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4/24/2017 Vietnam:ResearchandPracticeinHumanResourceManagement

RESEARCHANDPRACTICE
INHUMANRESOURCEMANAGEMENT

Quang,T.&Vuong,N.T.(2002).ManagementStylesandOrganisationalEffectivenessinVietnam,ResearchandPracticeinHuman
ResourceManagement,10(2),3655.

ManagementStylesandOrganisationalEffectivenessin
Vietnam
TruongQuang&NguyenTaiVuong
ABSTRACT
The paper identifies the management styles that are prevailing in
companieslocatedinthenorthernpartofVietnam.Managersofthree
selected enterprise sectors: state owned, private and joint venture
enterprises participated in the survey. A comparison in terms of
managementpracticesintheseenterpriseswasalsoconductedtofind
outwhetherthereareanydifferencesamongthem.
Thefindingsillustratethattherearedifferencesinmanagementstyles
among companies in the three sectors under study. The managers
practices also differ significantly, especially in their leadership styles.
The findings also show that management perceptions about
organisational effectiveness vary considerably in each enterprise
sector.Onthebasisofthesefindings,recommendationsforimproving
themanagementstyleandpracticesaresuggested.

INTRODUCTION
VietnamsRenovationPolicy(doimoi),whicheffectivelystartedin1987,hasencouragedinvestmentsboth
frominsideandoutsideVietnam.Ithassignificantlyboostedthecountryseconomyandthelivingstandard
oftheVietnamese.Openingupthemarketbroughtboththreatsandopportunities.Somebusinessesthrived
in the new business environment and were able to improve productivity, product quality, and ultimately
profit. Others failed to meet the new challenges and declined. However, there has still been no systematic
studyofmanagementstylesinVietnamandhowtheycontributetotheeffectivenessoforganisationsinthe
Vietnameseculturalcontext(Ralstonetal.,1999).Thispaperattemptstofillthisknowledgegapbydealing
withthefollowingissues:

WhichmanagementstylestypicallyprevailinVietnamesecompanies?
Arethereanydifferencesinmanagementstylebetweenstateownedenterprises(SOEs),private
companiesandjointventures?
Whatistherelationshipbetweenthemanagementstylesandorganisationaleffectivenessofthese
companies?

DEFINITIONOFMANAGEMENTSTYLE
The term management style can be understood simply as a way to manage an organisation. According to
Schleh(1977:10),managementstyleisTheadhesivethatbindsdiverseoperationsandfunctionstogether.It
is the philosophy or set of principles by which you capitalise on the abilities of your people. It is not a
procedureonhowtodo,butisthemanagementframeworkfordoing.Amanagementstyleisawayoflife
operatingthroughouttheenterprise.Itpermitsanexecutivetorelyontheinitiativeofhispeople.
Intermsofmanagementfunctions,Khandwalla(1995b:48)definedmanagementstyleasthedistinctiveway
in which an organisation makes decisions and discharges various functions, including goal setting,
formulationandimplementationofstrategy,allbasicmanagementactivities,corporateimagebuilding,and
dealingwithkeystakeholders.Dependingonanorganisationsoperatingconditions,stylesvary.
A variety of formal styles of management have been described since the 1950s. Likert (1961, 1967) defined
four styles that constitute a continuum from authoritarian to participative. Burns and Stalker (1961)
introduced the organic and mechanistic styles of management. Mintzberg (1973) described the
entrepreneurial, the planning and the adaptive type of strategic planning. Following Japans economic
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success,otherscholarsstudiedtheJapanesestyleofmanagement,whichemphasisespaternalism,lifetime
employment, seniority, life long learning, collective decision making, hard work, cooperation ethics,
continuous adaptation and improvement (Pascale & Athos, 1981 Williamson & Ouchi, 1981 Wilkins &
Ouchi, 1983). In the mid 1970s, having drawn findings from several studies of American, Canadian and
Indianfirms,Khandwalla(1995a,1995b),conceptualisedfivedimensionsofmanagementstyle,namelyrisk
taking,technocracy,flexibility,participation,andauthoritarianismandsuggestedthatthesebethebuilding
blocksofmoststyles.Intheearly1980s,PetersandWaterman(1982)cameupwithatypicalmanagement
style of American companies whose traits differed sharply from those of the idealised Japanese style, and
which focuses more on core values, highly flexible structures, business unit autonomy, interactivity and
innovation. More recently, de Geus (1997) advocated the adoption of the management of tolerance for
learningorganisationsandknowledgebasedcompaniesinsteadoftheactionorientedmanagementstyle.
Butintheirsearchforidealstyles,mostscholarshaveoverlookedtheapplicabilityofamanagementstyletoa
givenorganisation(Khandwalla,1995b).

MANAGEMENTSTYLESANDNATIONALCULTURE
Itisimportanttoidentifythemostsuitablestyleofmanagementtothespecificoperatingcircumstancesof
anorganisation.Thereisabeliefthatmanagementstylesareprofoundlyinfluencedbythesocialculturesin
whichorganisationsoperate.Thus,theJapanesehaveadistinctivemanagementstyle,ashavetheIndians,
the Americans, the British, the French and the Vietnamese. It is asserted that there is a core style that
reflectsthevaluesandnormsofacultureandthisispracticedineveryorganisationinthatculture,although
withneededlocalvariations(Evansetal.,1989).
In reality, management styles seem to vary sharply even in a given culture. For instance, in a study of 20
organisationsinBritain,twowidelycontrastingstyleswereidentified(BurnsandStalker,1961)inanother
studyof103Canadiancompanies,sevendifferingstyleswereclassified(Khandwalla,1977)andasurveyof
90enterprisesinIndialedtotheconclusionthatsignificantdifferencesinmanagementstyleswerefoundnot
onlybetweenindustries,butalsowithineachindustry(Khandwalla,1980).
Management styles vary due to firm characteristics, such as organisation type, business purpose, size,
operating environment, corporate culture and heritage. Given this diversity, it seems impossible for all
organisations to be managed in the same way, even though in authoritarian societies attempts are often
made to impose a uniform management style upon all organisations belonging to the system. Based on
practicalobservationsof11countriesofdifferentpoliticalandeconomicsystems,Davidmann(1995)found
that styles of management depend to a considerable extent on management. In a smaller or medium size
company,itispossiblefortheownerorthechiefexecutivetoimpresstheirownpersonalstyleofmanagement
ontherestoftheorganisation.
Inrecentyears,tremendousadvancesinthefieldofinformationtechnologyandcommunicationhavehad
profoundeffectsonthechoiceofamanagementstyleforanorganisation.Inmanycases,thenewdevicesand
systems(e.g.cellulartelephonesandtheInternet)canfacilitatetheadoptionofaparticularstyle,suchasthe
quantitativeandsystemsperspectives(Lewisetal,2001).However,aswarnedbytheseauthors,thiswould
forcetheorganisationtoundergoachange.Fromamoremarketorientedpointofview,Dolanetal.(2002)
argued that in an increasingly global, complex, and professionally demanding world, which is constantly
changingandorientedtowardqualityandcustomersatisfaction,anewmodelisneeded.

MANAGEMENTSTYLESANDORGANISATIONALEFFECTIVENESS
Management style is one of the important factors that affect organisational effectiveness. A good match
betweenthestyleofmanagementandtheoperatingrealitiesofanorganisationwillsubstantiallyinfluenceits
level of effectiveness. In each organisation, management style influences the performance of individual
employee and work groups, and thereby the whole organisations performance. In other words, the
effectivenessoftheorganisationisgreatlydeterminedbythewayworkisorganisedandbythewaypeople
workwithoragainsteachotheraswellashowpeoplecooperatewitheachother,withtheleadershipandwith
thecommunity,andtheextentoftheircommitmenttotheirorganisationverymuchdependonthestyleof
management(Davidmann1995).
CulpanandKucukemiroglu(1993)andKhandwalla(1995a,1995b)developedtwoseparatemodelstostudy
management styles, containing six principal dimensions for comparing management systems. They are:
supervisory style, decisionmaking, communication patterns, control mechanism, interdepartmental
relations, and paternalistic orientation (Appendix 1). These authors attempted to establish a link between
managementstyleandorganisationaleffectivenessbycomparingUnitedStatesandJapanesemanagement
systems.ThefindingsshowedthatwhileAmericanmanagersemphasisesupervisorystyle,decisionmaking

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andcontrolmeohanism,theJapanesearemoreconcernedwithcommunicationprocesses,interdepartmental
relations,andapaternalisticapproach(Culpan&Kucukemiroglu,1993:2738).
Based on an empirical study of 90 Indian organisations, Khandwalla (1995a: 4346) defined ten different
normal styles in association with ten defective styles, namely conservative, entrepreneurial, professional,
bureaucratic,organic,authoritarian,participative,intuitive,familial,andaltruistic(Appendix2).
These models can help identify the main characteristics of each management style, and therefore can be
usefulindefiningwhatstylesareprevalentinagivencountry.However,asthesemodelsuseawiderangeof
criteria,itisdifficulttocomparethemanagementpracticesbetweencompaniesindifferentindustriesand
economicsectors.Tofillthisvoid,themodelusedforthestudyoftheVietnamesemanagementstylehasbeen
developed by combining the two conceptual frameworks of Culpan and Kucukemiroglu (for analysing the
managementstyle)andKhandwalla(fordefiningthemanagementpractices)asdescribedabove.However,to
better reflect the evolution from a centrally planned (mechanistic) towards a market economy (organic)
system, only seven of Khandwallas identified ten management styles in India were used. They are:
bureaucratic,familial,conservative,participative,authoritarian,intuitiveandentrepreneurial.

SOME TRAITSOFTHE VIETNAMESE CULTURE


Vietnamhasadeepculturalheritage,whichhasbeendevelopedover4000years.Ingeneral,theVietnamese
peoplearehospitableandindustrious.Inparticular,peopleinthenorthofthecountryarecharacterisedas
politicallysensitive,hardworkingandriskavoiders(Quang,1977Ralstonetal.,1999).Thenorthernpartof
Vietnam was strongly influenced by the Chinese culture due to a 1000 year period of dominance of the
Chinesefeudalism.Inaddition,VietnamandChinahavebeenpartofthesocialistcampformanydecades.
ThehistoryandgeographicvicinitymeantthatVietnamesepeoplesharemanyoftheculturalandbusiness
practices of their Chinese neighbours. In the words of Hofstede (1980), the Vietnamese culture can be
described as high power distance, high collectivism, moderate uncertainty avoidance, and high context
(Swierczek,1994,Quang,1997Ralstonetal.,1999).
ThehighpowerdistancecharacteristicispresentinthedailylifeofVietnameseaswellasinbusiness.Inthe
family, sons and daughters have to obey parents orders. In organisations, there is a clear subordinate
superiorrelationship.Titles,status,andformalityareveryimportantinVietnamesesociety.Collectivismhas
existed for a very long time in Vietnam. It is characterised by tight social frameworks and selffunctioning
communities.Peopleexpectingroupstolookaftertheirmemberstoprotectthem,andprovidethemwith
security in return for their loyalty. Vietnamese people place importance on fitting in harmoniously and
avoidinglosingtheothersface.Inconflicts,theyprefertocomeoutwithawinwinsituation.Vietnamese
culturedisplaysmoderateuncertaintyavoidance.Peopleinsocietyfeelthreatenedbyambiguoussituations
and try to avoid these situations by providing greater job stability, establishing more formal rules, and
rejecting deviant ideas and behaviour. One of the distinctive features in the Vietnamese society is indirect
speech, resulting from the importance of saving face. In compensation, the Vietnamese have a very good
senseofhumourthatsurfacesoftenineveryopportunityandconversation.

VIETNAMESE MANAGEMENTSTYLE PRIORTOTHE R ENOVATIONPOLICY


Before1986,VietnamfollowedacentrallyplannedeconomyinwhichtheCentralStatePlanningCommittee
determinedtheresourceallocationsinthecountry.Thisstateorgandevelopedstrategiesandplansforthe
whole national economy. Performance targets were distributed to the production units following the strict
bureaucratic and hierarchical management system. Under such working conditions, managers in the state
owned enterprises used to comply with orders coming down from the centre, having very little room to
exercisetheirownleadershipandmanagementcompetencies.Thekeyfeaturesofsuchamanagementsystem
isdescribedinTable1.
Table1
ProfileofVietnameseManagementSystembeforetheRenovationPolicy
Item Characteristics
Planningterm Shortrange(12years)
Controldevices (Time)punchingolocksfrequentobservation
Quantitycontrol Somequalitycontrol
Authoritydefinition Unclearcollectiveresponsibility
Degreeof
Low
decentralisation/delegation
Leadershipstyle Paternalisticautocratic
Trustandconfidencein
Mediummenofthesystem,organisationmen
subordinates
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Item Characteristics
Personnelpolicy Notstated,nottransparent,regulatedandstandardised
Communicationpattern Topdown
Many(e.g.,onthejobtraining),butoftennoteffectiveand
Trainingprogrammes
relevant
Motivation Monetaryandpsychological
Employeemorale Notalwayshigh
Absenteeism Lowtomedium
Productivity Low

R ESEARCHMETHOD
ThesurveywasconductedinJanuary1998,adecadeaftertheintroductionoftheRenovationPolicy.Topand
middlemanagersfromthethreetargetsectorswereselectedonapersonaltitlebasisfromapublishedlistof
registered businesses in Hanoi, the capital of Vietnam, to participate in the survey. In total, 210
questionnairesweresentbymail(andbyhanddelivery)70setsforeachsector.Inmanycases,theresearcher
discussed, when needed, with the respondents to clarify the context of the questions to facilitate the
completionofthequestionnaire,whichwasstructuredafterthemodelsofCulpanandKucukemiroglu(1993)
andKhandwalla(1995a,1995b)aspreviouslymentioned.
Forty one responses were returned (or collected by the researcher) from the state enterprise sector (58.6%
yieldrate)andthirtysixmanagersineachoftheothertwosectorsrespondedtothesurvey(51.4%).Onthe
whole,respondentsfromthestatesectoraccountedfor36.2percentofthetotaltheremaining62.8percent
wassharedequallybetweenrespondentsfromtheprivateandjointventuresectors.AsshowninTable2,the
samplerepresentedawiderangeofmanagersworkinginselectedbusinesssectors.Theyweretourismand
services (45%), transport (15%), informatics (9%), heavy industry (8%) and construction (7%). The rest
(16%)wereelectronics,postandtelecommunications,andtradingcompanies.
Mostprivateenterprisesinthesampleweresmallinsize,employinglessthan50employees(77.8%oftotal),
whilstmostofthestateownedenterprisescouldbeclassifiedasmediumorlargesizeonthebasisofthelarger
numberofworkersemployed(41.5%and56.1%respectively).Similarly,almostallenterprisesselectedinthe
joint venture sector were of medium and large size. The profile of the respondents is presented in Table 2.
Most of the managers were male, making up 90.2 percent in the state sector, 83.3 percent in the private
sector,and86.1percentinthejointventuresector.Theaverageageofthemanagerswashighestinthestate
sector(48years),whichreflectedthesenioritysystem,astheyhave10yearsofexperienceonaverage.
Managers in the private and joint venture sectors were much younger on average (38 and 42 years old
respectively)andthereforelessexperiencedthantheircounterpartsinthepublicsector(with7and6years
averageexperiencerespectively).Intermsofeducationandprofessionalskills,mostoftherespondentshada
technical background and only a small number of them (78%) had obtained some education in business
administrationandeconomics.Manyofthesequalifiedmanagersworkedintheprivatesector(22.2%).
Table2
ProfileoftheRespondents
StateEnterprise PrivateEnterprise
Jointventure(N=36)
(N=41) (N=36)
Mean
No. % Mean(S.D.) No. % Mean(S.D.) No. %
(S.D.)
Age
<30 1 2.4 10 27.8 5 13.9
3135 4 9.8 12 33.3 8 22.2
3640 6 14.6 4 11.1 6 16.7
4145 9 22.0 48(1.67) 8 22.2 38(1.28) 6 16.7 42(1.67)
4650 6 10.5 2 5.6 4 11.1
5155 6 14.6 4 11.1
56andabove 7 17.1 3 8.3
Gender
Male 37 90.2 30 83.3 31 66.1
Female 4 9.8 6 16.7 5 13.9
Currentposition
Seniorsupervisor 5 12.2 2 5.6 3 8.3
Manager 30 73.2 12 33.3 24 66.7
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StateEnterprise PrivateEnterprise
Jointventure(N=36)
(N=41) (N=36)
Mean
No. % Mean(S.D.) No. % Mean(S.D.) No. %
(S.D.)
Deputydirector 3 7.3 4 11.1 6 16.7
Director 3 7.3 18 50.0
Directorgeneral 3 8.3
Yearsof
experience
<5years 13 31.7 18 50.0 24 66.7
610 17 41.5 18 50.0 12 33.3
1115 4 9.8
10 7 6
l620 3 7.3
2125 3 7.3
>30 1 2.4
Fieldofeducation
Engineering 35 85.4 14 38.9 21 58.3
Business 3 7.3 8 22.2 3 8.3
Socialsciences 8 22.2 6 16.7
Sciences 1 2.4 4 11.1
Others 2 4.9 2 5.6 6 16.7

R ESEARCHFINDINGS

ManagementStylesintheThreeSectors
Multivariate analysis of variance (MANOVA) was used to test the differences and relationships in
management styles among the sectors. In the model, the dependent variables are the sevenselected
managementstylesnamedearlier.Thesectorinwhichmanagerswereworkingisusedasthefactorvariable.
TheresultsoftheMANOVAareshowninTable3.Adifferenceinmanagementstyleamongthethreesectors
wassignificant.However,thefiguresalsopointtothefactthatthesedifferencesarenotsignificantlylarge.
The MANOVA results for each group of variables are also presented, showing that managers in the three
sectorshavedifferentviewsonhowtorunabusiness.
Table3
SummaryofMANOVAAnalysisofManagementStylesin
ThreeSectors
Source FRatio DegreeofFreedom p
Sectors 3.40 40,154 .000
AnalysisofGroupVariables
1.Conservative 3.69 6,214 .002
2.Entrepreneurial 3.45 6,214 .197
3.Bureaucratic 4.86 6,204 .000
4.Authoritarian 3.89 6,214 .010
5.Participative 4.39 8,212 .001
6.Intuitive 4.09 4,121 .003
7.Familial 7.29 4,213 .000
Table4showsthemeans,standarddeviationsandtherankofsevenmanagementstylesineachenterprise
sector.Statisticallyspeaking,thereisnosignificantdifferencebetweenthefirstclusterofstylecharacteristics
(bureaucratic, familial and conservative), with the highest mean varying between 5.97 and 6.28 (on a 17
scale),duetostatisticalerrorsratherthanstatisticalsignificanceatasignificantlevelof0.05.Typically,the
bureaucraticmanagementstylewasmostwidelyusedinthestateownedenterprises,withascoreof6.28.
Thishighscoreisunderstandablegiventhefactthatmostoftheenterprisesunderstudyweremediumand
large size, characterised by a complex and mostly undefined organisation where central planning and the
ministry patronage/subsidy system had been the rule of the day. The familial style ranked second (6.21)
showing the patriarchal influence on business in the Vietnamese traditional culture. The conservative,
participativeandauthoritarianstyleswerealsopopularlyused,rankingthird,fourthandfifthrespectively,

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withthemeanscoresrangingfrom5.185.97amongstateownedenterprises.Thisreflectsthecharacteristics
ofboththeoldtraditionalvaluesandthesocialistprinciplesoftodayssociety.
Intheprivatesector,thefamilialstylewasmostlyused,withameanscoreof6.39.Mostprivateenterprises
areofsmallsize,developedfromfamilyworkshopsorfamilystores.Membersintheenterpriseshadaclose
relationship, as they were often relatives or friends of the managers. The latter preferred to build their
enterprisesasabigfamily.Thebureaucratic,conservativeandauthoritarianstylesalsorankedhighinthis
sector(meansrangingbetween5.65and4.91).
Table4
DifferencesinManagementStylesbetweenSectors
StateenterprisesN=41 PrivateenterprisesN=36 JointventuresN=36
Managementstyle
Mean(S.D.) Rank Mean(S.D.) Rank Mean(S.D.) Rank
Bureaucratic 6.28(0.61) 1 5.65(0.67) 2 6.06(0.32) 1
Familial 6.21(0.33) 1 6.39(0.12) 1 5.79(0.18) 3
Conservative 5.91(0.09) 1 5.40(0.82) 2 5.52(0.64) 3
Participative 5.21(1.09) 4 4.63(1.05) 4 6.11(0.48) 1
Authoritarian 5.18(0.91) 4 4.91(0.59) 4 5.31(1.13) 3
Intuitive 3.84(1.29) 6 3.58(0.67) 7 3.08(1.65) 7
Entrepreneurial 4.96(1.25) 6 4.86(1.23) 4 4.73(0.89) 6
Scalebetween17(1=stronglydisagree7=stronglyagree)
Significantat0,05Note:thedifferencesinthemeansofvariablesareduetostatisticalerrors
Notstatisticalsignificanceatsignificantlevelof0.05.
Conversely, the participative management style prevailed in the joint ventures (mean score of 6.11). The
managersinthissectorweregenerallyyoungerandwerekeentolearnfromtheirforeignbusinesspartnerson
howtomanagebusinessinamarketeconomy.Theyweremorewillingtoencouragehorizontalcoordination
andcooperation,tobuildanopencommunicationsystem,andallowsubordinatestoparticipateindecision
makingprocesses.Intheseworksettings,companytripsandfamilydinnersareoftenorganisedtopromotea
senseofbelongingandloyaltytothecompany.
Theincidenceofthebureaucraticstyleinjointventures(meanof6.06)wasasurprisingresponse.Itcanbe
explained by the fact that most Vietnamese partners of the surveyed joint ventures were state owned
enterprises,whichstillretainedtheirinherentorganisationalcharacteristicsandmanagementstyles.
Theintuitivemanagementstylewastheleastpreferredforminallthethreesectors,withmeanscoresof3.08
in joint ventures, 3.58 in the private sector and 3.84 in state owned enterprises. In this regard, the
Vietnamese managers seemed not to rely on intuition, but rather on rationality in managing their
organisations.Similarly,asmallerproportionofmanagersagreedthattheentrepreneurialstylewouldbethe
most appropriate in their situation, with the scores differing slightly between 4.98 and 4.73 in the three
sectors. This reflects the lack of a more dynamic and innovative generation of managers in the transition
economyinVietnam.
From the MANOVA analysis, it can be observed that there are indeed differences in management styles
among the three sectors, albeit not very significant. In spite of discrepancies in functions, educational
backgrounds,agesandsector,managementstyleistosomeextenttheproductoftheprevailingculturein
whichthemanagerswereoperating.Hence,sincetheVietnameseeconomyisinthetransformationphase,
manytraditionalandsocialistvaluesarestillactiveinmostorganisations,especiallyinthenorthernpart
ofVietnam.

MANAGEMENTPRACTICESINTHE THREE SECTORS


In this section, managerial practices in the three enterprise sectors are analysed according to the six
managerialdimensionsaspreviouslypresented.ThesameMANOVAtechniquewasconductedineachsector
topointoutanydifferenceregardingthisaspectamongthesectorsunderstudy.Table5showsthatonlythe
leadershipdimensiondifferssignificantlybetweenthetargetsectors.Therest,namelydecisionmakingstyle,
communicationpattern,controlmechanism,interdependentrelations,andpaternalisticorientationdidnot
differentiatemuchinlevelfromonesectortoanother.
Table5
DifferencesinManagementPracticesintheThreeSectors
Dimension FRatio DegreeofFreedom p Difference
1.Leadershipstyle 3.46 16,178 .000 Yes
2.Decisionmaking 1.73 16,188 .077 No
3.Communicationpattern 1.71 10,204 .080 No
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Dimension FRatio DegreeofFreedom p Difference


4.controlmechanism 1.63 10,210 .092 No
5.Interdepartmentalrelations 1,54 8,210 .120 No
6.Paternalisticorientation 1.36 4,218 .247 No

LEADERSHIPSTYLE
Inthestateownedsector,mostmanagerstendedtoadoptapaternalisticapproachintheirmanagement,by
keepingclosesupervisionovertheirsubordinates(meanscoreof5.78on17scale).Theyoftengaveagreat
dealofdirectiontoensurethattheworkisdonewell.Managersinthissectorwerealsolesswillingtoprovide
freedomanddelegationtotheirsubordinatesindecidingtheircourseofactions(meanscoresof3.88and3.78
respectively).Theyseldomconsultedsubordinatesopinionsbeforemakingdecision(meanscoreof3.83).
Thesituationintheprivatesectorwasalmostthesameasinthestatesector.However,themanagersinthis
sectorwereinclinedtopaymoreattentiontotheinterestoftheirsubordinates(meanscoreof5.94).Atthe
same time, more concern seemed to be centred on the productivity of the employees/workers by exercising
muchclosersupervisionthantheircounterpartsinothersectors(meanscoreof5.83versus5.78inthestate
owned sector and 5.47 in joint ventures). In the joint ventures, managers particularly favoured the
participative management approach by stimulating teamwork (mean score of 5.47 versus 3.22 in the state
owned sector and 3.58 in the private sector) and giving more freedom to subordinates in deciding their
workingschedules(meanscoreof4.44).
In brief, many Vietnamese managers still displayed the authoritarian and familial styles of management.
However,inthetransitiontowardamarketeconomy,thereishighinterestamongtheyoungergenerationof
managers,pioneeredbythoseinjointventures,toadoptandpracticeaparticipativestyleofmanagement.A
comparisonisshowninTable6.
Table6
DifferencesinLeadershipStyle
StateEnterprises Privateenterprises Jointventures
Styles N=41 N=36 N=36
Mean (S.D.) Mean (S.D.) Mean (S.D.)
Leaderpaysattentiontoemployees
5.73 (1.37) 5.94 (1.19) 5.92 (1.52)
interests
Closesupervision 5.78 (1.19) 5.83 (1.11) 5.47 (2.09)
Encouragingworkteam 3.22 (1.27) 3.58 (1.20) 5.47 (1.24)
Amountofdirectiongivenfromthe
4.56 (1.43) 4.67 (1.66) 4.33 (2.08)
top
Givingfreedomtosubordinates 3.88 (1.29) 4.03 (1.32) 4.44 (1.56)
Consultingsubordinatesopinions 3.83 (1.77) 4.17 (1.11) 4.37 (1.86)
Delegationofauthorityto
3.78 (1.06) 3.75 (1.57) 4.11 (1.19)
subordinates
Scalebetween17(1=stronglydisagree7=stronglyagree)
significantat0.05

DECISIONMAKING
Table7
DifferencesinDecisionmaking
%Respondentsreply
Item
Toptwo Medium Bottomtwo
Degreeofemployeesparticipationindecisionmaking. 48.7 39.0 12.3
Degreeoffunctionaldepartmentscontributiontodecisionmaking 16.0 38.1 45.9
Degreeofapplyingnewmethods/technologiesindecisionmaking. 16.1 36.6 47.3
Thesupportofemployeestotopmanagementsdecision. 16.0 25.6 57.5
Scalebetween17(1=stronglydisagree7=stronglyagree)
One of the common characteristics regarding the Vietnamese leadership style is that management usually
does not promote employee participation in the decision making process. Accordingly, almost half of the
respondentsinthissurveyagreedthatthedegreeofemployeeinvolvementinthismatterwasverylow.Only
12.3%oftheinterviewees,mostofthemworkinginthejointventures,wouldfavourthisdemocraticpractice
ofmanagement.

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On the positive side, many managers tried new methods of management and technologies, such as
upgrading the computerisation and communication systems, to enhance the effectiveness of decision
making. Nevertheless, since the Vietnamese decisionmaking mechanism was typically topdown, nearly
58%oftherespondentssharedtheopinionthattheemployeessupportedthedecisionsoftopmanagement
andonly16%disagreed.ThestatisticalresultsareshowninTable7.

COMMUNICATIONPATTERN
Table8
DifferencesinCommunication
%Respondentsreply
Item
Toptwo Bottomtwo
Informationareprovidedadequatelywhenneeded 11.0 59.9
Leadersunderstandwhatarehappeningintheircompanies 8.1 58.4
Employeescomplaintsreachingtopmanagement 11.5 30.0
Employeesareawareofchangesinpoliciesanddirectives 17.7 24.8
Communicationisblocked 50.1 6.3
Scalebetween17(1=stronglydisagree7=stronglyagree)
Table 8 portrays a general picture that communication was functioning without much difficulty in the
surveyedenterprises.Fiftyeightpercentofrespondentsstatedthattheycouldunderstandverywellwhatwas
goingonintheirorganisations,andonlyasmallnumberofmanagershadsomeproblemswiththecurrent
stateofbusinesscommunication.
Vietnamesemanagersappeartoappreciatetheimportanceofopencommunicationinthemarketeconomy.
Sixtypercentoftherespondentsintendedtoprovidesufficientinformationtounitmemberswhenneeded.
Fiftypercentensuredthatcommunicationintheircompanieswasnotblocked,asopposedtoonly6percent
whothoughtthatitwas.Twowaycommunicationhasbeenintroducedinsomecompanies,whichallowed
employeesgrievancestoreachtopmanagement.

CONTROLMECHANISMS
ThefindingsofthesurveyoncontrolmechanismsinVietnamesecompaniesarereasonablyconsistentwith
others revealed earlier. Generally speaking, control was exercised by means of close supervision. An
overwhelming 75% of respondents believed that managers should not trust their subordinates and should
closelycontrolthelattersjobs.Only8percentofrespondentswereopposedtotheidea.Thesameproportion
ofthesurveyedpopulationemphasisedtheneedtoorganisecontrolsfrombothends,thatis,ontheprocess
andonthefinaloutcomes.Tobalancethisview,34%ofthemanagerssuggestedthatcontrolshouldfollow
democratic supervision, while about the same amount of respondents were against this view, as partly
displayedinTable9.
Table9
DifferencesinControlMechanism
%Respondentsreplied
Item
Topthree Bottomthree
Strictcontrol 8.0 75.3
Controlontheprocessaswellasonthefinaloutcomes 9.3 73.4
Democraticmannerofsupervision 32.1 34.0
Scalebetween17(1=stronglydisagree7=stronglyagree)

INTERDEPARTMENTALR ELATIONSHIP
Table10
DifferencesinInterdepartmentalRelations
%Respondent
Item replied
Toptwo Bottomtwo
Departmentsarewillingtocooperateandexchangeinformationwitheach
56.2 5.3
other
Therelationsbetweendepartmentsareinbargainingtype 77.0 5.4
Departmentshaveconflictsofinterests 66.1 6.3
Scalebetween17(1=stronglydisagree7=stronglyagree)
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Normally a good relationship is seen as a very important factor to ensure best performance in Vietnamese
enterprises. Table 10 shows that more than a half of the managers confirmed that the cooperation and
exchange of information between departments was effective. Most of the managers believed that
interdepartmental bargaining was not a general practice in their enterprises, and a majority of the
respondentsobservedthattherewerenoseriousconflictsofinterestsexistingintheirorganisations.

PATERNALISTICORIENTATION
As in other Asian countries, family values are still predominant in the Vietnamese culture. This feature is
visible in the way the Vietnamese managers run their businesses. They are not only concerned with their
employeesatwork,butalsoareinterested,andsometimesinvolved,inthefamilylifeoftheiremployeesand
usuallydotheirbesttoprovidesocialsupport.Managersoftengivepriorityinrecruitingemployeessonsor
daughterstoworkinthecompany.Itisalsoapracticethatfundsarecreatedtohelpemployeesovercome
theirfinancialproblems.However,thepaternalisticstylevariedfromoneenterprisetoanother.Inthesurvey,
40%oftherespondentsrevealedthattheywereactivepractitionersofthisapproach,andalmostthesame
proportionofrespondentsthoughtthattheydidittoacertaindegree.

MANAGEMENTSTYLE ANDORGANISATIONEFFECTIVENESS
Organisational effectiveness was assessed by managers of the three sectors on how their companies had
performedrelativetocomparablecompaniesintheirindustryoneachofthesevenmeasurementcriteriaof
effectiveness. They were employee satisfaction, profitability, growth rate of sales or revenues, financial
strength, the competitiveness of the companys products and services, public image and goodwill for the
company, and the ability to utilise new methods or new technologies in production. A test of possible
correlationsbetweenmanagementstylevariablesandthesevenindicatorsoforganisationaleffectivenesswas
conducted.Asaresult,21outof70intotalwereidentifiedasstatisticallysignificantcorrelations(at99%
confident, 2T). This suggests that there was a clear association between management style and
organisationaleffectivenessinthesectorsundersurvey.
Asalreadydiscussed,thereweredifferencesinmanagementstylesamongmanagersinthethreesectors.Ina
logicallink,theresultsoftheMANOVAanalysispresentedinTable11confirmthattheindicatorsdeciding
theeffectivenessleveldifferedconsiderablybetweentheenterprisesinthethreesurveyedsectors(Fratiowas
3.78atp=0.000).Hence,onecanconcludethatagivenmanagementstyleprevailinginanenterprisewould
reflectinitsbusinessperformance.
Among the listed indicators, employee satisfaction seems to be the largest difference between the sectors,
followedbyfinancialstrengthandthepublicimageoftheenterprise.Thereis,however,nofirmevidenceto
concludethatthethreesectorsdiffersignificantlyontheremainingindicators.
Table11
SummaryofOrganisationalEffectivenessinThreeSectors
Source FRatio DegreeofFreedom p Difference
Sectors 3.78 14.204 .000
AnalysisofGroupVariables
1.Employeessatisfaction 8.31 2,108 .000 Yes
2.Profitability 2.45 2,108 .091 No
3.Growthrate 1.31 2,108 .272 No
4.competitiveness 0.19 2,108 .830 No
5.Financialstrength 5.81 2,108 .004 Yes
6.Publicimageandgoodwill 3.38 2,108 .038 Yes
7.Leaderintechnology 2.24 2,108 .111 No
Significantat0.05
Table12presentsacomparisonbetweensectorsontheseindicators.Interestingly,thejointventurescameout
with the highest scores for all the three indicators of effectiveness (mean scores 4.33, 4.00, and 3.75
respectively). This leads to the conclusion that the enterprises in the joint venture sector were apparently
operatingmoreeffectivelythaninthetwoothersectors.
Table12
SummaryofIndicatorsofOrganisationalEffectiveness
Stateenterprises Private JointVentures
N=41 enterprisesN=36 N=36
Mean S.D. Mean S.D. Mean S.D.

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Employeesatisfactionrelativetorivals
3.46 1.12 3.56 0.84 4.33 0.96
inindustry
Financialstrengthrelativetorivalsin
3.54 1.29 2.94 1.19 4.00 1.01
industry
Publicimageandgoodwillrelativeto
3.73 0.87 3.06 1.19 3.75 1.18
rivalsinindustry
Scalebetween15(1=stronglydisagree5=stronglyagree)
Furthermore,theTtestwasalsocarriedoutforindependentsamples,namelythestateandprivatesectors.
Theoutcomeofthistestsuggestedthatenterprisesinthestatesectorwouldenjoybetterfinancialstrength
andpublicimagethantheprivateones.At95%confidencelevel,theTvaluesforthistestwere2.09and2.81
separately.Thisisexplainablegiventherelativesmallsizeoftheprivateenterprises,ascomparedwiththose
inothersectors.

CONCLUSION
The research study found differences in management styles between the state owned, private and joint
ventures enterprises. There was a significant correlation between management styles and organisation
effectivenessinthesethreesectors.Afurtherstudycoveringalargersampleofenterprisesandgeographymay
helptoprovetheseinitialfindingsfurther.
TherewasnosinglemanagementstylethatcutacrossallthethreetypesofenterprisesinNorthernVietnam.
Instead,itwasrevealedthatthebureaucratic,familial,conservativeandauthoritarianstylesofmanagement
werepredominantinthestatesector,wheretheheritageofacentrallyplannedsystemwasstilltobeseen.
The emphasis was on clear reporting relationships, formal communication and strict control. Such a
managementstylehasprovenunsuitablefortodayscompetitiveenvironment.Thefamilialstylewasalso
widely accepted in Vietnamese enterprises, in the private sector, where businesses were developed from
family workshops. The bosses used to treat their company as a big family and often showed a parental
concernfortheiremployees.Controlandcoordinationweretight,andwereachievedbypostingtheowners
relativesinkeypositions.ThisstyleseemstobeappropriatewithVietnamesecultureandcanbeeffectivein
smallscaleorganisations.Incontrast,theparticipativemanagementstylewasoftenpractisedinthejoint
venture sector, where expatriate managers brought in modern principles of management. Both local
managersandemployeesofthejointventurescanbenefitfromthislateralknowledgetransfer.
Leadership styles were also greatly influenced by the management concepts mentioned earlier. Although
managersinallsectorsclaimedtohavepaidattentiontoemployeesinterests,thereweresomedifferencesin
thewaytheypractisedit.Forexample,closesupervision,givinglimitedauthoritytosubordinatesandpower
reservedatthetop,seemscommoninbothstateandprivateenterprises.Conversely,managersinthejoint
ventures were in favour of participative management style, encouraging work teams and giving more
freedomtosubordinatesinselectingtheirowncoursesofactions.
It goes without saying that in spite of operating in different work settings, all the three sectors are
undoubtedlyaimingatthesameultimategoal,whichistosurviveintheincreasingcompetitiveenvironment
ofanemergingeconomy.Thisrequiresallenterprises,whetherstateowned,privateorjointventures,tocome
up with a more people centred management style and practice, using human resource development as a
channel to create a competent and motivated workforce. Such changes in attitude and behaviour should
encompasstherestructuringofkeycomponentsofanorganisationsuchasitsstructure,peopleandculture.
Itshouldbenotedthatwhileseveralenterprisescanclaimtohaveexperiencedsomemeasurableprogresses
with the first two components, changing the culture of an enterprise has proven to be most complex and
difficult to achieve. To be effective, a comprehensive change strategy, applicable for all enterprises in
Vietnam, should be generated and led by a more dynamic and creative contingent of managers who are
willingtofacilitateactiveemployeeparticipationandtotakepersonalresponsibility.
Endnote:Questionnairecanbeobtainedonrequestatqtruong@ait.ac.th

AUTHORS
Truong Quang, PhD, is an Associate Professor of Organisational Behaviour and Human Resource
Management,SchoolofManagement,AsianInstituteofTechnology,Bangkok,Thailand.
Nguyen Tai Vuong, MBA, is a Lecturer of Corporate Strategy, Faculty of Economics and Management,
HanoiUniversityofTechnology,Vietnam.

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APPENDIX1
VariablesusedinthemodelofRefikCulpanandOrsayKucukemiroglu
SUPERVISORYSTYLE Amountofdiscretiongiventosubordinates
Degreeofdelegationofauthoritytoemployees
Solicitingforworkerinputs
Freedomofemployeestoscheduletheirownwork
Democraticsupervision
Onlysupervisorhandlingworkproblems
Decisionsandworkproblemsdelayedinsupervisorsabsence
Supervisorybackupforhis/heremployees

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Amountofdirectiongivenfromtop
Closesupervision
Solicitingforworkersinputs
Tacklingunusualworkproblems
Tryinginnovativemethodsandproducts
Numberofsuggestionsfromthemembers
Wastingtimeandeffortbyincorrectestimates
Acceptingunpopularprojects
DECISIONMAKING Initiatingimprovements
Decisiondelegationtothelowestlevel
Consensusdecisionmaking
Employeeparticipationindecisionmaking
Amountofsupervisorydirection
Individualdecisionmaking
Employeefreedomtoselecttheirowncourseofactions
Supervisoryawarenessofunitperformancemeetingstandards
Freeflowofinformation
Supervisorsawarenessofthingshappeningwithinunit
COMMUNICATIONPATTERN
Complainsreachingtopmanagement
Employeeunawarenessofchangesinpoliciesanddirectives
Communicationareblocked
Managersbeingontopeverything
Emphasisingproductionasagoal
Freedomofworkerstoscheduletheirownactivities
CONTROLMECHANISM Democraticsupervision
Relyingtheunitwithoutchecking
Followingupsandcheckinginthegoalroalisation
Closesupervision
Providingassistancetootherunitsforfavours
Makingtradesanddealswithotherunits
Bargainingwithotherunits
INTERDEPARTMENTALRELATIONS
Frictionswithotherunits
Criticisedbyotherunitsforbeinguncooperative
Gettingintoconflictwithotherunits
Involvingfamilymattersofemployees
PATERNALISTICORIENTATION
Helpingemployeeswithnonworkrelatedmatters
Source:CulpanandKucuKemiroglu(1993)

APPENDIX2
VariablesusedinthemodelofPradipKhandwalla
MANAGEMENT
KEYFEATURES
STYLE
Biasforpreservingandextendingwhateverhasworked.
CautiousininnovatingancVorchangingstatusquo.
Predisposestheorganisationtorelateddiversificationandgrowthinfamiliar
CONSERVATIVE
directions.
Useoftraditionsthatpreservethestrengthsofthepast.
Conservationistincharacterbutnotnecessarily.
Indulgesincalculatedrisktaking,pioneering,innovationandrapidgrowth.
ENTREPRENEURIAL Necessaryforadevelopingcountrytodiversityitsindustrialbaseandexpandits
outputrapidly.
Adaptsscientificoptimisationorientedapproachtomanagement.
Usessophisticatedmanagementtoolsandtechniques.
PROFESSIONAL Undertakeslongrangeplanning.
Usefulformanagingnewandcomplicatedtechnologyintensiveindustriesin
complex,globalisationenvironments
Emphesisesorderlymanagement,accountability,andformalisationofrules,
regulations,andprocedures.
BUREACRATIC
Usedwidelyinlargeorganisationsandthepublicsectortoensureaccountability,
equity,orderlinessandoperatingefficiency.

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MANAGEMENT
KEYFEATURES
STYLE
Showdeepcommitmenttoflexibility,innovation,responsivenesstochange,
ORGANIC teamworkandinteractive,feedbackbaseddecisionmakingusefulforoperatingin
fastchangingenvironments.
Emphasisesdisciplineandobedience.
Isarchetypalstyleofgreatantiquity?
AUTHORITARIAN
Perceivedtobeusefulinsituationsofweakworkethicandahostiletask
environment.
Committedtoanideologyofcollective,consensusbaseddecisionmaking.
Usefulinensuringthatdiverseperspectiveisvoicedandthatdiverseinformation
PARTICIPATIVE
issharedbythoseaffectedbyadecisionbeforetakingthedecision.
Knowntofostermotivationandcooperation.
Showsfaithinexperience,commonsenseandintuitivejudgmentbasedongood
INTUITIVE rulesofthumborheuristicslearnedfromexperience.
Astyleasoldashumancollectiveliving.
Anchoredinthenotionthafforcohesivenessandloyaltytoorganisation,the
FAMILIAL organisationmusttreatitsemployeeslikemembersofthefamilyandlookafter
theirneeds.
Believesinthephilosophythattheorganisationisaninstrumentalityofsome
largersocialgood,notjustforprofitmaximisation.
ALTRUISTIC
Ofparticularrelevanceindevelopingsocietiesthathaveembarkedonmajor
nationbuildingandpovertyalleviationgoals.
Source:Khandwalla,P.(1995)

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