Department of Business Administration
I-Shou University
Master Thesis
The Study of Effective Leadership in Small
Business: The Case of Thanh Hoa in Vietnam
Advisor:
Advisor:
Dr. Jiin-Ling Lin
Dr. Nguyen Quang Vinh
Graduate Student:
Nguyen Tuan Hoa
Acknowledgements
First of all, I want to send many thanks to my advisors, Dr. Jiin-Ling Lin, Dr. Nguyen Quang Vinh for inspiring me with constructive comments and motivating me to complete this research paper. Their guidance and assistance were undeniably precious to my work.
Secondly, I want to give a special thanks to participants of the research. They gave me priceless feedbacks and ideas to improve the accuracy of my research results. Without them, the research is impossible to be done
Thirdly, this research paper is unable to be completed without the great help of teachers and lecturers at Hanoi University of Business and Technology (HUBT) and I-Shou University. They professionally organized an academic environment where we can improve valuable knowledge and skills. I want to express my deepest thank to them and hope we could have other opportunities to work together in the future.
Lastly, I would like to give thanks to my family, my wife for supporting me, encouraging me, staying by my side, and giving me valuable advices.
Abstract
The study aims to investigate factors effecting leadership style and leadership effectiveness in Small Business at Thanh Hoa Province, Vietnam. Results showed that traits had a positive effect on leadership styles and Skills had a positive effect on leadership styles. Results also showed there was a positive relationship between leadership style and effective leadership. This study couldn’t find any difference in gender, education, experience, position and effective leadership. Thus there was only difference in age and effective leadership for small company in Thanh Hoa, Vietnam. The implication and limitation are also discussed in this research.
Keywords: Leadership trait, leadership skill, leadership style, leadership effectiveness, small business, Thanh Hoa province
Table of Contents
Acknowledgements ... ii
Abstract ... ii
Table of Contents ... iii
List of tables ... v List of Figures ... vi Chapter I INTRODUCTION ... 1 1.1 Background of study ... 1 1.2. Research objectives ... 4 1.3. Research questions ... 4
1.4. Scope of the research ... 4
1.5. Significance of the research ... 4
Chapter 2 LITERATURE REVIEW ... 5
2.1. Definition of leadership ... 5
2.2. Leadership Skill and characteristic ... 5
2.2.1 Leadership skill ... 6
2.2.2 Trait of Leadership ... 7
2.3 Leader ship style ... 8
2.4 Leadership effectiveness ... 9
2.5 Leadership in small business in Vietnam ... 10
2.6. Research model and hypotheses ... 12
Chapter 3 RESEARCH METHODOLOGY ... 15
3.1 Instrument Design ... 15
3.2 Statistical analysis instrument ... 17
3.2.1 Reliability analysis ... 17
3.3 Sample and Location ... 17
Chapter 4 RESULT ANALYSIS ... 20
4.1 Respondent profile ... 21
4.2 Reliability analysis ... 23
4.3 Hypothesis testing ... 24
4.3.1 Traits have a positive effect on the leadership styles (H1) ... 24
4.3.2 Skills have a positive effect on the leadership styles (H2) ... 25
4.3.3 There is a positive relationship between the leadership style and the effective leadership(H3) ... 26
4.3.4 Examing the differces between socoidemorgraics and effective leadership ... 27
4.4 Discussion ... 31
Chapter 5 CONCLUSION AND RECOMMENDATION ... 33
5.1 Conclusion ... 33
5.2 Thesis contribution ... 33
5.3 Limitation and future research ... 34
References ... 35
List of tables
Table 3.2 list the companies were surveyed ... 19
Table 4.1 Respondent’s Profile ... 22
Table 4.2: Reliability Statistics ... 23
Table 4.3 Relationship between trait and leadership styles ... 24
Table 4.4 Relationship between skill and leadership styles ... 25
Table 4.5 Relationship between leadership style and effective leadership ... 26
Table 4.6 The difference between gender and the Effective leadership ... 27
Table 4.7 The difference between age and the effective leadership ... 28
Table 4.8 hoc test the difference between age and the effective leadership ... 29
Table 4.9 difference between working years with company and the effective leadership ... 30
Table 4.10 difference between education m and the effective leadership ... 30
List of Figures
Figure 2.1 Research framework ... 12
Chapter I INTRODUCTION
1.1 Background of study
The theme of inspirational leadership is being discussed in many researches and all countries around the world. More specifically, the question was raised to outstanding leaders inspire their team (Lussier and Achua, 2009). Working motivational for employee is an important role of a leader. Since motivation that lead to efficiently in working. Besides other factors, the leader must be: evoke the best potential of employees and the coordination and support; help break down the barriers to team work smoothly. If leaders want to motivate employees they should understand employees first, build a reasonable working environment.
The working environment of a business is determined by the management policies and attitudes of each employee. An environment of openness and sharing will facilitate skills development staff and their qualifications. These businesses work environment so will gather a lot of staff agreed with the business objectives, the fact of such enterprises will enjoy more success (Peter F.Drucker, 1955).
Currently, Thanh Hoa province has over 7,000 enterprises, in which there are 40% of enterprises that are operating in the industrial sector, 35% of business services, business for about 15% of imports and 10% other business types. Although the number of firms in the province is very strong, but most are small and medium enterprises, micro; small-scale producers lack business premises, fragmented business, management skills are limited, low quality of labor, machinery, obsolete equipment, quality of product not meeting the requirements of the market , not competitive, especially in foreign markets. Difficulties in accessing market information, promotion product promotion has not been focused. Lack of skilled workers, workers of high status professors are skilled workers are still shortcomings in the business today. Especially the lack of venture capital
World economic crisis had a strong impact on the domestic economy, in which the chemical is not out of the downturn that affected most of the business system, particularly the exporters and products industrial goods. Commodity prices unpredictable, bank loans fell, interest rates rose too high banks make business loans and cannot afford payments (20 -22%) year, leading to product input increased, making the cost of products that is very difficult to
consume, the backlog of goods. The import-export business in foreign markets is significant production cuts, cheap, fiercely competing with foreign businesses. According to statistics of the provincial Business Association 6 months in 2011, most of the enterprises declined from 30-35% yields. Many businesses in the state do not have the ability to pay bank loans, payment of salaries to employees, money owed Social, Health. According to the association's survey, only about 35 % stable now, about 50% of enterprises are operating very difficult and 15% of firms at risk for bankruptcy. Many businesses have narrowed production for temporary workers quit or lost a job, life workers face many difficulties. This number must accrue Thanh Hoa city to earn a living by unauthorized dealer lots profession, greatly affecting social security, social safety and traffic safety... .
In this situation, at the beginning of 2011 the province has organized conferences and business meetings to find solutions to remove difficulties for enterprises to create mechanisms and policies to stabilize production, capacity competition, jobs, income for workers, limited to the minimum reducing payroll... after that conference in collaboration with the Association Branch Chamber of Commerce & Industry of Vietnam in Thanh chemistry, to study the situation and grasp some businesses are having a hard time in business and learn, accumulate experiences some businesses are stable and business development. On that basis, the Executive Board held a business meeting to discuss the measures, programs and action plans of the business deal in the context of the economic downturn that focuses on five basic solution as follows;
Firstly, enterprises should proactively build business strategies consistent with the current economic downturn. First of all internal resources to promote best solution in terms of capital, mobilize idle capital in CB.CNLD and other sources, to focus on business, create jobs and stable incomes for workers.
Secondly: Emphasis domestic market, improving competitiveness, in particular, to improve the quality of products and services, reduce unnecessary costs, savings practices to reduce production costs first place. Businesses should support each other in the consumption of products such as raw materials, consumer goods, use of other services ...
Thirdly, review and assessment of quality, the number of employees in each business to determine which human resources to ensure business requirements. The number of redundant workers needs new training and retraining to meet the requirements of development and
renewal of business. On the other hand the businesses members can support each other in human resources with various forms of different labor contracts, creating immediate jobs and stable incomes for workers, limited to the lowest level of labor without work and income
Fourthly, the Association will work with departments to solve organizational problems and problems of most businesses is the bank system to support the enterprise business loans, stable production. Association will work to further strengthen trade promotion management marketing, creating favorable conditions for businesses to access domestic and international markets, joint ventures, associated co-exist and develop.
Fifthly, the Association will coordinate with branches Chamber of Commerce & Industry of Vietnam in Thanh Hoa invited economic experts on the open market expert training, to enhance knowledge on corporate governance and management of economic, market, sales in order to improve the competitiveness of enterprises
According to economic experts at home and abroad, the global economy will remain difficult. To cope with the world around economic recession and domestic, first confirmed to have macroeconomic decisive role to the stability and development of the country economy in which business is huge support from the macro policies. Association of small & medium enterprises, recommend to the State enterprise support policies in the current period as follows
Increased demand for increased state investment needs of residential consumers to resolve output products for the enterprise market mechanism. Consider the stimulus measures to reduce difficulties for enterprises more market-oriented. Special support policies such as reducing tax credits, credit guarantees and tax breaks, corporate income tax relaxation and effective VAT refund.
Continue to promote administrative reform, review, remove barriers, administrative procedures inconsistent harassing or obstructing business. Amend, supplement or regulations promulgated lacking, especially in terms of policy production, access to capital, training, human resources, information provision and technology innovation, equipment and facilitate.
Raising awareness of the various levels and branches of the position and role of businesses and entrepreneurs, especially in the current period; the state should create favorable conditions environment for businesses using many workers, especially women workers to the production, generate income for workers
1.2. Research objectives
The objective of the study is as follows:
- To identify the leadership styles of managers working in the Small business of Thanh Hoa.
- To identify the factors which influence the effective leadership in the Small business of Thanh Hoa
- To investigate the impact of traits and skills on the styles behaviors of the leaders in the Small business of Thanh Hoa
1.3. Research questions
In order to achieve the objectives of the study, the study seeks to answer the following research questions:
1. How the traits and skills affect the style behavior of leader working in Small business of Thanh Hoa?
2. What are the relationship between leadership style and the leadership effectiveness in Small business of Thanh Hoa?
1.4. Scope of the research
As the title has explicitly indicated, the focus of the study is on leadership styles and on effective leadership of the managers in the banks. Nevertheless, because of limited time and within the scope of an M.A thesis, this author decided to investigate the effective leadership perceived by 200 employees working at the Small business of Thanh Hoa province
1.5. Significance of the research
By reviewing the literature and conduct the survey, this study will contribute new knowledge in the field of leadership style and effective leadership at the Small business of Thanh Hoa, Vietnam.
Chapter 2 LITERATURE REVIEW
In this chapter, thesis is going to e review of related literature on leadership, leadership styles and the effective leadership. Also this chapter will design the model for this study to answer the research question above.
2.1. Definition of leadership
As definition of Gary Yuki (2002), Leadership is an effort to impact on others to ensure achievement of business objectives. Such is the lure, attract, motivate, and persuade, guide members promote organizations working to meet the request of work. Leadership involves commanding the operation, coordination and administration, expressed the relationship between subject and object of management administration, between the command and who implement the orders.
The purpose of leadership is to make all people, all members fully aware of the role, responsibilities and fulfills his duties, an important contribution to the implementation of the general objectives of the enterprise (Lussier and Achua, 2009).
Leadership that is essentially a type of entity operations management, including: Activities decisions and orders, Active guidance of the commander, Activities to coordinate and running, Active urge and remind, Active encouragement and incentives. Leadership is the process of influencing behavior and lead individuals or groups of people towards the organization's goals. Modern human subjects to enhance the role of leadership should this object has been studied more carefully(Rost, 1993; Griffin, 2012; Yukl, 2010; Durbin, 2007; and Lusier and Achua, 2009). Griffin (2012) defined leaders seemed to be born in the most crisis situations and crisis allelopathic be there. Because they were born like being challenged and feel very excited to win.
2.2. Leadership Skill and characteristic
There are not many theories have indeed in the leadership style (Warrick, 1981). The business world is changing. To meet the intense pressure from the outside world and grasp the opportunities presented by the pressures that brings, the leaders also predicted for a new
direction, that is: a complex world will create a generation of new leaders, who know how to use creativity as a lever to go to succeed (Gary Yuki, 2002).
2.2.1 Leadership skill
As discussed by Pernick, (2001) a good leadership skills are visionary, capable of strategic, predictable changes, great opportunities in the future. Leaders create the impression in the hearts employees have many skills that a normal person cannot afford it. So that's what skills and talented leaders who have adopted such skills as how to achieve your goals. There are many skills of leadership, it may includes:
Decision-making skills: Decision-making is the key stages in management, leadership
skills, which is when they have to choose the best solution to solve love problems or decide to plan something (Katz, 1955). The decision to fast or slow, right or wrong will determine the outcome of such plans. Therefore, when making decisions leaders must always consider all the advantages and risks confronting, the decision reflected the capacity and qualification of leaders. Therefore, to get the skills, the leader must have extensive knowledge, sharp reasoning and experience, experience in life and work.
Problem-solving skills: Being a good leader, it is needed to have the skills to solve the
problem quickly and accurately. The leader cannot ignore or push the responsibility for others when there are difficult problems or issues arising in their collective. To do this, the leader must be the truly fair and quick grasp favorable opportunity to resolve the issue is best (Pernick, 2001). Not slow but do not be too hasty, if yourself push things more complicated and may cause misunderstanding employees are incompetent, unworthy of the leadership position that people entrusted for.
Strategic thinking: Strategic thinking is extremely important for the leader; it represents
a strategic vision and leadership of both companies. Strategic thinking is the art of surpassing rival, outlined the specific strategies to compete. If the right strategy will help companies with good development steps, otherwise you will push companies into difficulties (Bradley, & Spicer, 2001).
Confident and assertive: Confidence and assertiveness skills are two things that need to
hone leadership regularly. When confronted difficulties and challenges corporate leaders was captain steered the boat, the boat had landed safely or not entirely depends on the captain
there. Therefore, if the leaders are not confident and assertive before the opportunity can ship will drown or rather the company will be pushed into the abyss (Nahavandi , 2000).
Communication skills work: The leader means they have to have management skills and
communication for employees. If leaders want to wear their subordinates do whatever she or sitting for time out means you do not have the capacity of a leader. But how to communicate the right person, right job is not easy, it requires them to have skills, skills that work (Bradley, & Spicer, 2001). To do this they must truly be a leader is always closely with their staff, knowing capacity, their forte. Then they will easily communicate employee work without fear or too much not to do theirs.
Motivational Skills: No one can avoid depression, sluggishness to work, especially if
the plan fails, the results are not as desired job, not get a raise or a promotion ... The careful this time leaders must know how to motivate them, have a clear reward. However, a leader should not scold their employees before others, make personal meetings and remind them, besides go have words of encouragement for them to escape the situation is not good at the time. So you truly are good leaders and staff understand psychology (Bono & Ilies, 2006).
2.2.2 Trait of Leadership
In theory of traits, characteristics and specific traits are thought to be related to an individual's ability to lead. List of leadership characteristics can still be found in many documents, including physical characteristics and intelligence, personality traits, behaviors and skills. While the existence of a clear relationship between successful leaders and these characteristics have been disputed, the development of theoretical characteristics exist in later texts, such as the recent study establishing a link between leadership and the characteristics such as logical thinking, perseverance, self-empowerment and control (Kinicki, 2008).
As the study of Yukl, (2002) the trait of a leader (of course not all of those who do have sufficient leadership qualities later): Ability to influence others: to persuade others to follow their instructions. This requires tact, diplomacy and some skills to work with people. Ability to inspire confidence: by example and / or set up high standards. Consistency: very important when a file can have political differences and perspectives. Credibility: never make collective frustration. Rectitude: unyielding in maintaining the standards already set. A process of striving and success: a good leader almost always easy to recognize when looking at the track
record they have achieved (Bensimon et al., 1989). This creates respect of subordinates and also gives confidence to the leaders themselves. Fairness: always impartial, unbiased towards any one. Listen: rather than just imposing and dominating know in every discussion. Consistency: not bend the rules in value or in deference to the circumstances. Sincerely interested in others: love, get along with people. Expressed increased confidence in collective: always ready to hand over power, authority and responsibility to the collective. Assessment of the situation, people: instead of assuming all the credit are the leaders. Collective stand with: no denial of responsibility in case of difficulties. Provide timely information to the collective: not show the "secret" to prove himself important ((David , 2010).
2.3 Leadership style
Style of leadership is how the work of leaders, is a form of human behaviour which show the efforts affecting the operation of the others; as a result of the relationship between the individual and the event is represented by the formula: leadership style = Personality x Environment.
Leadership style is a form of leadership behaviour reflected the efforts affecting the operation of the others. Style of leadership is how the work of leaders including system characteristic signs of activity of leaders, be defined by their personality characteristics (Nahavandi., 2000). Leadership style is considered as an important factor in management; it not only represents a scientific and organized but also talent, and artistic command of the leader. Each administrator has a particular style of leadership, no leadership style is best for all situations of management, it is important that managers know how to use leadership styles depending on each situation specific situations.
Based on the "readiness" of subordinates (measured by the ability and enthusiasm) when performing work to split into four situations of Ken Blanchard and Paul Hersey, (1960) : (1) Ability and enthusiasm, (2) is possible but no enthusiasm, (3) Inability but enthusiastic, (4) There is no possibility and no enthusiasm. The ability to include education, experience, skills, understanding. Confident Enthusiastic include job done, accept responsibility, longing done.
Leadership style Instructions: managers guide employees how to complete the work, closely examine the activities of employees and themselves make most decisions. This style is best suited to manage novice staff or for those who do the work are not good. However, if managers use only one style, it will become trifles, domineering.
Leadership style Consulting: managers constantly giving direction and force employees to participate solve problems and make decisions. To achieve this, it should entice the opinion of staff, answered the questions raised and expressed interest in talking with the individual. This style is appropriate when employees are no longer new to the job but not enough skill or confidence nǎng about becoming his job performance.
Leadership Support type: use this style when employees have the potential for performing assigned work but lacks confidence. Meanwhile, the staff managed to raise the difficult, concerns and to discuss how to solve. However, managers do not just support but instead to increase their independence and strengthen the confidence of the staff.
Empowered Leadership style: Use this style with the technical staff including nǎng and confidence in the potential for job performance, self-managing their staff and only upon request assistance or public objectives new job. However, only use this style when employees are ready to work, otherwise they will feel short of breath or they've been abandoned.
2.4 Leadership effectiveness
Leadership effectiveness has been defined as how well a leader functions (Cherulnik et al., 2001) effective when this leader benefits to the organization as well as the followers. Following this definition, examples of effective leadership are generating profit for the organization, motivating followers-being, and maintaining a good reputation of the organization.
A Frijda, (1994s) argue that The great leaders are born or created? That is one of the most common questions in the process of developing leadership skills. Let's start with the definition of "leaders". A good friend and also a seasoned mentor my experience, Dr. Paul Hersey, defines leadership as "working with and through others to achieve these goals." Thus, any someone in the position that the achievements require support from others can play the role of a leader. I like this definition because it supports the philosophy of "leadership at all levels" - which is very important in the world today intellectuals staff (George, 1995; Humphrey, 2002; Sy, et al., 2005; Damen, Van Knippenberg, & Van Knippenberg, 2008a)..
In fact, millions of people are working with and through others to achieve these goals was the leader then. Whether they think they are leaders or not (not saying they are the great
effective leaders do not? The answer is "maybe" but not compelling enough ( Bono & Ilies, 2006; Gaddis et al., 2004)
Bono & Ilies, 2006 had done a study on leadership development program involving over 86,000 people participated in 8 major companies. These discoveries have been following our study had extremely high persuasive. The leaders participating in a development program has received 360-degree feedback, pick out the important areas for improvement, discuss these issues with colleagues and follow up on this one uniform basis (to check the process). They are rated as may suddenly become better leaders. This is not a subjective assessment which is evaluated from the work with their colleagues from 6-18 months after the first development program.
The leaders that participate in the development of similar programs and receive a reply similar but not closely followed, it is implicitly deemed to have been improved. Here are some specific ways to strengthen your leadership effectiveness (Gaddis et al., 2004; George, 1995; Johnson, 2009): See the 360-degree feedback on how effective your current which is evaluated by colleagues you respect. Select the most important behavior to change - the behavior that you believe will improve your leadership effectiveness, such as "become a more effective listener" or "decision more timely. " Regularly ask colleagues for recommendations so you can do the job better follow conduct that you choose to change. Listen to the reviews - do not commit changes everything - and make changes that you believe will further enhance its effectiveness.
Track and measure the effectiveness of your changes over time.
2.5 Leadership in small business in Vietnam
At a recent investment conference, Nguyen Nam Son, chief executive of investment bank Vietnam Capital Partners, which provides information that many businesses are looking for opportunities and merger surprised: The most important factors that foreign investors consider when deciding to buy shares in a company in Vietnam, is corporate governance.
The majority of businesses in Vietnam, from the management company to the family style large state enterprises are experiencing a common challenge: lack of professional management team and advanced management model. This challenge is putting a tremendous pressure on the labor market higher administrators. Vietnam is still a serious lack of management team of capable
leadership, ability to lead and inspire high. The irony is that this shortage is occurring when only very few companies truly recognize the role of governance seriously.
Previous studies have shown that leader affect influences leadership effectiveness (Bono & Ilies, 2006; Gaddis, Connelly, & Mumford, 2004). "Probably only about 1% now Vietnam is actually perceived as a subject of management important," said Jonathan McGhie, regional director in charge of the search and selection of business leaders of the company's Navigos force said. "Just 10% of companies actually governance seriously, that 10% really is not that big, the market will be in trouble to the human problem. Wage inflation will skyrocket. "
At Navigos, one of the largest companies on human resources in Vietnam today, 90% of customers have requested recruiting management team is highly qualified foreign firms, only very few are companies domestic. However, Mr McGhie said recent strong growth recruitment needs of business leaders from the company Vietnam is successful, many are the companies listed on the stock market, or the company received from foreign investment through venture capital form and equity investment (Equity Investment). These investors are encouraging domestic companies focus more on governance issues and team building corporate governance.
The newly established businesses have in common is high aspirations, ideas and products may be good, but still weak in terms of governance. When exposed to foreign investors seeking to buy the company in the form of private investments from the start, needs a professional administrator to be placed on top. This is especially true with enterprise foreign direct investment (FDI). "Our customers seek out capable and inspired leadership. Specific skills (such as marketing, sales ...) only a part of the request, "Mr McGhie said.
Despite higher labor market in Vietnam has improved a lot over the years and basically, the development trend is positive, human resources consultants say the actual number of the leaders specialist Industry is still very limited. This put pressure on the company to pay a very high price to get on with its good people. Even paying a high price, tend to "betray" the cultural and lack of loyalty to the company remains dominant in Vietnam today, when candidates easily find a place for her to pay higher wages, or promised appointments higher benefits. Besides, corporate culture and work environment is also an important factor to retain talent.
Not to mention the bonuses and shares that the regime chief executive (CEO) employees are entitled, the salary of the Vietnam business leaders today is not inferior to
foreign CEOs. Recently, in order to avoid brain drain, state-owned corporations also decide when wage growth faster than productivity increases wages.
According Navigos, businesses in the areas of consumer goods, is growing rapidly with the broad market coverage, such as Vinamilk, usually must pay the general manager level from 15000-25000 USD / month ( not to mention other benefits). Small businesses can only pay salaries CEO 3,000 USD / month, but these people are promising to share plans, stock attractive. In many companies, particularly in the financial sector and consumers, annual bonuses of corporate governance team up salaries several times that they were receiving.
The economic downturn in recent years has changed very much the face of higher labor market. During outbreak two years ago, higher demand causes supply "wage inflation" very high. Currently, supply is higher than demand, enabling enterprises to recruit more easily at lower costs. However, this is only true for the middle workforce. The market is still a serious lack of professional leaders. The solution, with the majority of foreign companies, the end is still hiring foreigners even though they tend to want to find someone Vietnam. "The business leadership positions at high level, the majority still in the hands of foreigners", Mr. McGhie said.
2.6. Research model and hypotheses
2.6.1. Research framework
Figure 2.1 Research framework
Leader’s Skill Leader’s Trait Effective leadership Typer demographic information H3 Leadership style H1a H1b H2
Based on the literature review as well as previous studies, we have come up with the following research questions and hypotheses for this study :
The purpose of this study is to examine the relationships among leader’s characteristics (skill and trait), the leadership style, and the effective leasdership for the employees who work in company name, Vietnam. Research questions and hypothesis were listed as below:
RQ1:
What are the relationships between leader’s characteristics (skill and trait) and the leadership style for the employees who work in company name, Vietnam?
1a: The skill of leader is positively related to leadership style for the employees who work in small company, in Thanh Hoa, Vietnam.
1b: The trait of leader is positively related to leadership style for the employees who work in small company, in Thanh Hoa, Vietnam.
RQ2:
What is the relationship between leadership style the Effective leadership for small company in Thanh Hoa, Vietnam?
H2: The leadership style is positively the Effective leadership for small company in Thanh Hoa, Vietnam.
RQ3:
What are the differences between tourists’ demographics to the Effective leadership for small company in Thanh Hoa, Vietnam ?
H2a: there is difference between gender and the Effective leadership for small company in Thanh Hoa, Vietnam
H2b: there is difference between age and the effective leadership for small company in Thanh Hoa, Vietnam
H2c: there is difference between working years with company and the evffective leadership for small company in Thanh Hoa, Vietnam
H2d: there is difference between education and the effective leadership for small company in Thanh Hoa, Vietnam
H2e: there is difference between working years with company and the effective leadership for the employees who work in small company, in Thanh Hoa, Vietnam.
Chapter 3 RESEARCH METHODOLOGY
3.1 Instrument Design
The Multifactor leadership questionnaire (MLQ) of Bass and Avolio is taken for reference to developed the questionnaire in this study as show on the table 3.1.
The rating scale has the following designations 1= Strongly Disagree, 2= Disagree 3= Neutral, 4=Agree and 5= Strongly Agree.
Trait of Leadership
- Adaptable to situations - Alert to social environment
- Ambitious and achievement-orientated - Dominant (desire to influence others) - Energetic (high activity level)
- Persistent - Self-confident
- Willing to assume responsibility
Leadership skill
- Clever (intelligent) - Conceptually skilled - Creative
- Fluent in speaking
- Knowledgeable about group task - Organized (administrative ability) - Persuasive
- Socially skilled
Leadership Style
- Expressed frankly and Share different perspectives
- Making the involvement of employees in creating vision and goals - Push employee to achieve these goals
- Help employee feel that they are doing something with meaning - Answer questions and Expressed interest in talking to the individual
- Avoiding micro-management, Listening, providing resources and encouraging risk taking.
Effective Leadership
- I liked my boss’s leadership style.
- The team’s objectives were made very clear.
- Team members were highly utilized.
- Employee commitment was very high.
- Team productivity was very high.
- Team morale was very high.
3.2 Statistical analysis instrument
3.2.1 Reliability analysis
To test the reliability of scale this study use the cronbach’s Alpha to check ask recommended by Numally ( 1978) all variable should have the cronbach’s Alpha value bigger than .6.
To answer the Research question1 and 2: What are the relationships between leader’s characteristics (skill and trait) and the leadership style for the employees who work in company name, Vietnam? and What is the relationship between leadership style the Effective leadership for small company in Thanh Hoa, Vietnam? The regression method is taken.
To answer the Research question 3: What are the differences between tourists’ demographic information and Intention to revisit ? and Research question 3: What are the differences between tourist behavior and Intention to revisit for the tourists. This study use T-test and ANOVA to T-test the differences between tourists’ demographic information and Intention to revisit
ANOVA and T-test were used to test research questions two in this study. ANOVA was used to examine hypo ? and ?. T-test was used to examine The difference between gender and the Effective leadership for small company in Thanh Hoa, Vietnam
and ANOVA was to test The difference between age and the effective leadership for small company in Thanh Hoa, Vietnam, the difference between working years with company and the effective leadership for small company in Thanh Hoa, Vietnam and difference between education and the effective leadership for small company in Thanh Hoa, Vietnam
3.3 Sample and Location
Criteria for determining small and medium-sized enterprises to apply accounting regulations in accordance with Decision 15/2006 or 48/2006: it is based on criteria or NUMBER TOTAL CAPITAL LABOR under Decree 56/2009 / ND-CP:
- Small Business: The total capital of 20 billion VND or less or number of employees from 10 people to 200 people
- Medium Enterprises: The total capital of over 20 billion to 100 billion, or number of employees from 200 people to 300 people
II. Regional Trade and Services:
- Micro enterprises: Number of employees 10 people or less
- Small Business: The total capital of 10 billion VND or less or number of employees from 10 people to 50 people
- Medium Enterprises: The total capital of over 10 billion to 50 billion, or number of employees from 50 people to 100 people
Currently, Thanh Hoa province has over 7,000 businesses, of which about 40% of enterprises operating in the industrial sector, 35% of business services, business for about 15% of imports and 10% other business types.
This study conducted survey with 10 small business: The total capital of 20 billion VND or less or number of employees from 10 people to 200 people. Table 3.2 list the companies were surveyed
Table 3.2 list the companies were surveyed
No Enterprises Address Phone
1 Corporations CP build traffic advisory Thanh Hoa (TTCC) Hac Thanh street number 11 0373 852 092- 0373 750 489
2 Website: http: //tvgtthanhhoa.com.vn/vn/ Zone 5 0373 630 216 3 Website: http: //tamaxth.vn 775 Nguyen Trai Steeet 0373 750750 4 JSC Trade Hau Loc Long Dinh Commune 0913982582 5 Website: http: //chinethanhhoa.com.vn/ Hai Binh 0902227798 6 Chicken Garden 189 Nguyen Trai Street 0373 853188 7 Food Corporation of Thanh Hoa 630 Ba Trieu Street 0373 713933 8 Website:www.maytinhg8.com.vn 09 Le Hoan Street 0373 564342 9 Website http://tiensonco.com/ Bim Son Town 0986976636 10 JSC agricultural investment Yen Dinh Block 5 0912238789
This survey was conduct during December, 2014 to March, 2015
The questionnaire was sent direct to employees who are working in 10 small enterprises in Thanh Hoa that selected by author as the table 3.2.
Chapter 4 RESULT ANALYSIS
In order to answering those research questions and hypothesis, RQ1:
What are the relationships between leader’s characteristics (skill and trait) and the leadership style for the employees who work in company name, Vietnam?
1a: The skill of leader is positively related to leadership style for the employees who work in small company, in Thanh Hoa, Vietnam.
1b: The trait of leader is positively related to leadership style for the employees who work in small company, in Thanh Hoa, Vietnam.
RQ2:
What is the relationship between leadership style the Effective leadership for small company in Thanh Hoa, Vietnam?
H2: The leadership style is positively the Effective leadership for small company in Thanh Hoa, Vietnam.
RQ3:
What are the differences between tourists’ demographics to the Effective leadership for small company in Thanh Hoa, Vietnam ?
H2a: there is difference between gender and the Effective leadership for small company in Thanh Hoa, Vietnam
H2b: there is difference between age and the effective leadership for small company in Thanh Hoa, Vietnam
H2c: there is difference between working years with company and the evffective leadership for small company in Thanh Hoa, Vietnam
H2d: there is difference between education and the effective leadership for small company in Thanh Hoa, Vietnam
4.1 Respondent profile
A total of 300 questionnaires were sent to small companies located in Thanh Hoa City through author and 5 officers. Around 259 questionnaires were collected. However the number of valid questionnaire received is 214, representing 71.3% of the total number of questionnaires delivered. The respondents mainly were managers, and staffs who are working for these small companies in Thanh Hoa province.
The surveyed employees represent a broad range of title, gender, age, experience, position and education. Among the respondent, there is 54 percent of male, and 45.3 percent of female respondents.
Relating to age of respondent, the result show that there is 10.7 percent of the respondents are from 20 to 29 years old, 39.7 percent from 30 to 39 years old, 40-49 years old are counted for 37.9 percent and the rest are over 50 years old (11.7 percent).
Regarding working experience, 12.6 percent of the respondents have 1 to 5 years working, 18.2 percent of the respondents have from 6 to 10 years of working; 24.8 percent of the respondents work for their companies from 11 to less than 15 years, while 16-20 year of working group are counted for 21.0 percent and the rest have been working for more than 20 years (23.4 percent).
Regarding to the education, near to twenty one percentage of respondent have high school degree, 25.7 percent have college degree while 24.3% of respondent have bachelor degree, and 29.4 percent have master degree or higher indicated high education of respondent in this survey.
Table 4.1 Respondent’s Profile
Characteristic Frequency Percent
Gender Male 117 54.7 Female 97 45.3 Total 214 100.0 Age 20-29 23 10.7 30-39 85 39.7 40-49 81 37.9 50 or more 25 11.7 Total 214 100.0 Experience 1-5 year 27 12.6 6-10 year 39 18.2 11-15 year 53 24.8 16-20year 45 21.0 over 20 year 50 23.4 Total 214 100.0 Position Top manager 20 9.3 Middle manager 29 13.6
White color worker 93 43.5 Blue color worker 72 33.6
Company
High school degree 44 20.6
College degree 55 25.7
Bachelor degree 52 24.3
Master degree or higher 63 29.4
Total 214 100.0
4.2 Reliability analysis
A cronbach alpha was used to get the reliability for the instruments of skill, trait, leadership style, and effective leadership. The reliability for each instrument were .91, .93, .88, and .84. So it indicates the accepted reliability as recommended by Nunnally (1978).
Table 4.2: Reliability Statistics
Variables Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items Trait of Leadership .933 .93 8 Leadership skill: .905 .904 9 Leadership Style .876 .877 5 Effective Leadership .836 .837 5
4.3 Hypothesis testing
4.3.1 Traits have a positive effect on the leadership styles (H1)
For testing the relationship traits and leadership styles (H1), the regression is taken. As shown in the table 4.4, the result shows that with F= 182.345 ( p>0.05), Adjusted R2 = 46%
(P>0.05). β = .68 indicated significant. so H1 is accepted with statement that “Traits have a positive effect on the leadership styles”
Table 4.3 Relationship between trait and leadership styles
Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) .875 .162 5.415 .000 TR .676 .050 .680 13.504 .000 R2/Adjusted R 2 .462/.460 F/Sig. 182.345/0.000 a. Dependent Variable: LS
4.3.2 Skills have a positive effect on the leadership styles (H2)
For testing the relationship skill and leadership styles (H2), the regression is taken. As shown in the table 4.5, the result shows that with F= 186.636 ( p>0.05), Adjusted R2 = 46.6%. β = .684(P>0.05) indicated significant. So H2 is accepted with statement that “Skills have a positive effect on the leadership styles”
Table 4.4 Relationship between skill and leadership styles
Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) .473 .188 2.509 .013 SK .768 .056 .684 13.661 .000 R2/Adjusted R 2 .468/.466 F/Sig. 186.636/0.000 a. Dependent Variable: LS
4.3.3 There is a positive relationship between the leadership style
and the effective leadership(H3)
For testing the relationship leadership style and leadership styles (H3), the regression is taken. As shown in the table 465, the result shows that with F= 166.882( p>0.05), Adjusted R2 = 43.8%. β = .664(P>0.05) indicated significant. so H3 is accepted with statement that “There is a positive relationship between the leadership style and the effective leadership”
Table 4.5 Relationship between leadership style and effective leadership
Coefficientsa Model Unstandardized Coefficients Standardized Coefficients t Sig. B Std. Error Beta 1 (Constant) 1.082 .141 7.668 .000 LS .590 .046 .664 12.918 .000 R2/Adjusted R 2 .440/.438 F/Sig. 166.882/0.000 a. Dependent Variable: EL
4.3.4 Examing the differces between socoidemorgraics and
effective leadership
In order to answering research questions three: “What are the differences between tourists’ demographics to the Effective leadership for small company in Thanh Hoa, Vietnam?"
The T-test was used to test the hypothesis H3a: there is difference between gender and the Effective leadership for small company in Thanh Hoa, Vietnam. Table 4.6 shows that there is no is difference between gender and the Effective leadership for small company in Thanh Hoa, Vietnam ( t(1) =. 263 p>0.05.)
Table 4.6 The difference between gender and the Effective leadership
Group Statistics gender N Mean Std. Deviation Std. Error Mean t Sig. (2-tailed) EL Male 117 2.8615 .74067 .06848 .263 .793 Female 97 2.8371 .58760 .05966 .269 .788 ANOVA was adopted to test the hypothesis H3b: there is difference between age and the effective leadership for small company in Thanh Hoa, Vietnam. Table 4.7 shows the result. Since F (3, 210) = 5.112 (p<0.05), this can concludes that H3b is accepted.
Table 4.7 The difference between age and the effective leadership
ANOVA EL
Sum of Squares df Mean Square F Sig.
Between Groups 6.589 3 2.196 5.112 .002 Within Groups 90.226 210 .430
Total 96.815 213
Since there is difference between age and the effective leadership for small company in Thanh Hoa, Vietnam , the post hoc test was used to see which group have bigger mean score than other. The result in table 4.8 shows that the people who have more than 50 years old can have more agree that effective leadership in their companies
.
Table 4.8 hoc test the difference between age and the effective leadership
EL
Tukey HSD
Age N
Subset for alpha = 0.05
1 2 20-29 23 2.6609 40-49 81 2.7630 30-39 85 2.8518 50 or more 25 3.3040 Sig. .592 1.000
Means for groups in homogeneous subsets are displayed. a. Uses Harmonic Mean Sample Size = 37.179.
b. The group sizes are unequal. The harmonic mean of the group sizes is used. Type I error levels are not guaranteed.
ANOVA was adopted to test the hypothesis H3c: there is difference between working years with company and the effective leadership for small company in Thanh Hoa, Vietnam. Table 4.9 shows the result. Since F (3, 210) = 2.181 (p>0.05), this can concludes that H3c is not accepted.
Table 4.9 difference between working years with company and the effective
leadership
ANOVA
EL
Sum of Squares df Mean Square F Sig.
Between Groups 3.880 4 .970 2.181 .072 Within Groups 92.935 209 .445
Total 96.815 213
ANOVA was adopted to test the hypothesis H3d: there is difference between education m and the effective leadership for small company in Thanh Hoa, Vietnam(ANOVA). Since F (3, 210) = .263 (p>0.05), this can concludes that H3d is not accepted. Table 4.9 shows the result.
Table 4.10 difference between education m and the effective leadership
ANOVA
EL
Sum of Squares df Mean Square F Sig.
Between Groups .363 3 .121 .263 .852 Within Groups 96.452 210 .459
ANOVA was used to test the hypothesis H3a: there is difference between working position with company and the effective leadership for the employees who work in small company, in Thanh Hoa, Vietnam. Since F (3, 210) = 1.285 (p>0.05), this can concludes that H3d is not accepted.
Table 4.11 shows the result
ANOVA
EL
Sum of Squares df Mean Square F Sig.
Between Groups 1.745 3 .582 1.285 .281 Within Groups 95.070 210 .453
Total 96.815 213
4.4 Discussion
Leadership style of an individual is a form of behaviour which show the efforts affecting the operation of the others. Style of leadership is how the work of leaders. Leadership style is system specific signs of functioning and management of the leader.
From the accepted hypothesis 1 and 2, as the result in the table 4.4 and 4.5 show that “Traits have a positive effect on the leadership styles” and “Skills have a positive effect on the leadership styles”. This result is consistence with the research of Outcalt et al. (2000) when they conclude that the leadership skill may lead to leadership style. It can be concluded that Leadership style is the result of personal relationships and events, and is represented by the formula: Leadership style = Strait + Skill. This study cannot find any difference between gender, education, experience and position. Thus there is only difference between age and the effective leadership for small company in Thanh Hoa, Vietnam (H2b). Since the people who have long time and life experience of pervious time ( before 1986, the year of Renew ( Doi
Moi) policy of Vietnamese government ) can fell that some improve in effective leadership, others while the younger who are living in the active life and have opportunities for compare with other develop counties, they still cannot satisfied with the effective leadership for small company in Thanh Hoa.
There are many approaches the style of leadership and management. These styles are based on assumptions and systems separate treatise. Each person chooses for himself a style of leadership / management based on combining separate elements including beliefs, values and personal standards relating, in greater levels that are elements of corporate culture and common standards on a common overall system, may have a style would be appropriate, but style favored others without conditions apply.
Chapter 5 CONCLUSION AND
RECOMMENDATION
5.1 Conclusion
The purpose of this study is investigating the factors that effect on leadership style and leadership effectiveness in Small Business that located in Thanh Hoa Province, Vietnam. The hypothesis result shows that all three hypothesizes are accepted. From the accepted hypothesis 1 and 2 this thesis comes out with the conclusion that traits have a positive effect on the leadership styles and Skills have a positive effect on the leadership styles. Bennett T. (2009) show that leadership style of an individual is a form of human behavior which shows the efforts affecting the operation of the others. Style of leadership is how the work of leader’s. Leadership system characterized signs of functioning and management of the leaders is governed by the characteristics of their personality includes trait and skill.
The third hypothesis is tested the relationship between leadership style and effective leadership, the result shows the accepted that “There is a positive relationship between the leadership style and the effective leadership”. This result demonstrate others studies on leader affect specifically showed that leader display of positive affect result in higher followers ratings of leadership effectiveness ( Bono and Llies, 2006; Gaddis et al., 2004; Lewis, 2000). As Johnson, (2009) show in his research that Leadership style is a form of leadership behavior reflected the efforts affecting the operation of the others. Style of leadership is how the work of leaders including system characteristic signs of activity of leaders, be defined by their personality characteristics. Leadership style is considered as an important factor in the management, it not only represents a scientific and organized but also talent, chihuong and artistic command of the leader. Each administrator has a particular style of leadership, no leadership style is best for all situations of management, it is important that managers know how to use leadership styles depending on each situation specific situations.
5.2 Thesis contribution
This study is adding the literature one more model of leadership style and its effectiveness that is tested in the small companies in Thanh Hoa province. It help to provide
more theory since Vietnamese organisation behaviour concept are lack of study as addressed by (Anh, Vinh, Trang, 2012; Vo and Duc 2011). By review of the literature of leadership, this study provide the theory of leadership by systematic concept. The hypothesis supported consolidates the theory that Leadership style is the result of personal relationships and events, and is represented by the formula: Leadership style = Strait + Skill and there is a positive relationship between the leadership style and the effective leadership. That consistence with the result of previous in other countries and other type of business from research such as: Bono and Llies, (2006), Gaddis et al., (2004), Lewis, (2000). Johnson,(2009), Bennett T. (2009), Hitt et al. (2009).
From the managerial perspective this result can help the manager adjust their leadership style for get more leadership effectiveness while leading company with the 8 strait and 9 skill have proposed in this study.
From the results, the leader can find a reasonable balance between the social aspects, and business ethics. Effective leaders are often the leaders set an example and others follow because they believe what they do is right. Think of a person that previously you respect, is it honestly know who put others before yourself? It's effective leadership qualities. Honestly help me get credibility and make people trust us.
Effective leaders always exemplary leadership and attracted others to follow them. Always keep a promise is a further indication of effective leadership. They believe in others and always reward and praise the good work others do. Effective leaders know when they make false confession. The problem is how to solve the mistakes and this is a sure leadership qualities. Effective leaders recognize their error when doing wrong and doing so, will help people to feel comfortable to ask for help or advice.
5.3 Limitation and future research
The limitations of research are threefold. First, the relationship among variables in this research is the product of questionnaire survey, without interview with the leaders or experts. Second, some issues cannot be discussed in depth because of the scope of our research, particularly because the exploratory survey we used is just quantitative. Further research work will include a qualitative survey with a leaders and professors from business economic. Finally, another limitation of this study involves potential respondent bias since the sample just selected in Thanh Hoa. The future research should conduct survey with larger sample and places.
References
Antonakis, J. & House, R. (2002). The full-range leadership theory: The way forward, in B. Avolio & F. Yammarino (Eds.), Transformational and charismatic leadership: The road
ahead . (pp. 3-34). Kidlington, OX: Elsevier Science, Ltd.
Antonakis, J., Avolio, B., & Sivasubramaniam, N. (2003). Context and leadership: An examination of the nine-factor full-range leadership theory using the Multifactor Leadership Questionnaire* 1. The Leadership Quarterly, 14(3), pp. 261-295. Elsevier Science Inc
Antonakis, J., Cianciolo, A., & Sternberg, R. (2004). The Nature of Leadership . Thousand Oaks, CA: Sage Publications.
Avolio, B. & Yammarino, F. (2002). Transformational and Charismatic Leadership: The
road ahead . Oxford, UK, Elsevier Science, Ltd.
Avolio, B., Zhu, W., Koh, W., & Bhatia, P. (2004). Transformational leadership and organizational commitment: Mediating role of psychological empowerment and moderating role of structural distance. Journal of Organizational Behaviour, 25 (8), 951-968
Bartol, K., & Martin, D. (1998). Management (3rd edition). USA, McGraw-Hill Companies,
Inc. pp. 410-420
Bass B. & Avolio B. (2009). Multifactor Leadership Questionnaire Feedback Report, Published by Mind Garden, Inc. www.mindgarden.com.
Bass B. (1990b). From transactional to transformational leadership: Learning to share the vision. Organizational Dynamics, 18(3), pp. 19-31.
European Journal of Work and Organizational Psychology, 8(1), pp. 9-32.
Bass, B. & Avolio, B. (1994). Improving Organizational effectiveness: Through
Transformational Leadership. Thousand Oaks, CA: Sage publications.
Bass, B. (1990). From Transactional to Transformational Leadership: learning to share the vision. Organizational Dynamics, Vol. 18, No. 3, pp.19-31.
Bass, B. and Avolio, B. (1997) Full range leadership development: Manual for the
multifactor leadership questionnaire, Redwood City, CA: Mind Garden
Bass, B., (1985). Conceptualization of Transactional and Transformational Leadership.
Journal of Applied Psychology, 80, pp. 468–478.
Bass, B., (1997). Does the transactional-transformational leadership paradigm transcend organizational and national boundaries? . Journal of American Psychologist, 52 (2), pp. 130-139. Bass, B., Avolio B.; Jung, D., & Berson, Y. (2003). Predicting Unit Performance by Assessing Transformational and Transactional Leadership. Journal of Applied Psychology, Vol. 88, No. 2, pp. 207–218.
Bass, B., Avolio B.; Jung, D., & Berson, Y. (2003). Predicting Unit Performance by Assessing Transformational and Transactional Leadership. Journal of Applied Psychology, Vol. 88, No. 2, pp. 207–218.
Batool, B.F. (2013). An Empirical study on Effect of Transformational Leadership on Organizational commitment in the Banking Sector of Pakistan. Journal of Business and
Management, Vol.8, No. 2, pp. 38-44
Journal of Organizational Culture, Communications and Conflict, 13(2), p. 1.
Burns, J. M. (1978). Leadership. NY: Harper & Row
Bushra, F.,Usman, A. & Naveed, A. (2011). Effect of Transformational Leadership on Employees’ job satisfaction and Organizational commitment in the Banking sector of Lahore (Pakistan). International journal of Business and Social science, 18 (2), pp. 261-268
Cao, V.L. (2009). The Influences of employees Perceived Leadership Styles on Job satisfaction, Organizational commitement and Job performance in Viettel Telephone Company call center. Thesis in International Master of Business Administration, Ming Chuan University of China
Carlton, S. (2009). Leadership Assessment: A Tool for Developing Future Hospitality Leaders. Theses/Dissertations/ Professional Papers/Capstones. Paper 435, Universitt of
Appendix Questionnaire
Dear Participant,
I am MBA student, as a part of my studies; I am conducting an academic research project concerning Effective Leadership in Small Business, Participants in this study are all randomly selected for the invitation to participate. The satisfaction that comes from participating in an academic research project like this is the only benefit to you. There is no other compensation. Thank you for your kind consideration and participation in this project. I deeply appreciate your contribution.
Sincerely,
Part A: General Information
1. Gender (circle one): a. Male b. Female 2. Your age: ________
3. How long have you been working for the company? ______ (years) 4. Position (check one):
a. Top manager b. Middle level manager c. White color worker d. Blue color worker 5. Your highest level of education (circle one):
a. High school degree b. College degree
Part B: Please read each item carefully and circle the appropriate number that indicates HOW MUCH YOU AGREE OR DISAGREE with each of the sections below:
Your leader is: Strongly Disagree
Disagree Neutral Agree
Strongly Agree
- Adaptable to situations 1 2 3 4 5
- Alert to social environment - Ambitious and achievement-orientated - Dominant (desire to influence others) - Energetic (high activity level)
- Persistent
- Self-confident
- Willing to assume responsibility
Your leader have the following skill:
- Clever (intelligent) - Conceptually skilled
- Creative
- Diplomatic and tactful
- Fluent in speaking
- Knowledgeable about group task - Organized (administrative ability)
- Socially skilled
Leadership Style
Expressed frankly and Share different
perspectives
Making the involvement of employees
in creating vision and goals Push employee to achieve these goals Help employee feel that they are doing
something with meaning Answer questions and Expressed
interest in talking to the individual Avoiding micro-management, Listening,
providing resources and encouraging risk taking.
Effective Leadership
I liked my boss’s leadership style. The team’s objectives were made very
clear.
Team members were highly utilized. Employee commitment was very high. Team productivity was very high. Team morale was very high.
