Navigating the Nuances of Vietnamese Business Culture | The Sentry

Vietnam is a country that offers many opportunities and challenges for doing business across industries. The country has rich natural resources, a young and dynamic population, a stable and growing economy, a business-friendly environment, a well-developed infrastructure, and a time-honored culture. These factors make Vietnam an attractive destination for outsourcing and doing business, especially in the software development sector.

However, doing business in Vietnam also requires a good understanding of the local culture, which is unique and complex, like the country itself. The business culture in Vietnam is influenced by various factors, such as history, geography, religion, ethnicity, and politics. Therefore, doing business in Vietnam is not a simple task. You need to overcome the cultural barriers, which are the first and most important challenge.

In this article, we will explore some of the key aspects of Vietnam business culture and provide some tips on how to navigate them effectively.

The Importance of Cultural Awareness and Sensitivity in Doing Business in Vietnam

Learning and adapting to the business culture in Vietnam is not a hard task, but it requires some time, effort, and patience. It is not enough to just know the basic facts and figures about the country’s culture and its economy. You also need to understand the deeper aspects of the culture, such as the values, beliefs, attitudes, and behaviors of the Vietnamese people, especially in the business context. By learning and adapting to the business culture in Vietnam, you can gain many benefits and advantages. Some of them are:

• You can communicate more effectively and efficiently with your Vietnamese counterparts, by using the appropriate language, tone, and body language. You can also avoid misunderstandings and conflicts that may arise from cultural differences.
• You can negotiate more successfully and smoothly with your Vietnamese partners, by understanding their decision-making process, their expectations, and their negotiation style. You can also build trust and rapport with them, by showing respect and appreciation for their culture and customs.
• You can manage more productively and harmoniously with your Vietnamese employees, by understanding their motivation, work ethic, and feedback preferences. You can also motivate and inspire them, by recognizing their achievements and providing them with opportunities for growth and development.
• You can market more effectively and strategically to your Vietnamese customers, by understanding their needs, preferences, and behavior patterns. You can also create a loyal and satisfied customer base, by delivering high-quality products and services that meet their expectations and values.

On the other hand, doing business in Vietnam or any country without proper adaptation to the local culture can be a challenging and frustrating experience, or even worse, it may lead to failure and loss of reputation and credibility for foreign businesses. Therefore, this handbook will help you learn and adapt to the basic business culture in Vietnam, so that you can achieve your business objectives and enjoy your stay in the country.

Understanding Vietnam Business Culture

Vietnamese business culture is influenced by various factors, such as Asian culture, the country’s history, geography, religion, and social structure. Some of the main characteristics of Vietnamese business and Southeast Asia culture are:

• Collectivism: Vietnam is a collectivist society where people value group harmony, loyalty, and consensus over individualism, competition, and confrontation. This means that Vietnamese business people tend to avoid direct conflict, criticism, or disagreement and prefer to maintain a positive and polite tone. They also value personal relationships and trust, which can take time to build and require frequent interactions and follow-ups.
• Hierarchy: Vietnam is a hierarchical society where people respect authority, seniority, and status. This means that Vietnamese business people tend to defer to the opinions and decisions of their superiors, elders, or leaders and expect the same from their subordinates, juniors, or followers. They also use formal titles and honorifics to address people and observe proper etiquette and protocol when interacting with them.
• Indirectness: Vietnam is an indirect society where people use subtle cues, hints, and gestures rather than explicit words, statements, or actions to convey their messages. This means that Vietnamese business people tend to avoid saying “no” directly and instead use phrases such as “maybe”, “I will try”, or “I will think about it”. They also rely on non-verbal communication, such as eye contact, facial expressions, and body language, to express their emotions, intentions, and expectations.
• Flexibility: Vietnam is a flexible society where people adapt to changing situations, circumstances, and opportunities rather than following rigid rules, plans, or schedules. This means that Vietnamese business people tend to be pragmatic, creative, and resourceful, and can cope with uncertainty, ambiguity, and risk. They also value results, outcomes, and solutions rather than processes, methods, or procedures.

Understanding these cultural traits can help foreign investors and businesses to communicate, negotiate, and collaborate more effectively with their Vietnamese clients and avoid potential misunderstandings, conflicts, or mistakes.

Prevalent Business Customs in Vietnam

In order not to violate the unwritten rules stipulated by Vietnamese business people, you should try to keep these in mind to catch the signals rightly as well as respond properly:

Language and Greetings

Language Landscape in Vietnamese Business

Language plays a vital role in Vietnamese business culture, shaping communication and interactions. Vietnamese is the official language and is spoken by the majority of the population. This tonal language is characterized by its regional dialects and can present challenges for foreigners in terms of pronunciation, grammar, and vocabulary.

In Vietnam, English proficiency varies significantly, particularly among older and rural populations, where it is less common. Therefore, learning some basic Vietnamese phrases is highly advantageous for foreign business professionals. Utilizing simple yet essential Vietnamese phrases in your interactions can significantly enhance your rapport with Vietnamese clients and colleagues. A few key phrases include:

• Xin chào: Translates to “hello,” a fundamental greeting in any interaction.
• Cảm ơn: Means “thank you,” a polite expression of gratitude.
• Tạm biệt: The Vietnamese word for “goodbye,” useful in concluding meetings or conversations.

Employing these phrases demonstrates respect for the local language and culture, which is highly valued in Vietnamese society. It also shows a willingness to engage and adapt to the local business environment, fostering stronger relationships and smoother communication with Vietnamese partners and clients.

Respectful Greetings in Vietnam Business Culture

In Vietnamese business culture, understanding and practicing appropriate greeting methods is crucial for establishing respectful and positive interactions. The process involves a blend of physical gestures and verbal communication.

• Handshake and Bow: Greetings typically include a handshake accompanied by a slight bow. It’s important to ensure the handshake is firm yet gentle, and the bow is executed with respect. During this interaction, smiling and maintaining eye contact is essential for conveying friendliness and sincerity. Physical expressions like touching, hugging, or kissing are considered too intimate or inappropriate for business settings in Vietnam.
• Addressing Individuals: When addressing someone, it is customary to use their title and surname, followed by their first name, such as “Mr. An” for a person named Nguyen Van An. This format respects the Vietnamese naming convention, where the surname is placed first, followed by the first name, differing from the typical Western name order.
• Greeting a Group: In group settings, the protocol dictates greeting the most senior or important person first, followed by others based on their rank or age. Each individual should be greeted separately rather than as a collective group, which demonstrates greater respect and attention to personal status. It’s also advisable to wait for a Vietnamese host or business partner to introduce you to the group, as self-introductions can be perceived as less humble or courteous.

Adhering to these greeting conventions is a significant and important aspect of Vietnam business culture. It reflects an understanding and respect for local customs, thereby enhancing your business relationships and interactions with important clients in Vietnam.

Business Meeting Etiquette

Business meetings in Vietnam require personal and trust-based relationships. You should also follow the etiquette and customs that may differ from your culture.

Here are some tips for a business meeting in Vietnam:

Preference for Face-to-Face Meetings

Vietnamese like face-to-face meetings more than phone calls or emails, as they help to build personal and trust-based relationships. You should:

• Plan meetings ahead of time and confirm them a few days before.
• Avoid public holidays, such as Tet (Vietnamese New Year), when businesses are shut and meetings are not held.

Choosing the Right Location

When choosing a meeting location, it’s important to consider the status and preferences of your Vietnamese counterpart. Meetings typically take place in offices or restaurants, but this may vary depending on the goal and formality of the meeting. You should:

• Be on time or early, as being punctual is important and valued.
• Dress modestly and professionally, avoiding bright colors or casual clothing.

Business Card Exchange

You should swap business cards with your Vietnamese counterpart. You should:

• Give and take business cards with both hands and look at them carefully before putting them away.
• Have cards in both English and Vietnamese, with the Vietnamese side up. Include your name, title, company, contact details, and, if possible, your company logo.

During the Meeting

During the meeting, you should:

• Accept any hospitality from your Vietnamese host, such as tea, coffee, water, or snacks.
• Know the regional differences in Vietnam, such as the north being more formal and reserved, the south being more relaxed and friendly, and the central being more conservative and traditional.
• Follow the lead of your Vietnamese counterpart, and avoid interrupting, contradicting, or challenging them, as this may make them lose face or respect. You should also avoid using humor, sarcasm, or irony, as these may be confusing or offensive in Vietnamese culture.

These tips can help you have a successful and productive business meeting in Vietnam, and impress your Vietnamese counterpart. You should also follow up and keep in touch after the meeting, as this shows your interest and commitment.

Just remember that business in Vietnam is based on personal relationships and trust, which need time and frequent interactions.

Building Relationships

In Vietnam, business thrives on personal relationships and trust. It is crucial to invest time in establishing rapport and friendship with your Vietnamese counterpart before delving into business discussions. Keeping in touch and following up also demonstrate your interest and commitment.

You can build relationships in Vietnam by discussing personal topics such as family, hobbies, travel, or sports. You should avoid politics, religion, or the Vietnam War, as these may be sensitive or controversial. You should also respect and compliment the Vietnamese culture, history, traditions, and your Vietnamese counterpart’s achievements or hospitality.

Work-Life Balance

In Vietnam, maintaining a healthy balance between professional and personal life is a key expectation. This balance involves dedicating appropriate time to work activities and leisure, ensuring personal health and productivity.

Respecting others’ privacy is crucial, both in and out of the workplace, as inquiring too deeply into personal matters is considered rude.

Distinct from many other cultures, it is customary in Vietnam for employees to take regular breaks during the day. These breaks often involve sharing meals with colleagues, an activity that fosters a positive work environment and strengthens team relationships.

Reciprocation

Vietnamese culture highly values the principle of reciprocation, both in personal life and in business. This means returning favors or gestures of goodwill is expected and forms a core part of social and business etiquette. The inability to reciprocate can cause discomfort among Vietnamese individuals.

In business, this practice is essential for building and maintaining strong relationships with customers, business partners and colleagues. Reciprocation also plays a significant role in developing personal relationships within and outside the professional sphere.

Punctuality

Contrary to many cultures, punctuality is not a prominent characteristic in Vietnam, and lateness is often normalized. It is common for individuals to arrive 15 to 30 minutes late for various engagements, including business meetings.

However, as a foreign professional, adapting to this aspect involves scheduling meetings slightly earlier to accommodate potential delays. It’s also considered a mark of respect to inform parties of any changes in plans or schedules in advance, acknowledging the importance of their time. This approach helps navigate the relaxed attitude towards punctuality while maintaining professional standards and respect for Vietnamese timekeeping norms.

Understanding the Concept of ‘Face’

The concept of ‘face’ is very important in Vietnamese culture, as it reflects one’s reputation, dignity, and honor. Face can be gained, lost, or given, depending on one’s actions and words. Therefore, you should be careful not to cause anyone to lose face, or to lose face yourself, in business interactions.

Some of the ways to maintain and respect face in Vietnam are:

• Show deference and respect to seniority and hierarchy. Address people by their titles and surnames, and follow their lead and instructions. Avoid challenging, contradicting, or criticizing them, especially in public.
• Avoid confrontation, criticism, or disagreement in public. Keep a calm and polite tone, and use indirect and subtle ways to express your opinions or concerns. Avoid using negative words, such as “no”, “wrong”, or “bad”, and instead use positive or neutral words, such as “maybe”, “different”, or “interesting”. Avoid using gestures, such as pointing, nodding, or shaking the head, as these may have different meanings in Vietnam.
• Praise and compliment others in a sincere and modest way. Acknowledge and appreciate the achievements, contributions, or hospitality of your Vietnamese counterpart, and give them positive feedback and encouragement. Avoid boasting, exaggerating, or lying.
• Apologize and admit mistakes in a humble and sincere way. Take responsibility and accountability for your actions and words, and apologize sincerely and promptly if you make a mistake or offend someone. Offer a solution or compensation, and avoid blaming or making excuses.
• Fulfill promises and obligations in a timely and reliable way. Honor your commitments and agreements, and deliver your results and outcomes as promised. Avoid changing your plans or terms, or canceling your appointments or contracts.
• Accept invitations and gifts graciously and reciprocate them. Accept any invitations or gifts from your Vietnamese counterpart, and express your gratitude and appreciation. Reciprocate them with a similar or higher value, and avoid refusing or rejecting them.

Understanding the concept of face can help you avoid cultural misunderstandings, conflicts, or mistakes, and build trust, respect, and rapport with your Vietnamese counterpart. By following these tips, you can maintain and respect face in Vietnamese business culture, creating a positive and lasting impression.

Mastering Business Practices in Vietnam

Business Etiquette and Values

Understanding the Vietnamese Business Mindset

One of the key factors influencing business practices in Vietnam is the role of hierarchy and respect in business interactions. Hierarchy and respect are rooted in Confucianism, a philosophy emphasizing moral values, social order, and human relationships. Confucianism defines the roles and obligations of different members of society, emphasizing the importance of deference and loyalty to superiors, elders, and peers.

In business, this means that you should always respect the seniority, authority, and status of your Vietnamese counterpart and follow the appropriate etiquette and protocol. For example, you should:

• Greet the most senior person first, and use the proper titles and honorifics.
• Avoid direct or confrontational communication, and use indirect and subtle ways to express your opinions or concerns.
• Show gratitude and appreciation for any favors or assistance you receive, and reciprocate them in a timely and appropriate manner.
• Avoid causing anyone to lose face, or lose face yourself, in business situations.

Understanding the Vietnamese business mindset can help you to adapt to the local culture, values, and expectations, and to establish a respectful and harmonious relationship with your Vietnamese counterpart.

Communication Styles in Vietnamese Business

Communication is key in Vietnamese business, as it affects your business interactions. You need to be aware of the formal and informal communication styles, and the non-verbal cues in Vietnamese business settings, and adapt your communication style accordingly. Some of the communication styles in Vietnamese business are:

• Formal and Informal Communication: Vietnamese business communication is formal and respectful with senior or external parties. You should use titles and honorifics, polite and indirect language, and avoid slang, jargon, or colloquialisms. Vietnamese business communication is informal and friendly with peers or familiar parties. You may use nicknames, jokes, or compliments, and discuss personal topics to build rapport and friendship.
• Non-Verbal Cues: Non-verbal cues, such as facial expressions, gestures, eye contact, and body language, are very important in Vietnamese business communication. They convey emotions, attitudes, and intentions that may not be expressed verbally. You should pay attention to the non-verbal cues of your Vietnamese counterpart and interpret them correctly. You should also use appropriate non-verbal cues in your own communication, and avoid any gestures or expressions that may be rude or offensive.
• Indirectness and Subtlety: Vietnamese business communication is often indirect and subtle. Vietnamese business people tend to avoid saying ‘no’ directly, opting for phrases like ‘maybe,’ ‘I will try,’ or ‘I will think about it.’ They also rely on hints, implications, and suggestions rather than explicit statements or requests. This preference is rooted in their values of harmony, consensus, and face, as they strive to avoid offending, rejecting, or confronting anyone. When interpreting affirmative responses, it’s important to be cautious and seek clarification and confirmation, using open-ended questions.

Communication styles in Vietnamese business are influenced by the cultural values and preferences of Vietnamese business people. By following these tips, you can communicate more effectively, avoid misunderstandings, and build rapport with your Vietnamese counterpart.

Networking and Relationship Building

The Role of Social Events in Business

One of the ways to network and build business relationships in Vietnam is by participating in social events like dinners, parties, or festivals hosted by your Vietnamese counterpart or their company. These social events provide opportunities to know your Vietnamese counterpart personally, and to show your interest and respect for their culture and traditions. Some of the etiquette and best practices in business social settings are:

• Accept any invitation to a social event unless you have a good reason to decline. Declining may be considered rude or disrespectful, potentially harming your business relationship.
• Dress appropriately for the occasion and avoid casual or revealing clothing. You should also avoid white or black attire, as these colors are associated with mourning and funerals.
• Arrive on time or early and greet the host and other guests. You should also bring a small gift for the host, such as flowers, fruit, or sweets, and present it with both hands.
• Follow the host’s lead and sit where they indicate. You should also wait for the host to start eating or drinking before you do. You should also try everything that is offered to you, and avoid leaving food on your plate, as this may imply that you did not like the meal or that you were not served enough.
• Engage in conversation with your Vietnamese counterpart and other guests, avoiding sensitive or controversial topics, such as politics, religion, or the Vietnam War. Refrain from asking personal or intrusive questions, such as their income, marital status, or health. You should also avoid boasting or bragging about yourself or your company, as this may be seen as arrogant or disrespectful.
• Show appreciation and compliment your Vietnamese counterpart and the host on their hospitality, food, or achievements. You should also express your interest and curiosity about their culture, history, and traditions, and ask questions politely and respectfully.
• Avoid drinking too much alcohol as this may impair your judgment and behavior, and could cause you to lose face or offend your Vietnamese counterpart. You should also avoid smoking in public places, as it may be prohibited or frowned upon. You should also avoid chewing gum, which might be considered impolite or childish.

Networking and relationship building are vital for doing business in Vietnam, as they can influence the outcome and success of your business dealings. By following these tips, you can network and build relationships effectively with your Vietnamese counterpart, and create a long-term and successful business partnership.

The Art of Gift-Giving in Vietnamese Business

Another way to network and build relationships in Vietnam is to exchange gifts, especially during festive occasions. Gift-giving is a cultural tradition in Vietnam and a sign of respect, gratitude, and friendship. However, you need to be careful when selecting and presenting gifts, as there are some rules and customs that you need to follow. Some of the guidelines and suggestions for selecting appropriate gifts are:

• Choose modest, meaningful, and symbolic gifts, such as local handicrafts, books, or souvenirs. Avoid expensive, flashy, or inappropriate gifts, such as money, alcohol, knives, or clocks. Avoid red, yellow, or green gifts, as these are colors of the Vietnamese flag and may be disrespectful or political.
• Wrap your gifts in colorful paper, preferably red or gold, and present them with both hands. Include a card or note expressing appreciation or congratulations. Anticipate that your Vietnamese counterpart may initially refuse the gift as a sign of modesty. Politely insist until they accept it.
• Understand the cultural significance and meanings of different gifts. For example, avoid giving white flowers, handkerchiefs, or four of anything, as these are associated with death, sadness, or bad luck.

The art of gift-giving in Vietnamese business is a way of showing your respect, gratitude, and friendship to your Vietnamese counterpart, and of strengthening your business relationship. By following these tips, you can select and present appropriate gifts that will be appreciated and remembered by your Vietnamese counterpart.

Tips for Singaporean Businesspeople

Singapore and Vietnam have a strong and growing bilateral relationship, with trade, investment, and cooperation in various sectors, such as education, tourism, and technology. Singapore is one of the largest foreign investors in Vietnam, and Vietnam is one of the fastest-growing markets for Singaporean businesses.

However, to succeed in the Vietnamese market, Singaporean business people need to adapt to the Vietnamese business environment, and avoid some common pitfalls in Vietnamese business settings.

Some of the tips for Singaporean businesspeople are:

• Be prepared for the differences and challenges in the Vietnamese business environment, such as the legal system, the infrastructure, the bureaucracy, the corruption, and the competition.
• Be flexible and adaptable to the changing market conditions, customer preferences, and competitive advantages in Vietnam.
• Be patient and persistent in building trust and rapport with your Vietnamese clients, and respect their culture, history, and traditions.
• Be aware of the main challenges faced by Singaporean businesses in Vietnam, such as the lack of transparency and consistency in regulations, the difficulty in finding and retaining talent, and the language and cultural barriers.
• Be aware of the language barrier, and use an interpreter or a translator if needed. Avoid using slang, jargon, or colloquialisms, and speak clearly and slowly.
• Be aware of the communication style, and use indirect and subtle ways to express your opinions or concerns. Avoid using sarcasm, humor, or criticism, as these may be misunderstood or offensive in Vietnamese culture.
• Be aware of the negotiation style, and avoid signing contracts or closing deals on the first meeting. Focus on building trust, rapport, and understanding, and follow up with emails, phone calls, or visits until you reach a mutually beneficial outcome.
• Be aware of the contract enforcement, and seek legal advice or assistance if needed. Avoid changing your plans or terms, or canceling your appointments or contracts, as this may cause you to lose face or reputation.
• Be aware of the etiquette and protocol, and follow the appropriate dress code, greeting, seating, dining, and gift-giving customs. Avoid using gestures, such as pointing, nodding, or shaking your head, as these may have different meanings in Vietnam.

By following these tips, Singaporean businesspeople can capitalize on their strengths and opportunities while addressing their weaknesses and mitigating threats in the Vietnamese market.

Conclusion

Vietnamese business culture is a complex and fascinating topic that reflects the country’s history, culture, and society. As a business traveler, you need to understand and respect the nuances of Vietnamese business culture, and adapt your business strategies and practices accordingly.

By learning about the culture of your business partner, you will be able to communicate effectively, avoid misunderstandings, and create value and mutual benefit for both parties. You will also be able to appreciate and enjoy the richness and diversity of the world, and expand your horizons and perspectives.