Solution for ineffective leadership in cubes asia

UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Le Hoang Yen SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Tran Le Hoang Yen SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: DR PHAN THI MINH THU Ho Chi Minh City – Year 2018 SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA TABLE OF CONT Executive summary Chapter Company backgrou 1.1 Cubes Asia history and organizational structure 1.2 Cubes Asia customer and proportion of sales by chan Chapter Problem identifica 2.1 General symptoms 2.1.1 The first symptoms 2.1.2 The second sympto 2.1.3 The third symptom 2.2 Problem mess 2.3 Potential problems 2.3.1 The first potential 2.3.2 The second potenti 2.3.3 Central problem 2.4 Problem justification 2.4.1 Problem definition 2.4.2 Problem existence 2.4.3 Problem importanc 2.5 Cause validation 2.5.1 Potential causes 2.5.2 Verify causes of ce Chapter Alternatives analys 3.1 Solutions 3.1.1 Proposed solutions 3.1.2 Validated solutions 3.1.3 Alternative solutio 3.2 Action plan 3.2.1 Objectives SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA 3.2.2 Time line and cost estimation 3.2.2.1 Solution S1.2: Implement dedicated communication skill training programs 63 3.2.2.2 Solution S2: Implement strategic planning 3.2.2.3 Solution S3: Apply performance management and control framework Conclusion Chapter Supporting information 4.1 Appendix 1: Samples of customer complaints 4.2 Appendix 2: Company documents 4.3 Appendix 3: Interview transcriptions 4.4 Interview guide of interview ground References LIST OF DIAGRAMS Diagram - Initial cause effect map Diagram - Updated cause effect map Diagram - Final cause-effect map Diagram – Proposed solutions for Cubes Asia’s central problem Diagram – Solution set components Diagram – Solution set components LIST OF CHARTS Chart - Cubes Asia Organization chart, Feb 2018 Chart - Total sales by channel 2016 Chart - Total sales by channel 2017 Chart - Total sales by channel quarter 1, 2018 Chart - Total sales by channel quarter 2, 2018 LIST OF TABLES SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Table - Annual employee turnover 2014 - 2018 10 Table – Comparison of high and low performing managers 34 Table – Top five characteristics contribute to leadership inefficacy 39 Table – Top five indicators to evaluate leader effectiveness 40 LIST OF FIGURES Figure - Dimensions and categories of negative leadership and its consequences .42 Figure - Dimensions and categories of leadership and its antecedents 45 Figure – Stages of strategic planning process 54 Figure – Performance management and control framework 56 SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Executive summary Cubes Asia is a young company who develops quickly in recent years However, due to spending time to focus on sales and marketing, it is facing with several issues relating to personnel, customers, management system The research includes three important parts Firstly, it comes with the company background for readers to understand the company history, its customers, staffing, sales as well as the industry, the market Cubes Asia is in Secondly, the researcher identified problem through interviews and theories, it is found that the company is facing with poor employee training and ineffective leadership However, ineffective leadership has significant influences through most of variables Furthermore, the research presented the valid causes leading ineffectiveness leadership including personal traits of the boss, misuse of power from managers, poor communication between managers and employees, lack of financial and human resources, lack of strategic business plans, lack of internal and external control with the company context to contribute in later solutions Thirdly, there are solutions proposed and confirmed by employees through quick survey The alternatives plan are analyzed and presented which is a combination of developing communication strategy, implementing strategic planning and applying performance management and control framework The plan comes with total budget of 228.140.000VND in the duration of months for training programs, month for strategic planning and nearly month for applying performance management and control framework in Cubes Asia This total cost is feasible with the company who gained turnover of 54 billion and profit margin of approximately 30% in 2017 Furthermore, the ineffective leadership causes losing key customers which contribute – billion per year, losing money, business information and low productivity due to high employee turnover rate (over 25% through years) The presentation above support the readers have an overview on contents of this research From the work has been contributed, the full name of the study is "Solution for ineffective leadership in Cubes Asia" SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Chapter Company background 1.1 Cubes Asia history and organizational structure Cubes Asia was established in 2013 who specializes in distributing the top wellknown European coffee machines and grinders such as Melitta, Nuova Simonelli, Victoria Arduino, Animo, Cunill, Schaerer, Lelit etc Besides, the company also provides other related products such as coffee, blenders, juicers, water systems, milk frothers, etc to make a coffee competence that meets all customer demand The company is the pioneer in the field of trading professional coffee machines in Vietnam Its mission is to provide excellent products to enhance the quality of living, and we pride ourselves in customer satisfaction and faith Cubes Asia has built up a head office in Hochiminh (2013) then its three showrooms in Hochiminh (2016), Danang (2017) and Hanoi (2017) until now and it is expected to expand to other regions such as Nha Trang, Phu Quoc – all are potential markets to trade its main product line However, Cubes Asia is a small company that has over 40 employees in total until now The head office is responsible for all decision of the company as well as the main venue to take place most of training courses, official events, monthly meeting etc The company’s competitors who are also coffee machine distributors but from other manufacturers are Perfetto, Epicure, Quang Tan Hoa, Charles Wembley etc Among its competitors, Cubes Asia is considered as the leader of coffee machine distributor in Vietnam due to be pioneer and its high quality products Cubes Asia has a national presence, being in many areas around Vietnam by distribution system through dealers and agents: roasters (Shin Coffee, LaViet, Laha Coffee, Trung Nguyen, Cau Dat Farm, etc.), dealers (Phuong Binh, Tam Long, Meta etc.), Modern trade (Thien Hoa, Nam An etc.), Ecommerce (Yes24, Tiki, Sendo, Lazada etc.), Private agents (Barista, individuals, etc.) At Cubes Asia, most of decision is made by top managers who are founder, business development manager and company development manager In fact, the founder (boss) is always the person to make final decisions which are managerial, operational and business and other managers are those who implement and execute the boss’ decision In near future, the company expects to have complete organizational chart indicated as below: SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Chart - Cubes Asia Organization chart, Feb 2018 *(NN) means not yet available SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA 1.2 Cubes Asia customer and proportion of sales by channels Cubes Asia target to both B2B and B2C customers who are resellers, agents, corporates, hotels, resorts, restaurants, coffee chains, coffee shops, households, individuals Among the company’s customers, it can be counted the most important coffee chains, hotel and restaurants as well as many other customers the company served around Vietnam such as The Coffee House, Trung Nguyen, Twitter Bean Coffee, Laha Coffee, Aha Coffee, Heritage Line, Khanhcasa, Caudatfarm, Hella, Piza 4P, Golden Gate, Novotel, Sol Beach, Part Hyatt, etc In general, B2B customers account for the overwhelming proportion of B2C customers The data of sales by channel from 2016 – 2018 is described below showing that B2B customers (Dealers, Roasters, Chains, HoReCa etc.) place extremely important role in the company turnover than B2C customers (Coporate, retails, showrooms, individuals) There are differences in the name and the way in dividing channels because the demands of splitting or merging sub channels by the time Chart - Total sales by channel 2016 SR R Corporate 14% Horeca 31% SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Chart - Total sales by channel 2017 Own SR 13% E-com/Mo.Tra 0% Coffee Client 3% Roaster 2% Chain Stores 5% Chart - Total sales by channel quarter 1, 2018 Ecommerce /Modern … Roaster Corporate Chains SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Nhi: New customer is about price issue Furthermore, there are many case the technicians don’t support customers For example, on Saturday or Sunday, the company should have technician to take care customer He can be at home, not need to go to the office All he needs to is available when there is a customer call in Because Sunday and Saturday are very sensitive points However, the customers of Mr.Phong are well supported I know it’s a part of close relationship of technicians so Mr.Cuong and Mr.Dien support Mr.Phong I used to share with Maylis (Business development manager) about that Sometimes, I have to use my own money and relationship to install machines for customers Nhi know some technicians of other dealers so they help me without charges However, I don’t want to use the relationship like that, some problems we cannot solve by money That is the final solution Sometimes the customer has grand opening in the weekend, I have to ask a technician in my former company – Perfetto – to help me Yen: Besides that, is there anything else customers complain to company? Nhi: I think that’s all Customers usually see that the machine is good so they very little complain about the machine Yen: How you think about the turnover rate of the company? For example, customer service department Nhi: I think it’s due to the way how to work The boss changes too much For example, he asked customer service executive to a new form, but when the form is done, he doesn’t like it and want to change while that idea is his We shouldn’t like that It affects a lot of thing: firstly, it affects to the person who makes decision This person spends too much time to make decision and get no thing Secondly, it affects to other people, staff spend too much time to a job and it also affects to other jobs Yen: Do you think the job at the company is clear? Nhi: No It’s not absolutely clear About salary, it’s clear But in the job, it’s unfair That is a weakness of the company There is a favoritism in the work that comes from human Yen: How you think about the way to divide sales channel? Nhi: It’s totally unclear For the Aeon mall’s story, I feel it’s very bullshit In the past, Mr.Axel assign me that channel (modern trade) There is no reason that Ms.Sam sent email and cc me but discuss with Ms.Kim to something in this channel I don’t care who will take care the job, it needs to work and run However, at the first time Mr.Axel ask me to this not Ms.Kim Yen: Do you have any solution for all problems? Nhi: I only focus on sales department I think firstly, we need to clarify Mr.Phong to one single position, sales manager or technical department head He should single job Secondly, the way to put sales target The manager should be a person to cover all sales target then he splits it for all under member Thirdly, we shouldn’t have favoritism in the working place, only have right or wrong, not like or dislike The managers need to change their mind Every thing should be clear Yen: Thank you, Nhi Nhi: Thank you Interview transcript Qualitative research – In-depth Interview Type of research: Company meeting room Location: Tran Le Hoang Yen Interviewer: Do Thi Thuy Vy – Position: Sales Admin (Current) Interviewee: 12rd August, 2018 Date: 39 minutes 39 seconds Duration: Explore the reasons of high turnover rate of the company and ideas for solutions to improve Purpose: Content: Yen: Hello My name is Yen I’m working on a study for my MBA course relating to HR field in your company – Cubes Asia Through first round interview, it’s exposed that the employee turnover of your company has been quite high in recent years due to shortage of employee motivation So, I want to interview you to know more about it All information you provide will be kept confidential and used for research purposes only Could you tell me some things about you, your name and current position in your company is? Vy: Hi I’m Vy and I’m working at Sales Admin department of Cubes Asia and has worked here for over year Yen: Thank you So now you are working as full-time employee of the company at head office? Vy: Yes Full-time job at head office Yen: In general, how you feel about your job? Vy: I feel a little pressure due to environment around, boss and workload Yen: If you could assess your job based on satisfaction level from to 5, how you assess it? SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Vy: I think currently it has been at 6-7 Yen: So it is based on 10 score scale Vy: Yes In general I could say Yen: How you feel about your productivity at work? Vy: I always try my best to the job but I think my boss doesn’t highly appreciate it maybe my performance isn’t impressive as other else Yen: How about other reasons that make you dissatisfied with your job? Vy: The policy is not so clear here and job assignment is also not reasonable, some people have a lot of work but others are free Yen: Then you like your current job? Vy: For job, I really like it but not the human issue Yen: Could you please share more about your opinion? Which aspects you like in your job? Which not? Vy: Currently, I have worked as Admin supporting for Danang and Hanoi showrooms For job, I rather like it because I can make connection among departments, work with several departments Despite of high workload, I love this job so I still try my best to meet the job requirement For the reasons I don’t like with my job, they includes unclear job assignment among departments, so some jobs belong to other departments I also have to and it takes times Yen: What factors at Cubes Asia motivate you? Vy: I feel benefit for employee quite good, for examples, salary, health insurance, end year bonus Yen: I see you noted that although the workload is high but you can meet the requirements and it fits with your job descriptions, aren’t they? Besides above issues, you feel the company’s environment motivate you at work? Ms VY: Yes Some departments are well connected, supportive and I also fell happy at work but some other departments create pressure for me due to inconsistent personality Yen: As I understand that you feel quite good with your job in general because of good benefit May you explain more about it? For examples, salary, insurance, learning opportunities, how you feel about these components can meet your expectation or needs? Vy: Salary at the moment can meet my life needs but bonus level is emotional assessment of boss I don’t know how manager calculates it, or bias About health care, I think it’s OK However, about learning opportunities, when I sign employment contract, I see company promise that I have chance to take a barista course but in the end, I haven’t seen any course I’m willing to learn more about coffee industry but all things I have to learn by myself without any course Yen: How you feel about balance between work and life? Sometimes, it comes to a lot of work, you feel overload? Vy: It depends on different periods in a year In the beginning of the year, there are not too many orders, I feel OK But in the end of the year, I have to work more and I usually work overtime so it affects my life a little At present I have no children so it does not affect much but later with children it will affect more Yen: Do the company have benefit for overtime work? Vy: I haven’t received any benefit for extra time working However, in the future I think it is hoped be better when new general manager comes in Yen: Because it’s not often event, how you feel about it, it can be ignored or cannot? Vy: I think it can be neglected until now but later on I don’t know what will happen Yen: What other needs you want to receive at the company that haven’t met your expectation? Vy: I am just unhappy with employee assessment issue I feel I dedicate a lot but it’s not recognized correctly And some departments don’t really work but they still receive more recognition Therefore, I just want the company improves in this issues Yen: Does your company have travelling benefit? Vy: Yes The employees have chance to travel abroad but it’s different year from year depending on company performance That means we have chance to go traveling but going to domestic destination or abroad destination is depended on company performance Yen: We have just talked about essential needs that company provides to employees, now I would like to talk about working environment at Cubes Asia In general, what you feel about working environment at the company? Vy: As I mentioned before, almost departments support each other quite well but some departments are not concordant, so it makes some pressure Furthermore, the manager doesn’t assess employee fairly and equally creating a heavy atmosphere Yen: As I know, most of the companies have different departments and sometimes it occurs some conflicts, and also I guess that you used to work for several companies, so you feel the conflicts in your company are more than other companies, for other words, is it significant? Vy: It depends I think some cases the conflict is very strong but after that the manager has some solutions to handle it, in general, everything can overcome And I think it’s equal level comparing with other companies Therefore, it’s common I think and it’s the same with other companies I used to work for Yen: Which aspects you think the working environment is good at? Which not? SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Vy: People are supportive However, there is one point that needs to be improved Some employees need to change the way they the job, be more responsible Yen: So you think that working environment here is productive? Vy: I think the productivity depends on the vision of manager All employees are trying to their best but manager often changes his requirements in different ways Yen: If you evaluate yourself and other colleagues, all employees work well with their responsibility and productivity? Vy: Yes, we are all doing well We have to follow the boss Yen: Besides easy inclusiveness, friendliness How you think about respect among employees? Vy: Everybody respects each other in front, but from the back I’m not sure The boss is a bit phony I heard someone that the boss complained about me on my back but in front of me, he didn’t express anything Yen: So you think, actually, you are not respected? Vy: No, because I heard the boss talked more about other departments, not my department If it’s exist, just a few comments I think other people will more disturb However, I think it comes from angry words of the boss, in general, my boss is still OK compared to other manager in other companies I think Yen: As your sharing, you are working on suitable responsibilities, so you have any opportunities or challenges to the job? Vy: Currently, I satisfied with current job but I still feel something that doesn’t give development opportunities, maybe because of my job characteristics which is repeated job I’m considering how I deal with this issue Yen: Do you think that it comes from the orientation of the manager? Because as I know, when we want to develop, our boss is the person who affect our future most and support, orient our future direction How you assess this issue? Vy: I think a part of this issue comes from the manager, maybe he assesses me as good as his expectation so he doesn’t think he can direct me correctly Yen: So how does your manager assessment on employees at Cubes Asia? Vy: Many people said that he underestimates most of employees except one or two persons in the company I don’t know what he really wants His assessment on people is very emotional I think he doesn’t recognize people reasonably, he doesn’t expect employees can much for him so he puts employees in one fixed position Yen: Through previous interviews, I realize that all decisions is mainly determined from CEO – founder of the company I guess that in your company, it does have under level of supervisor, doesn’t it? Vy: Yes In general, the company structure is not clear and the lower level of manager only manages general issues Yen: Besides the boss you have described from the beginning until now, you have other upper manager or supervisor? Vy: Yes, I have but she has just left the company and the company is recruiting someone to replace her position Yen: Depending on your thought, what managers help you in your job and how? Could you please tell me about it? Vy: Managers always give excuse but when I express my difficulties in job, I think they don’t really help me to resolve it Therefore, I feel pressing with it Yen: Do you think this issue affect significantly on your performance? Vy: Yes I feel it affects a lot to my job because managers can direct employees, see qualities of the staff But the managers seem not to care employees and not to be helpful Yen: When you come to the company, you receive the support in term of coaching, training? Vy: Yes All things I need to learn by myself Yen: How about the communication of vision, strategies from managers to the employees? Vy: I still see the managers communicate with us but in the end, they make decision by their own though That means there are other ideas but it’s turned down Yen: After managers build up strategies, objectives for the company, are you clear about it? For examples, next year objective, strategies that company expects Are you clear about them? Vy: I think it’s vague, the boss is usually changing, for examples, sales target Yen: I feel that you will not be inspired the passion in your job? Vy: Yes Many morning I am so tired and don’t want to go to work Yen: So the motivation that you still work for the company, which factors motivate you to continue with your job? Vy: As my sharing, it comes from the company benefit that meet my needs and the support from other departments Yen: As my feeling, what is happening that are: firstly, un-objective assessment of the boss; secondly, the way managers inspire people at work, communicate strategies, objectives of the company; thirdly, there is no direction for employees to develop themselves; and these factors impact the employee motivation and intention at Cubes Asia Do you think that these factors are what other people in this company are facing with as well as other former employees? Vy: Exactly These are the main reasons making all people tired and discouraged In this company, there is the future seeing, only see what is happening in front of the eyes Maybe, some people are the same with me due to personal reasons they still cannot quit the job However, I still feel unsure future and unsure objectives SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Yen: How about the fairness and equity in your company? As you mentioned that the managers treat people unequally, so which points you think it’s unfair? For example, age, gender, ability, location, etc Vy: I think that the boss is very emotional, bias He likes the persons who often smarm him and he will put them in priority The workload is unequally divided, salary/bonus is divided emotionally Because the boss possesses different companies so he sometimes comes to the office Every time he comes to the office, some persons talks to him and he believes it Yen: Do you think that maybe the boss doesn’t know these persons handle less jobs? Vy: I think maybe he really doesn’t know, just depends on what he hears from some people Maybe he see that these people are talkative so he thinks these are good workers Moreover, the boss refer girls who are beautiful and have nice dress Yen: In your company, which factors does your company depend to reward or penalize employees? Vy: I see no penalty at my company, just some heavy words from the boss For rewards, I think it’s very emotional so I don’t know which criteria the boss bases on Yen: So is it the end year bonus or what others? Vy: It’s the end year bonus In last year end party, I see there are nonsense rewards that I don’t know what criteria they are based on Yen: Can you tell me more about it? Vy: I don’t remember so much For example, nice dress, sexy style etc Yen: Does the company have policy in manner of reward or penalty? Vy: No, the company doesn’t have these policy and also changes the policy frequently Yen: In your deep thought, you think that you will work here for long term? Vy: I’m similar to other people, I desire to have something for yourself so I would like to leave but currently I have some issues prepared for leave Yen: Usually, people use KPI to evaluate the performance, so which tool/method does your company use to evaluate employee performance? Vy: Only for sales The company evaluates whether sales meet target or not in monthly or quarterly For bonus of back office, I don’t know which criteria the manager based on to give bonus Yen: How about salary review? Vy: Salary is reviewed annually in the beginning of the year and it’s also emotional Yen: Does your manager make decision by himself or ask advices, feedbacks from several people or assessment table? Vy: There are feedbacks from several people but most of them are factions Therefore, I think it’s not fair The boss only asks his favorable persons but not all persons Yen: As you note that there is only one way assessment from manager and employees don’t review each other, also don’t review themselves? Vy: Actually, only this year, there is new innovation that the company has table of assessment for self-evaluation of employees, but not mutual review Yen: Could you please compare what you evaluated yourself with what you have received from the company? Are they compatible? Vy: I think they are not quite fit I don’t know how it is to other people I feel feedbacks I received don’t match with what I did in self-evaluation Yen: Do managers give you feedbacks in your job to make improvement? Is it frequent? Vy: No I haven’t received any feedbacks from my boss Even when I submitted the table of assessment, I don’t receive feedbacks from manager Yen: Which methods of assessment you prefer? For example, top-down method or down-top method? Vy: For me, I think we should listen to different sides: mutual assessment, self-assessment Yen: Besides these issues, would you like to share more about your current job relating to employee motivation in Cubes Asia? Vy: My supervisor has just left so I hope new supervisor will support me more in my job and provide me clearer direction and good policy for every person so it will improve the motivation of employee Yen: Thank you for your sharing All information will be kept confidential and support for study purpose only Thank you! SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA 4.4 Interview guide of interview ground INTERVIEW GUIDE Introduction Purpose of the interview Information security Department, job title, job description of interviewee Warm-up questions What you feel about your job at Cubes Asia? (Describe general feeling in their job: happy? satisfied? productive?) Why? What you like/dislike about your job at Cubes Asia? Why? Main body of interview What motivates you and demotivates you at Cubes Asia (researcher explain job motivation if necessary)? Why? Prompt: Needs of employees, work environment, responsibilities, supervision, fairness and equity, effort, employee development, feedbacks How is the job meeting your personal needs? What you think about (prompt) at your company? Can you give some examples? Prompt: Salary, Benefit as holiday, education, insurance or bonus, etc.; balance at work, general feeling of one’s satisfaction with the current and desired state of being What is your opinion on Cubes Asia’s working environment? Why is it good or not good? Which points you think it’s good and which one needed to be improved? How about _(prompt) in your company? Prompt: Productivity, respect, inclusiveness, friendliness How is the job you are doing at your company? Ask more about: Suitability of job descriptions, job challenges, recognition SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA What your supervisors/managers to help you in your job? How they affect your job performance? Prompt: Teach, coach, develop subordinates? How they impact the organization’s goals, objectives and strategies to obtain the mission of company? The way they inspire subordinates, communicate and share the organization’s goals, objectives and strategies? How is it? Clear or not And what you feel? How are people treated at Cubes Asia in term of fairness and equity? Prompt: Age, gender, ethnicity, disability, sexual orientation, geographic location, or other similarly defined categories How is rewarding and penalizing policy at Cubes Asia? Give some samples What are development opportunities in your company? Can you tell more about it? What you think about development opportunity at your company? Less or more Prompt: Challenge jobs, learning opportunities, opportunities for advancement and other personal development 10 Which methods your company use to assess employee performance? How often your supervisors/managers give feedbacks to you? Do you have timely and open feedbacks from your managers? What is the methods to give feedbacks: one way or two ways or 360 degree? Can you describe your favorable methods to assess employee performance and give feedback? 11 Is there anything else you want to share? 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SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA Diagram - Updated cause effect map 30 SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA 2.3.1 The first potential problem: Poor employee training