BUSINESS RESEARCH METHODOLOGY
Page 0 OPEN UNIVERSITY MALAYSIA ASSIGNMENT FACTORS MARKET IMPACT BUSINESS RESULTS
OF THE STATE OWNED COMMERCIAL BANK
IN HO CHI MINH CITY

Associate professor: Dr. NGUYEN THE KHAI
Prepared by: NGUYEN DUY MINH
ID: 14968
Class: MBA.OUM0313–K08B

HCMC AUGUST 2014

BUSINESS RESEARCH METHODOLOGY
Page 1


2.1 Overview of market–oriented business result 9
2.1.1 The concept of business result 9
2.1.2 The concept of market orientation 9
2.2 The relationship between business result and market orientation 11
2.3 Research models relates to business results according to market orientation 14
2.4 Research factors in accordance with orienting market impact on business results of
state–owned commercial banks 17
2.4.2 Factors in accordance with market orientation impact business results of the
system's state–owned commercial banks 22
2.4.2.1 Actual business results of Vietnam's banking system 22
2.4.2.2 Factors affecting the business results of the state–owned commercial bank
according to market orientation: 24
2.5 Recommended models and hypotheses 29

BUSINESS RESEARCH METHODOLOGY
Page 3

CHAPTER 3: RESEARCH METHODOLOGY 33
3.1 Research Process 33
3.2 Research Methodology 34
3.2.1 Qualitative Research 34
3.2.2 Quantitative Research 34
3.3 The Sample 35
CHAPTER 4: RESEARCH RESULT 37
4.1 The inspection 37
4.2 Database description 43
4.3 Correlation coefficient analysis 44
4.4 Regression method 49
CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 61
5.1 Conclusions from the research 61

particular should catch up with the trend, or creating customer demand to improve
operational efficiency and competition capacity according to market principles.
From the practical study on "The market–oriented factors that affect to
business results of the state–owned commercial banks in the Ho Chi Minh City” to
provide recommendations for improving business results to state–owned commercial
banks according to market orientation.

1.2 Objectives of the Assignment
The Assignment focuses on 2 main objectives:
– Identify market– oriented market factors that have impact on business results
of the state–owned commercial banks in Ho Chi Minh City;

BUSINESS RESEARCH METHODOLOGY
Page 5

– To propose recommendations for improving business performance through
market–oriented factors for the state–owned commercial banks in Ho Chi
Minh City;
However, with limited time, Assignment only offer research model and run a
number of variables on the basis of SPSS software to analyze and to give research way
to develop the assignment in the next assignments.

1.3 Object and scope of research
The study focused on the study’s object of market–oriented factors that have
impact on business results of the state–owned commercial banks
1
in Ho Chi Minh City
including:
The survey was conducted on the hierarchical management and direct sales staff
of the state–owned commercial banks in Ho Chi Minh City;

business results and the market –oriented factors. The scales applied in research are
scales of (Narver, JC and Slater, SF, 1990), (Deng, S. and Dart, J., 1994), (Gray, B., et
al., 1998) and (Wua, SF and Cavusgil, T., 2006).
– Stage 2, quantitative research, which was carried out by quantitative research
methods used to test the scale of the market–oriented factors affecting to business
results that have been explored and found during qualitative study period.
– Formal questionnaire after adjusting scale in qualitative research phase is
applied to conduct direct quantitative survey with respondents. Next students
start measuring the impact of these factors to the business results of some
State–owned commercial banks. The qualified questionnaire will be entered
directly on SPSS software to create analysis data for the research project.
The scales used in this study was assessed through Cronbach’s alpha reliability
coefficient. SPSS 17 and Excel 2013 is used to analyze the data.

1.5 Layout of the assignment
Chapter 1: Overview
This chapter gives a brief overview on the assignment, objectives, objects, scope,
methodology and content of the assignment.
Chapter 2: Theoretical Foundations of market–oriented factors affecting to
business results

BUSINESS RESEARCH METHODOLOGY
Page 7

Chapter 2 introduces the theoretical basis on market oriented factors, business
performance and measuring methods for these factors to improve business results and to
propose research model and hypotheses of the assignment. It also provides an overview
of researches on the impact of market orientation to business performance in the
enterprise.
Chapter 3: Research Methodology

during the integration period.

BUSINESS RESEARCH METHODOLOGY
Page 9 CHAPTER 2: THEORETICAL FOUNDATIONS OF MARKET–ORIENTED
FACTORS AFFECTING TO BUSINESS RESULT

2.1 Overview of market–oriented business result
2.1.1 The concept of business result
Business Result is defined as the achievement of the enterprise’s goals and is a
measure of business performance in each period. Business result is measured by
achieved profit, growth, market share, sales and other strategic goals (Homburg, C. et
al., 2007); (Yeniyurt, S., et al., 2005). (Hughes, M., et al., 2007) in their study give 2
ways to measure business result such as: customer performance and product
performance. In which, customer performance is often measured by customer attraction
and customer retention (Hansotia and Behram, 2004); (Jayachandran, S., et al., 2004);
(Chandon, P. et al, 2005). Therefore, according to (Hughes, M., et al., 2007)
performance measurement is based on what effect the enterprise create to create the
attraction, retention, the reuse of the customer and create loyal customers. Meanwhile,
the product performance is measured by the success of the enterprise relying on sales
and market share of product/service provided into the market.
Business effectiveness is defined as the degree on which achieved objectives
based for addressed issues. In contrary to the performance, effectiveness is determined
without taking into account cost. While performance means “correct performance”,
effectiveness means “doing right work”.
2.1.2 The concept of market orientation
Market orientation is one of the most important concept of modern marketing
(Pandelica, A. et al., 2009). This term was first known in developed countries from the

information relating to current and future customers’ need; the synthesis and popularity
of such information to the departments; planning and implementing synchronous
coordination among functional departments within the enterprise to respond to the
market opportunities. Thus, market orientation include (i) Creating information, (ii)
Spreading information and (iii) Responding to customer demand.
School of approach towards enterprise’s culture of Narver, Slater said that
market orientation is a kind of business culture which can create a foundation for better
value generation for our customers and the enterprise’s success (Narver, JC and Slater,

BUSINESS RESEARCH METHODOLOGY
Page 11

SF, 1990). This culture is a combination of three components: (i) customer orientation,
(ii) competitor orientation and (iii) The interfunctional coordination. Strategy–focused
approaching school of Ruekert, baseing on the study of Kohli & Jaworski and Narver
& Slater to focus on analysis of economic unit rather than analyzing individual markets.
According Ruekert external environmental factor which has biggest influence to the
market orientation is the client (Ruekert, 1992).
School of approach according to customer orientation of Deshpande and his
colleagues considered market orientation similar to customer orientation. They also
refuted the factor of competitor orientation in concept of orientation market factors and
recognized the interfunctional coordination suitable with customer orientation and is
one part of a customer–oriented. Deshpande’s research team also considered customer
orientation is one part of the overall corporate culture (Deshpande, R., et al., 1993).

2.2 The relationship between business result and market orientation
Market orientation is always valuable to enterprise because it will guide them to
create superior value for customers (Slater, SF and Narver, JC, 2000) and has been
proved to have positive impact to the enterprise’s business operation results (Jaworski,
BJ and Kohli, AK, 1993); (Baker, W.E. and Sinkula, J.M., 1999); (Baker, W.E. and

customers now and in the future, what customers expect today and in the future as well
as what customers feel at this time and can feel the latter to satisfy their need.
Competitor orientation is explained as a salesperson can understand the strengths
and short–term weaknesses and three behavioral components of market orientation (for
example: (Houston, 1986); (Kohli, AK and Jaworski, BJ, 1990). To survive long term
from the current competitive situation, the enterprise must think about further prospect.
To prevent their competitors from surpassing in creating added value for customers, the
enterprise must be persistent in creating and providing added value for customers, this
requires suitable investment and strategy. (Anderson, 1982) emphasized that a long–
term investment perspective should be interpreted as a market orientation.
The Interfunctional coordination is a combination of the enterprise’s resources to
create superior value for target customers. Any stages in the customers’ value chain
create opportunities for salesperson to provide value to customers. So any individual in
any the enterprise’s functional units can also potentially contribute to the creation of
value for customers (Porter, 1985), and this effort is a specific effort of all functional

BUSINESS RESEARCH METHODOLOGY
Page 13

units not from any one unit separately (Webster, 1988). This was also shared by
M.Porter when he came Vietnam that one of the biggest weaknesses of Vietnamese
enterprise is too internal competition.
The interaction among the enterprise resources in creating added value for
customers has a close relationship with both market orientation and competitor
orientation. Starting from the nature of creating superior value for customers, the
mutual dependence of the marketing function with other functional units must be
coordinated systematically according to the enterprise’s marketing strategy (Wind, Y.
and Robertson, TS, 1983).
Once the functional units in the enterprise do not have good tradition of
interaction, supporting and leader must implement the way to erase the barrier between

especially state–owned commercial banks, which are considered as less sensitive with
the change.

2.3 Research models relates to business results according to market orientation
Currently, there are many researches about the impact of market orientation on
business performance of enterprises all over the word. Some typical research models
are as follows:
– Research 1: An in–depth study of the relationship between market orientation
and business performance ("A meta–analysis of Relation between Market
Orientation and Business Performance: Evidence from five Continents"),
Cynthia Rodriguez Cano, Francois A.Carrillat, Fernando Jaramillo (2003).
The objective of this study was to clarify the relationship between market
orientation and business performance relationship is positive and constant
throughout the world. One of the unique contributions of this study is that the
sampling was carried out in 23 countries throughout 05 continents. The effect
diminishes with objects such as business (profit and non–profit), type of
industry (manufacturing and services), social and economic development
(GDP, HDI and measuring individual culture by Hofstede). Stronger
correlation of the relationships between market orientation and business
performance has been explored toward non–profit organizations compared
with profit ones and production compared with services.
Research model of Cynthia Rodriguez Cano and his colleagues focused on

BUSINESS RESEARCH METHODOLOGY
Page 15

testing the relationship between market orientation and business performance, the
authors offer the hypothesis as follows:
 There is a positive relationship between market orientation and business
performance

tools of market orientation of enterprise developed by 03 different researcher
groups in the late 1980s. This based on the new research of the author over
82 managers from 27 companies in America and Europe. The author has
discovered that all three scales are reliable and consistent. The scales seem to
be generalized globally, both in terms of reliability and performance
prediction. Finally, the author has compiled a scale to measure 10 variables
based on a more detailed definition of market orientation as "the set of
processes and activities directly multifunctional creating and satisfying
customers through reviews price needs on an ongoing basis”
– Research 4: Improving the efficiency management of enterprise in the
hospitality sector according to market orientation, Lai Van Tai and Hua
Kieu Phuong Mai, 2007 to assess the level of management according to the
market orientation of tourism hotel businesses in Ho Chi Minh City and also
determine the effect of each market orientation component on business
performance of enterprise.
In which Lai Van Tai and Hua Thi Kieu Mai tested the following hypotheses:
 There is a positive correlation between customer orientation and business
performance;
 There is a positive correlation between orientation competitor orientation
and business performance;
 There is a positive correlation between the interaction of the functional
units and business results;
 There is a positive correlation between profit orientation and business
performance;
 There is a positive correlation between response sensitivity and business
results;
Regression analysis results of this study show that, in the hospitality sector, of
the components of market orientation, sensitive response is component having the most

BUSINESS RESEARCH METHODOLOGY

National Assembly passed the Law on the State Bank of
Vietnam and the Law on Credit Institutions (dated 12/02/1997) and takes 1
Website: www.sbv.gov.vn/introduce.asp

BUSINESS RESEARCH METHODOLOGY
Page 18

effect from October 1, 1998; established House Development Bank of
Mekong Delta (Decision No. 769/TTg, dated 18.09.1997). This is also the
year when the financial crisis in East Asia happened, which had a negative
impact on Vietnam's banking system, after this period, a number of joint–
stock banks operating weak were rearranged. From more than 50 joint–stock
commercial banks, by the end of 2004 only left 37 banks;
– 2000: Restructuring finance and operation of state–owned commercial banks
and the joint–stock commercial banks. In particular, there was companies in
the commercial banks;
– 2001: Bilateral Trade Agreement Vietnam–the United States was signed. In
this agreement, Vietnam has committed to open banking and finance market
under a certain route;
– 2002: Liberalization VND lending interest rates of credit institutions – The
final step fully liberalized credit market interest rates on both input and
output;
– 2004: Amending the Law on Credit Institutions Vietnam;
– During this period, there was a very important event affecting Vietnam's
banking system in particular, the financial system in general, which is
Bilateral Trade Agreement Vietnam – the United States was signed. Under
this agreement, banking and finance markets Vietnam has been gradually

operational objectives, the types of banks include commercial banks,
development banks, investment banks, policy banks, cooperative banks and
other types of banks;
– Non–bank credit institution is a kind of credit institution that performs some
banking activities such as regular business content, but must not receive
money deposits or provide payment services. Non–bank credit institution
include finance companies, leasing finance companies and other non–bank
credit institutions;
– Foreign credit institution is credit institution established under foreign law;
– Cooperation credit institution is organization that trades currency and does
banking services and is established by organizations, individuals and
households voluntarily for banking operations with the main aim of mutual

BUSINESS RESEARCH METHODOLOGY
Page 20

assistance, developing production, business and life. Cooperative credit
institution include cooperative banks, people's credit funds and other forms;
– The types of credit institutions (as owner): Credit institution is established
under the laws of Vietnam including state credit institutions, shareholding
credit institutions, cooperative credit institutions, venture credit institutions,
credit institutions with 100% foreign capital. There is also a branch or
representative office of a foreign bank in Vietnam;
There are 45 banks and 53 branches of foreign banks in Vietnam currently,
including:
– 06 large commercial banks, in which 04 largest banks, each bank has
chartered capital of over $ 1 billion and total assets of 15–25 billion dollars,
Agrinbank is the largest bank (excluding Mekong Delta Housing
Development Bank and policy bank). Among them the Joint Stock
Commercial Bank for Investment and Development of Vietnam equitizated

shareholders, that is the main capital of the risks investors) to invest in the stock market
(stocks, corporate bonds, etc.). However investment banks are mainly in charge of
issuing stocks and bonds for companies being in need of capital to expand operations.
To do this task, investment banks have underestimated the ability of production and
development of companies that want to issue shares and must be able to mobilize other
financial companies to associate and guarantee minimum value of securities. This is
activities that hide high risk.
Insurance companies: There are 2 types of insurance, (i) health insurance or
accident insurance collectively referred to as non–life insurance (non–life) base on the
law that large numbers of people use the contribution to buy premium (premium) to to
pay for the victims and the rest to cover expenses for the company's operations and
make profitability for stake members. (ii) Life Insurance (life insurance) is the form that
people save money. The companies attract money contributed by individuals to invest
(usually financial investments) in order to increase total assets of above donations and
pay under the contract fixed prior as the contributing person is at limit certain age.
Pension Fund: Total assets are mobilized to the fund forming huge financial
resources in many countries. If people know the right management, it not only solves
retired problem but also raises capital for development, because the pension fund, in
principle, is the same as life insurance is saving money form of the public. The

BUSINESS RESEARCH METHODOLOGY
Page 22

difference is that pension fund, is usually held no profit purposes, is operated as an
independent fund from hired management, operate under the direct supervision of the
Board of Directors designated by the Government, business owner or union. The
organizations of pension fund in different country are not the same. In Vietnam,
pensions based on worker’s working years and last salary (known as defined benefits)
and the payment of retirement can be a burden for the budget or company if it is
carefully considered, especially the number of people working for the government or

Although much lower interest rate, deposit growth remained strong over 20% as
banks race interest rate, push up interest rates and appeal depositors, while other
investment channels such as real estate, securities have difficulty. In contrast to the
mobilization and credit in 2013 remains low growth compared with the previous year,
reaching 8.91% by the end of the year. This is mainly due to (i) the interest rate is too
high from the end of 2011 and until 2013 under the impact of tighter monetary policy, it
has led business operations of many businesses get stuck, leading to an increase in
dissolution and outage corporate rate, so the demand for a loan to expand production
and corresponding declines; and (ii) the bad debt ratio increased due to declining
repayment capacity of the business and consequent of the hot credit growth in the
previous year, so the banks are more careful in new lending.
Consequences of mobilization increased more than credit is excess liquidity
phenomenon in the banking system, especially in large banks. Do not push up credit
growth, many banks have stepped up investment in valuable papers (bonds, government
treasury bills and government guaranteed) in order to partially offset the decline in
interest income from credit activities. However, bond rates can not fully compensate for
the rate of credit interest income while still accounting for a large share of the income

BUSINESS RESEARCH METHODOLOGY
Page 24

structure of banks (70% – 80%). In addition, bad debt increased from 3.2% in 2011 to
over 8% by the end of 2012 and in 2013 was 7% had made provision for the cost of
banking risks increase.
The main reasons outlined above made profit of the banking system in 2013
significantly reduced in this context. In this context, the advantageous situation belongs to
the banks that are large, have strong financial strength and good risk management systems.
When the system falls into the difficult situation, the negative issues were
gradually revealed. Typically in 2012 and 2013, a series of violations of the bank staff,
typically at Agribank, Vietinbank and a number of other joint–stock commercial banks