The Transformation of HRM in Transitional Economies: The Case of Vietnam

Abstract The economic reform process in Vietnam, known as Doi moi (renovation), was to convert from a centrally planned mechanism to a market-oriented one. The results of Doi moi can be seen in economic growth and improving living standards. Doi moi has been taking place within the context of globalization. The changes in the area of labor and human resources have accompanied the economic changes. In this paper, a number of theories are reviewed, including political economy approach, strategic choice approach and human resource transformation by adopting HR dimensional approach. In addition, case studies of 32 enterprises with different ownership, location, market orientation, labor intensiveness and size are presented. The findings of this study show that a combination of political economy approach and strategic choice approach can be used to analyze the phenomenon of employment relations reform under the economic transition and globalization. The findings of this study also show that a strong interaction between three main forces is responsible for determining the transformation to HRM in Vietnam during Doi moi. These are the influences of global forces that brought in the new practices, the government interests of supporting the new practices for its political purpose and the demand of business operation from enterprises. The three forces are interacting in the current transformation process.