Vietnam is a fast-growing, attractive market opening multiple opportunities for foreign exporters and investors. The country is one of the fastest growing economies in the world, with a rising middle class, and a government committed to growth. The Vietnamese economy is competitive on low costs, and the workforce is young and hardworking. A growing global economic integration and a free trade agreement between the EU and Vietnam are enhancing market opportunities.
To seize the opportunities and grow your business in Vietnam to its full potential, awareness of Vietnamese business culture is necessary.
THIS IS YOUR MINIGUIDE TO VIETNAMESE BUSINESS CULTURE
You will find an outline of general tendencies in leadership and collaboration in Vietnamese business.
Still, always remember that you are dealing with people, not cultures and each individual is different.
In Vietnam, you will experience some cultural differences between North and South Vietnam. Ho Chi Minh City in the south is characterized by a dynamic, entrepreneurial, and open spirit. Hanoi up north, the center of Government, is more traditional.
AGREEMENTS AND TRUST ARE BUILT THROUGH RELATIONS
In Germany and Denmark, and several other Western countries trust and agreements are based mainly on the company’s and person’s business results and skills.
Trust with Vietnamese business partners is built on relationships. Through personal, emotional relations. Face to face. In combination, the results of your company will also be evaluated.
Building trusted relationships requires your attention, effort, and time.
When making initial contact with potential business partners, recommendations from a third-party business associate often paves the way.
In Vietnam, it is not a „waste of time‟ for business partners to socialize and talk about family and hobbies. It is a necessary investment to arrange and engage in social events to build and maintain personal relations.
It is not unusual for Vietnamese business partners to request renegotiations of a signed contract. The contract is often considered a „statement of intent‟. A change in outer circumstances, makes renegotiations of contractual terms seem natural.
You can read more about relationships here:
RESPECT HIERARCHY
Danish leadership style is low-key, egalitarian, and with a very low power distance. Communication flows freely across organizational levels in a flat hierarchy and open-door policy. Relatively German leadership style is medium egalitarian/hierarchical.
You can not copy and paste your Western leadership style into a Vietnamese business context and expect it to be effective.
What is expected to be „good leadership‟ in Vietnam differs significantly from the expectations in many Western countries, especially Nordic countries.
If you want to make changes to the organization- and work culture, in most cases, expect it to take time.
Vietnamese leadership style is hierarchical and the power distance is significant.
Hierarchy and inequality are expected and accepted and should be observed as a way of preserving harmony and stability.
Communication follows hierarchical lines.
As a leader, you make clear and detailed instructions, and you follow up in detail on assigned tasks.
DECISION MAKING
In general, decisions are made by top management in Vietnamese business. However, because of the need for harmony, often consensus at the management level is reached before deciding.
Of course, it depends on the specific situation and context. And, especially in the younger generations, you meet leaders and employees, who have a more Western approach to leadership and collaboration.
COMMUNICATION: GIVE FACE, SAVE FACE, DON’T LOSE FACE
German and Danish communication style in business is direct. Good communication is clear and specific. The intention is to ensure the message is understood.
In Vietnam communication is indirect. Communication is implicit and layered, and to decode the message you must scan the context and read between the lines.
The priority is maintaining harmony and taking care that no one loses face while the message is being delivered. This is also the reason why it is unusual to answer a request with a straight „no‟.
You do not give negative feedback and show disagreement in front of others. Always one-to-one.
NEVER LOSE YOUR TEMPER !
Losing temper is seen as a lack of respect for other people and yourself. You cause loss of face and you lose face.
TIME
Meet on time for appointments. Your Vietnamese business partner might arrive a little late. Just wait.
BUILD AND MAINTAIN RELATIONSHIPS – SHOW RESPECT – GIVE FACE
When leaders and business partners in cross-cultural business fail to reach their full potential and achieve what they aim for, it is often because they unknowingly fall prey to the pitfalls of different ways to create trust on seven trust drivers in cross-cultural leadership, collaboration, and teamwork.
LEARN MORE about Vietnamese business and work culture:
VIETNAM BOOKS
BENEFIT YOUR BUSINESS BY UNDERSTANDING VIETNAMESE BUSINESS CULTURE.
Birthe Ravn Greisen
Cross-cultural trainer, MSc in Economics and Business Administration, Author
Click here to add your own text