Modeling the external business environments for the Vietnamese construction SMEs in a transition economy

Abstract

Vietnam has been shifting from a centrally planned economy with subsidy schemes, to a socialist-oriented market economy with multiple economic components. The internal dynamics and external pressures have caused many changes in the environment for small and medium size construction enterprises. This research models the external environment in order to aid understanding of the strategic management of such contractors in the construction industry of Vietnam. Semi-structured interviews of senior managers were combined with a mailed questionnaire to collect data. Seven major concepts were found to emerge including the economic administration of the country, the legacy of the old system, changes in society, nature of the workforce and the variety of business styles found. The research results show that the behaviour of key stakeholders has a major impact on the strategic/competitive behaviour of the concerned firms and their profitability.