Vietnam’s international environment analyse

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This report will talk about some national and cultural factors. National factors may affect the decision whether the Australian company will invest into Vietnam. And culture factors will discuss how to avoid culture conflict. Vietnam is a socialistic country which locate in south-east of Asian. This country developed quite fast in recent years. The stable policy is good for foreign investing. 90% of business freedom and investment freedom in Vietnam also provide a good choice to invest. This report wills provide some valuable suggestions through analyze Vietnamese characteristic, base on national and cultural factors.


Vietnam is a developing country which locates in the south-east of Asian. It besides many other developing countries such as China, Kampuchea and all of these geography factors bring many joint ventures invest in Vietnam for the convince traffic makes business easily. However, when decide to invest; the investors still need to consider national forces such as political, legal and economic factors in Vietnam for all of these may affect the strategic of the company. More over, cultural is also key factors which have potential effect during business. Australian company has to avoid business problems by considering personal communication, attitudes, manners and customs. In a word, the considering of these factors may decide whether the joint venture will successful or not in Vietnam.

National factors

Vietnam is a country who has a long history, during this numbers of hundreds of years, some special situations of the country are formed, no matter what aspects, politic, economic and culture as well.

The Socialist Republic of Viet Nam is the whole name of Vietnam. This country is located on south of Asia, there are several countries around it, such as China, Laos, Cambodia. The acreage of Vietnam is more than 330 thousand square kilometers.

The environment of politics is similar as Chinese, there is only one party administer the whole country and people, which is the Communist Party. The Vietnamese government has sweeping political and economic powers and controls all the aspects of the political system. It is also same as other countries who are taken charged by Communist Party; socialism is instituted around the country. The environment of politics in Vietnam is steady, even better than its neighbors. And the social security is safe enough. There is only thing we should pay attention is that the disparity of rich and poor people is getting greater than before. On the other hand, the attitude of government to the foreign capital is very positive, and supplies some favorable tax policies, because the government knows that foreign capital is significant to the economy of Vietnam.

The government recognizes the policy of reducing tariff to encourage importing foreign capital as the most important one. What’s more, the fields where allowed foreign capital invests in are different and plenty. And the government still tries to open more fields which accept investment from abroad. And that is good news for us. Here is some basic rules of government, it carries out a policy of equality, solidarity and mutual assistance among all nationalities, and forbids all acts of national discrimination and division. Every nationality has the right to use its own language and system of writing, to preserve its national identity, and to promote its fine customs, habits, traditions and culture. The State carries out a policy of comprehensive development and gradually raises the material and spiritual living conditions of the national minorities. (Constitution, 1992)

However, there is also inferior position through this polity. The transparence of administration and legal in Vietnam is still at a lower level, and the efficiency of administration still has space to improve. Whereas WTO is going to accept Vietnam in a few years, its domestic market will open increasingly, that is an advantage to help the transparence improve.

On the basis of the Constitution, the law, and the resolutions of the National Assembly, the decree laws and resolutions of the latter’s Standing Committee, the orders and decisions of the country’s President, the Government issues resolutions and decrees, the Prime Minister issues decisions and directives and supervises the execution of those formal written orders. Major issues within the jurisdiction of the Government undergo collegial discussion and decisions will be taken in conformity with the will of the majority. (Constitution, 1992)

Here is talking about the environment of society of Vietnam. As same as a lot of Asian countries, the labor in Vietnam is cheap as well; they are working hard and have good ability of understanding. Structure of people in Vietnam is young in average, abundant in number, own a strong ability and do not require much salary. Especially women, they are not only working hard, but also at high rate of literacy and well trained. After training, the cost for labor will be cheaper than any other countries in Southeast Asia.

On the other hand, as the Communist Party is the only Party the nation has, when the government deals with the dissension between Vietnamese and foreign business, the government always takes the side of domestic people. The Vietnamese people have strong self-respect, so when we run a business there, do not blame the Vietnamese staff seriously. To protect their self-respect is respecting them, and the management stage will keep a good relationship with employees. That is a significant point. In so far as aspects of society security, there is nothing to worry about, as I describe above, Vietnam has a safe and steady society, we don’t have to pay much attention to the security problem.

The Religion is also an important part of society. Religion has exerted a deep influence on Vietnamese culture and the Vietnamese concept of life. The attitude towards life, death, and the world beyond bears a deep imprint of Buddhism, Confucianism, and Taoism. One important feature of the religious attitude of the Vietnamese is his great tolerance. There has never been religious fanaticism or religious warfare in Vietnam. The persecution of Catholics under the reign of Tu-Duc was carried out by a government that suspected the missionaries and Christian converts as spies for foreign powers. The religious belief of the common Vietnamese is a synthesis of the three traditional religions (Buddhism, Confucianism, and Taoism) which have been coexisting peacefully for centuries in Vietnam. (Huynh Dinh Te)

What we should attach importance to is the economic aspects. Because the Vietnamese government will carry on the revolution of market economy, and improve the environment of investment, in order to import foreign capital, the economy will keep increase rapidly in a long period. The rate of economic increasing is 8% in Vietnam last year. So we have reasons to believe that there is much more potential market in future. Besides that, the policy is also supportive to the economy, especially foreign investment. Vietnam encourages foreign organizations and individuals to invest funds and technologies in Vietnam in conformity with Vietnamese law and international law and usage; it guarantees the right to lawful ownership of funds, property and other interests by foreign organizations and individuals. Enterprise with foreign investments shall not be nationalized. The State creates favorable conditions for Vietnamese residing abroad to invest in the country. (Constitution, 1992)

The main position of economy of Vietnam is agriculture; there are plenty of crops, fruits and seafood. That means there is also a great potential development in agricultural market. To invest in extractive industry is encouraged most by government. And then, Vietnam has so many different kinds of mineral, and they all at great reserves. Yet, mineral is non-recycling material, if foreign business want invest in exploitation, there maybe some limitations. At last, though Vietnam is a not very big country, there still are a lot of places of interest to travel. Depends on travelling industry, Vietnamese government can get considerable revenue.

The aim of the State’s economic policy is to make the people rich and the country strong, satisfy to an ever greater extent the people’s material and spiritual by releasing all productive potential, developing all latent possibilities of all components of the economy – the State sector, the collective sector, the private individual sector, the private capitalist sector, and the State capitalist sector in various forms – pushing on with the construction of material and technical bases, broadening economic, scientific, technical co-operation and expanding intercourse with world markets.


Vietnam culture is different from Australian culture, it is provided with the typical eastern culture trait, such as personal communication, attitudes, manners and customs. Especially for the company which want to invest in Vietnam. If the company want to get opportunities to develop their business in Vietnam, and avoid any business problems which due to possible cultural misunderstandings with their business partners, they should pay attention to their business partners’ culture.

Personal communication

When the company enters to Vietnam and has some initiate negotiate with the local company who will be the future partners, the spoken language is the most common way to communicate with them. In Australia people speak English for communicating with each other. However, Vietnamese is the first language in Vietnam, fortunately, English is the common language all over the world, therefore some Vietnamese are able to speak English, although it is convenient for Australian companies in some degree, English is not their native language after all, and it could be in a certain extent the Vietnamese can not express their points of view in English. Therefore, in order to reduce the barrier of language communication, the best solution is that take a Vietnamese translator who has basic business knowledge and professional Vietnam language skill with Australian companies, and make negotiator clear to understand the Vietnamese ideas exactly.

Although employ translators will spend extra money, using this way will save a lot of time on explaining something and improve the negotiation quality. And also it can be shown that the Australian companies’ cooperation sincerity to Vietnam, the cooperation could be successful in an half with this pure-hearted beginning. On the other hand, the Australian corporate negotiators also need pay attention to their body language, such as the gesture, expression and eyes contract. In Vietnam, for instance, “Vietnamese tend not to make sustained eye contact with those they respect” and “No touching between those of the opposite sex in public”(Intercultural Communication between Australia & Vietnam,2000), sometime an action or eyes contact will get more effective than the words.


Vietnam is an Asian country, therefore Vietnamese who as same as other Asian thought the time is more important than money. They are always on time, not only when they have negotiation, but also when they go to date. Usually, when the Vietnamese want to have dated for the meeting, unless there is an emergency which they have to do at that time or it is in special condition, or the time will not be changed. If people have to change their dating time, they should apologize to the others and ask for their pardon. If negotiators disregard the time and can not often catch on time, Vietnamese will consider that’s the negotiators are the discourteous people, and also the Australian corporate credit will be reduced, as a result, the business will be failed by disregarding the time Vietnam.

Besides, Vietnamese who are the Asian preciseness on work is very famous all around the world. This statement also represent on their work. They consider work is very important, and also strict in working. They are diligent, and respect their job. Vietnamese pay more attention to work quality than to how long can complete the work. Consequently when the Australian corporate has the initial negotiation with Vietnamese, they should also to be more carefully, and consider some details which are important for the key successful factors. Vietnamese will like to cooperate with the companies which have the same serious-minded attitude toward work. Moreover, rules are considered to be vital in their daily life and work. So their work ethic is very strong.


In Australia, people will shake hands in the formal condition, they are not only shake hands before meetings, but also at the end of it. And so does it in Vietnam. When the beginning of the initial meeting, Australian people can shake hands and make sure they got eyes contact with the other side before they have the meeting. After that, people should exchange their own business cards with each other in order to know some personal information including his/her name and his/her statue or title. This point is very important for the negotiators because in Australia, people are friendly and open, they don’t impress with somebody’s position, title, or status, instead of calling people’s name directly.

But different from Australian culture, in Vietnamese culture, getting professional or position title is very difficult; they hope that people can respect their achievement, therefore when people call somebody, it had better add their courtesy title such as professor and doctor before their name, and may not call their name directly except that could be allowed. Moreover, when the negotiators print their business card, that’s should print your title or status before the name so that the Vietnam can easily know how to call them. Furthermore, remember the courtesy title and old age is both respected in Vietnam culture. In addition, in Australia, when people call somebody or pick up the telephone, it should be used to say hello and then say who it is. In contrast, in Vietnam, when people make a call, they must say people’s family name at first. It is their making phone’s manners.

In Australia, “Men wear a conservative dark business suit and tie and women may wear a dress, or skirt and blouse, for business. Informal clothing is appropriate when not attending business functions. Casual pants are fine for both men and women.”(Stephen Taylor, 2007). In Vietnam, the dressing are nearly same in formal condition, however, the clothes can be dressed very relaxed when people are not in business. That’s different from Australian, in Vietnam, people care about clothes’ tidiness and fashion, and the clothes appearance should reflect the Asian clothes fashion. Therefore make sure that don’t make the clothes to be gaffer and make shoes dirty, the Vietnam will misunderstand you seriously.

Similar to Australian, Vietnamese will talk about their opinions directly so don’t be strange. And the same as Australian, Vietnam don’t like exaggerated and complicated way to speak, people can be active, but they must be honest and terse. Most of Vietnam doesn’t prefer to talk about topic on the job during the dinner time. In Australia, sightseeing and sports are good conversational topics in relaxed time. But in Vietnam, people like to talk about their history, geography and culture more. And don’t be embarrassed if two Vietnam have whisper, although in Australia this is a discourteous action, they just want to talk about some private things or opinions.


Gift giving is not a common practice in business in Vietnam, like in Australia. And if the Australian companies’ partners invite negotiators to their home for dinner, the person who was invited should take some chocolate, wine, flowers, some books or special local product of Australia to the householder. The number of the flowers should avoid the number “3” and the kind of the flower can’t be red roses which stand for romantic and secrete.

Australian likes fried and baked chicken and fish, and they don’t like eat very salty things. That’s different from Vietnam, rice is the main food in Vietnam, people prefer to eat seafood and wheat. And also like Chinese tea, not coffee. On the dinner table, the negotiators form Australian companies should pay attention to that Vietnamese use chopstick for dinner, and also they don’t mind other people share the meal with them. In addition, don’t put overfull food in your own dish.


Through the overall aspects, Vietnam is a energic country who contains independent party, hardworking people, and colorful culture. Especially its economic aspects, as development of world economy goes on, the economy of Vietnam is also growing speedily. The speed of improvement in Vietnam is really attractive to foreign capital, no matter what kinds of investment; they are all welcomed by Vietnam. Furthermore, the data in growth of GDP in each year plus cheap labor and stuff let foreign company know that, this is a big chance to create a new market overseas. Same to other companies, such investment chance is extremely suitable for our company to look for joint venture in Vietnam. As regards of culture, there are many custom and tradition what we have to notice in Vietnam through all above aspects, therefore, if we want to look for chances to cooperate, we must run it with responsibility for our behavior. With all the information I had mentioned, I think we will find a good opportunity to develop our overseas business.

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