Solutions for lack of empowerment at VEAS

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Ly Bich Van SOLUTIONS FOR LACK OF EMPOWERMENT AT VEAS MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Ly Bich Van SOLUTIONS FOR LACK OF EMPOWERMENT AT VEAS MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR LE THI THANH XUAN Ho Chi Minh City – Year 2019 Table of Contents EXECUTIVE SUMMARY CHAPTER 1: INTRODUCTION CHAPTER 2: PROBLEM ANALYSIS 2.1 Symptom – Employee dissatisfaction 2.2 Symptom – High voluntary turnover rate 10 CHAPTER 3: PROBLEM IDENTIFICATION 14 3.1 Potential problems 14 3.1.1 Relationship at workplace 15 3.1.2 Salary 17 3.1.3 Empowerment 19 3.2 Initial Symptom-Potential Problem map 21 3.3 Main problem 22 CHAPTER 4: CONSEQUENCES 24 4.1 Time consuming 24 4.2 Cost consuming 27 4.2.1 Tangible cost 27 4.2.2 Intangible cost 30 4.2.2.1 Loss of experience 30 4.2.2.2 Loss of customers 30 4.2.2.3 Low productivity 30 CHAPTER 5: CAUSE IDENTIFICATION 33 5.1 Potential causes 33 5.1.1 Leadership style 33 5.1.2 Policies 35 5.1.3 Procedures 36 5.2 Initial Cause-Effect map 37 5.3 Main cause 37 5.4 Final Cause-Effect map 40 CHAPTER 6: ALTERNATIVE SOLUTIONS & ACTION PLANS 41 6.1 Change policies and procedures 41 6.2 Increase salary and benefit 41 6.3 Change leadership style 42 6.4 Solution justification 44 6.5 Action plans 46 CHAPTER 7: CONCLUSION 53 CHAPTER 8: SUPPORTING INFORMATION 54 8.1 Interview Transcript 54 8.2 Methodology 90 REFERENCE 91 APPENDIX 96 List of Figures Figure 1.1 Organizational structure of VEAS Figure 2.1 Percentage of employees agree that they feel satisfied when working at company Figure 2.2 Percentage of employees agree that they want to stay at the company for a long time 10 Figure 2.3 VEAS’s turnover rate from 2016 to 2018 11 Figure 2.4 VEAS’s turnover rate among departments in 2018 12 Figure 3.1 Reasons for employee dissatisfaction 15 Figure 3.2 Sales employee’s opinion for relationship at workplace 16 Figure 3.3 Sales employee’s opinion for salary 18 Figure 3.4 Sales employee’s opinion for the empowerment 21 Figure 4.1 Average time to hire new employees at VEAS 25 Figure 4.2 Time to hire new employees for Sales Department 26 Figure 4.3 VEAS's tangible cost in 2018 27 Figure 4.4 Departure cost at VEAS in 2018 28 Figure 4.5 Replacement cost at VEAS in 2018 29 Figure 4.6 Percentage of sales department’s employees agree that they get motivation at work 31 Figure 4.7 Compliance ratio between departments at VEAS in 2018 32 Figure 5.1 Potential causes of lack of empowerment at VEAS 38 Figure 6.1 The percentage of employees agrees to change from transactional to transformational leadership style 44 Figure 6.2 Employees’ opinion regarding to solution justification 45 List of Tables Table 2.1 Number of employees participating in the survey Table 6.1 Transactional vs Transformational leadership style 43 EXECUTIVE SUMMARY This study was conducted at VEAS, in Ho Chi Minh City VEAS is the company which specializes in holding international trade exhibitions, but it is facing the problem of high voluntary turnover rate and high percentage of dissatisfied employees The purpose of research proposal is to find the causes and suggest possible solutions for company’s current issue It comprises of eight chapters, where the first chapter gives an overview of the company In chapter two, three and four mention about problem analysis, problem identification and its consequences to the company While chapter five figures out cause identification, some alternative solutions and action plans are clearly discussed in the next chapter Conclusion of the research and supporting information are listed in the last two chapters The paper specifically stays focused on identifying and examining the causes and solutions of lacking of empowerment of VEAS Both probability and nonprobability sampling methods of data collection were employed in this study A total number of 40 respondents will be assessed Moreover, structured and unstructured questionnaires were used to get the information from selected departments of the organization Furthermore, personal observation and interviews will be applied in collecting information and presented in forms of percentage to show the relationship of the interviewees to find out the main cause of lacking of empowerment The research paper thoroughly shows the current symptoms of VEAS which are strong dissatisfaction of employees and a really high voluntary turnover rate, especially at sales department who helps company to achieve revenue target If it is not solved, bad consequences will considerably affect Some potential problems are found out such as lack of empowerment, relationship at work place and unsatisfactory salary with the main problem is the first issue – lack of empowerment The study about the causes of problem was also conducted with two potential causes – policies and procedures and leadership style Deep research has concluded that cumbersome policies and procedures are the main cause of VEAS Some alternative solutions; therefore, are suggested to solve the problems like changing leadership style, changing policies and procedures and increasing salary and benefit As a result, changing leadership style is recommended to implement based on company resources, its effective result and time to deploy CHAPTER 1: INTRODUCTION Minh Vi Exhibition and Advertisement Services Co., Ltd (VEAS) is one of the key International Exhibitions and Business to Business Conferences Organizers in South East Asia with the company head office in Tan Binh District, Ho Chi Minh City – Vietnam and possesses representative offices in the region, including Myanmar, Thailand and Cambodia VEAS was founded in 2007 It has successfully accomplished and organized many stunning corporate regional events, which has opened various potential opportunities for different regional and international companies VEAS plays an important and fundamental role in building the corporate connections and convincing establishments for partnership between Vietnamese and International enterprises through their provided dedication and professional services and solutions VEAS’s services cover a large variety of sectors from agriculture, livestock, aquaculture, beauty and aesthetics, pharmaceutics to coatings, paper, rubber and tyre, plastics, garment and textile and many more The company has clear vision and values which indicate that its dedication would bring the customers and partners valuable events where they can get memorable experience and long-term benefits Moreover, the organization’s aim is to provide its related parties with opportunities for recognizing market potentials through latest market and technology trends, meeting various business partners and promoting their cooperation Specializing in enhancing local and global business cooperation through interactive events, VEAS is highly appreciated to bring professionalism, quality and innovative ideas to its clients from conception to execution The company plays a key role as an international exhibition management and organizer, business to business events and professional seminar conference management and organizer VEAS provides platforms for investors, customers and vendors to connect, exchange information as well as expand their market Remarkably, what makes company special when accompanying with clients is its diversity in professional services At VEAS, people provide events from various sectors to meet diverse clients’ demands including personal and healthcare industry, agricultural industry, paper – rubber – plastics – coating industry, industrial production and so on Some featured events can be listed down such as Ildex Vietnam – the biannual large scale exhibition where local and international firms experience new technology and update latest market trends of livestock industry; Cosmobeaute Vietnam – the largest beauty show in Vietnam with more than 10-year long standing history and the presence of premium brands from over the world; HortEx Vietnam – the annual large scale exhibition where local and international firms experience new technology and update latest market trends of horticultural and floricultural production and processing technology, the most promising sectors of the Vietnamese economy In addition, the company is also successful abroad with the series of biggest international exhibition for agriculture industry in Myanmar and Cambodia where enterprises can explore business opportunities and achieve better market understanding or the largest international beauty trade fair in Myanmar and Cambodia to bring domestic and international enterprises in cosmetics-related industries together for networking and expanding businesses In general, VEAS is making efforts to raise the bar through its continuous improvements on professional services The business has successfully organized more than 500 events with over 9,000 exhibitors from around 50 countries and attracting some 350,000 local and international visitors since its establishment The company has currently kept strong relationship with approximately 15 well-known partners in the similar industry from China, Thailand, Malaysia, Korea, India, the Netherlands, Taiwan and Turkey VEAS has many trade customers including exhibitors and visitors, partners, suppliers for each exhibition in different industries The company always tries to develop the current holding exhibition and find the new partners to co-organizer new exhibition in new industry to meet the demands of customers and requirements from the market Board of Directors Operation – Technical Department Sales Department Marketing Department Human resources & Administration Department Marketing Manager Project Team Marketing Executive Project Team Finance – Accounting Department Support Department Content Marketing Accounting Manager Project Manager Project Manager Operation Manager Project Supervisor Project Supervisor Operation Supervisor Project Executive Project Executive Operation Executive Accountant Figure 1.1 Organizational structure of VEAS (Source: Company’s report) VEAS is a family-owned business, but it owns young, talented and experienced employees working in meetings, incentives, conferences and exhibitions (MICE) industry Therefore, although there are around 30 employees, they all work well together to support for the ambitions and success of company The organizational structure of VEAS is separated in hierarchical level with the board of directors – highest level including director and vice director Below are different teams who are in charge for different tasks to support for the exhibitions The main team who takes the largest responsibilities for the final results of each exhibition is project team or sales team In the past, there were project teams which were called project team 1, project team 2, project team and business development team While the first teams were in charge of the company’s current exhibitions, the business development team tried to support the organization to develop more new exhibitions However, because of some adjustment of the organization structure, there are only two project teams now and each team has or members managing some specific exhibitions and the director will be the one who will decide to open new exhibition The project manager will be the main contact for each team, and then there are project supervisor and project executives Their duties are to find customers to meet the target revenues and manage for the whole shows The next two teams supporting the most for project teams are marketing team and operation team Marketing team has five members with the marketing manager, marketing executives and content marketing to help for the marketing materials, social networks and so on to take the most advantages of these channels to promote for the company’s events Operation team; however, will be in charge for designing, constructing booths and working mainly with constructors when onsite with the operation manager on top and below are operation supervisor and operation executives Moreover, there is support team or considered as call center to send the invitation email and make phone call to introduce the event to customers and try to persuade them to participate the events or visit the exhibitions Other last teams which are also important are human resource (HR) – administration team and accounting team The former team includes HR and administrator The latter team includes members which are accounting manager and accountants which support in general finance and operation cash The assignment of HR is to recruit and find suitable candidates for vacant positions In addition, administrator does general tasks and supports the remaining teams when they require for stationery or other stuff In 2018, there are a total of 40 employees in VEAS and the number of employees in sales department is 11 people which accounts for 27.5 percent The company’s advantages are the customer-oriented service, professional service how does it affect your performance? + Lost a opportunities lot needs in time” “so it is lost a lot of opportunities to get big deals and contracts” of Interviewee: Phong thinks that the sales department is the direct contact between the company and the customer, so every decision made affects both sides Customers they may not fully understand the company's workflow, they just want to be met by their company In contrast, the company that performs each operation must follow a specific step-by-step process and each level, so sometimes the processing time does not response the customer's needs in time Therefore, any change, even the smallest, must be presented to the review levels, the work efficiency will be significantly affected Our customers are financial companies, so they require quick assertiveness to solve their requirements But with the proposal process and the current consultation process is taking a lot of time, so it is lost a lot of opportunities to get big deals and contracts + Effectiveness of Main body questions operations Q13 What does Phong realize that decentralization means to current issues? + Flexibility and timeliness Interviewee: In each company will apply in different forms, depending on the type of business that applies decentralized or decentralized forms, this nature affects and determines the effectiveness of operations of the company For large-scale companies, the form of decentralization has the flexibility and timeliness in doing business as well as making quick and accurate decisions, in order to timely grasp business opportunities for the company This helps business staff easily negotiate with customers in the range of their rights, promote business activities Q14 If the company empowers its employees, you think the factors that + Ability and experience need to be decided by the employee? + Knowledge + Negotiating and closing Interviewee: From Phong's point of view, when assigning powers to each issues level, the company considers it based on their ability and experience to determine the scope of authority and content of the assigned work For myself, in addition to the abilities and knowledge that have been learned and accumulated through each working period, Phong has also accumulated experiences in negotiating and closing issues with customers Therefore, + Decentralized company business structure + Flexibility at work “this nature affects and determines the effectiveness of operations of the company” “the form of decentralization has the flexibility and timeliness in doing business … decisions” + How to make “company considers it based on motivated for their ability and experience to employee? determine the scope of authority and content of the assigned work” “in addition to the abilities and knowledge that have been learned and accumulated through each working period” “Phong has also accumulated 83 decentralized decision making is an appropriate policy to meet the timely needs of business operations today, as it not only improves work efficiency, but is also an essential support Q15 As you have stated, the right to self-determination for business is very + Reducing transaction + Promotion important So for the current job position, how is Phong's authority fees package expressed? Interviewee: According to the current work, I support and advise the manager on business plan for the whole year, expand business scale Therefore, when customers have specific requirements such as reducing participation fees, Phong must make a proposal for a competent authority's opinion, and when the approval is granted by the competent authority, it will respond to the results for customer Perhaps, May be within the participation fee level, I can be decentralized to close transactions with customers, but still bring the company's profit Q16 During the time you work at the company, what are your dedications + Revenue and profit and contributions to the company? And what you think the company + Proposal of Suitable needs to improve? Products + Flexible policies Interviewee: As a business staff, I always want to contribute to the company many customers and bring the most revenue and profit, while building, contributing and proposing products suitable to the needs of the current market Although the market is increasingly difficult, the competition among businesses in the industry is fierce, plus the demand of customers is increasing, but I always try to encourage myself to strive to overcome through these challenges, outlined strategies and solutions to improve the quality of work However, in order for these efforts to be fully effective, I think that there is a need for partial support of the company which is essential for flexible policies in business, specifically as the right to approve the agreements Business agreement within your limit If his proposals are issued, Phong believes that business will be much more effective experiences in negotiating and closing issues with customers” “when customers have specific requirements such as reducing participation fees” + How to achive “I always want to contribute … goals revenue and profit, while building, + Flexible Work contributing and proposing Policies products suitable to the needs of the current market” “I think that there is a need for partial support of the company which is essential for flexible policies in business” 84 Interview Q&A Full Q&A Coding (key answer) Category (