RMIT International University Vietnam

BUSM 3311 – International Business

A3

Subject Code:
BUSM-3311 / 4626

Subject Name: International Business

Location & Campus RMIT Vietnam , HCMC / Hanoi

Class Group Number: 2

Student Name: CAO NHAT MINH

Student Number: S3818230

Your Teacher: TZACH RONEN

2005
Word Count:

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Foreign Business and Its Challenge in The Local Market

A, INTRODUCTION

Moving to a different market environment is a challenge for many organizations. The business needs to
study people’s culture and adapt to the local’s ways of operating business. The global economy is
mostly dominated by international firms, and the concept of international business influences to many
countries (Shenkar, Luo, and Chi 2014). The characteristics of this concept affected the people and set
international firms to have similar aspects of succeeding and profitable. The world has become more
connected; businesses around the world work together to produce their products as well as provide
people the best service they needed. Many large corporations begin to operate globally and continue to
expand their product to a new market. Countries can freely practice their business in a foreign market to
some limitations because of regulations and laws. Also, along with running the business in a local
market, it comes with different struggles that companies have to face against to sustain their business.

Common issues such as communications, policies, and cultures, companies have to understand the
differences to attract customers. Plus, with firms being responsible in the local market, dealing with
issues right away, and working hard to resolve problems (Carpenter and Dunung 2011). Mostly, to
satisfy the local demands and provide needs for the community. Customers are a priority, and it is
essential to provide them a pleasant environment and products to help companies receive a good
reputation.

In this report, audiences will have a closer look at how foreign business experienced the challenge and
their thought on coming to the Vietnam market. An interview with the owner has already been
conducted, and issues are identified. There are two issues mainly involved in the company. Vietnamese
employees take pride as a priority, so they often run away from responsibilities to protect their title.
Developing countries like Vietnam still lack technologies capable of producing goods on a large scale
and technological knowledge, which makes it more difficult for business production to be efficient.
First, review the importance of international business and how it affects globally. Second, analyze issues
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that caused the owner to have a difficult time in the Vietnam market by using IB theories. Third,
recommendations on how the company should deal with the issues and avoid losing in the market.
Lastly, a summary of the analysis and recommendations.

LANDER’S BACKGROUND

LANDER corporation was founded in 1991, and its primary manufacture is developing blind window
products. The organization originates in P.R China, and it grows up to a group including four main
members, Wenzhou land braid industry, Jiangxi, Langfeng, and Zhejiang. The use of advanced
technology and professional management helps the organization to become a leading company in the
window blinds industry. LANDER targets to provide customers quality products along with cooperation
with other institutes to invest new ideas and recruit talented employees. The corporation’s goal is to give
consumers a better life in households and provide necessary products for their window.

LANDER’s products have been recognized in China as well as globally. The company has a high
reputation from its customers and partners for their outstanding services and products. The company
follows standard rules, and they always focus on improving the quality of the products. Moreover, each
of LANDER’s members founded in different years and specialized in different categories. Especially
with applying professional management and the concept “quality first, service utmost” (LANDER
1991), LANDER gradually becomes a trustful partner for many large window blind organizations and
get its window components to appear in every wholesale store.

When the trade war begins between the U.S and China, LANDER’s products face difficulty in importing
and restrictions. The company decides to move a few of its production to Vietnam to ease the barrier.
The LANDER VIETNAM CO first entered in 2018, and Beilun Yu is the head of the business. The
company is located in Binh Duong and is known for the production of ribbon and window blind to the
Vietnam market. Till 2020, even though with two years of experience in the Vietnamese market,
LANDER VIETNAM still sees problems within the company due to employees and lack of
technological development.

B, ANALYSIS
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1, EMPLOYEES DIGNITY

Nations around the world perceive a different type of cultures. As numerous cultures appeared around
the globe, there is diversity in languages, customs, and traditions. People have different moralities and
principals, as well as how they interact with people in their environment. Business is affected the most
from cultural issues as people is critical to building products, and it causes harm to production. After
interviewing the owner of VIETNAM LANDER, “running a business in Vietnam is not similar to one in
China,” stated by Yu. Employees are never on time as well as being nosy on small problems or become
negative if the owner did not satisfy their demands. Employees create a separate group through social
media to besmirch the owner’s image and go against company policies.

Instead of improving themselves, Vietnamese employees are offended if things do not go as their wills.
Even when they are responsible for the problems, they choose to quit the job or wait to get fired. They
tend to damage the company’s reputation by sharing the wrong information about the firm to people
around the area. As Yu stated: “his company heard bad mouth from the neighborhood due to employees
going around spreading false rumors about his firm.” Which most information is not accurate, and it
negatively influences the company.

At LANDER, when it comes to dealing with problems, “Vietnamese lean more in individuals to resolve
than a team,” stated by Yu. For Vietnamese, a good name is vital than any material possession in the
world. They have to avoid actions and words that could damage their image. Decision making is based
on a person’s feelings and beliefs that action will protect their values (Abramson and Moran 2017).
They solve problems by themselves to protect their pride or hide problems behind. Also, some people
choose not to cooperate with others. According to Saigoneer (2019), 74% of Vietnamese workers earn
below the global living wage, and manufacturers are pushing them to work overtime. Vietnamese do not
want to work much overtime (Thomas 2004). Workers want to obtain benefit themselves and make the
most out of it rather than teamwork so they can achieve more. Therefore, Vietnamese employees choose
to work individually without sharing with their colleagues, and their action impacts company
production.

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2, TECHNOLOGICAL AND TRAINING

Vietnam experienced remarkable growth in the past, GDP growth above 8 percent in 1992, and
continuing through years (Harvie and Tran 1997). With an extraordinary growth, advanced technology
is slowly rising and increasing in the human index. It creates opportunities for foreign corporations to
invest their subsidiaries in the country and bring jobs to Vietnamese. Vietnam can benefit from studying
the business model foreign corporations used to maintain businesses themselves and to support the local
businesses. However, to obtain a successful business with high revenue is not always an easy task for
many, with many failed businesses every year and competitive in the market (Carrigan 2019).
Organizations such as Uber do not serve the people’s expectations, leading to their downfall. Most
Vietnamese prefer to pay cash rather than using electronic wallets. Similarly, LANDER experienced
issues from developing training for employees and technologies.

Vietnam is a growing market, and developing technologies has been regarded as a key to building the
country’s economy. Since Vietnam first joined ASEAN, they begin to import more technologies into the
nation and be active in managing these technological changes (Loc 1999). Every time LANDER needs
to purchase machines, they have to order from China. The process of shipping is even longer, machine
inspection, and complicated paper works. “If one machine got broke down, it would disrupt the
production line,” said Yu. Sometimes, the shipping process got delayed, and LANDER has to borrow
machines from partner factories as an alternative way.

Vietnamese employees are not trained enough in using machines and maintenance. According to Loc
(1999), with a population of 74 million in Vietnam, there is only 3 million technically trained workforce
with an average of 4 trained workers per 10000 population. Employees are being told what to do instead
of understanding how the machines operate. Yu stated: “LANDER provided training for employees in
operating machines, but employees do not apply the lesson in a realistic situation.” LANDER cannot
address how the machines are operated and giving clear instructions to employees. Besides, language
barrier makes it harder for the company to instruct, even with hiring translators. They cannot fully
extend LANDER perspective for its employees. In 2 years of working in the Vietnam market, LANDER
has to layoff many of its employees every month because they refused to acknowledge current
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technologies. Hence, it led to machines breakdown frequently and caused the company loss in profit for
two years straight.

C, RECOMMENDATION

1, COMMUNICATE WITH EMPLOYEES ONE ON ONE

LANDER should communicate privately to employees about the issue and avoid public discussion.
Vietnamese employees take pride as seriously, and the boss should set up a private meeting with
individuals to inform the problems. Discussion only between the two, so employees will not feel
embarrassed in front of other workers. In a private meeting, the boss should discuss issues with
employees and give them options to deal with the situation. Nowadays, smart leaders engage with
employee’s person-to-person than showing them commands (Groyberg and Slind 2012). Doing so will
help employees feel they are on the same page as the owner and helping the company to research
solutions. In the long term, LANDER could stop past employees from spreading untrue facts or damage
the company image by making reasonable deals between the two. Deals that both employees and the
company can benefit in return.

2, APPRECIATE EMPLOYEES

Create employees with a joyful environment at work to eliminate negative thoughts toward the
company. LANDER should organize more entertainment events to bond employees and show its
appreciation. Usually, the working environment is stressful, having events for employees to give them a
break from huge load amount of work. These events can congratulate an individual for working hard or
motivate employees. After employees realizing the company is respect them, they are going to view
LANDER in a good image. Recognize employees not just for their performance but what they talk about
the company when they are not at work (Jim 2000). For Vietnamese, it is important that the company
recognized employee’s contributions and invited them for meals. These actions could improve
LANDER’s reputation in treating employees and attract more customers to use its products.

3, PROVIDE MORE TRAINING OPPORTUNITIES

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Vietnamese employees do not have enough access to soft skills in education or having enough training.
The lack of training skills will prevent employees from working in an international environment as well
as dealing with foreign customers. By giving more trainings it helps employees to expand their
knowledge and gets specialized in their favorite field. When employees get to access these opportunities
knowing they will gain personal development. Employees will be more encouraged to stick around with
the firm (Business World 2019). LANDER should have an entire department responsible for human
resources, to develop employees, and manage their progress. Follow along with employees to keep track
of their practice and avoid the company losing customers. More than that, giving employees more
training will create a connection between them with the firm and create a better working environment.

D, CONCLUSION

Overall, the primary cause of LANDER to struggle is its employees. The company needed to improve
on appreciate workers and organize more orientation for employees to learn. Company production is
affected by the employees, lack of technological training, offer no benefit, and LANDER way of
handling issues, which makes people view it negatively. Therefore, three recommendations above are to
help the company dealing with challenges in the Vietnam market. By using these suggestions, LANDER
will survive in this competitive market and creating more quality products to Vietnamese consumers.

D, REFERENCES:

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Abramson, N, Moran, R 2017, Managing Cultural Differences: Global Leadership for the 21st Century,
Taylor and Francis Group, RMIT Library, viewed 20 May 2020,<
https://ebookcentral.proquest.com/lib/rmit/reader.action?docID=5042867>.

Business World 2019, The Importance Of Conducting Employee Training Workshops, Business World
[New Delhi], RMIT Library, viewed 20 May 2020,< https://search-proquest-
com.ezproxy.lib.rmit.edu.au/docview/2179668662/F8DCA1249F944F8PQ/5?accountid=13552>.

Carrigan, M 2019, 2019 Small Business Failure Rate: Startup Statistics by Industry, National Business
Capital & Services, viewed 20 May 2020,< https://www.national.biz/2019-small-business-failure-rate-startup-
statistics-industry/>.

Carpenter, M, Dunung, S, and Open Textbook Library distributor 2011, International Business, RMIT
Library, viewed 20 May
2020,<https://resources.saylor.org/wwwresources/archived/site/textbooks/International%20Business.pdf>.

Groysberg, B, Slind, M 2012, Leadership Is a Conversation, Havard Business Review, viewed 20 May
2020,< https://hbr.org/2012/06/leadership-is-a-conversation>.

Harvie, C, Tran, H 1997, Vietnam’s Reforms and Economic Growth, London:Palgrave Mcmillan UK,
RMIT Library, viewed 20 May 2020,< https://link-springer-
com.ezproxy.lib.rmit.edu.au/content/pdf/10.1057%2F9780230389472.pdf>.

Jim, S 2000, Recognize the importance of incentives and rewarding employees, Nation’s Restaurant
News 34.34 (2000), RMIT Library, viewed 20 May 2020,< https://search-proquest-
com.ezproxy.lib.rmit.edu.au/docview/229336805?accountid=13552&rfr_id=info%3Axri%2Fsid%3Aprimo>.

LANDER 1991, About us, LANDER, viewed 20 May 2020,< http://www.lander-cn.com/index.php?

c=msg&ts=aboutus>.

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Nguyen, L 1999, Vietnam’s Strategy of Technology Development: Some Managerial Issues,
PICMET’99: Portland International Conference on Management of Engineering and Technology, RMIT
Library, viewed 20 May 2020,< https://ieeexplore-ieee-org.ezproxy.lib.rmit.edu.au/stamp/stamp.jsp?
tp=&arnumber=807698&tag=1>.

Saigoneer 2019, 74% of Vietnam’s Garment Workers Earn Below Global Living Wages: Study,
Saigonner, viewed 20 May 2020,< https://saigoneer.com/vietnam-news/16471-74-of-vietnam-s-garment-
workers-earn-below-global-living-wage-study>

Shenkar, O, Luo, Y, and Chi, T 2014, International Business, Taylor and Francis Group, RMIT Library,
viewed 20 May 2020,< https://ebookcentral.proquest.com/lib/rmit/reader.action?docID=1757889>.

Thomas, R 2004, Vietnam work culture different than China, Funiture-Today 28.48 (2004): 24, RMIT
Library, viewed 20 May 2020,< https://search-proquest-com.ezproxy.lib.rmit.edu.au/docview/235457888?
accountid=13552&rfr_id=info%3Axri%2Fsid%3Aprimo>.