effective leadership the case of nexans vietnam power cable company

INTERNATIONAL EXECUTIVE MASTER OF BUSINESS ADMINISTRATION PROGRAMTHESIS EFFECTIVE LEADERSHIP THE CASE OF NEXANS VIETNAM POWER CABLE COMPANY Le Duc Minh Student’s ID: Vn1001083 Class: ieM

INTERNATIONAL EXECUTIVE MASTER OF BUSINESS ADMINISTRATION PROGRAM

THESIS EFFECTIVE LEADERSHIP

THE CASE OF NEXANS VIETNAM POWER CABLE COMPANY

Le Duc Minh

Student’s ID: Vn1001083

Class: ieMBA.B02

May 2013

Research student

Le Duc Minh

First and foremost, I would like to express my sincerest thanks to my instructor –Doctor Dang Ngoc Su – for his dedicated and enthusiastic instruction to thecompletion of this thesis But for Doctor Dang Ngoc Su’s help, my thesis wouldnot have been completed

Besides, I am grateful to leaders, managers and lecturers of PGSM program andThai Nguyen University for their facilitation and support in my MBA course as well

as research process and thesis formation

In addition, I would like to acknowledge leaders and colleagues at Nexans VietnamPower Cable Company who give me their enthusiastic and impartial support in mydata collection process by spending their precious time and putting efforts inmeeting me and completing survey questionnaire

Particularly, I would like to thank all beloved members in my family including mykind old parents, my beloved wife, daughter and son as well as my older brothersand sisters for their support and affiliation for my completion of the program andthis thesis

TABLE OF CONTENTS

1.1 Concept, nature and significance of leadership 4

1.1.1 Concept and nature of leadership 4

1.1.2 Role and importance of leader 6

CHAPTER II 29

LEADERSHIP IN REALITY 29

AT NEXANS VIETNAM CABLE POWER COMPANY 29

2.1 Introduction to Nexans Vietnam Power Cable Company 29

Core capacity 31

Nexans Vietnam Power Cable Company (NPVC) is the leading company in aluminum rod, high quality power cables with aluminum and aluminum alloy conductors in accordance with international standards During over 15 years of formation and development, the Company has gained a lot of experiences and knowhow in production of power cables with active and professional officers and employees trained oversea It has established its unique culture All play as a firm foundation for sustainable development of NVPC that cannot found in other companies in the industry 31

2.1.2 Organizational structure 31

2.2 Current situation of leadership in Nexans Vietnam Power Cable Company 33

2.2.1 Old organizational model 33

2.2.2 New organizational model since 2010 36

2.2.3 Human resources 38

2.3 Assessment of leadership in the company 40

2.3.1 Vision 40

2.3.2 Decentralization, authorization 48

2.3.3 Motivation, encouragement 52

2.3.4 Influence 56

2.3.5 Leadership communication 59

2.3.6 Decision making 61

2.3.7 Self-understanding - understanding others 63

2.4 A summary of achievements and shortcomings 66

Conclusion to Chapter II 70

CHAPTER III 71

SOME SOLUTIONS TO IMPROVEMENT OF LEADERSHIP EFFECTIVENESS IN NEXANS VIETNAM POWER CABLE COMPANY (NVPC) 71

3.1 Develop vision 71

3.2 Exploit employees’ psychology factor 73

3.4 Maintain and develop competitive human resources 76

LIST OF ABBREVIATIONS

LIST OF TABLES

Table 1.1: Concepts of leadership Error: Reference source not found

1.1 Concept, nature and significance of leadership 4

1.1.1 Concept and nature of leadership 4

1.1.2 Role and importance of leader 6

CHAPTER II 29

LEADERSHIP IN REALITY 29

AT NEXANS VIETNAM CABLE POWER COMPANY 29

2.1 Introduction to Nexans Vietnam Power Cable Company 29

Core capacity 31

Nexans Vietnam Power Cable Company (NPVC) is the leading company in aluminum rod, high quality power cables with aluminum and aluminum alloy conductors in accordance with international standards During over 15 years of formation and development, the Company has gained a lot of experiences and knowhow in production of power cables with active and professional officers and employees trained oversea It has established its unique culture All play as a firm foundation for sustainable development of NVPC that cannot found in other companies in the industry 31

2.1.2 Organizational structure 31

2.2 Current situation of leadership in Nexans Vietnam Power Cable Company 33

2.2.1 Old organizational model 33

2.2.1 Old organizational model 33

2.2.2 New organizational model since 2010 36

2.2.2 New organizational model since 2010 36

2.2.3 Human resources 38

2.2.3 Human resources 38

2.3 Assessment of leadership in the company 40

2.3.1 Vision 40

2.3.1 Vision 40

2.3.2 Decentralization, authorization 48

2.3.2 Decentralization, authorization 48

2.3.3 Motivation, encouragement 52

2.3.3 Motivation, encouragement 52

2.3.4 Influence 56

2.3.4 Influence 56

2.3.5 Leadership communication 59

2.3.5 Leadership communication 59

2.3.6 Decision making 61

2.3.6 Decision making 61

2.3.7 Self-understanding - understanding others 63

2.3.7 Self-understanding - understanding others 63

2.4 A summary of achievements and shortcomings 66

Conclusion to Chapter II 70

CHAPTER III 71

SOME SOLUTIONS TO IMPROVEMENT OF LEADERSHIP EFFECTIVENESS IN

NEXANS VIETNAM POWER CABLE COMPANY (NVPC) 71

3.1 Develop vision 71

3.2 Exploit employees’ psychology factor 73

3.4 Maintain and develop competitive human resources 76

Table 1.3: Comparison of approaches to leadership Error: Reference source not found Table 2.1 Production and business outputs of NVPC during the past several years .Error: Reference source not found Table 2.2 Statistics on quantity and quality of human resources in the company .Error: Reference source not found LIST OF FIGURES/GRAPHS Figure 1.1: Effective leadership – Procedural approach

Figure 1.2: Behavior – Task based model in effective leadership

Figure 1.3: Effective leadership – Component approach

1.1 Concept, nature and significance of leadership 4

1.1.1 Concept and nature of leadership 4

1.1.2 Role and importance of leader 6

CHAPTER II 29

LEADERSHIP IN REALITY 29

AT NEXANS VIETNAM CABLE POWER COMPANY 29

2.1 Introduction to Nexans Vietnam Power Cable Company 29

Core capacity 31

Nexans Vietnam Power Cable Company (NPVC) is the leading company in aluminum rod, high quality power cables with aluminum and aluminum alloy conductors in accordance with international standards During over 15 years of formation and development, the Company has gained a lot of experiences and knowhow in production of power cables with active and professional officers and employees trained oversea It has established its unique culture All play as a firm foundation for sustainable development of NVPC that cannot found in other companies in the industry 31

2.1.2 Organizational structure 31

2.2 Current situation of leadership in Nexans Vietnam Power Cable Company 33

2.2.1 Old organizational model 33

2.2.1 Old organizational model 33

2.2.2 New organizational model since 2010 36

2.2.2 New organizational model since 2010 36

2.2.3 Human resources 38

2.2.3 Human resources 38

2.3 Assessment of leadership in the company 40

2.3.1 Vision 40

2.3.1 Vision 40

2.3.2 Decentralization, authorization 48

2.3.2 Decentralization, authorization 48

2.3.3 Motivation, encouragement 52

2.3.3 Motivation, encouragement 52

2.3.4 Influence 56

2.3.4 Influence 56

2.3.5 Leadership communication 59

2.3.5 Leadership communication 59

2.3.6 Decision making 61

2.3.6 Decision making 61

2.3.7 Self-understanding - understanding others 63

2.3.7 Self-understanding - understanding others 63

2.4 A summary of achievements and shortcomings 66

Conclusion to Chapter II 70

CHAPTER III 71

SOME SOLUTIONS TO IMPROVEMENT OF LEADERSHIP EFFECTIVENESS IN NEXANS VIETNAM POWER CABLE COMPANY (NVPC) 71

3.1 Develop vision 71

3.2 Exploit employees’ psychology factor 73

3.4 Maintain and develop competitive human resources 76

Name of thesis: Effective Leadership – The case of Nexans Vietnam Power Cable

Company (NVPC)

1 Reason for choosing this thesis

In this changing context of “Flat world”, groups, companies and enterprises of allsizes are facing increasingly fierce competition in all fields With small size, limitedresources and modest experiences, corporations and enterprises of different sectors

in Vietnam are challenged For the survival and development of Nexans VietnamPower Cables Company, leaders of the Company should respond to constantchanges in surrounding environment besides seeking a suitable and proper directionfor management to achieve set targets

How can we achieve effective leadership? Getting influence to seek voluntaryparticipation of employees and create favorable conditions in order to achievetargets in the short-run and long-run is demanded of leaders in the current changingenvironment

As a leader of the Company, I have chosen the thesis of “Effective leadership – The case of Nexans Vietnam Power Cable Company” for graduation project From

reality of the Company during the past years and development direction for theyears to come, and my knowledge, I choose this thesis in order to contribute more

to the sustainable development of the Company

2 Research objectives

Applying learned theory and leadership skills, this thesis investigates and assessescurrent situation of leadership in Nexans Vietnam Power Cable Company inaccordance with procedure, behavior – task factors and component; at the sametime it recommends solutions for improving leadership in Nexans Vietnam PowerCable Company

3 Research Scope

The study just focuses on the leadership in Nexans Vietnam Power Cable Company(NPVC)

4 Research methodology

- Qualitative method: Case study of Nexans Vietnam Power Cable Company

- Detailed method: Analysis, comparison and consolidation (Descriptive analysis)

- Data collecting method: Direct interviews, survey questionnaire

- Data: Primary and secondary data are used in this study

5 Significance

Theoretically, the thesis focuses on systematizing some common theories, skills andstyles of effective leadership in the world Practically, the thesis analyses theleadership in NVPC by using theories of leadership and effective leadership.Additionally, the thesis may be used as a reference for other enterprises in the samefield

6 Limits

This study is limited within Nexans Vietnam Power Cable Company Therefore,conclusions from the study should be applied for the Company only Additionalstudy should be carried out if the study will be applied in other companies or othertypes of business

7 Thesis Structure

This thesis consists of preface, chapter I, chapter II, chapter III and a conclusion.The preface reveals reason for choosing this thesis, research objectives,methodology, significance and limitations

Chapter I presents theoretical foundation, emphasizing nature and significance ofleadership, some approaches to leadership and international experiences in effectiveleadership

Chapter II gives an overview in the establishment and development, organizationalstructure, operation, production and business outputs of the Company during therecent years It also assesses current situation of leadership of the Company, in

which it deeply analyzes leadership effectiveness in fields of good performance andworks out limitations and shortcomings that need solving for the improvement ofleadership effectiveness in the future

Chapter III recommends solutions to such limitations and shortcomings statedabove in Chapter II

The conclusion summarizes all contents in the thesis, points out contributions andlimitations, opens new projects in effective leadership for deeper studies

CHAPTER I: THEORETICAL FOUNDATION

1.1 Concept, nature and significance of leadership

1.1.1 Concept and nature of leadership

The topic of “leadership” has long drawn the attention from scholars as well asstudies In mentioning such concept, it commonly refers to powerful and activeindividuals who can have influences on others and establish future for theircountries History has proved influence extent and scale of “leadership” in manyfields such as religion, politics or military It is not accidental when all Vietnamesepeople admire and learn from President Ho Chi Minh – the old Father of the Nation,the distinguished leader of Vietnam In the world, eminent leaders such asMohammed, Mao Zedong and talented military experts such as Julius Ceasar,Charles the Great (Charlemagne) or Alexander the Great built powerful empires.Even Adolf Hitler can be seen as a “unique” leader with his strong power Forenterprises, many excellent leaders are socially recognized as Bill Gates (Microsoft–USA), Steve Jobs (Apple –USA), Akio Morita (Sony – Japan) They are typicalleaders with visions and qualities in exploiting potentials of people for successfulmissions of their organizations

century, the concept of leadership received attention and discussion from scholars.Researchers usually define leadership in accordance with their private concepts andaspects that draw their attention most The definition of Leadership may beapproached in such different angles as quality, behavior, influence or manner incommunication (Table 1.1)

As such, leadership is stated in different angles such as quality, behavior, influence

or simply the direction According to Richard and Engle (1986) leadership is aprocess of combining, articulating visions, embodying values and creating suitableenvironment While Richard J Daft (1999) stated that leadership is the process ofcreating influence between leaders and employees, which makes changes towardscommon goals of the organization In the book “Culture, Leadership, andOrganizations: The GLOBE Study of 62 Societies” published in 2004, House et al

defined leadership as the ability of an individual in creating influence andencouragement for attracting the highest contribution from followers for thedevelopment of an organization

Table 1.1: Concepts of leadership

No Concepts

of a group towards a shared goal (Hamphill & Coons, 1957)

compliance with the routine directives of the organization (D Katz & Kahn,1978)

toward goal achievement (Rauch & Behling, 1984)

(Jacobs & Jaques 1990)

revolutionary but appropriate changes (E.H Schein, 1992)

they are doing and they will understand and commit what they will do (Drath

& Palus, 1994)

environment within which things can be accomplished (Richards & Engles,1986)

encouraging his deputies to make their contribution to success of theorganization (House et al., 1999)

Besides the above-mentioned concepts, scholar Warren Bennis (2002) presented aquite comprehensive but sufficient concept of leadership

Bennis described leadership as a social process of influence in seeking participation

of followers for best implementation of targets of an organization Also the authoremphasized the significance of follower participation in implementing missions of

an organization and responsibilities of leaders as the search of such participation

Success of companies and organizations is gained when and only when companiesand organizations receive voluntary contribution from employees Therefore, thesocial process of influence is the process that thoroughly combines methods ofinfluence such as mental and material methods, direct and indirect methods, formaland informal methods, helps leaders to concentrate efforts and intelligence ofpeople In addition, Yukl (2002) stated that leadership should be defined in abroader concept It should include factors that form collective efforts from members

of an organization or a group of people in order to accomplish set goals

Therefore, the concept of leadership is understood as a social process in which theleader is seeking voluntary participation of followers for success of theorganization In other viewpoints, such concept implies the procedure of havinginfluence and creating environment to reach common goal of the organization

So what is the nature of “leadership”? In Peter F Drucker’s opinion, “leadershipart” involves not only the ability of attracting others but also the demagoguism.Moreover, it is not only the ability of persuasion but also skills of sale executives

1.1.2 Role and importance of leader

Leader and leader’s capacity prove significance and play crucial role in success ofany companies A company without a capable leader is like a fighting unit withoutits commander or a ship in difficult situation without a brave and wise captain.Therefore, for success in the short-run and the long run, it is necessary to find atruly capable leader who will be able to lead the company to success in changingbusiness environment

It is undeniable that leader capacity acts as the key factor for success of anorganization However, there have not many studies on long-term affects of theleader to production and profit of an organization To have deeper understanding ofthis issue, Ken Blanchard company has started to find answers in leadership abilityand its role to entire success of an organization The study focuses on four mainquestions; (1) What is the role of leadership in maintaining power of anorganization? (2) What can leaders do in details to improve an organization

operation? (3) What is the link between leadership capacity and customer’s royaltyand employee’s enthusiasm? (4) How do customer’s royalty and employee’senthusiasm affect power of an organization?

Five repeated factors in studies include: employee’s enthusiasm; customer’sroyalty; Strategic leadership; Operation leadership and power of the organization.Such terms are formed for the purpose of uniting an information system withbroader meaning than any previous definitions

Strategic leadership is to send orders to all members of an organization It answers

the question of “what” has created key relations that are necessary to ensure thecompliance of all units to a common strategy; the strategies must determinestandards as decisive factors of behaviors Strategic leadership, for example,includes vision, philosophy and strategic orders

Activities of operation leadership give answer to the question of “how” of the

organization It helps departments, boards and employees to know what they have

to do for success of the organization They are procedures and policies that showhow each unit can complete the general strategy

Employee’s enthusiasm is resulted from positive perception of and enthusiasm to

the organization, policies, procedures, products and management activities Thehard measurement to employee’s enthusiasm includes ownership, absence,occupation and production Soft measurement includes perception of equality andbelief

Customer’s royalty comes from positive perception to products, services, policies,

procedures and employees of the organization The hard measurement includesownership, durability of relation with customers, number of transactions, averagenumber of transaction, participation of new customers Soft measurement includessatisfaction of quality, value, customer service, expected products and the generalsatisfaction

Power of organization is success level and stability of the organization under the

eyes of customers, employees, shareholders Hard measurement includes good

understanding of contract, revenue management, share price, profit, growth rate.Soft measurement includes community belief, employee’s enthusiasm and royalty

to organization

In other viewpoints, a leader is considered to have 9 major roles, including:

The sage: The leader has an intensive and extensive knowledge on a wide range of

subjects and sees order and patterns where other sees chaos The leader remainsopen to new ideas and ways of thinking, uses understandable languages forfollowers to understand his ideas and revokes their determination to implement suchideas

The vision is a leader with a broad vision The prerequisite condition of a visionary

leader is to dream impossible dreams, commit and effort to turn them into realities

in spite of difficulties in order to shape future

The magician: The leader should be able to make things change their forms without

wasting effort At the same time he should keep a balance among structures,systems and processes between old state and new state The leader must sustaincalmness in all circumstances

The globalist: This type of people likes becoming world traveler in body, mind and

spirit He always diversifies workforces and fosters his organization’s success in anew height He always cares, understands and respects cultural differences withinthe company He is willing to change and to create a common working environment

in which productivity, harmonious connection of cultural differences in thecompany are obtained

The mentor: In this role, the leader is committed to ongoing personal and

professional development He always creates various opportunities for learning andmotivates his followers to find their own ways for development

The ally: The leader always promotes relationship in order to make close and

effective cooperation within the company He realizes benefits of teamwork andbuilds good relationship with suppliers and customers Besides, he realizes conflicts

as opportunities for promoting internal cooperation and always extends his trust toothers

The sovereign: The leader knows how to use his power thoughtfully He takes risks

and accepts responsibility for consequences of his decisions When deciding, he iskeen on his ways and empowers and extends certain authority for his followers tocomplete their duties

The guide: He is flexible in leadership but always keeps his directions and applies

principles that are based on core values to achieve goals He respectsimplementation methods and set targets, keeps his directions regardless of theobstacles and restraints He also uses experts at work for assisting his employees

The artist: He is like an actual artist He always devotes all his efforts to the

mastery of his crafts and questions how to have high quality of products and process

to create them Also he knows how to balance aesthetic and practical standards,pays attention to effectiveness, quality, simplicity and refuses indifferences in thecompany or organization

As a result, major roles of a leader will be the following:

+ Developing and sharing visions The leader must build his “future at hands” andturns dreams into realities

+ Committing to achievement of goals, values and standards

+ Realizing their challenges and effects and making appropriate decisions Takingall responsibility for operation and performance of the organization

+ Leading and motivating a suitable organization culture

+ Empowering his followers and being an influential example to his followers Being flexible and adjusting behaviors to achieve targets, adapting and responding

to changes of the situations; being keen on right decisions regardless to anypressure

+ Using skills and abilities of his employees suitable with their responsibilities,trusting, motivating and inspiring; complementing, recognizing and rewarding (PhD Dang Ngoc Su, 2006)

In modern companies, competitiveness is always considered as an important factorfor any success There is a large number of significant factors for evaluating strongpoints and weak points of competition Of those, the most significant factor is roleand effectiveness of leaders in companies

That the leaders can develop their companies depends on their roles, abilities inmaking polices and their qualification Any companies, enterprises and groupsalways need an actual leader who can direct the ship to overcome challenges and beready for new changes John Kotter (1996) stated that: “Leaders are the creators and

leaders of the past were trained how to make plans, budget, organize personnel,manage and resolve problems Such way of training is just suitable for a manager,not a leader Current studies have recognized and assessed the role of leaders to alarger and completely different extent

Leaders of new and modern era “create visions, communicate visions, makestrategies, manage changes, and build excellent corporate cultures” To a higherextent, leaders inspire passion, enthusiasm of employees and create bridge betweenemployees and companies Good leaders help companies to have strategic visions,determine their positions in markets, make strategies and sustainably develop.Leaders inspire employees, building healthy collective spirit, teamwork and careerdevelopment demand for employees Devoted leaders build strong corporate culturethat is embedded with special identity Within the companies, leaders createcompetitive and equal working environment, maximizing employees’ potentials,creating and communicating the message of effectiveness to all employees Goodleaders help companies to determine their positions in markets, creating reliabilityand good relationships with customers This is the foundation for sustainabledevelopment of companies in all aspects

1.2 Effective leadership and approaches to effective leadership

1.2.1 Effective leadership

There have been many studies on effective leadership Most of studies try tounderstand the interconnection between leadership behaviors and such criteria forassessing effective leadership as working productivity, attitudes and satisfactionlevel of employees They also focus on clarifying the concept of “effectiveleadership” and factors that shape an effective leader Researchers often link theconcept of “effective leadership” to the process of creating intentional influencestowards one or different individuals for the purpose of directing, building andcreating favorable working conditions and promoting relation within groups ororganizations Results of studies show that almost effective leaders pay attention onworking direction and establishment of relation with their partners

When mentioning “effective leadership”, many assessment criteria have beenpresented based on contributions of leaders to the organizations Some popularcriteria include:

+ Business results and sustainable development of organizations;

+ The ability to face challenges or crisis;

+ Satisfaction of followers to their leaders;

+ Commitment level of employees to common goals of organizations;

+ Qualified and psychological development of employees;

+ Remaining high positions in organizations;

+ The ability to reach higher positions in organizations

Finally, however, the most important criterion to leadership effectiveness is the factthat an organization excellently completes its set targets Such completion isreflected in criteria such as profit, net profit, increase of sales, increase of marketshare, reinvestment ratio, ability to maximize capacity of machineries andequipment, costs, ratios between cost and budget etc Leadership effectiveness can

be assessed through some criteria such as the compelling ability of leaders to theirleaders, followers and partners

Besides, another important criterion is employees’ attitudes towards their leaders It

is whether or not they satisfy their employees’ demands and expectations, get love

and respect from their employees and if employees commit to follow their orders.Employee’s behavior is in indirect factor helping to determine satisfaction level ofemployees to their leaders

Many different factors in assessment, however, interfere the assessment ofleadership effectiveness as it is difficult to determine the most necessary criterion.Therefore, there is no perfect answer to the question of “What is the mostcomprehensive criterion in assessment of leadership effectiveness?” Selection ofcriteria in assessment of leadership effectiveness depends on objectives andstandards in values of assessed subjects Assessment of the board of managementdiffers from that of employees, shops and relevant members To avoid this fact,preceding researchers suggest to select different criteria in assessment of leadershipeffectiveness and leadership effects to each criterion in each specific period of time

It cannot be denied that leader’s capacity is the crucial factor to success of anorganization Apart from personal characteristics of the leaders, some indispensablefactors that shape success of an effective leader include:

- Good communication skills and ability to understand psychology of others

- Ability to gather employees

- Methods of punishment and awards: right person, right thing, appropriatelevel, right time

- Wisdom in power use

- Successful decisions

- Development of enthusiastic and qualified employees

(Source: PhD Dang Ngoc Su, from lecture collection “Skills and styles of leaders”, Business Administration Faculty, Vietnam National University, Hanoi).

1.2.2 Approaches to effective leadership

(1) Procedural approach

Procedural approach begins with input, then “black box” and ends with output.Input includes such factors as personality and capacity of the leaders, capacity offollowers and environmental factors such as policies, directions, regulations, and

rules of organizations or companies Such factors are those establish the initialfoundation for leaders to play their roles

The next phase of effective leadership (procedural approach) is “black box” That ispresented in methods and mechanism for leadership “Black box” factors includeassessment, empowerment, assignment, motivation, encouragement, punishment,reward, decision, and communication In fact, such factors present activities of theleaders It is interaction between leaders and followers

The final phase of effective leadership (procedural approach) is output Outputsinclude results from leadership process presenting both results and effectiveness ofleadership Outputs are assessed by criteria of profit and satisfaction level ofcustomers including external customers as partners and internal customers asemployees in the company, organization (followers) Satisfaction level of internalcustomers (followers) is a general criterion reflecting satisfaction in specific aspectssuch as salary, bonus, social welfare and other means of treatment and speciallymental aspects

This approach is quite comprehensive It assesses leadership effectiveness in largescale during the process Leadership effectiveness is assessed in prosperity andsurvival ability of companies in markets Effectiveness of leadership is presented in

leaders’ capacity that helps companies to adapt environment, have necessaryresources for their survival and development It is reflected in the ability to collectand process data about competition environment, negotiating agreement towardsbenefits for the companies, promoting cooperation and support from partners Survival and prosperity of companies also depend on effectiveness of transferringprocess in “black box” By finding optimal measures and mechanism in leadership,maximizing of sources, human resources and technology, leadership effectiveness

of companies will be improved Leaders’ responsibilities include reasonablyorganizing and structuring companies, deciding power of each position incompanies, specializing each section in companies and at the same time connectingall such sections together

(Source: Gary Yukl, “Leadership in Organizations”, 2006, page 12 – 17)

Leader’s quality directly affects leader’s behaviors In the above mentioned ideas,

leader’s quality covers the term “Emotional Intelligence” that includes 5 factors (1)awareness, (2) self-control, (3) motivation, (4) sympathy, (5) sharing

Self-awareness is the first factor of Emotional Intelligence It includes deep

psychological awareness, personal feelings, personal strength and weakness,personal demand and drive, influence level of psychological status to personality,partners and work Such people are always aware of their personal values andobjectives to strive They self-evaluate themselves truthfully and accurately at work,knowing their strength and weakness Additionally, they are willing to havecontributive assessment from their colleagues and admit their failures They believe

in themselves, in the ability of knowing the time for help At the same time, theyassess risks in their jobs and they do not get them involved in challenges anddifficulties as their abilities do not allow to do Moreover, they know how to usetheir advantages

Self-control is the ability to control their personal psychological feelings A

self-control leader tries to understand causes of his failure, his role/mistake Then hesummons a meeting at which he will point out consequences, give his personalopinions and suggest appropriate solutions Why does a leader need such quality?People with ability of self-control are always able to create fair and reliable working

environment, improve work performance, keep talented employees and minimizehot tempers and break outs at work Leaders with such quality are good examplesfor their employees to follow as internal and external environments changeconstantly

Motivation presents the desire towards goals They show their passions at work,

their interests in challenges, eagerness for learning, pride of their success Also theyalways find best and the most effective ways to complete their jobs They are stilloptimistic even in unwanted situations Optimism and royalty to company are twoindispensable factors of any leaders

Sympathy is a recognizable factor of “Emotional Intelligence” Sympathy, however,

does not mean “listen – bow” In the position of a leader, it means the care andattention of leaders towards attitudes and feelings of their employees for makingright decisions Such quality is required for the following reasons:

Group works develop more and more Therefore, sympathy helps to provideintegrity and effectiveness of group works

Rapid globalization, particularly for multinational companies and groups,diversifies employees who originate from different levels and cultures

The demand for keeping talented employees Such persons need more listening,understanding and sympathy from leaders as “work force” is a special type of goods

in current market economy

Social expertise means the ability to maintain and manage relationships and createnetwork of relationships A good leader is able to maintain relationships, understandfeelings of his own and of others He is able to persuade and motivate his followers

to fulfill assignments Leaders with social expertness can establish extensive andintensive relationships and connect people They always believe that importanttasks cannot be completed with individual efforts

So, an effective leader, apart from Intelligence quotient and qualification, needshigh Emotional Intelligence Such qualities are linked with excellent performanceand contribute to effective leadership and success of leaders in current changingenvironment

Leadership behavior is presented in 3 aspects including: (1) task orientation, (2)human orientation, (3) building and organization of apparatus

Task orientation includes the organization of task for effectiveness, action plan inshort-run, assignment to individuals or groups, clarification of leader’s expectationand task objectives, explanation of rules, policies and procedures, direction andconnection of activities, emphasis on effectiveness, productivity and quality

Human orientation means that leaders support, motivate followers and trust theirfulfillment of set goals, establish relationships, recognize employees’ contribution,understand employees with decisions related to them, take advantage ofopportunities in building group spirit, act as good examples of behavior forfollowers, develop active, enthusiastic and qualified employees

Building and organization of apparatus should be done properly and lightly in theform of separation of power or concentration of power, depending on leadershipobjectives and methods, building good corporate culture and working environment Leadership behavior shows two-way interaction with contextual factors, presented

in demand of followers, work, power, trust and readiness Such factors arefoundation for leadership effectiveness To achieve effective leadership, leadersshould know how to balance the care to people and care to work Neglect of suchtwo factors results in ineffective leadership

(2) Behavior-based and Task-based approaches

Effective leadership model based on behavior – task (figure 1.2) is the most generalmodel in effective leadership

Accordingly, Bennis groups all factors into two major groups including based group and task-based group Behavior-based factors are all factors inbehaviors, culture, and emotion The latter (task-based group) includes workorganization, planning, establishment of work limits, assignments, supervision,assessment and modification (if necessary)

behavior-Human behavior is so important that any leaders should pay sufficient attention Inall times and in all fields, human being always proves their decisive role in success

of an organization Therefore, such role must be fully understood and appreciated

Human leadership and management greatly differ from wok management.Personality, thinking and even reaction of human depend on various factors Ofwhich there are some factors in expectation, emotion and feelings Therefore,exploitation of psychological and human factors is always crucial in leadership.Leaders direct behaviors, direct human beings This helps to form and consolidaterelationship, promoting collectiveness and cooperation of followers at work,improving trust and satisfaction

Effective leaders always help their followers, which includes trust, friendliness,care, and understanding of difficulties that face employees Leaders also promotethem to advance at work, provide information on time, and appreciate initiativesand experiences, recognize achievements and contributions of employees

(Source: Bennis, Harvard Business Review on Leadership, Harvard Business

School Press, 1998)

Behavior-based leadership consists of relationship establishment, development andrecognition of employees A friendly and dedicated leader always fruits respect androyalty from his employees He can help them to enhance their satisfaction at work.Specific tasks include:

Behavior-based

Figure 1.2 Behavior – Task based model in effective leadership

+ Supporting and encouraging.

+ Believing in employees’ fulfillment of work

+ Being sociable for building good relationships

+ Recognizing employees’ achievements and contributions

+ Consulting and training

+ Referring to employees’ opinion at decisions related to them

+ Notifying employees any changes that affect them

+ Settling conflicts

+ Building group work spirit through symbols, holidays or stories

+ Being good examples for employees

(Source: Gary Yukl, “Leadership in Organizations”, 2006, page 65 – 66)Unlike behavior-based approach, task-based approach does not take human factorinto account in implementing a certain work Task-based leaders often present therelationship between human and work through mathematic equations For example,they calculate necessary number of people for implementing a certain amount ofwork in a certain period of time (a day, for instance) by dividing the amount ofwork in need of completion to working limit of a person/day Therefore, task-basedscholars often put emphasis on such factors as work division, working limit,assignment of work, planning, inspection, assessment and working bonus based onfinal outputs

Task-based leadership behavior includes planning, assignment, direction.Implementation process involves determination of target, allocation and priority ofsources, division of responsibility and schedule, and appropriate allocation of time.Specific tasks include:

+ Organizing work for effectiveness enhancement

+ Planning implementation in a specific period of time

+ Assigning work to individuals or groups

+ Clarifying targets of each work and expectations from leaders

+ Explaining working standards and procedures clearly

+ Directing and connecting activities within a company.

+ Directing implementation

+ Settling problems that affect work

+ Emphasizing effectiveness, production and quality

+ Setting high standards for each unit

(Source: Gary Yukl, “Leadership in Organizations”, 2006, page 65 – 66)

Effective leadership model in task-based and behavior-based groups (figure 1.2)shows that leaders may fall in one of the four situations as following:

+ Low orientation of work – low orientation of human behavior (lower box on theleft)

+ High orientation of work – low orientation of human behavior (lower box on theright)

+ Low orientation of work – high orientation of human behavior (upper box on theleft)

+ High orientation of work – High orientation of work (upper box on the right)

It is great if the leaders take care of both work factor and human factor However,such fact rarely occurs when administration mechanism still works with orders Inleadership, it is the upper box on the right that shapes the highest goal of leadersand presents effective leadership Actually, only when an organization worksscientifically and human factor is maximized for mobilizing efforts andintelligences from followers, do leaders achieve final results and effectiveness

(3) Component approach

Effective leadership is actually the component approach to leader capacity Aleader’s capacity is composed by the following specific capacities: (1) strategicvision, (2) Encouragement and motivation ability, (3) Ability to have influence and

to build images, (4) Ability to empowerment and authorization, (5) Ability todecide, (6) Ability to understand himself and other people, (7) Ability tocommunicate (see figure 1.3)

(Source: Barrow, The variables of leadership Academy of Management Review,1977)

Accordingly, basic criteria for assessment of a leader’s effectiveness in componentapproach include vision, motivation, encouragement; empowerment; authorization;influence; self-understanding, understanding other; leadership communication anddecision

Leaders must be able to develop their visions under directions so that such visionsare imaginable, expectable, possible, concentrated, flexible and communicated Toachieve this, leaders should collect and analyze information, data on trends,relationships and connections, develop strategic direction and vision, be able to seewhat others cannot see With strategic visions, leaders will be able to grasp long-term trends in business environment and in markets in order to have appropriatestrategies for organizations

Moreover, leaders should have skills in empowerment and authorization, effectiveassignment, management of work outputs and proper application of assessmentcriteria In such way, followers will have enough power and confidence to completeassignments

Effective leaders should be able to have influence on behaviors and attitudes ofrelevant people by appropriate consultancy and persuasion; inspire; satisfy; connect;put pressure; take advantage of leaders’ support and exchange Effective leadersknow how to motivate and encourage their employees on time and to understandthemselves and others Therefore, leaders will be able to motivate, support andprovide their enthusiasm to their followers for voluntary completion of works As aresult, leaders will be able to exploit, maximize human sources and assets inorganizations for achievement of set goals

Leadership communication is one of the crucial criteria to evaluate leadershipeffectiveness Leaders should understand communication forms and principles,educate, understand and apply persuasion art, settle conflicts incurring within orbeyond the companies At the same time, leaders should communicate goodmessages

(Source: Gary Yukl, “Leadership in Organizations”, 2006, page 80-174)

(4) Other approaches to leadership

Famous scholars have presented different approaches to leadership such as DouglasMcregor with theory XY, Edgar H Schein’s theory, Frederick Herzberg’s theoryand theory Z on management

Douglas McGregor’s XY Theory:

Theory X states that average people dislike work and will “avoid” it if they can.They avoid responsibilities, have no passion or ambition, and prefer to be directed

Theory Y shows that people’s effort in work for success is natural Therefore, themost appropriate award is the commitment of “social self-satisfaction”.

Federick Herzberg’s theory

Herzberg states that five basic factors that determine satisfaction at work include:success, recognition, work attraction, responsibility and achievement Besides,causes of dissatisfaction include company policy and management, supervision,salary, relationship with people and work conditions

Loosened and official

Theories in leadership can be generalized in time flow as in Table 1.3

Table 1.3: Comparison of approaches to leadership

+ Human is the “extensive part” of

machinery

+ Human is the additional part ofmachinery

+ Human is spare parts that can be

replaced

+ Human is the important source andneeds developing

+ It is simple to divide duties and

maximize necessary skills

+ Grouping and diversification ofskills are optimized

+ Structure is cone and in form of power

separation

+ Structure is flat and highlycooperative

social goals

collectiveness

(Source, Dang Ngoc Su, lecture “Skills and styles of leaders”, 2006)

New approach to leadership shows a completely open approach that speciallyappreciates coordination within companies and cooperation among colleagues Inwhich, human factor is the first priority, in which the development of employees isdecisive in company survival Human is no longer a spare part that can replacemachinery Otherwise, human is an important source of the company Attention isput on group work spirit and skill Power concentration is limited Otherwise,employees are empowered and employees’ awareness of self-consciousness isdeveloped Organizational and social goals are balanced Initiatives and innovationare appreciated

However, no matter what the approach is, the factor of “common goal oforganization” is always the first priority among other concepts in “leadership” Forachieving such common goals, leaders affect, in different ways, “awareness” and

“heart’ of employees, changing their perception and, at higher level, creating thevoluntary and collective spirit

1.3 Distinction between Leadership and management

Management is a new process for working and working through others in order toachieve organizational goals in a changing environment In such environment, amanager should understand the method for working and working through others inorder to have highest output with lowest input At the same time, the manager needs

to balance working effectiveness and working results for the final purpose of

“organizational goals” Major matters in management can be illustrated as in bellowFigure 1.4

Figure 1.4: Management issues

(Source: PhD Dang Ngoc Su, lecture “Skills and styles of leaders”, Faculty of

Business Administration, Vietnam National University, Hanoi).

Any organizations need leaders and managers Leaders are necessary as they putlight to the road towards future and inspire others for perfection It is necessary tohave managers as they assure daily activities and protect assets of companiesincluding human resources and other sources

According to Peter F Ducker, father of modern business administration, duties of amanager are to do things right ( or well) and those of a leader are to do right things.Druker emphasizes that the top position always bears two concepts: leadership andmanagement A manager can act as a leader A leader, however, cannot act as amanager all times In the famous book named “The Art of Possibility”, Rosamundand Benjamin Zander mention the concept of “Leading from any chair” In thebook, they give a very interesting example of an orchestra in which the conductor

Highest output with limited input

Working with and through others

Achievement of organizational goals

Balance between effectiveness and results

Changing environment Changing environment

ensures integrity of the entire band, but the Violin players at the end of the band isactually the leader He directs tempo of the entire band for a successfulperformance

Leadership and management differ from and exclude each other The differencelays in the fact that one cannot be a leader and a manager at one time In otherwords, some people are suitable to be leaders and others are suitable to bemanagers Such authors work out the differences between a leader and a manager assomething that are incomparable and quality of each subject A manager appreciatesstability, tight structure and effectiveness He is more concerned with appropriateorganization or work, assigning and promoting employees for better performance atwork A leader appropriates the flexibility, creating changes and encouragingemployees to adapt such changes

Philip Kotler (1990) made clear distinction between “leadership” and

“management” In his opinion, management is the response to complexity,including (1) planning and budgeting; (2) organizing and staffing, communicatingplans and empowering; (3) controlling and problem solving Leadership is theresponse to changes and includes (1) establishing direction as “vision” and

“strategies” for building proper roads; (2) aligning people in one direction andtogether in one set road; (3) motivating, encouraging and inspiring people toovercome challenges and difficulties for completion of common goals

The similarity between “leadership” and “management” is the determination ofgoals, establishment of relationships and insurance of success for goals.Management and leadership contribute each other for success of companies

1.4 Some international experiences in leadership effectiveness

1.4.1 From Benjamin Franklin

Learning from great leaders is very necessary in preparation of personal leadership.Such concept was proven by Jack Undrich in lessons from “The first American” -Benjamin Franklin that was published in Leader to Leader magazine As mentionedabove, there are many significant achievements that one person can gain A large

number of achievements of Franklin were contributed by principles that he used touse for guidance of his leadership Such principles can help improve leadership

Significance of education and training

Franklin did not receive formal education At the age of 11, he learnt English,French and Italian by himself He, however, did not simply limit himself withinbook knowledge He was an excellent learner who always learnt from experiencedpeople many topics from poetry to natural history His approach is reflected in twosentences: “I don’t have one tenths of wisdom” and “I learn from hearing more thanfrom tasting.” One of his methods in learning is to invite other to participate indiscussion When being still a printer, he wrote: “Printers are educated in the Belief,that when Men differ in Opinion, both Sides ought equally to have the Advantage ofbeing heard by the Public; and that when Truth and Error have fair Play, the former

is always an overmatch for the latter”

Taking risks

At the age of 16, he left Boston, his homeland, for Philadelphia Within one year, heset up his own printing shop and three years later, he became one of the mostfamous printers in Philadelphia At the age of 26, he established the first system ofprinting shops in America from Hartford to Charleston He sought good employees,establishing major relationships, working hard and taking risks He also used hisfree time and external activities to promote his business Besides, he set up anetwork as he formed an organization named JUNTO – a group of artisans andtradesmen who hoped to improve themselves

Focusing on higher objectives

When being young, Franklin read the book “Lives” of Plutarch –a book based onthe foundation that personal attempts could change a historical period Franklin wasgreatly attracted and the book affected many phases in his life Such philosophy wasbest reflected in his decision, at the age of 42, as he moved from his very successful

printing business to science When telling such decision to his mother, he wrote: “Iprefer being told that: “his lives usefully” rather than “he dies in richness.”

In the second phase in his life, he realized such thinking as he focused on worldimprovement rather than his own business Even in science, his opinion was tofocus on how to create useful result for their work Franklin turned science curiosityinto practical effects He wrote: “It is a miracle to loose personal benefits forcommon goodness” He felt that if business activity was considered as somethingseparated from community in which employees worked and lived, it was a short-term vision

Building strategic partners

Franklin always took the most important role to decide what was necessary forsuccess in negotiations and what should be used as advices For example, afterRevolutionary war, Franklin requested England to recognize independence ofAmerica as a foundation for exchanging With this attitude, he assured the mostimportant goal prior the commencement of official negotiation

Personality

Franklin presented an opposition in his personality He believed in personal strengthbut strongly supported activities for community He believed in competition butnever hesitated in cooperation with his competitors if it was his passion

In all life, Franklin viewed the world and surrounding environment not only in twoopposite colors of black and white but also in change of hue of grey and actedaccordingly More importantly, Franklin believed that, as a person taking part inlocal and global job, he could affect his own world And he did it successfullythough his actions Benjamin Franklin surely is an example for us His principleswill create a stable foundation for our steps in the road of leaders

(Source: www//Leader to Leader/wiki)

1.4.2 Margaret Thatcher’s concept of leadership

"Leaders must have their principles A leader should have vision and principles –and always obey such principles, applying them in situations” It is the definition of

leadership made by the “Iron Lady” Margaret Thatcher – former Prime Minister ofthe United Kingdom

Margaret Thatcher was born on October 13 1925 She was the first female PrimeMinister in a history of 250 years of England and she was in office for 11 year(1979-1990) During her administration, she emerged as person of new changes andfiercely new changes She had many bold decisions that changed nature of England,turning an old England into the most dynamic economy in Europe She is called the

“Iron Lady” for her strength and determination

Margaret Thatcher shared her concepts in leadership Firstly, leadership means surprising things come and we have to prepare for them Secondly, leadership is the art of making impossible things possible Thirdly, leaders should review

experiences in previous time to avoid repetition

One of important experiences from Margaret Thatcher’s political life is her decision

of dispatching a naval task force to Falklands islands – the place of dispute betweenEngland and Argentina This decision was considered a strong one as previously,the mission was impossible because English military had to travel 3 weeks on thesea This would give its enemy a clear advantage But Margaret Thatcher inspiredher troops a belief that they could not be defeated and provided them with requiredequipment

Great leaders are responsible for morals of their followers and do what they can dowithin their power to help such followers Margaret Thatcher is one of thoseleaders She stated that: “It is the use and development of individual talents thatbrings prosperity This is true to all nations and organizations

(Source: www//Leader to Leader/wiki)

Conclusion of Chapter I

Chapter I presents basic theoretical foundation around effective leadership in whichsignificance, decisive role of leaders to the survival and development of companiesreceive great attention It investigates approaches to effective leadership such as

procedural approach, task-based and behavior-based approach and componentapproach The thesis suggests some models of effective leadership in the world and

“live”, dynamic lessons in realistic leadership of great individuals in economics andpolitics

Assessment of current situation and effective level in leadership in Nexans VietnamPower Cables Company will be presented in Chapter II

CHAPTER II LEADERSHIP IN REALITY

AT NEXANS VIETNAM CABLE POWER COMPANY

2.1 Introduction to Nexans Vietnam Power Cable Company

2.1.1 Establishment and development:

NVPC’s name is Cong ty Cap Dien luc Nexans Viet Nam in Vietnamese and isNexans Vietnam Power Cable Company (NPVC) in English It was established on

20 June 1997 in accordance with decision of the Minister of Planning andInvestment and the investment certificate No 1927 GP dated 20/6/1997 This was ajoint-venture between Nexans Korea under Nexans Group, Republic of France withcontribution ratio of 59% and Yen Vien Mechanical Factory under Electrical

Equipment Manufacturing Company, Electricity of Vietnam with contribution ratio

of 41% In 2007 both Yen Vien Mechanical Factory and Electrical EquipmentManufacturing Company converted to joint stock companies Then capital ofVietnamese partner was under the control of Hanoi Electricity Corporation underElectricity of Vietnam

The company is headquartered in 116 Ha Huy Tap, Yen Vien, Gia Lam, Hanoi.Over 15 years of building and development, Nexans Vietnam Power CableCompany has proven its prestige and trademark with stable position in domesticmarket and particularly in international markets The company’s products have beenexported to more than 40 countries in the world including USA, Canada, Australia,Russia, Italy, etc Such countries are developed and require high quality products.With the philosophy of “best quality”, the competitiveness and reputation of thecompany have been increasingly improved Production and business activities ofthe company mainly fall in the following products: All Aluminum Conductors andaluminum alloy conductors with cross section up to 1,000 mm2 for overhead powertransmission and distribution lines up to 500KV such as AAC, ACSR, AAAC,AACSR, ACAR; insulated cables with aluminum/aluminum alloy conductors with

AAAC/XLPE, ACSR/ XLPE, ACAR/ XLPE, etc; 9.5mm aluminum rod for inputmaterials of power cable company both inland and oversea

With continuous efforts and working of all officers and employees, NVPC hasbecome a strong company operating nationwide and in more than 40 countries inthe world after over 15 years of establishment and development Growth rate was25-30% in 2004-2005, 15-20% in 2010-2012 Revenue in 2011 reached VND313billion with USD9 million from export In 2012 it was over VND331 billion, anincrease of 6% compared to that in 2011, with over USD10 million from export.Profit reached more than VND7 billion For its contribution to the development ofVietnam industry, in general, and Vietnam electricity, in particular, NVPC has been

selected and granted precious merits such as “Golden quality” in 2001-2005, Meritsfor export performance in 2006-2007 by the Ministry of Industry and Trade,electricity industry, energy association and consumer association.

Core capacity

Nexans Vietnam Power Cable Company (NPVC) is the leading company inaluminum rod, high quality power cables with aluminum and aluminum alloyconductors in accordance with international standards During over 15 years offormation and development, the Company has gained a lot of experiences andknowhow in production of power cables with active and professional officers andemployees trained oversea It has established its unique culture All play as a firmfoundation for sustainable development of NVPC that cannot found in othercompanies in the industry

2.1.2 Organizational structure

On 26 June 1997, the Minister of Planning and Investment officially approved andissued the investment certificate No.1927GP to the company in form of a jointventure with foreign investment of USD29 million Accordingly, the Companyoperated in accordance with the laws of the Socialist Republic of Vietnam on thebasis of Company Charter, Joint Venture Agreement and Economic – TechnicalFeasibility Study that were entered by two parties and approved by the Ministry ofPlanning and Investment

According to Company Charter, the Board of Management consists of 5 members

In which Nexans Korea with 59% of capital contribution appoints 3 persons in theBoard of Management Vietnamese partner with 41% of capital contributionappoints 2 persons in the Board of Management The Board of Management would

be in office for 2 years In the first term, Chairman of the Board of Managementwould be held by a person from Vietnamese partner and the Vice Chairman of theBoard of Management would be a person from foreign partner Then the Chairman

and the Vice Chairman would be alternated every 2 years The Board ofManagement would be responsible for making policies, directions for each phaseand directing implementation of the Board of Directors The Board of Directorsconsists of 1 General Director appointed by Nexans (with higher ratio in capitalcontribution) and 1 Deputy General Director appointed by Vietnamese partner (withlower ratio in capital contribution) The Board of Director would directly lead theCompany and report to the Board of Management, in which the General Directorwould take main responsibility for all operations of the Company against the Board

of Management and the Laws of the Socialist Republic of Vietnam and hold theaccount of the company However, all major decisions and operations of thecompany must be approved by both General Director and Deputy General Director

in the Board of Director

Up to present, NVPC has got 102 officers and employees Structure of organizationand operation of the Company is shown in the figures 2.1 and 2.2

2.1.3 Production and business outputs of the company during the past years.

Table 2.1 Production and business outputs of NVPC during the past several years

Unit: Million VND

2010

Output 2011

Output 2012

+ Turnover from sales of goods and

Net revenue from sales of goods and