relations established and practised by the management (Zhu, 2002). There is a
mixture of control and nurturing in management practices. Most senior man-
agement did demonstrate a more transformational leadership, and the middle
management and the HR manager demonstrated the more transactional
approach. In addition, more firms emphasised personnel procedures and rules
as the basis of good managerial practice. This indicates that compliance with
rules is more important, suggesting that the aim is to encourage employee
commitment. Generally speaking, the position of the HR manager was not a
specialised one and in most of the firms was filled by line managers. The HR
managers had little involvement in their firm’s strategic planning. In fact, the
HR task was more operational (wage, social welfare calculations) than strategic.
This is clearly a traditional role of the so-called ‘personnel manager’.
A paternalist management pattern still has certain influence. However, in
the post-reform era this attitude has gradually changed, especially among
younger employees. The fixed-term contract employment system has largely
contributed to this change. Except for people who have worked for SOEs for a
long time and have attained a high position in the enterprise, most workers
have no problem in changing their place of work for purely economic reasons.
The philosophy of collectivism is still found in Vietnamese organisations
in terms of their group-oriented approach. Group-based activities including
teamwork and decision-making, quality control and incentives are common
managerial practices. In the Vietnamese organisation, leadership and decision-
making are team-based. Another group-based activity relates to the incentive
scheme, a collective orientation, which is still fundamental for bonus pay-
ments (Zhu, 2002).
Summary of socialist market economiesComparing China and Vietnam, both similarities and differences emerge: both
countries adopt the so-called ‘socialist market economy’ to replace the tradi-
tional planning system, and both countries are pushing for micro-economic
efficiency, flexibility and competitiveness. The trend of reforming SOEs and the
influence of foreign capital in terms of creating jobs and introducing new tech-
nology and management systems is profound in both countries. In the area of
HRM, however, the changes in China seem to be more radical: the implemen-
tation of regulations and policies on labour contracts, recruitment, dismissals,
wages and welfare has resulted in individual contracts, freedom in personnel
selection, and individual performance pay (Benson and Zhu, 1999: 71). The lib-
eralisation of the economy and the introduction of foreign investment in
China have created the opportunity for both FOEs and local firms to adopt
some of the best HR practices. In contrast, in Vietnam, change in local firms is
rather slow and FOEs adopt more local work practices in such areas as employ-
ment contracts and compensation.
HRM in East Asia 215