Transformation or Evolution in Equitised Vietnamese Pharmaceutical Companies? Stakeholder perceptions of adapted HRM practices through the theoretical framework of Complex Evolving Systems

This study examines the change of human resource management (HRM) practices in Vietnamese Pharmaceutical Joint Stock Companies formerly known as State-Owned Enterprises (SOEs). It addresses the overall research question: How have HRM practices in Vietnamese pharmaceutical companies changed since the commencement of the equitisation process of former SOEs?A qualitative case study approach was adopted, drawing on 40 semi-structured interviews with general managers, HR professionals, employees, and trade union representatives at five participating companies. Grounded in the Complex Evolving Systems (CES) framework, the study identified that HRM prior to equitisation was characterised by centralised state control, the absence of dedicated HRM departments, and administrative and bureaucratic procedures.After equitisation, the findings show that HRM change has been shaped by bounded adaptation and selective adoption, whereby equitised SOEs adjusted practices within contextual constraints and shareholder expectations. In terms of historicity and path dependence, historical legacies, compliance-oriented thinking, and the layering of past, present, and future expectations sustained the path-dependent and incremental nature of change. For co-evolution, organisations adapted reactively to external pressures such as shareholder demands and regulatory reforms and did not actively work to shape their operating environment. Patterns of connectivity and interdependence between governance structures, shareholder oversight, and HRM operations enhanced alignment but limited experimentation.Post-equitisation, trade unions, whose representatives held dual roles in HRM, acted as gatekeepers of legal compliance, thereby constraining the space of possibilities for HRM innovation. In terms of far-from-equilibrium, equitisation created disruption but did not push companies into genuine far-from-equilibrium states. Instead of catalysing radical change, companies responded cautiously and incrementally, with HRM adaptations focused on compliance and meeting shareholder expectations.Feedback mechanisms were in place but were mainly used to reinforce compliance and monitor alignment with strategy. Feedback supported incremental adjustment, but not transformation. For self-organisation, emergence, and the creation of new order, while some decentralisation occurred, HRM changes remained bounded by central coordination and regulatory oversight. Emergence was limited by historical legacies and external compliance obligations. The creation of a new HRM order was partial and ongoing, with organisations still negotiating between old and new practices.As a result, HRM systems shifted into hybrid configurations, blending administrative traditions with market-oriented practices. The study also reveals stakeholder perceptions of HRM effectiveness, identifying both successful practices and areas requiring improvement. It contributes to the HRM literature by offering insights into how organisations in transitional economies adapt to market reforms, with practical implications for policymakers and HR practitioners in similar contexts.