1. Cross- cultural leadership success
in Vietnam?!
The Power of Trust and Why it Matters.
A practical field study:
Bridging cultural differences and relational trust through strategic leadership intent.
A re- emphasis on the importance of context- based leadership strategies
in the multinational business environment.
An outreach for the importance of practical HR Research to conceptualize the international workplace
of tomorrow
~
“Let us be honest, Franziska. We have to go back to how we treat each other (…).
Sustainability is not how you optimize your money, but how you optimize your talent”
Interviewee, Ho Chi Minh City, 2012
~
Maastricht University
School of Business and Economics
April 20th
, 2013
Franziska Ottilie Becker
ID #: i597317
Study: MSc. IB – Change, Management &
Consultancy
Assignment: Master Thesis (EBS 4013)
Thesis supervisor – and supporter:
Yannick Bammens

2. 2
Time for some acknowledgement first.
When a Master Thesis means more than just a paper to be written, but includes a life-
long memory and guidance for the future there is a reason to thank those who were part
of it:
I hereby like to thank some people, who made it possible to realize this research, to move to
Vietnam and settle in fast, to finish it in times of severe ambiguity as well as all the support
ranging from making loads of coffee, good conversations, workouts, proof- reads or simply
shared and sincere silence:
Thank you to Yannick Bammens, my thesis supervisor and – supporter who was the one who
finally accepted my proposal of doing research in Vietnam. Having been able to follow my
curiosity and interest in the field of cross- cultural change management was a truly enriching
experience. Allowing me to bridge academia with my first field study is what my Master of
Science at Maastricht University created a truly valuable experience and ensured that I am on
the right path of my career. A sincere ‘thank you’ also for being a very understanding
supporter, when I had to personally shift priorities for some time.
Also ‘thank you’ to Hannes Gunther who supported this thesis by helping me to find Yannick
Bammens, as my final supervisor.
Thank you to all the managers I was able to interview. My time in Vietnam was a short and
deep dive into the culture and I believe that the practical insights I gained will support me in
my endeavors and career within Talent Management and Talent Education tremendously.
Thank you to my beloved family & friends. Their support in the last months of personal and
academic up and downs was a great lift- up. Special thanks to Oliver Kanders, with whom I
created this great field research idea. Oliver has supported me since we first discussed this
idea in a little Irish Pub in a small Italian town over a beer.

3. 3
Table of content
1. Introduction ……………………………………………………………….. p.4
2. Literature Review …………………………………………………………. p.5
2.1 Relational trust …………………………………………………… p.5
2.2. Cultural awareness ……………………………………………….p.10
3. Research Background ……………………………………………………...p.18
3.1. Personal Motivation… …………………………………………...p.18
3.2. The Vietnamese Market ………………………………………….p.20
4. Method …………………………………………...........................................p.23
4.1. Data Collection …………………………………………………...p.23
4.2. Analysis …………………………………………………………..p.24
5. Discussion …………………………………………………………………..p.41
5.1. Limitations & Future Research ………………..………………...………..p.43
6. Conclusion ………………………………………………………………….p.45
7. References …………………………………………………………………..p.47
8. Appendix ...………………………………………………………………….p.52

4. 4
1. Introduction
Within any newspaper or journal one is able to find something about
globalization and its effects on our society, economy and everyday business. A
practical challenge organizations face in times of increasing interdependence is the
capability to work effectively across cultural boundaries. Over the last decade, cross-
cultural studies have been of major interest. Following, on a company level the
importance of strategic HR and internal communication grows with the number of
companies expanding into different countries across the globe.
Globalization creates new constellations of management and internal
communication. Management of a multicultural nature demands shifts in thinking and
acting and goes beyond the single notion of directing work. In order to achieve a
healthy working environment differences in culture need to be addressed, such as
effective decision- making and control mechanisms are conducive to good
communication and cultural understanding (Cui, Ball & Coyne, 2002). Developing
effective human resource practices and trainings play an important role in this
process, and are critical for international joint ventures’ (IJV) success (Pucik, 1988;
Zeira & Parker, 1995). Moreover, it demands the engagement and bonding with and
for employees to understand individuals with different sets of values and
backgrounds. Thus, the creation of relational trust between a leader and his followers
needs to be addressed. Human Resource Management research (HRM) and leadership
research must address relational trust, establishing mechanisms to enhance trust and
thus performance on a viable basis (Inkpen & Currall, 2004). Here, the role of
expatriates, the managers sent abroad to establish a company’s subsidiary, has been of
special interest to other organizational behavior researcher (Davis, 1995; Molinsky,
2007). Trust builds loyalty to the business, an open business environment and shared

5. 5
understanding of business objectives, assuming all other things being equal. Just as
Kathleen Stephens, the U.S. Ambassador to the Republic of Korea summarized it:
“We must use our shared interests and values to compliment and transform each
other’s growth” (Matthews & Thakkar, 2012). Long- term success therefore depends
on context- based leadership strategies, which in turn depends on the ability of its
organizational actors and the ability to bridge cultural differences to create relational
trust. This study explores how leaders in cross-cultural settings may overcome
cultural barriers to build relational trust from a change management perspective.
2. Literature Review
2.1 Relational Trust
The interdependences of countries and businesses are growing. Ever since
trade barriers began to fall, the internationalization of markets has created new
business opportunities. Despite opportunities the interplay of cultures in the
workplace demands a shift in the focus and meanings of leadership, responsibility and
management theory. Cross-cultural leadership and workplace diversity management
have been on worldwide research and business agendas within the last decades. The
challenge of the expatriate, the sent- abroad manager, is to bond with his or
employees in a way to eliminate perceived inequalities, to motivate and create a
common ground for business. In the context of cross-cultural leadership, relational
trust gained attention and has been discussed more frequently over the last few years
(Davis, 1995; Fryxell et al., 2002) This is because trust serves as a bonding tool. It is
the basis for a mutually healthy relationship between a leader and his followers.
According to Mayer et al. (1995) trust is defined as an individual’s readiness to
perform a certain behavior and attitude. He defines trust as the “willingness of a

6. 6
trustor to be vulnerable to the actions of a trustee based on the expectation that the
trustee will perform a particular action”. Similarly, Rousseau et al. (1998) defined
trust as “a psychological state comprising the intentions to accept vulnerability based
on positive expectations of the actions of the trustee”.
In a cross- cultural context trust is particularly hard to reach as individuals’
criteria and pre-conditions for trust may differ for several reasons. For example,
culturally implied leadership styles or the attitudes towards formal authority may
differ across countries. In fact, it is proven that cultural distance is negatively
correlated with measures of trust in IJVs and that people are more inclined to trust
other people who are like them (Fryxell et al., 2002). Thus, to establish relational trust
in a new company environment, companies need to demonstrate a general readiness
and openness towards the new culture and its ways of doing business. Trust can
therefore be seen as a behavioral intention. This behavioral intention is the basis for
successful business. Dirks and Ferrin (2002) found that trust has a positive correlation
to many relevant performance indicators of a company. Amongst these are job
performance, organizational citizenship behavior, turnover intentions, job satisfaction,
organizational commitment and commitment to decisions. From a leadership
perspective, trust enables the successful coordination of work, higher levels of
motivation and especially better social exchange. The three mentioned factors will be
discussed separately, while social exchange will be discussed more thoroughly.
Coordination of work is enabled in situations of mutual trust between the
leader and employee. To coordinate a business a certain degree of programmability of
behaviors and measurability of outcomes is required. The lack of a basis of trust leads
to misunderstandings and inefficiencies in the long- run. Effectively a lack of trust
creates high transaction costs commonly found in many multicultural work

7. 7
environments. These misunderstandings slow down processes to an extent that
business objectives become less easily achievable (Colquitt, 2007).
From a motivational perspective, relational trust is an important enabler for
follower’s willingness to perform. According to Kouzes & Posner (1995) effective
leaders create motivation by generating trust through role modeling. Their main
ingredient is being a personal example and showing observable dedication. Effective
role models are able to act fast to stop behaviors that breakdown trust and
collaboration, e.g., “unethical behavior, backbiting and unproductive complaining”
(Kouzes & Posner, 1995).
In a multicultural setting, leading human motivation demands an
understanding of values and needs. If led and managed correctly, trust can therefore
serve as a leveraged form of motivation. (Bijlsma-Frankem, 2005). However,
successful leadership on multicultural level is one of positive social exchange. Ergo,
the leader in his role as a model of inspiration can influence the relationship to his
local colleagues positively through his social behavior. Rockstuhl et al. (2012) uses
social exchange, which explains the positive effects of the leader-member exchange
(LMX) on a multicultural level. Social exchange is defined as “involving unspecified
obligations created by received favors” (Blau, 1964). To be precise, as leaders engage
in favorable, positive social behaviors with their employees, work attitudes and
behaviors will be positively impacted as employees feel the positive urge to give back
as a matter of reciprocation. Reciprocity can be regarded as a central factor regarding
social exchange between foreign manager and local subordinate (Hamel & Prahalad,
1989). In Gouldner’s (1960) norm of reciprocity, he explains that the parties involved
in social exchanges appreciate that a favor received now “creates an expectation of
some repayment in the future” (Colquitt et al., 2007). For instance, to care about the

8. 8
“partner’s actions creates a sense of indebtedness on the part of the other, which may
lead to beneficial attitudes and behaviors directed toward the caring partner” (Colquitt
et al., 2007). Reciprocity in building trust is further important out of the following two
reasons. One, for an effective communication and collaboration access to and with
employees, managers needs to be able to rely on reciprocal responsibility, i.e. trust for
each other (Gerke and Patterson, 2008). Because leaders and employees are supposed
to manage unfamiliar relationships with unfamiliar parties an open and collaborative
environment for the IJV is an important ingredient to learn from each other. Two, in
the field of cross-cultural work settings uncertainty, ambiguity and volatility belong to
daily business processes as well as to the daily togetherness as both environment and
people are unknown. Reciprocity as a management intention is therefore crucial as to
how lasting intra-organizational relationships can be build. An open communication
style with each other and trustworthy relationships foster a community based on
collaboration, openness and innovativeness; a crucial determinant for the success of
IJVs (Kogut, 1989).
Concerning appropriate strategic leadership intents, past research shows that
certain leadership styles are more likely to unleash relational trust than others.
Generally, leadership styles based on empowering the follower instead of
commanding tasks work best in building a culture of trust. Such research focused on
identifying leadership styles that specifically foster non-material, trust- based
relationships rather than purely economic relationships. This focus can be most often
found in family business research, which aims to give deeper insight into
psychological aspects and ask whether family businesses can provide a blueprint for
built-in solutions on how to create successful companies (Davis, 1995). For instance
Colquitt et al. (2007) places high emphasis on establishing a so-called ‘common

9. 9
currency value’ to measure important antecedents for trust for different cultures. This
includes the notion of engagement, the strength of relationships through personal
rapport and reputation and the motivation to care for others. Those were commonly
found characteristics found in family-led organizations ranging from entrepreneurial
companies to small- and medium-sized companies as well as multinational
corporations (Davis, 1995). Within this field of research, the development of
stakeholder engagement, incentive alignment, and value currency creation is argued to
be an evolutionary process with implications for understanding organizational
behavior dynamics. For instance, bonding between leader and follower develops a
shared communication platform enabling a common understanding of business
objectives. Employees will better be able to gather and share formal and informal
knowledge if they do not fear harmful consequences from that action. In companies,
where trust is absent, relationships are characterized by an attitude of confrontation:
“me vs. you; us vs. them; by deep and hidden animosities rather than goodwill” (Lobo
and Dolke, 2007). In climates like this performance is shifting to lower level due to
energies going into “manipulation and protection rather than efficiency and
effectiveness” (Lobo and Dolke, 2007). Clearly, positive social exchange to build
relational trust is essential to organizational learning willingness and ability,
knowledge acquisition and dissemination as well as the generation of ideas.
Understanding the motivational cues across cultures demands time and patience,
which is hard to achieve in times of fast-changing and highly competitive markets.
Unlike homogeneous or mono- cultural teams, multicultural teams cannot refer to a
pre-existing identity because of their short- lived individual project-based life cycle
(Earley and Mosakowski, 2000). They develop and depend on a team culture of
straightforward rules, performance expectations and individual perceptions. Earley

10. 10
and Mosakowski (2000) further confirmed that an effective multicultural team has a
strong emergent culture as shared individual prospects facilitate communication and
team performance. This suggests that the positive effect and trust generated by the
perceived shared understanding can fuel performance improvement and boost team
effectiveness abroad.
2.2 Cultural awareness
Organizations that seek performance improvement on a global scale and use
opportunities in the global marketplace will face limitations “in attempting to transfer
organizational theories across cultures” (Casimir, 2006). Dynamics and environments
that have proven to be successful in creating trust in a mono-cultural setting may not
work in a multicultural workplace. Despite prior research, the importance of trust in
trust- enabling leadership and in-role performance remains an under-researched issue.
Partially, this is due to “the challenge in fully conceptualizing the potential mediating
effect of trust” as leader-follower relationships can occur in a variety of contexts,
including those pertaining to culture” (Casimir, 2006). The values and beliefs held by
members of a culture influence not only the behaviors of individuals within the
culture but also the extent to which specific behaviors are viewed as acceptable and
effective (House et al., 1999). In this section, the author elaborates on the general
challenges and opportunities of cross-cultural differences based on previous research.
Sub-questions at the end of the section will introduce conducted research in Vietnam
on how to enhance cross- cultural team convergence to build relational trust.
In an attempt to commonly define culture researcher Geert Hofstede, defines
culture as the following: “the collective programming of the mind that distinguishes
the members of one group or category of people from the others” (Hofstede, 1980).
Culture can include how people live and decide to live, role expectations, and child

11. 11
raising practices, attitudes about time or money, definitions of achievement, concepts
of aesthetics such as beauty, art, music and food among other things. Cultural
differences are most certainly belonging to the oldest differences perceived by human
kind. A culture exists of different layers that have varying degrees of visibility and
tangibility. This is often referred to the onion model of cultures and consists of layers
of symbols, heroes, rituals and values as seen in figure 1 in the appendix. For example
a culture’s religious customs can be explicitly communicated, while tendencies of
whether something is right or wrong are implicit and hard to communicate.
Symbols generally describe words, gestures, pictures, or objects that carry a
particular meaning, which is only appreciated and understood by those who share a
particular culture. New symbols easily develop over time, just as old ones disappear.
Symbols are also being copied from one particular group to others. Symbols are most
often taught in cross-cultural trainings as they are rather easy to memorize and do not
demand too big of a personality change in order to adapt. Examples involve the
learning of a new language, knowing the way to greet in another country or how to
hand over a business card. This is the reason why symbols represent the outermost
layer of a culture. Further, Heroes are people, past or present, real or fictitious, who
possess characteristics that serve as role or guiding models in a culture. Those do
differ in any country. Knowing the meaning of role models within a country can
increase the cultural awareness and understanding of certain employee reactions or
behaviors. Rituals are collective, shared activities. In everyday life and business they
sometimes seem superfluous in reaching desired objectives, but are considered as
socially essential. They are therefore carried out most of the times for their own
interest and desire. This involves especially religious and social ceremonies. The core
of a culture is formed by values. For outsiders, they are broad preference tendencies

12. 12
of certain state of affairs to others. For the same assumption, there will be different
tendencies on the good-evil-, right-wrong-, natural-unnatural continuum in different
countries. Most of the times, values remain unconscious to those who hold them as
they have been passed through multiple generations and thus are the deepest roots to
all outer layers (Spencer- Oaley, 1999). The greatest challenge of cultural
understanding is therefore to understand the very roots of a culture. This is where
great parts of every individual’s motivation lie. Due to people’s own lack of their own
cultural awareness, the understanding of other cultures is of an even greater challenge.
Neither can many cultural differences be easily discussed, nor be directly observed.
The level of difficulty increases if both parties are not aware of their own culture. The
cultural layers emphasize the complexity that lies in understanding and being fully
aware of a foreigner’s actions and explain the challenges managers face abroad. It
also points out the importance of personal and cultural awareness to bridge culture-
related differences (Adams, 1995).
Given a manager’s behavioral intention to understand a culture, cultural
awareness has a major impact on the success of cross-cultural undertakings. It shall
thus be further investigated. We will here define cultural awareness with reference to
Adams (1995). Cultural Awareness means to develop sensitivity and understanding of
another ethnic group. This involves internal changes in terms of attitudes and values.
Awareness and sensitivity also refer to the qualities of openness and flexibility that
people develop in relation to others. Cultural awareness needs to be seen within the
context of cultural knowledge (Adams, 1995).
In today’s business cross - cultural knowledge is often mentioned as a
prerequisite for success (Weiermair, 2000). Cultural knowledge can be seen as a
system of layers where cultural sensibility builds the outer layer, whereas cultural

13. 13
awareness builds the inner layer, similarly to the onion model above. Sensibility
differs from awareness in how it is implemented in the conscious and unconscious
state of mind of the individual. Sensibility draws on the ability to feel or perceive, to
have an intellectual perception alias the ability to see, hear or become aware of
something through the senses (Adams, 1995). Businesses invest great amounts of
personal and financial resources in the education of cultural sensibility. Here, so-
called cross-cultural trainings focus on behavioral determinants. This means, that they
provide a range of behavioral ‘to dos’ and ‘don'ts’ for the respective foreign country.
Those tools are of major importance to show a respectful, sensible attitude and
willingness to engage with the other party. The manager is able to sense alias hears,
sees, observes differences and through prior education is therefore able to react
according to the respective cultural norms and standards. Cultural sensibility opens
the door to cross- cultural communication and interaction though does not determines
the quality or depth of the relationship, i.e. cross-cultural understanding. If
international businesses aim to develop a lasting businesses abroad they have to dive
deep into the respective culture, gaining an intuitive understanding for their cultural
and societal cues and use their know- how and cultural savyness for their own good,
leveraging different inputs, creating a collaborative environment. Awareness instead
is more commonly defined as having knowledge as well as a deeper consciousness.
This awareness often requires a certain level of cognition of one’s own cultural
background to gain a deeper understanding of the present moment’s experience and
step back from judgments based on one’s personal cultural background. Basically this
implies that “every time one’s attention projects into judgment, memory or
anticipation, it constitutes a rejection of the adequacy of the present” (Farb, 2007).
The art to establish conscious cultural awareness is therefore to understand of how

14. 14
and how often self- judgments suggest itself by default (Farb, 2007). If leader and
follower were able to steer own biases towards a new culture, learning from each
other and creating cultural synergies would be facilitated. This cultural sensibility and
cultural awareness are ongoing processes and take time to become part of people’s
habitus. A congruent cultural diversity management for each employee going abroad,
especially when managing workplace diversity eases this challenging and long-lasting
task and is able to promote cultural convergence, which in turn facilitates relational
convergence. The connotation of ‘diversity’ implies it already: Social actors in all
possible settings are different in character and quality and by nature are not of the
same kind (Oxford Dictionary, 2009). Christensen & Overdorf (2007) thus propose to
approach a new market with a start-up strategy. This means that a company’s
established homeland strategy; structure and company culture may not be best within
the context of the new country subsidiary. In such case it is often better to approach
the new market by creating new best practices. Otherwise if established homeland
practices are applied without question, the company risks having to change its
approach not long after market entry. According to Hannan et al. (2006), a change in
the blueprint of employment relation in the early stages increases the hazard of
failure. Over time insufficient knowledge and inadequate understanding of each other,
will lead to “long lasting conflicts between international managers and local
counterparts and employees” (Quang et al., 1998). In the worst cases, this leads to the
failure of the business partnership (Quang, et al. 1998).
Following, in a culturally complex business environment, expatriate managers
are not only judged according to their technical and international business knowledge
and experience. They will also be judged on their cross- cultural soft - and leadership
skills. The general notion of cultural awareness includes cultural sensitivity to a

15. 15
degree in which the individual has an internalized understanding, that culture is
greatly influenced by societal customs, values, viewpoints and beliefs. Summarizing
in economic terms, the value proposition of the employer abroad is therefore partially
a function of the adaptability of the manager in a different country, just as the
willingness and proactive attitude in understanding the way of working and
communicating to get to his or her desired business objective. The importance of this
topic lies in the simple idea, that we as social actors are all part of a system. In fact,
we are not actors in a vacuum but rather a response to what we experience from the
outside and the action of other social actors. This is a crucial to know for strategic
decision- making and communication as these dynamic relationships come with
interdependencies. Thus, we need to understand personal biases in order to understand
and work with others (Hofstede, 1980).
Hofstede (1980) introduced five cultural dimensions to increase cultural
awareness and increase overall effectiveness in a multicultural context. His
motivation is based upon the drive to improve cross-cultural communication and with
it business strategies on the basis of mutual understanding. The cultural dimensions
Hofstede (1980) found within his international study are power distance,
individualism, and masculinity vs. feminity, uncertainty avoidance and long-term
orientation.
Power Distance concerns “the extent to which less powerful members of
organizations within a country expect and accept that power is distributed unequally”
(Hofstede, 1980). National cultures that demonstrated what Hofstede considers to be
‘low power distance’ are the countries in which there is a concern to minimize
inequalities. The less powerful in these societies tend to look to those with the
ultimate power to make decisions, and inequalities within society are overall more

16. 16
acceptable. This represents a tendency for the centralization of power and the
subordination of those with less power within businesses. Individualism is represented
by societies in which people look after themselves and their families. In every day
business this is often reflected in, employment contracts marked by hiring and firing.
More collective societies, people are more concerned for others and the culture. It is
based around the cohesiveness, bonding of groups, such as the family. Here, group
protection in exchange for loyalty is ranked highly. This tendency is reflected in
businesses as well as elsewhere in the society. In his 1980s research Hofstede cited
Ecuador and Indonesia as examples of collective societies. Masculinity or the
masculinity- feminity continuum refers to the degree to which gender roles are
distinct and adhered to within society. In high femininity societies, social gender roles
overlap. Both men and women valuing ‘feminine’ qualities such as modesty,
intuition, relationship building and quality of life above the more traditionally
‘masculine’ qualities of aggression, acquisition of wealth and competition. Japan, the
UK and West Germany scored high on masculine values. Uncertainty Avoidance
(UA) “concerns the extent to which the members of a society feel threatened by
uncertain and unknown situations” (Hofstede, 1989). In essence, this cultural
dimension measures a country or culture's preference for strict laws and regulations
over ambiguity and risk. High uncertainty avoidance scores imply further that there is
a fear of ambiguous situations. Germany scored relatively high on uncertainty
avoidance with a value of 65 compared to Japan with a value of 95. Also China with
85 lies in the upper range of uncertainty avoidance. Education often serves as a first
explanation for this. Remarkable, those are all cultures with a relatively stronger
emphasis on traditions in every day settings show higher values in the UA dimension.
The Long- term orientation dimension was included after the initial study in 1982 and

17. 17
includes such values as thrift, persistence, having a sense of shame, and ordering
relationships. Confucian work dynamism refers to dedicated, motivated, responsible,
and educated individuals with a sense of commitment and organizational identity and
loyalty (Bond & Hofstede, 1989). Its opposite, Short Term Orientation, stands for
embracing virtues related to the past and present, in particular, respect for tradition,
preservation of ‘face’ and fulfilling social obligations (Hofstede, 1980).
This paper is interested in contributing to further theory development about
how cultural differences influence relational trust in order to identify critical junctures
for multicultural HR strategies. The focus will be shifted to the following sub-
questions: First, what are cultural differences constraining the bonding between
follower and leader? Second, how do specific cultural differences have a greater
impact on trust- building leadership challenges? Third, what are leadership styles
supporting and fostering the building of relational trust to increase general
understanding for each other and make culturally diverse work groups striving for the
common goal? Fourth, What are most suitable communication strategies to bridge
perceived differences to advance the creation of relational trust? Last and fifth, how
do previous experiences of the leader in different cultures have an impact on trust-
building in the new cultural context?
3. Research Background
3.1. Personal Motivation
In qualitative research, the researcher is a vital factor. It is therefore relevant to
articulate the philosophical base upon which the study is based. The philosophical
beliefs regarding science involve ontology; the nature of reality, epistemology; the
relationship between the researcher and the participant, axiology; personal values

18. 18
influencing the research, rhetorical structure; use of language, and methodology; the
research procedures. Findings are thus driven by these beliefs and interpretation of the
author on it. Precisely, they have guided the formulation of the research question, the
data collection method, the analysis method, and will also guide the propositions
(Ponterotto, 2005). The author will therefore briefly outline a personal motivation on
top the literature review on relational trust and cultural differences and awareness.
This aims to support the inclusivity of the research into current multicultural
management discussions perspective and is likewise supposed to increase
understanding for the motivation to conduct research on this topic.
As elaborated in the literature review above, trust serves a bonding tool and
creates a meaningful environment for the parties involved. Though, this environment
is context- binding, i.e. environment- and people specific. In fact, management will
always depend on the socially and economically value it creates (Bloxham, 2002).
Human advancement through a wide set of new technologies and the general
convergence of global markets determines and demands a different idea of how to
plan, organize, command, coordinate and control today, i.e. the manager’s work.
Earlier, in times of mostly mono-cultural setting and industrialization the importance
managers’ practices were much more seen in creating a productive environment
including compliant and productive workers. After times of severe instability due to
wars and oil crises, industries and individuals were motivated to ensure stability and
efficiency in order to cover basic needs and enable financial security (Maslow, 1943).
Even though bonding was important, it was not prioritized due to its outside factors,
i.e. the context. In today’s international business world workplaces are meant to be
able to engage in a serious change management task asking: “How in such a
competitive and multicultural economy where entrepreneurial genius is the secret to

19. 19
success do you inspire employees to bring the gifts of initiative, imagination, and
passion to work every day” (Hamel, 2010)? Management of a multicultural nature
demands shifts in thinking and acting and goes beyond the single notion of managing,
overseeing projects. It demands the engagement with and for employees to understand
individuals with different set of values and backgrounds. With increasing dedication
and background in the field, the author more and more believes that the manager of
tomorrow brings by an understanding of necessary cultural convergence through
mutual understanding. Precisely, the manager of tomorrow is the one of a mindful and
listening character being able to go beyond own cultural boundaries and using the
notion of bonding, i.e. trust, to transform differences in opportunities for the business.
This led to the field study being elaborated onto in the next sections.
The next section will elaborate on the Vietnamese market to give insights into the
context of the study. Further, the methodology will include the data collection and
treatment, i.e. coding and an analysis section and resulting propositions.
3.2 Vietnamese Market
Especially countries of less economic exposure and yet unawareness of people
and culture seem to diminish the success of international assignments (Ralston et al.,
2006). In the next section, Vietnam’s economy will therefore first be briefly
introduced. Second, the impact of yet smaller economic exposure compared to China
will be discussed. Third, the author briefly introduces Vietnam’s culture relative to
the German culture. Vietnam has only been part of the global business community
since 1986, after opening up their country for international trade and severe foreign
direct investment (FDI). Germany, with a strong power in international trade as
leading export country was one of the first big investors in the past communistic
country. Despite of that, Vietnam is one of the ASEA countries next to Thailand,

20. 20
Malaysia, Indonesia and the Philippines who did as well as are seemingly to benefit
from bigger Foreign Direct Investments (FDI) throughout the next years. Prediction
surveys just stated that Vietnam is a strong competitor to China looking at labor
supply, skilled labor and a robust domestic demand. After its first opening in the
1980s Vietnam and the remarkable number of FDIs, they mean to stabilize and grow
his position as a likewise considered economics player next to China and Japan .
Additionally, a nation that has endured a century of being ruled by China and France
afterwards lasted three consecutive wars beginning in 1940 and a trade embargo in
1994, Vietnam still emerged as the country with the most optimistic people. 94% of
the Vietnamese population expects a good future (Statistics Publishing House, 2004).
A positive economic outlook supports this optimistic attitude, i.e. growth rates of
8.5% in 2007 before the financial crisis and on average 7.3% throughout the 1990s
(GIC, 2008; Statistics Publishing House, 2004). Further, around 50% of the
Vietnamese population is under the age of 27. Implications are a continuing
population growth as well as a large, dynamic and growing workforce experiencing a
more and more internationalized market structure.
A main fallacy in the discussion and research on cross-cultural leadership of
Western- Asian relationships is that many countries are being put within the same
cultural categorization as China. In 2006 Ralston et al. predicted that Vietnam
converged with and shows similarity to China, which is based on Vietnam’s past of
having been influenced in areas such as technology, knowledge, education and
Confucianism. This is especially relevant as China ruled Vietnam by around 1000
years between 111 B.C. and A.D 939. Also, their gained economic power over the last
decade fostered this impression (Statistics Publishing House, 2004). It is true, that
both China and Vietnam share the mere of traditional and value-oriented ways of

21. 21
living and working. Nevertheless, they do not share the same value set, background
and understanding of communication, team and group work as well as authority. In
fact, Ralston et al.’s findings in 2006 prove this. They found that “Vietnamese are
Vietnamese, and they are different from Chinese. This is a finding worthy of note
given the increasing activity between the West and Vietnam. One implication of
which Western MNCs should be aware is that this difference does exist, and in turn,
that they should realize that a cut- and- paste of Chinese Management strategies into
Vietnam may not insure success here” (Ralston et al., 2006). This fallacy brings up
two implications for cross-cultural leadership research in Vietnam. First, there has
been very little research conducted in Vietnam yet. Second, the generalizations of
clustering China and Vietnam into one cultural category causes a dysfunctional
communication and operation strategy in Vietnam, leaving leaders as well as
employees dissatisfied, clueless and wondering about the reasons what has gone
wrong, i.e. turnover behavior, loss of trust and authenticity, employee’s complacency
towards work. In this research the German and Vietnamese serve as an example to
elaborate on cross- cultural leadership challenges. German and Vietnamese culture
differs greatly in values, customs and their perceptions on professionalism and
business success. Nevertheless, cross-cultural research and training have yet not
found out what the major reasons for unsuccessful expatriate assignments are.
Notably, German businesses and programs are perceived as less based on national
interests (GIC, 2009). Furthermore, they are known to be innovative as well as for
high quality standards, i.e. Germany’s brand “made in Germany” is known all over
the Asian room and serves as a role model to foster economic stability and prosperity
in Vietnam. Previous argumentation shows that prerequisites already build a
constructive foundation for businesses in Vietnam. However, there have been very

22. 22
little contributions made to bridge the gap between the two countries in terms of
cultural understanding and communication. Despite of the categorization fallacy with
China from above, “there has been very little empirical investigation of management
practices in general” (Ralston et al., 1996). In this regard, the paper aims to enrich
academic as well as management insights for German MNEs conducting business in
Vietnam and showcase the importance of contextualization in multicultural
management. Specifically, the author highlights that the leader serves as the main
contributor to the social relationship development between German managers and
Vietnamese employees to overcome perceived cultural barriers.
4. Method
4.1 Data collection
Data was collected within a 1,5 month period in Ho Chi Minh City (HCMC),
South Vietnam. The choice of location was Ho Chi Minh City. HCMC is the most
important business region in Vietnam when looking at the number of total regions
with significant economic contribution to the overall GDP. Five out of the nine most
powerful economic regions for business lie in the South of Vietnam. Out of the 200
biggest companies in Vietnam, 101 companies account for the five regions. 54 of
those are situated in HCMC (Cheshier & Penrose, 2007). Interviews were considered
to be the most suitable instrument as it allowed the author to identify the greatest
challenges from the broad spectrum of overcoming cross-cultural challenges to build
relational trust. Furthermore, the interviews supported the following three points:
First, to discuss certain challenges in depth; second, to adapt the interview to the area
of expertise of the interviewed manager and third to adapt the interview over time in
order to address specific aspects which have been commonly highlighted by previous

23. 23
interviewees or have never been mentioned before. The sample includes n=17
interviews with German managers of small, medium and large-sized companies and
corporations living and working in Ho Chi Minh City. Four interviews had to be
excluded due to either bad recording quality or because the author decided that the
contributions made were not adding value to the research topic. The resulting sample
size is therefore n=13. All managers have at least two years of management
experience in their position. 50% of the managers have several years of other
management experience abroad, merely in other Asian countries, particularly Japan
and China. The choice of interview partners has been judgmental and often also based
on the snowball effect, which means that one interview partner recommended another
manager out of his network. The judgmental choice of interviewees was based on the
two dimensions, i.e. the personal and company background and their current
leadership position. Personal backgrounds include General Managers, Chief
Executive Officers, Lawyers and Consultants. Company background accounts for the
respective industry. The range of industries in this sample includes education,
consulting, banking, automobile, trade, renewable energy and engineering. The
interviews had an average length of one hour and eight minutes (67.58 min) and were
segmented into two parts. The first part the managers were asked to talk about the
different challenges based on the cultural dimensions. Over time, the author was able
to observe a clear pattern of highlighted cultural dimensions and further challenges
for the managers. Those highlighted cultural dimensions based on Hofstede’s five
cultural dimensions and other challenges have been established through the codifying
and conceptualizing the data based on the research method called grounded theory. A
non- disclosure agreement was made at the beginning of each interview, which gave
the author the opportunity to record every interview. To ensure anonymity, numbers

24. 24
replaces all names of the interviewees. Additionally, recordings have been noted
down as well and are available upon request with the author.
4.2 Analysis
In order to investigate the challenges within multicultural leader- follower
settings multicultural behavior research the author decided to use the constant
comparative method of grounded theory. The grounded theory was first termed by
Glasser & Strauss, 1967 and defined as “the discovery of theory from data”.
Grounded theory is the experiential reflection of acquired data to a certain topic. It is
often described by attributes such as holistic, naturalistic and inductive. The
responsiveness of research based on grounded theory is aimed at contextual values
determined by the investigator’s theoretical sensitivity, i.e. knowledge, understanding
and skill for the given context (Glaser, 1992). Here, it has been emphasized that the
variety of sources is important for the data collection to provide “a way to expose
variation and a way to establish conceptual frameworks” (Egan, 2002). In the case of
this study, it particularly supplied promising possibilities for “the development of
theoretical frameworks that emerge from research situated in practice and enhance the
Human Resource Development (HRD) theorist- HRD practitioner partnership in the
process of theory building” (Egan, 2002). Furthermore, grounded theory here was
used as the following: The author aimed to explore a cultural phenomenon and this
paper shall therefore be understood as a thorough exploration of contemporary cross-
cultural challenges between German and Vietnamese managers and employees,
respectively. By using the interviewing technique the researcher takes a real-world
way of looking at the problem of cultural differences in building relational trust
within a company and applies social and cultural understanding to it. The manager,
moved into the center as considered to be the expert on the topic of interest, defining

25. 25
the importance and relevance of the described problem at hand. The research design
helped understanding what is happening in Vietnam’s multicultural workplaces from
the manager’s point of view. Theory starts to emerge by comparing different data sets,
i.e. the different interviews with managers from various industries with each other and
continuously code insights, observe patterns across interviews and finally categorize
them (Glaser, 1992). Once saturation for one category was approached the author
formulated a proposition. All categorizations and therefore propositions aim to answer
and elaborate on the sub- questions from above. The data was handled by Strauss and
Corbin’s stage approach (1982), the so- called theoretical sensitive coding, as seen in
the coding sheets in the appendix. Visible in the appendix upon request the author
took each single interview itself and coded down first impressions related to the
directional keywords of the topic, i.e. trust, bonding, motivation, cultural differences,
power distance, uncertainty avoidance, masculinity, long-term orientation, cultural
convergence. At the beginning of each interview the interviewees introduced
themselves. In most cases, the interviewer introduced all cultural dimensions and
elaborated on the importance of trust to create a collaborative nature in the company.
They were then asked how they perceive the cultural differences and what the biggest
barriers are to overcome when aiming to motivate and bond with employees. Table 3
shows a general overview of all interview partners and their key inputs. Further, the
following propositions are proposing estimated action points to fill the gap between
cultural differences and relational trust. Likewise, thee are supposed to serve as
guiding thoughts and actions to overcome cultural barriers.
Continuing previous elaborations, trust is created through the matters of bonding.
Bonding in turn is based on the premise of convergence. In order to visualize the
cultural barriers to overcome a basic strategy in Change Management is supportive.

26. 26
The strategy first analyzes the status quo, compares it to the desired future state and
derives action points to bridge both. The author therefore first looked at the
differences, which most often were defined by the misunderstandings, frustrations and
daily challenges the managers would have. In the course of the interviews questions
on how to tackled those exact problems were supposed to finding out strategies to
change the current situation for good. Also the manager’s learning experience need to
be included here.
One HR manager shared an insight from one of his studies on employee retention:
“based on our surveys, turnover is about 40% in Vietnam
(…) the market is really fairly volatile when it comes to human capital.”
Manager #8 added which also reveals one of the major impressions the author gained
throughout the interviews:
“I think, international companies here in Vietnam have greater challenges in
realizing business goals such as in other subsidiaries, even with higher human
resource input.”
He later concluded:
“We may need to rethink the right leadership approach. Something needs to
be done”
Resolving, there is a demand for a leadership approach adaptive to the Vietnamese
context. This involves Change Management. The objective is to improve the
relationship between leader and employer to solve other challenges contingent to the
importance of relational trust. Here, the status quo are the three main cultural
differences mentioned above, the desired state is the relational trust assuming an open

27. 27
and honest exchange between leader and employee, a greater commitment and a
lower turnover rate in the long- run. Open and honest exchange, commitment or
loyalty, but especially accompanying turnover intentions are the greatest concerns for
the 15 managers in HCMC. Nevertheless, turnover intentions etcetera lie outside of
the scope of this study. Based on the literature review, i.e. the positive social
exchange discussion one can though assume that turnover behavior for instance
should be diminished. The author therefore proposes that a Change Management
perspective will be effective to outline action and performance indicators to overcome
cultural barriers for the sake of building relational trust.
P1: In order to overcome cultural barriers a change management perspective
supports the creation of relational trust, as specific action points help to
showcase the specific cultural differences of the two cultures.
During the coding and conceptualization phase, the interviews revealed a clear pattern
of what the greatest cultural barriers to a successful bonding and thus creation of
relational trust are. The analysis reveals that power distance, uncertainty avoidance
and individualism are the dimensions impacting the creation of trust the most. In 10 of
the 15 (~ 70 %) interviews managers referred back to the three dimensions when
elaborating on bonding, motivation, commitment and turnover behavior. Long-term
orientation and masculinity were also mentioned, though mostly in combination with
the latter dimensions, i.e. enforcing them.
Power Distance was mentioned by 70%, i.e. 10 of the 15 managers as a severe
difference to their previous management experiences in the Western world. The
implications of power distance were not only that the unequal power distribution was
accepted, but also desired. Vietnamese employees expect a hierarchical structure in

28. 28
which reactive task fulfillment is dominant over proactive problem solving. Instead,
proactive problem solving would be a common characteristic in western companies as
part of flatter hierarchies. In the course of the interviews the author understood, that a
common ground would only be possible by being more of a supervisor on an
operational level than a General Manager. From a leadership perspective this implies,
“that the manager always need to be one step ahead” and “work as hard as the
employees” (Manager #1) to earn respect. This is a further mean to foster bonding
between both, leader and follower, which was also closely related to achieving
operational excellence. Reaching operational excellence would depend to high extents
on providing clear task outlines, clear communication and high levels of management
involvement in daily business procurements. Instead of being focused on the
business’ strategy, known as a common job description in the western business
environment, leaders here would need to appreciate the direct contact with their
employees, their role model status and learning about effective strategic
communication to create a common ground and understanding, fostering the
importance of positive social exchange and bonding in the Vietnam. As manager #1
further elaborated:
“I had to realize that I had to be much more of a boss than I was used to (…) In fact,
to really grow this business, I am the only one who can build this up here. (…) I am
role model and I have to use this hierarchy thinking for the business’ greater good
(…).”
Proposition 2a therefore argues that:
P2a: Relational trust in Vietnam depends on how well the leader is able to lead
on the premise of desired power distance.

29. 29
In order to overcome cultural barriers, the manager also needs to focus on uncertainty
avoidance. By definition uncertainty avoidance is society’s tolerance for uncertainty
and ambiguity. It is an indication as to what extent the members of a culture feel
either uncomfortable or comfortable in unstructured situations. Hofstede (1989) found
out that Germany scores reasonably high, whereas Asian countries score reasonably
low on uncertainty avoidance. However, based on the interviews this does not hold.
Managers have stated higher levels of uncertainty avoidance on a company level for
their Vietnamese colleagues than in a German environment. Their Vietnamese
colleagues would have a stronger fear of making wrong decisions and being less
respected or fired as a result. The high desired power distance could thus be regarded
as a means of security from making mistakes. They explained that a leader should
“avoid surprises” (Manager #2), that “they like to know what is going on and when”
(Manager #3) and “basically to consider the company as a family construct to lower
fear” (Manager #1), which means to lower uncertainty in the workplace. In four
interviews managers were further referring to their experiences on supervision versus
control related to uncertainty avoidance. Manager #3 pointed out, that “they
[Vietnamese executives] do not want to be controlled, but they want to be
supervised”. The author was able to find out more about this distinction by looking at
the dynamics between power distance and uncertainty avoidance as well as
uncertainty avoidance by itself. Supervision is defined as a critical watching and
directing or overseeing of task or project to ensure it is done properly (Dictionary,
2013) Within supervision power of the beholder is smartly used, whereas by
definition control is defined as “exercising authoritative or dominating influence over
someone” (Dictionary, 2013). The notion of control would very much interfere with
the “family construct” mentioned above. Throughout the interviews it became clear

30. 30
that control would harm the open and honest exchange with each other, as it increases
the fear of being wrong with their work. Proposition 2a therefore claims that the
degree of uncertainty avoidance would translate into how much the leader is able to
supervise on the premise of the three previous elements, but not control his or her
employees. It seems Vietnamese are more encouraged to bond with their leader by
being involved and work together, than being dominantly pushed into a certain
direction. This fine difference reveals an aspect, which the author discussed and
abstracted from the interview with manager #9: Given the desired power distance and
the revealed fine distinction between supervision and control the author argues that
Vietnamese are more drawn to ‘with-powerment’ instead of em-powerment. Whereas
the prefix em- implies that power is entirely ‘covered’ by the empowered, the prefix
‘with’ shows that in the case of Vietnam uncertainty avoidance is not bridged by
giving the employee power to decide on his own, but rather power to co-decide. This
means to lessen the fear of making wrong decisions. Proposition 2b therefore argues:
P2b: Relational trust depends on how well the leader is able to supervise, but not
control the employees, i.e. lessen uncertainty avoidance.
In between the previous elaborations communication has been commonly mentioned.
In fact, cultural differences are most likely to be bridged by using an open
communication with each other. As argued above, power distance as well as
uncertainty avoidance may harm collaboration in the first place. Strategically,
communication therefore becomes an integer part of and additional tool in bridging
cultural differences. Moreover, the Vietnamese orientation towards collectivism
builds a promising ground to bridge differences through communication. The
collectivistic nature was found as a remarkably important cultural dimension of
Vietnam in 12 of the 15 interviews. Experiences of the managers indicate that

31. 31
employees identify themselves rapidly with their given environment as “it is in their
ideology to be committed to a group” (Manager #13). Also, communication was
experienced to be the best tool to combine most aspects in multicultural leadership
and management, but especially to build relationships and enhance learning for both
parties. Communication creates situations “in which you are very close to your
employees. They like to see that you are hands-on and close to them. Those are
situations when you build commitment” (Manager #14). Success in business requires
much more than basic communication skills. There is a need to develop
communication skills that allow sharing information accurately as well as building
constructive relationships. Collectivism can help to support this. Collectivist societies
are highly interdependent. When decisions are to be made, there have to be
consultations on each other’s ideas and opinions. This became especially clear when
managers would report about the increased turnover after holiday, which would be
spent with the family. When the family would consult with each other and decide that
this employment is not appropriate anymore, employees would quit the job right after
the holiday. Within this context, one manager elaborated on the necessity of policies
and regulations especially with new employees to make them aware of the collateral
damage for everyone involved. Following, if both parties understand the implications
of possible collateral synergies, their collectivistic nature can be used as a trust
enabler through open communication. This enhances sharing knowledge and
information and gives rise to adapt multinational strategies to the Vietnamese context.
The author perceives the leader as the main social actor in developing the relational
trust. This argument has already been backed up by the argumentation on desired
power distance above. Manager #15 also emphasized this and the importance of
involvement through clear communication. He told the author, that he has not

32. 32
experienced high levels of employee turnover and has observed a steady bonding
among his employees as well as with his employees:
[based on a discussion on employee turnover and talent management in
Vietnam] “They [Vietnamese employees] are perceived short-term thinkers.
But that is only fostered through the mere of current [international]
management actions (…) If you want them to be interested in the sustainability
of the company use their family focus. But if you only stay for 3 or 4 years they
will never understand.”
What is meant here is that an expatriate culture where managers are generally sent to
Vietnam for 2-3 years only opposes the Vietnamese idea of a family culture and
hinders a long-term focus to build relational trust. Proposition 2c proposes, that by
engaging employees in decision processes and continuously engaging them in the
process as well as encouraging them to participate here, the leader is able to replicate
the family decision- making processes and build trust through collectivistic
communication internally.
P2c: Relational trust depends on how well the leader is able to use strategic and
clear communication strategies, i.e. use collectivism for bonding.
After a thorough investigation of the dominant cultural dimensions in Vietnam, power
distance, uncertainty avoidance and collectivism the author observed that the major
barrier for managers was not that they did not accept the implied cultural differences
between them and the Vietnamese. Instead, they were much more challenged by the
shift in personal thinking and leading. The German business culture is marked by a
trend towards lower hierarchies, proactive self- thinking and acting when solving
tasks and problems. Instead, in Vietnam “liberal decision- making freedom has to be

33. 33
officially announced by the leader” (Manager #4). This means that translating the
cultural differences into an appropriate leadership framework is necessary. After
categorizing the three mentioned cultural dimensions, the author observed patterns of
a specific desired leadership style emerging – paternalistic leadership. Paternalistic
leadership is a leadership style in which the leader guides subordinates in a fatherly
manner. Previous research has already proven that paternalistic leadership styles are
most common in cultures of developing countries and likewise tend to be higher on
power distance (Wu et al., 2102). Effective leadership in Vietnam is highly status-
oriented and directive. Yet it requires a high level of interest and sometimes-active
involvement in subordinates' private lives (Dorfman , 1998). The basis for this is the
Confucian way of living. Here, humanity sits at the core of everyday interaction with
each other. Respect, traditions and integrity for and with each other are crucial, which
translates into the fact that family and relatives are being prioritized over all other
relationships, including work (Xuewu, 2008). Interviewee #5 pointed out that “in
business conversations in Vietnam, family is covered first, in Germany we are going
straight to business”. Managers pointed out that mutual understanding, loyalty and
commitment are often based on whether “a manager is interested in family matters of
their employee”, “supply good working conditions”, “create an environment of
stability”, “be part of their wedding”, “create lunch traditions to sit together”
(Manager #1, #3, #5, #10). In order to build relational trust it is important to know
about the values a specific culture is attached to. Thus, connecting the three cultural
dimensions with the most suitable leadership style support a culture- specific view of
leadership. Past research has already argued that unique cultural characteristics such
as language, religion, and values call for distinct leadership approaches in different
societies, instead of using universal leadership strategies (Dorfman, 1997). Research

34. 34
can support this. Clarifying prioritized Vietnamese cultural dimensions and values
helps leaders to create environments conducive to building trust from the beginning
onwards and leaves him with the right behavioral intentions. Proposition 3 therefore
argues that:
P3: The cultural dimensions of Power Distance, Uncertainty Avoidance and
Individualism reason that a paternalistic leadership is most effective when
aiming to build relational trust.
In order to emphasize on the appropriateness of the paternalistic the author
likes to include a rather political and economics argumentation managers made.
However, this argumentation concerns the understanding of the Vietnamese culture to
bridge cultural differences and lays the foundation for relational trust. Conducting
business in the Vietnamese market means that managers “have to understand that the
business world here in Vietnam is marked by family business (…) This is due to all the
years of closed markets” (Manager #17). The years of closed market impose that the
past was mostly marked by small and medium- sized enterprises, which were and are
run by families. Also, managers would state that due to political turmoil, lacking
political structures and unstable markets families would become very entrepreneurial.
In times where the country would not be able to supply stability, especially after the
Vietnam War, the creation of businesses was necessary for own survival and to cover
basic needs. The family orientation in Vietnam should therefore not only be seen as a
cultural value, but also as an economic necessity from the past. Manager #4 talked
about this as well:
“It is challenging to be part of a bigger whole. It is politically not encouraged.
It is not encouraged by society. And it is not encouraged by the values of

35. 35
Confucius, where the family is the priority. It becomes clear how the first
bonding to build up relational trust is really based on creating family
structures (…) but that does not make it any easier.”
The width of reasons for paternalistic leadership in Vietnam shows the necessity to
adjust own leadership styles to the respective country. Proposition 4 therefore argues
that:
P4: Paternalistic leadership has a positive effect on the leader- follower
relationship between German company managers and Vietnamese employees out
of cultural and economic reasons.
In the course of the interviews the author recognized a new pattern to build relational
trust. A new dimension within the change management strategy for cross- cultural
leadership is time. The author found, that conscious time management is important for
effective bonding. Time management refers to recognizing altering needs of
employees over time and the management of employee’s talents. Especially, in MNCs
based in emerging markets the local employees’ learning curve is steep. Being
exposed to a different culture within their own culture, they soon will adapt to a new
mindset and will differ from other co-nationals (Caprar, 2011). Cultural differences
will decrease. The interview with a German- Vietnamese manager has shown, that
Vietnamese employees in German firms are receptive for new learning opportunities.
They are aware of the better prospects and appreciate the “efficient, organized and
qualitative work Germans are pursuing in every day business” (Manager #6).
Manager #3 contributed to this with: “Vietnamese employees are fascinated by the
ability of Germans to abstract things and get it organized until it is done”
Also Manager #6 contributed:

36. 36
“As a manager here you should not use a copy- paste strategy. But take
advantage of the positive ‘made- in- Germany’ reputation. They will want to
listen to that.”
Though as in daily conversations, the Vietnamese value personal conversations over
business conversations when they get to know each other. This has implications for
the validity of paternalism in the leader- follower exchange when bridging cultural
differences to build relational trust. The Vietnamese culture appreciates reliability, a
care- taking attitude of the leader. The leader serves as a role model. This is different
from effective leadership approaches in Western management. However, building
bonding momentum through paternalistic leadership characteristics will be more
effective in the early day of the manager’s assignment to build a common ground with
each other and show interest in and an participative attitude towards the Vietnamese
employees. Based on the previous literature review, it can be assumed that focusing
on building the LMX from the beginning onwards increases the probabilities that
relational trust will be built. Further it can be assumed that lower turnover behavior;
commitment and loyalty will likewise be positively impacted. Proposition 5 therefore
argues that:
P5: Paternalistic leadership will be most effective for the relationship between
cultural differences and relational trust when pursued consistently when a new
expatriate leader arrives.
The next proposition will also elaborate on the time dimension in cross- cultural
leadership in Vietnam. During the interviews a shift in the appropriateness and
elements in the paternalistic leadership approach could be observed. Next to the
provision of good working conditions and a guiding and caring attitude of the leader,

37. 37
12 of the 15 managers (80%) referred to the “importance of learning opportunities to
create an interesting environment for the employees” (Manager #10). In the course of
the interviews it became clear, that the provision of a learning environment is going
beyond the guidance within the paternalistic leadership framework. The leaders would
most often state it as an addition to the discussion on managing cultural differences.
This especially holds for the younger professionals with a degree in higher education.
Those still belong to “a minority group of scarce talent in Vietnam” (Manager #10).
The international exposure creates a differentiation among locals. Foreign-locals, the
local employees working in a MNC, will want to participate in the business
development as well as stimulate own growing social needs in an international
business environment. Whereas in the beginning “you are in the [Maslow’s] basic
need pyramid level and you do not care about strategic goals and achievement as you
just want to survive tomorrow” (Manager, #15), the international exposure enriches
the employee’s personal horizon over time, which the leader can use to bond with his
or her subordinate. Manager #15 also experienced that clear career outlook programs,
which would had a positive impact on the commitment of their employees to stay:
“Career plans yet helped a lot to create loyalty from the beginning onwards.
We basically talked to them and said ‘this can be your career path, this is
what you can do in 5, 10, 15 years’.”(…) “They enjoy, if they see they can
learn and grow. Though over time, they look what the track records of the
company are. Do they send people abroad, are there self-development
opportunities?”
Thus, there is an importance of recognizing and nurturing different fellowship
demands. This is crucial to nurture employees in their personal development and
satisfy them. It creates a win- win situation for both parties. If the manager provides

38. 38
an opportunity- rich environment combined with the guiding paternalistic leadership
attitude, employees are more likely to embrace these opportunities:
“You have to provide meaning, but also boundaries and rules. We explained them at
the very beginning: This is where we want to be in 2-years time and they saw it is
happening” (Manager, #17)
It can therefore be proposed that paternalistic leadership will remain effective for
bonding over time, if the leader understands to provide learn and growth opportunities
particularly in an international environment.
P6: Paternalistic leadership will be less effective when employees do not find self-
development opportunities, such as trainings, abroad experiences as well as
monetary incentives over time.
The author found an additional relevant element to overcome cultural barriers and
build relational trust within a multicultural workgroup. During the interviews the
managers were often referring to the education system and its fallacy in providing the
necessary cognitive abilities and skills for diverse workplaces and for the sake of
cultural convergence. One manager stated openly “they [Vietnamese students] are
basically taught not to think”, which implies that operations are based upon the
notion that “If he [the leader] says do A,B,C you do A,B,C and not more” (Manager
#11). The author aimed then to investigate the core of this issue. In fact, eight
managers referred back to the current education system in Vietnam and referred to it
as the root of a low level of pro-activism, problem-solving attitude and other desired
traits in employees. Such lacks in competence would have to be overcome by MNCs.
It leaves them with great amounts of training efforts and costs to build more
proactive, self- managing and problem-solving colleagues. The emerging category

39. 39
here was that there is a need for “cross-cultural code switching” for employees as well
as for employees. As people get used to work with different cultures on a longer- run
basis, they tend to have a shorter adaption phase and are able to deal with cultural
differences, i.e. cultural heterogeneity more constructively. This so- called cross-
cultural code- switching (CCCS) was initially termed by Molinski (2009). CCCS
deals with the “psychological challenges of adapting behavior in foreign cultural
interactions”. Molinsky (2009) proposed that through “socialization in a particular
cultural setting, individuals internalizes norms for appropriate behavior in specific
interactions” and are therefore able to read cultural cues more easily than those
without CCCS ability. Combined with the awareness of the previous propositions, the
accumulation of previous experiences helps to be able to deviate from “accustomed
behavior in one’s native culture in order to engage in behavior appropriate to a foreign
culture” (Molinsky, 2009) more easily. HRM practitioners as well as HRM
researchers here often refer to a needed global mindset. Reviewing the interviews
with the managers, the author was able to observe a similar need. Managers would
clearly benefit from younger employees with experience abroad, whether through
studies, internships or employees with previous work experience abroad (Manager #6,
#7, #10, #11). However, the same holds true for the managers themselves. Expatriates
with previous work experience abroad mostly in the Asian room felt more
comfortable, patient and tolerant in bridging cultural differences. Having been
exposed to another culture before, those managers would be able to read cultural cues
faster. With an increasing level of cultural- and self- awareness, managers seem to be
able to listen and react upon the employees’ needs more effectively. Cultural
awareness and self-awareness of managers with previous experience abroad
resembles a greater sensibility and empathy for culturally difficult situations

40. 40
(Manager #7). As Manager #14 stated at the end of his interview, “it demands a very
strong character to be culturally flexible and still demonstrate an authentic self”.
Further, patience is an indicator of how fast managers would be able to “adapt to the
market and work around their business objectives within the cultural constraints”,
which demands a “mindset based on flexibility and curiosity over judgment”
(Manager #11).
The final proposition therefore argues that:
P7: Previous experiences abroad moderate the relationship between cultural
differences and relational trust as it supports cultural convergence through
cross- cultural code switching.
Based on a change management perspective, the extracted propositions of the research
study in Vietnam aim to showcase the importance of appropriate leadership as well as
current human resource tasks for international businesses aiming build relational trust
when conducting business in Vietnam. The outlined propositions draw a clear focus
on the leadership side of bridging cultural differences. The author likes to point out
that these propositions are based upon the idea of cultural convergence in the most
positive sense. Neglecting the notion that cultural convergence implies giving away
parts of the own cultural identity, the author aimed to make a contribution towards
strategic cultural convergence.
5. Discussion
Research on multicultural organizational behavior has been under thorough
investigation ever since falling trade barriers made it possible to let national
businesses become global. Cross- cultural differences became an increasingly

41. 41
important topic to researchers, but mostly part of the daily business agenda of sent-
abroad managers. In a new culture, the manager is not only exposed to new rules,
legislations, but mostly to a workforce who has a different value set and background.
Such as motivational cues differ among different people, the more we can expect the
motivational cues to differ among different cultures. In order to bridge cultural
differences to work with each other in multicultural workplaces the emphasis on
building stronger relationship based on trust become a strategic leadership task.
Relations based on trust serve as an effective bonding tool and as a leveraged form of
motivation, implying a greater acceptance of differences to overcome cultural
barriers. However, the discussion has yet not made greater contributions on how to
overcome cultural barriers on the basis of the actual differences. In this study, the
leaders’ challenges were used as starting points to find appropriate context- based
solutions. Generally, this approach is supposed to open the leader’s mindset to view
differences from a change management perspective. The difference between the status
quo and the desired state depends on their strategic intent and behavioral intention as
elaborated above. In fact, the leader may become the change he wants to see in this
yet asymmetric relationship. In this research, paternalistic leadership was proposed to
be the best leadership strategy to bridge cultural difference and build relational trust.
Besides the best leadership proposition, the author further argued that that a mix of
soft skills, i.e. paternalism and hard facts would create the best trust- based
environment. Hard facts define the self- development opportunities, i.e. trainings,
abroad experiences etcetera. Effective retention strategies are to support employees’
efforts to improve themselves. This can become more valuable to employees than
higher compensation offered by other companies because it keeps their skills
competitive. It also demonstrates employees, that their company is willing to invest in

42. 42
them, which can influence their commitment positively. This holds especially for
cultures with a desired power distance and great affection towards collectivistic
actions, which this paper also proposes. In fact, if one is not aware of the company’s
weaknesses, it is questionable whether they will ever be addressed. HR Change
management (HRCM) processes allow effectively identifying and measuring
performance gaps by evaluating employees’ performance of goals and demonstration
of key competencies in the international business environment. This data drives action
to address performance gaps at the individual, departmental and organizational level,
and then monitor the effectiveness of actions in terms of improved performance. One
may term those derived or contextualized performance drivers as Talent Key
Performance Indicators (TKPIs). They help to create a culture involvement as well as
of continuous improvement and development. It also helps to prevent performance
challenges in any part of the business from going unnoticed or unaddressed.
5.1 Limitations and Future research
The cross- cultural research in Vietnam also shows limitations. On a
systematic research level, the research shows limitations in its size of the sample, a
possible perception and subjective bias and empirical significance. The discussion on
the three limitations will then also lead to a brief elaboration on future research
respectively. First, the sample size in qualitative research may be chosen differently.
A known rule of thumb for research usually considers a sample of 30 participants or
more. Quantitative studies strive to do random sampling, whereas qualitative studies
often decided to do purposeful or criterion-based sampling. Generally, samples for
qualitative studies are smaller than those used in quantitative studies. The reason is,
that “there is a point of diminishing return to a qualitative sample—as the study goes
on more data does not necessarily lead to more information” (Mason, 2010).

43. 43
Especially in the coding process within grounded theory, the occurrence of another
piece of data, i.e. the code, is what is relevant “to ensure that it becomes part of the
analysis framework” (Mason, 2010). The author observed a cultural phenomenon, in
which frequencies are considered to be less important, than gaining a broad
understanding of the complexity around the topic. Also, qualitative research is labor-
intensive. An analysis of a large sample, i.e. between 30 and 500, can be time
consuming and simply unfeasible. In his research of 2010, he found out that a sample
size of 31 should be used as a reference point to leave the researcher with enough data
to learn from it. In this case, 17 interviews were held. 13 interviews were finally used
constitute the sample size. Based on the reference sample size of 31, 13 interviews
need to be considered as a limitation. Future research should look into interviewing a
larger sample to see whether the impressions of the author still hold. Involving more
interested researchers would help to conduct larger- scale qualitative research
projects. Second, because only managers, but no Vietnamese employees were
interviewed, the research includes a perception bias. Perception biases are grouped
into human cognition biases and are defined by “people's stereotypic beliefs about
other groups, and their affiliations with their own in-groups, color their perceptions
and judgments” (Pronin, 2006). However, the results of this research should be
regarded in the light of the manager’s experiences. Also, the author tried to translate
challenges of the managers abroad into opportunities to bridge the cultural gap. The
author’s perception is similarly based on own judgments concerning the propositions
she would formulate. Additionally, due to a limited amount of time in Vietnam of 1,5
month and the restricted accessibility to Vietnamese employees the author decided to
only focus on experiences of the managers. For research, it will be interesting to look
into the dynamics and perceptions of both parties and eliminate stereotypes. This

44. 44
would enhance the transparency of that relationship and outline clearer action points.
Another cognitive bias includes that the researcher had the same nationality and
cultural heritage as the managers interviewed. Both parties are German. On the one
hand this is an advantage as bonding was facilitated. On the other hand, the researcher
might have made some assumptions and did not discover more possible strategies on
the basis of cultural differences, as her view was not objective enough.
Finally, this research does not supply any empirical evidence. Qualitative research
data is based on human experience, which gives rise to greater details and depth in
complex research questions such as a cultural phenomenon. This makes it sometimes
more compelling than quantitative research data. Nevertheless, qualitative data is also
characterized by the rigor of the researcher and interviewees. This makes it hard to
assess and demonstrate. The lack of a structured quantitative analysis implies that
statistical significance cannot be provided. Future research may therefore consider
translating the outlined propositions into questionnaires and conducting quantitative
research on it. On of the advantages, but likewise disadvantages of quantitative
research is that it becomes generalizable (Mayring, 2007). Therefore, the author likes
to emphasize on the power of the context- based findings and deeper insights into the
dynamics of leadership in Vietnam, which would require a skillful and experienced
researcher.
6. Conclusion
Multicultural Leader- follower relationships belong to the most challenging.
Especially for the leader it involves to be able and willed to continuously build a
coherent local employer value proposition (EVP). By establishing a business abroad
managers have to reconsider that human capital is their strongest asset as management

45. 45
practices have not been well established yet and might differ in the new cultural
context.
The exploration of Vietnam’s culture shows that it is difficult to understand in many
aspects and that a better understanding and awareness of their own culture can help
key executives and their respective companies to be more successful in creating
lasting relationships with their employees. Across interviews, it was remarkable how
again and again contradictions were found that also key executives could not explain.
Equally varied was the success and satisfaction with which interview partners handled
their respective companies or departments. Some seemed to have discovered the most
outstanding learners in the world amongst their employees, many others were faced
by lazy men who did not seem to want to work at all. Generally, managers would
often switch between the internal and external influences, such as employee
motivation and would then switch to the fallacies of the education system and the
unpredictable market due to its fragile political system. Most key executives however,
were enthusiastic about the challenge they had chosen or had been given when
coming to Vietnam. They found it interesting to look at Vietnam through the frame of
cultural differences and think about possible strategic solutions to overcome those and
build relational trust, breaking down what would otherwise have caused an overflow
of information to consider. As already discussed in the analysis, much lies within the
hands of a leader in Vietnam. This is a conclusion that many interview partners as
well as the author herself could not as easily draw for Germany. Whether for
businesses or individuals I can only highly recommend Vietnam as a location of
dynamism, change and realization through a culture that challenges many life
assumptions.

46. 46
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52. 52
8. Appendix
1. Onion Model of cultural layers (Spencer- Oatey, 1999)
2. Coding Description for Grounded Theory
Stage Purpose
Coding Identifying anchors that allow the key points of data to
be gathered
Conceptualizing Collection of codes of similar content that allows the
data to be grouped
Categorizing Establishing broad groups of similar concepts that are
used to generate a theory
Theorizing Collecting explanations that explain the subject of the
research

53. 53
3. Basic Information Sheet – Interview Partners
Interview
partner
Industry Position Years in
Vietnam
(yrs)
Previous
experience in
Asia (e.g.
China, Japan)
(YES, NO)
1 HR General
Manager
5 Yes
2 Service
(Advocacy)
Associate 8 No
3 Chemicals/
Trade
CEO 15 No
4 German
Consulate
Diplomat 3 Yes
5 Automobile General
Manager
2 Yes
6 Renewable
energy
Associate 2 No
7 Trade,
Gastronomy
CEO &
Founder
10 Yes
8 Banking General
Manager
8 Yes
9 Banking General
Manager
45 Yes

54. 54
10 Education General
Manager
10 No
11 Banking General
Manager
12 Yes
12 Education Associate 2 Yes
13 Automobile CEO 6 Yes
14 HR CEO 9 No
15 Engineering CEO &
Founder
6 No
16 Postal Service CEO 9 Yes
17 Automobile General
Manager
6 Yes
Percentages Service (HR,
Advocacy,
Postal) = 24%
GM = 41 % Average =
9,294 yrs.
Excluding
Interviewee
#9 (german-
Vietnamese):
= 7,0625
yrs.
YES = 65 %
Automobile =
18%
CEO = 35 % NO = 35 %
Education = Associate =

55. 55
6% 18%
Banking =
18%
Diplomat = 6%
Engineering &
Energy =
4. Theorization/ Propositions
Category Elements/ No. of Interviews mentioned in
Power Distance High (12)
Interview partner recommends decreasing
power
distance (5)
Feedback to superior is low (4)
Determines decision-making authority (10)
Societal values (Confucius) are the reason (5)
Uncertainty Avoidance Economic growth and will to participate in it
are
higher- risk behavior outside of work (5)
Is low (4)
They try to avoid uncertainties (6)
Embrace change when added-value is seen
(4)
Fear to make wrong decisions and loose face

56. 56
(7)
Is high (8)
Collectivism A cohesive group is important (10)
Loyalty is very low (10)
Company is abstract/intangible (8)
Pride to work for western company high (6)
Individualists (5)
Loyalty is low due to lack of well-educated
labor (4)
Loyal to superior (4)
Family has highest priority (10)
Loyalty is high (5)
Career perspective matter of bonding (8)
Paternalistic leadership Feedback to superior is low 4
Fear to make wrong decisions and loose face
7
They try to avoid uncertainties (6)
Family has highest priority (10)
Pride to work for western company high 6
Time dimension (Need management) Not enough to supply only good working
conditions (3)
Opportunity cost to switch for more money
(5)
Adoption to multicultural setting (2)
Higher education degree (3)
Self- development opportunities Career perspective matter of bonding (8)

57. 57
Pride to work for western company high (6)
Increased turnover when better opportunity
(14)
Bonding through training (5)
Cross- cultural code switching Education lacks international business focus
(7)
Previous experiences (9)