The Globalisation of Executives and Economies: Lessons from Thailand

patience.

Introduction

Thailand is the leading economy in mainland Southeast Asia. It has undergone a considerable amount of development in the last century, moving from being an economy almost entirely reliant upon subsistence agriculture to one in which manufacturing and services constitute important export sectors. Yet the development is uneven across the different regions of the Kingdom and both across and within all industrial sectors. The quality of products and of services, therefore, is very varied and, where quality varies, reputation is easily lost. In a closed system this would not matter but Thailand is part of the globalisation process that is bringing ever increasing interdependence in every aspect of every country of the world. Globalisation increases both the breadth of activities that businesses can undertake and also the depth with which they can be undertaken. Spurred by the agreements of bilateral and multilateral Free Trade Agreements (FTAs), international firms constitute an increasingly important part of the Thai industry. Thai firms must improve continually in order to maintain even their existing level of competitiveness. They must improve at a considerable rate if they are to compete with incoming international firms, especially in advanced service industries such as finance and insurance and in areas such as agro-industry and tourism where Thailand enjoys considerable levels of comparative advantage. Understanding this situation and searching for methods by which managers can seek to institute improvements in their own firms was the stimulus for this book. It has brought together the works of scholars from both Thailand and beyond, who are united in their vision of a more competitive Thai economy for the benefit of all members of Thai society. In the next two sections, I will summarise some of the implications of the research in terms of a managerial agenda and a societal agenda for change.

The Managerial Agenda

Thai management should understand the nature and extent of change affecting the Thai economy and be able to predict both how those changes will affect their industries and what opportunities change will bring. A globalised world permits no industry to stand still and remain competitive because firms can exert competitive advantage across borders much more efficiently than before. In this environment, customers enjoy continuous increases in the excess of supply over demand. Hence, they can select products offering not just availability or low price as in the past but those that come with a full panoply of customer satisfaction management, from the provision of well-informed and professional sales staff to competent and comprehensive after-sales care to responsive, customizable design options. All aspects of the firm must be professional and of high quality to attract and maintain customer relationships.

Technology is an inevitable and vital part of the modern firm but its introduction and use must also be managed well and the interaction with human staff will remain critical in monitoring and improving service quality. The speed with which technological innovations now diffuse throughout the economies of the world, not to mention the difficulties inherent in maintaining the integrity of intellectual property in Thailand, mean that technological advantage provides only a short-term advantage to a firm which is likely to evaporate rapidly and also to be compensated for by human elements in the product offering.

Staff, human resources, must where appropriate be empowered to maximise the value of customer relationships. There are too many occasions in even the best-run Thai firms that frontline staff are demotivated by their inability to affect changes in working practice or institute change. The product offering is only as strong as its weakest point and a poorly managed personal interaction can destroy a nascent relationship.

An appropriate relationship with the outside world must be established and maintained. Thais are rightly proud that they have the only country in the region that was never colonised but far too frequently Thais in managerial positions adopt positions towards the rest of the world, especially the west, which are deferent or, its obverse, contemptuous dismissal. Thailand has comparative advantages that make for good offerings in a number of sectors but not all.

Agenda for Thailand

The changing national and international business environment requires responses from Thai government, society, firms and executives. Each must work individually and together to mobilise and develop existing resources and cultivate new ones.

The issues facing managers and firms are considered above. As for government, improving the education system is of central importance to the competitiveness of the Thai economy. It is not enough to blame teachers and educators, when they have few opportunities to develop their own capacity and little incentive to do so. The continued terrorist targeting of teachers in the extreme south of the country is the most obvious example of the dangers facing teachers but general low income is also important throughout the Kingdom. Secondly, there is a need to improve the level of discourse in political and civil society, so that each individual is both willing and able to engage with substantive issues concerning the future of the Thai economy and their role within that economy. All too often at present people have become accustomed to accepting occasionally duplicitous public assertions rather than search for a considered truth because of the sense of deference in Thai society. Thirdly, the changing legal environment will require improvements in terms of labour market regulation and workers’ rights of association and protection. Much has been done to improve government bureaucratic procedures with respect to dealing with foreign business but much more needs to be done in the regions of the country and with secondary agencies. The need for enhanced and well-policed intellectual property rights has been well-publicised but less attention has been placed on the need to create an e-commerce regulatory framework that will serve to enhance trust. Public trust will also need to be restored or created in the case of Genetically Modified Organisms and other new technologies on which the government is building its hopes for future competitiveness.

Thai society also faces a challenge. Public and political discourse will only be instituted effectively if Thai people are willing to accept the challenge of questioning their representatives and settling only for truth while demanding integrity in both the public and the private sectors. Within society, individuals must be encouraged to recognise the importance of good, prudent, socially responsible management and to wish to contribute towards achieving it. Firms and management are only as productive and innovative as their human resources allow them to be.

Of course, the final recommendation and often the central one of such studies is always the same: there needs to be more research. Thailand is, like most of the rest of the world, changing at an unprecedented rate and the implications of global phenomena such as climate change, the end of oil supplies and a potential new world economic order are too intricate and interrelated to be identified in advance or from a distance. The degree to which successful Thai firms have become interdependent with economic activities and agencies in other countries is also changing the nature of the type of research necessary to understand the challenges facing them. A future research agenda will almost certainly need to be multinational in scope, interdisciplinary in nature and syncretic in approach.

Organisation of the Book

The book is divided into four sections. The first of these is entitled Overview of Thailand and the Thai Economy. The first chapter is taken by Dr Frederick Swierczek, whose original research into the globalisation of Thai executives provided the initial stimulus for this book project. He describes the nature of competitiveness and globalisation in Thailand and the ways in which a new generation of executives has adjusted to changing realities in the business environment. Professor Gerald Sentell next provides a long-term view of the way that the Thai economy has developed over the thirty years that he has been visiting and studying the Kingdom. He notes that although some of the leading companies have become quite sophisticated in their response to the challenge of globalisation, much of the rest of the economy has hardly changed at all. Thirty years ago, Professors Hans B. Thorelli and Sentell wrote a book based on research into the topic of Consumer Emancipation and Economic Development. The main findings of that study have been updated for 2005 to indicate, again, how some things have changed and some things have remained exactly the same.

Section two is concerned with crucial industrial areas and the impact of globalisation. Gary Woollacott considers the globalisation in Thailand of a single but vital function of a modern economy. This is the executive search and recruitment industry and it is one of the advanced business services that is inadequately performed and regulated in Thailand. Unless Thai firms establish competencies in the relevant areas soon, Free Trade Agreement changes will lead to domination of the industry by international players. Wirat Krasachat deals with the development of agro-industry in Thailand. Agro-industry represents one of the central strengths of the Thai industry and is at the heart of Thai exports. Although Thailand is the world’s leading rice exporter and has great strengths in other crops and products, too much of the industry is devoted to generic commodity production with little or no value-added. Achieving the premiums attached to high quality or branded goods will be one of the most important challenges facing Thailand in the coming years. Walailak Noypayak and the editor next consider the Thai tourist industry, with particular consideration of the recovery from the tsunami disaster at the end of 2004. In addition to its initial devastation, the tsunami considers to exact a terrible human toll and also sustained economic difficulties for many of those accustomed to making their living from tourism-related activities. In this paper, we ask whether enough was done by government and industry agencies to help the affected regions to recover their competitiveness and what more remains to be done.

Section three provides papers addressing the political, legal and cultural aspects of the Thai environment. Cornelis Reiman presents a managerial perspective on the globalisation of Thailand. Based on extensive field work, he describes the difficulties that can result from intercultural interactions in the Kingdom and presents models to help resolving such difficulties. Professor Brian Corbitt analyses Information Communications and Technology (ICT) policy in Thailand and considers the globalizing role of the internet. Professor Corbitt has a great deal of experience in understanding and improving ICT policy from a comparative basis and he draws upon this to make cogent recommendations for policy change. Pacapol Anurit and Tachaphon Bisonyabut have investigated changes in the political marketing of Thailand. The current administration of Prime Minister came to power on a sea of votes for the newly formed Thai Rak Thai (TRT) party. TRT has claims to be the first modern political party in the Kingdom and, as the authors demonstrate, it made extensive use of innovative political marketing techniques that continue to leave their competitors far behind.

Section four addresses the globalisation of Thai consumers and firms. Rapeeporn Srijumpa, Ravipa Larpsiri and Mark Speece consider the interrelationships between technology and customer management in Thai financial services. Their research demonstrates the opportunities for improvement that must be seized by companies seeking to maintain their market share. Chanchai Bunchapattanasukda’s paper considers the factors affecting Thai investors’ decisions to invest in fixed income funds. He notes the lack of development of a sophisticated investment culture in Thailand and the problems caused by informational asymmetries. Many Thai investors seem to behave irrationally and this destabilizes the financial strength of the Kingdom. Sunanta Chaisrakeo and Mark Speece address the professionalisation of sales staff in the Kingdom through extensive fieldwork. The authors identify the importance of sales within customer relationship management and highlight areas for improvement. While Thailand is known for its hospitality and for being the Land of Smiles, that does not automatically mean that its sales staff can provide the detailed information often required by customers in complex product markets. Pacapol Anurit, Brian Corbitt and Siriwan Cheunban study the adoption of e-auction services in Thailand and provide an assessment of the factors influencing suppliers whether or not to participate in bidding. Ranchana Rajatanavin and Mark Speece have conducted research concerning the relationship between sales reps and information for new service developments in the Thai insurance industry. The insurance industry, like many other business services, is only poorly developed in the country and ripe for the arrival of dominant foreign firms as a result of FTAs. Understanding how to improve human resources so as to identify better customer requirements will be crucial for Thai companies to continue being competitive. Finally, Chuvej Chansa-ngavej, Somchai Puajindanetr and Nishapa Pontue provide a comparative study between Europe and Thailand with respect to the organisational decision to adopt Enterprise Resource Planning.

Author’s Biodata

Dr Adilla Pongyeela is a faculty member at Dhurakij Bundit University, Bangkok.

Dr. Chanchai Bunchapattanasukda is Director of the MBA Program in the School of Management at Shinawatra International University, Bangkok.

Associate Professor Chuvej Chansa-ngavej is Deputy Dean, School of Management, Shinawatra University.

Professor Dr Brian Corbitt is Head of the School of Business Information Technology at RMIT University in Melbourne, Australia.

Dr Katanyu Hiranyasomboon is a faculty member at Dhurakij Bundit University, Bangkok.

Ms Nishapa Pontue graduated with a master degree in industrial engineering from Chulalongkorn University in 2004. She is currently a faculty member at the Department of Industrial Engineering, Faculty of Engineering, Mahanakorn University of Technology.

Dr Pacapol Anurit earned a PhD focusing on cultural influences on consumer behaviour in the UK. He has worked for British, American, and Thai market research and management consulting firms and is now a faculty member of Shinawatra International University.

Dr. Ranchana Rajatanavin is chair of the Department of Finance and Banking at Sripatum University, Bangkok, Thailand.

Dr. Rapeeporn Srijumpa is MBA Director in the Graduate School and also in the Department of Marketing at Sripatum University, Bangkok, Thailand.

Dr. Ravipa Larpsiri is Director of the Academic Service Center, which offers executive seminars, and also in the Department of Marketing at Sripatum University, Bangkok, Thailand.

Dr. Cornelis Reiman has gained considerable business experience as an accountant with Arthur Andersen & Co, then in technical, sales and management positions with IBM, as well as through his private management consulting practice and Board appointments. As Dean and Vice President, he established a new MBA program and business school for Shinawatra University in Thailand and, before that, taught postgraduate, internationally-focused business, management and economics subjects at Monash University in Australia.

Professor Dr. Gerald D. Sentell, currently a partner in a private merchant banking firm headquartered in the US, was a founder and CEO (for 20 years) of an international management consulting and training firm, TAI.

Ms. Siriwan Cheunban is Procurement Administrator Level 7 at the Metropolitan Electricity Authority of Thailand.

Assistant Professor Somchai Puajindanetr is a faculty member of Department of Industrial Engineering, Chulalongkorn University.

Associate Professor Dr. Mark Speece is director of the online MBA program in the School of Business, Public Administration, and Information Systems at the University of Alaska Southeast in Juneau.

Dr. Sunanta Chaisrakeo is a faculty member and past department head in the Department of International Business at Sripatum University, Bangkok, Thailand.

Associate Professor Fredric W. Swierczek is a faculty member in the School of Management at the Asian Institute of Technology, Bangkok.

Mr. Tachaphon Bisonyabut is a researcher at Department of Public Works and Town and Country, Ministry of Interior, Thailand.

Professor Dr. Hans B. Thorelli is a Distinguished Professor Emeritus at the Kelley School of Business, Business Administration, Indiana University, Bloomington and has an exceptionally long and honoured academic career across the world.

Ms Walailak Noypayak is a senior manager at the Tourism Authority of Thailand and a PhD Candidate at the Institute of International Studies, Ramkhamhaeng University, Bangkok.

Assistant Professor Dr. John Walsh is a faculty member at Shinawatra International University in