Human Resources Management Strategies of Taiwan-based Enterprises in Vietnam

participants that the challenge of cross-cultural management they faced with is 
language barrier. 

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Additionally, the culture difference is also a factor impacts to cross-cultural 
management. It mentioned as difference of self-cognitive and conception on working of 
Vietnamese employees. In detail, somehow Vietnamese employees decide an important 
thing without discus with their manager, but they think that they well done on it. 
However, these actions may effect to consequence of production of company as well. It 
is also the reason Taiwanese companies pay more attention to the culture of Vietnam 
and the thinking of people and the cognition of Vietnamese employees in cross-cultural 
management.
Human Capital Issues 
Employee recruitment is one of issues of human capital mentioned by 
participants. They said that their company always in labor shortage situation. It’s not 
only hard to recruit skilled labor, but also hard to hire low-skilled labor. The statement 
of interviewees coherent to Ngoc Ha (2018) that FDI enterprises in Vietnam have 
difficulty in hiring skilled labor to meet their production activities. The reason of 
employee recruitment issues assumed that people prefer to go city to work rather than 
stay in somewhere far away urban and downtown while most of manufacture factories 
set up at industrial zone, rural, mountain, and countryside area where possesses the 
location convenient for seeking out material and production activities. Also, the 
population in rural area fewer than urban area couple with people tend to leave their 
hometown to search new opportunities in city so that produce on skills gap between 

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rural and urban area and bring about double hard to recruit talents. The skilled-labor 
does not eager to work in countryside area, according to a participant commented. 
Again, the result indicated that the great part of Taiwan-based companies in Vietnam 
face difficulty with employee recruitment as well as finding the local talents.
Furthermore, the labor productivity is considered as a critical part of human 
capital. As far as the participants commented, the labor productivity in Vietnam was 
evaluated lower compared with neighborhood countries. The result corresponded with 
Nguyen (2019), the labor productivity in Vietnam has improved significantly in recent 
years, however it still lower than other countries in ASIA region. Although the labor 
productivity of Vietnam wasn’t high appreciated, but when asked if 
company wants to 
continue production and business in Vietnam, the answer is “yes” from all participants. 
They stated that, Vietnam owns high rate young population and low labor cost, is a 
good condition to invest in Vietnam market, even the low labor productivity. The result 
also showed that the low labor productivity of Vietnamese workers come from lack of 
quality, technical skills and the responsibility on job.
Localization Management 
Most of participants agreed that localization management is preferable strategy 
in HRM. They revealed that recruit local managers to support Taiwanese managers 
manage company personnel as well as help to run the business operation effectively.
As the interview result showed, local managers in order to communicate smoothly and 

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don’t have language barrier, they could have bring mentally encourage and working 
morale to employees better than Taiwanese managers. Moreover, as a Vietnamese, at 
least they could understand Vietnamese culture and understand what the employees 
think and want then offer suitable HRM strategy which may help to reduce conflict 
situation and improve work efficiency. The result consisted with Hailey (1996) employ 
local mangers could contribute to the morale and effectiveness of employee better than 
expatriate managers. Hence, employing local managers are assumed more efficient in 
managing Vietnamese employees. 
Another, a benefit of hiring Vietnamese managers that are they could build up 
and maintain the relationship with local government which is necessary to company in 
Vietnam. As Hutchings (2005) remarked above, local managers are connected in a 
network of social relationship which makes it easier than expatriate to build trustful and 
closely relation with local government. Based on the response of participants, it is 
clearly that localization management was applied most of Taiwanese companies in 
Vietnam because of its benefits which local managers bring about. 
Training and Development 
As the result showed that company provides the training and development 
p
rograms which preferable with company’s system,
company’s characteristics
and 
Vietnamese culture for the purpose of improving employee’s performance and 
productivity. This result corresponded with Cheng and Ho (2001) mentioned earlier, a 

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complete training program produces noticeable improvements in employee 
communication and proficiency of performances as well as extending retention time. 
As a participant said that, their company offer free Chinese course to Vietnamese 
employees in order to enhance employee
s’ foreign language proficiency as well as 
reduce the mistake in communication, hope that employees could get more learning 
opportunities which let them improve more. Additionally, company launched out 
training program such as inviting Taiwanese expertise and experienced come to 
Vietnam to train and instruct Vietnamese employees, and assign Vietnamese employees 
go to Taiwan or abroad to receive training due to improve specialized knowledge and 
necessary skills. It matched with Schuler (2001), training policies are critical element in 
HRM of a business in which improving the skills of employees, the performance of 
firm, and organizational survival.
Moreover, as the participant affirmed that the employees trained and instructed 
have improved their skills and performance which bring about the positive outcome to 
company. The result similar with Thang and Quang (2011), the business conducted the 
employees training has positive impact and plays an important role in improving 
productivity of companies. In short, company offers an appropriate training and 
compensation program to both company internal and external conditions so that could 
achieve the expected outcome. 
Incentive and Compensation Systems 

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Incentive and compensation systems are considered as a part important of 
attracting, motivating and remaining talents strategy of HRM practice, according to the