Organisation Behavior

1. In Vietnam, textiles and garments are considered part of a

single industry. It is an important industry, because: (1) it is

labor-intensive, employing workers who do not require extensive

training, and (2) it has contributed considerably to the export

revenue of Vietnam in recent years. In this industry, the

Vietnam Textile and Garment Corporation (VINATEX) is the biggest

producer and exporter of textile and garment products. It is

also the largest importer of materials for domestic production.

2. Transition has been difficult for the textile industry.

Traditional markets such as the USSR and Eastern European

countries have collapsed. New markets in newly industrialized

countries, the EU and Japan, require high quality products, and

often raise entry barriers to Vietnamese textile products.

3. Vietnamese firms import a huge amount of textile products. In

1997, 23 countries exported textile products to Vietnam. The

biggest players are Taiwan, South Korea, and Japan, with the US

ranked 14th. Textile imports have swamped the domestic

producers, creating problems for them.

4. Textile products made by Vietnamese companies occupy a small

part of the total Vietnamese demand. Production technology used

by Vietnamese companies is out of date. Their products are of

low quality. In recent years, some companies have invested lots

of money to renew machinery and to upgrade infrastructure. An

example is Thanh Cong Textile company (T.CITEX), with its aims

for expanded capacity and higher quality products.

Unfortunately, due to financial difficulties, few companies can

afford to upgrade like Thanh Cong.

5. Since the end of the 1980s, when the Vietnamese Government

began open door policies to attract foreign investment, many

foreign companies have invested in the garment and textile

industry. By June 30, 1996, foreign companies from 13 countries

had invested in the textile industry. 20 joint-venture