The traditional ideology of senior management: obstacles to entrepreneurship and innovation in the reform of state-owned enterprises in Vietnam

Abstract

The radical economic reforms sweeping through former socialist countries over the 10–15 years have created the need to transform state-owned enterprises (SOEs) into market-oriented companies. In the specific case of Vietnam, this is a challenging process, as a number of managers and workers still unconsciously subscribe to a traditional management ideology. Based on interview data from seven SOEs' top managers, this paper argues that SOEs' traditional management ideology needs to be changed if economic reforms are to be effective. As the ideology tends to be unconsciously held, rational learning has little impact. Thus, company privatisation and management re-education – the most common approaches in SOE reform – cannot by themselves create entrepreneurial and innovative managers. Instead, there is a need to create opportunities for a new generation of managers to be in a position of corporate power and lead the change.