the study leadership competency of vietnam ceos research in hanoi

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INTRODUCTION

2. Objectives, Research object and scope
2.1. Objectives
The thesis will focus on the following main objectives:
Systemizing the basic theory of leadership and leadership competency to clarify what
is leadership competency, what is the difference between leadership and
management.
Systemizing knowledge about CEO, clarifying characters of the CEO position and
that of Vietnam CEOs.
Identifying components of leadership competency of Vietnam CEOs.
Analyzing Vietnam CEO’s leadership competency and testing the impact level of
components of their leadership competency on firm performance.
Proposing solutions and recommendations to improve Vietnam CEOs' leadership
competency.
2.2 Research object
Vietnam CEOs’ leadership competency
2.3 Research scope
The thesis focuses on examining components of leadership competency of Vietnam
CEOs to firm performance in Hanoi, period 2009-2012 and proposing
recommendations in the next period.
3. The management question
What should we do to improve Vietnam CEOs’ leadership competency?
4. The research questions
The thesis focuses on the following research questions:
What are the components of Vietnam CEOs’ leadership competency?
Are there difference in perception and evaluation on components of leadership

competency between CEOs and their superiors and subordinators ?
How Vietnam CEOs’ leadership competency impacts on firm performance?
How to improve Vietnam CEOs’ leadership competency?
(The superiors and subordinates are people who interact directly and most often with
the CEO such as: board members, heads and deputy heads of departments...)
5. New contributions
Theoretically
First, by summarizing and analyzing documents, the author explain the difference
among the terms ”competency”, “capability”, “capacity”. The author also explain the
similar and difference between the terms “leadership” and “management” and emphasis
on the role of leadership competency to the management position, which form the basic
for the following researches on leadership in Vietnam.
Second, the author combine the theory of competency models, leadership
competency, leadership theory to build and to test the impact level of components of
Vietnam CEOs leadership competency to firm performance. This is the premise to
promote recommendations for the thesis.

1. The necessity of the research
CEO - Chief Executive Officer is the heart of enterprises. Since the appearance of
the first CEO approximately 150 years ago, the number of CEOs has risen dramatically.
Because of the perceived and actual influence of these CEOs and their importance to
globalization, prosperity, and economic growth. Concern for CEO had been remaining
a topical issue . Although there are a lot of studies in CEO in Vietnam as well as in the
world, research on CEO’s leadership traits and actions to increase the performance of
the CEO is still very little. Over the past 2 decades , the studies in team of senior
executives and their influence to firm performance had been raising ( Canella , 1997;
Childs & Wolff , 1972 ; Finklestein & Hambrick , 1996 , Waldman , Javidan , &
Varella , 2004) . These studies have shown that firm performance was closely related to
CEO’s actions and quality . Finkelstein (1992 ) pointed out the need to consider the
leadership traits of senior management team influence subordinators and firm

performance. Waldman, Javidan , Varella (2004 ) stated a growing trend that firm
performance depends on the actions of the senior management team .
In Vietnam, it had became popular that people focus deeply on management
instead of leadership and lacking of people with ability of inspiring and building
visions in business. There have also existed three common mistakes in thinking about
management and leadership in Vietnam which were management thought to be
leadership and vice-versa, leader is the highest position in an organizational structure,
leader was born not made. In addition, the following statistics have shown alarming
situation in quality as well as leadership competency of Vietnam CEOs. The survey of
the Ministry of Planning and Investment in 63,000 enterprises in 36 provinces indicated
43.3% of the CEO having educated under high school level, 3.7% of the business
owners were master's degree or higher .The survey of Research and Development
Institute also showed 65% of 2,000 business owners in Hanoi served as leaders and
civil servants in the State sector was promoted and appointed positions rather than their
achievements in leadership, about 15% of the CEO is the entrepreneur family business
with a long tradition, the few remaining was CEO themselves . The issue of educating
CEO with high quality should be the urgent target especially when Vietnam has joined
the WTO[1]. So far, after nearly 30 years of innovation, Vietnam enterprises have
never been faced with challenges and difficulties in the changing context of business
environment and the crisis involves nations and regions. CEO is the person responsible
for operating business and this places on the role of CEO. The big challenges of
VietNam CEOs in the flat world is knowledge about international laws, foreign
languages, leadership and management….. In which, CEO’s leadership competency is
the key role to business success. It is necessary to clarify the nature of CEO’s
leadership competency and to improve it. Based on this review, the author selected the
thesis named “Leadership competency of Vietnam CEOs (research in Hanoi)”.


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Practically
First, the study results show that leadership traits and actions have not really met the
demands of subordinates. However, the results showed that all of them have “common
ground” when evaluating the importance of leadership traits and actions of Vietnam
CEO to leadership competency and to firm performance.
Second, the results of testing show that the proposed research model fit the survey
data and the basic argument and hypotheses are accepted. Accordingly, leadership
actions have strongest influence on firm performance and following are leadership traits
and knowledge.
Third, the thesis proposes oriented solutions and recommendations to improve
Vietnam CEOs’ leadership competency based on the above tested factors.
6. Structure of the thesis:
Beside introduction and conclusion, the thesis is divided into 5 chapters as
following:
Chapter 1: Literature review of CEOs’ leadership competency and chance to
research
Chapter 2: Theoretical background and the conceptual model
Chapter 3: Research methodology
Chapter 4: Research findings of Vietnam CEOs’ leadership competency
Chapter 5: Oriented solutions and recommendations for improving Vietnam CEOs’
leadership competency

CHAPTER 1
LITERATURE REVIEW OF CEO’s LEADERSHIP COMPETENCY AND
CHANCE TO RESEARCH
Literature review of leadership competency
1.1.
1.1.1. The research of leadership competency in the world

At the trait side, trait theory point out characters combine with leader success. The
leader with these characters will be competent. We always hear that ” he was born, not
made”. This means the individual with special traits should have leadership competency.
Stogdill (1948,1974) recognized traits with leaders as followed: Intelligence,
responsibility, self-confidence, socialability, arletness insight, initiative, persistence.
And there were ten traits positively affected leadership competency: responsibility,
persistence, risk taking, self-confidence, sensitive, cooperativeness
Lord et al.(1986) found intelligent, influenced, manly were traits of leaders.
Marlove (1986) found emotional intelligence (EI) could help leaders understand other
behaviours and emotion so that they could act well. Kirpatrick and Locke (1991) pointed
out leaders were different from others in confidence, understanding tasks, cognitive
ability, integrity, inspire ability, enthusiasm. These traits may be born or made and they
can help us realize leaders. Smith and Foti (1998) showed the leadership traits like
intelligence, self-confidence, exceptional. Mumford, et al (2000) showed 3 traits lead to
leadership competency which were challenging the difficult and using it as chances to
develop, influence, social commitment [8].
In conclusion, there had been many traits which were studied such as:
Intelligence, manly, responsibility, trust worthy, assertive, brave, creative, meticulous,
openness, compassion ,..
At the side of leadership knowledge, Schein (1996) said that leadership
competency included cognitive ability, the ability of understanding himself and the
world around, the motivation to learn and to change, emotional ability to self manage
and others, the ability of analyzing the effect of culture especially positive effect of
culture in leadership, attract subordinators’ participation, empowered by competency
and encouraging leadership based on the subordinators’ participation.
House (1996) and Howard (1995) said that leadership competency is about the
ability of recognizing limitation, analyzing and coordinating toward the goals. Bass
(1999), Zaccaro, et al (1991) said that leadership competency related to social
knowledge likes communication, persuasion, negotiation, training, conflict management.
Researchers likes Connelly et al. (2000), Kanungo & Misra (1992), Katz Kahn (1978),

Lau, Newman, & Broedling (1980), Mahoney Jerdee, & Carroll (1965), Mintzberg
(1973), Mumford, Marks, Connelly, Zaccaro, & Reiter Palmon (2000), Zaccaro (2001)
focused on leaders tasks with knowledge instead of traits. Back to the mentioned study
of Bass (1981,1997), leadership knowledge as followed in table 1.4.


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Table 1.4: Leadership knowledge were concerned
Adapt and
Occupation
Strategic
along with
Author/time
Cognitive
ability
other ability
ability
ability
Mahoney et
Controlling
Supervisor
Cooperating Planning
Directing Assessing
al. (1965)
Negotiator
Leader
Resource

Speaker
Directing
Mintzberg
contribution The
Communicating Negotiator
(1973)
Controller
communicator
Katz & Kahn
System
(1978)
cognitive
Relationship
Decision
Lau & Pavett
Professional
Monitoring
Collecting
and
making
(1980)
knowledge Problem solving
communicating
Kanungo &
Human oriented
Misra (1992)
Hooijberg,
Diverse social
Resource Merit
Hunt, &

ability
contribution
Diverse
Dodge (1997)
cognitive ability
Connelly et
Social awareness
Problem
solving
al. (2000)
General
skills
cognitive ability
Mumford,
High level
Marks, et al.
Social awareness
cognitive ability
(2000)
Zaccaro
Basic cognitive
Social ability
Professional
(2001)
ability
knowledge

influence of each factor, leadership actions tend to affect leadership effectiveness much
more than leadership traits. In conclusion, the study indicated that research model
combining leadership traits and actions is meaningful.

1.1.2. The research of leadership competency in Viet Nam
Despite the study of leadership competency extremely diverse in the world (based
on leadership traits, gender, levels, behavior and in specific field such as health,
insurance …) there have been very little researches on leadership competency especially
CEO’s leadership competency in Vietnam. The author found the relative studies as
followed:
Dissertation “Solutions to improve qualification of State CEO - research in Nam
Dinh” , Tran Van Dau, 2001 focused on the role of State CEO without concerning to
CEO competency and the system of assessing CEO’s leadership competency.
The study "Evaluation of CEO’s competency through the ASK model ", Le Quan,
4/2011, Journal of Economics and Business, National University Hanoi Science
magazine used ASK model to assess CEO’s competency in general and did not
metion leadership competency. The study also has certain conclusions on Vietnam
CEO’s competency.
The report " Survey of business leaders of Vietnam non state-owned ", Phung Xuan
Nha et al., 2012 gave an overview of the operating capability of Vietnam Non-state
enterprise leaders with certain pros such as assertiveness, optimism about the future,
having the ability to build relationships ... However, their operating capability still
exist many " holes" such as bad human management skills and forecasting... The
report also showed that CEO's leadership competency had not been researched in
detail.
The article " Improving Vietnam CEOs’ leadership competency in fluctuated
business environment", Nguyen Manh Hung, 2012, Proceedings of the Vietnam’s
day found Vietnam CEOs has the most strength to be assertive, creative, having
knowledge of manage and communication skills ... .Vietnam CEOs also reveal
weaknesses such as lack of solidarity, not high labor discipline, ... However, the
study did not show the separation between leadership competency and management
competency.
The dissertation titled ”Leadership competency – situation of leaders of Vietnam
SMEs”, 2012, Dang Ngoc Su, CIEM focused on evaluating leadership competency

of the leaders using competence model with 7 components included: vision,
motivation, decentralized authorization, influence, decision making, self building,
understand yourself and others, communication. The research object is Vietnam
SMEs’ leaders included CEO.
A ministerial-level project of the author Tran thi Van Hoa titled ”Improving CEO’s
leadership competency in process of international economic integration”, 2011 have
contributed to recognize Vietnam CEO competency model and pointed out the
leadership competency gaps of Vietnam CEOs. Based on the ASK model, the author

Source: Peter G. Northouse (2004), Leadership - theory and practice- 5thed.

At the side of leadership actions, leadership traits and knowledge are considered
as the ”Necessary condition” and the leadership actions are the “Sufficient”. The
leadership actions depend on the specific situation and context. There have been lots of
researches on leadership shifted from leadership traits to leadership actions like
behavioral theory. Avolio et al. (2004 a ), Judge & Piccolo (2004) showed that there
have positive relation between transformational leadership and firm performance in any
contexts and at any levels of leadership. The person with transformational leadership
style is focused by his actions in practice. The third component of leadership
competency depends on the specific context of the organization as well as specific
studies and situations.
Overview of studies in leadership competency showed that there is little research
combining leadership traits and actions and its influence to firm performance as well as
leadership effectiveness (Avolio, 2007). Combining leadership traits and actions can
explain at least 31% of the difference in leadership effectiveness. At the individual


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pointed out leadership traits, knowledge and skills needed of Vietnam CEO but these
lead to over loaded in her study. And there is no separation between management and
leadership competency in some cases. The research lacked of the literature reviews.
This lead to the lack of the research base, especially in Vietnam context. Reviewing
the literatures showed that no studies explore the relationship between the
components of CEO’s leadership competency and firm performance has been done in
Vietnam. Studies examining the relationship between the components of leadership
competency with firm performance has been done in the world but in a narrow range
likes the relationship between leadership traits and firm performance, leadership
skills and firm performance....So the author focused on the ”gap” to complete
leadership science.
In conclusion, there have been many studies in CEO and leadership competency
separately in Vietnam and in the world. Because CEO is also a manager and a leader so
that the leadership theoretical background can also be used to have research on CEO’s
leadership competency.
1.2. The chance of the research
After reviewing documents and analyzing consistency of the leadership
competency models, the author based on the BKD model to support the research.
Therefore, CEO’s leadership competency here means the combination of leadership
traits(BE), leadership knowledge (KNOW) and leadership actions (DO) to have
influence, motivate and encourage the others toward the goals of business .

CHAPTER 2
THEORETICAL BACKGROUND AND
THE CONCEPTUAL MODEL
2.1. Definition of leadership competency of the CEO
2.1.1. Competency definition
Competency is a compound of traits, knowledge and actions of a person to complete his
tasks.

2.1.2. CEO’s Leadership competency
2.1.2.1. CEO’s leadership competency definition
CEO’s leadership competency is a compound of leadership traits (BE), leadership
knowledge (KNOW) and leadership actions (DO) of the CEO in managing and leading
to gain the business goals.
2.1.2.2. The roles of leadership competency of the CEO
In the position of leading and managing business, CEO should have management
competency to ”do things right”. But CEO with management competency only could run
the business in the stable environment. When the business environment changing,
management competency may make the obstacles to CEO to reach long visions for the
company. Leadership competency of the CEO is the key factor for the CEO’s success.
The bankruptcy and recession of large corporations named GM, Ford, JAL… and the
dissolution of many Vietnam enterprises in 2012, 2013 is a testament for the weakness
of leading. In the dynamic environment today, management competency is not enough
and we need both management and leadership competency for the business success. A
survey of World Economic Forum in 2002 have confirmed the necessary of CEO’s
leadership competency in the globalizational context and pointed out the important
components to leadership competency such as vision building, risk management…
The roles of leadership competency of the CEO as follows:
First, CEO with leadership competency will have long visions to reach the
suitable fields for the company .
Second, CEO with leadership competency will have an ability do right things
(Bennis: leaders are people who do right things). In the CEO position, the “right
things” are running the business adapted to factors of external and internal
environment .
Third, CEO with leadership competency will have ability to initiate changes, the
ability to inspire and motivate followers to do their best for the intended targets.
Fourth, CEO with leadership competency will have an ability to gather well
followers to form an “all in one” to gain the intended targets.

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2.2 The research model

CHAPTER 3
THE RESEARCH METHODOLOGY

Leadership traits of
CEO (BE)
Leadership
knowledge of CEO
(KNOW)
Leadership actions of
CEO (DO)

FIRM PERFORMANCE

Figure 2.1: The research model

2.3. Hypotheses:
Based on the above analyses and the research model, the following
hypotheses are suggested:
Table 2.1: The research hypotheses
Content
Vietnam CEOs’ Leadership traits are positively related to firm
performance
Vietnam CEOs’ Leadership knowledge is positively related to

firm performance
Vietnam CEOs; Leadership actions are positively related to firm
performance
Source: The author’s results

Hypothesis
H1
H2
H3

3.1 .The research methodology
Archival research and secondary research: this approach provides qualitative data,
including published statistics, consolidated reports from organizations, relevant
authorities and from other resources.
In-depth interview: to understand more about components of leadership
competency of Vietnam CEOs, the author interviewed 2 experts in developing
enterprise, 2 CEO and 1 board member of 3 companies (includes construction,
banking and transforming). This method provides qualitative data.
Survey: this methodology will help to test the hypothesized relationship.
3.2. The process of research
Step 1: Qualitative study
After using archival research and secondary research, the author used the indepth interview to understand more about the research issue. It helped to propose
the research model and hypotheses. Also, this information was used to design
structured questionnaire more suitable. This used as the base to build the research
questions to collect the ideas of CEO and CEO’s subordinators.
Step 2: Quantitative study
Survey was conducted by questionnaires and in-depth interviewing. The
sample for this study was drawn from a population in Hanoi, including:
+ Respondents from 419 CEOs from 419 companies (covered a range of size,
type, majority of businesses).

+ Respondents from 600 people who are the CEOs’ superiors and
subordinates of the mentioned companies.
3.3 Data collection
To survey CEOs in the collected enterprises, the author use the structured
questionnaire. The questionnaire in this study was originally designed based on
secondary research, specifically previous theoretical basis and studies. Then the authors
discussed in the qualitative research and edited the first time. Questionnaires are
separated in 2 types, one is for CEO and the other is for those CEO’s superiors and
subordinates. Before conducting formal research, the author conducted a pilot test on
small samples (10 samples) including CEO and their superiors and subordinators to
check the last editing and adjusted the second time. The last step was to conduct the
official version and sent to the participants to answer questionnaires.
3.4 Scales
Most of the measures for dependent and independent variables used in this study
were drawn from the literature and adapted for the Vietnam context. Most of the scales
used in the study are adopted or modified from the previous researches of Tran thi Van
Hoa (2011) and Golden, Dornheim(1998)[3,7]. The items were developed based on the


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findings from the previous qualitative study, these scales were scored on a 5-point
Likert-type format from never to very often ; Dang Ngoc Su (2012) with scales were
scored on a 5-point Likert-type format from strongly agree to strongly disagree; Kouzes
and Posner (1995) with scales were scored on a 5-point Likert-type format from never to
very often.[6].These scales are used to measure variables: (1) leadership traits of
Vietnam CEOs); (2) leadership knowledge of Vietnam CEOs); (3) leadership actions of
Vietnam CEOs. And the author used the scale of Phan thi Thuc Anh et al (2012) to

mesure firm performance[2].
3.4 Data analysis
The survey was piloted and a number of questions were amended or withdrawn
after the pilot phase. This is the process of modifying structured questionnaires to make
sure that collected information would be more exact. Data was coded and used under
SPSS. The use of factor analysis and Cronbach’s alpha to decipher the internal
consistency of and relationships between questions within modules. Factor analysis was
used to identify common components among sets of items within questionnaires. The
statistical hypothesis test are applied significance level of 5%.(Nguyen Đinh Tho,
Nguyen Thi Mai Trang, 2007)[5].To examine the relationship between the dependent
variable with the independent variables as well as between the independent variables
together to identify the multicollinearity, Pearson correlation coefficients will be used.
If two variables have a linear relationship, the causal relationship of these two variables
can be modeling by linear regression.

CHAPTER 4
FINDINGS
Overview of the Vietnam CEOs
Recognition about the CEO position
Opposite to other countries, CEO has been recognized at the side of position rather than
that of career in Vietnam. CEO is considered as a special job with many difficulties,
challenges, pressures, but also a very high - paying jobs in society. CEO also is
considered as a job leading and managing other occupations in the same company.
The role of operating
Due to Vietnam economy has been changing from subsidized to market, the role
and function of CEO and chairman of the board of a company are sometimes not clearly
separated. Chairman of the board always concurrently hold the position of CEO, and the
CEO is often highly dependent on the chairman of the board when making decisions.
This is clearly reflected in the public sector and private sector which went up from the
small and medium from family business.

Education level
The survey was conducted with 63,760 enterprises in 30 provinces by the
Ministry of Planning and Investment in collaboration with the Japan International
Cooperation Agency (JICA) showed that 54.5% CEO have university degree or higher
(30% of these have degree of master and doctoral), 45.5% remaining is under high
school level. However, just 30% of the 54.5% trained in business management and the
remaining are from other areas. With such a low level, this result is big hindrance for
Vietnam CEOs to join the international business in the current trend of rapidly changing
technology.
4.1.

Training and retraining
The issue of training CEO is limited in Vietnam. There are 2 ways to train CEO: one
is school training and the other is practical experience. CEOs from practical
experience are very small proportion and becomes barely when Vietnam moving to
the economy market while training through schools in Vietnam is inefficient.
Vietnam CEOs are limited in using foreign language, having a poor ability of
informatics, and these lead to the limitation for CEOs to communicate and negotiate.


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Most CEOs only concentrate in improving their talents instead of the ethical.
Selection and appointment
Since CEOs have not been standardized especially the level of training so that
selecting CEOs is not based on the CEO’s training , just on his relations. The selection
of CEO is not really fair and democratic result in the poor quality of CEOs. Hiring CEOs
in Vietnam has not yet developed, primarily in foreign enterprises, private enterprises

with large-scale. And in the remaining, mostly business owners are CEOs. Hiring CEOs
in state-owned enterprises is in the pilot with a little number of companies: Vinashin,
Vinamotor, VEC, glass and ceramics.[4]
4.2 Situation of leadership competency of Vietnam CEOs
4.2.1. Descriptive statistics
Age of Vietnam CEOs
Vietnam CEOs are relatively young age: 39.4% are under the age of 35, 56.6%
aged 35-54 and only 4% over the age of 54.
Gender of Vietnam CEOs
Agree with the previous studies of CEO in Vietnam, Vietnam CEOs have male
sex ratio is higher than female. However, CEOs are female accounted for a significant
proportion (35.9%) in this research.
Level of Vietnam CEOs education
97,5% of Vietnam CEOs have university degree or higher ( 17.1% of this have
degree of master and doctoral), 2.5% are under high school level or have never been in
training. Although this result is not high but it is encouraging compared with the
previously published survey of CEO's education level (CIEM, 2000).
Specialized training of Vietnam CEOs
CEOs are trained in a variety majors: architecture, engineering, foreign languages,
communication, banking, law, computer science, business administration... There is very
little CEOs have not been in training yet (about 3.1%). The result showed that education
and specialized training of Vietnam CEOs have a positive change, in which the training
of economic and business administration accounting for more than a half (54.9%). This
assessment may be a positive influence on the CEOs’ leadership competency (this result
is encouraging compared to overall assessment of Vietnam CEOs with approximately
30% having business knowledge). The result also showed that 90% of CEO respondents
said that they have not been professional trained in the position of CEO and they mainly
rely on the specialized training of the self and self-learning experience.
Operating and leading Experience of Vietnam CEOs
CEOs with 3 years experience of managing and leading is the most percentage

(40.4%), the next is 5 years, 4 years, 6 years and 10 years. In general level, 49.6% of
CEO experienced under 5 years, 43.5% experienced from 5 to 10 years and 6.9%
experienced over 10 years.
4.2.2. Assessment of Vietnam CEO and their superiors and subordinators in
leadership competency

4.2.2.1. Assessment of Vietnam CEO and their superiors and subordinators in
leadership traits
The result show that CEOs seem to assess themselves higher than that of the
subordinators. However, VietNam CEOs’ leadership competency had been strengthened
as following:
CEOs understand and more aware of their role especially their position and their
responsibility to relevant partners inside and outside enterprise.
Creativity is highly appreciated traits of Vietnam CEOs. Vietnam CEOs are very
creative, innovative and hard working. Many CEOs work hard to build
enthusiasm and business development as well as an example for subordinators.
For ethics, CEOs represented pretty good sense of building enterprise’s values and
culture as well as respected for the value of individual.
Vietnam CEOs also very cleared sense of getting objectives and identifying longterm strategic direction for the business. In addition, sensitivity was also the trait
CEOs wanted to express to "win the heart" and run the business more efficiently.
There have a number of traits were shortaged in Vietnam CEOs such as limited
visions…. In addition, CEOs were still not familiar with the habit of meeting
partners’ expectation or actively seeking business opportunities. These lead to the
limitation of the sensitivity to partners’ expectation and business opportunities.
4.2.2.2. Assessment of Vietnam CEO and their superiors and subordinators in
leadership knowledge
For general knowledge of leadership, the authors just surveyed CEO's general
leadership knowledge and used previous research results to obtain a complete picture of
Vietnam CEOs’ leadership competency.
The assessment of general leadership knowledge was putted into the questionnaire

to ask Vietnam CEO self-assessing their leadership knowledge mainly aimed to know
whether they understood clearly about leadership or not. The results of the survey in
Hanoi showed that Vietnam CEOs did not really understand about leadership and this
can prevented CEOs to catch and train leadership knowledge. The question with the
statement "leadership is management" got the highest percentage level of "normal”
showed that Vietnam CEOs were not clearly aware of the nature of leadership.
According to Tran Thi Van Hoa ( 2011), although most Vietnam CEOs have good
technical knowledge, but they were lacked of leadership knowledge such as forecasting,
business strategic directing, developing human resources as well as the way to work
effectively to harness human resources and risk management.This knowledge was
weakest one of Vietnam CEOs and must be completed and updated in rapid change of
business environment. Most of the CEOs’ leadership knowledge was assessed at less
than 3.5 points (scale of 5). Assessment of Vietnam CEOs’ leadership knowledge was
not the same between CEOs and their superiors and subordinators, especially knowledge
of business strategy, risk management and corporate culture.
According to Dang Ngoc Su (2012), general leadership knowledge of leaders in


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Vietnam small and medium enterprises including CEO was not very well. The lack of
these knowledge was also expressed in the inaccurate understanding of the nature of
leading as well as effective leadership.
Overall, general leadership knowledge of Vietnam CEO was still limited and
these will affect Vietnam CEOs’ leadership actions and leadership competency.
4.2.2.3. Assessment of Vietnam CEO and their superiors and subordinators in
leadership actions
Vietnam CEOs understood and were aware of their role especially their position

and responsibility with relevant partners inside and outside enterprise clearly.
Vietnam CEOs had the ability to develop relationships well. Most CEOs were
aware of the business culture of Vietnam as "Commercial with you, sell with
wards" so they were very interested in developing relationships. They also
especially success in building relationships with investors and external partners.
Vietnam CEOs must concern to encourage employees’ heart. The fact that many
CEOs assigned work emotionally and did not assess employees’ ability leaded to
decreased their motivation. As the leader, CEO also need to be able to target
reaching at least 4.5 points. However this ability was still not highly rated. The
biggest drawback of Vietnam CEOs’ goal-oriented was communicating goal and
announcing business vision to all employees and making them understand
business goals in the same way and the same direction.
Vietnam CEOs must concern to developing staff for the achievement did not meet
requirements, particularly their ability to decentralize, staff training and mentoring
support staff.
4.3. Analysing the effect of components of Vietnam CEO’ leadership competency to
firm performance
4.3.1. Testing the variable value
Factor analysis (EFA) is used when the KMO (Kaiser – Mayer – Olkin) value is
more than 0.5 (Marija J, 1993). The results show that KMO & Berlett value of testing is
more than 0.5) and this lead to the conclusion that the scales have high value when used
to measure the corresponding variables.
4.3.2. Evaluating the reliability of the scale
Reliability evaluation is testing whether the scales are consistent with the
corresponding variables. The statistical method used to test the reliability is coefficient
Cronbach's Alpha. The testing results show that all Cronbach's alpha values are greater
the required value of 0.6. In addition, most of Cronbach's Alpha of Item Deleted values
are lower than Cronbach's Alpha and Corrected Item-Total Correlation values are greater
than 0.3. Therefore, the scales in this study are highly reliable.
4.3.3. Correlation coefficient

The Pearson correlation coefficient values between KQHDD and BE, KNOW, DO
are in the range of 0 to 1. It means the relationship between the variables is meaningful
and has no abnormal signs, may continue to use other statistics to test this relationship.

4.3.4. ANOVA test
The ANOVA test shows that the hypothesis at the 0.00 significant level (< 0.05).
The regression model fit the collected data and the variables are included in the
statistical significance of 5% significance level.
Table 4.33 ANOVAb
Model
Sum of Squares
df
Mean Square
F
Sig.
1
Regression
25.693
3
8.564
38.648
.000a
Residual
91.962
415
.222
Total

117.655

418

a. Predictors: (Constant), KNOW, BE, DO
b. Dependent Variable: KQHĐ
Source: The author’s results

4.3.5. Hypothesis tests

Model

Table 4.32: Model Summary
Change Statistics
Std.
Error of
R
R Adjusted the
Square
R Square R Square Estimate Change F Change df1
df2

.213 .47074
.218
dimens1 .467a .218
ion0
a. Predictors: (Constant), KNOW, DO, BE

38.648

3

Sig. F
Change

415

.000

Source: The author’s results

Model

Table 4.34: Coefficientsa
Unstandardized
Standardized
Coefficients
Coefficients
B
Std. Error
Beta

1

1.607
(Constant)
.490
DO
.370
BE
.121
KNOW

a. Dependent Variable: KQHD

.365
.050
.046
.036

.426
.321
.146

t

Sig.
4.404
9.728
7.481
3.314

.000
.000
.000
.001

Source: The author’s results

The result of the regression coefficient in the model shows that the meaning of all
Sig.are less than 0.05. Therefore, the independent variables affect firm performance. All
components of leadership competency are significant and affect firm performance at the
same side because the regression coefficients are positive. The beta coefficients are

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statistically significant which are followed: actions (0.258); knowledge (0.231); traits
(0.155).
The model for these data is the following:
Y = 1.607 + 0.370 BE + 0.121 KNOW+ 0.490 DO
4.3.6. Hypothesis test result
The hypothesis test result shows that the beta coefficients are statistically significant.
The hypothesis test summary as followed:
Table 4.4: Hypothesis test summary
Hypothesis

Result

H1:Vietnam CEOs’ leadership traits are positively related to firm Accepted
performance
H2:Vietnam CEOs’ leadership knowledge are positively related to Accepted
firm performance
H3: Vietnam CEOs’ leadership actions are positively related to firm Accepted
performance
Source: The author’s results

4.4. Discussion and conclusion
The summary from the research in Ha Noi are followed:
The age of Vietnam CEOs are increasingly younger and CEOs at the age of 30
accounted for the largest proportion.

Education level of Vietnam CEOs increasingly improved. There are more and
more CEOs have undergraduate and graduate degree and fewer CEOs are not in
training school. Vietnam CEOs were trained in diverse fields and very little had
not trained in fields. CEOs which trained in economics and business accounting
for more than half (54.9%). This was evaluated with a positive impact on Vietnam
CEOs’ leadership competency. This result is also encouraging compared with the
previous overall assessment of the situation of Vietnam CEOs stated with CEOs’
knowledge of business administration approximately 30%). However, the
alarming fact that 90% of CEOs respondents said that they had not been trained
on the CEO job professionally and they mostly relied on their specialized training,
their experience and self - study.
Vietnam CEOs with 5 years operating experience is the biggest proportion
(17.7%), followed was the number of CEOs had 3 years, 2 years, 4 years , 6 years
and 10 years experience. In general level , 49.6% CEOs had operating experience
under 5 years , 43.5% was from 5 to 10 years and 6.9 % was over 10 years .
Vietnam CEOs understand their role in the business, clearly awared of who they
are and how they responsible for relevant partners inside and outside the
enterprise.

The key traits of Vietnam CEOs were identified including innovative, flexible,
sensitive, responsible, ethical, trust worthy. In particular, creativity is appreciated
trait of Vietnam CEOs. They are very creative, innovative and hard working.
Many CEOs work hard to build enthusiasm and developing business as well as
doing an example for subordinates. With moral, Vietnam CEOs were good at
building a sense of corporate culture values and respecting for individual’s value.
The traits were not highly evaluated which were sensitivity and flexibility.
Vietnam CEOs were not also familiared with meeting partners’ expectation and
actively seeking business opportunities. Therefore, their sensitive to partners’
expectations and business opportunities is very limited . However, sensitivity is
the trait that CEOs expressed desire to "win the heart" and run the business more

efficiently. In addition to these traits, the research also found some leadership
traits are considered important for Vietnam CEOs as followed: assertive,
inquisitive, sociable , vision, acumen, humility, sharing, patience, intelligence…
Vietnam CEOs’ traits and actions are incommensurated with the requirements and
expectations of superiors and subordinators. Vietnam CEOs tend to appreciate
themselves higher than them.
According to the factor analysis result, the factors "honesty" and its observed
variables are eliminated. This can be explained that CEOs tend to concentrate the
traits flexibility, innovative and responsible. Specific business environment in
Vietnam sometimes causing CEOs to improvise flexibility in operating and this
can lead to the fact that honesty sometimes becomes excessive drag. Meanwhile,
the mentioned analysis shows that the board and the investors are very interested
in CEOs’ honesty (this reflects the relationship among the CEO, board
management and investors). In fact, honesty is the trait that is difficult to measure
so that it should be overshadowed in feeling about CEOs’ leadership competency.
Vietnam CEOs’ leadership general knowledge was still limited, especially they
did not really understand the nature of leadership as well as the difference
between leadership and management. This can affect CEOs’ leadership actions
and leadership competency. As mentioned in theoretical chapter, firm
performance expressed through CEOs’ leadership competency is the combination
of leadership traits, knowledge and actions. To have leadership competency, CEO
must have not only the basic but also the expert knowledge such as leadership,
management, the way to encourage, knowledge of politic, culture and society, ...
So that the general knowledge like a statement " leadership is management “ may
not contain much meaning when considering components of CEOs’ leadership
competency.
The observed variables such as "I facilitate individuals mature in their work
through training, learning " and " I let people decide proactive in their work" in
the scale of leadership actions "enabling others to act" were extracted into
leadership action "modeling the way". This shows that the action "modeling the

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way" of Vietnam CEOs needs to be shown not only verbally but also through
practical learning and specific action. CEOs want to develop others then they
must model the way and through modeling the way to develop others.
Among the components of Vietnam CEOs’ leadership competency, all three
factors positively impacted on firm performance. CEOs’ leadership actions had
the greatest impact, following were leadership traits and knowledge.
4.5. Recommendations
Although the subject of leadership and leadership competency had been studied a
lot in the world but it is still very little in Vietnam. With the differences in culture,
customs, traditions as well as the frequent change of business environment, there have
been much “space” to study in Vietnam with this topic. Specifically, researchers can
focused on the context of private enterprises, small and medium enterprises or
businesses in a certain industry. Objects of the research can be leadership competency of
senior leadership (not just the CEO) or the middle level... It can also be the issue of
gender, age, education level, experience of the leader or manager …The object also can
be factors affecting leadership traits, the relationship between leadership trait and action,
leadership knowledge and action...

CHAPTER 5
ORIENTED SOLUTIONS AND RECOMMENDATIONS FOR IMPROVING
VIETNAM CEO’ LEADERSHIP COMPETENCY
5.1. Discuss of the research
This research model is based on model leadership competency Be-Know-Do
(BKD) of the U.S. Army and is identical to the leadership competency model AttitudeSkills - Knowledge (ASK) (Bass, 1990). In addition, inheritance of previous researches

is a necessity in order to build the model. The author has inherited the results of previous
studies, such as leadership theories, especially transformational theory, the traits theory.
For the first component of the model is BE - traits: the trait theory as well as
researches on leadership traits has shown that there are certain personal qualities that
affect leadership competency - called leadership traits. That is, if individuals have strong
leadership traits will have leadership competency. In particular, Mann, 1959 emphasized
the qualities smart, manly, temperate, careful and openness; Marlove, 1986 emphasized
emotional intelligence; Mc Crae & Costa, 1987 emphasized creative, assertiveness, trust
and nurture subordinates; Kirpatrick and Locke, 1991 emphasized the confidence,
understanding tasks, integrity. Bass, 1997 showed courage, assertive, have compassion
and sensitive, ethics. Tran thi Van Hoa, 2011 also showed the leadership traits such as
creativity, flexibility, ethics...The result of this study also agree with the mentioned
studies with the traits of creativity, flexibility, trust worthy, responsibility, courage and
sensitive.
The second component of the model is KNOW- knowledge: Leadership
knowledge is the common understanding of the leadership field. The studies of
leadership competency had the following authors are more interested in aspects of
leadership knowledge such as Schein (1996, p.67) interested in understanding emotion
to manage themselves and others; Bass (1981.1997) showed that basic knowledge
(cognitive ability), social knowledge (capacity and sociable adaptive), and occupational
knowledge (professional competence) were mentioned in the study of Mahoney et al.
(1965), Mintzberg (1973), Katz & Kahn (1978), Lau & Pavett (1980), Connelly et al.
(2000), Mumford, Marks, et al. (2000); Zaccaro (2001) ... These authors also enhanced
common leadership knowledge for the leadership competency in individuals. In this
study, the authors just used basic leadership knowledge to provide a basic understanding
of concepts such as what is leadership and distinguished leadership with management ...
The results of the study also agreed with these view that leadership knowledge can affect
ones’ leadership competency.
The third component of the model is DO – action: The fact that leaders have
personal traits consistent with leadership position as well as knowing and applying

leadership is considered as "necessary condition". More over, the "sufficient condition"
is how can the leaders act with those leadership traits and knowledge. For this reason,
the DO component in the model was stressed.
In general, the results of the study basically agree with the mentioned quantitative


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researches. The result showed that firm performance influenced by three factors:
leadership traits, leadership knowledge and leadership actions. The effect level of these
factors to firm performance are different (shown by the magnitude of the beta).
Compared with Tran thi Van Hoa’s research (the closed approach subject), the author
pointed out the impact of VietNam CEOs’ leadership traits, knowledge and actions to
firm performance. Besides, the author has used the 3rd component "DO" of leadership
competency instead of "Skills" - "DO" contains more practices than "SKILLS" (The
question with "DO" includes CEOs’ attitude in managing and leading - see the survey
table in appendix).
In study, the author also concluded positively for the author Tran thi Van Hoa
when comparing and evaluating Vietnam CEOs’ leadership competency between
themselves and their superiors and subordinators. Thus, CEO is a specific position
which related to many others so that it should be need multi-dimensional assessment of
the components of leadership competency to improve CEOs’ leadership competency.
This could be the opened direction for further researches. This research also has limited
not to narrow the scope of the study to a particular industry in Vietnam. According to the
situational theory, the context has an influence on one’s leadership competency. And the
industry is characterized the context so that this also opens up a new direction for further
researches in Vietnam. Although there exist certain limitations but this research has
helped improve the understanding of leadership and leadership competency of

individuals as well as the components of leadership competency and its’ influence to
firm performance. This forms the basis for CEOs to improve their leadership
competency.
5.2. Oriented solutions to improve VietNam CEOs’ leadership competency
5.2.1. Improving VietNam CEOs’leadership competency based on the leadership traits
For leadership traits were identified in the study, Vietnam CEOs should clearly
aware of the nature of these traits as well as its role for leadership actions. For example,
flexible can help CEOs response quickly and consistently in building business vision
and behave consistent with individuals with different personalities inside the company.
Trustworthy, ethical, encourage help CEOs gain the trust and sympathy of the people,
generating invisible force to make everyone listen to and follow. Creative helps CEOs
refresh themselves and refresh formal and informal relationship between them and the
others as well as the business with new products and services ... Sensitive helps CEOs
exploit and recognize things early and be able to "go ahead" to solve problems (for
example, judgment is the mental state and the desire of employees to judge the trend of
market development product sales industry in the future ...). Those traits can be present
at birth but it is important that CEOs must be aware of their training and continuing
learning. CEOs can learn from those around them and through publications, participating
in programs and courses for the CEO, self-testing exercises to assess traits themselves or
ordering people around them (lower level, family ...) evaluate in order to have the multidimensional information. In addition, Vietnam CEOs should also note to train the traits

identified in the open - ended questions in this research, that are humility, decisiveness,
determination, generosity in order to improve and refresh their own in order to have the
ability to influent others.
5.2.2. . Improving VietNam CEOs’ leadership competency based on the leadership
knowledge
To be able to improve leadership competency, in addition to certain leadership
traits, CEOs should have basic knowledge of leadership such as the nature of vision and
the method of determining the vision, understanding of communication, the art of
building a personal image, skills of listening, culture of encouraging ... To do these,

CEOs should:
Visiting, surveying and studying successful businesses in Vietnam and around the
world. Note that not only the same but also the different industry can be visited so
that new ideas may be appeared.
Joining in clubs and workshops of experience sharing of leadership and
management to gather information and improve vision such as CEO Club,
seminars on personnel, industrial conferences...
Finding information on the mass media, reputation books on leadership and
executive management such as CEO forums.
Participating in training courses of professional CEO with topics such as strategic
thinking, creative thinking ... In addition, choosing good education institutions as
well as good lectures is extremely important factor in order to get good education.
(for example countries having leading education like UK, U.S., Singapore ...).
5.2.3. Improving Vietnam CEOs’ leadership competency based on the leadership
actions
For the action model the way: CEOs are aware clearly of their business value and
beliefs. They keep the firm on by behaving in a way that is consistent with these
values (for example, principles of behavior with clients and colleague). To do this,
CEOs must concern with others’ ability so that the company can reach its goals
more realistic.
For the action enable others to act: VietNam CEOs should build the company’s
vision, give out the ideas shape the way the company will be. Then, they should
transfer those in order to meet employee’s expectation. The CEOs with the ability
of enabling others to act can gain the support and assistance of subordinators. So,
CEOs need to establish the importance and trust in their subordinators.
For the action inspire a shared vision: CEOs need to be aware of their role to
shape, to build and to spread the vision in their business. To be able to share the
vision, CEOs should clearly aware of corporate vision at first. Then, by sympathy,
enthusiastic and effective networking skills, CEOs can share subordinators their
point, show them the good result of sharing vision, through which the company's

objectives will be achieved. This action can be divided into two main topics which
are: envisioning the business future and sharing with subordinators about that


23

vission.
For the action encourage the heart: To continue to pursue the given vision, CEOs
need to have their heart, minds and enthusiasm.This action can divide in two
components: recognizing one’s contributions and celebrating accomplishments.
For the action challenge the process: CEOs are pioneers – people who search out
opportunities even though they have to step into the “unknown” to build strategic
goals and long-term future of the company. CEOs can willing to take the risks.
There can be a failure following taking risks but CEOs must treat failure as
learning opportunities. The two important points of challenging the process are
searching opportunities and experimenting new ideas.
5.2.4. Recommendation
Strengthening leadership is not only the needs of CEOs themselves but also is one
of the key contents help to create high-quality human resources to meet the development
requirements of the country. However, in order to improve Vietnam CEOs’ leadership
competency, Viet Nam CEOs’ awareness and effort and the support of many other sides
are needed. Specific responsibilities and participation of these sides could be The
Government, the Association of departments, training facilities and businesses.

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CONCLUSION
Thus, in the process of international integration, Vietnam CEOs should have
adequate knowledge not only about management but also leadership to have leadership
competency running the business better. In the context of changing international,

regional and domestic business environment, improving Viet Nam CEOs’ leadership
competency is the important solution to develop enterprises sustainable on the basis of
people-centered as well as CEOs – center of management and leadership.
History of leadership theory showed the debate about whether the leadership traits
have made the leadership competency or not. As theory "Great man” confirmed the
leader was born – because of she/he had her/his natural talent or her/his origin. The
theory “Traits theory” gave "The element of the standard" making leadership
competency of individuals and confirmed that individuals with these traits would have
leadership competency. The identification of these leadership traits are valuable in
detecting the leadership talent, gathering the leadership traits expected from the
follower. However, the view that leadership traits are due to natural born and therefore
could not be changed are thought to be wrong. A person can learn how to change his
personal traits to get the necessary leadership traits. This survey was done to identify
Vietnam CEOs’ leadership traits, knowledge and actions. By identifying and
understanding the traits associated with Vietnam CEOs’ leadership competency as well
as the basic leadership knowledge and actions, CEOs are able to detect and train
themselves to improve and enhance their leadership competency. Believe that with
CEOs’ sense of self-training and suitable training programs, the attention of the
Government, the Association and business departments, Vietnam CEOs can improve
their leadership competency to lead the organizations better.
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