THE RELATIONSHIP BETWEEN CORPORATE CULTURE AND THE USE OF MANAGEMENT ACCOUNTING INNOVATIONS IN VIETNAMESE COMPANIES: A STUDY OF TECHCOMBANK BY NGUYEN QUYNH THU Graduation Project Submitted to the Department of Business Studies, HELP University College, in Partial Fulfillment of the Requirements for the Degree of Bachelor of Business (Accounting) Hons October 2011 2 Declaration of Originality and Word Count DECLARATION I declare that this graduation project is based on my original work except for quotations and citation which have been duly acknowledged. I also declare that it has not been previously or concurrently submitted for any other courses/degrees at HELP University College or other institutions. Word Count: 11,602 words. Nguyen Quynh Thu Date 3 ACKNOWLEDGEMENT The completion and result of this thesis paper is not only the achievement of efforts from me but also the indispensable supports from a lot of helpful people. Firstly, I would like to express my gratefulness to my dear teachers at the International School, Vietnam National University where I spent nearly five years studying, researching and growing. They have helped me and my friends enlarge our knowledge as well as share with us lots of valuable experiences and lessons in life which I will never forget. Especially, I would love to extend my heartfelt thanks to my thesis’ supervisor, Mrs. Phan Thu Huong for her instruction and encouragement during the time. She was not only the person who initiated and inspired me to the topic of this paper, but also continuously supported and consulted me to find out solutions and complete this paper. Without her and other teachers’ advices and helps, I could not come to the destination and attain this result. Additionally, it is my great honor to receive the enthusiastic supports from all managers, chief accountant and other accounting staff who are involved in the survey conducted in this thesis. Although the relationship between me and those people is not close; however, I received one hundred percent replies over the questionnaire papers sent through both emails and in hands. Based on their answers, the influence of corporate culture on management accounting innovations in Techcombank has been found out and contributed a big value to this research. Finally, from the bottom of my heart, I would like to express my great thanks to all of my family members and friends for their vital encouragement and cares during the time conducting this thesis. 4 Once again, I’d love to send the profound feeling to the above-mentioned people, hadn’t been for all their supports and suggestions, this paper cannot be properly accomplished. 5 ABSTRACT THE RELATIONSHIP BETWEEN CORPORATE CULTURE AND THE USE OF MANAGEMENT ACCOUNTING INNOVATIONS IN VIETNAMESE COMPANIES: A STUDY OF TECHCOMBANK By NGUYEN QUYNH THU October 2011 Supervisor: Mrs. Phan Thu Huong Corporate culture is no longer a new term for developing countries. It has developed through the long history and nowadays it is expected to perform by any enterprises in the world. However, the term is not familiar to Vietnamese enterprises until the recent years when the economy is more open, corporate culture plays an important role in development and initiation of Vietnamese enterprises. In particular, this graduation project represents the results of research on the relationship between corporate culture and the use of management accounting innovations in Vietnamese companies, a case study of Techcombank. The objective of the research is to access the understanding of Techcombank’s managers and accountants about the influence of corporate culture on the initiations of managerial accounting system. In this thesis, the author reviews knowledge related to corporate culture and management accounting innovations involving definitions, elements, roles and theories of several international researches (Schein, Quinn and Rohrbaugh). The 6 author also analyzes the relationship between Techcombank’s corporate culture and its management accounting innovations based on models of Schein, Quinn and Rohrbaugh. Finally, from the success of Techcombank, the author will propose some useful experience lessons for Vietnamese companies. 7 TABLE OF CONTENT Declaration of Originality and Word Count 2 Acknowledgement 3 Abstract 5 Table of contents 7 List of Figures 11 List of Abbreviations 13 CHAPTER I – INTRODUCTION 14 1.1. Research background 14 1.2. Research objectives 15 1.3. Research significant 16 1.4. Research questions 16 1.5. Scope of research 16 1.6. Structure of research 17 CHAPTER II – LITERATURE REVIEW 18 2.1. Overview of corporate culture 18 2.1.1. Definition of culture 18 2.1.2. Definition of corporate culture 19 2.1.3. The role of corporate culture in business 20 8 2.1.3.1. Fostering innovation and invention 20 2.1.3.2. Creating corporate vision, shared values and beliefs 22 2.1.3.3. Creating the competitive advantage 22 2.2. Overview of the innovation of management accounting 23 2.2.1. Definition of management accounting 23 2.2.2. Definition of management accounting innovation 24 2.2.3. The role the innovation of management accounting 24 2.3. The relationship between corporate culture and the use of management accounting innovations 26 2.3.1. Iceberg’s principle - The model of Edgar H. Schein 26 2.3.1.1. Artifact 27 2.3.1.2. Espoused values 28 2.3.1.3. Assumptions 28 2.3.2. The competing value framework of corporate culture 29 2.3.2.1. Human relations 30 2.3.2.2. Open systems 31 2.3.2.3. Rational goals 31 2.3.2.4. Internal processes 32 CHAPTER III – RESEARCH METHODOLOGY 33 9 3.1. The survey 33 3.1.1. Objectives of survey 33 3.1.2. Questionnaire design 34 3.2. Case study 35 3.2.1. Objectives of case study 35 3.2.2. Data collection 36 3.2.3. Data analysis 37 CHAPTER IV – RESEARCH RESULTS AND EXPERIENCE LESSONS . 39 4.1. Findings from the survey 39 4.1.1. Detail findings 39 4.1.2. Overall findings from the survey 50 4.2. Findings from case study 52 4.2.1. Overview of Techcombank 52 4.2.2. Corporate culture of Techcombank 53 4.2.2.1. Artifacts 53 4.2.2.2. Espoused values 55 4.2.2.3. Assumptions 57 4.2.3 Management accounting innovations in Techcombank 58 4.2.3.1 ABC method 59 10 4.2.3.2 BSC method 60 4.2.4. The positive relationship between corporate culture and the use of management accounting innovation in Techcombank 61 4.2.4.1. Human relations 63 4.2.4.2. Open systems 64 4.2.4.3. Rational goals 66 4.2.4.4. Internal processes 68 4.3. The experience lessons for Vietnam enterprises 70 4.3.1. Improving the awareness of people about corporate culture and its relationship with management accounting 70 4.3.2. Establishing corporate culture for long-term strategy and development of management accounting 71 CHAPTER V – RECOMMENDATION AND RESEARCH LIMITATIONS73 5.1. Recommendations 73 5.2. Research Limitations 74 CHAPTER VI – CONCLUSION 76 6.1. Summary 76 6.2. Conclusion Remarks 77 REFERENCES 79 APPENDICES 82 [...]... organization when taking part in the international marketplace 2.2 Overview of the innovation of management accounting 2.2.1 Definition of management accounting Management accounting refers to the process of preparing management reports and accounts which provide accurate and timely financial as well as statistical information and data required by accounting management agents in a company to make day-to-day... culture and the innovations of managerial accounting in Techcombank iii Understand why and how the corporate culture influences on the use of managerial accounting innovations in Techcombank iv Find out some solutions and recommendations to upholding the good effects of corporate culture on the use of management accounting innovations in Techcombank 15 1.3 Research significant Vietnam appropriates the value... Difficulties in using management accounting innovations in 46 Techcombank Figure 4.10 Level of impact of corporate culture on the innovations in 47 managerial accounting system in Techcombank Figure 4.11 Problems in the relationship between corporate culture and 48 managerial accounting innovations in Techcombank Figure 4.12 Solutions for problems in the relationship between corporate 49 culture and managerial... And what is the innovation of management accounting? Secondly, what is the relationship between the corporate culture and the use of management accounting innovations in Techcombank? Finally, what are the experience lessons from building corporate culture in Techcombank in order to achieve the efficiency of management accounting innovations? 1.5 Scope of research 16 Due to time limitation, the research... concentrates on concept of corporate culture and its relationship with the use of management accounting innovations in a specific company It is Techcombank – the best enterprise in banking industry in Vietnam The content of this research is specific information of corporate culture at Techcombank in two year: 2009 and 2010 and its relationship with the use of management accounting innovations From the. .. between corporate culture and the use of management accounting innovations From the case study of Techcombank, I expect the good recommendation will be made for creating corporate culture process of this company Therefore, this research aims to: i Systematize the basic issues of corporate culture and the management accounting innovation ii Understand what is the relationship between the corporate culture. .. of Management Accounting, innovations such as activity-based costing /management, the balanced scorecard, value-chain analysis and economic value-added systems have been introduced by organizations to improve the quality of information and management within those organizations.” It means that initiation in managerial accounting is considered as a new idea by an adopting enterprise which serves as an... accounting innovations by Techcombank A summary has been made to obtain the generalization and percentage of asked managers and accountants for different choices and opinions This is also the primary data The finding of this survey is the primary source of data providing the significant answers for the queries and concerns about the understanding of corporate 33 culture and its relationship with management. .. asks about the roles of management accounting innovations in business of the surveyed staff in making decisions  Question 12 inquiry the difficulties when applying management accounting innovations In section III, there are five questions that cover the relationship between corporate culture and the use of management accounting innovations  Question 13 and question 14 asks about the awareness of surveyed... Difficulties in building corporate culture in Techcombank 42 Figure 4.5 Initiative methods of managerial accounting in Techcombank 43 Figure 4.6 The most understandable method in managerial accounting in 43 Chapter II Chapter IV Techcombank Figure 4.7 Roles of management accounting innovations in Techcombank 44 Figure 4.8 Levels of manager use management accounting innovations in 45 Techcombank 11 Figure . ABSTRACT THE RELATIONSHIP BETWEEN CORPORATE CULTURE AND THE USE OF MANAGEMENT ACCOUNTING INNOVATIONS IN VIETNAMESE COMPANIES: A STUDY OF TECHCOMBANK. of research on the relationship between corporate culture and the use of management accounting innovations in Vietnamese companies, a case study of Techcombank.