The human resource development strategy at the joint stock company of autoparts and industrial equipments manufacturing

human resources of an organization are formed on the basis of individuals with different roles and linked together to perform certain objectives of the organization.Ensuring sufficient quantity and appropriate structure for human resources Improve the regime on arranging human resource. SEVERAL HUMAN RESOURCE DEVELOPMENT SOLUTIONS

“THE HUMAN RESOURCE DEVELOPMENT STRATEGY AT THE STOCK COMPANY OF AUTOPARTS AND INDUSTRIAL EQUIPMENTS

JOINT-MANUFACTURING

INTRODUCTION

URGENCY OF THE DISSERTATION

Human, resource of all resources is the motivation for the development of humansociety since its initial formation and development until now Hence, countries andethnic communities around the world are all concerned about human, especially humantraining and development, and consider this as the most important element to thesuccess in our development progress

Practice has proven that not only resource-rich countries are able to developmodern industry with high living standard On the contrary, there are small countrieswhere natural resources or other advantages are limited, however, by using appropriatedevelopment policies, utilizing and promoting their strengths and especially developingthe special element - human resource, they have become developed countries andstrong economies in the world, such as Japan

In the increasing globalization trend nowadays, where the international division oflabor has been taking place strongly and dramatically, the most important advantagethat plays as the key in long term must be the high quality of human resources Becausethe lack of capital resources can be solved by mechanisms and policies, the lack oftechnology and equipments can be overcome by purchasing etc., however, the lack ofhigh-quality human resources cannot be easily absorbed as for modern technology Wecannot convert the capital or modern technology into this valuable asset fordevelopment Therefore, human resources development has a decisive role for thefuture of each country, each nation

Vietnam is carrying out its “industrialization and modernization” in the context ofthe world economy turning into the integration and globalization stage In order toconduct the country’s industrialization and modernization progress successfully, the

10th Congress of Vietnam Communist Party has affirmed that “Human resource – thefundamental element to social development, rapid and sustainable economic growth”and “Human and human resource are the decisive factor to the development of thecountry in industrialization and modernization progress” Therefore, human resourcedevelopment is the topical issue that draws lots of special attentions from nationalstrategic policy planners as well as corporate managers

The Automotive industry is an important manufacturing industry which benefitsfrom many favorable conditions of the Party and the Government for its development

It plays a significant role in promoting the socio-economic development progress;contributes to accelerate the industrialization and modernization movement of thecountry

The production and business practices of Vietnamese automotive industry in thepast few years has shown that the development of the industry was still notcommensurate with the preferential conditions that the government has given to thissector; or in another word, has shown its failure

There are many reasons for the past failure of the automotive industry but for some

perspective, the weak ancillary industries cannot satisfy the localisation requirements

of the automotive joint-venture manufacturers in Vietnam is considered to be animportant cause Why many other countries such as Thailand, Malaysia and Indonesiaetc have succeeded in this sector, especially Thailand is currently the reliable addressfor placing factories of the automotive industries of Japan, Taiwan etc This is becausethe supporting manufacturing businesses of these countries are well developed andsatisfy the requirements of foreign automotive manufacturers

From the lesson of ancillary manufacturing of other countries within the region, inorder to develop Vietnamese automotive industry, the development of ancillarymanufacturers is a direction of prioritizing and urgent matter as expressed through theDecision No 12/2011/QĐ-TTg dated Feb 2nd, 2011 by a Prime Minister regarding thedevelopment policy for several ancillary industries.

The Joint-Stock Company of Autoparts and Industrial equipments ManufacturingJAT is a young small-and-medium-sized enterprise but has created for itself anappearance of a company with vision, effective investment and initial reputation to anumber of automotive assembly plants of many well-known domestic and joint-venturecompanies, such as TOYOTA, HONDA, etc However, the development of the firm iscurrently not really stable and strong enough to reach its goal in Strategy 2012-2020which is: “The manufacturing enterprise with low costs and market capability in theleading top of Northern Area of Vietnam” Starting from such thoughts, I have chosenthe topic “The human resource development strategy at the Joint-Stock Company ofAutoparts and Industrial equipments Manufacturing JAT in 2012-2020” to do researchfor my disertation

- Determine perspectives, objectives and orientations so as to suggest solutionsfor human resources development for the company

RESEARCH SCOPE

Human resource development, factors affecting human resource development andother elements related to human resources development of the firm in 2012-2020

RESEARCH METHODOLOGY

To use synthetically a number of methods as following:

- Methods of systematizing, generalizing, systematic thinking, logical thinkingand comparing (Chapter 1 and 2)

- Quanlitative method through group discussion technique to developmeasurement scales and design questionnaires about the firm’s human resourcesdevelopment situation

- Methods of forecasting, analyzing, synthesizing professionally through SWOTtechnique to form and suggest solutions for human resources development of thefirm in the period 2012-2020 (Chapter 3)

Chapter I THEORICAL BASIS OF HUMAN RESOURCES DEVELOPMENT

1.1 OVERVIEW ABOUT HUMAN RESOURCE AND HUMAN RESOURCES DEVELOPMENT

1.1.1 The concept of Human Resource

Nowadays, the concept of human resource is no longer strange to anyone of us, it isseen in many different aspects The “human resource” concept was mentioned for thefirst time in the 80’s of the 20th century which was the period containing fundamentalchanges in procedure of human management and utilization in labour economics.Human resource was considered to be more important If previously employees wereconsidered to be the executive, dependent force whose labor-power should be exploited

to maximum with the lowest cost then from this period till now employers or the laborusers began to manage and utilize their human resources in a softer and more flexibleway, create better conditions for laborers to promote their existing potential abilities tothe highest level through natural accumulation during labor and development process However, the concept of human resource has been interpreted in many differentways:

According to the assessment report by United Nations about the impact ofglobalization on human resource, the definition of human resource has been given:

Human resources are actual skills, knowledge and capacity together with abilities existing in the form of human potential Human resource here is interpreted in favor of

the quality of human resources In this concept, the most appreciated point is todescribe human potentials as their actual abilities so that we can have appropriatemechanisms in management and utilization

As Nicholas Henry (Public Administration and Public Affairs, 10 th Edition, 2007),

“Human resources is the resources of human in organizations (with different sizes, types or functions) that have abilities and potentials to participate in the development

process of the organizations along with the socio-economic development of the country, region and the world” This definition comes from the conception that

considers human resources as a resource with material and spiritual elementsgenerating capacity, power to serve the overall development of organizations

In Vietnam, the concept of human resource has been widely used recently,especially since the renovation started A number of scientists who participated in thestate-own science and technology program under the code KX-07 by Prof Dr Pham

Minh Hac being the chairman believed that human resources are the population and

quality of human, including physical and mental status, health and intelligence, capacity and quality With this understanding, human resource is understood as a

synthesis form of the quantity and quality of human resources

Or according to Mr Nguyen Tan Thinh (Human resources management in

enterprises, 2005) human resource is interpreted as all of physical and mental

capabilities of human that are employed in production and labor process It is alsoconsidered to be the labor power of the human – the most valuable resource in all theproduction elements of enterprises

In summary, although there are different understandings of human resourcesdepending on the angle of research approach, the common point that we can easilyrealize through the concepts, definitions above is that talking about human resources

means referring to the quantity and quality of human resources In which:

Quantity of human resources is expressed through the indicators of scale and speed

of human resources development

Quality of human resources is synthetic factor of various partial factors such as

mental, physical strength and aesthetic character of the employees

- Mental strength is the power of intelligence, the understanding, knowledge and

education level, expertise and labor skills, or the potential part of the human being as

talents, gifts etc not only dues to innate nature but also depends on the process ofcultivating, training, striving process of each individual.

- Human physical strength includes not only muscle strength, the ability to work

flexibly under pressure, but also flexibility of neural activities, the power of their will,the active ability of mentality Physical strength is the precondition to maintain anddevelop intelligence; it is a basic tool conveying knowledge into practical activities, totransform knowledge to physical strength Therefore, the intellectual power can onlypromote its advantages successfully when human physical strength is fully developed

In other words, intelligence is the most valuable asset of all assets, but health is the onenecessary precondition to create that asset and they have an intimate relationship witheach other

In short, in terms of the overall, human resource is the labor potential of the human

at the sides of quantity, structure (industries and training levels, structure by regions, structure by economic sectors) and quality, including the quality and capacity (mental strength, physical strength, occupational skills) to meet the needs of socio-economic development within the country, territories, locals or sectors, and competitive capacity nationally and in the international labor markets.

Besides, to mention about human resources we cannot but taking into account their

aesthetic personality, culture and life perspective These elements represent a range of

laborer values such as: ethics, behavior, activeness, self-discipline and sense ofresponsibility at work, the cooperative ability in teamwork etc Among them, ethicsplays an important role because it gives people the ability to better implement theirsocial functions and enhance their creative capacity in practical activities

Thus, when mentioning about human resources we are referring to the harmoniouscombination between the three elements which are mental strength, physical strengthand aesthetic personality These are the most basic elements that direct laborerstowards their comprehensive development

1.1.2 The concept of human resources development

The concept of human resources development, similar to the concept of humanresource, is understood in various aspects and perspectives:

According to the ILO (International Labour Organization), "human resources

development involves not only dominating skill levels or even training issue generally but also developing human capacity and using that capacity of human to progress to effective employment as well as job satisfaction and personal life." The concept

considers human resources development in a wide scope It is not only including skilllevels but also the capacity development in the full sense for the laborers Skill,according to them, is the process of finalizing to supplement and enhance knowledge inthe process of living and working in order to meet human expectations

According to McLean & McLean (2000), "Human Resources Development is any

process or activity in order to develop basic working knowledge, expertise, productivity, and satisfaction that are necessary for a team, group, individual or in order to benefit an organization, community, nation or in short, neccessary for all humanity."

According to Swanson and Holton III (2001) "Human Resources Development is a

process to develop and promote the expertise of employees through organizational development, training, and personel development in order to improve productivity ".

As Prof Dr Nguyen Minh Tang defined, "Human resources development is

understood as adding value to people in the sides of intelligence, labor skills, physical strength, ethics, spirit etc so that they can participate in the labor force, to enrich the country, contribute to social improvement as well as to promote the traditions of the nation and contribute to embellish the colorful picture of humanity Therefore, human resources development must be carried out on all three aspects: personality development, organism development, and simultaneously creating a favorable social environment for human resources to develop."

Thus, even there are many ways to approach the problem, generally humanresources development means the process of enhancing social capacity and dynamism

of human in every aspect (physical strength, mental strength and aesthetic personality,life perspective) as well as allocation, use and promotion of the capacity in the mosteffective way to develop businesses, organizations and the country That is the process

of developing human resources from the form of potential elements to "human capital,human resource capital"

In the economic perspective, this process is considered as the accumulation of human

capital and the investment of that capital effectively to the development of the economy

In the socio-political perspective, it is the process of creating a loyal workforce with

the sense of organizing and discipline, being creative at work and abide strictly by thepolicies of the Party and the State, assured in quantity and quality, and at the same time,this force is utilized effectively to meet the needs of socio-economic development of thecountry or territory for each period

In individual perspective, human resource development is to improve knowledge,

health, practical skills, sense of organization and discipline so as to increase laborproductivity which in turn leads to increase income and improve quality of life

Hence, in a general way we can understand that human resources development is the

process of creating changes in quantity and quality of human resources together with improving the efficiency of using them to meet better and better the demand for socio- economic development of the country, region, sector or a business In other words, human resources development is the aggregation of all forms, methods, policies and solutions to improve and enhance social labor-power to meet the requirement of human resources for the socio-economic development in each development period.

1.1.3 The role of human resource and human resources development

Since the 90s of the 20th century, the business philosophy has had a large changefrom seeing technology as the center to considering human as at the heart, prioritized

human in the aspect of knowledge, expertise and work motivation Traditional resources

of production and growth such as land, capital, monetary and fiscal policies have beendiminishing their importance while human resource, which is the ability to create,distribute and exploit information, scientific knowledge and technology, became thebiggest comparative factor that determines the competitive strength of each nation, eachenterprise in the in-depth globalizing market

When considering the role of human resources in a narrow range which is acompany, according to Prof Van Phuc, the human resources of the company is "anindependent input; the input that decides the quality, cost, duration and effort of otherinputs; decides the quality, cost and duration of intermediate products, partial productsand output products of a firm" This is fully proved because all of activities within a firmare performed by human and come back to serve human

Most of the theories about economic growth recently have pointed out that the mostimportant motivation of economic growth with sustainability is the human factor, humanresources However, these theories also emphasize that: human, human resources must

be invested to develop, create the skills, knowledge, expertise, experience, creativity andsense of organization and discipline in order to become "the capital - human capital,human resource capital" Through which we have emphasized the importance of humanresources development That is the investment in people through education, training,vocational training, health care, job creation, social security, etc to develop the physicalstrength, intellectual strength, cognitive ability and acquiring knowledge and skills;enthusiasm and creativity of the human; along with the promotion of cultural identity,historical traditions of the nation to mould the skill and spirit of human in labor That isthe internal resource, the endogenous factor that if being promoted and used effectively

it will be the motivation and the great strength to serve human themselves, the businessesand the society

1.2 HUMAN RESOURCES DEVELOPMENT WITHIN ENTERPRISES

1.2.1 The characteristics of human resource and human resources development within enterprises

According to Dr Tran Kim Dung: "human resources of an organization are formed

on the basis of individuals with different roles and linked together to perform certainobjectives of the organization."

Here, the difference of human resource from other resources is that humanresources contain human nature with the creative abilities, demands, motivation,physiological characteristics of individuals differ from each other They have theability to form groups, associations, unions to protect their interests Their behaviormay change depending on themselves or on the impact of the surroundingenvironment

Therefore, compared to other resources, human resource and human resourcesdevelopment within an enterprise include the basic characteristics below:

First, the human resource within an enterprise is a part of the whole human

resources of the country or territory It is the work ability that an enterprise canmobilize from the human resources of the country or territory

Therefore, the human resources development of an enterprise must be put in adialectical relationship with the human resources development of the nation or territoryand under the influence of policies, strategies of human resources development of thecountry or territory

Secondly, the human resource of an enterprise is not a simple sum of individual

working capacity of each person in the company but must be a coherent coordination inworking capacity of those people It means the collection and development ofteamwork skills play an important role in the content of human resources development

of the organization In other words, human resources development within an enterprise

is not only the improvement of working ability of each individual that reflects in thequality of labor, but also developing and completing the factors that enhance teamworkcapacity among those people so as to arrange suitable jobs, strengths, weaknesses,appropriate remuneration and continuously improve work environment etc to promotethe highest capacity of working and creativity of the human.

Third, the human resources development in an enterprise is associated with the

firm’s objectives and must be planned from the firm’s objectives It differs from thehuman resources development of a country or territory which is associated with thestrategies, objectives for socio-economic development of that country or territory

It means that human resources development within enterprises must come from thestrategic objectives of the business and must aim to solve the objectives

Fourthly, a firm’s human resource is a resource inside other resources which are

capital, technology etc but differs from the other resources in its nature and role for thefirm It is its human nature governed by physiological and biological factors, itsutilization process will create value that is greater than the value of itself; at same time,

it keeps the decisive role in utilizing effectively other resources of the enterprise

The fifth is, in terms of objectives, if human resource management has the goal of

optimizing results of the business and the employees themselves that is high economicefficiency for the enterprise and satisfying better the needs of employees, then humanresources development is to improve work abilities that the enterprise can mobilize tocomplete their missions and goals That means, human resources development is thenecessary condition and human resources management is the sufficient condition toobtain labor resources and use them effectively towards achieving the goals that thefirm has set

1.2.2 The content of human resources development within enterprises

1.2.2.1 Ensuring sufficient quantity and appropriate structure for human resources

In each period, each different time of the production and business developmentprocess, an enterprise will build particular business strategies in order to achieve theobjectives that they have set Along with each business strategy is the resourcesplanning for the successful implementation of the strategy In which planning,attracting, selecting personnel is the most important factor that will help ensuring theenterprise to achieve sufficient personnel in quantity, age structure, sex composition,qualification and the resource allocation in each department of the enterprise to realizethe strategies that were built.

Human resources planning can only become reality when the process of attractingand recruiting human resources is done in a scientific way Job analysis, workstandards development, staff competency assessment, planning the needs of trainingand supplementing human resources is an essential work to know how many people thecompany needs and the requirements, standards set out for candidates Recruitmentannouncement publicly as well as the application of recruitment skills such as tests andinterviews will help companies to select the best candidate for the job

1.2.2.2 Developing professional levels and qualifications

We are living in an era where the pace of changing is going on dramatically - it isthe era of technology explosion, information explosion These "explosions" affectstrongly onto production lines, management behavior, lifestyles and thinkings ofpeople in the company This change set out to all executive levels the need to equiptheir workforce with the new knowledge and skills of profession in order to keep upwith the changes However, firms cannot simply stop at the training programs as short-term solution but also need to be acumen and visionary They have to realize the trend

of the times in the next five or ten years from which to build plans, training programsand short-term as well as long-term development strategies in order to foster, enhanceand update knowledge for all personnel in the company In addition, the developments

of appropriate professional qualification standards for each position in each period as

well as the assessment process of job training are indispensable Simultaneously, theexecutive/leadership management must constantly enhance levels of expertise andskills related to administration and development of human resources in order to wellsatisfy the work in the new situation.

1.2.2.3 Developing skill levels

This is an indispensable requirement if we want to improve the efficiency ofproduction and business activities of enterprises "Education must go hand-in-handwith practice", a person was highly trained in professional qualification but do not havethe access to the works that allow him to apply his professional knowledge as trained,then essentially the trained skills will gradually be oblivious and, of course, cannotimprove his skill level Therefore in the process of human resources development,firms must necessarily arrange the right personnel to the right work so as to maximizetheir skills as well as increasingly develop the skill levels of the staff to deliver thehighest efficiency in human resources utilization

At the same time, firms should also frequently set up training, education plans andretraining combined with accurate assessment of employees with regards to practicalskills whenever there are changes in production and business demands or technologicaland technical procedures Besides, firms need to regularly train to enhance the skilllevel and management skills for managers and professional staff

1.2.2.4 Developing teamwork skills

In the era of extensive industrialization and globalization today, when science andtechnology are growing faster and faster, work pressure is increasing and the level ofrequirement is more complicated, each individual can hardly accomplish all the workthey are assigned, the necessity of teamwork is an essential and extremely importantrequirement It is simply because no one is perfect; group work will focus on thestrengths of each person and complement them with each other Therefore, developingthe ability of team working should be properly concerned in the human resources

development in the firm It is also a critical factor for effective utilization of humanresources in every company.

Teamwork skills development is the development of interactive skills betweenmembers of a group in order to promote work efficiency and develop the potential ofall the members For team leaders, they need to develop the skills to build up theirmajor role in the group, meetings management, teamwork process development,creativity and potential encouragement For the other members of the group, they need

to achieve necessary skills such as: collaboration, problem solving, communication etc.The effectiveness of the team will be much improved if the team members candevelop a strategy to change their own behavior rather than let the leader develop andimpose it to the members Leaders should consider themselves in the role of acoordinator rather than in the role of a "boss" as before

1.2.2.5 Developing labour health

Enhancing physical strength and stature is the goal of countries as well as ethnicgroups, so as for enterprises, officers and employees with strong and healthy physiquewill have a refreshing spirit to better acquire cultural and professional knowledge andultimately, safe and effective laboring

In enterprises, physique development is increasing health, longevity, endurance ofthe nerve and the muscle in order to best meet the requirements of the productionprocess in terms of the high technology and complex lines, hard and dangerous workswhich are prolonged continuously

This has a significant meaning in the efforts to increase labor productivity, increaseproduct quality, reduce costs and ensure work safety So in order to improve humanresources for enterprises, it is necessary to study the production and businesscharacteristics from which to build health standards for each stage, each job in thecompanies to be the basis for recruitment, caring, monitoring, fostering employees’health as well as being the basis for appropriate job arrangement

1.2.2.6 Developing aesthetic personalities of the labour

Developing personalities, culture and aesthetics of employees has an extremelylarge influence to enhancing the quality of human resources In the process of humanresources development within enterprises, along with the improvement of mental andphysical strengths of workers, the development of the aesthetic character value isequally important Aesthetic character of employees directly affects the quality ofhuman resources because this is the foundation of all behaviors Developingpersonalities, culture and aesthetics of workers in enterprises is in fact developingsense of organization and discipline, ethics, personal responsibility, industrial style,cooperation spirit in working, being dynamic, creative and adaptable in the job

1.3 HUMAN RESOURCES DEVELOPMENT IN ENTERPRISES MANUFACTURING AUTO PARTS AND INDUSTRIAL EQUIPMENTS (ANCILLARY MANUFACTURING)

1.3.1 Production and technical specifications in ancillary manufacturing enterprises

1.3.1.1 The concept of ancillary industry

Ancillary or supporting industry (SI) is an important industry in the industrialsystem of each country However, in fact according to the industries managementclassification and ranking system, SI does not exist; the SI enterprises are located in aspecific value chain of a random industry such as cars, motorcycles, marine,electronics, electrical appliances etc

In narrow concept, supporting industries are business organizations providingcomponents, spare parts, production tools of these components and spare parts.Components and spare parts will be supplied to auto manufacturing and assemblycompanies With this approach, the products of SI in automobile manufacturing ac

assembly industry includes parts and components such as the chassis, tires, engine,mirror glass, wiring, etc.

In broad terms, there are two different approaches which are horizontally andvertically Horizontal approach expands the scope of SI to not only including materialproducts but also non-material support services Vertical approach means associatingwith the product value chain and production activities to provide the components andparts for auto manufacturing and assembly companies

According to the horizontal approach, SI is the business organizations who producecomponents, spare parts and production tools for the products as well as productionservices In this approach, SI products include not only the components, spare parts andmachinery but also the services of warehousing, transportation, etc

As in the vertical approach, SI are organizations and enterprises that provide theentire material inputs including components, spare parts, tools, machinery andmaterials for the production of those products Accordingly, the products of SI have anextensive range of diverse from components and spare parts such as engines, wheels,etc to the input materials for the production of components and spare parts such assteel, plastic components, robber products, etc Manufacturing automotive parts andindustrial equipments is also a key component of ancillary industries and has animportant position in enhancing localization in the automotive industry of our countryaccording to the policy of the State of Vietnam

Characteristics of supporting industry

a An enterprise network with highly association

Supporting industry in general and the supporting industry for the automotiveindustry in particular include an entire system with many enterprises abundant anddiversified in types and scales of production Enterprises operate in many different

areas related to manufacturing and supplying SI for the automotive production andassembly industry such as producing plastic parts, metal parts, raw materials, etc Notonly different in operating fields, these firms also have different scales, they can belarge-cap FDI enterprises, state-owned enterprises or private SMEs.

SI firms are not only associated vertically but also cross-linked to form theproduction network (PM) PM interprets the linkages inside or between enterprisegroups in a certain value chain, to produce the final product which is automobiles.Global corporations usually have large PMs; they control the input of main resources,product design activities, branch management in many countries and access to the endcustomer The production stages are mostly outsourced by suppliers These suppliersare the main ingredient in PMs Companies within PM connects to each other throughvarious relationships such as subcontracting, production licensing, technical standardsregistry, marketing contracts, sharing products and standards relating to procedures Sectors within network are also constantly increasing A company can participate inseveral network For example, the world famous autoparts supplier Lear is a PMmember of many automobile assemblers such as General Motors Corporation, Ford,Toyota and Volkswagen A.G

PMs create different supply layers (Figure 1) The first layer is specialized inmanufacturing products particularly for the assemblers This enterprise layer suppliesluxury component products with the highest added value These SI enterprises areusually direct subsidiaries of large assemblers The second layer is individual SMEssupply directly for manufacturing and assembly firms or firms in the first layer Thislayer provides smaller components to complete major components, such as engines,gearboxes, etc for enterprises or supplies directly small parts to manufacturing andassembly firms The third layer is enterprises which specialize in supplying rawmaterials or processed products such as plastic products, metal products, etc for

enterprises of the first and second layers SI can have more supply layers depending onthe characteristics and complexity of the components The more complicated thecomponents are, the more layers of enterprises SI needs.

Figure 1: The layer network of supply enterprises (supporting enterprises)

Source: Abonyi G 2007 Linking greater Mekong subregion Enterprises to international Market (Slide 18ths)

b Supporting Industry contains high content of capital and technology

Most of SI products contain high content of capital and technology, such aselectronic components, machinery parts, precision metal stampings, etc The researchand development of these products are based on a relatively developed platform ofscience and technology and require long time To manufacture these products requiresmodern machinery and cannot be splited Firms must buy the whole machinery system,not only some parts of the production line On the other hand, in order to operate themachinery SI firms only need to use a small amount of labor but they must have highskill level and, therefore, require generous payment Furthermore, the inputs of SIbusinesses are also advanced material products so their prices are relatively high Thus,

SI enterprises always have very high capital demand in order to maintain and developtheir production activities

However, there is a part of SI products such as seat belts, floor mattress, etc Theseproducts only require simple machinery or hand-crafted These products have lowcontent level of capital and technology and use more labor These are products thatcreate low added value

c Mainly consist of small and medium-sized enterprises

SI products are often produced in small and medium-sized enterprises (SMEs) withsmall scale, and less labor So the SI system has all of the advantages anddisadvantages similarly to SMEs These enterprises have advantages of starting,compact leadership management, easy to renew equipments and technologies to adaptwith changes in requirements of the automobile manufacture and assembly enterprises.However, these enterprises also have to face limitations of SMEs The first and biggestweakness of the SMEs lies in its characteristics, which is small capital scale, lowfinancial source so they often fall into lack of fund anytime they want to expand marketshare or implement innovation, upgrade equipments SMEs usually depend on thecompanies they are supplying products to There are many limitations in employers and

workers training, lack of know-how and technical assistance, no experience in productdesign, lack of investment for research and development etc In other words, theyrarely have enough capability to meet quality requirements, difficult to improveproductivity and labor efficiency.

1.3.2 Factors primarily affect the human resources development in ancillary manufacturing enterprises

Similar to enterprises operating in other fields, human resources developmentwithin auxiliary production enterprises is also influenced by factors of macroenvironment, micro environment and internal environmental factors However, due tothe characteristics of autoparts and industrial equipments manufacturing industry, theeffects of these factors concentrate on the following factors:

1.3.2.1 Macro environmental factors

For the human resources development in enterprises producing autoparts andindustrial equipments, the primary influence factors are economic environment;population; guidelines of The Party and policies, laws of government relating to humanresources; science, technology and socio-cultural factors, market elements of theindustry

Economic environment, Stable economic development with high pace is the

important economic condition to help industries to develop, including autopartsproduction industry, its increased demand leads to the need to increase in humanresources for the industry; besides, the economic cycles such as growth, recession orinflation, income, standard of living, investment pace etc have direct impact on thedemand of human resource and policies of enterprises for human resources This maycreate opportunities or pressure for the human resources development of enterprises

Population, population growth rate affects the quantity and quality of human

resources as well as the strategy of labor structure within enterprises

Guidelines of the Party will have orientation impact on the nation's human resource

strategy related to the issues of human resources training and talent development.Human resource development strategy of a firm, especially in terms of attracting newhuman resources, also need to be considered in the context of reference to the nationalstrategies of human resource training and development

Laws and policies of the Government For the human resource development sector,

the Government laws, typically Labor Law regulating general issues related toresponsibilities and rights of employees and employers within an enterprise to avoidarbitrary conducts related to employment issues, labor contracts, termination ofemployment, dismissal and the prescribed regulations etc The Government policies,for example economic integration policy, state-owned enterprises reform policies etc.have had a strong influence on competitive attraction of human resources as well asaffect to change the opinions, methods and working style of many businesses.Moreover, State policies also change the mechanisms and salary policies of enterprisesand affect human resources attraction Particularly in automotive production, theimpact is shown in both the policy system of automotive industry developmentplanning, the preferential policies related to development including incentives in lands,taxes and finance etc All of these policies facilitate the development of productionindustry and certainly create the opportunity to develop the human resources inautomotive industry

Science and technology, currently the general automotive parts and ancillary

industry in Vietnam is slower than other ASEAN countries for 30 years, therefore,about science and technology our policy is to leap-frog the development in productionscience and technology of the world Along with this policy is the challenge ofensuring skilled workers and engineers force, especially the experts in order to capturethe time to manage and operate advanced technologies that enterprises invest in.Besides, when changing technology, some current jobs or skills are no longer suitable

so that it raises the demand of retraining, arranging, organizing human resources to fitthe new situation Hence, the human resources development within enterprises requiresspecific plans and strategies to address thoroughly the objective requirements of thenew situation.

Socio-cultural factors of the country has a significant impact on psychology,

behavior, living, lifestyle and changes in perceptions about the value of laborers And

so, it affects the way of thinking and the policies of human resources development inorder to highly promote positive elements, and simultaneously overcome negative sides

in working behavior of human resources in enterprises

Natural conditions, being the country that has an area stretching from the north to

the south with a full range of terrain and weather conditions is a favorable condition forthe development of vehicles such as cars, motorcycles, etc It becomes a goodcondition for business human resources development, however, due to thecharacteristics of production industry require human resources to meet the terms ofphysique and strength, the content of human resources development should emphasizemore on methods to improve physique and strengths of human resources

1.3.2.2 Micro environmental factors

The key micro-environmental factors in human resources development iscompetition of attract human resources of businesses and the availability of trainingfacilities

Competition to attract personnel of enterprises in the same industry affects strongly

on the quantity and quality of human resources of each business It creates themovement of human resources from business to business, especially high-qualityhuman resource Because, the specifications of production, requirements of humanresources of enterprises in the same automotive parts and auxiliary industry alwayshave similarities

The availability of training facilities is one of the labor supply sources which is

very important for enterprises, this ability high or low will directly affect the level ofexcess or shortage of human resources in different periods

In addition, the quality of training facilities must also be considered as a factor thatdetermines the quality of the company’s human resources in the future

Thus, the two micro environmental factors affect the supply and demand in the

industrial labor market, increase competitive pressure of human resources and affectthe orientation and goals of human resources development of each enterprise inaucillary manufacturing sector in general and the automotive parts manufacturingindustry in particular

1.3.2.3 Internal environmental factors

Internal environment consists of the elements about internal resources of anenterprise, directly affects the firm’s operating results, decides internal strength todevelop human resources of the firm In human resources development of theenterprise, these factors are human resources attracting policies, allocation andutilization regulations of human resources, training and re-training regime,remuneration packages, organizational culture environment, financial resources andtechnological capacity

(1) The policy of attracting human resources

Depending on the business strategies and actual situation, the enterprise will havespecific policies to attract human resources for each period to ensure the enterprisehaving sufficient quantity and quality of human resources with appropriate structure toperform their works, objectives and tasks

Planning human resources accurately and scientifically will help enterprises tobuild up an appropriate and attractive policy to absorb human resources, create afoundation for enterprises to recruit people with higher initial quality This contributes

to create favourable conditions for human resources development within the

enterprises Besides, it directly affects requirements and methods of human resourcesdevelopment of the business.

(2) Regulations of human resources allocation and utilization

Personal work inspiration is the result of many resources operating simultaneouslyinside human and in the living and working environment of the human In which,assigning the right person to the right job, appreciating the nature and level ofcontribution of individual employees accurately to encourage, treat them timely are thekey factors promoting personal efforts to improve themselves, increase contributionstowards achieving objectives of the organization

And so, the regulations of human resources allocation and utilization are one of theimportant factors affecting the human resources development of the enterprises, beingthe solid basis for the development of human resources within enterprises

(3) Training and re-training regulations

Training and re-training regulations are activities to maintain and improve thequality of human resources of the business in a comprehensive way It helps employees

to better understand their work, understand more about the professions so as to performtheir duties and functions more voluntarily with better attitude as well as enhance theiradaptability to future works in the context of developing science and technology morerapidly than ever before This is the foundation for human resources development ofenterprises

Besides, derived from one of the burning issues of our country currently is thattraining activities are not associated with the demand of businesses According to thelatest statistics of the Ministry of Education and Training, 63% of graduates areunemployed and 37% of them who are employed do not meet the requirements of thejobs (Mr Phung Xuan Nha, Economic Administration Department, UEB, VietnamNational University) While waiting for improvements from education sector, the work

that SI enterprises need to do immediately is re-training human resources to meet thejob requirements.

Training and re-training regulations need to be done in a scientific, organized andplanned manner The necessity is choosing the right people, right content, right trainingmethods, right training effectiveness assessing methods and a reasonable financinginvestment From that, workers will have rightful and strong learning motivation,pushing them to truly learn to improve their qualifications Thus, the quality of firms’human resources will be improved over time

(4) Remuneration policy

Material and spiritual remuneration policy for employees (wages and salaries,rewards, discipline, environment improvement, working conditions, implementation ofhealth care, labour safety and insurance, leisure, vacations, etc.) is one of the coreelements to attract good workers who are suitable with the job requirements of thefirms, preserve and encourage them to perform the best in their works On the otherhand, it has a huge impact on the choice of work, status of work implementation,product quality, and operational efficiency of human resources within enterprises This

is the basis for maintaining and developing human resources of businesses Whendeveloping remuneration policy we should consider simultaneously the followingobjectives:

- The remuneration system must be legal

- The remuneration system has to be fair, reasonable and effectively stimulatesemployees to complete their work with high efficiency

- The remuneration system must ensure effectiveness: requiring enterprises tomanage the remuneration system effectively and to have financial resources to supportthe system to operate for a long time, continuously and better over time

(5) Organizational and cultural environment

An enterprise cannot survive sustainably and flourish without building a workenvironment with specific and progressive disciplines Only when businesses develop aprofessional and friendly work environment, then employees themselves will feel thatthis is very good opportunity to assert and develop the maximum work capacity, studyability to improve their expertise to practically serve requirements of the employers.Therefore creating a working environment for employees to see the workenvironment of the company as their own living environment is a very important factorthat businesses need to pay attention to in developing human resources of the unit Inother words, it is the need to build and develop organizational culture or corporateculture.

Corporate culture is the entire cultural values built up during the existence and development of an enterprise, to become values, concepts, practices and traditions rooted deep inside the operation of the firm; to govern feelings, thoughts and behaviour of each member of the enterprise; making up the difference between businesses and is considered to be the definite tradition of each enterprise These

factors of difference and particular tradition of corporate culture would be the drivingforce behind the success of every company

Corporate culture creates motivation and environment to form the new values thatmeet current and future requirements, orienting the thoughts and actions of members topromote the highest of the available advantages of internal resources, inspire andmultiply new resources for development From the angle of work environment inhuman resources development, corporate culture is analyzed on the following basiccriteria: working style, leadership style, relationship between employees and employeecharacteristics

(6) Financial resources

As already known, finance is one of the most fundamental factors for the survivaland development of an enterprise, the crucial factor decides the issue of attracting and

retaining qualified staff It is the prerequisite to ensure the implementation ofremuneration regime, training and development of human resources in the enterprise.Indeed, whether the business has developed very attractive and convincing trainingplans, remuneration plans etc but without financial resources, they can only stop at theidea generation stage Therefore, human resources development within automotivemanufacturing enterprises nowadays needs to be considered in accordance with thefinancial capacity of the enterprise.

(7) Technological capacity

The current and future level of a firm’s technology is also a factor that directlyinfluences the development of human resources within that enterprise It raises theneeds to be assured of the quantity and quality of human resources in enterprises Thatmeans, the technology must be qualified by labourers with skill levels, qualificationsand work behaviours which are associated with it Thus, the development of humanresources must be consistent with the production technology being applied and theexpected changes in technology in the future of automotive manufacturing companies.Simultaneously, in a dialectical relationship, the capacity of technologydevelopment of automotive manufacturer will create the environment to attract, useand develop high quality human resources

1.4 HUMAN RESOURCES DEVELOPMENT EXPERIENCE IN OTHER COMPANIES WORLDWIDE AND IN VIETNAM

1.4.1 Experience of American companies

United States is a young, resource-rich country that attracts resources from aroundthe world American culture expresses pragmatism, highly individualistic; personalfreedom is placed on top priority Americans accept conflicts; consider conflicts as themotivation of growth For Americans, "making money is one of the most effectivemethods to gain social respect" So, the thoughts of wealth in society are stimulated.Positions and titles in American society are not appreciated as in other countries with

the traditional civilization; even education and training are simply considered as a form

of individual investments

Human resources development experiences in the United States always focus onpromoting American cultural values and lifestyles and are considered as one of themost powerful and successful school of administration in the world, with the followingcharacteristics:

- Short recruitment regime for easy change of personnel

- Training is applied by highly specialization

- Job descriptions are clear and narrow of scope

- There are polarization in wages and salaries being used as the basic tool toattract highly qualified skilled workers

- Female employees are protected by law: equality in recruitment, training,promotion opportunities and wages to male employees Decision-making andresponsibility regimes as individuals

Today, the human resource development activities in the US in the 21st century willcontinue to improve towards:

- Design richer work contents, scope of work will be expanded to apply forteamwork to perform

- Recruitment regime will last longer; firms will now pay more attention to theliving and welfare of the staff Continue to develop personal freedom foremployees Pay more attention to multi-disciplinary skills in training

- Human resources development activities tend to be more human, developingwelfare programs and improving quality of life in the workplace

1.4.2 Experience of Japanese companies

Japan has a traditional and human-natural culture The Japanese society hastraditions, distinct class and has a focused goal is linkage and development

The Japanese human resources development and management system has thefollowing characteristics:

- Company is a large family, working in groups, friends and contains multipleoverlapping relationships

- Employees and companies have the same destiny due to seniority and life workingregimes

- Long-term recruitment regime, maybe for life Employees are loyalty, concernabout long-term benefits, are self-esteem, have high sense of collective, hard-working,positive, enthusiastic in work, do all the work and never over time

- Training is applied on a large scale, multi-skilled, focused on quality issues andthe relationship between training and use

- Salary, bonus, motivation as average, seniority is still an important factor for basis

of promotion and advancement

- Job description is unclear, wide scopes, rich contents

- There is a big distinction between male and female employees in recruitment,training, promotion opportunities and salary

- Decision-making in teams, employees prefer to participate in governance

However, since the late 1970s until now, especially in the 90s, the cultural,economic, social and technological factors of Japan have had radical changes In manycompanies gradually forms an opposing trend in philosophies of life betweengenerations of middle-aged and elderly workers and the youth Japanese youth todayhas received partially Western lifestyle They do not value the factor of loyalty tocompany as before; do not appreciate the superiority of lifetime employment regime

On the contrary, they want to promote individual freedom factor, want to enjoy moreand emphasize on material values Japanese human resource development, hence, hasmade several adjustments such as: seniority salary regime is adding the factor of work

quality system, advancement takes into account capacity factor and practical results ofjob implementing, etc.

Through the above analysis, we can see that the human resource governance anddevelopment of the United States and Japan are in two completely opposite schools andstyles, but if implementing in accordance with business mechanism and culturalcharacteristics, they are still successful Currently these two schools tend to movetowards each other Modern Americans tend to be more interested in the human aspectand the spiritual, cultural and traditional family values; in contrast, Japanese workersare expecting enterprises to offer more material incentives and higher personalfreedom Modern human resource development in the United States is tending to usevarious methods to encourage long-term employment, stimulate collective perceptionthrough group work activities etc The top successful companies in US are thecompanies who have business philosophy, organizational culture and work stylesrelatively similar to the Japanese model In contrast, many Japanese companies started

to care about material motivation factors, evaluation based on results of the works etc

1.4.3 Experience of Truong Hai Auto Joint Stock Corporation in Vietnam (THACO)

Thaco is a leading enterprise in market shares of automobiles distribution inVietnam in 2011, exceeded Honda’s market share, and is now the corporation that hasthe biggest scale in automobile manufacturing and assembly in Vietnam; havingfactories in Chu Lai open economic zone with operating area of 500 hectares; with thenumber of personnel until the present is about 7,000 people Along with thedevelopment of automotive production and assembly industry in Vietnam, Thaco Co.During the years always continued innovation and sustainable development in manyareas, improving product quality stability, focusing on technical logistics, after-salesservices, ensure supplying to their customers with high quality products, safe in usewith competitive prices, contributing to the economic and social development of the

country The above results come from a variety of causes, in which the essential cause

is the human resource development activities in the last period have been concentratedappropriately by the company and having many developments in width and depth;since its establishment in 1997 the workforce has grown from 20 to 7,000 people.Specifically, to develop human resources in order to improve the production andbusiness performance of the company, the company’s solutions are as followed:

1 Arrange human resources in a rational and scientific manner

2 Improve the quantity and quality of human resources for the development of thecompany

3 Have policies to attract talents to undertake tasks assigned in the short-comingand long-term period

Contents of implementation are as follows:

First, statistically collect the skills and capacity levels of all staff to easily select

qualified personnel in order to strengthen the capacity of human resources Trainingand re-training staff to ensure a good working level to serve the Company

Second, create the synchronized mechanism in attracting talents from resources to

voluntarily contribute to the workforce of the Company with scientific selectionmethods such as affiliate recruitment financing outstanding students who commit toserve the Company after graduated; takes part in talent recruitment fairs etc Graduallysupplement and replace the current staff, create all favourable conditions to promoteintellectual contributions to the firm

Third, change evaluation methods of work effectiveness in a scientific way to

identify criteria for evaluating the efficiency and capacity of staff including: workresults, work methods, qualities and skills related to the job For example, managers ofall levels together with workers to agree on work plans; commit to well implement theworks set out, depend on objects to daily, weekly, monthly, quarterly review the plan

implementation; during the implementation process workers will respond to anyunreasonable issues of the plans and suggest improvements, rationalizations of stages

in order to achieve higher efficiency The work results include both volume andquality, the levels of completion of the work assigned are very important criteria forevaluating employees There are also professional competence, work attitude andpersonal qualities to help the company having a more comprehensive view ofemployee work efficiency

Fourth, in parallel with the implementation of the above solutions, the company has

developed and implemented a payment mechanism associated with the labour capacityand results of each employee and stimulated labourers to create and commit long-term

to the company Delivering unit wage to units based on production and businessperformance criteria, not apply a too high basic salary which is 60% of the totalelectricity production and business wages to motivate strive for units, which unitperforms well will enjoy higher incomes from the units with medium or low workcompletion Wages by work assigned of each person associated with the level ofcomplexity, required accountability of the work, the level of work completion and theactual number of working days of each employee

Fifth is, timely reward to ensure spiritual and material encouragement to employees

who have made great contributions to the Company

1.4.4 Lessons of experience

On the basis of studying the experience of human resources development of anumber of successful businesses within the country and worldwide, we have drawn anumber of lessons that should be applied in the development of human resources in theJoint Stock Company of Autoparts and Industrial equipments JAT as follows:

First, the company needs to raise awareness of the role of human resources for the

business development from which issued the guidelines, policies, plans for human

resources development properly to contribute to decide the success in businessactivities of the enterprise.

Second, the company has to build and maintain a staff of highly qualified people,

committed to the company, working with a team spirit, responsibility and enthusiasm

Third, in management and utilization of human resources, the company needs to

promote humanity, respect for employees, use people for their talent and placeefficiency above all, to trust and create advancement opportunities for employees

Fourth, businesses need to have a human resource development system with new

policies about recruitment, training, salary, arrangement, rewards, assessment inaccordance with the requirements of human resource management in the marketeconomy Construct a human resources management system that runs smoothly,scientifically and effectively at all management levels

Fifth, to develop human resources, develop the business, a problem that we cannot

avoid is corporate culture The core of corporate culture is the corporate spirit and thevalue perception of the enterprise Hence, businesses and employees need to achievethe unity of spirit and the view of value Create an environment for employees to workcomfortably and safely, cooperative labour relations, equality among employees andbetween employees and managers in the company

Sixth, Regularly care and place human resources development in the business at the

top priority in the development strategy of the company and see it as the decisivecompetitive factor leads to the company’s success in the fierce competitive businessenvironment today

Last but very important is that the company must be completely autonomous in all

activities in accordance with the laws and take responsibility for their economicefficiency on the basis of the regulations on operation mechanism of the Government

Summary of Chapter 1

This chapter has introduced the theorical basis of human resources development:

- An overview of human resource and human resources development, including thecontents of: The concept of human resource; Human resources development; Role ofhuman resource and human resources development

- About human resources development within enterprises, including the followingcontents: Characteristics of human resource and human resources development withinenterprises Content of human resources development in enterprises: Ensure humanresources sufficient in quantity and appropriate in structure; Develop professionalqualifications; Develop skill levels; Develop the ability of teamworks; Developphysical strength of workers; Develop ethics, behaviour of employees

- About human resources development in JAT Co., including: Production andtechnical specifications in enterprises from the perspective of human resourcesdevelopment The factors that have primary impact on human resources development

in ancillary businesses: macro environmental factors; micro environmental factors;internal environmental factors

- Experience of human resources development of companies in the world and in thecountry

CHAPTER 2:

SITUATIONAL ANALYSIS OF HUMAN RESOURCES DEVELOPMENT IN JAT AUTOPARTS AND INDUSTRIAL EQUIPMENTS MANUFACTURING

JOINT STOCK COMPANY

2.1 INTRODUCTION OF JAT AUTOPARTS AND INDUSTRIAL EQUIPMENTS MANUFACTURING JOINT STOCK COMPANY

2.1.1 Formation and development

Current profile information of the Company:

- Company’s name: The Joint Stock Company of Autoparts and IndustrialEquipments Manufacturing JAT

- International Trade Name: JAT AUTO PARTS AND INDUSTRYEQUIPMENTS PRODUCTION JOINT STOCK COMPANY; Abbreviation: JAT.JSC

- Address: Lot G11 - Que Vo Industrial Zone, Bac Ninh City, Bac Ninh Province

The Joint Stock Company of Autoparts and Industrial Equipments ManufacturingJAT, formerly Motorcycle Parts Factory serving the enterprises manufacturing andassembly of domestic motorcycles and Chinese-brand motorcycles since 2003 until

2007 The company was founded on 25 January, 2008 with main line of business ismanufacturing and trading autoparts and industrial equipments The company officiallystarted its production and business activities in Lot G11 - Que Vo Industrial Zone, BacNinh City, Bac Ninh Province in November 2008

Mission: To be an products provider at low costs, high quality and timely delivery.Vision: To build JAT to become the leading enterprise in the ancillary industrialmanufacturing sector in Vietnam and in South East Asia

Business philosophy: Always achieve satisfaction of all customers by quality, priceand delivery time, to ensure the harmony between interests of all parties.

Several images of the products:

- The company currently focuses on manufacturing and processing motorcyclecomponents, motorcycle parts and auto parts for customers who are the leadingcompanies in motorcycles and cars assembly in Vietnam such as Honda, Yamaha,Piaggio, Suzuki, Toyota, Ford Vietnam, to meet the increasing localization demands ofthese companies and also export spare parts for assembly companies overseas(Philippines, Malaysia, Indonesia etc.)

2.1.2 Functions and duties:

2.1.2.1 Functions:

The Joint Stock Company of Autoparts and Industrial Equipments ManufacturingJAT is a joint-stock enterprise operating under the Vietnam Enterprise Law, with thefunctions of manufacturing and trading ancillary products, automotive equipments andspare parts for motorbikes as the issued business license and accordinging the strategicorientation of the company

2.1.2.2 Duties:

The current mission of the Company is to manufacture equipments and spare partsfor automobiles and motorbykes to serve the increasingly growing demands ofautomotive assembly due to the localization rate of these sectors is prioritized anddeveloped

2.1.3 Organizational structure:

2.1.3.1 Functions and responsibilities of departments:

- Department of Finance and Accounting: Financial and investment planning;costs administration; cash management; supervising spendings of departmentsunder the approved budgets; mobilizing and balancing capital resources; setting

up and monitoring the implementation of financial policies within the company;

implementing regulations of accounting and tax reporting in accordance withthe law.

Organizational structure diagram is as followed:

- Department of Human Resource Management: Planning strategies about human

resources to meet development requirements of the company over periods;

Proposing, set up and implementing HR policies within the company; Creatingand implementing annual training plans for human resource development of thecompany

Board of Directors

General Director

Assistant/ ISO coordinator

Deputy General Director

Research and Develop- ment Depart -ment

ing Depart- ment

Market-Business Adminis- tration Depart- ment

Deputy General Director

Depart -ment

of Productio

n planning manage -ment

Depart -ment

of Produc- tion technique

tion Depart -ment

Produc-Depart -ment

of Quality manage -ment

of Legal - Adminis -tration