Researching about organization commitment at DHG pharma in viet nam

RESEARCH PROJECT
(BMAOUM0915)

RESEARCHING ABOUT ORGANIZATION
COMMITMENT AT DHG PHARMA
IN VIET NAM

STUDENT’S FULL NAME

: NGUYEN THI DIEM THUY

STUDENT ID

: CGS00019906

INTAKE

: SEPTEMBER, 2015

ADVISOR’S NAME & TITLE : DR. NGUYEN THE KHAI

March, 2017


ADVISOR’S ASSESSMENT

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Advisor’s signature
(March, 2017)

DR. NGUYEN THE KHAI


ACKNOWLEDGEMENTS

I would like to thank my teacher for his participation in the survey who supported my
work in this way and helped me get results of better quality. I would like to express my
deepest gratitude to Dr. NGUYEN THE KHAI, who instructed, gave me a chance and
guided me to do this research.

I am also grateful to my friends in the this class for their patience and support in
overcoming numerous obstacles I have been facing through my research.

Last but not the least, I would like to thank my family: my mother and sister for
supporting me spiritually throughout writing this thesis and my my life in general.

Once again, I thanks very much to all !

With kindest regards,
HCMC, Mar 2017

NGUYEN THI DIEM THUY Student


CONTENTS
ABSTRACT--------------------------------------------------------------------------------- 1
PART I. INTRODUCTION-------------------------------------------------------------- 2
Company introduction- DHG Pharma Company -----------------------------------2
Principal activities- Capitalization---------------------------------------------------------2
Vision- Mission- Core values---------------------------------------------------------------6

Organisational structure ---------------------------------------------------------------------6
Financial performance - The positioning statement--------------------------------------7
Research introduction----------------------------------------------------------------------9
Reason of research- Introduction of Research--------------------------------------------9
Motivation of the study- significance of the study---------------------------------------10
Purpose of the study- Question of the study----------------------------------------------12
Time of research- Overcome of research--------------------------------------------------13
PART II: LITERATURE REVIEW----------------------------------------------------14
Organization Commitment------------------------------------------------------------------15
Job Satisfaction-------------------------------------------------------------------------------20
Employee Pay Level-------------------------------------------------------------------------23
Work Role Ambiguity ----------------------------------------------------------------------25
Job Tension-----------------------------------------------------------------------------------27


PART III. METHODS--------------------------------------------------------------------31
Research design------------------------------------------------------------------------------31
Sample----------------------------------------------------------------------------------------31
Measures--------------------------------------------------------------------------------------32

Data Analysis--------------------------------------------------------------------------------Error! Bookmark not defined.6
PART. IV. RESULTS----------------------------------------------------------------------39
Reliability statistic--------------------------------------------------------------------------Error! Bookmark not defined.9
Descriptive statistic--------------------------------------------------------------------------40
Correlation statistic--------------------------------------------------------------------------40
Hypotheses Testing Results----------------------------------------------------------------42
PART V. DISCUSSION-------------------------------------------------------------------48
PART VI. RECOMMENDATION----------------------------------------------------- 54
Appendix 1: Survey Questionnaires----------------------------------57
Appendix 2: Presentation Slides-------------------------------------61

LIST OF TABLE
Table 1.1: Capitalization--------------------------------------------------------------------5
Table 1.2: Organisational structure-------------------------------------------------------7
Table 1.3: Financial performance---------------------------------------------------------7
Table 1.4: DHG’s position in Southeast Asia--------------------------------------------8
Table 1.5: DHG’s position in the Vietnam pharmaceutical industry-----------------9
Table 2.1: Maslow’s Need Hierarchy--------------------------------------------------- 14
Table 2.2: The basic process of organizational behavior---------------------------- 16
Table 2.3: Attitudinal and behavioral perspectives on organizational commitment
Table 2.4: Prerequisites for organizational commitment----------------------------- 17
Table 3.1: Hypotheses--------------------------------------------------------------------- 31
Table 3.2: Measures----------------------------------------------------------------------- 35
Table 4.1: Reliability Statistics---------------------------------------------------------- 38
Table 4.2: Descriptive Statistics--------------------------------------------------------- 39
Table 4.3: Correlations ........................................................................................... 40
Table 4.4: Model Summary (H1)----------------------------------------------------------41
Table 4.5: Coefficientsa (H1)--------------------------------------------------------------42
Table 4.6: Model Summary (H2) ............................................................................. 43
Table 4.7: Coefficientsa (H2) ................................................................................... 43
Table 4.8: Model Summary (H3) ............................................................................. 44
Table 4.9: Coefficientsa (H3) ................................................................................... 45


Table 4.10: Model Summary (H4) ........................................................................... 46
Table 4.11: Coefficientsa (H4) ................................................................................. 46

LIST OF FIGURE
Figure 1: DHG Pharma’s Production Line-----------------------------------------------4

Figure 2: DHG Pharma's Product List----------------------------------------------------4
Figure 3: DHG Pharma’s Factory---------------------------------------------------------6
Figure 4: The Board of Directors----------------------------------------------------------6
Figure 5: Job Satisfaction-------------------------------------------------------------------23
Figure 6: Are you stressed at work?-------------------------------------------------------27


ABSTRACT

The purpose of the study was to investigate the influence of Job satisfaction (JS),
Employee pay level (EPL), Work role ambiguity (WRA), and Job tension (JT) on
Organization commitment (OC) in DHG Pharma company. Practical data were
collected from 285 employees out of 1,000 employees in the company by means of a
questionnaire. Statistical techniques such as descriptive statistics, correlation and linear
regression were employed. The results of the study indicated a positive significant
relationship between Job satisfaction, Employee pay level, Job tension and
Organization commitment.
Empirical results also indicated that the Work role ambiguity were having slightly
impact or was not having significant impact on Organization commitment. The results
can provide the reference for Human Resource Management Team about the
relationship between Job satisfaction (JS), Employee pay level (EPL), and Job tension
(JT) on Organization commitment (OC) in DHG Pharma company.

Key Words: Job satisfaction (JS), Employee pay level (EPL), Work role ambiguity
(WRA), and Job tension (JT) on Organization commitment (OC).

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PART I: INTRODUCTION

Figure 1: DHG Pharma’s Factory

Company introduction
Principal activities
FORMATION HISTORY
Establishment: Precursor of DHG Pharma (DHG) was 2/9 Pharmaceutical Factory and
was founded on September 02nd 1974 at 5 Dat Set Channel, Khanh Lam Commune
(Khanh Hoa Commune now), U Minh District, Ca Mau Province.
After 30/4/1975 Southwest District People Health Board was dissoluted, Pharmaceutical
Factory 2/9 was managed by the Department of Health Hau Giang
In 1982: Factory of United Hau Giang Pharma was established on the base of uniting
three branches: 2/9 state-owned pharmaceutical factory, Level 2 Pharmaceutical
Company, and Pharmacognostic Station.
In 1988: People’s Committee of Hau Giang Province decided to merge Health Device
Material Supply Company and Factory of United Hau Giang Pharma
Ngày 02/9/2004: On September 2, 2014: Factory of United Hau Giang Pharma was
equitized into DHG Pharma Joint-Stock
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MILESTONES
In 2004: Become Joint-Stock Company
In 2005: Become member of Enterprise Club having over 500 billion VND in revenue
Be the first enterprise pharmaceutical equivalent clinical trial Haginat and Klamentin
powder. Develop effective policies to attract talent, especially the policy of "4D Salary”.
In 2006: First time having listed stocks at SGDCK HCM city; Achieving WHOGMP/GLP/GSP
In 2007: Recognize vison, mission, and 7 core values. Try relevant biology successfully
Haginat 250 mg and Glumeform 500mg. Increase required capital from 80 billion to 200
billion VND. Established 02 first subsidiaries and SH and DHG Pharma Travel. Convert

ISO / IEC 17025 from version 1999 to version 2005
In 2008: Operate effectively modern managerial tools: 10.5S, Balance Score Card.
Established 6 branches: CM Pharma, DT Pharma, HT Pharma, ST Pharma, DHG PP,
DHG Nature
In 2009: Successfully perform 20/80 strategy: product, customer, human capital,
established A&G Pharma
In 2010: Successfully perform “Kieng 3 chan” Strategy: Shareholders, customers, and
laborers. Established 3 branches: TOT Pharma, TG Pharma and Pharma DHD MTV Ltd
In 2011: Successfully Initiated “ Increase the productiveness of the branch operation”,
Established Bali Pharma

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In 2012: Subject “Today Solution is Tomorrow Problem” brought the company high
effectiveness in expense controlling, risk management and policy. Established 5
branches: VL Pharma, TVP Pharma, B&T Pharma, DHG PP1, DHG Nature 1.
In 2013: Completed project of new Non Betalactam Factory, standardized GMP WHO
at industrial park Tan Phu Thanh. Its capacity was over 4 billion products per year.
Completed DHG packaging and Printing Factory of DHG PP1 at industrial park Tan
Phu Thanh.

Figure 1: DHG Pharma’s Production Line

Figure 2: DHG Pharma’s Product List
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Capitalization:
The charter capital increasing:

No.

1

Increased
capital

Charter
capital

No. GCNDKCK

Date

Equitisation:
the
80.000.000
initial charter capital

80.000.000

67/2007/GCNCO
-CNTTLK

18/12/2006

100.000.000

68/2007/GCNCO
-CNTTLK

17/08/2007

100.000.000 200.000.000

129/2007/GCNC
O-CNTTLK

11/12/2007

66.629.620

266.629.620

115/2009/GCNC
P-CNVSD

9/12/2009

2.500.000

269.129.620

69/2006/GCNCP
VSD-4

19/06/2010

2.500.000

271.629.620

69/2006/GCNCP
VSD-5

10/06/2011

380.134.670 651.764.290

69/2006/GCNCP
VSD-6

03/08/2011

2.000.000

653.764.290

69/2006/GCNCP
VSD-7

25/06/12

217.879.010 871.643.300

69/2006/GCNCP
VSD-8

27/06/2014

Subjects

Existing shareholders
Strategic investors
2

20.000.000
Laborers
Public auction
Existing shareholders

3
(bonus shares 1:1)
Existing shareholders
4
(bonus shares 3:1)
Employee
5
ESOP 2010
Laborers
6
ESOP 2011
Existing shareholders
7
(bonus shares 1:1,4)
Employee
8
ESOP 2012
Existing shareholders
9

(bonus shares 3:1)

Table 1.1: Capitalization
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Vision
For a more beautiful and healthier life.
Mission
DHG Pharma always provides high quality products and services to satisfy the
aspiration for a more beautiful and healthier life.
Core values
1. Quality, safety, effectiveness targeted as our highest commitments.
2. Knowledge and creativity served as our foundation for development.
3. Responsibility, cooperation, and promotion prioritized in our motto of action.
4. DHG Pharma identity features taken as our pride.
5. Mutual prosperity with partners established as our long-term goal.
6. Outstanding differentiation employed as our strength in competitions.
7. Benefits for the community centered upon at the start of all activities.
Organisational structure:

Figure 3: The Board of Directors

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Table 1.2: Organisational structure

Financial performance:

Table 1.3: Financial performance
The positioning statement:
*Growth potential of generics in emerging market:
Generics in the emerging countries holds a high proportion and their proportion
increased from 58% (2012) to 63% (2018). This is a potential market for pharmaceutical

P a g e 7- 64


companies producing generics. Up to 2018, proportion of patent drug will be decreased,
generics will grow fast but will only account for 36% because of its low value.
*DHG’s position compared with peers in Southeast Asia:
According to Bloomberg, in 2014, in Top 10 listed pharmaceutical companies in
Southeast Asia, DHG ranked 6th in market capitalization, 7th in sales and 5th in profit
after tax.

Table 1.4: DHG’s position in Southeast Asia

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* DHG’s position compared with peers in the Vietnam pharmaceutical industry

Table 1.5: DHG’s position in the Vietnam pharmaceutical industry

Research introduction
Reason of research
Vietnam Pharmaceutical Industry growth has slowed down in recent years due to
cyclical economic downturn. The average growth rate of 2005-2015 reached 15.8% per
year, but during 5 years from 2011 to 2015 this figure was only 10.5%. Nevertheless,

growth rate of Vietnam pharmaceutical market remains high among emerging markets
group and also has great growth potential.

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In 2015, DHG Pharma company continues to be the leading enterprise of Vietnam
Pharmaceutical industry. However, net sales were only VND 3,608 billion, meeting
90.2% of the plan, down 7.79% compared with that in 2014; profit before tax was VND
701 billion, reaching 92% of the plan and down 2.37% over the same period.
Profit after tax reached VND 593 billion, an increase of 11.04% over the same period
thanks to cost savings initiatives, product portfolio restructuring (cut down inefficient
products) and tax incentive from the new plant,…. Hot growth rate in previous years has
created an enormous challenge DHG itself.
So DHG Pharma must to review planning including strategies, revised goals and targets,
core activities and tasks, and prudent use of resources,…. One of them is Organizing,
like organisational strategy, restructuring, teamwork, multi-tasking. Then DHG need a
good staff force, qualified workers, high capacity, and always devoted to companies.
DHG determined that human is the most precious capital to create value for business
and society. Therefore, the company has always focused on policy development and
attracting care workers; staff rejuvenation. This is the reason to do below research.
Introduction of Research
This study explored Job satisfaction, Employee pay level, Work role ambiguity, Job
tension on DHG’s employees’s Organization commitment. This part also presents the
motivation of the study, significant of the study, purpose of the study, the questions of
the study, time of the study, overcome of the study and the key words of study.
Motivation of the study

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DHG’s organizational structure, human resources and administration system have not
fully fit with the scale of growth and development of DHG; exposing many
shortcomings. In 2015, DHG faced many difficulties, both objective and subjective,
resulting in some unmet business targets. Difficulties which DHG encountered were not
only challenges but also motivation for the Company determining to restructure, laying
the foundation for growth and sustainable development in the coming years. Fully aware
of its internal shortcomings, in 2015 DHG has gradually strengthened its operational
aspects such as building a long-term development strategy; fine-tuning rules/procedures
to enhance institutional capacity; restructuring the product portfolio by only produce
effective products; completing Beta Lactam factory with GMP-WHO standard to
enhance production capacity of additional 1 billion units of products per year;
restructuring a professional and efficient distributionsystem; improving capacity
framework for future leaders, especially in senior positions of the Company.
In many ways to generate competitiveness of the company, the advantage through
people is considered essential elements. Human resources are considered basic and
crucial of all time. Human resources is sustainable elements and difficult to change in
any organization. Through human capacity in the company shall be understood as the
ability of staff within the company. Human resources contribute to the success of the
company on the aspects of high quality, superb service, the ability to innovate; skills for
specific jobs; and productivity of staff. This is the key factor to bring the success of the
organization.

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Human

resources

management practices

are therefore affect the survival and

development of any organization and Organization commitment has been an important
focal point for organizational . How does the organization create employee’s
commitment? This question is what heads of an organization are interested in.
Therefore, the relationship between employee’s commitment and organization
commitment are necessary and should be focused. In fact, a lot of organization didn't
satisfy Organization commitment with the employee related promotion, salary so on.
Human resources management is at the core development and execution of DHG
organizational strategy. The board of directors of DHG knows thoroughly innovation,
leadership; cooperation and loyalty play a vital role in rang DHG’s success. DHG has
invested heavily in people and acquired a large pool of young, talented professionals
who have the ability and desire to conquer new technologies fast and deliver them to
customers successfully.
Significance of the study
This study will be conducted from either managerial employees or non-managerial
employees to exclude the bias of self-report. The opinion of employees in DHG about
the impact of factors as Job satisfaction, Employee pay level, Work role ambiguity, Job
tension on DHG’s employees’ Organization commitment will be collected to see what
the being implemented side evaluates the company HRM policies.
Purpose of the study
The purpose of the current study is to investigate the impact of factors as Job
satisfaction, Employee pay level, Work role ambiguity, Job tension on DHG’s
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employees’ Organization commitment. Then provide for managers knowledge of the
study to manage staff most effectively.

Question of the study
This study addresses some points follow:
o How is the impact of Job satisfaction on DHG’s employees’ Organization
commitment ?
o How is the impact of Employee pay level on DHG’s employees’ Organization
commitment ?
o How is the impact of Work role ambiguity on DHG’s employees’
Organization commitment ?
o How is the impact of Job tension on DHG’s employees’ Organization
commitment ?
Time of research
During three months, from October to December 2016.
Overcome of research
The level of participant responses varies.

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PART II: LITERATURE REVIEW
Understanding People’s Needs: Maslow’s Need Hierarchy (18)
selfactualization
Ego

Social

Safety

Physiological

Table 2.1: Maslow’s Need Hierarchy
The purpose of the current study is to investigate the impact of Job satisfaction,
Employee pay level, Work role ambiguity, Job tension on DHG’s employees’
Organization commitment. This part present the body of organizational literature
containing the base theory and relevant other theories used in this study. This part
includes the following: (1) Job Satisfaction
(2) Employee Pay Level
(3) Work Role Ambiguity
(4) Job Tension
(5) Organization Commitment
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Organization commitment
“Unless commitment is made, there are only promises and hopes . . . no plans.”
Peter Drucker (1909-2005)
It is commitment that gets the job done. This intense dedication is more powerful than
our best intentions, willpower, or circumstances. Without commitment, influence is
minimal; barriers are unbreachable; and passion, impact, and opportunities may be lost
(Maxwell, 1999).
This primer explores the topic of organizational commitment, its possible influence on
organizational efficiency, and actions leaders can take to build highly-committed
workforces.
Organizational behavior is the study of beliefs, attitudes, and behaviors displayed by
people in the workplace. Behavioral scientists argue that managers who know why
workers behave the ways they do are better equipped to motivate employees to
contribute to the achievement of organizational goals. Gray & Starke explain in their
book, Organizational Behavior, Concepts and Applications (1988, p.6) that the process
for obtaining this knowledge involves understanding, prediction, and control. (See
Figure 1) They write:

Understanding is aimed at identifying and measuring (as accurately as possible) the
major factors affecting a situation. If understanding is successful, patterns of behavior
may emerge, and one can make certain predictions about behavior in light of acquired
knowledge. The ability to understand then predict makes it possible to control behavior
(16).
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Table 2.2: The basic process of organizational behavior

Table 2.3: Attitudinal and behavioral perspectives on organizational commitment

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Prerequisites for organizational commitment
Age
Gender
Personal Characteristics

Education
Perceived Competence
Protestant Work Ethic
Job Satisfaction

Job Attitudes
Organizational Citizenship Behavior
Job Level
Position Tenure
Job Skills

Autonomy
Job Characteristics
Challenges
Ambiguity
Role Stress

Conflict
Overload

Group Cohesiveness
Relationships with Coworkers and Supervisors
Leadership

Initiating Structure
Consideration

Table 2.4: Prerequisites for organizational commitment
In organizational behavior and industrial and organizational psychology, organizational
commitment is the individual's psychological attachment to the organization. The basis
P a g e 17- 64


behind many of these studies was to find ways to improve how workers feel about their
jobs so that these workers would become more committed to their organizations.
Organizational commitment predicts work variables such as turnover, organizational
citizenship behavior, and job performance. Some of the factors such as role stress,
empowerment, job insecurity and employability, and distribution of leadership have
been shown to be connected to a worker's sense of organizational commitment.
employee experiences a 'sense of oneness' with their organization.
Organizational scientists have also developed many nuanced definitions of

organizational commitment, and numerous scales to measure them. Exemplary of this
work is Meyer and Allen's model of commitment, which was developed to integrate
numerous definitions of commitment that had been proliferated in the literature. Meyer
and Allen's model has also been critiqued because the model is not consistent with
empirical findings. It may also not be fully applicable in domains such as customer
behavior. There has also been debate surrounding what Meyers and Allen's model was
trying to achieve (15).
Organizational commitment may be viewed as an organizational member's
psychological attachment to the organization. Organizational commitment plays a very
large role in determining whether a member will stay with the organization and
zealously work towards organizational goals.

THEORY OF ORGANIZATIONAL COMMITMENT
A prominent theory in organizational commitment is the 3-component model (or TCM).
The model argues that organizational commitment has three distinctive components.
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