Enhancing the efficiency of internal coordination at interlog company

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

Tran Bao Ngoc

ENHANCING THE EFFICIENCY OF
INTERNAL COORDINATION AT
INTERLOG COMPANY

ID: 22130047

MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: NGUYEN THI MAI TRANG

Ho Chi Minh City – April 20th , 2016


ACKNOWLEDGEMENT
Foremost, I would like to express my sincere to my supervisor Mrs. Nguyen Thi Mai
Trang for the support of my thesis, for her insightful comments and immense knowledge. Her
guidance deeply helped me during the time of collecting information and writing of this thesis.
My thought process was enriched from conversations and illustrations of Mrs. Mai Trang
especially problems identification. The attention of Mrs. Mai Trang to the details and specific
theories as well as evidences in my thesis is valuable. I am deeply grateful for the time and
energy that she invested in my thesis.
Likewise, I would like to thank International Logistics Company’s management team
and colleagues who generously provided me much related documentations and precise
information concerned the background and current problems. Especially, I am thankful to
Human Resource department, Accounting department for the annual data reports. Besides,
my deep gratitude is extended to each of people in several departments of International

Logistics Company as Mr. Nguyen Duy Minh, Mrs. Dang Nguyen Thao Linh, Ms. Nguyen
Thi Hoang Linh, Mr. Ho Phuoc Loc and Mrs. Vo Van Cat Duyen for supporting in-depth
interview as well as rich friendship.
Finally, I would like to thank all members of my family and my close friends who
continuously supported me during difficult period of time when doing this research.

1


TABLE OF CONTENTS
Page
ACKNOWLEDGEMENT .................................................................................... 1
LIST OF TABLES ............................................................................................... 3
LIST OF FIGURES ............................................................................................. 3
EXECUTIVE SUMMARY ................................................................................... 4
I.

INTRODUCTION ...................................................................................... 6
1.1 Logistics industry overview ................................................................... 6
1.2 Company background .......................................................................... 10
1.3 Company structure ............................................................................... 12

II.

PROBLEM IDENTIFICATION ............................................................ 15
2.1 The problem symptom ......................................................................... 15
2.2 The inefficiency of internal coordination at Interlog Company .......... 24
2.3 The low satisfaction of salary and wages at Interlog Company .......... 30
2.4 The limited evaluation and promotion system at Interlog Company .. 33
2.5 Causes and effect diagram ................................................................... 35

2.6 The real core problem .......................................................................... 37

III.

TENTATIVE SOLUTIONS .................................................................... 39
3.1 The first alternative of enhancing communication and ....................... 40
internal sharing knowledge.
3.2 The second alternative of standard working process ........................... 44

IV.

IMPLEMENTATION ............................................................................ 47

V.

CONCLUSION......................................................................................... 48

VI.

SUPPORTING INFORMATION........................................................... 49
6.1 Research methodology ......................................................................... 49
6.2 Report transcript ................................................................................... 51
6.3 Interview transcript .............................................................................. 53

REFERENCES .................................................................................................... 64

2


LIST OF TABLES

Tables

Page

1

Types of transportation ............................................................................ 7

2

Historical development of growth stage of logistics ................................ 8

3

The turnover rate of each department ................................................... 16

4

List of literature reviews.......................................................................... 20

5

Vietnam Logistics Average Salary ......................................................... 32

6

Salary scale according functional position ............................................ 34

LIST OF FIGURES
Figures

Page

1

Types of logistics......................................................................................... 7

2

Percentage changes of LPI score from 2007 – 2014 ................................ 9

3

Organizational Chart in 2015 ................................................................. 13

4

Ranking of Positive responses to each dimension ................................. 17

5

[Relation with other Department] dimension........................................ 18

6

[Wages] dimension ................................................................................... 18

7

[Evaluation, Promotion] dimension ....................................................... 19

8

Fishbone diagram of the inefficiency internal ...................................... 36
coordination in Interlog

3


EXECUTIVE SUMMARY
Currently, Logistics industry is one of the key development plans of Vietnam economy,
especially in the world economic integration. According to Vietnam Logistics Association
(VLA), there are more than 1200 enterprises in the logistics sector which mostly small and
medium company. Meanwhile, there are only 25 multinational logistics companies but they
occupy 70% to 80% Vietnam logistics market share. Along with efforts to participate in the
important economic agreements such as ASEAN Economic Community (AEC), EU –
Vietnam Free Trade Agreement (EVFTA), Trans-Pacific Partnership (TPP), the Vietnam’s
logistics industry in general and Vietnam Logistics enterprises in particular are growing
constantly. Following, import-export activities will be increasing in company with the growth
of GDP. Therefore, the landscape of Logistics sector in Vietnam is fronting with opportunities
and challenges not only business but also human resource management.
International Logistics Joint Stock Company (Interlog) is a small and medium-sized
enterprise (SME) of Vietnam Logistics industry. Interlog was established in August 2005 with
its head office located in Hochiminh City. They have developed the branch offices in South
and North of Vietnam as well as the cooperated partners in Hai Phong and Da Nang. From
the beginning of Interlog, they have built a powerful workforce of 30 to 100 full time
employees and the number will be increasing in future. However, Interlog has currently faced
with the high turnover rate of employees from 19.5% out of total in 2013 to 26.88% out of
total in 2014, especially a higher rate more than 50% of Sales Division. This rate is particularly
high compared with the average rate of the same industry. Through collecting secondary data

from the company as well as the Employee Satisfaction Survey (ESS) results, the author

4


conducted in-depth interview technique to find out viewpoints of some people in different
position at Interlog Company. Following, there are some tentative problems include
inefficiency of internal coordination, low salary and limited evaluation system that affect to
employee satisfaction.
Overall, the core problem of Interlog Company was identified inefficient coordination.
The causes of this coordination were illustrated by communication, working relationship,
knowledge sharing and working process. In details, these causes influenced the ability of
employees’ satisfaction to which performed the high turnover rate of employees through
every year. Moreover, the determination of existing problems will be based to offer the
appropriate solutions in order to reduce the negative impacts on the internal coordination at
Interlog Company.

5


I.

INTRODUCTION

1.1 Logistics industry overview
In most industries, logistics is the part of the supply chain management that includes
transportation, warehousing, forwarding and other value added services. The term “logistics”
refers to the process or activities of planning and managing the flow and storage of goods,
services or information from the point of origin to the point of consumption in order to
conform to customer requirements. Further, logistics nowadays is a significant component of

global trade. Accordingly, logistics in business has the main function of control the movement
of resources and supplies. The business in logistics industry need to be sure that required
items are in the right place at a right time. In brief, the lower the logistics cost and the greater
the quality of logistics services available, the higher the amount of word trade being
conducted. Regarding to World Bank (2004), logistics activities typically involve the
following elements:
-

Infrastructure: ports, terminals, railway, roads;

-

Operations: warehousing, storage, local distribution, trucking, cabotage;

-

Services: freight forwarders and customs brokers.

6


Figure 1: Types of logistics
Source: Decree No. 140/2007/ND/CP issued by September 5, 2007

Among the types of logistics includes Forwarding, Transportation, Warehouse and
Other value added services, Transportation is the most common one which occupies 40% to
60% of logistics cost. Besides, Transportation can create many combinations of transport
modes appropriately. There are five common modes of transportation as follows:
Table 1: Types of transportation
Transport modes

Description

Limitation

Airways / airplanes

Airplanes are the fastest mode but very
expensive

Availability of appropriate airport facilities

Roadways / trucks

Trucks are relatively quick and a very
flexible mode

Subject to the fluctuation of fuel cost and
road conditions

Railway / rail

Rail is a cost efficient mode but can be
slow

Availability of rail lines

Shipping / vessels

Ship is very cost efficient but the slowest

mode of transport

Availability of port and canals

Pipelines

Pipelines can be very efficient

Restricted to liquid commodities and gases
Source: VPBS collected
7


Moreover, according to the historical economic development, logistics has grown from
the simplest stage as first party logistics (1PL) to more complex and upper stages such as third
party logistics (3PL) and fourth-party logistics (4PL). Currently, following the advancement
of technology, infrastructure and human resource, the upper stages of logistics services
especially 3PL are more applicable in developed countries as Vietnam. In fact, the 3PL in
Vietnam is developing quickly in terms of revenues and number of active firms. The Vietnam
Logistics Association stated that their 3PL members increased from 4 members in the period
of 1994 to 1997 to 275 members in 2014.
Table 2: Historical development of growth stage of logistics
First party logistics
(1PL)

Second party logistics
(2PL)

Third party logistics
(3PL)

Fourth party logistics
(4PL)

1960s

1970 – 1980

1980 – 2000

>2000

Companies create
complete logistics chains
and systems connected
with customer and
supplier. The integration
of corporate activities and
the development of
supplying, production
and distribution systems
is actually being
materialized.

Integrated logistics
system is a very complex,
system-related problem.
One of the requirements
is the establishment of
strategic alliances

between companies, their
customers, products
suppliers and logistics
providers.

Logistics were limited to
distribution. Problems
relating to transaction
with finished products
and related physical
distribution were
dominant. The problem of
inventories was not
important.

Corporate logistics were
gradually extended to
supplying (purchases,
procurement) and to
production
management.

Source: Technical University Liberec

In Vietnam, logistics are now becoming a major driving force in the development of
national economic development. In fact, Vietnam’s logistics cost nowadays occupies about
25% of GDP that it still much higher than peer countries. Reality, logistics development in
Vietnam still meets difficulties with limitations of logistics sectors include bulky and
inconsistent government regulations easily enable payment to officials, separation of planning

8


and implementing in transportation infrastructure without considering of supply and demand.
Further, the limitation also represent with fragmented trucking industry as well as imbalances
in infrastructure provision. In the other hand, Vietnam showed the consistent improvement
over each year through economic growth. According to the World Bank report of connecting
to compete 2014, Vietnam ranked number 48 among 166 countries and number 5 in the
Association of Southeast Asian Nation with a Logistics Performance Index (LPI) score of
3.15 which following after Singapore (4.3), Malaysia (3.59) and Thailand (3.43).

Figure 2: Percentage changes of LPI score from 2007 – 2014
Source: World Bank

Moreover, the free trade agreements such as the Trans-Pacific Partnership (TPP) and
Free trade agreement (FTA) of Vietnam – European Union (EU) was established at the end
of 2015 that will boost Vietnam economy as well as international trading. Especially, logistics
will be one of the strongest growing sectors through these agreements.

9


1.2 Company background
International Logistics Joint Stock Company with the short name Interlog is a small
and medium-sized enterprise (SME) of Vietnam Logistics industry. Accompanying the
important role of Logistics industry in the development of the economy, Interlog was
established in August 2005 with its head office located in Hochiminh City. They have
developed the branch offices in South and North of Vietnam as well as the cooperated partners
in Hai Phong and Da Nang. From the beginning of Interlog, they have built a powerful
workforce of 30 to 100 full time employees and the number will be increasing in future. Their

employees have been constantly improving and enhancing their professional qualifications in
order to respond to the growing and competition of a market in general and Logistics industry
in particular.
Operating in logistics business, Interlog has developed a mission to create the effective
supply chain that brings benefits to customers, itself and community. Besides, Interlog has
oriented in the next 5 years to become the leading supply chain innovator not only in Vietnam
but also in Indochina area. Together with its own vision and mission, Interlog consciously
builds the corporate culture through important criteria. The first criterion is teamwork which
working skills play a vital role. This one aims to working together towards the same objective
and sharing responsibility. In additional, the information interacts in precise, prompt and
sufficient way as well as rapidly and accurately targeting, analyzing and solving problem. The
next criterion of corporate culture is knowledge which individual background combines with
intense training. Accordingly, knowledge is defined to positive attitude as non-stop learning
and willing to adopt by changing all the time. Therefore, the leadership team of Interlog has

10


determined that training plays an important role in order to improve the service quality. More
importantly, Interlog focuses on recruitment hunting for high passionate employees in
Logistics industry. The last important criterion is win-win cooperation with benefits sharing
equally. Interlog has been creating corporation’s benefits base on the benefit of their
customers and partners. Accordingly, their stakeholders who work as employees are
appraised equally by working performance as well.
Over 10 years, Interlog has developed with achievements through significant
milestones, include:
-

2005: Established Intelog Head office in Hochiminh City. Achieved ISO 9001:2000

-

2006: Achieved Vietnam Excellent Brand Certificate, which was organized by
Ministry of Trade and Vietnam Economic Times

-

2007: Became the agent of PCI (Pacific Concord INTL in Taiwan) who is one of the
leading of NVOCC in Asia

-

2008: To be approved as an Official Licensed Customs Broker by Vietnam Customs
General Agency

-

2011: Became the partner of AGS (AGS World Transport) in Vietnam. AGS is one of
the leading of NVOCC in Asia

-

2012: Established Interlog-Hanoi Branch

-

2014: Established Nhon Trach Depot in Dong Nai province

11

1.3 Company structure
With the nature of logistics business, Interlog sets up its organization into particular
departments that run each part of every shipment from customers. The organization system
of Interlog comprises of Sales Division, Production Division and HR-Finance Division. In
details, Sales Division contains many specific segments of Export, Import and Domestics
shipments; meanwhile Production Division gets involve in paperwork, documents, customs,
trucking and warehousing departments etc. According to survey report of Vietnam National
Productivity Institute about enterprises capacity, Interlog’s organizational structure quite
cumbersome with many different departments. This structure are split many small parts with
intermediate levels of management.

12


Board of Director

Board of Supervisor

Director

Deputy Director

Warehouse

Customs

Trucking
Solutions

Multi
Transport
Operator

Interconsol

Agents
Development

Document

Accounting

Sales

Supply Chain
Management

Marketing
& HR

Figure 3. Organizational Chart in 2015
Source: Organizational structure from Human Resources Department in 2015

13

Hanoi
Branch

Working in Logistics services, Interlog started business with basic forwarding services
includes Sea and Air freight forwarding, customs clearance, warehouse management and Non
Vessel Operating Common Carrier (N.V.O.C.C). From 2008 until now, Interlog has developed
Logistics service provider with total logistics services and ongoing projects.
To be a professional logistics services provider in Vietnam, Interlog determines to set up
developed network system widely with agents all over the world. Furthermore, Interlog has
constantly provided many solutions through diversified projects that are created based on its
logistics knowledge and local expertise. During 10 years of operation, Interlog has determined
their core customers of factories, FDI companies with large volumes of import or export
inquiries. Together with all main services, Interlog constantly creates values to benefit customers
by offering multiple projects that directly optimized the production process and complete the
supply chain as well. The projects were operated over years include barge transportation in 2012;
Hanoi Hub as Logistics Center in Northern Vietnam and Dong Nai Hub as Logistics Center in
Dong Nai, Binh Duong and neighboring regions in 2013; Nhon Trach Depot of New Transport
Model in 2014; and the Nhon Trach – Cai Mep connection by trucking solution in 2015.

14


II.

PROBLEM IDENTIFICATION

2.1 The problem symptom
Although there are many important distributions of small and medium-sized enterprises
(SMEs) in Logistics now, they face many problems in human resource (HR) as increasing
demand for human resources and lacking of the right personnel especially in the management
positions which prevent the SMEs development. Being the SME of Logistics industry in
Vietnam, during 10 years of operation, Interlog has made a lot of changes and developments.
From 30 employees to nearly 100 ones and from the basic service provider to total logistics

services provider in recent proved that Interlog has been to the right direction. Additionally, the
revenues and profits have been growing annually although the growth rate is relatively low.
While developing stably throughout 10 years with the staffs and diversified services, Interlog
still has problems of personnel effects. Specially, from the beginning of the year 2014 to 2015,
they have faced the biggest personnel changes ever. With the high turnover ratio 26.88%
compared to 10% as in the official report of Tower Watson Company in 2014 (Gioi, 2015),
Interlog has faced with the high number of leaving job from employees. From the annual human
resource reports, the statistical numbers of turnover rate are showed 19.5% in 2013 and 26.88%
in 2014 with a higher rate more than 50% of Sales Division as follows:

15


Table 3. The turnover rate of each department
Number of employee
No.

The ratio (%)

Department
2013

2014

2013

2014

1

Warehouse

2

3

12,5

12

2

Customs

0

0

0

0

3

Trucking solution

2

1

12,5

4

4

Documentation

0

4

0

16

5

Multi transport operator

0

0

0

0

6

Interconsol

1

3

6,25

12

7

Agents development

2

1

12,5

4

8

Sales

0

1

0

4

9

Supply chain management

3

6

18,75

24

10

Hanoi Branch

2

3

12,5

12

11

Marketing & HR

2

1

12,5

4

12

Accounting

2

1

12,5

4

13

Board of Director

0

1

0

4

16

25

100

100

Total

Source: Data sourced from Annual human resource report of year 2013 & 2014

In additional, the results from Employee Satisfaction Survey (ESS) of Vietnam National
Productivity Institute (VNPI) in Interlog which was implemented in May 2015 indicated that
some factors of employee satisfaction had low rate positive responses compared with total
employee satisfaction. These factors were studied related to survey questions in order to find out
ranking of them includes wages; work load; evaluation, promotion; relation with other

16


department; working hours; physical work environment; supervision; relation with customers;
motivation, job enrichment; job assignment, allocation; career development; understanding
corporation and relation with colleagues. This ESS was based on 79 people including managers
and staffs. Accordingly, figure 4 shows four factors of employee satisfaction survey which has
lowest rates compared with the remaining factors, those are relation with other department,

evaluation, promotion, work load and wages. Through the ranking of positive responses to each
dimensions of figure 4, from figure 5 to figure 7 analyzed details of the lowest dimensions
includes relation with other department, wages and evaluation, promotion. These details
represent the lowest response rate in each of the compatible survey questions from employees.

Ranking of Positive responses to each dimensions
Wages
Work Load
Evaluation, Promotion
Relation with Other Department
Working hours, Leaves
Physical Work Environment
Supervision
Relation with Customers
Motivation, Job Enrichment
Job Assignment, Allocation
Career Development
Understanding Corporation
Relation with Colleagues

57.0
69.5
72.2
73.6
76.0
77.6
78.7
82.3
83.0
83.1

83.6
85.3
89.3

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0 100.0

Figure 4. Ranking of Positive responses to each dimension
Source: Report on Management Consultancy of Vietnam National Productivity Institute in 2015

17

[Relation with other Department] dimension
Agree

Slightly agree

Neither agree nor disagree

The necessary information is shared well with the
relevant departments

Disagree

1.2
16.5 3.8

44.3

34.2

In the workplace, support for the relevant
departments is provided enormously
The coordination of work between departments is
smooth and appropriate

Slightly Disagree
%

11.4 6.31.3

43.0

38.0

15.2

41.8

24.1

15.2 3.7

Figure 5. [Relation with other Department] dimension
Source: Report on Management Consultancy of Vietnam National Productivity Institute in 2015

[Wages] dimension
Agree

Slightly agree

Neither agree nor disagree

Slightly Disagree

Disagree

%
I am satisfied with the mechanism of determination
of my salaries and bonuses
My salary is appropriate level in the aspect of the
job description

My salary is equal or more compared to the other
companies of the same industry

20.3

43.0

24.0

15.4

5.0 16.5

39.2

25.6

8.9

24.4

12.8

16.5

15.2

11.4

21.8

Figure 6. [Wages] dimension
Source: Report on Management Consultancy of Vietnam National Productivity Institute in 2015

18


[Evaluation, Promotion] dimension
Agree

Slightly agree

Neither agree nor disagree

Slightly Disagree

Disagree

%

I am satisfied with the mechanism of personnel
evaluation

31.6

I am satisfied with the mechanism of promotion and
pay hike

32.9

The staffing of our company is in accordance with
the competencies and aptitude of the employees
properly
By obtaining the qualification or enhancing the high
level of knowledge and skills, opportunity for the
highly specialized positions are available in my…

39.2

30.4

13.9 6.3

24.1

6.3 6.3

2.5
13.9 3.8

30.4

49.4

38.0

8.9

21.5

30.4

5.15.0

Figure 7. [Evaluation, Promotion] dimension
Source: Report on Management Consultancy of Vietnam National Productivity Institute in 2015

Through the data gathered from Human Resources Department reports and Management
Consultancy of Vietnam National Productivity Institute, the number shows that Interlog has the
job satisfaction of employees quite low at some factors which affect to employees intention
through the years. Anis, Rehman, Khan & Humayoun (2011) stated that general satisfaction
refers to an employee’s emotional state regarding a job calculated by the different between actual
and desired outcome. Another theory of job satisfaction found that it also refers to an individual
attitude towards the job. Therefore, the employees will score high or low on factors of job
satisfaction toward positive or negative attitudes (Buitendach, Rothmann, 2009). Following
another related theory, employee turnover is well defined as the movement of employees across
the labor market; between firms and positions (Ongori, 2007). Chikwe (2009) and Cho, Woods,

19


Jang and Erdem (2006) stated that the definition of turnover refers to the replacement of an
employee who left the organization with a newly hired employee. According to Price (2001), the
turnover rate can be measured and calculated by dividing the number of employees leaving the
organization over a specific period by the average number of employees employed in that same
period, multiplied by a hundred. Regarding collected data from Interlog Company and related
theories, the turnover rates from last two years is shown at high level, thus, it can damage the
company image and development. Especially, the three lowest rate dimensions of employee
satisfaction currently are the root cause that needs immediate attention.
All the antecedents and findings on the table below is very useful and valuable source for

the writer to propose the tentative problems and identify the central problem at Interlog Company
currently. All the findings show the impact of antecedents to turnover intention and job
performance.
Table 4: List of literature reviews
No.
1

Author

Antecedents

Aamir and Sohail
(2006).

Facets of job
satisfaction:

Antecedents and
Consequences of
Organizational
Commitment.
Applied H.R.M
Research (Vol.11,
Number 1, 2006).

- Pay
- Promotion
opportunities
- Coworkers /
Supervision

- Job security
- Training opportunities
- Working conditions

Outcomes
- Job performance
- Turnover
intention

Research findings
The findings of this research
revealed that personal
characteristics, facets of job
satisfaction, and both
distributive and procedural
justice significantly explained
variance in the organizational
commitment. Hence it
examined the influence of
organizational commitment on
job performance and turnover
intention.

20


2

Kumar and Gupta
(2008).

Perceived organizational
justice:

Perceived
Organizational
Justice, Job
Satisfaction and
Turnover Intentions:
A Co-relational
Study.

- Distributive justice:
employees'
perceptions about the
fairness of managerial
decisions relative to
the distribution of
outcomes such as pay,
promotions…
- Procedural justice:
decision-making
process

Gujarat Journal of
Psychology (25-26).

- Turnover
intention

There was a significant positive
correlation between Perceived
Organizational justice and Job
satisfaction whereas significant
negative correlation was found
between Perceived
Organizational justice and
Turnover Intention; Job
satisfaction and Turnover
Intention.

- Compensation
practices
- Performance
evaluation
- Promotion practices

Employee
performance

This study investigated the
impact of three HRM practices
namely compensation,
performance evaluation and
promotion practices on
employee performance of both
public and private sector
organizations of Pakistan.
Result indicated that
compensation and performance

evaluation practices were
significantly and positively
associated with employee
performance of both public and
private sector organizations of
Pakistan. On the other hand
promotion practices were found
to be insignificantly associated
with employee performance of
both public and private sector
organizations.

- Job satisfaction
- Career growth
opportunities
- Organizational
environment

Turnover intention

This study is aimed at finding
the impact of organizational
environment, job satisfaction of
employees and career growth
opportunities upon the
employee’s intent to leave the
organization. Therefore, the

Job satisfaction
3

Bilal (2011).
Impact of
Compensation,
Performance
Evaluation and
Promotion Practices
on Government
Employees
Performance VS
Private Employees
Performance.
Interdisciplinary
Journal Of
Contemporary
Research In Business
(907-918)

4

Shahzad (2011).
Organizational
Environment, Job
Satisfaction and
Career Growth
Opportunities: A

21

Link to Employee
Turnover Intentions
in Public Sector of
Pakistan.
Interdisciplinary
Journal Of
Contemporary
Research in Business.

results of this study indicate
significant negative correlations
among three independent
variables and turnover
intentions.

Source: Literature reviews of own collection

Human resource always plays an important role and core issue that each company has to
build up and maintain in the long-term. According to Itami & Roehl (1987), human resource is
an “invisible asset” of the firm. It is inserted in the operational system and creates value to the
organization to enhance its core competencies (Prahalas and Hamel, 1990). Additionally,
Interlog is operating in Logistics service industry which is a “people” oriented business so that
the value of human asset strategy directly affects cost, quality, responsiveness and customer
satisfaction (Yew Wong, C. and Karia, N., 2009).
Actually, in logistics, customers need the right product or services at the right time and in
the right place. The value challenge of Logistics companies is to give customers the best solutions
for their system. If logistics companies deliver cargos late, it affects the planning of factories and
concurrently part of supply chain. The logistics cost also is high in Vietnam, so low cost is one
of advantages that logistics company have to pay attention to increase competition. Regarding to
Chyn & Kalianna (2011), one of the major problems faced by logistics service providers is

collaboration, communication and high turnover rate. Accordingly, these problems could deeply
affect employee satisfaction and business performance. Theoretically, Samad (2006) stated that
the factors contribute to employee’s decision to leave the organization including the attitudinal,
22


behavioral and organizational factors. Moreover, job satisfaction leads to the employee’s
intentions to leave the organization according to Samad (2006). Pertaining to Kumar and Gupta
(2008), job satisfaction is attitudinal response of employee towards organization. Brown and
Leigh (1996) stated that organizational climate is anticipated to have progressive links with
employee satisfaction, customer satisfaction, financial performance and staff turnover. In details,
organizational influences include job stressors, organizational culture, management
relationships, and support systems. Accordingly, managers can indirectly affect employee
performance through creating an environment in which their employees can work effectively,
developing a suitable philosophy that helps employees shape their commitment to organizational
goals, and understand strategy (Avery, 2004). On the other hand, Huselid (1995) found that a
high turnover rate is strongly connected to negative effects in an organization such as low yield,
higher cost in hiring and coaching new people (Rousseau, 1984) and weak future performance
as well (Baron, Hannan and Burton, 2001).
According to the impacts of job satisfaction to the turnover intention and the secondary
data from Interlog Company and Consultancy of Vietnam National Productivity Institute, the
approach to study problems is to use a qualitative method based on in-depth interview of five
people who are Manager and experiences staffs of Interlog Company. Therefore, there are some
potential problems that may directly affect the high turnover rate of Interlog from 2013 until
now.

23


2.2 The inefficiency of internal coordination at Interlog Company

The current tentative problem of Interlog Company was identified as inefficiency of
internal coordination. Accordingly, internal communication does not effective; the working
relationship are not smoothly between departments; lack of sharing information and knowledge;
and limited empowerment in working process. Regarding to Osifo (2012), coordination is an
action of empowering and organizing different individuals to work or connect together in order
to achieve goals of the organization. This is a managerial function in which different activities
and functional employees of business are linked and adjusted properly. Following, internal
coordination leads to efficiency in operation within particular groups. In case there is lack of
internal coordination between different functional groups within the organization, it will be
danger the stability as well as flexible that leads to affect organizational efficiency.
In fact, there are some cases of employee’s leaving due to this poor coordination as well
as reducing the business performance and productivity. Academically, the evolution of services
practice has created an environment in which selling and delivering customer solutions are no
longer activities relegated to an individual, but instead are performed by coordinated team efforts
(Cespedes, Doyle, & Freeman, 1989). Further, Gladstein (1984) stated that team effectiveness
has demonstrated the core components of an organizational group process consisting of boundary
management and intra group process involving knowledge transfer and communication. On one
hand, employees are the organization’s production force, which directly contributes to the
organizational performance. On the other hand, employees are corporate ambassadors and brand

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