Solutions to Ineffective Leadership at Cubes Asia

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
--------------------------------
Tran Le Hoang Yen
SOLUTION FOR INEFFECTIVE
LEADERSHIP
IN CUBES ASIA
MASTER OF BUSINESS ADMINISTRATION

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
--------------------------------
Tran Le Hoang Yen
SOLUTION FOR INEFFECTIVE
LEADERSHIP
IN CUBES ASIA
MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: DR. PHAN THI MINH THU

SOLUTION FOR INEFFECTIVE LEADERSHIP IN CUBES ASIA 1
TABLE OF CONTENT
Executive summary ......................................................................................................... 4
Chapter 1. Company background ................................................................................. 5
1.1 Cubes Asia history and organizational structure ............................................... 5
1.2 Cubes Asia customer and proportion of sales by channels ................................ 7
Chapter 2. Problem identification ............................................................................... 10
2.1 General symptoms ........................................................................................... 10
2.1.1 The first symptoms: High employee turnover .......................................... 10
2.1.2 The second symptom: Increasing employee complaints........................... 12
2.1.3 The third symptom: Increasing customer complaints ............................... 13
2.2 Problem mess ................................................................................................... 14
2.3 Potential problems ........................................................................................... 29
2.3.1 The first potential problem: Poor employee training ................................ 31
2.3.2 The second potential problem: Ineffective leadership from managers ..... 34
2.3.3 Central problem ......................................................................................... 36
2.4 Problem justification ........................................................................................ 37
2.4.1 Problem definition ..................................................................................... 37
2.4.2 Problem existence ..................................................................................... 38
2.4.3 Problem importance .................................................................................. 42
2.5 Cause validation ............................................................................................... 45
2.5.1 Potential causes ......................................................................................... 45
2.5.2 Verify causes of central problem .............................................................. 46
Chapter 3. Alternatives analysis and possible solutions ............................................. 51
3.1 Solutions........................................................................................................... 51
3.1.1 Proposed solutions .................................................................................... 51
3.1.2 Validated solutions .................................................................................... 56
3.1.3 Alternative solution sets ............................................................................ 60
3.2 Action plan ....................................................................................................... 62
3.2.1 Objectives .................................................................................................. 62

3.2.2 Time line and cost estimation ................................................................... 63
3.2.2.1 Solution S1.2: Implement dedicated communication skill training programs
63
3.2.2.2 Solution S2: Implement strategic planning ............................................... 66
3.2.2.3 Solution S3: Apply performance management and control framework ... 68
Conclusion .................................................................................................................... 71
Chapter 4. Supporting information ............................................................................. 72
4.1 Appendix 1: Samples of customer complaints ................................................ 72
4.2 Appendix 2: Company documents ................................................................... 78
4.3 Appendix 3: Interview transcriptions .............................................................. 87
4.4 Interview guide of interview ground 1 .......................................................... 112
References ................................................................................................................... 114
LIST OF DIAGRAMS
Diagram 1 - Initial cause effect map .................................................................................. 16
Diagram 2 - Updated cause effect map .............................................................................. 30
Diagram 3 - Final cause-effect map ................................................................................... 49
Diagram 4 – Proposed solutions for Cubes Asia’s central problem................................... 60
Diagram 5 – Solution set 1 components ............................................................................. 61
Diagram 6 – Solution set 2 components ............................................................................. 61
LIST OF CHARTS
Chart 1 - Cubes Asia Organization chart, Feb 2018 ............................................................. 6
Chart 2 - Total sales by channel 2016 .................................................................................. 7
Chart 3 - Total sales by channel 2017 .................................................................................. 8
Chart 4 - Total sales by channel quarter 1, 2018 .................................................................. 8
Chart 5 - Total sales by channel quarter 2, 2018 .................................................................. 9
LIST OF TABLES

Table 1 - Annual employee turnover 2014 - 2018 ............................................................10
Table 2 – Comparison of high and low performing managers..........................................34
Table 3 – Top five characteristics contribute to leadership inefficacy..............................39
Table 4 – Top five indicators to evaluate leader effectiveness .........................................40
LIST OF FIGURES
Figure 1 - Dimensions and categories of negative leadership and its consequences ........ 42
Figure 2 - Dimensions and categories of leadership and its antecedents .......................... 45
Figure 3 – Stages of strategic planning process ................................................................ 54
Figure 4 – Performance management and control framework.......................................... 56

Executive summary
Cubes Asia is a young company who develops quickly in recent years. However,
due to spending time to focus on sales and marketing, it is facing with several issues
relating to personnel, customers, management system. The research includes three
important parts. Firstly, it comes with the company background for readers to understand
the company history, its customers, staffing, sales as well as the industry, the market
Cubes Asia is in. Secondly, the researcher identified problem through interviews and
theories, it is found that the company is facing with poor employee training and
ineffective leadership. However, ineffective leadership has significant influences through
most of variables. Furthermore, the research presented the valid causes leading
ineffectiveness leadership including personal traits of the boss, misuse of power from
managers, poor communication between managers and employees, lack of financial and
human resources, lack of strategic business plans, lack of internal and external control
with the company context to contribute in later solutions. Thirdly, there are solutions
proposed and confirmed by employees through quick survey. The alternatives plan are
analyzed and presented which is a combination of developing communication strategy,
implementing strategic planning and applying performance management and control
framework. The plan comes with total budget of 228.140.000VND in the duration of 3
months for training programs, 1 month for strategic planning and nearly 1 month for
applying performance management and control framework in Cubes Asia. This total cost
is feasible with the company who gained turnover of 54 billion and profit margin of
approximately 30% in 2017. Furthermore, the ineffective leadership causes losing 3 key
customers which contribute 2 – 3 billion per year, losing money, business information and
low productivity due to high employee turnover rate (over 25% through years).
The presentation above support the readers have an overview on contents of this
research. From the work has been contributed, the full name of the study is "Solution for
ineffective leadership in Cubes Asia".

Chapter 1. Company background
1.1 Cubes Asia history and organizational structure
Cubes Asia was established in 2013 who specializes in distributing the top well-
known European coffee machines and grinders such as Melitta, Nuova Simonelli,
Victoria Arduino, Animo, Cunill, Schaerer, Lelit etc. Besides, the company also provides
other related products such as coffee, blenders, juicers, water systems, milk frothers, etc.
to make a coffee competence that meets all customer demand. The company is the
pioneer in the field of trading professional coffee machines in Vietnam. Its mission is to
provide excellent products to enhance the quality of living, and we pride ourselves in
customer satisfaction and faith.
Cubes Asia has built up a head office in Hochiminh (2013) then its three showrooms in
Hochiminh (2016), Danang (2017) and Hanoi (2017) until now and it is expected to expand
to other regions such as Nha Trang, Phu Quoc – all are potential markets to trade its main
product line. However, Cubes Asia is a small company that has over 40 employees in total
until now. The head office is responsible for all decision of the company as well as the main
venue to take place most of training courses, official events, monthly meeting etc.
The company’s competitors who are also coffee machine distributors but from other
manufacturers are Perfetto, Epicure, Quang Tan Hoa, Charles Wembley etc. Among its
competitors, Cubes Asia is considered as the leader of coffee machine distributor in
Vietnam due to be pioneer and its high quality products. Cubes Asia has a national
presence, being in many areas around Vietnam by distribution system through dealers and
agents: roasters (Shin Coffee, LaViet, Laha Coffee, Trung Nguyen, Cau Dat Farm, etc.),
dealers (Phuong Binh, Tam Long, Meta etc.), Modern trade (Thien Hoa, Nam An etc.),
Ecommerce (Yes24, Tiki, Sendo, Lazada etc.), Private agents (Barista, individuals, etc.).
At Cubes Asia, most of decision is made by top managers who are founder, business
development manager and company development manager. In fact, the founder (boss) is
always the person to make final decisions which are managerial, operational and business
and other managers are those who implement and execute the boss’ decision. In near
future, the company expects to have complete organizational chart indicated as below:

Chart 1 - Cubes Asia Organization chart, Feb 2018

*(NN) means not yet available.

1.2 Cubes Asia customer and proportion of sales by channels
Cubes Asia target to both B2B and B2C customers who are resellers, agents,
corporates, hotels, resorts, restaurants, coffee chains, coffee shops, households,
individuals. Among the company’s customers, it can be counted the most important
coffee chains, hotel and restaurants as well as many other customers the company served
around Vietnam such as The Coffee House, Trung Nguyen, Twitter Bean Coffee, Laha
Coffee, Aha Coffee, Heritage Line, Khanhcasa, Caudatfarm, Hella, Piza 4P, Golden Gate,
Novotel, Sol Beach, Part Hyatt, etc.
In general, B2B customers account for the overwhelming proportion of B2C
customers. The data of sales by channel from 2016 – 2018 is described below showing
that B2B customers (Dealers, Roasters, Chains, HoReCa etc.) place extremely important
role in the company turnover than B2C customers (Coporate, retails, showrooms,
individuals). There are differences in the name and the way in dividing channels because
the demands of splitting or merging sub channels by the time.
Chart 2 - Total sales by channel 2016
SR
Retail 8% Dealer
16% 31%
Corporate
14%
Horeca
31%

Chart 3 - Total sales by channel 2017
Own SR 13%
E-com/Mo.Tra. Retail 12% Dealers
40%
0%
Coffee Client 3%
Corp. 8%
Roaster 2%
Ho.Re.Ca 17%
Chain Stores 5%
Dealers Ho.Re.Ca Chain Stores
Corp. Roaster E-com/Mo. Tra.
Coffee Clients Retail Own SR
Chart 4 - Total sales by channel quarter 1, 2018
Co.Clients Retail
5% 3% Own SR
Ecommerce 14%
/Modern …
Dealers
Roaster 46%
6%
Corporate
1% HoReCa
Chains
17%
8%
Dealers HoReCa Chains
Corporate Roaster Ecommerce/Modern trade
Co.Clients Retail Own SR

Chart 5 - Total sales by channel quarter 2, 2018
Modern trade Ecommerce
Offices 0% 0%
2% Individuals
Convenient Stores 14%
1%
Pro kitchen supplier
0%
HoReCa Dealers/Roasters
17% 52%
Coffee chains
12%
Hotel Chains
1%
Hotel Appliance Dealers
1%
Dealers/Roasters Hotel Appliance Dealers Coffee chains
Hotel Chains HoReCa Pro kitchen supplier
Convenient Stores Offices Modern trade
Ecommerce Individuals

Chapter 2. Problem identification
2.1 General symptoms
Several in depth interviews were taken place to have ideas about what the company
is facing and need to be improved. The information is collected from both current
employees and former employees who are:

Ms. Sam Duong – Current Marketing Executive



Mr. Duy Nguyen – Current Marketing Executive



Ms. Loi Nguyen – Current Accountant



Ms. Tien Le – Former Senior Sales Executive



Ms. Nhi Nguyen – Sales Executive



Mr. Duong Nguyen – Former Head of Central Retail Office



Ms. Trang Nguyen – Current Sales Admin



Ms. Vy Do – Current Sales Admin

There are several key performance indicators (KPIs) which cover financial, customer,
process and people metrics (1). In this research, author focus on 3 KPIs including Employee
Turnover Rate (ETR), Employee Satisfaction, Customer Satisfaction and Retention.
2.1.1 The first symptoms: High employee turnover
There is a clear and impressive symptom that Cubes Asia is dealing with
significantly high employee turnover rate. It is always at much higher level compared
with the industry (about 11.9% in trading industry (2)) or even other closet competitors
(15 – 20%), (acquire from available relationships in competitor’s company). Below table
shows the employee turnover from establishment until now:
Table 1 - Annual employee turnover 2014 - 2018
Year
CEO/ Director level
People end of period
People left through period
Middle level
2014 2015 2016
1 1 3
0 0 1
1 2 3
2017
3
1
6
Up to
July
2018
3
1
4

People left through
period Staff level
People left through period
Total people end of period
Total people of period (Average)
Total people left through period
Employee turnover rate
1
6
1
8
8
2
25%
1
6
1
9
8.5
2
24%
1
14
4
20
14.5
6
41%
4
22
4
31
25.5
9
35%
1
36
8
43
37
10
27%
Why is employee turnover important? “It’s not who you hire that counts, it’s who
you keep” (3). Employee contributes in success of a business because they create long-
term competitive advantage. Employee turnover cost can range from monitoring,
evaluating factors that impact it, managing its probable costs in term of human and capital
resources. Furthermore, high employee turnover may lead to negative effect on
organization’s information and knowledge, recruitment and training costs and
performance of remaining employees (4). If we put losses of high turnover in broad
categories, it can be mentioned following (5), which are:

Costs of recruitment



Cost of selection



Cost of covering during the period in which there is a vacancy



Administration costs of recruiting and selecting process



Induction training for the new staff

Based on the literature, the researcher took interview of Huong Nguyen, Human
Resource Executive, which shows many negative influences to the company due to high
turnover rate which are summarized as below:

High cost of time to recruit and train new employees: HR team spend over 40
hours/month, supervisors spend nearly 25 hours/month and 15 hours/month for co-workers.



Cost of job advertisement and hunters: The company usually pays 3 – 4 million
VND for job advertisement and hunters to find new candidates.



High cost of management or handling the former’s documents and new employee

documents, for example insurance issue, that may cost travelling expenses, time, printing
cost, et

High separation costs: cost of increase of unemployment tax, cost of administration
function, cost of terminating the employee, cost of exit interview, estimated nearly 2
million VND per employee



Negative effect of job handover: there are some comments that the organization’s

information, knowledge and even assets missing after job handover.

Negative impact to current employees: all employees at the base level expressed that
they felt unstable environment and shortage of motivation when more and more people
started to leave the company.


2.1.2 The second symptom: Increasing employee complaints

Employees in Cubes Asia are most likely unsatisfied with the job they are doing, not
only due to their responsibility itself, but also due to board of directors and employee
relationship. Employee satisfaction is essential to the company (6) that it contributes to
productivity of the employees that relates directly to employee’s performance,
organizational commitment of employees and “cohesiveness of workers for sustainability
of achieving the organization’s goals”. The company with low employee’s satisfaction
may lose its competitive advantages – the talent employees who leave the company, and
result in further crisis besides the economic disorder. Furthermore, proved that employee
satisfaction meaningfully relates to business outcomes (7).
It’s interesting that none of them expressed dissatisfaction with the compensation
they receive from the company. There are complaints from all interviewer interviewed
which are:

Ms.Sam – Marketing Executive at Cubes Asia mentioned that some people were
waiting for favorable opportunities to leave the company and they didn’t intend to stay with

the company for long-term

Ms.Vy – Sales Admin expressed that she lacks motivation for work, sometimes she
just wanted to stay at home, didn’t want to go for work



Ms.Sam, Ms.Vy and Mr.Duong - Former Head of Central Retail Office agreed that

they didn’t see that people can develop themselves with the company, or see their future
and company future as well when working at the company. People didn’t understand what
they are doing for and why they have to do so, no direction, no strategy

Furthermore, Ms.Nhi – Sales Executive addressed that people were not supported
well with their job and there was an unfair treatments from managers to staff



In Ms.Sam,Mr.Duy and Ms.Nhi opinions, people in the company were tired to do one
job for more once, they were required to re-do the job as the boss’s requirement and ideas



According to Ms.Trang – Sales Admin, there were persons who were stressed to
deal with other people in the company in some situations.


Though the collected data, there is a need that company should pay attention to its
employee satisfaction to improve its performance as well as employee intention.

2.1.3 The third symptom: Increasing customer complaints

Many researches show that customer satisfaction positively influences company’s
profitability. Moreover, there is a positive correlation among customer satisfaction,
loyalty and retention, whereas, customer dissatisfaction is main reason of discontinuing
repurchasing from customers (8, 9). If the customers are dissatisfied with a company’s
product or service, they possibly decide to discontinue purchasing product or service,
complain to third party or to the company and communicate negatively worth of mouth
(10).
People reported that customers at Cubes Asia are not taken good care of its customers.
The company receives a lot of complaints (appendix 1) and there is a record that customers
who left company are significant. According to Ms.Trang, Ms.Loi and Ms.Nhi, the customer
complaints are considered as serious issues that the company needs to pay attention. They
assumed that the customers are unhappy with the service and this issue impacts on the long-
term sustainable development of the company. The departments know customers’ reaction are
sales, admin, technical and accounting department. Customer complaints are evaluated to
increase more and more both wholesale and retail customer:


Mr.Duong and Ms.Loi agreed that customers call in the company, they don’t talk

directly with salespersons or technician or customer service executive. There are too
many phone number to contact, 3 hotlines for 3 showrooms, 2 hotlines for 2 office
salesperson, 1 hotline for technical, 1 hotline for sales admin, 1 hotline for Barista trainer,
4 landlines for head office and 3 showrooms. Customers don’t know which phone number
they should contact so they usually call in the head office, then the HR executive answer
the phone call and note their problems to transfer related department after that

Three interviewees, Ms.Nhi, Ms.Loi and Ms.Trang have the same opinion that some
customers cancelled contracts due to not timely delivery and poor customer service



Furthermore, Ms.Trang addressed that customers have to wait 3-4 days for their
problem resolved after continuous calls, “This is very popular even customers in Hochiminh
still have to wait several days as a routine. In other competitors’ company, their

technicians have to do overtime and on the weekend. If customers need to fix the
machine, they almost immediately are being their place. I think this is very important
point because customers are selling coffee, if the machine goes wrong or was broken that
will interrupt the business very much”

Most of customers complained poor service instead of products. Some key
customers (dealers) complained unclear information or they are not informed essential
information from salespersons (appendix 1)


To dig deeper on this issue, author create initial cause-effect map from interviewed
information which is showed in next part.
2.2 Problem mess
Being aware what is happening to the company, author firmly takes the employee
turnover rate, employee complaints, customer complaints in consideration and want to
find out the potential problems Cubes Asia is facing with.
The initial cause-effect map is built up by several researches with employees in Cubes
Asia. The study used primary information through qualitative research by conducting in-
depth interview on 8 employees who are both current and former employees of the company.
This study aims at current and former employees because firstly, they worked

for the company at least 6 months and they understand the operation and management
system, secondly, the research may concern the reasons why employees left company so
it’s essential to know the opinions of former employees. In addition, this research mostly
looks for employees who work at Ho Chi Minh city because over 70 percent of employees
work at Ho Chi Minh and it’s easier to reach them (there are one employee who used to
work for Cubes Asia in Danang city). The in-dept interviews are done by face to face
interviews (6 interviews) and telephone interviews (2 interviews).
The in-depth interview was semi structure and divided into 2 main topics: the factors
that satisfy and dissatisfy the employees and what the customers complained about and
why. For the in-depth interview with the topic of employee satisfaction, it focuses on
main aspects: Needs of employees, work environment, responsibilities, supervision,
fairness and equity, effort, employee development, feedbacks. For the topic of customer
complaint, author focuses on customer experience who are mostly dealers, B2B
customers under viewpoint of Cubes Asia employees.
It is exposed typical points through interviews with current and former employees of
Cubes Asia, which are:

Diagram 1 - Initial cause effect map


Inappropriate actions from dealers:

- Unsystematic pricing from dealers: Dealers (wholesale customers) are applying
different prices of the same products to attract retail customers. Therefore, the company
received complaints from both retail customers and employees. Firstly, the retail customers
complained that Cubes Asia always said it was the exclusive distributor of Nuova Simonelli,
Melitta but its offer prices were higher than other companies (wholesales customers of Cubes
Asia). Secondly, salespersons said that due to the difference prices, they meet difficulties to
compete with the dealers in selling products. If Cubes Asia salespersons lower the prices to
obtain customers, the dealers will complain, but if salespersons don’t lower the prices to
obtain customers, they cannot sell in the case the
customers research prices and have many quotations from different companies.
Furthermore, if the whole seller continue lowering the prices to compete each other like
this, they will distort the market, Mr.Duong said.
- Dealers disclose different discount scheme to each other: Dealers talk with each other
about the discount percentage they receive from Cubes Asia. For example, Phuong Binh
Group (dealer) share discount information with The Married Bean (dealer) that they receive
higher discount from Cubes Asia. This results in The Married Bean complained why they
receive less benefit than other dealer while they have worked with Cubes Assia for a long
time, Ms.Loi mentioned. With this case, it possibly demotivate dealers who receive lower
margin per products. Moreover, it’s a tricky that some dealers they want to monopolize
the market by kicking other competitors out like Phuong Binh Group.

Poor customer care and service:

- Lack of hotline switchboard: there are too many hotlines and landlines that confuse
customers and the company also don’t have hotline switchboard for customers to contact
asking the service, as Mr.Duong, Ms.Loi shared in the interview. The customers usually
directly call head office, meet HR department, HR department record information and
concerns, then, pass to related department. The customers complained they can’t reach
directly technicians because they don’t have information to contact them. Therefore,

customers have to wait for technicians call back or even at peak time, technicians forget
to call back customers so the customers are very distasteful with it.
- Late machine installation and repair: customers have to wait for long time to get
machine installed and repair. The technicians usually let customers wait for 2-3 days or
longer although the customers wish machines fixed as soon as possible for continuing
selling coffee for their guests, as Ms.Trang shared in the interview. This situation is more
serious for customers who are located at outside of HCM, for example, there is a
customer in Dalat had to wait 5-7 days for getting machine fixed.
- The company staff don’t act as their promises: The promises come from technicians
and salespersons who directly work with customers. For technicians, sometimes they
promised customers that they would come their place and check the machines but they
didn’t (Ms.Trang, transcript, appendix 1). Besides, some customers called in company
and asked technicians instruct them descale and clean machine system through telephone
but the technicians didn’t, they blamed for busy times. For salespersons, they promised
customers that the machines would arrive, for example, in 2 weeks, but finally it arrived
late than 2 weeks. The reasons can be objective, due to unexpected delay from
manufacturer or the longer shipping time, rarely due to salespersons’ subjectivity
(Ms.Trang, Ms.Nhi, transcript).
- Salespersons don’t well serve customers: Some salespersons don’t inform new
products and promotion to dealers, as Ms.Loi, Ms.Sam said in the interview. For example,
the case of Phuong Binh – Biggest dealer in Hochiminh, salesman taking care this
wholesale customer didn’t inform them about new supper automatic machine and
promotion for dealer. Besides, the company has policy to give congratulation flowers on
grand opening day of customers who are coffee shops but the some salespersons don’t
offer this gifts to their customers, Ms.Loi assumed.
- Technical service commonly doesn’t support customers on the weekend or overtime
like other competitors, Ms.Trang addressed: technicians of other competitors are resumed
that they are always available for anytime customers need for better and quicker service but
Cubes Asia’s technicians don’t. The technicians almost don’t come to customers’ place on

weekend or overtime although this is the peak time of their shop (coffee shop customers),
they truly need technical support to repair the machine as soon as possible as Ms.Loi
shared in the interview. When machines of customers have problems, salespersons call
technicians for help but they don’t agree to come customer’s place or say “busy”. The
customers don’t receive support immediately or the salespersons have to ask other outside
technicians depending on salespersons’ relationship, Ms.Nhi said.
- Technicians are not friendly with customers: technical service is important part of
customer service in and after selling. Technicians are evaluated who are not friendly with
customers and receive not good feedbacks, Ms.Trang and Ms.Nhi had same opinion. There
were the cases that the customers asked for changing another technician for next time
service. The customers said that they didn’t want nasty technician to install or repair the
machine at their place.

Inappropriate policy for dealers:

- Policy for special offer for dealers for holiday: there is no special offer for dealer on
holiday like other companies so the employees also receive feedback from customers why
they don’t receive special offer for special events or why don’t support them with their
events.
- Conflict scheme discount between wholesale sales and retail sales: the company do
market by targeting not only wholesale customers but also retail customers that causes
conflicts between discount percentage for wholesale customers and for retail customers
(Mr.Duong, transcript). Because the retail customers and wholesale customers both receive
discounts so the wholesale customers usually complain that if Cubes Asia run promotion for
retail customers, it will affect their profit because they have to run promotion as well to
compete. A solution the company does is it offers extra discount within a short time for
dealers when it run promotion for retails customers. However, this solution is not working
well because the time dealers receive extra discount is too short and margin they receive too
low and they are not satisfied with that. Moreover, if a salesperson of Cubes Asia deal with
the same customers who are taken care by dealers, the salesperson has to give up these

customers for dealers, as Ms.Nhi mentioned. Salespersons are not allowed to compete
with dealers because the company wants to establish the good relationship with dealers.
- No policy for dealers in pricing products: there is no policy to require consistent and
transparent pricing of dealers (wholesale customers). Therefore, they put different prices
on their website or they deal with their customers at different prices than original one to
compete other companies.
- Unstable policy for dealers: the policy for dealers have changed quickly so
salespersons expressed that they couldn’t catch up with all new policies, Ms.Tien shared.
The employees in the company couldn’t adapt quickly new policy, so do the customers.
The customers are confused with different policy, some other customers didn’t agree with
new policy so they complained back to the company. For example, the new policy of
extra discount is mentioned before.
- Inconsistent policies for all dealers: different dealers are applied with different discount
frame which depends on the purchase history and agreement between salespersons and
dealers. The salespersons most likely to offer as less discount as possible because it affects
their commission, as Mr.Duong asserted. For example, they can offer 30% discount for the
same position customers, such as customer A and customer B. However, if customer B agree
with 28% discount, the salespersons will apply this rather than the maximum discount they
can. It takes a lot of working effort to manage all dealers with inconsistent
policy because it is not only on paper work but also the technical service for dealers’
customers and payment term.

Unclear directions, strategy from boss:

- Unclear strategy communication: Employees don’t know much about strategy of the
company, even they don’t hear anything about company vision, goal, this is the opinion of
Ms.Sam, Ms.Vy and Mr.Duy. Therefore, they don’t know why they should do the job and
what the company get from their contribution. Furthermore, Ms Sam said that due to lack
of directing strategy, employees don’t see they can develop themselves and who they are
in the future

- Unclear direction from the boss: When employees are assigned a task, they usually
don’t receive the direction from the boss, for example, what he wants them to do. Because
of unclear direction, the employees often do one tasks several times if it’s not suitable
with what the boss actually want. Moreover, the boss changes his mind too many times so
people is stress to follow his idea without much argument, as Mr.Duy, Ms.Sam, Ms.Vy
told in the interviews.

Unfair customer allocation:

- The customer allocation is uneven among sales team: Most of customers are been in
charge by a leader who works as sales manager, as product manager and as technical
department head. This situation happen after former salespersons left the company, they
handed over the jobs and their customers to the sales manager for later allocation to new
sales staff. However, this manager didn’t re-allocate the customers of former salespersons,
he took over all these customers and the new salespersons have to find new customers in
competitive market (Mr.Duong, transcript). This action results in 2 main consequences.
First, the new salespersons lose motivation because they feel unfair treatment. Customers
are divided by channel which means each salesperson has to take care and report 1
channel and they have the responsibility to their channel. However, they don’t receive the
benefit of old customers in their channel. Second, because one person takes care too many
customers, he cannot support them well and result in poor customer relationship as
Ms.Trang and Ms.Loi expressed through the interview.
- Imbalance human resource in different channels: Customers are divided by channels,
not by regions, which include Coffee Chains, Dealers, Ho.Re.Ca, Offices, Convenient Store,
Modern Trade, Hotel Chains, Ecommerce, etc. while Dealers counts for highest turnover and
Modern Trade/Ecommerce count for lowest turnover, each channel is taken care by one
person (Ms.Loi, transcript). It causes the different sales in the end of every month and too
different commission salespersons receive in the end of month because there is person who
can sell a lot, on the other hand, there is also a person who cannot sell anything. A true story
from the salesperson who is in charge of Hotel Channel that Cubes Asia recruited people
handling this channel but there were 2 people “come in and come

out” due to poor sales result. Some people don’t need to do much effort, they still meet
the assigned target on their potential and lucrative channel, other people are struggling
with their difficult channel to get sales.

Inconsistence of applying customer regulation among sales team:

- Ms.Trang and Ms.Nhi thought that the sales manager don’t comply machine delivery
policy: the company has policy that requires customers buying big machine to deposit at least
50% before delivering but he delivered machines to his key customers even no any deposit in
advance. For other salespersons, they cannot do that. The problem is the manager asked
warehouse team deliver to customers without informing sales admin and accountants
(usually, accountants don’t let warehouse team deliver machines to customers if the
company haven’t received deposit, Ms.Trang asserted). The consequence can be very
serious that firstly, the company cannot collect the money from customers because
machine delivers without confirmed delivery note by sales admin and secondly, it causes
the deviation of the data in the accounting book and the real stocks at the warehouse.
Other salespersons feel unfair, chagrined and lose their motivation, they see the sales
manager doesn’t deserve to be a manager, Ms.Nhi assumed
Salespersons don’t comply discount scheme for customers: salespersons apply different
discounts with different customers, especially, sometimes they offer a discount which is
out of the sales discount scheme of the company by making special requests and have
managers sign in. However, due to too many different discounts for different customers,
it’s hard to manage later on and everything goes unsystematic.

Unclear performance measurement:

- There is KPIs for departments except sales department: Sales department has sales
target to evaluate the effectiveness but other departments don’t have KPIs to evaluate.
Furthermore, the company doesn’t have bonus and penalty policy if the staff do wrong
some things, Ms.Vy, Ms.Sam shared through the interviews. Hence, the employees lose
their motivation because of lack of recognition.
- No transparent performance measurement: Due to lack of KPIs, the company doesn’t
have transparent performance measurement. At the end of the year, employees receive a

form to evaluate themselves but they don’t believe it’s valuable to the boss. They don’t
know which measuring method the boss bases on to judge them and why they receive that
amount of bonus different from others’, Ms.Sam and Ms.Vy had same idea. All things
they know is the boss have a meeting with Mr.Phong – As the sales manager/ the product
manager/ the technical department head – to evaluate each person in the company.

Inappropriate empowerment:

- The boss too concentrate on details: Ms.Sam and Mr.Duy assumed the boss too pay
attention to the details rather than the whole situation that makes employees stressed and
prolong the time to finish job. The employees though that they should have the power to
decide by themselves and be responsible for these details.
- Employees have high position without essential power: Before, special requests of
salespersons was signed by the boss. However, the sales manager used to write an email
to ask the boss the right to approve these all special request and other related problems
with the reason that he was the sales manager. Currently, sales promotions have also been
approved by the boss with very little participation of the sales manager. However, due to
sales promotion of which purpose is to push sales, the sales manager should be the most
important person to involve in this case.

Unclear responsibility among departments:

- Non-listed responsibilities: Some tasks are not listed into job description in labor
contract but the employees have to do if they want to smooth their work, this opinions
showed in the talks of Ms.Sam, Ms.Vy and Mr.Duy. For example, when Mr.Duy –
Marketing executive – was recruited, the HR department and on the labor contract address
that Mr.Duy is in charge of content marketing. However, when he official works for the
company, he has to take over the website management, fanpage management, video
production as well.
- Mix-up responsibilities among people: Some jobs are finished by people who are not
responsible for them, Ms.Vy said. For example, all salespersons need to inform customers
of promotion but some of them didn’t so the boss asked marketing department is in charge of
informing customer about this information, Ms.Sam and Ms.Loi shared in the interviews.

Another example, POS and CRM system are responsible by sales admin team but for
loyalty program and updating some information, the boss asked Marketing team do
because he don’t believe sales admin team will do well.

Unclear workflow, detail process:

- Ms.Sam, Mr.Duy, Ms.Nhi asserted that employees addressed that the company
doesn’t have clear workflow and detail process so the responsibilities of each person are
not exactly same with what is listed in their job description.
- There is duplicate tasks which are done by different departments such as organizing
party (Marketing and Human Resoure Department), product comparison (Product
development manager, Marketing department), POS (Sales admin and Marketing),
promotions informing customers (Sales and Marketing department) etc. This leads to one
person push responsibilities to other person, finally, no one do the job. Furthermore, the
resource of the company will waste a lot if too many duplicate tasks are among departments.
When asked further information, the interviewees addressed more considerable
points that leads to above issues, which are demonstrated as below:

Inadequate technicians:

- There are only 2 technical staff in HCMC – the biggest market of the company (exclude
the technical department head). The technicians place very crucial role in customer service
part because they are not only the ones to install the machine but also check the machine
every 1 month for each customer in their valid warranty period. Therefore, people considered
that 2 technicians for the big market is absolutely not enough and need to recruit more for
better customer service, through Ms.Trang and Ms.Loi’s talks.
- The technicians also have to travel in other provinces, such as Phu Quoc, Da Lat,
Binh Duong, Can Tho etc. if salespersons sell products to customers living there. The
problem is the coffee machine is a big equipment and it requires to set up with particular
electric power, particular water system into the machines. With very technical products
like that, the customers cannot do by themselves the installation or repair the machines.
Certainly, travelling takes a lot of time.

Inefficient customer service department:


- Customer service department are the team to handle all customer’s concerns, support
them quickly and effectively. Furthermore, they are the bridge between the technicians,
salespersons and customers who make sure all information is transparent and effectively
transmitted. All customers’ complaints will be resolved. Customer service department is
responsible for tracking technicians’ schedules so they don’t miss the meeting with
customers. Moreover, they are the people to check the customer satisfaction with the
products, customer care attitude of technicians and salespersons. Thereby, it increases the
satisfaction of customers to the quality of service of the company
- In the past, no one or no department controlled number of call-in customers, number
of customers resolved, number of customer’s sites technicians need to go, number of
finished installations or pending etc. When interviewed, Mr.Duong also expressed the
concern that the company didn’t have the department to take responsibility for that part.
- As Ms.Trang shared, the company has taken this issue into consideration and tried to
employ someone managing jobs relating to customer services. However, there were 3 turns
that people came in then came out because they are not well trained, didn’t receive
sufficient support from sales and technical department and the company didn’t establish
documents or procedures for this department.

Poor sales and technical skills:

- Salespersons at the beginning have poor understanding of products and markets, don’t
know clearly how to use machines, different types of machines and different brands on
the market from other competitors, as Mr.Duong addressed. Moreover, Ms.Nhi revealed
that they don’t know the processes to work with technicians, admin or accountants so
sometimes they mix up and take longer time to finish the job.
- Salespersons are poor problem solving skills when dealing with customers: As B2B sales
admin, Ms.Trang expressed that salespersons don’t react well in answering customer’s
complaints or requirements when machines go wrong so sometimes customers ask the
company to change the consultants. This issue directly impacts on customer satisfaction
because salespersons are the ones who work with customers firstly.

Inappropriate technical service and dealer policy:


- Weekend technical support: the company should apply technical support for weekend
and evening like other competitors, this is what Ms.Loi, Ms.Nhi and Ms.Trang mentioned,
because that time is the peak time of a common coffee shop, the probability of machine
broken is very high. The broken machine will affect very much customer’s business
because they don’t have alternatives and also cannot repair machine by themselves.
- Not attractive compensation for technician to travel outside of HCM and to work
overtime: the benefit technicians receive only the extra annual leave so it’s not enough
attractive for them to be willing go far from HCM. The reason of not taking care of far
customer site or at the weekend is possibly the compensation, as Ms.Trang assumed.
- Ms. Sam and Ms.Vy assumed that it is lack of appropriate reward and punishment
for policies applied to employees. For example, there is no policy for technicians who
answer/come to customer’s site quickly or late. They don’t have any benefit when they do
well or any penalty when they don’t fulfill their responsibility.
- For dealer policies, as mentioned above, the policies are determined inappropriate
because company doesn’t have policy for special offer for dealers for holiday, there is
conflict scheme discount between wholesale sales and retail sales. No policy for dealers
in pricing products: there is no policy to require consistent and transparent pricing of
dealers (wholesale customers). Therefore, they put different prices on their website or
they deal with their customers at different prices than original one to compete other
companies, unstable policy for dealers and inconsistent policies for all dealers.

Poor communication between managers and employees:

- There are records from the interviews showing that the communication between
managers and employees is not good, specifically, in generating policies and direction,
strategy communication. Mr. Duy, Ms. Trang and Ms. Sam suppose that almost all policies
are issued and made decision by managers without communication or researches from
employees. Therefore, it makes some policies inappropriate. As a salesperson, Mr.Duong and
Ms.Tien assumed that the policies for dealers are not appropriate and cause unexpected
consequences. For example, different discount schemes for different dealers cause

confusion and problems in management later on; there is no regulation for dealer to set
the retail prices when they resell products etc.
- Ms. Tien and Ms. Nhi who are current and former sales in Cubes Asia and also work
with dealers closely determine the inappropriate dealer policies cause difficulties when they
sell products. Although they are sales and they know market well, they haven’t been
asked or researched the opinion for new policy issues. Furthermore, some of policies,
such as policies for dealers, are changed too frequently that not only dealers cannot catch
up with but also the salespersons, as Ms. Tien expressed. Besides, Ms. Trang and Ms. Nhi
reported that the technical policies are not reasonable when technicians don’t support
customers on weekends like other competitor’s technicians. However, they were not
likely willing to express their idea, difficulties and situation to managers.
- When being asked whether employees actively voiced out their opinion or not, some
said “Yes” and others said “No”. This issue also indicated the communication between
managers and employees are not good and effective in order to create reasonable and
inappropriate technical and dealer policies.

Bias from managers:

- Sales manager favor his customers: He sells products and is taking care so many
customers. Because this manager is also technical department head, he has the right to assign
technical staff to work on the weekend or work overtime. His customers are better treatment
than other salespersons customers that they can receive support from technicians on the
weekend or in the evening, out of working time, Ms.Trang and Ms.Nhi presented.
Furthermore, the technicians put this manager’s customers on first priority, not the same
treatment with other salespersons’ customers. There is a situation that in the beginning,
the technical department received a request from one sales member to fix his customer
machine, but when technical staff received other request from the manager’s customers
after that, they moved the initial’s schedule later and resolved manager’s customers first
Ms.Nhi said.
- Machine pre-order, machine arrival information: the information of machine arrival
wasn’t shared to all employees, Ms.Trang told. As certain, salespersons are those who

extremely need to be aware of this information to consult customers and build up their own
selling plan. Besides, sales admin also should be informed of this information because they
are the persons dealing with customers on contracts, delivery day etc. The product
development manager (also as sales manager, technical department head) knows this
information but he didn’t share information with his sales team, and, purchasing department
also don’t officially inform people about machine buying and arriving schedule, Ms.Trang
mentioned. The reasons are possibly the product manager is too busy or he actually doesn’t
want to share other salespersons because he is afraid other people will book machines in
advance for their customers right before him, and he doesn’t have any machines to sell after
that. For example, the recent order included 36 big coffee machines but 32 machines of them
are booked by him because other salespersons don’t know much about how many and when
the machine arrive so they cannot book machine soon. On the other hand, the interviewee
exposed that there is also salespersons booking the machine with warehouse team but when
machines arrived, warehouse team blame these salespersons don’t book official on email so
they don’t keep machines for them. However, there is no evidence that the product
manager/sales manager/technical department head had booked 32 machines by official email
with warehouse team before (Ms. Trang, Ms. Nhi, transcript). Hence, only 4 machines left
that’s for remaining 11 salespersons at that time.
- The boss changes his mind so quickly and frequently, Ms.Sam, Mr.Duy, Ms.Nhi have
same opinions, for example, the way to break down channels change many times and the
allocation of sales channel as well. There is interesting problem that although sales A is in
charge of channel A, all she has to do is reporting for that channel, taking care of current/old
customer in that channel but she doesn’t receive commissions from that channel – most of
customers are belong to sales manager, Ms.Nhi addressed.
- The boss sometimes assigns tasks or potential customers directly to person he wants
(not by sales in charge channel). This also discourage salespersons who is in charge of that
channel because they feel it’s unfair. Or, this distress those who have to do that jobs
which they are not responsible for. In other words, they have to cover the tasks of other
persons and have to take responsibilities for that, Ms.Sam said.

- The boss involves too much in detail job content but he doesn’t emphasis on
communication of the strategy, the whole picture, as Ms.Sam, Mr.Duong mentioned.
Usually, the arguments of employees are not accepted and all people have to follow him,
Mr.Duy said.
- People said that the boss make emotional decisions of the performance evaluation as
Ms.Sam, Ms.Vy assumed. The bonus of end of year is mainly depended on his feeling about
a person, there is unclear criteria to evaluate employee’s performance.

Unclear and inappropriate delegating from boss

- Delegating is about assessing employee strength and weakness, allotting resources for
employees, evaluating employee performance, teamwork, matching the tasks to the right
employees, trust in employees etc (11). At first interview, Ms.Vy mentioned that the boss is
biased when he appreciates persons as his feeling. He treats differently from people to people,
for example, customer allocation for salespersons, bonus or job assignment and this is
coming from part of the trust. Specifically, the employees evaluate themselves through an
available form of the company. However, the boss re-assessed them by a meeting with sales
manager/technical department/product manager and makes decision. The employees
don’t understand the results of performance measurement.
- Looking another aspect, the boss doesn’t trust employees so that makes him set
inappropriate empowerment. That mean, employees have high position without essential
power, as mentioned above. Besides, there are some tasks that the boss assigned
unreasonably as Ms.Sam described, for example, she sometimes had to handle admin
staff’s tasks and HR’s tasks.
- Besides, as description above, the workflow and process are unclear. Although there
is documents listing the job descriptions for employees, there are few documents
demonstrating the workflow and process. Therefore, some tasks are duplicated and some
other tasks are not handled.
2.3 Potential problems
After first interviews, researcher verified the map with theories and confirmation
from the staff. The updated map is demonstrated as below:

Diagram 2 - Updated cause effect map

2.3.1 The first potential problem: Poor employee training
In Obisi’s opinion (12), training is the process of enhancing and increasing
employee’s skills, competences and knowledge. Thence, the training make employee
perform more effectively and productively (13). They address that it’s easier for the new
employees to do well jobs and become leaders if they receive effective and sufficient
training and development.
The “training” and “development” are usually considered as an integration of which
composition conceptualization is any activities growing skills, behaviors, knowledge.
They include both formal and informal training as well as shadowing, coaching and
mentoring (14).
There is a close relationship between the employees perceived effectiveness of training
and job satisfaction, motivation and commitment which affect directly the company’s
performance such as sales turnover, productivity and absence (15). Besides, it is proved that
the effectiveness of training programs can decrease the employee turnover (16). Formal
training program directly imparts on employee productivity. Employee training influences on
job satisfaction and from then, on intention to stay with the company.
As a result, Ms.Trang agree that the company had missed its new employees in the
position of customer service executive due to poor employee training.
According to several researches, the training effectiveness can be evaluated on four
levels (17,18) including:

Level 1: Reaction

The term of reaction mentions how employees feel about the training program
which is about trainer, schedule and topic. In other words, it’s about the satisfaction of
employees. There are two reasons that managers would like to know participants’
reaction: to ensure people interested in learning and motivated and to make appropriate
training decisions if there is any need to change training program.

Level 2: Learning


The measurement of learning focus on the difference of skills, knowledge and
attitude of participants before and after training. Depending on the purpose of the training
program, the course can concentrate on only one of above aspects or all aspects.

Level 3: Behavior


This is an extension of measuring training effectiveness. We need to look on the
behavior of employees on their job before and after receiving the training.

Level 4: Results


The final results relate to a lot of important key performance indicators of the
company such as sales, productivity, profit, turnover, quality. The managers should know
whether the training turn these aspects into positive results or not.
For Cubes Asia, the training effectiveness has evaluated under the scales of the four
levels through real stories of interviewees:
- Ms. Nhi in sales department mentioned that the training is very general that she was not
trained about the procedures how to work with other related departments who supported her
in selling products. Therefore, in the beginning she didn’t know how to resolve a customer’s
complaint although she was trained with sales manager before. In her case, she
stood in the middle between customer and technicians when the contract of customer is still
valid but the technician charges customer maintenance fee. It comes from the very general
training with product knowledge only. Due to lack of knowledge and skills, Ms. Nhi didn’t
well resolve customer’s concern and had to apologize customer, promised them for better
future service. The reaction of customer is very serious, he said “I will not buy your company
machine anymore”. The company actually lose this customer – Kofi Kai due to low quality of
customer service. For another example, Ms. Nhi also missed a deal because she didn’t pre-
book machine with right person (pre-book machine before it arrives). At the beginning, she
offical sent email to Mr.Hien – storekeeper. However, when machine arrived, Mr.Hien said to
Nhi that she needed to send email for Mr.Phong – sales manager, not him. Finally, she
couldn’t have machine to deliver to customer although her customer deposited 2 month ago
because all machines were booked in advance. We could say, for the shortcoming of essential
knowledge and skills, Ms.Nhi performed lower productivity

she could and that affects her sales. Besides, she suggested that the company needs to
frequently train salespersons because the company often has new products.
- Ms. Sam in marketing department address that she is not trained when start working for
Cubes Asia, she needed to learn by doing the job so at the beginning, she somehow struggle
with her job and it takes her a lot of time to learn all things. She complained there is no
person mainly responsible for orientation, skills and knowledge training. She feel that she
cannot develop herself because there are very few development opportunities so she
doesn’t want to stay for long time with company. Furthermore, she also confirmed that if
the people working in the company are ambitious, they will most likely leave the
company, except some people have personal plan at that time. She also shared other
people’s story in the company. The case of technical department head trained customer
service executive, didn’t well do his job to instruct and guide her, let this person isolated
so two new customer service executives had left the company. According to Ms.Vy –
Sales admin – she also agreed that there is almost no opportunity to develop herself when
working at Cubes Asia because the company only trains employees one time and doesn’t
have further investment for enhancing employee’s skills and knowledge. Therefore, she
also believed that she doesn’t commit to the company for long time but now, she doesn’t
know what to do. Due to personal reasons, she still works for the company. In the case of
Ms.Sam and Ms.Vy, it is clear to say that the company doesn’t have effective training
program and it affects to the employee turnover as they perceive there are almost no
development opportunities for employees.
- Mr. Duong complained that the new employee in Danang (Mr.Huy) wasn’t supported
reasonably, he had to learn by himself about the marketing and selling skills. Moreover,
he complained the sales manager who is responsible for training and supporting all
members in his team doesn’t coach and mentor Mr. Huy appropriately. In fact, Mr.Huy
doesn’t meet his sales target in the first four months from he started working for the
company. The reasons are possibly not Mr.Huy skills – as Mr.Duong evaluated Huy is
active person and possesses good skills – but all about the supports on customer’s
relationship and market intelligence.

2.3.2 The second potential problem: Ineffective leadership from managers
The link between leadership effectiveness and the positive traits or habits of the leaders
is very strong. These traits or habits include such as integrity, ethic, communication and care
for employees. Moreover, the barriers that lead to ineffective leadership highly related to not
the company’s finance, but the company’s structure, culture and policy (19).
The manager is the person that direct and instruct employees that what/why/how
they need to do jobs. If the management team show that they poorly perform their
leadership ability, it will has a negative impact on internal communication. For example,
with poor leadership ability, the manager cannot explain to their employees what they
need to do clearly, even cannot inspire them, make things mix up. Furthermore, poor
leadership ability includes the appropriate leadership style that fit to the company
situation. Certainly, poor leadership style results in poor communication and employee
performance as Femi proved (20).
In other research, there is a relationship between leader skills and leader
performance. As Shipper, Pearson, Singer (21), “effective managers have significantly
different leadership skill profiles than ineffective managers”. As we can see through
below results from the research, 10 of 18 leadership scales were considerably different
between effective and ineffective performing managers.
Table 2 – Comparison of high and low performing managers (21)

Applying for Cubes Asia, there is a relationship among ineffective organizational
policies and ineffective leadership. According to Ms.Trang, the boss who doesn’t care for
his personnel cannot issue a good caring policy for his employees, such as the benefit for
technicians working overtime or on weekend. Besides, the ineffectiveness of leadership is
also evaluated through wrong use of power (22). In the case of Cubes Asia, Ms.Trang told
that the sales manager used his power to ask warehouse team to deliver machines to his
customers even they hadn’t deposited machine yet but in the company policy, the
machine is only delivered when the company receives deposit at least 50% contract value.
Furthermore, the poor communication between managers and employee also proves that
the leaders are low performing and it affects not only one aspects but almost all aspects
required communication.
One interesting things, Ms.Sam and Mr.Duy insisted the managers seem to cannot
determine vision, strategy or direction and show it to their employees. And, that belongs
to the skills of visioning, establishing strategic and operational objectives which a high
performing managers must have.

Moreover, without the integrity of which evidence is bias to assess employees and
assign jobs as Ms.Sam and Ms.Vy expressed, the boss’s leadership ability is evaluated
ineffective. The employees also considered he doesn’t communicate well the direction
and the strategy to all employees. For other leaders, for example, other two mentioned
leaders in the interviews – the product manager/the sales manager/the technical
department head (Mr.Phong) and general manager (Ms.Dung) – who are reported as their
inappropriate work ethic to employees in Mr.Duong, Ms.Trang, Ms.Nhi opinions.
There is an importance of the combination between organizational fairness and
performance appraisal (23). At Cubes, Ms.Vy shared that people feel it’s not clear for
them to be assessed in both daily jobs and final year assessment. The boss seems to refer
people who have good appearance and doesn’t recognize them. Sometimes, he is
considered as he only trusts some people who usually talk with him, report daily stories to
him, Ms.Sam said. Besides, one of the factors that affects sales team’s performance is the
favoritism of the sales manager, which means, he doesn’t support well others in training,
selling products, technical issues, pre-booking products, information sharing which
directly influence other salespersons performance – sales. And, basing on sales, the boss
appraises people without other factors that they have to deal with.
2.3.3 Central problem
Author decides to focus on central potential problem of ineffective leadership from
managers due to several reasons:

The strong influence in both customer side and employee side. With ineffective
leadership from managers, the company cannot have effective policies, clear vision and
suitable strategies and objectives. Furthermore, low performing managers directly affect tasks
and responsibilities of employee, thence, impact on employee commitment and intention
which relate to employee turnover. Specially, with any organization, the effectiveness of
leaders have close relationship with the company performance such as number of customers,
employee turnover, account receivable (Ms.Loi mentioned that the policies for customers
buying machine and salesperson selling machine are not tight enough


so the account receivable is very high and overdue is high as well. Therefore, this is a
significant part for the company to look on.

Author, as marketing position at Cubes Asia, is responsible for internal and external
communication and most likely to be a connector between managers and other
departments. There is a different between Cubes Asia and other common companies that
Marketing department takes care of employee concerns and reports to managers, closely
work with HR department (Ms. Huong). Therefore, Marketing understand employee
situations and can collect their opinion officially by researches in order to persuade
managers to make things changed.



The problem is feasible to solve. However, it somehow requires a managers who are
open-minded to take actions. At Cubes Asia, the managers usually expressed to fix

occurring problems but they don’t know where to start. For example, the company already
tried to employ people for customer service department, the boss often asks employees to
show their opinions but he doesn’t receive many comments, the managers tried to update
frequently job descriptions of all employees but all departments haven’t cooperate well
due to unclear work flow and detail process etc.
2.4 Problem justification
2.4.1 Problem definition
Before coming to definition of leadership, there is essential to understand the term
of “leader”. Leader is one or more than one person whose responsibilities are selecting,
training, preparing, affecting one or more than one follower and who possesses variety of
incentives, skills, abilities and directs, inspires subordinates to spend their spirit, emotion
and physical energy to implement, obtain organization’s mission and goals readily and
enthusiastically.
There are many different definitions of leadership which consider different aspects
of leadership. In spite of that, these definitions expressed four common components (24):

Leadership doesn’t work alone, “it is a group and social phenomenon”, it can be no

leaders and followers


Leadership is about interpersonal interaction and persuasion for leaders in order to

gain objectives through others’ actions

“Leadership is goal directed and action oriented”



If there are presence of leaders, it assumes to have hierarchy within a group which
can be formal or informal and flexible

According to Barker (25), “leadership is about two things-processes and behaviors”.
The processes in leadership are defined as social process in which “individuals and
organization members authorize themselves and others to interact in ways that experiment
with new forms of intellectual and emotional meaning” (26). This research is considered
as a remedy for those study on leadership based on leader’s traits. In general, we can
conclude some key points to set up a definition of leadership as a process:

Firstly, leadership is a process that executes individual wills and needs in
organization, not a function of the people in charge



Secondly, “leadership is a process of adaptation and of evolution”



Thirdly, “leadership is a process of energy, not structure”. Therefore, it is essential
to clarify leadership with management. In Barker opinion (25), the managers seem to
obsess stability but leadership involves changes


Thence, the short definition of leadership can be asserted as “a process of
transformative change where the ethics of individuals are integrated into the mores of a
community as a means of evolutionary social development” (25)

There are different approaches into leadership effectiveness. The leader trait theory
addressed effectiveness of leadership through number of abilities or characteristics of
leaders (26). These abilities or characteristics can be persuasiveness, good memory,
superior intelligence, etc. However, the trait theory fails to link the characteristics of
leader with organizational performances until behavior theory which asserts leadership
effectiveness by leader behaviors. (27). Lately, the leadership effectiveness are explained
by leader situtional theory which considers leadership effectiveness in the interactions
between different behavioral elements in a specific leadership process (28).

2.4.2 Problem existence

The in depth interviews with Cubes Asia’s employees has done to justify the
problem existence which is ineffective leadership from managers. The unstructured in
depth interviews had occurred with six current employees and three former employees
who are persons from HR, Marketing, Sales, Accountant, Admin. The participants are
chosen based on the living place in Hochiminh that’s convenient to research, both current
and former employees for objective results, people working on different departments due
to small company structure and the year people have/had worked for Cubes Asia that is
required over 6 months to understand the company’s situation. The number of
respondents is seven due to saturation point that means until the seventh person, there was
no new information to find out.
It’s not easy to evaluate the leadership effectiveness due to difficult process in
methodology and conceptualization (29,30). In evaluating efficacy, leadership style and
influence is described as organizational outcomes including the use of force (31),
misconduct at working place (32), optional coercive decisions (33,31), follower
personnel, abnormal findings profusely (31). In general, when assessing the leadership
efficacy, we need to consider the organizational performance, outcomes and conduct.
To apply above theories into Cubes Asia cases, author adapts Joseph research (34)
and looks on the characterizations of dimensions of leadership such as traits and habits of
both ineffective leaders, metrics to evaluate leadership effectiveness. As Joseph research,
the ranking of traits and habits that is used to assess one leader ineffective is shown below
table:
Table 3 – Top five characteristics contribute to leadership inefficacy (34)

Furthermore, the leadership effectiveness is also demonstrated through key
organizational goals by Joseph research and they are ranked by interviewees:
Table 4 – Top five indicators to evaluate leader effectiveness (34)
Following these tool and applying to the company, author recognized interesting
findings from in-depth interviews corresponding to above dimensions.
For traits and habits, as above demonstration in problem identification part, managers in
Cubes Asia likely perform ineffective communication when they don’t communicate well the
company vision, strategies, direction to employees and even don’t have two-way
communication in generating policies as Ms.Sam, Ms.Trang asserted. Furthermore, managers
seem to ignore the need of employees such as the demand for personal development, more
supportive customer policies, more technicians to improve customer

service. And the most outstanding things is the ability to delegate of the managers which
involves (11) “accepting feedback from employees”, “allotting resources for employees”,
“assessing employee strengths and weaknesses”, “evaluating employee performance”,
“identifying measurable outcomes”, “matching the task to the right employee”, “training”,
“trust in employees”, etc. From interviews with Ms.Trang, Ms.Vy, Mr.Duong, managers
in Cubes Asia tend to not trust in employees, not assess probably employee strengths and
weaknesses, not evaluate fairly employee performance, not assign appropriately
responsibilities to people. Last but not least, the boss is unwillingness to change. When he
determines somethings, whatever other people consults or feedback, he insists on his
ideas and opinion, as Mr.Duy expressed.
For effectiveness leadership, adapting from the dimensions of theory from Joseph
research, managers in Cubes Asia expose to fail below key indicators:

Growth and development of subordinates: subordinates are almost learning by doing

based on their available skills and competence. The company nearly doesn’t have
opportunities and chance for employees to develop themselves and they don’t see they can
get higher level when working at Cubes Asia later on, followed by Ms.Sam and Ms.Vy’s
opinions. In long term, the company cannot retain their employees if managers don’t find
way to offer employees chance for growth and development that makes them satisfied.

Subordinates have positive morale: Through interviews with Ms.Vy, Mr.Duong,
Ms.Sam, subordinates have negative morale such as demotivation, depressed,

insubordinate, etc. Even “somedays, I even don’t want to go for work”, Ms.Vy said.

Subordinates achieve desired goals: The employees cannot determine their goals due to
unclear vision, strategies, direction from managers, “We don’t know what we do for and

why we have to do so” – Ms. Sam. The interviewee addressed that some tasks are very
important but they are underrated and some tasks are just small tasks and unimportant but
they are overrated by the boss.

Productivity of unit: the inappropriate policies, unclear workflow and detail process,
unclear responsibilities leading to duplicate tasks, poor communication, poor training etc.


somehow result in low productivities for whole company. And, it is certain that the
ineffective leadership is part of root set.

Low complaints against subordinates: the managers are complained by subordinates.
For examples, Mr. Duong insisted that Ms.Dung – general manager – does not have
enough competence and knowledge to manage people; Mr.Duong, Ms.Trang, Ms.Nhi
assumed that Mr.Phong – business development manager – are not fair to treat people and
not complied business regulations for all sales, bias and not fulfilled his responsibilities;
Ms.Sam, Ms.Vy complained that the boss is very emotional to make decisions such as
assessing employee performance.


2.4.3 Problem importance

The ineffective leadership, or we can call “negative, bad, poor or evil” leadership in a
certain way causes negative impacts to the company. Firstly, it is proved that there is a
statistically significant influence of ineffective leadership on individual and organizational
performance (35). According to Jan Schilling (36), the ineffective leadership leads to several
consequences such as negative follower feelings and attitudes, destructive follower behavior
through categories of person (dissatisfaction on leader performance, further effort of leader to
manage mistakes and difficulties, discredit and failure to contact with subordinates),
interaction (conflicts between leader and subordinates, negative effects on team spirit) and
negative environment (follower’s feeling, attitudes, performance,
knowledge and skills, behavior, working conditions, organizational results).
Figure 1 - Dimensions and categories of negative leadership and its consequences (36)

Besides, Jan Schilling also assumes that ineffective leadership possibly results in
devastating organizational results on organizational and company level such as low
overall performance of “amount of sales, profitability, market share, and company market
value”, “competitive gap, slow and late response to market changes, ethical scandals and
ethical violations”.
To justified problem importance, the semi-structure in depth interviews had occurred
with five current employees and three former employees who are persons from
marketing/sales, R&D, purchasing, HR, accounting, technical, warehouse departments,
former employees. The participants are chosen based on the living place in Hochiminh that’s
convenient to research, both current and former employees for objective results, people
working on different departments due to small company structure and the year people
have/had worked for Cubes Asia that is required over 6 months to better understand the
leadership effectiveness of the company. The number of respondents is eight due to saturation
point that means until the seventh person, there was no new information to find

out. The contents of interviews based on theories to verify which impacts of problem is
occurring with Cubes Asia and how strong it is. Referring the literature above, several
interviews show the level of impact due to ineffective leadership in different aspects:

Negative follower feelings and attitudes: the employees complained the managers,
they feel depressed, unfair and unrecognized from managers as Ms.Vy, Ms.Trang and
Ms.Sam expressed. These all inappropriate actions of managers caused negative feelings

and attitudes. Firstly, they feel that whether they do the job well or not, the managers
won’t recognize it properly. Secondly, the unfair treatment can make the employees
demotivated and suspect on what managers assess employee performance, Ms.Vy
asserted. The results of performance assessment are very important to employees because
it directly involves in how much benefit they will receive such as salary, bonus etc. if the
employees don’t receive the deserving amount, they seem not to dedicate with all effort
and possibly have negative actions.

Low overall company performance: Ms.Nhi shared that the productivities of
employees are assumed to be lower because unclear responsibilities, unclear workflow
and detail procedure. Moreover, the employees are impacted from ineffective leadership
negatively that they are dissatisfied and want to leave the company. Employees don’t see
they can develop when working at the company for long term and the managers don’t

communicate clear strategy and direction. Therefore, the company hardly retains people
in long tern and it leads to high employee turnover, as Ms.Sam assumed.

Slow and late response to market changes: there is poor communication between
employees and managers which results in inappropriate policies. When the market raises
the demand of new relative products such as ice maker, roasting machine or price war
among dealers, the managers don’t know or don’t have reasonable actions to fight with it,

as Mr.Duong addressed.

Narrowing the competitive gap: Ms.Tien thought that when comparing with other

competitors, employees agree that the products of Cubes Asia is good and it’s the
outstanding point. However, the customer service of the company is not as good as other
competitors because the technical team firstly don’t support customers on weekend,

secondly don’t quickly respond customer’s issues, thirdly don’t assist well customers who
are at other provinces far from cities, followed Ms.Trang, Ms.Loi interviews.
Furthermore, Ms.Loi indicated that when dealers want the company support more in
manner of special promotions or offers in holiday like other distributors, the company
doesn’t have policies and program equally.
From all discussion above, we come to final cause effect map that demonstrates the
relationship among central problem, organizational symptoms and consequences valid to
the company.
2.5 Cause validation
2.5.1 Potential causes
In order to find the solution for problem solving, firstly, we need to know the causes
leading to problem. There are various causes that impact on leadership effectiveness. In
Shamas-ur-redman (37) opinion, “negative personal attributes” and “organizational
impediments or neutralizers” “can be detrimental to the effectiveness of leadership”. The
negative personal attributes are misusing power from manager, poor communication, lack
of competence on controlling complicated situations, lack of experience, etc. For the
organizational impediments or neutralizers, we can understand they are as the shortage of
resources, shortage of plan and control, non-strategic management, shortage of support
from top manager, etc.
According to Jan Schilling, the ineffective leadership are mainly affected by
environment of the leader which includes followers, supervisor, tasks, functional field and
role, processes, structures, resources, etc. The next strong impact is person of leader him
or herself, his or her traits, states, knowledge and learning, goals and needs. And, the
interaction of the leader with the environment are weakest effect.
Figure 2 - Dimensions and categories of leadership and its antecedents (36)

2.5.2 Verify causes of central problem
The literature cannot promote its support if it’s not relevant to the company context. To
prove these causes exist in the company, author double checked with the content of in-depth
interviews again to justify the potential causes of the ineffective leadership in Cubes Asia.
Below findings are described and go belong with perspective potential causes:

Personal traits of the boss: Ms.Trang, Ms.Vy and Ms.Sam agreed that the boss is a
emotional person in the way he assesses employee performance, assigns tasks and making
business decisions. For instance, as Ms.Vy, he just likes to talk with some people in the
company and believes what he hears from them; and if he has positive impression with

someone at the first time, he will trust and assume this person’s ability and competence
rather than others he has negative impression.

Misuse of power from managers: the business development manager/technical
manager/sales manager uses his power wrongly, firstly, as Ms.Trang and Ms.Nhi


mentioned, he asked warehouse team to deliver machines to his customers even when the
customers haven’t made any deposit as company regulation, secondly, he use his power to
book machines for his customers although there is machine booked in advance by other
team member, Ms.Nhi expressed. Moreover, the boss sometimes uses wrongly his power
to make employees done the tasks which don’t relate to their job description or the
company itself. For example, Ms.Sam told that he used to ask her to do the video for his
customers of his architecture company (the boss has 2 companies which are not relative to
each other, one is architecture company and other is coffee machine distribution
company, Cubes Asia). For other example, he asked employees to design or produce the
materials for his personal house. An other issue that we call misuse of power is using
disrespectful language and mentioning the sensitive topics to the employees. The boss is
assumed to mention other’s personal topics by Ms.Sam and sometimes he comments with
disrespectful words to employees such as “disaster”, “stupid” etc.

Poor communication between managers and employees: it’s obvious that the
managers have poor ability to communicate with his subordinates as above descriptions in
last parts as well as its consequences.



Shortage of resources: there are four major resources which are human resources,
financial resources, physical resources and information resources. When asked whether
the company is lacking of resources that lead to ineffective leadership, interviewees agree
with that argument because:


-Firstly, the shortage of financial resources that cause the company doesn’t order
enough machine for sales team to deliver to customers. Therefore, some unexpected
situations occurred that the company didn’t deliver machines on time and the customers
were not happy with that. Because of machine shortage, the manager used his power
wrongly to get other person’s machine booked. Besides, lack of financial resources seems
to stress the managers to make strict policies for dealers in term of payment, special
offers, special incentives, etc.
- Secondly, lack of human resources causes poor customer service. The company is
lack of technicians in Hochiminh and customer service executive for better customer care

and service as discussion in previous parts. Besides, it is also due to lack of qualified
person who should be in charge of designing suitable training program and other issues
relating to operation management, as Ms.Sam asserted.

Lack of strategic business plans: there is an opinion which are agreed by several
interviewees, for example, Ms. Sam and Mr.Duong that the company are lack of strategic
business plans. Mr. Duong recognized that the market of coffee machines, coffee grinders

is saturated and there is a need to develop the product line but the top managers don’t
have any strategic plans to deal with the changes in the market. Furthermore, the reality is
that, the boss expand the product line in unorganized way. For recent years, according to
company’s datum, he decided to import Braun product line, Promix product line which
relates to home blenders, Eurohome product line which relates to ice cream makers etc.
but all product lines failed in couple of months due to lack of demand and low quality of
products. There are considerable money paying out such as marketing expense,
administration cost, service cost etc. Rather than paying then learning, the managers
should make a strategic business plan which thoroughly considers all factors including
strategic direction, market opportunity, competition, possible circumstances, etc. before
making any decisions. Not only the strategic business plans, functional department
planning is weak, for example, in Marketing department as Ms.Sam addressed. Most of
tasks seem to be like execution, not planning, and the sudden tasks account for lot of time
than plan and the plan is not appropriately complied.
- Lack of internal and external control: Ms.Loi mentioned that the company doesn’t
assign anyone for tracking installation and service schedule for technicians, almost all cases
are service as demand. Besides of that, there is no policies for award and penalty for
employees or dealers. For policy compliance, due to lack of control, salesperson doesn’t
apply customer regulation. The company requires customers to deposit at least 50% for big
machine before delivery but sales manager use his power and personal arguments to ask
warehouse team deliver products even when they haven’t deposited yet. With this issue, no
one control him and penalize him. For responsibility among departments, there are some
flowchart are established but employees don’t apply. For example, flowchart of new

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