spiked to 74% which is 65.5%
more than 5 years ago
 Differences between large
companies and SMEs

Large companies SMEs

Objectives and Goals Profit growth, long term Survival and short term

Market share Often medium to large Small

Profit share Competitive Mixed result

Tend to have high growth but

Growth Depend on the company’s life cycle
constrained by access to finance

Sustainability Mixed result Mixed result

 Size of organization
• Size of organization is divived into:
- Small
- Medium
- Large
• Based on three aspects:
– Size of Capital ($) (see Balance sheets and Income statements)

– Size of physical capacity (building, vehicles, equipments,

capacities of equipments...)

– Numbers of employees

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 How to evaluate the size of firm
on capital aspect?

• Analyse total Assets (tổng tài sản)

• Analyse total Liabilities (Tổng nợ)
• Analyse total Owner Equity (Tổng vốn chủ sở hữu)
 What is owner equity?

• Owner equity (Vốn chủ sở hữu) = Common stock

(cổ phiếu phổ thông) + Retained Earnings (lợi
nhuận giữ lại, không phân phối cho cổ đông)

• Total Assets (tổng tài sản) = Total Liabilities (Tổng

Nợ) + Owner equity (Vốn chủ sở hữu)
Balance sheet
 Income
statement
 Net income

• Income before tax (lợi nhuận trước thuế) =

Revenue (doanh thu) – Cost (chi phí)

• Net income (lợi nhuận sau thuế) = Income

before tax – Corporation tax (thuế thu nhập
doanh nghiệp)
Distribution of Net income
Net Income (Lợi nhuận sau thuế)

9%
10%

Retained earnings
23% 58% Investment Funds
R$D Funds
Dividends
III. Scope of business
organization
 Scope

• Scope of organizations is classified based on:

1. Geographic locations/ markets: name the countries/ provinces in
one country if as a local company, where the chosen company is
running a business.

 Main Market: Bring most profit to company

2. Target customers: Explain characteristics of the customer: gender,

age, religion, race, location…
 Geographic market

• Name the market according to – - Domestic:

provinces
- International: countries, areas

• If a lot, name 10 at maximum

 The market which bring
most profit
• Most profit = most revenue

• 1. According to PLACE  search the revenue of each place, even

revenue for International and Domestic are still acceptable

• 2. According to PRODUCT  find out which place the product is

distributed most

• 3. According to DISTRIBUTION of braches  find out which place

has branches most  suppose the most branches place is the
most profit place
Apple’s Market
share
https://brandongaille.com/18-apple-
target-market-demographics/
 Target customer

• 1. In general, for ALL product

• 2. According to 1 specific PRODUCT

Age, gender, religion, location, favorite,

race, wage….
THE END