Poor team cooperation at donga bank’s trading department

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Kieu Khanh POOR TEAM COOPERATION AT DONGA BANK’S TRADING DEPARTMENT MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Nguyen Kieu Khanh POOR TEAM COOPERATION AT DONGA BANK’S TRADING DEPARTMENT MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr Doan Anh Tuan Ho Chi Minh City – Year 2018 Table of Contents Executive Summary CHAPTER 1: PROBLEM IDENTIFICATION Company overview 1.1 DongA Joint Stock Commercial Bank (DongA Bank/ DAB) 1.2 Trading Department Symptoms 2.1 High turnover rate 2.2 Low profit 11 Problem identification 14 3.1 Potential problems 14 3.1.1 High workload 14 3.1.2 Poor team cooperation 17 3.1.3 Market condition 18 3.2 Validating problems 22 3.2.1 Managers’ perspectives 23 3.2.2 Employees’ perspectives 24 3.3 Main problem 24 3.4 Consequences 27 CHAPTER 2: ALTERNATIVE SOLUTIONS 29 Cause validation 29 1.1 Potential causes 29 1.1.1 Personality differences 29 1.1.2 Poor communication 29 1.1.3 Lack of updating job descriptions 30 1.1.4 Poor reward system 30 1.2 Validating causes 31 Alternative solutions 33 Action plan 42 3.1 Task handling 43 3.2 Gantt chart 47 3.3 Effectiveness measurement through taking actions 48 Conclusion 49 CHAPTER 3: SUPPORTING INFORMATION 50 Methodology (Qualitative research – In-depth interviews) 50 Interviewees’ Demographic 51 Interview Guide 51 References 53 Appendices 58 List of Abbreviations BO Back office DAB DongA Bank FX Foreign Exchange HR Human Resource List of Tables Table 1: The percentage of turnover rate at DongA Bank's Foreign trading department from 2015 to 2017 10 Table 2: Data of foreign exchange trading profit from January to December, 2017 at DAB 11 Table 3: Profits of FX trading in interbank and Banknotes trading in 2017 13 Table 4: Foreign exchange trading profit in 2017 among commercial banks in Vietnam 14 Table 5: Framework of measuring cooperation 26 Table 6: Estimated costs for updating job description at Trading department 37 Table 7: Estimated labor cost in Action plan step 44 Table 8: Estimated labor cost in Action plan step 45 Table 9: Estimated labor cost in Action plan step 45 Table 10: Estimated total budget for action plan 46 Table of Figures Figure 1: DongA Bank's organizational structure Figure 2: Trading Department's organizational structure Figure 3: The percentage of turnover rate at DongA Bank's Foreign trading department from 2015 to 2017 10 Figure 4: Foreign exchange trading profit from January to December, 2017 at DongA Bank 11 Figure 5: Profits of FX trading in interbank and Banknotes trading in 2017 13 Figure 6: Working days 48 Figure 7: Project summary 48 List of Diagrams Diagram 1: Initial cause-effect map of Foreign Trading Department 20 Diagram 2: Updated cause-effect map of Foreign Trading Department 21 Diagram 3: Final cause-effect map of Foreign Trading Department 33 Executive Summary Cooperation is considered as one of the most fundamental aspects of human interaction and for organizations, it has become the main tools for achieving their strategic competitiveness Moreover, team cooperation also has been found to benefit companies’ sustainability efforts and performances Clearly, cooperation is more likely to be successful if it is well-managed and well-concerned However, DongA Bank’s Trading department has been experiencing high turnover rate as well as low foreign exchange trading profits for many years due to poor cooperation between teams Using different literature reviews and conducting in-depth interviews among employees at the Trading department, this research aims to define what the main problem is, why it is the main problem, how important it is and how it affect to employees’ work abilities as well as business performance at Trading department Subsequently, the findings show that employees have some obstacles while cooperating with other teams to work for common goals and how the factors effect to their working performance as well as their personal lives To be specific, following finding “Poor team cooperation at DongA Bank’s Trading department” as the central problem, the research also presents that two main causes of the problem are lack of updating job descriptions and poor reward system It can be seen that in order to enhance effectiveness and efficiency of their employees, it is essential to make sure that they are given clear directions towards their work; therefore, they will know what is expected out of them Moreover, Ashraf (1) stated that job descriptions also lay foundation for key performance indicators (KPIs) In addition, KPIs are essential for measuring performance of the employees to improve reward systems Thus, if an organization does not have clear job description for their employees, how will it measure performance As a result, with the two main causes of the problem, this research will show two alternative solutions to solve that problem, to enhance employees’ performances, increase FX profits and decrease turnover rate of employees CHAPTER 1: PROBLEM IDENTIFICATION Company overview 1.1 DongA Joint Stock Commercial Bank (DongA Bank/ DAB) DongA Bank (DAB) – one of commercial banks in Vietnam – was established on 1st July, 1992 Through more than 25 years of operation in finance and banking industry, with constant development and sustainable growth, DAB has gained many achievements in banking information technology as well as in the quality of services such as personal financial services, services for small and medium businesses, and especially card services In fact, due to the volatile market, the increase in bad debts and some legal issues, DAB has been going through many difficulties and challenges in recent years; therefore, it was impossible for the bank to stay unaffected However, with a straightforward point of view towards existing issues, the bank has continually focused on developing organization, restructuring and rearranging operating system, ensuring the effectiveness of operational risk management as well as promoting strengths of technology, products and quality of services to increase customers’ satisfaction as well as to empower DAB to become the leading retail bank in Vietnam According to Figure 1, to manage the organization, DAB divides into nine divisions Importantly, in the business of DAB, Trading department is considered as the most important one in Capital and Trading Division, which is responsible for dealing with and managing the purchase and sale of foreign currencies to make profits for the bank Source: DongA Bank’s website (www.dongabank.com.vn) Figure 1: DongA Bank's organizational structure 1.2 Trading Department Director of Trading Department Deputy Director of Trading Department FX Trading (Interbank) Banknotes Trading Gold Trading Back Office Figure 2: Trading Department's organizational structure With the development of information technology, the foreign exchange market – one of the most liquid markets in the world – is expanding rapidly and trading has become widespread in the market (2) Moreover, Omar and Jones (3) stated that money is what the banks trade in; therefore, currency trading, which is done by the buying and selling of money, is an appropriate product the banks need to focus on to make profits Clearly, the Trading Department was established with the aim: (i) to advise the Board of Directors on the development of annual business strategies related to forex trading, gold and banknotes trading; (ii) to directly organize, manage and implement the trading activities in accordance with DAB’s strategy and the State Bank of Vietnam’s regulations; (iii) to analyze and evaluate the trading performances; and (iv) to coordinate with other departments in the Division to complete the general mission of DAB It can be seen in Figure that the Trading Department is made up of four sections: FX Trading (Interbank), Banknotes Trading, Gold Trading and Back Office Specifically, Mr Vo Van Dat – Director of the Department and Mrs Duong Thi Thuy – Deputy Director are in charge of this department However, during this hard time of operation, this department begins to show signs of going down while operating Therefore, this thesis will indicate the causes and effects of this issue at the Trading Department Symptoms According to Marlon Wayne (4), it is critical to recognize and distinguish symptoms to define a problem After the first meeting with employees at the department and based on data from each month in 2017, it can be seen that two main symptoms are reported currently: (i) high turnover rate and (ii) low profit To be specific, these symptoms of this department are analyzed as following: 2.1 High turnover rate Woods (5) described human resource issues are one of the most popular internal challenges companies face today Actually, there are numerous of surveys and researches in many different areas of human resources being conducted by organizations in order to obtain insights and provide the best working environment Obviously, high turnover rates 63 Techcombank 64 Eximbank 65 MBBank 66 ACB 67 Appendix 4: KPI – Band scores & evaluation results Evaluation results Scale Definition Outstanding (A) Over 100 points Complete (B) 80 - 100 points Need to improve (C) 60 - 79 points Inadequate (D) Less than 60 points Employees’ working abilities and performances are outstanding in most areas High productivity and always maintained on a regular basis Employees’ working abilities and performances achieve the standard level regularly in all areas Employees’ working abilities and performances are not qualified in some areas / areas and need to be improved Employees have poor working abilities and performances, not qualified in most areas Source: DongA Bank’s Human resources department 68 Appendix 5: Transcript summary Question and Answer Coding Category Name and Job position at DongA Bank’s Trading Department Mr Dat: My name is Vo Van Dat and I’m in charge of Director of Trading Department - Director of Trading Department Mrs Thuy: My name is Duong Thi Thuy – Deputy Director of the department - Deputy Director of Department Ms Tam: My name is Pham Minh Tam – team leader of Back office team - Team leader of BO team Ms Thao: My name is Nguyen Thi Phuong Thao – BO staff - BO staff Ms Thuy: My name is Nguyen Thi Ngoc Thuy – Senior of Banknotes trading - Senior of Banknotes trading Ms Hong: My name is Nguyen Thi Anh Hong – Banknotes Trading staff - Banknotes Trading staff Mr Nhut: My name is Nguyen Minh Nhut – FX Trading staff - FX Trading staff Mr Hau: My name is Tran Trung Hau – FX Trading staff - FX Trading staff Job Position Q1: How long have you worked at DAB? Employees’ Mr Dat: 10 years tenure Mrs Thuy: 13 years Ms Tam: 10 years Ms Thao: years Ms Thuy: years Ms Hong: years Mr Nhut: years Mr Hau: years 69 Question and Answer Coding Category Q2: What you feel about your job at DAB? Mr Dat: I think this job is fine, it suits to my personality Although I have a lot of work to - Feeling good with job Employee do, manage and control, I like to interact, guide and support my employees feelings Mrs Thuy: My job is ok - Quite OK Ms Tam: I think it’s fine although sometimes I feel a little stressful - Little pressure at job Ms Thao: I’m really stressful doing job right now There are many employees quitting - Stressful Heavy workload their jobs at present; so, the work of the remaining employees is very heavy and one person needs to work for or persons Ms Thuy: Previously, my team included employees but now only has people, so I need - Do more work to more work than before Ms Hong: I love this job; however, Ms Thuy in my team is going to have six-month - Love this job maternity leave so I’m afraid that I cannot finish my work if I don’t have any support and cooperation from other teams Mr Nhut: If my seniors have more guidance to me and cooperate with me in doing job, I - Quite satisfied will feel more satisfied with the job Mr Hau: I feel a little pressure due to decrease in trading frequency which causing low - Little pressure trading profits and workload Q3: What you like/dislike about your job? Mr Dat: In our work situation, staff recruitment is not sufficient and timely due to limited - Enhance team cooperation, follow -Employees’ working environment, lack of applications and competitive salaries; therefore, we need to job descriptions cooperation 70 Question and Answer Coding Category focus more on improving internal work firstly to boost business development and and cooperation over unit boundaries is a vital factor As a manager, I have a supportive role, satisfaction ensure that everyone worked toward the common goal and make sure all employees taking -Job their responsibilities for the work as whole groups, rather than working alone and taking descriptions individual responsibility It should be clearly reassigned to employees to ensure that they always follow the job descriptions However, if having problems at the department, team members who are responsible for solving those could request the other sections to coordinate and get supports to find solutions quickly and accurately Mrs Thuy: One of the biggest problems is that there is lack of team cooperation at the -Lack of team cooperation department For example, when Tan Binh branch sent email to Back office to ask about the false inquiries in its branch’s monthly report last June, BO did not find a way to support and cooperate with Banknotes team to solve the problem to answer the branch’s questions as soon as possible Instead, BO only said the problem was not related to their part and shifted their responsibilities to Banknotes team, which influenced the branch’s checking process, other units as well as top management Ms Tam: In the regulation of foreign currency business, Back office is responsible for -Lack of team cooperation carrying out all relevant reports at the department Currently, there are only three staffs left in the team However, due to the lack of cooperation among teams, it makes the internal work overloaded and occurs the shifts in job responsibilities between teams Ms Thao: At first, when I was working for years, the work was just right and fun, -High workload 71 Question and Answer Coding besides, the working environment was quite good; so, I wanted to stick to my job for a long time However, recently, many employees have been off work and working environment has become tense, I start feeling less motivated to work than before Ms Thuy: In fact, co-workers are friendly but they not cooperate much in work Each team only focus on their own work and does not voluntarily support other teams unless -Unbalance work-life, high being required by directors Therefore, I always try my best to finish my job without help workload even though sometimes I must take work home and lack of breaks which affecting much on my leisure activities and work-life balance Ms Hong: For job, I rather like it because I can express my feelings, show my work ability and work with other teams Despite of high workload, I love this job so I still try my best -Not update job descriptions to meet the job requirement For the reasons I don’t like with my job, the department still doesn’t have updating job descriptions among teams, so some jobs belong to other teams sometimes I also have to based on our director’s request and it takes my times I feel benefits for employee are not good, for examples, salary, rewards and end year bonus Mr Nhut: I like my job; but what I not like is that there are not many opportunities for growth, advancement or training programs for employees as well as rewards for good -Do not have opportunities for employees growth and reward system Mr Hau: I’m a little confused of job description and job assignment - Confused of job description Q4: What is your opinion on Trading Department’s working performance? Category 72 Question and Answer Coding Category Mr Dat: Actually, our department had the decrease in trading profits due to the increase in -Decrease in trading profits Poor expenses and the decrease in revenue; thus, it can be said that our working performance is working not good during this difficult period performance Ms Tam: I think it’s not good because employees tend to work only what is outlined in -Only work what is outline in job their job description and little else, resulting in lack of cooperation and high workload description Ms Thuy: Since the number of staffs decreased, the amount of workload still increased - Inflexible job description causes while the job descriptions were unchanged and inflexible, so members from other teams poor working performance refuse to carry out assignment and cooperate in work, which cause poor working performance Mr Nhut: There is no benefits and good conditions in my work area that can promote me -No benefits to be highly productive and gain high performance Q5: What impacts the foreign exchange profit? Why? Employees’ Mrs Dat: Currently, I’m too busy to have enough time to focus mainly on the department -Ineffective planning confidence because I’m appointed as a temporary Director of the division until further change So, and planning instead of holding meeting with 4teams, I will transfer briefly the information of work assignments and let them to have their own team plans Mrs Thuy: The profitability of trading in foreign currency products is specific due to the -Market condition influences of both the market and workers About market factors, it may be due to the -Human factors market news, foreign exchange rate fluctuations, competitors or some internal factors as -Lack of confidence in trading our bank is facing with many difficulties In addition, about human resource factors, there 73 Question and Answer Coding Category are some aspects need to be considered such as leader's working experience, leadership styles, team collaboration or business strategies Importantly, as a deputy director, I want to emphasize on the abilities, the work spirits and the flexibilities of employees in the current working environment to enhance business performance Especially, employees’ confidence in trading is a necessity to speed up the trading process and to restrict timeconsuming work affecting other teams Ms Tam: During the difficult times, the number of partners who wanted to have long -Decrease in partners business relationships with DAB also fell significantly from 31 banks to just under 20 banks including Vietcombank, BIDV, ACB, MBBank, HDBank, Maritime Bank or TP Bank, which causes decrease in trading Q6: The turnover rate of DAB is high, how about your department? How does it Team impact on your operation? What you think about the reason? cooperation Mr Dat: In the report on the number of employees needed in the year of 2017, the actual -Stressful staffs number of employees’ demand at the department was 25 persons; however, the current employees at the department were 19 and human resources department have not recruited enough employees immediately; hence, it is not enough employees to assign and support work to have the best work performance, which can easily cause work stress for the remaining employees Ms Tam: Due to shortage of staffs, the business development is facing many difficulties -Not enough staffs for BO team Mr Thao: With the decrease in the number of current staffs at the department, there will -Poor cooperation, need to stay 74 Question and Answer Coding Category have more works need to accomplish on time as well as meet the expectations of the longer to finish job manager Sometimes I need to stay longer in office to finish my work although I have oneyear-old son need to take care at home If other team members can help and cooperate with each other, I think I can finish my work earlier Mr Hong: At present, the job is overloaded and the job always need to be done on time -Poor cooperation, poor work while my working capacity has certain limits Without having cooperation between team productivity and there are now only three people in my team, I also feel unhappy and my team members’ work productivity is also reduced Q7: How is the job meeting your personal needs? Can you give some examples? Employee Ms Tam: I think it’s OK at this company The salary is quite good and I’m quite satisfied -Quite good salary No reward demands about this aspect although there is no reward system system Ms Thao: I think there is a need to reward high performances of employees - Low salary Need to have reward system Ms Thuy: Salary at the moment can meet my life needs but bonus level is not good -Good salary Not good bonus level Mr Nhut: According to the current situation of my department and my working situation - Poor salary such as having overload work and working overtime, I think salary is quite low now Especially, I feel that my concerns are not voiced to my boss Stress Q8: How is the job you are doing at your department? In your opinion, you face any difficulties or stress in your job? What are those and why? Ms Tam: As you know, my team supports FX trading team to check and confirm deals -Stressful 75 Question and Answer Coding Category with other banks, as well as takes part in tracking money transfers, contacting partners and implementing over twenty daily and monthly reports So, it is stressful because there are a lot of work for only members to Ms Thuy: In fact, co-workers are friendly but they not cooperate much in work Each -Friendly coworkers but they don’t team only focus on their own work and does not voluntarily support other teams unless cooperate much in work being required by directors Therefore, I always try my best to finish my job without help even though the work sometimes overloaded and recently, I feel more and more stress and unhappy while doing job Ms Hong: Working at Trading Department, it required staffs to be skillful and dynamic; however, at present, one team only has 1-2 members, so much more work need to be done -High workload affecting employees’ abilities Moreover, other team members don’t cooperate much at work and I feel dissatisfied in working now Mr Nhut: For myself, the job is quite stable, but the workload is much, there is not much guidance, mostly learning on-the-job Q9: What your supervisors/managers to help you in your job? How they affect your job performance? Ms Thao: He’s quite nice to me He always to support me in working However, - Supported by boss Making Supportive sometimes he makes decision by emotion; this makes me feel not pleasure decision by emotion management Ms Thuy: Our directors are quite comfortable, friendly with the staff, the way they guided - Good boss, good communication staff is also very good with employees 76 Question and Answer Coding Category Mr Nhut: My boss is a very model and friendly with his subordinates He has the vision, encourages and motivates staff to strive to accomplish goals set in the work I easily get - Good vision and encourage irritated when the job is not satisfactory, but the boss has trained me to keep calm, employees especially soft to convince the customer Q10: What are development opportunities in your company? Can you tell more Employee about it? What you think about development opportunity at your company? development Mr Hau: Currently, I satisfied with current job but I still feel something that doesn’t give - Should have clear job description opportunity development opportunities To me, the job description would not be demanding enough and I would not able to improve my skills and consider it as a challenge for me to devote my time to work here Q11: Is there anything else you want to share? Mr Dat: I hope young people are joining and will be a key force in any human resource in - Pay attention to core force is the future Therefore, the whole company, including the board of directors, managers and young employee and enhance all employees, should pay more attention to the desires, as well as facilitate integration and cooperation help young people to enter the profession firmly More importantly, the department needs to develop career development for young people, as they are convinced that what awaits them ahead in this company and not another company Finally, it is hoped that all current employees can cooperate with each other to reach the department’s final goals Mr Hau: If we have clear evaluation, I hope my manager can base on that to revise our -Clear job descriptions salary In addition, there are three things which I want to change Firstly, all of employees Expectation 77 Question and Answer Coding should know clearly about their job clearly The manager should be clarified the decentralization in responsibility, clear job description Secondly, every kind of job needs an evaluated standard, so that they know how they have to effort to be recognized and avoid being jealous of each other Thirdly, people should have good relationship together Ms Thuy: I hope our director will support me more in my job and provide me clearer -Clear direction and have reward direction and good reward system for every person so it will improve the motivation of system employee Category ... finding ? ?Poor team cooperation at DongA Bank’s Trading department? ?? as the central problem, the research also presents that two main causes of the problem are lack of updating job descriptions and poor. .. Source: DongA Bank’s website (www.dongabank.com.vn) Figure 1: DongA Bank''s organizational structure 1.2 Trading Department Director of Trading Department Deputy Director of Trading Department FX Trading. .. HO CHI MINH CITY International School of Business Nguyen Kieu Khanh POOR TEAM COOPERATION AT DONGA BANK’S TRADING DEPARTMENT MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr Doan