Managing change in Vietnamese state-owned enterprises: What is the best strategy?

Abstract

Reforming the state-owned enterprise (SOE) sector has been the key goal of the economic renewal (Doi moi) program in Vietnam. However, the distinctive challenge facing Vietnamese SOEs is how to change management practices founded within the context of traditional socialist ideology. Specifically, the dilemma is how to introduce more innovative and entrepreneurial management approaches while retaining Marx's labor theory of value as the underlying ideology. Although the need for economic renewal is widely accepted, at this stage of the reform, individual commitment to the traditional model of management still has strong political and social justification at the ideological level.This paper argues that the fundamental job of managing change is shifting individual commitment away from the traditional model to a new ideological model more consistent with the economic development needs of the country. Theoretically, the heterogeneity of commitment to the traditional model suggests there are people who would pioneer the change and people who would be less open to the change. One consequence of the labor theory of value is that people who are less open to the change hold positions of power. As a result, the conventional approach to managing change, which suggests that change champions articulate a clear vision and goals and then sell people based on the vision, may not work. As an alternative, an incremental approach to change using behavior commitment is proposed. © 2003 Published by Elsevier Inc.