Read This Before Doing Business in Vietnam

The Vietnamese business culture has its basis in Confucianism. Confucianism is derived from the teachings of the great ancient Chinese philosopher Confucius, and is a system that determines how interpersonal relationships are to be conducted. Confucianism also describes how one should behave in a society and the ethics to be maintained.

It is important to be aware of the basic tenets of Confucianism if you are to do business successfully in Vietnam, because to understand the Vietnamese society and business community, it is important to have at least a general understanding of the philosophy they are based on.

The Vietnamese society believes in Collectivism, in which the individual is secondary to a group. This is true of Vietnamese businesses as well. You should expect your Vietnamese business partners to make decisions based on group consensus, rather than on individual initiative.

Another important thing you should make a note of while doing business in Vietnam is the importance attached by Vietnamese businessmen to hierarchy. As you would expect in a Collectivist society, hierarchy determines who leads and gets to make the final decision on behalf of the whole group.

And seniority in a hierarchy is generally determined by age. It is hence very important to be properly deferential to Vietnamese business executives who are senior to you. You should remain standing till those who are senior to you in age are seated first in a business meeting.

Equally, the concept of “Face” is very important. This aspect of doing business is common in all Southeast Asian countries, and more so in Vietnam, which has only recently got out of the clutches of Communism.

Vietnamese business partners are quick to take offence, to get slightest by what they perceive to be an insult. But they are unlikely to reply in kind or even say “no” to a simple yes or no question, even if they completely disagree with you. This is because of the concept of Face, wherein, there is nothing worse than getting criticized in public by a colleague, especially by a foreign business executive.

The reactions will never be in kind, criticism will never be met with criticism or answered back. Instead, you’re likely to get the silent treatment from your Vietnamese business partner if he feels insulted by you. He is likely to avoid meeting you and even refuse to take your calls. Your business partnership is as good as finished.

That is why you should exercise great caution while negotiating with your Vietnamese business partner and take extra care not to cause any offence. If you are polite yourself, you can expect your politeness to be reciprocated 10 times over.

Offer your Vietnamese business partner respect, forgive and ignore minor mistakes and you will be surprised at how much that can achieve. It would win you a plenty of goodwill and the permanent loyalty of your business partners in Vietnam.

Always remember to compliment your Vietnamese host for their hospitality or business ability. Don’t be afraid to flatter, whenever possible. Always remember to offer a small but well thought out gift to your Vietnamese business partner just before a meeting. This helps a long way in maintaining a harmonious business partnership with your local Vietnamese business partner.

Also, it takes a long time for a Vietnamese company to arrive at a business decision. But once a decision is made, there is no going back on that. So be prepared to wait it out patiently as there are several advantages to expanding your business in a fast growing emerging nation such as Vietnam.

This article is a part of our ongoing series on “Doing Business in Southeast Asia”. Our goal is to inform people about the right way to form a business partnership with local business partners in the region, and to offer a better understanding of the business culture and etiquette followed in that part of the world. The intention is to ensure that you are comfortable and know what to expect during a business negotiation with a business partner in Southeast Asia. Please send us your suggestions on how we may help to serve you better. Ciao!

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