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Cross Cultural Management Guide - Vietnam

 

What Will you Learn in this Guide?

In this guide, expatriate managers will gain an understanding of a number of key cross cultural areas when working in Vietnam:

  • Hierarchy
  • Face
  • Harmony 
  • Leadership style
  • Time and scheduling 
  • Communication style and; 
  • Negotiation style 

 

Gaining an Expert Understanding:

Once you've read this guide, ensure the success of your Vietnam business venture by: 

  • Taking part in a two hour live webinar, customised to meet your unique needs, with one of our Vietnam country and culture training experts or;
  • Contacting us in respect to our Vietnam consultancy services. 

 

Being a Manager in Vietnam

The management styles used in Vietnamese business culture, may be fairly different to the management style of your home country. To get the most out of your business assignment, it's essential that you understand these differences as behaviours considered acceptable in your home country, may actually put you at a disadvantage in Vietnam.

Here are some key tips that you should consider to help you get the most out of your international business assignment:

  • To ensure successful cross cultural management in Vietnam, it is essential to maintain harmonious relationships and to be cognizant of the need for people to retain face in all transactions.
  • In business it is important that you treat people with respect and deference at all times as this saves face. Public criticism or displaying anger causes a loss of face and may jeopardize future business relationships.
  • The business climate is undergoing a gradual transformation into market-orientation and Vietnamese companies are becoming far more open to working with foreign firms. It is important to note however, that some Vietnamese business people may remain suspicious of foreigners, which is perhaps as a holdover from the Communist regime. As such, taking the time to build trusting relationships is essential.  This may involve extending the time that you spend in Vietnam to allow for additional face to face meetings and personal contact as trust is not something that can be built over virtual communication tools. 
  • The government is undertaking a form of privatization, called "equitization" where companies are made public, with the government retaining a minority stake of about 20%. This means that many negotiations with private companies may entail dealing with a government agency as well. It is possible that this may introduce additional bureaucracy into your meetings and extend the decision making process.  It's essential that you are patient and that you don't appear to be trying to rush proceedings as this may lose the trust of your Vietnamese counterparts. 

 

The Role of a Manager

The business set up in Vietnam is typically hierarchical which impacts the way in which managers and staff relate to each other:

  • Cross cultural management is more likely to succeed when working in Vietnam if you bear in mind that each person has a very distinct role within the organisation. The hierarchy and structured contribution of individual roles are considered important as they help to maintain organisational order and stability.
  • Vietnamese employees typically believe that their supervisors have been chosen because they have more experience and greater knowledge than those they manage. It is often considered, therefore,unnecessary, and even inappropriate for managers to consult with lower-ranking individuals when decision-making.

In Vietnam, as in other hierarchical societies, managers may take a somewhat paternalistic attitude to their employees.

 

Approach to Change

Let's now look at Vietnam's intercultural adaptability and readiness for risk:

  • Readiness for risk tends to be limited. This means that change can be difficult to bring about and that the idea of change may not be received with enthusiasm.
  • In order for change to take hold, the idea needs to be perceived as good for the group and be accepted by the group.
  • If you are keen to promote change, then it's essential you outline the need clearly and highlight the benefits that this will bring to the organisation. Be prepared for lengthy discussions with all relevant stakeholders. Influencing them of the need is likely to take time and a strong business case. 

 

Approach to Time and Priorities

The Vietnamese are generally hold very relaxed attitudes towards schedules and timelines. How might this manifest in the working environment?:

  • Vietnamese prioritise relationships over timescales and are unlikely to be inclined to upset others in order to enforce  a deadline.
  • While appointments and schedules need to be set in advance, these should be viewed as flexible. Patience is a necessary attribute to successful cross cultural managers in Vietnam.
  • Global and intercultural expansion means that some managers may have a greater appreciation of the need to enforce timescales and, as such, agreed deadlines are more likely to be met.

 

Decision Making

Although changing, Vietnam’s ingrained bureaucracy is still evident in government agencies and SOEs which manifests in a number of ways in the Vietnamese workplace:

  • Since this is a hierarchical culture, most decisions are made at the top and then given to the employees to implement.Actual power is generally held in the hands of a few key people at the top of the organization.
  • You may find that some Government or SOE employees are not comfortable taking initiative due to a general risk aversion within Vietnamese business culture. The impact of communist rule has further compounded levels of risk aversion within the business place. 

 

Boss or Team Player?

We have already mentioned that Vietnam business culture is fairly hierarchical. This impacts the Boss / Team Player situation in a number of ways:

  • If you are working in Vietnam, it is important to remember that face and reputation play an important role. If you are a manager in Vietnam and would like to encourage participation from your reporting team members, then it is important to first clearly establish a non-threatening work environment and communicate fully that their participation is desired. Avoid putting team members on the spot by challenging their ideas or insisting on a response as this may impact their feelings of face and make people feel uncomfortable about contributing in the future. 
  • When meeting together and moderating ideas, intercultural sensitivity is necessary. It is important to qualify ideas that are raised in a gentle manner, protecting the reputation of those bringing up ideas, so no one is shamed.

 

Communication and Negotiation Styles

Personal relationships are essential for business relationships to grow and become productive:

  • The initial meeting is viewed as an introductory meeting where you get to know one another. If you jump too quickly into discussions of business, then you risk being perceived as uninterested in the relationship. Instead, you should be prepared for your Vietnamese counterpart to raise the business subject when they feel it is appropriate to do so.
  • To avoid any potential cross cultural miscommunication, it may be necessary to have all your materials translated and to arrange for an interpreter to be present.
  • The Vietnamese put a higher value on keeping one’s word than on contracts. Never commit yourself verbally unless you are prepared to stand by your word.
  • Negotiations move at a slow pace and patience will be a necessary cross cultural attribute. It is important to speak to all stakeholders, which often includes government officials. When recommending a proposal, it is a good idea to offer several ways the other party could structure the deal. The Vietnamese like to consider as many options as possible - as such, it may be in your benefit to think through all possible scenarios and outcomes. 
  • Be aware that Vietnamese are generally skilled negotiators.

 

 

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