The impact of cultural work differences on Japan Company doing business in Viet Nam

Honda Motor Company

Working Paper

Mai Hoang Vu

Mai Anh Tu

Nguyen Duc Anh

Ngo Van Luc

Nguyen Tuan Phuc

The Honda motor Company

“Honda Motor Co., Ltd. is a Japanese public multinational corporation primarily known as a

manufacturer of automobiles and motorcycles.

Honda has been the world's largest motorcycle manufacturer since 1959 as well as the world's

largest manufacturer of internal combustion engines measured by volume, producing more than

14 million internal combustion engines each year. Honda became the second-largest Japanese

automobile manufacturer in 2001. Honda was the eighth largest automobile manufacturer in the

world behind General Motors, Volkswagen Group, Toyota, Hyundai Motor Group, Ford, Nissan,

and PSA in 2011.

As a young man, Honda's founder, Soichiro Honda (Honda Sōichirō) (17 November 1906 – 5

August 1991) had an interest in automobiles. He worked as a mechanic at the Art Shokai garage,

where he tuned cars and entered them in races. In 1937, with financing from his acquaintance

Kato Shichirō, Honda founded Tōkai Seiki (Eastern Sea Precision Machine Company) to make

piston rings working out of the Art Shokai garage.After initial failures, Tōkai Seiki won a

contract to supply piston rings to Toyota, but lost the contract due to the poor quality of their

products. After attending engineering school without graduating, and visiting factories around

Japan to better understand Toyota's quality control processes, by 1941 Honda was able to mass-

produce piston rings acceptable to Toyota, using an automated process that could employ even

unskilled wartime laborers.” ( Wikipedia , 2012 )

Honda Viet Nam:

Honda entry into Vietnam market in March 1996. March 22, 1996, Honda Company was

officially founded. Honda Vietnam is a joint venture between Honda Motor Company of Japan,

Asian Honda motor company in Thailand and corporations movers and Vietnam agricultural

machinery.

. In March 2005, Honda Vietnam has received the license of Ministry and Planning and

Investment Portal of Vietnam to allow Honda produces and assembles cars in Vietnam.

This is an important history of Honda Vietnam; it marked the development of Honda Vietnam in

Vietnam market. After one year and five months, Honda Vietnam has successful built factories

and construction agency network. The company has completed the training programs, service

and safe driving for employees and agents released first car model in August 2006.

Since this time, Honda Vietnam is not only known as motor manufactures with product

reputation, but also a manufacturer of automotive prestige in Vietnam market. Manufacture of

Automobiles:

Established: 2005

Office: Phuc Thang, Phuc Yen, Vinh Phuc province.

Capital: Approximately $ 60 million

Area: 17.000m2

Labor: 408 People

Capacity: 10,000 cars per year

Total capital investment of Honda Vietnam is 290 427 084 usd, 62.900.000usd charter capital,

number of employees is 4,369 people. Automotive manufacturing plant is equipped with

machinery and equipment similar to the Honda plant in other countries with criteria focusing

especially on quality, safe and friendly environment. Moreover, the plant also is equipped with

engine assembly lines with the desired gradual localization of products Cars.

Abstract:

Culture has become an essential factor in understanding different economic and business

environments. . The culture has on people and society has been studied and defined by scholars

through different models. In the global business environment, it is inevitable that activities are

increasingly across cultures. As a major emerging market, Vietnam offers many MNCs great

potential in their future growth. This paper explores issues in cross-cultural management area in

the setting of joint ventures in Vietnam. This articles also talks about the abilities in adjusting to

working and living in Vietnam and its impact on their performance. It further discusses the

management style appropriateness and cultural differences in leadership styles and the impact of

these issues on effective management in Vietnam for Asia MNCs.

Introduction

Business development across continents has become the important problems for

organizations whose activities are expanding internationally. In the 2014, these international

businesses must necessarily employ managers with the skills to manage across extremely

different cultures. The Japan based businesses, operating in Viet Nam have proved to be a major

challenge of cross-cultural expertise. Cultural differences are reasons have led to the research

and activities of foreign companies in Viet Nam unsuccessful performance. The increasing

parameters of foreign investments in Viet Nam raises the issue culture and the working in the

company become the top issue to resolve before we invested to Viet Nam. In this paper, the case

of an Japan business in Viet Nam is example to exemplify the impact of cultural difference

on international business operations. The challenge for the Japanese managers is how to

understand Vietnamese culture and use this as a basis for conducting business and managing

Japanese staff in Viet Nam. This cross-cultural competency directly affects the performance of

many MNCs.

Relevant research

This paper has constitutes an intersection of two research fields concerning cross-cultural

technology transfer and cross-cultural Honda company management practices.

In the cross-cultural technology transfer , we have many important problems to facilitating

develop knowledge and technology transfer in cross-cultural business contexts, “ but these works

such as the characteristics of the knowledge, the suppliers and recipients, and their relationships

(e.g, Le & Evangelista, 2007 ; Sazali, Raduan, Jegak, & Haslinda, 2009). Some studies have

indicated the importance of national culture in the cross-cultural knowledge transfer process

(e.g., Holden, 2002; Pauleen, Wu, & Dexter, 2007). Others have pointed out that cultural

difference and distance are the key obstacles and the roots of cultural conflicts and

misunderstandings in inter-firm knowledge and technology transfer (e.g., Lin & Berg, 2001)”.

(Nguyen, T.D.N., & Atsushi Aoyama, 2013)

And In the cross-cultural Japanese management practices, “there are few insights into how

Japanese manufacturers adjust their successful production methods on the locational, regional, or

spatial level (Schlunze, 2002). Some studies have taken culture-based approaches to examine the

impact of Japanese-style management on Japanese multinational companies (e.g., Swierczek &

Onishi, 2003; Dore, 2011),” (Nguyen, T.D.N., & Atsushi Aoyama, 2013) or to analyze the

potential for the international transfer of Japanese production systems. While acknowledging that

the Japanese-style production system is difficult to transfer successfully.

Finally, the studies on cross-cultural technology transfer and cross-cultural Japanese

management practices have mainly aimed to explain the nature of international culture transfer,

and have lacked a synthetic and incorporating both theoretical and empirical approaches. The

key issues, which have yet to be conceptualized adequately, are how Japanese managers adjust

their management styles to match local cultures, and how they decide which managerial elements

should be adjusted.

Reason chosen topic

The topic we chose to investigate Honda Company in Vietnam because it was one of the first

companies in Vietnam to develop very early. And also the Honda Company improves work

culture and advanced manufacturing technology in the latest Vietnam since 1960. That makes

our team very interested in Honda Company so after all the Japanese companies in Vietnam, we

chosen Honda priority become target group has a studies working papers.

The difference about group consciousness between Japanese and Vietnamese

In this article I will write about cultural studies and cultural groups active in company time

Honda. First we will learn about the cultural activities of the group to date. Japanese people have

other thoughts to the west on how it's done. The western thinks that they have done in the

shortest possible time. However the Japanese people think that they want the job done most

efficiently. Each individual knows his limits and they do not want their work is not completed

perfectly. Because they always think like this so personal they feel they need to help their peers.

They are always willing to help their colleagues a dedicated and thoughtful way. For reasons

similar to those caused by many Japanese workers rarely use their vacation time fully. They feel

it is their duty not to abandon others while they are working; regardless of their work has been

completed. They stay in the office to share the experience together. From there they can learn

from the experience of others. Because of this and to ensure that workers get some time with

their families, the traditional Japanese company completely shut down for a week in the spring

and summer and also in the New Year. A common practice is the "company trips” with everyone

going away for a few days of fun with each other, either wholly or partially funded by the

company. I will tell you the story of Rene T. Domingo when he was working in Japan. Rene T.

Domingo writes “When I was in Japan, I worked in the office doing paperwork. One day I heard

my boss talking to someone over the phone and he became very excited. It turned out he was

negotiating with a manager of one factory who was borrowing workers from his factory. In

Japan, it is a very fluid situation. There is no such thing as loyalty to a factory. You are loyal to

the company. If one factory needs your workers, then you lend them out. No questions asked.

There was this negotiation because demand suddenly picked up or there was a high rate of

absenteeism. I thought the problem was over when the phone rang again. Another factory needed

more people. But there were no more people to send over from our factory. All the extra workers

were already lent out to other factories. But we had to help this particular factory. So my boss

started calling up the marketing department, the accounting department, the personnel

department borrowing people. There was no resistance, no angry remarks from the different

departments. The Chief Accountant said, "Okay, I'll lend you five accountants to assemble cars,

to run your milling machines." The Marketing Manager said, "I have five salesmen here who are

not busy. I'll send them over to you." And for the sake of knowing what Japanese teamwork

really is, I also volunteered”. In this situation, you can understand that cultural groups in

renovation work not only within the company but also in the middle of the company together. It

is a culture of team work in Japanese company Honda. This passion for teamwork shows up in

endless ways. The easiest way to see how much the Japanese people truly enjoy teamwork is to

watch a Mikoshi team at a Japanese festival. A mikoshi is a chariot for a god. They are heavy.

Mikoshi can easily weigh 1000 kilograms (2200 pounds). It takes a great deal of teamwork and

determination to get a mikoshi through the streets. Just to make things a little more challenging,

competing Mikoshi teams might meet at a predetermined spot and bounce the mikoshi wildly in

the air. Mikoshi teams are fiercely competitive. In Japan, when one member of a team has to

work late, it's common for the entire team to stay (even when half the team isn't directly involved

in the task at hand).  There's an unwritten rule in Japan, never go home before the boss. Workers

who have finished their day's work may wait for the boss to leave before going home. 

The opposite also happens, if there's a task to be done on the weekend, it's common for the entire

team (including management) to show up. Traditionally, Japanese companies hired employees

for life. Only in unusual situations such as bankruptcy were people laid off. This is slowly

changing. These days, some employees will shop around for a new job every five or ten years.

Companies are a little more likely to lay off employees in difficult times. However, compared to

the United States layoffs and firings are uncommon in Japan. Workers in Japan take

responsibility for mistakes of their company. When the company screws something up,

employees apologize. When something goes very wrong, the entire executive team is likely to

quit in apology. All workers on Honda's assembly line have the authority to stop the entire

production line if they spot a quality problem. Any mistake is the responsibility of the entire

organization (not only the individual who committed the error). When Honda workers call a cab

in Tokyo, they request a Honda. Japanese workers not only buy their company's products, they

pressure their entire extended family to do the same. This stems from their team loyalty. In

Japan, everyone loves uniforms. A uniforms makes you part of the team. 

But after investing in Vietnam, the culture of teamwork has not been maintained perfectly.

Honda Company is the joint venture company, but the all most of company' employees is

Vietnamese so there is the inevitable impact of the work culture of the Vietnamese to Honda

Company. Write your employees always have negative thoughts when working in groups as they

are afraid of losing their own interests. They always have the thought that I am always right, only

I do it in the best way. This caused a great impact on the connecting member in the group.

Difficulties arise both cognitive problems and offering solutions, because everyone is claiming to

be the center stand, is "valuable asset" of the group. Besides, they had looked at the strengths and

weaknesses of themselves. Understanding their role in interacting with other colleagues is very

important. To create credibility for the rest of the team members, they must be made aware and

proactive about their role in the collective. This is beneficial when the head of the work group

assigned to members. If you know about, they will be more accurate decisions, leading to more

satisfactory results. That's two crucial issues affecting the working culture of employee groups.

However, there are equally important issues such as who wrote frequently on relations and for

relations between the emotional views. So there are issues most people are not pro but still

passed. It is even affecting the culture of teamwork. It means that people do not have a voice in

the group and k be given ideas to help get the job done in a better way. It also affects the

creativity and learning of those around them. That is the problem that Honda employees who are

suffering in Vietnam. Honda Vietnam need to find out solutions in order to promote the culture

of teamwork as Honda Japan has done. Since then the quality of the new Honda Viet Nam

increasingly developed.

Working style

It can be defined as the way people in the work force absorb and retain new and difficult

information, think or concentrate, do their daily work and solve problems. Everyone has a unique

style in which they prefer to work and if a person's working style is matched with their work

requirements, job satisfaction increases and their work performance improves.

Are working styles useful for managers?

Yes, particularly when it comes to staff selection or promotion. Knowing an employee's working

style will also help with communication, how they need to be instructed and supervised and to

which management style they will respond best.

Working style in Vietnam

Of course, in a company you cannot avoid of bicker with each other because of different ideas.

However, try to give some suggestions and open your mind with your colleagues. Talk bad

things about a person with others, people will estimate you as a bad component which is try to

dividing the company. This is the taboo thing in a company, because it will decrease the rate of

progress of the company.

Too messy: It can be shown through your appearance or your desk. Vietnamese have a bad

habit in the company; they think that their job need a lot of documents and papers, therefore a

messy table is not important for them. But this habit will show your personality. People will

estimate you as a messy person in the company also. So, you need to take care your appearance

and redecorate your desk.

Go to work late always happen in Vietnamese business. It is very common that people are

always having a reason for being late in Vietnam like: traffic jam; bad weather; car or bike broke

which only a small part in these reasons is truth. Some business man in Vietnam after finish their

job in the company, they hang out with their colleagues to drink alcohol or beer, some stay at

home and watch a late soccer match, some get in trouble with the traffic jam everyday but not try

to wake up and go to work sooner… They think there are a lot of people are always late like

them, or if they late for 5 minutes not thing going to happen with them.

Vietnamese businessman sometimes very selfish, they carry things, which is value for

themselves. They know how to deal with this job but they never teach and tell with anybody in

the company. Then in the future, they might get in trouble with other jobs but nobody tell them

how to solve these problems. Furthermore, these problems can affect to the whole company and

directly affect to their job. Vietnamese businessman should learn how to prevent from this

problem by share their knowledge and information with others staffs in a company.

One more problem is people in Vietnam are very subjective, they gather their job to finish it

quickly and spend their free time in the company to talking, chatting… However working like

this is very dangerous and illogically because it will brings a lot of stressful to them with a

pressure how to deal with all of these things. It is so shame that a lot of people still remain this

kind of work. Whenever they have a new project or take part in a meeting, they do not have any

concrete idea, also not spend time to invest the plan and looking for necessary information.

Working style in Japan:

In general, most Japanese "salary men" employed with a Japanese corporate environment work

much longer hours than their western counterparts in a western environment, as do their

managers and female assistants. Although the law states a maximum number of hours per

working week and most companies officially work from around 9 am to 6 pm. In fact, the

majority of people will be in their office at least 30 minutes earlier.

Working in time is very important in Japan, which is a necessary manner for a businessman.

Japanese believe that a person who cannot work in time is an untrusted person. Therefore, they

had prepared everything for the job in the night before they sleep. In the morning, they go to

office by bike, bus or subway that is exactly in minute.

In Japan most of the works are done by group, therefore to make the job smoothly, the staffs

need to stay focus and catch the rate of progress of other’s job in the company to acting

harmoniously. This mean you need to report your rate of progress to others, and keep contact

with people and your higher authority for your difficulty.

Japanese’s desks are always clean, well ordered and perform logically to safe time when looking

for stuffs and necessary documents. They do that to prevent plenty of problems appear from

careless.

A recently enacted law restricting the amount of overtime an individual could work has

unfortunately just resulted in employees not reporting the extra hours they do. Japanese work

spontaneously and too much that Japan had a word “ karoshi “ which psychologically unsound

work processes are allowed to continue in a way that disrupts the worker's normal work and life

rhythms, leading to a buildup of fatigue in the body and a chronic condition of overwork

accompanied by a worsening of pre-existent high blood pressure and a hardening of the arteries

and finally resulting in a fatal breakdown, or shortly: the death caused by working too hard.

Table: The Honda company management style with respect to Vietnamese culture

Critical managerial elements

Original Japanese management style

Actual Japanese management style

Dimension of Vietnamese culture

Seniority system The person who has worked longer with the company will have the higher wage.

Promoted by age; the younger person with stronger abilities will not be promoted to aposition higher than one held by an older person.

Reward group success rather than individual success.

Adjust the wage system each year according toVietnamese material labor laws and labor unions.Increase about 10-20% depending on the business situationPerformance-based rewards according to personal performance evaluation.Rewards for individuals are recognized in a positive way—openly, frankly, and fairly.The bonuses are paid one per year, about 1 to 3 months' salary.The promotion is done by the immediate superior and is based on work experience, seniority (usually up one level

Individual initiative.

Working to receive personal rewards or incentives worth the effort spent.

Differentiation according to power distance.

per 3 years). Flexible Japanese-style system and local-style system.

Job classification Job classificationis not related towages or promotion.

Not much adjustment.Apply multiple work for one employee, e.g., accountant cum office administration,technical staff cum production management, quality control.

Adventurousness, eager to take new chance, less care about risk.

To demonstrate individual ability in organization’s success.

On-the-job-training The best way tosecure production is on-the-job-training

Train the key Vietnamesetechnician in Japan from 3 to 6 months, who will trainVietnamese workers under the supervision of Japanese experts in the early stage.

The differentiation inindividual ability.

The differentiation inmanagerial role leading company.

Quality control Require high senseof responsibility forthe efficient production of highquality products.

Group for quality control and group for quality improvement

Supervisors for eachproduction area.

subordinates tolerateinspection anddistribution of power at work.Adventurousness, pay less attention to quality practices.Value balance in the process of working and a balance between personal and work life.

Hiring policy Lifetime employment Long-term contract: Emphasis on

the working experience and skills.Short-term contract: workers who are less education, good health, diligence.

autonomy,separation between management groupand worker, professional andSkilled education.

(http://dx.doi.org/101.5539/ass.v8n11p26)

Conclusion

Suggestions for a better working environment:

+ Vietnamese should learn Japanese in how they work and their working altitude. When

Japanese working, they really stay focus on their duty and try their best to finish it perfectly even

they could stay in the office overnight.

+ People in a company should help each other with their problem, share your knowledge and

information with your colleagues, you will get their respect and if you have a trouble in the

future, you will get their help too.

+ Try to keep an orderly working environment. By having a good place to work, you will work

perfectly and it will safe your time when you are looking for your items and documents.

Therefore, your pressure in the company will noticeably reduce.

+ Vietnamese should prepare everything they need for the next day before they go to sleep. This

will prevent them from being late for work. Although, they should leave the house as soon as

possible if they do not like the traffic jam. Besides, going to work late gradually can make them

dismiss from the company.

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