Nguyen Guerilla Capitalism

The State in the Market in Vietnam
1. Auflage 2009
ISBN: 978-1-78063-255-1
Verlag: Elsevier Science & Techn.
Format: EPUB
Kopierschutz: 6 - ePub Watermark

E-Book, Englisch, 250 Seiten

Reihe: Chandos Asian Studies Series

Aimed at globalising companies, institutional investors, business researchers, students and practitioners. Guerilla Capitalism analyses the nature of the business system and behaviour of state owned enterprises in Vietnam. Written by an expert author, the book is based on first hand case studies containing full and frank interviews with local managers on the country's business culture. It thus provides those seeking to do business in Vietnam with an unparalleled insight into how and why its businesses in general, and state owned enterprises in particular, are structured and managed, a topic about which little has been previously written. The book also presents researchers and students with a comprehensive, societal approach to the study of organisational behaviour, and offers a distinctive interpretation of the common problems of state owned enterprises in transitional economies that goes beyond the traditional economic explanation. - Is written by a Vietnamese academic whose unique access gave him an in-depth knowledge and understanding of business practices in Vietnam - Provides information on the business environment in Vietnam - Provides a comprehensive and innovative explanation and interpretation of the business system in Vietnam based on real world case studies and observations

Dr L. Nguyen is currently working for the International Finance Corporation (IFC) in Vietnam where he leads a technical assistance programme that aims at improving the regulatory environment for business and corporate governance practices there. Prior to that, Dr Nguyen lectured at Vietnam's National Economics University Business School where he taught economics, business law, and project management. He has carried out extensive research on business environment issues in Vietnam.

Autoren/Hrsg.

Nguyen, Lan

Leseproben

Introduction
This monograph focuses on the business environment and behaviour of state owned enterprises (SOEs) in a transitional country, Vietnam, a country well known to the world through war but still little understood when it comes to business and management. Like China and other former socialist countries in Eastern Europe, Vietnam first pursued the Soviet-style development model, characterised by the central planning of economic and social activity. Then in the early 1980s, the country began a transitional process towards a market economy. As a result, especially after 1986 when a radical reform programme (called doi moi in Vietnamese) was implemented, the Vietnamese economy grew rapidly and the living conditions of the Vietnamese people improved significantly. Today Vietnam is following the capitalist path to development, despite there being a reluctance to admit it. Although the country has recently made notable economic progress, its transition process is far from over. The economy is still burdened with a large and inefficient state sector and the institutional systems associated with a market economy remain, to a great extent, underdeveloped. Given that Vietnam is the world's 13th most populous country, with a population of about 80 million and a rich pool of natural and human resources, there has been growing interest among international investors, institutions, and organisations in the country's potential economic development. This study aims to provide the various audiences interested in Vietnam with hitherto unavailable information on the country's business environment in general, and the behaviour of its dominant type of businesses, the SOEs in particular. Although this research is mainly concerned with the behaviour of Vietnamese SOEs, it does not consider them independent of their environment. As current social science theory would argue, since organisations in general and SOEs in particular are embedded in their broad societal context; they are not the same everywhere. This research is, therefore, designed to study first, the Vietnamese business environment and then its SOEs with reference to their environment. In fact, ‘environment’ is perhaps too weak a concept, since there are many different kinds and numerous definitions of what it means. In the case of the Vietnamese SOEs, any concept of their environment must take into account two important factors and consider how they have interacted to shape the behaviour of the enterprises operating within that environment. The first, the informal environment, is constituted by Vietnamese history and culture while the second, the formal context, is defined by the nature of the economic transition process occurring in the country. This study incorporates these two factors into a model of analysis by first constructing an ‘ideal type’ of business in Vietnam, and then interpreting SOE behaviour with reference to this ideal and the particular characteristics of the transitional process. The ‘ideal type’ is thus a construct for the purpose of comparison and explanation, a way to capture the key characteristics of Vietnamese culture and history and their bearing on business organisations operating in that specific context. By comparing them with an ‘ideal type’, certain aspects of the SOEs become ‘known’. SOE behaviour, and in particular some of the problems associated with them, can be explained by combining the ‘ideal type’ method with an analysis of the particular features of the reform process in Vietnam. The major questions tackled in this study are: What are the major characteristics of Vietnamese culture and history, and what bearing have they had on the form of business organisation and management practice in Vietnam? More specifically, given its historical, cultural and institutional background, what would be the ‘ideal type’ of business organisation operating in Vietnam? What are the key differences between SOEs and the ‘ideal type’ (in terms of ownership and governance, for example) and how can SOE behaviour in general and some of their particular problems, be explained by reference to these differences? What are the current limitations and difficulties of SOE reform in Vietnam, and how do these limitations account for and exacerbate some of the problems within the SOEs? What policies should the Vietnamese government adopt in order to overcome problems associated with the SOEs, and to improve their performance? The study is divided into three parts. Part 1 consists of three chapters and is concerned with theories and methods. Its objective is to review various theories concerning the present topic. A brief review of the literature is given in Chapter 1. In fact, very little has been written about management and organisational behaviour in Vietnam and so this review focuses on the theories and research that appeared most relevant. These include the soft budget constraint (SBC) theory, agency theory, Hofstede's culture dimensions, Boisot and Child's C-space, and several versions of institutional theory. Chapter 2 is concerned with the theoretical framework of the study. It further elaborates the two broad research questions referred to above, and lays out the rationale for the chosen theoretical framework. North's concept of institutions is chosen as the theoretical tool to establish the pattern of the firm in the Vietnamese institutional environment, and the internal structure of the ‘ideal’ firm is drawn from, or conceptualised as, a consequence of the Vietnamese culture. Chapter 3 concerns the study's methodology and methods. Since this research was concerned with interpreting and building theories rather than testing hypotheses and theories quantitatively, I chose an overall qualitative methodology and an interpretative approach for this study. The data used were drawn from multiple sources ranging from proverbs and stories to direct interviews, observations and questionnaires. Part 2 is concerned with the process of building the ideal type, the typical firm associated with the cultural and institutional environment in Vietnam. It too consists of three chapters. Chapter 4 covers Vietnamese history and culture and demonstrates how and why the Vietnamese share many cultural traits with the Chinese, Confucianism being the dominant value system. This fact allows management and organisational studies literature written about China to be incorporated into the study. Chapter 5 presents a history of the Vietnamese economy and more importantly, the country's recent economic reform process, and provides the context for the later chapters about institutions and the organisational behaviour of the Vietnamese SOEs. Chapter 6 describes the institutional framework in Vietnam and the type of capitalism associated with it. The current Vietnamese institutional matrix presented in the chapter is characterised by insecure property rights and high or inefficient transaction costs. This framework, the chapter argues, is associated with a special form of capitalism, ‘guerilla capitalism’ in which business firms (the ideal type) are characterised as small-scale, with little fixed capital, short-term orientation, family controlled and managed. Throughout the process of building the ideal type, a comparative methodology was used that took evidence about Chinese and Japanese culture, family and trade, and compared and contrasted it with that of Vietnam. Part 3 consists of five chapters and is directly concerned with SOE behaviour. Chapter 7 deals with authority relations within the state enterprises, the major characteristics of which are patrimonial and over-centralised since the firm's director, who to some extent resembles the family head, makes almost all management decisions. Chapter 8 looks at the industrial governance of SOEs. It demonstrates how they are still, to a great extent, dependent on government officials since important decisions, especially those concerning finance and investment are made by government officials. Chapter 9 presents the findings of the research into the problems of managing SOEs, notably the ubiquity of opportunism. This chapter presents an in-depth case study, the shoe enterprise, in which the son of the director used his power to obtain his own ends. The explanation for the problem of opportunism offered here rests on the difference between SOEs and the ideal type, the family business. SOEs are not owned by the family, but by the ‘ambiguous’ owner, the state, yet whenever there is a conflict of interest, the family is always placed above everything else. A discussion section follows that is aimed at reconciling action and structure within the Vietnamese SOE context to confirm the ideal type thesis of capitalism in Vietnam. Chapter 10 presents and analyses what we call ‘embedded materialism’. It argues that Marx's labour theory of value, with its emphasis on materialism, was the building block of the old system in Vietnam, and still exercises a great influence. The current ‘rules of the game’ (i.e. payment policy and incentive systems) applying to SOEs are still heavily material-oriented. This embedded materialism either accounts for, or exacerbates, some of the problems presented in Chapter 9. Based upon these research findings and analysis throughout the study, Chapter 11 offers several suggestions as to...