Strategic human resource management impacts on local managerial employees’ capacity building in foreign companies in Laos People’s Democratic Republic

Abstract

To succeed in today’s competitive business environment, Strategic Human Resource Management (SHRM) should be integrated with the organisational strategic plan. Particularly, SHRM in capacity building should be taken into account. This is because SHRM in capacity building can enhance the capabilities of the organisational workforce which is a key value of the organisation in performing better work, as well as increasing the productivity of the organisation. In Laos, there are high numbers of foreign investments, thus investors require a competent local workforce to operate their businesses, especially at the management level. Therefore, if business firms wish to survive in the competitive environment, they should implement the right SHRM in capacity building for their local managerial workforce which is a key success factor for organisations.

This research project employs a qualitative approach to study some research questions in capacity building of local managerial employees. The main objective is to examine whether foreign companies in Laos possess the appropriate SHRM in capacity building for their local managerial employees. If they do not possess it, what is the effective SHRM in capacity building for the local managerial employees that should be designed and implemented? This research study also applies the semi-structured interview as the main data collecting technique with twelve participants from seven foreign companies in Laos.

The findings revealed valuable perceptions of HR professionals toward the SHRM in capacity building which provide positive answers to the research questions. All of the participants from foreign firms in Laos possess SHRM in capacity building for their local managerial employees but its implementation was not executed effectively. From the findings, the effective implementation of outstanding SHRM in capacity building, the so-called localisation strategy, was reported by three participants, whilst nine participants said that there were some obstacles that prevented the implementation and practice of SHRM in capacity building, namely limited budget, less important roles of HRM in strategic level, not sufficient qualification of local managerial employees and unsuitable specific development programmes. Therefore, to conclude the finding of the research, there is a model of ‘SHRM in capacity building for the local managerial employees in Laos’ which has been developed by the researcher. This model aims to guide the suitable steps and implementation of the SHRM in capacity building of the local managerial employees for foreign firms in Laos, to assist them to improve their performance and productivity.