Business financial management is seen as the brain of the business. Enterprise stability depends heavily on the ability of financial management. However, Vietnam has a severe shortage of these resources. Most Vietnamese enterprises consider experience the key for management, and may not fully understand the importance of financial management in business operation.
Reporter Thu Huyen interviews Mr Hoang Huu Phuoc, General Director of My A Business Corporation, on measures to increase resources for financial management in Vietnam.
How do you describe the role of financial management in business operation?
Business financial management plays a huge role in the business operation of enterprises because the business finance holds many critical roles in determining business effectiveness, such as capital management for business activities of the enterprise; capital preservation, effective use of capital, handling problems of loans and lending, as well as the mechanisms of managing business operations. The global slowdown has pushed the role of financial management to a new level of importance, not only encapsulating the management of capital, debt settlement, investment performance, and risk management by all the ordinary measures, but also carrying the responsibility to help businesses cope with prolonged stagnation and general instability of the local, regional, or global economy, such as risk management at the strategic level, orienting maintenance activities, business development in short and long term, etc.
However, these resources in Vietnam are insufficient; why do you think this is the case?
Media surveys show a severe shortage of resources on financial management - here referred to as the chief financial officer (CFO) level. If this deficiency in other developing countries is perhaps natural, then in Vietnam, it is the consequence of training content which lacks wide foresight and breakthrough impetus to "be the first to do it." The financial accounting management mechanism in the subsidy period did not set high requirements on the level of financial management, privately owned companies assigned the majority of high positions to relatives of the business owners, while labourer passivity springs from focusing on ‘trends’ in university (such as Information Technology, Tourism, Stock Market, and Auditing) or the general industry (such as Foreign Language, East Asian Studies, and Business Administration). So, along the increasing demand from foreign companies for financial management cannot be met by the senior labour supply in Vietnam. Perhaps, the increasing demand and the specialty will catch the attention of Vietnamese students so more and more people will take higher degrees or professional certificates from overseas in finance and banking, but the basic challenge remains: only a few people have actual practical experience of many years working in the industry; instead they have degrees, hence their ability to meet the standard requirements of recruiters from the beginning through the interview test or to maintain their positions in organisations long after recruitment. The essential point here reflects the psychological nature of Vietnamese culture, that people aim for a subject to achieve a high position, such as business administration courses for chief executive director, financial management education to CFO, rather than learning by talent and learning to become skilled professionals, which is the first step to advance into leadership positions. Pragmatic thinking without following a professional process leads Vietnam’s labour market into a difficult situation: either there is no professionally trained staff, or there is staff with professional degrees but with no work experience.
With the experience and knowledge of a business manager who has master's degree in international business, could you please give some suggestions regarding the problem of human resource of financial management in Vietnam?
Masters programme in International Business (MIB) is similar to master's programmes in business administration (MBA), but the difference is that MIB focus on strategic planning for operations on the international level, including international marketing, international banking and finance, international strategic planning of business, international business law, global business management, and international human resources management.
Because each country has a unique business environment, based on knowledge and experience in business management practice for many years, I think Vietnam needs to customize a specific recipe: X = Adaptive + Flexibility + Proactively respond to unexpected or unplanned problems + Right vision.
Vietnam needs to have customized solutions to deal the problem of limited human resource for financial management and enhance competitiveness in business administration at all levels of business leaders through training on financial administration in the international business environment. Business leaders need programmes like "Finance for non-Financial managers" for those who are not financial professionals.
In addition, enterprises should implement decentralization and devolve decision-making authority to key personnel in financial management of the business processes who are involved in business development, rather than just limit the functionality within the accountants and cashier who are not required to have financial management knowledge, and are positions often assigned to relatives of the owners. Management skills change when faced with unexpected events like regional economic fluctuations, local or global changes in policies or laws, and natural disasters. This shows the ability to handle situations impacting business performance, business results, capital, loans, and issues related to the loan or investment.
Foresight and the ability to work in unexpected conditions were hardly anticipated as necessities in non-business or service and sales fields in general previously. But the chaos in world finance, with unusual recessions in the late first decade of this twenty-first century, not only pushed the wonders of capitalist power, but also the concepts, theories, and faith in free markets. So situations from natural catastrophes to armed conflict make this capacity a must-have for leadership at all levels within the enterprise, particularly a CFO position, as finance is extremely important in all internal operations of the business. The prediction ability of a CFO can come from innate ability or experiencing the ideal environment of advanced training and practical application.
All the above implies that to solve the shortage of qualified external recruits or the lack of internal resources for financial management, the business owner must invest not only for themselves with appropriate activities and financial management, but also bring selected personnel to become efficient financial managers in this competitive, volatile and risky market, the natural environment for a modern CFO.
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