1. Introduction
Vietnam has a total population of approximately 92.7 million in 2016 (1). The Vietnamese are descendants of nomadic Mongols from China and migrants from Indonesia. In 1994, with U.S involvement in the war, the U.S lifted a Vietnamese trade embargo. In 1995, it was announced the two country’s full diplomatic relations. The following years the nation began to reform their economy by eliminating inefficient bureaucrats and approval process for direct foreign investment (3). As the corruption scandal surfaces in Vietnam in 2006. Transport Minister Dao Dinh Binh resigned amid allegations that members of his staff embezzled millions from the country and used the funds to bet on soccer games. President Tran Duc Luong and Prime Minister Phan Van Khai had led Vietnam since 1997 and were the influential in Vietnam’s two-decades-long transition to a market economy called Doi Moi or renovation(4) and due to the scandal they both resigned in 2006.
1.1 Rational of choosing Vietnam
Vietnam became the 150th member of the World Trade Organization in 2007. With Vietnam’s accession to WTO helped catalyze FDI growth, with the average annual inflows rise from USD$2.5bn in the year 2000-2005 to USD$8.4bn in the year 2008-2014. As of November 2016, total FDI stock was USD$293bn, with a total of 22,2280 projects from investors from remarkable 114 countries(5). This has open up opportunities for foreign investment and it is also a reason for us to enter our business into Vietnam’s market due to Vietnam’s government decreased the corporate tax from 22% to 20% in 2016 (6). It encourages foreign company to venture into their market which can also stimulate Vietnam’s economic development.
2. Culture Difference Between Vietnam and Singapore
Culture is the characteristics and knowledge of a particular group of people, encompassing language, religion, cuisine, social habits, music and arts (7). There are many culture difference between Vietnam and Singapore such as Religious Respect, Language, Family, Marriage and Face/Dignity. As we are a foreign investor and knowing their culture would give us a boost to manage and understand future local employees. This can earn some respect from the local as they appreciate foreigners to know at least a little of their culture.
2.1 Religious Respect
Vietnam have various religion beliefs such as Buddhist, Hoa Hao, Cao Dai, Christian and Muslim (10). Hoa Hao is a new reformist millenarian Buddhist movement. It is derive from the work of a 19th century Buddhist master known as the Healing Buddha of Tay An (8). Cao Dai is a syncretist Vietnamese religious movement with a strongly nationalist political character. It is derive from the perception from Confucianism, occult practices from Taoism and concept of karma and rebirth from Buddhism and some influence from Catholicism(9).
The Vietnamese follows the teachings of Confucius. Confucianism is the obligations of people based upon their relationship, how our behaviors and ethics should be towards each other. Based on these five basic relationships: Ruler and subject, husband and wife, parents and children, brothers and sisters and friend and friend.(10).
Singapore has been described as one of the most religious countries in the world (12). The major religions includes Buddhist (mostly Chinese), Islam (mostly Malays), Christian, Hinduism (mostly Indians), Sikh, Taoist and Confucianist (11).
2.2 Language
Vietnam’s official language, Vietnamese, is a tonal language that often compared to Cambodia’s official language, Khmer. In their language, each syllable has sex different tones which can change the meaning of the word. Foreigners often don’t understand or pick up the language. Some Vietnamese were able to speak other languages such as Mandarin, Khmer and Cham (10).
Singapore has many religions and they have their own languages. The four main national languages are Mandarin, Malay, Tamil and English (11). Singlish is Singapore English, usually comes from other languages such as malay and hokkien spoken in singapore.
2.3 Family
Vietnamese life is all about the family. In the Confucian tradition, the father is the head of the family and he is responsible to provide for the family such as food, clothing and a shelter. And the most important making decisions for the family. It is also unusual for three generations to live under one roof together. They also believes that after someone dies their spirit lives on (10). Vietnamese avoid confrontation or disrespect and praising someone often regarded as flattery and even mockery. They are respectful to the elderly (13).
Singaporeans thinks that the concept of group, harmony and mutual security are more important than that of the individual. The family is the center and the one to go to when one needs support. This emphasizes unity, loyalty and retain core values in this nation. Being respectful to elderly is very important and it’s a core value in every family. In Singapore, family doesn’t just means people who have blood relations but also includes extended family and close friends (11).
2.4 Marriage
In the early 1950s, the marriage in Vietnam was very different than today. Vietnam’s marriage was influence by Buddhist theology and Confucian philosophy. Vietnamese believed in fate in marriage, wealth and position of the partner. The extended family usually arranged marriage but they would consult the individuals on the choice of their mate. As the western influence, parents began to take on the advisory role in their child’s choice of mate. Arranged marriages are declining as parents now are more concern on their child’s future in securing a better mate. Parents would usually desire a mate of higher status in career wise but they are more open to the choices their child made. Once a couple is marriage they would establish their own household rather than staying under one roof with the husband’s family (13).
In Singapore it’s pretty much the same as the western influence marriage culture in Vietnam. There is a growing trend in different races marriage. Around 21% of marriages in Singapore in 2015 were inter-ethnic compare to a decade ago, it was increase by 15%. The trend is unsurprising as Singapore is increasingly well-travelled population with many different mix of ethnics and races (14).
2.5 Face/Dignity
The concept of ‘face’ can be explained as the quality that reflects a person’s reputation, pride, dignity and prestige. Face is extremely vital to Vietnamese and it’s easy to give, save or lose face to another person. Examples to give face to someone is give compliments for their hospitality or business acumen. Accusing their poor performance publicly will lead to loss of face for that particular person (10).
Concept of face is the same as Vietnam. Singaporean are very sensitive at maintaining their face in all aspects of lives. It can be lost, given, taken away or earned. Dignity can be conceive as greater than the person and extend to their company, school, family, and even the nation itself (11).
3 Business Culture in Vietnam
Doing business in Vietnam will be a good opportunity as the government is opening doors for foreign investors. Therefore, it will be necessary to look into their business culture to understand before penetrating into the market as well as to prevent upsetting the locals or at any business settings.
3.1 Business Etiquette
In Vietnam business etiquette, appointments is to be made several weeks in advance. They value any appointments and meetings in fact they are very punctual and expect the other party to be as well. Being late can be regarded as impolite. Always be dress presentable and conservatively (10). Do not refuse tea or food offered by Vietnamese. Take note on body language such as standing with you hands on your hips, arms crossed or using fingers to point are not acceptable in Vietnam. Do not touch a person’s head as they believe to be the spiritual center of a person (15). The most important to Vietnamese is do not make promises that you can’t keep which can result to lost of face.
In Singapore, we have strict business etiquettes and protocols which must be observed and take note. People usually observe a rigorous chain of command. The most commonly used way to schedule a meeting or appointment is by telephone, fax or e-mail. It should be made at least 2 weeks in advance or whenever possible. Punctuality is all business etiquette is vital as goes to Singapore. Questioning the authority is a taboo in Singapore business settings, however you may ask questions after making a presentation with a smile. Singaporean are afraid of losing face, so to avoid that, never disagree or criticize someone who is higher authority or rank than you. Hence, both of us will lose face (11).
3.2 Hierarchy
Vietnamese follows the teaching on Confucius (discussed previously in religious respect) which emphasizes social order and also very much based upon age and status. Everyone has a distinct place, role and responsibility within the hierarchical structure. In social situations, the oldest person in a group is usually greeted or served first. And in business meetings, the most senior person should enter the room first (10).
Even through Singaporean claimed that we are an egalitarian society, yet they still retain strong hierarchical relationships. Such relationships includes parents and children, teachers and students, and employers and employees. Singapore’s hierarchy is also drawn from Confucianism which emphasizes respecting age, status and elderly. In business greetings, elderly are the first to be introduced and given preferential seating, given choicest food and treated with utmost respect and courtesy.
3.3 Business Card
In Vietnam, on initial meetings business cards can be exchanged and should be presented with both hands. Be sure to show proper respect and glance at it before keeping or putting it on the table (10). If we are doing business in Vietnam, to show respect politeness, we can print some Vietnamese language on the business card.
Same goes for Singapore, during the initial introduction the business cards are exchanged using both hands. We may hand your card typeface facing the person. Then examine the business cards before carefully putting them away. If possible, when meeting with Chinese personnel, having your card translated into Mandarin and printed in essence of gold as it is an auspicious colour for them. This can imprint a good image for yourself or your organization (11).
3.4 Greetings and Handshakes
In Vietnam, addressing people formally by using Mr. or Mrs. Or a title with the first name of the person. Usually they greet by bowing slightly and greeting the elderly first (13). Handshakes are usually used during the initial meeting and departing. In Vietnam, handshakes only happen between members of the same sex. If the opposite sex is a women, always wait for her to extend her hand, if she does not, you may bow your head slightly. There’s many types of handshakes and only some Vietnamese like to use a two-handed shake. Left hand on top of the right wrist (10).
As for Singapore, there’s a strict protocol for greetings based on the ethnic origin and age of the person. Usually the elderly or the person who the status is higher is introduced first. Many younger generation people are following the western concept of shaking hands with everyone but not for the elderly and more reserved Singaporeans. Both genders shake hands but the women has to extend her hand first. Different ethics has their rules on handshakes. Chinese handshakes is rather light and can be prolonged. Ethnic Malays can shakes if they are both men. Muslim men traditionally do not touch women in public as the result they do not shake hands. A more appropriate way to shakes hands between a younger Malays and foreign women is by the use of ‘salaam’ greeting (bowing the head). Ethnic Indians can shake hands with the same sex and if being introduced to a opposite sex, nodding the head and smiling is sufficient (11).
3.5 Gift Giving
In Vietnam, gift giving is a very common practice and it doesn’t have to be an expensive gift, just a simple token of appreciation which can include fruits and flowers (15).
In Singapore, we may express our thanks by gift giving. A simple token of appreciation gift such as pen with the company logo would be sufficient and the gift can be wrapped. Do not open or cut open the gift by using scissors as it is inappropriate and it could symbolize conflict. However, letter openers are an exception. For gift giving to a Chinese, do not prepare any gift that is related to the number 4 as it rhymes with the word death. Clock is also a taboo for Chinese. As for the Malays, do not prepare gifts that is made from pigskin and alcohol as it is contravene to the laws of Islam (16).
4 Ways to Operate Efficiently in Vietnam
The theory of Geert Hofstede’s cultural dimensions is a cross-cultural communication. The 5 Hofstede dimension is to capture the impact of the culture in the society on the values of the members of that society. With the help of a structure based factor analysis, we will be able to describe the relationship between the values and behavior. It is a study on the aspect of culture which can provide us a better rating on a comparison scale (18).
Power Distance (High)
Power Distance refers to the individual in societies are not equal. In Vietnam, power distance is very high, it means that the members in the society are expected to accept that power is distributed unequally. They accept the hierarchical order which means everyone has a place and role. In the organization, it can be seen as reflecting inherent, inequalities, centralization is prominent. Your subordinates expect to be told what to do and the boss is a benevolent, exercising absolute political power (17).
Individualism (Low)
In Individualist societies, people tends to look after themselves and their immediate family only. Vietnam’s had a low score on individualism which means Vietnam is a collectivist society.