Hofstede: A Peek into Vietnam’s Business Culture

Recently, we stumbled across the website of Prof. Geert Hofstede (geerthofstede.com). Some of you might remember him from your student years. He developed the “Cultural Dimensions Theory”. In a way, Prof. Hofstede was the father of modern cultural studies. On aforementioned site (which is excellent and even contains an online exhibition on the life of the professor) you can actually compare all six dimensions with specific countries, e.g. Germany and Vietnam. This may be an interesting angle to introduce Vietnamese business culture in comparison with Germany. And that is what this article is about. As a seven-minute-read, this can naturally only scratch the surface, but we still hope it will help you.

Introduction: Vietnam as an East Asian Culture

Vietnam might be geographically located in Southeast Asia (SEA) but culturally firmly belongs into the East Asian Cultural Sphere. Its culture is therefore quite different from SEA countries like Thailand or Myanmar. Vietnam is more akin to China, Korea and Japan. Hence, cultural traits such as arts, cuisine, traditions, literature, language, and philosophy are similar to aforementioned East Asian countries. This is largely because Vietnam, just like Korea and Japan, was heavily influenced by China during its development. Also, Vietnam’s economy was and still is heavily integrated with its northern neighbor. Most foreign businesspeople consider Vietnam being an East Asian culture an advantage because this allegedly brings many positive traits which will be explained as following. However, while Vietnam certainly shares a lot of values with its East Asian brethren it also deviates heavily in some respects which we will also explore beneath.

Hofstede’s Cultural Dimensions

According to Prof. Hofstede, his theory measures six dimensions that “that society needs to come to term with in order to organize itself”. Below, you will find these dimensions as a comparison of Germany and Vietnam. As you see, in some dimensions the two countries are quite similar while they diverge heavily in others. Within this blog article, we will go through and explain on them.

Comparison of Hofstede’s Dimension Scores Germany/Vietnam

Power Distance

Hofstede: “(…) the extent to which the less powerful members of organizations (…) accept and expect that power is distributed unequally.”

Score Germany: 35
Score Vietnam: 70

Vietnam’s power distance indicator is quite high largely because the local culture is accustomed to a strictly vertical hierarchical system. Fitzgerald (1972) cites a Vietnamese proverb as: “To be without leaders, to obey no one, is unworthy of man: it is to behave like animals”. Within this context, age plays an important role in designating “leaders”. For example, in family structures, the oldest male member will often formally be the head. At work, too, age plays an important role with older staff usually receiving more respect than younger ones. Rousseau’s “free association between equals” with flat hierarchies as practiced in Germany is unknown here. Fitzgerald describes Vietnamese relationship structures as rather homogenous and absolute. Within this vertical hierarchical system it is therefore – other than in Western societies – unusual to scrutinize persisting circumstances, such as instructions by a superior. Many investors value this specific trait. It comes in handy if an established process is transferred to Vietnam. Once instructed, Vietnamese employees will expertly put it into practice and not deviate from proven methods. Of course, this can be a drag if an employer demands self-driven ingenuity from her staff. Here, (foreign) management must be sensitive to cultural differences. A German manager of an IT company commented “Vietnamese do not TAKE responsibility; you have to GIVE it to them” proficiently explaining the extra-load of responsibility thus put on superiors in Vietnam.

Individualism (respectively: Collectivism)

Hofstede: “(…) the extent to which people feel independent, as opposed to being interdependent as members of larger wholes.”

Score Germany: 67
Score Vietnam: 20

Vietnam belongs to the most collectivist cultures in the world. While Western individualist cultures primarily orientate on the “I”, collectivist cultures gravitate towards “common goals”. Society is not considered as the aggregation of people but as a complete organism. The individual does not care about its needs but adapts to the demands of society. This concept and the world of thought connected herewith is fascinating but also difficult to understand for Westerners. The following (almost mystical) citations might be helpful to grasp its meaning:

Fitzgerald (1972): “Every man here feels that he is both father and son (…) and is aware of being held fast by the people around him and the dead below him and the people to come, like a brick in a brick in a wall. He holds. (…)”
Pham, a German-Vietnamese (2017): “When you are in Vietnam you forget that there is an “I”. (…). You are what you are for others: Not “young” or “old”, but “younger” or “older”. You sense: Thinking in the “I” form is inward-looking and arrogant. Nobody elevates their needs over the others. Who am I? This is a question you cannot answer in Vietnam”.

Collectivism is one of the core aspects of East Asian Cultures and therefore has been intensely studied. In business, decision-making is typically a core topic different from western cultures. Collectivist cultures strive to find consensus with all relevant stakeholders. It may therefore take longer to finish negotiations. Also, when discussing between business partners, unexpected questions will mostly not be cleared because queries must be confirmed within the organization before giving a “definitive” reply. However, once a Vietnamese organization has convinced all stakeholders and thus created “harmony”, project implementation is usually quite fast because there will be no further dissent because everybody is “in line”. Please note that this kind of “harmony” overall is a very important concept in Vietnamese society. It should always be taken care of in relationships with all kinds of stakeholders (e.g., clients, suppliers, employees). Thus, western “treats” such as direct criticism, stand-alone decisions or breaching hierarchical structures should be avoided focusing on a more communitarian and indirect approach. For superiors this means that they ought to consider their employees more strongly in decision-making. However, in a hierarchical context, the superiors will still be the ones “calling the shots” and should not expect their subordinates to actively step forward (see: Power Distance).

Masculinity

Hofstede Insights: “A high score (Masculine) on this dimension indicates that the society will be driven by competition (…) A low score (Feminine) (…) means that the dominant values in society are caring for others and quality of life. (…) The fundamental issue here is what motivates people, wanting to be the best (Masculine) or liking what you do (Feminine).”

Score Germany: 66
Score Vietnam: 40

Hofstede Insights, a consultancy dedicated to intercultural consulting, argues that in “masculine” Germany performance is highly valued and that people “live in order to work”. In “feminine” Vietnam, people are “working in order to live”. They value equality, solidarity and quality in their working lives. In this context, many Vietnamese are considering their co-workers a “second home” and hence care a lot what happens there even beyond a pure “work” context. As a collectivist culture, managers in Vietnam are expected to involve all stakeholders (i.e. subordinates) into decision-making. Interestingly, in Germany managers are expected “to be decisive and assertive” while this will likely not be necessarily demanded in Vietnam because managers will have a “natural” authority derived from their higher status within the hierarchy.

It should be noted that China has a much higher masculinity index than Vietnam (66). Therefore, managers coming in from that country should keep in mind to be more forthcoming and mindful about their subordinates than back north. We have seen some instances in which foreign or Chinese managers transferring from China initially have indeed been quite assertive and too forceful to successfully manage their Vietnamese teams.

Finally, a score of 40 does not qualify Vietnam as an “extremely” feminine country. Thus, some “masculine” traits, like a conservative role model definition between man/woman, may be observed.

Uncertainty Avoidance

Hofstede: “Uncertainty avoidance deals with a society’s tolerance for uncertainty and ambiguity.”

Score Germany: 65
Score Vietnam: 30

Vietnam’s score here is very low meaning that its people maintain a “relaxed attitude in which practice counts more than principles” (Hofstede Insights). In Vietnam, this means there are rules and laws but they may be “bent” if deemed necessary. In business, contracts might be signed but deviated from. They are a basis, but their content might not principally be followed. It is thus advisable to develop excellent relationships with Vietnamese business partners to guarantee “harmony” and a favorable outcome. Gaining trust and developing long-term relationships really is key to be successful in Vietnam. For more information, please see this article on our blog.

An uncertainty inducing process is changing jobs. While in an uncertainty avoiding country – like Germany – life-long employment still is widespread, people in Vietnam often change jobs if conditions elsewhere seem promising. Although turnover rates are not as high as in China, securing personnel long-term is a key issue in Vietnam for foreign investors. Also, because of regular staff turnover, business travelers might find themselves talking to different contact persons over time because of frequent personnel changes.

Long-Term Orientation

Hofstede Insights: “This dimension describes how every society has to maintain some links with its own past while dealing with the challenges of the present and future (…)”

Score Germany: 83
Score Vietnam: 57

Both Vietnam and Germany are long-term-oriented (LTO). Germany’s score belongs to the highest in the world. This means that Germans are extremely pragmatic treating situations depending on their context, not on pre-existing beliefs. Vietnam scores lower than its East Asian peers but much higher than many other SEA countries. So, while the Vietnamese are somewhat adhering to long-standing traditions and beliefs, within the context of SEA they are seen as fairly pragmatic. Overall, most managers praise the mindset of the Vietnamese. They perceive them as goal-oriented and focused. Andy Ho, Chief Investment Officer of Vina Capital commented: “Vietnamese people are very practical. They just want to make money, to get on with it.” Because LTO societies show a greater ability to invest and adapt, Hofstede even argues that poor LTO countries develop faster than their short-term-oriented counterparts. This would certainly fit the Vietnamese being on track to becoming an industrialized country.

Indulgence

Hofstede Insights: “(…) the extent to which people try to control their desires and impulses (…)”

Score Germany: 40
Score Vietnam: 35

Germany and Vietnam belong to the more restrained countries in the world. There are strong social norms keeping them from expressing their desires and impulses. In business meetings, the Vietnamese seem to be more restrained than the Germans. Because they do neither gesticulate nor overly underscore their feelings through facial expressions it can be very hard to “read” them at times. On the other hand, (Western) foreigners should be careful not be too emotional and open with their Vietnamese counterparts.

Both Germany and Vietnam have more of a “work ethic” than a “leisure ethic”. Again, this correlates very well with the goals of foreign investors to Vietnam. Because of their strong focus on labor, Vietnamese even received the nickname of the “Prussians of Asia” in Germany. Prussia is a former German state that is still held in high regard for some of its values such as industriousness, dutifulness, punctuality, and dedication. These values are often also attributed to Vietnamese ennobling them in the German mindset.

Conclusion

And there you have it. Vietnam’s culture at times can be quite peculiar. But this basically is the case with any culture. While most Vietnamese would likely not expect foreigners to completely adhere to their norms it seems to be important for foreigners to at least be aware of cultural differences. Only then they can implement strategies warranting success within cross-cultural relationships.

Now, we are of course aware that this short article based on Hofstede’s dimensions barely scratches the surface. There is much more to be said about the six dimensions. Also, further topics such as particularism, women in society and trust have not really been touched. But we still hope that it can give you an introductory overview on Vietnamese business culture.

The culture dimensions developed by Prof. Hofstede are an excellent tool to compare and investigate cultural differences. They can support to develop measures to successfully interact between different cultural spheres. If you’d like to know more, we recommend looking up his family’s official website at geerthofstede.com. Another insightful resource can be the homepage of Hofstede Insights, which is a consultancy utilizing the professor’s principles in their work at hofstede-insights.com.

If you’d like to read more on cultural comparison, we recommend:

Geert Hofstede, Gert Jan Hofstede, Michael Minkov: Cultures and Organizations, ISBN 978-0071664189
Charles Hampden-Turner, Fons Trompenaars: Riding the Waves of Culture, ISBN 978-1529346183

In this article, we also cited the following books:

Fitzgerald, Frances (1972): Fire in the Lake, ISBN 978-0316159197
Kocatürk-Schuster et al (2017): Unsichtbar – Vietnamesisch-Deutsche Wirklichkeiten, Friedrich-Ebert-Stiftung/Domid

If you’d like to know more, you may contact us any time via mail to [email protected].