the study leadership competency of vietnam ceos research in hanoi

1 INTRODUCTION Objectives, Research object and scope 2.1 Objectives The thesis will focus on the following main objectives: Systemizing the basic theory of leadership and leadership competency to clarify what is leadership competency, what is the difference between leadership and management Systemizing knowledge about CEO, clarifying characters of the CEO position and that of Vietnam CEOs Identifying components of leadership competency of Vietnam CEOs Analyzing Vietnam CEO’s leadership competency and testing the impact level of components of their leadership competency on firm performance Proposing solutions and recommendations to improve Vietnam CEOs' leadership competency 2.2 Research object Vietnam CEOs’ leadership competency 2.3 Research scope The thesis focuses on examining components of leadership competency of Vietnam CEOs to firm performance in Hanoi, period 2009-2012 and proposing recommendations in the next period The management question What should we to improve Vietnam CEOs’ leadership competency? The research questions The thesis focuses on the following research questions: What are the components of Vietnam CEOs’ leadership competency? Are there difference in perception and evaluation on components of leadership competency between CEOs and their superiors and subordinators ? How Vietnam CEOs’ leadership competency impacts on firm performance? How to improve Vietnam CEOs’ leadership competency? (The superiors and subordinates are people who interact directly and most often with the CEO such as: board members, heads and deputy heads of departments ) New contributions Theoretically First, by summarizing and analyzing documents, the author explain the difference among the terms ”competency”, “capability”, “capacity” The author also explain the similar and difference between the terms “leadership” and “management” and emphasis on the role of leadership competency to the management position, which form the basic for the following researches on leadership in Vietnam Second, the author combine the theory of competency models, leadership competency, leadership theory to build and to test the impact level of components of Vietnam CEOs leadership competency to firm performance This is the premise to promote recommendations for the thesis The necessity of the research CEO - Chief Executive Officer is the heart of enterprises Since the appearance of the first CEO approximately 150 years ago, the number of CEOs has risen dramatically Because of the perceived and actual influence of these CEOs and their importance to globalization, prosperity, and economic growth Concern for CEO had been remaining a topical issue Although there are a lot of studies in CEO in Vietnam as well as in the world, research on CEO’s leadership traits and actions to increase the performance of the CEO is still very little Over the past decades , the studies in team of senior executives and their influence to firm performance had been raising ( Canella , 1997; Childs & Wolff , 1972 ; Finklestein & Hambrick , 1996 , Waldman , Javidan , & Varella , 2004) These studies have shown that firm performance was closely related to CEO’s actions and quality Finkelstein (1992 ) pointed out the need to consider the leadership traits of senior management team influence subordinators and firm performance Waldman, Javidan , Varella (2004 ) stated a growing trend that firm performance depends on the actions of the senior management team In Vietnam, it had became popular that people focus deeply on management instead of leadership and lacking of people with ability of inspiring and building visions in business There have also existed three common mistakes in thinking about management and leadership in Vietnam which were management thought to be leadership and vice-versa, leader is the highest position in an organizational structure, leader was born not made In addition, the following statistics have shown alarming situation in quality as well as leadership competency of Vietnam CEOs The survey of the Ministry of Planning and Investment in 63,000 enterprises in 36 provinces indicated 43.3% of the CEO having educated under high school level, 3.7% of the business owners were master's degree or higher The survey of Research and Development Institute also showed 65% of 2,000 business owners in Hanoi served as leaders and civil servants in the State sector was promoted and appointed positions rather than their achievements in leadership, about 15% of the CEO is the entrepreneur family business with a long tradition, the few remaining was CEO themselves The issue of educating CEO with high quality should be the urgent target especially when Vietnam has joined the WTO[1] So far, after nearly 30 years of innovation, Vietnam enterprises have never been faced with challenges and difficulties in the changing context of business environment and the crisis involves nations and regions CEO is the person responsible for operating business and this places on the role of CEO The big challenges of VietNam CEOs in the flat world is knowledge about international laws, foreign languages, leadership and management… In which, CEO’s leadership competency is the key role to business success It is necessary to clarify the nature of CEO’s leadership competency and to improve it Based on this review, the author selected the thesis named “Leadership competency of Vietnam CEOs (research in Hanoi)” 3 Practically First, the study results show that leadership traits and actions have not really met the demands of subordinates However, the results showed that all of them have “common ground” when evaluating the importance of leadership traits and actions of Vietnam CEO to leadership competency and to firm performance Second, the results of testing show that the proposed research model fit the survey data and the basic argument and hypotheses are accepted Accordingly, leadership actions have strongest influence on firm performance and following are leadership traits and knowledge Third, the thesis proposes oriented solutions and recommendations to improve Vietnam CEOs’ leadership competency based on the above tested factors Structure of the thesis: Beside introduction and conclusion, the thesis is divided into chapters as following: Chapter 1: Literature review of CEOs’ leadership competency and chance to research Chapter 2: Theoretical background and the conceptual model Chapter 3: Research methodology Chapter 4: Research findings of Vietnam CEOs’ leadership competency Chapter 5: Oriented solutions and recommendations for improving Vietnam CEOs’ leadership competency CHAPTER LITERATURE REVIEW OF CEO’s LEADERSHIP COMPETENCY AND CHANCE TO RESEARCH Literature review of leadership competency 1.1 1.1.1 The research of leadership competency in the world At the trait side, trait theory point out characters combine with leader success The leader with these characters will be competent We always hear that ” he was born, not made” This means the individual with special traits should have leadership competency Stogdill (1948,1974) recognized traits with leaders as followed: Intelligence, responsibility, self-confidence, socialability, arletness insight, initiative, persistence And there were ten traits positively affected leadership competency: responsibility, persistence, risk taking, self-confidence, sensitive, cooperativeness Lord et al.(1986) found intelligent, influenced, manly were traits of leaders Marlove (1986) found emotional intelligence (EI) could help leaders understand other behaviours and emotion so that they could act well Kirpatrick and Locke (1991) pointed out leaders were different from others in confidence, understanding tasks, cognitive ability, integrity, inspire ability, enthusiasm These traits may be born or made and they can help us realize leaders Smith and Foti (1998) showed the leadership traits like intelligence, self-confidence, exceptional Mumford, et al (2000) showed traits lead to leadership competency which were challenging the difficult and using it as chances to develop, influence, social commitment [8] In conclusion, there had been many traits which were studied such as: Intelligence, manly, responsibility, trust worthy, assertive, brave, creative, meticulous, openness, compassion , At the side of leadership knowledge, Schein (1996) said that leadership competency included cognitive ability, the ability of understanding himself and the world around, the motivation to learn and to change, emotional ability to self manage and others, the ability of analyzing the effect of culture especially positive effect of culture in leadership, attract subordinators’ participation, empowered by competency and encouraging leadership based on the subordinators’ participation House (1996) and Howard (1995) said that leadership competency is about the ability of recognizing limitation, analyzing and coordinating toward the goals Bass (1999), Zaccaro, et al (1991) said that leadership competency related to social knowledge likes communication, persuasion, negotiation, training, conflict management Researchers likes Connelly et al (2000), Kanungo & Misra (1992), Katz Kahn (1978), Lau, Newman, & Broedling (1980), Mahoney Jerdee, & Carroll (1965), Mintzberg (1973), Mumford, Marks, Connelly, Zaccaro, & Reiter Palmon (2000), Zaccaro (2001) focused on leaders tasks with knowledge instead of traits Back to the mentioned study of Bass (1981,1997), leadership knowledge as followed in table 1.4 5 Table 1.4: Leadership knowledge were concerned Adapt and Occupation Strategic along with Author/time Cognitive ability other ability ability ability Mahoney et Controlling Supervisor Cooperating Planning Directing Assessing al (1965) Negotiator Leader Resource Speaker Directing Mintzberg contribution The Communicating Negotiator (1973) Controller communicator Katz & Kahn System (1978) cognitive Relationship Decision Lau & Pavett Professional Monitoring Collecting and making (1980) knowledge Problem solving communicating Kanungo & Human oriented Misra (1992) Hooijberg, Diverse social Resource Merit Hunt, & ability contribution Diverse Dodge (1997) cognitive ability Connelly et Social awareness Problem solving al (2000) General skills cognitive ability Mumford, High level Marks, et al Social awareness cognitive ability (2000) Zaccaro Basic cognitive Social ability Professional (2001) ability knowledge influence of each factor, leadership actions tend to affect leadership effectiveness much more than leadership traits In conclusion, the study indicated that research model combining leadership traits and actions is meaningful 1.1.2 The research of leadership competency in Viet Nam Despite the study of leadership competency extremely diverse in the world (based on leadership traits, gender, levels, behavior and in specific field such as health, insurance …) there have been very little researches on leadership competency especially CEO’s leadership competency in Vietnam The author found the relative studies as followed: Dissertation “Solutions to improve qualification of State CEO - research in Nam Dinh” , Tran Van Dau, 2001 focused on the role of State CEO without concerning to CEO competency and the system of assessing CEO’s leadership competency The study "Evaluation of CEO’s competency through the ASK model ", Le Quan, 4/2011, Journal of Economics and Business, National University Hanoi Science magazine used ASK model to assess CEO’s competency in general and did not metion leadership competency The study also has certain conclusions on Vietnam CEO’s competency The report " Survey of business leaders of Vietnam non state-owned ", Phung Xuan Nha et al., 2012 gave an overview of the operating capability of Vietnam Non-state enterprise leaders with certain pros such as assertiveness, optimism about the future, having the ability to build relationships However, their operating capability still exist many " holes" such as bad human management skills and forecasting The report also showed that CEO's leadership competency had not been researched in detail The article " Improving Vietnam CEOs’ leadership competency in fluctuated business environment", Nguyen Manh Hung, 2012, Proceedings of the Vietnam’s day found Vietnam CEOs has the most strength to be assertive, creative, having knowledge of manage and communication skills Vietnam CEOs also reveal weaknesses such as lack of solidarity, not high labor discipline, However, the study did not show the separation between leadership competency and management competency The dissertation titled ”Leadership competency – situation of leaders of Vietnam SMEs”, 2012, Dang Ngoc Su, CIEM focused on evaluating leadership competency of the leaders using competence model with components included: vision, motivation, decentralized authorization, influence, decision making, self building, understand yourself and others, communication The research object is Vietnam SMEs’ leaders included CEO A ministerial-level project of the author Tran thi Van Hoa titled ”Improving CEO’s leadership competency in process of international economic integration”, 2011 have contributed to recognize Vietnam CEO competency model and pointed out the leadership competency gaps of Vietnam CEOs Based on the ASK model, the author Source: Peter G Northouse (2004), Leadership - theory and practice- 5thed At the side of leadership actions, leadership traits and knowledge are considered as the ”Necessary condition” and the leadership actions are the “Sufficient” The leadership actions depend on the specific situation and context There have been lots of researches on leadership shifted from leadership traits to leadership actions like behavioral theory Avolio et al (2004 a ), Judge & Piccolo (2004) showed that there have positive relation between transformational leadership and firm performance in any contexts and at any levels of leadership The person with transformational leadership style is focused by his actions in practice The third component of leadership competency depends on the specific context of the organization as well as specific studies and situations Overview of studies in leadership competency showed that there is little research combining leadership traits and actions and its influence to firm performance as well as leadership effectiveness (Avolio, 2007) Combining leadership traits and actions can explain at least 31% of the difference in leadership effectiveness At the individual pointed out leadership traits, knowledge and skills needed of Vietnam CEO but these lead to over loaded in her study And there is no separation between management and leadership competency in some cases The research lacked of the literature reviews This lead to the lack of the research base, especially in Vietnam context Reviewing the literatures showed that no studies explore the relationship between the components of CEO’s leadership competency and firm performance has been done in Vietnam Studies examining the relationship between the components of leadership competency with firm performance has been done in the world but in a narrow range likes the relationship between leadership traits and firm performance, leadership skills and firm performance So the author focused on the ”gap” to complete leadership science In conclusion, there have been many studies in CEO and leadership competency separately in Vietnam and in the world Because CEO is also a manager and a leader so that the leadership theoretical background can also be used to have research on CEO’s leadership competency 1.2 The chance of the research After reviewing documents and analyzing consistency of the leadership competency models, the author based on the BKD model to support the research Therefore, CEO’s leadership competency here means the combination of leadership traits(BE), leadership knowledge (KNOW) and leadership actions (DO) to have influence, motivate and encourage the others toward the goals of business CHAPTER THEORETICAL BACKGROUND AND THE CONCEPTUAL MODEL 2.1 Definition of leadership competency of the CEO 2.1.1 Competency definition Competency is a compound of traits, knowledge and actions of a person to complete his tasks 2.1.2 CEO’s Leadership competency 2.1.2.1 CEO’s leadership competency definition CEO’s leadership competency is a compound of leadership traits (BE), leadership knowledge (KNOW) and leadership actions (DO) of the CEO in managing and leading to gain the business goals 2.1.2.2 The roles of leadership competency of the CEO In the position of leading and managing business, CEO should have management competency to ”do things right” But CEO with management competency only could run the business in the stable environment When the business environment changing, management competency may make the obstacles to CEO to reach long visions for the company Leadership competency of the CEO is the key factor for the CEO’s success The bankruptcy and recession of large corporations named GM, Ford, JAL… and the dissolution of many Vietnam enterprises in 2012, 2013 is a testament for the weakness of leading In the dynamic environment today, management competency is not enough and we need both management and leadership competency for the business success A survey of World Economic Forum in 2002 have confirmed the necessary of CEO’s leadership competency in the globalizational context and pointed out the important components to leadership competency such as vision building, risk management… The roles of leadership competency of the CEO as follows: First, CEO with leadership competency will have long visions to reach the suitable fields for the company Second, CEO with leadership competency will have an ability right things (Bennis: leaders are people who right things) In the CEO position, the “right things” are running the business adapted to factors of external and internal environment Third, CEO with leadership competency will have ability to initiate changes, the ability to inspire and motivate followers to their best for the intended targets Fourth, CEO with leadership competency will have an ability to gather well followers to form an “all in one” to gain the intended targets 9 10 2.2 The research model CHAPTER THE RESEARCH METHODOLOGY Leadership traits of CEO (BE) Leadership knowledge of CEO (KNOW) Leadership actions of CEO (DO) FIRM PERFORMANCE Figure 2.1: The research model 2.3 Hypotheses: Based on the above analyses and the research model, the following hypotheses are suggested: Table 2.1: The research hypotheses Content Vietnam CEOs’ Leadership traits are positively related to firm performance Vietnam CEOs’ Leadership knowledge is positively related to firm performance Vietnam CEOs; Leadership actions are positively related to firm performance Source: The author’s results Hypothesis H1 H2 H3 3.1 The research methodology Archival research and secondary research: this approach provides qualitative data, including published statistics, consolidated reports from organizations, relevant authorities and from other resources In-depth interview: to understand more about components of leadership competency of Vietnam CEOs, the author interviewed experts in developing enterprise, CEO and board member of companies (includes construction, banking and transforming) This method provides qualitative data Survey: this methodology will help to test the hypothesized relationship 3.2 The process of research Step 1: Qualitative study After using archival research and secondary research, the author used the indepth interview to understand more about the research issue It helped to propose the research model and hypotheses Also, this information was used to design structured questionnaire more suitable This used as the base to build the research questions to collect the ideas of CEO and CEO’s subordinators Step 2: Quantitative study Survey was conducted by questionnaires and in-depth interviewing The sample for this study was drawn from a population in Hanoi, including: + Respondents from 419 CEOs from 419 companies (covered a range of size, type, majority of businesses) + Respondents from 600 people who are the CEOs’ superiors and subordinates of the mentioned companies 3.3 Data collection To survey CEOs in the collected enterprises, the author use the structured questionnaire The questionnaire in this study was originally designed based on secondary research, specifically previous theoretical basis and studies Then the authors discussed in the qualitative research and edited the first time Questionnaires are separated in types, one is for CEO and the other is for those CEO’s superiors and subordinates Before conducting formal research, the author conducted a pilot test on small samples (10 samples) including CEO and their superiors and subordinators to check the last editing and adjusted the second time The last step was to conduct the official version and sent to the participants to answer questionnaires 3.4 Scales Most of the measures for dependent and independent variables used in this study were drawn from the literature and adapted for the Vietnam context Most of the scales used in the study are adopted or modified from the previous researches of Tran thi Van Hoa (2011) and Golden, Dornheim(1998)[3,7] The items were developed based on the 11 12 findings from the previous qualitative study, these scales were scored on a 5-point Likert-type format from never to very often ; Dang Ngoc Su (2012) with scales were scored on a 5-point Likert-type format from strongly agree to strongly disagree; Kouzes and Posner (1995) with scales were scored on a 5-point Likert-type format from never to very often.[6].These scales are used to measure variables: (1) leadership traits of Vietnam CEOs); (2) leadership knowledge of Vietnam CEOs); (3) leadership actions of Vietnam CEOs And the author used the scale of Phan thi Thuc Anh et al (2012) to mesure firm performance[2] 3.4 Data analysis The survey was piloted and a number of questions were amended or withdrawn after the pilot phase This is the process of modifying structured questionnaires to make sure that collected information would be more exact Data was coded and used under SPSS The use of factor analysis and Cronbach’s alpha to decipher the internal consistency of and relationships between questions within modules Factor analysis was used to identify common components among sets of items within questionnaires The statistical hypothesis test are applied significance level of 5%.(Nguyen Đinh Tho, Nguyen Thi Mai Trang, 2007)[5].To examine the relationship between the dependent variable with the independent variables as well as between the independent variables together to identify the multicollinearity, Pearson correlation coefficients will be used If two variables have a linear relationship, the causal relationship of these two variables can be modeling by linear regression CHAPTER FINDINGS Overview of the Vietnam CEOs Recognition about the CEO position Opposite to other countries, CEO has been recognized at the side of position rather than that of career in Vietnam CEO is considered as a special job with many difficulties, challenges, pressures, but also a very high - paying jobs in society CEO also is considered as a job leading and managing other occupations in the same company The role of operating Due to Vietnam economy has been changing from subsidized to market, the role and function of CEO and chairman of the board of a company are sometimes not clearly separated Chairman of the board always concurrently hold the position of CEO, and the CEO is often highly dependent on the chairman of the board when making decisions This is clearly reflected in the public sector and private sector which went up from the small and medium from family business Education level The survey was conducted with 63,760 enterprises in 30 provinces by the Ministry of Planning and Investment in collaboration with the Japan International Cooperation Agency (JICA) showed that 54.5% CEO have university degree or higher (30% of these have degree of master and doctoral), 45.5% remaining is under high school level However, just 30% of the 54.5% trained in business management and the remaining are from other areas With such a low level, this result is big hindrance for Vietnam CEOs to join the international business in the current trend of rapidly changing technology 4.1 Training and retraining The issue of training CEO is limited in Vietnam There are ways to train CEO: one is school training and the other is practical experience CEOs from practical experience are very small proportion and becomes barely when Vietnam moving to the economy market while training through schools in Vietnam is inefficient Vietnam CEOs are limited in using foreign language, having a poor ability of informatics, and these lead to the limitation for CEOs to communicate and negotiate 13 14 Most CEOs only concentrate in improving their talents instead of the ethical Selection and appointment Since CEOs have not been standardized especially the level of training so that selecting CEOs is not based on the CEO’s training , just on his relations The selection of CEO is not really fair and democratic result in the poor quality of CEOs Hiring CEOs in Vietnam has not yet developed, primarily in foreign enterprises, private enterprises with large-scale And in the remaining, mostly business owners are CEOs Hiring CEOs in state-owned enterprises is in the pilot with a little number of companies: Vinashin, Vinamotor, VEC, glass and ceramics.[4] 4.2 Situation of leadership competency of Vietnam CEOs 4.2.1 Descriptive statistics Age of Vietnam CEOs Vietnam CEOs are relatively young age: 39.4% are under the age of 35, 56.6% aged 35-54 and only 4% over the age of 54 Gender of Vietnam CEOs Agree with the previous studies of CEO in Vietnam, Vietnam CEOs have male sex ratio is higher than female However, CEOs are female accounted for a significant proportion (35.9%) in this research Level of Vietnam CEOs education 97,5% of Vietnam CEOs have university degree or higher ( 17.1% of this have degree of master and doctoral), 2.5% are under high school level or have never been in training Although this result is not high but it is encouraging compared with the previously published survey of CEO's education level (CIEM, 2000) Specialized training of Vietnam CEOs CEOs are trained in a variety majors: architecture, engineering, foreign languages, communication, banking, law, computer science, business administration There is very little CEOs have not been in training yet (about 3.1%) The result showed that education and specialized training of Vietnam CEOs have a positive change, in which the training of economic and business administration accounting for more than a half (54.9%) This assessment may be a positive influence on the CEOs’ leadership competency (this result is encouraging compared to overall assessment of Vietnam CEOs with approximately 30% having business knowledge) The result also showed that 90% of CEO respondents said that they have not been professional trained in the position of CEO and they mainly rely on the specialized training of the self and self-learning experience Operating and leading Experience of Vietnam CEOs CEOs with years experience of managing and leading is the most percentage (40.4%), the next is years, years, years and 10 years In general level, 49.6% of CEO experienced under years, 43.5% experienced from to 10 years and 6.9% experienced over 10 years 4.2.2 Assessment of Vietnam CEO and their superiors and subordinators in leadership competency 4.2.2.1 Assessment of Vietnam CEO and their superiors and subordinators in leadership traits The result show that CEOs seem to assess themselves higher than that of the subordinators However, VietNam CEOs’ leadership competency had been strengthened as following: CEOs understand and more aware of their role especially their position and their responsibility to relevant partners inside and outside enterprise Creativity is highly appreciated traits of Vietnam CEOs Vietnam CEOs are very creative, innovative and hard working Many CEOs work hard to build enthusiasm and business development as well as an example for subordinators For ethics, CEOs represented pretty good sense of building enterprise’s values and culture as well as respected for the value of individual Vietnam CEOs also very cleared sense of getting objectives and identifying longterm strategic direction for the business In addition, sensitivity was also the trait CEOs wanted to express to "win the heart" and run the business more efficiently There have a number of traits were shortaged in Vietnam CEOs such as limited visions… In addition, CEOs were still not familiar with the habit of meeting partners’ expectation or actively seeking business opportunities These lead to the limitation of the sensitivity to partners’ expectation and business opportunities 4.2.2.2 Assessment of Vietnam CEO and their superiors and subordinators in leadership knowledge For general knowledge of leadership, the authors just surveyed CEO's general leadership knowledge and used previous research results to obtain a complete picture of Vietnam CEOs’ leadership competency The assessment of general leadership knowledge was putted into the questionnaire to ask Vietnam CEO self-assessing their leadership knowledge mainly aimed to know whether they understood clearly about leadership or not The results of the survey in Hanoi showed that Vietnam CEOs did not really understand about leadership and this can prevented CEOs to catch and train leadership knowledge The question with the statement "leadership is management" got the highest percentage level of "normal” showed that Vietnam CEOs were not clearly aware of the nature of leadership According to Tran Thi Van Hoa ( 2011), although most Vietnam CEOs have good technical knowledge, but they were lacked of leadership knowledge such as forecasting, business strategic directing, developing human resources as well as the way to work effectively to harness human resources and risk management.This knowledge was weakest one of Vietnam CEOs and must be completed and updated in rapid change of business environment Most of the CEOs’ leadership knowledge was assessed at less than 3.5 points (scale of 5) Assessment of Vietnam CEOs’ leadership knowledge was not the same between CEOs and their superiors and subordinators, especially knowledge of business strategy, risk management and corporate culture According to Dang Ngoc Su (2012), general leadership knowledge of leaders in 15 16 Vietnam small and medium enterprises including CEO was not very well The lack of these knowledge was also expressed in the inaccurate understanding of the nature of leading as well as effective leadership Overall, general leadership knowledge of Vietnam CEO was still limited and these will affect Vietnam CEOs’ leadership actions and leadership competency 4.2.2.3 Assessment of Vietnam CEO and their superiors and subordinators in leadership actions Vietnam CEOs understood and were aware of their role especially their position and responsibility with relevant partners inside and outside enterprise clearly Vietnam CEOs had the ability to develop relationships well Most CEOs were aware of the business culture of Vietnam as "Commercial with you, sell with wards" so they were very interested in developing relationships They also especially success in building relationships with investors and external partners Vietnam CEOs must concern to encourage employees’ heart The fact that many CEOs assigned work emotionally and did not assess employees’ ability leaded to decreased their motivation As the leader, CEO also need to be able to target reaching at least 4.5 points However this ability was still not highly rated The biggest drawback of Vietnam CEOs’ goal-oriented was communicating goal and announcing business vision to all employees and making them understand business goals in the same way and the same direction Vietnam CEOs must concern to developing staff for the achievement did not meet requirements, particularly their ability to decentralize, staff training and mentoring support staff 4.3 Analysing the effect of components of Vietnam CEO’ leadership competency to firm performance 4.3.1 Testing the variable value Factor analysis (EFA) is used when the KMO (Kaiser – Mayer – Olkin) value is more than 0.5 (Marija J, 1993) The results show that KMO & Berlett value of testing is more than 0.5) and this lead to the conclusion that the scales have high value when used to measure the corresponding variables 4.3.2 Evaluating the reliability of the scale Reliability evaluation is testing whether the scales are consistent with the corresponding variables The statistical method used to test the reliability is coefficient Cronbach's Alpha The testing results show that all Cronbach's alpha values are greater the required value of 0.6 In addition, most of Cronbach's Alpha of Item Deleted values are lower than Cronbach's Alpha and Corrected Item-Total Correlation values are greater than 0.3 Therefore, the scales in this study are highly reliable 4.3.3 Correlation coefficient The Pearson correlation coefficient values between KQHDD and BE, KNOW, DO are in the range of to It means the relationship between the variables is meaningful and has no abnormal signs, may continue to use other statistics to test this relationship 4.3.4 ANOVA test The ANOVA test shows that the hypothesis at the 0.00 significant level (< 0.05) The regression model fit the collected data and the variables are included in the statistical significance of 5% significance level Table 4.33 ANOVAb Model Sum of Squares df Mean Square F Sig Regression 25.693 8.564 38.648 000a Residual 91.962 415 222 Total 117.655 418 a Predictors: (Constant), KNOW, BE, DO b Dependent Variable: KQHĐ Source: The author’s results 4.3.5 Hypothesis tests Model Table 4.32: Model Summary Change Statistics Std Error of R R Adjusted the Square R Square R Square Estimate Change F Change df1 df2 213 47074 218 dimens1 467a 218 ion0 a Predictors: (Constant), KNOW, DO, BE 38.648 Sig F Change 415 000 Source: The author’s results Model Table 4.34: Coefficientsa Unstandardized Standardized Coefficients Coefficients B Std Error Beta 1.607 (Constant) 490 DO 370 BE 121 KNOW a Dependent Variable: KQHD 365 050 046 036 426 321 146 t Sig 4.404 9.728 7.481 3.314 000 000 000 001 Source: The author’s results The result of the regression coefficient in the model shows that the meaning of all Sig.are less than 0.05 Therefore, the independent variables affect firm performance All components of leadership competency are significant and affect firm performance at the same side because the regression coefficients are positive The beta coefficients are 18 17 statistically significant which are followed: actions (0.258); knowledge (0.231); traits (0.155) The model for these data is the following: Y = 1.607 + 0.370 BE + 0.121 KNOW+ 0.490 DO 4.3.6 Hypothesis test result The hypothesis test result shows that the beta coefficients are statistically significant The hypothesis test summary as followed: Table 4.4: Hypothesis test summary Hypothesis Result H1:Vietnam CEOs’ leadership traits are positively related to firm Accepted performance H2:Vietnam CEOs’ leadership knowledge are positively related to Accepted firm performance H3: Vietnam CEOs’ leadership actions are positively related to firm Accepted performance Source: The author’s results 4.4 Discussion and conclusion The summary from the research in Ha Noi are followed: The age of Vietnam CEOs are increasingly younger and CEOs at the age of 30 accounted for the largest proportion Education level of Vietnam CEOs increasingly improved There are more and more CEOs have undergraduate and graduate degree and fewer CEOs are not in training school Vietnam CEOs were trained in diverse fields and very little had not trained in fields CEOs which trained in economics and business accounting for more than half (54.9%) This was evaluated with a positive impact on Vietnam CEOs’ leadership competency This result is also encouraging compared with the previous overall assessment of the situation of Vietnam CEOs stated with CEOs’ knowledge of business administration approximately 30%) However, the alarming fact that 90% of CEOs respondents said that they had not been trained on the CEO job professionally and they mostly relied on their specialized training, their experience and self - study Vietnam CEOs with years operating experience is the biggest proportion (17.7%), followed was the number of CEOs had years, years, years , years and 10 years experience In general level , 49.6% CEOs had operating experience under years , 43.5% was from to 10 years and 6.9 % was over 10 years Vietnam CEOs understand their role in the business, clearly awared of who they are and how they responsible for relevant partners inside and outside the enterprise The key traits of Vietnam CEOs were identified including innovative, flexible, sensitive, responsible, ethical, trust worthy In particular, creativity is appreciated trait of Vietnam CEOs They are very creative, innovative and hard working Many CEOs work hard to build enthusiasm and developing business as well as doing an example for subordinates With moral, Vietnam CEOs were good at building a sense of corporate culture values and respecting for individual’s value The traits were not highly evaluated which were sensitivity and flexibility Vietnam CEOs were not also familiared with meeting partners’ expectation and actively seeking business opportunities Therefore, their sensitive to partners’ expectations and business opportunities is very limited However, sensitivity is the trait that CEOs expressed desire to "win the heart" and run the business more efficiently In addition to these traits, the research also found some leadership traits are considered important for Vietnam CEOs as followed: assertive, inquisitive, sociable , vision, acumen, humility, sharing, patience, intelligence… Vietnam CEOs’ traits and actions are incommensurated with the requirements and expectations of superiors and subordinators Vietnam CEOs tend to appreciate themselves higher than them According to the factor analysis result, the factors "honesty" and its observed variables are eliminated This can be explained that CEOs tend to concentrate the traits flexibility, innovative and responsible Specific business environment in Vietnam sometimes causing CEOs to improvise flexibility in operating and this can lead to the fact that honesty sometimes becomes excessive drag Meanwhile, the mentioned analysis shows that the board and the investors are very interested in CEOs’ honesty (this reflects the relationship among the CEO, board management and investors) In fact, honesty is the trait that is difficult to measure so that it should be overshadowed in feeling about CEOs’ leadership competency Vietnam CEOs’ leadership general knowledge was still limited, especially they did not really understand the nature of leadership as well as the difference between leadership and management This can affect CEOs’ leadership actions and leadership competency As mentioned in theoretical chapter, firm performance expressed through CEOs’ leadership competency is the combination of leadership traits, knowledge and actions To have leadership competency, CEO must have not only the basic but also the expert knowledge such as leadership, management, the way to encourage, knowledge of politic, culture and society, So that the general knowledge like a statement " leadership is management “ may not contain much meaning when considering components of CEOs’ leadership competency The observed variables such as "I facilitate individuals mature in their work through training, learning " and " I let people decide proactive in their work" in the scale of leadership actions "enabling others to act" were extracted into leadership action "modeling the way" This shows that the action "modeling the 19 20 way" of Vietnam CEOs needs to be shown not only verbally but also through practical learning and specific action CEOs want to develop others then they must model the way and through modeling the way to develop others Among the components of Vietnam CEOs’ leadership competency, all three factors positively impacted on firm performance CEOs’ leadership actions had the greatest impact, following were leadership traits and knowledge 4.5 Recommendations Although the subject of leadership and leadership competency had been studied a lot in the world but it is still very little in Vietnam With the differences in culture, customs, traditions as well as the frequent change of business environment, there have been much “space” to study in Vietnam with this topic Specifically, researchers can focused on the context of private enterprises, small and medium enterprises or businesses in a certain industry Objects of the research can be leadership competency of senior leadership (not just the CEO) or the middle level It can also be the issue of gender, age, education level, experience of the leader or manager …The object also can be factors affecting leadership traits, the relationship between leadership trait and action, leadership knowledge and action CHAPTER ORIENTED SOLUTIONS AND RECOMMENDATIONS FOR IMPROVING VIETNAM CEO’ LEADERSHIP COMPETENCY 5.1 Discuss of the research This research model is based on model leadership competency Be-Know-Do (BKD) of the U.S Army and is identical to the leadership competency model AttitudeSkills - Knowledge (ASK) (Bass, 1990) In addition, inheritance of previous researches is a necessity in order to build the model The author has inherited the results of previous studies, such as leadership theories, especially transformational theory, the traits theory For the first component of the model is BE - traits: the trait theory as well as researches on leadership traits has shown that there are certain personal qualities that affect leadership competency - called leadership traits That is, if individuals have strong leadership traits will have leadership competency In particular, Mann, 1959 emphasized the qualities smart, manly, temperate, careful and openness; Marlove, 1986 emphasized emotional intelligence; Mc Crae & Costa, 1987 emphasized creative, assertiveness, trust and nurture subordinates; Kirpatrick and Locke, 1991 emphasized the confidence, understanding tasks, integrity Bass, 1997 showed courage, assertive, have compassion and sensitive, ethics Tran thi Van Hoa, 2011 also showed the leadership traits such as creativity, flexibility, ethics The result of this study also agree with the mentioned studies with the traits of creativity, flexibility, trust worthy, responsibility, courage and sensitive The second component of the model is KNOW- knowledge: Leadership knowledge is the common understanding of the leadership field The studies of leadership competency had the following authors are more interested in aspects of leadership knowledge such as Schein (1996, p.67) interested in understanding emotion to manage themselves and others; Bass (1981.1997) showed that basic knowledge (cognitive ability), social knowledge (capacity and sociable adaptive), and occupational knowledge (professional competence) were mentioned in the study of Mahoney et al (1965), Mintzberg (1973), Katz & Kahn (1978), Lau & Pavett (1980), Connelly et al (2000), Mumford, Marks, et al (2000); Zaccaro (2001) These authors also enhanced common leadership knowledge for the leadership competency in individuals In this study, the authors just used basic leadership knowledge to provide a basic understanding of concepts such as what is leadership and distinguished leadership with management The results of the study also agreed with these view that leadership knowledge can affect ones’ leadership competency The third component of the model is DO – action: The fact that leaders have personal traits consistent with leadership position as well as knowing and applying leadership is considered as "necessary condition" More over, the "sufficient condition" is how can the leaders act with those leadership traits and knowledge For this reason, the DO component in the model was stressed In general, the results of the study basically agree with the mentioned quantitative 21 22 researches The result showed that firm performance influenced by three factors: leadership traits, leadership knowledge and leadership actions The effect level of these factors to firm performance are different (shown by the magnitude of the beta) Compared with Tran thi Van Hoa’s research (the closed approach subject), the author pointed out the impact of VietNam CEOs’ leadership traits, knowledge and actions to firm performance Besides, the author has used the 3rd component "DO" of leadership competency instead of "Skills" - "DO" contains more practices than "SKILLS" (The question with "DO" includes CEOs’ attitude in managing and leading - see the survey table in appendix) In study, the author also concluded positively for the author Tran thi Van Hoa when comparing and evaluating Vietnam CEOs’ leadership competency between themselves and their superiors and subordinators Thus, CEO is a specific position which related to many others so that it should be need multi-dimensional assessment of the components of leadership competency to improve CEOs’ leadership competency This could be the opened direction for further researches This research also has limited not to narrow the scope of the study to a particular industry in Vietnam According to the situational theory, the context has an influence on one’s leadership competency And the industry is characterized the context so that this also opens up a new direction for further researches in Vietnam Although there exist certain limitations but this research has helped improve the understanding of leadership and leadership competency of individuals as well as the components of leadership competency and its’ influence to firm performance This forms the basis for CEOs to improve their leadership competency 5.2 Oriented solutions to improve VietNam CEOs’ leadership competency 5.2.1 Improving VietNam CEOs’leadership competency based on the leadership traits For leadership traits were identified in the study, Vietnam CEOs should clearly aware of the nature of these traits as well as its role for leadership actions For example, flexible can help CEOs response quickly and consistently in building business vision and behave consistent with individuals with different personalities inside the company Trustworthy, ethical, encourage help CEOs gain the trust and sympathy of the people, generating invisible force to make everyone listen to and follow Creative helps CEOs refresh themselves and refresh formal and informal relationship between them and the others as well as the business with new products and services Sensitive helps CEOs exploit and recognize things early and be able to "go ahead" to solve problems (for example, judgment is the mental state and the desire of employees to judge the trend of market development product sales industry in the future ) Those traits can be present at birth but it is important that CEOs must be aware of their training and continuing learning CEOs can learn from those around them and through publications, participating in programs and courses for the CEO, self-testing exercises to assess traits themselves or ordering people around them (lower level, family ) evaluate in order to have the multidimensional information In addition, Vietnam CEOs should also note to train the traits identified in the open - ended questions in this research, that are humility, decisiveness, determination, generosity in order to improve and refresh their own in order to have the ability to influent others 5.2.2 Improving VietNam CEOs’ leadership competency based on the leadership knowledge To be able to improve leadership competency, in addition to certain leadership traits, CEOs should have basic knowledge of leadership such as the nature of vision and the method of determining the vision, understanding of communication, the art of building a personal image, skills of listening, culture of encouraging To these, CEOs should: Visiting, surveying and studying successful businesses in Vietnam and around the world Note that not only the same but also the different industry can be visited so that new ideas may be appeared Joining in clubs and workshops of experience sharing of leadership and management to gather information and improve vision such as CEO Club, seminars on personnel, industrial conferences Finding information on the mass media, reputation books on leadership and executive management such as CEO forums Participating in training courses of professional CEO with topics such as strategic thinking, creative thinking In addition, choosing good education institutions as well as good lectures is extremely important factor in order to get good education (for example countries having leading education like UK, U.S., Singapore ) 5.2.3 Improving Vietnam CEOs’ leadership competency based on the leadership actions For the action model the way: CEOs are aware clearly of their business value and beliefs They keep the firm on by behaving in a way that is consistent with these values (for example, principles of behavior with clients and colleague) To this, CEOs must concern with others’ ability so that the company can reach its goals more realistic For the action enable others to act: VietNam CEOs should build the company’s vision, give out the ideas shape the way the company will be Then, they should transfer those in order to meet employee’s expectation The CEOs with the ability of enabling others to act can gain the support and assistance of subordinators So, CEOs need to establish the importance and trust in their subordinators For the action inspire a shared vision: CEOs need to be aware of their role to shape, to build and to spread the vision in their business To be able to share the vision, CEOs should clearly aware of corporate vision at first Then, by sympathy, enthusiastic and effective networking skills, CEOs can share subordinators their point, show them the good result of sharing vision, through which the company's objectives will be achieved This action can be divided into two main topics which are: envisioning the business future and sharing with subordinators about that 23 vission For the action encourage the heart: To continue to pursue the given vision, CEOs need to have their heart, minds and enthusiasm.This action can divide in two components: recognizing one’s contributions and celebrating accomplishments For the action challenge the process: CEOs are pioneers – people who search out opportunities even though they have to step into the “unknown” to build strategic goals and long-term future of the company CEOs can willing to take the risks There can be a failure following taking risks but CEOs must treat failure as learning opportunities The two important points of challenging the process are searching opportunities and experimenting new ideas 5.2.4 Recommendation Strengthening leadership is not only the needs of CEOs themselves but also is one of the key contents help to create high-quality human resources to meet the development requirements of the country However, in order to improve Vietnam CEOs’ leadership competency, Viet Nam CEOs’ awareness and effort and the support of many other sides are needed Specific responsibilities and participation of these sides could be The Government, the Association of departments, training facilities and businesses 24 CONCLUSION Thus, in the process of international integration, Vietnam CEOs should have adequate knowledge not only about management but also leadership to have leadership competency running the business better In the context of changing international, regional and domestic business environment, improving Viet Nam CEOs’ leadership competency is the important solution to develop enterprises sustainable on the basis of people-centered as well as CEOs – center of management and leadership History of leadership theory showed the debate about whether the leadership traits have made the leadership competency or not As theory "Great man” confirmed the leader was born – because of she/he had her/his natural talent or her/his origin The theory “Traits theory” gave "The element of the standard" making leadership competency of individuals and confirmed that individuals with these traits would have leadership competency The identification of these leadership traits are valuable in detecting the leadership talent, gathering the leadership traits expected from the follower However, the view that leadership traits are due to natural born and therefore could not be changed are thought to be wrong A person can learn how to change his personal traits to get the necessary leadership traits This survey was done to identify Vietnam CEOs’ leadership traits, knowledge and actions By identifying and understanding the traits associated with Vietnam CEOs’ leadership competency as well as the basic leadership knowledge and actions, CEOs are able to detect and train themselves to improve and enhance their leadership competency Believe that with CEOs’ sense of self-training and suitable training programs, the attention of the Government, the Association and business departments, Vietnam CEOs can improve their leadership competency to lead the organizations better REFERENCES Phan Anh (2009), Seriously lack of CEO, VnExpress 29.9.2009 Phan thi Thuc Anh, Baughn, C., Ngo thi Minh Hang, & Neupet, K (2006), Knowledge acquisiton from foreign parents in International Joint Ventures: An empirical study in Vietnam, International Business Review, 15(5), tr 463-487 Tran thi Van Hoa (2011), Ministerial level research ”Improving Viet Nam CEOs in international economic integration”, National economics University Nguyen Manh Hung (2012), Viet Nam CEOs’ ability of leading and operating in changing business environment, Proceedings of Viet Nam human day Nguyễn Đinh Tho, Nguyen Thi Mai Trang, (2009), Research in business administration, Statistics Publishers Đặng Ngọc Sự (2011), The dissertation “leadership capability of leaders in Viet Nam SMEs”, CIEM Golden, Dornheim (1998), Lead and manage people, Republic of South Africa Wright, P (1996) Managerial Leadership, London: Routledge [...]... have basic knowledge of leadership such as the nature of vision and the method of determining the vision, understanding of communication, the art of building a personal image, skills of listening, culture of encouraging To do these, CEOs should: Visiting, surveying and studying successful businesses in Vietnam and around the world Note that not only the same but also the different industry can be visited... of leadership competency and its’ influence to firm performance This forms the basis for CEOs to improve their leadership competency 5.2 Oriented solutions to improve VietNam CEOs leadership competency 5.2.1 Improving VietNam CEOs leadership competency based on the leadership traits For leadership traits were identified in the study, Vietnam CEOs should clearly aware of the nature of these traits as... According to the situational theory, the context has an influence on one’s leadership competency And the industry is characterized the context so that this also opens up a new direction for further researches in Vietnam Although there exist certain limitations but this research has helped improve the understanding of leadership and leadership competency of individuals as well as the components of leadership. .. and leadership History of leadership theory showed the debate about whether the leadership traits have made the leadership competency or not As theory "Great man” confirmed the leader was born – because of she/he had her/his natural talent or her/his origin The theory “Traits theory” gave "The element of the standard" making leadership competency of individuals and confirmed that individuals with these... those in order to meet employee’s expectation The CEOs with the ability of enabling others to act can gain the support and assistance of subordinators So, CEOs need to establish the importance and trust in their subordinators For the action inspire a shared vision: CEOs need to be aware of their role to shape, to build and to spread the vision in their business To be able to share the vision, CEOs should... Besides, the author has used the 3rd component "DO" of leadership competency instead of "Skills" - "DO" contains more practices than "SKILLS" (The question with "DO" includes CEOs attitude in managing and leading - see the survey table in appendix) In study, the author also concluded positively for the author Tran thi Van Hoa when comparing and evaluating Vietnam CEOs leadership competency between themselves... identify Vietnam CEOs leadership traits, knowledge and actions By identifying and understanding the traits associated with Vietnam CEOs leadership competency as well as the basic leadership knowledge and actions, CEOs are able to detect and train themselves to improve and enhance their leadership competency Believe that with CEOs sense of self-training and suitable training programs, the attention of the. .. meet the development requirements of the country However, in order to improve Vietnam CEOs leadership competency, Viet Nam CEOs awareness and effort and the support of many other sides are needed Specific responsibilities and participation of these sides could be The Government, the Association of departments, training facilities and businesses 24 CONCLUSION Thus, in the process of international integration,... that CEOs must be aware of their training and continuing learning CEOs can learn from those around them and through publications, participating in programs and courses for the CEO, self-testing exercises to assess traits themselves or ordering people around them (lower level, family ) evaluate in order to have the multidimensional information In addition, Vietnam CEOs should also note to train the traits... long-term future of the company CEOs can willing to take the risks There can be a failure following taking risks but CEOs must treat failure as learning opportunities The two important points of challenging the process are searching opportunities and experimenting new ideas 5.2.4 Recommendation Strengthening leadership is not only the needs of CEOs themselves but also is one of the key contents help ... hindrance for Vietnam CEOs to join the international business in the current trend of rapidly changing technology 4.1 Training and retraining The issue of training CEO is limited in Vietnam There... of leadership traits (BE), leadership knowledge (KNOW) and leadership actions (DO) of the CEO in managing and leading to gain the business goals 2.1.2.2 The roles of leadership competency of the. .. knowledge of leadership such as the nature of vision and the method of determining the vision, understanding of communication, the art of building a personal image, skills of listening, culture of encouraging