GROUP 5

DANG NHU NGUYET

NGUYEN THI HUYEN TRANG
NGUYEN HOAI NAM
TRAN QUOC HUNG

STRATEGIC HUMAN RESOURCE MANAGEMENT STRATEGY
VIETNAM AIRLINES CASE STUDY

ABSTRACT

Human Resource Management (HRM) has changed its function significantly from the

early date until now. In the modern function, HRM and its higher level of Strategic Human

Resource Management (SHRM) would serve the company to effectively and strategically

transform its human treasures into company’s profit and value.

The paper will firstly mention about the revolution of Human Resolution of Human

Resource Management and its implication for the choice of HRM strategy in Vietnam. Secondly,

it examined the case study for HRM in Vietnam Airlines, at a state-owned but recently public

company, in how it defines the leadership style adjustable to its employee expectation in a

position which is expected to lift corporation value by utilizing human resource techniques.

Thirdly, the paper points out the Strategic Human Resource Management strategy in order to

develop this position.

In the whole analysis process, the paper utilized the theories and findings under classical

case study 14.1 (Mansour Javidan, 2015) about culture differences and how it develops

Strategic Human Resource Strategy.

LITERATURE REVIEW

The most important change in the human resource management arena is the increased

emphasis being given to developing a much more strategic perspective for the various HRM

activities and doing this against the backdrop of the organization’s values, vision and strategic

goals and objectives. (Nankervis, Compton, Baird, & Coffey, 2011)

1. The Revolution of Managing Human Resource

As pointed out by the authors Nankervis, Compton, Baird, & Coffey, 2011, early employee

specialists were called personnel managers (or personnel administrators), and this term is still

in use. ‘Personnel management’ (PM) refers to a set of functions or activities (e.g. recruitment,

selection, training, salary administration, industrial relations) often performed effectively but

with little relationship between the various activities or with overall organizational objectives.

It is worth pointing out the difference between Personnel Management and Human

Resource Management so that we could emphasize the integral part of HRM in changing the

leader and HR manager’s view of their human assets in achieving the overall company’s goal

and strategy.

The Differences of Personnel Management & HRM and SHRM

 Strategic Human
Personnel Human Resources
Resource Management
Management (PM) Management (HRM)
(SHRM)

Operative and Effectively Utilizing Strategically Transform

Function
Managerial Human Resource Human Resource to Value

Middle term, proactive

Time and Long term, proactive,
Short term, reactive, ad- but within structured
Planning strategically direct towards
hoc, marginal manner and not
Perspective the goals of organization
strategic

Psychological
Compliance Commitment Partnership
contract

Change Follows Change Prepare for the Change Initiate the Change

Treatment of
Machines or Tools Assets Asset
Manpower

Management
Procedures Business Needs Business Goal and Strategy
Actions

Bureaucratic and Stringent Control over

Control Exhibits Leniency.
Centralized Control Employees

Integrated into Line Fully Integrated with All

Roles Specialized/ Professional
Manager Management Level
 Maximum Utilization
Evaluation Investment Initiatives for
Cost Minimization (human asset
criteria Higher Value Achievement
accounting)

Source: (Nankervis, Compton, Baird, & Coffey, 2011)

From the above comparison, personnel management focuses on short term and detailed

supervision over staff performance meanwhile human resource management encourages self-

improvement and delegation provided that it could utilize its human asset at the maximum

level. HRM focuses on recruiting and hiring the best employees and providing them with the

compensation, benefits, training, and development they need to be successful within an

organization.

However, SHRM takes these responsibilities one step further by aligning them with the

goals of other departments and overall organizational goals. HR departments that practice

strategic management also ensure that all of their objectives are aligned with the mission,

vision, values, and goals of the organization of which they are a part (Study.com, 2020).

In Asian countries, HRM strategy varies among countries due to different political,

economic status and cultural factors. Even in Vietnam, HRM has also changed over the period

in different social, political and economic contexts. The study by (Nguyen, Teo, & Ho, 2017)

shows that “the development of Human Resource Management in Vietnam has been

responsive to the country’s economic development and institutional changes.”



Source: (Nguyen, Teo, & Ho, 2017)

From 1984 to 1993, Vietnam's economy transformed from a centrally planned system to

a market-oriented economy; PM dominated in this period and there was little evidence

showing the existence of HRM and SHRM in this period. The government needed to build up its

officials in the new economic context so training and compensation for an effective public

administration were the most important task.

From 1994 – 2003, with the increasing foreign investment flows and under the pressure

from the Asia Financial Crisis, the enterprises were under pressure to utilize its human assets

in surviving and staying competitive against newcomers from outside. There was a need for

adopting a more management system so HRM became popular. The training and

administration process were to add value to their management.

From 2004 – 2013, the economy saw robust growth when the country integrated more

into the global economy as a member of WTO while the competition from both regional and
international players was much tougher. It pushed the companies to achieve higher levels in

managing its human resource. HRM was transformed to SHRM so that they could achieve

longer term business goals strategically.

2. Relationships between leadership style, culture and HRM/ SHRM

Business community is getting familiar with Strategic Human Management and are

aware of all factors that regulate its movements. Different viewpoint and approach will result

in a different mindset and method in managing its people and reflected well in its leadership

style.

Leadership style reflects the perspectives and philosophies on organizational

management in order to maximize the use of resources, achieve the organization’s goals, and

maintain the organization’s position and image (Yukl, 2010) (Avolio, 1999).

Leadership style is also seen as the combination of subjective psychological factors and

environmental factors in the management system (Schein, 1985). Many researchers

worldwide argue that in the different business stages, the nature of business or organizational

structure requires different leadership styles to match with corporate cultures.

On one hand, the leadership styles therefore would change in accordance to business

development stage and requirement. According to Robert E. Quinn (2011), there are four

leadership styles based on corporate culture types.

● The spiritual and guide leader in Clan oriented cultures are family-like, with a

focus on mentoring, nurturing, and “doing things together.”

 ● The style of music conductors and expedition leader in Adhocracy oriented

cultures are dynamic and entrepreneurial, with a focus on risk-taking, innovation,

and “doing things first.”

● The style of director and commanding general in Market oriented cultures are

results oriented, with a focus on competition, achievement, and “getting the job done.”

● The style of supervisor and manager in Hierarchy oriented cultures are

structured and controlled, with a focus on efficiency, stability and “doing things right.”

3. The relationship between business strategy and HRM/ SHRM

HRM strategies (same as business strategies) would take both external and internal

business environments into account so that it could be responsive to changes in the planning

period. As Rose Holdsworth, senior consultant in education and professional development at

the Australian Human Resources Institute (AHRI) explains, HR professionals need to

understand:

• the business environment in which (the organization) is operating

• the industry forces that impact on the ability of the (organization) to succeed

• how their initiatives will deliver the human capability for the (organization) to

compete in its nominated markets.

The only way to reply to these requirements is by developing the close relationship with

all management levels and forming relationships that promote the ‘bottom line’ value of the

strategic management of an organization’s employees (Nankervis, Compton, Baird, & Coffey,

2011). As observing the business movement, the authors points out several types of

relationship between HR and organizational strategies as follows:

• Accommodative: HR strategies simply follow organizational strategies,

‘accommodating’ the staffing needs of already-chosen business strategies.

• Interactive: This is a two-way communication process between HRM and corporate

planning in which HRM contributes to, and then reacts to, overall strategies.

• Fully integrated: HR specialist is intimately involved in the overall strategic process in

both formal and informal interactions – a real reflection of strategic human

resource management in practice.

Based on different business strategy, there would be corresponding HRM choices.



4. Leadership Style in Vietnam and The Implication for Choice of Human Resource

Strategy

Vietnamese culture in comparison with other typical cultures in Hofstede’s study


Source: (Hofstede, 2001)

Based on the culture model by Hofstede’s study, to clearly define Vietnamese culture, the

study put it in comparison with the most typical cultures in the world namely China, Japan and

the United States.

In common sense, it is widely known that Vietnamese culture is strongly affected and

inevitably similar to that of China. It is partly true in almost all aspects but far different in Long

term orientation. But it is totally different from Japanese and United States culture. All in all,

Vietnamese, Chinese and Japanese shared some similarities which represents Asian culture of

high-power distance, low rate of individualism. For some aspects, its characters support

human resource development but the others pose challenges to overcome. To sum up,

Vietnamese culture is characterized as the following features:

● Vietnam has high power distance

 ● Vietnam is a collectivistic society

● Vietnam is a Feminine society

● Vietnam has a low preference for avoiding uncertainty

● Vietnam is considered to have a pragmatic culture

● The culture of Vietnam is characterized as Restrained

As a result, the culture reflects its features in the business environment to leadership

style and expectation to employees’ personalities. It well serves as the guideline to companies

in selecting its leadership style and HR strategies.

Elements in traditional Vietnamese companies

Features Leadership Employees

Respect for authority Paternalistic Respectful

Hierarchical order Compassionate Loyal

Collectiveness Honorable Obedient

Consensus Protective of subordinates

Cooperation

Long-term commitment

Source: (Anne Cox, 2014)

It cited the survey by (Quang & Vuong, 2002) and pointed out that despite the typical

elements, the leadership styles vary among State, Private and Joint Venture enterprises. In

Joint Venture enterprises, it is obvious that it pioneers to adopt a new approach in

participative management from Western countries by giving more freedom to subordinates

and delegating more authority to subordinates.

Source: (Quang & Vuong, 2002)

In assessing an organization's effectiveness, there is no significant distinction in all

factors among three sectors. But it is interesting that Joint Ventures achieves the highest scores

in all factors proving that this sector operated more effectively than the other two. Therefore,

its leadership style is worth considering for the other sectors in order to improve its

effectiveness.

Source: (Quang & Vuong, 2002)

 However, there has been skepticism about the applicability of western HRM practices

and leadership style, given that these may be add odds with some of the core defining values of

Vietnamese culture as stated by Rowley and Quang 2009. Performance-oriented leadership,

reward management strategy or employee performance rating could not fully be utilized but

show deficient with regards to the elements in Vietnamese culture. One more time, it is crucial

to put the culture difference in place in adopting HRM strategies from outside countries.

II. PRACTICE OF STRATEGIC HUMAN RESOURCE MANAGEMENT IN VIETNAM AIRLINES

1. Vietnam Airlines – Corporate Strategy

Vietnam Airlines is the flag carrier of Vietnam. The airline was founded in 1956 and later

established as a state-owned enterprise in April 1989.

Development strategy of Vietnam Airlines is to develop dual parallel brands (Vietnam

Airlines, Jetstar Pacific) with improved operational efficiency to take advantage of internal and

external forces.

Vietnam Airlines develops sustainably through a key investment policy in the main

business lines, creating a competitive advantage, improving the quality of air transport services

of VNA and companies with capital contribution in principle, ensure the balance of investment

capital and investment efficiency. Concentrate on investing in technical infrastructure, repair and

maintenance, specialized training, training facilities and facilities in the comprehensive service

line at the bases. Vietnam Airlines is focusing on improving service quality, customer satisfaction

towards 5-star airline and becoming the leading Asian airline chosen by customers.

2. Vietnam Airlines - Leadership Style and Human Strategy

2.1 Leadership Style

 Vietnam Airlines’ HR Strategy is developed appropriately to successfully implement the

development strategy of Vietnam Airlines ( (Vietnam Airlines, 2019).

The HR strategy of Vietnam Airlines is built with the following key points:

• Creating a friendly, professional working environment, many opportunities for

successful development for employees.

• Workers are the most valuable asset. All remuneration policies are built on the basis

of fairness and worthy benefits to maintain cohesion and create unity in the

organization.

• Continuous innovation. Taking creativity as the motto of innovation, VNA is

constantly innovating in all areas with breakthrough thinking to achieve great

success.

• Becoming a leading favorite enterprise in Vietnam labor market

Some of the main factors such as motivation and leadership are carefully consider built in VNA’s

HR strategy. Vietnam airlines control their staff by autocratic leadership style.

Tight Control

Opened Result
System Oriented
Autocratic
Leadership
Style

Professional
Job Oriented
Performance

Figure: Leadership style in Vietnam Airlines

 In this style, decision-making power is centralized to the leader and the leader holds the

principal decision making. It is interesting to note that the Autocratic or authoritarian style

leadership style is a useful motivational tool for a manager or leader as it motivates the leader or

manager to perform. Also, the decision-making process in strict form is very quick and

straightforward because only one person very decides for the whole group. Vietnam Airlines

applied Tells style that means the staff force is very significant; it performs in the Annual report

2013. Lack of the entertainment in working place and the company focus on Job-oriented instead

of employee-oriented, employees have pressure from job. The strict norms made people more

mature, have the ability to face challenges. Overall, this style led Vietnam Airlines on the way to

international trade.

2.2. Human Strategy & Job Description for a Position Matching Its Strategy

The HR department is a significant contributor to organizational success since they are

mainly responsible for maintaining and organizing the workforce. They oversee the people in the

organization and deliver HR services that meet the needs of both the company and employees.

(Unleash World, 2020).

Entering 2020, with new opportunities and challenges, with the motto "Responsibility -

Active - Innovative", on the basis of thorough assessment of the business environment and

effective resource balance. As mentioned in the previous section, Vietnam Airlines has developed

an operation plan with innovations to aim to improve the quality of 4-star service, towards the

highest 5-star standard of the world aviation industry.

 In order to achieve a perfect goal for service quality, VNA has implemented a human

resource strategy: Maximizing internal resources, focusing on human resource development as

the focus. To build an elite human resource system with high labor productivity, strong quality,

and well perform the operation and management of a large-scale professional airline.

Therefore, having the right people in the right places is vital in the organization. In order

to be on the right track with the company strategy set out, VNA certainly needs in-depth training,

improving the professional competence of its staff to increase customer satisfaction. It is also the

way to evaluate the success of the proposed strategy. In addition, VNA's future goal is to become

the leading airline in Asia chosen by customers. (2018 Annual Report, n.d.)

Looking at the reality of Vietnam Airlines' HR structure, to be able to take them further in

the future, the position of Director of Training & Development is really important. Accordingly,

VNA should recruit a professional manager that the foreigners might be fit. They will be able to

utilize problems, detail-oriented, thorough, organized to join growing organization and adapt to

global standards in aviation. Moreover, the leadership style will be the factor that makes a

difference in the current human resource management system in VNA. This will also create

cross-cultural and a variety of workforce. Cross-cultural human resource management will bring

trust enhancement between people, brings to improvement, because it is also the way to deploy

the strategy that VNA has set out.

Culture in VNA seems to be less future oriented, less assertive, more collectivist, both

small group and socially, and more rules oriented. Up to now, due to requirement of new

development stage, it is time for Vietnam Airlines to change its organizational culture. This is also

the reason for a professional management position to gradually transform leadership style and
meet the globalization goal set by the company. It takes time to communicate the change to their

staffs and transform from the current to a or a mixture of more effective models.

Based on the given theories and the case of VNA, the position of Director of Training &

Development needs to meet the criteria to suit the environment at VNA including: being

trustworthy and honest; having foresight and planning ahead; being positive, dynamic,

encouraging, motivating, and building confidence; being communicative, informed, a

coordinator, and team integrator.

If this leader fulfills his role, giving policies to engage personnel, it will create the trust

between people is from effective communications and understandings, which can pull people

together, make the group a team. After that, the employees feel like they are part of company,

have a sense of belonging, therefore enhancing the loyalty of employees. However, cultural

differences sometimes have some risks. Different nations have different psychology, way of

thinking and behavior, religions, and context, which cause conflicts easily.

The details below will be a detailed Job Description table for this important position.

Job Classification Training and Development Director

Report to Board of Director

Provisional Period Permanent

Research and implement strategies related to training and staff

Responsibilities
development of all human resources in VNA

Main Duties 1. Training Process

 ● Participate in strategy development and coordination of

annual company-wide training plans.

● The overall conduct and efficiency of all flying training

and standardization within the Company.

● Managing all training personnel and the associated

training budget. Ensuring that courses are cost effective

and efficient.

● Manager and responsible for all aspects of aircrew service

including development of the syllabus and course

material.

● Supervising flying training and currency records within

the Company and ensuring that these are maintained

accurately and up to date.

● Issuing the necessary training paperwork to each check

candidate prior to the check.

● Attend selection boards as appropriate for the selection

and appointment of new flight crew and promotion of

flight crew.

● Responsible for overall training standards.

2. Staff development

● Monitoring the implementation of the human resource

development program, keeping talented people.

 ● Responsible for conducting surveys on customer

satisfaction, corporate culture ...

● Ideally degree-qualified in Aeronautical Studies or the

alike

● Certification and/or relevant industry experience in

Requirements and Training and Development, particularly in a commercial

Qualifications airline environment

● Experience in working collaboratively with a civil

aviation authority, including interpretation of legislation

for airline operations and training

● At a minimum, a Bachelor’s degree in Airport

Management, Business Administration or related field

● Have at least ten (10) years of experience in senior

management experience, be currently employed as an

airport manager, and have at least five (5) years at the

same position at a commercial service airport.

Minimum Qualifications
● Demonstrate appropriate knowledge of the planning,

implementation and direction of operations, services and

maintenance programs;(training & develop)

● Demonstrate knowledge of regulations and standards

relating to airline’s service

● Have a valid and current passport in Vietnam

 ● Advanced Degree in Aviation, Science or related field plus

6 years of experience

● Experience in positions of authority and making difficult

decisions

● Have demonstrated experience leading organizations

Preferred Qualifications
and/or departments

● Have excellent communication skills and some public

speaking/presentation skills

● Demonstrated history of leadership success in small to

large organizations

Workplace Hanoi & Ho Chi Minh City

3. Strategic Human Resource Management Strategy to Develop the Position

In order to achieve a perfect goal for service quality, VNA has implemented a human

resource strategy: Maximizing internal resources, focusing on human resource development as

the focus. To build an elite human resource system with high labor productivity, strong quality,

and well perform the operation and management of a large-scale professional airline.

In order to realize its human resource strategy which has been set as the key focus of

company strategy, it is necessary for Vietnam Airlines to empower and develop Training &

Development Director. The leader maybe recruited from overseas, which enables the corporation

to more quickly bridge the gap with global standard in global aviation industry.
 If that is the case, Vietnam Airlines is advised to take SHRM from cross culture perspective.

First and foremost, on the one hand, the leader must be aware of typical elements in Vietnamese

and Vietnam Airlines’ culture in comparison with his own.

Vietnam Airlines which is still characterized by Vietnamese culture which highly value

collectivism and pragmatism. Only when the leader could reach plural and mutual consensus,

does he become more persuasive of the change. In order to do it, he should communicate well to

his staff and peer leaders about his leadership style and expectation for job achievement. His

subordinate should be aware of such approach is not a sign of weakness but a more effective style

for the manager and for the team’s and organization’s success (Mansour Javidan, P. W. (2015).

In addition, there are certain disadvantage impeding Vietnamese Airlines from being

innovative and active, which encourage its management board to make the change due to

autocratic leadership style. SHRM therefore should develop broad career paths to reinforce the

development of a broad range of skills in addition to designing the jobs that allow employees to

develop skills which can be used in other positions in the firm. This SHRM will support Training

and Development Directors to conduct long term development plan and be ready of human

resource adjustable to different phases of business movement.

CONCLUSION

It is found out that HRM or SHRM is the new trend in human management which is

supportive to long term strategy of corporation. Any corporation which aims at going in global

scale and sustainable development should view its human resource as value assets of the
company. Such as view and responsiveness to business environment by adopting SHRM will

ensure the company to pursue its long term goals.

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