Table of Contents

I. Introduction……………………………………………………………………………..2

II. Body……………………………………………………………………………...…….2

1. REE’s mission, values and objectives and the influence of stakeholders ……..2

2. Achievement of stakeholder’s objectives…..………….……………………..……..5

3. REE Corporation’s responsibility and strategies employed to meet objectives of

stakeholders………………………………………………………………...…..8

4. Explanation of how economic systems in your country (Viet Nam) attempt to allocate

and make effective use of resources available within the country……………11

5. The impact of social welfare and industrial policy initiatives on the organization and

the wider community…………………………………………………….……13

5.1 Social welfare………………………………………………………..13

5.2 Inductrial policy………………………………………………………33

6 The impact of macro economic policy measures and the influence of the global

economy on the company and its stakeholders……………………..…...........14

6.1 The influence of the macro economic policy…………………………14

6.2 The influence of the global economy…………………………………16

III. Conclusion……………………………………………………………………..……16

IV. References………………………………………………………………….…….....17

1

I. INTRODUCTION:

Established since 1977, REE (Refrigeration Electrical Engineering Corporation) today is a 

diversified  business  group  operating in  the  fields of  mechanical  and  electrical 

engineering  services  (M&E), manufacturing, assembling  and  sales  of  air-conditioner 

systems,  real  estate  development  and management, and financial investments.

 The  Group  businesses  include  REE  M&E,  a leading mechanical  and  electrical 

engineering contractor  in Vietnam, REE Electric Appliances which manufactures, 

assembles, and markets air conditioners under the Reetech  brand, REE  Real  Estate,  a 

management services company  for  lease office properties of REE, and  REE  Land,  a real

estate developer.  REE is also a strategic infrastructure investor in the power and water 

sectors with ownership stakes in several power and water utilities.  

REE  is one of  the  first companies to list its shares on the Ho Chi Minh City’s Stock

Exchange with a market capitalization of US$ 170 million as of 31/12/2010 and a wide 

investor base.

(http://www.reecorp.com/upload/files/REE%20Annual%20Report%202010%20-%20Final_0.pdf )

II. BODY:

1. REE’s mission, values and objectives and the influence of stakeholders:

Mission statements Values Objectives

Committed to quality.

Nurturing our business

relationship

Creating values for our

shareholders

Recognizing the

Professional

qualified and

upgrade training

in local and

overseas.

Creative

performance

Increasing capital and continuing

investments in the fiels of M & E Capital

increase and continued investments in the

areas of M & E, real estate, finance –

banking.

(http://stocknews.vn/default.aspx?

2

contribution of our

employees

Maintaining our

integrity

(http://

www.reecorp.com/?

q=en/node/189)

ways make

customer saving

money.

(http://

www.reecorp.c

om/?q=en/

node/197 )

tabid=300&ID=18523&CateID=209 )

In 2011, the Group will achieve strong 

revenue and profit growth in the

mechanical and electrical engineering

business and the business of Reetech 

products, maintain the office lease

business at a high occupancy level, and

optimize the allocation of capital raised 

of 810 billion dong from a convertible

bond issuance in 2010 in infrastructure 

investments in electricity, water, and 

real estate projects.

(REE annual report 2010, page 69)

Stakeholders:

While vision, mission, values and objectives set the direction for a company, stakeholders are the

one that shapes and directly influences these features. According to Johnson, Scholes and Whittington

(2006) define stakeholders as “individuals or groups who depend on the organization to fulfill their own

goals and on whom, in turn, the organization depends”. Consequently, REE Corporation impacts and are

affected by different stakeholders.

Influence of the stake holder

Internal stakeholders   This include managers and employees and are those that

are situated within the company and affect the ‘day-to-

day' running of the organization. Furthermore, they are

interested in the company’s continuation and growth,

can influence the company from the inside and will 3

directly influence the quality of jobs done in the

company.

Connected stakeholders cover groups such as shareholders, suppliers and

customers, and are parties which invest or have dealings

with the firm. Moreover, they are usually connected to

the company on a contractual basis. They mostly

influence the company through the distribution of

company resources such as capital, raw materials etc

and profit and production cost the company will

generate.

External stakeholders The third groups, , are those not directly linked to the

organization but who can be influenced or influence

activities of the firm through various means. External

stakeholders include the Government, neighbours,

pressure groups, local councils and the surrounding

community.

(http://www.articlesbase.com/management-articles/

stakeholders-and-how-they-affect-your-business-

760088.html )

A helpful method used to evaluate and analyze how influential stakeholders is stakeholder

mapping. In the Power/Interest matrix below, stakeholders are categorized on a graph rating

their level of interest against the power they possess to exercise those interests. The stakeholders

4

in this way are broadly divided into four groups; low interest-low power (A), high interest-low

power (B), low interest-high power (C) and high interest- high power (D).

(http://www.lmcuk.com/management-tool/stakeholder-mapping)

According to Fig, for a customer orientated company such as REE Corporation, the customer is

a strong force that the company’s management has to take into consideration. Customers are

likely to put into group B since they share a strong interest in the quality of the company’s

products and services. The power of the customers is emphasized by the obvious fact that

without customers, REE will lose its market and then will be no longer exist after a period of

continuing losses.

Therefore, whatever REE’s management is planning to do, they have to take into consideration

the influence of stakeholders. They may regard one group of stakeholders higher than another,

but after all, they can’t ignore any group.

2. Achievement of stakeholder’s objectives:

Different stakeholder groups have different objectives in a organization.

Stakeholders Objectives

Shareholders -High profits 5

-High dividend

- Long term growth

-Prospect of capital gain

-A say in the business

-Preferential treatment as customers

Employees -High salary

-Job security

-Good working conditions

-Fair treatment

-Fringe benefits

-Health and safety

-Promotion prospects

-Training opportunities

Customers -Low prices

-Value for money

-High quality products

- Good service

-Innovation

- Certain and regular supply

- Choice of goods i.e. variety

-Clear and accurate information

Suppliers -A long term relationship with the firm

- Large size and high value of contracts

- Frequent and regular orders

- Prompt payment

-Fair prices

Creditors -Prompt payment

-Payment of interest on outstanding debt

-Repayment at agreed date

6

- Credit worthiness of the organization

-Sufficient positive cash flow to meet

obligations

The

community

-Employment prospects

- Safeguarding the environment

- Acceptance of social responsibility

- Ethical behavior

Government - Compliance with laws and regulations

- Efficient use of resources

-Employment

- Contribution to the national economy

- Payment of taxes

As seen from the table, The community is a highly concern for the corporation, that is the

company needs to bring a good image to it. To be able to that, the enterprise will consider

“Employment prospects”, “Safeguarding the environment”, “Acceptance of social

responsibility”, and “Ethical behavior” as the vital objectives to follow.

Customers always concern about the price, the quality and the value of goods that they

purchase as well as service after sale. In order to satisfy this, REE had develop a modern

management system and customers service system. The company should often opens several

special events for clients such as “Gratitude Conference to customers”, “Customer Day”, etc. and

special occasions, customers always receive gifts or discounted products for using REE’s

products. Furthermore, REE had launch variety product lines to fit its customers’ interest. Last

but not least, the manufacturer information is clearly printed in the product packets.

Employees: to maximize salaries and job security, the objective of REE is promote creative

thinking, bring equal opportunities and promotion for everyone, income stability, conditions and

friendly working environment for employees. Make sure the employee is regularly improving

care professional. Moreover, REE needs to improve organizational system, human resource

development by offering a good training course and improve their skill.

7

3. REE Corporation’s responsibility and strategies employed to meet objectives of

stakeholders.

Organization is part of human society, therefore it has many obligations towards the people or

group of people and the environment in the society.

responsibilities Strategies:

The social “The social responsibilities

of an organization may be

defined as the obligations

that the organization has

towards the people and the

environment in which the

company operate”. When

doing business,

organization has to take

notice of social

responsibility as well as

making profit to return its

stakeholders.

The corporation make social

commitment, for example, REE must

ensure that their business do not harm

to ecological environment. For

example, the refrigerator does not have

CFC. In addition, REE provides good

quality product to meet customers’

need. That is an effective using

strategy as well as providing work

opportunity for the locals and people

from the rural areas. REE also obey

the law and policy given by

government to avoid damaging the

society.

The

environmental

While producing the

products, the production

process needs to be

friendly with the

environment.

The manufacture must follow

environment policies. There are a lot

of environment elements that the

company must consider, such as land,

water, air, etc that is limited. In its

business development process, REE is

8

committed to the implementation of

pro-active sustainable activities such

as the environmental preservation with

full consciousness of the importance

of its corporate. REE to minimize the

resources are used as much as

possible.

The business ethic An enterprise has responsible

for making the code of ethics;

these will lead the company to

make the right decision for the

society.

Obey the law

Be fair

Avoid harming others

Prevent harm to others

Respect the right of others

Should not take unfair advantage of

anyone through manipulation,

concealment, abuse of privileged

information, misrepresentation of facts or

any other unfair-dealing practice.

Must not give or accept bribes, kickbacks,

promises or preferential extensions of

credit.

Must approve or award orders, contracts

and commitments based on objective

business standards to avoid favoritism or

perceived favoritism.

9

Must not conspire or collude in any way

with competitors.

The management This has responsibilities to

employees, customers,

suppliers, the local

community and the general

pubpic

To employees: building

recruitment policy and redundancy and

retirement policies.

To customers: providing a product

of a quality that customers expect, and

of dealing honestly and fairly with

customers

To suppliers: the organization

should not delay payments to suppliers

beyond the agreed credit period. One

more thing, all suppliers should be

treated fairly.

To the community: upholding the

social and ethical values of the

community and contributing towards

the well-being of the community, eg

sponsoring local events and charities,

or providing facilities for the

community to use. Furthermore,

responding constructively to

complaints from local residents or

politicians ( eg abou problems for

local traffic caused by the

organization’s delivery vehicles)

10

Public relation and

corporate image

Bring the good image to

customers mind

Open the events that help poor

people in the whole country, especially

the place always get flooded like Hue.

Support the financial sources for

some charity center, for instance,

S.O.S.

(BUSINESS ESSENTIAL, Business Environment, pg 60, 65-68)

4. Explanation of how economic systems in your country (Viet Nam) attempt to allocate

and make effective use of resources available within the country.

Vietnam is the mixed economy system, which is: “A "mixed" economy is a mix between

socialism and capitalism. It is a hodgepodge of freedoms and regulations, constantly changing

because of the lack of principles involved. A mixed-economy is a sign of intellectual chaos. It is

the attempt to gain the advantages of freedom without government having to give up its power.”

In fact, the company can control their production to make suitable to the change of the market.

Besides, the government can control the company in some ways to protect the enterprise or to

make more benefits for all of the members of society.

Now, we will classify how mixed economy effective use of resources available within Vietnam.

Vietnam is now in transition from a centrally -run to market economy. The country's constitution

recognizes a socialist oriented multi sector economy operating under booth the market

mechanism management by the state. Foreign and domestic private sectors are among the

economic sectors constitutionally recognized in Vietnam. There are currently state-owned

enterprise, state-private joint-stock companies, foreign invested enterprise, domestic private firm,

cooperatives and household business operating in the country. A level playing field is being

created to encourage all economic sectors to expand and develop. Therefore, there are few good

sources which are cited as the good conditions for the organization such as: natural resources,

human resources, financial resources and technology resources. (http://www.vietnam-

ustrade.org/index.php?f=news&do=detail&id=29&lang=english )

11

Natural resources: Vietnam has natural material plentiful and rich minerals,

agriculture, forestry and fishery such as Coal, crude oil, zinc, copper, silver, gold,

manganese, iron. Agriculture, forestry, and fisheries (20.58% of GDP, 2010): Principal

products--rice, coffee, cashews, maize, pepper (spice), sweet potato, pork, peanut, cotton,

plus extensive aquaculture of both fish and shellfish species. Cultivated land-12.2 million

hectares. Land use--21% arable; 28% forest and woodland; 51% other. It is advantage for

economy of Vietnam. Vietnam has used this advantage as well as attracts foreign

organization to invest in the country. The government has been doing many things to

protect natural material while using it to improve economic.

Human resources: human resources are always the most important factor to

decide the strength of the whole country. As of 1/4/2009, Vietnam's population: 85,789,573

people, second most populous country 13 in the world and 3rd in the region. The young

generation accounted 55% national population so that Vietnam has a major advantage of

labor resources.

Financial resources: Vietnam is developing country, so most of capital is from

investment’s foreign organization and loan from the World Bank. After Vietnam joined in

WTO, many foreign companies invested their money in Viet Nam. On the other hand,

Vietnam is invested from Official Development Assistance (ODA capital), Foreign Direct

Investment (FDI). Project no 1 has US$130 million in total capital , of which $120million

comes from ordinary capital resources (ORRC) and $10 million is from the Asian

Development Fund(ADF). The loan airs to assist Vietnam as the country reform a number

of state-owned enterprises and their affiliated companies to improve their efficient and

governance.

http://www.state.gov/r/pa/ei/bgn/4130.htm

Technology resources: Vietnam has good resources but skill and experience of

them still below the standards. Vietnam is in a trouble of labor surplus in quantity and

quality essential. Therefore, the country has to improve machines system, services,

numbers and quality. The government has to utilize technology form other developed

countries.

12

5. The impact of social welfare and industrial policy initiatives on the organization and the

wider community

5.1 Social welfare

Social welfare policies set out by the Vietnamese government are to protect and directly improve

citizens’ living standard. As a socialist orientation country, the Vietnamese government made the

minimum standard of living for all of its citizens a primary task. From 2011 to 2020, the

government will try to address the issues in three main areas: labour markets, social insurance

and poverty reduction. According to Decree No. 70/2011/NĐ-CP and Decree No. 98/2009/ND-

CP the government increased the minimum wage to 1,400,000 VND to 2,000,000 VND will

push up the labour cost for the company. Also, Vietnamese Labour Law 1994, last edited in

2007 stated that employees must have the right to be provided health insurance in the company.

REE will have to increase its labour costs in providing its employees with protection from not

only diseases and accidents but also other things such as get pregnant etc. On the other hand,

according to the Vice Minister for Labour, War Invalids and Social Affairs (MOLISA) Nguyen

Thanh Hoa, the government will try to put into practice the policies including providing of

unemployment benefits to the unemployed. This is good sign for REE as it will not have to

worry about straining its budget to buy insurance which also covers the risk of losing jobs for

their employees. Therefore, the employees and the trade union of REE will be able to feel more

secured about the workers’ source of income if they are to be unemployed.

5.2 Inductrial policy

A country wish growth and economic development will require the appropriate economic

policies in each stage of development. Among those policies, industrial policy is the most

important policy for large industrial contribution to GDP and is the driving force for agricultural

development as well as services. Because Viet Nam is developing country, industrial policy is

the most important policy is the core of the industrialization strategy.

http://thuvientructuyen.vn/chi-tiet-tai-lieu/chinh-sach-cong-nghiep-cua-viet-nam-trong-chien-

luoc-phat-trien-kinh-te-hien-nay/7114.ebook%E2%80%9D).

13

Industrial Policy (IP) is a plan of a nation, “denotes a nation's declared official, total strategic

effort to influence sectorial development and, thus, national industry portfolio." These

interventionist measures comprise "policies that stimulate specific activities and promote

structural change".

In Vietnam, a lot of electronics corporations have sought investment opportunities and are

willing to cooperate with Vietnamese enterprises. Recently, Intel Corp, the world€™s largest

computer chip manufacturer, has invested in a chip assembling and testing plant in Vietnam with

a total capital of over US$1 billion. Many big companies also did the same way as Intel. After a

year joining the WTO, Vietnam had been a world€™s largest manufacturer of printers and

electronic chips.

The remaining issue is to capture opportunities. To avoid the failure path, the Vietnamese

electronics industry needs a clear development strategy from the improvement of human

resources to R&D activities to enhance the competitiveness of electronics products. Besides,

companies in Vietnam in general and REE Corp in particular should be encouraged to shift from

manufacturing civil electronics products to producing specialised items, from assembling

products to manufacturing parts and software products. Local firms need to have more conditions

to turn out products of higher high-tech content. The final work is planning. To avoid

ineffectively unfocused investment, Vietnam needs to work out electronics development zones

where electronics companies will locate their factories.

(http://vietnambusiness.asia/vietnam-electronics-industry-stuck-with-assembly/ )

6. The impact of macro economic policy measures and the influence of the global

economy on the company and its stakeholders

6.1 The influence of the macro economic policy

There are two main sets of macro-economic policy that the Vietnamese government enforces in

order to influence level of economic activities within a country: fiscal and monetary policy. And

it is obvious that these two types of policy will definitely have an impact on the electronics

manufacture industry in general and REE Corporation in particular.

14

The government used Fiscal policy to directly influence the level of economic activities in a

country with two main tools: Taxation (T) and Government spending/expenditure (G). Due to

the recent global economic crisis, in 2009, Vietnamese government is still trying to recover its

economy by increasing State budget and reducing tax at the same time as part of the stimulus

package. However, on October 2009, the government has decided to end this stimulus package

tax cuts and exemption programs except for the interest rate subsidy of 2% for medium and long

term loads which will end at the end of 2010. They plan to increase their spending on social

welfare programs and other socioeconomic issues. This growing budget deficit potentially can

cause inflation in the country, leading to higher prices for REE products and services .

Furthermore, “ In order to benefit from the tax payment deferral, labor-intensive enterprises are

required to employ at least 300 workers, not counting workers with contracts of three months or

less. The right to delay payment for 2011 corporate income taxes for one year takes effect from

the due date this year.

Accordingly, corporate income tax in the first quarter of 2011 shall be settled before April 30,

2012; tax in the second quarter of 2011 shall be cleared before July 30, 2012; tax in the third

quarter of 2011 shall be paid before October 30, 2012; and tax in the fourth quarter of 2011

shall be settled before March 31, 2013. This decision takes effect on November 30, 2011”

(http://www.vietnam-briefing.com/news/corporate-income-tax-delayed-year-laborintensive-

enterprises.html/ ).This tax rate helps REE to increase profits, higher dividends to satisfy

shareholders and staffs can also receive high salary.. This support from government will helped

REE to be able to invest more in its manufacturing activities .

Monetary policy is “one of the tools that a national Government uses to influence its economy.

Using its monetary authority to control the supply and availablity of money, a government

attempts to influence the overall level of economic activity in line with its political objectives.

Usually this goal is "macroeconomic stability" - low unemployment, low inflation, economic

growth, and a balance of external payments” (http://www.finpipe.com/monpol.htm ). Loans

come from banks is very important for finance issues of almost every companies including REE

Corporation. The high interest rate will decrease in GDP. Vietnamese government adjusts

interest rate at 8% which will help our economy to prevent inflation

15

(http://mediaviet.vn/en/ServiceDetail.aspx?Category=4&SubCategory=40&Id=142 ). In

addition, exchange rate is an advantage for REE. Moreover, according to economics’ status, the

banks will decide whether they increase or decrease the supply of money to the enterprise.

6.2 The influence of the global economy

Vietnam has joined to ASEAN (28/7/1995), ASEM (2/3/1996), APEC (14/11/1998), United

Nation (20/9/1977), ACCT (1979), and WTO (11/1/2007). 2011 is the first year implementing

the country's 5 -year plan from 2011-2015

(http://www.iso.org/iso/iso_action_plan_developingcountries-2011-2015.pdf ) and implementing

the resolution annual party congress. with the recovery of the global and Vietnam economy,

sound policies of the government, the state bank of Vietnam, relevant ministries, the trust

support of customers, partners and shareholders, with the dynamism, creativity and

determination of REE's employees, we strongly believe those objective set for 2011 will be

realized, shareholder's benefits will be ensured.

Right after Vietnam speed up the global economic integration, especially when Vietnam

participated into AFTA and Vietnamese government negotiated to joint to WTO, enterprises’

leaders and other stakeholders were aware deeply that they would not only have more

opportunities but would also face with many challenges. Those companies recognized that

international integration results in more opportunities and advantages in penetrating into global

market. And REE is one of those companies. Nevertheless, it also increases the competition in

domestic market. This competition results from import goods and foreign investors.

III. Conclusion

All in all, this report shows basic information about REE Corporation, which is mission, values,

and key objectives of the company. Besides, the influence, objectives of three stakeholders and

the responsibilities of this company are also evaluated clearly as well as figures out the economic,

social and global environment in which REE Corp. operates.

16

REFERENCES:

REE Annual Report 2010, page 67, 69

Abitily, http://www.reecorp.com/?q=en/node/197 accessed on 22th, November

Stakeholders and How They Affect Your Business, http://www.articlesbase.com/management-

articles/stakeholders-and-how-they-affect-your-business-760088.html , accessed on 21th,

November

Stakeholder Mapping, http://www.lmcuk.com/management-tool/stakeholder-mapping, accessed

on 15th, November

International relations and basic economic system, http://www.vietnam-ustrade.org/index.php?

f=news&do=detail&id=29&lang=english, accessed on 21th, November

Background Note: Vietnam, http://www.state.gov/r/pa/ei/bgn/4130.htm, accessed on 21th,

November

Chính sách công nghiệp của Việt Nam trong chiến lược phát triển kinh tế hiện nay,

http://thuvientructuyen.vn/chi-tiet-tai-lieu/chinh-sach-cong-nghiep-cua-viet-nam-trong-chien-

luoc-phat-trien-kinh-te-hien-nay/7114.ebook%E2%80%9D, accessed on 21th, November

Vietnam electronics industry: stuck with assembly, http://vietnambusiness.asia/vietnam-

electronics-industry-stuck-with-assembly/, accessed on 21th, November

Corporate Income Tax Delayed One Year For Labor-Intensive Enterprises, http://www.vietnam-

briefing.com/news/corporate-income-tax-delayed-year-laborintensive-enterprises.html/ ,

accessed on 23th, November

Monetary policy, http://www.finpipe.com/monpol.htm, accessed on 15th, November

Vietnam central bank to keep benchmark rate at 8 pct next month,

http://mediaviet.vn/en/ServiceDetail.aspx?Category=4&SubCategory=40&Id=142, accessed on

22th, November

ISO Action Plan for developing

countrieshttp://www.iso.org/iso/iso_action_plan_developingcountries-2011-2015.pdf17