Studying the relationship between leadership skills and business performance of Vietnamese textile and garment companies

m textile and garment companies. Hypotheses H2: Interpersonal skills affect posivitely on performance of Vietnam textile and garment companies HypothesesH3: Business skills affect posivitely on performance of Vietnam textile and garment companies HypothesesH4: Strategic skills affect posivitely on performance of Vietnam textile and garment companies. Conclusion of chapter 2 CHAPTER 3: RESEARCH METHODOLOGY 3.1Reseach process Defining research objectives and missions Conducting an official survey Studying theor and suggest research model and research hypotheseses Evaluating the results, adjusting the measurement and design questionnaire Interview Defining and coding measurement Checking and perfecting data, testing measurement, testing models and research hypotheses Stage 1 Writing report Stage 2: Qualitative study Stage 2: Quantitative study Fig3.1: Reseach process (Source: the author's suggestion) 3.2 Stage 1 –Defining and coding measurement 3.2.1Leadership skills measurement and coding This thesis uses the scale of Mumford, Campion and Morgeson (2007)to measure cognitive skills, interpersonal skills, business skills, and strategic skills. 3.2.2 Performance measurement and coding This thesis uses Balanced Score Card of Kaplan to measure performance of Vietnamese textile and garment companies. 3.3 Qualitative study 3.3.1 Interview Preparation:Based on the proposed measurement, author prepares appropriate content. Interview subject:Leaders at all levels working in Vietnam textile and garment compamies. Sample zise:30 leaders Interview methods: directly and by phone 3.3.2 Evaluating the results, adjusting the measurement and design questionnaire Results of discussions with 30 leaders showed that: In terms of leadership skills, most of the interviewed subjects said that the skills mentioned in the measurement are very necessary skills for leaders, and these skills affect business performance. Regarding the business performance of enterprises, the leaders all believe that the above indicators are necessary, and supplement the indicator "Lead time" to evaluate the performance in internal processes perspective of performance. 3.4Quantitative study 3.4.1 Conducting an official survey Sample size: 476 respondents Data collection:Data is collected through online survey, direct survey and indirect survey via questionaire. Data analyse software: IBM SPSS Statistics 20and AMOS 20. 3.4.2 Checking and perfecting data, testing measurement, testing research models and research hypotheses 3.4.2.1 Checking and perfecting data The data after being collected will be checked and removed invalid observations, perfected and moved the next steps. 3.4.2.2 Testing measurement Cronbach Alpha, EFA, and CFA (Confirmation Factor Analysis) testing are used to test leadership skills and performance measurement. 3.4.2.3 Testing research models and research hypotheses SEM and bootstrap testing are used to test research models and research hypotheses. Conclusion of chapter 3 CHAPTER 4: RESEARCH RESULTS Vietnam’s Textile and Garment Industry overview 4.1.1 Industrial production and export indicators Industrial production index shows that the industrial production of Vietnam textile and garment industry has increased over the years. The ratio of textile and apparel export turnover shows that the textile and garment industry accounts for a large proportion of Vietnam's total export turnover. Main markets and product The products of Vietnam’s textile and garment industry are sold in both domestic and foreign markets. In the domestic market, they are sold in markets, retail store, supermarkets, trade centers and accounts for about 14%. The products of Vietnam’s textile and garment industry arer exported to more than 180 countries and territories worldwide (Le Hong Thuan, 2017). In particular, the main markets are he United States, the EU, Japan, Korea, and some other markets such as ASEAN, Canada, China and Taiwan. These markets are notorious for being extremely strict in terms of product quality, price and design. In addition, these markets are also high demanding in product control and standard of the product. Main modes of production Although Vietnam textile and garment industry has a high proportion of export turnover and high growth rate, it is mainly manufactured under the CMT method (the mode of production produces the lowest added value), about65% of total export value.About30% of export value is produced by FOB mode and only 5% of total export value is by other mode of production. Labor in Vietnam textile and garment industry Labor is one of the main factors of production and business in the textile and garment industry and is reflected in both the quantity and quality of labor. The number of labors in textile and garment industry is about 1.6 million labors, accounting for more than 12% of the labor force in the industrial sector and nearly 5% of the total labor force in Vietnam. The average labor productivity in this indutry is lower than other countries in the region, such as Hong Kong, China, Korea, Thailan Number and size of companies in Vietnam textile and garment industry According to statistics by Bui Van Tot (2014), there are about 6.000 companies operating in the textile and garment sector in Vietnam, of which small and medium companies account for a large proportion. In terms of ownership, about 84% of textile and garment enterprises are prive; 15% are foreign invested enterprises and about 1% is SOEs. By sector, about 70% of companies are in of the garment sector, 17% of enterprises are in the textile/ knit sector, 6% of enterprises are in the yarn sector, 4% are in the dyeing sector and about 3% of companies are in the supporting industries. In terms of grography, companies in the north occupy about 30%, companies in the central and highlands occupy 8% and companies in the south is about 62%. Some financial indicators of some typical textile and garment enterprises Table 4.1: financial indicators of some typical textile and garment enterprises Indicators Vinatex Phong Phu Corporation Nha Be Corporation 2016 2017 2018 2016 2017 2018 2016 2017 2018 Revenue 15.462 17.447 19.101 3.238 3.021 3.499 4.215 4.217 4.897 Revenue growth 2,0% 12,8% 9,5% -16,6% - 6,7% 15,8% - 4,6% 0,1% 16,1% Profit 579 685 703 272 187 218 53 58 68 Profit growth 8,8% 18,3% 2,6% 28,8% -31,3% 16,6% -53,9% 9,4% 17,2% ROA 1,64% 1,85% 2,00% 6,19% 3,54% 4,23% 1,92% 1,81% 1,82% ROE 4,28% 4,93% 5,49% 18,41% 11,39% 13,66% 12,59% 13,35% 14,31% (Source: Summarized from the financial statements) 4.2 Descriptive statistics The sample size was 476 observations. Table 4.2: Descriptive Statistics Frequency Percentage Gender Male 270 56,72% Female 206 43,28% Age Under 30 101 21,22% From 30 to under 40 150 31,51% From 40 to under 50 152 31,93% From 50 73 15,34% Level Junior leaders 165 34,66% Middle leaders 236 49,58% Senior leaders 75 15,76% Years of experience Under 5 years 166 34,87% From 5 to under 10 years 192 40,34% From 10 years 118 24,79% Type of companies Limited companies 303 63,66% Joint stock companies 173 36,34% Size of companies Small 56 11,76% Medium 107 22,48% Large 313 65,76% Location The South 369 77,52% The Center 36 7,56% The North 71 14,92% (Source: from SPSS) 4.3Measurement realability test 4.3.1 Cronbach’s Alpha Test Cronbach’s Alpha test show that the leadership skills scale is satisfactory after removing Cog3 item, and the business performance scale is satisfactory. 4.3.2 EFA Test The results of leadership skills EFA testand performance EFA test show that the leadership skills scale and performance scale are satisfactory. The general EFA analysis results show that the leadership skills and business performance scales meet the requirements of reliability, convergence and discriminatory values, thus can move to the next step (CFA test). 4.3.3CFA Test The results of CFA test show that the scale is consistent with market data. Fig 4.1: CFA test results (Source: The result of thesis) 4.4 Survey results of current status of leadership skills in Vietnamese textile enterprises The results show that leadership skills in Vietnamese textile and garment companies can be measured through four main skill groups: cognitive skills, interpersonal skills, business skills and strategic skills. Details of the leader's self-assessment about the importance and the performance of these skills are as follows: Table 4.3: the leader's self-assessment about the importance and performance Codes Skills leader's self-assessment Importance Performance Cog Cognitive skills 4,06 3,77 Cog1 Speaking 4,31 3,74 Cog2 Listening 4,30 3,75 Cog4 Writing 3,68 3,74 Cog5 Reading comprehension 3,89 3,82 Cog 6 Active learning 3,78 3,80 Cog7 Critical thinking 4,37 3,76 Per Interpersonal skills 4,55 3,75 Per1 Social perceptiveness 4,46 3,76 Per2 Coordination 4,56 3,71 Per3 Negotiation 4,59 3,82 Per4 Persuasion 4,59 3,72 Bus Business skills 4,39 3,73 Bus1 Operation analysis 4,67 3,72 Bus2 Motivating people 4,61 3,78 Bus3 Directing people 4,34 3,74 Bus4 Developing people 4,29 3,66 Bus5 Financial resources management 4,28 3,71 Bus6 Material resources management 4,14 3,74 Str Strategic skills 4,49 3,80 Str1 Visioning 4,42 3,82 Str2 Systems perception 4,39 3,74 Str3 System evaluation 4,72 3,76 Str4 Identification of downstream consequences 4,59 3,71 Str5 Identification of key causes 4,52 3,85 Str6 Problem identification 4,46 3,88 Str7 Solution appraisal 4,32 3,87 (Source: From SPSS) The above results show that there is a significant gap between the importance and the performance in interpersonal skills, business skills and strategic skills. Therefore, leaders of Vietnamese textile and garment companies should focus on improving these skills to narrow the above gap. 4.5Research model and research hypotheses test 4.5.1 SEM test 4.5.1.1 Detailed research model SEM test Table 4.4: Detailed research model SEM test results Estimate S.E C.R P value Standardized regression weights Performance <- Str 0,381 0,073 5,215 *** 0,388 Performance <- Bus 0,152 0,046 3,326 *** 0,222 Performance <- Cog 0,148 0,044 3,367 *** 0,201 Performance <- Per 0,192 0,051 3,735 *** 0,244 (Source: from SPSS and AMOS) Fig 4.2: Detailed research model SEM test (Source: from SPSS and AMOS) The above analysis results show that the research model and the hypotheses are statistically significant, and can conclude that cognitive skills, interpersonal skills, business skills and strategic skills affect the business performance of Vietnamese textile and garmentcompanies. The hypotheses test result shows that research hypotheses are accepted. Table 4.5: Conclussion on research hypotheses Hypotheses Standardized regression weights Result H1: Cognitive skills affect posivitely on performance of Vietnam textile and garment companies 0,201 Accepted H2: Interpersonal skills affect posivitely on performance of Vietnam textile and garment companies 0,244 Accepted H3: Business skills affect posivitely on performance of Vietnam textile and garment companies 0,222 Accepted H4: Strategic skills affect posivitely on performance of Vietnam textile and garment companies 0,388 Accepted (Source: the authors’ research results) 4.5.1.2 General research model SEM Test The results of SEM test show that the general research model is statistically significant, and can conclude that leadership skills affect the business performance of Vietnamese textile and garmentcompanies. Fig 4.3: General research model SEM test (Source: from SPSS and AMOS) The results show that the general research model is statistically significant, and can conclude that leadership skills affect the business performance of Vietnamese textile and garmentcompanies. 4.5.2 Bootstrap test Table 4.6: the results of Bootstrap test Estimate Mean Bias SE - Bias CR Performance <- Str 0,388 0,390 0,002 0,004 0,5 Performance <- Bus 0,222 0,219 -0,003 0,003 -1 Performance <- Cog 0,201 0,198 -0,003 0,003 -1 Performance <- Per 0,244 0,245 0,001 0,003 0,333 The results of Bootstrap test show that the research model issignificant. 4.5.3Extensive testing of research models Fig 4.4: the results of Extensive testing of research models (Source: From SPSS and AMOS) The results show that strategic skills affect positively on four perspectives of performance, business skills and interpersonal skills affect positively on customer perspective, learning - growth perspective and financial perspective of performance. Cognitive skills affect positively on customer perspective, learning – growth perspective and internal process perspective of performance. Besides, the results indicate that the satisfaction of customer and employee in Vietnamse textile and garment companies are affected by cognitive, interpersonal, business and strategic skills. The financial perspective is affected by strategic, business and interpersonal skills. The internal process perspective of performance is affected by both strategic skills and cognitive skills. 4.5.4Manova test The research results show that there is a difference in gender, age, position and experience of leaders with leadership skills. Conclussion of chapter 4 CHAPTER 5: DISCUSSIONS AND RECOMMENDATIONS 5.1 Discussion about the main research results of the thesis 5.1.1 Status of importance and level of implementation of skills 5.1.1.1 Cognitive skills Leaders think that the importance of writing skills, active learning skills, and reading comprehension skills are not high, and their level of performance equals importance. However, the gap between the level of performance and the importance of speaking, listening and critical thinking skills is quite wide. 5.1.1.2Interpersonal skills Leaders at Vietnamese textile and garmentcompanies appreciate the importance of interpersonal skills (4.46/5 points). Meanwhile, the average self-assessment score of the performance of the above skills ranges from 3.7 to 3.8, the gap between the importance and performance level of these skills is quite wide. 5.1.1.3 Business skills The skills that are judged to be of high importance and the large gap between importance and performance are the skills related tooperation analysis, motivating, developing and directing skills. The two skills with smaller gaps are financial resource management skills and material resource management skills. 5.1.1.4 Strategic skills Leaders’ seft – assessment on importance of strategic skills is quite high, from 4.32 to 4.72/5, but Leaders’ seft – assessment on performance of strategic skills is only from 3.71 to 3.88/5. 5.1.2The influence of leadership skills on business performance of Vietnamese textile and garment companies 5.1.2.1 Impact of business performance in general In general, the results show that leadership skills affect positively on performance of Vietnamese textile and garment companies. This result is similar to the previous research results of some authors (Cheng, HC 2011; Kehinde, JS, Jegede CA and Akinlabi, HB 2012; Abosede et al 2011; Do Anh Duc 2014; Le Thi Phuong Thao 2016) about the impact of leadership skills on business performance. In particular, strategic skills have the greatest impact (0.388), followed by interpersonal skills (0.244), business skills (0.222) and cognitive skills (0.201). 5.1.2.2 Impact of every perspective ofperformance Strategic skills (0.235), business skills (0.193) and interpersonal skills (0.162) positively affect the financial perspective of Vietnamese textile and garment companies. Strategic skills (0.146), business skills (0.1122), interpersonal skills (0.25) and cognitive skills (0.181) have the same effect on the customer perspective of performance of Vietnamese textile and garment companies. Strategic skills (0.476) and cognitive skills (0.166) has a positive influence on the internal process perspective of Vietnamese textile and garment enterprises. Strategic skills (0.280), business skills (0.223), interpersonal skills (0.171), cognitive skills (0.1119) influence the same direction to the learning and growth perspective. 5.1.2.3 Impact of four leadership skills on each aspect on business performance Strategic skills affect all aspects of business performance of Vietnamese textile and garment companies, including: customer perspective (0.146), learning and growth perspective (0.280), internal process perspective (0.476) and the financial perspective of performance (0.235). Business skillsand interpersonal skills affect customer perspectives (0.122 and 0.25), learning and growth perspectives(0.223 and 0.171), and financial perspective of performance (0.193 and 0.162). Cognitive skillsinfluence on customer aspective (0.181), learning andgrowth perspective (0.119) and innovation perspective in Vietnamese textile and garment companies (0.166). 5.2 Some recommendations related to the research topic for Vietnamese textile and garment companies 5.2.1 Developing leadership skills through training programs The content of training programs can focus on a narrow group of skills, or training multiple skills at the same time. Vietnamese textile and garment companies may hire consulting firms or external organizations to design suitable training programs for own companies. At the same time, when designing training programs, Vietnamese textile and garment enterprises should pay attention to the factors such as: time, location, funding and training performance evaluation. In addition, they should also focus on training adjacent leaders. In order to effectively implement the training programs, stakeholders should: - Vietnam Textile and Apparel Association and Training Institutions should link with other agencies to propose and develop training programs in line with the development orientation of Vietnam's textile and apparel industry in particular and the economy in general. - Vietnamese textile and garment companiesshould link with the Association and training institutions to analyze the limitations of leaders in their enterprises in order to propose the implementation of leadership skills training programs. It is necessary to arrange appropriate work arrangements, creating conditions for time and funding so that leaders at all levels and adjacent leaders can effectively participate in training programs. - Existing and adjacent leaders should regularly assess their own skills, find, propose and participate in appropriate leadership skills training programs. 5.2.2 Developing leadership skills through learning from real experience This method is essential in the development of strategic skills, skills related to visioning, system perception and system evaluation, identification of downstream consequences, problem identification and solution appraisal. Skills development through experiential learning is often affected by three factors, which are job challenges, task diversity and feedback. - Higher-level leaders should trust and boldly delegate more complex tasks to subordinates with limitation on leadership skills, encourage lower-level leaders to be confident and brave in performing the tasks, do rotation so that lower-level leaders have the opportunity to perfect their limited skills. - Existing or nearby leaders should dare to take on challenging tasks so that they can perfect and develop leadership skills. 5.2.3Developing leadership skills through self-improvement from the leaders Leaders themselves need to listen to the opinions of senior leaders, colleagues, subordinates and others to know exactly the status of their skills, choose the training method appropriate to their own resources. 5.3 Contributions Theoretically: The dissertation's research results also reinforce the theory of the relationship between leadership skills and business performance of companies. The thesis has systematized the theoretical basis of leadership, leadership skills, summarized the leadership skills models often used to assess the leadership skills of businesses. The thesis has systematized the theoretical basis of business performance of companies, and different approaches to measure business performance of companies. Practically The thesis proposes a set of criteria to evaluate leadership skills and the thesis assesses the status of leadership skills in textile and garment enterprises in Vietnam. The thesis also points out that leadership skills affect positively on the business performance of Vietnamese textile and garment companies, and with each different perspectives of business performance, the influence of leadership skills will vary. Therefore, depending on the business goals of the enterprise in each period, Vietnamese textile and garmentcompaniesshould improve and develop appropriate leadership skills, contributing to improve the business performance on every perspective. The thesis also proposes some recommendations to improve the skills of leaders in Vietnamese textile and garment companies to enhance the business performance in particular and develop of Vietnam's textile and garment industry in general. 5.4Further research Besides some achievements, the thesis still has certain limitations: Firstly, considering the research space, the thesis studies Vietnamese textile and garment enterprises. However, the research results of the thesis are based on the results of a survey of 476 leaders in Vietnamese textile and garment companies, in which, the majority of the collected observations are concentrated in the southern region, the main Therefore, research results may be biased. Secondly, although the thesis has clearly indicated the influence of each leadership skill on each perspective in the business performance of Vietnamese textile and garment companies, the thesis has not clarified this influence for different types of businesses. The thesis has not clarified this influence on leaders in different regions. Thirdly, the research has pointed out the influence of leadership skills on business performance of Vietnamese textile and garment companies, howeverit has not mentioned the impact of environmental factors on this relation. Vietnam's textile and apparel industry includes enterprises which only perform sewing and enterprises which perform spinning, weaving and sewing. Moreover, Vietnamese textile enterprises are now following different production methods and different levels of production specialization, so the requirements for leadership skills may vary and there are can affect the business performance of enterprises differently. This thesis does not go into depth to analyze, evaluate and make recommendations for each specific case mentioned above. These issues are also the future research directions of the author. Conclusion of chapter 5 CONCLUSION Performance is always the most important issue of all businesses. The performance is affected by many factors, of which the leader is considered as one of the most important factors. Among the leadership elements, leadership skills is considered as one of the most important factors, because the skill demonstrates the ability to perform the work of the leader, therefore, studying leadership skills is very important and extremely meaningful in improving the business performance. Vietnam's textile and garment industry has been developing strongly and plays an important role in the growth process of the national economy. Therefore "Studying the relationship between leadership skills and the performance of Vietnamese textile and garment companies" is very important, necessary and meaningful. Based on the theoretical background related to the research topic, and through the use of qualitative and quantitative research methods, many data collection methods, scientific and rigorous testing tools, at the same time combining the methods of analysis, synthesis and critical thinking, the thesis has given some research results as follows: Firstly, leadership skills in Vietnamese textile enterprises can be measured through cognitive skills, business skills, interpersonal skills, and strategic skills. Research results show that there is a significant gap between the importance and the level of performance in interpersonal skills, business skills and strategic skills. Therefore, leaders of Vietnamese textile and garment companies should focus on improving these skills. Secondly, the research results show that leadership skills positively affect on the business performance of Vietnamese textile and garment companies. Strategic skills are the most influential, followed by interpersonal skills, busine