Tóm tắt Luận án Impact of competitiveness on business performance: An emperical study for jointstock commercial bank in Hochiminh ciy

ness of a firm based on their ability to combine the resources its to create competitive advantage (Sanchez & Heene, 1996, 2004). In the banking and financial sector has many of the concepts of competitiveness of commercial banks, the thesis would like to quote some of the following concepts: Nguyen Thanh Phong (2010) defined: “The competitiveness of banks is likely that by itself created on the basis of maintaining and developing its own advantages, to consolidate and expand market share; increase profitability and resilience and overcome the adverse changes of the business environment”. According to Nguyen Thi Quy (2008), “The competitiveness of a bank is its ability to create, maintain and develop the advantages to maintain and expand market share; achieve higher profitability than the average of the industry and constantly increasing, while ensuring safe operation and healthy, able to resist and overcome the adverse changes in the business environment”. In this study, the competitiveness of banks are defined as follows: “The competitiveness of banks is ability to use, combine the resources, capabilities to maintain and create their advantages compared to competitors and achieve its objectives in terms of business environment changes” 2.2. Overview theory of competitivenes 2.2.1. Competitiveness approach from internal resources of the entepries 6 2.2.1.1. Competitiveness in the school of industrial organization economics Industrial Organization economics model is Procter (1980) generalized through the relationship between the industry structure, operations, or firm strategy and business performance of the sector. The key of this model is that business performance depends largely on the industry structure that businesses are competing with each other. Industry structure decided acts - business strategy - of a firm and this leads to business performance of the industry (Barney, 1986; Porter, 1980). Theoretical economics organizations have presented an analytical framework to help firm analyze a whole business sector, forecasting future movement of the industry, understand the competition and position themselves business and thereby transform this analysis into a competitive strategy for the specific firm (Porter, 1985, 1998). This model also helps us to analyze the business performance of the industry and identify the potential of each business sector. Economics organizations admitted decisive advantages huge difference to the business strategy of the business. The distinct advantage of this firm is the basis for the resource - based theory of the firm (Wernefelt, 1984, 1995; Barney, 1991, 2001) 2.2.1.2. Resource-based View of the firm The Resource-based view - RBV was launched by a number of key publications, including Lippman & Rumelt (1982); Wernerfelt (1984); Dierickx & Cool (1989); Barney (1991, 1996);; Peteraf (1993); Maijoor & Witteloostuijn (1996), Miller & Shamsie (1996), Markides & Williamson (1996). The RBV mainly tries to use the resources available to a firm at a certain point in time to explain firm performance. The approach is based on two target resource is classified different forms of resource ownership and resource linked together to form and create competitive advantages from comparative advantages (Makadok, 2001; Wilcox & Zeithmal, 2001). RBV assumes businesses in the same industry using different business strategy to compete. Arccoding to Barney (1991, p.105), a firm resource create competitive advantage must have four arttributes: (1) it must be valuable, (2) it must be rare, (3) it must be imperfectly imitable and (4) Non-substituable, called to VRIN. RBV emphasizes the characteristics of resources (Barney, 1991) is valuable, rare, difficult to imitate and no substitute will create a competitive advantage for businesses. However, today's competitive environment, firm compete not only by differences in resources that focus on the ability to coordinate and use resources effectively to achieve their strategic objectives (Sanchez & Heene, 1996). This is a limitation of resource-based theory when only emphasizes the intrinsic element without no consideration to these factors the business environment, the competitive pressures of the business. 2.2.1.3. Competence-Based View of the firm Competence-based Management of firm focused on usability, combined assets, resources and capabilities to achieve growth and overall efficiency of the organization. It was developed by the research mainstream of Barney (1991), Wernerfelt (1984), Peteraf (1993), Sanchez & Heene (1996, 2004, 2008, 2010). Competence-based view 7 defines a set of fundamental concepts of the original entity that it represents and used as a basis for analyzing businesses, markets and their interaction (both side competitive and cooperative). Figure 2.2 shows the relationship between the original entity is the ability constituents of the companies that Sanchez & Heene (1996, 2004) proposed to use in the development of strategic theory in view of competence –based. Fig. 2.2: Primitive Entities Invoked in Competence Perspective. Source: Sanchez.R (2008) Sanchez & Heence (1996, 2004), Hubbard et al (2008), Freiling et al (2008) works is confirmed that the competencies are created by adding the capabilities, coordinate resources to create competitive advantage and allow the company achieve its strategic objectives. According to Sanchez & Heence (1996, 2004), the organizations are organized as open system resources and the flow of resources to be deployed and coordinated in the process of value creation and value distribution. Effective organization must be designed and managed as open systems targeted search. CBV has been built into an approach “dynamic, systemic, cognitive and holistic” to strategy manage (Sanchez & Heene, 1996; Sanchez, 1997; Sanchez & Heene, 2004, Freiling et al, 2008). Four point are called “Four-Cornerstones” of the competence perspective. It examines how each platform identified a significant impact on the nature of the performance management process in the organization as open system. Sanchez (2008) summed up these fundamental conceptual differences in the foundations of the RBV and competence perspective can be summarized in this compact form: RBV assumptions: Firm Success = Sustained generation of rents 8 Firms Success = f(resources) Competence Perspective assumptions: Firm Success = Ongoing satisfactory level of attainment of a firm’s goals Firm Success = f(resources, capabilities, management processes, strategic logic) 2.2.1.4. The value chain approach Porter (1985, 1998) propose common value chain by the enterprises can use to test all of their activities and see how they coordinated. Value chain explains how companies create value and find ways to increase the value is an important factor in developing a competitive strategy. Hubbard et al (2008) suggested that the value chain resources and capabilities will be most useful when determining how the business processes of a firm should be invested in the resources and capabilities to create them, or how these decisions might affect the current organizational structure of the company. Fig. 2.6: The resources and capabilities Investement Valua Chain Source: Hubbard et al (2008) Study of Lamarque (2005) research to source of competitive strength in the value chain applied to various commercial banks. The value chain of commercial banks corresponding to the description of banking activities for private investors or small business (financial, investment, savings, service) Fig 2.8: The Commercial Bank Value Chain Source: Lamarque. E (2005) 9 Huovinen (2008) summarized the studies related to business management competence from 1990 to 2002 (Appendix 1). Accordingly has 84 research works related to the competitiveness of firm. In particular, the geographical distribution, the 43 publishers in the US and 26 in Britain. From 2003 to 2013 there were more than 32 (according to the author's collection) study on this issue was published in the US journal. 2.2.2. Competitiveness approach of market orientation Competitiveness based on market orientation (MO) was developed on the basis that the business will achieve competitiveness by focusing on how to meet needs customers, create customer value better than competitors and achieve business performance. Kohli & Jaworski (1990) and Narver & Slater (1990) have developed the content of market orientation consists of three components: customer responsiveness, competitor responsiveness, functional coordination. Following the point of view, the study of Deng & Dart (1994) in Canada to add the fourth component- Profit orientation. Gray et al (1998) were synthesized and build a more general scale with 5 components MO, includes four basic components plus the new component is to Adapt to the business environment (Hou, 2008) 2.2.3. Gaps in the literature Resource-based view (Barney, 1991), competence-based view (Sanchez & Heene, 1996) and market orientation (Kohli & Jaworski 1990; Narver & Slater 1990), was directly addressing the the most basic challenge in the heart of the survival of firms: What creates competitiveness and how can be maintained? On the other hand, within the knowledge and efforts of the author to review both international and Vietnam, so far in the banking sector no empirical studies on the relationship Competitiveness – Business Performance. Researches on competitiveness from the resources, competence and market orientation perspective has not completely solve this relationship. Therefore, this study aims to fill the identified gaps by employing the RBV, CBV and MO of the firm approaches to deveplop intergrative theoretical model that explain the relationships among components of competitiveness and their impacts on business performance. This research also aims to provide empirical evidence by testing the model in the context of Joint-stock commercial banks in Ho Chi Minh city - Vietnam, the area of development and significant changes in the current period of Vietnam. 2.3. Business performance of commercial bank 2.3.1. Concepts of business performance Kaplan & Norton (1992) have defined the business performance of the enterprise is determined from 04 impotent perspectives: financial, customer, internal processes and innovation and learning. Firms used to manage and measure business results to create a consistent understanding of business strategy by transforming strategy into a set of scales measuring business performance. According Waal & Coevert (2007), the result means that continuous process to achieve financial and non-financial targets, to develop skills, abilities and improve 10 customer care and process quality. Thus, the concepts of business performance of Waal & Coevertl (2007) mentioned both financial factors (Kaplan & Norton, 1992) and the process to meet customer demand, product development, and creating the capacity of the firm. It reflects the system of criteria for evaluating the busniess performance and adapt to a dynamic environment 2.3.2. System of evaluation criteria for business performance Yadav et al (2013) summarized the trend of using the ladder measure business performance in two decades, from 1991 to 2011 show the change the pattern from financial to integration perspective (1991 -2000), from strategic viewpoint, the use of technical systems and modeling (2001-2011). The change and the development of the results measurement systems, integrated and dynamic business performance are presented in Figure 2.9. Fig 2.9: Research trends of Performance Management and Measurement Source: Yadav & Sagar (2013) Business results expressed as a multidimensional structure with measuring groups: The firstly, the financial indicators to measure competitiveness and forecast the degree of success of business strategy, as well as ensuring protect the interests of shareholders (Kaplan and Norton, 1992; Neely et al (1995); Waal & Coevert, 2007; Consuegra et al, 2008). The second, operating targets are non-financial indicators in the business process activities to support achieving the profitability targets, including: market share, growth in the size and resources (Kaplan and Norton, 1992; Neely et al, 1995; Waal & Coevert, 2007; Consuegra et al, 2008, Laihonen et al, 2014). Third, customer criteria to assess customer satisfaction and is considered important criteria for evaluating the degree of success of most of the organization's strategy (Kaplan & Norton, 1992; Neely et al, 1995; Waal & Coevert, 2007; Laihonen et al, 2014). Finally, the criteria for innovation and learning through knowledge, skills and attitudes to work of employees is the priority investment because it determines the existence and development of organization (Kaplan & Norton, 1992; Neely et al, 1995; Vorhies & Harker, 2000; Waal & Coevert, 2007). 11 In the banking sector outside the above criteria, the need to add an aspect of measurement in terms of NPL ratio of commercial banks (Tran Huy Hoang, 2008). 2.4. Theoretical model of competiveness of the commercial bank 2.4.1. Conceptualisation of competitiveness components of the commercial bank 2.4.1.1. Manangement capability - MC Management capability refers to the potency of an organisation’s collective management competencies as they can be applied to achieve desired outcomes. Management capability, therefore, does not simply reflect the total sum of a management team’s competencies or required abilities. Rather, management capability describes how effectively the management team puts into practice its combined competencies to deliver business results. Excellence in management capability is an integral marker of strong organisational performance. According to AIM (2012, 2013) The ability of management consists of 4 issues that leaders of corporate governance must be (1) Visionary and strategic leadership, (2) Performance leadership, (3 ) People leadership and (4) Organizational capability. According to Kivipold & Vadi (2010), leader in the organizational level is determined by the ability to lead to detect and respond to changes in the external environment by maintaining the main goals of the organization. Research of Cameli & Tishler (2004) also confirmed the ability of management and human resources have a positive impact on business performance of the administrative organization in Israel. Study of Kivipold & Vadi (2013) about the leadership capacity of the financial services organizations in Estonia have shown that leadership capacity to positively impact business performancc of enterprises. 2.4.1.2. Marketing Capability – MAC Marketing capability is integrated process designed to apply the knowledge, skills and resources of the firm to meet market demand, enabling firm to increase the value of products and their services and competitive needs (Day, 1994; Vorhies & Harker, 2000). Marketing capability of the firm is expressed through continuous monitoring and respond to the market changes. Such as customers, competitors and adapt to the business environment (Day, 1994; Vorhies & Harker, 2000; Srivastava et al, 2001; Homburg et al, 2007; Thọ & Trang, 2008; Kotler & Armstrong, 2012) Thus, marketing capabilities is the ability to monitor and respond to changes in the market, including customers, competitors, activities coordination between functional departments (Kohli & Jaworski, 1990; Narver & Slater, 1990), adapted to the business environment and quality of relationships (Vorhies & Harker, 2000; Hou, 2008; Life & page, 2008). The experimental studies have not fully confirmed the positive relationship between marketing capabilities and business performance. 2.4.1.3. Financial Capapbility – FC Financial viability is a measure of the strength of a bank at a particular time. To evaluate the effectiveness of a financial commercial banking, the criteria used CAMEL – (1) Capital adequacy, (2) Asset quality, (3) Management competence, (4) Earning strength and (5) Liquidity risk. There are many research about the relationship between financial capability of banks to business performance that have 12 the financial ability to influence the performance of commercial banks such as: Baral (2005), Trinh Quoc Trung (2005); Le Dinh Hac (2006), Nguyen Thi Quy, (2008), Kouser et al (2011), Nguyen Thu Hien (2012), Phan Thi Hang Nga (2013). However, these are identified as the main subjective, not quantifying its impact on business performance and how strongly? In other words, previous studies have not tested this relationship experimentally. 2.4.1.4. Innovation Products-Services Capability - IPSC Innovation products and services demonstrates the process encourage continuous innovation of products and services in creating new value for the firm; the ability of enterprises recommended new production processes, new products or new ideas to increase the competitive advantage of the firm (Damanpour. F, 1991). Deshpandé & Farley (2004) suggest that the introduction of new products or new services to the market will reflect the innovative capacity of the business. Anderson & Narus (1998) refers to the interaction between innovation capacity and added value for customers as cost, time, etc ... The innovation capacity is the means to achieve these improvements and invented for the firm, it is the desire of firm to overcome these practices, habits are no longer appropriate in the business and pursue innovative business ideas, consistent with competition requirements (Menguc & Auh, 2006). The research results of Tomas et al (2004), Anabel et al (2013) have confirmed the innovation capacity an enterprise higher than other firms in the industry will be higher competitiveness and innovation capability product - service has a positive influence on the business performance of the firm. 2.4.1.5. Organization Service Capability – OSC Organization service capability to meet customer requirements and is considered an important component of service quality in the study of Newman (2001), Wang et al (2003), Tahir & Bakar (2007 ), Ladhari et al (2011). “The ability to serve the wishes expressed by the willing of staff and provide timely service to customers in order to bring satisfaction to customers” (Tahi & Bakar, 2007). Organizationa service capability of the bank include: (1) Attitude and services staff: expressed desire and willingness of staff providing services to clients; (2) The capacity of staff in service: professional skills of staff to implement customers' requirements; (3) Trust: creating confidence for customers that trust companies (Tahir & Bakar, 2007). The research results of Parasuraman et al (1988), Karatepe et al (2005), Tahir & Bakar (2007), Ladhari et al (2011) about the service quality of commercial banks has shown that enterprises ability to organize good service will create competitive advantage and bring products to customers faster and more efficiently. 2.4.1.6. Risk Management Capability – RMC Banking is one of the sectors facing a lot of risk. “Never before matters improve risk management of the banking system has become so urgent” that is recognized by the banker Nguyen Thi Thanh Huong (2013) with the risks of the operation banks incurred in recent years. Hubert Knapp (2012) - CEO of Financial Advisory Services at Ernst & Young in Vietnam, said: “These limitations in the administration of the credit risk of commercial banks in Vietnam related to the first issue of culture, which is the habit of the staff working in risk management or related 13 officers risk management is often regarded as routine work, nature more procedures. For example, when a customer to apply for loans, there will be a list of prerequisite checking and only check it, see something there, something no ... Actually, governance risk is not so simple. Second, many banks in Vietnam are still regarded risk management segment is only supporting activities. Really this is the wrong perspective. The recent financial crisis showed that banks underestimated the task of risk management will lead to a huge collapse”. Lamarque (2005), the results underline the bank's profitability depends on the coordination of risk management activities in the value chain. Especially within the administration of Assets - Liabilities and process customer transactions. Thus, risk management capabilities have an impact on the business performance of the bank. 2.4.2. Theoretical model and hypothese Table 2.2: Summary of the research hypothesis Research hypothese Relationship H1 Management capabilies + Bank Performance H2 Marketing capabilies + Bank Performance H3 Financial capability + Bank Performance H4 Innovation Product and Service capabiltiy + Bank Performance H5 Organization Services capability + Bank Performance H6 Risk Management capability + Bank Performance Source: Development for this study CHAPTER THREE: METHODOLOGY 3.1. Quanlitative research paradigm 3.2. Operationalisation of measures 3.2.2. Development scale measuring competitiveness 3.2.2.1. Measuring management capabilities Management capability refers to the potency of an organisation’s collective management competencies as they can be applied to achieve desired outcomes. 14 Management capability therefore, does not simply reflect the total sum of a management team’s competencies or required abilities. Rather, management capability describes how effectively the management team puts into practice its combined competencies to deliver business results. The management capability consists of 4 issues that leaders of corporate governance must be (1) Visionary and strategic leadership, (2) Performance leadership, (3 ) People leadership and (4) Organizational capability (O'Connor & Quinn, 2004; Morrill, 2007; Bolden, 2011; AMCI, 2012; Kivipõld & Vadi, 2010). This study uses scales of AIM (2012, 2013) and is adjusted to suit the banking sector with 20 items. 3.2.2.2. Measuring marketing capabilities Marketing capability is integrated process designed to apply the knowledge, skills and resources of the firm to meet market demand, enabling firm to increase the value of products and their services and competitive needs (Day, 1994; Vorhies & Harker, 2000). This study used the scale of Vorhies & Harker (2000), Homburg et al (2007), Nguyen Dinh Tho & Nguyen Thi Mai Trang (2008) for marketing capability consists of 4 components (1) customer responsiveness, (2) competitor responsiveness, (3) Adaptation to the business environment (Srivastava et al, 2001; Hou, 2008), (4) relationship quality (Nguyen et al, 2004; Srivastava et al, 2001). The scales are adjusted to suit the banking sector with 19 items. 3.2.2.3. Measuring financial capability Financial viability is a measure of the strength of a bank at a particular time. To evaluate the effectiveness of a financial commercial banking, the criteria used CAMEL – (1) Capital adequacy, (2) Asset quality, (3) Management competence, (4) Earning strength and (5) Liquidity risk and discussion specialist opinion, the scale of financial the ability are evaluated include: increase in equity, the ability manage asset quality, capital adequacy ratio. In addition, the financial structure ensures reasonable profit target and meet the liquidity in financial management. Thus, the scale of financial capability are summarized in 5 items. 3.2.2.4. Measuring Innovation Product and Service capability Innovation products and services demonstrates the process encourage continuous innovation of products and services in creating new value for the firm; the ability of enterprises recommended new production processes, new products or new ideas to increase the competitive advantage of the firm (Damanpour. F, 1991). Deshpandé & Farley (2004) suggest that the introduction of new products or new services to the market will reflect the innovative capacity of the business. This study used the scale of Damanpour (1991) and Deshpande & Farley (2004) is adjusted to suit the financial and banking sector with 7 observed variables. 3.2.2.5. Measruing Organasational Sercice capability Organization service capability to meet customer requirements and is considered an important component of service quality in the study of Newman (2001), Wang et al (2003), Tahir & Bakar (2007 ), Ladhari et al (2011). Organizationa service capability of the bank include: (1) Attitude and services staff: expressed desire and willingness of staff providing services to clients; (2) The capacity of staff in service: 15 professional skills of staff to implement customers' requirements; (3) Trust: creating confidence for customers that trust companies (Tahir & Bakar, 2007). This research used the scale of Tahir & Bakar (2007) and Ladhari et al (2011) is modified to suit the banking sector with 7 items. 3.2.2.6. Measuring Risk management capabilty Risks in the banking business are understood to be unexpected events which occur will lead to the loss of bank assets, the actual profit decline than expected or have to spend an additional costs to be able to fulfill a certain financial transactions. Through discussion specialists opinion, the scale and risk management capability are measured include: (1) The interest of bank management to risk management activities, (2) ability to handle good risk incidents, (3) Knowledge and experience of managers in dealing with risks, (4) control of banking risks and (5) the process of training to improve governance risk to personnel. Therefore, risk management capability developed include 5 observed variables. 3.2.3. Development scale measuring Business performance of the commercial bank Scale business performance of commercial banks was discussed with specialists agree that the results must be evaluated on different aspects instead of just focusing on financial targets. Business results include financial elements such as; operational and internal processes; customer satisfaction; learning and development (Kaplan & Norton, 1992, 1996; Neely et al, 1995; Waal & Coevert, 2007; Laihonen et al, 2014). Specialists requested to consider to bad debts in business performance. Thus, the scale concept business results of banks including 5 items 3.3. Pilot survey 3.4. Main survey 3.5. Results of the pilot study The measures were refined via Cronbach’s alpha reliability and EFA, using the data collected from 121 vice director of the branch of the joint-stock cmmercial bank in the pilot study. 3.5.1. Cronbach’s Alpha reliability The results indicated that all scales satisfied the requirement for reliability. Specifically, the Cronbach’s alphas of the components of bank competitiveness were 0.801 to 0.912. The Cronbach’s alpha of performance leadership pool is the lowest (α=0.801) and innovation products-services capability is the highest (α=0.912). Considered item-total correlation shows that they have the closely relationship (CUSRE05 is lowest, r= 0.520 and ACBE04 is highest, r=0.848) 3.5.2. Eploratory factors analysis -EFA 3.5.2.1. The results of EFA management capabilities Conceptual theoretical model Management capabilities is a multidemension concept with 4 latent concept: visionary and strategic leadership; performance leadership; people leadership and organizational capability. However, the results of EFA with data collected from pilot survey showed three observed variables were 16 deleted due to their low factor loadings PEL03, PEL05 and PEOL01 (0360; 0373; 0495 <0, 50), respectively. There is combined between the two concepts visionary and strategic leadership with performance leadership. The concept of people leadership with organizational capability as a concept. to confrimed the value of the scale, the authors have conducted exchange with three specialist the meaning of the underlying concepts of management capabilities. The idea to have said that it was reasonable for the actual management capabilities present only on two aspects: (1) leadership capacity and (2) the organization and use of human resources in the bank. Analysis of the questionnaires shows that there is a reasonable between theory and practical questions. Thus, the concept of management capability will be adjusted in the theoretical models include two underlying concept is renamed: leadership capability and organizational human resource capability of the bank. The second of EFA results indicator that the Barlertt's results showed very high significance Sig=.000, KMO = .927 (> 0.5). Initial eigenvalues = 1.458 (1st was 1,462) and the total variance extracted is 63.781% (1st is 63 246%). Factor loadings of high value (0534 -> 0959). Accordingly, these measures were used in the main survey 3.5.2.2. The results of EFA marketing capabilities The first EFA results indicate that one item measuring marketing capabilies (CUSRE05) was deleted due to its low factor loadings and extract to two components ( ACBE and SQ). The second EFA results show that RQ01 was deleted cause of low factor loadings (0.455<0.50). The EFA results of marketing capabilies extract to four components. Total variance extracted is 72.916%, initial eigenvalues = 1.028. Barlett’s have high significant (Sig = 0.000) and KMO =0.904>0.50. All the scales satisfied the requirement for factor loadings (>0.5). Accordingly, these measures were used in the main survey 3.5.2.3. The results of EFA unidimensionality The EFA results of uindemension (financial capability, innovation products – sevices capability, organizational service capability an risk management capability) with Promax rotation show two items (IPSC07 and OSC01) were 0.480, 0.477, respectively and were deleted due to low factor loadings. The second FEA results uindemension idicate total variance extracted was 60.484%, initial eigenvalues = 1.024, KMO = 9.00 and Barlett’s had significant (Sig=0.000). All the scales remain satisfied the requirement for factor loadings (>0.5). 3.5.2.4. The results of EFA bank performance Business performance measured by 5 items from BP01 to BP05 was analysis for dependend variable. The EFA results indicate that all the scales All the scales satisfied the requirement for factor loadings (>0.5), total variance extracted was 69.380% (>50%), initial eigenvalues = 3.469 (>1.00). In summary, through pilot assessment by Cronbach's Alpha reliability and EFA, the scale of the unidemansions are satisfactory. Scale multidemension was adjustment of the underlying concepts. Scale concept management capabilities include: leadership capability and organizational human resource capabilities. Scale concept marketing capabilities with four concepts: customer responsiveness, 17 relationship quality, competitor responsiveness and adaptation to the business environment. The scales after pilot analysis to be used in formal research through CFA and SEM in the main study. CHAPTER: FINDINGS AND DISCUSSIONS 4.1. Main study sample profile Table 4.1: Sample profiles Chỉ tiêu Sex Age Total Male Female < 30 30-45 45-60 Count % Eduaction Bachelor 55 48 3 69 31 103 32.3% After bachelor 132 84 0 161 55 216 67.7% Experiences Under 5 years 10 3 3 6 7 16 5.0% From 5 to 10 109 90 0 161 36 197 61.8% Above 10 years 68 39 0 63 43 106 33.2% Management experience Under 2 years 17 14 3 19 10 32 10.0% From 2 to 5 101 58 0 114 45 159 49.8% From 5 to 10 57 48 0 77 27 104 32.6% Above 10 years 12 12 0 20 4 24 7.5% Total Count 187 132 3 230 86 319 100.0% % 58.6% 41.4% 0.9% 72.1% 27.0% 100.0% Source: Results of survey data processing 4.2. Measurement model development 4.2.1. CFA results for Multidimentional construct 4.2.2. CFA results for Unidimentionality 4.2.3. CFA results for Commercial bank competitiveness 18 Fig 4.9 show that the CFA results of competeiveness of commercial banks indicate that the measurement model of competetiveness pool received an acceptable fit the data: χ2/df = 1.689 <2, χ2=1415.371, TLI = 0.926; CFI = 0.932, RMSEA = 0.047 < 0.05. In addition, all factor loadings were high (from 0.68 to 0.93) and significant (p=0.000). 4.2.4. CFA results for bank business performance 4.2.5. CFA results for saturated model The saturated model (final measurement model) received a good fit to the data: χ2=1804.129 (p=0.000), χ2/df = 1.715 <2, CFI = 0.923, TLI =0.918, IFI =0.924 were above 0.90 and RMSEA = 0.047 < 0.05. The factor loadings of all items were high and substantial (the lowest loading was 0.68), and all were significant (p=0.000). These findings indicate that the scales measuring all constructs used in this study were unidimensional and the within method convergent validity was achieved. 4.3. Structural Equation Modeling and Hypothesis testing 4.3.1. Theoretial model testing The proposed model received a good fit to the data: Chi-square=1804.129 (p=0.000), CMIN/df=1.715 <2. The indexs CFI=0.923, TLI=0.918 were higher 0.90 and RMSEA = 0.047 <0.05. It is noted that no improper solution was found in any model: Heywood cases were absent; all error-term variances were significant; and, all standardized residuals were less than /2.58/. Table 4.10 shows the unstandardized estimates of the structural paths and Figure 4.12 presents the standardized ones. The 19 estimation results show that the relationships are the same dimension and impact directly on business performance of commercial banks in Ho Chi Minh City. The SEM results showed that all model assumptions in the study are reaching significance. The estimation results (unstandardized) weights are positive (+) and a statistically significant level (particularly innovation products - services capability at the level of significance p<0.1), suggesting that the concept in theoretical models: capability of management, marketing capability, financial capability, innovation products – sevices capability, organizational service capability and risk management capability were to impact business results of joint stock banks. This was the conclusion of the scale of the concept of model worth linking theory Table 4.10: Unstandardized structural paths in the model Paths Estimate S.E C.R P Bank performance <- Risk management capability 0.270 0.080 3.368 *** Bank performance <- Organizational Service capability 0.074 0.075 0.986 0.024 Bank performance <- Innovation products /Services capability 0.068 0.102 0.669 0.053 Bank performance <- Financial capability 0.237 0.060 3.980 *** Bank performance <- Marketing capabilities 0.350 0.181 1.934 0.003 Bank performance <- Management capabiliies 0.164 0.103 1.592 0.011 Source: Results of survey data processing 4.3.2. Bootstrap testing This study, the authors performed by sampling Bootstrap repeat with size N = 1000. Results showed that bias and errors of bias standard deviation (SE-Bias) appear but not great though. The absolute value of CR << 2 should be able to confirm the 20 bias is very small and not statistically significant at the 95% confidence level. Thus, proving the model estimates are reliable. 4.3.3. Hypothesis testing After the overall structural model fit was assessed and confirmed, the next step was to examine the individual parameter estimates to test the causal relationships. The results of the structural links between the six components of competitiveness and business performance are displayed in Figure 4.12 and table 4.12. All six hyposses have positive effects on business perfomance. Especially, the Risk management capability was found to have a strong and positive impacts on business performance (ß=0.310), followed by marketing capability (ß=0.307), the financial capability is the third (ß=0.304). Management capability, innovation product – service capabilty and Organizational service capability also impact positive on business performance. But, the innovation product – service was found to have weakness effects to business performance (ß=0.078) and statistical significance level at 90%. Thus, the hypothesis H1, H2, H3, H4, H5, H6 are accepted in theoretical research models. Hypothese paths Estimate S.E C.R p H1 Bank performace <- Management capability 0.164 0.103 1.592 0.011 H2 Bank performace <- Marketing capability 0.307 0.181 1.934 0.003 H3 Bank performace <- Financial capability 0.304 0.060 3.980 *** H4 Bank performace <- Innovation Product/ Service capability 0.078 0.102 0.669 0.053 H5 Bank performace <- Organizational Service capability 0.081 0.075 0.986 0.024 H6 Bank performace <- Risk management capability 0.310 0.080 3.368 *** Source: Results of survey data processing CHAPTER FIVE: CONCLUSIONS AND IMPLICATIONS 5.1. The results 5.1.1. Measurement model The results of the measurement model after adjustment, additional shows are achieving scale reliability, convergent validity, discriminant validity and nomological validity allows. Results expertise scales the following specific meanings: Firstly, the research methodology, this study contributes to the unique factors of scale competitiveness constitute the application for commercial banks, in the most dynamic economic and financial center of Vietnam - Ho Chi Minh City. This is an important contribution in research areas strategic management for banks and firm in the different business lines. In particular, the scale used in the international market and other industries can also be adjusted and applied to the banking sector. Table 4.12: Standardized structural paths in the model 21 Second, this study used two scales multidimension constructs are: (1) The management capability based on the concept of management capabilities of AMCI (2012, 2013) include 4 contructs: Visionary & strategic leadership, performance leadership, people leaderhsip and organizational capabilities with 20 items. The results showed that two constructs are formed as leadership and organizational human resource capabilities with 13 items. This is a new point in this study, because of the scale used in the study of AIM (2012, 2013), just stop at the descriptive statistical results and do not have the testing for this scale; (2) The marketing capability the scale is based on four dimensions from research Vorhies & Harker (2000), Srivastava et al (2007), Nguyen Dinh Tho and Nguyen Thi Mai Trang (2008). There are similarities with the research of Vorhies & Harker (2000) and Tho & Trang (2008) with 4 components are customer responsiveness, relationship quality, competitive responsiveness, environmental adaptation and impact rather strong business results of banks. Third, the results of testing unidimension scales are reliability and convergent validity has contributed to more easily measure the competitiveness factor. For the scale of the financial capability has confirmed the reliability and value of converged of CAMEL model. As for innovation product - service capability and organizational service capability have confirmed the value of this scale appropriate for the banking sector (from the study of Damanpour. 1991; Desphande & Farley. 2004; Tahir & Bakar. 2007, Ladhari et al, 2011). Fourth, the study results also confirm that the study of the relationship between competitiveness and business results of commercial banks can be measured by the question acts through Likert scale from the subjective opinion of the bank executives instead of objectively measured by financial results. As Uncels (2000) confirmed that based on financial indicators is too difficult especially developing country because they are afraid to publicly available financial indicators and indicators of their competitiveness. Finally, the results of this measurement model to help researchers in the field of strategic management used measurement scales in study reliability and validity when used for measurement. If this is not done properly, the value of the research results will be a matter for retesting 5.1.2. Theoretical contributions This study attempts to expand extant literature in competitiveness and strategic management by making several significant contributions. First, this study build new scale is risk management capabilities with 5 items. Research results confirmed the value of the scale with the level of convergence, discriminant validity, reliability and unidimension that the study previous not done. It makes the premise for the next study to prove the value of this scale Second, the results also confirmed that the risk management capability has the strongest impact on business performance. In addition, during the study, the banking market, are facing financial collapse of the state credits. Perhaps these are the reasons which led to findings that differ from studies conducted in the developing countries. 22 Therefore, the research results also reflect the status of the current phase of the banking business. Third, research results have identified the impact of individual components of competitiveness to the business performance of banks which that previous studies unresolved. Fourth, research results have identified the priority order of the components in the model study. Such as: The Risk management capability was found to have a strong and positive impacts on business performance (ß=0.310), followed by marketing capability (ß=0.307), the financial capability is the third (ß=0.304). Management capability, innovation product – service capabilty and organizational service capability also impact positive on business performance. But, the innovation product – service was found to have weakness effects to business performance (ß=0.078). These results help managers need special attention to risk management capability, financial capability and marketing capability in making operating decisions to discover, maintain and develop the competitiveness and business performance of banks. Finally, the research results have been filled gaping slit study while coordinating approach from internal factors, market-oriented research in competitiveness. 5.2. Pratical implications 5.2.1. Improving financial capability The study results showed that the financial capabiliity of banks have strong impact (ß = 0304) to business performance of commercial banks. Improved financial and capital strong enough and efficient matching process of growth and development of the commercial banks to ensure that competitiveness, scalability and service development, technology innovation,. . . 5.2.2. Improving organizational and humnan management The research results show that management capability (including leadership skills and ability to organize people) have positive impact to business performace (ß = 0.164). it enables bank managers need to realize and more interested in leadership and management. Therefore, to improve business efficiency and competitiveness, banks must: First, improve the quality management team. Second, improve the quality and operating efficiency. Thirdly, improve the quality of human resources. 5.2.3. Improving marketing capability The research results confirm the marketing capability impact (ß = 0.307) to the business performance of commercial bank. So, the commercial bank need to invest, nurture and develop this capability through the follows: First, implement client policy. Second, strengthen the consulting and customer support. Thirdly, keeping the satisfaction and strengthen cooperation with its customers. Finally, often collect information about the macro environment and competitors to be able to track changes in the macro environment and competition. 5.2.4. Improving customer service quality and product diversification 23 The study results also showed the ability to develop products and organizational capabilities of the banking service remains limited. Its impact on business performance of the bank is relatively low (ß = 0.078 and ß =0.081). Therefore, banks must change their mode of operation, implementation of product diversification and focus on service development as follows: First, diversification of products - service and product development of modern banking. Second, improve the quality of customer service. Third, expand the branch network customer convenience and improve service capacity. 5.2.5. Improving risk management capability The study results showed that in the current stage, risk management capability with strongest impact (ß = 0.310) to business performance of the bank. To improve risk management capability ensures the soundness of its operation, requires the banks to pay attention to the following issues: First, there should be new thinking about risk management in banking activity, especially in credit risk management from the most senior executives of the bank. Second, improve the quality of appraisal and customer credit ratings to risk management. Thirdly, the need to raise the importance of risk management functions in banking management activities instead it merely support functions. Fourth, design patterns effective risk management as recommended by the Bank for International Settlement - BIS issued in June 2012, banks should build risk management model under three fashion model room protection (1) Managing product lines, (2) risk management functions operate independently and (3) the internal audit function. 5.3. Limitation of the study and future research First, the research model proposed in Chapter 2 stop at 6 components of competitiveness and analyze the impact of these factors to business performance of commercial banks in the city. Ho Chi Minh City. Second, the scope of the study only assessed the competitiveness of the bank executives in Vietnam not represent the characteristics of the competitiveness of Vietnam commercial banks. Consequently, there should be a study to test the model in other areas such as Hanoi, Da Nang, Can Tho or across the country to increase the generalizability of research models Third, this study evaluated the competitiveness of the banking sector but no evaluations from customers. Therefore, it is still subjective and awareness from the perspective of the bank executives. On the other hand, respondents are director of the branch, so in the next study should extend respondents include leaders at head office and branches will have more accurate information on energy awareness competitiveness. CONCLUSION The aim of this study is to explore and test and adjust the components of the competitiveness of commercial banks and the impact of these factors on business performance of commercial banks. The study is based on competitiveness theory comes from the based-resources and based-competence perspective of enterprises and 24 the competitiveness of the market orientation approach. To review, evaluate and develop applied research models for joint-stock commercial bank in HCM City. The empirical results of SEM analysis of data collected from 319 usable responses confirmed that the model is workable in the context of Ho Chi Minh city - Vietnam, an emerging less developed country. Research methodology used to evaluate and test the scale and the theoretical model in the study included three main steps: Pilot study (theoretical study and discussion expert opinion), research to assess and explore the elements of competitiveness of commercial banks. This study was conducted on 121 direct investigations deputy director of the branch of commercial banks in Ho Chi Minh city. The main study is carried out after the adjusted scale results from pilot study was carried out by quantitative methods with n = 319 through direct investigations branch director. This study tested the scale by CFA and SEM (results presented in chapters 3 and 4). Chapter 4 analyzes and testing of scale models of measurement and theoretical research. The results showed that the scale studies to achieve reliability, convergent validity, discriminant validity and nomological validity allows. Research has developed new scale (risk management capability) of the competitiveness of commercial banks and testing showed that the risk management capability with the most powerful impact on business performance of banks commercial. Moreover, the scale of management capabilities with the initial proposal consists of 4 elements (Visionary & strategic leadership, performance leadership, people leadership and organizational capability), the results showed that 2 factors are formed as leadership and organizational human resource capabilities. Additionally, research results determine the importance and extent of influence of each factor of competitiveness to business performance of commercial banks. Therefore, the implication for the bank executives in the process of developing competitive strategies and business operating to enhance business performance of banks.