Why Sweden Should Not Invest in Vietnam

Tatiana E. Nobleza                                                                        June 27, 2016

11126744                                                                                   INTERBU K31

Quiz 2: Why Sweden should not invest in Vietnam

The compatibility of Sweden and Vietnam to enter a cohesive business relationship can be difficult due to the large differences in their business culture. It is not advisable for Sweden to pursue its business venture in Vietnam due mainly to the following elements: power distance, business relationship, and individualism.

Power Distance

As a society that values equality, the Swedish group are known to apply egalitarianism in their way of life. In business, this character is exemplified on an organizational structure that is decentralized and less hierarchical. Given, Swedish leaders are more inclusive of other members’ opinions and ideas. They do not find the need to assert their ranks on their employees to prove their superiority. Unlike the Swedes, Vietnamese people highly value seniority. There is a clear distinction between a leader and a subordinate. Tensions may arise during decision-making as Swedes prefer reaching a consensus, while Vietnamese depend on the one in charge to give the final say.

Business Relationship

        Fika breaks between office hours are more than just coffee breaks for Swedes. They are reflective of their essential nature to separate work from other aspects of their lives. In contrast, Vietnamese people tend to turn business relationships to social relationships in the long run. The Viets believe that the more you share your personal life among co-workers, the stronger a business relationship can become. The nature of the Viets to develop a social relationship with Swedes can be a bit appalling to the other party that tries to keep the relationship as professional as possible. On the other hand, the Viets may perceive the business relationship to be weak because of the Swedes’ inability to reach their expectations.

Individualism

Individualism, in contrast with collectivism, is the level of interdependence members maintain in the society. Individualism-Collectivism is one of the causes of intercultural misunderstandings because collectivistic cultures tend to conform and obey to maintain harmony and focus on the interest of the group as a whole, while individualistic cultures focus on asserting individual interests. Viets are more collectivistic in nature, taking care of other members as themselves. Among the Vietnamese is a promise to fulfill the needs of the group in exchange for their loyalty. Swedes, on the other hand, are similar to their Western counterparts, driven by their personal needs and motivation.