Empirical Study on Transferability of Kaizen Practices in Vietnamese Manufacturing Companies

This study examines the link between Kaizen practices and different culture dimensions in Vietnamese manufacturing companies. The study follows the cultural framework suggested by House et al. (2004) and three typical Kaizen practices implemented in Vietnam such as Small Group Problem Solving, Process Control and Employee’s Suggestion. Statistical techniques such as path analysis and regression analysis are applied to analyze the data collected from 124 Vietnamese manufacturing companies through a questionnaire survey during 2011-2012. The findings indicate that there is positive correlation on Kaizen practices and culture’s dimensions in relation to performance of manufacturing companies in Vietnam.


Introduction
In Japanese management, Kaizen means "continuous improvement", a business strategy involving the entire workforce from the top management to middle managers and workers.Everyone is encouraged to come up with small improvement suggestion on a regular basis.This is not a once a month or once a year, it is continuous.Kaizen is often seen as a key element in Japanese management and has been presented as one of the sources of the competitiveness of Japanese manufacturers (Imai, 1986).
Since late of the 1980s, a larger number of studies, which have focused on different Kaizen systems, approaches and practices such as Japanese manufacturing techniques (Brunet & New, 2003;Schonberger, 1986), the Toyota production system (Liker, 2004;Ohno, 1988), and lean production (Womack et al., 1990) have illustrated the effectiveness of Kaizen.Furthermore, studies of kaizen activities in the countries outside Japan, such as Australia (Chapman et al., 1997), Sweden (Lindberg & Berger, 1997) and the UK (Oliver & Wilkinson, 1992) suggest that the concept, approaches, and practices of Kaizen have become routinely accepted throughout the world.
Quality improvement is now regarded as the key management issue in Vietnamese companies.Though the attention of Kaizen and quality management practices in Vietnamese companies is constantly increased, there is a lack of Kaizen studies.There is several questions regarding the performance of Japanese management techniques implemented in Vietnamese companies and how do they fit to the culture and organization structure of Vietnamese companies.These issues should be further examined for better understanding on the transformation of Japanese management in Vietnam.
The main objective of this study is to examine the relationship between the implementation of Kaizen practices and organizational culture in Vietnam.In other words, the study raises a question that "Is the level of the implementation of Kaizen practices related to the Vietnamese national and organizational culture?"Specifically, the study analyzes how the culture's dimensions influence the implementation of Kaizen practices and just the performance in Vietnamese manufacturing companies.
The remainder of this paper is structured as follows.Section 2 and section 3 summary the literature review on Japanese management transformation and the analytical framework respectively.Subsequently, section 4 explains the methodology and data collection.Section 5 presents data analysis and discusses the main findings.
The last section will be concluding remarks.

Literature Review
The Kaizen is an originally Japanese management concept for incremental change.According to Imai (1986), Kaizen is defined as continuous improvement involving employees in all levels of an organization.Unlike Western business concepts, generally summarized by the terms innovation or drastic change in order to create fast results, the Japanese Kaizen management system was made popular because it was adapted to adhere to a continual process of improvement (Becker & Snow, 1997).More specifically, in business context, Kaizen includes quality control, automation, workers suggestion system, just-in-time delivery system and the 5S process (Note 1) (Genobz, 2010).
Kaizen involves everyone in the organization and largely depends on cross-functional teams that can be empowered to challenge the status and commit to better quality and improve productivity.Kaizen involves bottom-up decision-making and practices an employee-driven management style that heavily emphasizes teamwork.Kaizen is also process-oriented, that is before results can be improved process must be improved, as opposed to result-orientation where outcomes are all that counts (Imai, 1986).Kaizen encompasses several techniques including 5S (sorting, setting in order, shining, standardizing and sustaining), mudadori (eliminating the seven types of waste: transport, inventory, motion, waiting, overproduction, over-processing and defects), quality control circle (groups of workers who regularly brainstorm on productivity and quality, bringing improvement from the bottom up), the seven quality control tools, and many other approaches and techniques of Total Quality Management (TQM).The key objectives of Kaizen are elimination of waste, control quality of products process, standardization of work, delivery on time and efficient use of resources.With such improvement that relates to the key objectives, the organization will achieve superb quality levels, greater efficiencies, teamwork with improved employee morale and higher level of profitability.
Kaizen is a hot topic in Japanese management studies over the past few decades.Many studies have been conducted to examine the transferability of Kaizen from Japan to other countries such as US (Kenney & Florida, 1993), UK (Saka, 2004;Elger & Smith, 2005), China (Taylor, 1999;Hong et al., 2006), Kenya (Kariuki, 2011).
Those studies suggest that the results of the implementation of Japanese Kaizen practices in oversea plants depend on cultural and social context.Essentially, some scholars suggest that Kaizen practices are embedded in Japanese culture and hence difficult to transfer to another culture.Others suggested that only the rational aspects of Kaizen practices were transferable overseas.Recent studies show that Kaizen approaches were not easily adopted in abroad due to such environmental factors as the differences in national culture and working ethics.Along with national culture aspects, scholars argue that the adoption of Kaizen highly depends on some specific organizational culture (Recht & Wilderom, 1998).
There are a number of studies on transferability of the Japanese management practices but very limited studies focus on practices compatible with Vietnam working culture.Such research literature is by Anh & Minh (2013) on relationship between Japanese management practice and company's performance.The findings indicated that Japanese continuous improvement practices have positive relationship with companies' performance on quality, cost, and delivery.The authors also suggest that companies in Vietnam should further emphasis on implementing Japanese management practices to enhance the performance.Although Kaizen practices are increasingly implemented in Vietnam in recent year, little attention has been paid to have a better understanding the problem of Kaizen implementation in Vietnamese companies.Therefore this study will not only enrich the literature on Kaizen practices in the world in general and in Vietnam in particular but also provide some interesting findings about the link between Kaizen practices and culture's dimensions in relation to performance in Vietnamese manufacturing companies.
According to Hofstede (1980), national culture is defined as collective programming of mind that distinguishes members of one group from another, organizational culture is regarded as the specific collection of values and norms that are shared by people and groups in an organization and that control the way they interact with each other and with stakeholders outside the organization.When Kaizen practices are adopted in an organization, those factors would moderate the teamwork, decision-making process for problem solving, and autonomous activities.Whereas, House et al. (2004) defines culture as shared motives, values, beliefs, identities, and interpretations or meanings of significant events that result from common experiences of members of collectives that are transmitted across generation.This section focuses on two distinguished approaches on culture studies suggested by Hofstede (1980) and House et al. (2004).
The culture of Vietnam is quite different from that of Japan.While Vietnam witnesses high level of Power Distance, Japanese culture appreciates Uncertainty Avoidance (UAI) and Masculinity-Femininity (MAS).Interestingly, both Vietnam and Japanese share the same cultural features of Long-term orientation and Individualism.These differences in culture may suggest that Kaizen practices need an adjustment when being transferred in Vietnam.Many scholars adopt the culture dimensions suggested by Hofstede (1980Hofstede ( , 2001) ) and House et al. (2004) to study the transferability of Kaizen practices in the countries outside Japan, (Anwar & Jabnoun, 2006;Lagrosen, 2003;Flynn & Saladin, 2006).The results suggest some culture dimensions have significant relationship with the implementation of Kaizen practices.
First, Power distance influences the amount of formal hierarchy, the degree of centralization and the amount of participation in decision making in organizations.The plants that are located in high power distance countries tend to be more centralized and employees participate less in decision making.Implementation of such Kaizen practices as group problem solving or autonomous activities requires empowerment and participative decision making, which mirrors low power distance.
Second, in term of Uncertainty Avoidance, clarity of plans, policies, procedures and systems helps to avoid uncertainty.Kaizen practices emphasizes on the improvement of processes through scientist improvement methods and statistical process control.This relates to the cultures with high uncertainty avoidance, which greater emphasizes on procedure and routines.Third, literature on Kaizen studies indicated that the implementation of Kaizen requires cooperation, teamwork, and joint decision-making, which means that the collectivism supports Kaizen practice.
To study the transferability of Kaizen in Vietnam, House et al.'s approach is selected because it sharply differentiates between national and organizational cultural components.The study will examine how such House et al.'s cultural dimensions impact three typical Kaizen practices in Vietnam as follows: 1) Small Group Problem Solving: plants use the small group/team to solve the quality problems.
2) Process Control: Activities involved in ensuring a process is predictable, stable, and consistently operating at the target level of performance with only normal variation.
3) Employee's Suggestion: plants implement the employee suggestion and give feedback to the employees.
The main research questions are: 1) Is the level of implementation of Kaizen practices significantly related to culture dimensions of the manufacturing companies?
2) Is quality performance significantly related to culture dimensions and Kaizen practices?
The framework of this study is presented in the Figure 1.H4: Quality Performance is significantly related to Small Group Problem Solving, Employee Suggestion, and Process Control.

Methodology and Data Collection
The methodology employed in this study is applying path analysis and regression analysis to analyze the data collected based on questionnaire survey conducted in 152 Vietnamese manufacturing companies.
Path analysis is a statistical method of finding cause/effect relationship.It has been used widely in empirical quality management studies (Flynn et al., 1995;Anderson et al., 1995;Kaynak, 2003;Yeung et al., 2005).In this study, path analysis is selected to test the framework and hypotheses, with regression analysis determining the significance of the relationships between the independent and dependent variables.Path coefficients between each independent variable and dependent variable are presented by standardized regression coefficients.
There were 124 Vietnamese manufacturing companies responded the survey with a response rate of 83%.They are belonging to five industries: Electronics (29), Machinery (38),Transportation (26),Textile (24) and Food (7).In each company, quality manager was asked to indicate his/her opinion about how the plant compares to its competitors in the same industry on a global basis of conformance quality on a five-point Likert scale (1=Poor or low end of the industry, 2=Below average, 3=Average, 4= Equivalent to competitor, 5=Superior or top of the industry).
Kaizen and culture dimension constructs (scales) are formulated and evaluated by 3 positions in each company: quality managers, production engineer and direct labor on a seven-point Likert scale (1 = strongly disagree, 4 = neither agree nor disagree, 7 = strongly agree).
The first step of analytical process is the analysis of reliability and validity which are performed to evaluate the measurement properties of the individual scales.Reliability is an estimate of measurement consistency.In this study, Cronbach's alpha coefficient is calculated for each scale to evaluate the reliability.2 shows the Cronbach's alpha values for all scale.As can be seen all of the scales have alpha value above 0.60 which is minimum acceptable value of alpha suggested by Nunnally (1967), indicating that the scales are internally consistent.The content validity and construct validity are also conducted to ensure the validity of data.
An extensive review about empirical literature on quality management and organization performance was conducted to ensure the content validity.The construct validity is tested to ensure that in a scale, all question items measure the same construct.The tested results indicate that data is reliable and valid for using to test the hypotheses.

Data Analysis
To answer the research questions, statistical methods such as path analysis and regression analysis are employed to analyze the collected data.This section will present the results of data analysis and then some key findings will be discussed.
First, the results of path analysis indicate the cause/effect relationships between culture's dimensions suggested by House et al. (2004) and three Kaizen practices as shown in Figure 2.
Each path in the figure indicates the estimated path coefficients and t-values.
The fit indices used in this study to estimate measurement models are Chi square, Root Mean Square Error of dependent variable Quality Performance is found to have strong relationship with three Kaizen practices as Process Control, Small Group Problem Solving.Therefore, Hypothesis 4 is accepted.

Implications and Discussion
The results of path analysis and regression analysis indicate the strong link between Kaizen practices and culture dimensions in relation to performance of manufacturing companies in Vietnam.
The implementation of such Kaizen practices as Small Group Problem Solving requires empowerment and participative decision making, which mirrors low Power Distance and high Collectivism.It is suggested that Small Group Problem Solving should be implemented in the companies characterized as low Power Distance and high Collectivism to yield the higher performance.The analysis results also confirm that Power Distance and In Group Collectivism have greater impact on Small Group Problem Solving compared to other variables.
Kaizen is process-oriented, that is before results can be improved, and process must be improved (Imai, 1986).
The process begins with by measuring or defining the current process using value stream mapping to map the current state and future state map so as to identify the gap.The analysis results reveal that Uncertainty Avoidance and Performance Orientation have greater impact on Process Control.This means that such Kaizen practice should be implemented in the organization that is characterized as high Uncertainty Avoidance and high Performance Orientation to yield the higher performance.It is worth noting that other Kaizen practices as Small Group Problem Solving and Employee's Suggestion also have significant influence on result of Process Control.This implies that Kaizen practices tend to be dependent on each other and thus they should be implemented together to give the best result performance.
Employee's Suggestion aims at generating many small improvement and morale boosting benefits of positive employee participation.Literature indicates that a total of 60 to 70 suggestions per employee per year are written down, shared, and implemented in Toyota Motor Company.The analysis results also confirm that Power Distance, Human Orientation and Performance Orientation have great impact on Employee's Suggestion and the implication should be made here is that such Kaizen practice should be implemented in the organization that is characterized as low Power Distance, high Human Orientation and high Performance Orientation to generate higher performance.
The analysis results also indicate the link between Kaizen practices and firm's quality performance.Although Process Control is found to have greater impact on quality performance compared to Small Group Problem Solving and Employee's Suggestion, firm should apply and implement such Kaizen practices flexibly and effectively to yield the highest performance.

Conclusion
This study examines the link between Kaizen practices and different culture dimensions in Vietnamese manufacturing companies.The study follows the cultural framework suggested by House et al. (2004)  The study enriches the literature of Kaizen from the cultural perspective.Kaizen literature suggested scholars to look deeply into a specific culture to determine why certain Kaizen practices may or may not be effective.The results are also critical to practitioners.The manager needs to understand the dynamics of national culture and focus on the Kaizen practices that are more effective under that culture.For any organization, resources are limited or even scare.Consequently, allocating resources to the right practices at the right time becomes critical to success.The conclusion will benefit quality managers working in Vietnam or those working with their Vietnamese partners who want to develop a competitive advantage along quality dimensions.
Although this study makes a significant contribution to the Kaizen research in a certain cultural settings, there is certain limitation we would like to recognize.First, the sample used to estimate national culture consists of only five industries.The culture in these areas is of more interest to foreign companies as most of their subsidies or supply chain is located there.Second, culture can be studied at different levels and with several approaches, and this study only focuses at the national level suggested by House et el. (2004) without taking organizational culture into account.As such, it would be fruitful to add in organizational culture once a good understanding of national culture has been obtained.
Future studies should expand the sample to have better and comprehensive data and information.Scholars should also take organizational culture into account as well as use another culture approach.Future studies should also attempt to explore the reasons behind the adoption of Kaizen practices and organizational culture in the manufacturing companies in Vietnam.

Notes
Note 1. 5S process includes sorting (serri), setting straight (seiton), cleanliness (seiso), standardization in the workplace (seiketsu) and sustaining self-discipline and promoting a sense of pride in workers in their work and being owners of their responsibility (shitsuke).
Note 2. Power Distance is the extent to which less powerful members of institutions and organizations accept that power is distributed unequally.Note 3. Uncertainty Avoidance is the degree to which people within a culture are made uncomfortable by situations they perceive to be unstructured, unclear or unpredictable.
Note 4. Individualism/collectivism describes the degree to which people are oriented towards acting as individuals versus acting as part of a group.
Note 5. Masculinity/femininity describes the extent to which aggressiveness and success are valued, versus concern for relationships.
Note 6.The degree to which members of an organization or society expect and agree that power should be stratified and concentrated at higher levels of an organization or government.
Note 7. The extent to which members of an organization or society strive to avoid uncertainty of future events by relying on established social norms, rituals, and bureaucratic practices.
Note 8.The degree to which organizational and societal institutional practices encourage and reward collective distribution of resources and collective action.

Table 1 .
Hofstede's culture dimensions of Asian countries Extending Hofstede's culture dimension, House et al. (2004) introduces other national culture frameworks as the results of Global Leadership and Organizational Behavior Effectiveness (GLOBE) program.GLOBE involved 170 researchers working in 62 different societies and collected data from approximately 17,000 middle managers in 951 organizations.

Table 2 .
Descriptive analysis of data and three typical Kaizen practices implemented in Vietnam as Small Group Problem Solving, Process Control and Employee's Suggestion.Statistical techniques such as path analysis and regression analysis are applied to analyze the data collected from 124 Vietnamese manufacturing companies through a questionnaire survey during 2011-2012.The findings indicate that there is positive correlation on Kaizen practices and culture's dimensions in relation to performance of manufacturing companies in Vietnam.The results of the study suggest that manufacturing firms in Vietnam should adopt and adapt Kaizen practices effectively and flexibly to enhance the performance and achieve competitive advantage.