The functions including planning, organizing, controlling, leading,

The goal of Posco Vst is to meet a strong demand
for quality stainless steel in Vietnam and world markets as well as contribute
to the economic growth of Vietnam. Since our inception, Posco have been
pursuing continuous improvement in product quality and diversified development
of cold rolled stainless steel products. In 2015, 6 years after its
establishment, Posco Vst has been regarded as one of the most efficient
subsidiaries of Posco.  It achieved the objectives
of becoming the leading STS producer and making up the largest proportion of market
share in Vietnam (combined with Inox Hoa Binh, 80%) (Vietnam Breaking News, 2015). According to my assessment, achieving these results is due to
effective management functions including planning, organizing, controlling,
leading, and staffing.

Roles of five
functions in Posco VST

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to DuBrin in “Essentials
of Management “, the planning function
ensures the organization to be aware of environmental conditions such as
competitors and customers, forecast future situation, set goals and determine
what actions should be carried out to achieve these goals (DuBrin, 2012). Posco sees this as an important
management function because of its vision of becoming the number one stainless
steel company in the world and long-term planning is the first step it needs to
take to achieve its target. Only one year after the year of establishment, in
2010, Posco started the construction of a cold-rolled factory, which completed
in 2012 with annual production capacity of 150,000 tons (POSCO Expands STS Capacity, 2012). ­­­This event
turned Posco to be the unique STS producer in Vietnam, and rapidly occupied the
largest portion of Vietnamese market share, 40 percent in 2012 (Thu, 2013).

At a time when the world market is flooded with
Chinese steel products, low quality and low cost, Posco VST has set a plan to
provide the best quality and best price for the Vietnamese market. as well as
export markets. With this
plan, Posco Vst has invested heavily in research and development of new
stainless steel products that can meet the needs of customers and market demand.
As a result, in 2013, they invented a product 201 type as an alternative for
type 304 in common application like manufacturing water tank, tableware and
pipe. To be more specific, the type of product 304, which is considered as high
quality since it meets the strict international standards, consists of 8
percent Nickel, meanwhile type 201, in which there is an additional composition
of Manganese, consists of only 4 percent Nickel and 5 percent of Manganese. Reducing
nickel rates helped to reduce costs significantly while quality remained unchanged,
making Posco almost exclusively available on the market at that time.


Firstly, I would like to introduce our company’s
mission. It is to maintain profitability and strengthen the financial
structure, keep the relationship trustworthy with the customer by providing
high quality products and cheap products, set up a factory does not cause an
accident, work well, gain the unity of all employees to improve productivity
and save costs, continuous efforts to get raw materials at competitive prices,
and secure markets by improve production and quality, ethical behavior,
information security, creative activities (QSS), and maximize personal ability,
create “Great Work and Share profit “by harmonizing the Company –
Employees – Customers, carrying the corporate social responsibility of a global
business through volunteering and sharing value. According to Lussier, “Leading
involves affecting and inspiring employees to work towards the organizational
vision and contribute their best effort to the achievement of its objectives” (Lussier, 2012). Managers at Posco
apply this function in improving the coordination of employee performance and
behaviors by encouraging teams to have a short meeting on every Monday as well
as work in groups. The company also organizes an Innovation day on monthly
basis, where managers will summarize what the company has achieved last month,
share the company’s production and business. It also awards individuals who
make an active contribution to the growth of the company or who initiate good
projects to help the company reduce costs and increase revenue.


Organizing includes the establishment and
development of organizational structure and allocation of human resources. This
function values on divisions, collaboration and control over duties and
information flowing within the company (Lussier, 2012). All Posco employees use a common
system called Posco The Great, a modern ERP system used throughout the Posco
Group system. This system links all departments from order processing, order
management, inventory management, production materials, production to
distribution, shipping and payment. The most obvious example of the
effectiveness of this system is that a salesperson has access to the inventory
management system, raw material system where the data is updated by the raw
material department daily, thereby assessing the supply capacity of the plant.
This is very important for salespeople, as when quoting a customer as well as
making a contract, the delivery deadline is one element that customers
frequently discuss and complain about (lead time of a steel order usually from
2-3 months after contract, often late due to lack of raw materials or slow
production schedule). Another example is when the accounting department sees
any contracts not paid on time, they immediately notify the sales department.
Sales staff must immediately contact Customer to request payment, ensure
financial balance for the company. Therefore, organizational structure in Posco
is widely evaluated as to be successful in which employees know clearly what
their duties and responsibility are and work collaboratively in harmony.  


The controlling function requires constantly
monitoring of the strategic plans and organizational structure to make sure they
serve the company to meet its objectives. According to Kerzner, this function
includes three stages of setting standards of performance, measuring the
difference between the actual performance and standards and correcting if
necessary (Kerzner, 1989). Controlling at Posco is maintained
through weekly budget reviews as well as financial criteria, then they could
take action immediately when there is a sign of reducing revenue or profits. Production
processes and delivery procedures are also monitored regularly to ensure that
the goods are produced on schedule and delivered to the customer’s warehouse on
time. Posco regularly organizes training on updating
knowledge, skills, internal systems change and organizational structure to
ensure that employees are working in accordance with established standards.


The last function is staffing, which involves
proper recruitment and selection, evaluation of individuals to fill the positions
assigned by employer and retainment of skilled labors (DuBrin, 2012). At Posco, almost all the high position
such as general director, managers of departments such as sales and marketing,
finance, purchasing, import-export, production are occupied by those appointed
and transferred from the parent company. Those people have served Posco in
Korea for a long time, so they could utilize their experience and knowledge
about STS area to contribute to the operations and development of a newly
established company.  Lower positions
such as team leaders and staff are hired from local areas, and there is a
program of transferring new employees amongst departments during probation time
so that those employees could have more awareness of duties and
responsibilities of each department, before they are put in a position which
they are suitable most according to their ability and characteristic. Moreover,
the company has a policy to increase salary for loyal and skilled employees. For
example, employees who work for Posco will receive a pay raise each year as
well as excellent employees will receive a good salary increase.


has successfully managed five fundamental functions of management so that they
could effectively support the company to set the right objectives, maximize
available resources and obtain those goals. I believe that how the company
currently carries out those functional activities will help them to raise
employees’ motivation and customers’ satisfaction, expand their market and soon
reach their target to become the global leading company in stainless steel
industry. However, there is still one thing that this company should consider
to improve is the strategies on leading to enhance its development. Since those
Korean managers and Vietnamese staff does not have a common language, then it
is difficult for managers to convey their inspiration, motivation and
enthusiasm to staff. Moreover, leading function focus too much on forcing
employees to strictly obey policies and rules, which discourage flexibility, creativity
and somehow reduce labor productivity. Therefore, I recommend that Posco
maintains its current strategies on planning, controlling, organizing and
staffing, but improve its function on leading. This can be attained by opening
classes or courses for employees to advance their foreign language not only
English but also Korean as well. There should be more outdoor activities to
have more connection and open communication between managers and employees. As
for policies and regulations, managers, in some cases, should be flexibly break
the rules in acceptable limitation in order to make their staff feel
comfortable to enhance their creativity as well as increase productivity.