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Table of Contents

Introduction............................................................................................................................................. 2

Major Findings........................................................................................................................................ 3

Task 1. Explain how economic systems attempt to allocate resources effectively............................. 3

1. The way economic systems attempt to effectively allocate f irms resources:....................... 3

2. Vietnama sociali st or ientated country and its objective to transform f rom an

agricul tur e to a modern industri al countr y................................................................................... 6

Task 2. Assess the impact of fiscal and monetary policy on businesses organizations and their

activities.............................................................................................................................................. 7

1. Fiscal policy............................................................................................................................ 7

2. Monetary policy:.................................................................................................................. 10

Task 3. Evaluate the impact of competition policy and other regulatory mechanisms on the

activities of a selected organization.................................................................................................. 13

Task 4. Explain how market structures determine the pricing and output decisions of the business18

1. The market structure that Tr uong Thanh Furnitur e Corporation competing i n.............. 18

2. The pricing and output decisions determination under market structure......................... 20

Task 5. Illustrate the ways in which market forces shape organizational responses using a

range of examples............................................................................................................................ 24

Task 6. Judge how the business and cultural environments shape the behavior of a selected

organization....................................................................................................................................... 29

Task 7. Discuss the significance if international trade to Vietnamese business organizations......... 32

Task 8: Analyse the impacts of global factors on Vietnamese business organisation...................... 37

1. Economic.............................................................................................................................. 37

2. Social impacts:..................................................................................................................... 38

3. Environmental degradation................................................................................................. 38

Task 9: Evaluate the impact of policies of the European Union on business organisation............... 40

1. EU Social Char ter:............................................................................................................... 40

2. Single European Market...................................................................................................... 40

Conclusion............................................................................................................................................ 42

Reference.............................................................................................................................................. 43

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Introduction

Truong Thanh Furniture Corporation (TTFC) is a Vietnamese business located in Tan UyenDistrict, Binh Duong Province which is set up in 1993 and works on growing forests and

processing and exporting wooden products in Vietnam. Companys products consist of

indoor, outdoor, floorings and others which are mainly exported to markets such as US, EU,

Japan, Australia and local customer via their distribution through Vietnam with seven subsidy

companies and, more than 1,400 employees and total equity of US$34 million. From the

beginning, the company has already had clear mission that it will provide good quality

products with competitive prices, on time delivery, non - stop innovation and good services

for customers. In this report we are going to explain and evaluate domestic and foreign

factors which are related and impact to the business activities as well as discussing, analysing

in order to understand the nature of natural environment in which TTFC operated. Besides,

we are going to find out the behaviour of the company in its market environment and assess

the significant of the global factors that shape Vietnamese business activities.

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Major Findings

Task 1. Explain how economic systems attempt to allocate resourceseffectively

1. The way economic systems attempt to effectively allocate firms resources:

One of the most important elements as well as the factor that every enterprise has to care

about when running a business, is deciding whether it is doing the business under what kind

of market systems. In the current economy, there are three kinds of economic systems that are

basically analysed in the table below:

Types of

Economic

Systems

Definition Who owns

the

resources

Who

make

economic

decisions

The role government plays in

system

Free

market

economy

The decisions are carried

out based on the activity

structure of the market.

Supply, demand and the

payment ability are 3

important elements that

affect the business

decisionmaking. The

government regulation

does not have any

influence in making

decisions.

The

government

and the

enterprises.

The

customers.

Make sure that the market

forces invisible hand can be

freely carried out through the

free price system.

Command

economy

The decisions are taken

under the control of

central planning

committees. The

government plays an

important role in

The central

committee

decides the

target level

as well as

the

The

workers

and the

consumers

at the

enterprise-

The state controls the running

of the economy by deciding

what, how and for whom to

produce goods.

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controlling the goods

produced, the quantity of

them as well as the price

and who to deliver. The

members of society all

contribute to the products

and services of the nation.

composition

of output.

level.

Mixed

economy

This economic system has

thestate andprivate

sector direct theeconomy

and the characteristics of

bothmarket

economies andcommand

economies.Normally,

mixed economies are

known asmarket

economies with

strong monitoring, and

most of them feature a lot

of enterprises carried out

by government and

governmental provision

ofpublic products.

The

government.

The

market

forces, the

public

owner and

the

welfare

sector.

The government protects the

public, supplies maintenance

ofemployment standards,a

standardizedwelfare system,

andmaintenance of

competition.

Based on the real situation of Vietnam economy, in 1986, our country has carried out an

economic reform called The Renovation. The objective of it is tobuilding a socialist-

oriented market economy. Since that time, Vietnam has followed the economic line to shift to

the mixed economy which uses both directive andindicative planning.Truong Thanh

Furniture Corporation, as a large domestic Company in Vietnam has followed the trend and

also supports the mixed economic system. This kind of economic system, however, has some

pros and cons, which are shown as below:

Advantages:

http://en.wikipedia.org/wiki/State_(polity)http://en.wikipedia.org/wiki/Private_sectorhttp://en.wikipedia.org/wiki/Private_sectorhttp://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Public_goodhttp://en.wikipedia.org/wiki/Employment_standardshttp://en.wikipedia.org/wiki/Welfarehttp://en.wikipedia.org/wiki/Competition_lawhttp://en.wikipedia.org/wiki/Competition_lawhttp://en.wikipedia.org/wiki/Indicative_planninghttp://en.wikipedia.org/wiki/Indicative_planninghttp://en.wikipedia.org/wiki/Competition_lawhttp://en.wikipedia.org/wiki/Competition_lawhttp://en.wikipedia.org/wiki/Welfarehttp://en.wikipedia.org/wiki/Employment_standardshttp://en.wikipedia.org/wiki/Public_goodhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Planned_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Economyhttp://en.wikipedia.org/wiki/Private_sectorhttp://en.wikipedia.org/wiki/Private_sectorhttp://en.wikipedia.org/wiki/State_(polity)

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- The producers and the customers have the power to select what to produce as well

as what to consume but production and consumption among harmful products and

services can be prevented by the government.

- The social cost of business activities can be reduced by carrying out costbenefit

analysis as set up by the government.

- Monopolies may still exist but they are controlled under governments close

supervision.

- A mixed economy may have less income inequality rather than the same situation

of Market economy by the role of government.

Disadvantages:

- As the welfare of society is becoming an important part of the mixed economy

system, the usage of resources then also decreases.

- The mixed economy also suffers from the drawbacks of both the capitalism and

the socialism.

The role that the government plays is promoting economy sources to branches to prevent the

lack as well as the residual while producing goods. The economy sources are also limited and

the mission of the government is considering opportunity cost to use the resources

effectively. According to Kutuzov (2012), there are 3 main kinds of resources that a republicsocialist orientated country like Vietnam has to consider, including:

- Land and resources:There is a fact that Vietnam has been wasting more and more

resources and they are becoming exhausted. Same for the situation of land, which is

used for producing food and developing the industry. The cause of this situation is

that the controlling policy of our country is not strict and logical enough to solve

this problem. As a firm which provides products, TTFC need land but also

resources.

- Labor:Having the population of nearly about 86 million, Vietnam also has a huge

proportion of Labor force of 67%. However, there is a fact that the amount of high

level and skilled labor is very small. In a different way, the staffs that have

knowledge are not used effectively and the consequence is that they are unemployed

or working jobs they havent learnt. TTFC opens training classes to raise level of

employees to conformity with professional requirements.

-Capital:TTFCs capital is raised by foreign investment.

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Overall, Vietnam is now changing its economic system by developing the technology and

figure out the most suitable methods to use these resources effectively.

2. Vietnama sociali st or ientated country and its objective to transform f rom an

agri culture to a modern industri al country

According to Bao Moi official website, the main objective of 10th Party Central Committees

report, which was presented by Party General Secretary Nong Duc Manh, is to create the

fundamentals for Vietnam and become an industrial country in 2020. Having looked into the

advantages and the challenges brought about by the renewal process, the report appointed that

the entire Party and the citizens made efforts against difficulties to achieve the goals set by

the 10th Party Congress. Overall, becoming an industrial country can help Vietnam to easily

integrate with the economy of the world but transforming from agriculture to industrialization

can brings about many challenges for our country.

First of all, if Vietnam goes to industrialized, the economy of the country then develops. As a

result, the gap between rich and poor may become enlarge due to the increase in the amount

of rich people in businesses. Thus, according to Mr. Do, Vietnam must expand social security

system that covers all social classes of all regions of the country to reduce the gap between

the rich and the poor and reduce social disparity.

Secondly, the more industries are carried out, the more companies are opened. This can lead

to some environmental problems, which are air and water pollution, more trees are cut down

to supply the timber industry purpose. However, Vietnam now has created many regulations

to protect the environment such as banning wood exploiting.

Thirdly, individuals will have more power to affect the industry. Therefore, the state

investment must be improved efficiently as well as the State - owned economic sector.

Moreover, the state must attach the importance to investment from private sector and

establish policies and mechanisms that strongly promote investment of this kind of sector.

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Task 2. Assess the impact of fiscal and monetary policy on businesses

organizations and their activities

1. F iscal poli cy

According to businessdictionary.com, fiscal policies are the policies which influence the

economy by the taxation and public investment. The impact of this policy is to develop and

stabilize the economy of a country. Fiscal policy including two factors which make a great

influence on the business: taxation and government spending- subsidies. Apply to the case of

a big company in wood industry like Truong Thanh Company, the impact of taxation and

government spending will be discussed.

From the Business Environment Course Book, fiscal policy has a feature that the

government must plan what it wants to spend, and so how much it needs to raise in income or

by borrowing. Tax is a compulsory contribution to State revenue; gain from the profit of the

company. Besides, it is also an important part of the State income so the tax policy will make

a great influence in both the government and the business. There are some main tax law in

Vietnam such as: the corporate income tax, import tax, value added tax and all of these three

tax law influence the wood industry, particularly is the Truong Thanh Company. Particularly,

this company has to pay the following taxes:

- Corporate income tax: Truong Thanh must pay taxes on income from their production

and business activities, such as: production and processing of wood materials,

production of furniture. Besides, the company also must pay taxes on the conversion

of the right to use the property. According to their annual report in 2011, they have

the transfer the right to use land in BinhChuan-ThuanAn, Binh Duong for another

company. Based on the Section 10, Chapter 2 of the corporate income tax in Vietnam,

Truong Thanh will have to pay the tax with the tax rate from 32% to 50% based on

their projects. It is higher than the normal business because Truong Thanh

exploitation woodwhich is consider as the nature resources.

- VAT: Truong Thanh is a large company in the wood processing industry and furniture

production. So besides having a separate brand, they also received orders from

renowned companies. IKEA is a typical example. This is one of the major partners of

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Truong Thanh Company in the foreign market. According to Article 8, Chapter 2 of

the VAT law in Vietnam, the company's commodity will be subject to a 10% tax rate.

Besides, according to the 2011 annual reports of the company, they also take interior

provides furniture for construction projects such as major hotels and resort. For this

reason, from Article 7 and Article 8 of Chapter 2 in the VAT law of Vietnam, this

service of the company will also subject to a 10% tax rate.

- Import, Export tax: With the timber industry, the Vietnamese government has also

issued a number of specific import and export tax laws to this kind of industry. There

are different tax rates for each type of wood products. Particularly, the products which

are made from natural wood to export will be subject to the tax rate from 5% to

10%.However, with products made from plantation timber, the export tariffs of these

products will be at the lowest level: 0%.Truong Thanh Company is producing and

exporting both of kind of products so they have to pay the tax with the tax rate has

been mentioned above.

Beside of these taxes which Truong Thanh Company has to pay, they also get

preference in the import of raw wood. The company in wood industry could import

raw wood from other countries with no need of any paper from the agencymanagement (except import from Cambodia- which require the necessary permits

from the Ministry of Trade from both Vietnam and Cambodia). And the tax rate for

import material is at 0%. This is an competitive advantages of the company from

Vietnam with other competitors from foreign countries on the market.

Government spending (or subsidies) is also an important part of the fiscal policies. By

provide the subsidies; the government could encourage companies to expand their business in

domestic market. Subsidies can be divided into three parts: direct cash subsidies from the

government to the companies, bank loans with preferential interest rates and reduced business

taxes in some first year of operation. Vietnamese Government does not seem to spend a lot of

incentives and subsidies to private companies. However, there are still a few subsidies for

companies, particularly with Truong Thanh Company.

- Direct cash subsidies from the government to the companies: According to the annual

report of 2011, Truong Thanh Company has received the subsidies from the

governmentwhich reached 50%- in the construction of nurseries, tissue culture, and

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seed selection by DNA for woodland planting process raw materials for the wood

industry. This is a direct government subsidies for the company and it has helped

Truong Thanh has great advantages in the proactive sourcing of raw materials for

production and exports.

- Bank loans with preferential interest rates: Private companies in Vietnam are not

have the chance to receive the government subsidies easily such as the State

companies, especially in bank loans for invest and expand their business. However,

with the timber industry, there are a few banks have notice the potential in this

industry. An example is the Techcom Bank. Recognize the market potential from

wood processing and furniture manufacturing; Techcom Bank issued preferential

policies to customers in the wood processing industry: companies could borrow

working capital for the business such as imported raw materials with interest rates

reduced to 10% compared to normal rates. Besides that, Techcom Bank also gives

these companies loans worth up to 70% with 95% discount rate. However, to get this

big loan, these companies must meet certain conditions; for example, they must set

their whole production machinery as collateral for loans worth up to 70%.

-Reduced business taxes in some first year of operation: From the annual report of

Truong Thanh Company, they have received some subsidies: a 50% reduction of

corporate income tax for the additional income when export revenues of a year higher

than the year before; a 20% corporate income tax payable on the income earned from

export revenuewhich reached over 50% of total revenue and maintain stable export

market for quantity for three previous years in a row. It applies until the end of 2011

under the provisions of Decree No. 124/2008/ND-CP dated 11/12/2008 of the

Government detailing the implementation of the EIT Law. Also, some sub-companies

of Truong Thanh such as Wall JSC (Dalai 1) just have to pay corporate income tax

with the tax rate of 10% in 15 years.

When assessing the impact of fiscal policy to a business, we must consider about the

government spending and tax policies. If government spending is increased, there will be an

increase in the expenditure of the economy and also the national income will rise. More

specifically, if the government provides many benefits for businesses such as: direct

sponsorship money for production research and development activities, offering policies to

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help business loans at preferential interest rates, reduction of corporate income tax, the

company will increase investment and business expansion. Also at the same time, the

national income will increase, creating a positive effect on economic growth. However, if

there are too many expenses, inflation and unemployment will rise. About the taxation, if the

government increases the tax, it will increase withdrawals from the economy and at the same

time, the expenditure and national income will fall down. Tax is a cost that every company

wants to cut down for maximize profits and avoid losses. If the government increases taxes,

businesses will limit their investment and development in order to minimize the risk of losing

money. This will cause a reduced in economic growth. However, this is one of the methods

which has been used to reduce the burden of inflation on the economy.

2. Monetary policy:

According to businessdictionary.com, monetary policy is an economic strategy which is

chosen by the government to decide the expansion or contraction in the countrys money-

supply. Monetary policy is usually applied through bank centres and it includes 3 key tools,

they are: buying or selling national debt, changing credit restriction, and changing interest

rate by changing reserve requirement. Monetary policy plays the dominant role in control ofthe aggregate-demand and, byextension,of inflation in an economy. Also, monetary policy is

called as monetary regime or monetarism. The monetary policy can be made to act as a

subsidiary support to fiscal policy and demand management. Apply to the case of Truong

Thanh Company; we will discuss the effect of monetary policy on their business.

Different from fiscal policy which include both tax and expenditure, monetary policy mostly

focus on the interest rate. The interests always have big influences on business, especially is

on customers and suppliers. According to course book, Business Environment, the monetary

policy can control the inflation as well as manage the demand by using 3 methods:

a) A policy of low interest rate might stimulate bank lending, which would increase

demand of the economy. This could lead to increased inflation.

b) High interest rate might be the deterrent to borrowing and reduce the demand. This

leads to reduced inflation.

c) Strict credit controls can reduce the lending of the banks and then lead to reduce the

demand in the economy.

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The high interest rate also leads to the decrease in the customer demand. The order of

the customer decline by a half.

The high interest rate makes it difficult to export. The high interest lead to the high in

price, and this is disadvantages to price competitiveness of Truong Thanh Companyto other competitors from China.

Also the high interest rate would lead to troubles in import. The interest rate is too

high would not encourage other companies to import in Vietnam. Meanwhile Truong

Thanh Company has to import wood from other countries (Vietnam government is not

allowed to cut the trees). This lead to difficulties in Truong Thanh business.

We have found out the effects of monetary policy on business, more detailed is the effects of

interest rate on Truong Thanh business. The interest rate is decided by the government, and

whether it is high or low, it will affect the business. Apply to the case of Truong Thanh

Company, the high interest rate lead to the drop in net profit. This also led to the decrease in

customer demand and supplier. But Vietnamese government does this for reducing inflation,

and to protect VND before USD. The monetary policy will be continuous in 2012, so Truong

Thanh Company should have suitable business strategy for the high in interest rate and crisis

in the future.

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Task 3. Evaluate the impact of competition policy and other regulatory

mechanisms on the activities of a selected organizationAccording to the article Competition Law and Policy in Vietnam from Singapore

Law Gazette, Issue November 2008 by Dang The Duc and Pham Tri Hung, we have the

definition and the details of competition policy in Vietnam as below:

In Vietnam, competitive behaviours must be within the framework of the law and must be

undertaken on the principle of honesty while not related to the national interests, the public

interests, or the lawful rights and interests of other businesses and consumers. According tothe Competition Law, there are two main categories of competitive behaviours that are

regulated: (a)practices in restraint of competition, including: agreements in restraint of

competition (collusion); abuse of dominant market or monopoly position; and economic

concentration; and (b) unfair competitive practices.

The Competition Law applies to all organizations and individuals conducting business,

including domestic private enterprises, SOEs, foreign-invested enterprises, overseas

enterprises operating in Vietnam (foreign branch offices and foreign contractors with an

office in Vietnam and/or directly supplying services in Vietnam) and industry associations

(comprising trade associations and professional associations).

A striking difference between Vietnam's legal regime and legal of the EU is that regulation of

agreements in restraint of competition in Vietnam appears to be limited to horizontal

agreements (i.e. agreements between competitors, often referred to as cartels), with vertical

arrangements being regulated solely under the provisions relating to abuse of dominant

market position.

According to the Competition Law, the following agreements in restraint of competition are

prohibited only when the participating parties have a combined market share of 30% or more

of the relevant market (Decree 116 provides more details on how to determine the relevant

market and market share):

1/ Price-fixing agreements (direct or indirect);

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2/ Agreements to divide the market or sources of goods and services;

3/ Agreements to restrain or control the volume of production, purchase or sale of goods or

supply of services;

4/ Agreements to restrain technological investment; and

5/ Agreements to improve other enterprises' conditions before entering into a contract for the

purchase/sale of goods or services, or to force other enterprises to accept unrelated

obligations.

Exemptions are permitted for definite periods of time if a prohibited agreement satisfies

certain criteria aimed at reducing prime costs and benefiting consumers. Exemptions are

decided by the Minister of the MOIT upon recommendations from the Vietnam Competition

Administration Department (VCAD').

The following agreements in restraint of competition (boycotts and tender collusion) are

strictly prohibited under the Law, and no exemptions are available:

1/ Agreements which prevent, impede or do not allow other enterprises to participate in a

market or to develop business;

2/ Agreements which exclude from a market other enterprises not parties to the agreement;

and

3/ Collusive agreements that allow one or more parties to win a tender for supply of goods or

services.

The Law provides that an individual enterprise will be deemed to be in a dominant market

position if it has a market share of 30% or more in the relevant market or if it is capable of

substantially restraining competition. The following groups will be deemed to be in a

dominant market position if they act together in order to restrain competition:

1/ Two enterprises with a market share of 50% or more in the relevant market.

2/ Three enterprises with a market share of 65% or more in the relevant market.

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3/ Four enterprises with a market share of 75% or more in the relevant market.

Market dominance itself is not prohibited but abuse of that position is unlawful and no

statutory exemption is available. Prohibited abuses of dominant market position comprise:

1/ Selling goods or providing services below total prime cost of the goods with the aim of

excluding competitors.

2/ Fixing an unreasonable selling/purchasing price or fixing a minimum reselling price for

goods/services, thereby causing loss to customers.

3/ Applying different commercial conditions to the same transactions aimed at creating

inequality in competition.

4/ Imposing on other enterprises conditions precedent prior to signing a contract for the

purchase/sale of goods or services.

5/ Forcing other enterprises to accept obligations which are directly unrelated to the subject

matter of the contract.

6/ Preventing market participation by new competitors.

An enterprise will be deemed to be in a monopoly position in the market if there are no other

enterprises competing in the goods and services in which that enterprise conducts business, ie

if it is a single seller. Strictly prohibited abuses of monopoly position include the abuses

listed above, imposing disadvantageous conditions on customers, and changing or unilateral

rescission of a contract without a legitimate reason.

Mergers, consolidations, acquisitions, joint ventures and other (undefined) forms of economic

concentration are regulated under the Competition Law. When the participating parties have a

combined market share of less than 30%, or if the economic concentration results in a small

or medium enterprise (SME'), there are no exemptions or notification requirements.

Participating parties to any economic concentration resulting in a combined market share of

30-50% must notify the VCAD. The VCAD must confirm in writing whether the proposed

economic concentration can proceed without exemption or whether it requires a prior

exemption. Any economic concentration resulting in a SME or falling under an exemption is

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granted. Exemptions are available when one or more of the participating parties is at risk of

being dissolved or becoming insolvent, or when the economic concentration enhances export,

socio-economic development or technical progress.

In order to protect consumers and to ensure competitors can compete freely, the following

unfair competitive practices are prohibited:

1/ Misleading instructions;

2/ Infringing business/trade secrets;

3/ Coercion in business;

4/ Disruption of competitors' businesses;

5/ Defamation;

6/ Advertisement aimed at unfair competition;

7/ Promotion aimed at unfair competition;

8/ Discrimination by association; and

9/ Illegal multi-level selling (more commonly known as pyramid selling).

After studying about the competitive policy of Vietnam, we will look at the annual report of

Truong Thanh Company to find out the effects of this policy on the company business. There

are some main points:

Vietnam joined WTO promises stronger growth in foreign investment, and promote

export of goods on the international market as well as enjoying the conditions for

most favoured nation treatment of all members WTO, improved dispute settlement

mechanism trade, tariffs were cut reduction, to create conditions for Vietnamese

goods international market penetration. However, the in the integration process, the

business export wood product processing industry also face certain risks as the level

of competition is increasingly intense violently with many competitors from other

countries developing member economies, with the level higher engineering, has beeninvested in wood processing plant in Vietnam large-scale.

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In addition, more attention is competition for skilled labour by investorsnew arrivals

from abroad. However, the Company has recognized this many years ago should have

given the project to build the wood processing industry training centre for managers

and technical workers from the end of 2006, annual training centre complete create at

least 500 - 700 employees, not only for TTF that businesses sector. This contributes to

stable workforce management and workers training in the development of the

Company and the subsidiaries of the Company.

Vietnam has become a member of WTO. It means that Vietnam would open to international

market. This is a challenge as well as an opportunity for companies in domestic market. In

global market, there is wider market with more consumers, but also there are so many

competitors. The companies could be monopoly in domestic market but they still have to

compete in global market. When Vietnam, a developing country joins WTO, the government

has to publish the competitive policy, and companies in domestic market could have

difficulties in competition. To overcome these difficulties, the companies have to base on

their competitive advantages and understand their competitors. Also the government tries to

protect the domestic market as well as the companies, but this cannot exist for long term.

Before completely joined with international market, all companies in Vietnam have to

develop to compete in domestic market and further in international market.

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Task 4. Explain how market structures determine the pricing and output

decisions of the business

1.

The market structure that Truong Thanh Furnitur e Corporation competing in

There are many different kinds of market structures corresponding to different economies.

Thus, depending on these existing structures, different types of output and pricing decisions

will be carried out. Normally, these factors are associated with each other except for perfect

competition case. According to Business Environment Course Book, in perfect competition,

because of there are a lot of customers in the market, so that a single firm is so small that it

cannot influence the prices. Depending on the conditions to apply to the perfect competition,

we will finally decide which kind of market structures that TTFC belongs to. As mentioned

above, the number of buyers and sellers is very large and has no effect on the quantity

supplied and quantity demanded. Therefore, the barriers to entry or exit the market are not

exist and the price are fixed and set up rely on the quantity for sale and the amount of

products that consumers want to purchase. Moreover, the standardized goods make the

customers do not care so much on the things they buy from. Last but not least, the perfect

information of the products leads the buyers to know all about the prices of others in the

market. Thus, there are other four other kinds of market which have different characteristics

comparing to perfect competition, including:

- The monopoly market: A monopoly exists when a specific individual or enterprise is

the only one who supplies a product and service. Monopolies are indicated by a very

high level of supplier concentration of good and service and a lack of substitute

goods. To run the monopoly structure in a long term period, the barriers to entry must

be created. Some of the most popular barriers are a key resource without a close

substitute, government restrictions and a huge amount of Capital.

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- The monopsony market: This market structure is set up in which only one buyer

purchases a specific kind of product. The buyer therefore can have the right to set

some special terms to the sellers.

- The oligopoly market: In this type of market, there is a small number of sellers and

their business decisions have been affected by each other. Thus, the lack of

competition between marketers can lead the customers to purchase higher - cost

products. These goods may be homogeneous or close substitutes. Like monopoly, if

oligopoly is protected by barriers to entry, it will exist for a long time and so that, the

condition to enter this kind of market is difficult.

- The duopoly market:As mentioned above, oligopoly is a market where there are a

few large suppliers. In the case of duopoly, there are only two firms which competing

to each other of a homogenous product or service.

- The monopolistic competition:Last but not least, this kind of market structure exists

when there are a lot of independent sellers which take part in the market. The

producers sell products which are differentiated to each other and not to be considered

as being perfect substitutes by the consumers. Furthermore, the condition to entry and

exit this market is free and easy, as the economies of scales are few.

(Business Environment Course Book, 2010, BPP Learning Media)

With the characteristics as listed above, it can be seen that the market structure that Truong

Thanh Furniture Corporation nowadays is carrying on is the monopolistic competition. From

our perspective, there are some evidences that demonstrate to this view, such as:

- The number of suppliers of wood and furniture industry in Vietnam is very large. As

regard to Vifores (2007), there are 216 timber processing enterprises in the Northeast,

135 enterprises in the Red River Delta. The number of wood enterprises in Southeast

is 1,493 and 166 enterprise are carrying out their businesses in Mekong River Delta.

- There are many differentiated products comparing to wood furniture, which are some

kinds of furniture coming from other materials such as plastic, metal, simili mattress.

As the economy is in crisis, consumption for furniture among Vietnamese is also

declined, leading the consumers to the trend of using cheaper types of furniture as

listed above (Annual Report of Truong Thanh Furniture Corporation, 2011)

-

According to The realistic of wood processing industry in Vietnam, by 2007,Vietnam has 2,526 timber processing enterprises, increasing by 2.8 times comparing

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to the year 2000 and 7.7 times comparing to 1990. From our point of view, this proves

that the number of wood processing enterprise in our country is increasing more and

more, and the condition to enter this industry seems to be easy.

2. The pri cing and output decisions determination under market structure

After deciding monopolistic competition as the market structure that TTFC is competing in,

the pricing and output decisions then will be affected by this kind of market. In details,

according to Scribd official website, the corporation under monopolistic competition

produces goods up to that limit in which its marginal cost is equal to marginalrevenue

(MC=MR) and the MC curve cuts the MR curve which is shown in the graphs below. In

monopolistic competition, price and equilibrium position of TTFC is decided by the Firms

equilibrium and this is divided into two parts: Shortrun equilibriumand Longrun

equilibriumas follows:

Shortrun equilibri um:

A short period is defined as the time period inwhich the output can only be risen by

changing the quantity of variablefactors the fixed factors has no time to be changed.

o Chart 1: Supernormal profit:

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o Chart 2: Normal profit:

o Chart 3: Minimum Loss

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In a Long period, the output can be increased by changing the quantity of both fixed and

variable factors. TTFC then will produce up to that limit in which MR equals to long run MC

and it can only gain normal profit. When it earns Super Normal Profit, new Firms will enter

this type of market. The result of it is that the Total Supply will rise, leading to the decline of

the Profit Margin. Besides, In the Longrun, TTFC will not suffer Loss. If it incurs Loss, a

solution for it is to shut down the business. This leads to the other firms to quit, and the Total

Supply will decrease Short of Total Demand and it can cause their price to rise. Thus, these

firms will earn Normal Profit again.

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Task 5. Illustrate the ways in which market forces shape organizational

responses using a range of examples

Beside of some factors such as taxation policy or state spending- which have been listed

above, there are some other elements also affect to the market and the organization. One of

them is the five basic competitive forces of Michael Porter. For a short brief, this is a

framework for industry analysis and business strategy development and by using this

framework, the competitive intensity and the attractiveness of a market could be measure.

Five competitive forces are including:

+ The threat of new entrant.

+ The threat from substitute products.

+ The bargaining power of customer (or buyer power).

+The bargaining power of suppliers (or supplier power).

+ The rivalry amongst current competitors in the industry.

At this part of the report, these five forces will be analyses apply to the case of Truong Thanh

Company.

a.

The threat of new entrant:

When apply this element to the case of Truong Thanh Company, we will mainly discuss on

what the new competitors need to notice if they want to enter the wood industry and how

Truong Thanh Company could against these new competitors. According to the Business

Environment Course Book, the strength from this element is mainly depending on two

factors: the strength of the barriers to entry and the likely response of existing competitors to

the new entrant. With barriers to entry, it could be categorized like below:

o Economy of scale:

It could be understand as: The more of an item you make the cheaper it becomes to produce

each item (Basic Economic Course Book, pg 258). According to the 2011 annual report of

Truong Thanh Company, they have the factory system and advance production technology

with an investment of nearly $ 25 million. In an average year, Truong Thanh exports 3.000

containers of wood a year. They always leading the timber industry and until 2007, they have

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need to prove the quality of their products, the competitive advantages if these retailers sale

their products.

Furthermore, other cost advantages of existing suppliers will also influence the strength of

new entrants. Particularly, like the case of Truong Thanh Company, they have received a lot

of government subsidies such as: tax reduction, cash aid for technology research &

development because they had great achievements in the production and export of wood

products. This can be a major obstacle for any new entrants who want to enter the wood

industry.

b. The threat from substitute products:

Now the economy is in crisis, which lead to the consumption of furniture is also reduced.

Customers also want to reduce the living expense so they follow the trend to use cheap

furniture made by metals, plastics and simili mattresses. Truong Thanh Company may need

suitable policy to attract the customers in using wood furniture.

c. The bargaining power of customers:

Truong Thanh Company is operating in a market which has a lot of competitors, both in

domestic market and foreign market. In domestic market, they have strong competitors such

as the Hoang Anh Gia Lai furniture company and a lot of small and medium sizes ofbusiness, not including some foreign company such as: Shing Mark, Latitute Tree, RK

Resource, Sancom Vietnam who also invest in Vietnam. In foreign market, they have to

compete with other furniture company come from China- which provide 1/3 overall amount

of export furniture from The Group of Developing Countries to the world market. For this

reason, the customers in both domestic market and foreign market could switch to use

products from others company, so the bargaining power of customers increase. The

customers are in stronger position. The only way to increase their bargaining power over the

customers is to create a strong brand image. And Truong Thanh Company has done that. In

their Mission Statement, they have mentioned that Truong Thanh Company will always make

the customers satisfy based on these factors: suitable price, delivery good on time with the

best quality, always improve and innovate to provide the best service. By following this

statement, they have received the European Trophy For Quality at October 2005,

International Trophy For Quality at November 2005 given by the Trade leaders Club. These

prizes will make a deep impression in customers mind. Also, the main focus of Truong

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Thanh is to improve the quality of products so as the result, the customers may less likely

worried about the price.

d. The bargaining power of suppliers:

The wood industry is not just one or two company on the market and also at the same time,

the company like Truong Thanh still be threatening by the substitute products from the other

industry. However, Truong Thanh could set a higher price for their products. Currently, the

government is limiting the exploitation of wood resources in the country, making Truong

Thanh Company lost a large source of material. For this reason, to ensure the source of raw

material for the production process, rather than the use of wood, Truong Thanh had moved to

use domestic timber planting. However, Vietnam has no great clarity in the reforestation loan

because the interests for these loans are too high. For this reason, in the their 2011 annual

reports, it mentioned that they were associated with the OJI Paper Enterprise (have the

number 1 position in Japan and 6th worldwide) for additional capital to operate the planted

100,000 ha of forest project in Phu Yen, Dak lak and Dak Nong. Besides, Truong Thanh also

imports the source of wood from some area such as Africa, Brazil, Uruguay, Canada, etc.

They incur high costs for these activities; however, Truong Thanh can take the initiative in

the use of raw materials for production. This was made the conditions for Truong Thanh able

to set higher product prices.

e. Intensity of competition:

All companies when expanding their businesses are all under pressure of huge intense

competition. Truong Thanh is not an exception, especially when beside of doing business in

the local market, they are also facing the international market. Some of the challenges that

Truong Thanh could met can be listed right below.

Firstly, Truong Thanh will be challenge by the economic crisis. The customer want to cut

down their living expense so instead of using the furniture make from wood, they will choose

the product made from metal or plastic- which are cheaper. In the domestic market, demand

for housing and real estate is declining, as the result make the demand for furniture also

decline. This is an external factor which affects the business and Truong Thanh cannot have

solutions to solve it out.

Secondly, Truong Thanh may face with experienced competitors come from Sweden, Japan,

Australia when enter the European market. This is a particular market which require highstandard of quality. For example, the product export to this market must meet the standards of

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FSC (Forestry Stewardship Council)C.o.C (Chain of Custody) or the FLEGT Agreements

from European Community. The company come from Europe may have more competitive

advantages than Truong Thanh, so it is important for them to study carefully about this

market.

Another threat in the Asia market is the companies come from China. They have provided

about 1/3 amount of furniture from the group of developing countries to the international

market. The have a surprisingly growth in export because of the rich and cheap source of raw

material. The interest of bank loans also lowers than in Vietnam and they also have higher

production performance. The labors from China are also cheaper and larger number than in

Vietnam. They also have advantages when they have received advance production

technology from Taiwan, Singapore, US and Europe. Truong Thanh will need to research and

develop new product to have differentiate products to compete with company come from

China. Also, they will need to prepare stable sources of raw material, go along with the

training programs to have more skillful labors.

In conclusion, Truong Thanh Company has achieved a lot of successful in timberland

industry. However, if they want to expand their business for the future, they need to evaluate

the market and prepare the suitable operations plan for the company based on these five basic

competitive forces which influence the industry.

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Task 6. Judge how the business and cultural environments shape the

behavior of a selected organization

According to Truong Thanh company annual report, we can judge the effect of Business

environment and cultural environment to company behavior. Firstly, we look at the business

environment:

The effects of business environment are shown by 4 main factors:

a / Economic

For the export market:

+ The interest rate banks in VN too high, from 18 - 24% / year, while the rest of the world is

less than 5% / year. This makes Vietnam's export business reduce price competition,

especially the "lost at home "for FDI Vietnam to open the timber processing plant

+ Keeping dong against the U.S. dollar largely good for a number of interest groups,

specialized in import of $ (especially in Hanoi), leading to continuous deficit not reduced.

While exports contributed so much in GDP of the country, this does not click like to export.

For the domestic market:

+ There are a number of policies detrimental to Real production in recent years, should be

accompanied by domestic interior very poor.

+ When the tough economy, consumption furniture is also reduced, and users to follow cheap

used furniture trends is metals, plastics and mattresses simili.

b / The law

Difficulties in common:

+ The minimum wage applies to Binh Duong area is equal to the Ho Chi Minh City and

Hanoi as inappropriate. Pots Ocean is an area of wood processing companies so much, that

application of this decrease competitive timber industry of the province for other provinces

+ The unemployment of 60% is too high for workers in Vietnam. This is very easy to make

workers demotivated, because unemployment is also at least 1.2 million subsidy and then go

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out do not sign the contract work but the revenues may be more. State needs new roadmap

towards that level, when Unemployment is an insult of the labor.

+ Provisions, Labor laws:

Environment is not consistent with implementation capacity of state-owned enterprises

States, especially in the crisis period economy. State should set up according to the schedule

from low to high to help businesses, but that sure most of them would break the law would

only facilitate negative to develop, but not sure about the purpose of the rules.

For the export market:

Arising more and more technical barriers from importing countries, such as the provisions on

original source of wood (U.S. Lacey Act, the Agreement FLEGT Europe, FSC-COC Europe),

the regulations on toxins, safety of the product, the packaging ... make more charge of the

business increased significantly, or very difficult to implement for many business career.

However, with the TTF, we had good preparation by doing the market research. Therefore, it

only influence on costs. And this is a competitive advantage over with the companies in the

same industry.

c / Materials

In recent years, businesses Woodworking $ switched to wood domestic varieties from many,

particularly rubber wood, Acacia, Melaleuca ... therefore, was more active than before.

However, to meet the needs Vietnam's wood processing industry, they have grown faster and

more forest. But the difficulties are the plantation sector, the need long-term capital. But in

the U.S, it is not a great striking in the plantation loans (because common interest expense is

too high, than tree growth over the years). Because, although Truong Thanh has a project to

plant 100,000 hectares of forest production in Phu Yen, Dak Lak and Dak Nong, it still have

difficulties in financial, which lead to an agreement with the Oji Paper Enterprise (have the

number 1 position in Japan and have the 6 position in the international marker) to have more

capital planting.

After studying the report, inside the effect of business environment, there are also the culture

environment aspects. It is reflecting through the customer behaviors when there are crisis, the

customer orders and demand reduce. In conclusion, business environment has huge effect on

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Truong Thanh business in the aspect of: economic, the law, materials. The business and

culture environment has affected TTF as follow:

- In the short term duration of the global economic crisis, the order of each decline, the

average was 50%;

- There are many alternative products such as song, rattan, bamboo, metal, plastic, etc.

- Human resources trained subjects the wood processing industry in Vietnam which not

meeting the development needs of industry in the next two years.

- Reduced government stimulus package, namely no or reduced preferential interest rates will

support export business difficult, reduce strong price competition in International business.

- Interest expense was too high, although there were declined slightly. This reduces the

competitiveness of Vietnamese enterprises. This is the lead to "lost at home".

- Keeping the dong against the U.S. dollar largely good for a number of interest groups,

specialized in import of $ (especially in Hanoi), leading to continuous deficit not reduced.

While exports contributed so much in GDP of the country, this does not encourage the

export.

- The minimum wage applies to Binh Duong area is equal to the Ho Chi Minh City and Hanoi

as inappropriate. Pots Ocean is an area of wood processing companies so much, that

application of this decrease competitive timber industry of the province for other provinces.

- The unemployment of 60% is too high for workers in Vietnam. This is easily for workers

demotivated.

- Regulations, Labor laws, Environment ... is not consistent with implementation capacity of

state-owned enterprises, especially in the crisis period.

- Cost of electricity and gas on the rise again, when the output is not strong enough to raise

prices corresponding

- U.S. to strengthen anti-dumping tax price for China. This led to the company in China will

pour into Vietnam to build processing plants, accidentally making domestic companies lost

more labors by the FDI lower interest expense and are capable of the transfer price.

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In addition, skilled labor from foreigncompany is also a factor which needed to be notice.

However, the company were aware of this many years ago should have given construction

project Center wood processing industry training for staff management and technical workers

from the end of the year 2006, annual training center complete create at least 500 - 700

employees not the TTF that the enterprise and sector. This contributed to the steady force of

managers and workers during the development of the profession companies as well as

subsidiaries of the Company. And in March 2011, the company also implementation of

training courses for 21 students from South Africa by the South African governments

recommendations. After 5 months of learning about the techniques wood, design, read

product Inter- Exterior; processing using machines modern wood; impregnation technique,

drying, drying dry wood; management skills, ... 21 outstanding young students have

completed program, certified traveled to the country to become staff management, staff

training service projects important projects in South Africa. With courses Truong Thanh

increasingly confirmed the importance of cooperation, international human resource training.

Opportunities:

After Vietnam signed the BTA with the U.S., and joined the WTO, the U.S. market is

becoming a great opportunity for exporting wood Vietnam's interior;

- Wood furniture export turnover of Vietnam is still under 3% of total world demand.

Therefore, the market potential is very large.

- More and more buyers for wholesale supermarket / retail famous such as Carrefour, Metro,

Tesco, OBI, Costco, Wal-mart, Target, IKEA ... order online with manufacturers in Vietnam.

- Trend of importers, wholesalers ... wants to buy directly from the manufacturer strong

brand, not through the intermediate company as many years ago. Therefore, manufacturers

have the opportunity to sell directly for the better.

- Many major international furniture fair large-scale economic organizations in Vietnam and

neighboring countries for the manufacturer easy-going exhibition, less costly exhibitions in

the U.S., Germany, France, Australia, etc.

- Vietnamese government paid more attention in the trade promotion for industry Vietnam's

wood, creating many more liberal legal frameworks for the business sector. Government

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Vietnam has issued Development Strategy Forestry from 2006 to 2020, especially in contact

the privatization planting, ensure viable local source of wood after a few years.

- GTZ coordinate with Truong Thanh to establish the Center Wood working and training

from technical to management prepared with 20% of the TTF and 80% from the other

sectors. So, in the near future, not the more mature staff - employees are trained, but also

reduced at high risk online won skilled manpower in the industry.

- Many businesses have dissolved due to crisis global economic crisis, this will be the great

opportunity for businesses still remain and to develop to be stronger;

The Integration and Opportunities of TTF are only the internal factors (micro inside the

company) but the international trade also base on the external factors (macro outside of thecompany), it is the Balance of Payment of Vietnam (BoP).

Billion USD

2010 2009 2008 2007

A. CURRENT ACCOUNT -3,511 -7,440 -10,787 -7,092

1. Trade balance -5,147 -8,306 -12,782 -10,438

Exports (FOB) 72,192 57,096 62,685 48,561

Imports (FOB) 77,339 65,402 75,467 58,999

Imports (CIF) 84,000 69,949 80,713 62,765

2. Non factor services (Net) -2,461 -1,129 -915 -894

Receipts 7,460 5,766 7,041 6,030

Payments 9,921 6,895 7,956 6,924

3. Transfers 8,661 6,527 7,311 6,430

Private transfers (Net) 8,342 6,018 6,804 6,180

Official transfers (Net) 319 509 507 250

4. Investment Income (net) -4,564 -4,532 -4,401 -2,190

Receipts 456 752 1,357 1,166

Payments 5,020 5,284 5,758 3,356

B. FINANCIAL AND CAPITAL

ACCOUNT5,542 11,452 12,341 17,730

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5. Foreign Direct Investment 7,100 6,900 9,279 6,516

FDI in Vietnam 8,000 7,600 9,579 6,700

Equity 7,101 6,369 8,960

Loan 899 1,231 619

Vietnams FDI abroad 900 700 300 184

6. Medium and long term loans 2,751 4,473 992 2,269

Disbursements 4,671 6,140 2,441 3,640

Scheduled Amortization 1,920 1,667 1,449 1,371

(Actual payments) 1,920 1,667 1,449 1,371

7. Short term loans 1,043 256 1,971 79

Disbursements 8,386 5,588 11,414 1,404

Scheduled Amortization 7,343 5,332 9,443 1,325

(Actual payments) 7,343 5,332 9,443 1,325

8. Portfolio 2,370 128 -578 6,243

9. Money and deposits -7,722 -305 677 2,623

C. ERRORS AND OMISSIONS 3,796 -12,178 -1,081 -439

D. OVERALL BALANCE -1,765 -8,166 473 10,199

E. FINANCING 1,765 8,166 -473 -10,199

10. Change in NFA (-;incr) -1,765 8,166 -473 -10,199

Change in Nir (-;cr) 1,803 8,204 -434 -10,180

Use of IMF cred (38) -38 -39 -19

Purchases - 0 0 0

Repurchases 38 38 39 19

11. Change in arrears and

rescheduling0 0 0 0

Change in arrears 0 0 0 0

Rescheduling 0 0 0 0

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In the BoP table, we will focus mostly on the import and export in the trade balance. As we

could see that they are increasing over the years. The trade balances, the FDI and loan

increase. Vietnam borrowed lots of money, and with the development of the economic, they

are not suitable. With the global crisis, Vietnamese market is in troubles. The government has

change tax and interest rate, reduce the customer demand as well as focus on reduce inflation.

The government also tries to keep the VND non convertible to protect domestic market from

competitors. However, this can lead to the reducing in exporting.

In conclusion, the international trade is difficult to day. When the economic is in crisis, the

government tries to reduce the inflation and protect domestic market by keep the currency

non-convertible. Also there are difficulties because of the differences in culture, social,

economic, technology and policies and so on. So if TTF want to compete in international

market, they have to base on their advantages, firstly to overcome the crisis in domestic

market using absolute advantages, then get used to the international market and competitors

using competitive advantages. Both of these advantages have been mentioned above in other

tasks.

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Task 8: Analyse the impacts of global factors on Vietnamese business

organisationGlobalisation trends emerged in the year 1870 to 1913 and have still continued until

now and have more and more effects in almost aspects of social life. According to Hodgetts,

Luthans and Doh (2006), globalisation is the process of social, political, economic, culture,

and technological integration among countries around the world. Globalisation brings a lot

of benefits and good changes for the country but also has some drawbacks and limitation.

Vietnam also did not stand out this trend and already succeed in negotiating to join

the World Trade Organisation (WTO) in November 7 th, 2006. Since then, almost of

Vietnamese business organisation including TTFC started to be affected by global impacts in

three main aspects of life: economic, social impacts and environment degradation.

1. Economic

First of all, one of the biggest benefits is that Vietnamese business organisations have

more changes to acquit success in economic, science and technology of mankind. Thanks to

the transaction and a lot of ways to exchange innovated technology, people can add more

values to their products and increase the quality of output. As a result, they set up certificates

in which organisations can follow and prove the quality of products. To be more specific in

wood industry, TTFC already achieved certification of International Organisation for

Standardization (ISO 9001:2008) in 2009. As regard to Vietnam Certificate Central official

website, ISO is a worldwide certification and is used in developed countries which have

markets and ability markets of TTFC such as Singapore, Canada, Spain, the UK, Spain, etc.

These things lead to the improvements in standard of living. Besides, these things result in

the increasing of competitors. Open trade means that the government will have to facilitate

for foreign companies and foreign products enter to Vietnamese market. In other way of

thinking, the more competitors we have, the more perfect market we are. Customers have

more changes to use high quality products which come from all over the world with

competitive price. In case of TTFC, importing material activities of company might be easier.

In contrast, lots of competitor means that the level of competitive will be higher for

domestic companies. In fact, the brain drain issues have already existed in Vietnam. This

shows that Vietnamese organisations are losing in employees sources which are important as

other economics sources. With the old opinion that Vietnam is a market with cheap labour,

and with lots of employees it would have the volume of outputs higher; it might be a loser

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The most dangerous thing with the Earth at the moment might be the global warming

issue. Follow National Law University, Vietnam has more than 3.260 kilometres adjacent to

the sea. Besides, the altitude of ground is approximately with the sea level. It is the reason

why Vietnam is one of countries be affected seriously because of global warming in the

world. Especially almost provinces in Vietnam are affected seriously by the natural disasters

include floods, storm, etc. These disasters usually made the transportation are obstructive so

that the growing plans or import activities and export activities might be delayed and be

damaged for the long term and short term business activities. Moreover, follow the scientist

from science environment program of BBC; the speed of climate changing is faster than the

previously forecast. In other way of thinking, the time we have to research and find out

solution to make these issues have lighter effects will be shorter; the risk will be higher

especially with an industry which have to depend a lots in the weather like wood industry. In

addition, to avoid deforestation and decreasing in biodiversity, Vietnam government already

has policies so that furniture companies cannot be able to exploit the domestic wood and have

to import wood material instead; its mean the cost for TTFC might be higher.

Globalisation has lots of impact to every site of Vietnamese business organisations. It brings

lots of changes, opportunities and challenges. Standing in front of these things, organisations

have to find out suitable plans to develop as well as solution to improve weakness.

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Task 9: Evaluate the impact of policies of the European Union on business

organisation.

TTFC is having the main market to export is EU; the two policies potentially influences thecompany are the EU Social Charter and Single European Market.

1. EU Social Charter :

According to the Council of Europe official website, the European social charter is a

council of Europe treaty which guarantees social and economics human rights. It was adopted

in 1961 and revised in 1996. About the employees in the EU of TTFC; because of business

activities in this area, TTFC has to hire lots of local employees and must follow the rule about

their worker. All of the staffs have their individual labour contract in which they must be

informed of Health and Safety risks (worker consultation, informing employees, training

obligation and psychological factors in 1989) and have responsibility to Health and Safety

risks. Besides, the working time is also mentioned; the employees must have at least 11 hours

rest in 24 hours, 20 - minute rest in meal after 6 hours working and so on. The paid for

vacation leave 20 days minimum required. In contrast, Vietnamese workers just have 12 days

to be paid for their vacation during the year. These policies and enacts are much stricter than

a Vietnamese labour contract and the employees have more benefits and are protected very

well. As a result, TTFC will have to treat with its employees in the right way and the

company could have less retaining profits when it follows the rules. However, these policies

still bring benefit for the company because workers have right to be free movement. Working

in a large market, TTFC distributions and staff might have to move a lots, so that when the

company wants exchanging and moving between countries inside the EU, this activities will

be easier and save a significant budgets and time for transaction and transportation.

2. Single Eur opean Market.

According to Euro found (June 12th, 2007), the Single European Market Programme

was proposed in 1992 have the objectives are the serious implications for employment and

industry relation in the EU. Following these programme, EU is the worlds largest free trade

area. When TTFC enter to this market, there is no any barrier to trade within bloc which is

result in the opportunity to expanding activities of company will be open and have more

advantages. Moreover, there is free movement of goods, people and money; there is no any

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customs or border checks, less delay and quicker transportation as well as less

documentation. Based on these policies, the time and the fee for transportation and

exchanging will be saved. This is a good condition to help TTFC develop distribution and

improve customer service quicker and better than other marker.

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Conclusion

In conclusion, through this report, we have analysed and evaluated the allocation of resources ofeconomic systems as well as the influence of fiscal and monetary policy on businesses organisations.

Moreover, we discussed the impact of competition policy and other mechanisms on the business

activities of selected organization. In addition, the market structures are determined and its

impacts on pricing and output decisions of the enterprise have been clearly shown. The way

in which market forces shape organizational is also illustrated through some examples.

Finally, we focus on international trade and globalizational impact on Vietnam business.

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2012.

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