BBUS-HR-D3 AHMED RASHEED HRM303

Contents
1. INTRODUCTION OF COMPANY ..................................................................................... 3
1.1. VISION OF COMPANY ................................................................................................. 3
1.2. MISSION OF COMPANY .............................................................................................. 3
1.3. TODAY THE ORGANIZATION .................................................................................... 4
2. COMPANY HUMAN RESOUCRE MANAGEMENT POLICIES AND
PHILOSOPHIES .......................................................................................................................... 5
2.1. Reward & Motivation: ..................................................................................................... 5
2.2. Equal Employment Opportunity policies ......................................................................... 6
2.3. Staff Training & Development:........................................................................................ 6
2.4. Overtime compensation: .................................................................................................. 6
2.5. Meal periods and break periods: ...................................................................................... 6
2.6. Performance Management Policies: ................................................................................. 7
2.7. Developing employee line:............................................................................................... 7
2.8. Staffing: ............................................................................................................................ 7
2.9. Payroll deductions: ........................................................................................................... 7
3. BUSINESS MOVING TO INTERNATIONAL DESTINATION IN VIETNAM ........... 8
3.1. THE VIETNAM ECONOMY AND ENVIRONMENT ................................................. 9
3.2. THE MAJOR ISSUES AND CHALLENGES OF IHRM AT STO FACES: ................. 9
3.2.1. The issues of managing people in different culture and environment: ..................... 9
3.2.2. Global work-life management challenges in Multinational Corporation: .............. 10
3.2.3. The issues of compliance with international laws and regulation: ......................... 10
3.2.4. The issues of communication: ................................................................................ 11
3.2.5. The issues of training and compensation: ............................................................... 11
4. NEW INTERNATION HRM PALN FOR VIETNAM BRANCH ................................. 12
4.1. Recruitment and selection: ............................................................................................. 12
4.2. Training and development: ............................................................................................ 13
4.3. Rearward and Compensation: ........................................................................................ 13
4.3.1. Foreign Service increment: ..................................................................................... 14
4.3.2. Allowance: .............................................................................................................. 14
4.4. Performance Management: ............................................................................................ 14
4.5. Employment career development: .................................................................................. 14

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4.6. Performance Appraisal: .................................................................................................. 15

5. THE KEY CRITICAL ASPECT IN STO NEW BRANCH OF VIETNAM ................. 15
5.1. Culture of the Vietnam: .................................................................................................. 15
5.2. Training program conduct for abroad employees: ......................................................... 16
5.3. Compensation philosophies provided by HR department: ............................................. 16
6. DEVELOPING IHRM MODEL FOR STO BSUINESS ................................................. 17
6.1. Contextual model ............................................................................................................... 18
6.2. Matching model.............................................................................................................. 19
7. RECOMMONDATION ...................................................................................................... 20
8. CONCLUSION .................................................................................................................... 21
9. Reference .............................................................................................................................. 22
10. Bibliography ..................................................................................................................... 24

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1. INTRODUCTION OF COMPANY

In 1964, a fully state-funded business was set up by the

Maldivian government with one key mission to begin
with strengthening national food security. The main task
of the company, then named Athireemaafaanu Trading
Agency (ATA) (Stomaldives.com, 2004). With proven
success in contributing to national development, ATA
matured to become the State Trading Organization (STO) on 9th June 1979. STO undertook all
trading and commercial activity on behalf of the Maldivian government. At that time, the country
was growing and expend its imports, first to an increasing number of commodity items, and then
on to modern construction material, home appliances and consumer goods.

1.1.VISION OF COMPANY
“Be a leading business creating enduring value for all stakeholders, whilst being a catalyst of
economic growth & supporting sustainable development” (stomaldives.com, Annual report 2013,
2013).

1.2.MISSION OF COMPANY
 Lead through expansion of existing businesses, diversification, exploring new possibilities
and entering into new ventures.
 Explore beyond our borders; expand our markets and establish ourselves as an international
player, respected by the international business community.
 Ensure accessibility with our presence nationwide; offer peace of mind and assurance to
the public of uninterrupted provision and affordability of essential goods and services and
those that contribute to a fulfilling modern lifestyle.
 Build a skilled workforce by investing in human development; build our competencies, to
achieve sustainable and unhindered growth and fulfill our vision.

(stomaldives.com, annual report 2013, 2013).

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1.3.TODAY THE ORGANIZATION

Building up on the background of solid commercial success,
STO has streamlined its operations to where profit and viability
matter as much as the need to ensure broad access to basic
essentials at affordable prices. STO has become the dynamic
organization demanded by a prosperous, rapidly developing
country. The company is geographically diverse with operations and developments throughout
Maldives and operations in Singapore. This has been achieved by direct procurement and
distribution as well as forming joint ventures to effectively trade in areas where it presents greater
opportunity (stomaldives.com, The Organization... Today, 2015). However, extensive work and
collaboration from staff with the management is still required to integrate the SAP module into
daily work (organization, 2014). Every year HR department analysis the employees feedback and
identify the various new different strategies to motivate the employees in organization.

The entire operation of STO is now built on the SAP ERP platform. As a result, the Company has
identified the need or SAP trained professionals in the organization and also organization can plan
training program both local and foreign employees. The below shows the current status in genders
of employees work in STO.

Figure: 1.1. average percentage of male and female in organization.

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2. COMPANY HUMAN RESOUCRE MANAGEMENT POLICIES AND

PHILOSOPHIES

HRM is a term used to refer the philosophy, policies, procedures and practices related to the
management of people begin an organization. Today every organization has to face highly
competition. Therefore organizations try to do right thing at the right time. In that situation HRM
plays major roll to achieve organizational goals. Satisfaction is the one of major concept in Human
Resource Management.

Human resource policies are the formal rules and guidelines that businesses put in place to hire,
train, assess, and reward the members of their workforce (Armstrong, 2000). These policies, when
organized and disseminated in an easily used form, can serve to preempt many misunderstandings
between employees and employers about their rights and obligations in the business place.

The Human Resources Department of STO remains dedicated to provide the necessary services
and assist STO employees in order to take the company forward. In this regard, HRD is committed
to introduce and implement policies to further enhance and facilitate its services to the employees.
The year 2014 and 2015 had been a challenging year given that the substantive implementation of
the SAP, including its alignment with the HR work, required significant effort. In this regard, the
lack of an adequate staff appraisal system to integrate with the SAP presented a major hurdle. The
role of human resource management is to plan, develop, and administer policies and programmers
designed to make expeditious use of an organization’s human resources. It is that part of
management which is concerned with the people at work and with their relationship within an
enterprise. The main HR policies and functions which included in State Trading Organization as
follows:

2.1. Reward & Motivation: STO motivates the staff by providing challenging tasks, a smart
corporate culture and long-term progressive perspectives. The top priority of the
management is to develop employees so that their services in turn propel the Company’s
performance. In this regard, the Company encourages staff initiatives and participation in
the decision making process.
As a reward for their performance, staff were compensated with an annual bonus according
to the annual bonus plan. This is a reflection of the fact that the Company’s management

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has appreciated the employee’s hard and dedicated work. In addition to this, the
management gives special importance to promote workplace safety and provide a
conducive work environment.

2.2. Equal Employment Opportunity policies: STO provide equal benefited to their staff as it
can be more motivational factors. The main purpose of implementing this policies can be
all federal contractors to take affirmative action to prevent discrimination in employment
practices and to report on their progress. Specifically, affirmative action requires
contractors to implement affirmative action plans to assure equal employment opportunity
for underutilized minorities and women, people with disabilities.
2.3. Staff Training & Development: During the year a total of 382 staff participated in various
short-term training programs, while 72 staff continued in Company sponsored long-term
trainings of local and overseas programs. In 2013 STO has given strong emphasis on staff
training and development. As such, career and capacity development remains a top priority
of the Company’s HR strategy.
It is important to note that the HRD is working continuously to ensure that staff training
needs are met in order to develop capacity and staff ability to make informed decisions and
deliver the best service to the customers. The Company has taken steps to ensure staff
retention by maintaining policies that reward and motivate staff.
2.4. Overtime compensation: The philosophy behind State Trading Organization (STO)
compensation program is to create a compensation program that support the company’s
mission and values and objectives. As an interview with Mariyam, HR manger: says “we
believe that employee consistently performing above expectations and proficient in the role
should be rewarded with a higher base pay. Employee who are new and prohibition period,
should be paid the half of target compensations amounts”. In addition to base salary, the
company will utilize incentive or variable pay as a way to meet the strategic goals of the
company (Mariyam, 2015).
2.5. Meal periods and break periods: To promote a productive and safe work environment, the
STO provides rest and meal periods. As STO 50% sharing government, normally company
provide work period. Furthermore, excluding prayer time each employees get break period
for one hour.

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2.6. Performance Management Policies: Performance Management includes annual appraisal

of employee job performance and procedures used to communicate job expectations and
provide feedback on performance on an ongoing basis and through a year-end performance
rating. The performance rating is used for compensation, promotion and other employment
decisions. According to STO annual report says company in this area has done a substantial
amount of work. The Company has implemented a new performance management process
for entre organization. STO employees in the 2002 review cycle (covering job performance
in calendar year 2009) and will complete implementation for all employees covered under
the each year.

2.7. Developing employee line: In order to raise productivity and ensure the company’s success
in the future, the HRD policies are geared towards developing employees in line with the
company’s business strategies this also has the dual advantage of ensuring long term staff
retention and allowing the staff to develop and further advance within the company.
Continuous learning and knowledge transfer has been the cornerstones of high performance
within the company. In addition to this, strategic competence development has been
utilized to identify the skill sets and expertise needed for the future and highlights
structured career development for the employees.

2.8. Staffing: staffing emphasizes the recruitment and selection of the human resources for an
organization. Human resources planning and recruiting precede the actual selection of
people for positions in an organization. In STO, staffing can be done by interviews and
selecting the suitable employees in the organization.

2.9. Payroll deductions: Human resource departments may do the calculations for payroll
deductions or may have the accounting or payroll departments handle them, depending
upon the number of employees and company structure. As in STO there is no any fixed
salary and deduction. The salary can be deducted in pension schemes and employee late
fin.

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2.10. Termination policies: employers have a basic right to terminate an employee, but along
with that right, come responsibilities. Employers must comply with the
Employment/Labor Standards and human rights legislation for their jurisdiction and
beyond that, employers must treat employees fairly and in good faith as defined by
common law or civil law (Québec, 2002).

3. BUSINESS MOVING TO INTERNATIONAL DESTINATION IN VIETNAM

International business must procure, motivate, retain and effectively utilize services of people both
at the corporate office and at the foreign plant. The process of procuring, allocation, effectively
utilizing human resources in an international business is called International Human Resources
Management.

IHRM can be defined as set of activities aimed managing organizational human resources at
international level to achieve organizational objectives and achieve competitive advantage over
competitors at national and international level. IHRM is an important component of firms' global
strategy and is often recognized as an influencing factor of success or failure of international
business (Deresky, 2003). IHRM involves developing human resource capabilities to meet the
diverse needs of multinational and global corporations. Ensuring high-quality management is
critical due to the complexity of managing international operations

More and more STO company plan to conducting their business in other countries as on Vietnam.
Like huge global companies such as Toyota, Walmart’s Molson’s have long had extensive
overseas operations. In company strategic committee plan to open a new department in Vietnam.
For implementing this plan, STO human resources department and human resource manager
workout on behalf of employees and evaluating the country culture, market, government roles and
regulation for international assignment. Furthermore, STO decide to send five employees to
Vietnam and two of them are managerial employees which can be controller of the department.
The remaining three employees are administrative level of employees which is working on
administrative works on Vietnam branch.

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3.1.THE VIETNAM ECONOMY AND ENVIRONMENT

Vietnam’s Socio-Economic Development Strategy (SEDS) 2011-2020 gives attention to structural
reforms, environmental sustainability, social equity, and emerging issues of macroeconomic
stability. It defines three "breakthrough areas" (i) promoting human resources/skills development
(particularly skills for modern industry and innovation), (ii) improving market institutions, and
(iii) infrastructure development (bank, 2015). In addition to the elaboration of three SEDS
breakthrough areas, the five-year Socio-Economic Development Plan 2011-2015 focused on three
critical restructuring areas the banking sector, state-owned enterprises and public investment that
are needed to achieve these objectives.

Vietnam has boosted its international economic integration as it enters into more free trade
agreements with the Eurasian Economic Union, the European Union, South Korea and the Trans
Pacific Partnership.

3.2.THE MAJOR ISSUES AND CHALLENGES OF IHRM AT STO FACES:

Global or international human resources management is the process of employing, developing and
rewarding people in international or global organization. It involves the world-wide management
of people in international or global organization. In STO after venturing in to the tourism industry,
business looking and decided to open new business into international which the company could
thrive, expand and develop its businesses and contribute to the international economy. In pursuit
of success, the Company consistently and continuously tries its maximum to keep its’ business
development goals in-line with national interests. The issues in international HRM in STO faces
can be as follows:

3.2.1. The issues of managing people in different culture and environment:

A salient issue in international HR is understanding and maintaining cultural diversity.
Working with people from different locations or from different cultural backgrounds
mean adapting the business's work style to new ideas, new ways of communicating and
unfamiliar social practices. In Sri Lanka, culture can be different while comparing
Maldives culture. As on STO human resources department mainly focus on giving
training and conducting different program to aware Sri Lanka culture. Moreover,
organization are bringing one specialist trainer which can be guided and coaching the

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cultural environment of Vietnam. Culture issues can be important factors which must
solve for growth and development of international business environment.

3.2.2. Global work-life management challenges in Multinational Corporation:

Globalization has brought numerous, noteworthy developments in the diversity and
complexity of international business and forms of multinational corporations. As a
manager where working in international, face substantial challenges in balancing the
often competing pressures of global integration and local responsibilities (Anne-Wil
Harzing, 2011). Connecting with those challenges, STO human resources department
giving information to reduce the stress and increasing awareness on global workforce.
The organization itself provide some strategies, policies, and programs in workplace to
address flexibility and increasing quality of work and life balance and work family
conflict. Furthermore, benefits and compensation are the backbone of any HR strategy,
but in international HR, benefits and compensation are even more important in focusing
on the work-life balance of employees. The idea behind work-life balance is to provide
employees with programs and initiatives that improve both their personal and
professional lives. In the STO, HR department considered this is the part of
international HR, because companies have already implemented programs such as
flexible working time, paternity leave, extended holidays and on-site childcare.

3.2.3. The issues of compliance with international laws and regulation:

Sweeping demographic changes across both the developed and developing world will
place greater pressure on both the government and private sector to initiate and
implement creative solutions to educate, integrate and retain a rapidly changing and
diverse working population. As businesses begin to expand into the global marketplace
or as they hire employees from diverse geographic and cultural backgrounds, they may
have to adapt to new labor laws and tax liabilities (Bradley, 2016). As in STO, the HR
management are learning the industrial rules and regulation of Sri Lankan culture. As
on HR, the organization must working on behalf of employees as well as train and build
employee’s skills while adopting new market. It includes protecting employee rights,
avoiding harm to individuals from violent or perverted content.

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3.2.4. The issues of communication:

Problems in business communication conducted across cultures often arise when
participants from one culture are unable to understand culturally determined
differences in communication practices, traditions, and thought processing. At the most
fundamental level, problems may occur when one or more of the people involved clings
to an ethnocentric view of how to conduct business. Among the most often cited
barriers to conflict-free cross-cultural business communication is the use of different
languages. It is difficult to underestimate the importance that an understanding of
linguistic differences plays in international business communication. According to the
country langue, organization staff can face difficult to sustain in the market. To remove
this kind of problem, HR department must train well and conducting language classes
on the employees. Especially for the managerial employee’s aware about it. Managers
must communicate different business company and working on developing and
expending the business in global culture. The organization itself, the employees who
are working on abroad can be selected according to the skills and knowledge of person
and current performance in organization.

3.2.5. The issues of training and compensation:

Related to the idea of benefits and compensation in international HR are training and
professional development programs. Training programs typically encompass in-house
seminars and meetings designed to give employees on-the-job knowledge of skills that
are important to doing business globally. HR might offer language classes, for example.
Professional development encompasses the "extra" training that HR provides to its
employees, such as allowing them to attend networking events and conferences, global
training seminars and other specific competency-based programs.

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4. NEW INTERNATION HRM PALN FOR VIETNAM BRANCH

Human resources planning is a process that identifies current and future human resources
needs for an organization to achieve its goals. Human resources planning should serve as
a link between human resources management and the overall strategic plan of an
organization. Below shows the IHRM one year plan which STO provides and implemented
in new branch of Vietnam.

Figure 4.0. IHRM model for new branch of STO in Vietnam.

4.1.Recruitment and selection:

In order to select the best applicant suited for a certain position in the organization, the
company relies on selection standards on which management can focus when recruiting
and hiring. Being an international company, STO must prefers that their applicants be
fluent in more than one language which will ease the transfer to other geographic areas
where their fluency will help them in different operations in their work location. While
recruiting people for international operations, the international HR managers must identify
the global competitiveness of the potential applicants at the time of the recruiting process.
It is essential that the workforce of an international organization is aware of the nuances of
international business. Understandability, the company must keep international knowledge
and experience as criteria in the recruitment and selection process. In STO, while choosing
employees for international overseas operations, usually prefer people with:

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 Highly developed technical skills

 Good language and communication skills

 Tolerance towards other culture, race, creed, color, habits, and values

 High level of motivation

 Stress resistance

 Goal-oriented behavior

4.2.Training and development:

International training and management development are always closely associated in the
management literature (Gregerson, 2004). In state trading organization mainly provide four
strategic for developing global managers, international travel, the formation of diversified
teams, international assignments and training. These four strategies relate to expatriation
management, particularly integrating international training and management development.
Training aims to improve current work skills and behavior, whereas development aims to
increase abilities in relation to some future position or job, usually a managerial one. Most
of the time, the managers who are working in abroad, can be best method of expatriates
training. Furthermore, STO plan to give training in different area such as business
operational area, cultural training and marketing as well as managerial level training. Those
forms of training, once a person has been appointed for an international assignment, pre-
departure training is normally used to ensure the candidate has adequate skills and
knowledge that are necessary for working abroad effectively.

4.3.Rearward and Compensation:

There are various financial incentives provided to the employee that is based on short term
or long term incentives. In STO, HR planning can be adapt to new ways of providing
benefits to an organization's employees. Especially employee who are working on abroad
can give different compensation and reward which can affect the employee motivation and
satisfied their job. Non-traditional benefits such as flexible working hours, paternity leave,

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extended vacation time and telecommuting are ways to motivate existing employees and
to attract and retain new skilled employees. Below showing some of rewards and benefits
which STO planning to provide for international staff which working on abroad.
4.3.1. Foreign Service increment: apart from salary, company plan to provide the service
premium and mobility premium. Service premium can be given only expatriates in
order to encourage them to accept assignment in other countries. On mobility premium
are bonuses which given to employees for their ability to willingness to move between
two foreign posts. Those increments are based on company objectives as well as
employees are motivated.
4.3.2. Allowance: discretionary allowance are also giving to foreign staff in order to attract
and retain those most qualified. In STO plan to give cost of living allowance and goods
and services allowance for accommodating those staff in the country.
The all the managerial level of employees and other administrative employees which are
working on aboard can get many rewards, as a result those employees are happily
motivated with their company. Balancing compensation and benefits for the organization's
workforce is an important HR function because it requires a sensitivity to the wants and
needs of a diverse group of people.

4.4.Performance Management:
There are various standard formed for the employees in order to maintain their performance
throughout the financial year and the feedback is also provided after an employee goes
through whole set of standards. The feedback is provided continuously in STP, for example
there is performance measurement on the quarterly basis which provides a base for the
employees to check on their performance.

4.5.Employment career development:

The international executives and managerial planning is a part of the strategic planning
process of the company. Once a year, the global executives staffing needs for selected
countries are derived from each division’s long-term strategic planning activities. For the
planning of career development in STO abroad staff, STO plan to provide scholarship

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opportunities for relevant field. With those opportunities organization can get educated and
skilled employees as well as it can be easy to sustain the business in Vietnam.

4.6.Performance Appraisal:
The goal of global performance management strategy is to enable peak performance in the
enterprise. This means creating an environment where employees can excel, develop skills
for improvement, and move toward their career goals. All the employees of STO in
Vietnam branch are made a part of the peak performance process, which includes
performance, development, and career planning elements that are recorded in the
company‘s online tool. The Compensation and bonuses are linked to this process every
year. The process is a cycle that includes several key phases throughout the year. Such as
setting objectives and establishing core competencies, creating a development and career
plan. Reviewing both of the above regularly, through mid-year and year-end formal
reviews, Calibrating output across departments throughout STO. This is managed through
face-to-face meetings. While implementing this kind of performance appraisal system,
organization well know the accurate work level of employee and it can be easy to rate them.

5. THE KEY CRITICAL ASPECT IN STO NEW BRANCH OF VIETNAM

Managing human resources in different cultures, economies, and legal systems presents
some challenges. However, when well done, HR management pays dividends. Moreover
multinational companies are all facing same issues, which are developing policies and
practices for the human resource management in their subsidiary overseas operations.
Below classifying some of important aspect which STO international business consider
moving new destination.

5.1.Culture of the Vietnam:

In terms of culture, too, had a significant influence on Vietnam and this continues up to the present,
if only as a residual factor, both with respect to institutions and norms. Such cultural influences

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may have had a significant impact on the evolution of HRM in their respective countries western
model to which they have adapted their own versions. The degree to which this strand of culture
continues to play a significant role on HRM in Vietnam is an important one to stress. Its role in
influencing societal values has been measured by many social scientists. According to Hofstede,
2000, research studies says that out scores for both China and Vietnam which are somewhat similar
and approximate to what one would expect for East Asian countries. Both are high on ‘hierarchy’
and ‘collectivist’ values, similar on ‘uncertainty avoidance’. With this STO HR manager must
identify the influence on Vietnam culture and must study the social and economic condition of
Vietnam for success and development of business.

5.2.Training program conduct for abroad employees:

Training is the process of altering employee’s behavior, attitudes and knowledge in a way that
increases the probability of individual and organizational goal attainment (Gomes, 2012). Training
aims to improve employee’s current work skills and behavior. For International assignment, once
a STO must selected a person (whether, Manager, structured reproducer, trouble shooter or
administrator) expatriate training is considered to be the next crucial step to ensure the expatriate’s
effectiveness and success on abroad. In cross cultural training can be conducted, based on
management philosophy but highly concentrate on staffing approach. Effective training
programmers can also improve overall management style. In terms of leadership, the locals would
like their expatriate managers to be friendly, more. While company focusing on training can be
benefited to organization as well as it will easily wide the business in global market.

5.3.Compensation philosophies provided by HR department:

The impact of the growth of international economy has become a major force in business in general
and in human resource management in particular. These practices are important realities faced by
STO doing business overseas. Before entering into global market STO HR department must
coordinate policies and procedures that effectively balance the needs and desires of host country
nationals (HCNs), parent country nationals (PCNs). Compensation is one of the most complex

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areas of international human resource management. Pay systems must conform to local laws and
customs for employee compensation while also fitting into global company policies. It is also
important for company to consider carefully the motivational use of incentives and rewards among
the employees drawn from three national or country categories (Haile, 2002). The challenge for
the STO’s HR manager must work with top management in fostering the desired “international
mind-set.” MNCs’ HR managers are facing the complex components of international benefits and
compensation every day as they attempt to manage human resources across national boundaries.

6. DEVELOPING IHRM MODEL FOR STO BSUINESS

HRM is delivered through the HR architecture of systems and structures, the HR function and,
importantly, line management. The practice of referring to people as resources as if they were any
other factor of production is often criticized.

Working on developing the business in Vietnam, there will be different model/approaches which
can be wide the business and by applying can be increase the productivity as well as increase the
brand name of business in market. Human resource management professionals working for global
organizations often have unique staffing choices.

Similarly, techniques and expertise of IHRM can be scrutinized into a critical examination that
reveals the hidden intentions and interests behind the seemingly neutral facade of HRM,
international management and IHRM. The academic have respondent positively to the challenges
of internationalization pro-positing different HRM approach. The majority of HRM scholars are
concerned with the design of HRM process in global organization/MNCs, interaction between
institution, societal norms and government regulation and comparative analysis of HRM
approaches across economies (Melcalfe and Rees, 2005).

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6.1.Contextual model

Figure 5.1: contextual model, (H.Pinington, 2011).

The international process with the HRM system can be complex and is heavily influence by a
variety of contextual and historical factors. According to Hendry and Pettigrew (1990) argue that
the existence of a number of linkages between the outer environmental context (socio economic,
technological, political-legal and competitive) and inner organizational context of HRM. The
contextual model of HRM emphasizes the importance of environmental factors by including
variables such as the influence of those above factors. The latter, at best, consider the context as a
contingency variable. The contextual approach is broader, integrating the human resource
management system in the environment in which it is developed

According to Vietnam Development Report says that in year of 2011 was important for the
economy of Viet Nam because this is the first year in the latest Socio-Economic Development
Strategy (2011-2020), with the goal of becoming an industrialized and modern economy by 2020.
This strategy goes on to identify the country’s key priorities to meet this ambitious target: stabilize

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the economy, build world-class infrastructure, create a skilled labor force, and strengthen market-
based institutions. Finally, the degree on the issuance of certain additional tax measures to remove
difficulties for enterprises and individuals, contributing to economic development in 2011. With
all those factors STO HR management must learn and guided to sustain the market. With the
contextual model business can work on achieving strategic objectives by involving skilled
employees in organization. HR manager must concentrated on every part of environment
especially HR context. By implementing contextual model can get employee benefits and it is the
one factor which employees satisfied their job.

6.2.Matching model

Figure 6.2: Matching model (Pinnington, 2011)

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When working within this model, a company concentrated on performance management system
that exercise tight control over individual activities, with the ultimate goal of securing a
competitive advantages (Guest, 1995.) The matching model can generate high-corporation on
organization staff and culture of the country. Every factor of this model can be interrelated with
each other. The main three target of this model can be achieving strategic mission, full filling the
IHRM policies and formalize organization structure. With this three targets STO Vietnam branch
can sustain business in the country of Vietnam. Thus, implementing the business, this model can
shows some influence factors such as culture of country, political forces, and economical forces.
In order to make business affective HR manager can consider those three influences and working
on removing those issues in the market.

7. RECOMMONDATION
Firstly, rapid international growth brought with it the problems of controlling and coordinating
increasingly complex global organizations. Here we should point out that, while many authors use
these terms interchangeably, we make an explicit distinction between control and coordination. To
remove the issues of IHRM, the company go with best plan and company must choose suitable
candidates for working on international branch. Those selected employees should have ability to
work with competitive market and different culture in country.

Secondly, the IHRM manager must integrate compensation planning with human resource
planning as a vital component of the firm’s corporate strategy. By developing global compensation
plan, it can developed to attract in the procurement process, to retain in the allocation process, and
motivate in the utilization process the kind and quality of IHRM to achieve global objectives of
company.

Finally, while moving the International, one of important factors which STO focus can be
marketing the business. Marketing can be main factors which increase the sales and wide the
business in Vietnam. STO must select best marketing manager in order to introduce the market.
Marking is the only tools which increase the portfolio of the business in International.

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8. CONCLUSION
In conclusion, business organizations have been increasingly expanding to global markets because
of the virtue of globalization. Company operating in the international business environment are
faced with a great variety of cultural and institutional variations which make managing in a
multinational context particularly complex (Doz & Prahalad, 1986). Managers of STO Vietnam
branch must realize the importance of IHRM practices in ensuring the profitability and viability of
their business operations, and global staffing is increasingly seen as a primary HR practice used
by company to control and coordinate their spatially dispersed global operations.

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