ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH --------------------- PARK JONG-HO THE EFFECT OF LEADERSHIP'S EMPOWERMENT OF KOREAN COMPANIES IN VIETNAM ON EMPLOYEE INNOVATION ẢNH HƯỞNG CỦA VIỆC LÃNH ĐẠO TRAO QUYỀN TRONG CÁC CÔNG TY HÀN QUỐC TẠI VIỆT NAM ĐỐI VỚI SỰ ĐỔI MỚI CỦA NHÂN VIÊN LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2023 ĐẠI HỌC QUỐC GIA HÀ NỘI TRƯỜNG QUẢN TRỊ VÀ KINH DOANH --------------------- PARK JONG-HO THE EFFECT OF LEADERSHIP'S EMPOWERMENT OF KOREAN COMPANIES IN VIETNAM ON EMPLOYEE INNOVATION ẢNH HƯỞNG CỦA VIỆC LÃNH ĐẠO TRAO QUYỀN TRONG CÁC CÔNG TY HÀN QUỐC TẠI VIỆT NAM ĐỐI VỚI SỰ ĐỔI MỚI CỦA NHÂN VIÊN Chuyên ngành: Quản trị kinh doanh Mã số: 8340101.01 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS NGUYỄN NGỌC THẮNG HÀ NỘI - 2023 DECLARATION The author confirms that the research outcome in the thesis is the result of author‟s independent work during research and research period and it is not yet published in other‟s research and article. The other‟s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given. The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business, and the law for above-mentioned declaration. ACKNOWLEDGEMENT Through the MBA program over the past two years, I have been able to learn a lot of knowledge and experience with the passion of the professors.
As a business owner in Vietnam, I have no doubt that the knowledge and experience I learned through HSB's MBA will be of great help to my business. My choice to research the MBA program will be one of the best choices of my life. First of all, I would like to express my deep gratitude to my esteemed Professor Mr. NGUYEN NGOC THANG.
He provided useful references and prompt, clear instructions for writing the thesis. Thanks to these excellent suggestions and encouragement, I was able to overcome the difficulties I had while studying at HSB. At first, I was skeptical that I would be able to balance work and school life, but with the warm guidance of the professor, I was able to finish my studies. Also, I am very happy to be able to apply the knowledge I learned at school to the management of the company.
I would like to express my sincere gratitude to all the professors and classmates who have taught at HSB again. Also, I would like to thank my beloved wife Jung-in Lee and my lovely two children Hayul and Harin for their encouragement and support so that I could successfully complete the MBA. Thank you again TABLE OF CONTENTS LIST OF ABBREVIATIONS. i LIST OF TABLES.
ii LIST OF FIGURES. Research Background & Objective. Research on leadership .1 Recent Changes in Leadership Studies. A Research on Trust and Felt Trust.
Research on innovative behavior. Definition of Innovation. Research on Innovation Success Factors and Innovation Behavior25 CHAPTER 3: RESEARCH DESIGN AND METHODOLOGY. Research Models and Hypotheses.
Operational definition of constructs .2 Organizational member Trust, Felt trust .3 Individual innovation behavior .1 Information of survey company.2 Information of survey .3 Validation of research hypotheses. Changes in innovative behavior according to the degree of empowerment .5 Summary and evaluation of empirical analysis results. 48 CHAPTER 5: CONCLUSIO AND IMPLICATION .3 Limitation and directions for future research .1 Limitation of the research .2 Directions for future research. 54 APPENDIX LIST OF ABBREVIATIONS SMEs Small and Medium Enterprises KOTRA Korea Trade-Investment Promotion Agency FDI Foreign Direct Investment SPSS Statistical Package for the Social Sciences i LIST OF TABLES [Table 2-1] Definition of innovation.
36 [Table 4-2] Industrial Robot Controller. 37 [Table 4-4] JT SENSOR CO. 39 [Table 4-6] The basic frequency of basic questionnaire. 40 [Table 4-7] KMO & Bartlett‟s test.
43 [Table 4-8] correlation analysis result. 44 [Table 4-9] Empowering Leadership & Trust. 45 [Table 4-10] Empowering Leadership & Felt Trust. 45 [Table 4-11] Felt Trust & Trust.
46 [Table 4-12] Felt Trust & Innovation behaviour. 46 [Table 4-13] Trust & Innovation behaviour. 47 [Table 4-14] The basic frequency of basic questionnaire. 47 [Table 4-15] Validation of research hypotheses.
48 ii LIST OF FIGURES [Figure 1-1] Research Structure. 7 [Figure 2-1] The relationship between trust and organizational performance 20 [Figure 3-1] Empirical Research Concept Model. Research Background & Objective In a world that is rapidly changing in an unpredictable direction, businesses are always in need of new changes. In order to quickly and effectively respond to changes in the quickly changing business environment due to intensifying competition among companies, it is necessary to change the appropriate organizational members to respond to the new business environment.
However, the environmental factors that determine the sustainability of a company are unpredictable, and the pace of change in the business environment is accelerating. Therefore, as society develops, efforts to cope with changes that affect the survival and development of businesses become increasingly difficult. In order for a company to effectively adapt to the rapidly changing environment and secure competitiveness, constant change and innovation are required. In particular, it can be said that innovation is the best and most important strategy that companies should continuously pursue.
„Innovation‟ can mean a new „invention‟ or it can mean that an organization or individual uses a new idea that did not exist before another organization or individual. The important point here is that when a company first embraces a new idea and puts it into action, it becomes the very an innovation. These innovations not only change the business environment to adapt to the new environment, but also have a profound impact on driving new businesses. In the past, the company's aggressive innovation not only overthrew its competitors in an instant, but also provided an opportunity to dominate the market.
However, companies sometimes struggle to innovate and sometimes go bankrupt. For example, the emergence of smartphones 1 completely changed the camera market from 'analog' to 'digital'. However, it is true that innovation in all companies is not as easy as expected. For example, only 45% of companies looking to transform their business globally have achieved their intended purpose of innovation.
That means the remaining 55% failed. Although there may be some differences depending on the period and subject of the investigation, many studies have shown similar results as above regarding the failure of management innovation. As such, the role of organizational members is increasing for successful implementation of innovation activities. This is because the members of the organization must concentrate on their work according to the goals and plans pursued by the organization.
Rather than passively following tasks given by organizational members' motivation for development, companies need to promote innovation behavior so that individual members of the organization can develop and implement ideas for innovation. According to existing innovation-related studies, the success factors of innovation are very diverse, but they can be largely classified into leadership factors, organizational factors, organizational member factors, and CEO factors. The purpose of this study is to understand the impact of 'leadership', one of important condition for innovation that determines the success or failure of such companies, on the innovation behavior of its members. In leadership research, various forms of leadership such as 'autocratic leadership', 'transactional leadership', 'empowerment leadership', and 'ethical leadership' are being studied, but this study only mentions empowerment leadership.
The purpose of this study is to examine Empowerment Leadership, a leadership that motivates organizational members voluntarily by guaranteeing a certain degree of autonomy to members and sharing certain authority with members. In particular, the relationship between empowerment leadership, trust, and innovation was studied for Vietnamese employees working in 2 Korean companies that entered Vietnam. For this reason, „EMPOWERMENT LEADERSHIP‟S EFFECT OF KOREAN COMPANIES IN VIETNAM ON EMPLOYEE INNOVATION' was selected as the title of thesis. Research Motivation The recent economic crisis caused by COVID-19 and the rapidly changing environment in an unpredictable direction are desperately demanding new changes and attempts by companies.
Changes in the corporate environment are directly related to the survival of the company, but unfortunately, efforts to adapt to the changes in the company are becoming more and more difficult than expected. In addition, evolving IT technology is changing from the existing direct, vertical, face-to-face work method to a remote, horizontal, and flexible work method, and accordingly, a new order is required for corporate management. In particular, small and medium-sized enterprises (SMEs) often lag behind large companies in adapting to the new business environment because of their relatively small economic scale and limited market competitiveness. The reality is that society demands that small and medium-sized enterprises compete with large corporations in an economic system in which large corporations dominate or monopolize.
In order to faithfully fulfill these roles and quickly adapt to the rapidly changing business environment, many SMEs also need 'innovation', and new 'leadership' is also required to operate the organization efficiently in the rapidly changing corporate structure. First, regarding innovation, innovation is called 'creative breakthrough' and in 1948 Harvard University economist J. Schumpeter defined it. He also defined innovation or 'creative destruction' as the driving force behind all economic development, including capitalism.
He also said, 'It is not the feat of the capitalist to give the queen more stockings, but it is the feat of the 3 capitalist to make it possible for girls working in factories to buy stockings with less effort.' Also said another economist described leadership as 'the process of positively influencing all members of an organization while interacting closely with them to achieve organizational goals' (Avolio et al. It means that leadership is communication between the leader and the organization members of the organization for the purpose of the organization, and is not a one-way street but an 'interaction'. Therefore, it is judged that the results of many 'innovations' in the past have changed due to leadership based on these interactions. In the current business environment, various types of leadership such as 'dictatorial leadership' and 'transactional leadership' exist, but attention is more focused on 'empowerment leadership' that can affect workers.
In the case of empowerment leadership, motivates corporate innovation by cultivating or discovering qualified talent and granting certain authority to the authority of in-house management innovation, which used to be concentrated on a small number of leaders and managers within the company. In other words, empowerment leadership is when a superior shares his or her authority with members of an organizational structure, allowing members to take responsibility and autonomy for their work and intrinsically motivate them (Pearce & Sims, 2002; Bartol & Locke, 2006; Sims, Faraj & Yun, 2009). After Empowerment Leadership received attention, research through scholars has demonstrated that empowerment leadership influences corporate innovation such as job satisfaction, teamwork performance, and creativity (Sparrowe, 1994; Birdi, Clegg, Patterson, Robinson, Stride, Wall & Wood, 2008; Chen, Kirkman, Kanfer, Allen & Rosen, 2007; Zhang & Bartol, 2010). However, while most studies on leadership empowerment have „positive effects,‟ some studies have noted that they can potentially negatively affect task performance and outcome variables (Boatwright & Forrest, 2000; Wilkinson, 1998).
4 In the case of Korean companies' overseas expansion, according to KOTRA (www.kr), among foreign-invested countries that invested in Vietnam from 1988 to 2019, Korea invested 67. This accounted for 18.7% of the total foreign investment, ranking first among 135 countries. As of 2020, the number of Korean companies (FDI) entering Vietnam also exceeded 10,000. Accordingly, the interaction between the Vietnamese business site members of Korean companies with diverse cultures and the leaders dispatched to Korea has emerged as a new topic in corporate management for innovation of corporate management.
However, there are few studies on the leadership of Korean companies entering Vietnam.