Abstract
This paper examines the process of transforming employment relations in Vietnam and Indonesia using case studies of two state‐owned enterprises in each country. Three factors are identified as important in the transformation process, although their impacts were different in each country: the role of the state; the influence of management and unions; and the impact of international bodies such as the International Labour Organization, the International Monetary Fund and multinational enterprises. While the role of the central government is stronger in Vietnam, particularly since the end of the Soeharto regime in Indonesia, both countries are increasingly subject to global influences and pressures. The paper utilises ‘new institutionalist’ theory to emphasise the important emergence of new institutions and their interaction with organisational changes in each country. The transformation of employment relations is likely to be an ongoing process in each country although the pace and direction of change will continue to differ, particularly given the stronger roles played by the state and unions in Vietnam compared with Indonesia
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