How changes in economic structure affects management of jobs in Vietnam

Vietnam economy is currently considered to be in the transitional period. As the result, there are many changes in both economic structure and resource allocation. One of the important transformation signs is the ownership system shifting from the model almost dominated by SOEs to a more competitive one with multiple ownership including SOEs, multinational companies (MNCs; wholly owned foreign-invested companies), joint ventures (JVs; between foreign investors and local SOEs), and privately owned enterprises (POEs). As a result of this change, the socialist system has been changed to a hybrid structure mixed between public ad private ownership. Current research proposed a likely influence of ownership on the creation and management of jobs in Vietnam. In general, it may be divided into the following categories.

The first one mentioned the effects of ownership structure on HR practices. Weinstein and Obloj (2002) claim that the more experience in a market economy the company has, the more developed and sophisticated HR practices it will develop compared with other companies in a centrally planned economy. It is predicted that social entities that are looking for approval for their performance in Vietnam — may use HR dimensions as a solution to them to gain legitimacy and acceptance in order to facilitate survival. Therefore, it can be concluded that the original motivation to creat HR dimensions for jobs in Vietnam of foreign-invested enterprises, including both MNCs and JVs, creates the different demands for legitimacy from those of local enterprises, which in turn induce different HR practices. In the meanwhile, resource dependence theory claims that the distribution of power in enterprises is presented by the scale of that enterprises and that HR practices is a way to reflect the nature of this power distribution (Jackson & Schuler, 1999). Consequently, there will be more complicated HR management system with the view to reflect the complicated power distribution as the size and types of  of stakeholders in enterprises increase. As a matter of fact, ownership other than SOEs may make efficiency a more compelling goal for management to achieve.

The second kind of research consists of case studies of other transitional economies. Some of these examples, particularly those focusing on China, provide an understanding of ownership changes and adoption of HRM.  Benson and Zhu’s (1999) present three representative models of transition: (1) a minimalist approach, in which enterprises have made little attempt to adopt new HR practices; (2) a transitional stage between the old and the new forms of people management; and (3) an attempt to adopt the HRM paradigm. Chinese domestic enterprises can adopt some of the novel HR practices due to the liberalization of the economy and the foreign investment, which have also created precious opportunities for less developed countries such as Viet Nam, Indonesia…There have been more jobs in Vietnam for people herein.  SOEs that are involved in JVs or contracting arrangements with foreign companies are more likely than other SOEs to have adopted HRM. Therefore, it’s really necessary for enterprises to get engaged in HRM with the fusion of globalization, business-oriented beliefs, and a stronger customer-oriented strategy (Benson & Zhu, 1999). Furthermore, Ding, Goodall, and Warner’s (2000) research on China shows that MNCs and JVs have a positive effect on changes in HR practices. They not only introduce updated management systems and practices into their business operation, but they also have great effect on other domestic enterprises in changing traditional people-management practices.

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