The business of privatisation: an examination of the transformation process of Vietnamese state-owned enterprises (SOEs) into privatised corporations

2017-02-21T00:17:53Z (GMT) by Nguyen, Hong Phong
Following reform waves in Central and Eastern European (CEE) countries and China, Vietnam started its State-Owned Enterprise (SOE) reform right after ending the war against American troops to reunite the country in mid-1975 (Geogre, 1995). Vietnam did gain some remarkable achievements in its reconstruction and development process. However, the latest SOE reform which introduced and applied the shareholding system in the twenty-five largest SOEs faced an initial failure and was postponed until further notice (Quan, 2011). With the intention of exploring and understanding key reform drivers and challenges facing Vietnamese SOEs in their privatisation processes, this study focuses on two questions: (i) “What are the key drivers facing Vietnamese SOEs in the privatisation process”, and (ii) “What are the key challenges facing Vietnamese SOEs in the privatisation process”. To address the research questions, this thesis utilises a case study methodology. Two representative cases were selected. The first case is BVH, the leading insurer in Vietnam and the first pilot privatisation project approved by the Government to follow shareholding system and form a conglomerate in Vietnam. The second case is BIDV, the most recent privatisation initiative of large SOEs before the recent suspension of the shareholding system in Vietnam. In order to collect data from the selected cases, semi-structured interviews were conducted with three different layers of employees including senior managers, supervisors, and front-line employees. Ethnographic data is also collected to support the interviews. In order to support the data analysis, this research applies institutional theory and isomorphism to build a conceptual framework to better understand Vietnamese privatisation context. This frame will then be used to guide the data collection, investigate and analyse key reform drivers and challenges in the privatisation process of Vietnamese SOEs. In addition, NVIVO and Ms EXCEL were used to analyse the qualitative data. The findings from this study suggest that different sets of factors drive Vietnamese reforms and different challenges prevent it from gaining expected outcomes. These drivers and challenges are different from previous reform programmes around the world. Differences, in turn, signal a specific level of customisation in Vietnamese SOE reform and privatisation programmes. However, the recent postponement and collapses of two of the twenty-five largest SOEs in Vietnam indicate serious problems in this reform process. Findings from this study could partially contribute to explaining the suspension and recent collapses of two recent privatisation initiatives. In addition, this study also reveals the possible relationships between reform drivers and challenges. Based on these findings, further research opportunities are suggested to improve the performance of the privatisation process in Vietnam. Through its findings, this research contributes significantly to the body of knowledge by analysing relationships between drivers and challenges, thus enriching the literatures on public sector reform within Vietnamese context. It also provides important recommendations for future privatisers in Vietnam in terms of reform skills and knowledge, reform planning and execution, and reform monitoring and supervision. In addition, the findings of this study provide significant insights for policy-makers in Vietnam. Based on these recommendations, privatisation-supported legislation would be strengthened and the educational system in Vietnam would be more practically-oriented in the long-run.