Sustainable Construction: Bridging the Gap Between Development and Nature

Building Bridges, Not Walls: How to Navigate Construction Restructuring in Emerging Economies

Avery Sinclair in Business & Economy August 2025 • 4 min read.

"Unlocking Growth and Efficiency in Vietnam's Construction Sector: Key Insights for a Smooth Transition"

The restructuring of state-owned enterprises (SOEs) is a complex but necessary process, especially in emerging economies striving for greater efficiency and global competitiveness. While the academic world buzzes with discussions on corporate restructuring, practical insights from specific industries and regions often remain scarce. Vietnam, with its unique blend of socialist ideals and market-oriented reforms, presents a fascinating case study.

Since the Doi Moi (renovation) policy in 1986, Vietnam has undergone significant economic transformation. The shift from a centrally planned economy to a market-based system has necessitated the restructuring of its state-owned sector. This transition aims to concentrate state ownership in strategic industries while encouraging private sector participation in small and medium-sized enterprises. However, this process is far from straightforward, particularly in sectors like construction, which are heavily influenced by government policies and macroeconomic conditions.

This article will help look into the challenges and opportunities encountered during the corporate restructuring of Vietnam's state-owned construction sector, using VINACONEX, a major player in the industry, as a case study. The insights here will help provide a better understanding of how construction companies in Vietnam and other similar emerging economies can navigate this intricate process and achieve sustainable growth.

What are the Unique Challenges of Restructuring a State-Owned Construction Firm?

Sustainable Construction: Bridging the Gap Between Development and Nature

Organizational restructuring involves significant changes to improve a company's efficiency and effectiveness. In the context of state-owned construction firms, this often means reorienting business units and reallocating resources for better performance. According to Gibbs (1993), corporate restructuring can take three main forms:

Each type of restructuring presents its own set of challenges, particularly in the context of a state-owned enterprise operating in an emerging economy. These challenges are further compounded by factors such as:

Legacy structures and processes: SOEs often have deeply ingrained bureaucratic systems that resist change.
Resistance to change: Employees and managers may be hesitant to adopt new strategies and technologies.
Government influence: Political considerations can sometimes outweigh purely business decisions.
Macroeconomic instability: Fluctuations in inflation, interest rates, and government spending can significantly impact the construction sector.
Competition: SOEs face increasing competition from both domestic and international private sector companies.

Overcoming these challenges requires a strategic approach that addresses both internal and external factors.

Building a Stronger Future: Practical Steps for Successful Restructuring

The restructuring of state-owned construction enterprises in emerging economies is a multifaceted process that requires careful planning, strategic execution, and a deep understanding of the local context. By focusing on these key areas, companies can increase their chances of success and contribute to the sustainable development of their economies.

About this Article -

This article was crafted using a human-AI hybrid and collaborative approach. AI assisted our team with initial drafting, research insights, identifying key questions, and image generation. Our human editors guided topic selection, defined the angle, structured the content, ensured factual accuracy and relevance, refined the tone, and conducted thorough editing to deliver helpful, high-quality information.See our About page for more information.

This article is based on research published under:

DOI-LINK: 10.5539/ass.v10n22p291, Alternate LINK

Title: Problems And Issues In Corporate Restructuring In The State-Owned Construction Sector In Vietnam: The Case Of Vinaconex

Subject: General Economics, Econometrics and Finance

Journal: Asian Social Science

Publisher: Canadian Center of Science and Education

Authors: Nguyen Ngoc Thang

Published: 2014-10-29

Everything You Need To Know

What is the primary goal of restructuring state-owned enterprises (SOEs) in emerging economies like Vietnam?

The primary goal of restructuring SOEs in emerging economies like Vietnam is to enhance efficiency and global competitiveness. This involves transitioning from centrally planned economic models towards market-based systems. This is particularly relevant in the construction sector. The process aims to concentrate state ownership in strategic industries while promoting private sector participation in small and medium-sized enterprises, driving overall economic growth and development.

What are the main types of corporate restructuring as described by Gibbs (1993), and how do they relate to state-owned construction firms?

The text mentions Gibbs (1993) as a reference to corporate restructuring, but the specific types are not detailed within the provided context. However, it is clear that the restructuring of state-owned construction firms involves reorienting business units and reallocating resources for improved performance. Understanding Gibbs' framework would likely offer insights into strategies such as organizational restructuring, financial restructuring and operational restructuring, all of which are pertinent to improving efficiency. Each of these strategies presents unique challenges, especially in the context of SOEs operating within emerging economies.

What specific challenges do state-owned construction firms in Vietnam face during restructuring?

State-owned construction firms in Vietnam encounter several challenges during restructuring. These include legacy structures and processes, which mean deeply ingrained bureaucratic systems that resist change. Resistance to change from employees and managers when adopting new strategies and technologies is also a factor. Government influence, where political considerations might supersede business decisions, presents another challenge. Macroeconomic instability, such as fluctuations in inflation and government spending, and increasing competition from private sector companies, both domestically and internationally, also greatly impacts these firms.

How has Vietnam's economic transformation influenced the restructuring of its state-owned construction sector, and what is the role of VINACONEX?

Vietnam's economic transformation, initiated by the Doi Moi policy in 1986, has been pivotal in shaping the restructuring of its state-owned construction sector. The shift from a centrally planned economy to a market-based system has necessitated restructuring, concentrating state ownership in strategic industries and encouraging private sector involvement. VINACONEX, a major player in the construction industry, serves as a case study for understanding the specific challenges and opportunities during this restructuring phase. Analyzing VINACONEX provides insights into how construction companies in Vietnam and similar emerging economies can navigate this complex process and achieve sustainable growth.

What are some practical steps to successfully restructure a state-owned construction enterprise in an emerging economy?

The article emphasizes that the restructuring of state-owned construction enterprises requires careful planning, strategic execution, and a thorough understanding of the local context. The provided text does not offer detailed practical steps, but it indicates that a strategic approach addressing internal and external factors is crucial. Focusing on key areas is essential to increasing the chances of success and contributing to the sustainable development of the economy. Addressing the identified challenges, such as legacy systems, resistance to change, government influence, macroeconomic instability, and competition, is key to the success of these initiatives.