Solution to enhance the internal communication issues interlog company

Hence, this dissertation has come up with two main objectives: critically review the vital factors that affect the high turnover rate of employees at Interlog Company and recommend solut

EXECUTIVE SUMMARY

The terminology “logistics” was first used in the late 19th century and for military purposes during wars Since the 1950s, logistics have grown gradually from the simplest stage as first party logistics (1PL) to more complex stages such as third- party logistics (3PL) and fourth-party logistics (4PL) nowadays To date, Asia Pacific’s logistics sector has been expanding rapidly together with economic growth; therefore the industry landscape of Vietnam’s logistics sector is teaming with both opportunities and challenges The main drivers are the growth of GDP and import-export activities based on the upcoming Trans-Pacific Partnership (TPP) that Vietnam has joined recently

Inter Logistic Company is a small logistic firm with its head office located in Ho Chi Minh City, Vietnam They have built a powerful workforce with more than 100 full time staffs and three members of Board of Directors (BoD), developed an official network in three big cities in Northern, Central and Southern regions of Vietnam In reality, the high turnover rate at Interlog was increasing significantly in the last two recent years from 2013 till now from 20 to 27 percent out of total Especially, the Sales Department is one of the most important departments at the company that accounted for 50% out of total This rate is extremely high compared with the average rate in the same industry and it strongly affects the expansion and development activities of the company particularly before the Asean Economic Community (AEC) comes into effect and holds immense potential for the region in many aspects including logistics service starting in

2016 Indeed, the AEC allows the free flow of goods, services and skilled labor across

the region so that the competition has become even harsher than before in several industry sectors of Vietnam economy

After conducting research on various viewpoints of several people at different positions in the company by using in-depth interviews technique and collecting the secondary information from some reliable sources both inside and outside company The author has noticed that there are some tentative problems that have directly affected the employees such as lackluster motivation and promotion, the ineffective internal communication between each other, and the heavy workload Among these, the ineffective internal communication between Sales and Custom Department is the most serious issue because it comprises numerous causes such as inappropriate leadership style, shortcoming in the managerial skills of mid-level managers, poor working relationship etc

Hence, this dissertation has come up with two main objectives: critically review the vital factors that affect the high turnover rate of employees at Interlog Company and recommend solutions to solve the core problem in order to improve the entire organizational performance All of these tentative solutions have carefully considered in three vital elements: benefits, costs and feasibility, then finally the most appropriate one

is chosen to implement In reality, the implementation plan breaks each solution into identifiable steps, assigns each step to one or more divisions and suggests when each step will be completed as well

Table of Contents

EXECUTIVE SUMMARY 2

LIST OF FIGURES 6

LIFT OF TABLES 6

ACKNOWLEDGEMENT 7

I VIETNAM’S LOGISTICS OVERVIEW 8

1.1 General Overview 8

Figure 1: Number of 3PL Members of Vietnam Logistics Association (VLA) 8

Figure 2: The Growth Rate of Vietnam’s Logistics Market 9

Figure 3: Types of Logistics Service 9

Table 1: Types of Transportations in Global 10

Table 2: Transportation Infrastructure in Vietnam 11

1.2 Limitations and Obstacles 11

II PROBLEM CONTEXT 13

2.1 Company Background 13

2.2 Main Achievements 14

2.3 Organizational Structure 15

Figure 4: Organizational Structure Chart 15

III PROBLEM IDENTIFICATION 16

3.1 Problem Symptom 16

Table 3: The Overall Turnover Rate in year 2013 and 2014 17

Table 4: Elements Contributing to Losses Related with Employee High Turnover 18

Table 5: The Specific Turnover Rate of Each Department at Interlog Company 20

Table 6: List of Literature Reviews 21

3.2 The Lackluster Motivation and Promotion 26

Table 7: The Comparison Between Annual Base Salary Increase and Inflation Rate 27

Table 8: Vietnam’s Logistic Average Salary 28

3.3 The Ineffective Internal Communication 30

3.4 The Heavy Workload 34

Table 9: The Number of Male and Female Left the Company in 2013 & 2014 34

Figure 5: Results of Incident Analysis at Interlog Company 37

3.5 The Real Core Problem 38

IV SOLUTIONS 44

Table 11: The Internal Communication Strategy Suggestion 45

V IMPLEMENTATION 53

VI CONCLUSION 60

VII SUPPORTING INFORMATION 61

7.1 Research Methodology 61

7.2 Report of Transcript 62

7.3 Detailed Transcript 64

REFERENCES 75

LIST OF FIGURES

Figure 1 Number of 3PL Members of Vietnam Logistics Association (VLA)

Figure 2 The Growth Rate of Vietnam’s Logistics Market

Figure 3 Types of Logistics Service

Figure 4 Organizational Structure Chart

Figure 5 Results of Incident Analysis at Interlog Company

LIFT OF TABLES

Table 1 Types of Transportations in Global

Table 2 Transportation Infrastructure in Vietnam

Table 3 The Overall Turnover Rate in year 2013 and 2014

Table 4 Elements Contributing to Losses Related with Employee High Turnover Table 5 The Specific Turnover Rate of Each Department at Interlog Company Table 6 List Paper Research Topic

Table 7 The Comparison Between Annual Base Salary Increase and Inflation Rate Table 8 Vietnam’s Logistic Average Salary

Table 9 The Number of Male and Female Left The Company in 2013 and 2014 Table 10 List of Alternative Solutions

Table 11 The Internal Communication Strategy Suggestion

ACKNOWLEDGEMENT

I would like to extend the warmest thanks and a debt of gratitude to the following people who have truly made vital contribution to the completion of this dissertation Indeed, without them I definitely would not have written this paper

Firstly, I would like to express my truthful thanks to my advisor, Mrs Nguyen Thi Mai Trang for her kindly guidance and deeply encouragement from the beginning to the ending

Secondly, special thanks to Mrs Thao Linh, Ms Bao Ngoc, Mrs Thanh Hoa, Mr Phuoc Loc, Ms Hoang Linh, Mrs Minh Nguyet, Mrs Ngoc Diep for their valuable and precisely information during the information collection period and in-depth interviews at the International Logistic Company

Last but not least, a big thank-you to all of my family’s members and my close friends who made invaluable contributions I hope to receive more support from all of them in the future

I VIETNAM’S LOGISTICS OVERVIEW

1.1 General Overview

Nowadays, Vietnam’s logistics sector is expected to grow at a Compound Annual Growth Rate (CAGR) of 27% from 2013 to 2020 with increasing 3PL – outsourcing needs from both existing and new multinational corporations as well In fact, the 3PL industry in Vietnam is growing quick in terms of revenues and active firms, particularly

in the Southern region In addition, the 3PL revenues are projected to achieve 11.8 billion USD in 2020 with a CAGR at 25.8% from 2007 to 2020 Indeed, the number of 3PL members of Vietnam Logistics Association increased tremendously from four members

in the period of 1994 to 1997 to 275 members in June 2014

Figure 1: Number of 3PL Members of Vietnam Logistics Association (VLA)

Figure 2: The Growth Rate of Vietnam’s Logistics Market

Logistics industry typically comprises of three key elements as the following:

 Infrastructure: ports, terminals, railway, and roads

 Operations: warehousing, storage, local distribution and trucking

 Services: freight forwarders and customs brokers

The main objective of logistics is to move goods from their point of beginning to the point of consumption while conforming to customer requirements

Figure 3: Types of Logistics Service

Among the above several types of logistics, the most common one is transportation (on the right-hand side), which occupies about 40% to 60% of logistics cost Transportation can take the form of many combinations of modes and routes Basically, there are five routes in worldwide:

Table 1: Types of Transportations in Global

Notably, Vietnam enjoys a good location within the region and is equipped with a huge transport infrastructure As people may know, it has more than 3,000 kilometers of coastline, is situated nearby vital international shipping lanes; 49 seaports, classified in six groups according to their geographic location along the coastlines (Vietnam Marine Administration – VMA, 2013); and 206 thousand kilometers of roadways (GSO, 2012) Nonetheless, the quality of the transport infrastructure is still low compared with the good geographical condition Vietnam was ranked 44th in infrastructure Logistics Performance Index (LPI), which is much lower than Malaysia (26th), China (23rd) and Thailand (30th) Additionally, in the “Global Competitiveness Report” of WEF, Vietnam was ranked low in terms of quality of transport infrastructure but did show a bit of improvements from 2012 to 2014

Table 2: Transportation Infrastructure in Vietnam

1.2 Limitations and Obstacles

Presently, the World Bank assesses that the logistics infrastructure of Vietnam may

be able to accommodate fast growth but there are still many limitations The limitations come from the prevalence of unpredictability in the supply chains as follows:

(i) Cumbersome and inconsistently applied government regulations

(ii) Facilitation payments to avoid delay

(iii) Isolation in planning and executing transportation infrastructure projects

without considering supply – demand

Despite several inefficiencies and weaknesses, Vietnam’s logistics are now becoming a major driver in the development of the nation’s economic development since Vietnam’s logistics cost occupies about 25% of GDP It is expected to grow at a CAGR

of 27% from 2013 to 2020, which is in line with the rising trend of GDP and import – export value The establishment of the Trans-Pacific Partnership and other free trade

agreements such as the Vietnam – EU, NAFTA, and AFTA etc coming into effect in the near future will serve to increase Vietnam’s international trade including the logistics sector

Nevertheless, 70% to 80% of the logistics market currently belongs to 25 big foreign companies among the 1,200 logistics companies that operate in Vietnam Likewise, as some segments of the logistics market opens fully to foreign companies in accordance with WTO commitments; the growth opportunity for Vietnamese firms will narrow down significantly In order to increase competitiveness as well as improve the capability of the logistics sector, the Vietnamese government has drafted a detailed master plan for each type of transportation mode and logistics services It definitely takes time and cost to transform the master plan into the real life for Vietnam logistics firms

II PROBLEM CONTEXT

2.1 Company Background

Inter Logistic Company with its head office located in Ho Chi Minh City was established in August 2005 They have built a powerful workforce with more than 100 full time staffs and three members of Broad of Directors (BoD), developed an official network in three big cities in Northern, Central and Southern regions of Vietnam The mission of the company is to create the effective supply chain that brings benefits to customers and community (Interlogistic.com.vn, 2012)

Name of Company: International Logistics Joint Stock Company

Short name: Interlog Company

Head office: 5th Floor, Saigon Port Building, 03 Nguyen Tat Thanh St., W.12, Dist 4, HCMC

 2005: Established Interlog Head Office; Achieved ISO 9001:2000

 2006: Established Interlog-Danang Agency

 2007: Achieved Vietnam Excellent Brand Certificate, which was organized by Ministry of Trade and Vietnam Economic Times

 2008: Became agent of PCI (Pacific Concord INTL) and to be approved as an Official Licensed Customs Broker by Vietnam Customs General Agency

 2011: Established Interlog-Haiphong Agency and became the partner of AGS (AGS World Transport) in Vietnam

 2012: Established Interlog-Hanoi Branch

 2014: Establishing NhonTrach Depot-Dong Nai province

 Achieved Excellent Brand Award by the Vietnam Economic Times 2005 certified

 InterLog efforts are striving to become one of the service providers of logistics – (Logistics Provider) first in Vietnam and Indochina specializing in service "one-stop" for clients and packages

2.3 Organizational Structure

Interlog sets up its organizational structure into particular departments that run each part of every shipment from customers The organization system of Interlog comprises of Sales Department and Expert Bureau Department In details, Sales Division contains three segments of Export, Import and Domestics shipments meanwhile Expert Bureau Department gets involve in documents, customs, trucking and warehousing etc

Figure 4: Organizational Structure Chart

This organizational structure presents that the General Director (GD) has to directly take responsibility six out of twelve departments meanwhile the sole Deputy Director has to take care five departments in the company This is a huge workload for both two of them and they may not be able to closely monitor each department so that the company needs additional Deputy Director to share the workload

III PROBLEM IDENTIFICATION

In order to understand deeply the real problem that happens at the company, the writer would like to reveal the symptom and critical evidences as the following:

3.1 Problem Symptom

In today’s competitive environment, the rapidly changing and increasingly connected modern society has made employees one of the most important strategic constituencies of organizations (Kim & Rhee, 2011) On the one hand, employees are the organization’s production force, which directly contributes to organizational performance On the other hand, employees are corporate ambassadors and brand advocates that represent the organization to external stakeholders (i.e., customers and stockholders) both online and off-line Therefore, satisfying employee and organization relationships could not only boost employee productivity but also help create a critical and cost efficient workforce that cultivates quality external relations and protects the organization’s invisible assets such as reputation (Berger, 2008) Likewise, delivering high quality services and maintaining customers satisfied are mostly regarded as crucial elements for increasing a sustainable advantage Pertaining to Osterman (2006), workforces with a high level of guarantee to the business definitely have a stronger sense

of belonging They are willing to learn new skills, share knowledge, provide ideas and exceedingly pay more attention to quality and output as well In addition, the commitment related literature (Mowday, Porter, & Steers, 1979) implied that employee

performance and job satisfaction are intensely interrelated to the satisfaction of employee needs in terms of economic and non-economic

Here is the turnover incident that happens in the Interlog Company These employees worked at different positions in the company such as mid-level manager, assistant and staffs There were 16 out of 82 people in 2013 and 25 out of 92 people in

2014 left the company that account about 20 to 27 percent out of total employees based

on the annual report of Human Resource (HR) Department In fact, this number is considered as a high turnover rate for a small logistics service company in Vietnam since the average turnover rate in 2014 is approximately 10% (Gioi, 2015)

Table 3: The Overall Turnover Rate in year 2013 and 2014

Among these departing employees, the turnover rate of Sales Department accounted for 50% out of total and this number is quite high for one of the most important departments at the company This department comprises of four divisions: Interconsol, Agents Development, Sales and Supply Chain Management and they are the main sources to bring back the revenue for the company so far

Academically, employee turnover is well defined as the movement of employees across the labor market; between firms and positions (Ongori, 2007) A focused definition focusing on a single organization proposed by Price (2001) explains turnover

as the movement of a worker over the membership boundaries of an organization Chikwe (2009) and Cho, Woods, Jang and Erdem (2006) claim, however, that the definition of turnover refers to the replacement of an employee who left the organization with a newly hired employee On the flip side, turnover is only completed once a replacement to fill the open vacancy is successfully recruited A degree of employee turnover is beneficial to an organization as new talent provides new perspectives and skills Nonetheless, when turnover cost surpasses the beneficial value of new employees, organizational effectiveness declines gradually

Table 4: Elements Contributing to Losses Related with Employee High Turnover

Separation Cost Exit interviews cost

Administrative functions linked to termination Separation / compensation pay

Substitution Cost Advertising position availability in various media channels

Placement test and entrance interviews Holding decision-making meetings

Training & Coaching

Cost

Norms of conduct and performance Publicizing relevant information for organizational socialization Joining on the job training activities

(Source: Own Research)

The turnover rate can be measured and quantified by dividing the number of employees leaving the organization over a specific period by the average number of

employees employed in that same period, multiplied by a hundred (Price, 2001) This

method is not used often as it does not distinguish between individuals that leave voluntarily and those employees who are asked to leave (Msomi, 2010) According to Perez (2008), intention to leave an organization is strongly influenced by a group of organizational factors Organizational influences include job stressors, organizational culture, management relationships, and support systems All of these factors contribute to the decision process of terminating one’s services with an organization In reality, Huselid (1995) found that a high turnover rate is strongly connected to negative effects in organization such as low yield, higher cost in hiring and coaching new people (Rousseau, 1984) and weak future performance as well (Baron, Hannan and Burton, 2001) Thus, this is a bad symptom for any company that wants to enlarge and develop consistently

with the high turnover rate as above

Here are some potential causes that directly affect the intention to leave of employees particularly at the Sales Department of Interlog Company The approach to study the problem is most likely based on qualitative method particularly in-depth interview and the secondary data from the annual reports of HR, Finance Departments and other outside sources Notably, a sample of eight people who are mid-level managers and experienced employees at Interlog Company was targeted for in-depth interviews These people have

the experience and knowledge to evaluate the current situations at the company

Table 5: The Specific Turnover Rate of Each Department at Interlog Company

(Source: All of the data is gathered from Annual Human Resource report of year 2013 & 2014)

All of the literature reviews in this table below will be used in order to find out the tentative problems in the Interlog Company Even though some of theories are not quite

up to dated, they are still very useful sources for the author

Table 6: List of Literature Reviews

- Servant Leadership

- Service Technology

- Organizational Commitment

- Turnover Intention

The organizational commitment becomes

an insignificant predictor of turnover intention when the effect of job satisfaction

is taken into consideration and that this is consistent with longitudinal research indicating that job dissatisfaction causes turnover

The study results also suggest that training, employee rewards, supportive management, servant leadership and service technology jointly affect to the job satisfaction and organizational commitment

02 Jing, Keng &

- Employee Empowerment

- Employee Involvement

- Teamwork

- Job Satisfaction

- Turnover Intention

This study shows these crucial factors of leadership, level of training and development, degree of employee

empowerment, extent of employee involvement, level of teamwork as well as the impact of reward and recognition

in increasing the job

of Business

Management

(Vol.5, No 15)

satisfaction and turnover intention among the employees

- Job Satisfaction

- Affective Organizational Commitment

- Turnover Intention

The results support that tenure (not age) is the more important factor in terms of organizational commitment, job satisfaction and turnover intention The affective organizational commitment plays a mediating role between job satisfaction and turnover intention rather than job satisfaction

According to the findings of this study, longer tenured, highly job-involved employees need to be prioritized to benefit from the job design programs The high organizational costs associated with employee turnover in service industries, the retention of these valuable employees is also critical for the transfer of accumulated knowledge and skills to new employees Both recruiters and applicants

to develop a common understanding of the basic job attributes at the beginning of the employment period

- Turnover Intention

Both forms of job satisfaction (intrinsic and extrinsic

satisfaction) have inverse relationship on

employees’ turnover intentions However it is found that in this research, the intrinsic satisfaction has significantly inverse correlated with turnover intention as compared to the extrinsic

satisfaction That means the extrinsic satisfaction founded to have less influence with negative relationship on turnover intention

- Workload

- Training

- Management Commitment

- Rewards

- Internal Communication Issues

The mean for organizational procedures/bureaucracy

is a tie for the highest dissatisfaction with the amount of red tape and bureaucracy inhibiting productivity

The mean for workload indicates that the time pressures/demands of the job are not at a reasonable level

The mean for training is high suggesting that organizational members believe that they have not been adequately trained in dealing with a wide range of customer problems required to perform their duties efficiently

The organizational members do not perceive the actions of management as demonstrating their commitment to

achieving the goals and objectives of the company

The mean for rewards suggests the

organizational members are not sufficiently rewarded nor recognized for actions

- Management’s personal involvement

- Empowerment

- Job Competence

- Job Autonomy

- Employee’s Job Satisfaction

The management commitment is positively related to effective employee involvement, and this involvement is positively associated with employees’ job satisfaction In addition, effective employee involvement fully mediates the relationship between management

commitment to service quality and

Internal communication can be considered as just one among many possible solutions to be used to increase commitment, but not the only one

The literature highlights that internal

communication acts as a lever to generate

employee trust relationships

What becomes important to increase commitment is therefore the relationship between

management and single employee, the

combination of information that management provides to employees

All three mindsets of organizational commitment (affective, normative and

continuance) predict turnover intention The practical implication of these findings can assist management in

enhancing an array of work behaviors such as job performance, work attendance and

organizational citizenship, and also reduce turnover rate

- Job Satisfaction

- Intention to Quit

Task Uncertainty will lead to employees’ lower job satisfaction and higher quit intention due to the mediation effect born by role ambiguity

It shows that the relationship between task uncertainty and role conflict would be positive for low self- efficacy employees Employees are supposed to be able to lower their job stress when they have the decision power on their jobs

3.2 The Lackluster Motivation and Promotion

According to Mrs Minh Nguyet who worked as the Deputy Manager of Accounting Department from 2009 till 2013 and Mrs Ngoc Diep who worked as a staff

of Documentary Department from 2008 till 2014, “the turnover intention happens due to the lackluster motivation and development for the employees from the company In fact, they do not see the bright career path for their future since the company does not have a visibly promotion roadmap for long-term employees, so that they do not know how to climb up their career ladder Consequently, the employees may gradually lose their inspiration in working before they leave the company” Generally speaking, employees

have the right to choose various career paths for them because not everyone is well matched to navigating careers oriented toward power, and there are two different paths that people’s careers generally take Firstly, linear career path for those employees gradually escalate in an organization until they reach the top of hierarchy Secondly, becoming experts in which these employees are inspired to reach a high level of proficiency in a particular field Therefore, companies have to implement strategies to ensure their employees career ladder and how they view their career path can be attained

by following that kind of strategies (Driver & Brousseau, 1997) In addition, Wubuli (2009) did research on employees of fast food restaurants include KFC for Alor Setar and Penang, McDonald’s, and MYFC and found that work conditions, pay variable, fairness and promotion are also a significant predictor of job satisfaction And he also found that motivation factor is absolutely valid in job satisfaction of employees

According to the annual report in the fiscal year 2014 and 2013 from the Accounting Department, Mrs Thuy Loan who works as an accounting manager believed that the potential reason that caused the high turnover rate of employee might not be the base salary

Table 7: The Comparison Between Annual Base Salary Increase and Inflation Rate

Labor Cost/ People 99,167,613 VND 115,387,261 VND 118,502,135 VND

(Source: Annual Human Resource Report from year 2012 to 2014)

An explanation for these numbers is that in 2013 the company increased the annual base salary per every single employee by 16 percent from 99,167,613 Million VND to 115,387,261 Million VND for each single employee And then in 2014 the base salary was increased by 3 percent from 115,387,261 Million VND to 118,502,135 Million VND These numbers were quite good when it was compared with the inflation rate in Vietnam that was only 6.6 percent and 4.09 percent in 2013 and 2014 respectively That means the labor force still get the higher base salary after deducting the inflation particularly during the Vietnam recovering economy

Table 8: Vietnam’s Logistic Average Salary EMPLOYEE POSITIONS AVERAGE SALARY PER MONTH

Non-experienced employees From 4 to 6 Million VND

Experienced employees From 7 to 10 Million VND

Mid-level manager From 15 to17 Million VND

(Source: Data gathered from DHB International JSC Vietnam in year 2014)

Another thought comes from Mrs Thanh Hoa who currently works as a manager

at Sales Division She said, “The base salary and commission rates particularly for the sales force at Interlog are average comparing to the logistic industry in Vietnam Nonetheless, some other logistic companies allow their salesmen the right to do the service for customer from beginning to ending and thus the sales force receives the high commission Nevertheless, this policy is quite risky for the company since the customer definitely gets used with that salesman rather than the company so that one day if he leaves the company, the customer will follow him as well Therefore, in order to prevent this bad incident, Interlog Company has implemented some tactics to restrain the power

of salesmen by divide the job task into small activities with more people to get involve in the whole process rather than salesmen only” This policy has a positive side because

more people work together and the probability of success in dealing contracts would be higher than only salesman Additionally, the sales force will have more free time and resources to seek out the new customers instead of taking care only existing customers because the main task of sales force is always finding more and more new customers for

the company However, the sale commission goes down drastically from 16% to 12 % because more people share it As a result of this policy, some salesmen lower their commitment to the company due to unattractive benefits

Academically, Papasolomou & Vrontis (2006) have indicated that there is no doubt that the motivation is a crucial factor which drastically improves the performance

of the staffs; many companies build up a systematic reward system to motivate its employees in order to develop their job performance Likewise, rewards are not only vital

in incentivizing employees to deliver high quality of performances but also important in motivating them when dealing with high pressure during working process (Farrell & Rusbult, 1981) Analyses found that an organization’s reward structure can have a significant impact on employee satisfaction and organizational commitment as well (Brown & Peterson, 1993) In reality, the reward infrastructures of modern organizations are comprised of two major categories of rewards: financial and non-financial (Armstrong and Murlis, 2005; Milkovich and Newman, 2008) According to Naldöken et

al (2011: 286), the financial incentives provided for employees are listed as payment raise, premiums, profit share, economic awards, payment packages, etc Ellis and Pennington (2004) claimed that financial incentives have a short-term effect on the motivation levels of employees although they play a critical role in their motivation Therefore, non-financial incentives are also required to give a long-term motivational effect instead of the short-term effects of financial incentives at these premises Non-

financial incentives are listed as enabling authority, participating in the management, job enrichment, promotion, holidays, better working atmosphere and facilities etc

Briefly, the first problem of the Interlog Company is lacking of effective incentive motivation and career ladder promotion It drastically decreases the working motivation and creates the turnover intention

3.3 The Ineffective Internal Communication

Another thought comes from Mr Phuoc Loc who currently works as Manager at

Customs Department said that “the chronic troubles are directly between the Sales Department and Customs Department because the cross communication between these two departments are quite loose” Generally speaking, the employees at Custom

Department argue that the sales force is lacked of professional knowledge in imported goods because it takes plenty of time and quite sophisticated to do imported goods properly meanwhile the sales force claims that the custom department regularly raises unnecessary difficulties to them such as certificate of origin for goods, procedure declaration, customer profile confirmation etc Therefore it results in wasting a plenty of working hours; and the complicated working procedure creates the internal conflict between both employees and managers as well Brown and Leigh (1996) told that organizational climate is foreseen to have progressive connections with worker satisfaction, customer satisfaction, financial performance and staff turnover In addition, the professional knowledge of mid-level managers is good but their management skills especially in dealing with human capital are shortcomings Avery (2004) stated that

managers could influence employee performance indirectly through creating an environment in which their employees can work effectively; developing a suitable philosophy that helps employees shape their commitment to organizational goals and understand the strategy The satisfaction of employees with their jobs and leaders has been significantly studied in the business and organizational communication fields In the literature on relationship management, satisfaction refers to the degree to which parties to the relationship are satisfied with each other Stafford and Canary (1991) considered a satisfying relationship as one in which “the distribution of rewards is equitable and the relational rewards outweigh the cost” (p 225) They also defined satisfaction as good feeling about the other party; this feeling can be developed through a positive expectation

of relationships According to Ni (2007), among the four widely studied relationship indicators (i.e., trust, control mutuality, commitment, and satisfaction), satisfaction has received the most attention in the literature and this has been used as the main measure for effective employee relations When employees are satisfied and contented, they are most likely to commit in a long-term relationship and vice versa

One more idea from Mrs Thao Linh who works as the Deputy Manager at HR

Department, “the delivery of communication between the CEO and mid-level managers is not clear and steady enough Somehow, the CEO takes part in many small issues and the empowerment rate of subordinates is not high either For instance: the recruitment policy

in the company is deeply inconsistent due to the CEO’s strategy” Initially, he wants to

employ freshly graduated students and then assigns department managers to properly

train for them approximately in two to three months This is because the graduated students as a blank paper and they are easy to train and coach their mindset Furthermore, they most likely request a much lower salary than experienced employees particularly during the economic recession Nevertheless, these mid-level managers are too busy to train these graduated students so that they request the CEO to hire experienced employees in order to spend less minimal time to train Notably, the company normally trains the newcomers for two months before they get involved in the real work Indeed, the training contents most likely come from the experience of senior managers rather than professional and academic theories; hence it may lack of up-to-date knowledge and the new employees are probably not deeply well prepared to work in the fierce competitive environment Additionally, the CEO has a strong belief in Feng Shui and Chinese zodiac signs, thus he does not completely trust any subordinates especially in recruitment process He wants to directly have a final interview each final candidate and then makes a final decision rather than base on the recommendation of department managers and HR manager In reality, it easily creates the internal conflict because the mid-level managers think that the CEO intensively underestimates their opinions and capabilities Sometimes, they have to accept and to take the responsibility for someone that they do not want to recruit in their squad

In order to understand clearly this aspect, Ms Hoang Linh who currently works as

Manager at Interconsole Division said “there are only two people in this company who have Master of Business Administration (MBA) degree meanwhile the majority of staffs

got the bachelor and diploma degrees Additionally, most of the mid-level managers did not have management background and before getting promotion, they were sent to learn

a very short course about management Thus they may not be able to closely monitor and support their subordinates in the appropriate way”

Roughly speaking, every company needs sufficient information from its surroundings to survive in a highly competitive market Information from micro and macro surroundings helps fulfill the company's targets In reality, the communication process inside the company is as important as external information and sometimes, in special situations, could be even more important It is necessary to realize that the main task of internal communication is satisfying the information needs of all people in the company Academically, internal communication is defined as “all forms of communication from management to employees in service organization” (Lovelock & Wright, 1999) It has been declared as a “central component of effective business operations (Hargie, Dickson & Tourish, 2004, p.5) so that the internal communication is the core process that business can create value Notably, internal communication helps the management to ensure service delivery with high satisfactory level and build trust, respect and loyalty of employee (Lovelock & Wright, 1999) Organizations must give serious methods to drastically increase the level of communication within employees to transfer knowledge and information (Roberts-Lombard, 2010)

An effective internal communication is a very important tool since it leads to enhanced productivity, reduced absenteeism and costs, and higher levels of innovation

and quality services (Argenti, 2007) In contrast, the poor internal communication results

in work inefficiency Particularly, Hargie (2004) claimed that lack of ineffective communication have led high rate of employee turnover; useless coordination of all activities of the company; failing to reach the company's target; ineffective target and strategy; ineffectiveness in marketing; incapacity to compete with the rival in the market etc Briefly, the second problem is inefficient internal communication among departments and the shortcoming in the managerial skills with subordinates of mid-level managers This problem steadily leads to dissatisfaction and low commitment of employees

3.4 The Heavy Workload

Ms Bao Ngoc who works as the HR manager in the company noticed “the number of female employees left the company increased nearly triple from 2013 to 2014 due to the heavy workload” According to the Annual Human Resource report from HR

department of Interlog Company, in 2013, there were only 6 out of 16 female employees left the company meanwhile this number in 2014 increased significantly to 16 out of 25 and this number accounted for 64 percent out of total The common reason is that they cannot endure the extremely high workload of the logistic industry

Table 9: The Number of Male and Female Left the Company in 2013 & 2014

In reality, most of the staffs in Documentation and Supply Chain Departments at the company have to work over time or do not even get public holidays off when the feeder and mother vessels arrive to the seaports of Vietnam The company has to retain a large number of female employees because most of them are more patient and careful than male so that they are more appropriate for the back office works such as: document, procedure, admin etc In reality, the back office is comprised of the areas that normally

do not directly generate revenue for the organization but provide vital support and administration The front office staffs are the people in contact with the consumers or clients who depend on the support of the back office to function effectively

According to the Vietnam Logistics Association (VLA) (previously known as the Vietnam Freight Forwarder Association (VIFFAS)), there are more than 1,200 enterprises

in the logistics sector (Vnlogistics.vn, 2015) However, except the State Owned Enterprises, most of the enterprises are very small with a contributed capital from VND4 billion (USD 187 thousand) to VND6 billion (USD 281 thousand) There are about 25 multinational logistics companies in Vietnam (e.g DHL, UPS, FedEx, etc.), which account for 70% to 80% of market share Meanwhile, most of Vietnam’s logistics companies only serve as sub-contractors or agencies for foreign companies The logistics – outsourcing rate of Vietnamese corporations is still low at 25% to 30%, which is much lower than China (63%) and Japan (40%)

Indeed, this issue is not just a shift working as usual because customers in anywhere always need the right product or services at the right time and in the right place so that

everyone has to finish their duty on time regardless late time or holidays in order to maintain the reputation and preventing the compensation for the customers as well Thus,

if the logistics companies deliver cargos late, it strongly affects to the planning of production and trading Based on that reason, the employees have to work over time a lot and this incident happens frequently in the peak season In fact, it causes many inconveniences for female employees particularly for those who just get married or have

a baby since they need to have more time to take care of their own family Likewise,

according to some middle age employees in Interlog Company, “2014 is a year of the horse which symbolize enthusiasm and energy This animal gives people an impression of independence and integrity Thus, it is considered as a good year hence a lot of people want to have baby in this year and the employees at Interlog Company are not exception

as well” Mora and Ferrer (2009) did research on 5287 graduates of 12 recognized

universities in Catalonia, Spain and found that women are statistically less satisfied than men for three out of five job satisfaction domain (promotion possibilities, earnings, and job security) The other two are scored equally for both genders (satisfaction with the applicability of acquired knowledge and with work content)

Academically, Garvin (1988) stated that organization could compete by giving received value through innovation and quality Somehow, the niche market is a lucrative segment for the small and medium firms to innovate their products and services quality

by finding new solution for each customer in order to cut down time and work paper process too Satisfaction with the delivered products and services has been suggested and empirically documented as affecting the buyer’s decisions to continue a relationship

(Ndubisi, 2003; Anderson, 1994; Fornell, 1992; Hirchman, 1970)

To sum up, all of the tentative problems that have mentioned above need to solve properly In case the problem cannot be solved correctly, it will absolutely affect people

in other departments as a domino effect Moreover, the company’s performance will significantly go down because sales department plays a vital role in any business

Figure 5: Results of Incident Analysis at Interlog Company

3.5 The Real Core Problem

In today's competitive world, the management of human resources plays an integral role as it influences prosperity of the company The satisfied and loyal employees - internal stakeholders create the foundation for effective work within the real life of the company that is to improve the effectiveness of internal communication The internal communication process directly influences the building of mutual relations between the company (management) and its employees Unfortunately, the significance of internal communication is not sufficiently understood in managerial practice Management is not deeply aware of the most important function of effective internal communication, which

is essential for knowledge management, reengineering and wealth of the company Without effective internal communication, the company does not take full advantage of its resources Additionally, an effective internal communication improves the work environment climate while growing awareness among staffs of company activity and plans too Management gets to hear suggestions about the company's plans and policies from its employees through effective feedback mechanisms Hence the company is able

to fully use the accumulated experience of all employees Last but not least, an effective internal communication enriches the role of the managers and gives more positive attitude to change within the company It also allows opportunities to solve problems before they become chaotic, creates and maintains employee commitment and concentrates effort on the task on hand while reaching the company's objectives

Actually, internal corporate communication is a term that has been used in public relations and corporate communications for years (Kazoleas & Wright, 2001; Van Riel & Fombrun, 2007; Wilcox, Cameron, Ault, & Agee, 2003; Zerfass, 2008) Senior management communication and open, effective communication strategies are recognized as having a crucial role in the development of positive employee engagement (Bakker, Albrecht, & Leiter, 2011; Bindl & Parker, 2010; Saks, 2006) Employee engagement is expressed through positive physical, cognitive, and emotional work role performance (Kahn, 1990), it also enables organizations to innovate and compete and has communication implications (Welch, 2011) Roughly speaking, every company needs essential information from its environments to survive in an extremely competitive market Particularly, all employees including top to mid-level managers and low-level staff really need sufficient information and communication for better identification of the corporate objectives In reality, the communication process inside the company is as important as external information and sometimes, it could be even more important Moreover, internal communication reinforces organizational effectiveness since it provides positive internal relationships by facilitating communication between senior managers and employees Ironically, internal communication can also pose a threat to organizational relationships, as poor communication can be counter-productive The potential benefits of internal communication rely on appropriate messages reaching employees in useful and acceptable formats to them Hence, the ineffective internal communication particularly between Sales and Customs Departments is core problem that Interlog Company needs to solve quickly and properly

Table 10: List of Alternative Solutions

01 Steven, Barbara,

Shapiro, Helen, Gino, Lisa, David, Patricia and Nicolas (2004) Internal communication issues in an IT engineering

department An

International Journal (Vol 9,

Issue 1)

- Management needs to devise goals and objectives clearly with its

organizational members and disseminate this information on a regular basis

- Create a dual career path whereby employees can grow on the technical side or

on the management side

of the organization

- Upper management to implement appropriate succession planning

- Implement more significant individual rewards

-Internal Communication Issues

Employee participation or participative management, workplace democracy, empowerment, and employee

ownership It can

be defined as a participative process that uses the entire capacity

of employees and

is designed to encourage increased commitment to the organization’s success The underlying logic is that by involving workers in those decisions that affect them and by increasing their autonomy and control over their work lives;

employees will become more motivated, more committed to the organization, more productive, and more satisfied with their jobs.

02 Linjuan (2014)

Strategic Internal Communication:

Transformational Leadership

- The selection of

The findings suggest that leaders play a