19 June 2017

Surprising reasons Vietnam can’t develop ability to compete globally

surprising reasons vietnam can’t develop ability to compete globally hinh 0


Private sector businesses are slowly coming to the full realization that they cannot develop the ability to compete in the international marketplace, a fact that has far reaching implications.

The signs of the problem had been visible for some time. Almost all the economic growth the country has experienced over recent years has been created by the foreign sector, principally by companies such as Samsung and LG Electronics.

The same is true for job creation.  While it is accurate that some of the new jobs have been created in government, healthcare and retailing, these are areas of the economy that are not exposed to international competition.

If one looks at the jobs created by the domestic private sector in manufacturing, which is exposed to competition from foreigners, the results can be described as lacklustre at best, a sure sign Vietnamese businesses are not developing an ability to compete.

Vu Thi Kim Hanh, chair of the Business Association of High Quality Vietnamese Products told the audience at the conference that she believes there is a generic problem with the strategies being pursued by domestic private sector businesses.

Business leaders, she said, generally try to place the blame for their failures on the government, foreign tariffs, other non-tariff barriers, the legal system, K–12 education, and fiscal or monetary policy.

In other words, the inability to compete isn’t the business leaders’ fault— it’s always the fault of someone else and not them. When in fact management is all about the art and science of getting things done and overcoming constraints, whatever they happen to be.

In other words, Ms Hanh is saying that we often hear Vietnamese agricultural businesses complain about problems they encounter with shipments of product being rejected by the US Food and Drug Administration.

The problem doesn’t lie with the USFDA, according to Ms Hanh, but with the Vietnamese business leaders who don’t have the ability to channel their company’s resources to meet with the exacting standards and requirements for safe food.

Through globalization, it has become possible and attractive for local businesses to operate in far more countries.But going international requires a monumental and fundamentally novel way of leading and managing a business.

It requires business leaders to shift from the old management style of controlling individuals to organizing teams of workers;a change from coordinating work by hierarchical bureaucracies to dynamic linking;anda move from top-down communications to horizontal conversations.

Dealing with competitiveness thus implies a revolution in the way private sector businesses are run. To be sure, improvements in the tax code and streamlining regulations will help. But ‘business leaders’ need to start acting like true managers and draw on the long tradition of can-do management on which the country was built.

More now than ever in the history of the country, there is a need for a wider embrace of the ethos of imagination, exploration, experiment and discovery.Now to compete, businesses have to excel with their customers on a global basis.

Today to become successful, businesses need to continuously delight their customers with innovative and creative new products, said Ms Hanh. Whereas in the past just being a bit more efficient than the local competitor might have been enough to get by.

Most importantly Vietnamese business leaders have yet to step up and meet the challenges presented by globalization and the new age consumer demand for quality products— and discard the outdated concept that cheap is best, Ms Hanh concluded.



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