Human resource leaders as strategic business partners in state-owned enterprises in Laos

Abstract

Due to increasing international competition, rapid advancement in information technology, as well as gradual social and demographic changes, HR practitioners are required to play a completely new role as a strategic business partner. HR professionals are required to be accountable to business and create value by being proactive, long-term oriented and strategic thinkers so as to meet changes head on. Evidence-based studies carried out in the field suggest that when HR professionals demonstrate the competency of a business partner, they can strategically implement HR practices that integrate with corporate strategy, thus leading to the improvement of organisational effectiveness and productivity.

This research study applies a qualitative approach to examine the research question whether HR leaders in Lao state-owned enterprises are strategic business partners, and, if they are not, how can HR leaders in such business units perform the role of a business partner so that they can enhance their contribution to business success? The semi-structured interview was used as a data collecting technique with twelve participants from seven state-owned organisations.

The findings of this study revealed weak support for an affirmative answer to the research question. The HR leaders who participated in this research study did not have full ability to perform the role of business partner. The characteristics of the HR leaders' role appeared to be more administrative than strategic. However, it was found that all of the participants showed an interest in upgrading their roles as business partners regardless of the two major barriers: limited capability and lack of legitimate position power. Therefore, based on the findings the researcher developed a model called “building a strategic HR partnership role” (Figure 4) as a basic guideline for how to enhance the role of business partner in the case organisations. It is strongly recommended that Lao state-owned enterprises pursue the HR transformation as a means to drive competitive advantage. The HR leaders are more able to do value-added work when they get support, perform all business partner roles, and demonstrate the necessary competencies.