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                              Pham Thi Bich Ngoc

       A research study submitted in partial fulfillment of the requirements
              for the degree of Master of Business Administration.

    Examination Committee:           Dr. Fredric William Swierczek (Chairman)
                                     Dr. Truong Quang
                                     Dr. Hans Stoessel

    Nationality:                     Vietnamese
    Previous Degree:                 Bachelor of Business Administration
                                     National Economics University
                                     Hanoi, Vietnam

    Scholarship Donor:               Government of Switzerland

                          Asian Institute of Technology
                            School of Management
                               Bangkok, Thailand
                                   April 2000


I would like to express my sincere gratitude to Dr. Fredric William Swierczek, advisor
and chairman of the research committee for his professional guidance, constructive
comments, and encouragement throughout the research study.

Thanks are due to Dr. Truong Quang and Dr. Hans Stoessel for their valuable
contribution in serving as committee members and for precious comments in
accomplishing this research.

I would like to express my deep appreciation to the Government of Switzerland for
granting me the privilege and scholarship to undertake MBA program at Asian Institute
of Technology.

I would like to deserve special thanks to Mr. Bui Anh Tuan, and Mrs. Nguyen Thi Thuy
Chi for their valuable guidance, advices and assistance at the very beginning of this

I am very grateful to the Directors, Managers of various state-owned enterprises, who
offered instructive information and useful discussions for this research.

Thanks to my best friends for their enthusiasm and assistance in helping me collecting
data needed for the research.

I would like to thank my best friend at AIT, Lan, who helped me learn actual realities of
both love and life and shared feelings with me during time of both laugher and hardship.

Thanks especially to my parents, brothers and loved ones, for their continued love,
whole-hearted supports and encouragement to this undertaking.

Last but not least, I would like to extend my thanks to all of the faculties, staffs, and
colleagues in SAV5, at School of Management and at Asian Institute of Management for
their valuable help.


Despite the renovation policy of Vietnam’s government offered more credit to non-state
sectors, and create highly business competitive environment within country, state-onwed
enterprises (SOEs) still keep dominating role in Vietnam’s economy. The economic
scenario in the country is undergoing a notable change for technology, competition and
globalization in attempting to integrate Vietnam economy into the world economy. State
sector has experienced fast growth and absorb a large proportion of country resources.
However, many SOEs continue to face losses and fall in deep debt situation. State-
owned enterprises in Hanoi, which amount to nearly 20% of total SOEs in the whole
country, are not an excluding case. They also face many difficulties and losses. Among
the reasons for these losses and ineffective operation of these enterprises like capital
shortage, cumbersome management mechanism, out-date technology, the profusion of
confusion in methods of human management appears to be the standing one.

Aiming at providing a better understanding of human resource development (HRD) and
exploring different problems concerning to HRD in management of SOEs in Hanoi, this
research is carried out.

The interviews with several managers in different SOEs and the survey of nearly 100
SOEs in Hanoi indicated that there are certain considerations placing on HRD, the HRD
practices in those enterprises are not revealed. Based on the results, some
recommendations for formulating effective HRD program, which help SOEs in Hanoi
improve the effectiveness of their operations are given.

                              TABLE OF CONTENTS


          Title page                                                           i

          Acknowledgement                                                      ii

          Abstract                                                             iii

          Table of contents                                                    iv

          List of tables                                                      vii

          List of Figures                                                     viii


          1.1 Background                                                           1

          1.2 Problem statement                                               1

          1.3 Objectives of the research                                           2

          1.4 Research Methodology                                                 2

          1.5 The scope and limitation                                             3

          1.6 The organization of the research                                     4

          1.7 Framework of the research                                            4


          2.1 Definition of Human resource development (HRD)                       6

          2.2 The need for HRD function                                            6

          2.3 The link between HRD and organization’s competitive advantage        7

          2.4 Orientation                                                          8

          2.5 Training, Education and Development                                  9

          2.6 Training and development process                                11

          2.7 Training needs assessment                                       12

          2.8 Training and development methods                                13

          2.9 Evaluation of training and development                          17

     2.10 Management Development                                    17

     2.11 Career planning and development                           18

     2.12 Performance appraisal                                     19


     3.1 Recent management reform progress of state sector in Vietnam    20

     3.2 Pilot equitization (1992-1998)                                  22

     3.3 The position of SOEs in Vietnam                                 23

     3.4 Performance of SOEs in Vietnam                                  24

     3.5 Challenges and difficulties facing SOEs in Vietnam              27

     3.6 The operational situation of SOEs in Hanoi                      28

         3.6.1 Profile of SOEs in Hanoi                                  28

         3.6.2 Performance of SOEs in Hanoi                              28


     4.1 Introduction                                                    31

     4.2 Human resource function                                         31

     4.3 Orientation                                                     32

     4.4 Training and Development                                        33

     4.5 Training needs assessment                                       35

     4.6 Training methods                                                37

     4.7 Training resources                                              39

     4.8 Training budgets                                                40

     4.9 Management development                                          42

     4.10 Career planning and development                                43

     4.11 Performance appraisal                                          43

    4.12 Promotion base in SOEs                45

    4.13 Employee motivation in SOEs           45


    5.1 Conclusions and Recommendations             48

    5.2 Human resource management function          48

    5.3 Orientation                                 48

    5.4 Training and development                    49

    5.5 Management development program              51

    5.6 Career development                          51

    5.7 Performance appraisal                       52

    5.8 Compensation and employee motivation        52

    5.9 Recommendation for further research         52

    REFERENCES                                      53

    APENDICES                                       56

                                  LIST OF TABLES

Table 2-1 Comparison among training, education and development   11

Table 3-1 Operational situation of SOEs in Hanoi                 30

Table 4-1 Employee’s general opinion of working in SOEs          46

                                   LIST OF FIGURES

Figure 1-1 Framework of the research                                    5

Figure 2-1 Changing role of training                                    11

Figure 2-2 The needs assessment process                                 12

Figure 3-1 GDP structure by ownership form                              23

Figure 3-2 Debt situation of local SOEs in Hanoi                        29

Figure 4-1 Functions of HR Department in SOEs                           32

Figure 4-2 Purposes of orientation program in SOEs                      32

Figure 4-3 Purposes of training programs in SOEs                        34

Figure 4-4 Trainees of training and development programs in SOEs        35

Figure 4-5 Training needs assessment in SOEs                            36

Figure 4-6 Financial sources of training in SOEs                        37

Figure 4-7 Training methods in SOEs                                     38

Figure 4-8 Training resources of SOEs                                   40

Figure 4-9 Distribution of training budgets/revenue ratio across SOEs   41

Figure 4-10 Subject focused in management development program           43

Figure 4-11 Purpose of performance appraisal in SOEs                    44

Figure 4-12 Turnover rate in SOEs                                       47


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