Solution for ineffective leadership in cubes Asia

If Cubes Asia salespersons lower the prices to obtain customers, the dealers will complain, but if salespersons don’t lower the prices to obtain customers, they cannot sell in the case t

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Tran Le Hoang Yen

SOLUTION FOR INEFFECTIVE

LEADERSHIP

IN CUBES ASIA

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2018

UNIVERSITY OF ECONOMICS HO CHI MINH CITY

International School of Business

-

Tran Le Hoang Yen

SOLUTION FOR INEFFECTIVE

LEADERSHIP

IN CUBES ASIA

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR PHAN THI MINH THU

Ho Chi Minh City – Year 2018

TABLE OF CONTENT

Executive summary 4

Chapter 1 Company background 5

1.1 Cubes Asia history and organizational structure 5

1.2 Cubes Asia customer and proportion of sales by channels 7

Chapter 2 Problem identification 10

2.1 General symptoms 10

2.1.1 The first symptoms: High employee turnover 10

2.1.2 The second symptom: Increasing employee complaints 12

2.1.3 The third symptom: Increasing customer complaints 13

2.2 Problem mess 14

2.3 Potential problems 29

2.3.1 The first potential problem: Poor employee training 31

2.3.2 The second potential problem: Ineffective leadership from managers 34

2.3.3 Central problem 36

2.4 Problem justification 37

2.4.1 Problem definition 37

2.4.2 Problem existence 38

2.4.3 Problem importance 42

2.5 Cause validation 45

2.5.1 Potential causes 45

2.5.2 Verify causes of central problem 46

Chapter 3 Alternatives analysis and possible solutions 51

3.1 Solutions 51

3.1.1 Proposed solutions 51

3.1.2 Validated solutions 56

3.1.3 Alternative solution sets 60

3.2 Action plan 62

3.2.1 Objectives 62

3.2.2 Time line and cost estimation 63

3.2.2.1 Solution S1.2: Implement dedicated communication skill training programs 63 3.2.2.2 Solution S2: Implement strategic planning 66

3.2.2.3 Solution S3: Apply performance management and control framework 68

Conclusion 71

Chapter 4 Supporting information 72

4.1 Appendix 1: Samples of customer complaints 72

4.2 Appendix 2: Company documents 78

4.3 Appendix 3: Interview transcriptions 87

4.4 Interview guide of interview ground 1 112

References 114

LIST OF DIAGRAMS Diagram 1 - Initial cause effect map 16

Diagram 2 - Updated cause effect map 30

Diagram 3 - Final cause-effect map 49

Diagram 4 – Proposed solutions for Cubes Asia’s central problem 60

Diagram 5 – Solution set 1 components 61

Diagram 6 – Solution set 2 components 61

LIST OF CHARTS Chart 1 - Cubes Asia Organization chart, Feb 2018 6

Chart 2 - Total sales by channel 2016 7

Chart 3 - Total sales by channel 2017 8

Chart 4 - Total sales by channel quarter 1, 2018 8

Chart 5 - Total sales by channel quarter 2, 2018 9

LIST OF TABLES

Table 1 - Annual employee turnover 2014 - 2018 10

Table 2 – Comparison of high and low performing managers 34

Table 3 – Top five characteristics contribute to leadership inefficacy 39

Table 4 – Top five indicators to evaluate leader effectiveness 40

LIST OF FIGURES Figure 1 - Dimensions and categories of negative leadership and its consequences 42

Figure 2 - Dimensions and categories of leadership and its antecedents 45

Figure 3 – Stages of strategic planning process 54

Figure 4 – Performance management and control framework 56

Executive summary Cubes Asia is a young company who develops quickly in recent years However, due

to spending time to focus on sales and marketing, it is facing with several issues relating to personnel, customers, management system The research includes three important parts Firstly, it comes with the company background for readers to understand the company history, its customers, staffing, sales as well as the industry, the market Cubes Asia is in Secondly, the researcher identified problem through interviews and theories, it is found that the company is facing with poor employee training and ineffective leadership However, ineffective leadership has significant influences through most of variables Furthermore, the research presented the valid causes leading ineffectiveness leadership including personal traits of the boss, misuse of power from managers, poor communication between managers and employees, lack of financial and human resources, lack of strategic business plans, lack of internal and external control with the company context to contribute in later solutions Thirdly, there are solutions proposed and confirmed by employees through quick survey The alternatives plan are analyzed and presented which is a combination of developing communication strategy, implementing strategic planning and applying performance management and control framework The plan comes with total budget of 228.140.000VND in the duration of 3 months for training programs, 1 month for strategic planning and nearly 1 month for applying performance management and control framework

in Cubes Asia This total cost is feasible with the company who gained turnover of 54 billion and profit margin of approximately 30% in 2017 Furthermore, the ineffective leadership causes losing 3 key customers which contribute 2 – 3 billion per year, losing money, business information and low productivity due to high employee turnover rate (over 25% through years)

The presentation above support the readers have an overview on contents of this research From the work has been contributed, the full name of the study is "Solution for

ineffective leadership in Cubes Asia"

Chapter 1 Company background

1.1 Cubes Asia history and organizational structure

Cubes Asia was established in 2013 who specializes in distributing the top known European coffee machines and grinders such as Melitta, Nuova Simonelli, Victoria Arduino, Animo, Cunill, Schaerer, Lelit etc Besides, the company also provides other related products such as coffee, blenders, juicers, water systems, milk frothers, etc to make

well-a coffee competence thwell-at meets well-all customer demwell-and The compwell-any is the pioneer in the field of trading professional coffee machines in Vietnam Its mission is to provide excellent products to enhance the quality of living, and we pride ourselves in customer satisfaction and faith

Cubes Asia has built up a head office in Hochiminh (2013) then its three showrooms

in Hochiminh (2016), Danang (2017) and Hanoi (2017) until now and it is expected to expand to other regions such as Nha Trang, Phu Quoc – all are potential markets to trade its main product line However, Cubes Asia is a small company that has over 40 employees

in total until now The head office is responsible for all decision of the company as well as the main venue to take place most of training courses, official events, monthly meeting etc The company’s competitors who are also coffee machine distributors but from other manufacturers are Perfetto, Epicure, Quang Tan Hoa, Charles Wembley etc Among its competitors, Cubes Asia is considered as the leader of coffee machine distributor in Vietnam due to be pioneer and its high quality products Cubes Asia has a national presence, being in many areas around Vietnam by distribution system through dealers and agents: roasters (Shin Coffee, LaViet, Laha Coffee, Trung Nguyen, Cau Dat Farm, etc.), dealers (Phuong Binh, Tam Long, Meta etc.), Modern trade (Thien Hoa, Nam An etc.), Ecommerce (Yes24, Tiki, Sendo, Lazada etc.), Private agents (Barista, individuals, etc.)

At Cubes Asia, most of decision is made by top managers who are founder, business development manager and company development manager In fact, the founder (boss) is always the person to make final decisions which are managerial, operational and business and other managers are those who implement and execute the boss’ decision In near future, the company expects to have complete organizational chart indicated as below:

Chart 1 - Cubes Asia Organization chart, Feb 2018

*(NN) means not yet available

1.2 Cubes Asia customer and proportion of sales by channels

Cubes Asia target to both B2B and B2C customers who are resellers, agents, corporates, hotels, resorts, restaurants, coffee chains, coffee shops, households, individuals Among the company’s customers, it can be counted the most important coffee chains, hotel and restaurants as well as many other customers the company served around Vietnam such

as The Coffee House, Trung Nguyen, Twitter Bean Coffee, Laha Coffee, Aha Coffee, Heritage Line, Khanhcasa, Caudatfarm, Hella, Piza 4P, Golden Gate, Novotel, Sol Beach, Part Hyatt, etc

In general, B2B customers account for the overwhelming proportion of B2C customers The data of sales by channel from 2016 – 2018 is described below showing that B2B customers (Dealers, Roasters, Chains, HoReCa etc.) place extremely important role in the company turnover than B2C customers (Coporate, retails, showrooms, individuals) There are differences in the name and the way in dividing channels because the demands

of splitting or merging sub channels by the time

Chart 2 - Total sales by channel 2016

Dealer31%

Horeca31%

Corporate14%

Retail16%

SR8%

Chart 3 - Total sales by channel 2017

Chart 4 - Total sales by channel quarter 1, 2018

Dealers 40%

Dealers46%

HoReCa17%

Chains8%

Chart 5 - Total sales by channel quarter 2, 2018

Dealers/Roasters52%

Hotel Appliance Dealers

1%

Coffee chains12%

Hotel Chains

1%

HoReCa17%

Pro kitchen supplier

Chapter 2 Problem identification

2.1 General symptoms

Several in depth interviews were taken place to have ideas about what the company

is facing and need to be improved The information is collected from both current employees and former employees who are:

 Ms Sam Duong – Current Marketing Executive

 Mr Duy Nguyen – Current Marketing Executive

 Ms Loi Nguyen – Current Accountant

 Ms Tien Le – Former Senior Sales Executive

 Ms Nhi Nguyen – Sales Executive

 Mr Duong Nguyen – Former Head of Central Retail Office

 Ms Trang Nguyen – Current Sales Admin

 Ms Vy Do – Current Sales Admin

There are several key performance indicators (KPIs) which cover financial, customer, process and people metrics (1) In this research, author focus on 3 KPIs including Employee Turnover Rate (ETR), Employee Satisfaction, Customer Satisfaction and Retention 2.1.1 The first symptoms: High employee turnover

There is a clear and impressive symptom that Cubes Asia is dealing with significantly high employee turnover rate It is always at much higher level compared with the industry (about 11.9% in trading industry (2)) or even other closet competitors (15 – 20%), (acquire from available relationships in competitor’s company) Below table shows the employee turnover from establishment until now:

Table 1 - Annual employee turnover 2014 - 2018

Up to July

2018

People left through period 1 1 1 4 1

Why is employee turnover important? “It’s not who you hire that counts, it’s who you keep” (3) Employee contributes in success of a business because they create long-term competitive advantage Employee turnover cost can range from monitoring, evaluating factors that impact it, managing its probable costs in term of human and capital resources Furthermore, high employee turnover may lead to negative effect on organization’s information and knowledge, recruitment and training costs and performance of remaining employees (4) If we put losses of high turnover in broad categories, it can be mentioned following (5), which are:

 Costs of recruitment

 Cost of selection

 Cost of covering during the period in which there is a vacancy

 Administration costs of recruiting and selecting process

 Induction training for the new staff

Based on the literature, the researcher took interview of Huong Nguyen, Human Resource Executive, which shows many negative influences to the company due to high turnover rate which are summarized as below:

 High cost of time to recruit and train new employees: HR team spend over 40 hours/month, supervisors spend nearly 25 hours/month and 15 hours/month for co-workers

 Cost of job advertisement and hunters: The company usually pays 3 – 4 million VND for job advertisement and hunters to find new candidates

 High cost of management or handling the former’s documents and new employee documents, for example insurance issue, that may cost travelling expenses, time, printing cost, et

 High separation costs: cost of increase of unemployment tax, cost of administration function, cost of terminating the employee, cost of exit interview, estimated nearly 2 million VND per employee

 Negative effect of job handover: there are some comments that the organization’s information, knowledge and even assets missing after job handover

 Negative impact to current employees: all employees at the base level expressed that they felt unstable environment and shortage of motivation when more and more people started to leave the company

2.1.2 The second symptom: Increasing employee complaints

Employees in Cubes Asia are most likely unsatisfied with the job they are doing, not only due to their responsibility itself, but also due to board of directors and employee relationship Employee satisfaction is essential to the company (6) that it contributes to productivity of the employees that relates directly to employee’s performance, organizational commitment of employees and “cohesiveness of workers for sustainability

of achieving the organization’s goals” The company with low employee’s satisfaction may lose its competitive advantages – the talent employees who leave the company, and result

in further crisis besides the economic disorder Furthermore, proved that employee satisfaction meaningfully relates to business outcomes (7)

It’s interesting that none of them expressed dissatisfaction with the compensation they receive from the company There are complaints from all interviewer interviewed which are:

 Ms.Sam – Marketing Executive at Cubes Asia mentioned that some people were waiting for favorable opportunities to leave the company and they didn’t intend to stay with the company for long-term

 Ms.Vy – Sales Admin expressed that she lacks motivation for work, sometimes she just wanted to stay at home, didn’t want to go for work

 Ms.Sam, Ms.Vy and Mr.Duong - Former Head of Central Retail Office agreed that they didn’t see that people can develop themselves with the company, or see their future and company future as well when working at the company People didn’t understand what they are doing for and why they have to do so, no direction, no strategy

 Furthermore, Ms.Nhi – Sales Executive addressed that people were not supported well with their job and there was an unfair treatments from managers to staff

 In Ms.Sam,Mr.Duy and Ms.Nhi opinions, people in the company were tired to do one job for more once, they were required to re-do the job as the boss’s requirement and ideas

 According to Ms.Trang – Sales Admin, there were persons who were stressed to deal with other people in the company in some situations

Though the collected data, there is a need that company should pay attention to its employee satisfaction to improve its performance as well as employee intention

2.1.3 The third symptom: Increasing customer complaints

Many researches show that customer satisfaction positively influences company’s profitability Moreover, there is a positive correlation among customer satisfaction, loyalty and retention, whereas, customer dissatisfaction is main reason of discontinuing repurchasing from customers (8, 9) If the customers are dissatisfied with a company’s product or service, they possibly decide to discontinue purchasing product or service, complain to third party or to the company and communicate negatively worth of mouth (10)

People reported that customers at Cubes Asia are not taken good care of its customers The company receives a lot of complaints (appendix 1) and there is a record that customers who left company are significant According to Ms.Trang, Ms.Loi and Ms.Nhi, the customer complaints are considered as serious issues that the company needs to pay attention They assumed that the customers are unhappy with the service and this issue impacts on the long-term sustainable development of the company The departments know customers’ reaction are sales, admin, technical and accounting department Customer complaints are evaluated to increase more and more both wholesale and retail customer:

 Mr.Duong and Ms.Loi agreed that customers call in the company, they don’t talk directly with salespersons or technician or customer service executive There are too many phone number to contact, 3 hotlines for 3 showrooms, 2 hotlines for 2 office salesperson, 1 hotline for technical, 1 hotline for sales admin, 1 hotline for Barista trainer, 4 landlines for head office and 3 showrooms Customers don’t know which phone number they should contact so they usually call in the head office, then the HR executive answer the phone call and note their problems to transfer related department after that

 Three interviewees, Ms.Nhi, Ms.Loi and Ms.Trang have the same opinion that some customers cancelled contracts due to not timely delivery and poor customer service

 Furthermore, Ms.Trang addressed that customers have to wait 3-4 days for their problem resolved after continuous calls, “This is very popular even customers in Hochiminh still have to wait several days as a routine In other competitors’ company, their technicians have to do overtime and on the weekend If customers need to fix the machine, they almost immediately are being their place I think this is very important point because customers are selling coffee, if the machine goes wrong or was broken that will interrupt the business very much”

 Most of customers complained poor service instead of products Some key customers (dealers) complained unclear information or they are not informed essential information from salespersons (appendix 1)

To dig deeper on this issue, author create initial cause-effect map from interviewed information which is showed in next part

2.2 Problem mess

Being aware what is happening to the company, author firmly takes the employee turnover rate, employee complaints, customer complaints in consideration and want to find out the potential problems Cubes Asia is facing with

The initial cause-effect map is built up by several researches with employees in Cubes Asia The study used primary information through qualitative research by conducting in-depth interview on 8 employees who are both current and former employees of the company This study aims at current and former employees because firstly, they worked

for the company at least 6 months and they understand the operation and management system, secondly, the research may concern the reasons why employees left company so it’s essential to know the opinions of former employees In addition, this research mostly looks for employees who work at Ho Chi Minh city because over 70 percent of employees work at Ho Chi Minh and it’s easier to reach them (there are one employee who used to work for Cubes Asia in Danang city) The in-dept interviews are done by face to face interviews (6 interviews) and telephone interviews (2 interviews)

The in-depth interview was semi structure and divided into 2 main topics: the factors that satisfy and dissatisfy the employees and what the customers complained about and why For the in-depth interview with the topic of employee satisfaction, it focuses on main aspects: Needs of employees, work environment, responsibilities, supervision, fairness and equity, effort, employee development, feedbacks For the topic of customer complaint, author focuses on customer experience who are mostly dealers, B2B customers under viewpoint of Cubes Asia employees

It is exposed typical points through interviews with current and former employees of Cubes Asia, which are:

Diagram 1 - Initial cause effect map

 Inappropriate actions from dealers:

- Unsystematic pricing from dealers: Dealers (wholesale customers) are applying different prices of the same products to attract retail customers Therefore, the company received complaints from both retail customers and employees Firstly, the retail customers complained that Cubes Asia always said it was the exclusive distributor of Nuova Simonelli, Melitta but its offer prices were higher than other companies (wholesales customers of Cubes Asia) Secondly, salespersons said that due to the difference prices, they meet difficulties to compete with the dealers in selling products If Cubes Asia salespersons lower the prices to obtain customers, the dealers will complain, but if salespersons don’t lower the prices to obtain customers, they cannot sell in the case the customers research prices and have many quotations from different companies Furthermore, if the whole seller continue lowering the prices to compete each other like this, they will distort the market, Mr.Duong said

- Dealers disclose different discount scheme to each other: Dealers talk with each other about the discount percentage they receive from Cubes Asia For example, Phuong Binh Group (dealer) share discount information with The Married Bean (dealer) that they receive higher discount from Cubes Asia This results in The Married Bean complained why they receive less benefit than other dealer while they have worked with Cubes Assia for a long time, Ms.Loi mentioned With this case, it possibly demotivate dealers who receive lower margin per products Moreover, it’s a tricky that some dealers they want to monopolize the market by kicking other competitors out like Phuong Binh Group

- Lack of hotline switchboard: there are too many hotlines and landlines that confuse customers and the company also don’t have hotline switchboard for customers to contact asking the service, as Mr.Duong, Ms.Loi shared in the interview The customers usually directly call head office, meet HR department, HR department record information and concerns, then, pass to related department The customers complained they can’t reach directly technicians because they don’t have information to contact them Therefore,

customers have to wait for technicians call back or even at peak time, technicians forget to call back customers so the customers are very distasteful with it

- Late machine installation and repair: customers have to wait for long time to get machine installed and repair The technicians usually let customers wait for 2-3 days or longer although the customers wish machines fixed as soon as possible for continuing selling coffee for their guests, as Ms.Trang shared in the interview This situation is more serious for customers who are located at outside of HCM, for example, there is a customer

in Dalat had to wait 5-7 days for getting machine fixed

- The company staff don’t act as their promises: The promises come from technicians and salespersons who directly work with customers For technicians, sometimes they promised customers that they would come their place and check the machines but they didn’t (Ms.Trang, transcript, appendix 1) Besides, some customers called in company and asked technicians instruct them descale and clean machine system through telephone but the technicians didn’t, they blamed for busy times For salespersons, they promised customers that the machines would arrive, for example, in 2 weeks, but finally it arrived late than 2 weeks The reasons can be objective, due to unexpected delay from manufacturer

or the longer shipping time, rarely due to salespersons’ subjectivity (Ms.Trang, Ms.Nhi, transcript)

- Salespersons don’t well serve customers: Some salespersons don’t inform new products and promotion to dealers, as Ms.Loi, Ms.Sam said in the interview For example, the case of Phuong Binh – Biggest dealer in Hochiminh, salesman taking care this wholesale customer didn’t inform them about new supper automatic machine and promotion for dealer Besides, the company has policy to give congratulation flowers on grand opening day of customers who are coffee shops but the some salespersons don’t offer this gifts to their customers, Ms.Loi assumed

- Technical service commonly doesn’t support customers on the weekend or overtime like other competitors, Ms.Trang addressed: technicians of other competitors are resumed that they are always available for anytime customers need for better and quicker service but Cubes Asia’s technicians don’t The technicians almost don’t come to customers’ place on

weekend or overtime although this is the peak time of their shop (coffee shop customers), they truly need technical support to repair the machine as soon as possible as Ms.Loi shared

in the interview When machines of customers have problems, salespersons call technicians for help but they don’t agree to come customer’s place or say “busy” The customers don’t receive support immediately or the salespersons have to ask other outside technicians depending on salespersons’ relationship, Ms.Nhi said

- Technicians are not friendly with customers: technical service is important part of customer service in and after selling Technicians are evaluated who are not friendly with customers and receive not good feedbacks, Ms.Trang and Ms.Nhi had same opinion There were the cases that the customers asked for changing another technician for next time service The customers said that they didn’t want nasty technician to install or repair the machine at their place

- Policy for special offer for dealers for holiday: there is no special offer for dealer on holiday like other companies so the employees also receive feedback from customers why they don’t receive special offer for special events or why don’t support them with their events

- Conflict scheme discount between wholesale sales and retail sales: the company do market by targeting not only wholesale customers but also retail customers that causes conflicts between discount percentage for wholesale customers and for retail customers (Mr.Duong, transcript) Because the retail customers and wholesale customers both receive discounts so the wholesale customers usually complain that if Cubes Asia run promotion for retail customers, it will affect their profit because they have to run promotion as well to compete A solution the company does is it offers extra discount within a short time for dealers when it run promotion for retails customers However, this solution is not working well because the time dealers receive extra discount is too short and margin they receive too low and they are not satisfied with that Moreover, if a salesperson of Cubes Asia deal with the same customers who are taken care by dealers, the salesperson has to give up these

customers for dealers, as Ms.Nhi mentioned Salespersons are not allowed to compete with dealers because the company wants to establish the good relationship with dealers

- No policy for dealers in pricing products: there is no policy to require consistent and transparent pricing of dealers (wholesale customers) Therefore, they put different prices

on their website or they deal with their customers at different prices than original one to compete other companies

- Unstable policy for dealers: the policy for dealers have changed quickly so salespersons expressed that they couldn’t catch up with all new policies, Ms.Tien shared The employees in the company couldn’t adapt quickly new policy, so do the customers The customers are confused with different policy, some other customers didn’t agree with new policy so they complained back to the company For example, the new policy of extra discount is mentioned before

- Inconsistent policies for all dealers: different dealers are applied with different discount frame which depends on the purchase history and agreement between salespersons and dealers The salespersons most likely to offer as less discount as possible because it affects their commission, as Mr.Duong asserted For example, they can offer 30% discount for the same position customers, such as customer A and customer B However, if customer

B agree with 28% discount, the salespersons will apply this rather than the maximum discount they can It takes a lot of working effort to manage all dealers with inconsistent policy because it is not only on paper work but also the technical service for dealers’ customers and payment term

- Unclear strategy communication: Employees don’t know much about strategy of the company, even they don’t hear anything about company vision, goal, this is the opinion of Ms.Sam, Ms.Vy and Mr.Duy Therefore, they don’t know why they should do the job and what the company get from their contribution Furthermore, Ms Sam said that due to lack

of directing strategy, employees don’t see they can develop themselves and who they are

in the future

- Unclear direction from the boss: When employees are assigned a task, they usually don’t receive the direction from the boss, for example, what he wants them to do Because

of unclear direction, the employees often do one tasks several times if it’s not suitable with what the boss actually want Moreover, the boss changes his mind too many times so people

is stress to follow his idea without much argument, as Mr.Duy, Ms.Sam, Ms.Vy told in the interviews

- The customer allocation is uneven among sales team: Most of customers are been in charge by a leader who works as sales manager, as product manager and as technical department head This situation happen after former salespersons left the company, they handed over the jobs and their customers to the sales manager for later allocation to new sales staff However, this manager didn’t re-allocate the customers of former salespersons,

he took over all these customers and the new salespersons have to find new customers in competitive market (Mr.Duong, transcript) This action results in 2 main consequences First, the new salespersons lose motivation because they feel unfair treatment Customers are divided by channel which means each salesperson has to take care and report 1 channel and they have the responsibility to their channel However, they don’t receive the benefit

of old customers in their channel Second, because one person takes care too many customers, he cannot support them well and result in poor customer relationship as Ms.Trang and Ms.Loi expressed through the interview

- Imbalance human resource in different channels: Customers are divided by channels, not by regions, which include Coffee Chains, Dealers, Ho.Re.Ca, Offices, Convenient Store, Modern Trade, Hotel Chains, Ecommerce, etc while Dealers counts for highest turnover and Modern Trade/Ecommerce count for lowest turnover, each channel is taken care by one person (Ms.Loi, transcript) It causes the different sales in the end of every month and too different commission salespersons receive in the end of month because there

is person who can sell a lot, on the other hand, there is also a person who cannot sell anything A true story from the salesperson who is in charge of Hotel Channel that Cubes Asia recruited people handling this channel but there were 2 people “come in and come

out” due to poor sales result Some people don’t need to do much effort, they still meet the assigned target on their potential and lucrative channel, other people are struggling with their difficult channel to get sales

- Ms.Trang and Ms.Nhi thought that the sales manager don’t comply machine delivery policy: the company has policy that requires customers buying big machine to deposit at least 50% before delivering but he delivered machines to his key customers even no any deposit in advance For other salespersons, they cannot do that The problem is the manager asked warehouse team deliver to customers without informing sales admin and accountants (usually, accountants don’t let warehouse team deliver machines to customers if the company haven’t received deposit, Ms.Trang asserted) The consequence can be very serious that firstly, the company cannot collect the money from customers because machine delivers without confirmed delivery note by sales admin and secondly, it causes the deviation of the data in the accounting book and the real stocks at the warehouse Other salespersons feel unfair, chagrined and lose their motivation, they see the sales manager doesn’t deserve to be a manager, Ms.Nhi assumed

Salespersons don’t comply discount scheme for customers: salespersons apply different discounts with different customers, especially, sometimes they offer a discount which is out of the sales discount scheme of the company by making special requests and have managers sign in However, due to too many different discounts for different customers, it’s hard to manage later on and everything goes unsystematic

- There is KPIs for departments except sales department: Sales department has sales target to evaluate the effectiveness but other departments don’t have KPIs to evaluate Furthermore, the company doesn’t have bonus and penalty policy if the staff do wrong some things, Ms.Vy, Ms.Sam shared through the interviews Hence, the employees lose their motivation because of lack of recognition

- No transparent performance measurement: Due to lack of KPIs, the company doesn’t have transparent performance measurement At the end of the year, employees receive a

form to evaluate themselves but they don’t believe it’s valuable to the boss They don’t know which measuring method the boss bases on to judge them and why they receive that amount of bonus different from others’, Ms.Sam and Ms.Vy had same idea All things they know is the boss have a meeting with Mr.Phong – As the sales manager/ the product manager/ the technical department head – to evaluate each person in the company

- The boss too concentrate on details: Ms.Sam and Mr.Duy assumed the boss too pay attention to the details rather than the whole situation that makes employees stressed and prolong the time to finish job The employees though that they should have the power to decide by themselves and be responsible for these details

- Employees have high position without essential power: Before, special requests of salespersons was signed by the boss However, the sales manager used to write an email to ask the boss the right to approve these all special request and other related problems with the reason that he was the sales manager Currently, sales promotions have also been approved by the boss with very little participation of the sales manager However, due to sales promotion of which purpose is to push sales, the sales manager should be the most important person to involve in this case

- Non-listed responsibilities: Some tasks are not listed into job description in labor contract but the employees have to do if they want to smooth their work, this opinions showed in the talks of Ms.Sam, Ms.Vy and Mr.Duy For example, when Mr.Duy – Marketing executive – was recruited, the HR department and on the labor contract address that Mr.Duy is in charge of content marketing However, when he official works for the company, he has to take over the website management, fanpage management, video production as well

- Mix-up responsibilities among people: Some jobs are finished by people who are not responsible for them, Ms.Vy said For example, all salespersons need to inform customers

of promotion but some of them didn’t so the boss asked marketing department is in charge

of informing customer about this information, Ms.Sam and Ms.Loi shared in the interviews

Another example, POS and CRM system are responsible by sales admin team but for loyalty program and updating some information, the boss asked Marketing team do because

he don’t believe sales admin team will do well

- Ms.Sam, Mr.Duy, Ms.Nhi asserted that employees addressed that the company doesn’t have clear workflow and detail process so the responsibilities of each person are

not exactly same with what is listed in their job description

- There is duplicate tasks which are done by different departments such as organizing party (Marketing and Human Resoure Department), product comparison (Product development manager, Marketing department), POS (Sales admin and Marketing), promotions informing customers (Sales and Marketing department) etc This leads to one person push responsibilities to other person, finally, no one do the job Furthermore, the

resource of the company will waste a lot if too many duplicate tasks are among departments

When asked further information, the interviewees addressed more considerable points that leads to above issues, which are demonstrated as below:

- There are only 2 technical staff in HCMC – the biggest market of the company (exclude the technical department head) The technicians place very crucial role in customer service part because they are not only the ones to install the machine but also check the machine every 1 month for each customer in their valid warranty period Therefore, people considered that 2 technicians for the big market is absolutely not enough and need to recruit

more for better customer service, through Ms.Trang and Ms.Loi’s talks

- The technicians also have to travel in other provinces, such as Phu Quoc, Da Lat, Binh Duong, Can Tho etc if salespersons sell products to customers living there The problem

is the coffee machine is a big equipment and it requires to set up with particular electric power, particular water system into the machines With very technical products like that, the customers cannot do by themselves the installation or repair the machines Certainly,

travelling takes a lot of time

- Customer service department are the team to handle all customer’s concerns, support them quickly and effectively Furthermore, they are the bridge between the technicians, salespersons and customers who make sure all information is transparent and effectively transmitted All customers’ complaints will be resolved Customer service department is responsible for tracking technicians’ schedules so they don’t miss the meeting with customers Moreover, they are the people to check the customer satisfaction with the products, customer care attitude of technicians and salespersons Thereby, it increases the

satisfaction of customers to the quality of service of the company

- In the past, no one or no department controlled number of call-in customers, number

of customers resolved, number of customer’s sites technicians need to go, number of

finished installations or pending etc When interviewed, Mr.Duong also expressed the concern that the company didn’t have the department to take responsibility for that part

- As Ms.Trang shared, the company has taken this issue into consideration and tried to employ someone managing jobs relating to customer services However, there were 3 turns that people came in then came out because they are not well trained, didn’t receive sufficient support from sales and technical department and the company didn’t establish documents

or procedures for this department

 Poor sales and technical skills:

- Salespersons at the beginning have poor understanding of products and markets, don’t know clearly how to use machines, different types of machines and different brands on the market from other competitors, as Mr.Duong addressed Moreover, Ms.Nhi revealed that they don’t know the processes to work with technicians, admin or accountants so sometimes they mix up and take longer time to finish the job

- Salespersons are poor problem solving skills when dealing with customers: As B2B sales admin, Ms.Trang expressed that salespersons don’t react well in answering customer’s complaints or requirements when machines go wrong so sometimes customers ask the company to change the consultants This issue directly impacts on customer satisfaction because salespersons are the ones who work with customers firstly

- Weekend technical support: the company should apply technical support for weekend and evening like other competitors, this is what Ms.Loi, Ms.Nhi and Ms.Trang mentioned, because that time is the peak time of a common coffee shop, the probability of machine broken is very high The broken machine will affect very much customer’s business because they don’t have alternatives and also cannot repair machine by themselves

- Not attractive compensation for technician to travel outside of HCM and to work overtime: the benefit technicians receive only the extra annual leave so it’s not enough attractive for them to be willing go far from HCM The reason of not taking care of far customer site or at the weekend is possibly the compensation, as Ms.Trang assumed

- Ms Sam and Ms.Vy assumed that it is lack of appropriate reward and punishment for policies applied to employees For example, there is no policy for technicians who answer/come to customer’s site quickly or late They don’t have any benefit when they do well or any penalty when they don’t fulfill their responsibility

- For dealer policies, as mentioned above, the policies are determined inappropriate because company doesn’t have policy for special offer for dealers for holiday, there is conflict scheme discount between wholesale sales and retail sales No policy for dealers in pricing products: there is no policy to require consistent and transparent pricing of dealers (wholesale customers) Therefore, they put different prices on their website or they deal with their customers at different prices than original one to compete other companies, unstable policy for dealers and inconsistent policies for all dealers

- There are records from the interviews showing that the communication between managers and employees is not good, specifically, in generating policies and direction, strategy communication Mr Duy, Ms Trang and Ms Sam suppose that almost all policies are issued and made decision by managers without communication or researches from employees Therefore, it makes some policies inappropriate As a salesperson, Mr.Duong and Ms.Tien assumed that the policies for dealers are not appropriate and cause unexpected consequences For example, different discount schemes for different dealers cause

confusion and problems in management later on; there is no regulation for dealer to set the retail prices when they resell products etc

- Ms Tien and Ms Nhi who are current and former sales in Cubes Asia and also work with dealers closely determine the inappropriate dealer policies cause difficulties when they sell products Although they are sales and they know market well, they haven’t been asked

or researched the opinion for new policy issues Furthermore, some of policies, such as policies for dealers, are changed too frequently that not only dealers cannot catch up with but also the salespersons, as Ms Tien expressed Besides, Ms Trang and Ms Nhi reported that the technical policies are not reasonable when technicians don’t support customers on weekends like other competitor’s technicians However, they were not likely willing to express their idea, difficulties and situation to managers

- When being asked whether employees actively voiced out their opinion or not, some said “Yes” and others said “No” This issue also indicated the communication between managers and employees are not good and effective in order to create reasonable and inappropriate technical and dealer policies

- Sales manager favor his customers: He sells products and is taking care so many customers Because this manager is also technical department head, he has the right to assign technical staff to work on the weekend or work overtime His customers are better treatment than other salespersons customers that they can receive support from technicians

on the weekend or in the evening, out of working time, Ms.Trang and Ms.Nhi presented Furthermore, the technicians put this manager’s customers on first priority, not the same treatment with other salespersons’ customers There is a situation that in the beginning, the technical department received a request from one sales member to fix his customer machine, but when technical staff received other request from the manager’s customers after that, they moved the initial’s schedule later and resolved manager’s customers first Ms.Nhi said

- Machine pre-order, machine arrival information: the information of machine arrival wasn’t shared to all employees, Ms.Trang told As certain, salespersons are those who

extremely need to be aware of this information to consult customers and build up their own selling plan Besides, sales admin also should be informed of this information because they are the persons dealing with customers on contracts, delivery day etc The product development manager (also as sales manager, technical department head) knows this information but he didn’t share information with his sales team, and, purchasing department also don’t officially inform people about machine buying and arriving schedule, Ms.Trang mentioned The reasons are possibly the product manager is too busy or he actually doesn’t want to share other salespersons because he is afraid other people will book machines in advance for their customers right before him, and he doesn’t have any machines to sell after that For example, the recent order included 36 big coffee machines but 32 machines of them are booked by him because other salespersons don’t know much about how many and when the machine arrive so they cannot book machine soon On the other hand, the interviewee exposed that there is also salespersons booking the machine with warehouse team but when machines arrived, warehouse team blame these salespersons don’t book official on email so they don’t keep machines for them However, there is no evidence that the product manager/sales manager/technical department head had booked 32 machines by official email with warehouse team before (Ms Trang, Ms Nhi, transcript) Hence, only 4 machines left that’s for remaining 11 salespersons at that time

- The boss changes his mind so quickly and frequently, Ms.Sam, Mr.Duy, Ms.Nhi have same opinions, for example, the way to break down channels change many times and the allocation of sales channel as well There is interesting problem that although sales A is in charge of channel A, all she has to do is reporting for that channel, taking care of current/old customer in that channel but she doesn’t receive commissions from that channel – most of customers are belong to sales manager, Ms.Nhi addressed

- The boss sometimes assigns tasks or potential customers directly to person he wants (not by sales in charge channel) This also discourage salespersons who is in charge of that channel because they feel it’s unfair Or, this distress those who have to do that jobs which they are not responsible for In other words, they have to cover the tasks of other persons and have to take responsibilities for that, Ms.Sam said

- The boss involves too much in detail job content but he doesn’t emphasis on communication of the strategy, the whole picture, as Ms.Sam, Mr.Duong mentioned Usually, the arguments of employees are not accepted and all people have to follow him, Mr.Duy said

- People said that the boss make emotional decisions of the performance evaluation as Ms.Sam, Ms.Vy assumed The bonus of end of year is mainly depended on his feeling about

a person, there is unclear criteria to evaluate employee’s performance

- Delegating is about assessing employee strength and weakness, allotting resources for employees, evaluating employee performance, teamwork, matching the tasks to the right employees, trust in employees etc (11) At first interview, Ms.Vy mentioned that the boss

is biased when he appreciates persons as his feeling He treats differently from people to people, for example, customer allocation for salespersons, bonus or job assignment and this

is coming from part of the trust Specifically, the employees evaluate themselves through

an available form of the company However, the boss re-assessed them by a meeting with sales manager/technical department/product manager and makes decision The employees don’t understand the results of performance measurement

- Looking another aspect, the boss doesn’t trust employees so that makes him set inappropriate empowerment That mean, employees have high position without essential power, as mentioned above Besides, there are some tasks that the boss assigned unreasonably as Ms.Sam described, for example, she sometimes had to handle admin staff’s tasks and HR’s tasks

- Besides, as description above, the workflow and process are unclear Although there

is documents listing the job descriptions for employees, there are few documents demonstrating the workflow and process Therefore, some tasks are duplicated and some other tasks are not handled

2.3 Potential problems

After first interviews, researcher verified the map with theories and confirmation from the staff The updated map is demonstrated as below:

Diagram 2 - Updated cause effect map

2.3.1 The first potential problem: Poor employee training

In Obisi’s opinion (12), training is the process of enhancing and increasing employee’s skills, competences and knowledge Thence, the training make employee perform more effectively and productively (13) They address that it’s easier for the new employees to do well jobs and become leaders if they receive effective and sufficient training and development

The “training” and “development” are usually considered as an integration of which composition conceptualization is any activities growing skills, behaviors, knowledge They include both formal and informal training as well as shadowing, coaching and mentoring (14).

There is a close relationship between the employees perceived effectiveness of training and job satisfaction, motivation and commitment which affect directly the company’s performance such as sales turnover, productivity and absence (15) Besides, it

is proved that the effectiveness of training programs can decrease the employee turnover (16). Formal training program directly imparts on employee productivity Employee training influences on job satisfaction and from then, on intention to stay with the company

As a result, Ms.Trang agree that the company had missed its new employees in the position of customer service executive due to poor employee training

According to several researches, the training effectiveness can be evaluated on four levels (17,18) including:

 Level 1: Reaction

The term of reaction mentions how employees feel about the training program which

is about trainer, schedule and topic In other words, it’s about the satisfaction of employees There are two reasons that managers would like to know participants’ reaction: to ensure people interested in learning and motivated and to make appropriate training decisions if there is any need to change training program

 Level 2: Learning

The measurement of learning focus on the difference of skills, knowledge and attitude

of participants before and after training Depending on the purpose of the training program, the course can concentrate on only one of above aspects or all aspects

For Cubes Asia, the training effectiveness has evaluated under the scales of the four levels through real stories of interviewees:

- Ms Nhi in sales department mentioned that the training is very general that she was not trained about the procedures how to work with other related departments who supported her in selling products Therefore, in the beginning she didn’t know how to resolve a customer’s complaint although she was trained with sales manager before In her case, she stood in the middle between customer and technicians when the contract of customer is still valid but the technician charges customer maintenance fee It comes from the very general training with product knowledge only Due to lack of knowledge and skills, Ms Nhi didn’t well resolve customer’s concern and had to apologize customer, promised them for better future service The reaction of customer is very serious, he said “I will not buy your company machine anymore” The company actually lose this customer – Kofi Kai due to low quality of customer service For another example, Ms Nhi also missed a deal because she didn’t pre-book machine with right person (pre-book machine before it arrives) At the beginning, she offical sent email to Mr.Hien – storekeeper However, when machine arrived, Mr.Hien said to Nhi that she needed to send email for Mr.Phong – sales manager, not him Finally, she couldn’t have machine to deliver to customer although her customer deposited 2 month ago because all machines were booked in advance We could say, for the shortcoming of essential knowledge and skills, Ms.Nhi performed lower productivity

she could and that affects her sales Besides, she suggested that the company needs to frequently train salespersons because the company often has new products

- Ms Sam in marketing department address that she is not trained when start working for Cubes Asia, she needed to learn by doing the job so at the beginning, she somehow struggle with her job and it takes her a lot of time to learn all things She complained there

is no person mainly responsible for orientation, skills and knowledge training She feel that she cannot develop herself because there are very few development opportunities so she doesn’t want to stay for long time with company Furthermore, she also confirmed that if the people working in the company are ambitious, they will most likely leave the company, except some people have personal plan at that time She also shared other people’s story in the company The case of technical department head trained customer service executive, didn’t well do his job to instruct and guide her, let this person isolated so two new customer service executives had left the company According to Ms.Vy – Sales admin – she also agreed that there is almost no opportunity to develop herself when working at Cubes Asia because the company only trains employees one time and doesn’t have further investment for enhancing employee’s skills and knowledge Therefore, she also believed that she doesn’t commit to the company for long time but now, she doesn’t know what to do Due

to personal reasons, she still works for the company In the case of Ms.Sam and Ms.Vy, it

is clear to say that the company doesn’t have effective training program and it affects to the employee turnover as they perceive there are almost no development opportunities for employees

- Mr Duong complained that the new employee in Danang (Mr.Huy) wasn’t supported reasonably, he had to learn by himself about the marketing and selling skills Moreover, he complained the sales manager who is responsible for training and supporting all members

in his team doesn’t coach and mentor Mr Huy appropriately In fact, Mr.Huy doesn’t meet his sales target in the first four months from he started working for the company The reasons are possibly not Mr.Huy skills – as Mr.Duong evaluated Huy is active person and possesses good skills – but all about the supports on customer’s relationship and market intelligence

2.3.2 The second potential problem: Ineffective leadership from managers

The link between leadership effectiveness and the positive traits or habits of the leaders is very strong These traits or habits include such as integrity, ethic, communication and care for employees Moreover, the barriers that lead to ineffective leadership highly related to not the company’s finance, but the company’s structure, culture and policy (19) The manager is the person that direct and instruct employees that what/why/how they need to do jobs If the management team show that they poorly perform their leadership ability, it will has a negative impact on internal communication For example, with poor leadership ability, the manager cannot explain to their employees what they need to do clearly, even cannot inspire them, make things mix up Furthermore, poor leadership ability includes the appropriate leadership style that fit to the company situation Certainly, poor leadership style results in poor communication and employee performance as Femi proved (20)

In other research, there is a relationship between leader skills and leader performance

As Shipper, Pearson, Singer (21), “effective managers have significantly different leadership skill profiles than ineffective managers” As we can see through below results from the research, 10 of 18 leadership scales were considerably different between effective and ineffective performing managers

Table 2 – Comparison of high and low performing managers (21)

Applying for Cubes Asia, there is a relationship among ineffective organizational policies and ineffective leadership According to Ms.Trang, the boss who doesn’t care for his personnel cannot issue a good caring policy for his employees, such as the benefit for technicians working overtime or on weekend Besides, the ineffectiveness of leadership is also evaluated through wrong use of power (22) In the case of Cubes Asia, Ms.Trang told that the sales manager used his power to ask warehouse team to deliver machines to his customers even they hadn’t deposited machine yet but in the company policy, the machine

is only delivered when the company receives deposit at least 50% contract value Furthermore, the poor communication between managers and employee also proves that the leaders are low performing and it affects not only one aspects but almost all aspects required communication

One interesting things, Ms.Sam and Mr.Duy insisted the managers seem to cannot determine vision, strategy or direction and show it to their employees And, that belongs to the skills of visioning, establishing strategic and operational objectives which a high performing managers must have

Moreover, without the integrity of which evidence is bias to assess employees and assign jobs as Ms.Sam and Ms.Vy expressed, the boss’s leadership ability is evaluated ineffective The employees also considered he doesn’t communicate well the direction and the strategy to all employees For other leaders, for example, other two mentioned leaders

in the interviews – the product manager/the sales manager/the technical department head (Mr.Phong) and general manager (Ms.Dung) – who are reported as their inappropriate work ethic to employees in Mr.Duong, Ms.Trang, Ms.Nhi opinions

There is an importance of the combination between organizational fairness and performance appraisal (23) At Cubes, Ms.Vy shared that people feel it’s not clear for them

to be assessed in both daily jobs and final year assessment The boss seems to refer people who have good appearance and doesn’t recognize them Sometimes, he is considered as he only trusts some people who usually talk with him, report daily stories to him, Ms.Sam said Besides, one of the factors that affects sales team’s performance is the favoritism of the sales manager, which means, he doesn’t support well others in training, selling products, technical issues, pre-booking products, information sharing which directly influence other salespersons performance – sales And, basing on sales, the boss appraises people without other factors that they have to deal with

so the account receivable is very high and overdue is high as well Therefore, this is a significant part for the company to look on

 Author, as marketing position at Cubes Asia, is responsible for internal and external communication and most likely to be a connector between managers and other departments There is a different between Cubes Asia and other common companies that Marketing department takes care of employee concerns and reports to managers, closely work with

HR department (Ms Huong) Therefore, Marketing understand employee situations and can collect their opinion officially by researches in order to persuade managers to make things changed

 The problem is feasible to solve However, it somehow requires a managers who are open-minded to take actions At Cubes Asia, the managers usually expressed to fix occurring problems but they don’t know where to start For example, the company already tried to employ people for customer service department, the boss often asks employees to show their opinions but he doesn’t receive many comments, the managers tried to update frequently job descriptions of all employees but all departments haven’t cooperate well due

to unclear work flow and detail process etc

2.4 Problem justification

2.4.1 Problem definition

Before coming to definition of leadership, there is essential to understand the term of

“leader” Leader is one or more than one person whose responsibilities are selecting, training, preparing, affecting one or more than one follower and who possesses variety of incentives, skills, abilities and directs, inspires subordinates to spend their spirit, emotion and physical energy to implement, obtain organization’s mission and goals readily and enthusiastically

There are many different definitions of leadership which consider different aspects of leadership In spite of that, these definitions expressed four common components (24):

 Leadership doesn’t work alone, “it is a group and social phenomenon”, it can be no leaders and followers

 Leadership is about interpersonal interaction and persuasion for leaders in order to gain objectives through others’ actions

 “Leadership is goal directed and action oriented”

 If there are presence of leaders, it assumes to have hierarchy within a group which can

be formal or informal and flexible

According to Barker (25), “leadership is about two things-processes and behaviors” The processes in leadership are defined as social process in which “individuals and organization members authorize themselves and others to interact in ways that experiment with new forms of intellectual and emotional meaning” (26). This research is considered as

a remedy for those study on leadership based on leader’s traits In general, we can conclude some key points to set up a definition of leadership as a process:

 Firstly, leadership is a process that executes individual wills and needs in organization, not a function of the people in charge

 Secondly, “leadership is a process of adaptation and of evolution”

 Thirdly, “leadership is a process of energy, not structure” Therefore, it is essential to clarify leadership with management In Barker opinion (25), the managers seem to obsess stability but leadership involves changes

Thence, the short definition of leadership can be asserted as “a process of transformative change where the ethics of individuals are integrated into the mores of a community as a means of evolutionary social development” (25)

There are different approaches into leadership effectiveness The leader trait theory addressed effectiveness of leadership through number of abilities or characteristics of leaders (26) These abilities or characteristics can be persuasiveness, good memory, superior intelligence, etc However, the trait theory fails to link the characteristics of leader with organizational performances until behavior theory which asserts leadership effectiveness by leader behaviors (27) Lately, the leadership effectiveness are explained

by leader situtional theory which considers leadership effectiveness in the interactions between different behavioral elements in a specific leadership process (28)

2.4.2 Problem existence