Doing business in Vietnam: a cultural guide

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

Vietnamese society is comprised of an interconnected network of personal relationships, all of which carry obligations on both sides. These mutual obligations are the underpinnings of social order in Vietnam, so they are taken very seriously. Americans need to understand and be sensitive to the serious nature of what may seem to them to be casual business relations. Failure to do so could easily result in a loss of trust or credibility, with obvious implications for longer-term relationships.

Individual and Group Dynamics

Vietnamese consider themselves part of a larger collective, generally centered on the family or clan. Individual needs are considered subordinate to those of their family or organization. Conformity to familial and social norms is an important goal. Americans, on the other hand, are highly individualistic, believing in the primacy of the individual as a highly valued ideal.

These differences in values and outlook can have significant implications for business transactions. Praising or singling out an individual for attention or to reward in public, for example, is embarrassing to the individual concerned and will likely be counterproductive. Public rewards are best given to groups, not individuals. Although this cultural characteristic may change over time, it remains prudent to proffer individual rewards in private.

The same general rule is even more important when it comes to criticism or censure. Vietnamese culture considers "face," an individual's public image, extremely important. Any overt public criticism or disparaging remarks can result in a loss of face and cause extreme embarrassment. For this reason, criticism is best handled privately and, if possible, indirectly.

In Vietnam, the ultimate goal of all personal interactions is harmony, not discord. Like many Asians, Vietnamese will try to avoid conflict and direct confrontation. A direct refusal or negative answer is considered impolite and crude, often leading Vietnamese to agree to something even when they have no intention of carrying it out. From a Vietnamese perspective, this is not considered to be untruthful; it is simply the means for maintaining a harmonious relationship. This Vietnamese attribute offers great potential for cross-cultural misunderstandings with Americans, for whom disagreement and negative responses are merely a part of the negotiating process and have nothing to do with interpersonal relationships.

Gender Issues

Vietnamese society is outwardly egalitarian in accord with Marxist ideology, but continues to exhibit paternalistic, male-dominant attitudes in business and most official activities. So when Vietnamese women hold key positions, they are accorded the respect due that position, even if such is not the case in their personal lives.

On the other hand, foreign women professionals are accepted in Vietnam, particularly if they have high status in their company or strong professional reputations. Such individuals will be treated with the respect their position demands. Business women lacking such status will find it harder to be taken seriously in Vietnam.