31/03/2024

PROJECT APPRAISAL

Chapter 5
MANAGEMENT ORGANIZATION AND
PERSONNEL OF THE PROJECT

Assoc. Prof. Dr. Tien Dung Khong

E: ktdung@ctu.edu.vn
P: 0939 006 222

Recall
• Organizing the drafting of the investment project
• Organizing the appraisal of the investment project
• Market analysis of the project
• Technical analysis of the project
• Organizing management and personnel
• Financial analysis of the project

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Contents
• The requirements of organizing management and personnel
• The types of organizational structures
• Estimation of personnel and remuneration

The significance of the organization of

management and personnel
• Since looking for investment opportunities → setting up a feasible
project → managing operation
• The project's operations depend on the organization, management,
and the ability of the members involved

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Requirements of the organization of

management and personnel
• Legal: legal documents.

• Suitability:

- Organizational structure,

- Number and structure of employees.

• Compacting but effectiveness

The types of
organizational
structures
 Simple structure
 Functional structure
 Vertical structure by function
 Vertical structure by product, geography, customer
 Matrix structure

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However,…5 or 7 or
even more
• https://creately.com/blog/dia
grams/types-of-
organizational-charts/
• https://vncmd.com/chuyen-
de/nhan-su/co-cau-to-chuc/
• https://fastdo.vn/co-cau-to-
chuc/
• https://gapowork.com/blog/c
o-cau-to-chuc-nao-phu-hop-
voi-doanh-nghiep-cua-ban

 Simple structure
• Advantages:
– The simple and dynamic structure
– Small, highly centralized, and flexible organization
– Direct and fast information
– Less trouble between parts
• Drawbacks:
– Responsibility and obligation are not high
– Due to lack of regulation, it is possible to act individually
– Fewer opportunities for promotion

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 Functional structure

Director

Functional Functional Functional

ManagerA Manager B Manager C

Workshop Workshop Workshop

Foreman 1 Manager 2 Manager 3

 Functional structure
• Advantages :
– Using specialists to meet the complexity of the expertise
– Concentrating capacity in intensive activities
• Drawbacks:
– Many commanders lead to be easily contradict
– Difficult to coordinate between departments
– Distributing responsibility, weak individual dynamism

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 Vertical structure by function

Head of Department of
Organization and Administration

Head of Department of
EquipmentAdministration

Director
Head of Department of
Busines

Head of Department of
Finance

Head of Department of
Technique

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 Vertical structure by function

• Advantages :
– Centralized decision-making
– Promoting expertise talents
– Well coordination with the specialist
– Be easy to recruit expertise
• Drawbacks:
– Difficulty in cooperation and communication between departments
– Spending time to resolve conflicts between functions
– Difficult to have common standards for functions
– Difficult to control and evaluate each functional department

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 Vertical structure by product, geography, customer

Director

Workshop Workshop Workshop

Foreman 1 Foreman 2 Foreman 3

Leader

Leader

Leader
Leader

Leader

Leader
Leader

Leader
Group

Group

Group
Group

Group

Group

Group

Group
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 Vertical structure by product, geography,

customer
• Advantages :
– Focusing on a specific product or market
– Easy management decentralization
– Opportunities to train and develop administrators
– Clear responsibility with the results of each department
• Drawbacks:
– Increase in management costs
– There are many levels of management so information can be misleading
– Managers tend to focus on short-term profits, less interested in long-term activities.

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 Matrix structure
President

V.P. Human V.P.

Resources V.P. Finance V.P. Business V.P. Supply Technique

Project
Management A

Project
Management B

Project
Management C

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 Matrix structure
• Advantages:
– Be active and creating a good cooperative relationship
– Efficient use of resources
– Encouraging and creating employees’ participation
– Allowing more people to make decisions
• Drawbacks:
– A disagreement between managers across horizontal
– Be easy to appear informal relations
– Decreased performance due to many managers

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BUILDING THE ORGANIZATION

STRUCTURE OF THE PROJECT
Factors affecting the organizational structure:
• Business environment
• Purpose and operated function of the project
• Technological factors
• Project scale
• Human Resources
• The legal form of project

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ESTIMATION OF PERSONNEL AND EMUNERATION

Personnel Planning
• Indirect personnel:

- Compact and incremental to full capacity

- Be competent and professional

• Direct production workers:

- Norms by time or work

- Based on machine standing norms

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ESTIMATION OF PERSONNEL AND REMUNERATION

Recruitment and Training
• Internal labor force

• Does the external professional labor source meet the project?

• Are the procedures for recruitment, dismissal, salary regime, bonus,

benefits, working regime appropriate?

• Determination of the appropriate training options

https://employers.glints.com/vi-vn/blog/cac-hinh-thuc-tuyen-dung-nhan-su/

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ESTIMATION OF PERSONNEL AND REMUNERATION

Salary
• Main Salary
• Allowances: position, seniority, overtime, working, clothing, location, family,...
• Items included in salary : (23.5% of salary fund)
– Social insurance (Enterprise 17.5%, employee 8%)
– Health insurance (Enterprise 3%, employee 1.5%)
– Labor union fee (Enterprise 2%)
– Unemployment insurance (Enterprise 1%, employee 1%)

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ESTIMATION OF PERSONNEL
AND REMUNERATION
Method of salary payment
• Salary for time (difficult to determine norms)

• Product salary:

– Individual product salary

– Collective product salary

– Progressive product salary

https://amis.misa.vn/11340/cac-hinh-thuc-tra-luong-trong-doanh-nghiep-
pho-bien-nhat/

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ESTIMATION OF PERSONNEL AND

REMUNERATION
Method of salary payment

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