Solution for ineffective leadership in cubes asia

 Mr.Duong and Ms.Loi agreed that customers call in the company, they don’t talkdirectly with salespersons or technician or customer service executive.. If Cubes Asia salespersons lower

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

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 summaryCubes 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 issuesrelating to personnel, customers, management system The research includes threeimportant parts Firstly, it comes with the company background for readers to understandthe company history, its customers, staffing, sales as well as the industry, the marketCubes Asia is in Secondly, the researcher identified problem through interviews andtheories, it is found that the company is facing with poor employee training andineffective leadership However, ineffective leadership has significant influences throughmost of variables Furthermore, the research presented the valid causes leadingineffectiveness leadership including personal traits of the boss, misuse of power frommanagers, poor communication between managers and employees, lack of financial andhuman resources, lack of strategic business plans, lack of internal and external controlwith the company context to contribute in later solutions Thirdly, there are solutionsproposed and confirmed by employees through quick survey The alternatives plan areanalyzed and presented which is a combination of developing communication strategy,implementing strategic planning and applying performance management and controlframework The plan comes with total budget of 228.140.000VND in the duration of 3months for training programs, 1 month for strategic planning and nearly 1 month forapplying 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 ofapproximately 30% in 2017 Furthermore, the ineffective leadership causes losing 3 keycustomers which contribute 2 – 3 billion per year, losing money, business information andlow productivity due to high employee turnover rate (over 25% through years)

The presentation above support the readers have an overview on contents of thisresearch From the work has been contributed, the full name of the study is "Solution forineffective 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 providesother related products such as coffee, blenders, juicers, water systems, milk frothers, etc

well-to make a coffee competence that meets all cuswell-tomer demand The company is thepioneer in the field of trading professional coffee machines in Vietnam Its mission is toprovide excellent products to enhance the quality of living, and we pride ourselves incustomer satisfaction and faith

Cubes Asia has built up a head office in Hochiminh (2013) then its three showrooms inHochiminh (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 mainproduct line However, Cubes Asia is a small company that has over 40 employees in totaluntil now The head office is responsible for all decision of the company as well as the mainvenue to take place most of training courses, official events, monthly meeting etc

The company’s competitors who are also coffee machine distributors but from othermanufacturers are Perfetto, Epicure, Quang Tan Hoa, Charles Wembley etc Among itscompetitors, Cubes Asia is considered as the leader of coffee machine distributor inVietnam due to be pioneer and its high quality products Cubes Asia has a nationalpresence, being in many areas around Vietnam by distribution system through dealers andagents: 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, businessdevelopment manager and company development manager In fact, the founder (boss) isalways the person to make final decisions which are managerial, operational and businessand other managers are those who implement and execute the boss’ decision In nearfuture, 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 importantcoffee chains, hotel and restaurants as well as many other customers the company servedaround Vietnam such as The Coffee House, Trung Nguyen, Twitter Bean Coffee, LahaCoffee, 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 B2Ccustomers The data of sales by channel from 2016 – 2018 is described below showingthat B2B customers (Dealers, Roasters, Chains, HoReCa etc.) place extremely importantrole in the company turnover than B2C customers (Coporate, retails, showrooms,individuals) There are differences in the name and the way in dividing channels becausethe demands of splitting or merging sub channels by the time

Chart 2 - Total sales by channel 2016

SR

16%

Corporate14%

Horeca31%

Chart 3 - Total sales by channel 2017

Own SR 13%

Dealers

40%0%

Chart 4 - Total sales by channel quarter 1, 2018

8%

Chart 5 - Total sales by channel quarter 2, 2018

Hotel Chains

1%

Hotel Appliance Dealers

1%

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 currentemployees and former employees who are:

 Ms Sam Duong – Current Marketing Executive

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 EmployeeTurnover 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 withsignificantly high employee turnover rate It is always at much higher level comparedwith 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 tableshows the employee turnover from establishment until now:

Table 1 - Annual employee turnover 2014 - 2018

Up to Year 2014 2015 2016 2017 July 2018 CEO/ Director level

Middle level

People left through period 1 1 1 4 1

Staff level

Why is employee turnover important? “It’s not who you hire that counts, it’s whoyou 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 capitalresources Furthermore, high employee turnover may lead to negative effect onorganization’s information and knowledge, recruitment and training costs andperformance of remaining employees (4) If we put losses of high turnover in broadcategories, it can be mentioned following (5), which are:

 Costs of recruitment

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

 High cost of time to recruit and train new employees: HR team spend over 40hours/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 employeedocuments, for example insurance issue, that may cost travelling expenses, time, printing cost, et

 High separation costs: cost of increase of unemployment tax, cost of administrationfunction, cost of terminating the employee, cost of exit interview, estimated nearly 2 millionVND per employee

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

 Negative impact to current employees: all employees at the base level expressed thatthey felt unstable environment and shortage of motivation when more and more peoplestarted 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, notonly due to their responsibility itself, but also due to board of directors and employeerelationship Employee satisfaction is essential to the company (6) that it contributes toproductivity 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 satisfactionmay lose its competitive advantages – the talent employees who leave the company, andresult in further crisis besides the economic disorder Furthermore, proved that employeesatisfaction meaningfully relates to business outcomes (7)

It’s interesting that none of them expressed dissatisfaction with the compensationthey receive from the company There are complaints from all interviewer interviewedwhich are:

 Ms.Sam – Marketing Executive at Cubes Asia mentioned that some people werewaiting 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 thatthey didn’t see that people can develop themselves with the company, or see their futureand company future as well when working at the company People didn’t understand whatthey 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’sprofitability Moreover, there is a positive correlation among customer satisfaction,loyalty and retention, whereas, customer dissatisfaction is main reason of discontinuingrepurchasing from customers (8, 9) If the customers are dissatisfied with a company’sproduct 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 customerswho left company are significant According to Ms.Trang, Ms.Loi and Ms.Nhi, the customercomplaints are considered as serious issues that the company needs to pay attention Theyassumed 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 aresales, admin, technical and accounting department Customer complaints are evaluated toincrease 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 manyphone 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 landlinesfor head office and 3 showrooms Customers don’t know which phone number theyshould contact so they usually call in the head office, then the HR executive answer thephone 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 theirproblem resolved after continuous calls, “This is very popular even customers in Hochiminhstill 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 themachine, they almost immediately are being their place I think this is very importantpoint because customers are selling coffee, if the machine goes wrong or was broken thatwill interrupt the business very much”

 Most of customers complained poor service instead of products Some keycustomers (dealers) complained unclear information or they are not informed essentialinformation 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 employeeturnover rate, employee complaints, customer complaints in consideration and want tofind out the potential problems Cubes Asia is facing with

The initial cause-effect map is built up by several researches with employees in CubesAsia 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 managementsystem, secondly, the research may concern the reasons why employees left company soit’s essential to know the opinions of former employees In addition, this research mostlylooks for employees who work at Ho Chi Minh city because over 70 percent of employeeswork at Ho Chi Minh and it’s easier to reach them (there are one employee who used towork for Cubes Asia in Danang city) The in-dept interviews are done by face to faceinterviews (6 interviews) and telephone interviews (2 interviews).

The in-depth interview was semi structure and divided into 2 main topics: the factorsthat satisfy and dissatisfy the employees and what the customers complained about andwhy For the in-depth interview with the topic of employee satisfaction, it focuses onmain aspects: Needs of employees, work environment, responsibilities, supervision,fairness and equity, effort, employee development, feedbacks For the topic of customercomplaint, author focuses on customer experience who are mostly dealers, B2Bcustomers under viewpoint of Cubes Asia employees

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

Diagram 1 - Initial cause effect map

 Inappropriate actions from dealers:

- Unsystematic pricing from dealers: Dealers (wholesale customers) are applyingdifferent prices of the same products to attract retail customers Therefore, the companyreceived complaints from both retail customers and employees Firstly, the retail customerscomplained 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 CubesAsia) Secondly, salespersons said that due to the difference prices, they meet difficulties tocompete with the dealers in selling products If Cubes Asia salespersons lower the prices toobtain customers, the dealers will complain, but if salespersons don’t lower the prices to obtaincustomers, 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 likethis, they will distort the market, Mr.Duong said

- Dealers disclose different discount scheme to each other: Dealers talk with each otherabout 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 higherdiscount from Cubes Asia This results in The Married Bean complained why they receive lessbenefit than other dealer while they have worked with Cubes Assia for a long time, Ms.Loimentioned 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

 Poor customer care and service:

- Lack of hotline switchboard: there are too many hotlines and landlines that confusecustomers and the company also don’t have hotline switchboard for customers to contactasking the service, as Mr.Duong, Ms.Loi shared in the interview The customers usuallydirectly call head office, meet HR department, HR department record information andconcerns, then, pass to related department The customers complained they can’t reachdirectly 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 getmachine installed and repair The technicians usually let customers wait for 2-3 days orlonger although the customers wish machines fixed as soon as possible for continuingselling coffee for their guests, as Ms.Trang shared in the interview This situation is moreserious 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 techniciansand salespersons who directly work with customers For technicians, sometimes theypromised customers that they would come their place and check the machines but theydidn’t (Ms.Trang, transcript, appendix 1) Besides, some customers called in companyand asked technicians instruct them descale and clean machine system through telephonebut the technicians didn’t, they blamed for busy times For salespersons, they promisedcustomers that the machines would arrive, for example, in 2 weeks, but finally it arrivedlate than 2 weeks The reasons can be objective, due to unexpected delay frommanufacturer 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 newproducts 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 thiswholesale customer didn’t inform them about new supper automatic machine andpromotion for dealer Besides, the company has policy to give congratulation flowers ongrand opening day of customers who are coffee shops but the some salespersons don’toffer this gifts to their customers, Ms.Loi assumed

like other competitors, Ms.Trang addressed: technicians of other competitors are resumed thatthey 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.Loishared in the interview When machines of customers have problems, salespersons calltechnicians for help but they don’t agree to come customer’s place or say “busy” Thecustomers don’t receive support immediately or the salespersons have to ask other outsidetechnicians depending on salespersons’ relationship, Ms.Nhi said.

- Technicians are not friendly with customers: technical service is important part ofcustomer service in and after selling Technicians are evaluated who are not friendly withcustomers and receive not good feedbacks, Ms.Trang and Ms.Nhi had same opinion There werethe 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

 Inappropriate policy for dealers:

- Policy for special offer for dealers for holiday: there is no special offer for dealer onholiday like other companies so the employees also receive feedback from customers whythey 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 domarket by targeting not only wholesale customers but also retail customers that causes conflictsbetween discount percentage for wholesale customers and for retail customers (Mr.Duong,transcript) Because the retail customers and wholesale customers both receive discounts so thewholesale customers usually complain that if Cubes Asia run promotion for retail customers, itwill affect their profit because they have to run promotion as well to compete A solution thecompany does is it offers extra discount within a short time for dealers when it run promotionfor retails customers However, this solution is not working well because the time dealersreceive extra discount is too short and margin they receive too low and they are not satisfiedwith that Moreover, if a salesperson of Cubes Asia deal with the same customers who are takencare 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 andtransparent pricing of dealers (wholesale customers) Therefore, they put different prices ontheir website or they deal with their customers at different prices than original one tocompete other companies

- Unstable policy for dealers: the policy for dealers have changed quickly sosalespersons 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 withnew policy so they complained back to the company For example, the new policy ofextra discount is mentioned before

- Inconsistent policies for all dealers: different dealers are applied with different discountframe 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 theircommission, as Mr.Duong asserted For example, they can offer 30% discount for the sameposition customers, such as customer A and customer B However, if customer B agree with28% discount, the salespersons will apply this rather than the maximum discount they can Ittakes 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 directions, strategy from boss:

- Unclear strategy communication: Employees don’t know much about strategy of thecompany, even they don’t hear anything about company vision, goal, this is the opinion ofMs.Sam, Ms.Vy and Mr.Duy Therefore, they don’t know why they should do the job andwhat 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 usuallydon’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 suitablewith what the boss actually want Moreover, the boss changes his mind too many times sopeople is stress to follow his idea without much argument, as Mr.Duy, Ms.Sam, Ms.Vytold in the interviews

 Unfair customer allocation:

- The customer allocation is uneven among sales team: Most of customers are been incharge by a leader who works as sales manager, as product manager and as technicaldepartment head This situation happen after former salespersons left the company, theyhanded 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 incompetitive market (Mr.Duong, transcript) This action results in 2 main consequences.First, the new salespersons lose motivation because they feel unfair treatment Customersare divided by channel which means each salesperson has to take care and report 1channel and they have the responsibility to their channel However, they don’t receive thebenefit of old customers in their channel Second, because one person takes care too manycustomers, he cannot support them well and result in poor customer relationship asMs.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 andModern 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 differentcommission 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 thesalesperson who is in charge of Hotel Channel that Cubes Asia recruited people handling thischannel 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 meetthe assigned target on their potential and lucrative channel, other people are strugglingwith their difficult channel to get sales.

 Inconsistence of applying customer regulation among sales team:

- Ms.Trang and Ms.Nhi thought that the sales manager don’t comply machine deliverypolicy: the company has policy that requires customers buying big machine to deposit at least50% before delivering but he delivered machines to his key customers even no any deposit inadvance For other salespersons, they cannot do that The problem is the manager askedwarehouse team deliver to customers without informing sales admin and accountants

(usually, accountants don’t let warehouse team deliver machines to customers if thecompany haven’t received deposit, Ms.Trang asserted) The consequence can be veryserious that firstly, the company cannot collect the money from customers becausemachine delivers without confirmed delivery note by sales admin and secondly, it causesthe 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 salesmanager doesn’t deserve to be a manager, Ms.Nhi assumed

Salespersons don’t comply discount scheme for customers: salespersons apply differentdiscounts with different customers, especially, sometimes they offer a discount which isout of the sales discount scheme of the company by making special requests and havemanagers 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 salestarget 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 wrongsome things, Ms.Vy, Ms.Sam shared through the interviews Hence, the employees losetheir 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’tknow which measuring method the boss bases on to judge them and why they receive thatamount of bonus different from others’, Ms.Sam and Ms.Vy had same idea All thingsthey know is the boss have a meeting with Mr.Phong – As the sales manager/ the productmanager/ 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 payattention to the details rather than the whole situation that makes employees stressed andprolong the time to finish job The employees though that they should have the power todecide by themselves and be responsible for these details

- Employees have high position without essential power: Before, special requests ofsalespersons was signed by the boss However, the sales manager used to write an email toask the boss the right to approve these all special request and other related problems with thereason 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 salespromotion of which purpose is to push sales, the sales manager should be the most importantperson to involve in this case

 Unclear responsibility among departments:

- Non-listed responsibilities: Some tasks are not listed into job description in laborcontract but the employees have to do if they want to smooth their work, this opinionsshowed 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 addressthat Mr.Duy is in charge of content marketing However, when he official works for thecompany, he has to take over the website management, fanpage management, videoproduction as well

- Mix-up responsibilities among people: Some jobs are finished by people who are notresponsible 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 ofinforming 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 forloyalty program and updating some information, the boss asked Marketing team dobecause he don’t believe sales admin team will do well.

 Unclear workflow, detail process:

- Ms.Sam, Mr.Duy, Ms.Nhi asserted that employees addressed that the companydoesn’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 organizingparty (Marketing and Human Resoure Department), product comparison (Product developmentmanager, Marketing department), POS (Sales admin and Marketing), promotions informingcustomers (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:

 Inadequate technicians:

- There are only 2 technical staff in HCMC – the biggest market of the company (excludethe technical department head) The technicians place very crucial role in customer service partbecause they are not only the ones to install the machine but also check the machine every 1month for each customer in their valid warranty period Therefore, people considered that 2technicians for the big market is absolutely not enough and need to recruit more for bettercustomer 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 Theproblem is the coffee machine is a big equipment and it requires to set up with particularelectric power, particular water system into the machines With very technical products likethat, the customers cannot do by themselves the installation or repair the machines.Certainly, travelling takes a lot of time

 Inefficient customer service department:

- Customer service department are the team to handle all customer’s concerns, supportthem quickly and effectively Furthermore, they are the bridge between the technicians,salespersons and customers who make sure all information is transparent and effectivelytransmitted All customers’ complaints will be resolved Customer service department isresponsible for tracking technicians’ schedules so they don’t miss the meeting withcustomers Moreover, they are the people to check the customer satisfaction with theproducts, customer care attitude of technicians and salespersons Thereby, it increases thesatisfaction 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 toemploy 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 receivesufficient support from sales and technical department and the company didn’t establishdocuments or procedures for this department

 Poor sales and technical skills:

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

- Salespersons are poor problem solving skills when dealing with customers: As B2B salesadmin, Ms.Trang expressed that salespersons don’t react well in answering customer’s

complaints or requirements when machines go wrong so sometimes customers ask thecompany to change the consultants This issue directly impacts on customer satisfactionbecause salespersons are the ones who work with customers firstly

 Inappropriate technical service and dealer policy:

- Weekend technical support: the company should apply technical support for weekendand 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 workovertime: 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 punishmentfor 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 dowell or any penalty when they don’t fulfill their responsibility

- For dealer policies, as mentioned above, the policies are determined inappropriatebecause company doesn’t have policy for special offer for dealers for holiday, there isconflict scheme discount between wholesale sales and retail sales No policy for dealers inpricing 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 dealwith their customers at different prices than original one to compete other companies,unstable policy for dealers and inconsistent policies for all dealers

 Poor communication between managers and employees:

- There are records from the interviews showing that the communication betweenmanagers and employees is not good, specifically, in generating policies and direction, strategycommunication Mr Duy, Ms Trang and Ms Sam suppose that almost all policies are issuedand made decision by managers without communication or researches from employees.Therefore, it makes some policies inappropriate As a salesperson, Mr.Duong and Ms.Tienassumed 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 workwith 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 beenasked 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 Nhireported that the technical policies are not reasonable when technicians don’t supportcustomers on weekends like other competitor’s technicians However, they were notlikely willing to express their idea, difficulties and situation to managers

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

- Sales manager favor his customers: He sells products and is taking care so manycustomers Because this manager is also technical department head, he has the right to assigntechnical staff to work on the weekend or work overtime His customers are better treatmentthan other salespersons customers that they can receive support from technicians on theweekend 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 sametreatment 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 customermachine, but when technical staff received other request from the manager’s customersafter that, they moved the initial’s schedule later and resolved manager’s customers firstMs.Nhi said

- Machine pre-order, machine arrival information: the information of machine arrivalwasn’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 ownselling plan Besides, sales admin also should be informed of this information because theyare the persons dealing with customers on contracts, delivery day etc The productdevelopment manager (also as sales manager, technical department head) knows thisinformation but he didn’t share information with his sales team, and, purchasing departmentalso don’t officially inform people about machine buying and arriving schedule, Ms.Trangmentioned The reasons are possibly the product manager is too busy or he actually doesn’twant to share other salespersons because he is afraid other people will book machines inadvance for their customers right before him, and he doesn’t have any machines to sell afterthat For example, the recent order included 36 big coffee machines but 32 machines of themare booked by him because other salespersons don’t know much about how many and whenthe machine arrive so they cannot book machine soon On the other hand, the intervieweeexposed that there is also salespersons booking the machine with warehouse team but whenmachines arrived, warehouse team blame these salespersons don’t book official on email sothey don’t keep machines for them However, there is no evidence that the productmanager/sales manager/technical department head had booked 32 machines by official emailwith warehouse team before (Ms Trang, Ms Nhi, transcript) Hence, only 4 machines leftthat’s for remaining 11 salespersons at that time.

- The boss changes his mind so quickly and frequently, Ms.Sam, Mr.Duy, Ms.Nhi havesame opinions, for example, the way to break down channels change many times and theallocation of sales channel as well There is interesting problem that although sales A is incharge 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 ofcustomers 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 jobswhich they are not responsible for In other words, they have to cover the tasks of otherpersons and have to take responsibilities for that, Ms.Sam said

- The boss involves too much in detail job content but he doesn’t emphasis oncommunication 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 asMs.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 foremployees, evaluating employee performance, teamwork, matching the tasks to the rightemployees, trust in employees etc (11) At first interview, Ms.Vy mentioned that the boss isbiased 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 comingfrom part of the trust Specifically, the employees evaluate themselves through an availableform of the company However, the boss re-assessed them by a meeting with salesmanager/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 setinappropriate empowerment That mean, employees have high position without essentialpower, as mentioned above Besides, there are some tasks that the boss assignedunreasonably as Ms.Sam described, for example, she sometimes had to handle admin staff’stasks 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 documentsdemonstrating the workflow and process Therefore, some tasks are duplicated and someother 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 increasingemployee’s skills, competences and knowledge Thence, the training make employeeperform more effectively and productively (13) They address that it’s easier for the newemployees to do well jobs and become leaders if they receive effective and sufficienttraining and development

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

There is a close relationship between the employees perceived effectiveness of trainingand job satisfaction, motivation and commitment which affect directly the company’sperformance such as sales turnover, productivity and absence (15) Besides, it is proved thatthe effectiveness of training programs can decrease the employee turnover (16). Formaltraining program directly imparts on employee productivity Employee training influences onjob 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 theposition of customer service executive due to poor employee training

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

 Level 1: Reaction

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

 Level 2: Learning

The measurement of learning focus on the difference of skills, knowledge andattitude of participants before and after training Depending on the purpose of the trainingprogram, the course can concentrate on only one of above aspects or all aspects.

 Level 3: Behavior

This is an extension of measuring training effectiveness We need to look on the

behavior of employees on their job before and after receiving the training

 Level 4: Results

The final results relate to a lot of important key performance indicators of the

company such as sales, productivity, profit, turnover, quality The managers should know whether the training turn these aspects into positive results or not

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 nottrained about the procedures how to work with other related departments who supported her inselling products Therefore, in the beginning she didn’t know how to resolve a customer’scomplaint 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 stillvalid but the technician charges customer maintenance fee It comes from the very generaltraining with product knowledge only Due to lack of knowledge and skills, Ms Nhi didn’twell resolve customer’s concern and had to apologize customer, promised them for betterfuture service The reaction of customer is very serious, he said “I will not buy your companymachine anymore” The company actually lose this customer – Kofi Kai due to low quality ofcustomer 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, sheoffical 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, shecouldn’t have machine to deliver to customer although her customer deposited 2 month agobecause all machines were booked in advance We could say, for the shortcoming of essentialknowledge 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 forCubes Asia, she needed to learn by doing the job so at the beginning, she somehow strugglewith her job and it takes her a lot of time to learn all things She complained there is no personmainly responsible for orientation, skills and knowledge training She feel that she cannotdevelop 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 ifthe people working in the company are ambitious, they will most likely leave thecompany, except some people have personal plan at that time She also shared otherpeople’s story in the company The case of technical department head trained customerservice 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 whenworking at Cubes Asia because the company only trains employees one time and doesn’thave further investment for enhancing employee’s skills and knowledge Therefore, shealso believed that she doesn’t commit to the company for long time but now, she doesn’tknow what to do Due to personal reasons, she still works for the company In the case ofMs.Sam and Ms.Vy, it is clear to say that the company doesn’t have effective trainingprogram and it affects to the employee turnover as they perceive there are almost nodevelopment 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 allmembers in his team doesn’t coach and mentor Mr Huy appropriately In fact, Mr.Huydoesn’t meet his sales target in the first four months from he started working for thecompany The reasons are possibly not Mr.Huy skills – as Mr.Duong evaluated Huy isactive person and possesses good skills – but all about the supports on customer’srelationship 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 carefor employees Moreover, the barriers that lead to ineffective leadership highly related to notthe 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/howthey need to do jobs If the management team show that they poorly perform theirleadership ability, it will has a negative impact on internal communication For example,with poor leadership ability, the manager cannot explain to their employees what theyneed to do clearly, even cannot inspire them, make things mix up Furthermore, poorleadership ability includes the appropriate leadership style that fit to the companysituation Certainly, poor leadership style results in poor communication and employeeperformance as Femi proved (20)

In other research, there is a relationship between leader skills and leaderperformance As Shipper, Pearson, Singer (21), “effective managers have significantlydifferent leadership skill profiles than ineffective managers” As we can see throughbelow results from the research, 10 of 18 leadership scales were considerably differentbetween 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 organizationalpolicies and ineffective leadership According to Ms.Trang, the boss who doesn’t care forhis personnel cannot issue a good caring policy for his employees, such as the benefit fortechnicians working overtime or on weekend Besides, the ineffectiveness of leadership isalso evaluated through wrong use of power (22) In the case of Cubes Asia, Ms.Trang toldthat the sales manager used his power to ask warehouse team to deliver machines to hiscustomers even they hadn’t deposited machine yet but in the company policy, themachine is only delivered when the company receives deposit at least 50% contract value.Furthermore, the poor communication between managers and employee also proves thatthe leaders are low performing and it affects not only one aspects but almost all aspectsrequired communication.

One interesting things, Ms.Sam and Mr.Duy insisted the managers seem to cannotdetermine 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 highperforming managers must have

Moreover, without the integrity of which evidence is bias to assess employees andassign jobs as Ms.Sam and Ms.Vy expressed, the boss’s leadership ability is evaluatedineffective The employees also considered he doesn’t communicate well the directionand the strategy to all employees For other leaders, for example, other two mentionedleaders in the interviews – the product manager/the sales manager/the technicaldepartment head (Mr.Phong) and general manager (Ms.Dung) – who are reported as theirinappropriate work ethic to employees in Mr.Duong, Ms.Trang, Ms.Nhi opinions.

There is an importance of the combination between organizational fairness andperformance appraisal (23) At Cubes, Ms.Vy shared that people feel it’s not clear forthem to be assessed in both daily jobs and final year assessment The boss seems to referpeople who have good appearance and doesn’t recognize them Sometimes, he isconsidered as he only trusts some people who usually talk with him, report daily stories tohim, Ms.Sam said Besides, one of the factors that affects sales team’s performance is thefavoritism of the sales manager, which means, he doesn’t support well others in training,selling products, technical issues, pre-booking products, information sharing whichdirectly influence other salespersons performance – sales And, basing on sales, the bossappraises people without other factors that they have to deal with