Improving working competency of employees at sales division habeco one member co , LTD

52 Table 2.18: Gap between the required and current level of competencies for Habeco Sales Division employees .... - Assess the current competencies of employees at the Sales Division; f

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS TRẦN KIM HÀO

HÀ NỘI - 2019

DECLARATION

The author confirms that the research outcome in the thesis is the result of author‟s

independent work during study and research period and it is not yet published in other‟s

research and article

The other‟s research result and documentation (extraction, table, figure, formula, and

other document) used in the thesis are cited properly and the permission (if required) is

given

The author is responsible in front of the Thesis Assessment Committee, Hanoi

School of Business, and the laws for above-mentioned declaration

Date: 15th November 2018

Secondly, I would like to express my big thank to managers and employees at Habeco One Member Co., Ltd for their persistent support and contribution to put all knowledge into real cases throughout this thesis

Last but not least, I offer my regards and blessings to my family, my friends and all of those who supported me in any respect during the completion of the thesis

Hanoi, 15/11/2018 Nguyen Trong Nghia

CONTENT

INTRODUCTION 1

1 Rationale 1

2 Aims of research 2

3 Objects of research 2

4 Scope of research 2

5 Research methodology 3

5.1 Research process 3

5.2 Data collection 3

5.3 Data analysis 4

6 Research structure 4

CHAPTER 1: LITERATURE REVIEW ON COMPETENCY 5

1.1 Overview of competency 5

1.1.1 Definition of competency 5

1.1.2 Competency model 6

1.2 Components of competency of sales division employees 8

1.3 Competency assessment process 13

1.4 Competency assessment method 14

1.5 Factors affecting competency at organizations 15

1.5.1 External factors 15

1.5.2 Internal factor 16

CHAPTER 2: WORKING COMPETENCIES OF EMPLOYEES AT THE SALES DIVISION OF HABECO 20

2.1 Overview of Habeco Trading One Member Company Limited 20

2.1.1 History of development and establishment 20

2.1.2 Organizational structure 23

2.1.3 Human resources 25

2.1.4 Current situation of sales system of Habeco 26

2.2 Job descriptions for employees at Sales Division of Habeco 27

2.3 Required competencies for Habeco Sales Division employees 29

2.3.1 Required knowledge for Habeco Sales Division employees 32

2.3.2 Required skills for Habeco Sales Division employees 34

2.3.3 Required attitude for Habeco Sales Division employees 36

2.4 Current competencies of Habeco Sales Division employees 38

2.4.1 Current knowledge 38

2.4.2 Current skill 43

2.4.3 Current attitude 51

2.4.4 Overall assessment on the competency gap 54

CHAPTER 3: RECOMMENDATIONS TO IMPROVE WORKING COMPETENCIES OF EMPLOYEES AT THE SALES DIVISION OF HABECO 59

3.1 Objectives to improve competencies of Habeco Sales Division employees 59

3.1.1 Orientation to the company development 59

3.1.2 Objectives to improve competency of Habeco Sales Division employees 59

3.2 Recommendations to improve competencies of Habeco Sales Division employees 60 3.2.1 Training recommendations 60

3.2.2 Non-training recommendations 65

CONCLUSION AND LIMITATION 71

1 Conclusion 71

2 Limitation 71

LIST OF REFERENCES 72

HRM : Human Resources Management

HSB : Hanoi School of Business

HSD : Habeco Sales Division

KPI : Key Performance Indicator

KSA : Knowledge, Skills, Attitude

KSV : Knowledge, Skills, Values

MBA : Master of Business Administration

OJT : On the Job

PA : Performance Appraisal

R&D : Research & Development

ROI : Return On Investment

VNU : Vietnam National University

LIST OF FIGURES

Figure 1.1: Competencies architecture model 7

Figure 1.2: Sales division employees‟ competencies assessment process 14

Figure 2.1: Organizational chart of Habeco Trading One Member Co., Ltd 24

Figure 2.2: Organizational chart of each branch of Habeco Trading One Member Co., Ltd 25

Figure 2.3: Required level for each competency of Habeco Sales Division employees 37

Figure 2.4: Current – Required knowledge gaps of Habeco Sales Division employees 43

Figure 2.5: Current – Required skill gaps of Habeco Sales Division employees 51

Figure 2.6: Current – Required attitude gaps of Habeco Sales Division employees 53

Figure 2.7: Gaps between required and current competencies 55

LIST OF TABLES

Table 1.1: KSA model for sales division employees 10

Table 2.1: Habeco Trading One Member Co., Ltd‟s staff qualification in 2018 26

Table 2.2.: Result of manager‟s selection 30

Table 2.3: Ratio of answering questionnaires of respondents of the research 38

Table 2.4: Current product knowledge of Habeco Sales Division employees 39

Table 2.5: Current customer knowledge of Habeco Sales Division employees 39

Table 2.6: Current competitors knowledge of Habeco Sales Division employees 40

Table 2.7: Current technological knowledge of Habeco Sales Division employees 41

Table 2.8: Current regulation and policy knowledge of Habeco Sales Division employees 42

Table 2.9: Current communication skill of Habeco Sales Division employees 43

Table 2.10: Current presentation skill of Habeco Sales Division employees 45

Table 2.11: Current relationship building skill of Habeco Sales Division employees 46

Table 2.12: Current problem solving skill of Habeco Sales Division employees 47

Table 2.13: Current negotiation skill of Habeco Sales Division employees 48

Table 2.14: Current time management skill of Habeco Sales Division employees 49

Table 2.15: Current teamwork skill of Habeco Sales Division employees 50

Table 2.16: Current responsibility attitude of Habeco Sales Division employees 51

Table 2.17: Current positive attitude and enthusiasm of Habeco Sales Division employees 52

Table 2.18: Gap between the required and current level of competencies for Habeco Sales Division employees 54

Table 3.1: Recommended training courses for Habeco Sales Division employees 61

INTRODUCTION

1 Rationale

Choosing the right person to the right position is the right decision to the success of any business In other words, matching individual competencies with job competency models puts staffs in positions where they can contribute most Nowadays, with the development

of international business, especially in Vietnam in particular, labor force plays an important role in any company‟s business because they are the people who can apply their knowledge, skills, and behaviors to directly bringing the profits to the company as well as bringing the company‟s image to out-side customers Therefore, improving labor force‟s competency is regarded as the leading strategy of any company Increasing the competency

of an organization‟s labor force represents increasing its opportunities to be successful Strategies, business models, products and services can all be copied by competitors, but talented and competent employees represent a sustainable source of differentiation

The beer industry is one of the Fast Moving Consumer Goods (FMCG) industries Currently, Vietnam is considered as a potential market due to its young population and rising incomes Habeco One Member Co., Ltd is one of the three largest beer companies in Vietnam In the period of 2010 – 2014, Habeco made great strides in the sales volume and profit The success factor of the company in this period was mainly due to the strong development of the beer market in Vietnam due to limited number of beer providers both domestically and internationally Therefore, Habeco attracted a large amount of customers, facilitating Habeco‟s revenue growth significantly The role of employees in the sales division at this stage was only to meet the needs of customers

However, before the attractiveness of the Vietnamese beer market, many domestic and foreign beer companies have been stepping up their investment and competition to occupy Habeco's market share In addition, in the trend of modernization, information technology becomes more and more important and indispensable in the process of managing and operating the production and business activities of enterprises Some major brands in the FMCG sector have applied very well technology in sales system management, business efficiency improvement and have boom such as Saigon Beer, Sapporo, Huda, etc Facing changing business environment and fierce competition, working competency of employees

at the Sales Division of Habeco could not meet the new internal and external requirements

of the market As a result, the sales volume of the company declined severely, making the company's gross profit from sales and revenue significantly decline as well In order to

survive and develop in Vietnam beer market, it required Habeco to trigger the sales volume and revenue It means that the competency of employees at the Sales Division of Habeco was required to be as perfect as possible Until now, there has been no research to provide any rationale for the competency of employees at the Sales Division as well as assess the current competency of employees at the Sales Division, from which proposes solutions to improve the competency of employees at the Sales Division of Habeco

Therefore, the Sales Division at Habeco has been chosen as a case study for this master

research with the topic: “IMPROVING WORKING COMPETENCY OF EMPLOYEES

AT SALES DIVISION - HABECO ONE MEMBER CO., LTD”

2 Aims of research

This research aims to achieve the following objectives:

- Identify necessary competencies of employees at the Sales Division of Habeco

- Assess the current competencies of employees at the Sales Division; find out the gap between required and current competencies of employees at the Sales Division and the root causes of the identified gaps in working competencies of employees at the Sales Division

of Habeco

- Propose recommendations to improve working competencies of employees at the Sales Division of Habeco

3 Objects of research

The research object is studying working competencies of employees at the Sales Division

of Habeco and giving recommendations to improve those competencies for the period of

2019 - 2025

4 Scope of research

The research took place within the head office of Habeco at Hanoi

The data were collected for the period of November 2018

The purposes of in-depth interviews:

- To identify required competencies of employees at the Sales Division: The author proposed the list of required competencies based on the theoretical framework to select which competencies are important competency for employees at the Sales Division

- To find out the evaluation of current sales division employee competencies: The author interviewed each person directly by prepared content in open questions Through

Current competencies for sales division employees

GAP Recommendations

the open questions, managers can illustrate and give more ideas about their selected competencies and suggest their recommendations

- To find out the required level for competencies of employees at the Sales Division: The author asked the managers to determine required level of each competency that sales division employees need to complete the job and take average to get the overall required

level of each competency

b) Survey: The author used survey method to identify the current level of employees at the Sales Division This current level was calculated in average of judging from 10 managers,

60 employees of the Sales Division and 30 customers of Habeco These 30 customers of Habeco represented for nearly 20 distributors They were leaders and senior officials that often contact closely with employees at the Sales Division of Habeco

5.3 Data analysis

All collected statistics were transferred to the form of tables and graphics together with analysis supported by Excel computer programs

6 Research structure

The research were divided into three chapters as follows

Chapter 1: Theoretical background on competency

Chapter 2: Working competencies of employees at the Sales Division of Habeco

Chapter 3: Recommendations to improve working competencies of employees at the

Sales Division of Habeco

CHAPTER 1 LITERATURE REVIEW ON COMPETENCY

1.1 Overview of competency

1.1.1 Definition of competency

The most important asset of any organization is the knowledge and competency of the employees Effective and strategic management of the human resources is crucial to successful business management It is essential to have qualified employees in the right place at the right time to cope with the needs of the business to quickly respond to the dynamics of the business environment Therefore, management must pay adequate attention to their improving sales division employee competency to ensure that the appropriate sales division employee competency is available for the organization to achieve its objectives To be effective in assess and upgrade the competency, the Human Resources Management firstly needs to understand thoroughly the concept of competency The term competence originated from Latin verb “competere”, which means to be suitable The definition of “competency” is broadly defined:

In 1973, David McClelland first introduced competency as “components of performance associated with “clusters of life outcomes””

The term “competency” became popular when Boyatzis (1982) defined job competency represents ability An individual‟s set of competencies reflect their capability or what they can do A job competency may be a motive, trait, skill, aspect of one‟s self-image or social role, or a body of knowledge that an individual uses, and the existence and possession of these characteristics may or may not be known to the individual Spencer and Spencer (1993) defined competency as internal characteristics of an individual that produced effective and superior performance

According to Fletcher (1997), competency is a worldwide concept found in vast numbers

of editorials and publications devoted to this subject The major concern, however, is that there is no agreed definition on what competency is This in itself produces confusion, to the extent that employers and trainers tend not to understand one another during discussions of competency training

Within an organization, competencies for an employee are well discussed by Parry (1996)

as, characteristic of an employee that contributes to successful job performance and achievement of organizational results These include knowledge, skills, and attributes plus other characteristics such as values, motivation, initiative and self-control

Competencies enable employees to achieve results, thereby creating value It provides a roadmap for the range of behaviors It follows that competencies aligned with business objectives help foster an organization‟s success Organizations should understand their core competency needs, the skills, knowledge, behaviors and abilities that are necessary for people in key roles to deliver the results

To summarize the definitions listed above, the most general and detailed definition was proposed by Parry Parry‟s definition has been accepted by numerous scholars (Lucia & Lepsinger, 1999):

A competency is a cluster of related knowledge, skills, and attitudes that affects a major part of one‟s job (a role or responsibility), that correlates with performance on the job, that can be measure against well-accepted standards, and that can be improved via training and

development (as cited by Lucia & Lepsinger, 1999, p 5)

1.1.2 Competency model

Competency model identifies the competencies necessary for each job Competency models provide descriptions of competencies that are common for an entire occupation, organization, job family, or specific job Competency model can be used to help identify the best employees to fill open position and to serve as the foundation for development plans that allow employees and their manager to target specific strengths and development areas

Competency models are the foundation for important human resource functions such as recruitment and hiring, training and development and performance management since they specify what is essential to select for or to train and develop

In the organization, competency models and systems can help:

- Improve the selection of people for jobs

- Develop skills and characteristics that lead to improve effectiveness and productivity

- Provide a consistent framework for Human Resources applications

- Build alignment with organizational values and strategy

The size of the organization should be a factor in determining the model Larger organizations should use survey approaches to collect job information to get sufficient input from a representation of the relevant population Smaller organizations or smaller job roles within larger organizations should use focus groups

There are three main different approaches to staff competencies, includes:

 Behavior approach

 Standard approach (Job-Based Model)

 Situational approach (Competency-Base Model)

In this thesis, the author uses job based competency model which is represented by competencies architecture model of Roe (2002), because it is appropriate with sales and marketing field and general practice In fact, many researchers have been approach to competency model However, within the scope of research, the author uses KSA model developed by Roe (2002) The model is shaped like a Greek temple and can be interpreted

Knowledge is awareness, information, or understanding about facts, rules, principles,

guidelines, concepts, theories, or processes needed to successfully perform a task The knowledge may be concrete, specific, and easily measurable, or more complex, abstract, and difficult to assess Knowledge acquisition involves complex cognitive processes: perception, learning, communication, association and reasoning The term knowledge is also used to mean the confident understanding of a subject with the ability to use it for a specific purpose if appropriate

Skill is a capacity to perform mental or physical tasks with a specified outcome Similar to

knowledge, skills can range from highly concrete and easily identifiable tasks, such as

filing documents alphabetically, to those that are less tangible and more abstract such as managing a quality improvement order

Attitude is a mental position consisting of a feeling, emotion or opinion evolved in

response to an external situation An attitude can be momentary or can develop into a habitual position Employee shows different position either positive views, negative views

or neutral views Emotions are the attitude, which may be shown as positive or negative Employee performing a task may show negative attitude, which falls bad impression on the organization

In the scope of thesis, these KSAs were selected to study the sales division employee competency in order to improve the competency of employees at the sales division of

Habeco

1.2 Components of competency of sales division employees

Sales division employee competencies are behaviors required for succeeding in sales activities, such as generating sales leads and converting them into customers Small and large businesses need to identify the competencies of sales division employees to drive top-line growth, increase market share and respond to changing business conditions Businesses also need to identify competencies of sales division managers because they play an integral role in motivating and retaining competent sales division employees Certainly, there are specific competencies for success in different positions that can be

determined In the book, Competence at Work, Lyle Spencer and Signe Spencer (1993)

report the research they have conducted exploring whether there is a common set of competencies that are predictive of success in various jobs They determined that it is possible, based on the structured interviews that conducted in the course of their research

to identify the specific competencies required for success in major jobs

For sales division employees, the Spencer finds the key competencies required for this position as below: Impact and Influence, Achievement Orientation, Initiative, Interpersonal Understanding, Customer Service Orientation, Self-Confidence, Relationship Building, Analytical Thinking, Conceptual Thinking, and Technical Expertise

Competencies for sales division employees also are the subject in the study of Sypniewska (2013) This study focused on common competencies, including: leadership, motivation, communication, team management, supporting development/training, entrepreneurship, strategic thinking, focusing on the customer and attitude towards work, dealing with stress, knowledge, experience and learning These competencies were selected using several methods of analysis, including studies of company documentation, interviews, direct

observations, expert consultations and workshop The study was performed to identify the competences that best differentiate the surveyed sellers groups (starting out in the business

- group I, coordinators - group II, leader – group 3) The result of analysis showed that competencies such as leadership, team management, knowledge and experience most differentiate group I from groups II and III These competencies are stronger in groups II and III than in the group I, which is composed of people who have just started sales works

in multilevel marketing

The analysis also showed that the differences in proportions between the competencies of self-motivation, learning and coping with stress most differentiate group II from group III The difference between the groups is not related to higher levels of these competences but rather to the differences in their proportions Groups II and III include sales division employees that have already achieved significant results in sales works

In the study of Barber and Tietje (2004), in order to identify the competencies necessary to succeed in industrial sales, they used the structure proposed by Evers et al (1998) that subdivides competencies into knowledge, skills, and values (KSV) Their study consisted

of three rounds of data collection The first two rounds employed an executive panel, and the third round utilized a random sample of industrial sales managers from a diverse range

of industries

The results of the study showed that the important knowledge competencies in descending order of their average importance ratings as rated by Executive Panel and Sales Managers: Product Strengths, Product Application, Financial Cost/Benefit Analysis, Sales Process, Competitors Relative Strengths and Weaknesses, Customer Decision Making Process, Product Weaknesses, Selling Techniques, Contact Information, Account Management, Consultative Selling, Product Special Specification and Product Design

The most important skill competencies in descending order of their average importance ratings as rated by executive panel and sales managers, including: Uncover Customer Needs, Interpersonal Listening, Closing the Deal, Generate Solutions, Negotiation, Audience Awareness, Need Assessment, Open and Honest Communication, Leadership Skills, Verbal Communication, Time Management, Critical Thinking, Analysis Cost/Benefit (ROI), Search Out Potential Customers, Prioritizing, Networking, Written Communication and General Computer Literacy

The most important attitudes in descending order of their average importance ratings as rated by executive panel and sales managers, including: Ethical Behavior (honesty), Integrity, Credibility (authentic), Listening, Professionalism, Trustworthiness, Responsible,

Common Sense, Ambitious, Achievement-orientation, Adaptable to Change, Genuine, Assertive, Determination, Customer Loyalty, Patience, Optimistic, Friendly and Future vision

From the literature review as mentioned above, the author decided to use KSA model including Knowledge, Skill and Attitude to analyze working competencies for sales division employees at Habeco Based on characteristics of sales work, components of competencies as mentioned above, as well as specialized knowledge in FMCG market, knowledge is considered in terms of five variables: product knowledge (2 indicators), customer knowledge (1 indicator), competitors knowledge (1 indicator), technological knowledge (1 indicator) and regulation and policy knowledge (1 indicator) Skill is considered in terms of seven variables: communication skill (5 indicators), presentation skill (4 indicators), relationship building skill (6 indicators), problem solving skill (5 indicators), negotiation skill (6 indicators), time management skill (3 indicators) and teamwork skill (4 indicators) Attitude is considered in terms of two variables: responsibility attitude (4 indicators) and positive attitude and enthusiasm (4 indicators)

They are presented in the table bellows

Table 1.1: KSA model for sales division employees

Factor Competency

KNOWLEDGE

Product  Knowledge of strengths and weaknesses of product and service

 Knowledge of special specification of product

Customer  Understand about customer: customer‟s business, customer‟s

requirement, etc

Competitors  Deeply understand about relative strengths and weaknesses of

competitors

Technological  Capture and constantly update knowledge of FMCG technology

development trends in the world and Vietnam

Regulation and

policy

 Knowledge of international rules (i.e.: Incoterm, CISG, etc.) and

laws, regulation of the Government and FMCG industry in Vietnam

SKILL Communication  The ability to present intentions, ideas, information with

confident style

 Delivers accurate, clear, and concise messages orally and/or in writing to ensure his/her message is understood

 Speaking and writing skills in English with foreign partners

 Listen carefully to deeply understand customer‟s need

 Share ideas, opinions with others

 Schedule time to build relationships

 Treat themselves and others with respect Ex: actively listen to the other party or try to complete the deal as agreed

 Face differences with others directly

 Work towards solutions where both parties win

 Stay connected with other parties after an order or an assignment end

 Resolve the problem: implementing action

 Examine the results: Monitoring the outcome of the action taken and reviewing the problem and problem-solving process to avoid similar situations in future

Negotiation

 Identify the issues for both parties which can help to find a compromise for all parties

 Determine goals or alternatives goals, areas for trade, etc

 Good presentation for negotiations

 Listen actively to the other party to find areas for compromise during the meeting

 Ability to seek a variety of solutions to problems to benefit both parties of the issue

 Patience and the ability to persuade others during a difficult negotiation

Time

management

 Make a list of tasks and arrange the priority order of tasks to reach the target

 Set deadlines to ensure the task is completed on time

 Implement a task following and rearrange the order of steps to carry out a task

Teamwork

 Give and receive feedback from peers or other team members in order to perform the task

 Contribute personal opinions and areas of disagreement tactfully

 Listen patiently to others in conflict situations

 Support group decisions even if not in total agreement

ATTITUDE

Responsibility

 Possess an appropriate sense of urgency, as exemplified in the need to see the sale progress and to bring situations to a resolution

 Anticipate consequences and evaluate alternatives before acting

 Tend not to have excuses for a situation and take action when situations require action

 Can accept valid criticisms and suggestions for performance improvement

Positive attitude

and enthusiasm

 Empathy with customer

 Has a positive disposition towards others and their job

 Initiative and the ability to focus on opportunities and solutions

 Persistence in forcing an important issue even in the face of possible rejection

Source: Collected by Author (2018)

1.3 Competency assessment process

A competency assessment measures how well an employee does the job in relation to performance standards In the scope of the thesis, the competency assessment process has been implemented as following:

 Step 1: Identify the required competency:

The first step in competency evaluation is to determine which competencies are important, both within the organization and within the specific position Performance is measure based on KSA‟s model Through the research on secondary data such as job description, organization‟s objective, etc associated with in-depth interview the managers, the competency requirements have been found out Its aim is to satisfy the research objective:

„Identify necessary competencies of employees at the Sales Division of Habeco‟

 Step 2: Assess the current competency: Rating current level of competency on attitudes, knowledge and skill to identify in the position profile

Based on requirements of competences as determined in step 1, questionnaire was designed to investigate current competences of sales division employees Three objects are chosen to investigate including sales division employees, managers and customers at the Sales Division of Habeco Result of this step is to satisfy the second research objective of the thesis: „Assess the current competencies of employees at the Sales Division; find out the gap between required and current competencies of employees at the Sales Division and the root causes of the identified gaps in working competencies of employees at the Sales Division of Habeco‟

 Step 3: Clarify the gap between required and current competencies: Identify any

current attitudes, knowledge and skill that are lower than required competencies

Based on survey result of the second step, these results were processed by Excel application to find rate of assessment of each object about sales division employees‟ current competences At the same time, considering gaps between current competency and required competency

 Step 4: Propose solutions to fulfill the gap

How to improve competencies to catch up requirements? Recommendation were suggested

in order to improve the weaknesses in competencies of sales division employees This is the main important objective of the thesis: „Propose recommendations to improve working competencies of employees at the Sales Division of Habeco‟

Figure 1.2: Sales division employees’ competencies assessment process

Source: Author (2018)

1.4 Competency assessment method

In this thesis, the author used 360 degree feedback to assess the current level of competency for sales division employees at Habeco 360 Degree Feedback is a system or process in which employees receive confidential, anonymous feedback from the people who work around them This method typically includes self-assessment by employee, supervisor‟s evaluation, customer‟s assessment

 Self-assessment by sales division employees

Sales division employees evaluated themselves based on common competencies criteria The advantage of this method is nobody can understand you by yourself And this disadvantage of this method is their evaluation is not exact in some cases

 Manager’s or supervisor’s evaluation

This assessment usually is made at the end of month, quarter, year, etc The advantage of the method is time saving and exact evaluation, because the manager can understand their staffs through daily working The disadvantage of this method is being subjective, factor-influenced, and managers at different levels may have different ways to evaluate sales division employees

Step 1: Define required competencies

for sales division employees at Habeco

Step 2: Assess the current competencies

of sales division employees at Habeco

Step 3: Identify gaps between required

and current competencies

Step 4: Recommendations to reduce the

gaps

 Customer’s assessment

Sales division employees at Habeco have to perform and contact with their customer every day to make a deal, to present their selling knowledge for any customer‟s question, etc Therefore, customers evaluated the qualification of sales division employees through their feelings The advantages of this method are showing the requirement of the customer about behavior or experience of sales division employees The disadvantages of this method are: long time to collect assessments from customer, some troubles happening with unready customer, and the quality of the evaluation influenced by customer‟s emotion

1.5 Factors affecting competency at organizations

There are some factors, which directly or indirectly influence the competencies of sales division employees These factors can be divided into external and internal factors

1.5.1 External factors

 Social factors

Social factors relate to changes in the behavior, tastes and lifestyles of communities on a local, national and international scale Trend in social factors affect the demand for a company‟s products and how that company operates For example, an aging population may imply a smaller and less-willing workforce (thus increasing the cost of labor) Furthermore, companies may change various management strategies to adapt to these social trends (such as recruiting older worker)

 Technological analysis

Technological factors include ecological and environmental aspects, such as R&D activity, automation, technology incentives and the rate of technological change They can determine barriers to entry, minimum efficient production level and influence outsourcing decisions Furthermore, technological shifts can affect costs, quality, and lead to innovation

The rapid development of technology requires quick reaction by businesses in order to survive in an emerging competitive environment and keep up with new trends and innovative services, which other competitors might be offering

The rapid development of mobile communication and the Internet facilitates the approaching of a „global village‟ It demands all businesses in general have to stay ahead

of the game in technology, giving optimal solutions, good quality equipment and service and meet the demand of customer It means that the company must develop their staff‟s in technological knowledge and skill to develop themselves

 State policies and political analysis

Political factors are basically to what degree the government intervenes in the economy Specifically, political factors include areas such as tax policy, labor law, environmental law, trade restrictions, tariffs, and political stability Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads) Furthermore, governments have great influence on the health, education, and infrastructure

of a nation

Therefore, understanding of the legal in Vietnam and international trade rules represents a major challenge for the company who would like to expand into the national market As the legal systems vary considerably, absence of profound knowledge in their differences will put the company in great peril

 Economic factors

Economic factors include economic growth, interest rates, exchange rates and the inflation rate These factors have major impacts on how businesses operate and make decisions For example, interest rates affect a firm's cost of capital and therefore to what extent a business grows and expands Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy

1.5.2 Internal factor

In this part, the author just names some internal factors that are considered having big impact on working competencies of employees in general and in FMCG industry in particular

 Recruitment

A competency based approach to recruitment and selection of staff can help the organization make it an effective and successful investment of time, money and expertise Therefore, and in view of the importance of these values, special attention should be paid

to develop a clear and fair recruitment process to find and hire the best-qualified candidate for a required job It is the role of management and HR to keep an eye on valuable candidates from outside and to benchmark internal skills with external offers

 Training

Training is the process of helping people learn the material and skills the company thinks

is important Through training, sales division employees are introduced to the overall goals

of the organization, the procedures used to accomplish specific tasks and the skill and

knowledge necessary to succeed in sales works For sales division employees, though the training process they can learn new information and can regenerate their sales work skill for new product and changing environment In general, training helps sales division employees develop specific knowledge as well as skill that enable them to succeed in their current job and develop for the future

 Accurate performance assessment

The performance of a company depends not only on human assets but also on the right match of competencies and their level for performance requirements To improve performance companies must use reliable techniques and identify the right competencies and their levels Additionally, employees need and should have an accurate performance assessment to have enough motivation to know how they meet the position requirements, and help them figure out what they are needed to perform better This can make employees learn, change and make more progress to work and that means their competencies are improve Nevertheless, if an employee has an accurate performance review but have no motivation it would become worse They would not make any efforts to work better even they would work due to their unsatisfactory

 Motivation

Motivation is the process of getting people to works achievement of an objective Form various theories, motivation could be rooted in the basic needs of a person which include physical and metal needs, for example, pleasure, satisfied, eating, playing, time self-organizing, etc Most of employees want to make effort to have motivation that also means they want to get more things that they need In sales area, sales division employees need constant motivation to maintain performance and productivity to satisfy levels and to present challenges that encourage them to raise their performance and productivity to greater than satisfactory levels by offering way that address the personal needs of each Therefore, it is clear that motivation plays a direct role to affect sales division employees‟ performance as well as their competency

with an employer's requirements Personality element is widely used by organizations for assessment centres, team building, coaching, competency profiling and personal development Personality is vital in aligning the task and individual personality Personality is important in order to stimulate job performance and competency if it is carefully matched with the appropriate occupation and organization Employee with high work performance could also consider as high level of competency Employee personality also affects the performance of the company and the team Therefore, personality is much more related to employee competency Diverse personality characteristics have distinctive both positive and negative consequences for various parts of showing execution Of all discoveries, the most exceptional one is that outgoing going to doctors are assessed as better educators, both on general and particular instructing execution

 Peer support

Having peers show each other is an answer that offers numerous advantages, including sharing the preparation obligation among numerous and vesting all staff included with a feeling of possession Peer support is significant in providing support in term of knowledge sharing, transfer learning and improves knowledge, skills and ability of the employee Through this support system employee could increase the level of competency and level of confidence in order to perform the related task for their duty Employee competency not only comes from the exposure to the task or related experience, it has also come from support system that helps employees to diffuse the knowledge, skills and ability Working environment learning happens outside the classroom in a casual setting among employee and their peers Many organizations are helping staff sharpen their abilities and redesign their insight by offering staff advancement opportunity which cover increasing employee competency Peer support acts as support group that help employees to perform better in their work Employees with greater peer advice ties will have greater access to their peers and the information they could provide, thus being able to use the employee support more effectively than employees who have less peer advice ties because of which will have

limited access to information from peers

 Work life balance

Work life balance refers to the factor that associate between the responsibility at work and responsibility at home as the factor that contribute towards employee competency in performing their task There is a general acknowledgment that the accessibility of work life parity hones prompts advantageous results Among the advantages of offering work life equalization rehearses examines have highlighted change in general society picture of the

firm as the organization is seen to be socially dependable, there are additionally other more substantial advantages, for example, lessening of non-appearance, lower anxiety levels, more elevated amounts of efficiency, competency, execution and enhanced nature of life, satisfaction and duty among representatives The element of work life balance as an indicator is crucial in order to measure employee competency Many organizations ignore the practice of work life balance due to ambiguous results that does not provide tangible benefits to the organization and poor understanding of towards work life balance practice

In addition, work life balance practices are viewed as key to holding and drawing in exceedingly qualified experts (men and women) For all the above reasons, the accessibility of work life parity hones, regardless of the possibility that representatives don't utilize them, can be required to increment authoritative performance or employee

CHAPTER 2 WORKING COMPETENCIES OF EMPLOYEES AT THE SALES DIVISION OF

HABECO

2.1 Overview of Habeco Trading One Member Company Limited

2.1.1 History of development and establishment

Established in 2009, HABECO Trading One Member Co., Ltd is one of the strongest member companies of Hanoi Beer, Alcohol And Beverage Joint Stock Corporation With the growth rate of high and stable business indicators, the company has been playing the role of a leading “shocker” in the market, contributing to the success of the brand of Hanoi Beer

It can be said, the period of 2009 to 2017 is the time of the world economy with constantly complicated developments: crisis, recession, conflict, natural disasters occur in many places So far, the world economy is gradually recovering, many industrialized countries have strongly adjusted policies to protect domestic production Fierce competition among major countries in the region has adversely affected the socio-economic development of Vietnam

The domestic economy continues to face difficulties and challenges Economic growth slowdown, business production and people's lives are difficult Natural disasters, epidemics cause severe damage Especially, the uncertainties in the banking and finance sector, the high bad debt ratio has greatly affected the production and business activities of many enterprises throughout the country as well as affecting the consumption of the people In addition, severe weather in recent years, such as the North Central Coast, has been affected

by hurricanes and floods that have caused significant losses, adverse impacts on agriculture, production, people's livelihoods in general and beverage industry in particular

In this context, HABECO Trading One Member Co., Ltd was established under Decision

No 41/QD.HDQT-HABECO dated July 16, 2009, becoming a subsidiary of Hanoi Beer, Alcohol And Beverage Joint Stock Corporation By 01/9/2009, the company officially came into operation, with the task of consuming canned beer products and bottled beers under the brand of Hanoi Beer produced by the corporation, meet the requirements of serving customers at the best, high efficiency, preservation and capital development of the company in particular and the corporation in general

On the first days of establishment, besides being advantageous for 100% capital of the holding company, the direction and supervision of the Board of Directors, the close and

timely leadership of the Board of Directors and the coordination and support from many functional departments of the corporation, etc the company has many difficulties and challenges It is a comprehensive transformation from a single office – the Department of Consumption - Market of the corporation into an independent business

In the spirit of difficulty overcoming, right from the first day of operation, based on the charter of organization and operation of the company approved by the corporation, the company has developed and issued the system of internal management regulations complying with the current charter and laws to manage the operation of business Since then, the company has deployed the sales to agents (on the basis of receiving the Branches/Warehouses transferred by the corporation), has immediately started to organize, strengthen the mechanism (from the Board of Directors to the professional sections, the branches/stores, the accounting department to carry out the accounting work of corporate finance) There are so many procedures and many difficulties for Habeco Sales Division employees, as well as for customers

However, with the direct direction of the corporation, together with the spirit of unity together to overcome difficulties, the Board of Directors and all employees strive to accomplish exceedingly assigned tasks In 2010, consumption of canned beers and bottled beer of the corporation increased by 268,419,013 liters, equal to 130% compared to the same period in 2009 In the following years, the main business targets increased from 5%

to 30% In 2016, the total output of canned beer, bottle beer of all kinds achieved 440,508 million liters In 2017, the company strived for total beer consumption of 465,5 million liters, equivalent to 106% over the same period last year

In order to achieve stable growth and increase annual consumption, the company has introduced many quick solutions, sticking to reality and applying many policies to promote consumption as follows: support customers recovering the bottles; bottle money guarantee; providing transportation support for mountainous customers and flexible seasonal sales policy (helping to significantly increase sales volume in mountainous markets, customers are excited and assured in using Hanoi beer); organizing the meeting of representative agents with high turnover in the years for the purpose of discussing solutions to strive for consumption, etc In addition, the company also improves the procedures to facilitate and quick purchase for agents; put into operation a number of new warehouses, contributing to reducing costs for businesses, agents and customer service on a better manner Thanks to the practical and timely solutions, the company has pushed up the consumption capacity,

developed the system of agents throughout the country, bringing Hanoi beer products into the retail channel of supermarkets, etc

HABECO Trading One Member Co., Ltd has paid much attention to the Party and trade unions and social work It is an important activity, an essential organic correlation with business, creating motives, values, harmonious development, contributing to the building and affirming corporate brand and corporate prestige

The Party branch of HABECO Trading Limited Co., Ltd was established under Decision

No 60-QD/DU on 08/10/2009, including 21 members of the Party Committee Up to now, the Party Cell has grown to 34 members, has been staffed in 6 Party Groups, participated

in, set up and managed all activities Over the past five years, the Party Cell has consistently won the title of clean and strong Party Cell In particular, in 2013, one of the two branches of the corporation‟s Party Committee has won the title of clean and strong branch

The company‟s trade union now has 06 trade unions and 03 trade union groups, with 147 trade unionists, including 39 female unionists, accounting for 26.5% The union has actively taken care of spiritual life for workers and employees, policies of workers and employees on monthly, holidays, New Year in the year, birthday, standard tours The union

of the corporation held Mid-Autumn Festival for children who are children of workers and employees The average income of laborers is 10.8 million VND/person/month Representing its pioneering role, the company has become a core unit, participating in the movements organized by the corporation such as Performance Arts Festival, Annual Sports Festival and won the high rankings such as First Prize at Ho Chi Minh City Music Festival

2010 in Hai Duong, the second prize of the Youth Arts Festival 2012 in Thanh Hoa

The Youth Union of the company has more than 100 youth union members who are young, dynamic, creative, active in both professional and extra-curricular activities, often contributing to the fulfillment of business tasks of the company

With the development of medium and specialized enterprises, stable growth of business indicators and good performance of all social and corporate activities, the company has received many awards and emulation flags in consecutive years of the Ministry of Industry and Commerce in many areas such as business activities, fire safety work; Certificate of merit for implementation of tax policy by Hanoi People's Committee; Emulation Flag of the Industry and Trade Union, General Confederation of Labor of Vietnam, Certificate of Merit, Emulation of the Corporation

Particularly, the company has honorably received the Government's emulation flag for two consecutive years of 2012, 2013 and the Ministry of Industry and Trade approved the dossier requesting the State to award the third grade Labor Medal

Over nearly ten years of construction and development, although the time is not much, but achieve the initial results as today, it is a commitment, enthusiasm, strive for endless effort

of the collective of employees and workers of the company

In the roadmap towards sustainable development, competition is the driving force for development HABECO Trading One-member Co., Ltd has been improving its business activities to provide the market with products and services that meet the needs of the society Since then, the company has applied the business policies towards the satisfaction

of customers in a timely manner At the same time, strengthening the responsibility of enterprises with distribution systems, consumers; create credibility for the agent system when trading products bearing the brand name of HABECO

In the coming time, the company will continue to organize and implement the direction of HABECO At the same time, promote dynamism, initiative in management decentralization to quickly expand the market, increase market share Along with that, the company will apply information technology deeper into the management system to direct selling points, applying modern selling methods in line with the market development Especially, the company will continue playing a pioneering role in business activities,

enhance corporate culture, meet the increasing demand of customers as well as consumers

2.1.2 Organizational structure

The organizational structure of Habeco Trading One Member Co., Ltd is represented as follows

Figure 2.1: Organizational chart of Habeco Trading One Member Co., Ltd

Source: Habeco’s Annual Report (2016)

The company establishes the system of 9 branches and 7 warehouses (including 1 warehouse under direct management of the company and 6 warehouses under management

of branches), mainly located in the central areas to create favorable conditions for goods and goods shipment

The structure of each branch of Habeco Trading One Member Co., Ltd is also organized as

in the following figure

Figure 2.2: Organizational chart of each branch of Habeco Trading One Member

in the Vietnamese beverage market

The employees of the company have many strong points in comparison with those of competitors The first point is that the management team of the company, all of them are very experienced and dedicated for the common developement of the company, this dominant poin creates more advantages than any other local competitors

Looking at the table below, the proportion of staffs having Bachelor degree is 66.25% which is definitely high compared with other companies operating in Vietnam Some other strong points are the solidarity, high responsibility and passionate attituate of the whole system, that make Habeco Trading One Member Co., Ltd have more and more dominant

factors currently

Table 2.1: Habeco Trading One Member Co., Ltd’s staff qualification in 2018

Degree Number of employees Ratio (%)

Source: Report of Habeco’s HRM Dept (2018)

However, in order to transform to a modern business and gain competitive advantage in an integrated environment, leadership skills of the company‟s leaders still need to be improved to approach international standards Management competences still have a gap,

so there is a slowdown in communicating and implementing the direction from the senior leaders Moreover, training qualifications of staff are inconsistent amongst regions and a great number of staff has not updated knowledge of new technologies so productivity is hampered

2.1.4 Current situation of sales system of Habeco

According to many experts and reports of Habeco, the current sales system of Habeco Trading One Member Company Limited has many limitations which need to be improved The company‟s selling system is not suitable for market situation, market demand is smaller than supply Level 1 distributors are fully involved in the distribution of products

to retail customers, the sales team of Habeco is weak in competency, resulting in the distribution of products which is mostly dependent on the agent system It has not been possible to make the allocation of productive lines leading to the situation of overlap among distributors and they cannot measure the market size accurately In the decentralization between large agents and small agents, longtime agents and new agents, it

is still unable to manage the selling price, which leads to unfair competition among agents, business trust among levels in the distribution system is declining, not creating a hierarchy

of profit levels at the vertical channel The distributors operate ineffectively, so they do not continue to focus intensive investment on Hanoi beer or change the business to other products to cause points of sales who do not care even without goods There are difficulties

in inventory management, container security, retail customers There are no mechanisms and policies that oblige agents in terms of revenue, market share, market development, and

new product development Equally, business agents and many competing products affect Habeco's market share It is difficult to analyze and evaluate market information for commercial assistance programs due to inadequate and timely sources of information, without clearly identifying the focus of the program Each market is in accordance with the existing conditions Deployment of programs is difficult due to the staff management and control of the objects being deployed at present is too ineffective The effectiveness of the sales support program has not been as accurately assessed, and it is not known whether the programs support the right target group Distributors take advantage of sales support programs to depreciate market prices Moreover, the company cannot respond to the competitive information systems of the market and competitors (which help the leaders in making timely and correct decisions in response to the market and competitors) There are

no sanctions, policies to support agents, the company has not developed criteria for selecting agents to create incentives for the operating system The coordination between sales division employees and agents has not been effective because distributor KPIs are not

logically consistent with employee KPIs

2.2 Job descriptions for employees at Sales Division of Habeco

This section mentions functions of Habeco Sales Division, relationships of the Sales Division with other divisions of Habeco and job description of 60 employees working at Habeco Sales Division as follows

 Sales Division’s functions

- Building and maintaining customer relationships including: Identify continually new

sales opportunities to capture potential orders and analyze customer needs, Promote company's beer products, Be responsible for developing sales strategies, develop and maintain good relationship and network with customers, Turn customer demands into business opportunities and drive overall productivity to meet and exceed revenues as well

as profitability targeted, and Maintain and grow customer satisfaction towards beer products

- Completing the offers including: Collaborate with distributors to calculate and build up

the sales and distribution channel system basing on the requirements from customer (Request for Information, Request for Quotation, and Request for Proposal, etc.), Prepare and complete the offers (including equipment, service, transportation, delivery, etc.), and Negotiate commercial contracts‟ terms and conditions

- Supporting during order implementation including: Support and co-ordinate with the

operation team during implementation time if there are changes in requirement or customer

is asking for a modification/enhancement in order; the division is responsible to issue relevant document on a case by case basis following managerial decision

 Relationship of Sales Division with other divisions of Habeco

- HRM Division: The HRM Division is into training, selection, recruitment and motivating

of employees The Sales Division and HRM Division have to work together in formulating policies in establishing policies for recruiting, training, compensating and motivating the sales force Most sales persons are not adequately equipped to service sales personnel's personal problems like leaves, sickness, entertainment, refreshments, conveyance, pensions, safety, health checks etc HRM policies are decided through formal coordination while the routine matters are informed through informal coordination

- Finance Division: The Sales Division helps the Finance Division to arrive at a realistic sales budget by doing a thorough market and customer research Based on the sales budget

a formal coordination of top management happens on deciding the pricing and sales promotions The Finance Division helps the Sales Division in providing credit checks on prospective customers and thus identifies new account acquisitions The salesperson also helps in making collections and securing credit information

The coordination of the Sales Division and the Finance Division happens informally during mutual effort to overcome nature conflicts of interests in credit policy The sales persons generally want to offer liberal terms to the prospective and existing customers while the Finance Division generally do not think in the same way as sales persons Close coordination is necessary for the benefits of both Sales and Finance Divisions

- Marketing Division: The Marketing Division assists the Sales Division to gather data on customer's sales, trends, patterns for analyzing the sales problems and identifying solutions This research is done either through external marketing agencies or by an in-house market research team itself The Marketing Division makes substantial use of computers to generate reports that will highlight the required attention quickly and efficiently The exception reports such as sales persons failing to achieve quotas, sales activities exceeding budgeted expenses, territories in which the competitive position is being lost, customers with declining purchases and product lines having slow movement help the Sales Division to implement quick curative actions Generally both the Head of the Marketing Division and the Head of the Sales Division generally report to the same head for a formal coordination However, the sales persons have a closest informal coordination with the market research staff as every day they need even the smallest information change about the company, customers and competitors

- Production Division: The top management has to decide the infrastructure in the form of systems, processes and people along with the company‟s infrastructure On the sales side, the peak and non-peak time may require the Sales Division to provide extra shifts, strategy

to handle rush, etc

- Advertising Division: The Advertising Division has an important role to play for designing the right marketing information and choosing the right vehicle for taking this information to the target market to stimulate a demand of its prospective customers The activities of the sales persons are planned and directed in a formal coordination method to increase the advertising impact Proper use of the company's market research, research and development and marketing strategy is essential for designing any advertisement that can help the sales person in securing the dealer's support and conserve the sales force time Formal coordination is best achieved by a joint meeting of the Sales Division and the

Advertising Division who generally report to the Chief Marketing Officer

 Job description for Habeco Sales Division employees including: Looking for

customer, research and identify potential customers for beer products; Collaborating with suppliers and distributors to understand customer requirements, to promote the sale of company beer products, and to provide sales support; Developing, presenting or responding to proposals for specific customer requirements with the cooperation and support from distributors and/or related departments of Habeco; Making accurate, rapid cost calculations and providing customers with quotations; Negotiating on price, costs, delivery and specifications with suppliers and distributors; Negotiating commercial contracts‟ terms and conditions; Creating sales or service contracts for products with customers, distributors and suppliers; Consulting with customers after sales or contract signings to resolve problems and to provide ongoing support; and Liaising with suppliers and distributors to check the progress of existing orders

2.3 Required competencies for Habeco Sales Division employees

To identify the required competencies for Habeco Sales Division employees, the author conducted structured interview and in-depth interview with ten people, including: one leader, two managers, three team leaders and four managers of customers

 Step 1: The author produced a list of required competencies for Habeco Sales

Division employees based on the result of research in Chapter 1 and gave it to all interviewees The objective of this step was to select which competencies are important competency for Habeco Sales Division employees and to get their suggestions for

additional required competencies (if any) It helped managers to quickly choose necessary competencies for Habeco Sales Division employees Besides, the author also drafted a list

of questions to in-depth interviewees with the purpose of collecting relevant information, opinions from them Through the open questions, managers can illustrate and give more

ideas about their employees‟ selected competencies

If any competency had five or more choices from ten managers, it was selected into required competencies list for Habeco Sales Division employees The result is presented in the table below

Table 2.2.: Result of manager’s selection

Item Competency Frequency

of choice Note KNOWLEDGE

Suggestion: Understand about customer 10

9

Technological

Suggestion: Capture and constantly update

knowledge of FMCG technology development trends in the world and Vietnam

• Leadership/team management skills 0

 Step 2: After interviewing managers, the author contracted the shortlisted of required

competencies for Habeco Sales Division employees Then, the author asked them define point scale to access Habeco Sales Division employees and the meaning of each scale