Ineffective managerial support in electrolux vietnam AC

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

Truong Hieu Lam

INEFFECTIVE MANAGERIAL SUPPORT IN
ELECTROLUX VIETNAM AC

MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: DR. NGUYEN PHONG NGUYEN

Ho Chi Minh City – Year 2019

1


Table of Contents
Executive summary ......................................................................................................................... 5
1. Company background .............................................................................................................. 6
2.

Problem mess ........................................................................................................................... 8
2.1. Symptoms ......................................................................................................................... 8
2.1.1.First symptom: Low sales .........................................................................................

8

2.1.2.Second symptom: Low customer satisfaction...........................................................

9

2.2.

Initial cause-effect map .................................................................................................. 12

2.3.

Updated cause-effect map ..............................................................................................18

2.3.1.

Ineffective managerial support ...............................................................................18

2.3.2.

Work-life imbalance ...............................................................................................19

2.3.3.

Insufficient training .................................................................................................20

2.3.4.

Ineffective segmentation ......................................................................................... 21

2.4.

3.

2.4.1.

Ineffective segmentation ......................................................................................... 23

2.4.2.

Ineffective managerial support ...............................................................................24

2.4.3.

Main problem validation .........................................................................................25

Problem justification.............................................................................................................. 26
3.1.

Problem definition ..........................................................................................................26

3.2.

Problem existence .......................................................................................................... 27

3.2.1.

Quantitative research findings ................................................................................ 27

3.2.2.

Qualitative research findings .................................................................................. 29

3.3.
4.

Potential problems ..........................................................................................................23

Problem importance .......................................................................................................32

Cause validation .................................................................................................................... 35
4.1.

Literature review ............................................................................................................35

4.2.

Qualitative research findings .......................................................................................... 36

5. The set of solutions ................................................................................................................ 41
5.1.

Training sales manager and supervisor .......................................................................... 41

5.2.

Developing the performance management system......................................................... 42

5.3.

Solution selection ...........................................................................................................43

5.4.

Change plan design ........................................................................................................45

2


5.4.1. Objectives ............................................................................................................... 45
5.4.2. Action plan .............................................................................................................. 45
5.4.2.1.

Development of an appraisal form .................................................................. 45

5.4.2.2.

Guideline for effective performance feedback ................................................ 49

5.4.2.3.

Disciplinary procedure for poor performance management ............................ 49

Conclusion .................................................................................................................................... 55
Supporting information ................................................................................................................. 56
References ...................................................................................................................................

111

Appendix .....................................................................................................................................

115

3

List of Figures
Figure 1: Initial cause-effect map..................................................................................................17
Figure 2: Updated cause-effect map..............................................................................................22
Figure 3: Managerial support at sales department.........................................................................28
Figure 4: Managerial support at sales department.........................................................................28
Figure 5: Employee satisfaction of salespeople at Electrolux Vietnam AC 2014-2018................33
Figure 6: Final cause-effect map................................................................................................... 40
List of Tables
Table 1: Sales growth of Electrolux Vietnam AC, Daikin, Toshiba and Vietnam AC market from
2016 to 2018.................................................................................................................................... 8
Table 2: Results of the survey collected from Electrolux Vietnam AC, Daikin and Toshiba........11
Table 3: Measurements of managerial support..............................................................................27
Table 4: Cost estimation for solution to training sales manager and supervisor........................... 42
Table 5: Cost estimation for solution to updating the performance management system.............43
Table 6: Organization of actions in implementation of effective performance management
system............................................................................................................................................51

4


Executive summary
Customer dissatisfaction undoubtedly imposes a challenge for the organization to
maintain consumers’ loyalty and retention

62

. Dissatisfied consumers discontinue purchasing the

product or service as well as have a high potential to engage in negative word-of-mouth
communication about the organization’s product or service

62

. The fact that keeping customers

satisfied with their product or service does have a positive influence on an organization’s
profitability is non-negotiable

63

. Hence, customer defection or discontinuance of purchase from

consumers causes Electrolux Vietnam AC to suffer remarkable loss of sales. To investigate the
worrisome situation, potential problems which are identified through interviews and subsequently
confirmed with theories involve ineffective managerial support and ineffective segmentation. By
evaluating and verifying each potential problem, a discussion to focus on ineffective managerial
support is determined as the central one. Electrolux Vietnam AC is confronting the ineffective
managerial support that makes their employees feel dissatisfied with the job and consequently,
has low commitment and intention to leave the company in the future. Their low productivity
causes the organization to experience low performance as well. After further rounds of interviews
and the support of literature, the validated and most important cause of ineffective performance
evaluation is chosen to build the set of solutions. The possible solutions for improvement of
performance evaluation are training sales manager and supervisor on evaluating and giving
performance feedbacks to their subordinates effectively or developing the performance
management system. Basing on the cost-benefit analysis, the development of the performance
management system is feasible to efficiently solve the ineffective managerial support. The
solution is beneficial from available resources that are gained from the cooperation between HR
department and sales department, which costs around VND 11,500,000 and takes approximate
two months without a break in order for salespeople to keep up with the schedule to promote
their work efficiency. By taking an action, this cost-efficient solution can terminate the current

problem of Electrolux Vietnam AC. Not only customer satisfaction but also employee satisfaction
is expected to enhanced in order to improve the organizational performance.

5


1.

Company background
Electrolux Group which headquarters in Stockholm, Sweden is a world-leading provider

of diverse consumer appliances and electronics with more than 100 years of history. The
organization has 54,400 employees in Europe, North America, Latin America, Asia, Africa and
Oceania. It is in the company’s DNA to continuously strive to further improve efficiency and
quality across the organization, from production to administration. The mission of Electrolux is to
provide outstanding products in order to enrich people’s enjoyable and sustainable life.
As a member of Electrolux Group, Electrolux Vietnam which was established in 1999
specializes in distributing thoughtfully designed and innovative products for households and
businesses. Electrolux Vietnam has a head office in Ho Chi Minh City and representative offices
in Hanoi and Danang. According to the company’s HR report in February 2019, there are 6
departments with a total of 130 employees. There are departments of human resources and
general administration (11 headcounts), finance and accounting (23 headcounts), corporate
marketing (8 headcounts), customer service (5 headcounts) and consumer electronics (83
headcounts) that conjointly support the company’s operation. The consumer electronics
department has three sub functions which are air conditioning (31 headcounts), kitchen
appliances (23 headcounts) and home appliances (29 headcounts). Air conditioning, abbreviated
as AC, comprises air conditioners whilst kitchen appliances include cookers, ovens, kettles and
food processors, and home appliances consist of refrigerators, washing machines, and vacuum
cleaners.
In the AC division, each department has their own departments to go along with to

support their activities for related products. Specifically, there are 4 departments which belong to
AC division. The head of AC administers not only sales management but also product
management, customer service and administration. Product management is in charge of
monitoring pricing, inventory, orders and marketing activities. Customer service is accountable
for handling consumers’ inquiry in terms of installation, maintenance and reparation.
Administration supports administrative tasks. In total, there are 3 managers and 28 employees.
Every department in AC collaborates with each other towards a shared vision with the goal of
achieving excellent business outcomes and outstanding customer experience.
In today’s ever changing business environment, Electrolux is proud of being one of the
leaders in the air conditioning industry that foresees the future and continuously innovates to
6


develop future-proof air-conditioning solutions. The product line of air conditioning contains
residential air conditioner and system air conditioner. The compatible models can be single-split,
multi-split, single-split packaged, multi-split packaged air conditioners and VRF system. For the
residential air conditioners, air conditioners are used when an outdoor unit connects to an indoor
unit, which are best suited to houses with a number of floors and rooms with little space for an
outdoor unit. For the system air conditioner, they are ideal for installation in larger areas such as
larger-scale residential houses, commercial buildings, condominiums, etc. A single or multiple
outdoor units serving various indoor units and allows for a mixture of system types. Driven by a
never-ending quest for product innovation, their goal is to deliver products with superior quality
and reliability and provide experience of true comfort for businesses and homes. The proportion
of sales for product type is shown that residential air conditioner constitutes 65 percent of total
sales which is higher than that of system air conditioner accounting for 35 percent.
Electrolux Vietnam AC division’s competitors are Daikin, Panasonic, LG and others.
They target B2B customers that a distribution network is applied through modern trade and
traditional trade to attract customers and sell their products. Regarding modern trade, ecommerce
such as Tiki, Lazada, etc. and supermarkets such as Dien may Xanh, Nguyen Kim, Cho Lon, Tu
Do, etc. Concerning traditional trade, retailers are Truc Mai, Thien Nam Hoa, etc. The proportion

of sales for consumer type is shown that modern trade constitutes 40 percent in which 15 percent
for ecommerce and 25 percent for supermarkets which is lower than that of traditional trade
accounting for 60 percent.
Sales department has a total of 15 members including a sales manager, a sales supervisor,
11 sales representatives and a sales administrator. The role of a sales admin is to assist sales force
with daily sales administration activities. Sales reps are in charge of developing customer
intimacy and establishing new sales opportunities. Sales supervisor is responsible for ensuring
customer satisfaction, increasing sales for the company, consistently monitors the sales activity of
the team and tracks the results. Sales manager participates in strategic and tactic planning and
managing for the department. Because of increasing competition between air conditioning
manufacturers, it is crucial for Electrolux to foster a motivated and committed sales force which
plays an important role in generating revenue for the company.

7


2.

Problem mess

2.1.

Symptoms

To indicate something abnormal in the current business operation of Electrolux Vietnam AC, the
source of internal data was examined such as reports of HR department, customer report which
was published by management team so that employees are aware of their performance level.
These internal data was found to be advantageous due to its ease to approach and availability,
together with cost efficiency and useful time series data. Moreover, depth interviews with sales
manager and sales supervisor were carried out in order to have a better understanding about what

the division is struggling with and any necessary improvements.
2.1.1. First symptom: Low sales
According to the company’s internal data, Electrolux Vietnam AC experienced an
increase in sales over the last three years. Nevertheless, sales growth rates declined markedly,
falling from the high 17 percent to the low 11 percent in 2017 and 9 percent in 2018, even as the
company added approximately USD 3.5 million of additional revenues in each of the past three
years. As declared by head of AC in the company’s annual meeting, Daikin has continued sales
growth exceeding 25 percent from 2015 to 2018. Another Japanese-based air conditioning
provider, Toshiba has achieved over 18 percent of sales growth in the same period. What is more,
it is reported by Nikkei Asian Review that sales of Vietnam AC market is forecasted to grow over
14.5 percent from 2015 to 2021. In general, Electrolux Vietnam AC suffered progressive
slowdown in sales growth. From 2015 to 2018, its sales also experienced a slower growth rate
than that of their biggest rivals, Daikin and Toshiba and local AC market.
Table 1: Sales growth of Electrolux Vietnam AC, Daikin, Toshiba and Vietnam AC
market from 2016 to 2018
Year
Sales revenue – Electrolux Vietnam
AC
Sales growth – Electrolux Vietnam AC
Sales growth – Daikin
Sales growth – Toshiba
Sales growth – Vietnam AC market

2014
24.5

2015
27
10.2%

2016
31.6

Unit: million USD
2017
2018
35.3
38.5

17.0%
11.7%
25.0%
18.0%
14.5%

9.1%

43

Source: Nikkei Asian Review , internal meeting
8


2.1.2. Second symptom: Low customer satisfaction

9; 10
11; 12.

Customer satisfaction is defined as a consumer’s response to the assessment of their
consciousness of inconsistency between preceding expectations and actual exhibition of the product

1

or service as discerned in the time following its consumption . The measure of satisfaction can be
economic satisfaction in terms of financial returns derived from the sales of the supplier’s products or
non-economic satisfaction in terms of satisfaction that could be derived from interpersonal
2

relationships with the supplier’s sales representatives . In today’s highly competitive market,
customer satisfaction is regarded as a major contribution for organizations to not only retain
customers but also assist in recognizing economic goals like sales turnover and profitability

3; 4; 5

. It
6

is shown that there is a positive relationship between customer satisfaction and customer loyalty .
The higher level of customer satisfaction leads to the greater customer loyalty

6; 7; 8

. Otherwise, as a

result of customer dissatisfaction, they will not hold commitment to
re-buy or re-patronize product or service

in the future and have a potential to cause switching

behavior and negative word of mouth
It was reported that sales representatives at Electrolux Vietnam AC did not take good care

of their customers. As a consequence, the number of customers who either ceased repurchasing
products or left the company is noticeable. In accordance with Mr. Phu, customer complaints
were regarded as serious problems of which must be taken notice. Customers expressed their
dissatisfaction towards poor service rather than products. They complained about late responses
from salespeople which made them wait for more than 1 day and have to make a call for prompt.


In some cases of emergency, salespeople are the ones that customers directly contact to ask for
immediate help but they were asked to leave messages or voice mails and would be re-contacted
after few hours later rather than receiving an instant support from salespeople. They also
complained that they were not informed about necessary information from salespeople on time
such as delay in product delivery, or changes in promotion. As a consequent, customers were
discontented with salespeople, which brought about not only loss of existing customers but also
low sales. There was no denying the fact that this issue had an influence on the long-term
sustainable growth of the company.
To be more specific, Mr. Phu elaborated the issue that many dealers had not ordered
Electrolux products for more than 2 months although he definitely guaranteed that they had been
9


sold out. Most of them were air conditioner specialists, known as ACS, were qualified customers
that were believed to have a potential in buying and selling to gain revenue on a monthly basis
because they had sufficient resources in terms of human resources, financial resources and
inventory capacity. Some of them intentionally sent formal complaints to related parties whilst
others complained by oral and decided to slow down the period of time from buying to selling
Electrolux products as a way of not hurting the relationship with the company, which made the
company challenging to figure out the problem owing to their inaccurate reasons. Therefore, after
receiving a large number of complaints from customers, manager and supervisor were able to
aware of the main cause of this problem, which was because of salespeople. As shared by Mr.
Quan, there were actually 3 cases that have had a close relationship with the company more than

3 years finally being out of business with the company. Alongside, other 2 cases did not want to
enthusiastically sell their products which mean that when individual customers come to ask their
recommendation about proper products that matched their needs; however, they did not mention
about Electrolux brand.
In the context of business-to-business relationship, it is proven that salespeople’s job
performance as customer contact employee plays a crucial role in securing business customers’
satisfaction

13

satisfaction

13; 14

. Specifically, attitudes, expertise and traits of salespeople can impact on customer
. To measure the level of customer satisfaction, a quantitative survey which

includes quality of service in case of salespeople was distributed to 56 business customers that
carry out product lines of not only Electrolux Vietnam AC but also their competitors, among
which Daikin and Toshiba were particularly chosen to investigate the level of customer
satisfaction of these companies and to compare with the existing situation of Electrolux. All items
are measured using 10-point scale ranging from 1 which indicates strong dissatisfaction or fully
disagreement to 10 which indicates strong satisfaction or fully agreement. By providing them
with a hard copy at shop as well as an email invitation to online survey, complete questionnaires
could be acquired from a total of 53 customers out of 56 in total, for a response rate of 94.6
percent.

10

Table 2: Results of the customer satisfaction survey collected from Electrolux Vietnam AC,
Daikin and Toshiba
Items
Electrolux
1. My sales representative spends sufficient time
6.24
with me.
2.
My sales representative can be reached when I
5.77
need him.
3.
My sales representative advises me according to
6.25
my requirements.
4.
My sales representative deals with my concerns
5.86
quickly.
5. My sales representative gives me information
6.73
about current developments that are important for
our business.
6. My sales representative is solution-orientated.
6.87
7. My sales representative is flexible.
6.98
8.
My sales representative has professional
6.74

expertise.
9.
I would repurchase the offering from this
6.40
salesman.
10. Overall, I am satisfied with the company.
6.13

Mean
Daikin
7.85

Toshiba
7.11

7.63

6.92

8.89

6.78

7.92

7.34

8.14

7.42

7.26
7.59
8.16

7.15
7.86
7.22

8.48

7.16

8.32

7.89

Source: Quantitative survey from the company’s dealers
According to the table, there were 10 items measuring the quality of salespeople in
Electrolux Vietnam AC, Daikin and Toshiba. In case of Electrolux, the average mean is 6.4 which
showed that customers did not really agree or satisfy with all of the statements of this dimension.
Noticeably, item 2 “my sales representative can be reached when I need him” and item 4 “my
sales representative deals with my concerns quickly” had the lowest mean scores which are 5.77
and 5.86, respectively. Meanwhile, the average of Toshiba was 7.28 and that of Daikin was 8.02,
which indicated the highly agreement of the respondents to this dimension. The quality of
salespeople of Electrolux should be significantly concerned due to their lowest satisfaction of
customers. It is clear from this analysis that sales organizations needed to provide guidance and
support for their team members’ improvement.
Taking everything into account, it is vital for Electrolux Vietnam AC to conduct an
investigation into the reason why the customer dissatisfaction is so high to mitigate the risks of

losing business partners and therefore, low sales. The research plans to scrutinize causes that
11


result in customers’ action to leave the company and to suggest solutions to improve customers’
retention.
2.2.

Initial cause-effect map

The depth interview was conducted in order to investigate the potential causes of
customer dissatisfaction and low sales situation which Electrolux Vietnam AC is struggling with.
All of 7 respondents were chosen to work for the sales department and a product manager works
for product management department in the company’s AC division at least 2 years in order for
them to be capable of understanding the operation and management system of the company. In
the sales department, sales manager and sales supervisor who are responsible for the symptoms
as well as sales representatives who are directly related to the symptoms joined the interview for
the data collection. Interviews which were done by face-to-face interviews to reflect the customer
experience under viewpoint of Electrolux Vietnam AC salespeople. There are 9 causes resulting
in 2 symptoms in AC division that were clearly shown in an initial cause-effect map.
Basing on the symptoms, sales manager and sales supervisor noticed that customer
dissatisfaction was due to the lack of customer follow-up from salespeople. Regarding
salespeople’s lack of awareness in dealer programs, the company had a policy to ensure a quality
customer service that salespeople were responsible for providing dealers with special offers in
special occasions. Nevertheless, according to sales supervisor and a sales rep, some salespeople
did not send special promotions like gifts, vouchers, etc. to customers in holidays such as
Christmas Eve, Vietnamese New Year, etc. Some customers also complained about the lack of
PG, PB support in running promotion in their grand opening days. What is more, dealers were
assisted with marketing and training sessions in order for them to be well equipped to attract and
serve their customers well. Salespeople were those who were ready to fully support customers by

any means of communication. However, they were regarded as promises that made customers
have a long wait. Consequently, customers were dissatisfied with the service of the company.
Besides, there were some delays in delivering air conditioners to the customers. Sales
supervisor admitted that salespeople did not meet the deadlines because the product was not
delivered and installed as promised. Although it is not salespeople’s subjectivity because the main
reason for this situation is due to unexpected delay from manufacturer or the longer shipping
time, salespeople needed to actively contact with customers to inform them about it
12


instead of their irresponsibility to let customers wait. Some customers show their displeasure by
asking another salesperson to consult them instead of the first one who was responsible for
selling the product to them before. Another case was illustrated by sales manager which was
about an adjustment in sales forecast of customers. Some customers increased their purchasing
volumes after a period of time of initial order that makes the company impossible to follow their
new orders because their initial order was approved and completed. It was possible that
customers were conscious of this policy; however, they blamed salespeople for not spending time
on consulting them clearly about the increasing trend of that line of air conditioners in that
season. Likewise, another salesperson disclosed that there are some situations in which customers
ordered products in advance and willing to receive products later without exact time; however
salespeople believed that it was customers’ responsibility to actively contact with them to ask for
their products, so they were unable to meet customers’ requests for product delivery at a specific
point of time set by customers because the company’s policy allowed salespeople to order their
products at one random week set by product management on a monthly basis. Salespeople also
did not respond to requests of brochures from dealers because they believed that marketing team
would actively send brochures to them. Salespeople seemed to take it for granted, which showed
their unconcern about their customers’ needs. Consequently, they did not provide product and
service delivery on time, which made customer unhappy.
Insights from salespeople revealed that they could not follow up with all customers due to
their hectic working schedules which results in work-life imbalance. Salespeople performed their

jobs that involved three main duties which are ongoing relationship management to grow sales
from upselling or cross-selling, new consumer acquisition and non-selling activities such as
paperwork, meetings, reviews, etc. Salespeople received large number of emails coming in their
mail box and phone calls and they were so busy to check email and answer phones every day. In
specific occasions, they had to travel to other regions to interact with clients and colleagues in
more than one week. As a rule, companies could not lie within their existing territories, so in
order to be not only a survivor but also a passion to be market leader; salespeople of Electrolux
Vietnam AC were required to help the company increase their market share by find new potential
ones. They were counted as 20 percent of each salesperson’s KPI. In order to complete jobs and
achieve sales targets, they had to work overtime and in the weekends besides 8 official working
hours on a daily basis. They had to sacrifice their personal choice such as family time, doctor’s
1
3


appointment, etc. Moreover, they rarely had enough for a full breakfast or lunch meals in busy
days. Work-life imbalance was so common in the company that when a salesman decided to leave
the office earlier than others, sales supervisor did not let him away from the office by asking him
to help his urgent paperwork. Salespeople also revealed that they usually had to meet clients in
office hours, so administrative tasks must be done by working overtime. Although salespeople
were aware of customers’ needs, their high workloads made them unable to timely keep track of
all customers’ requests.
Moreover, some salespeople were unable to provide answers to customer enquires about
products. Salespeople needed to acquire sufficient product knowledge to present benefits of their
products accurately and persuasively because customers were likely to respond to enthusiastic
salespeople who were passionate about their products and eager to share the benefits with them.
Air conditioners were complicated and expensive, so they were challenging to sell. Salespeople
could diversify different models with distinct designs, materials, specifications, dimensions, BTU
and functions regarding energy saving, comfortable, convenient and clear. However, it was not
the end of selling because many business customers were more concerned about the technology

of products which were regarded as the competitive strengths between Electrolux and other
competitors. When being asked to make a comparison of V-PAM and i-PAM which were
optimized inverter control or the function of sine-wave DC inverter control between the company
and other competitors, salespeople could not demonstrate confidence and expertise that made
customers enjoy. Another case was shared about mistaken suggestion of the product selection
because the salesperson remembered wrong indicators of the product application, which
somehow showed their poor understanding of products. As revealed by salespeople, their
knowledge was limited due to the lack of training, so what they could overcome the situation and
persuade customers to purchase products was to emphasize on their products’ attractive features
and competitive price scheme. It seemed that salespeople mainly focused on achieving the
revenues rather than customer orientation. As a result, customers agreed to purchase a small
volume of the company’s air conditioners; however, some of them were not motivated to
enthusiastically sell our products to their customers.
Insights from salespeople revealed that they have deficiency of product knowledge due to
the lack of training opportunities. It was confirmed that there was no adequate training sessions
because they were only given opportunities to work alongside with more experienced colleagues
1
4


so that they were expected to learn and develop their current role. In contrast to the expectation,
salespeople affirmed that they could shadow a couple of people who were extremely busy with
their clients and their tasks without giving any advices or responses to their questions.
Consequently, salespeople had to figure out everything by themselves. They could learn on their
own from their experience, failure, quick conversation with colleagues at their spare time, etc.
They also expressed their difficulties with sales supervisor; however, he did not take their
concern into consideration and reminded them to actively figure out answers for their problems.
They believed that the main reason for lack of training provision was not because of sales
manager’s busy schedule but because he underestimated the importance of coaching and training
since he was a formerly successful sales professional before being promoted into sales manager.

For him, selling came naturally and he often could not understand why salespeople were not
“getting it.” Moreover, salespeople were recruited as they must possess more than 2 years of
experience. However, many of them admitted that their skills and knowledge are at a basic level.
Salespeople were provided with a variety of software as tools for them to utilize to improve their
selling process. However, how to use them depended on their capacity and time allocation
because they had to learn all by themselves. As compared with other departments, marketing
team was given a chance to participate in a training course for digital marketing whilst new
members of HR team who were had less than 2 years of experience were brought up by both
unique training courses and specific on-the-job assignments, together with HR director’
involvement in coaching these talents. The company also had a talent program for STEM talent
to develop their potential to be able to work in factories and laboratories. What salespeople
expected was a solid training program for selling skills and technical knowledge must be come
down so that they were much more confident and excellent in selling and serving their customers.
Besides, as shared by product manager, the company was struggling with intense
competition with other air conditioning rivals who constantly found a breakthrough to spur a
cutting-edge technology. Because the existing products of Electrolux remained the technology
without advancement, dealers expressed their expectation for the company to make an additional
innovative features in the product in such a way that increased their cooling capacity but
significant energy saving such as dual inverter compressors as LG or effectively carried heat and
had lower environmental impact such as R32 as Daikin. Many of dealers’ customers revealed that
the climate change and an increase in electricity bills up to approximately 8.4 percent which
1
5


might affect their change in buying behavior for air conditioners in the near future. Therefore, the
salespeople found it challenging to attract new clients who kept pace with the latest trend to be
more concerned about energy efficiency.
Lastly, product manager also shared that the price of the company’s air conditioners are
not really as attractive as other rivals. Dealers were encouraged to purchase products with high

discounts; however, there is no policy to require consistent and transparent pricing of dealers. The
larger volume of products were purchased, the higher discount dealers would receive from the
company; however, they wanted to preserve their profit as much as possible, so they dealt with
their customers with different prices and always higher than original one, which made the
company unable to strongly compete with other organizations.

16


Lack of awareness in
dealer programs
Organizational symptoms
Overwhelming
workload

Lack of customer

Low customer
satisfaction

follow-up

Low
sales

Delay in service
delivery

Lack of training

Lack of product
knowledge

Lack of product
innovation
Difficult to find new
clients
Less attractive price

Figure 1: Initial cause-effect map

17


2.3.

Updated cause-effect map

2.3.1. Ineffective managerial support
Managerial support means that managers are willing to adjust working schedule, job tasks
and provide assistance to help employees manage their work and non-work demand

57

. It is

15; 16; 17; 18
management’s responsibility for supporting employees

in such a way that employees

perceive their work matters are consulted, and their needs are considered and are taken action
properly

19; 20

.

The value of training subordinates concerning the advantages of demonstrating support
for their supervisors fosters a virtuous cycle of support between subordinates and managers

55

.

Management that pays attention to the occurrence of actions such as upper management
involvement, pre-training preparation, support during training, job linkage and follow-up plays an
important role to support the transfer of training to the job, which helps increase productivity of
employees while controlling the high costs of training

56

. Hence, a relationship can be established

as ineffective managerial support results in insufficient training.
Managers play an important role in introducing and endorsing work-life balance policy
within the organization

57

. It is suggested that employees should be given some autonomy and

flexibility regarding working hours and the ability to work from home to improve work-life
balance

18

. Not only working parents and young employees but also employees at developing and

pre-retirement career stages find managerial support for work-life balance important

57

. All levels

of managers should take effort in undertaking a supportive workplace. Therefore, a relationship
can be established as ineffective managerial support leads to work-life imbalance.
In order to confirm the new variables and new relationships established based on the
literature, manager, supervisor and employees from sales department were asked to participate in
the subsequent round of interview. Salespeople believed that their concerns about work-life
imbalance and training opportunities were not heard by the management, so there was lack of
perceived management support in this company. Sales manager thought that the current number
of salespeople were not enough to manage and serve their customers as well as expected.
However, after the investigation of causes of customer dissatisfaction from salespeople, the actual
reason lied in the management of sales department because salespeople perceived that their
management did not care about the overwhelming workload that their salespeople were
18


emotionally and physically exhausted to perform so that they had to sacrifice their personal

obligations for work responsibilities. Moreover, the management was discerned to not provide
salespeople sufficient training so that salespeople did not have competencies necessary to have a
conversational comfort level with varied technology offerings and a comprehensive
understanding of what technology could do for customers.
2.3.2. Work-life imbalance
Work-life balance consists of initiatives from organization to help employees reconcile
their work and personal life

57

. Management support flexible work will offer advantages to both

employers and their employees so that employers are beneficial from employee productivity,
commitment, motivation and retention whilst employees are advantageous from better time
management and less stress

21, 22

. Indeed, work-life balance enhances overall well-being of

employees and reduces absenteeism. In order to assuage the burden of work-life balance, there
should be availability of work-life policies that enable employees to enact both their work and
non-work roles without threats

23

. Hence, a relationship can be established as lack of work-life

policy creates work-life imbalance. Work-life imbalance brings about either absenteeism or work
stress which generates low overall well-being.

Sales supervisor admitted that sales team was always under pressure to achieve higher
growth, so they cared about employees’ achievements at work rather than their personal life.
Salespeople are preferred to put themselves as much as possible at work. Sales supervisor
realized that some employees consistently requested for absence due to sickness or family issues;
however, salespeople were not encouraged to take days off without rationale. As a result,
employees voluntarily took sick leave before asking permission from sales supervisor, which
made work behind the schedule. A salesperson, Mr. Anh, revealed to plan to have a break in
roughly more than 2 months to let his mind free and relaxed because his mental and physical
resources get drained as the consequence of insomnia and personal relationship matter. In case of
poor performance, another salesperson, Mr. Phong, did not receive any support but a warning to
suffer not only a decrease in salary but also a possibility to lose the job. In addition to daily high
workloads, he had to increase his effort and time to overcome the challenges of the work to reach
the quotas. Consequently, he got depressed and stressful because he had to stand alone to be
survival. The work was so much that another salesperson, Mr. Minh, did not have enough time
1
9


for his outdoor activities to increase his well-being because he had to frequently meet clients in
the evening after leaving the office. Mr. Long, the most experienced salesperson, had physical
problem caused by work-life imbalance in a combination with the essence of the work that
required him to drink without exercises.
2.3.3. Insufficient training
Training fulfillment refers to the extent which training meets the expectation and desire of
employees. Self-efficacy is regarded as the belief of an individual in his or her capability to
control the work situations and handle them well

24

. Thus, individuals with lower levels of self-

efficacy are likely to find the work unbearable and highly stressful whilst those with higher levels
of self-efficacy perceive the job as a challenge to be mastered rather than as a threat

24

.

Meanwhile, motivation can be intrinsic, which shows employees’ engagement in work for its own
benefits since the work itself is interesting and satisfying whilst extrinsic motivation shows
employees’ motivation to work in response to something apart from the work, such as recognition
or rewards

25

. Training plays an important role to enhance motivation and self-efficacy of

employees, so organizations should take effort to develop right training programs to enhance the
training fulfillment of employees

58

. Hence, a relationship can be established as insufficient

training results in lack of motivation and lack of self-efficacy.
Although sales supervisor and sales manager admitted that they were not aware the need
for providing employees with training workshops, employees were encouraged to learn by doing
and learn from experienced co-workers. From the viewpoints of salespeople, they were not
performing to their best at work due to lack of required skills and knowledge. Therefore, they
were demotivated to hit their revenue targets by always making excuses for their poor

performance without actual improvement. They were also unconfident about their capabilities to
perform their work better because they believed that they could not achieve excellent results
since their field was extremely competitive with very complicated products and that their quotas
were reached in some quarters was because of serendipity or luck. Therefore, they agreed that it
was necessary for the company to organize job-related training workshops to help improve
workmanship of employees as well as enhance their working motivation and self-efficacy.

20


2.3.4. Ineffective segmentation
In order to support marketing’s goal that creates value for customers and generate
profitable consumer relationships, segmentation plays a key role in helping the company to know
and determine which customers to serve. The company segments the market based on certain
criteria that are relevant to the context of the company so that they are able to target customers
effortlessly with advertising and marketing programs

53

. Concentrating on customers’ desired

outcomes, organizations utilize segmentation for the purpose of innovation which is regarded as a
key instrument to use resources and capabilities to win customers and markets through different
market offerings

53

. Innovation is steered by customers and market requirements as well as

competition among suppliers and shaped by the advancement of technology

26

. Product

innovation is regarded as product differentiation in the marketing sense although all
differentiation may not be innovations

27

. It is also noted that the companies can find customers

at higher prices especially for high technology innovations; however, it is suggested that in order
to achieve superior value, the organization needs build extraordinary features at bearable prices
27; 53

. Hence, a relationship can be established as ineffective segmentation results in insufficient

product innovation and less attractive price, both of which generate the difficulty in finding new
clients. Being a sharp weapon in segmentation, innovation mechanism based on technology helps
the company catch up with competitors or surpass the world levels. When few changes in their
products and most of products were of slight differences, the company utilizes price mechanism
based on attractiveness to fight with competitors in the price wars

53

.

Product manager agreed that the segmentation of the company was ineffective. The
company did not stand out to offer newness and difference in product offerings, as revealed by

her, because of limited R&D resources. Moreover, dealers were more likely to offer prices that
made them profitable; however, they explained to her that the fact was that they compensated
into the cost of marketing activities, accompanied gifts or vouchers, cost of installation, etc. She
believed that there should be an unambiguous policy for the pricing of dealers so that new ones
would be confidently cooperate with the company.

21


Low overall
well-being
Lack of awareness
in dealer programs

Work stress
Potential central
problems

Insufficient worklife balance policy

Ineffective
managerial
support

Work-life
imbalance

Absenteeism

Insufficient

training

Lack of customer
follow-up

Symptoms
Low customer
satisfaction

Low
sales

Delay in service
delivery

Lack of product
knowledge
Lack of selfefficacy

Lack of motivation

Ineffective
segmentation

Insufficient
product innovation

Difficult to find new
clients

Less attractive
price

Figure 2: Updated cause-effect map
22


2.4.

Potential problems

2.4.1. Ineffective segmentation
The availability of technology of Electrolux air conditioners was consistently taken up by
their competitors. Compared with competitors in the same industry, the utilities of Electrolux air
conditioners are generally no different from competitors such as cooling mode, temperature
sensor mode, sleep mode, powerful mode, anti-bacterial filter, inverter technology, etc. Sales
manager revealed that designers, marketers and engineers had to work together in crossfunctional teams under pressure to add advanced technology as well as come up with new air
conditioners that would appeal to a wide range of our customers. Product manager emphasized
on the significance of advancement in products’ technology due to many reasons: people were
more likely to spend most of their day indoors, so they highly appraised quality air to steer clear
of diseases caused by toxic contaminants, climate change, global warming and an increase in
electricity bills that arise their awareness and purchasing behavior to shift to air conditioners
which are ozone-safe, climate friendly, energy efficient. It is noted that Panasonic’s most
advanced purification system, the nanoe technology, deodorizes, inhibits bacteria and viruses,
remove dust and purifies room even though cooling function is turned off. Meanwhile, Daikin’s
econo mode is accompanied with inverter to create a much more energy savings and minimize
the monthly electricity bills. LG incorporates dual inverter which saves energy up to 70 percent
compared to single inverter. In order to meet consumer demand and compete with other
competitors to gain customers, it is necessary for the company to consistently update those
utilities to exceptionally higher level of efficiency.

Electrolux Vietnam AC aims at middle class. Price goes along with the technology of the
product. Comparing the lowest price for the Inverter line 1 HP cooling capacity between
Electrolux and Toshiba, the price is at VND 8 million for Toshiba and VND 8.5 million for
Electrolux. Although the air conditioner of Toshiba costs customers VND 500 thousands higher
than Electrolux, the saving mode of Electrolux only has inverter whilst that of Toshiba has both
DC hybrid inverter and eco. Moreover, Electrolux's antibacterial technology is HD dust filter
whilst Toshiba’s features IAQ filter, anti-fouling technology magic coil and mold-resistant filter.
As a result, customers are more likely to pick up Toshiba’s. It was also revealed by product
manager that dealers of Electrolux enjoy a relatively good discount, generally at 30 percent and it
23


can be increased up to 45 percent for new ones to encourage them to try our products. The
discount rate is believed to be competitive compared to that of other competitors. Some dealers
increase the price to compensate into the cost of marketing activities, accompanied gifts or
vouchers, cost of installation, etc. to attract their customers. It is suggested by product manager
that there should be an unambiguous policy for the pricing of dealers so that new ones would be
confidently cooperate with the company. However, doing so does not mean to help dealers
because they find it challenging to compete to promote their products. Some of them denied
purchasing products from Electrolux and turned to its competitors. As a matter of fact, the
original price which is considered as not attractive because all costs and expenses have to be
taken into account which can be import price from Thailand and China (50 percent), taxes (40
percent), overhead expenses (approximately 15 to 20 percent) and discount for dealers (30 to 45
percent).
2.4.2. Ineffective managerial support
Sales representatives perceived the insufficiency of support from their sales manager and
sales supervisor. Sales manager and supervisor did not care about subordinates’ problems and
concerns regarding to their work overload and insufficient training sessions. From the viewpoint
of sales manager and supervisor, salespeople were expected to devote their time and effort to
work and contribute to the achievement of not only themselves but also the whole team. Because

of an imbalance between work and personal lives, salespeople’s performance was negatively
impacted concerning customer dissatisfaction and their low overall well-being. Salespeople were
believed to be well-qualified to have a capability to carry out their selling and non-selling
activities effectively as all of them had prior experience in the same industry. From the beginning
of their first days in the company, they were expected to start right away in to their new job as
their experience and knowledge were believed to be more than sufficient. However, salespeople
shared that they were not confident and persuasive in selling products to customers as they
focused on what they knew and thought about their products rather than showed how a particular
product would address consumers’ needs. The bottom line was that customers crave and need
product knowledge. It was how they made the buying decision and how they knew they could
trust salespeople. The current situation in which lack of training opportunities and lack of worklife balance policy made salespeople not satisfied with their job and would jump jobs when better

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