Poor co operation between employees at thai tu company

APPENDIX 3: Thesis cover page UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business VO THI HAI THUONG POOR CO-OPERATION BETWEEN EMPLOYEES AT THAI TU COMPANY MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 APPENDIX 4: Thesis title page UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business VO THI HAI THUONG POOR CO-OPERATION BETWEEN EMPLOYEES AT THAI TU COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR TRAN HA MINH QUAN Ho Chi Minh City – Year 2018 CONTENTS EXECUTIVE SUMMARY CHAPTER 1: COMPANY INTRODUCTION 1.1 Company background 1.1.1 Company Overview 1.1.2 Business activities of customers: 1.1.3 Organization Structure 1.2 Symptoms 1.3 Initial cause effect map 1.4 Updated cause effect map 12 1.5 A discussion to eliminate some potential central problems and focus on a central problem of interest 14 1.5.1 Discussion to eliminate some potential problems 14 1.5.2 A discussion to focus on a central problem 15 CHAPTER 2: PROBLEM JUSTIFICATION 16 2.1 Problem definition 16 2.2 Problem existence 16 2.3 Problem importance 17 2.3.1 The importance of problem 17 2.3.2 Consequences of the problem 18 CHAPTER 3: CAUSES VALIDATION AND SOLUTIONS 20 3.1 List of real causes of the central problem 20 3.1.1 Lack of Leadership 20 3.1.2 Unclear Goals and Duties 21 3.1.3 Lack of training program 21 3.1.4 Disengaged Employees 22 3.1.5 Virtual Teams 22 3.2 The solutions 25 3.2.1 Solutions for Clear Goals (about weeks) 25 3.2.2 Solution for Specified Roles (about weeks) 27 3.2.3 Solution for Processes and Procedures (about months) 29 3.2.4 Solution for Interpersonal Relationships (about months) 32 3.2.5 Cost-benefit analysis of the development of cooperation between employees plan 33 APPENDIX 35 Appendix 1: Interview transcription - Mr Thuy - Manager of Sale Department 35 Appendix 2: Interview transcription - Mr Tuan – Manager of Planning Department 38 Appendix 3: Interview transcription - Mr Tung – Manager of Support Department 40 Appendix 4: Interview transcription - Ms Thao - sales staff of Sale department 41 Appendix 5: Interview transcription - Ms Ngan - sales staff of Sale department 43 REFERENCES 45 Figure 1: Operation structure of Thai Tu Company Figure 2: Initial Causes-effect Map 11 Figure 3: Updated Causes-effect Map 13 Figure 4: Finnal Causes-effect Map 19 Figure 5: Potential Causes for Thai Tu Company’s central problem 23 Figure 6: Real Causes for Thai Tu Company’s central problem 24 Figure 7: The GRPI model 25 Table 1: Financial report from 2015 – 2017 Table 2: Annual operating management report from 2015 – 2017 Table 3: Human resource management report from 2015 – 2017 15 EXECUTIVE SUMMARY This study analyzes the case of Thai Tu company with the symptom is the decline in number of customers There are four main chapters in this paper; they are the overview company, the problem identification, the causes validation and solutions in company and the supporting information Based on information from interviews with relevant individuals and data from the company, the problem of poor cooperation between employees has been analyzed and chosen as central problem to be solved Next chapter is a list of causes of central problems; they are lack of leadership, unclear Goals and duties, lack of training program, disengaged employees and virtual teams In this chapter, a set of solutions to solve the problem has been proposed as well Continuing, selecting one solution in this set of solution for action plan in organization Finally, in the final chapter, interview guides, transcripts or reports will be composed to support this paper CHAPTER 1: COMPANY INTRODUCTION 1.1 Company background 1.1.1 Company Overview Thai Tu Company was established in September 2007 In the past eleven years, the company's operation has been gradually stabilized and developed The company's business scope has been gradually expanded, supplying drugs to units in Ho Chi Minh City and southern provinces and central Revenue and profit of the company in recent years increased stably In 2012, despite the difficult economic situation, the revenue and profit of the company still grows well, the number of units that the company has increased, the number of contracts signed also increased Company activities gradually come into stability In 2013, the company has actively participated in bidding packages of Health Services of Vinh Long, Tra Vinh and Quang Ngai provinces The bidding packages of Cho Ray Hospital, Tropical Disease Hospital and some units have won large drug supply contracts The number of drugs provided to units in need increases, the trend of development of drug supply network to the provinces are expanding In 2014, the orientation of continuing to supply medicines in the territory of Vietnam and supply of medicines on the list of drugs for health insurance in hospitals in Ho Chi Minh City and in provinces and units continue to expand the bidding of Bidding packages for drug supply shall be organized by the provincial / municipal Health Services or provincial-level hospitals The company has been granted the certificate of good practice of distribution of medicine (GDP) since 2008 and the GDP license dated 11/02/2010 It has been granted the certificate of qualified drug business by the Health Department of Ho Chi Minh City 1.1.2 Business activities of customers: − Main business lines: Trading in pharmaceuticals + The main products and services of the company: The company specializes in providing medicinal products for hospitals, health departments and health care agencies in Ho Chi Minh City and provinces Drugs are offered through the form of bidding or contracting when the unit needs medicine − Production capacity: + The head office of the Company is located at 116/1/10 Hoang Hoa Tham St., Ward 12, Tan Binh District, Ho Chi Minh City + Human resources: The number of employees working for the unit is about 20 people + Method of organization of production and business activities: The company orders in large quantities Good business relationship with prestige in payment of goods has helped the unit receive many incentives from partners Some partners have delayed payment of 30-45 days Hospitals supplying drugs to hospitals is mainly, the value of the winning package is ranging from several million to several billion, the time for the average partner from 45 to 90 days to pay for the purchase of goods when the application VAT invoice for partners + Operating network, location: The company's customers are mainly in Ho Chi Minh City and neighboring provinces 1.1.3 Organization Structure Figure 1: Operation structure of Thai Tu Company General Director Product Planning Department Human Resource Finance Bidding Support Department Accounting Department Sale Department 1.2 Symptoms Losing Customers Data from financial report from 2015 – 2017 shows that: Net revenue at the end of 2016 is VND 15,947 million, decreasing 7.02% to VND 1,205 million compared to the end of 2015 Revenue of 2017 is VND 14,591 million, equivalent to 91.5% compared to the end of 2016 The decline in revenue is due to the bidding units require the participating units for the price of the product must be the lowest To compete with the other participants, the company must reduce the selling price to achieve the bidding packages Corresponding with the decrease in revenue, cost of goods sold at the end of 2017, the company reduced the selling price by VND 1,924 million compared to the end of 2016, because the company negotiated the price with the input partners to have the lowest selling price of the output partners Accordingly, after-tax profit in 2017 reached VND 144 million equivalent to 2016 reached VND 130 million but reducing sharply compared to 2015 reached VND 978 million The company's profit fell sharply due to higher management and interest expenses (details shown as table below) Table 1: Financial report from 2015 – 2017 Unit: million VND Terms 2015 2016 2017 Sale Revenue 17,152 15,947 14,591 Cost of goods sold 13,219 12,917 10,993 Gross Profit 3,933 3,030 3,598 Operating expenses 2,244 2,521 2,955 606 529 502 1,638 1,992 2,453 386 336 451 - Selling expenses - Administration expenses Interest expense EBT 1,303 173 192 Tax Expenses 325 43 48 Net Income 978 130 144 According to annual operating management report, Thai Tu Company has increased bidding packages for the last years Table 2: Annual operating management report from 2015 – 2017 Content 2015 2016 2017 17,152 15,947 14,591 Package 24 18 15 Customer 16 14 12 million Sale Revenue Total Unit VND bidding packages Total customers According to the general report of the sales department, in 2016, the company lost two customers Van Phuc Medical Joint Stock Company and An Giang General Hospital Of which, the total value decreased from these two customers compared to 2015 is 3.455 million equivalents to 20% of sales revenue in 2015 In 2017, the company continues to lose two bidding packages of Pharmaceutical Joint Stock Company District and Hung Vuong Hospital with the total value of 2.962 million This shows that in the past years the company has lost a large revenue from close customers Although the company has tried to boost the value of its existing customers' orders by maintaining the cost of sales, the cost of managing the business, however, with the downward trend in revenue and the number of customers, drop in profit that are symptoms make the management of the company is not satisfied 1.3 Initial cause effect map From 2016 – 2017, due to the influence of the pharmaceutical market, the price of medicines decreases by 10-15% based on regulation of government, cause of the objective factor of the market, sales revenue of the company has reduced as a result However, it is worth noting that the customers number reduced from 16 customers in 2015 to 12 customers in 2017 To find out what causes losing customers, interview was conducted with Mr Thuy - Manager of Sale Department about this issue He said that there are two causes: The first is high bidding price compared to competitors He explained that Thai Tu Company is a company with many years of experience in pharmaceutical distribution The company has many large and loyal customers in Ho Chi Minh City and West provinces However, among the bidding packages they did not reach because their bidding price was higher than competitors that also caused the company to lose some important bidding packages such as: Van Phuc Medical Joint Stock Company and Hung Vuong Hospital According to interview with Ms Thao who is sales staff, directly manage Van Phuc Medical Joint Stock Company She said that Van Phuc Medical Joint Stock Company is very interested in the price factor She also spent a lot of time negotiating on prices and their requirements on orders However, they give Thai Tu Company the price that cannot be met Similarly, Ms Ngan who is responsible for supporting to Hung Vuong Hospital, shared the reason that they left Because drug prices on the market are down but the company based on the actual situation of the company to calculate the bidding price and can not offer the low price as required by the Hung Vuong hospital To find out more about this issue, in interview with Mr Tuan who is manager of Planning Department, is responsible for planning and managing the entire business plan of the company including finance, input and bidding He said that the prices of the packages are reviewed and decided by the management based on the relationship with customers and the general interests of the business to offer price for each bidding package Besides, he explained that the price of the drug when bidding is based on the requirements of the contractor and the actual situation of the company Some drugs are high price because of the high cost of input The reason is that sometimes some drugs in the warehouse have higher input price than the actual time This affects the calculation of drug bidding prices to ensure that the company does not suffer losses and meet the requirements of the contractor However, the company lost some bids because of poor inventory forecast that affects bidding price Mr Tuan further explained that the cost of goods sold of each drug is now calculated by beginning inventory of each drug plus purchases during the period of that drug minus ending inventory of its Consequently, poor inventory planning is the reason for the high inventory of some drugs compared to the actual demand leading to high cost of goods sold According George N Root pointed out that good inventory control means that time to fulfill orders stays low If using inventory management system to analyze product sales, company can 33 more open, friendly contact opportunities 3.2.4.2 - The purposes of the solutions Individuals will be aware of their roles and responsibilities and work towards achieving the best results - This is about how the employees in the company have the opportunity to interact with each other and understand each other - Create cohesion and intimacy between company leaders and employees - Encourage and facilitate the creation of deeper interpersonal relationships - Create a dynamic, comfortable environment after work that promotes personal well-being, minimizes work pressures, enhances their level of satisfaction ➔ Through this solution, the relationship between the employees in the company is improving A friendly, dynamic and open working environment is an opportunity for each individual to express and develop their skills and relationships In addition, the challenges of work are the motivation for each individual to constantly try to learn and develop, create resonance for people around the same effort and promote the company growing 3.2.5 Cost-benefit analysis of the development of cooperation between employees plan Costs Qualitative Benefits - Time consuming (about - Reduce ambiguity about goals months during the period of cooperation and roles in the workplace development - Reduce job dissatisfaction time in company) - Strengthen commitment and coordination of staff - Build trust from employees and the spirit of employees - Facilitate the collaboration process among of the divisions within the company 34 Quantitative - Estimated costs for - Increase employee rewards: VND 50 million (print productivity - Reduce - Estimated costs for media media, employees’ the error in the cooperation of the employees electronic - Increase the level of customer media, social media): VND satisfaction of the quality in 10 million service - Estimated costs for other communication (meeting, notice board, to customers, re-attract keep lost current tools customers It is estimated that if presentation, pulling the lost customers, the mailbox): company can improve sales VND million revenue of 6.41 billion dong - Estimated costs for training more than the previous year and programs: VND 10 million increase 10% revenue each year - Estimated costs for social activities: VND 30 million Total estimated costs: VND 105 million by developing new customers 35 APPENDIX Appendix 1: Interview transcription - Mr Thuy - Manager of Sale Department Interviewer Interviewee Please share some personal information: your job/responsibility/position within the company Hi Thuong, I am currently managing the sales department of Thai Tu Company How long have you been working for Thai Tu Company? Please Interviewer kindly share more about your job in Thai Tu Company? I have been working for over years in the company with years as sales manager My responsibility is to organize the management and operation of the sales department to meet the requirements of sales Interviewee revenue and service quality of the Company In addition, I have to regularly report on business performance for the company's board of directors; Receive, disseminate and timely implement the instructions of the board of directors Interviewer As your position, can you share me a little about the business situation of the Company in the past? From 2016 – 2017, due to the influence of the pharmaceutical market, the price of medicines decreases by 10-15% based on regulation of Interviewee government, Cause of the objective factor of the market, sales revenue of the company has reduced as a result However, it is worth noting that the some of customers reduced from 16 customers in 2015 to 12 customers in 2017 Interviewer Interviewee Interviewer The number of customers of the company tends to decrease Has the company developed new customers in the past? We have not developed new customers and the two of four leaving customers are our close customers What does the losing customers mean to you? For the direction of our management, we not only want to maintain Interviewee but also expand the market and the number of customers Therefore, with the current results is not what we want and the company needs to 36 consider the shortcomings that lead to lose customers Interviewer So, can you categorize customers among those who left? We lost customers in the last time Two clients of those customers are An Giang General Hospital and Hung Vuong Hospital that had Interviewee traded to the company for the past five years The other two clients are Net Joint Stock Company and Pharmaceutical Joint Stock Company had traded for more than one year Interviewer As you shared above, what caused some of customers to leave your company? In my opinion, there are two causes; the first is high bidding price Interviewee compared to competitors, the second is the company received a lot of feedback from customers about their dissatisfaction with company's service quality Interviewer What is the most important reason for above issue that company have been facing? Thai Tu Company is a company with many years of experience in pharmaceutical distribution In particular, the company has a large and loyal customer numbers in Ho Chi Minh City and West provinces However, among the bidding packages we did not reach because our bidding price was higher than competitors that also caused the company to lose some important bidding packages Besides, the Interviewee delivery time to the provinces takes quite a long time so the situation is more delayed compared to the requirements of customers that make they are dissatisfied Therefore, some customers when bidding will select partners with favorable locations In addition, many employees often deal with issues based on personal experience Many solutions to problems not optimize the interests of customers and they are unhappy with the frequent mistakes in work requirements Interviewer Interviewee Why does not the company adjust prices so that it can compete and retain customers? The company has thoroughly considered However, the cost of each bid calculated by the planning department and approved by the 37 management of the company, our business department only made those decisions Interviewer Is late delivery often occurring? Interviewee It is frequently occurred, especially it is provincial clients Interviewer Why? Who is responsible for this? We receive orders and forward to support department, we always note Interviewee some of orders should be made urgently, they are responsible for fulfilling those requirements However, the coordination of their work is quite late, so we often are complained by customers Interviewer As you said above, so who has poor problem-solving skills? I generally evaluate the employees in our department because they are the ones who work and handle the issues directly with the customer Interviewee However, this is also a problem encountered by employees of other departments When the implementation of the work requires the coordination of the employees of the departments, they not understand each other and often to delay work 38 Appendix 2: Interview transcription - Mr Tuan – Manager of Planning Department Interviewer Interviewee Please share some personal information: your job/responsibility/position within the company As you know, I'm the manager of the company's Planning Department How long have you been working for Thai Tu Company? Please Interviewer kindly share more about your job in Thai Tu Company? I have been in this position since entering the company about years I Interviewee am responsible for planning and managing the entire business plan of the company including finance, input and bidding According to information obtained from Mr Thuy, the company Interviewer lost a lot of customers due to the high price of the bidding package, can you confirm this issue? Interviewee Interviewer Not most of the loss of customers is due to price factors However, there is also a real cause at some point Can you explain in detail? The price of the drug when bidding is based on the requirements of the contractor and the actual situation of the company Because some drugs are high price because of the high cost of input The reason is that Interviewee sometimes some drugs in the warehouse have higher input price than the actual time This affects the calculation of drug bidding prices to ensure that the company does not suffer losses and meet the requirements of the contractor However, the company lost some bids because of poor inventory forecast that affects bidding price Interviewer Exclude above factor, is the price of the package depends on other factors? Basically, we calculate the price of the package depending on the input Interviewee price, the desired profit level and are approved by the management In some cases with large orders, close customers, company leaders still accept the low profit or the break even Interviewer Why does not the company accept losses to keep customers and 39 solve the inventory? There are some bid packages we accept losses to get it However, some Interviewee bid packages make us big loss if we accept their rates Meanwhile, if we keep the goods, we can still distribute to other units 40 Appendix 3: Interview transcription - Mr Tung – Manager of Support Department Interviewer Interviewee Please share some personal information: your job/ responsibility/ position within the company My responsibility is managing of Supporting Department of Thai Tu Company How long have you been working for Thai Tu Company? Please Interviewer kindly share more about your job in Thai Tu Company? I work for the company from 2015 up to now Our department is Interviewee focused on solving requests from the sales department for the drafting and revision of tender documents and the coordination of delivery vehicles I am responsible for managing these stages Interviewer As your position, how are your difficulty during working daily? As supporting department, we often depend on the requirement of the Interviewee sale department Therefore, sometimes, we are overloaded due to too many requests that need to be processed quickly According to the information I collected, there are many customer Interviewer feedbacks that they are unhappy about the delayed delivery time of the company and your department is responsible for this, Do you receive about these feedbacks? Interviewee Interviewer Of course This issue is often encountered with the provincial customers and sometimes happened with customers in Ho Chi Minh City In your opinion, what is the most important reason for above issue? Firstly, the company has three trucks, we must coordinate them for a lot of orders from Ho Chi Minh City to the provinces Sometimes, there are orders at the same time that need to be delivered but not enough Interviewee trucks Secondly, as I mentioned above, we receive requests from the sales department and arrange vehicles according to those requirements However, we can't sort closely the delivery schedule because the delivery requestments are informed suddenly, no previous plan 41 Appendix 4: Interview transcription - Ms Thao - sales staff of Sale department Interviewer Interviewee Please share some personal information: your job/responsibility/position within the company Now, I am sale people of Thai Tu Company How long have you been working for Thai Tu Company? Please Interviewer kindly share more about your job in Thai Tu Company? I have been working for the company for over years My main jobs are to work directly with clients, address customer inquiries and receive Interviewee positive and negative feedbacks from them Besides, I have to work with other departments to support the requirements of the customer is going on accurately and quickly I know that two of your clients that are An Giang General Hospital Interviewer and x have left for a while, so can you share the reasons for leaving the company? An Giang General Hospital is very close customer to Thai Tu Company However, now they not cooperate with us anymore and choose another contractor I also find out through the representative of An Giang General Hospital that our bid prices are very competitive with new constructor but their advantage is the company based in An Giang province That representative also complained to us that the time of Interviewee cooperation with our company, they are not satisfied when many of their orders are often delayed that affects the operation of the hospital Therefore, even though they are long-term partners, they still have to choose other contractors For Van Phuc Medical Joint Stock Company, they are very interested in the price factor We also spent a lot of time negotiating on prices and their requirements on orders However, they give us the price that cannot be met Interviewer Interviewee How are you difficulty during working daily? I often receive a lot of information and large workload from customers and other departments Therefore, the shortcomings in the work process 42 is inevitable and that makes customers unhappy Interviewer Can you explain me why so? First, many jobs are not treated exactly as the customer's request The reason may be that when taking over the job the sales person does not understand the requirements and communicates inaccurately to other departments and leads the results of the work are not correct or Interviewee employees in other departments not properly understand the requirements of works, handle works based on personal perception without communicating to the sales staff in charge Second, the exchange of information between employees between departments is rather slow This affects the feedback to the customers 43 Appendix 5: Interview transcription - Ms Ngan - sales staff of Sale department Interviewer Interviewee Please share some personal information: your job/responsibility/position within the company In company, I am a sale staff How long have you been working for Thai Tu Company? Please Interviewer kindly share more about your job in Thai Tu Company? I have worked in this territory for many years Each sales staff takes care of and handles a group of corporate clients Every day, I have to Interviewee handle requests from the customers Also, when participating in the bidding, I have to coordinate with the departments to learn about the requirements from the investor to complete the application document Interviewer How are your difficulty during working daily? Handling customer requests is not an easy job for salespeople Having requests from customers can cause difficulties for the company and the consideration to address them is a hindrance to us and the company If it is not possible to solve those problem then some of customers can chose to leave the company Besides, many jobs are not treated exactly as the customer's request The reason may be that when taking over the Interviewee job the sales person does not understand the requirements and communicates inaccurately to other departments and leads the results of the work are not correct or employees in other departments not properly understand the requirements of works, handle works based on personal perception without comunicating to the sales staff in charge Secondly, the exchange of information between employees between departments is rather slow This affects the feedback to the customers So, two of your clients that are Hung Vuong Hospital and Interviewer Pharmaceutical Joint Stock Company District have left for a while, so can you share the reasons for leaving the company? Hung Vuong Hospital is our longtime client In 2017, we did not get Interviewee their package because of the price issue Drug prices on the market are down, however, the company based on the actual situation of the 44 company to calculate the bidding price and cannot offer the low price as required by the Hung Vuong hospital However, we are still trying to maintain a relationship with this side and try to get back other bidding packages in the future Pharmaceutical Joint Stock Company District deals with us only a short time and now has temporarily stopped trading The most recent order they asked us, because of problems with source information, quantity inspection, input prices are unclear, so take time to respond to them So, when we respond to them, they put from another company 45 REFERENCES Kuchař V Melliferous marketing Brno BizBooks Prague Albatros Media; 2012 Jackson CL, Colquitt JA, Wesson MJ, Zapata-Phelan CP Psychological Collectivism A Measurement Validation and Linkage to Group Member Performance, Journal of Applied Psychology 2006; 91(12): p 884 – 899 ES The Nest Web site [Online] Available from: https://woman.thenest.com/importancecooperation-workplace-14647.html West MA, Tjosvold D, Smith KG International Handbook of Organizational Teamwork and Cooperative Working; August 2002 Zaccaroa SJ, Rittmana AL, Marksb MA Team leadership The Leadership Quarterly 12 2001;(451 – 483) Walton J, Dorneich MC, Gilbert SB, Bonner D, Winer EH, Ray C Industrial and Manufacturing Systems Engineering Conference Proceedings and Posters Modality and Timing of Team Feedback: Implications for GIFT 2014 Jun;(45) Elnaga DA, Imran A European Journal of Business and Management The Effect of Training on Employee Performance 2013; 5(4) Heikkeri , Elena Roots and consequences of the employee disengagement phenomenon Master‟s Thesis Saimaa University of Applied Sciences; 2010 Ebrahim NA, Ahmed S, Taha Z Australian Journal of Basic and Applied Sciences 2009: p 2653-2669 10 Raue S, Tang SH, Weiland C, Wenzlik C The GRPI model – An approach for team development Paper Draft Systemic Excellence Group; 2013 46 SUPERVISOR’S REPORT ON THE FINAL THESIS SUBMITTED FOR THE DEGREE OF MASTER of BUSINESS ADMINISTRATION Final thesis title: POOR CO-OPERATION BETWEEN EMPLOYEES AT THAI TU COMPANY Student name: VO THI HAI THUONG Supervisor name: Dr QUAN TRAN General comments: Remarks on the student’s attitude: Remarks on the assignment’s academic quality: Overall assessment: Meet requirement for submitting; Not meet requirement for submitting Other remarks: 47 - Did the student follow the report schedule? Yes No Other - The Turnitin plagiarism percentage: Supervisor’s signature ... is poor cooperation between employees in Company There are causes of a poor cooperation between employees in Company as follow: 3.1.1 Lack of Leadership Leadership of a team is an important contribution... validate whether poor cooperation between employees is real central problems of Thai Tu Company Michael A West, Dean Tjosvold, Ken G Smith, cooperation in the workplace can make the difference between. .. UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business VO THI HAI THUONG POOR CO- OPERATION BETWEEN EMPLOYEES AT THAI TU COMPANY MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: