Doing business in Vietnam: a cultural guide

Business Horizons, May-June, 1996 by Esmond D. Smith, Jr., Cuong Pham

How that U.S.-Vietnamese diplomatic ties have been restored, many American businesses are hoping to be in on the development opportunities offered by what some analysts consider to be Asia's newest economic "tiger." Structural problems do abound in Vietnam. Its underdeveloped economic infrastructure, a ponderous and pervasive government bureaucracy, and an embryonic legal system are but a few of them. But the country's dynamism lies in its principle asset--its people.

The population of Vietnam is young: 80 percent of its 73 million people are under the age of 40. They are also well educated, with an overall literacy rate approaching 90 percent. In addition, despite two decades of communist "socialism," Vietnamese have retained a strong work ethic and an energetic sense of entrepreneurialism. Add to these facts the current low cost of labor in the country--the average annual per capita income was under $250 in 1994 and it is easy to understand why foreign businesses and investors are pouring into Vietnam.

Competing successfully in Vietnam against other foreign--mostly Asian--businesses will require that American companies make an effort to understand, respect, and, to some extent, adapt to Vietnamese culture. The purpose of this article is to provide some insights into that culture, with a focus on business and interpersonal communications.

THE IMPORTANCE OF CULTURE

Many Americans fail to see the unique set of traits and approaches they bring to international business dealings. Some of these traits are so ingrained in their psyche that they don't even realize they may differ in other cultures. Americans show they are listening respectfully, for example, by staring into the speaker's eyes as he or she talks. In much of Asia, however, including Vietnam, staring directly into a person's eyes is considered discourteous. Respect in such cultures is shown by keeping one's eyes lowered while someone in authority is speaking. Although Vietnamese who are used to dealing with Americans might understand their behavior, an uninformed American might interpret a Vietnamese's lack of eye contact to indicate lack of interest or respect. This small example illustrates the ease with which misunderstandings can occur if both parties fail to study the culturally conditioned behaviors of the other.

All cultures have developed certain styles, methods, and actions considered appropriate for interpersonal communication. These often vary greatly among cultures, as will be indicated below. Like most Asian cultures, for example, Vietnam is considered to be "high-context" when it comes to communications. In such a culture, the context--situation, place, attitude, non-verbal behavior, and gestures--is more important than the words spoken in a meeting. Americans, on the other hand, are considered "low-context"; words carry the message, and the context in which they are spoken is relatively unimportant. This major difference between the two cultures will have an obvious impact on the communication process itself as well as on the perceptions a person from each culture might carry away from a meeting. By understanding this and other cultural differences, however, American executives can adjust their communication style and behavior appropriately to put their message across.

SOME VIETNAMESE CULTURAL CHARACTERISTICS

Although culture encompasses many areas, we will examine only a few of those relevant to business situations. These include attitudes toward time, personal relationships, individual and group dynamics, gender issues, and age. It should be noted that in most of these areas, Vietnamese attitudes are very different from those of Americans.

Concepts of Time

Like most Asians, the Vietnamese have a more extended concept of time than that of most Americans. The agrarian nature of their traditional society focuses on seasons rather than days or weeks. And this tradition is reinforced by the Confucian tradition of respect for earlier generations. Americans measure time by the clock, Vietnamese by the monsoon.

Although this is changing somewhat, Vietnamese can still be expected to take a longer view of time and be suspicious of the need for urgency in making decisions or culminating a business deal. Patience remains the ultimate Confucian virtue in personal life as well as in business.

Personal Relationships

In Vietnam, propriety and courtesy play a major role in personal relationships. Vietnamese are generally more interpersonally formal than are Americans. This formality decreases the uncertainty surrounding interpersonal contacts in Vietnamese society and is carried over into the business realm for the same reasons. During initial meetings with Vietnamese officials, you can expect little real business to be accomplished. The Vietnamese will concentrate on getting to know you--your background, your expertise, your character. In their high-context communication culture, they will depend heavily on non-verbal clues to assess meaning. By becoming acquainted and establishing a personal relationship with you, they are merely trying to understand you better.