Achievements, challenges, and new directions of family business in Vietnam

Abstract

This chapter focuses on analysing the achievements, challenges, and new directions of Vietnam’s family business sector. The Vietnamese family business’s achievements are revealed in each successive phase of Vietnam’s economy. Accompanying their achievements, there are several challenges Vietnamese family businesses encounter, such as the effect of culture on the Vietnamese family business operation, the generation transfer, and conflict management. To be specific, this chapter utilizes an in-depth interview method to explore the features and challenges of the Vietnamese family business, whose sample comprises two medium-sized family business firms. The results indicate that some Vietnamese family businesses possess distinctive features. Particularly, in contrast with the elementary education of founder 1, founder 2 obtains the higher education. Simultaneously, there is a female manager acting as founder 1 who is the main decision-maker in her firm. Besides, they also operate under regular culture which is inherent by Confucianism, Buddhism, and Collectivism which leads to the conflicts between family members and management boards. Moreover, Vietnamese family businesses have less commitment and trusting outsiders than non-family businesses; consequently, they do not want to hire outside professional managers. Nevertheless, the founders construct respectful and friendly relationships with employees in the firms. Hence, most of these businesses face difficulty in expanding and maintaining the business. In addition, the founders of the family business in Vietnam have low levels of integration capabilities, technology and innovations adaptability, and generation transfer planning.