Doing Business in Vietnam: Understanding Cultural Differences
In today's global business environment with your business, it's important to understand the people and culture that you intend to do business with.
The better you are prepared, the more successful your trade negotiations will be, "be forewarned, it is forearmed", it is your choice.
I've included some basic strategies and options that, if properly used, will improve and improve your level of success. These suggestions are based on many years of personal work experience in the real world with real people. This approach works and I can assure you that it works well.
1. Family culture
2. Reputation – "Save face"
3. Structure of the name
5. Bribery and corruption
6. Give gifts
7. Standard work practices
8. Business Meetings – Preparation
9. Business Meetings – What to Expect
10. Corporate culture – communication
11. Ask questions
12. Festivals / Holidays
14. Social gatherings
16. Other – Traditional Vietnamese customs
Although with the current technology, we can manage a large part of our online business, in this type of scenario, it can only lead you up to that point. There is no substitute to actually be there, in person and immerse yourself in the local environment.
I think we often lose sight of the fact that technology is only a tool that can help us do our job, the true nature of business is people-centered.
1. Family culture
The first step in understanding how to do business in Vietnam is to understand what is the dominant dynamic that defines the parameters of their social structure. By knowing a little about the basic cultural aspects of Vietnamese society and showing a little empathy, we can begin to understand the key elements that constitute the pillar of their society and, in turn, the way which defines and influences their business culture.
– Chinese Confucianism plays a very important role in their philosophical beliefs and in their daily lives
– Elders are generally revered and their life experiences are highly valued within the family.
– We understand why we see several generations of the same family living under the same roof
– The man makes the final decision for most things, if not all, the traditional ideal of male superiority is still in place today
– The eldest son of a family is considered the head of the household and in this case, the eldest is generally perceived as a model.
– Ancestral worship is a commonplace because they are considered the source of life, fortunes and a key tenant who respects family culture.
– Their ancestors are honored and on the day of their death they often perform special ceremonies and rituals. For the Vietnamese, their deceased elders are considered the source of their very existence
– Birthdays are not usually celebrated by traditional Vietnamese families
– Vietnam is fundamentally a collectivist society in which the needs of the group are often placed above those of the individual, this is particularly true in the context of family values
– Family and community concerns will almost always go before the needs of businesses or individuals
– The family philosophy plays a very important central role in Vietnamese society
– Families, extended families and communities can have a major influence on the behavior of family members, whether they are children or adults
The essence of the "family" is one of the most important characteristics of Vietnamese culture, the "family" is everything. And we must not forget that Vietnam is also a type of patriarchal society with regard to the ethics of the family. A similar type of hierarchy is in place in most Vietnamese companies to varying degrees.
Vietnamese society is changing rapidly, as the country opens up, as society becomes richer, the Vietnamese become over time more and more "western-style". Some of the long-standing family traditions are starting to disappear.
As the younger generations are exposed to western culture, some of these long-standing traditional family values are eroding and western spirit and culture are becoming more and more prevalent.
2. Reputation – "Saving Face"
The notion of "face" is a concept prevalent throughout Asia. In some cases, it's the determining factor in everything they do. Today, in some of the most developed Asian countries, this state of mind is no longer so rigorously adopted.
– The concept of saving the face is always extremely important
– The reputation confers dignity and prestige to a person and by virtue of which his family
– Particularly among Vietnamese, it is deeply rooted in their psyche. "Reputation" is considered the only thing that can be left to the family after death.
As the youngest and most educated generations begin to make their presence felt in their own cultures, these changes will become more pronounced. Some of these types of traditional beliefs are starting to take a step back, but do not underestimate the impact; "reputation" will have on your trade negotiations in Vietnam.
3. Structure of the name
– The names are written in the following order: 1. Last name. 2. Middle name and 3. Given name (first name)
– The last name is placed first because it puts the focus on the person's heritage, the family, as mentioned earlier, "the family" is everything
– The middle name "Thi" indicates that the person is a woman, "Van" indicates that the person is a man
– For more important occasions, use the surname, the middle name and finally the first name
– Use the word "Thua" which means "please", being more polite to their eyes
– Sending to an older person or to a higher rank in your name is considered disrespectful; even within the family or in relative relationships, always include their title with their first name
– In general, women do not shake hands with men; they tilt slightly one to the other
– With regard to age and rank, people of higher rank are usually welcomed first
5. Bribery and corruption
Be aware that various forms exist at all levels of Vietnamese society; it's an integral part of their culture and has been for a long time. One of the main reasons is that the "standard" wages in many sectors of activity in Vietnam are very low, this also includes the ministries. At the bottom of the scale, monthly wages can be as low as US $ 100 per month.
– Recommended resource: Transparency International
Corruptions Perceptions Index for 2012, which covers 174 countries. The higher the number, the more corrupt a country is:
o Vietnam – 123
o Cambodia – 157
o Laos – 160
o Myanmar – 172
– Recommended resource: Tuoitre News (English information site for Vietnam)
It is generally recognized as a sensitive area; from an ethical point of view, you will have to make your own decisions. Some sectors of activity are different from others, it is better to be informed. All I can suggest is to do a decent amount of research, from which you can draw your own conclusions and make informed decisions.
I suggest that your research be focused on understanding the "how" and "where" of commissions. Somewhere on the line, you will pay commissions, whether you know it or not. You need to know where it's going to be, how it's going to be and, most importantly, what it's going to cost, get ready.
Make sure that when you do business in Vietnam, you get as close to the source as possible. If you buy products, do business only with the manufacturers.
The further you get from the people who can do the job, the more it will cost, because everyone involved must get their commission, which you will pay.
6. Give gifts
Gifts are a common practice in Vietnam and are not perceived as a form of corruption. These thank you gifts do not have to be expensive and should be considered a small pledge of your appreciation.
It may be surprising to see how sincerely grateful the Vietnamese are when you give them small gifts, it puts you in a good position for further negotiations, there are some options.
– chocolates / candies
One of the most effective gifts you can offer them is made up of small souvenirs representing your country of origin. For example, if you come from Australia, buy a dozen small keychains with kangaroos, koalas, boomerangs, etc., they only cost a few dollars each.
Go to length to wrap them in a box with shiny packaging paper. This type of approach will earn you tons of brownie points, so much more than it cost you to buy such gifts, it's a great investment for the future.
7. Standard work practices
Normal business hours are from 08:00 to 17:00 Monday to Friday in major cities. Some offices and ministries are open on Saturdays for half a day. In the regions, hours may vary and stores may close during lunch time for an hour or more.
– When you operate in the main cities of Vietnam, English is widely spoken by Vietnamese businessmen. Do not automatically assume that their English will be good enough to give you all the information you need
– The further away from regions and provinces, the harder it is to find these small family businesses and the less English is spoken. So, plan your trip well to cover any eventuality
If in doubt, hire a translator and save yourself a lot of headaches. It is very important to find the right translator for you and it is not an easy process. I would suggest here that you ask your translator to sign one of your company's confidentiality agreements.
Ask them to sign both copies in both English and Vietnamese, and be sure to give them a copy and keep the originals for your records. You must be absolutely certain that the translator you have hired is on your side, not theirs (commission).
8. Business meetings (preparation)
Vietnamese businessmen prefer to organize business meetings well in advance. Several weeks in advance is not unusual. This is especially true when they know that you come from another country. They will prepare much this type of meeting; you should do the same thing.
– The first meeting in many ways is the most important, you can use your agenda as a starting point for your key discussion points. Minutes, take notes, document all decisions, actions, deadlines etc.
– Before the meeting, I would recommend that you also provide a written agenda in the form of points (a list), describing very precisely your objectives, how, what, where, when, who, etc.
– Within 24 hours of the meeting, send your official minutes to everyone who attended the meeting.
– Do not forget that you have the opportunity to organize your first meeting (s) at the hotel where you will be staying. This can save a lot of hassle if you do not know your way. You also have the advantage of being in a "neutral" territory and you may not have to deal with so many people in your first round of discussions.
– Later, when you have reduced your selection, you can then organize meetings on their premises. It's absolutely mandatory before deciding who to do business with (how will you know that the business they're showing you is actually theirs?)
– Precisely find out who will be at the meeting, find their names and titles and try to send them your agenda directly from you. Rather than relying on someone from their organization to distribute your agenda to the right people in-house
– If you really want to impress them, you can do it. a) translate the agenda into Vietnamese and / or b) bring a translator to the meeting. If you do that, do not tell them first that you bring one
– Always assume that fluency in the English language (conversation) by other parties will not be as good as their ability to read English.
As they say, "the devil is in the details", taking the time and effort to achieve this level of detail, you will get much more, in a shorter time.
1. This will give you a little control over the events taking place
2. You will impress them and gain a lot of respect ("face")
3. You can move much faster in your negotiations
4. You have created a framework that both parties understand and can work in
More importantly, you have provided a "non-confrontational" way of dealing with the problems that arise or delicate issues, it is now the problem, not the person.
9. Business meetings (what to expect)
Punctuality is extremely important. it is profitable to be at the meetings right now, do not take any chances. Some places can be very difficult to find, plan to be at the meeting venue 15 to 20 minutes in advance. This gives you the time to focus and soak up your surroundings.
– When you attend the meeting for the first time, carefully observe the organization of the seats, this will give you an indication of the order of internal hierarchy
– Do not be surprised if the most senior person at the meeting does not chair the meeting. If you have adopted the approach I am suggesting, at this point you have a subtle level of control, you get the most out of it and you handle it very carefully.
– The person most likely to lead the meeting is the person who speaks and understands English best, but it is highly unlikely that this person is the decision maker himself.
– At the meeting, never say a "no" dish for nothing, the best answer is something like; "Yes, I will have to leave and think about that one" or "Yes, but I will have to confer with my co-workers at home" or "I do not have the authority to make this decision "
– When they ask, "How long are you here for", do not disclose this information. Answer the question with something like, "When all my stuff is done, I'll go home" or "When my job is done, I'll be able to go home"
Always smile, even when you say no, or if you are confused or uncertain. If something "extraordinary" suddenly appears, something completely unsuspected, take note of what it is. Make sure you understand the consequences of this new information before moving on to other points on your calendar.
10. Corporate culture (communication)
Vietnamese companies tend to be very hierarchical in nature; the most senior person in the business usually exerts the most influence on the decision-making process. Titles are very important in Vietnamese business culture because their status is acquired according to education and age.
There is a lot of deference and respect for co-workers, supervisors and managers, a few key points to keep in mind.
– Trade relations in Vietnam are relatively formal and tend to take time, as Vietnamese like to know their foreign counterparts before doing business.
– Vietnamese can be wary of those they do not know very well at the beginning, so be sure to spend time during the first meetings to get to know you better
– It is important to use the titles whenever possible, you show respect and you win the face by doing it.
– Referring to each other, the Vietnamese use the title of a person followed by his first name and not his last name (for example, Mr. John)
– It may be wise to have all written documents translated into Vietnamese, because your commercial counterparts in Vietnam will not necessarily indicate that they do not understand you perfectly. If you do not know what their true knowledge of English is, using a translator can be a very useful option.
– As in most Asian countries, business cards are commonly used in Vietnam; It is considered a good business etiquette to have your business cards printed in both English and Vietnamese.
– When offering your business card for the first time, present it with both hands, the Vietnamese language facing upwards and towards the person you are offering.
– The negotiations can be quite long and tedious, because the Vietnamese will want to examine everything and consult their own group before reaching an agreement.
– Business in Vietnam can also be slow because there is often a lot of bureaucracy to go through before an agreement can be finalized. Ensure that all official (government) documentation is properly completed, stamped, and certified by all relevant government agencies.
– Most Vietnamese people tend to hide their feelings, to avoid conflict and clashes in order to avoid hurting or embarrassing anyone. For example, a "yes" may not be an affirmative answer, but a polite response to avoid hurting the person in question (you really need to be able to tell the difference).
– Vietnamese people usually smile when they do not want to answer an embarrassing question or when they do not want to offend the person involved
– Vietnamese people will smile when they are scolded by an elderly or high status person to show them that they always respect the scolded people and keep no grudges. (This type of behavior can be interpreted as a challenge or an insult to a Westerner, but the reality is that it is part of their nature and that it is a cultural norm. .)
A word about nonverbal communication: Be careful when interpreting Vietnamese body language, hand gestures, tone of voice and facial expressions. The assumptions and inferences you can make as a western, based on your previous experience, are likely to be somewhat wrong.
They can use the same kind of gestures, but some of these gestures that you know well may mean something quite different from Vietnamese.
Finally, when you finish a meeting, always end on a positive note, a little flattery well placed takes a lot of time and always remember, smile, smile, smile … ï¿½ï¿½
11. Ask questions
When a Vietnamese person asks you questions, it is not considered offensive or rude in his / her culture to ask personal questions regarding age, marital status, salary, religion, etc. .
Learn about the people you are dealing with, take informal and informal conversations, and ask the following types of questions.
– Single or married, do you have children, ages, sex, etc.?
– What are your qualifications, diplomas, where did you go to Uni, etc.?
– Have you been abroad, where, what did you do, etc.?
– How long have you been working for this company?
Keep the discussion light and easy, this type of survey serves many useful purposes; you build relationships and comfort with other players, you have an idea of their abilities and you can subtly discover who speaks the best English.
12. Festivals / Holidays
However, at this time of year, the country is practically "closed" and, although it is officially four days of vacation, these holidays can start earlier and last longer. I would suggest that a week before "Tet" and a week later, there is no reason to attempt to schedule meetings and conduct business.
For many Vietnamese, this holiday is extremely important. they are all trying to come together under the same family roof to celebrate the Chinese New Year.
– Lunar New Year, is the most important annual festival
– It is the first day of the lunar calendar year
Tet Trung Thu
– Tet Trung Thu takes place on the fifteenth day of the eighth month, Mid-Autumn Festival
Vietnamese do not say "thank you" very often, because it is considered insincere. When they do, they really think so and this form of gratitude can last a lifetime. They will not be happy until they can find a way to repay the kindness you have shown them.
14. Social gatherings
In the social context, by referring to each other, the term "brother" or "sister" is often used.
This term is a sign of respect; it is the youngest members of the group who subtly recognize older people as "brothers" or "sisters".
If a Vietnamese person calls a Westerner "brother" or "sister" in informal conversations at social gatherings, your actions have earned you respect. This is in itself a huge victory. you must congratulate yourself because you are doing exceptionally well.
In social situations and informal meetings, the oldest of the present is the person who is automatically considered the leader.
Vietnamese are very superstitious people. The "owl" is a good example. In Western society, it is generally perceived as a symbol of wisdom or wisdom. For the Vietnamese, the owl is a bad omen, an omen of death.
Whatever happens, do not become a "bad" omen for them; If the Vietnamese businessmen with whom you do business consider you "lucky", they will do their utmost to protect not only your business, but also your friendship.
16. Other Vietnamese traditional customs (useful to know)
Friendships are very popular, especially among friends, they are often considered relatives of blood. All in all, most Vietnamese are warm, friendly and hospitable.
– When a child is born, he is considered to be one year old
– When women get married, they do not change their name
– It is the filial duty of older sons to worship ancestors at home
– If a parent dies, children usually wait three years before getting married
– If a husband dies, it is necessary to wait one year before remarrying
– If a brother or sister dies, the other brothers and sisters must wait a year before getting married
If you have serious intentions to do business in Vietnam, nothing can replace a presence "in situ", viscerally in touch with the local environment. Take a little time to acclimatize, feel the "feel" of the place, landscapes, sounds, smells.
It pays to explore and walk, stop here and there and watch the Vietnamese do their daily work. It's not just what they do, but even more telling, that's the way they do it.
Finally, do not forget the network, go out on the street and find Westerners living or working in Vietnam. Start a conversation with them, you will be amazed at the wealth of knowledge and experience accumulated by this type of people. If circumstances permit, you may be able to access their network. Now your time and effort are well spent around a beer.
In wishing you, dear readers, the best of luck in your trade negotiations and I hope that this article has provided you with useful elements to make your trade negotiations in Vietnam easier and more effective.
Thank you very much for reading this article.