Culture is one of the primary factors that affect the operation of businesses. Businesses that operate internationally are mainly affected considering that they have to deal with people from different countries with different cultures. Other countries have different cultures, so companies have to be selective in the kind of practices they exhibit when doing business. By culture, it means the language spoken, dressing code, values, norms, and artifacts. Before starting a business in a foreign country, business people first conduct a cultural assessment of that country to ascertain how the company will be ran. This is because the cultural traditions of a particular country determine how most of the activities, including business, will be conducted. This paper will analyze the cultural traditions of Vietnam and show how Hofstede’s and Trompenaars’ theories integrate into its culture. It will also discuss the impact of culture on businesses in that country.
Every individual country has its own cultures and traditions, and Vietnam is not an exception. Vietnam is one of the countries with the wealthiest cultures around the world. People living in rural areas, cities, the old, young, and essentially everyone upholds the traditions in one way or another. The country is intensely immersed in rituals, ceremonies, and rules that define most practices as a business. Most of the country’s culture stems from Confucius’s teachings.
One of the most significant traditions is that family and its structures are highly valued and treated with utmost importance. This extends to families living under the same roof for up to three generations. In many households, the man is the family’s head and makes pertinent decisions, while women take care of the home and children (Justice, 2022). Besides, women work in family-owned businesses or the markets, and in such situations, they become the breadwinners of their families. Due to the value placed on families and their structures, children are expected to care for their parents at old age.
Another culture is respect for elders. The concept of seniority is highly recognized, and children are expected to respect their elders. Besides, virtues such as honesty, duty, and filial piety are emphasized in all situations. This means that there is some form of hierarchy within the society, and elders are expected to be at the top of juniors. It can be tied with the previous point of children taking care of their parents at old age. Given that parents are more senior than children, children respect and take duty by caring for them. Besides, there is nothing much they can give their parents other than respect.
Another culture is collectivism, where the country values it more than individualism. It is a custom where Vietnamese cherish communities, families, and a collective country. Instead of using the verbs I and me, they refer to people in their relationships. For example, a Vietnamese might refer to a close friend as a brother or a neighbor as an aunt. This shows that such a person is open to collectivism and ready to establish and maintain relationships with other people. This leads to the explanation of another custom, relationships. Relationships in Vietnam are of utmost importance because they determine how they establish business transactions and relationships (Justice, 2022). Because of the collectivist culture, establishing and maintaining relationships is easy and of primary importance. Additionally, people often start with small talks during engagements because of the easy formation of relationships.
Another cultural tradition regards religion, where ancestors’ worship is common. When people die, the Vietnamese believe that they continue living in another realm. They, therefore, honor them through rites and ceremonies such as the Hungry Ghost Festivals. Also, every year, funeral rites for the departed souls are done during the Lunar New Year. The rituals and ceremonies are done to respect the dead as part of the culture. Besides, as discussed previously, respect is highly emphasized in the country. This means that the honors given to the dead are ways of respecting them and appreciating their time in the country.
Lastly, other cultural traditions are that the Vietnamese avoid confrontation in case of conflicts and opt for silence. They also avoid eye contact, not as a sign of disrespect, but as a sign of deference during conversations. Additionally, education is highly respected, and children are expected to study hard in school.
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The two theories posit that different countries have different cultures, and as such, businesses have to consider the culture of a particular country before starting operations. They assert that a country’s culture affects organizations’ business practices (Koleśnik, 2013). To begin with, Hofstede’s theory has six dimensions that explain the cultures of different countries. The first dimension is the power distance index, which defines inequality within a country. Countries that score high indicate they accept hierarchical and unequal power distribution, while those who score low do not. Vietnam is a high power distance country because hierarchy exists as much as respect is emphasized. People with more skills and ascribed power are at the top than those who do not.
Secondly, in terms of individualism and collectivism dimensions, it is a collectivist country where relationships, teamwork, and harmony are valued. The country values relationships, which enhances collectivism rather than individualism. Thirdly, based on the masculinity and femininity dimension, Vietnam is a masculine country where men’s roles overlap with women’s. As stated earlier, men hold top family positions, translating into a male country. Vietnamese do not share their feelings or emotions regarding the uncertainty avoidance index dimension, making it hard to cope with anxiety. This is because there is a tendency that when one shows an opposing side of themselves, they lose face or feel inferior.
The Vietnamese emphasize truth, principles, nationalism, and religious values regarding the long versus short-term orientation. For example, they value religion, mainly Buddhism, and a lower percentage of Christianity. Besides, they engage in religious activities such as ancestor worship. Lastly, in terms of the indulgence versus restraint dimension, Vietnam emphasizes restraint because there are strict social norms that citizens have to follow, and there is a regulation of behavior through social norms and values. For example, eye contact is not encouraged during conversations, and when handing something to an older person, they use both hands.
In terms of Trompenaars’ theory, most of the dimensions discussed also apply to this theory. Other dimensions that this theory adds and are significant in analyzing Vietnam’s culture are specific versus diffusion, achievement versus ascription, and internal and external directions. They are concerning different versus diffuse dimensions; Vietnamese separate their personal and professional lives. Given that social relationships, respect, and family are highly valued, they are specific about personal and professional lives and do not integrate them. For example, they love family, and hence, they must leave work behind to concentrate on the family.
Leaders in Vietnam are given status both by achievement and ascription. For example, a person can be named a leader because of their social status or education. They could still be named leaders due to their knowledge and skills on specific issues. In all cases, they are highly respected regardless of how they gain their social status. However, those given a high rate through ascription mainly lead the communities’ social groups rather than business organizations. Leaders are given social status in business organizations depending on their knowledge, skills, performances, and experiences.
Regarding internal direction versus external direction, the dimension concerns whether the environment controls individuals or individuals control the environment. Vietnam is a superficial direction culture that believes that they must work with the environment to achieve their goals. In other words, the climate controls them. The main concern for such countries is not to win but to maintain a strong relationship with the environment. Such countries focus on connections to achieve their goals. For example, since the Vietnamese value relationships and collectivism so much, they integrate everyone’s ideas when making decisions. In cases where people are not available, an individual cannot make a decision alone. They rely on the environment around them to achieve their goals.
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Culture has a profound impact on businesses ranging from how an organization manages its employees based on their priorities and values to functional areas of a company like distribution, marketing, and sales. Business practices depend on people, and as such, an organization must align with people’s way of life so that they integrate (Wang et al., 2019). For example, the success of a business depends on the employees and customers. The employees and customers have their own culture or traditions and customs that they identify with. Such a business must ensure that it aligns its practices with their rules and customs to attract them and be successful. In this case, Vietnam’s culture impacts firms in various ways.
Firstly, communication is one central area that culture affects. Communication is a crucial element in any business, as every activity depends on communication (Luo & Shenkar, 2017). Different countries have different communication styles, which affects how business is conducted. In some countries, there are specific languages that citizens speak. For example, some could be speaking only English or native languages. In that case, it will impact businesses in that the company must operate in the native or English language. In this case, communication culture in Vietnam affects businesses in that silence is observed during disagreements, eye contact is avoided, and respect is emphasized during communication. This means that companies operating in Vietnam must adhere to such customs even if their home countries hold opposite traditions. If a business operating in Vietnam fails to observe some silence and instead opts for confrontation in case of a dispute, the company may not go far.
The relationship culture of the country is strong as Vietnamese value collectivism. This means that businesses must work towards engaging with the public, their customers, and employees. They must have ways of showing collectivism to succeed in Vietnam because that is what Vietnamese value. For instance, businesses could consider engaging in social community services or events that bring them together with the communities. By this, they can succeed in the country because they would be enhancing collectivism, one of the leading cultures.
Secondly, culture affects businesses in terms of workplace etiquette. Workplace etiquette means how an organization treats its employees. Employees have traditions that are tied to their countries. How an organization treats its employees affects its success and economic development. In Vietnam, employees should be treated with respect because the country greatly values respect. Also, they need to be given a chance to establish social relationships even if they are in the organizational environment. This is because it is a tradition or a norm to develop social relationships and embrace collectiveness in Vietnam. Lastly, the organization must also spend time with their families, as a family is integral to Vietnam’s culture. If organizations treat employees according to their beliefs and culture, they will likely succeed because it will motivate or engage them (Stoyanova & Iliev, 2017). Additionally, since Vietnam is a religious country, organizations that do not give their employees off days to worship or attend ancestor worship rites and ceremonies might not succeed because they will not have adhered to the people’s culture.
Another impact of culture is tied to an organizational hierarchy of a business. Often, different countries have different business organizational structures. As the discussed theories posit, some countries are masculine, like Vietnam, while others are equal. Also, Vietnam leaders gain status through both achievement and ascription. In that case, how an organization structures a business in leadership depends on that country’s culture. If a company wants to set up a subsidiary in Vietnam, and it has its top leaders are only women, it is unlikely to succeed. This is because Vietnam is a masculine country that believes men should be on top of women in leadership. Besides, women work in family businesses and the market and are not supposed to be leaders.
Considering the country’s culture that a business is operating or is set to operate is vital as culture is one of the leading factors that impact the success of a business. This case has analyzed Vietnam’s culture and explained that it values family, education, relationships, respect, collectivism, ancestor worship, and small talks during conversations. Besides, Vietnamese observe silence in case of disagreements and avoid confrontation and eye contact as a sign of deference to the speakers. To understand how culture impacts businesses, Hofstede’s and Trompenaars’ Cultural Dimensions theories explain that different countries have different cultures, indicating that companies must align their practices to the culture of particular countries. In that case, Vietnam’s culture impacts business in terms of communication, work etiquette, and organizational hierarchy. Hence, organizations must consider a country’s culture to align their practices with the culture to enhance their success and economic development.
Justice, W. (2022). Traditions and Culture in Vietnam: Overview of Culture and Facts – IL. International Living. Retrieved 31 March 2022, from https://internationalliving.com/countries/vietnam/traditions-and-culture-in-vietnam/?msclkid=d27717b3b0ee11ecb6b09d02b50e3390.