title: HRM Practices of Multinational and Domestic Enterprises in Vietnam
Creators: name: Nguyen, Thi Minh Phuoc
Publisher: name: Griffith University
Year: 2017
Subjects: subject: Multinational
subject: Domestic enterprises
subject: Vietnam

description: Human resource management is important for improving enterprises’ competitiveness. Consequently, many enterprises have paid much attention to managing and developing their human resources and a great number of professional and academic studies have been produced in this field. However, the literature on the human resource management (HRM) practices of multinational enterprises (MNEs) and their performance in developing countries like Vietnam is considerably less voluminous. This research is motivated by two main research questions:  RQ1. How do differing ownership types affect the adoption of HRM practices in Vietnam?  RQ2. To what extent do differing HRM practices in Vietnam affect employee job satisfaction and employee performance? The research contributes to the existing literature in several ways. First, it adds to the literature on HRM in Vietnam, a topic which remains under-researched, despite the country’s increasing significance in economic and geopolitical terms, and the very large and growing literature on HRM in developed countries. Specifically, the study focuses on comparisons of four main types of enterprise ownership: enterprises considered as state-owned (SOEs where the state is the sole shareholder); equitised state-owned (ESOEs where part of the ownership is sold to other sectors); privately owned (POEs, with 100% domestic private ownership); and multinational (MNEs, with majority or 100% foreign investment). Second, the current study contributes to the broader international literature with regard to the possible relationship between HRM practices and employee outcomes. Although some previous research (e.g., Gardner, Moynihan, Park &amp; Wright, 2001) has shown that employee outcomes play a crucial mediating role between HRM practices and enterprise performance, to date such a mediating role has been overlooked by most empirical HRM studies, which tend to focus on the direct relationship between HRM practices and enterprises outcomes (e.g., Arthur, 1994; Huselid, 1995; Macduffie, 1995, Wright et al., 2005). However, the relationship between employee outcomes and enterprise performance is beyond the scope of this research. This current research focuses on employee outcomes rather than organisational level outcomes. The current research covers HRM practices in four key areas: recruitment &amp; selection (R&amp;S), training and development (T&amp;D), performance management (PM), and reward systems (RS). It considers two types of employee outcomes: employee performance and job satisfaction. Third, this research uses a theoretical framework (RBV) to gain a deeper understanding of the various patterns of enterprise practices observed. This helps to address a weakness in the current literature, as most previous studies in this particular area have tended to give little consideration to the theoretical underpinnings of their findings. This research adopts a qualitative method and involves two studies of in-depth, semi-structured interviews, both of which were carried out in the Northern region of Vietnam. In Study 1, 18 managers were interviewed; in Study 2, interviews were conducted with 49 employees. Qualitative content analysis was utilised first (Flick, 2014), followed by thematic analysis, to compare and synthesise findings from the two groups of interviews. The main findings from the analysis are as follows. First, the perceptions of managers and employees regarding HRM philosophy and practices at the various types of enterprises are somewhat similar, although there are a number of instances where the employees provide the differences. The similar perspectives between managers and employees could be due to the fact that employees did not want to be seen differ from their managers’. Some employees had different perspectives from their managers because they may see things at their personal view while the managers had a broader view on the interviewed issues. Second, it appears that participating MNEs were more inclined (than the participating domestic enterprises) to see human resource as a critically important resource, to treat HRM as a key part of efforts to achieve strategic goals, and to implement HRM systems and practices that are in line with international standards (and that evidence a RBV approach). By contrast, the relevant SOEs were least likely to do so, while the large POEs were often quite close to the position of MNEs, and ESOEs tended to take intermediate paths between these two approaches. It should be emphasised that ownership was not the only influence on the adoption of HRM practices. Other factors also play important roles, including national culture (e.g., collectivism, respect for seniority, and the importance of “face”). Third, while differences across the participating enterprises regarding employee outcomes are not as clear-cut as differences in terms of HRM practices, there are indications that employee outcomes at MNEs and large POEs are more favourable than at SOEs, especially for younger employees. The findings suggest a number of practical implications for HR managers as well as for the government of Vietnam. The government should encourage and assist universities to provide prospective graduates with more up-to-date training, including more hands-on experience. Managers at domestic enterprises need to be familiar with the HRM practices of MNEs and should make an effort to select and adopt those practices that, on balance, are likely to enhance their own enterprise’s overall performance and competitiveness. Managers at MNEs could do more to ensure that their HRM practices do not conflict with the local business culture.