BUSINESS CULTURE IN VIETNAM

 

 

 

 

Company cultures may be just as different as country cultures. Whether you deal with a hierarchical run State Owned Enterprise in Vietnam or with a club of whizz kids makes a world of difference, just as it will be different in the Netherlands whether you deal with a company with 80 employees, a large turnover and a more formal organisation structure, or with a start up, that is setting up business in the Netherlands and at the same time trying to find ways to new markets and a simple organisation structure and 2 employees.

In Vietnam you may have to deal with family companies and family relations within companies. The family culture becomes even more important when the family also participates in government circles and may exercise its power in a whole province.

Dutch companies work with matrix structures and matrix responsibilities with lots of paperwork and reports. Management by procedures and rules and regulations is rampant here and certainly not run on the basis of personal contacts. These differences need to be highlighted when bringing companies into contact for matchmaking purposes.

When the matchmaking is in full swing, Twiss could do a due diligence procedure when the clients ask for it. However, another factor that needs to be taken into account when companies decide to look into cooperation is trying to build synergy between the two different company cultures. This should be done before or during the negotiation phase not after or during the implementation. Western companies often think they are superior in knowledge, procedures and management styles. They miss out on the local wisdom and experience, which is vital for a win-win venture to succeed. Twiss could carry out a cultural audit, to find out about the cultural obstacles and possible conflicting situations and write a plan how to change the resistance into loyalty to new business. The outcome of such an audit may be that it is not wise for the two companies to merge or cooperate, because the cost to change resistance into building loyalty might be too expensive. Many mergers and other forms of cooperation fail because the cultural differences have not been sufficiently taken into account.

A cultural audit will focus on the following areas:

 

  • Country culture: which values and rituals are important for the clients, suppliers, and employees. How do people live and how do they mix with one another?
  • Company culture: which cultures do the clients’ companies have and what improvements would they like to see in the new venture?
  • Management style: which management styles are practised in the different companies. Is a new style or a mix of the present styles needed?

 

During the audit, the future partners will answer questions on the above topics and will be asked about their wishes and demands regarding the new venture.