Tài liệu Effective leadership the case of nexans vietnam power cable company

Paris Graduate School of Management Thai Nguyen University INTERNATIONAL EXECUTIVE MASTER OF BUSINESS ADMINISTRATION PROGRAM THESIS EFFECTIVE LEADERSHIP THE CASE OF NEXANS VIETNAM POWER CABLE COMPANY Le Duc Minh Student’s ID: Vn1001083 Class: ieMBA.B02 M ay 2 0 1 3 Effective Leadership Le Duc Minh – IeMBA-B02 COMMITMENTS I guarantee that the contents of this thesis have never been submitted to any master program or other programs. In addition, I am committed that this thesis presents my own efforts. All analysis outputs and conclusion included (apart from quoted contents) are results of my research. Research student Le Duc Minh i Effective Leadership Le Duc Minh – IeMBA-B02 ACKNOWLEDGEMENTS First and foremost, I would like to express my sincerest thanks to my instructor – Doctor Dang Ngoc Su – for his dedicated and enthusiastic instruction to the completion of this thesis. But for Doctor Dang Ngoc Su’s help, my thesis would not have been completed. Besides, I am grateful to leaders, managers and lecturers of PGSM program and Thai Nguyen University for their facilitation and support in my MBA course as well as research process and thesis formation. In addition, I would like to acknowledge leaders and colleagues at Nexans Vietnam Power Cable Company who give me their enthusiastic and impartial support in my data collection process by spending their precious time and putting efforts in meeting me and completing survey questionnaire. Particularly, I would like to thank all beloved members in my family including my kind old parents, my beloved wife, daughter and son as well as my older brothers and sisters for their support and affiliation for my completion of the program and this thesis. ii Effective Leadership Le Duc Minh – IeMBA-B02 TABLE OF CONTENTS COMMITMENTS.................................................................................................... ACKNOWLEDGEMENTS.................................................................................... LIST OF ABBREVIATIONS................................................................................ LIST OF TABLES................................................................................................ LIST OF FIGURES/GRAPHS............................................................................. PREFACE................................................................................................................ 1. Reason for choosing this thesis............................................................................. 2. Research objectives............................................................................................... 3. Research Scope..................................................................................................... 4. Research methodology.......................................................................................... 5. Significance........................................................................................................... 6. Limits.................................................................................................................... 7. Thesis Structure..................................................................................................... CHAPTER I: THEORETICAL FOUNDATION................................................. 1.1. Concept, nature and significance of leadership............................................... 1.1.1 Concept and nature of leadership.............................................................. 1.1.2 Role and importance of leader.................................................................. 1.2. Effective leadership and approaches to effective leadership......................... 1.2.1. Effective leadership................................................................................ 1.2.2 Approaches to effective leadership........................................................ (1) Procedural approach.............................................................................. (2) Behavior-based and Task-based approaches.......................................... (3) Component approach............................................................................. (4) Other approaches to leadership............................................................... Douglas McGregor’s XY Theory:.......................................................... Federick Herzberg’s theory.................................................................... Theory Z in management........................................................................ 1.3. Distinction between Leadership and management........................................ iii Effective Leadership Le Duc Minh – IeMBA-B02 1.4 Some international experiences in leadership effectiveness........................... 1.4.1 From Benjamin Franklin......................................................................... 1.4.2 Margaret Thatcher’s concept of leadership............................................. CHAPTER II: LEADERSHIP IN REALITY AT NEXANS VIETNAM CABLE POWER COMPANY............................................................................. 2.1 Introduction to Nexans Vietnam Power Cable Company.............................. 2.1.1 Establishment and development:............................................................. 2.1.2 Organizational structure.......................................................................... 2.1.3. Production and business outputs of the company during the past years. ......................................................................................................................... 2.2 Current situation of leadership in Nexans Vietnam Power Cable Company ............................................................................................................................. 2.2.1 Old organizational model........................................................................ 2.2.2 New organizational model since 2010.................................................... 2.2.3 Human resources..................................................................................... 2.3. Assessment of leadership in the company.................................................... 2.3.1. Vision..................................................................................................... 2.3.2. Decentralization, authorization.............................................................. 2.3.3. Motivation, encouragement.................................................................... 2.3.4. Influence................................................................................................ 2.3.5. Leadership communication.................................................................... 2.3.6. Decision making.................................................................................... 2.3.7 Self-understanding - understanding others............................................ 2.4. A summary of achievements and shortcomings............................................ CHAPTER III: SOME SOLUTIONS TO IMPROVEMENT OF LEADERSHIP EFFECTIVENESS IN NEXANS VIETNAM POWER CABLE COMPANY (NVPC)............................................................................... 3.1. Develop vision.............................................................................................. 3.2. Exploit employees’ psychology factor.......................................................... iv Effective Leadership Le Duc Minh – IeMBA-B02 3.3. Improve decentralization and authorization mechanism............................... 3.4 Maintain and develop competitive human resources..................................... 3.5 Improve leadership communication............................................................... 3.6 Raise awareness of self-understanding and understanding others................. CONCLUSION...................................................................................................... REFERENCES...................................................................................................... APPENDIX............................................................................................................ SURVEY QUESTIONNAIRE.............................................................................. v Effective Leadership Le Duc Minh – IeMBA-B02 LIST OF ABBREVIATIONS English English NVPC Nexans Vietnam Power Cable Company AAC All Aluminum Conductor ACSR Aluminum Conductor Steel Reinforced AACSR Aluminum Alloy Conductor Steel Reinforced AAAC All Aluminum Alloy Conductor ABC Arial Bundled Cables ACAR Aluminum Conductor Alloy Reinforced vi Effective Leadership Le Duc Minh – IeMBA-B02 LIST OF TABLES Table 1.1: Concepts of leadership............................................................................ Table 1.2: Theories of management....................................................................... Table 1.3: Comparison of approaches to leadership............................................... Table 2.1. Production and business outputs of NVPC during the past several years .............................................................................................................. Table 2.2 Statistics on quantity and quality of human resources in the company .............................................................................................................. LIST OF FIGURES/GRAPHS Figure 1.1: Effective leadership – Procedural approach.......................................... Figure 1.2: Behavior – Task based model in effective leadership........................... Figure 1.3: Effective leadership – Component approach......................................... Figure 1.4: Management issues............................................................................... Figure 2.1: Organizational model of the company before 2010............................... Figure 2.2: New organizational model from 2010................................................... Figure 2.3: Survey result under criterion of vision.................................................. Figure 2.4: Procedure for determining vision in NVPC.......................................... Figure 2.5: Survey results under criterion of decentralization and authorization .............................................................................................................. Figure 2.6: Effects of motivation and encouragement............................................. Figure 2.7: Survey results under criterion of motivation and encouragement......... Figure 2.8: Survey results under criterion of influence............................................ vii Effective Leadership Le Duc Minh – IeMBA-B02 PREFACE Name of thesis: Effective Leadership – The case of Nexans Vietnam Power Cable Company (NVPC) 1. Reason for choosing this thesis In this changing context of “Flat world”, groups, companies and enterprises of all sizes are facing increasingly fierce competition in all fields. With small size, limited resources and modest experiences, corporations and enterprises of different sectors in Vietnam are challenged. For the survival and development of Nexans Vietnam Power Cables Company, leaders of the Company should respond to constant changes in surrounding environment besides seeking a suitable and proper direction for management to achieve set targets. How can we achieve effective leadership? Getting influence to seek voluntary participation of employees and create favorable conditions in order to achieve targets in the short-run and long-run is demanded of leaders in the current changing environment. As a leader of the Company, I have chosen the thesis of “Effective leadership – The case of Nexans Vietnam Power Cable Company” for graduation project. From reality of the Company during the past years and development direction for the years to come, and my knowledge, I choose this thesis in order to contribute more to the sustainable development of the Company. 2. Research objectives Applying learned theory and leadership skills, this thesis investigates and assesses current situation of leadership in Nexans Vietnam Power Cable Company in accordance with procedure, behavior – task factors and component; at the same time it recommends solutions for improving leadership in Nexans Vietnam Power Cable Company. 1 Effective Leadership Le Duc Minh – IeMBA-B02 3. Research Scope The study just focuses on the leadership in Nexans Vietnam Power Cable Company (NPVC). 4. Research methodology - Qualitative method: Case study of Nexans Vietnam Power Cable Company - Detailed method: Analysis, comparison and consolidation (Descriptive analysis) - Data collecting method: Direct interviews, survey questionnaire. - Data: Primary and secondary data are used in this study. 5. Significance Theoretically, the thesis focuses on systematizing some common theories, skills and styles of effective leadership in the world. Practically, the thesis analyses the leadership in NVPC by using theories of leadership and effective leadership. Additionally, the thesis may be used as a reference for other enterprises in the same field. 6. Limits This study is limited within Nexans Vietnam Power Cable Company. Therefore, conclusions from the study should be applied for the Company only. Additional study should be carried out if the study will be applied in other companies or other types of business. 7. Thesis Structure This thesis consists of preface, chapter I, chapter II, chapter III and a conclusion. The preface reveals reason for choosing this thesis, research objectives, methodology, significance and limitations. Chapter I presents theoretical foundation, emphasizing nature and significance of leadership, some approaches to leadership and international experiences in effective leadership. Chapter II gives an overview in the establishment and development, organizational structure, operation, production and business outputs of the Company during the recent years. It also assesses current situation of leadership of the Company, in 2 Effective Leadership Le Duc Minh – IeMBA-B02 which it deeply analyzes leadership effectiveness in fields of good performance and works out limitations and shortcomings that need solving for the improvement of leadership effectiveness in the future. Chapter III recommends solutions to such limitations and shortcomings stated above in Chapter II. The conclusion summarizes all contents in the thesis, points out contributions and limitations, opens new projects in effective leadership for deeper studies. CHAPTER I: THEORETICAL FOUNDATION 3 Effective Leadership Le Duc Minh – IeMBA-B02 1.1. Concept, nature and significance of leadership 1.1.1 Concept and nature of leadership The topic of “leadership” has long drawn the attention from scholars as well as studies. In mentioning such concept, it commonly refers to powerful and active individuals who can have influences on others and establish future for their countries. History has proved influence extent and scale of “leadership” in many fields such as religion, politics or military. It is not accidental when all Vietnamese people admire and learn from President Ho Chi Minh – the old Father of the Nation, the distinguished leader of Vietnam. In the world, eminent leaders such as Mohammed, Mao Zedong and talented military experts such as Julius Ceasar, Charles the Great (Charlemagne) or Alexander the Great built powerful empires. Even Adolf Hitler can be seen as a “unique” leader with his strong power. For enterprises, many excellent leaders are socially recognized as Bill Gates (Microsoft –USA), Steve Jobs (Apple –USA), Akio Morita (Sony – Japan). They are typical leaders with visions and qualities in exploiting potentials of people for successful missions of their organizations. Although the term of leadership had been in use for long time, it was until the 20 th century, the concept of leadership received attention and discussion from scholars. Researchers usually define leadership in accordance with their private concepts and aspects that draw their attention most. The definition of Leadership may be approached in such different angles as quality, behavior, influence or manner in communication (Table 1.1). As such, leadership is stated in different angles such as quality, behavior, influence or simply the direction. According to Richard and Engle (1986) leadership is a process of combining, articulating visions, embodying values and creating suitable environment. While Richard J. Daft (1999) stated that leadership is the process of creating influence between leaders and employees, which makes changes towards common goals of the organization. In the book “Culture, Leadership, and Organizations: The GLOBE Study of 62 Societies” published in 2004, House et al. 4 Effective Leadership Le Duc Minh – IeMBA-B02 defined leadership as the ability of an individual in creating influence and encouragement for attracting the highest contribution from followers for the development of an organization. Table 1.1: Concepts of leadership No. Concepts 1 Leadership is the behavior of an individual when he is directing the activities 2 of a group towards a shared goal (Hamphill & Coons, 1957) Leadership is the influential increment over and above mechanical compliance with the routine directives of the organization (D. Katz & Kahn, 3 1978) Leadership is the process of influencing the activities of an organized group 4 toward goal achievement (Rauch & Behling, 1984) Leadership is a process of shaping goals to reach through collective efforts 5 (Jacobs & Jaques 1990) Leadership is the ability of overcoming existing culture to begin 6 revolutionary but appropriate changes (E.H. Schein, 1992) Leadership is the process in which individuals in an organization feel what they are doing and they will understand and commit what they will do (Drath 7 & Palus, 1994). Leadership is about articulating visions, core values and creating the environment within which things can be accomplished (Richards & Engles, 8 1986) Leadership involves the ability of an individual in having influence and encouraging his deputies to make their contribution to success of the organization (House et al., 1999). Besides the above-mentioned concepts, scholar Warren Bennis (2002) presented a quite comprehensive but sufficient concept of leadership. Bennis described leadership as a social process of influence in seeking participation of followers for best implementation of targets of an organization. Also the author emphasized the significance of follower participation in implementing missions of an organization and responsibilities of leaders as the search of such participation. 5 Effective Leadership Le Duc Minh – IeMBA-B02 Success of companies and organizations is gained when and only when companies and organizations receive voluntary contribution from employees. Therefore, the social process of influence is the process that thoroughly combines methods of influence such as mental and material methods, direct and indirect methods, formal and informal methods, helps leaders to concentrate efforts and intelligence of people. In addition, Yukl (2002) stated that leadership should be defined in a broader concept. It should include factors that form collective efforts from members of an organization or a group of people in order to accomplish set goals. Therefore, the concept of leadership is understood as a social process in which the leader is seeking voluntary participation of followers for success of the organization. In other viewpoints, such concept implies the procedure of having influence and creating environment to reach common goal of the organization. So what is the nature of “leadership”? In Peter F. Drucker’s opinion, “leadership art” involves not only the ability of attracting others but also the demagoguism. Moreover, it is not only the ability of persuasion but also skills of sale executives. 1.1.2 Role and importance of leader Leader and leader’s capacity prove significance and play crucial role in success of any companies. A company without a capable leader is like a fighting unit without its commander or a ship in difficult situation without a brave and wise captain. Therefore, for success in the short-run and the long run, it is necessary to find a truly capable leader who will be able to lead the company to success in changing business environment. It is undeniable that leader capacity acts as the key factor for success of an organization. However, there have not many studies on long-term affects of the leader to production and profit of an organization. To have deeper understanding of this issue, Ken Blanchard company has started to find answers in leadership ability and its role to entire success of an organization. The study focuses on four main questions; (1) What is the role of leadership in maintaining power of an organization? (2) What can leaders do in details to improve an organization 6 Effective Leadership Le Duc Minh – IeMBA-B02 operation? (3) What is the link between leadership capacity and customer’s royalty and employee’s enthusiasm? (4) How do customer’s royalty and employee’s enthusiasm affect power of an organization? Five repeated factors in studies include: employee’s enthusiasm; customer’s royalty; Strategic leadership; Operation leadership and power of the organization. Such terms are formed for the purpose of uniting an information system with broader meaning than any previous definitions. Strategic leadership is to send orders to all members of an organization. It answers the question of “what” has created key relations that are necessary to ensure the compliance of all units to a common strategy; the strategies must determine standards as decisive factors of behaviors. Strategic leadership, for example, includes vision, philosophy and strategic orders. Activities of operation leadership give answer to the question of “how” of the organization. It helps departments, boards and employees to know what they have to do for success of the organization. They are procedures and policies that show how each unit can complete the general strategy. Employee’s enthusiasm is resulted from positive perception of and enthusiasm to the organization, policies, procedures, products and management activities. The hard measurement to employee’s enthusiasm includes ownership, absence, occupation and production. Soft measurement includes perception of equality and belief. Customer’s royalty comes from positive perception to products, services, policies, procedures and employees of the organization. The hard measurement includes ownership, durability of relation with customers, number of transactions, average number of transaction, participation of new customers. Soft measurement includes satisfaction of quality, value, customer service, expected products and the general satisfaction. Power of organization is success level and stability of the organization under the eyes of customers, employees, shareholders. Hard measurement includes good 7 Effective Leadership Le Duc Minh – IeMBA-B02 understanding of contract, revenue management, share price, profit, growth rate. Soft measurement includes community belief, employee’s enthusiasm and royalty to organization. In other viewpoints, a leader is considered to have 9 major roles, including: The sage: The leader has an intensive and extensive knowledge on a wide range of subjects and sees order and patterns where other sees chaos. The leader remains open to new ideas and ways of thinking, uses understandable languages for followers to understand his ideas and revokes their determination to implement such ideas. The vision is a leader with a broad vision. The prerequisite condition of a visionary leader is to dream impossible dreams, commit and effort to turn them into realities in spite of difficulties in order to shape future. The magician: The leader should be able to make things change their forms without wasting effort. At the same time he should keep a balance among structures, systems and processes between old state and new state. The leader must sustain calmness in all circumstances. The globalist: This type of people likes becoming world traveler in body, mind and spirit. He always diversifies workforces and fosters his organization’s success in a new height. He always cares, understands and respects cultural differences within the company. He is willing to change and to create a common working environment in which productivity, harmonious connection of cultural differences in the company are obtained. The mentor: In this role, the leader is committed to ongoing personal and professional development. He always creates various opportunities for learning and motivates his followers to find their own ways for development. The ally: The leader always promotes relationship in order to make close and effective cooperation within the company. He realizes benefits of teamwork and builds good relationship with suppliers and customers. Besides, he realizes conflicts 8 Effective Leadership Le Duc Minh – IeMBA-B02 as opportunities for promoting internal cooperation and always extends his trust to others. The sovereign: The leader knows how to use his power thoughtfully. He takes risks and accepts responsibility for consequences of his decisions. When deciding, he is keen on his ways and empowers and extends certain authority for his followers to complete their duties. The guide: He is flexible in leadership but always keeps his directions and applies principles that are based on core values to achieve goals. He respects implementation methods and set targets, keeps his directions regardless of the obstacles and restraints. He also uses experts at work for assisting his employees. The artist: He is like an actual artist. He always devotes all his efforts to the mastery of his crafts and questions how to have high quality of products and process to create them. Also he knows how to balance aesthetic and practical standards, pays attention to effectiveness, quality, simplicity and refuses indifferences in the company or organization. As a result, major roles of a leader will be the following: + Developing and sharing visions. The leader must build his “future at hands” and turns dreams into realities. + Committing to achievement of goals, values and standards. + Realizing their challenges and effects and making appropriate decisions. Taking all responsibility for operation and performance of the organization. + Leading and motivating a suitable organization culture. + Empowering his followers and being an influential example to his followers. Being flexible and adjusting behaviors to achieve targets, adapting and responding to changes of the situations; being keen on right decisions regardless to any pressure. + Using skills and abilities of his employees suitable with their responsibilities, trusting, motivating and inspiring; complementing, recognizing and rewarding. (PhD. Dang Ngoc Su, 2006) 9 Effective Leadership Le Duc Minh – IeMBA-B02 In modern companies, competitiveness is always considered as an important factor for any success. There is a large number of significant factors for evaluating strong points and weak points of competition. Of those, the most significant factor is role and effectiveness of leaders in companies. That the leaders can develop their companies depends on their roles, abilities in making polices and their qualification. Any companies, enterprises and groups always need an actual leader who can direct the ship to overcome challenges and be ready for new changes. John Kotter (1996) stated that: “Leaders are the creators and keepers of success in any companies in 21 st century” (page 175). He said that leaders of the past were trained how to make plans, budget, organize personnel, manage and resolve problems. Such way of training is just suitable for a manager, not a leader. Current studies have recognized and assessed the role of leaders to a larger and completely different extent. Leaders of new and modern era “create visions, communicate visions, make strategies, manage changes, and build excellent corporate cultures”. To a higher extent, leaders inspire passion, enthusiasm of employees and create bridge between employees and companies. Good leaders help companies to have strategic visions, determine their positions in markets, make strategies and sustainably develop. Leaders inspire employees, building healthy collective spirit, teamwork and career development demand for employees. Devoted leaders build strong corporate culture that is embedded with special identity. Within the companies, leaders create competitive and equal working environment, maximizing employees’ potentials, creating and communicating the message of effectiveness to all employees. Good leaders help companies to determine their positions in markets, creating reliability and good relationships with customers. This is the foundation for sustainable development of companies in all aspects. 1.2. Effective leadership and approaches to effective leadership 1.2.1. Effective leadership 10 Effective Leadership Le Duc Minh – IeMBA-B02 There have been many studies on effective leadership. Most of studies try to understand the interconnection between leadership behaviors and such criteria for assessing effective leadership as working productivity, attitudes and satisfaction level of employees. They also focus on clarifying the concept of “effective leadership” and factors that shape an effective leader. Researchers often link the concept of “effective leadership” to the process of creating intentional influences towards one or different individuals for the purpose of directing, building and creating favorable working conditions and promoting relation within groups or organizations. Results of studies show that almost effective leaders pay attention on working direction and establishment of relation with their partners. When mentioning “effective leadership”, many assessment criteria have been presented based on contributions of leaders to the organizations. Some popular criteria include: + Business results and sustainable development of organizations; + The ability to face challenges or crisis; + Satisfaction of followers to their leaders; + Commitment level of employees to common goals of organizations; + Qualified and psychological development of employees; + Remaining high positions in organizations; + The ability to reach higher positions in organizations Finally, however, the most important criterion to leadership effectiveness is the fact that an organization excellently completes its set targets. Such completion is reflected in criteria such as profit, net profit, increase of sales, increase of market share, reinvestment ratio, ability to maximize capacity of machineries and equipment, costs, ratios between cost and budget etc. Leadership effectiveness can be assessed through some criteria such as the compelling ability of leaders to their leaders, followers and partners. Besides, another important criterion is employees’ attitudes towards their leaders. It is whether or not they satisfy their employees’ demands and expectations, get love 11 Effective Leadership Le Duc Minh – IeMBA-B02 and respect from their employees and if employees commit to follow their orders. Employee’s behavior is in indirect factor helping to determine satisfaction level of employees to their leaders. Many different factors in assessment, however, interfere the assessment of leadership effectiveness as it is difficult to determine the most necessary criterion. Therefore, there is no perfect answer to the question of “What is the most comprehensive criterion in assessment of leadership effectiveness?” Selection of criteria in assessment of leadership effectiveness depends on objectives and standards in values of assessed subjects. Assessment of the board of management differs from that of employees, shops and relevant members. To avoid this fact, preceding researchers suggest to select different criteria in assessment of leadership effectiveness and leadership effects to each criterion in each specific period of time. It cannot be denied that leader’s capacity is the crucial factor to success of an organization. Apart from personal characteristics of the leaders, some indispensable factors that shape success of an effective leader include: - Good communication skills and ability to understand psychology of others - Ability to gather employees - Methods of punishment and awards: right person, right thing, appropriate level, right time. - Wisdom in power use - Successful decisions - Development of enthusiastic and qualified employees (Source: PhD. Dang Ngoc Su, from lecture collection “Skills and styles of leaders”, Business Administration Faculty, Vietnam National University, Hanoi). 1.2.2 Approaches to effective leadership (1) Procedural approach Procedural approach begins with input, then “black box” and ends with output. Input includes such factors as personality and capacity of the leaders, capacity of followers and environmental factors such as policies, directions, regulations, and 12