Operational strategies of Japanese multinational corporations and some countermeasure suggestions for Vietnam

Firstly , amend economic policies and legal documents that are not in line with WTO regulations. Strengthen propaganda and guidance on the effective implementation of the newly promulgated Investment Law and Enterprise Law. These are newly amended laws that are meaningful in creating an equal investment attraction environment for investment by TNCs as well as domestic investors.

 Strengthening highly attractive incentive policies for sectors and locations that need to attract investment from TNCs such as: Implementing tax policies to encourage high-tech projects, quickly implementing localization programs...

 Services provided to businesses of Japanese TNCs in particular and TNCs in general such as insurance, banking, post and telecommunications, etc. need to have their value added tax rates reduced to reduce TNCs' business costs.

 Create favorable conditions for Japanese TNCs investors to freely convert investment forms and reorganize businesses.

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Second, improve the quality of the state management staff in the field of investment management of TNCs in our country. State management is carried out primarily through state officials. To meet the increasingly high demands of the integrating economy, the state staff must be trained to improve their qualifications in all aspects. First of all, in terms of professional capacity, they must reach an advanced, modern management level, suitable for the management level of TNCs partners. Regularly update knowledge of international law and economics, improve foreign language skills, and understand Japanese TNCs partners. In terms of ethics and political qualities, state management staff in the field of investment of TNCs must be responsible and obligated to the State, to the people, and impartial.

Third, promote administrative procedure reform in the field of investment by TNCs. Promote decentralization of management and build a coordination mechanism in state management of investment activities by TNCs. Focus on decentralization of state management of

activities related to all stages before and after granting investment licenses on the basis of ensuring the principle of centralized and unified management of planning, structure, policies and management mechanisms. It is necessary to avoid overlap, encroachment, complexity and inefficiency of the management system but at the same time avoid the phenomenon of "breaking the fence" and exceeding authority.

State management agencies must serve enterprises with investment capital from Japanese TNCs as customers. There should be regular direct contact between state management agencies and TNCs investors. Establish consulting organizations as proactive bridges between enterprises and the state management agency system to easily resolve problems related to TNCs investment activities.

Fourth , it is necessary to innovate and improve the quality of building socio-economic development strategies. There needs to be unified direction on planning work nationwide, avoiding the inconsistency between the overall planning of the whole country and the planning of localities. There also needs to be a strategy to attract investment from Japanese TNCs in each major industry and field in the national economy. There also needs to be a strategy to adjust and balance investment from Japanese TNCs in regions and areas across the country. Japanese TNCs often focus on areas with certain favorable conditions in terms of both infrastructure and labor market as presented above, therefore, in addition to continuing to attract investment from TNCs in domestic growth triangles, it is necessary to implement well the investment incentive policy in other localities.

3. Establish domestic investment partners and develop supporting industries

Domestic investment partners with sufficient capacity in joint ventures and investment cooperation with Japanese TNCs are an important factor in attracting and appealing to TNCs. To effectively create domestic investment partners with sufficient capacity in joint ventures and investment cooperation with Japanese TNCs, we need to continue to consolidate and develop enterprises, especially continue to reorganize and innovate, improve the efficiency and competitiveness of state-owned enterprises, build strong economic groups on the basis of state-owned corporations, with the participation of economic sectors.

encourage investment from all economic sectors and improve the production and business capacity of enterprises.

Along with building domestic investment partners, it is necessary to solve the problem of "developing supporting industries along with removing other existing obstacles in this industry".

Currently, the Ministry of Industry is building a strategy for developing Vietnam's supporting industry. Accordingly, it focuses on key areas that Vietnam has the potential to develop early as well as attract large FDI capital from Japanese TNCs: automobiles, motorbikes; electronics and information technology; textiles and consumer goods manufacturing sectors. However, in addition to the Government's determination, there needs to be great efforts in linking, gathering businesses, and assigning reasonable specialization. This effort not only requires the Government's determination in issuing support policies, but also requires businesses themselves to rise up and produce components and spare parts that meet the quality requirements set by major foreign partners.

In the immediate future, it is necessary to review state-owned enterprises to find manufacturing units with the potential to supply parts, components, and accessories with competitive quality and price, thereby increasing capital and technology support to make the potential become reality. The government must have a satisfactory incentive regime for enterprises, including private enterprises and foreign-invested enterprises, to succeed in producing and supplying supporting industrial products with efficiency and good quality.

To develop the supporting industry, the experience of many countries shows that it is necessary to apply measures to increase import component tax rates, but this policy must be simultaneously linked to the policy of protecting complete products. In the current conditions of Vietnam, it is impossible to protect complete products, so it is necessary to implement another direction. The optimal policy now is to quickly increase competitiveness to export complete products, thereby increasing the scale of domestic production rapidly, creating conditions for enterprises to provide industrial products.

Supporting industries invest in expanding production. Most automobiles, motorbikes, electrical appliances, and household electronics are goods that are manufactured through many stages, so there should be a horizontal division of labor between enterprises in the production and supply of components and parts to each other. However, most production technology lines have been standardized, so enterprises tend to actively increase the rate of internalization of components and parts when production reaches a large scale. On the other hand, when finished products are manufactured for the international market, assembly companies must frequently change the features, designs, and styles of products. That forces enterprises to always maintain mobility and flexibility in managing the supply chain of supporting products, increase the rate of internalization, and proactively participate in building industrial clusters.

A long-term, comprehensive policy for the automobile, motorbike, electrical appliance, consumer electronics industries, etc. needs to be formed in Vietnam, in which there must be a program to attract and develop production facilities and supply of spare parts and raw materials. In the development stages of these industries, policies to encourage domestic industrial development are extremely important.

Investing in developing and manufacturing auxiliary products often faces many uncertainties and risks, so there must be a commitment between the manufacturer and the assembler, such as providing genuine consulting, equipment, and techniques so that the component suppliers have confidence and peace of mind to invest in expanding production. It is also necessary to realize that each business should be flexible and proactive to find its own path that suits it. It is impossible to demand that the assembler come to you, or see that they do not have feedback on the product and be discouraged from deciding to invest. Assemblers only pay for products that are true to their true value, with high quality and standard delivery time.

An indispensable factor when cooperating with Japanese enterprises is that the enterprise must have ISO 9000 and ISO 14000 certificates. During the cooperation process, it is necessary to be straightforward, honest, and strictly implement commitments.

For Vietnamese businesses, this is really a difficult problem but it must be done.

4. Human resource development

To attract and use FDI from Japanese TNCs effectively, Vietnam needs to pay more attention to training and human resource management. Clearly identifying human as the most basic resource and the long-term goal of development, our Party and State always consider education and training policy as the top national policy, especially the quality of human resources is important for improving the efficiency and competitiveness of the economy in general and enterprises in particular. Therefore, to develop human resources, we need to do well the following contents:

First , thoroughly reform the education system and develop high-quality human resources. For education to truly be a top national policy, the State must first have a policy of valuing talents, truly considering "talents as the vital energy of the nation", creating favorable jobs, and promoting the capacity of good cadres.

Along with the quality of education, it is necessary to rapidly develop the scale of education and shift from the traditional education model to a new education model: lifelong learning, continuous career development, in which schools train basic skills so that graduates can both work and study for life.

Second , invest appropriately in training and improving the quality of staff and workers working in the FDI sector. Take advantage of funding from countries, international organizations, and non-governmental organizations to send staff to study abroad or establish research centers in big cities such as Hanoi, Ho Chi Minh City, etc.

Establish appropriate mechanisms to encourage Japanese enterprises to train domestic and foreign workers. Encourage universities, colleges, and vocational high schools nationwide to participate in research, application, and sales of products and research projects to the state and enterprises.

Third , it is necessary to narrow the gap between business requirements and school training. In the current open economic conditions, the younger generation has the ability to absorb science and technology faster than previous generations. This has met the recruitment requirements of enterprises with investment capital from TNCs. However, most Japanese TNCs often consider experience as a condition for recruitment, which for most new graduates, this is a condition that is difficult to meet. The most common form of training support to help students gain work experience is to create conditions for them to practice and intern at enterprises. However, to do this well, it is necessary to strengthen the relationship between training institutions and enterprises. Moreover, enterprises need to provide new graduates with skills in teamwork, handling relationships within the company, etc.

Fourth , it is necessary to strengthen administrative, economic and educational measures, and to encourage the improvement of new work ethics and attitudes. Vietnamese workers have small-scale production habits. The majority of workers today have not been trained in industrial labor discipline. Most of them come from agriculture or rural areas, and are arbitrary about working hours and behavior. Workers have not been equipped with knowledge and skills to work in groups, are not able to cooperate and take risks, and are afraid to promote personal initiative and share work experiences. Many businesses, especially Japanese TNCs, have spent months training workers in work style before recruiting them to work at the business. Therefore, workers need to equip themselves with new work habits.

CONCLUDE

Japanese multinational corporations are increasingly developing and expanding their scope of operations and influence around the world. Internal environmental factors (such as natural conditions, the appreciation of the yen, labor shortages and the Japanese government's promotion policies) along with external environmental factors (globalization, regional situations, scientific and technological revolutions, etc.) have contributed significantly to the decision of TNCs to invest abroad.

Typical operating strategies of Japanese TNCs have been analyzed, including: network strategy, business structure diversification strategy, merger and acquisition strategy, and production base localization strategy. The network strategy has built a worldwide branch system for Japanese TNCs, helping them conduct business and dominate the global market. The business diversification strategy is a way for TNCs to avoid business risks as well as gradually penetrate new fields and industries. Currently, Japanese TNCs have a business structure with many industries, focusing most on the manufacturing industry. The merger and acquisition strategy has also been favored by TNCs recently, with the cost and number of TNCs participating in M&A increasing rapidly over the years. And a strategy chosen by most TNCs is the production base localization strategy. With this strategy, Japanese enterprises are increasingly successful in foreign markets due to their efforts to integrate locally. Each strategy is implemented by Japanese TNCs in their own conditions and circumstances with their own countermeasures, but it can be said that a TNC in its operation tries to coordinate effective strategies to increase its competitiveness, increase its revenue, profit and influence.

The reality of Japanese direct investment activities in Vietnam in recent times shows that Japanese TNCs have appreciated the business and investment environment in Vietnam more highly. The direct investment activities of Japanese TNCs have also shown

part of their investment strategy in the world. However, there are also shortcomings in the Vietnamese investment environment that make the positive characteristics in the investment strategy of Japanese TNCs not clearly expressed in Vietnam. Therefore, the thesis proposes 4 groups of solutions including solutions on improving the investment environment and policies; solutions to enhance the effectiveness and efficiency of State management; solutions to create investment partners and develop supporting industries and solutions to develop human resources. For the above groups of solutions to be truly effective, there needs to be coordinated attention and implementation by both the State and enterprises in a long-term strategy.

Although I have tried my best, the thesis will inevitably have shortcomings. I sincerely hope to receive comments from teachers to make the thesis more complete. I sincerely thank you.

Student Vu Thi Ha

Operational strategies of Japanese multinational corporations and some countermeasure suggestions for Vietnam - 11

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