I. What is the organizational structure restructuring and enterprises internal management?

It is the association of people to fulfill the owner's desired objectives, in which organizational restructuring is the process of reviewing, restructuring and redeploying structures, departments, and human resources to ensure the organizational effectiveness and suitability concerning strategic goals and changes in the market.

Organizational structure restructuring and internal management will help enterprises enhance the products and services quality, reduce costs and create work motivation for employees. At the same time, it makes enterprises keep up with changes in the market and create a foundation for enterprises to develop stronger in the future.

II. When do you need to conduct the organizational structure restructuring and enterprises internal management?

Firstly, the organizational structure is not suitable for enterprises.

The organizational structure is the core of any enterprises and a foundation for the enterprises’ success. An effectively structured organization will make enterprises management systematic, flexible and create convenient conditions for implementing future strategies. On the contrary, an unreasonable organizational structure will obstacle or drain enterprises’ potential. Consequently, to choose a suitable organizational structure for enterprises, managers must have a wide vision and deep understanding of their business fields and occupation markets.

Secondly, it is necessary to respond to the market changes.

Vietnam's international economic integration process has strongly broken through in recent years and promises to transform in the coming time. Therefore, there are high demands on organizations/enterprises to change and meet the market's strict requirements or enterprises face difficulties in the changing economic context. Hence, transforming types of enterprises is one of the current enterprises’ options, that meets and matches the enterprises’ ability and development situation in each period.

Thirdly, the enterprises’ internal management system is outdated.

Stagnation, bulkiness, overlap, delay, and uncooperativeness negatively affect organizational performance, costs augmentation, customer dissatisfaction, commercial reputation decline, loss of competitive positions; Or there are expressions such as high employee replacement rate, loss of market share, GDP decline. It's necessary to restructure when enterprises express ineffective organizational performance as above-mentioned.

What factors need to be considered when making an effective organizational and management model for enterprises ?

1. Types of enterprises (about the enterprise’s legal form)

Enterprises transformation is carried out between types of enterprises for which law has regulations on transformation procedures. Coming from the transformation demand as well as the State's purpose and management requirement for reorganizing enterprises and scope, transformation forms are determined by current laws and may change towards an ever-expanding direction.

According to the provisions of the Enterprises Law 2020, the following types of enterprise can be conducted:

 (1) Changing types of enterprises from a private enterprise to a one-member limited liability company;

 (2) Changing types of enterprises from a private enterprise to a two-member limited liability company;

 (3) Changing types of enterprises from a one-member limited liability company to a two-member limited liability company;

 (4) Changing types of enterprises from a one-member limited liability company to a joint-stock company;

 (5) Changing types of enterprises from a two-member limited liability company to a joint-stock company;

(6) Changing types of enterprises from a two-member limited liability company to a one-member limited liability company;

(7) Changing types of enterprises from a joint-stock company to a two-member limited liability company;

(8) Changing types of enterprises from a joint-stock company to a one-member limited liability company.

However, the transformation form in indexes ( 6), (7), and (8) are rare in reality.

2. Management enterprise function

• Identifying the target
• Planning
• Implementing
• Coordinating the implementation
• Controlling

Through internal management, managers can recognize shortcomings in the organizational system and adjust the management structure. The establishment of an internal control system is strong enough to manage risks and prevent enterprises from negative activities.

When enterprises conduct internal restructuring, the result that enterprises want to achieve will be

• Having a gentle, flexible management system to minimize enterprises’ costs;
• Staff capacity is developed to meet higher job requirements;
• Having an appropriate policies system and professional administration tools;
• Leadership capacity is developed as required;
• Enhancing image, brand, and competitiveness in the market;
• Members comply with the internal rules, regulations, and the enterprise’s operating procedures;
• Solving internal disputes;
• Leadership management capacity is transferred and improved organizational.

III. Counseling on organizational restructuring and enterprise internal management

Phong & Partners will provide the following legal services on organizational restructuring and internal management:

1. Counseling on transforming the legal form of the enterprise

• Counseling on the transformation conditions for each enterprise;
• Counseling on types of enterprise transformation procedures, advantages and disadvantages of each different type;
• Counseling specifically on each change request for enterprises in the company type transformation process;
• Drafting transformation dossiers for company type;
• Representing your enterprises, we conduct company type transformation procedures at competent state agencies;
• Engraving seal, announcing new company seal sample
• Counseling, drafting internal company dossiers after the transformation;
• Counseling on tax procedures, accounting, and related legal issues.

2. Counseling on restructuring enterprise internal management

• Counseling on building the optimal management system for enterprises:
• Counseling on drafting internal management dossiers of enterprises;
• Counseling on training staff juridically.

Is the organizational structure and enterprises management in the current situation a breakthrough? It depends on the enterprises’ choice. Enterprises need sharp thinking, fast action, and high determination to make difficulties and challenges become new development opportunities.

If you have any concerns about the restructuring of organizational structure and enterprises management, please contact us.

Phong & Partners Law Firm

Add: 6th Floor, Thanh Loi Building, 249 Nguyen Van Linh Street, Danang city - 0905.102425

Son Tra Branch: 01 Dong Giang street, Danang city - 0905.205624

Lien Chieu Branch: 21 Truong Van Da street, Danang city - 0901.95099

Ngu Hanh Son Branch: 03 Chu Cam Phong street, Danang city - 0905.579269

Tel: 0236.3822678

Email: Phongpartnerslaw@gmail.com

Web: https://phong-partners.com