1

ASSIGNMENT
THAILAND STRUCTURE AND
MANAGEMENT
SUBJECT: COMPARATIVE
MANAGEMENT
SUBMITTED TO: MR. HASHIM ZAMEER
SUBMITTED BY: ADNAN ASLAM KHAN
(MB-09-!"
PROGRAM: MBA# MOR ($
%&
S'(')%'*"
BZU, BAHADUR SUB-CAMPUS LAYYAH
DATE 12-12-2012
2
Thailand
The name "Thailand" is associated with the dominant ethnic group, Thai. Thailand was never
under European colonial rule. It was an absolute monarchy until 1932, when it became a
constitutional monarchy. In 1939 the countrys name was changed !rom "iam to Thailand.
#ilitary dictators ruled the nation until the early 19$%s& the military remained a power!ul !orce in
national politics into the early 199%s. "ince that time, its role has diminished, and a new
constitution was adopted in 199$. The military governments a!ter 'orld 'ar II promoted rapid
economic development and attempted to assimilate ethnic minorities. (apid economic growth
continued until the late 199%s, when the economic boom o! the early part o! the decade came to
an abrupt end. )s part o! a trend toward devolution o! authority, the democratic governments o!
the 199%s adopted more liberal policies with regard to ethnic minorities. *owever, members o!
ethnic minorities continue to !ace many problems in regard to political rights and economic
security.
Location and Geography
The +ingdom o! Thailand has an area o! 19,,11- s.uare miles /013,110 s.uare 1ilometers2. The
country is commonly divided into !our main regions and borders 3urma, 4aos, 5ambodia, and
#alaysia. The northern region is hilly, with much o! its population concentrated in upland
valleys and the !lood plains o! rivers& the dominant geographic !eature is the +horat 6lateau. The
southern region is a narrow isthmus with hills running down the center. The Thai /also 1nown as
the 5entral Tai2 live mainly in the central region, with closely related groups o! Tai7spea1ing
peoples occupying most o! the remainder o! the nation. "maller ethnic groups are scattered
throughout the country, especially in the north and the northeast. 3ang1o1 has been the capital
since the late eighteenth century, when it replaced the earlier capital o! )yutthaya, which was
sac1ed by 3urmese invaders in 1$8$. 'ith a population o! almost 1% million, 3ang1o1 is the
most important city politically and economically. )bout twenty smaller regional cities have
populations o! two hundred to three hundred thousand.
Demography
The population estimate !or 2%%% is appro9imately 82 million. There are about $0 ethnic groups,
and appro9imately ,- percent o! the population is Thai, including people !rom other Tai7
spea1ing ethnic groups& the Thai, constitute about 38 percent o! the population. The Thai74ao
account !or about 32 percent o! the population& their territory !ormerly was part o! the 4ao
1ingdom. The 4anna Thai account !or about , percent o! the national population. The 6a1 Thai
constitute about , percent o! the population. :ther ma;or ethnic groups include 5hinese /about
12 percent o! the population2, #alay7spea1ing #uslims /about 3 percent2, and +hmer /about 2
percent2. The ma;ority o! the 5hinese live in central Thailand, especially in urban areas. The
#alay7spea1ing #uslims live near to the border with #alaysia. The +hmer live near the
5ambodian border. There are communities o! +orean7 and <rdu7spea1ing peoples in 3ang1o1,
and there is a small population o! #on in central Thailand.
3
Ethnic Relations
Thailand o!ten is portrayed as a culturally homogeneous country, but there are appro9imately
seventy7!ive distinct ethno linguistic groups. The 5entral Tai is the dominant ethnic group and
accounts !or 38 percent o! the population. The Thai74ao and 4anna Tai, who together account !or
about -% percent o! the population, were not assimilated into the national culture until the
twentieth century.
There have been 5hinese in Thailand !or centuries. In the nineteenth century, their numbers more
than doubled until they constituted about 1% percent o! the population. )long with 'esterners,
the 5hinese merchant class dominated the economy in the nineteenth century, especially with the
e9portation o! rice. In the early twentieth century, the 5hinese established their own educational
institutions, resulting in antipathy toward them under the nationalistic 6hi bun regime, which
blamed the 5hinese !or the countrys economic problems. In 193,, the 6hi bun government ta9ed
the 5hinese, limited the use o! their language in schools, and closed most 5hinese7language
newspapers. 5hinese immigration came to a virtual halt. 'hile anti75hinese sentiment remained
strong, by the 19$%s virtually all the 5hinese had Thai citi=enship. 'ith the growth o! a more
open and democratic society in the 199%s, the 5hinese began to e9press their culture openly.
Economy of Thailand
The Economy o! Thailand is a newly industriali=ed economy. Thailand has a relatively
diversi!ied e9port7oriented economy that grew rapidly in the latter part o! the twentieth century
until the crash o! 199$. #anu!acturing and tourism led its growth, but agriculture continued to
play an important role>employing over 8% percent o! the wor1!orce. The country remains a
ma;or producer and e9porter o! agricultural products, including rice, rubber, and tapioca.
Thailands currency is called the baht.
It is a heavily e9port7dependent economy, with e9ports accounting !or more than two thirds o! its
gross domestic product /?@62. In 2%11, Thailand has a ?@6 at current mar1et prices o!
T*31%.0- trillion /<"@3-0.80 billion appro9 2 with the growth rate o! %.1 percent, much lower
than the e9pected growth rate o! 3.0 percent due to severe damage !rom the historic !lood the
+ingdom con!ronted mainly in the last .uarter o! the year. In 2%12, the Thai economy is
e9pected to grow by 0.078.% percent, a A7shaped recovery !rom last yearBs !lood.
The industrial and the service sectors serve as the two main sectors in the Thai gross domestic
product, with the !ormer accounting !or 39 percent thereo!. )lbeit o!ten seen as an agricultural
country, Thailand has an agricultural sector which shares only ,.8 percent o! the ?@6 C lower
than the trading sector and the logistics D communication sector which account !or 13.0 percent
and 9.8 percent o! the ?@6 respectively. The construction D mining sector adds -.3 percent to
the countryBs gross domestic product. In addition to this, other service sectors 7 which include the
!inancial, the educational, the hotel D restaurant sectors etc. 7 account !or 20 percent o! the
countrys ?@6.
E-F
The Telecommunications in Thailand as well as new types o! "ervices trade are
emerging at the center !or the industrial e9pansions and economic competitiveness !or the
economy o! Thailand.
Thailand is the second largest economy in "outheast )sia, a!ter Indonesia. *owever, its per
capita ?@6 in 2%11 remains very low at T*3100, 928 /<"@0, 39-2 C slightly lower than 5hinas
per capita ?@6 in 2%11. In "outheast )sia, the +ingdom ran1s midway in terms o! its per capita
4
?@6, a!ter "ingapore, 3runei and #alaysia. )s o! 2- )ugust 2%12, Thailand holds <"@1$,
billion reserve money and international reserves which ran1s 2nd in "outheast )sia, a!ter
"ingapore. 'ith regard to the volume o! the e9ternal trade, Thailand ran1 as 2nd in "outheast
)sia, a!ter "ingapore.

Macro-Economic Trend
In the past 31 years, the economy o! Thailand has e9panded .uite considerably. The ?@6 at
current prices shows that !rom 19,% to 2%11, the si=e o! the Thai economy has e9panded nearly
si9teen7!old when measured in the Thai 3aht, or nearly eleven7!old when measured in the <.".
@ollar. This ma1es Thailand the 31st biggest economy in the world. 'ith regard to the ?@6 at
constant prices.
Industries
Agriculture, forestry, and fishing @evelopments in agriculture since the 198%s have supported
Thailands transition to an industriali=ed economy. )s recently as 19,%, agriculture
represented $%G o! employment. In 2%%, agriculture, !orestry, and !ishing contributed
only ,.-G percent to ?@6 and even in rural areas !arm ;obs represent only hal! o!
employment. Thailand is the worlds leading e9porter o! rice and a ma;or e9porter o!
shrimp. :ther crops include coconuts, corn, rubber, soybeans, sugarcane and tapioca.
In 19,0 Thailand o!!icially designated 20 percent o! the nations land area !or protected !orests
and 10 percent !or timber production. 6rotected !orests have been set aside !or conservation and
recreation, while production !orests are available !or the !orestry industry. 3etween 1992 and
2%%1, e9ports o! logs and sawn timber increased !rom 0%,%%% cubic meters to 2 million cubic
meters per year.
Thailand is the worlds second largest e9porter o! gypsum a!ter 5anada, even though government
policy limits gypsum e9ports to prevent price cuts. In 2%%3 Thailand produced more than -%
types o! minerals with an annual value o! about <"H$-% million. *owever, more than ,% percent
o! these minerals were consumed domestically.
er!ices In 2%%$ the service sector, which ranges !rom tourism to ban1ing and !inance,
contributed --.$G o! gross domestic product and employed 3$ percent o! the wor1!orce.
Thailands service industry is prominent and competitive that contributes to its e9port
growth.
Tourism Tourism ma1es a larger contribution to Thailands economy /typically about 8 percent
o! gross domestic product2 than that o! any other )sian nation. #ost tourists come to
Thailand !or various reasons>mostly !or the beaches and rela9ation, although with the
ongoing insurgency in the @eep "outh, 3ang1o1 has seen a large increase in tourism
over the past years.
)lso, a sharp increase in tourism !rom other )sian countries has contributed largely to Thailands
economy even though the 3aht has gained strength compared to most other currencies in the past
two years. In 2%%$ some 1- million tourists visited Thailand.
"an#ing and finances @angerous levels o! nonper!orming assets at Thai ban1s helped trigger
the attac1 on the Thai baht by currency speculators that led to the )sian !inancial crisis
in 199$C199,. 3y 2%%3 nonper!orming assets had been cut in hal! to about 3% percent.
5
@espite a return to pro!itability, however, Thailands ban1s continue to struggle with the legacy
o! the !inancial crisis in the !orm o! unreali=ed losses and inade.uate capital. There!ore, the
government is considering various re!orms, including establishing an integrated !inancial
regulatory agency that would !ree up the 3an1 o! Thailand to !ocus on monetary policy.
In addition, the Thai government is attempting to strengthen the !inancial sector through the
consolidation o! commercial, state7owned, and !oreign7owned institutions. "peci!ically, the
governments Iinancial "ector (e!orm #aster 6lan, which was !irst introduced in early 2%%-,
provides ta9 brea1s to !inancial institutions that engage in mergers and ac.uisitions.
Labour Thailands labor !orce was estimated at 38.9 million in 2%%$. )bout -9G were employed
in agriculture, 3$G in services, and 1-G in industry. In 2%%0 women constituted -, percent
o! the labor !orce and held an increasing share o! pro!essional ;obs. 4ess than -G o! the
wor1!orce is unioni=ed, but 11G o! industrial wor1ers and 0%G o! state enterprise
employees are unioni=ed.
)lthough laws applying to private7sector wor1ers rights to !orm and ;oin trade unions were
una!!ected by 19 "eptember 2%%8, military coup and its a!termath, wor1ers who participate in
union activities continue to have inade.uate legal protection. )ccording to the <.". @epartment
o! "tate, union wor1ers are inade.uately protected. Thailands unemployment rate lies at 1.0G
percent o! the labor !orce.
E-$F
Land Tenure and $roperty In the past, all land was owned by the crown in theory, but
individuals had use rights i! they paid ta9es on the land that they occupied. 3ecause o! the low
population density, land ownership in rural areas was not a matter o! concern. 4arge agricultural
estates were rare. The commercial buying and selling o! land too1 place in the main towns,
where commercial li!e was concentrated. <rban land was o!ten owned by "ino7Thais. In the
190%s, around 9% percent o! !armers owned their own land. "trong nationalist sentiments
in!luenced the 19-1 4and )ct, which made it di!!icult !or non7Thais to own land. In!ormal means
o! circumventing these restrictions on land ownership helped create a chaotic system in which
the title to land was di!!icult to determine. <nder the new constitution and a!ter the economic
collapse, e!!orts were made to re!orm land ownership. #any restrictions on !oreign ownership
were removed, including those placed on Thais married to !oreigners and their children.
Trade7in the mid7199%s, e9ports were e.ual in value to about 20 percent o! the gross domestic
product. The most important e9ports are computers, integrated circuits, and related parts. :ther
ma;or e9ports include electric appliances, garments, rubber, plastic products, shrimp, !ootwear,
gems and ;ewelry, rice, and canned sea!ood. #a;or imports include nonelectric machinery and
parts, electrical machinery and parts, chemicals, vehicle parts, iron and steel, crude oil,
computers and parts, metal products, and integrated circuits. )!ter the 199$ crash, the
manu!acturing sector declined sharply, especially the sectors that were highly dependent on
imports, such as garments. 3y late 199,, however, manu!acturing had begun to recover. The
<nited "tates and Japan are the largest mar1ets !or the countrys e9ports and suppliers o! its
imports. Keighboring countries, especially 5hina, have become increasingly trading important
partners. The economy o! Thailand in the table !orm on ne9t page.
6
tatistics
GD$
T*31%.0- trillion /<"@3-0.8-9 billion
E2F
2
GD$ gro%th
3.$G /as o! L3 2%122
GD$ per capita
T*3100,928
E3F
/<"@0,39-
E2F
2
GD$ by sector
agriculture /,.8G2, industry /39G2, services /02.-G2
Inflation &'$I(
3.,G /2%112
$opulation
belo% po!erty
line
$.$0G /2%1%2
Gini coefficient
-3 /2%%82
Labour force
39.82 million /2%11 est.2
)nemployment
%.$G /2%112
Main industries
)utomobiles and )utomotive parts /11G2, Iinancial
"ervices /9G2, Electric appliances and components
/,G2, Tourism /8G2, cement, auto manu!acturing,
heavy and light industries, appliances, computers and
parts, !urniture, plastics, te9tiles and garments,
agricultural processing, beverages, tobacco
Ease of Doing
"usiness Ran#
1,
th
E*ternal
E*ports
<"@22,.,30 billion /2%112
E,F
E*port goods te9tiles and !ootwear, !ishery products, rice, rubber,
;ewelry, automobiles, computers and electrical
7
appliances
Main e*port
partners
5hina 12G, Japan 1%.0G, <.". 9.8G, *ong +ong
$.2G, #alaysia 0.-G, "ingapore 0G, Indonesia -.-G
/2%11 est.2
Imports
<"@22,.-9% billion /2%112
E,F
Import goods
capital goods, intermediate goods and raw materials,
consumer goods, !uels
Main import
partners
Japan 1,.0G, 5hina 13.-G, <)E 8.3G, <.". 0.9G,
#alaysia 0.-G, "outh +orea -G /2%11 est.2
+DI stoc#
<"@119.0 billion /31 @ecember 2%11 est.2
Gross e*ternal
debt
<"@110.8 billion /3% "eptember 2%11 est.2
$ublic finances
$ublic debt
-%.0G o! ?@6 /2%11 est.2
Re!enues
<"@80.21 billion /2%11 est.2
E*penses
<"@$-.99 billion /2%11 est.2
Economic aid
Kone
'redit rating
"tandard D 6oorsM
)7 /@omestic2
333N /Ioreign2
) /TD5 )ssessment2
:utloo1M "table
#oodysM
E1%F
3aa1
:utloo1M "table
IitchM
E1%F
333
:utloo1M "table
+oreign
reser!es
<"@1$, billion /2- )ugust 2%122
E11F
$olitical Life
Go!ernment of Thailand Thailand is a constitutional monarchy. )ccording to the constitution,
the three ma;or independent authorities holding the balance o! power are e9ecutive, legislative,
and ;udicial. )lthough the +ing has little direct power under the constitution and Thailand
categori=es itsel! as a constitutional monarchy, the +ing is more than a symbol o! national
8
identity and unity. The present monarch has a great deal o! popular respect and moral authority,
which has been used to intervene in political crises and in!luence the course o! the government.
The head o! government is the 6rime #inister. <nder the present constitution, the 6rime
#inister must be a #ember o! 6arliament. 5abinet members do not have to be #embers o!
6arliament. The legislature can hold a vote o! no7con!idence against the 6remier and members o!
his 5abinet i! it has su!!icient votes. I! the votes pass, the 1ing 1eeps the government and 1ing
how it is, i! they dont, then everything changes.
The 1ing, on occasion, involves himsel! directly in political a!!airs when national stability is
threatened. 3etween 1932 and the early 199%s, the government was dominated by military and
bureaucratic elite. )!ter the elections in 1992, political parties opposed to military intervention
!ormed a coalition government, with the leader o! the @emocratic 6arty becoming prime
minister. 6arliament was dissolved in 1990, and the @emocratic 6arty lost to the Thai Kation
6arty. That government lasted only until 1998, when a !ormer military commander !ormed a
coalition government and became prime minister. The economic collapse o! 199$ led to the !all
o! that government and the eventual assumption o! power by a coalition government led by the
@emocratic 6arty with its leader, 5huan 4ee1pai, as prime minister.
) re!ormist constitution was promulgated in late 199$ with the intent to enhance participatory
democracy. )ttention has !ocused on eliminating corrupt political practices and devolving power.
@evolution has included holding elections to a wider range o! local o!!ices. ) Kational 5ounter7
5orruption 5ommission was !ormed and given some powers to monitor electoral !raud.
Thailand held its !irst national election under the 199$ constitution in January 2%%1. The newly
!ormed Thai (a1 Thai party led by Ta1sin "hinawatra, one o! Thailands richest men, de!eated
the @emocrats and won 2-, o! parliaments 0%% seats. The Thai (a1 Thai party was ;oined by the
smaller Kew )spiration party to !orm a coalition with 320 seats. Aoters appeared to have grown
tired o! 5huan 4ee1pais si97party coalition government. They were lured by Ta1sin "hinawatras
promises o! e9pansive economic policies, including his pledge to give every one o! the countrys
$%,%%% villages 1 million baht /about <.". H20,%%%2 in development !unds. The election was
!raught with corruption, which the Kational 5ounter75orruption 5ommission proved to have
only limited in!luence in curtailing.
Gender Roles and tatuses
The Relati!e tatus of ,omen and Men ?ender ine.uality is mani!est in violence against
women, societal discrimination against women, and tra!!ic1ing in women !or prostitution. E!!orts
to improve the status o! women have increased, and the 199$ constitution provides women with
e.ual rights and protections, although, some ine.ualities in the law remain. @omestic abuse
9
a!!ects women in all social classes. "peci!ic laws concerning domestic violence have not been
enacted, and the rules o! evidence ma1e prosecuting such cases di!!icult. @omestic violence
o!ten is not reported, since many victims and the police view it as a private matter.
'omen constitute !orty7!our percent o! the labor !orce. 4aws re.uire employers to give women
e.ual wages and bene!its !or e.ual wor1, and there are no legal restrictions on women owning
and managing businesses. )n increasing number o! women hold pro!essional positions, and
womens access to higher education has grown. #ore than hal! the university graduates are
women. 6olice and military academies do not accept !emale students. There is still a gap between
the average salaries o! men and women since women are concentrated in lower7paying ;obs.
There are no legal restrictions on womens participation in politics. 'hile there have been
improvements at the lower levels, women remain underrepresented in national politics.
Religion
Religious "eliefs )bout eighty7!ive percent o! the people are Theravada 3uddhists, and the
monarch must be a 3uddhist. Airtually all Tai7spea1ing peoples are Theravada 3uddhists, as are
members o! many o! the ethnic minorities. The 3uddhism o! 5entral Tais o!ten is re!erred to as
4an1avamsa, re!lecting its origins in "ri 4an1a. Thai 3uddhism, however, is a syncretic religion
that borrows !rom earlier animistic belie!s, *induism, and 5hristianity.
)ppro9imately ten percent o! the population is #uslim, primarily ethnic #alays in the south.
)lthough 5hristian missionaries have been active in the country since the nineteenth century,
only about one percent o! the population is 5hristian. The 5hristian population consists primarily
o! non7Tai ethnic minorities in the north and ethnic Aietnamese and 5hinese. There are small
numbers o! animists, 5on!ucianists, Taoists, #ahayana 3uddhists, and *indus.
Deep Rooted 'ulture of 'orruption
Thailand has had a long history o! corruption, and the types regularly seen range !rom e9tortion
and bribery to use o! insider in!ormation to buy land. These 1inds o! corruption are deeply
embedded in the Thai society !or many reasons. Ior one, o!!icials were traditionally not paid in
salaries, but instead entitled to 1%73%G o! e9penditures !or rendering their services. Traditions o!
giving gi!ts to high o!!icials also e9ist. These practices are not directly corrupting, but their
continuation when o!!icials actually do receive salaries is a ma;or basis o! corruption and how it
is perceived as otherwise.
:ne big area o! corruption popular in todays developing countries, including Thailand, is in the
energy sector. #illions and billions o! dollars are spent all over the world to develop "5lean
Energy." ThailandBs power development planning process is premised on perpetuating gains !or
vested interests and designed to continue providing perverse incentives to e9tractive and nuclear
industries. :n top o! wrong allocation o! !inances, large bribes are given to and received by
o!!icials /or their !amilies2 in charge o! choosing contractors !or the ;obs, li1e in the recent
"uvarna bhumi )irport pro;ect, where a car par1 contractor allegedly gave H20% million <"@ to
an the prime ministers sister in order to secure ac.uisition o! the ;ob.
+oreign relations of Thailand
10
Thailands !oreign policy includes support !or )"E)K C in the interest o! regional stability 7 and
emphasi=es a close and longstanding security relationship with the <nited "tates. Thailand
participates !ully in international and regional organi=ations. It has developed increasingly close
ties with other )"E)K members>Indonesia, #alaysia, the 6hilippines, "ingapore, 3runei,
4aos, 5ambodia, 3urma, and Aietnam>whose !oreign and economic ministers hold annual
meetings. (egional cooperation is progressing in economic, trade, ban1ing, political, and cultural
matters. In 2%%3, Thailand served as )6E5 host. "upachai 6anitchpa1di, the !ormer @eputy
6rime #inister o! Thailand, currently serves as @irector7?eneral o! the 'orld Trade
:rgani=ation /'T:2.
Mergers - Ac.uisitions
3etween 199$ and 2%1%, -,3%8 mergers and ac.uisitions involving Thai businesses were
announced& the announcements consisted o! a total 1nown value o! <"@H,1 billion. The year
2%1% was a new record in terms o! value with 12 bills. <"@ o! transactions. The largest
transaction with involvement o! Thai companies has beenM 6TT 5hemical 654 merged with 6TT
)romatics and (e!ining 654 valued at 3., bills. <"@ in 2%11.
R'+,%-./)&-0) ,/1 R')0'2%
Thailands cultur is str!n"l# "r!u$%!rintd& Assrtin" indi'idual $r(rncs
)a# * sn as lss i)$!rtant than ha'in" a sns !( *l!n"in" t! a "r!u$+
c!n(!r)in" t! its n!r)s+ and )aintainin" har)!n# a)!n" its ))*rs&
,uildin" lastin" and trustin" $rs!nal rlati!nshi$s is thr(!r 'r#
i)$!rtant t! )!st Thai $!$l+ -h! !(tn .$ct t! sta*lish str!n" *!nds
$ri!r t! cl!sin" an# dals& /!$l in this c!untr# $r(r t! d! *usinss -ith
th!s th# 0n!- and rs$ct& 1!ns2untl# $r!cd -ith sri!us *usinss
discussi!ns !nl# a(t r #!ur c!untr$arts ha' *c!) s!)-hat
c!)(!rta*l -ith #!u&
3lati!nshi$s ar *asd !n (a)iliarit#+ rs$ct+ and $rs!nal trust+ -hich can
ta0 a l!n" ti) t! sta*lish& ,usinss rlati!nshi$s in this c!untr# .ist
*t-n $!$l+ n!t ncssaril# *t-n c!)$anis& E'n -hn #!u ha'
-!n #!ur l!cal *usinss $artnrs (rindshi$ and trust+ th# -ill n!t
ncssaril# trust !thrs (r!) #!ur c!)$an#& That )a0s it 'r# i)$!rtant t!
0$ c!)$an# intr(acs unchan"d& 1han"in" a 0# c!ntact )a# r2uir
th rlati!nshi$ *uildin" $r!css t! start !'r& 4!rst cas+ such a chan"
)a# *rin" n"!tiati!ns t! a c!)$lt halt&
In Thailands cultur+ 5sa'in" (ac is 'r# ssntial& 6ar)!n# )ust *
)aintaind at all c!st+ and )!ti!nal rstraint is hld in hi"h st)& E'r#
$rs!ns r$utati!n and s!cial standin" rsts !n this c!nc$t& 1ausin"
)*arrass)nt t! an!thr $rs!n !r !$nl# critici7in" !thrs )a# caus a
loss of face (!r all $artis in'!l'd and can * disastr!us (!r *usinss
n"!tiati!ns& 3$utati!n and s!cial standin" str!n"l# d$nd !n a $rs!ns
a*ilit# t! c!ntr!l )!ti!ns and r)ain (rindl# at all ti)s& Th i)$!rtanc !(
di$l!)atic rstraint and tact cann!t * !'rsti)atd& 8$ #!ur c!!l and
n'r sh!- !$nl# that #!u ar u$st&
11
Thais ar usuall# 'r# (rindl# and $!lit& 9i( is thr t! * n:!#d and
0$in" a $!siti' attitud is .$ctd and a$$rciatd& N'r l!s c!ntr!l !(
#!ur )!ti!ns !r * !'rl# assrti'&
In Thailands *usinss cultur+ th rs$ct a $rs!n n:!#s d$nds $ri)aril#
!n his !r hr a" and ran0& It is 'r# di;cult (!r Thais t! ha' a c!n'rsati!n
-ith a $rs!n -h!s status is unclar+ sinc 0n!-in" -hthr s!)!n is a
su$ri!r+ in(ri!r+ !r 2ual str!n"l# in<uncs *ha'i!rs& ,usinss ladrs
)a# ha' a hi"h sns !( sl(%rlianc and can * 'r# aut!cratic and
auth!ritarian& Titls ar 'r# i)$!rtant& Ad)ird $rs!nal traits includ
$!litnss+ )!dst#+ sincrit#+ h!nst#&
C.((3/-2,%-./
The o!!icial language o! the country is Thai. #any businesspeople spea1 English, although not
always well. 'hen communicating in English, spea1 in short, simple sentences and avoid using
;argon and slang. It will help people with a limited command o! English i! you spea1 slowly,
summari=e your 1ey points o!ten, and pause !re.uently to allow !or interpretation.
Thai people usually spea1 in .uiet, gentle tones. 5onversations may include periods o! silence,
which do not necessarily convey a negative message. 4oud and boisterous behavior is perceived
as a lac1 o! sel!7control. 6eople generally converse while standing around three !eet apart.
3ecause being !riendly and saving !ace are so important in this culture, communication is
generally indirect, though slightly less so than in other )sian countries. @irect con!rontation is
inappropriate, and it is better to as1 open .uestions instead o! closed ones. 'hen responding to a
direct .uestion, Thai people may answer OyesB only to signal that they heard what you said, not
that they agree with it. Pou rarely hear a direct Ono.B Instead, they may give seemingly ambiguous
answers such as OI am not sure,B Owe will thin1 about it,B or Omaybe.B Each o! these could mean
Ono,B as does a OyesB that sounds hesitant or wea1. )lternatively, a respondent may deliberately
ignore your .uestion or pretend that he or she does not understand English. It is bene!icial to use
a similarly indirect approach when dealing with Thais, as they may perceive you as rude and
pushy i! you are too direct.
?estures are usually subtle. It is advisable to restrict your body language. Kon7verbal
communication is important, though, and you should care!ully watch !or othersB small hints, ;ust
as they will be watching you. )void any physical contact with Thai people e9cept !or
handsha1es. Kever touch someoneBs head, not even that o! a child. "ince Thais consider the le!t
hand unclean, use it only i! inevitable. 6ointing with the inde9 !inger or the !ull hand is
considered rude. Instead, gesticulate in the general direction o! whatever you are re!erring to or
point with your chin. Eye contact should be very in!re.uent. Thai people rarely loo1 the other
straight in the eye. (estrain your emotions and avoid any !acial e9pressions that may suggest
disagreement, such as grimacing or sha1ing your head.
Thai people do not e9pect !oreigners to smile as o!t en as they do. "miles and laughter do not
always indicate amusement or approval. Ire.uently, they may mas1 embarrassment, disapproval,
and other !eelings o! distress. )ccordingly, 'esterners may sometimes observe Thai people
smiling or laughing at what they might consider inappropriate moments.
12
N'4.%-,%-./
I/-%-,+ C./%,2%) ,/1 M''%-/4) ,(!r initiatin" *usinss n"!tiati!ns in
Thailand+ it is hi"hl# ad'anta"!us t! idnti(# and n"a" a l!cal
r$rsntati' -h! can )a0 th initial c!ntact& This $rs!n -ill hl$ *rid"
th cultural and c!))unicati!ns "a$+ all!-in" #!u t! c!nduct *usinss -ith
"ratr =cti'nss& 4ith!ut such an a"nt !r *usinss $artnr+ 'n
s)in"l# si)$l thin"s such as "ttin" it)s thr!u"h cust!)s can *c!)
'r# di;cult and (rustratin"& 1h!!s #!ur r$rsntati!n car(ull# t! nsur
that th# can acc!)$lish -hat #!u .$ct th) t! d!& 1!nductin"
n"!tiati!ns in Thailand -ith a ta) !( n"!tiat!rs instad !( rl#in" !n a sin"l
indi'idual
)a# s$d u$ th n"!tiati!n $r!css& It is 'ital that ta)s * -ll ali"nd+ -ith
r!ls clarl# assi"nd t! ach ))*r& 1han"in" a ta) ))*r )a# r2uir th
rlati!nshi$ *uildin" $r!css t! start !'r and sh!uld thr(!r * a'!idd& 4!rst
cas+ such a chan" can *rin" n"!tiati!ns t! a c!)$lt halt&
I( $!ssi*l+ schdul )tin"s at last (!ur -0s in ad'anc& Thais
"nrall# .$ct (!ri"n 'isit!rs t! * $unctual& In ,an"0!0 -ith its !(tn%
cha!tic tra;c and rsultin" c!nsidra*l dla#s+ all!- $lnt# !( ti) t! "t
t! an a$$!int)nt& A'!id *in" )!r than 10 t! 15 )inuts lat& >is$la#in"
an"r i( #!u ha' t! -ait+ -hich ha$$ns !(tn+ r<cts 'r# $!!rl# !n #!u&
)cademic and pro!essional titles are highly valued and must be used. Introduce and greet older
people !irst. Thais use hand sha1e only to greet !oreigners. The local greeting is the wai M the
hands are held together as i! praying, touching your body lightly somewhere between your chest
and !orehead. )!ter the introductions, o!!er your business card to everyone present. Kot having a
card as a !oreigner is viewed as unpro!essional, even though you may not always get one in
return. 3usiness cards should be o! high .uality and printed in English, with the other side
translated into Thai. "how doctorate degrees on your card and ma1e sure that it clearly states
your pro!essional title, especially i! you have the seniority to ma1e decisions. 6resent your card
with your right hand, with the Thai side !acing the recipient. "imilarly, accept othersB cards using
only the right hand. "mile while doing so, then e9amine the card care!ully. Kot reading
someoneBs card can be an insult. Ke9t, remar1 upon the card and then place it on the table in
!ront o! you or into your card case. Kever stu!! someoneBs card into your bac1 poc1et or
otherwise treat it disrespect!ully. Kever write on a personBs business card.
)t the beginning o! a meeting, there is normally some small tal1. This allows participants to
become personally ac.uainted. It is best to let the local side set the pace and !ollow along. The
primary purpose o! the !irst meeting is to become ac.uainted and build relationships. 3usiness
may be discussed, but do not try to hurry along with your agenda. It is unrealistic to e9pect initial
meetings to lead to straight decisions. Ire.uent meeting interruptions are normal and do not
signal a lac1 o! interest& /rsntati!n )atrials sh!uld * 'r# attracti'+ -ith "!!d
and clar 'isuals& ?s dia"ra)s and $icturs -hr'r (asi*l+ cut d!-n !n -!rds+
and a'!id c!)$licatd .$rssi!ns& 6a'in" #!ur hand!ut )atrials translatd t!
Thai is n!t a )ust+ *ut it hl$s in "ttin" #!ur )ssa"s acr!ss&
13
A%%-%31') ,/1 S%5+') 4everaging relationship is an important element when negotiating
in Thailand. To Thai businesspeople, negotiating is usually a ;oint problem7solving process.
'hile the buyer is in a superior position, both sides in a business deal own the responsibility to
reach agreement. They e9pect long7term commitments !rom their business partners and will
!ocus mostly on long7term bene!its. The primary negotiation style is cooperative and people may
be open to compromising i! viewed help!ul in order to move the negotiation !orward.
#aintaining harmonious relationships throughout the process is vitally important. 'hile each
party is e9pected to pursue their best interests, Thais disapprove o! competitiveness and strive to
!ind win7win solutions, avoiding con!rontation and always leaving a way out !or the other. In
!act, Thais may pre!er compromising even i! there is no real need to compromise. *owever, 1eep
in mind that there are o!ten 5hinese cultural in!luences that can a!!ect negotiation styles. The
bargaining stage o! a negotiation can be e9tensive. 6rices o!ten move more than -% percent
between initial o!!ers and !inal agreement.
haring of Information is rarely shared !reely, since the locals believe that privileged in!ormation
creates bargaining advantages. *owever, it can be advantageous to share some in!ormation as a way to
build trust.
D'2-)-./ M,6-/4
The countryBs business culture is e9tremely hierarchical and superiors en;oy enormous de!erence.
@ecision ma1ing is a very slow and deliberate process in Thailand. @ecision ma1ers are usually
senior e9ecutives who consider the best interest o! the group or organi=ation. They may consult
with others be!ore ma1ing the call. "ubordinates may be reluctant to accept responsibility.
@ecision ma1ers also rarely delegate their authority, so it is important to deal with senior
e9ecutives. ?aining access to top managers can be di!!icult, though. Pou may !irst have to deal
with layers o! subordinates, many o! whom could strongly in!luence the !inal decision. In
ThailandBs still7sha1y political and economic environment, company decisions are rarely
independent o! outside in!luences. Kever underestimate the role o! government o!!icials,
bureaucrats, and the military. )ll o! them wield considerable in!luence across many industries. )
number o! criminal groups e9ist as well, many o! which are led by high7ran1ing army o!!icers.
@oing business in the country can become e9tremely di!!icult and very unpleasant without the
support o! the Opowers7 to7be.B It is important to come prepared to deal with these outside !orces.
'hen ma1ing decisions, Thai businesspeople may not rely much on rules or laws. They usually
consider the speci!ic situation rather than applying universal principles. 6ersonal !eelings and
e9periences weigh much more strongly than empirical evidence and other ob;ective !acts do.
Thais are o!ten reluctant to ta1e ris1s. I! you e9pect them to support a ris1y decision, you may
need to !ind ways !or them to become com!ortable with it !irst. Pou are much more li1ely to
succeed i! the relationship with your counterparts is strong and you managed to win their trust.
Agreements and 'ontracts
5apturing and e9changing written understandings a!ter meetings and at 1ey negotiation stages is
use!ul. 'hile oral commitments may be legally binding, they are rarely en!orceable and may
sound stronger than what your Thai counterparts may be willing to put in writing. @o not rely on
interim agreements to be !inal. )ny part o! an agreement may still change signi!icantly be!ore
both parties sign the !inal contract. 'ritten contracts are usually 1ept high7level, capturing only
the primary aspects, terms, and conditions o! the agreement.'riting and signing the contract is a
!ormality. Thais believe that the primary strength o! an agreement lies in the partnersB
commitment rather than in its written documentation. It is recommended to consult a local legal
14
e9pert be!ore signing a contract. *owever, do not bring your attorney to the negotiation table as
it may be viewed as a sign o! mistrust. "igned contracts may not always be honored. This
depends to no small degree on the strength o! the continuing relationship between the contract
partners. It is strongly advisable to continue staying in touch and maintaining the trust o! your
Thai business partner. 3usiness partners usually e9pect the other side to remain somewhat
!le9ible i! conditions change, which may include agreeing to modi!y contract terms. Thais e9pect
to sett le all disputes out o! court.
Training programs in %or#places
#ost o! the selected !actories used training li1e on the ;ob training, !ormal training, wor1 under
supervision, and teamwor1 to !orm and develop s1ills o! labors. :ut7door training tended to be
!or so!t s1ills, !or instance7 behavior s1ills 7 attitude to wor1, passion, motive, spirit, trait,
positive thin1ing, leadership, trust!ully, personality improvement, and time management Irom
interviewing director, managers, the researcher !ound that employers needed their employees to
train onM Teamwor1 and developed management such as L5,TL#, L), I":, balance scorecard&
"1ills !or ma1ing decisions& wor1 collaborate with colleagues& problem7solving, good
communication& language, reporting D cultural understanding& "1ills !or using In!ormation
Technology Caccess and interpret in!ormation& "1ills !or better wor1 per!ormance. Training
programs in wor1places by outside trainers, group activities, role play, games and so on.
Inter!ie%ed personnel managers on training #ost o! them indicated that they understood the
importance o! training, in particular technical s1ills, but mostly trainings programs which were
conducted !ormally were behavior s1ills as they were easy to conduct because o! the use o! less
time /172 days2 and low budget. Ior technical training, it ta1es time and a!!ects to wor1 process.
Electronics, car industrial, !ood processing, said that it was not easy to conduct !ormal training
because they had to organi=e each shi!t care!ully.
15
'omparison of Thais and Americans
"asic imilarities
Thailand and the <nited "tates are 1nown as the country o! !reedom. Thailand is only one
country in "outheast )sia that was not under western control during coloni=ed period. )t the
individual or national level, both o! them seem to be !reedom7loving& they tend to resist outside
control and have high personal independence. )merican pragmatism re!lects practical human
s1ill more concerned with doing the real things than creating theories. )s the in!luence o!
3uddhism, Thais try to live in harmony with nature. Even Thai pragmatism parallels )merican
approach, both people can ma1e realistic assessments and !le9ible ad;ustments as they search !or
ways to solve problems o! mutual concern.
Key Differences
)mericans Thais
The relationship o! land
and people
7 nature as a bac1ground
!or man1ind
7 humans as a part o!
Kature
7 control o! natural
environment
7 natural disasters beyond
control
)uthority and power
7 decentrali=ed power&
distrust o! power and
authority
7 de!erence to authority
"ocial structure 7 egalitarian social order
7 comple9 hierarchy
5oncept o! time 7 lineal concept o! time 7 cyclical time sense
) hori=ontal orientation in )merican society is a constant attempt to distribute and disperse
power and authority to as broad an e9tent as possible and an accompanying tendency to level
di!!erences in status by insisting on an in!ormal egalitarianism in social relations. Thailand, in
contrast, has more o! vertical orientation, characteri=ed by a concentration o! power at the top o!
the social structure and a hierarchical social order !eaturing a series o! superiorQsubordinate
relationships, involving a show o! respect, obedience, or reciprocity.
16
ocial Relations
They have similar concept about friendship that a friend must be reliable and will give
honest, considered advice. There are differences in pace and perspective of social
relations which can be summarized in the table below.
)mericans Thais
7 tend to be assertive& distinguish
individual !rom another
7 tend to be nonassertive& try to be in
groups
7 social status is determined by
occupation, achievement, and earnings
7 dichotomy between two une.ual
positionsM age di!!erence, !amily role, or
occupational status
7 tend to e9press emotions 1%%G 7 tend to 1eep emotions under control
7 is it honest, correct, or accurateR 7 is it !itting, suitable, or properR
7 tend to be more compartmentali=ed 7 tend to react more to the totality o!
other individuals
7 a tendency to try to Oma1e upB& pre!er to O!orget
and !orgiveB
7 tend to di!!use their con!lict
humor and laughter as a good thing 7 smile covers a multitude o! emotionsM
happiness, contentment, or sadness
Attitudes toward Work
)mericans Thais
7 tend to wor1 hard& separate time !or
wor1 !rom time !or !un
7 tend to wor1 and have !un in the same
time
7 li!e is short& men could change
everything in their li!e
7
7 no matter how much human changes
thing& li!e is still in its cycle/birth, getting
older, illness, and dead2
7 li1e challenging wor1 tend to wor1 one step below their actual
17
capacity
7 ambition is a good thing& tend to
improve their position
7 wealth and power will bring only
unhappiness
7 ris17ta1ing& Snothing ventured, nothing
gainedT
7 li1e com!ort and security than all7out
individual achievement
Relations at Work
Americans Thais
:rgani=ation
structure
7 hori=ontal coordination
7 try to ma1e thing well
organi=ed&
o!ten loo1
sideways
7 vertical respect
7 try to 1eep things in good
order& mainly loo1 up and
down
)ssistance 7 initiate will come !rom the
one who needs help
7 superior is Oside that givesB
5on!rontation 7 pre!er to bring problems
out and discuss in a !ran1
manner
7 tend to avoid con!licts
6ersonal and
3usiness
7 li!e centers on oneBs ;ob 7 do not consider wor1 to be
all o! li!e& allow social or
personal time within wor1
hours
'ross-'ultural Dimensions in "usiness
#any !irms in 3ang1o1 adapted 'estern management styles but it is not easy to apply all issues
to Thai company. In the !ollowing table, it is shown )merican and Thai approaches in 3usiness.
Thais and )mericans have di!!erent perceptions o! wor1& )mericans tend to be tas17oriented
while Thai pre!erence is relationship. )s it was discussed be!ore, these attitudes are based on
di!!erent concepts in their cultures. 3oth Thai and )merican companies have to be aware o! each
other when they have to do business together.
)merican Thai
'or1 pattern 7 is based on organi=ation
and coordination
7 is based on order and
protocol
"uperior subordinate
relationship
7 is characteri=ed by an
Easy going in!ormality
7 paternalism& chie! has right
to order but also has duty to
protect and assist
)ppraisal and
6romotion
7 is based on wor1
per!ormance
7 tend to use personal
relationship
@ecision ma1ing 7 systematic, !acts7oriented
method
7 is made by the leader
18
Kegotiation 7 precision, directness and
productive use o! time& SletBs
get down to businessT
7 human relationship& the way
o! !le9ibility and congeniality
6lan 7 !it into a schedule 7 !le9ible
Learning from One Another
Though Thais and )mericans have a common core o! values, there are two basic di!!erencesM /12
di!!erent attitudes toward time and natural environment and /22 di!!erent social structures and
concepts o! authority. )merican and Thai values are the 1ey to understanding how and why
certain basic ideas are played out so di!!erently in each o! the two societies. Thais and )mericans
use the up7to7date technical e9pertise and 'estern management techni.ues but they also 1now
when and how to adapt and apply them. These cultures complement each other, and )mericans
and Thais, wor1ing together as partners, can help one another pic1 and choose the right thing
which will improve the .uality o! li!e o! both countries.
Decision making, Planning, and Negotiation
)ccording to *o!stadterBs research /*oec1lin, 199-2, Thailand scores 8- on the high power
distance side and <") scores -% on the low power distance side. In the same way, it is
mentioned in this boo1 that )merican managers seem to ma1e decision a!ter consulting with
subordinates and Thai managers seem to use their power in decision ma1ing. 6lanning is not
common in traditional Thai companies, comparing with )merican companies that have both
long7termed and short7termed plan. )s an in!luence !rom 3uddhist, Thais tend to view that
everything in !uture can change, it is unnecessary to have a plan. 5ontrast with )merican way,
they have a !i9 schedule and plan !or the !uture. )s the conse.uence !rom decision ma1ing and
planning, )merican negotiation tends to get to the point whereas Thai approach is to build up a
personal relationship. It is mentioned in TrompenaarsBs research /*oec1lin, 199-2 that Thailand
tends to be in particularism part and the <nited "tates is in universalism. That means Thais !ocus
is more on relationships and )mericans more on their plans and schedule.
19