Doing business in Thailand

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Thailand, known as Siam until 1939, is divided into six distinct geographical regions, and borders Myanmar, Laos, Cambodia and Malaysia. It is the only south-east Asian country not to have been colonised by a European power.

Thailand has a relatively well-developed infrastructure, a free-enterprise economy, and pro-investment policies. Economic growth however has slowed in the last few years due to domestic political turmoil and sluggish global demand, but government spending has maintained the dynamism. Furthermore, 50% of the world’s population live within a 5-hour flight of Thailand and tourism continues to boost the economy.

Business culture in Thailand

Buddhism is followed by over 90% of the population and its influences can be detected in Thai mannerisms, traditions, the arts, architecture and language. Buddhist monks are held in high esteem and should never been referred to disrespectfully. Thailand is widely known as the ‘land of smiles’ and the traits of generosity and friendliness are examples of Buddhist influence on the national personality.

With a population of 10 million, the capital city of Bangkok is the most important city economically and politically. Thai business reflects a society in which hierarchy and respect for seniors is very important. Understanding the social status of people and the vertical structure of a company is essential. When Thais meet a stranger, they will try to place you within a hierarchy so they know how you should be treated. This is often done by asking quite personal questions.

The most common form of greeting is the ‘wai’ which you make by raising both hands, palms joined with the fingers pointing upwards as if in prayer, lightly touching the body somewhere between the chest and the forehead. This is both a sign of respect as well as a greeting. The person who is junior in age or status is the first to offer the wai.

Thailand is a highly collectivist culture which manifests itself in close long-term commitments to groups (family, extended family, business). Loyalty to the group is paramount and the Thais will seek to preserve harmony and not lose face. Therefore, do not accept a “yes” as an enthusiastic acceptance or agreement to your ideas. Patience and personal relationships are key for conducting business here.

As with other Asian cultures, most decisions are still made at the top and transmitted down the hierarchical line to workers who perform their duties as they are told. The system is slowly changing and middle managers now play a greater role in decision-making, but they would not challenge others’ opinions or statements in open meetings. Therefore, it is acceptable to ask immediate supervisors for feedback privately, but whether you get the right response depends on their leadership ability and experience.

To avoid unpleasantness or hurt feelings the Thais try their best to evade direct answers. People who keep cool are respected, and don’t be surprised to see a smile even in a stressful situation. Frankness is not highly valued. This may be interpreted as indecisiveness and frustrating to Westerners, but patience is a virtue and you need to give time for issues to work themselves out. Using a respected third party for a more direct answer can be useful.

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Inspired? If you want to learn how you can work more effectively with your Thai colleagues, clients or supplier, contact us for a 'Doing business in Thailand' sample course outline’.


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