Ineffective leadership style in sale department at CADIVI company

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

PHAN NGUYEN THU HANG

INEFFECTIVE LEADERSHIP STYLE
IN SALE DEPARTMENT
AT CADIVI COMPANY
MASTER OF BUSINESS ADMINISTRATION

Ho Chi Minh City – Year 2018


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

PHAN NGUYEN THU HANG

INEFFECTIVE LEADERSHIP STYLE
IN SALE DEPARTMENT
AT CADIVI COMPANY

MASTER OF BUSINESS ADMINISTRATION

SUPERVISOR: Dr. Pham Phu Quoc

Ho Chi Minh City – Year 2018

TABLE OF CONTENT
ACKNOWLEDGE ..................................................................................................................................... 1
EXECUTIVE SUMMARY ........................................................................................................................ 2
CHAPTER I: INTRODUCTION ABOUT CADIVI COMPANY AND RECOGNISED SYMTOMS
WITHIN SALE DEPARTMENT .............................................................................................................. 3
1.1

Background of CADIVI company ................................................................................................. 3

1.2

Symptoms of problem in Sale Department at CADIVI company: high turnover rate ............. 5

CHAPTER II: PROBLEM IDENTIFICATION IN SALE DEPARTMENT AT CADIVI ................. 8
2.1

Potential problems in Sale Department ......................................................................................... 8

2.2.1 Interview results ............................................................................................................................ 8
2.2.2 Initial cause- effect map .............................................................................................................. 11
2.2.3 Theoretical framework ................................................................................................................ 13
2.2.4 Updated cause- effect map .......................................................................................................... 14
2.2

Problem Justification .................................................................................................................... 16

2.2.5 Central problem: Ineffective leadership style.............................................................................. 16
2.2.6 Definition of central problem- ineffective leadership style ......................................................... 17
2.2.7 Justify the existence of problem: ineffective leadership style ..................................................... 18
2.2.8 Justify the importance of problem: ineffective leadership style .................................................. 19

CHAPTER III: CAUSE VALIDATION................................................................................................. 23
3.1

Identification of potential causes.................................................................................................. 23

3.1.1 Poor attitude and personality of leaders ...................................................................................... 23
3.1.2 Soft-Skills shortage ..................................................................................................................... 23
3.1.3 Poor leader-follower relationship ................................................................................................ 24
3.2

Final cause-effect map................................................................................................................... 25

3.3

Causes validation of real problem: ineffective leadership style ................................................ 26

CHAPTER IV: SOLUTION ANALYSIS .............................................................................................. 28


4.1

Theoretical framework ................................................................................................................. 28

4.2

Short-term solution: Improving leader-follower relationship ................................................... 29

4.3

Long-term solution: Solution for training, emphasizing soft skill and enhancing leader

relationship ................................................................................................................................................ 31
4.4

Solution Comparison: short-term solution and long-term solution .......................................... 32

CHAPTER V: SELECTED SOLUTION AND CHANGING PLAN................................................... 34
5.1

Selected long-term solution ........................................................................................................... 34

5.2

Details plan for long-term solution .............................................................................................. 34

5.2.1 Criterion set of this plan: ............................................................................................................. 34
5.2.2 Action plan .................................................................................................................................. 35
5.2.3 Cost-benefit analysis of this comprehension plan ....................................................................... 37
5.3

Changing plan................................................................................................................................ 38

CHAPTER VI: SUPPORTING INFORMATION ................................................................................ 40
6.1

Questionnaire development to justify central problem.............................................................. 40

6.2

Questionnaire development to justify causes .............................................................................. 41

APPENDIX ................................................................................................................................................ 43
REFERENCES ......................................................................................................................................... 61


LIST OF FIGURE
Figure 1: CADIVI structure........................................................................................................................... 4
Figure 2: Turnover rate in Sale Department from 2015 to 2018 ................................................................... 6
Figure 3: Turnover rate of 4 main departments at CADIVI in 6 first months in 2018 .................................. 7
Figure 4: Initial Cause- Effect Map ............................................................................................................... 12
Figure 3: Updated Cause-Effect map ............................................................................................................ 15
Figure 6: Customer Satisfaction .................................................................................................................. 22
Figure 7: Final Cause-Effect map ............................................................................................................... 26

LIST OF TABLE
Table 1: Turnover rate in Sale Department from 2015 to 2018 .................................................................... 6
Table 2: Turnover rate of four main departments at CADIVI in 6 first months in 2018 ............................... 6


ACKNOWLEDGE
I would like to express my great appreciation and endless thank to my supervisor, Dr.
Pham Phu Quoc, who has kindly supported, guided, motivated, and given me loads of
advances during the time writing this thesis. His encouragement and comments
significantly help me to fulfill this. Without his support and instructions, this thesis
would have been impossible to be done effectively.
In addition, I would like to approve my special gratitude to my family and all friends in
MBUS 7.1 for encouraging me, caring and giving me strength in all the time writing
this thesis.

Page 1

EXECUTIVE SUMMARY
This study has talked about the case in Sale department within CADIVI with the
symptoms of the high turnover rates in the first six months in 2018. Based on the
interview result and theoretical framework, ―ineffective leadership style in Sale
Department at CADIVI‖ is the central problem that sale department needs to solve.
Ineffective leadership has been the great attributes to retention rate because of
significant role of the leader in the way their staff devote their time, efforts, commitment
and extend their support to achieve organizational goals. Therefore, if turnover rate
reduced, it could help to increase employee satisfaction, high performance and
productivity. In this thesis, leader personality, lack of soft-skill training, leadershipfollowers relationship and gender-related leadership are listed as potential causes of the
problem in Sale Department. According to cost-benefit analysis between two solutions
as short-term and long-term, long- term solution selected as suitable solution, which
could improve soft-skill of leaders and enhance leadership relationship in sale
department. With the detailed action plan and combination between sale department and
HR department, the situation of sale team is expected to be solved in near future. The
cost for this plan is approximately 80 million VND each year but it expected to reduce
the cost for recruit and train news replaced and the lower customer satisfaction.

Page 2


CHAPTER I: INTRODUCTION ABOUT CADIVI COMPANY AND
RECOGNISED SYMTOMS WITHIN SALE DEPARTMENT
1.1

Background of CADIVI company
This section aims to point some features of the Electric Cable Industry, especially

CADIVI.
1.1.1 Overview of Electric Cable Industry
In this constantly changing world, Vietnam is also entering the accelerated stage
with the fast development of technology. According to investors, Vietnam is highly
considered as one of the most attractive market. Modernization applied for all industries
from manufacturing to business, the main wire and cable industry is in the fast-growing
stage with the development of power generation, the construction of transmission and
distribution networks from high voltage to low voltage networks and consumption. The
demand for electric wires and cables for power network construction expected to
increase rapidly in the coming years. Therefore, wire and cable products are considered
as one of the most important contributors to the value of the industrial sectors in
Vietnam. There are more than 200 enterprises engaged in the production and export of
electric wires and cables. Some typical companies in the industry can be named as:
Vietnam Electric Wire & Cable (CaDiVi), Tran Phu Electric Company, LG Vina Cable
Joint Venture Company, TaYa Vietnam Company, Cable and Telecommunication
(SaCom), ...
In recent years, Vietnam's electric wire and cable industry is facing a great
opportunity, but there are also many challenges to overcome. The recovery of the real
estate market has led to the demand for residential wires serving the infrastructure of
industrial zones, new urban areas and office buildings. CADIVI is the main unit
supplying power cables for many projects in Ho Chi Minh City. Based on General
Department of Vietnam Customs‘ statistics, the group of electrical wires and cables of
Vietnam exported to dosmetic markets in March 20118 reached $ 140.1 million, up
50.5% over February 2018, total export value of this group in the first quarter of 2018
is 388 million, up 47.0% over the same period in 2017. Vietnam's electrical wire and
cable are mainly exported to China, Korea, Thailand, France, Malaysia.
Page 3


Based on the analysis above, electric cable industry is really an interesting market

and attracts a large number of work force.
1.1.2 Overview of CADIVI company
Vietnam Electric Cable Corporation (CADIVI) is established in 1975 as a stateowned enterprise and specializes in manufacturing various kinds of electric wire and
cable. CADIVI has five factories and two branches, distributing through more than 200
agents in Vietnam. CADIVI is considered as one of the leaders of technology in wire
and cable manufacturing in Vietnam. After several times of rename and transforms, on
August 08, 2018 CADIVI transformed as a Joint-Stock Company. With more than 40
years of development, CADIVI has owned machinery and equipment from Europe,
USA, and other developing countries in the region and maintained the business
philosophy that ―good quality is the key factor to the development of CADIVI‖. With
the vision of ―being one of the leading electric wire and cable manufacturers in the
Southeast Asian region by 2020‖, CADIVI attempts to produce more high quality
products, increase the revenue, meet more demand and build the workforce to be union,
active, creativity, professional and highly responsible.
CADIVI‘s structure is shown as the chart below:
General meeting of Shareholder
Board of supervisor
Board of management
Board of director

Sale Dept

Manufacturing
Dept

Quality
Assurance
Dept

Eastern

Factory

Finance&
Accounting
Dept
Western
Factory

Figure 1: CADIVI structure

Page 4

Human
Resources
Dept

Technology
Dept


1.1.3 Sale Department in CADIVI company
With 32 people including 01 manager, 01 assistant manager, 02 deputy managers,
4 supervisors who have been responsible in agency, tender, exported, project and 24
employees, sale department have to:
-

Be responsible for looking all sales opportunities to sell cables and wires with

the existing and new customers, presenting effectively to the customers regarding the
requested product, keeping contacts with the customers to understand their needs and

requirements, identifying the target budget, classifying different business opportunities
for each customer to plan comfortable target budget or forecast list
-

Be one of the key department affecting the success of company.

-

4 supervisors are responsible for exporting area, contributor area, power corporation

and project.
Despite of the important role, high salary and fast staff growth, symptoms of high
turnover rate may be a big worry needed to be concerned to sustain long-lasting
development for sale team in CADIVI.
1.2

Symptoms of problem in Sale Department at CADIVI company: high

turnover rate
This part aims to validate the symptoms of problem in Sale Department through
time series analysis and comparison with other departments in company.
Firstly, according to a human resource report, turnover in Sale Department has a
high rate from 2015 to 2018, especially in first 6 months in 2018, the rate is nearly 38%,
as being seen in figure 2 follow:

Page 5


40%

37.5%

35%
30%
25.000%
25%
21.4%.
20%
15%

10.34 %

10%
5%
0%
2015

2016

2017

First 6 months 2018

Figure 2: Turnover rate in Sale Department from 2015 to 2018
Year
2015

Total employees
28

Turnover
6

Turnover rate
21.4%

2016

29

3

10.34%

2017

34

8

23.5%

First 6 months in 2018

32

12

37.5%

Table 1: Turnover rate in Sale Department from 2015 to 2018
Comparing with other departments in company, although sale team is the most
important department in the company with various priorities, it had the highest turnover
rate.
Department

Total employees

Turnover

Turnover rate

HR

25

1

4%

Sale

32

12

37.5%

Quality Management Procedure

18

2

11%

Technology

20

2

10%

Table 2: Turnover rate of 4 main departments at CADIVI 6 first months in 2018

Page 6


40%

37.50%

35%
30%

25%
20%
15%
11%

10%

10%
5%

4%

0%
HR

Sale
HR

Sale

Quality Management
Procedure

Quality Management Procedure

Technology

Technology

Figure 3: Turnover rate of 4 main departments at CADIVI in 6 first months in
2018
In addition, CADIVI is as the first leading of cable in Vietnam, therefore, it is
important to make sale teams more professional, stronger and create great image in
customer. Thus, sale force would need to have large special concerns. However, in

reality, salesmen at CADIVI tend to quit job than others. It can be threat to company
performance and productivity. News replaced with fewer experiences not only can
negative impact on customer satisfaction but also increase the recruitment and training
cost. Therefore, it is necessary to analyze and find out the cause, then propose solution
to solve the current struggling situation of Sale department at CADIVI.

Page 7


CHAPTER II: PROBLEM IDENTIFICATION IN SALE DEPARTMENT AT
CADIVI
2.1

Potential problems in Sale Department
Potential problems in Sale Department are determined through interview and

theoretical framework.
2.2.1

Interview results
To understand the reason of high turnover rate further, interview has been

conducted with three groups below:
The first group including two people who are working at Human Resources
Department at CADIVI company: Mr. Cao Duc Phuong- Recruitment and Training
Specialist, Mrs. Le Huong Giang- Talent Acquisition Specialist.
The second group of three employees who are currently working in sale
department: Ms. Nguyen Thi Hoang Anh, Mr.Nguyen Hoang Vu and Mrs. Nguyen Thi
Thuy Trang.
The third group of three people who left CADIVI and work for another company.

The first one is Mrs. Doan Thi Tuyet Mai, she used to be a salesman at CADIVI. Mr.
Nguyen Nam Cuong who used to work in sale department at 2 different positions:
salesman and sale admin. The last interviewee- Ms. Pham Le Anh Van- who used to
work in exported area.
By the initial interview, there are some dissatisfaction happened among employees
and company due to the higher turnover rate. Choosing these people with different
features for each group will make various perceptions and perspective. The first group
is specialists in HR department, so they understand well about the reason and problem
that makes high turnover rate. The second group is all currently working in Sale
Department but different positions so they can point out the problems and difficulties
when working at sale and marketing department. The third group includes ex-worker
who clearly understood the inside problem in sale team. The last group with their real
experience will gives various viewpoints and make recommend then.

Page 8


According to the interview with Mr. Phuong- deputy of HR department, the higher
turnover rate because of higher dissatisfaction about training program for Sale team,
high workload, unclear career path and motivation, conflict between manager and staffs.
Therefore, most of employees do not have enough necessary motivations, knowledge
and skills to be sale to CADIVI. Some salesmen are in charge of looking for new
customers and organizing effective presentation to the customers regarding the
requested products but they do not know how to attract and present to customer. That
reason led to sale team feel difficult to seek new customers. Besides, there are some
differences of opinion between the leader and employees, which made the low employee
satisfaction in team.
Sharing the same perspectives, Mrs. Le Thi Huong Giang stated that, most of
young talent people in sale department feel stress because of being difficult to work with
customers, lost energy to work. Besides, young salesmen feel unclear about their career

path and motivation to contribute, they just do their work by themselves without
mentoring or coaching from manager.
Deeper discovering with Ms. Hoang Anh, who is employee in Sale department, it
was found that she has worked in this department for 6 years with the Economic
background. In her current position, the work procedure, which she has to do, includes
four steps: Seeking customers, attracting and negotiating them, suggesting suitable
price, making contact and maintaining relationship with customers. She felt that she had
a high workload but no have enough skill, understanding about CADVI‘s product and
lost direction. Therefore, it made her meet a large amount of stressful and difficult to do
her job, low satisfaction but her supervisor and sale manager also did not give her
necessary advances, instruction and suitable training program.
Alongside with the same perspectives, Mr. Nguyen Hoang Vu shared that Sale
team was facing the fact that huge number of key salesmen left because of the lack of
energy to work and concentrate, lack motivation to contribute, low productivity, unfair
assign task and sympathy from the manager. He also said that a large of new salesmen
recruited to replace ones but the lack of knowledge about the product and complicated
procedure makes difficult to maintain customer and lower customer satisfaction. This
Page 9


confusion made a lot of difficult for sale team to work together and reach the target, they
need time to understand and combine. However, the manager forced the employees to
align to do task without understand their problem and not agree to use any new ways.
Mrs. Mai, who used to work in CADIVI Sale team confirmed that she left CADIVI
because of lack of promotion opportunity and motivation, stress, pressure and
ineffective leadership style. To satisfy the high demand of market, the managers and
supervisors put the higher target without taking more care about the inside problems, it
makes sale team not happy to come work, unclear orientation. She also said that in her
team it did not have any activities to build up relationship or enhance team-work, the
manager just wanted them to focus on working. She felt that it was difficult to share her

feeling and ideas to her manager or supervisor. They just want to put target and high
pressure to have high turnover. She also needs to do many jobs without understanding
about the benefit.
On the other hand, when being asked about current situation in Sale Department,
Mrs. Trang stated that she has to work overtime and sometimes needs to work at home.
She felt stressful and did not have time for herself and her family. According to Mrs.
Trang, the manager did not check the results from employee and usually blame for them
if having the mistake.
Furthermore, according to Mr Cuong, in sale department, there are a large of unfair
assignments between man and woman. The manager usually decided based on her
emotion. In addition, department manager was the one who decide all work in the
department but she he had no initiative to remind, understand her employee‘s demand,
inspiration to push up motivation of team and follows their work. It seems to be the
weak management method to control her department.
Regarding about the high turnover rate, Ms. Pham Le Anh Van shared that there
was also no internal database system, working delegation board, meeting and team
building to make everyone in department know clear about the information. In other
hand, sale manager and supervisors supervised all sections but the work in each section
had no management by person in charge and no record. It is the reason why they could
not remember how many works needed to solved to urge everyone and support sale team
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as soon as possible. It led to the low performance for whole department. Besides, due to
the unattractive salary policy, it makes the salesmen lower efforts and be bored to work.
2.2.2

Initial cause- effect map
Collecting all the information, initial cause – effect map showed as below:

Page 11


Poor teamwork activities
Bad management relationship

Conflict between
manager and staff

Poor Management

Lack of Mentoring and coaching

Lost energy and
motivation

Organizational
Symptom

Unfair work assignment
Unattractive salary policy

HIGH
TURNOVER
RATE

Long working time
Complicated Procedure
Be confused with the job
Lack of experienced salesman

Lack of clear
information

High Job stress

High workload
Difficult to work with customers

Low job
performance

Difficult seek new customers

Figure 4: Initial Cause-Effect map


2.2.3

Theoretical framework
There are many scholar studies regarding about the cause of high turnover rate.

This part outlines some main causes that most of finding stated.
Employee satisfaction impact on turnover rate
Nowadays, employee satisfaction plays an important role for the development of
organization‘s workforce. Employees give more care with their jobs now, greatly expect
to get more satisfaction likely criteria to stay or leave the current company (1)The lower
job satisfaction, the lower commitment to organization. It also affects to resignation
thoughts, job search behaviors and actual turnover (2). Workers most would like to
commit with an organization if they have highest levels of job satisfaction, while ones
who were overwhelmed by demanding work environment will increase desire to

leave(3).
Inverse relationship of leadership on turnover rate
Between, the quality of leader-employee relationship and retention of employee
related significantly(4). Managers impact on employee turnover through meeting
employee job expectations, beliefs, environment, counseling and behaviors(5). It
demonstrates social-cognitive theory of bi-directional influence where, in organizations,
managerial environment bi-directionally influences workers. Leader who have good
skills such as interpersonal communication, listening skill, recognizing employees,
training workers, sympathize and managing job can have positively direct impact on
employee turnover (6).
Training program and development opportunities impact on turnover rate
Employees‘ satisfaction and long-term commitment will be greatly increased if
they are highly trained more (7). The more concern to training content, the more
decreasing turnover risk and time management (8). Besides, the employees can work
effective, believe and commit with the organization if they have a plenty of development
opportunities(9). In contrast, staff will quit the job if the company cut down training and
development plans(10).
The effect of recognition, rewards and salary satisfaction to turnover rate
13


Recognition and reward of workers can significantly affect to employees retention,
reduce stress and raise business effectiveness (11-13). Turnover intention can be
decreased if have an effective recognition and reward systems(14, 15). In addition,
salary levels, salary system, salary structure and salary satisfaction also can positively
impact on employee‘s behavioral satisfaction is often thought to affect behavior,
business commitment and turnover intention (16-18).
Job stress correlation with turnover rate
Job stress can result in poor employee‘s satisfaction which result in reducing
productivity and increasing high job turnover(16, 19). Moreover, job stress and burnout

highly related to decisions as intent or leave company(20).
2.2.4

Updated cause- effect map
According to initial cause effect map and theoretical framework, there can be five

potential problems in Sale Department: Ineffective leadership style, complicated
procedures, unattractive salary policy, low employee satisfaction, lack of information.
They will be shown and generated in the following initial cause – effect map:

14


Bad management relationship
Ineffective
Leadership
style

Low Job Satisfaction

Poor support from manager
Unfair work assignment

Lost energy and
motivation
HIGH
TURNOVER
RATE

Unattractive salary policy

Waste of time
Complicated Procedure
Be confused with the job
Lack of experienced
salesman

High Job stress

High workload
Lack of clear

Low job
performance

information

Organizational
Symptom

Poor sale skill

Figure 5: Updated Cause-Effect Map


2.2

Problem Justification
This section aims to justify the central problem, the existence, the importance and

causes of problem in Sale Department at CADIVI.

2.2.5

Central problem: Ineffective leadership style
This part explores the central problem that makes the high turnover rate in Sale team.
Like being shown in initial cause and effect map and based on the interview results

and other secondary data, a plenty of issues is collected to contribute as the factors of high
turnover rate. Factors like unattractive salary policy and complicated procedure are the
company policy so it is difficult to change or improve if chosen them as central problem.
In other hand, based on the interview result, most of applicant stated that the job stress come
from ineffective leadership style, therefore, if greatly increased the effectiveness of
leadership style, the problem could be solved. Regarding low employees‘ satisfaction, it
needs more time and resources to solve, so it is not suitable to see as central problem. The
problem of ―lack of information‖ mostly comes from the lack of guidance from managers
and supervisors, thus, if improve leadership effectiveness, that problem can be limited.
Moreover, the result of interview showed that ineffective leadership style is the deeply
effective factor which most of people mentioned. Mr. Cuong and Mrs. Mai shared that they
left company because of plenty reasons, but problem about ineffective leadership style is
the key to this issue. From Mrs. Mai‘s perspective, employees did not leave their company,
they left their manager, she stated that her manager did not understand her feelings and
made team feel lack of energy and enthusiasm to work. She did not receive any support or
guide from manager to do well. Similarly, Mr. Cuong shared that the manager just cared
about herself and her feeling without build a good relationship with employees or give them
opportunity to share opinions.
There are numerous previous studies showed that leadership style is the reason for the
choices of employees staying or leaving their job. Effective managerial leadership is the
main reason for employee‘s to decide staying or leaving(21).
Page 16

Therefore, the way how managers lead can decide staff‘s retention. (22) “Turnover
experts, both academic and practitioner, have asserted that supervision plays a meaningful
role in employee turnover decisions”. To reach the company target, increase inspiration
and motivate employee, the leader plays as an important role. Besides, with the highly
comparative, retention becomes a big problem that manager need to care, especially
leadership style(23).
Sales manager and supervisors, who are responsible for giving counsel, guiding,
building strategies, encouraging, having far vision, motivating to make salesman feel full
of energy, are greatly contributed and well-performed. It means that leadership behavior
needs to be concerned more. A salesman usually not only faces much pressure from
working, external environment but also needs to be clever to interact inside and outside the
company, deliver and sell products. They also have to collect all data related the market,
gather and analysis competitor‘s characteristic. Besides, nowadays with the fast
development of Internet, it is easier for finding employment information sharing and job
postings, well performing salespeople are in demand and are able easily access other
company. Thus, if the manager can satisfied the staff they can retain the talent.
Salesperson‘s actions, performance, turnover can be effected by sales manager
leadership or the type of leadership behavior, turnover (23-25).The higher addressing on
the leadership skills, the higher maintaining top performing employees in the organizations.
It also helps to attract more other top performers and increase global competition.
In conclude, according the collecting information and analysis above, ineffective
leadership style is highly considered as central problem need to solve in this scope of this
thesis.
2.2.6

Definition of central problem- ineffective leadership style
Leadership is defined as an influence process in which the leader can be delegates or

assign others to reach some specified objective and reach organization goals(26),
maximizes the interests of leader over the interests of the company. Leadership is also the

Page 17


ability to give motivation and direction to staff to achieve mutual goals or display
extraordinary performance.(27-29).
Effective leadership styles is the positive way that the leader motivate employees,
raise their morale and make a positive impact on employee and organizational performance
to achieve common goals(30-32) In contrast, ineffective leadership styles are seen to have
a negative impact on individuals and organizational performance; motivations to attain
common goals(33). Ineffective leadership is also a set of negative characteristics or
inadequate capacities in the leadership that make the bad results in effectiveness, ethics,
accomplishment and the staff development, harms an organization in the long term(32).
2.2.7

Justify the existence of problem: ineffective leadership style
This part helps to validate whether ineffective leadership style really likes a central

problem in sale department in CADIVI based on theory inform and interview results.
Theory inform
The ineffective performance management can be showed through increasing turnover,
using false or misleading information, lowing self-esteem, wasting much time and money,
damaged relationships, reducing motivation to perform, increasing burnout and job
dissatisfaction, being difficult to determine demands on managers‘ and employees‘
resources(34). Ineffective leadership can have two

broader

dimensions

as

the ineffective side and immoral side(35). It means that ineffective leadership can be both
unethical and inefficient.
Effective leaders is the person who had strong character, cared for their employees,
worked hard, and were successful communicators while ineffective leaders had
questionable character, neglected the needs of workers, displayed a poor work ethic, lack
of compassion, lack of training; lack of leadership experiences, education, mentoring,
networking, incorporating and failed to communicate(36).
Quantitative research

Page 18


In other hand, semi-structured interviews with closed-ended questionnaires, which is
designed to collect data, will be showed in section 6.1 chapter 6. Four respondents from
Ms. Hoang Anh, Mr. Vu, Mrs. Mai and Mr. Cuong, who joined in the first interview, will
help to prove the existence of ineffective leadership style in Sales Department.
According to Mrs. Mai, she was dissatisfied with her old manager‘s character, skills
and behaviors. She said that there was no good communication between her old leaders and
her. She really felt tired, just followed the assignment without growing up and being
progressive. From perspective of Mr. Cuong, the working environment in sale team always
was stressful and strict due to manager‘s frustration. She always criticized others, noted
most of small things and always shouted. Mr. Vu and Ms. Hoang Anh also had the same
perceptions.
Result of this justification process illustrated that ineffective performance
management does exist in this department.
Based on identifying ineffective leadership style really exists in managers and
supervisors in sale department at CADIVI, this part will help to determine the consequences
which central problem made.

2.2.8

Justify the importance of problem: ineffective leadership style
A large number of consequences has been found from low job performance and

productivity, low customer satisfaction, low profit, higher recruitment and training cost.
The higher turnover rate the higher recruitment and training cost
The high turnover rate can increase the need to recruit, onboard and train new talent
as well as the diminishing productivity because of the time that new employee accustomed;
the rising of work stress for ones who pick up the additional duties during the transition(6).
Managers plans to limit the budget for training to save the cost to bring more profit.
However, in real, it can bring the higher cost to recruit and train for news, waste more time
and money to wait them accustomed with the job responsibility. It not only makes the
productivity is decreasing but also makes the sale team lost market share. The
Page 19


organizational costs of turnover can makes the higher actual costs of replacement, shortterm fill-in costs and productivity during the transition(37). The new employee would
require training and time to fully replacing the workload of the original employee, resulting
in additional costs and loss of productivity for the organization as well as potential
consequences to those whom the original employee served.
The higher turnover rate the unhealthier workplace image
The organizations which had a high turnover rate were generally not healthy
workplaces because of the decreasing interpersonal trust negative attitudes in the workplace
and they might not want to contribute to achieve organization goals(38, 39). In whiles,
salesman who working in an organization where have a high level of confidence, being
valued and important part of the organization, come to work with more enthusiasm, and are
happier with their jobs(40).
The lower working satisfaction the lower individual performance and low company
performance

Leadership is generally considered as a source of competitive advantage and need to
invest in developing future leaders. Without effective leadership, productivity, innovation,
and profits will likely suffer. The way in which sales management leadership style can
positively or negatively influence the ability of a sales person to perform at optimum levels.
The leaders of the departments with a great knowledge and skills can enables employees
to take on new challenges, achieve business results, enhance productivity, motivate staff to
meet organizational goal(41, 42). Therefore, sales managers need to find the way to lead
personnel to increase sales performance. Turnover rate has been linked to productivity,
employee retention, quality of work, and strategy for organization(43). The more the
employees are satisfied with their leader, the more efforts they want to contribute for
achieving business objectives, positively effect on the success of the organization(44, 45).
(46) “How a salesperson operates, and to what extent the salesperson is successful,
may depend heavily on the actions of the sales manager”. The better salesman-manager
relationship, the higher trust can have the higher honest of staff to the company. If
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