I.
QUESTION 1: COMPANY OVERVIEW (500)
1. Vision, mission, and core values (100)
Phu Nhuan Jewellery Joint Stock Company (PNJ) expresses an ambitious vision in its
endeavor to establish itself as a prominent jewellery producer and seller in the Asian
region, while demonstrating a dedication to appreciating aesthetics and expanding
into international markets. The mission of PNJ emphasizes its unwavering dedication
to artistic expression, with the goal of crafting exceptional jewellery items that
encapsulate genuine principles, while commemorating the aesthetic allure and
intrinsic significance of individuals' experiences. PNJ incorporates customer and
societal benefits into its corporate interests, reflecting a foundation in the principles of
sustainable development. PNJ's organizational philosophy is founded upon a set of
core values, namely acting with integrity, demonstrating dedication to objectives,
fostering a caring culture, dedicating efforts to customers, and embracing a pioneering
spirit (PNJ Annual Report, 2022).
2. Operating sector (200)
The main operational scope of PNJ encompasses both the secondary and tertiary
sectors. Within the secondary sector, PNJ is actively involved in the manufacturing
and processing of jewellery, gold, silver, gems, and associated products, thereby
making a significant contribution to the production of finalized goods. This statement
is in line with the broader categorization of the jewellery industry as part of the
secondary sector, highlighting its focus on converting raw materials into physical
goods. PNJ's retail and distribution operations concurrently place the company within
the tertiary sector, wherein it engages in direct interactions with consumers through
the provision of services and sale of finalized jewellery products. The comprehensive
approach of PNJ is highlighted by its dual-sector presence, which encompasses the
integration of production and customer-facing services in its business model.
3. Organizational structure (200)
Figure 1. Organizational Structure of PNJ (PNJ Annual Report, 2022)
The organizational structure of PNJ demonstrates a functional structure,
characterized by a well-defined hierarchy commencing with the General Meeting of
Shareholders, succeeded by the Board of Directors. The Board of Directors is
subsequently subdivided into various significant subcommittees, including the Audit
Committee, Subcommittee of Strategy-Finance, Subcommittee of Environmental-
Social-Governance (ESG), and Subcommittee of Human Resources-Remuneration.
Beneath these committees, there exists a Chief Executive Officer (CEO) who assumes
the responsibility of supervising multiple divisions, including but not limited to
Finance, Operations, Marketing, Strategy, Supply, Human Resources, Information
Technology, and others.
The functional structure presents several benefits for a corporation of substantial size,
such as PNJ. One significant advantage is specialization, as employees within each
functional division can cultivate expertise in their respective areas, which may result
in enhanced efficiency and effectiveness (Daft, 2015). Furthermore, the
implementation of clear reporting structures and the establishment of clearly defined
roles have the potential to augment both accountability and the process of decision-
making (Jones, George, & Hill, 2011).
Nevertheless, this particular framework also presents inherent difficulties. The
implementation of a functional organizational structure has the potential to create
departmental silos, thereby constraining effective communication and collaboration
among different divisions (Robbins & Coulter, 2021). The absence of integration
within an organization can impede its capacity to promptly adapt to market
fluctuations or execute cross-functional endeavors (Lawrence & Lorsch, 1967).
II. QUESTION 2: ANALYSIS OF CHANGES IN ORGANIZATION DURING
COVID-19 (500)
1. SWOT Analysis (250)
Strengths Strong brand reputation Weaknesses Imitability concerns,
requiring continuous
innovation
Unique designs and Dependence on a
proprietary processes common extensive
Established and efficient product range
supply chain
Skilled workforce
Adaptability to market
changes
Opportunitie Digital expansion and e- Threats Regulatory challenges
s commerce emphasis and government
regulations
Adapting to changing Economic downturn
consumer preferences affecting consumer
spending on non-
essentials
Enhancing supply chain Competitive pressure in
resilience the online jewelry market
Technological Supply chain disruptions
advancements
Diversification of revenue Legal compliance
streams challenges
Table 1. SWOT Analysis of PNJ during COVID-19
The construction of the SWOT analysis for PNJ during the COVID-19 pandemic
involved the integration of insights derived from a VRIO analysis and a PESTEL
analysis (see in APPENDIX). The study identified several strengths of PNJ, namely
its robust brand reputation and effective supply chain management, which were
deemed significant competitive advantages. Conversely, weaknesses were also
acknowledged, specifically concerns regarding the potential for imitation and the
company's reliance on a limited product range. These weaknesses were identified as
areas that could benefit from further development and enhancement. Opportunities
such as digital expansion and technological advancements were juxtaposed with
threats like regulatory challenges and supply chain disruptions. The aforementioned
considerations facilitated a thorough comprehension of PNJ's internal capacities and
the external variables impacting its functioning.
The strengths that have been identified are in accordance with the strategic changes
that PNJ undertook during the period of the pandemic. The adoption of online
platforms, as part of the digital transformation process, is a response to the evolving
consumer preferences and the growing importance of e-commerce. The
implementation of this strategic maneuver not only leverages PNJ's well-established
brand reputation but also conforms to wider patterns observed in the industry (Porter,
2001). Furthermore, the implementation of an Employee Stock Ownership Plan
(ESOP) policy within the realm of human resources compensation demonstrates a
progressive mindset. According to Freeman (2010), empirical evidence indicates that
ESOP have the potential to augment employee motivation, engagement, and overall
organizational performance.
Nevertheless, it is of utmost importance for PNJ to persist in its efforts to innovate in
both product design and manufacturing processes in order to mitigate concerns
regarding imitability. According to Freeman (2010), in order to fully optimize the
advantages of incorporating ESOP into the remuneration framework, it is imperative
to implement proficient communication tactics and strategies that foster active
involvement and commitment from employees. This comprehensive SWOT analysis
offers a strategic framework for PNJ to effectively navigate the challenges posed by
the COVID-19 era, capitalizing on its strengths, and addressing any weaknesses
within a rapidly evolving market.
2. Details of changes (250)
2.1. First change: Digital transformation
The digital transformation at PNJ represents a re-orientation and mandatory
change. Although the foundation for digital initiatives may have been established in
previous years, the effective implementation in 2020, specifically through the
establishment of the "Digital Transformation Centre," indicates a purposeful change in
the company's emphasis and approach (see Figure 3). The need for re-orientation
arose due to the dynamic nature of the business environment, which was further
intensified by the difficulties posed by the COVID-19 pandemic. This situation
underscored the company's ability to swiftly adjust to changing market requirements.
The change is also attributed to an external force, namely the increasing prevalence of
online shopping. As a result, customers are increasingly opting to make their
purchases online, thereby reducing their visits to physical retail stores (Galhotra,
2020).
Figure 2. Organizational structure of PNJ (PNJ Annual Report, 2019)
Figure 3. Organizational structure of PNJ (PNJ Annual Report, 2020)
2.2. Second change: Implement of ESOP
On the other hand, the implementation of the ESOP policy aligns with tuning,
adaptation, and initiative changes. The proposal was initially put forth in 2018,
predating the onset of the COVID-19 pandemic, and subsequently executed in 2019,
involving two instances of capital raising for the organization. The initial occurrence
transpired on June 19th, while the subsequent instance took place on December 16th,
amidst the period of lockdown (PNJ Annual Report, 2019). The proposal put forth in
the year 2018 exemplifies a tuning approach, advocating for moderate changes to the
organizational structure. Nevertheless, the prompt execution in the year 2019, along
with the acquisition of additional funds, signifies an adaptive reaction to both
internal and external influences, underscoring a proactive strategy to synchronize
employee incentives with the achievements of the organization. Although the ESOP
was originally suggested prior to the onset of the pandemic, its execution exemplifies
PNJ's capacity to modify strategies in light of evolving circumstances. The change
was prompted by internal factors related to the need for capital during the challenging
period of COVID-19 lockdown, as revenue declined due to a decrease in demand for
non-essential goods. Furthermore, through the implementation of this policy, PNJ has
the potential to enhance the company's financial performance in the near future (Pugh,
2000).
III. QUESTION 3: ANALYSIS OF CHANGES IN ORGANIZATION AFTER
COVID-19 (500)
1. SWOT Analysis
Strengths Strong brand reputation Weaknesses Imitability concerns,
requiring continuous
innovation
Unique designs and Dependence on a
proprietary processes common extensive
Established and efficient product range
supply chain
Skilled workforce
Adaptability to market
changes
Potential for Sustainable Supply Chain
Practices Management
Technological
Infrastructure
Opportunitie Digital expansion and e- Threats Regulatory challenges
s commerce emphasis and government
regulations
Adapting to changing Economic downturn
consumer preferences affecting consumer
spending on non-
essentials
Sustainable Practices Changing Sociocultural
Implementation Trends
Technological Supply chain disruptions
advancements
Economic Recovery Technological
Challenges
Table 2. SWOT Analysis of PNJ after COVID-19
The SWOT analysis conducted for PNJ in the post-COVID-19 period involved the
integration of findings from a VRIO analysis and a PESTEL analysis (see
APPENDIX). This process facilitated the alignment of internal strengths and
weaknesses with external opportunities and threats.
2. Changes Analysis
The initial modification implemented at PNJ, referred to as the digital transformation,
was not solely a reactive measure to address the immediate adversities posed by the
COVID-19 pandemic, but rather a deliberate and premeditated strategic transition that
had been under development for a considerable period of time. The pandemic,
nevertheless, served as a catalyst, amplifying the necessity for a strong digital
presence as consumers progressively transitioned towards online shopping. This
assertion is in accordance with the findings of Alshurideh's (2021) study, which
underscores the significance of aligning digital transformation initiatives with external
factors. Despite being initiated before the onset of the pandemic, the rapid
advancement of digitalization during the COVID-19 crisis reinforces its enduring
nature, establishing it as a vital element of PNJ's long-term strategy. This aligns with
the research conducted by Li (2020), which highlights the lasting influence of digital
transformation on business performance. Therefore, this transition is expected to
endure and gain further significance in the coming years, as it contributes to
increased profitability for the company amidst the growing prominence of online
shopping.
In a similar vein, the introduction of the ESOP at PNJ, as suggested in 2018,
exemplified a forward-thinking approach in adjusting the company's organizational
framework. According to Park (1995), the utilization of ESOP can be advantageous in
terms of capital generation and employee motivation. In the context of the COVID-19
pandemic, the process of downsizing has presented various difficulties. However, it is
noteworthy that the ESOP has emerged as a strategic financial tool that has effectively
contributed to enhancing employee morale and engagement. The observed increase in
ESOP capital from 2,252,935,850,000 to 2,461,716,200,000 VND in 2021 and 2022
signifies the continued success of this ownership model (PNJ Annual Report, 2021,
2022). This trend is consistent with the findings of Hallock (2004), who conducted
studies highlighting the favorable effects of employee ownership on both firm
performance and employee productivity. Consequently, the implementation of the
ESOP has had a favorable impact on the financial structure of PNJ and has served as a
source of motivation for employees. Hence, this alteration is expected to continue
and will be employed in subsequent times.
IV. QUESTION 4: ORGANIZATION CULTURE (500)
RESOURCES ENRICHMENT (2020)
ADDITIONAL INVESTMENT IN THE OWNER’S EQUITY (2020)
1. Before COVID-19
2. After COVID19
3. Analysis of culture changes
V. QUESTION 5: HUMAN RESOURCE STYLE (500)
VI. APPENDIX
References
Approved personnel changes of the Strategy Subcommittee and assigned tasks to each member;
Approving adjusting the assigned duties.of the members of BODs (2020)
