Ineffective leadership style in sale department at CADIVI company

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business PHAN NGUYEN THU HANG INEFFECTIVE LEADERSHIP STYLE IN SALE DEPARTMENT AT CADIVI COMPANY MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business PHAN NGUYEN THU HANG INEFFECTIVE LEADERSHIP STYLE IN SALE DEPARTMENT AT CADIVI COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr Pham Phu Quoc Ho Chi Minh City – Year 2018 TABLE OF CONTENT ACKNOWLEDGE EXECUTIVE SUMMARY CHAPTER I: INTRODUCTION ABOUT CADIVI COMPANY AND RECOGNISED SYMTOMS WITHIN SALE DEPARTMENT 1.1 Background of CADIVI company 1.2 Symptoms of problem in Sale Department at CADIVI company: high turnover rate CHAPTER II: PROBLEM IDENTIFICATION IN SALE DEPARTMENT AT CADIVI 2.1 Potential problems in Sale Department 2.2.1 Interview results 2.2.2 Initial cause- effect map 11 2.2.3 Theoretical framework 13 2.2.4 Updated cause- effect map 14 2.2 Problem Justification 16 2.2.5 Central problem: Ineffective leadership style 16 2.2.6 Definition of central problem- ineffective leadership style 17 2.2.7 Justify the existence of problem: ineffective leadership style 18 2.2.8 Justify the importance of problem: ineffective leadership style 19 CHAPTER III: CAUSE VALIDATION 23 3.1 Identification of potential causes 23 3.1.1 Poor attitude and personality of leaders 23 3.1.2 Soft-Skills shortage 23 3.1.3 Poor leader-follower relationship 24 3.2 Final cause-effect map 25 3.3 Causes validation of real problem: ineffective leadership style 26 CHAPTER IV: SOLUTION ANALYSIS 28 4.1 Theoretical framework 28 4.2 Short-term solution: Improving leader-follower relationship 29 4.3 Long-term solution: Solution for training, emphasizing soft skill and enhancing leader relationship 31 4.4 Solution Comparison: short-term solution and long-term solution 32 CHAPTER V: SELECTED SOLUTION AND CHANGING PLAN 34 5.1 Selected long-term solution 34 5.2 Details plan for long-term solution 34 5.2.1 Criterion set of this plan: 34 5.2.2 Action plan 35 5.2.3 Cost-benefit analysis of this comprehension plan 37 5.3 Changing plan 38 CHAPTER VI: SUPPORTING INFORMATION 40 6.1 Questionnaire development to justify central problem 40 6.2 Questionnaire development to justify causes 41 APPENDIX 43 REFERENCES 61 LIST OF FIGURE Figure 1: CADIVI structure Figure 2: Turnover rate in Sale Department from 2015 to 2018 Figure 3: Turnover rate of main departments at CADIVI in first months in 2018 Figure 4: Initial Cause- Effect Map 12 Figure 3: Updated Cause-Effect map 15 Figure 6: Customer Satisfaction 22 Figure 7: Final Cause-Effect map 26 LIST OF TABLE Table 1: Turnover rate in Sale Department from 2015 to 2018 Table 2: Turnover rate of four main departments at CADIVI in first months in 2018 ACKNOWLEDGE I would like to express my great appreciation and endless thank to my supervisor, Dr Pham Phu Quoc, who has kindly supported, guided, motivated, and given me loads of advances during the time writing this thesis His encouragement and comments significantly help me to fulfill this Without his support and instructions, this thesis would have been impossible to be done effectively In addition, I would like to approve my special gratitude to my family and all friends in MBUS 7.1 for encouraging me, caring and giving me strength in all the time writing this thesis Page EXECUTIVE SUMMARY This study has talked about the case in Sale department within CADIVI with the symptoms of the high turnover rates in the first six months in 2018 Based on the interview result and theoretical framework, ―ineffective leadership style in Sale Department at CADIVI‖ is the central problem that sale department needs to solve Ineffective leadership has been the great attributes to retention rate because of significant role of the leader in the way their staff devote their time, efforts, commitment and extend their support to achieve organizational goals Therefore, if turnover rate reduced, it could help to increase employee satisfaction, high performance and productivity In this thesis, leader personality, lack of soft-skill training, leadershipfollowers relationship and gender-related leadership are listed as potential causes of the problem in Sale Department According to cost-benefit analysis between two solutions as short-term and long-term, long- term solution selected as suitable solution, which could improve soft-skill of leaders and enhance leadership relationship in sale department With the detailed action plan and combination between sale department and HR department, the situation of sale team is expected to be solved in near future The cost for this plan is approximately 80 million VND each year but it expected to reduce the cost for recruit and train news replaced and the lower customer satisfaction Page CHAPTER I: INTRODUCTION ABOUT CADIVI COMPANY AND RECOGNISED SYMTOMS WITHIN SALE DEPARTMENT 1.1 Background of CADIVI company This section aims to point some features of the Electric Cable Industry, especially CADIVI 1.1.1 Overview of Electric Cable Industry In this constantly changing world, Vietnam is also entering the accelerated stage with the fast development of technology According to investors, Vietnam is highly considered as one of the most attractive market Modernization applied for all industries from manufacturing to business, the main wire and cable industry is in the fast-growing stage with the development of power generation, the construction of transmission and distribution networks from high voltage to low voltage networks and consumption The demand for electric wires and cables for power network construction expected to increase rapidly in the coming years Therefore, wire and cable products are considered as one of the most important contributors to the value of the industrial sectors in Vietnam There are more than 200 enterprises engaged in the production and export of electric wires and cables Some typical companies in the industry can be named as: Vietnam Electric Wire & Cable (CaDiVi), Tran Phu Electric Company, LG Vina Cable Joint Venture Company, TaYa Vietnam Company, Cable and Telecommunication (SaCom), In recent years, Vietnam's electric wire and cable industry is facing a great opportunity, but there are also many challenges to overcome The recovery of the real estate market has led to the demand for residential wires serving the infrastructure of industrial zones, new urban areas and office buildings CADIVI is the main unit supplying power cables for many projects in Ho Chi Minh City Based on General Department of Vietnam Customs‘ statistics, the group of electrical wires and cables of Vietnam exported to dosmetic markets in March 20118 reached $ 140.1 million, up 50.5% over February 2018, total export value of this group in the first quarter of 2018 is 388 million, up 47.0% over the same period in 2017 Vietnam's electrical wire and cable are mainly exported to China, Korea, Thailand, France, Malaysia Page Based on the analysis above, electric cable industry is really an interesting market and attracts a large number of work force 1.1.2 Overview of CADIVI company Vietnam Electric Cable Corporation (CADIVI) is established in 1975 as a stateowned enterprise and specializes in manufacturing various kinds of electric wire and cable CADIVI has five factories and two branches, distributing through more than 200 agents in Vietnam CADIVI is considered as one of the leaders of technology in wire and cable manufacturing in Vietnam After several times of rename and transforms, on August 08, 2018 CADIVI transformed as a Joint-Stock Company With more than 40 years of development, CADIVI has owned machinery and equipment from Europe, USA, and other developing countries in the region and maintained the business philosophy that ―good quality is the key factor to the development of CADIVI‖ With the vision of ―being one of the leading electric wire and cable manufacturers in the Southeast Asian region by 2020‖, CADIVI attempts to produce more high quality products, increase the revenue, meet more demand and build the workforce to be union, active, creativity, professional and highly responsible CADIVI‘s structure is shown as the chart below: General meeting of Shareholder Board of supervisor Board of management Board of director Sale Dept Manufacturing Dept Quality Assurance Dept Eastern Factory Finance& Accounting Dept Western Factory Figure 1: CADIVI structure Page Human Resources Dept Technology Dept 1.1.3 Sale Department in CADIVI company With 32 people including 01 manager, 01 assistant manager, 02 deputy managers, supervisors who have been responsible in agency, tender, exported, project and 24 employees, sale department have to: - Be responsible for looking all sales opportunities to sell cables and wires with the existing and new customers, presenting effectively to the customers regarding the requested product, keeping contacts with the customers to understand their needs and requirements, identifying the target budget, classifying different business opportunities for each customer to plan comfortable target budget or forecast list - Be one of the key department affecting the success of company - supervisors are responsible for exporting area, contributor area, power corporation and project Despite of the important role, high salary and fast staff growth, symptoms of high turnover rate may be a big worry needed to be concerned to sustain long-lasting development for sale team in CADIVI 1.2 Symptoms of problem in Sale Department at CADIVI company: high turnover rate This part aims to validate the symptoms of problem in Sale Department through time series analysis and comparison with other departments in company Firstly, according to a human resource report, turnover in Sale Department has a high rate from 2015 to 2018, especially in first months in 2018, the rate is nearly 38%, as being seen in figure follow: Page Mr.Vu: Enhancing teamwork‘s spirit and creating more opportunity for them to develop themselves I think that manager should spend more time to listen and understand staff more, instead of shouting and assign job Q10: Thank you very much for your responses Mr.Vu: Thank you  Respondent 5: The interview with Nguyen Hoang Vu, the 2nd interview Q1: Hi again, can we continue to discuss our last topic Mr Vu: Yes Q2: You said you were disappointed with your leaders, does your leaders have enough leadership experiences and compassion with employee? Mr Vu: No She really did not care what problems I had when I asked permission to take some day off She refused though I did not have any important thing to solve Q3: What about their performance? Did you see them very intelligence and good at education? Did they mentor and give you advance when you have problems? Mr Vu: Just little They required me to found the way to solve by myself and they just cared about the results Q4: Did your managers or supervisors mentor and give you advance when you have problems? What is about giving feedback? Dis they usually give feedback for you? Mr Vu: At the first time, my direct manager gives feedback to me constructively But now she is too busy to help me At the present, most of us need to own task by ourselves Q5: For you, how importance of soft-skills training to leadership effectiveness? Mr Vu: I think it can help to change leadership skill and enhance their effectiveness If leaders had strong soft-skill, they could know the best way to manage, train and lead well It also could help to improve salesmen‘s loyalty and satisfaction because of the feeling a part of team Q6: Did the company provide soft-skill training for manager and supervisor in sale team? Mr Vu: In CADIVI, it mainly focuses on technology and procedure without focusing on soft-skill training Q7: What topic did leaders need to be trained to improve? Mr Vu: My current supervisors and managers are knowledgeable about the product and competitor analysis but there is lack of creative method They need to think out of box, give more trust in our ability and listen to our idea I think communication and management skills need to be trained for leaders Page 53 Q8: Is there any rapport between salesmen and leaders? Mr Vu: Not at all Just my supervisors usually deliver rapport to me Q9: Did your leaders give you motivation to contribute and devote for working? Mr Vu: Yes, but just sometimes So I usually feel bored and lost direction Q10: Did your leaders arrange time for your team to have some outside activities to enhance? Did the leader be actively engaged in making sure that employee interests are satisfied? Mr Vu: No, we are too busy to arrange time for it Q11: Did your manager trust you and give you many opportunities to show strength? Mr Vu:: I think just 50% My direct managers did not believe on me with critical task Q12: Did you receive any care from your boss? Did you have a good relationship with them? Mr Vu: Like I said before, I think she does not have enough time to listen, care and understand what I really think or want The way my manager is force me doing like the way she want Q17: How does gender difference leadership in sale team? Mr Vu: Actually, I see that gender is not the influence implement Because leadership effectiveness will depend on their ability, skills and knowledge, not gender Q19: Thank you for your sharing  Respondent 6: The interview with Ms Nguyen Thi Hoang Anh, 1st interview Q1: Hello, my name is Thu Hang and now I am currently working on my graduation thesis May we talk around 30 minutes? Ms Hoang Anh: Yes Q2: Can you introduce little about yourself? What is your current job? Ms Hoang Anh: My full name is Nguyen Thi Hoang Anh Now I worked in Sale Department at CADIVI Q3: How long have you been working in CADIVI? Have you change many position? Ms Hoang Anh: I have worked in this department for years with the Economic background Q4: How was your feeling when you worked at here? Page 54 Ms Hoang Anh: For me, I feel stressful with a high workload but no have enough skill, understanding about CADVI‘s product and lost direction Therefore, it makes me feel difficult to my job, low satisfaction but my direct manager also did not give me necessary advances, instruction and suitable training program In my current position, the work procedure which I have to includes steps: Seeking customers, attracting and negotiating them, suggesting suitable price, making contact and maintaining relationship with customers I really cannot balance work and life Q5: Do you see any problem in your department now? Ms Hoang Anh: Of course I have worked at here for a long time so I can understand deeply about inside problem in here A plenty of workers quit jobs, especially young salesmen because of disappointed about working environment and leadership Most of employees go to work with tiredness, loss of energy and bad spirit Q6: In your opinion, what is the reason for that problem? Ms Hoang Anh: It can come from lack of necessary training, lost no direction, unclear career path and pressure from my manager Q7: Can you detailed more about it? Ms Hoang Anh: Generally speaking, our company have training program but just at the first time we apply the job But as you know, our company is getting expanded, we did not updated it so it made us a lot of difficulties to meet customer‘s demand Besides, we not have ability to present and persuade customer as well as effective In addition, manager not trust in us, thus they need to many thing and not have free time to share or listen us Q8: So what is the main reason? Ms Hoang Anh: I think because the lack of training and unclear information about our product Q9: How can it fluent department productivity? Ms Hoang Anh: I see it makes the low productivity for misleading and need time to work together We also need to recruit and train again new staff Since Quarter 1/2017, sales has decreased in Agency Area (from 3,212 billion VND in 2016 to 2,707 billion VND in 2017) In other hand, products are higher cost than other competitions, nearly 30-40% CADIVI lost some market share, especially exported area decrease 30% as 2016 Q10: What you think that your department needs to change to increase employee retention? Page 55 Ms Hoang Anh: Training more and give us opportunities to join skill training to be more confidence and professional working with customers Q11: Thank you very much for your responses Ms Hoang Anh: Thank you  Respondent 6: The interview with Ms Hoang Anh, the 2nd interview Q1: Hi again, can we continue to discuss our last topic Ms Hoang Anh: Ok Q2: What you feel about your manager performance? Did you see her very intelligence and good at education? Did you feel that the leader has time to deal with the everyday business of their employees (i.e camaraderie, group membership, career interests, conflict resolution)? Ms Hoang Anh: She is good at working analysis But she seems too busy to care and understand staff Q3: Did your leaders have positive influence to staff‘s emotion and feeling? Ms Hoang Anh: Actually, my direct manager is friendly with me Q4: Did she mentor and give you advance when you have problems? What is about giving feedback? Dis they usually give feedback for you? Ms Hoang Anh: Like I said before, they are busy to listen and understand me Therefore, when I try to raise voice or give new idea, they did not listen and gave me chance to try doing by my way Q5: Did your managers define clearly your role and responsibility? Ms Hoang Anh: Sometimes, I feel stressful with lot of unclear job Q6: For you, how importance of soft-skills training to leadership effectiveness? Ms Hoang Anh: For me, it is important If my managers and supervisors could spend more time to improve our communication, our relationship would be improved Q7: What you think that your managers and supervisors need to improve? Ms Hoang Anh: Soft-skill and good relationship building skill I hope that in the future, they would not stop me immediately when I tell about new idea Q8: Did your leaders give you motivation to contribute and devote for working? Ms Hoang Anh: May be no I need to follow without encouragement or comfortable feeling Page 56 Q9: Did your leaders arrange time for your team to have some outside activities to enhance? Did the leader be actively engaged in making sure that employee interests are satisfied? Ms Hoang Anh: Certainly not Because they are so busy Q10: Did your manager trust you and give you many opportunities to show strength? Ms Hoang Anh: Just a little But they always assign me some simple tasks, which makes me bored and unexcited And sometimes when there is some problem, they complain and blame to me Q11: Is there any difference between male and female leaders in your department? Ms Hoang Anh: No Q19: Thank you for your sharing  Respondent 7: The interview with Mrs Pham Le Anh Van Q1: Hello, my name is Thu Hang and now I am currently working on my graduation thesis May we talk around 30 minutes? Ms Van: Of course I am pleasure to discuss with you Q2: Can you introduce little about yourself? What is your current job? Ms Van: My full name is Pham Le Anh Van Now I worked as a Salesman at… Q3: Did you use to work as Sale Department in CADIVI and which was your position? Ms Van: Yes, I recently left it last month Q4: How was your feeling when you worked at there? Ms Van: To be honest, I could not learn anything when I worked at there The procedure was too complicated to take me much time to useless thing The job did also not have many challenges for me to grow up Q5: So, why did you decide to leave your job at CADIVI? Ms Van: Like I said before, I want to have an active job which challenged me everyday and makes me better than the day before It also did not have internal database system, working delegation board, meeting and team building to make everyone in department know clear about the information In other hand, sale manager supervised all sections but the work in each section had no management by person in charge and no record It is the reason why managers could not remember how many works needed to be solved to urge everyone and support sale team as soon as possible It led to the low performance for whole department Besides, due to the unattractive salary policy, it makes the salesmen lower efforts and be bored to work In Page 57 addition, there are deputy managers in sale manager but they cannot decide anything without big boss‘s direction It made to waste a lot of time Q6: What is the major reason? Ms Van : I graduated in Canada with master degree, so I can use English fluently But in my department, I could not have opportunities to extend my strength My direct boss just assigned us to for her She always thought that she was the most intelligent person in my team Q7: You said that in sale department, there was an unattractive salary policy Can you give me more detailed about this issue? Ms Van : Actually, the salary and benefit in sale department are high but they were not based on productivity and target It means the commission would be divided as same as different people The salesmen who worked longer could have a higher salary The positive thing is limited pressure of competition between salesmen, but negatively impact on productivity and motivation to try the best This policy could not foster and kick staff off for better sales Especially for young staff like me, we did not have a high base salary Q7: What is about your job now? Ms Van: Now, I moved to international company so I think it the good environment for young talent can develop and improve themselves better Q8: Thank you very much for your responses Wish you having a good job in your new company Ms Van: Thank you  Respondent 8: The interview with Mrs.Nguyen Thi Thuy Trang Q1: Hello, my name is Thu Hang and now I am currently working on my graduation thesis May we talk around 30 minutes? Mrs Trang: Okie Fine Q2: Can you introduce little about yourself? What is your current job? Mrs.Trang: My full name is Mrs Nguyen Thi Thuy Trang Now I worked as a Salesman in CADIVI Q3: How long have you been working in CADIVI? Have you changed many position? Mrs Trang: I have been working here for years as a salesman from agency to projector Q4: How was your feeling when you worked at here? Page 58 Mrs Trang: Generally talking, I feel little stressful and pressure I have learned many things since I worked at here but now I have work too much to spend more time for me and my family I often need to work overtime and sometimes have to work at home Q5: Do you see any problem in your department now? Mrs Trang: I think the problem is that a few of young salesmen leave sale department Most of salesmen feel loss energy to motivation to work The working environment is quite overwhelming I rarely see smile in my department Q6: In your opinion, what is the reason for that problem? Mrs Trang: I think that we lack of team building activities to relax and enhance teamwork spirit There is a lot of work to because of lack of key person The manager also not support and sympathize for us She did not check the results from employee and blame for us if having the mistake Q7: So what is the main reason? Mrs Trang: Leadership style is the main reason Most of us are dissatisfied with our managers We not have time for sharing, understanding and supporting together We can also not balance our life and work Therefore, it makes us be stressful as well as lack of motivation Q8: Are you satisfied with your salary now? Mrs Trang: Actually, I think we have a high income But the salary policy in our department is unattractive to make us improve and develop ourselves The commission is the same as different person It makes to diminish contribution of young person It is also the reason why a plenty of salesmen leave our company to others Q9: Many young salesmen left your department, does it make any impact on your department performance? Mrs Trang: Certainly Young salesmen not only have a full of energy, active and creative but also has ability to learn, adapt and work under high pressure Besides, when recruit others to replace, we need time to wait them accustom and keep up It really affects to productivity We need to work more to fill the vacancy In additions, the result of customer satisfaction showed that decreasing of customer satisfaction in first months in 2018 Q7: What you think that your department needs to change to increase employee retention? Mrs Trang: I think that the first thing is teamwork spirit, which decided the combination of team and second thing is soft-skill training Page 59 Q8: Training Is it mean that in your company, there is lack of training program, isn‘t it? 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Social Behavior and Personality 1987;15(1) Page 66 ... struggling situation of Sale department at CADIVI Page CHAPTER II: PROBLEM IDENTIFICATION IN SALE DEPARTMENT AT CADIVI 2.1 Potential problems in Sale Department Potential problems in Sale Department. .. ECONOMICS HO CHI MINH CITY International School of Business PHAN NGUYEN THU HANG INEFFECTIVE LEADERSHIP STYLE IN SALE DEPARTMENT AT CADIVI COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR:... turnover rates in the first six months in 2018 Based on the interview result and theoretical framework, ineffective leadership style in Sale Department at CADIVI is the central problem that sale department