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This briefing focuses on Vietnam.
The goal of this presentation is to inform you on various aspects of that country,
in preparation for your upcoming investment decision.
There are many aspects of a country that may be relevant to potential investment decisions;
and the various languages of a country is the first of such issues.
Similarities and/or differences in languages can have a substantial impact on a firm’s
ability to communicate with local customers, suppliers and even employees.
As most people in Australia would be aware, the dominant language in the Vietnam is Vietnamese,
formerly known under French colonization as Annames.
This language is one of several in the family of languages known as Austroasiatic,
although its vocabulary borrows heavily from Chinese,
especially words that denote abstract ideas.
Indeed, it would be difficult to find two languages further apart than English and Vietnamese.
A second issue which can influence a firm’s ability to conduct business in a foreign country
is the dominant religion.
Religion has a potentially powerful impact on people’s value systems,
and can influence how they behave and interact with one another.
In contrast to Australia, between 50 and 80% of the Vietnamese population claims an affiliation
with Mahayana Buddhism,
leaving Christianity as a minority religion at 7% of the population.
Moreover, there is a deep suspicion of Roman Catholicism in Vietnam,
and the Vatican Church is still officially banned.
These hostilities relate back to the French colonial period
and the Roman Catholic Church’s strong opposition to communism.
A third factor which may influence a company’s ability to conduct business in a foreign country
is the level of industrial development.
This not only influences the cost of labour in a country and the consumption patterns,
but it also arguably shapes the attitudes, values and behaviours of the population in
general.
Despite its substantial industrial growth over the past decade,
the differences between Australia and Vietnam in terms of economic and industrial development
are still quite substantial.
In particular, Vietnam is still a heavily rural agrarian society
with over 50% of its workforce in agricultural production versus only 5% for Australia.
Similarly, the ownership and consumption of consumer goods such as cars, TV, radios and
telephones,
while on the rise, is still substantially below Australian levels.
A fourth important issue is the similarities and/or differences in the educational systems
of countries.
Unlike Australia, in Vietnam there is a competitive entrance exam to enter Universities.
In Vietnam, education still faces many difficulties regarding adequate teaching materials, infrastructure
and teacher qualifications.
Education is free and compulsory only at primary school levels, ages 6 - 11.
After grade 6 parents have to pay for schooling.
In contrast, Australia offers free public school education up to level 12.
Also, educational access is unavailable to millions of children in Vietnam.
A fifth critical issue with respect to doing business in another country
is similarities and/or differences in the legal and political systems.
In contrast to Australia’s parliamentary democracy,
Vietnam is a law-governed socialist state under the leadership of the Communist party.
The Communist party-controlled government operates under a state constitution;
This provides a democratic appearance;
however, the country is effectively run by the executive branch.
The National Assembly elects the president and the prime minister
but only meets twice a year.
The Vietnamese legal system includes the Constitution and laws that are passed by the National Assembly.
However, it does not embrace the same principles of procedural fairness, judicial precedent
and the separation of powers
that are fundamental to Australia's legal system.
A sixth but potentially more subtle issue is similarities and/or differences in actual
business practices.
This can involve simple, but potentially embarrassing issues
such as how to properly greet people, and attitudes towards time.
There are striking differences in business practices between Australia and Vietnam.
An indirect style of communication is preferred over a direct style in Vietnam.
It’s best to imply what you are saying than to actually say it.
Vietnamese also tend to favor indirect eye contact,
overtly direct eye contact is viewed as suspicious and threatening.
Vietnamese people view time in a more relaxed sense as well,
putting more emphasis on people and relationships, rather than set schedules and deadlines.
Hierarchy is very important in the Vietnamese culture,
so it is always best to defer to the most senior person in the room
when it comes to beginning and guiding a conversation.
Lastly, periods of silence are considered acceptable and are to be expected.
Above all, avoid interrupting,
showing displeasure through facial or eye movements
and talking over someone. Be patient.
The seventh and final issue is the broader set of cultural values which are commonly
shared by a large portion of a country’s population.
Countries can vary in terms of the emphasis placed on individuality (versus conformity),
the attitudes towards uncertainty and ambiguity,
the attitudes towards authority and social inequities,
and not the least, attitudes towards how gender roles are allocated in society.
Vietnam has a strikenly different culture from Australia.
The country emphasizes the group and group concerns far more than Australia.
Additionally, hierarchy and authority structures are far more rigidly observed.
Gender roles are also different with women enjoying more freedom and power in Australia.
Lastly, the Vietnamese are far less comfortable with ambiguity.
This concludes our brief presentation on Vietnam.