Tóm tắt Luận án Solutions for Implementing Business Strategy (IBS) at EVN’s generation companies

1 INTRODUCTION 1. The reasons for choosing the research topic In Vietnam, the strategies of electricity industry in general and power generation sector have been formulated through 2 documents: (1) The development strategy of EVN period of 2012-2015, towards 2020 by EVN; và (2) The master plan for national electricity development period 2011 – 2020 and 2030 (Master Plan VII). However, the operations of a competitive power market from July 1st 2012 as instructed by the Prime Minister have made the power sector no longer a monopoly in the economy. VCGM is introduced and developed through 3 levels: (1) Competive generation market until 2014; (2) towards competitive electricity wholesale market from 2015 to 2021; and (3) develop to competitive electricity retail market after 2021 and after 2023 will be perfect competitive electricity retail market. Business strategy has been implemented by EVN to its generation companies for 4 years to adapt to VCGM level 1. However, most of EVN’s generation companies even don’t have an implementing plan that can achive to high business performance for recent strategy and for the appear of competitive electricity wholesale market in 2021, only 06 years from now. There is a number of projects, papers related to implementing business strategy in general and in electricity sector in particular. However none of them directly researches on how to perfect business strategy implementing of EVN’s generation companies. From this situation and the objective demands of practice, the author has chosen the topic "Solutions for Implementing Business Strategy (IBS) at EVN’s generation companies" as the topic for PhD dissertation. 2. Overview of the research situation 2.1. Overview of the research situation oversea Oversea reseaches have just limited to functional areas of power generation. The implementing BS at corporation’s subsidiaries in general and at electricity corporation’s subsidiaries is the direction that has not been researched much and has much space for researching. 2.2. Overview of the research situation in Vietnam Strategy implementing in general and BS implementing have not been researched much even though all of strategy textbooks have chapters about strategic implantation theory. Researches concern to electricity industry, power generation sector and EVN from 2000 until now mainly focus on perfecting produce organization model, perfecting salary management, developing the humance resource, restructuring There is the only strategy of EVN where highlight some solutions for implementing strategy but they are too general and are not in details for generation companies. 2.3. Conclusion: So far there is no comprehensive study on theoretical and application of IBS for EVN’s generation companies both in Vietnam and oversea. Therefore “Solutions for Implementing the business strategy of EVN’s generation companies” is a new study and needed to research. 3. Objectives and tasks of the research 3.1. Research Objectives: Research the space in theory and practice about the relationship of strategies from corporation to electricity generation 2 companies and the ways to implement strategies from top organization (EVN) to subordinate organizations (electricity generation companies). Base on that a set of scientific and practical will be highlighted to promote and perfect for implementing busisness strategy at EVN’s electricity generation companies period until 2021, vision to 2030 . 3.2. Research Tasks - Establishing a basic theoretical and practical framework for IBS from EVN to electricity generation companies suited for competitive oriented market. - Analyzing and sssessing the recent situation of IBS at EVN's generation companies. - Identifying the orientations, points of view and solutions for IBS at EVN’s generation companies, period to 2021, vision to 2030. 4. Objects and scope of the research 4.1. Research Objects: The objects of the dissertation are theoretical and practical factors in IBS at EVN's generation companies in the context of developing VCGM from commercial business point of view. 4.2. Research scope - Content: focusing on implementing EVN’s business strategy at generation companies that start from formulating and implementing BS at generation companies. In details, the dissertation studies on impact factors to business strategy performance (BSP) that presented in research model. - Space: limiting the choice of study in SBUs of EVN’s Genco1, Genco 2 and Genco 3, that are EVN’s generation companies. - Time: generating data from 2011 until now to research the situation of implementing business strategy at EVN’s generation companies; proposing solutions to 2021, vision to 2030. 5. Research Methodology The methodology of this dissertation is to approach the system dialectical logic and history to consider the study of the relationship between the general (EVN), and the individual (generation companies); research RBS of generation companies in the overall strategy of companies across the supply chain (Generation - Transmission - Power Purchase) and the relationship between three strategy levels (corporate - business and functional level). General research methodology for IBS is the research method from abstract to concrete, generalized method to describe the state of the IBS at EVN’s generation companies because most of generation companies haven’t had an official strategy plan yet. Based on that, the research procedure is described in Figure 1. 3 Figure 1. Research procedure 6. New contributions of the dissertation - Theoretical contributions: Codifying some basic theory about BS, implementing and managing BS from corporate level to SBUs level; building hypothesis, research model scale factors in research model and test them in the power generation business conditions in Vietnam to build realistic model for implementing BSs at EVN’s generation companies. - Practical contributions: through the application of suitable research methods and models, the dissertation identified and clarified the practical arguments for IBS at EVN’s generation companies: systematically analyzed and objectively evaluated the status of elements and content of IBS at EVN’s generation companies. Since then the dissertation derives the overall assessment of recent situation and the causes of restrictions exist in IBS at EVN’s generation companies. - Regarding research objectives: The dissertation reached to research objectives through applying above scientific argument, proposed orientations, opinions, goals, general IBS solutions for EVN’s generation companies to achieve high BS performance in period to 2021, vision to 2030. 7. Structure of the dissertation The dissertation was structured in 03 chapters CHAPTER 1: SOME THEORETICAL AND PRACTICAL BASICS OF IMPLEMENTING BUSINESS STRATEGY IN GENERATION COMPANIES In the first chapter, the author has hoghlighted basic related concepts as: product, market and electricity market; Electricity supply chain; BS and its position, the contents of BS that is deployed at corporation’s subsidiary. According to that, when implementing BS at corporation’s subsidiaries, it means that the corporation has formulated its BS already and actualizing its objectives and 4 choices into actions at subsidiaries. It also means that subsidiaries haven’t had detailed BSs and therefore implementing BS at subsidiaries start from formulating BSs for them and then formulating BS implementing plan. Implementing BSs. Implementing BSs at corporation’s subsidiaries therefore includes 02 main tasks: (1) formulating BSs for corporation’s subsidiaries, and (2) formulating the above BS implementing plans. Implementing BSs at corporation’s subsidiaries is a phase of BS management. Regarding position, it mainly belongs to implementation phase in strategic management of entire the corporation, but for at corporation’s subsidiaries, it includes all formulation, implementation and control phase. Therefore, implementing BSs at corporation’s subsidiaries is known as procedure of development and implementation the contents of BS that is formulated and maintaining their compatibility with regular changes and uncertainty from competitive electricity market to ensure achieving objectives that has been established by the corporation. After reviewing theory of the basic content of implementing BSs at power generation enterprises as in Table 1, 07 hypotheses have been created as basis for establishing research model and scale factors as follows (Figure 1). Table 1. Synthesis of theoretical studies about implementing BS at generation companies Authors Implementing Strategic information and startegic analysis Henderson, B. (1984), Andrews, K (1987), Ravanavar G.M., Charantimath P.M., (2012), Esteban R. Brenes el al (2008), Flood, P.C., Dromgoole, T., Carrol, S.J. & Gorman, L (2000), Hitt, M.A., Ireland, R.D. & Hoskisson, R.E (2007), Hobbs, B. F., Metzler, C. and J. S. Pang (2000), Holman, P. (1999), M.Prabavathi và R.Gananadass (2014), Qin Li, Xin Li & Ping Zhou (2010) Implementing strategic positioning in competitive market Holman, P. (1999), D.Aaker (2001), Esteban R. Brenes el al (2008), Ralf Muller el al (2008), Gary L. Neilson, Karla L. Martin và Elizabeth Powers (2008), Verlyn Klass (2010), M.Prabavathi và R.Gananadass (2014), Kepha Otieno Omuoso (2013) Implementing functional strategy Henderson, B. (1984), Rowe el al (1998), Hobbs, B. F., Metzler, C. and J. S. Pang (2000), Pearce & Robinson (2003), Hrebiniak, L.G (2005), Yang Xiaozhou. (2005), Charles W.L. Hill & Gareth R.Jones (2008), Karani Teresa (2009), Qin Li, Xin Li & Ping Zhou (2010), Verlyn Klass (2010), M.Prabavathi và R.Gananadass (2014) Implementing alliances and partnership Jack Casazza và Frank Delea (2003), Jia Shuzhi. (2003), Nagurney. A, Dmytro Matsypura (2005), Ralf Muller el al (2008), Qin Li, Xin Li & Ping Zhou (2010), Kepha Otieno Omuoso (2013), Anna Nagurney, Dong, J. and D. Zhang (2002) Implementing strategies that create sources of sustainable competitive advantadge Flood, P.C., Dromgoole, T., Carrol, S.J. & Gorman, L (2000), Gary L. Neilson, Karla L. Martin và Elizabeth Powers (2008), Hobbs, B. F., Metzler, C. and J. S. Pang (2000), Esteban R. Brenes el al (2008), Firdaus Alamsjah (2011), Astif Osmani el al (2013), Giorgos el al (2014) 5 Upgrading resources, capabilities and business competences Prahalad, C.K. and Hamel, G. (1990), Casazza and Delea (2005), Yang Xiaozhou. (2005), Richard Lynch (2006), Verlyn Klass (2010), Firdaus Alamsjah (2011), Giorgos el al (2014), Hrebiniak, L.G. (2005), Karani Teresa (2009) Business strategy performance Henderson, B. (1984), Pearce, J.A. & Robinson, R.B, (2007), Esteban R. Brenes el al (2008), Gary L. Neilson, Karla L. Martin và Elizabeth Powers (2008), Qin Li, Xin Li & Ping Zhou (2010), Verlyn Klass (2010) Figure 1. Research Model Source: Author Qualitative method is used through expert workshops and interviews with 16 CEOs of generation companies, tranmission companies, power tradding company, EVN; Government officers from the over power sector under MOIT; strategy management researchers to develope officials the scale of the research model. At the workshop the scales and the theoretical background were infroduced and discussed. The results of the scale research are summarized in Table 1. Table 1. The items and meanings in implementing BS at power generation companies Items Meanings (1) Quality of implementation of strategic information and strategic analysis (SA) SA1. Applying SPACE for environmental analysis according to the level of competitive market. SA2. Applying BCG, GE/McKinsey for analysing SBUs. SA3. Applying TOWS for identifying the BS implementing orientation. SA4. Building Business information Management based on electronic database. (2) Quality of implementation strategic positioning in competitive market (PS) PS1. Implementing strategic position as cost leadership PS2. Implementing strategic position as more added value to customers PS3. Implementing strategic position as higher quality/higher price in the market. PS4. Implementing strategic position as safer and more friendly in CSR (3) Quality of implementation FS1. R&D more often new product, new technology and new procedure FS2. Suitable and effective development orientation, generation technology managmeent FS3. Oriented organization and management of production and streamlined 6 Items Meanings functional strategies (FS) operational efficiency. FS4. Implementing market oriented and value based marketing. FS5. Corporate finance development and effective development portfolio management. FS6. Oriented organization and development of quality, professional and high efficiency human resources. (4) Quality of implementation of strategic alliances and partner relationaship (PR) PR1. Sharing information and knowledge about the market and business timel, comprehensively and reliable. PR2. Sharing and collaborating in operational and sales planning timely and efficiently PR3. Reasonable sharing and harmonizing of EVN about benefits /costs in accordance with the level of contribution of power generation enterprises throughout the power chain. PR4. Practicing internal strategic alliance in EVN to better promote independence, autonomy and accountability of chain members. (5) Quality of implementation strategies that create sources of sustainable competitive advantage (CA) CA1. Ensure suitable, safe, modern, and efficient inputs and infrastructure for electricity production CA2. Better practicing streamlined technology system for generation production CA3. Faster practicing roaming power supply system CA4. Effectively activate the value chain CA5. Skilled and effective exploiting of the experience curve . (6) Quality of implementation and upgrade of resources, capabilities and business competences (BC) BC1. Capacity of implementing suitable and dynamic BSs BC2. Capacity of financing for implementing BSs. BC3. Capacity of risk management and ensure security for generator BC4. Building core compentence towards customer value and generators’dynamic compentence in market. BC5. Leadership capacity in BS implementing based on knowledge management. (7) Business Strategy Implementing Performance (BSP) BSP1. Quality of technology system for production, power generators and corporate social responsibility are appreciated BSP2. Quality of roaming services and meet orders is trusted. BSP3. The benefits and services that the customer obtained is much higher than the cost spent to buy electricity. BSP4. Imlementing current BS will ensure that the company obtains competitiveness, brand value and high business efficiency . Source: The author Quantitative research method through survey with the structure of sample as Table 3. Table 3: The structure of sample Structure of respondents/Experts Số lượng mẫu Tỉ lệ (%) 1 CEOs of generation companies 47 29,01% 2 CEOs of companies in EVN’s supply chain 32 19,75% 3 CEOs of Gencos and EVN 28 17,28% 4 Goverment from power sector under MOIT 15 9,27% 5 Officiah from provinces that has generation companies 21 12,96% 6 Researchers on Strategy Management and Power sector 19 11,73% Total 162 100% Source: author Results tested by Cronbach Alpha scales are summarized in Table 4. 7 Table 4: Reliability Analysis through Cronbach Alpha Items Scale Mean if items deleted Scale Variance if items deleted Corrected item – Total correlation Cronbach Alpha if item deleted Quality of implementation strategic information and strategic analysis (SA), Cronbach Alpha = 0.724 SA1 13.08 2.101 .607 .603 SA2 12.87 2.939 .465 .694 SA3 12.94 2.837 .501 .676 SA4 13.21 2.243 .524 .663 Quality of implementation strategic positioning in competitive market (PS), Cronbach Alpha =0.756 PS1 11.81 2.091 .546 .708 PS2 11.85 1.705 .630 .655 PS3 11.92 1.898 .514 .722 PS4 11.83 1.913 .537 .708 Quality of implementation functional strategies (FS), Cronbach Alpha =0.773 FS1 20.13 7.390 .293 .827 FS2 20.09 7.584 .615 .719 FS3 19.76 7.279 .573 .725 FS4 20.04 7.693 .623 .720 FS5 19.97 7.419 .595 .721 FS6 19.95 7.692 .585 .726 Quality of implementation strategic alliances and partner relationaship (PR), Cronbach Alpha =0.818 PR1 12.31 3.744 .594 .792 PR2 12.23 3.238 .641 .774 PR3 12.16 3.425 .664 .760 PR4 12.18 3.501 .668 .759 Quality of implementation strategies that create sources of sustainable competitive advantage (CA), Cronbach Alpha =0.718 CA1 15.50 6.073 .733 .564 CA2 15.47 6.110 .729 .567 CA3 15.91 8.489 .108 .818 CA4 15.75 8.021 .247 .757 CA5 15.47 6.200 .738 .567 Quality of implementation and upgrade resources, capabilities and business competences (BC), Cronbach Alpha =0.748 BC1 16.10 4.627 .647 .654 BC2 16.12 4.399 .704 .629 BC3 16.05 4.673 .688 .643 BC4 16.23 6.079 .079 .871 BC5 16.20 4.774 .620 .665 Business Strategic Performance (BSP), Cronbach Alpha = 0.802 BSP1 13.69 3.239 .675 .785 BSP2 13.56 3.891 .708 .752 BSP3 14.13 3.675 .694 .767 BSP4 14.21 4.038 .716 .773 Source: Results from analyzing data Table 3 shows that: Cronbach Alpha of 6 components are all above 0.7, therefore all 6 items are accpeted and are used for further analyze. However, 4 items (FS1, CA3, CA4 and BC5) are elimilated out of resecrh model because its total correlation <0.3 or Cronbach Alpha if item deleted is increase. After conducting multiple draft of EFA, final outcome of EFA after deleting 4 observed variables (FS1 , CA3 , CA4 and BC4) with Alpha < 0.3 for the results of KMO = 0.712 with sig 1). Therefore it meets the 8 requirements for total variance extracted = 66.938%. To enhance the ability to explain the factors, the authors selected Varimax rotation method - this procedure will swivel the factors to minimize the number of variables that have large coefficients at the same factor. Thus, the scale after assessing has 6 components and consists of 24 items. Moreover, factor loadings are all > 0:55 so the observed variables are important factors and have practical significance. Each variable has difference in loading factor were ≥ 0:30 ensure the distinction between factors. KMO = 0.712 so EFA is matching data. Chi-square statistics of Bartlett's significance is 0.000. Thus the variables are correlated overall. The concept of "Business Strategic Performance - BSP" is assumed to be a unidirectional concept. EFA factor analysis for this concept study showed that Cronbach alpha = 0.802; Eigen value is 2.249; variance extracted = 74.968; all factor loadings are greater than 0.80, therefore conclusions are: after elimilating 4 items, all existing items can present the value of business strategic performance and they reach convergence. In other words, the observed variables are representative for the concept that need to be measured. The paper using Pearson's coefficient to analyze the relationship between the independent variables with business strategy performance of EVN’s generation companies. Results showed business strategy performance has correlation to most of other variables and tthe correlations reached statistical significance (p <0.01). Putting 6 such components named above to run a regression to assess the suitability of a multiple regression model using the Enter method, final results show