Ethical Challenges - Vietnam International BUsiness Analysis PDF

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Vietnam International BUsiness Analysis...

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Ethical Challenges Corruption Corruption is one of the main ethical challenges facing business people in Vietnam. According to the Global Integrity 2006 report, corruption consumes between 3 percent and 4 percent of the country’s gross domestic product each year, so managers must be prepared to confront it. The latest International Finance Corporation report shows that 67 percent of firms studied expect to pay bribes in Vietnam. Most instances of corruption can arise through regulatory bureaucracy and miscalculating the length of time that negotiations and permit approval can take. In preparing for business, you should consult trusted local sources such as experienced law and accounting firms and adjust your expectations accordingly. Vietnam has recently strengthened regulations for corrupt public officers, including execution sentences, so an improving climate can be anticipated over time

Freedom of speech Enforcing a single party system in Vietnam has fostered numerous restrictions with regards to freedom of speech, and business managers must be cognizant of the issue. There have been several recent cases of foreign journalists imprisoned for reporting human rights violations or government abuses.

Supply chain ethics As the prices of labor and cost of living in several established Asian economies have risen, many businesses have relocated to lower-cost Vietnam. While there are sound business reasons for this, companies have to be aware of the perception that lower costs arise because worker rights are

ignored, along with health and safety protections. The reputations of companies, including Nike and IKEA, have suffered when issues such as child labor abuse have been tied to the production of a company’s product by local contractors.

Business Etiquette and Business Culture

Meeting and Greeting

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The Vietnamese generally shake hands both when greeting and when saying good-bye. Shake with both hands, and bow your head slightly to show respect. Bow to the elderly who do not extend their hand. Vietnamese women are more inclined to bow their head slightly than to shake hands.

Dressing

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For men: conservative colored suits with white shirts and ties. Jackets are not a must but good to have just in case. Being well groomed is appreciated.

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For women: conservative skirts, pants, suits, and blouses are appropriate. Avoid short, tight fitting, and sleeveless attire.

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Jeans and business casual attire are not recommended but may be appropriate in more rural areas.

Gifts

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Flowers are normally given only by men to women.

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Always wrap a gift in colorful paper.

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When visiting a Vietnamese home, bring a gift for the hostess. A gift for children or an elderly parent is also appreciated.

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Give items useful for daily activity, like designer soaps, cosmetics, lamps or framed pictures for the home.

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Don't give handkerchiefs (symbols of a sad farewell). Most Asians consider the Western habit of using a cloth handkerchief and then returning it to your pocket to be barbaric.

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In business, give whiskey. Giving a gift in an office setting may be misinterpreted as a bribe. Try to save your business gift giving until you are invited to your colleague's home.

For Woman!

In the major cities, little sexual discrimination exists, and Vietnamese

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women receive equal pay for equal work. In the country, men are still boss. Western women should dress conservatively in Vietnam. Women who

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wear heavy makeup and revealing clothing are viewed as prostitutes. When dining with a Vietnamese man, a western businesswoman

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should arrange to eat in a public place and should insist upon hosting. If the Vietnamese man hosts, the Western woman is obliged to reciprocate with a meal of equal value.

Fa c e

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Aswi t hmanyot herAs i annat i ons ,t heconc eptoff ac ei sex t r emel yi mpor t antt o t heVi et namese.

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Facei sat r i ck yc onceptt oex pl ai nbutcanber oughl ydes c r i bedaqual i t yt hat r efl ect saper son' sr eput at i on,di gni t y ,andpr es t i ge.

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I ti spos si bl et ol os ef ac e,s av ef aceorgi v ef acet oanot herper son.

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Compani esaswel lasi ndi vi dual sc anhav ef aceorl os ef ace.

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Forf or ei gner si ti si mpor t antt obeawar et haty oumayuni nt ent i onal l yc aus ea l os soff ac es oi ti si mpor t antt obeawar eofy ourwor dsandac t i ons .Under st andi nghow f acei sl os t ,sav edorgi v eni sc r i t i cal .

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Someonec anbegi v enf acebyc ompl i ment i ngt hem f ort hei rhos pi t al i t yor bus i nes sac umen.Ac cus i ngs omeoneofpoorper f or manceorr epr i mandi ngt hem publ i c l ywi l ll eadt oal ossoff ace.

Taboos

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Donotpoi ntwi t hy ourfinger-usey ourhand.

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Donots t andwi t hy ourhandsony ourhi ps .

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Donotc r ossy ourar msony ourc hes t .

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Donotpassany t hi ngov ers omeone' shead.

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Donott ouc hany oneont hes houl der .

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Donott ouc hamemberoft heoppos i t es ex

Business should do:

Business tips: 1 ) Don't be late and set up meetings before arriving in Vietnam. Appointments are required and should be made several weeks in advance. Avoid holiday like Tet. 2) Present documents in Vietnamese and hire a Vietnamese translator. The best means of doing business is through a local representative who can act as a reference and also translator/interpreter. 3) Exchanging gifts and having tea or a drink is important before sitting down to business. 4) Contacts are important and build relationships - The first

meeting is used as an opportunity for your Vietnamese colleagues to get to know you and for you to get to know them. 5) Start with small talk and enquire about their families and personal life before discussing any business matter.

De c i s i onMa k i ng

Al t houghc hangi ng,Vi et nam’ si ngr ai nedbur eauc r ac yi ss t i l levi denti ngov er nment agenc i esandSOEs .Si ncet hi si sahi er ar c hi calc ul t ur e,mostdec i s i onsar emadeatt he t opandt hengi v ent ot heempl oy eest oi mpl ement .Ther emaybei nf or malnet wor k i ng amongempl oy eesorbet weenmanager sands ubor di nat es ,al t houghact ualpoweri s gener al l yhel di nt hehandsofaf ewk eypeopl eatt het opoft heor gani zat i on. In a hierarchical society like Vietnam, the top-down approach remains preferred, and decisions are usually taken by the head of the organization. However, consultations and building consensus play an important role in the decision-making process, particularly in public-sector organizations, including governmental agencies and other entities that owned and/ or run by the government (i.e., state-owned enterprises; universities; schools, hospitals; etc.). In addition, as Vietnam is still maintaining a communist regime, the Communist Party of Vietnam (CPV) still play a crucial role in most public-sector organizations. For instance, CPV

representatives do not run these organizations administratively; however, they still have the right to review (and even revoke when necessary) major decisions made by managers/ administrators, particularly with respect to personnel issues. Vietnamese people tend to keep their distance from their immediate supervisors/ managers and not to disclose their feelings and thoughts directly to their bosses. Therefore, they usually share their work-related concerns with co-workers and/ or family members or relatives, and seek feedback or advice from these people. Should Vietnamese be interested in discussing sensitive or controversial issues with their supervisors/ managers, they would prefer to raise these issues in an indirect manner. To avoid direct confrontation at the workplace, they tend to conduct oneto-one informal discussions regarding their problems/ challenges, rather than raising them during formal meetings  Communist party + freedom of speech (cultural values and political environment impact)

Communication Communication styles depend on the context of meeting. Both men and women shake hands at business meetings or formal events. In a casual context, Vietnamese usually say "hi" or "how are you?" instead of shaking

hands. They tend to maintain a certain distance when speaking to someone. Vietnamese rarely greet by kissing each other on the cheek, even among close friends. Hugging is becoming more common, particularly among younger people if they know each other well. Vietnamese do not usually maintain their eye contact when they speak to a person; however, they would not feel offended if someone maintains eye contact with them. Hand gestures are not common in communication. Sitting on the table, slouch, and pointing fingers at someone should be avoided. Vietnamese tend to avoid direct confrontation, and keeping face in the public is very important to them. They usually prefer to speak in an indirect manner, particularly on sensitive or controversial issues. At the workplace, many discussions take place behind the scenes in order to seek agreement or consensus on these issues Negotiation Per s onalr el at i onshi psar er equi r edf orsucc es s f ulbus i nes sr el at i onshi ps .Thei ni t i al meet i ngi sv i ewedasani nt r oduct or ymeet i ngwher ey ougett ok nowoneanot her .You s houl dwai tf ory ourVi et namesec ount er par tt or ai s et hebus i nes ssubj ec t . Manymeet i ngsar econduc t edi nVi et nameseandt oensur ey ouav oi danypot ent i al c r ossc ul t ur almi s communi c at i ony ouwi l lneedat r ans l at or .Vi et nameseputahi gher

v al ueonk eepi ngone’ swor dt hanonc ont r act s .Nev erc ommi ty our sel fv er bal l yunl es s y ouar epr epar edt os t andbyy ourwor d. Negot i at i onsmov eatas l owpaceandpat i enc ewi l lbeaneces s ar yc r os sc ul t ur al at t r i but e.I ti si mpor t antt os peakt oal lst ak ehol der s ,whi c hof t eni nc l udesgov er nment offici al s .Whenr ecommendi ngapr opos al ,i ti sagoodi deat ooffers ev er alway st he ot herpar t yc oul ds t r uct ur et hedeal .Vi et names el i k et oc ons i deropt i ons .Vi et namese ar es ki l l ednegot i at or s . Relationship between employee and employer Toens ur es ucc es s f ulc r ossc ul t ur almanagementi nVi et nam,i ti ses s ent i alt omai nt ai n har moni ousr el at i onshi psandbecogni z antoft heneedf orpeopl et or et ai nf acei nal l t r ans ac t i ons . I nbus i nes si ti si mpor t antt haty out r eatpeopl ewi t hr espectanddef er enceatal lt i mes ast hi ssav esf ace.Publ i cc r i t i c i sm ordi s pl ay i ngangerc aus esal os soff aceandmay j eopar di z ef ut ur ebus i nes sr el at i onshi ps Peopl ebel i ev et hatt hei rs uper v i s or shav ebeenc hos enbec aus et heyhav emor e ex per i enceandgr eat erknowl edget hant hos et heymanage,andi ti s ,t her ef or e, unneces sar y ,andev eni nappr opr i at ef ort hem t ocons ul twi t hl ower r anki ngi ndi v i dual s whendec i s i onmaki ng. I nVi et nam,asi not herhi er ar c hi c als oci et i es ,manager smayt ak eas omewhat pat er nal i s t i cat t i t udet ot hei rempl oy ees .

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