Table of contents

1. Objective..................................................................................................................................3

2. Introduction............................................................................................................................3

2.1. Overview of the organization...............................................................................................3

2.2. Background of the leader....................................................................................................4

3. Leadership and management................................................................................................4

3.1. Leadership style identification according to characteristics, behaviors and qualities of

leader...........................................................................................................................................4

3.2. Importance of leadership style as a part of management and identification of

management style........................................................................................................................6

4. Power and politics...................................................................................................................7

4.1. Identify the power/authority reference to leadership style.................................................7

4.2. Impact of power on office politics.......................................................................................8

5. Organizational culture and effectiveness.............................................................................8

5.1. Influence of leadership/management and power/politics on culture of organization. .8

5.2. Impact of leadership/management and power/politics on the effectiveness of the

organization................................................................................................................................9

6. Conclusion.............................................................................................................................10

References.....................................................................................................................................11
 1. Objective
The main purpose of this paper is to demonstrate the affection of leadership and
management as well as power and politics in the case of Vingroup Joint Stock Company in
Viet Nam. In this report, the organizational effectiveness under the leadership of Mr. Pham
Nhat Vuong as known as CEO of Vingroup JSC is also described.
Additionally, this report also focuses on classifying leadership and management styles
which are belong to Mr. Pham Nhat Vuong in the case of managing and leading his
organization. Furthermore, the impacts of power and politics on organizational culture and
effectiveness are mentioned and analyzed in this paper.
 2. Introduction
2.1. Overview of the organization.

Vingroup Joint Stock Company (Vingroup JSC) was previously known as Technocom
Corporation which was founded in Ukraine in 1993 by Pham Nhat Vuong and his six friends.
Technocom participated in dried food industry as instant noodles. Mivina was their very first
production in Ukraine at that time and it particularly satisfied consumers due to the certain
demands and familiar flavor to the citizen. In addition, it created a great reputation for
Technocom when gained up to 90 percent in market share of instant noodle market and 80
percent of instant fried potato in Ukraine. Technocom had been a former in the industry that
other companies were willing to follow. In 2010, Nestle bought and yielded 100 percent
ownership over Technocom (KyivPost, 2010) and planned to expand Mivina’s product
globally by promoting the product in Eastern and Middle Europe.

In early 2000s, Technocom moved their head office to Viet Nam and changed their name
into Vingroup. At the beginning, Vincom JSC and Vinpearl JSC are two separate companies
with different investment target. In January 2012, Vingroup Joint Stock Company has been
completely formed by mergence of two key brands Vincom JSC and Vinpearl JSC. Vincom is
the chain of retail systems and Vinpearl majors in real estate field. After more than a decade,
Vingroup has sharply grown and become the largest company in Viet Nam at the present by
the ownership of many area of operation such as retail, healthcare, education and agriculture
industries with popular brand name including VinHomes, VinPearl and VinPearl Land,
Vincom, VinMec, VinSchool (Vietnamnews.vn, 2017). Together they have brought plenty of
priceless value for the society as well as economy.

2.2. Background of the leader.

Mr. Pham Nhat Vuong was born in 1968 in Ha Noi – capital of Viet Nam, at the ending of
Viet Nam war against US. His father joined North Vietnamese air defense force and his
mother possessed a sidewalk tea stand for living (Noer, 2013). Be born in the crisis period of
country, he soon had thought of helping his family so he tried to overcome the difficulty by
learning. He was also a good and hard-working student, by achieving a scholarship of
Moscow Geological Prospecting Institute in Russia which majors in the economics of raw
material extraction. By the time he graduated 1993, the chaos in Ukraine due to the collapse
of Soviet Union had created opportunities for Mr. Pham Nhat Vuong to start a business for
his own. By asking for loans from friends and family, he firstly operated a restaurant in
Ukraine and then processed for supplier systems which technologies of producing are
imported from Viet Nam. And the project has successfully created a new way of consuming
food in Ukraine. By that time, "Ukrainians were very poor--and very hungry" – said Vuong.
After Technocom changed its owner, Vuong continued his business in hometown.
Starting with real estate and retail, Vuong continuously expand his business on several
different sectors as education, health care, agriculture. Although there are many difficulties
that occur due to the diversity of investment field, Vuong and his organization are still
acknowledged their contribution for the development of the country especially for the luxury
of the neighborhood.
Furthermore, Vuong is known as a charismatic leader. He has gone through his hard
period of life with effort and an amazing working spirit. His target, according to his speech,
is “I don't care how much money I make. I want to build things that make life beautiful”.
3. Leadership and management
3.1. Leadership style identification according to characteristics, behaviors and qualities
of leader.
Leadership is a relation of leader and followers who expect the significant changes and
result which influence effectively to general outcomes (Daft, R. , 2011). And through
researching and identifying behaviors, personality and virtues, leadership style can easily be
revealed and recognized. In the case of Mr. Vuong, this definition is completely true and
reliable. Over the years, Mr. Vuong, with his strategy, has changed the way of leadership and
management in people’s standard.
Generally about his qualities, he is a consistent and disciplinal people. He is also
considered as a hard-working person with an open mindset. He does not hesitate to try and
learn new things, he always thinks outside of the box which others consider that would be
impossible. Vingroup’s CEO also mentions three elements that are the fundamental features
for new sector approach; they are passion, effort and teamwork. We can see thoroughly that
not only does he aim on business diversity but also focuses on human development. His
subordinates are always motivated and encouraged because of his friendly approaches.
Besides, Mr. Vuong tends to avoid the commendations and he is willing to approach the
complaints from not only customers but also his co-workers. Consequently, his leadership
style has become democratic and rational.
According to the above qualities, Mr. Vuong’s leadership style can be considered as the
transformational leadership. The leader with this style aims to the development of
subordinate system, their interest rate, ethical possibility (Ismail et al., 2009). In fact, Mr.
Vuong stays highly focus on his people in organization. In one hand, Vuong particularly
emphasizes that education is significant for not only the development of the company but
also individual promotion. Indeed, every employees or administrators in Vingroup are
continuously enhanced their essential skills and knowledge and those things are critically
more valuable for them than ever. In addition, Vuong always accommodates people and gives
them opportunities to speak up their opinions and concerns about.
Furthermore, Mr. Vuong advances “Five principles” in strategy included: centralization,
standardization, simplification, automation and sharing. This strategy mainly tackles the
issues of management and human resources sector and it has been proved itself being
effective through Vingroup’s succeed(Tin, 2018). Centralization, in his opinion, means that
every leader in organization must become the nucleus; they have responsibility in remain
company images as well as organizational culture. Secondly, every process must be efficient
and highly sync with every geographical part of organization. Thirdly, simplifying is
recommended as eliminating unnecessary procedures and regulations. Fourthly, due to the
development of technology, applying the advancement in improving management ability is
completely relevant and necessary for any organization but Vingroup in order to maximize
the productivity and organizational effectiveness. Last but not least, the core of maintenance
is sharing and accommodating interpersonally; by doing that, knowledge and dynamic would
be continuously expanded and enhanced and consequently, building a greater and greater
organization.
Besides, Mr.Vuong is also really strict in discipline. He requires all of his employees as
well as subordinates and leaders to follow closely the rules and policies which have been
regulated and essential to organizational culture. This would create a good and professional
behavior in working environment.
It can be clearly concluded that Mr. Pham Nhat Vuong is precisely a former of
transformational leader. Transformational leader acts comfortably and tend to consider about
subordinates’ interest when they are on the same track with the leader to reach the mutual
goals or simply is to enhance organizational effectiveness (Bass and Avolio, 1994). And
Mr.Vuong is a great sample for a successful leader with transformational leadership in Viet
Nam, this style would significantly uphold not only his reputation but also value of company
brand.
3.2. Importance of leadership style as a part of management and identification of
management style.
In comparison, leadership is multiple actions and behaviors that motivate, inspire and
collaborate the followers towards common achievement meanwhile management takes
responsible on appropriately keeping the existed standard of organization (Igbaekemen and
Odivwri, 2015). Due to this, Mr. Pham Nhat Vuong is considered to be the proper
combination of autocratic and democratic management style.
In Vingroup, all the ideas from not only customers but also staffs and employees are all
listened and considers. Making a decision is critically important in organization and avoiding
risk by taking all the ideas into account would be a brilliant way to maximize the percentage
of risk but not all the case would be applied the same way of solution. In some specific
circumstances, depend on the qualities of the workers or customers; there would be relevant
style towards them. For instance, autocratic management style would be amazingly applied
for new workers (IB and Studies, 2015) because they would need to be supervised and
guided efficiently and after the employees gather sufficiently experience, democratic style
would perfectly work in order to inspire and motivate their creativity.
Viet Nam is a new and prospect marketplace for investment. So as to comprehend the
marketplace, manager needs to well understand the external factors and internal factors
which can cause the issues to organization. By possessing a proper management approaches,
Vingroup has easily executed their investment in several different sectors and all of them are
particularly successful. Mr.Vuong emphasizes on the appropriate strategy in management
when applying in different circumstances are critically crucial. Because with a proper
strategy, manager would be able to control the outcomes and manage the risk in human
resources, finance or team work.
Furthermore, Mr. Vuong also creates the accommodative culture in his company in order
to turn every staffs and employees become a good supervisor and assistant. Consequently, not
only do people focus on their performance but also take care of others therefore, every new
member in organization will be continuously educated and improved. According to
Vingroup’s CEO, he mainly emphasizes on the importance of education and self-studied. In
early 2010s, Vingroup focuses much on quintessence in development and now Mr. Vuong is
willing that every people in his organization would remain the start-up spirit, with dynamic,
enthusiasm, and learning desire. And his aspiration is perfectly suitable in the era of
development, where human investing is constant and valuable.
4. Power and politics
4.1. Identify the power/authority reference to leadership style
Acknowledged that transformational style is applied for Mr.Vuong, it also is crucial to
determine the way he obtains the power in Vingroup. A recognition is applied to Mr.Vuong in
the form of conversion, it is also very important in determining his power in Vingroup. He
allocates the power for the purpose that motivates and inspires managers and subordinates to
maximize their effort and effectiveness of organization. Vingroup’s CEO expresses his
concern in finding and keeping talented people. By rationalizing the ability to fully exploit
the potential of managers or subordinates, as well as encouraging and inspiring them,
Vingroup's CEO take advantage of all the efforts and get many positive effects in the
organization. His interest in recruiting people like search and plans to retain talented
employees is also his focus.
In fact, the problem is not only in his case but also generally for management concern. In
one hand, Mr. Vuong proceeds basically from formal power as coercive power and reward
power. Reward power, if used correctly, it would highly motivate worker; however, it would
discourage people and reduce their productivity (Merchant, 2018). In fact, this issue is not
only a concern of Pham Nhat Vuong but also a common concern of many managers in many
different fields. Mr.Vuong has started to manage from the most basic things like applying his
power to rewarding as well as establishing conditions with the company's manpower.
Rewards are factors that have the power to promote the ability of workers, if it is applied
positively and accurately, on the other hand, if applied incorrectly, labor productivity will be
reduced (Merchant, 2018). By setting up discipline for each department, Vuong constructs
firm department with high level of productivity. Unlike other common punishment, people
will get fined or punished whenever they have a mistake, Vingroup sets up the rule that if
employee does wrong, his rewards would be decreased or vanished. This way of discipline
reveals the open mindset of his transformational leadership style. In order to build a team of
highly responsible employees, the CEO has given mental discipline as well as compliment,
so every business division of the group is evaluated with productivity and performance of the
results at work are very high and sustained. By cutting off, rewarding or reducing the value
of rewards, when employees make mistakes, even small mistakes, show the openness of this
entrepreneurial leadership thinking. That would consider the mistakes as the certain things in
life and it will be amazing if people play on right track, otherwise, they would still achieve
their basic rewards without any hesitation of mistake. Therefore, subordinates under the
leadership of Mr.Vuong always work enthusiastically and that is the significant reason for the
prosperity of Vingroup. Therefore, the enthusiasm of each member of VIngroup is always
full, thanks to the right direction of CEO Pham Nhat Vuong, and that is also the main reason
for the success of Vingroup today.
On the other hand, legitimate power is also intelligently applied by Vuong. Legitimate
power originates from positioning a person for his or her performance according to
hierarchical form of promotion (Harris, 1991). This application not only encourages the
working environment but also orients the target for subordinates. Furthermore, the people
with long time experience in organization would definitely gain the trust of the others, they
can well adapt with organizational culture and behavior, through that they would perform
better. On the other hand, Mr. Vuong has cleverly applied the use of legal power. The
beginning of legal power is the determination of a person's position on his or her
performance in the form of decentralized advertising (Harris, 1991). This method not only
promotes the working environment of the working environment but also directs the goals for
subordinates. In addition, the trust of leaders is reflected in the ability and experience of
long-term work in an organization, so that the activities of the employees go better, they will
choose a positive and sociable direction. respond to organizational behavior and culture.
4.2. Impact of power on office politics
Politics, in its broadest sense, is the activity through which people make, preserve and
amend the general rules under which they live (Heywood, 2015). Politics is defined in the
broadest sense as activities that force people to preserve, implement and modify the common
rules they live in (Heywood, 2015). According to his reputation, Vuong can easily gain the
referent power from his subordinates. By having that power, Vuong continuously maintains
the inspirations for his followers Nhat Vuong's followers, always felt and inherited his
inspiration and thanks to that power, and regulate the politics which can be easily accepted
for his people. With his traits and transformational leadership style as well as his referent
power, Vuong has had positive impact of building the regulation for his company. Because of
this introduction capacity and special leadership style of Pham Nhat Vuong, he has had
strong and positive influences in the image building process as well as Vingroup's own
regulations.
5. Organizational culture and effectiveness
5.1. Influence of leadership/management and power/politics on culture of
organization
Being a source of inspiration, Vingroup’s CEO is a huge motivation for the employees to
follow. With his transformational leadership style, Vuong always motivates his subordinates’
performance by the clear and bright vision as well as building up an extraordinary culture for
the company.
According to his five principles of management, Vuong has considered the organizational
culture should take its beginning from the managers. Every individual in Vingroup would
contain the same mission that is being the organizational image no matter which position or
sector. This culture originated from his leadership style, which is willing to spread and share
the good values to others. With his effort, Vingroup has transformed from value development
organization to human development organization and the culture of organization absolutely
impact positively to the employees. This strategy motivates employees by making them see
that they are the essential concentration of organization and that not only encourage but also
raise up the responsibility of them. Overall, building the solidarity in organization is
Vingroup’s achievement by creating this culture
Additionally, education is another essence in culture of Vingroup. Mr.Vuong emphasizes
in education as the irreplaceable and the core competitive elements in this era of
development. He also analyzes the importance of knowledge in innovation and how rapid it
could revolutionize. Therefore, every factor in Vingroup has to be active in learning and
willing to knowledge.
 In short, transformational leadership style again plays a significant role in innovating
organizational culture in Vuong’s case. He is merely successful by the referent power that
people put their fate in him. In fact, people in Vingroup strongly believe in his leadership
style and totally be convinced by organizational succeeds. And with this innovative culture,
Vingroup could be even more developing than Mr.Vuong’s desire.
5.2. Impact of leadership/management and power/politics on the effectiveness of the
organization.

The effectiveness of the organization might be measure by the particular number in every
sector. The significant features such as the growth, market share, network and revenue are all
considered as the dimension of the efficacy of Mr.Vuong’s leadership and power.

After four years from 2013 to 2017, the total assets of Vingroup rise from 75.8 trillion
VND to 213.8 trillion VND, meanwhile the net revenue also rises nearly five times from 18.4
trillion VND in 2013 to 89.4 trillion VND in 2017. Amazingly, Vincom shopping mall
network in 2012 is 3 with 132,000 meter square but in 2017, 46 stores has been built with
1,173,000 meter square gross floor area. Furthermore, Vingroup has expanded their sectors
by releasing a new brand VinFast – major in automobile and motorbike. Additionally,
Vingroup has become the most famous and reliable brand in Viet Nam and known by the
world due to their excellence of development and innovation.

Ultimately, the main reason for the success of Vingroup is the solidarity of the whole Vin-
community for the mutual achievement that is to bring the best value to people. Fortunately,
Mr.Vuong’s leadership style and qualities are mostly important in the sustainable
development of Vingroup now and forever.

6. Conclusion

In conclusion, it is particularly correct to state that leadership and power are significantly
remarkable in the case of building the culture of organization as well as consequently impact
to organizational effectiveness. In the case of Vingroup, we can well see that the
transformational leadership style amazingly remotes the outcomes of the organization by
some strategy of concentration. Therefore, there is no doubt to say that consideration in
choosing leadership style is the first requirement for the leader in order to accommodate the
organization to achieve the desire goals.
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