1. Introduction
A major attraction of travelling to other countries is that people are different to what we are accustomed to at home. A few hours in an aeroplane carries us to places where an incomprehensible language is spoken, exotic food is eaten and almost everything else is different to what we are accustomed to. This is most certainly true for people travelling from Australia to Vietnam. The organised chaos of Hanoian traffic, the colourful markets and the narrow streets in the Old Quarter — everything is different. If everything is different, then it can be assumed that people also manage organisations in a different way and as such also manage people differently.
The economy of Vietnam is transitioning from a centrally planned to a free market system and has moved from a situation of crisis after the war against the Americans to a vibrant, fast-growing nation. The main question for this research is to provide a description of contemporary Human Resource Management (HRM) practices in Vietnam, within the context of their transitioning economy, using a Grounded Theory approach. This research is also an excursion of self reflection on the applicability of Grounded Theory as a research method in Human Resource Management.
This project is part of a research expedition to Hanoi, undertaken by the Graduate School of Management of La Trobe University, with assistance from Hanoi University. Data was gathered through site visits to seven local businesses and government organisations and through five confidential interviews with managers of local businesses.
Vietnam has gone through enormous changes since the introduction of Doi Moi, Vietnam’s economic restoration policy that commenced in 1986, the government policy that seeks to transition the Vietnamese economy from a centrally-planned to a market-driven economy (Williams 1992). The process of transition in developing economies has a major impact on the way business is adopted (Warner et al. 2005) and the way Human Resource Management practices are conducted. The role of HRM in a transitioning economy is discussed in Chapter 2.
Several researchers have investigated management styles in Vietnamese organisations and found significant differences between Vietnamese and Western styles of management (Nguyen 2000; Quang and Vuong 2002; Rowley and Abdul-Rahman 2008). Country culture is, however, not a homogeneous phenomenon and significant differences between the work values of North and South Vietnamese management exist (Ralston et al. 1999). This report is thus focused on Human Resource Management in North Vietnam and specifically the capital Hanoi.
A literature review of Human Resource Management in Vietnam (Chapter 3) shows that Vietnamese management styles in the state sector can be “bureaucratic, familial, conservative and authoritarian”, emphasising clear reporting relationships, formal communication and strict control (Quang and Vuong 2002: 52). The ‘familial’ style was also widely accepted in Vietnamese enterprises; developed from family workshops. In contrast, Quang and Vuong (2002) further found that a participative management style was often practised in the joint venture sector, where expatriate managers brought in Western and Japanese principles of management. Rowley and Abdul-Rahman (2008) researched the existence of convergence towards a ‘Western’ style of management in Vietnamese Human Resource Management practises. They found evidence of this occurring, but argued against the use of a universal Western-inspired model of Human Resource Management and described an alternative model based on Asian values.
Further literature review on qualitative research methodologies, specifically Grounded Theory (Chapter 4), has been undertaken in preparation of the Hanoi expedition. This review shows that Grounded Theory is suitable for this type of research, specially given the ethical limitations placed on the expedition, i.e. no recording of conversations and limitations on the use of questionnaires (UHEC 2009: 13©, 22(g)).
Following the initial review of literature, two research questions were formulated, both very open, to allow for flexibility during the research:
- What is the role of Human Resource Management in transitioning economies?
- What are HRM practises in contemporary Vietnam?
- How can the Grounded Theory methodology be used in HRM research?
Research in Hanoi has been undertaken, using a Grounded Theory approach (Chapter 5). The purpose of the research was not to determine how HRM practices relate to business performance, but to examine what HRM practices are actually used. Following the Straussian approach of Grounded Theory, no hypothesis was formulated and theory has been constructed post hoc.
The qualitative research data (Chapter 6) is analysed in detail, combined with further literature review (Chapter 7). From the analysis, three major topics emerge.
Firstly, Vietnamese managers have a salience for management theories origination outside of Vietnam, particularly Japan and the United States.
Secondly, companies seem to rely on social networks for recruitment. This is in contrast to most Australian organisations, where public advertisements are the dominant vehicle for recruitment. Research by Breaugh (1981: 145) showed that the source of recruitment is “strongly related to subsequent job performance, absenteeism and work attitudes” and that people recruited through newspaper advertisement missed almost twice as many days as those recruited through other sources, such as employee referrals.
Third finding is an indication that performance management in collective cultures, such as Vietnam, is more effective when aimed at improving the collective rather than focusing solely on the individual. Further detailed research is required to validate this hypothesis.
Using Grounded Theory as a methodology to study Human Resource Management was found to be very suitable. The outcomes are, however, limited to hypotheses, as quantitative research is needed to confirm the validity of the findings.
The managerial relevance of this research is to provide insight into Vietnamese HRM practices for those considering to invest or work in this country.
The findings in this paper can also have implications for the way in which recruitment practices are conducted in Australia, specifically the use of social networks to find suitable candidates. The relevance of this report extends also into the academic realm as the secondary purpose of this project is to assess the usability of Grounded Theory in HRM research.
This research is also of personal interest to the authors. It can be argued that the Victorian water industry, in which the authors are currently employed, is undergoing a transition similar to what is currently occurring in Vietnam. Only a few years ago, water management and pricing was centrally planned by the government. Recent changes, such as the introduction of the Essential Services Commission, have moved the industry towards a simulated market-driven environment. The current discourse regarding the future of water services provision in Victoria points towards even further transition to a market-driven industry (Essential Services Commission 2009). The recent and impending changes in the Victorian water industry can be considered analogous to the developments in countries such as Vietnam.
Table of Contents
- Introduction
- Literature Review
- Hanoi Expedition
- Theory Building
- References