Effect of human resource management practice on competitive advantage and business results of enterprises: Case study on vnpts in provinces and cities

ource management practice in enterprises, especially enterprises operating in fields subject to the pressure of science and technology change such as post and telecommunications, in addition to functional activities, need to lead and encourage employees to innovate and create, and through activities encourage employees to propose new ideas; promote initiatives, improve techniques, renovate working methods; diversify horizontal and vertical activities to increase adaptability to the specific requirements of the business environment such as: assigning new tasks; alternation of employees and work, etc. It means that leading and encouraging necessary change in the components of the human resource management practice. Furthermore, in terms of logic, the higher the employee is encouraged to change, the more effective their work is and therefore the more efficient the organization will be. Research by Tran Kim Dung et al (2010) in the Vietnamese market also verified that the component of encouraging change (innovation) was positively related to the human resource management practice. From the theoretical gap through a review of relevant researches: Applying resource-based theory, researches in the world have integrated the theory of human resource management at the micro level, and at the same time have proved that human resource is an important potential source of a sustained competitive advantage of an enterprise and in practice, human resource management is a sufficient condition to help enterprise to achieve and maintain the sustained competitive advantage. However, the researches mentioned above still have some gaps. Then, this thesis is done to fill the research gaps of the above researches. New point 1: Many researches have considered the role of the human resource management practice, but they are still limited, they have not researched into depth and comprehensively considered (measured) the role of the human resource management practice (components of the human resource management practice). Therefore, the first new point of the thesis is to consider and verify the components of measurement of the human resource management practice. New point 2: The relationship between the human resource management practice, the competitive advantage of human resource and business results of enterprises has not been verified from previous researches. New point 3: Researches on the human resource management practice have been mainly done in developed markets, and limited in transition markets like Vietnam, especially in the post and telecommunications industry. 1.2. Objectives of the research General objective: The thesis aims to measure the effect of human resource management practice on the competitive advantage and business results of VNPTs in the provinces and cities directly under Vietnam Posts and Telecommunications Group. Based on the research results, the thesis introduces governance implications to increase the competitive advantage and business results of VNPTs. Specific objective: To achieve the general objective, the research needs to implement the following specific objectives: Objective 1: determine the components of the human resource management practice; competitive advantage on human resource and business results of enterprises - Case study on VNPTs in provinces and cities under Vietnam Posts and Telecommunications Group. Objective 2: adjust the scale of components of the human resource management practice; competitive advantage on human resource and business results of VNPTs in provinces and cities under the Vietnam Posts and Telecommunications Group. Objective 3: build and verify scale model and theoretical model of the relationship between the human resource management practice, competitive advantage on human resource and business results of enterprises - Case study on VNPTs in provinces and cities under the Vietnam Posts and Telecommunications Group, on that basis, locate the intensity of the interaction between these factors and propose recommendations to complete the human resource management practice to contribute to improving the competitive advantage and business results of VNPTs in provinces and cities under the Vietnam Posts and Telecommunications Group 1.3. Methodologies of the research 1.3.1. Qualitative research method Qualitative research is carried out by group discussion technique, with the participation of a group of lecturers specialized in the human resource management and a group of specialists of human resource management department who are currently working at VNPT Dong Nai and some other provinces, cities, to explore, adjust and supplement the components of the human resource management practice; competitive advantage from the human resource management practice and business results of telecom enterprises with variables of observing and measuring the components of these concepts (chapter 3). 1.3.2. Quantitative research method Quantitative research (chapter 3 and chapter 4) is carried out to confirm the values and reliability of the scale of components of the human resource management practice; competitive advantage from the human resource management practice and business results of VNPTs in provinces and cities; verify research models and research hypotheses; check whether there are differences in the effects of the human resource management practice on competitive advantage and business results of VNPTs in provinces and cities. 1.4. Object and scope of the research The research object of the thesis is: the human resource management practice; competitive advantage based on human resource theory and business results of VNPTs in terms of the human resource management practice and competitive advantage of human resource. The unit analyzed is VNPTs in provinces and cities directly under the Vietnam Posts and Telecommunications Group. Respondents surveyed are department heads; Officers and workers directly working at VNPTs in provinces and cities. Minimum defined number of respondents for each region is 30 (to ensure that the minimum sample size of an analyzed unit is large enough to be considered a normal distribution). 1.6. Meaning of the thesis 1.6.1. Practical meaning The research will help the human resource managers to have a more overview of the effect of the human resource management practice on competitive advantage and business results of telecommunications enterprises in Vietnam. Therefore, this research will lay the basis for developing human resource development strategies, policies on the human resource management practice in telecommunications enterprises in Vietnam. 1.6.2. Theoretical meaning The research is the summarization and systematization of theories about the human resource management and competitive advantage; researches on the human resource management practice in the relationship with competitive advantage and business results of enterprises. Therefore, the author hopes that the research will contribute to form a theoretical framework to deploy other researches on topics related to the human resource management practice, competitive advantage of human resource and business results of enterprises. The research develops of scale system and research models on the relationship between the human resource management practice, competitive advantage from a perspective of the human resource management practice and business results of enterprises. Therefore, it will contribute to the development of theory and contribute to the missing scale system, especially the scale system in developing countries to establish the system of equal measurement value as stated by Craig. & Douglas (2000). The research uses a combination of modern techniques and methods in qualitative and quantitative research such as Focus Group, Cronbach Alpha analysis, EFA, CFA, SEM structural equation modeling, bootstrap testing, etc. Therefore, this research will be a reference source of methodology, research model design and research data processing, etc. for researchers, students in the field of management in general, of human resource management in particular. CHAPTER 2: THEORETICAL BASIS AND RESEARCH MODEL 2.1. Competition theory Competitive advantage is the implementation of a business strategy that a competitor fails to implement to facilitate cost reduction, exploit market opportunities or disable competitive threats (Barney, 1991). The first model of the competitive pressure approach was widely disseminated by Porter (1980). According to Peteraf and Barney (2003), an enterprise achieved competitive advantage will create higher economic value than its competitors. Competitive advantage is related to the economic value created from exploiting the ability of an enterprise to use resources, operational efficiency related to the economic value from commercialization. Thus, an enterprise with high competitive advantage will create higher operating efficiency than its competitors. 2.2. Resource basis view of the firm Resource basic view of the firm of Wernerfelt (1984) focuses on the competition analysis based on internal resources. Barney (1991) classified resources into three categories: physical capital (Williamson, 1975), human capital (Beckei; 1964), and organizational capital (Tdmei; 1987). Barney (1991) examined the relationship between firm resource and sustained competitive advantage. However, RBV theory did not fully explain how and why enterprises gain competitive advantage in a rapidly changing and unpredictable business environment. 2.3. Theory dynamic capabilities The theory dynamic capabilities of Teece et al (1997) was found on the basis of the RBV theory applied in fast changing market (dynamic market). Teece et al. (1997) defined dynamic capabilities as the ability to integrate, build, and reformat internal and external capabilities in response to the rapidly changing environment. Dynamic capabilities reflect an organization's ability to achieve new innovation to create a competitive advantage in the market (Leonard-Barton, 1992). Dynamic capabilities of an enterprise are difficult to copy and replace. Therefore, dynamic capabilities are the basis to create a competitive advantage and improve business performance (Barney, 1986; Eisenhardt and Martin, 2000). 2.6. Research model and hypotheses Components of human resource management practice: functional activities (second level concept includes: work identification; recruitment; training; work evaluation; salary, bonus; career planning and promotion), participation of staff, activities of teams and groups, administrative activities and lead, encouragement of change. Components of competitive advantage: quality of human resource and behavior of human resource. Work Recruitment Training Evaluation Salary- bonus Promotion Participation Team- Group Function Change Administration Human resource management practice Human resource quality Human resource behavior Competitive advantage Business results Figure 2.1. Proposed research model Summary of research hypotheses: Hypothesis H1: Human resource management practice has a positive effect on the competitive advantage of human resource of VNPTs in provinces and cities. Hypothesis H2: Human resource management practice has a positive effect on the business results of VNPTs in provinces and cities. Hypothesis H3: Competitive advantage of human resource has a positive effect on the business results of VNPTs in provinces and cities. Kết quả hoạt động của DNKN CHAPTER 3: RESEARCH DESIGN 3.1. Research process This research is conducted in two main phases: (1) preliminary research by preliminary qualitative and quantitative methods, (2) official research by quantitative method. Preliminary research: Preliminary qualitative research: From the research objective, the thesis summarizes the theoretical basis (background theory, research concept and previous researches). On that basis, research model, hypotheses and observed variables of the scale of research concepts are formed. Through the expert method in the form of face-to-face interview, the research model is evaluated to standardize the theoretical model, new factors appear and the scale will be adjusted/ supplemented to be clear, consistent with research context. Preliminary quantitative research: The scale is used for interview test with samples of 135 VNPT enterprises according to convenience sampling method to verify the reliability of Cronbach's Alpha and analyze the EFA exploratory factor analysis before conducting the official research. Official research: In this step, the thesis verifies the appropriateness of the survey data and the value of the scale (Composite Reliability, Convergent validity, unidirectionality, particularity). In addition, the thesis tests the suitability of the research model and initial hypothesis. Finally, the thesis uses Bootstrap analysis to verify the reliability of the expected value of sample. 3.2. Qualitative research results Work Recruitment Training Evaluation Salary- bonus Promotion Participation Team- Group Function Environment Human resource quality Human resource behavior Human resource management practice Competitive advantage Business results 3.2.1. Results of the theoretical model adjustment Figure 3.1. Results of the theoretical model adjustment 3.2.2. Results of scale adjustment From the comments on scale adjustment, the author summarizes supplements and adjusts the scales of research concepts: Table 3.1. Scale measurement Symbol 1st level components 2nd level components Number of observed variables Source of scale Human resource management practice Join 3 Tran Kim Dung et al. (2010); Singh (2004); Le Chien Thang and Truong Quang (2005) Team 4 Functions Work 4 Recruitment 5 Training 4 Evaluation 5 Salary and bonus 4 Promotion 4 Change 5 Competitive advantage Human resource quality 5 Wright, McMahan and McWilliams (1993) Human resource behavior 4 Business results - - 5 Nguyen Dinh Tho and Nguyen Thi Mai Trang (2009) Source: Results supplemented and adjusted from the original scale 3.3. Quantitative research method Data collection method: Sample information is collected by interview technique in three forms: face-to-face interview, e-mail interview and online interview by - Google Dos for staff, employees who are currently working in VNPTs in provinces and cities. Sampling method: Due to time constraints, the thesis uses convenience sampling method. VNPT enterprises are classified according to the following criteria: Region, gender, age, education, level, position and seniority. Data analysis method: Analyzing the reliability of the scale through Cronbach's Alpha coefficients, EFA exploratory factor analysis, Confirmatory Factor Analysis, SEM Structural equation modeling, Multi-group analysis, Bootstrap analysis. 3.4. Official research samples The research model (after eliminating five variables in the preliminary research) has 117 parameters that need to be estimated. Therefore, according to Bollen's (1989) rule that if there are 5 samples/ parameter to be estimated, the minimum sample size will be 585. This research uses multi-group structure analysis, furthermore, to make the minimum sample size large enough ( n ≥ 30) for each analyzed unit (VNPT regions), the author decides to choose a sample size of 750. However, to achieve a defined sample size in the case samples are insufficient or unsatisfactory due to lack of information or low quality, the author decides the number of questionnaires given out to interview VNPT’s staff is 125% of the expected sample size, or 940. The author collected 812 questionnaires (reaching the rate of 86.38%), the number of questionnaires meeting the requirements is 773 (reaching the rate of 82.23% of the questionnaires given out). CHAPTER 4: RESEARCH RESULTS 4.1. Researched sample characteristics Table 4.1. Researched sample characteristics Demographic characteristics Frequency Frequency (%) Gender  Male 434 56.1 Female 339 43.9 Total 773 100 Age 20 - 35 299 38.7 36 - 50 406 52.5 Over 50 68 8.8 Total 773 100 Education Have not studied college 141 18.2 College- University 589 76.2 Post graduate 43 5.6 Total 773 100 Position  Director and deputy director 31 4.0 Head and deputy head of departments 116 15 Specialist 207 26.8 Officer 348 45.0 Worker 71 9.2 Total 773 100 Working years in VNPT < 5 years 96 12.4 5 – 10 years 154 19.9 10 - 20 years 433 56.0 20 years and upward 90 11.6 Total 773 100 4.2. Verification of scale reliability with Cronbach's Alpha coefficient Table 4.2. Verification of reliability No. Scale Symbol Number of observed variables Conbach alpha coefficient Corrected Item - Total Correlation 1 Work identification CV 4 0.880 0.701 – 0.758 2 Recruitment TD 5 0.944 0.796 – 0.891 3 Training DT 4 0.910 0.786 – 0.819 4 Staff evaluation DG 5 0.911 0.700– 0.836 5 Salary - Bonus LT 4 0.910 0.772– 0.844 6 Career planning and promotion TT 4 0.922 0.758 – 0.867 7 Participation TG 3 0.892 0.766 – 0.810 8 Activities of teams and groups DN 4 0.925 0.800– 0.878 9 Working environment MT 5 0..881 0.502– 0.868 11 Staff quality CL 5 0.900 0.680 – 0.791 12 Staff behavior HV 4 0.924 0.787 – 0.863 13 Business result KQ 5 0.901 0.423 – 0.770 4.3. EFA exploratory factor analysis 4.3.1. Exploratory factor analysis (EFA) for the human resource management practice The KMO index = 0.956 with the sig = 0.000 proves that the analyzed data are suitable for EFA. 37 observed variables (after eliminating TT1 and TT2) are extracted into 8 factors such as EFA for the first time at Eigenvalue = 1.001, the total average variance extracted is 71.240%, and the rechecked Cronbach alpha coefficients meet the requirements. However, the factor that combines 2 components of career planning - promotion has variable TT4 with an unsatisfactory factor loading (λ = 0.368 <0.4) and variable TT3 with a factor loading difference that does not meet the standard of less than 0.3. If the variable TT4 continues to be eliminated, the total average variance extracted will be reduced to 69. 002%, if the variable TT3 is eliminated, the total average variance extracted will be deducted to 69.032%, so the author decides to keep the variables TT3 and TT4 for CFA (see Table 4.3) 4.3.2. Exploratory factor analysis (EFA) for competitive advantage and business results The KMO index = 0.895 with the sig = 0.000 proves that the analyzed data are suitable for EFA. 13 observed variables are extracted into 3 factors that keep the original components before performing EFA at Eigenvalue = 1.031 and the total average variance extracted is 70.249%, factor loadings, and rechecked Cronbach alpha coefficients meet the requirements, so this result is accepted for CFA. Table 4.3. Exploratory factor analysis (EFA) for the human resource management practice Observed variables Factors 1 2 3 4 5 6 7 8 CV1 0.595 CV2 -0.114 0.854 CV3 0.101 0.829 CV4 -0.108 0.716 TD1 0.904 TD2 0.758 0.104 0.106 TD3 0.690 0.130 0.118 TD4 0.968 TD5 0.949 DT1 0.840 -0.116 DT2 0.981 DT3 0.791 0.151 DT4 0.837 0.152 DG1 -0.149 0.745 0.107 DG2 0.127 0.102 0.150 0.569 DG3 0.811 DG4 0.117 0.781 DG5 0.866 LT1 0.909 LT2 0.940 LT3 0.705 LT4 0.734 0.113 TT4 0.242 0.265 0.487 TT3 0.228 0.327 0.368 TG1 0.791 TG2 0.131 -0.102 0.904 TG3 0.872 DN1 0.830 -0.128 DN2 0.842 0.151 DN3 0.803 -0.106 0.102 0.129 DN4 0.967 MT1 0.758 0.116 MT2 0.838 MT3 0.612 0.140 MT4 0.748 -0.111 MT5 0.687 0.197 -0.108 Engenvalue 17.455 2.508 1.624 1.558 1.432 1.207 1.109 1.001 Average Variance Extracted 47.707 6.195 3.819 3.504 3.209 2.532 2.268 2.005 Cronbach alpha 0.944 0.881 0.920 0.925 0.910 0.910 0.906 0.880 Table 4.4. Exploratory factor analysis (EFA) for competitive advantage and business result Observed variables Factors 1 2 3 CL1 0.812 CL2 0.208 0.623 CL3 0.937 CL4 0.796 HV1 0.920 HV2 0.760 HV3 0.938 HV4 0.791 KQ1 0.610 0.239 KQ2 0.652 0.138 KQ3 0.938 KQ4 0.947 KQ5 0.766 Engenvalue 6.816 2.131 1.031 Average Variance Extracted 50.172 14.154 5.923 Cronbach alpha 0.901 0.880 0.894 4.4. CFA Confirmatory Factor Analysis The Standardized Regression Weights are all greater than 0.5 (the lowest is λKQ5=0.608 and statistically significant (p <0.001), proving that the observed variables of the scale meet the convergent validity. All correlations between concepts are less than 1 (human resource management practice ↔ competitive advantage = 0.736; human resource management practice ↔ business results = 0.593; business results ↔ competitive advantage = 0.650) and statistically significant (p <0.001), proving that the concepts in the model meet the discriminant validity, the scales have composite reliability values; Average Variance Extracted and Cronbach alpha coefficients are satisfactory, proving that the scale of concepts in theoretical model reaches the validity and reliability. Table 4.5. Analysis of composite reliability and average variance extracted Concept Component Number of observed variables Reliability Value α ρc ρvc Human resource management practice Work identification (CV) 4 0.88 0.88 0,65 Meet the requirements Recruitment (TD) 3 0.93 0.94 0,83 Training (DT) 3 0.89 0.89 0,73 Evaluation (DG) 4 0.89 0.80 0,67 Salary - Bonus (LT) 3 0.89 0.89 0,74 Participation (TG) 2 0.84 0.85 0,74 Activities of teams and groups (DN) 3 0.90 0.91 0,76 Working environment (MT) 4 0.87 0.87 0,63 Competitive advantage Human resource quality (CL) 3 0.85 0.86 0,67 Human resource behavior (HV) 3 0.91 0.91 0,78 Business result (KQKD) 3 0,83 0.85 0.69 Verification of SEM Structural equation modeling Table 4.6. Estimated SEM Relationship Estimation Standard Error Critical value P-value Human resource management practice → Competitive advantage 0.736 0.053 12.380 *** Human resource management practice → Business results 0.249 0.086 4.080 *** Competitive advantage → Business results 0.468 0.102 7.195 *** The theoretical SEM results show that: p = 0.000; Chisquare / df = 3,260; GFI = 0.878; TLI = 0.936; CFI = 0.942, RMSEA = 0.054; all the regression weights met the standard of more than 0.5; the scales with composite reliability, average variance extracted and Cronbach alpha coefficients all meet the requirements of more than 0.5; error variance of the parameters to be estimated and the concepts in the scale model have no Heywood phenomenon at any error and all standard errors are <| 2.58 |. Therefore, we can conclude that the theoretical model is consistent with the market data. The estimated results (normalization) of the main parameters in the model all receive a certain value and are statistically significant (p ≤ 0.05). It shows that "each measure is related to the others as theoretically expected" (Churchil, 1995). It can be concluded that the scales of the concepts in the model satisfy the standard of theoretical relation value. Hypotheses H1, H2 and H3 of the model are accepted. 4.6. Verification of estimated theoretical model by Bootstrap Table 4.7. Verification of estimated model by Bootstrap Relationship Estimated ML Bootstrap Bias Mean SE Mean SE SE (SE) Bias SE (Bias) Human resource management practice → Competitive advantage 0.736 0.053 0.736 0.036 0.001 0.001 0.001 Human resource management practice → Business results 0.249 0.086 0.249 0.068 0.001 0.000 0.002 Competitive advantage → Business results 0.468 0.102 0.467 0.075 0.001 0.000 0.002 Based on this research, sampling is repeated with size N = 1500, to perform bootstrap estimation; The Bias, standard error of Bias (SE-Bias) between the optimal estimated ML and bootstrap appear, but the standard error of the bias is not statistically significant, proving that the estimated results of this research are reliable. 4.7. Analysis of multi-group structure The verification results show that there is no difference in the evaluation model of the effect of human resource management practice in VNPT enterprises in the provinces and cities on the competitive advantage and the business results of enterprises among regions, areas and demographic characteristics of staff working in VNPTs in provinces and cities nationwide. Therefore, the verified theoretical model is the only model used to explain the effect of human resource management practice in VNPT enterprises in the provinces and cities on competitive advantage and business results of enterprises. CHAPTER 5: CONCLUSION AND MANAGEMENT IMPLICATION 5.1. Conclusion 5.1.1. Measureme