The application of international human resource management in the context of the human capital of multi-national organizations in Laos

Abstract

Humans are part of the key capital in every organization, and it is also likely that the management of humans is the underlying success factor for every organization. This is because human resources play an important role in all activities and are the means of endeavour in organisations. If we envisage the integration of human resources (HR) and the growth of global cooperation and the effect it could have on doing business globally, we will be able to see HR from a wider perspective, and understand that International Human Resource Management (IHRM) is studied with the purpose of understanding the concept and its implications for business.

Laos is a country that is affected by globalization especially after the opening of the country in 1986 and the introduction of New Economic Mechanism (NEM). The implementation of NEM and the contribution of external force of globalization have made the tiny, poor but resource rich country become increasingly significant on the international stage. With a stable annual growth rate of GDP of 7% and political stability, Laos has caught the eye of foreign and investors as well. Therefore, there are many foreign investments and international aid projects coming in and operating their businesses and activities in Laos. This is the reason why the IHRM should be applied.

Before conducting the data collection, some literature review was done to provide the guidelines for the research, and the data collection methods and data analysis were identified. Both qualitative and quantitative data collection were selected to be used in this research. The data collection was conducted in five international organizations in Laos. These organizations work mainly on the international aid programmes. Their mission is to support the provision of development programmes through various projects in order to uplift Laos out of poverty.

After the research, this thesis answers the following questions:  There is application of the IHRM by the participant organizations but not all HR activities are practiced due to some issues, such as the limits of budgets.  Staffing policies that are commonly used by the participant organization are Geocentric and Regiocentric. The decisions are made by head office.

Factors influencing the application of HRM include the lack of skilled labour in some sectors, such as health care and internal audit and the limitation of budgets to employ highly-qualified applicants in the recruitment process.  Generally, Lao workforces are knowledgeable and qualified to do the assigned jobs but they still need to improve.  Apart from the findings above, the association between variables, especially the human capital of Lao staff, are tested with interesting results. This thesis also provides some recommendations that the researcher expects will be useful for the improvement of the participant organizations. Additionally, it outlines some future research opportunities that could be useful for other researchers.