Perceived formal authority and the effectiveness of the HR department in Vietnam
| Date | 04 March 2019 |
| Pages | 551-569 |
| DOI | https://doi.org/10.1108/PR-03-2017-0073 |
| Published date | 04 March 2019 |
| Author | Diep T.N. Nguyen,Stephen T.T. Teo,Helen DeCieri,Marcus Ho |
| Subject Matter | HR & organizational behaviour,Global HRM |
Perceived formal authority and
the effectiveness of the HR
department in Vietnam
Diep T.N. Nguyen and Stephen T.T. Teo
School of Business and Law, Edith Cowan University, Joondalup, Australia
Helen DeCieri
Department of Management, Monash University, Melbourne, Australia, and
Marcus Ho
Management Department, Auckland University of Technology,
Auckland, New Zealand
Abstract
Purpose –The purpose of this paper is to investigate whether formal authority of the HR department has
any impact on line managers’evaluations of HR department effectiveness.
Design/methodology/approach –Two studies were conducted in Vietnam. Study 1 comprised a survey of
405 line managers to test the hypothesized model. Study 2 comprised a survey conducted with 155 line
managers validated the findings from Study 1. Structural equation modeling and PROCESS macro were used
to analyze the data.
Findings –Line managers’perceptions of the HR department’s formal authority had a positive and indirect
impact on HR department effectiveness through the HR department’s strategic involvement and influence.
Public sector line managers tended to perceive their HR departments as possessing a higher level of formal
authority than did their private sector counterparts.
Research limitations/implications –This study extends the theory of political influence as it applies to
the HR department. Specifically, the study provides empirical evidence of the influences of an organization’s
political conditions on the perceptions of HR department effectiveness. This study also contributes to the
extant literature on HRM in Vietnam by showing how Vietnam’s HR departments can utilize power and
influence in accordance with specific ownership types.
Practical implications –Public sector HR managers could establish their formal authority among
stakeholders as a way to enhance the recognition of HR department effectiveness. This can be done by relying
on the presence of the traditional bureaucratic characteristics of the public sector which confer the HR
department with formal authority.
Originality/value –The study contributes an understanding of the determinants of HR department
effectiveness in the context of Vietnam. Research findings show that highly formal authority practices in the
public sector affect the way line managers perceive the strategic involvementof the HR department. The more
formal the authority, the more the public sector HR department is perceived to be involved in the strategic
management process. Thus, formal authority is a prerequisite that public sector HR departments need to
signal its importance among line managers. To have a long-term influencing role in the organization, the HR
department in the public sector needs to develop its political and influencing skills. In contrast to this, the
private sector HR department needs to develop a strategic partnership with line managers in order to increase
its influence and perceived effectiveness.
Keywords Quantitative, Line managers, Advanced statistical, Structural equation modelling (SEM),
Strategic HRM, HR department
Paper type Research paper
Introduction
The impact of human resource management (HR M) practices on individual and
organizational performance have been found in the literature. For instance, HR practices
have positive relationships with employee motivation, operational and financial outcomes
( Jiang et al., 2012) and innovation (Chowhan, 2016). Concurrently, scholars (Bowen and
Ostroff, 2004; Ferris et al., 2007; Sheehan et al., 2016; Ulrich and Dulebohn, 2015) have
Personnel Review
Vol. 48 No. 2, 2019
pp. 551-569
© Emerald PublishingLimited
0048-3486
DOI 10.1108/PR-03-2017-0073
Received 14 March 2017
Revised 30 January 2018
10 June 2018
Accepted 4 July 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0048-3486.htm
551
Effectiveness
of the HR
department in
Vietnam
presented arguments for more evidence of HR department’s power, influence and
effectiveness as this department often lacks the recognition of its effectiveness in triggering
the HRM-performance linkage. This developing literature has supported the notion that an
examination of HR department effectiveness from a political perspective is of critical
importance for our understanding of how the HR department can become a vital part of the
organization when organizational politics cannot be overlooked (Ferris et al., 2007; Haggerty
and Wright, 2010).
Scholars (e.g. Haggerty and Wright, 2010; Ferris et al., 2007) have encouraged research
efforts to examine the HR department’s formal authority as it is a crucial and prerequisite
ingredient making the HR department important. To understand the process in which the
HR department exercises its formal authority, we incorporate the theories of
intraorganizational power (Hickson et al., 1971; Pfeffer, 2009) and political influence of the
HR department (Ferris and Judge, 1991; Galang and Ferris, 1997) in the current study.
The theory of intraorganizational power (Hickson et al., 1971; Pfeffer, 2009) suggests the
ability of a department to demonstrate and attract attention by showing its solely important
expertise in helping the organization effectively cope the critical uncertainties and
successfully deliver the expected results. The theory of political influence of the HR
department (Ferris and Judge, 1991; Galang and Ferris, 1997) draws attention to the idea
that symbolic actions taken by the HR department enable this subunit to acquire scarce
resources and eventually create a shared perception of its importance. The integration of
these two theories helps us explain the influence of the HR department’s formal authority
which is a fundamental form of power perceived by line managers on their assessment of
HR department effectiveness as a process of first what is occurring (intraorganizational
power) and second how and why it is happening (political influence).
The context forour study is Vietnam as an example of an emerging anddynamic economy
where the recognition of strategic roles of the HR department is developing (Zhu et al., 2008;
Zhu and Verstraeten, 2013). Althoughprevious studies (such as Thang and Quang, 2005; Vo
and Bartram, 2012) provided evidence of HRM-performance linkage, these studies did not
consider the HR department effectiveness. Because of the distinctive characteristic of power
distribution between private and public sectors (Zhu et al., 2008; Vo and Bartram, 2012), it is
important to understand the circumstances in which the HR department can exercise formal
authority to affect the perceptions of HR department effectiveness.
The current study is relevant to theory and practice because we develop new theoretical
perspectives in understanding the power and influence of the HR department. Our results
provide insights that HR practitioners can use in their efforts to maximize the potential
power sources and exercise these sources to shape the common acceptance of HR
department effectiveness. Specifically, building on research conducted by Sheehan and
colleagues, our study contributes to the on-going discussion about the determinants of HR
department effectiveness in the context of Vietnamese organizations. We additionally
contribute empirical evidence of the differences in the influences of the HR department’s
formal authority between public and private sectors, which have received little attention in
the HRM literature.
Theoretical foundation and key concepts
It is well documentedthat organizational politicsis a reality showing organizationalmembers’
inexorable engagement in an exercise of power, and the ownership of power signifies one of
the most inspiring aspects of organizational life (Treadway et al., 2013). The theo ry of
intraorganizational power (Hickson et al., 1971; Pfeffer, 2009) posits that power relations are
shaped in a context of autonomy limitation and the interdependence of tasks and resources
among organizational actors. A subunit’s power is characterized by its ability to control the
strategiccontingencies, to be a centraland non-substitutable divisionand to hold a critical and
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