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Cross-cultural Management 101: Australia and Vietnam

We get it. We know you understand the economic benefits of outsourcing lower value tasks to low cost resources overseas. The benefits of the economic arbitrage involved is pretty simple to understand. In addition to the simple cost benefits, outsourcing can also be a gateway to improving efficiencies within your business and growing and scaling in a way that would not be financially responsible if you kept all of your operations onshore.

Unfortunately, for many Australians the idea of working with people in other countries can make us a little apprehensive. After all, we live on this massive island in the middle of the Pacific Ocean. Geographically, Australia is quite removed from the influences of other countries and their cultures. What if you weren’t Australian and, instead, you were running your business in Germany? It wouldn’t be much of a stretch to consider working with people in France, Switzerland, The Netherlands, Austria, Italy etc. Afterall, you can get in your car and drive to these places. You would probably have weekends away and longer vacations in these countries, have gotten to know the various cultures and picked up some of the language.

 

What’s different in the Australian context? You can’t drive. You have to get on a plane. It costs more time and money for us to explore nearby countries and learn about their cultures. But, everything else is pretty much the same.

Away Digital Teams has its operations set up in Ho Chi Minh City, Vietnam. That’s right, if you were to outsource with us, you’d be working very closely with some of our Vietnamese team. Fortunately, Australia and Vietnam share a very rich history and over the years many Vietnamese have migrated to Australia to build a new life for themselves. In a broad sense, we’ve already seen how well our two cultures can work together.

But what does the research say about our ‘Cultural Alignment’? And what do we need to consider when working cross-culturally with Vietnamese teams?

Fortunately, there was a large body of research conducted by a Dutch Social Psychologist, Geert Hofstede. Hofstede’s Cultural Dimensions ranks every culture across 6 criteria, these definitions are quoted directly from the website (If you want to learn more, click on the link):

 

Power Distance: the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.

Individualism: the degree of interdependence a society maintains among its members.

Masculinity: The fundamental issue here is what motivates people, wanting to be the best (Masculine) or liking what you do (Feminine).

Uncertainty Avoidance: The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these.

Long Term Orientation: How every society has to maintain some links with its own past while dealing with the challenges of the present and future.

Indulgence: The extent to which people try to control their desires and impulses.

 

The following graph provides a comparison between how Australia and Vietnam rank on the 6 Cultural Dimensions.

Australia and Vietnam

Broadly speaking, it is obvious that both Australian and Vietnamese cultures have quite a few differences. This shouldn’t come as a surprise. Both countries have very different histories and most Australians come from a European heritage not an Asian heritage; which is key in understanding this research. The research is very general. It does not take into account individual’s heritage, education level, personalities etc.

Treat the research as a starting point for developing your cross-cultural management skills with regard to working with Vietnamese teams.

 

So what are the two big takeaways from this research?

 

Australia and Vietnam

 

Power Distance:

Australia enjoys a flat management structure with little hierarchy. In a practical sense, Australians don’t mind escalating issues up and skipping a few managers in the process. We do not have a strict hierarchical approach to the workplace. In contrast, traditional management structures (Think 1980s USA corporate culture) exist in Vietnam and there is still some cultural baggage with regard to this.

So when meeting with your Vietnamese colleagues don’t be surprised if they take a little bit of time to develop the confidence to share new ideas, raise challenges and have a joke. Ask plenty of questions and don’t use slang words.

 

Australia and Vietnam

 

Individualism:

The big takeaway here is that Australians are generally motivated by personal success and by putting themselves first. Vietnamese people have a strong attachment to family and community. This means that many personal decisions are made with the majority in mind e.g. “is this the best decision for my family/community”.

Consider this when working out how to incentivise your team.

 

Remember that this research is very high level and you can’t simply apply it to individuals and expect it to be accurate. The research is here to demonstrate some overarching and general cultural traits that exist and that can be used as a reference point for those looking to learn more about cross-cultural management.

If you would like to know more about outsourcing in Vietnam and how Vietnam stacks up against other locations around the world then contact us today.

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