Microsoft word pham thi kim huyen ID 22180014 ISB MBA 9 2 master thesis (low level of motivation at ITVN)

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

PHAM THI KIM HUYEN

LOW LEVEL OF MOTIVATION
IN DATA ANALYSIS TEAM
AT IMPERIAL TOBACCO VIETNAM

MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2020

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------

PHAM THI KIM HUYEN

LOW LEVEL OF MOTIVATION
IN DATA ANALYSIS TEAM
AT IMPERIAL TOBACCO VIETNAM
MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: DR. NGUYEN THI MAI TRANG

Ho Chi Minh City – Year 2020

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TABLE OF CONTENT
LIST OF FIGURE........................................................................................................................... 1
LIST OF TABLE ............................................................................................................................ 1
Executive Summary ........................................................................................................................ 2
Acknowledgements ......................................................................................................................... 3
1. COMPANY INTRODUCTION .............................................................................................. 4
1.1 Company overview ............................................................................................................. 4
1.2 Organizational structure ...................................................................................................... 5
2. PROBLEM CONTEXT ........................................................................................................... 7
2.1 Symptoms ............................................................................................................................ 7
2.2 Symptom validation and justification ............................................................................... 11
3. PROBLEM IDENTIFICATION .......................................................................................... 14
3.1 Problem mess .................................................................................................................... 14
3.2 Potential Problems and validate the main problem ........................................................... 16
3.2.1 . Income dissatisfaction ----------------------------------------------------------------------- 16
3.2.2 . Poor working environment------------------------------------------------------------------ 18
3.2.3 . Low level of motivation ---------------------------------------------------------------------- 21
3.3 Updated preliminary cause and effect map ....................................................................... 24
3.4 Problem justification ......................................................................................................... 25
4. CAUSE VALIDATION ......................................................................................................... 27
4.1 Potential causes ................................................................................................................. 27
4.1.1 . Lack of Intrinsic motivation: --------------------------------------------------------------- 28
4.1.2 . Low level of Extrinsic motivation: --------------------------------------------------------- 29
4.2 Cause justification ............................................................................................................. 31
5. ALTERNATIVE SOLUTIONS ............................................................................................ 33
5.1 Alternative solution 1: Eliminate benefits inequality........................................................ 33

5.2 Alternative solution 2: Ensure the employees’ job security ............................................. 36
5.3 Solution justification ......................................................................................................... 38
6. ORGANIZATION OF ACTIONS ........................................................................................ 41
6.1 Contents of organization of action .................................................................................... 41
6.2 Timeline of implementation .............................................................................................. 42
7 CONCLUSION ....................................................................................................................... 44

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8 SUPPORTING INFORMATION ......................................................................................... 45
8.1 Interview Guide................................................................................................................. 47
8.2 Questionnaire .................................................................................................................... 50
8.3 Summary of transcripts ..................................................................................................... 51
REFERENCES ............................................................................................................................ 69

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LIST OF FIGURE
Figure 1. ITVN Operation diagram ................................................................................................ 5
Figure 2. ITVN Organization Chart ................................................................................................ 6
Figure 3. Turnover trend - Talentnet – Mercer post survey report 2018 ........................................ 8
Figure 4. Top 3 & Bottom 3 Turnover - Talentnet – Mercer post survey report 2018 ................. 10
Figure 5. Turnover rate at ITVN ................................................................................................... 12
Figure 6. Preliminary cause and effect tree .................................................................................. 15
Figure 7. Updated preliminary cause and effect map ................................................................... 24
Figure 8. Cause and effect map..................................................................................................... 31

LIST OF TABLE

Table 1. Total employee turnover rate at ITVN ............................................................................. 7
Table 2. Breakdown employee turnover rate at ITVN in 2018 and 2019....................................... 9
Table 3. Turnover rate of Data Analysis Team............................................................................. 11
Table 4. Replacement costs of Data Analysis Team..................................................................... 13
Table 5. Costs to implement solution 1 ........................................................................................ 35
Table 6. Costs to implement solution 2 ........................................................................................ 38
Table 7. Questionnaire .................................................................................................................. 40
Table 8. Survey results .................................................................................................................. 40
Table 9. Detailed action plan ........................................................................................................ 41
Table 10. Implementation plan ..................................................................................................... 43

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Executive Summary
Employees is often considered as the most valuable assets in all organizations. Recruiting and
retaining employees in organizations is not only tasks of Human Resources but also involves all
other departments. Therefore, managers and leaders in organizations should care about employees,
understand their expectations as well as their difficulties, then give ideas to help organizations in
establishing appropriate policies to attract and develop employees to retain them. By doing so,
organizations can enhance employees motivation and reduce employees turnover rate, which helps
to increase employees productivity and company performance.
The purpose of this research is to find out the main problem and the root cause leads to the high

turnover rate in Data Analysis team at Imperial Tobacco Viet Nam Representative Office recently.
With the secondary data provided by Human Resources Department and primary data collected
during the in-depth interviews with three groups of the company’s leaders and the employees who
are currently working in Data Analysis team and who are also left the company, it revealed that
income dissatisfaction, poor working environment, and low level of motivation are potential
problems lead to the high turnover rate in Data Analysis team at Imperial Tobacco Viet Nam
Representative Office.
Further investigating the underlying problems by analyzing the interview results and using the
theories from literature, the main problem is identified as the low level of motivation, especially
extrinsic motivation, which caused by benefits inequity and job insecurity, that leads to the high
turnover rate in Data Analysis team at Imperial Tobacco Viet Nam Representative Office.
After finding the root cause of high turnover rate, alternative solutions are designed and justified.
The solution to eliminate benefits inequity as well as reduce job insecurity by revising the company
benefit policies and enhancing engagement meetings for sharing company strategies to the
employees is suggested by the managers, selected by the indirect employees and supported by the
company Director for execution. Then, the detailed action plan of this solution is presented to the
company for implementation to solve the problem.

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Acknowledgements
I would like to express my appreciation to all people who supported me during my studies. First,

I would like to send my thankfulness and special appreciation to my supervisor, Dr. Nguyen Thi
Mai Trang, who has kindly supported, guided, advised, and motivated me to complete this thesis.
Then, I would like to thank my managers, my colleagues at Imperial Tobacco Vietnam
Representative Office who gave me chances for conducting interviews and spent their valuable
times for giving me comments and opinions which helps me to come up the results of this thesis.
In addition, I would like to send my regards to all of my classmates of MBA 9 for their support,
encouragement and giving me strength in all the time writing this thesis.

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1.

COMPANY INTRODUCTION

1.1

Company overview

Imperial Tobacco is a group of subsidiaries of Imperial Brands ( 1), one of the biggest corporations
in tobacco industry in the world. Imperial Tobacco subsidiaries manufacture and trade a range of
cigarettes, tobacco products, cigars, and tobacco accessories such as papers and tubes. Imperial
Tobacco International Limited Company in United Kingdom has established its representative

office in Ho Chi Minh city, Viet Nam since 1995 and the office is called Imperial Tobacco Vietnam
Representative Office (ITVN). ITVN’s scope of activities is a liaison office, conducting market
surveys, identifying and accelerating the trade opportunities in Vietnam market on behalf of the
Head Office in United Kingdom. ITVN is not allowed to conduct any directly profitable activities
in Vietnam, but only supports the Head Office (Imperial Tobacco International Limited Company
in United Kingdom) to boost sales of the company’s products in Vietnam market. Therefore, ITVN
is responsible for spending investments to increase the quantity of the company’s products selling
in Vietnam market, because the more company’s products are sold in Vietnam market, the more
profits the Head Office are earned.
The key product of ITVN is Bastos cigarettes, which are producing by local manufacturer under
the licensing contract with Imperial Tobacco International Limited Company in United Kingdom.
Bastos cigarettes have been produced and sold in Vietnam market for nearly 25 years, and up to
now, Bastos cigarette brand is in the list of top ten selling brands in Vietnam, gaining its market
share around 5% (based on data of AC Nielsen 2018). Bastos cigarette brand is strength in
mainstream segment, having price ranges from 10.000 dong to 12.000 dong per pack of 20
cigarette sticks. The key competitors of Bastos cigarettes in the same price segment is Thang Long
cigarettes and Sai Gon cigarettes, which are produced by Vinataba, a state-own corporation.
The operation diagram of Imperial Tobacco in Vietnam market can be described in the Figure 1 as
below:

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Imperial Tobacco
International Limited
Company in United
Kingdom (Head Office)

Supply materials based
on licensing contract
Earnings profits on material
supplied and Royalty fees on
products sold

Dong Nai Food
Industrial Corporation
(Manufacturer)

Funding
for ITVN
activities

Imperial Tobacco Vietnam
Representative Office
(ITVN)

Distribution
channel of Bastos
products in Vietnam
market
Investment to distribution
channel to boost sales

Distributors in
Vietnam

Figure 1. ITVN Operation diagram
(Source: ITVN Management Department)

Besides, Imperial Tobacco Vietnam Representative Office inherits six values from Imperial
Brands: we can, I own, I am, we surprise, I engage, we enjoy. Those values are focused to
employees’ competency, performance, motivation, and retention. Furthermore, Imperial Brands
has built the Leadership Expectations that give opportunities for not only leaders but also
employees to drive performance, to take accountability, to build capability, to lead by example, to
improve and learn, and to create great teams.
1.2

Organizational structure

At the end of the year 2019, ITVN has 20 direct employees who are working in 6 departments in
ITVN, which are: Operation Support, Human Resource (HR& Admin), Finance, Marketing, Sales,
and Business Intelligence. Besides, ITVN also has 12 indirect employees working in Data Analysis
Team who are reported to Business Intelligence Manager of ITVN. Those indirect employees
working in Data Analysis Team are having their labor contracts signed with the labor supply
agency of ITVN, Humidor Company. Though having salary paid by ITVN through Humidor
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Company, the recruitment process of Data Analysis Team is done by Human Resource Department
of ITVN. This means ITVN is responsible for recruitment, training, appraising, and paying salary
to the direct and indirect employees. However, although working in the same office, there is a
difference in benefits between the direct employees and the indirect employees of ITVN, in which
the direct employees - who have labor contracts signed with the Representative Office - have some
additional benefits such as yearly performance bonus, healthcare insurance for their family, while
the indirect employees – who have labor contracts signed with the labor agency – do not have
those types of benefits. Furthermore, the direct employees of ITVN are official headcounts of
Imperial Brands, so they have employee codes which can be used to log in the intranet websites
and access to online resources of Imperial Brands. The organization structure of ITVN is described
in Figure 2 below.

Labor
contract
signed
with
ITVN

Data
Analysis
Team

Labor
contract
signed
with
Agency

Figure 2. ITVN Organization Chart
(Source: ITVN Human Resource Department)
Data Analysis team has been established since 2015, and the purpose of having this team is to
collate and analyze market data of tobacco industry and ITVN’s competitors in Vietnam market.
The daily tasks of Data Analysis team are to input daily data collected from market to the internal
system, keep track of Bastos cigarettes sell-in, sell-out volumes and cigarette inventories of
distributors and wholesalers, to run and analyze the reports regarding the Bastos cigarettes and its
competitors. Those type of reports will help the Business Intelligence Manager having a clearer
picture of the whole tobacco industry in Vietnam market so that he can support the Director for
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decision making. The Director is responsible for all operations and activities of ITVN, as well as
provides strategies to the head quarter for future growth of ITVN.
Before 2015, without Data Analysis team, ITVN had to buy the market data of tobacco industry
and ITVN’s competitors in Vietnam market from AC Nielsen, which costs about 5 billion dongs
per year. Therefore, from 2015, the Director of ITVN made the decision to form up a Data Analysis
Team to do collating and analyzing tasks regarding the market data. The total employment costs
for Data Analysis team is about 2 billion dongs per year, and the total cost for collecting raw data
from market is around 1 billion dongs per annum. Having Data Analysis team, ITVN can save
about 2 billion dongs per year while ITVN still has the same results of having reports regarding
the market data of tobacco industry and competitors in Vietnam market.
2.

PROBLEM CONTEXT

2.1

Symptoms

Though Imperial Tobacco Vietnam Representative Office and its Group has a strong and clear
strategy to attract, motivate, and retain people, the voluntary turnover rate of the employee at ITVN
was high in the past two years, and increased significantly in 2019. This is a symptom that needs
to be validated, identify the problems, analyze and diagnose the problems to find out the root cause,
then provide the solutions and implementation plans to improve the company situation.
Based on the data collected from Human Resource Department of ITVN, the voluntary turnover
rate of total direct and indirect employees at ITVN is showed in Table 1 as below:
Table 1. Total employee turnover rate at ITVN
Year

2016

2017

2018

2019

Q1/2020

Total number of employee
(at the year-end)
Total resigned

34

35

35

32

31

5

6

8

10

2

Replacement

6

6

5

9

3

15%

17%

23%

30%

6%

Turnover rate

(Source: ITVN Human Resource Department)

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Turnover rate is the percentage of the employees leaving the organization during a period of time.
Turnover rate is calculated by using “the total number of employees leaving the organizations
during the month divided by the average number of employees during the month”, postulated by

Phillips as cited by Hernández et al ( 2).
Table 1 showed that the turnover rate of total employee at ITVN in 2019 at 30%, which is
significantly higher than 2017 and 2018 and has an increasing trend year on year. Besides, the post
survey seminar report from Talentnet-Mercer in October 2018 ( 3) (see Figure 3) showed that the
voluntary staff turnover rate is 15.1% in 2017 and its trend is to increase to 15.6% in 2018 in
multinational corporations (MNC).

Figure 3. Turnover trend - Talentnet – Mercer post survey report 2018
Comparing the employee turnover rate at ITVN during the past four years with the staff turnover
rate in local companies and also multinational corporations, it can say that the total employee
turnover rate at ITVN is significantly high in 2018 and 2019.
As ITVN is a representative office of Imperial Tobacco International Limited Company in United
Kingdom which is a subsidiary of Imperial Brands - a global corporation - therefore, ITVN inherits
all factors of a multinational corporation. Since cigarette and tobacco is a special type of business
that requires Vietnam Government’s controls, thus it is not allowed Imperial Tobacco International
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Limited Company in United Kingdom to establish a company limited in Vietnam, but just only a
representative office. Despite the business license of a representative office, ITVN is still
considered a multinational corporation, same as its competitors such as British American Tobacco
(BAT), Phillip Morris International (PMI), and Japanese Tobacco International (JTI). Therefore,
the employee turnover rate of ITVN can be compared with the staff turnover rate in MNC.

In addition, the breakdown turnover rate data for 2018 and 2019 provided by Human Resource
Department of ITVN (Table 2) showed the details of turnover rate by department at ITVN. There
is a huge gap in turnover rate between the direct employee and the indirect employee at ITVN, in
which the turnover rate of the direct employee is less than 10% in these two years, while the
turnover rate of the indirect employee at ITVN is significant high in 2018 (50%) and 2019 (64%).
Due to the high turnover rate of the indirect employee at ITVN, which is Data Analysis team, leads
to the increasing in total turnover rate of the whole ITVN, 23% in 2018 and 30% in 2019.
Table 2. Breakdown employee turnover rate at ITVN in 2018 and 2019
Yearly turnover rate
in ITVN, breakdown
by department

Average
number of
employee

Direct employee
HR & Admin
Finance
Marketing
Sales
Business Intelligence
Operation Support
Indirect employee
Data Analysis
Total

23
8
3

4
3
2
3
12
12
35

Year 2018
Year 2019
Number of Turnover Average
Number of Turnover
resigned
rate
number of resigned
rate
employee
employee
employee
2
1
0
1
0
0
0
6
6
8

9%
21
2
10%
13%
6
1
17%
0%
3
0
0%
25%
4
1
25%
0%
3
0
0%
0%
2
0
0%
0%
3
0
0%
50%
13

8
64%
50%
13
8
64%
23%
34
10
30%
(Source: ITVN Human Resource Department)

Besides, the post survey seminar report from Talentnet-Mercer in October 2018 ( 2) also showed
that the highest turnover rate in 2018 is 37.6% belongs to Retail industry in Vietnam market (see
Figure 4).

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Figure 4. Top 3 & Bottom 3 Turnover - Talentnet – Mercer post survey report 2018
ITVN is participating in annual surveys conducted by Talentnet-Mercer on human resources
topics, such as compensation and benefits trend, voluntary staff turnover trend, which conducting
within organizations in retails industry and also in tobacco industry. The post survey report 2018

of Talenet-Mercer has been conducted with 602 organizations in 16 industries. This survey report
shows the trends of voluntary staff turnover rate within those organizations and industries.
Based on the data in Table 2, the turnover rate of Data Analysis Team at ITVN in 2018 is
significantly higher than the staff turnover rate in MNC, 50% versus 15.6%, and about 2.5 times
higher than the staff turnover rate in local company (20.2%). Furthermore, this turnover rate of
Data Analysis Team in 2018 is higher than the highest turnover rate in Retails industry in 2018 of
37.6% (Figure 4). In 2019, the turnover rate of Data Analysis Team at ITVN increased to 64%
(Table 2), that is a symptom needs to identify its problems and causes.
As stated in Section 1.2 Organizational structure, Data Analysis team is indirect employees of
ITVN, whose employment contract has been signed with the labor supply agency of ITVN,
Humidor. Despite signing labor contracts with the agency, Data Analysis Team is following the
recruitment and training processes of ITVN, working in ITVN’s office, and reporting to ITVN’s
Business Intelligence Manager. Thus, Data Analysis Team is reported as indirect employees of
ITVN, having their recruitment and training costs, and salary paid by ITVN through agency. It can
be said that Data Analysis team is part of the ITVN workforce and cost to ITVN’s employment
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costs. As a result, any change in direct and indirect employees leads to the increasing in the
employment costs of ITVN. Therefore, it is crucial for ITVN to manage their workforce to
eliminate their employment costs for better performance. Hence, the high voluntary turnover rate
in Data Analysis Team is a symptom that the Management of ITVN needs to investigate its causes
and design solutions to solve the issue.

2.2

Symptom validation and justification

With the detailed data provided by Human Resource Department of ITVN in Table 2, it showed
that Data Analysis team has the highest turnover rate comparing to other departments at ITVN
during the past four years. The turnover rate of Data Analysis Team is more than two times
comparing to the total turnover rate of ITVN. It is showed in Table 3 below:
Table 3. Turnover rate of Data Analysis Team
Year
Number of Data Analysis employee
(at the year-end)
Total quit
Turnover rate of Data Analysis Team
(Indirect employee)
Turnover rate of other Departments
(Direct employee)
Total Turnover rate of ITVN

2016

2017

2018

2019

Q1/2020

10

11

13

12

11

3

3

6

8

2

30%

29%

50%

64%

17%

8%

13%

9%

10%

0%

15%

17%

23%

30%

6%

(Source: ITVN Human Resource Department)

The data from Table 3 showed that the turnover rate of Data Analysis team in 2019 is significantly
higher than 2018, 64% versus 50%, and it is more than two times higher than 2017 (29%), with an
increasing trend since 2018. It can say that the turnover rate of Data Analysis team is the highest
number among the turnover rate of all the departments at ITVN (Table 2), and also is much higher
than the retails industry data (Figure 4).
Total turnover rate of ITVN is illustrated by the chart below (Figure 5)

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