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“THAILAND STRUCTURE AND MANAGEMENT”
SUBJECT: MANAGEMENT SUBMITTED TO: SUBMITTED BY: COMPARATIVE MR. HASHIM ZAMEER ADNAN ASLAM KHAN (MB-09-28)
PROGRAM: MBA, MOR (7th Semester)
Smaller ethnic groups are scattered throughout the country. However. Other major ethnic groups include Chinese (about 2 . constitute about 36 percent of the population. In 1939 the country's name was changed from Siam to Thailand. the dominant geographic feature is the Khorat Plateau. There are about 75 ethnic groups. Rapid economic growth continued until the late 1990s. Thai. Location and Geography The Kingdom of Thailand has an area of 198. BAHADUR SUB-CAMPUS LAYYAH DATE 12-12-2012 Thailand The name "Thailand" is associated with the dominant ethnic group.115 square kilometers). when it became a constitutional monarchy. The Pak Thai constitute about 8 percent of the population. It was an absolute monarchy until 1932. its role has diminished. The Thai-Lao account for about 32 percent of the population. Laos. The southern region is a narrow isthmus with hills running down the center. With a population of almost 10 million. Demography The population estimate for 2000 is approximately 62 million. The country is commonly divided into four main regions and borders Burma. The northern region is hilly. The Thai (also known as the Central Tai) live mainly in the central region. the Thai. Since that time. the democratic governments of the 1990s adopted more liberal policies with regard to ethnic minorities. with much of its population concentrated in upland valleys and the flood plains of rivers. Thailand was never under European colonial rule. Cambodia. especially in the north and the northeast. including people from other Taispeaking ethnic groups. when the economic boom of the early part of the decade came to an abrupt end. the military remained a powerful force in national politics into the early 1990s. and Malaysia. their territory formerly was part of the Lao kingdom. The Lanna Thai account for about 8 percent of the national population. when it replaced the earlier capital of Ayutthaya. which was sacked by Burmese invaders in 1767.114 square miles (513. Military dictators ruled the nation until the early 1970s. About twenty smaller regional cities have populations of two hundred to three hundred thousand. and approximately 84 percent of the population is Thai. members of ethnic minorities continue to face many problems in regard to political rights and economic security. Bangkok has been the capital since the late eighteenth century. with closely related groups of Tai-speaking peoples occupying most of the remainder of the nation. As part of a trend toward devolution of authority. Bangkok is the most important city politically and economically. and a new constitution was adopted in 1997.BZU. The military governments after World War II promoted rapid economic development and attempted to assimilate ethnic minorities.
Albeit often seen as an agricultural country. The Khmer live near the Cambodian border. which blamed the Chinese for the country's economic problems.which include the financial. other service sectors . the educational. In addition to this. including rice. by the 1970s virtually all the Chinese had Thai citizenship. especially with the exportation of rice. In 2012. Along with Westerners. While anti-Chinese sentiment remained strong.3 percent to the country’s gross domestic product. Ethnic Relations Thailand often is portrayed as a culturally homogeneous country.6 percent of the GDP – lower than the trading sector and the logistics & communication sector which account for 13. the hotel & restaurant sectors etc. and there is a small population of Mon in central Thailand. but agriculture continued to play an important role—employing over 60 percent of the workforce. In 2011.0 percent. the Chinese established their own educational institutions. who together account for about 40 percent of the population. the Chinese merchant class dominated the economy in the nineteenth century. The country remains a major producer and exporter of agricultural products.12 percent of the population). The construction & mining sector adds 4. the Thai economy is expected to grow by 5. With the growth of a more open and democratic society in the 1990s.1 percent.65 billion approx ) with the growth rate of 0. There are communities of Korean. rubber. In the nineteenth century. limited the use of their language in schools. the Chinese began to express their culture openly.account for 25 percent of the 3 . The majority of the Chinese live in central Thailand. The Malay-speaking Muslims live near to the border with Malaysia.and Urdu-speaking peoples in Bangkok. and Khmer (about 2 percent). the Phi bun government taxed the Chinese. and closed most Chinese-language newspapers. Thailand's currency is called the baht. much lower than the expected growth rate of 3. Chinese immigration came to a virtual halt. In the early twentieth century. especially in urban areas.5 percent and 9.5-6. The Thai-Lao and Lanna Tai. were not assimilated into the national culture until the twentieth century. resulting in antipathy toward them under the nationalistic Phi bun regime. There have been Chinese in Thailand for centuries. The Central Tai is the dominant ethnic group and accounts for 36 percent of the population. It is a heavily export-dependent economy. Thailand has a GDP at current market prices of THB10. with the former accounting for 39 percent thereof. In 1938. Economy of Thailand The Economy of Thailand is a newly industrialized economy. and tapioca.54 trillion (USD345. The industrial and the service sectors serve as the two main sectors in the Thai gross domestic product. but there are approximately seventy-five distinct ethno linguistic groups. with exports accounting for more than two thirds of its gross domestic product (GDP).6 percent of the GDP respectively. . a V-shaped recovery from last year’s flood.5 percent due to severe damage from the historic flood the Kingdom confronted mainly in the last quarter of the year. their numbers more than doubled until they constituted about 10 percent of the population. Manufacturing and tourism led its growth. Malay-speaking Muslims (about 3 percent). Thailand has an agricultural sector which shares only 8. Thailand has a relatively diversified export-oriented economy that grew rapidly in the latter part of the twentieth century until the crash of 1997.
the Kingdom ranks midway in terms of its per capita GDP. soybeans. Dollar. With regard to the GDP at constant prices. the size of the Thai economy has expanded nearly sixteen-fold when measured in the Thai Baht.7% of gross domestic product and employed 37 percent of the workforce. 394) – slightly lower than China's per capita GDP in 2011. With regard to the volume of the external trade. although with the ongoing insurgency in the Deep South.4% percent to GDP and even in rural areas farm jobs represent only half of employment. more than 80 percent of these minerals were consumed domestically. However. and fishing Developments in agriculture since the 1960s have supported Thailand's transition to an industrialized economy. However. Thailand is the second largest economy in Southeast Asia. which ranges from tourism to banking and finance. exports of logs and sawn timber increased from 50. In 1985 Thailand officially designated 25 percent of the nation's land area for protected forests and 15 percent for timber production. Protected forests have been set aside for conservation and recreation. Most tourists come to Thailand for various reasons—mostly for the beaches and relaxation. corn. Thailand is the world's leading exporter of rice and a major exporter of shrimp. Brunei and Malaysia. As recently as 1980. its per capita GDP in 2011 remains very low at THB155. agriculture represented 70% of employment. after Singapore. Thailand holds USD178 billion reserve money and international reserves which ranks 2nd in Southeast Asia. or nearly eleven-fold when measured in the U. In Southeast Asia. Bangkok has seen a large increase in tourism over the past years. Other crops include coconuts. Thailand is the world's second largest exporter of gypsum after Canada. the economy of Thailand has expanded quite considerably. while production forests are available for the forestry industry. The Telecommunications in Thailand as well as new types of Services trade are emerging at the center for the industrial expansions and economic competitiveness for the economy of Thailand. 926 (USD5. even though government policy limits gypsum exports to prevent price cuts. Industries Agriculture. Services In 2007 the service sector. The GDP at current prices shows that from 1980 to 2011. after Indonesia. This makes Thailand the 31st biggest economy in the world. As of 24 August 2012. 4 . Macro-Economic Trend In the past 31 years. sugarcane and tapioca. contributed 44. and fishing contributed only 8. forestry.country's GDP. In 2003 Thailand produced more than 40 types of minerals with an annual value of about US$740 million. forestry. Thailand rank as 2nd in Southeast Asia. after Singapore. In 2008 agriculture. after Singapore. Tourism Tourism makes a larger contribution to Thailand's economy (typically about 6 percent of gross domestic product) than that of any other Asian nation.S. rubber. Between 1992 and 2001.000 cubic meters to 2 million cubic meters per year. Thailand's service industry is prominent and competitive that contributes to its export growth.
but individuals had use rights if they paid taxes on the land that they occupied. The most important exports are computers. Thailand's unemployment rate lies at 1. rice. In the 1950s. including those placed on Thais married to foreigners and their children. all land was owned by the crown in theory.5% percent of the labor force. the government is considering various reforms. land ownership in rural areas was not a matter of concern. Labour Thailand's labor force was estimated at 36. Other major exports include electric appliances. the Thai government is attempting to strengthen the financial sector through the consolidation of commercial. rubber. plastic products. footwear. around 90 percent of farmers owned their own land. Specifically. iron and steel. Department of State. and foreign-owned institutions.S. however. union workers are inadequately protected. a sharp increase in tourism from other Asian countries has contributed largely to Thailand's economy even though the Baht has gained strength compared to most other currencies in the past two years. which made it difficult for non-Thais to own land. such as garments. shrimp. and 14% in industry. Under the new constitution and after the economic collapse. After the 1997 crash. efforts were made to reform land ownership. state-owned. In addition. garments. Informal means of circumventing these restrictions on land ownership helped create a chaotic system in which the title to land was difficult to determine. The commercial buying and selling of land took place in the main towns. especially the sectors that were highly dependent on imports. and related parts. By 2003 nonperforming assets had been cut in half to about 30 percent. provides tax breaks to financial institutions that engage in mergers and acquisitions. Because of the low population density. In 2007 some 14 million tourists visited Thailand. Less than 4% of the workforce is unionized. Strong nationalist sentiments influenced the 1941 Land Act. In 2005 women constituted 48 percent of the labor force and held an increasing share of professional jobs. Trade-in the mid-1990s. 37% in services. gems and jewelry. Urban land was often owned by Sino-Thais. integrated circuits. metal products. military coup and its aftermath. computers and parts. Therefore. and integrated circuits. which was first introduced in early 2004. and canned seafood. Land Tenure and Property In the past. The United States and Japan are the largest markets for the country's exports and suppliers of its 5 . including establishing an integrated financial regulatory agency that would free up the Bank of Thailand to focus on monetary policy.Also. the government's Financial Sector Reform Master Plan. Although laws applying to private-sector workers' rights to form and join trade unions were unaffected by 19 September 2006. electrical machinery and parts. According to the U. exports were equal in value to about 25 percent of the gross domestic product.9 million in 2007. manufacturing had begun to recover. crude oil. where commercial life was concentrated. chemicals. Thailand's banks continue to struggle with the legacy of the financial crisis in the form of unrealized losses and inadequate capital. the manufacturing sector declined sharply. vehicle parts. By late 1998. Major imports include nonelectric machinery and parts. About 49% were employed in agriculture. however. Many restrictions on foreign ownership were removed. Despite a return to profitability. workers who participate in union activities continue to have inadequate legal protection. Large agricultural estates were rare. Banking and finances Dangerous levels of nonperforming assets at Thai banks helped trigger the attack on the Thai baht by currency speculators that led to the Asian financial crisis in 1997–1998. but 11% of industrial workers and 50% of state enterprise employees are unionized.
649 billion) 3. cement. Financial Services (9%). Electric appliances and components Main industries (8%). furniture. Statistics GDP GDP growth THB10.) Unemployment 0. appliances. auto manufacturing. textiles and garments.62 million (2011 est.4%) Inflation (CPI) 3. have become increasingly trading important partners.394) GDP by sector agriculture (8. agricultural processing. computers and parts. especially China.6%).926 (USD5.7% (2011) Automobiles and Automotive parts (11%). services (52.54 trillion (USD345. Tourism (6%). plastics.7% (as of Q3 2012) GDP per capita THB155. beverages.imports. The economy of Thailand in the table form on next page.75% (2010) line Gini coefficient 43 (2006) Labour force 39. heavy and light industries. industry (39%).8% (2011) Population below poverty 7. tobacco Ease of Doing th Business Rank 18 6 . Neighboring countries.
5%.) Gross external USD115.) Imports USD228. consumer goods.4% partners (2011 est. automobiles. fuels Main import Japan 18. Singapore 5%.) USD65. 5. UAE 6.490 billion (2011) Import goods capital goods.3%.2%.6%. U.S.4%.(Domestic) BBB+ (Foreign) A (T&C Assessment) Outlook: Stable Credit rating Moody's: Baa1 Outlook: Stable Fitch: BBB Outlook: Stable Foreign USD178 billion (24 August 2012) reserves 7 .9%.835 billion (2011) textiles and footwear.5 billion (31 December 2011 est.5% of GDP (2011 est.) USD74. Hong Kong 7.S. intermediate goods and raw materials.6 billion (30 September 2011 est.21 billion (2011 est.External Exports USD228.) FDI stock USD119.4%. 9.) Economic aid None Standard & Poor's: A. fishery products. partners Malaysia 5. computers and electrical appliances Main export China 12%. Japan 10. rice. U.99 billion (2011 est. South Korea 4% (2011 est. China 13.5%. Export goods jewelry. Malaysia 5.) debt Public finances Public debt Revenues Expenses 40.4%. Indonesia 4. rubber.
then everything changes. the three major independent authorities holding the balance of power are executive. with the leader of the Democratic Party becoming prime minister. Between 1932 and the early 1990s. $25.000 villages 1 million baht (about U. if they don't. They were lured by Taksin Shinawatra's promises of expansive economic policies. defeated the Democrats and won 248 of parliament's 500 seats. If the votes pass. one of Thailand's richest men. political parties opposed to military intervention formed a coalition government. and judicial. involves himself directly in political affairs when national stability is threatened. The economic collapse of 1997 led to the fall of that government and the eventual assumption of power by a coalition government led by the Democratic Party with its leader.000) in development funds. legislative. the king keeps the government and king how it is. The king. Under the present constitution. Chuan Leekpai. including his pledge to give every one of the country's 70. Parliament was dissolved in 1995. According to the constitution. A reformist constitution was promulgated in late 1997 with the intent to enhance participatory democracy. 8 . Voters appeared to have grown tired of Chuan Leekpai's six-party coalition government. which the National Counter-Corruption Commission proved to have only limited influence in curtailing. the government was dominated by military and bureaucratic elite. The Thai Rak Thai party was joined by the smaller New Aspiration party to form a coalition with 325 seats. A National Counter-Corruption Commission was formed and given some powers to monitor electoral fraud. the Prime Minister must be a Member of Parliament. The head of government is the Prime Minister.Political Life Government of Thailand Thailand is a constitutional monarchy. Although the King has little direct power under the constitution and Thailand categorizes itself as a constitutional monarchy. Thailand held its first national election under the 1997 constitution in January 2001. Devolution has included holding elections to a wider range of local offices. The election was fraught with corruption. Cabinet members do not have to be Members of Parliament. which has been used to intervene in political crises and influence the course of the government. That government lasted only until 1996. The present monarch has a great deal of popular respect and moral authority. as prime minister. After the elections in 1992. and the Democratic Party lost to the Thai Nation Party. when a former military commander formed a coalition government and became prime minister. The legislature can hold a vote of no-confidence against the Premier and members of his Cabinet if it has sufficient votes. Attention has focused on eliminating corrupt political practices and devolving power. The newly formed Thai Rak Thai party led by Taksin Shinawatra.S. on occasion. the King is more than a symbol of national identity and unity.
One big area of corruption popular in today's developing countries. and there are no legal restrictions on women owning and managing businesses. There is still a gap between the average salaries of men and women since women are concentrated in lower-paying jobs. primarily ethnic Malays in the south. Women constitute forty-four percent of the labor force. Traditions of giving gifts to high officials also exist. and the 1997 constitution provides women with equal rights and protections. although. is a syncretic religion that borrows from earlier animistic beliefs. and Hindus. Thai Buddhism. reflecting its origins in Sri Lanka. Religion Religious Beliefs About eighty-five percent of the people are Theravada Buddhists. Specific laws concerning domestic violence have not been enacted. Domestic violence often is not reported. Hinduism. Virtually all Tai-speaking peoples are Theravada Buddhists. Mahayana Buddhists. Taoists. For one. Efforts to improve the status of women have increased. is in the energy sector. as are members of many of the ethnic minorities. Millions and billions of dollars are spent all over the world to develop "Clean Energy. There are small numbers of animists. Laws require employers to give women equal wages and benefits for equal work. and the monarch must be a Buddhist." Thailand’s power development planning process is premised on perpetuating gains for vested interests and designed to continue providing perverse incentives to extractive and nuclear industries. Approximately ten percent of the population is Muslim. large bribes are given to and received by 9 . On top of wrong allocation of finances. The Buddhism of Central Tais often is referred to as Lankavamsa. and Christianity. since many victims and the police view it as a private matter. There are no legal restrictions on women's participation in politics. but their continuation when officials actually do receive salaries is a major basis of corruption and how it is perceived as otherwise. however. Confucianists. These practices are not directly corrupting. The Christian population consists primarily of non-Tai ethnic minorities in the north and ethnic Vietnamese and Chinese. and the rules of evidence make prosecuting such cases difficult. societal discrimination against women. Deep Rooted Culture of Corruption Thailand has had a long history of corruption. More than half the university graduates are women. Police and military academies do not accept female students. and women's access to higher education has grown. including Thailand. and trafficking in women for prostitution. officials were traditionally not paid in salaries. women remain underrepresented in national politics. Although Christian missionaries have been active in the country since the nineteenth century. some inequalities in the law remain. only about one percent of the population is Christian. Domestic abuse affects women in all social classes. but instead entitled to 10-30% of expenditures for rendering their services.Gender Roles and Statuses The Relative Status of Women and Men Gender inequality is manifest in violence against women. These kinds of corruption are deeply embedded in the Thai society for many reasons. While there have been improvements at the lower levels. and the types regularly seen range from extortion and bribery to use of insider information to buy land. An increasing number of women hold professional positions.
Cambodia. 4. Worst case. Asserting individual preferences may be seen as less important than having a sense of belonging to a group. respect. the announcements consisted of a total known value of USD$81 billion. Laos. In Thailand’s culture. Mergers & Acquisitions Between 1997 and 2010. and personal trust. not necessarily between companies. The largest transaction with involvement of Thai companies has been: PTT Chemical PCL merged with PTT Aromatics and Refining PCL valued at 3. It has developed increasingly close ties with other ASEAN members—Indonesia. People in this country prefer to do business with those they know and respect. Relationships are based on familiarity. Burma.officials (or their families) in charge of choosing contractors for the jobs. and cultural matters. the former Deputy Prime Minister of Thailand. and Vietnam—whose foreign and economic ministers hold annual meetings. That makes it very important to keep company interfaces unchanged. USD in 2011. banking. and emotional restraint is held in high esteem. In 2003. Business relationships in this country exist between people. trade. Foreign relations of Thailand Thailand's foreign policy includes support for ASEAN – in the interest of regional stability . USD of transactions. currently serves as Director-General of the World Trade Organization (WTO). The year 2010 was a new record in terms of value with 12 bills. political.8 bills. Consequently proceed with serious business discussions only aft er your counterparts have become somewhat comfortable with you. Supachai Panitchpakdi.306 mergers and acquisitions involving Thai businesses were announced. the Philippines. and maintaining harmony among its members. Even when you have won your local business partners’ friendship and trust. Thailand participates fully in international and regional organizations. such a change may bring negotiations to a complete halt. Thailand served as APEC host. Malaysia. Every person’s reputation and social standing rests on this concept. Building lasting and trusting personal relationships is therefore very important to most Thai people. Causing 10 . Regional cooperation is progressing in economic. Singapore.and emphasizes a close and longstanding security relationship with the United States. like in the recent Suvarna bhumi Airport project. where a car park contractor allegedly gave $250 million USD to an the prime minister's sister in order to secure acquisition of the job. Brunei. who often expect to establish strong bonds prior to closing any deals. which can take a long time to establish. conforming to its norms. they will not necessarily trust others from your company. ‘saving face’ is very essential. Changing a key contact may require the relationship building process to start over. Relationships and Respect Thailand’s culture is strongly group-oriented. Harmony must be maintained at all cost.
Many businesspeople speak English.’ ‘we will think about it. Eye contact should be very infrequent. Reputation and social standing strongly depend on a person’s ability to control emotions and remain friendly at all times. though. Life is there to be enjoyed and keeping a positive attitude is expected and appreciated.embarrassment to another person or openly criticizing others may cause a loss of face for all parties involved and can be disastrous for business negotiations. Thai people rarely look the other 11 . Titles are very important. It is advisable to restrict your body language. speak in short. gesticulate in the general direction of whatever you are referring to or point with your chin. gentle tones. summarize your key points often. Thai people may answer ‘yes’ only to signal that they heard what you said. Since Thais consider the left hand unclean. since knowing whether someone is a superior. they may give seemingly ambiguous answers such as ‘I am not sure. a respondent may deliberately ignore your question or pretend that he or she does not understand English.’ Instead. sincerity. and you should carefully watch for others’ small hints. communication is generally indirect. When communicating in English. inferior.’ or ‘maybe. though slightly less so than in other Asian countries. It is very difficult for Thais to have a conversation with a person whose status is unclear. honesty. People generally converse while standing around three feet apart. Alternatively. Avoid any physical contact with Thai people except for handshakes. the respect a person enjoys depends primarily on his or her age and rank. Gestures are usually subtle. Because being friendly and saving face are so important in this culture. not even that of a child. It will help people with a limited command of English if you speak slowly. Non-verbal communication is important. and pause frequently to allow for interpretation. use it only if inevitable. Business leaders may have a high sense of self-reliance and can be very autocratic and authoritarian. as they may perceive you as rude and pushy if you are too direct. which do not necessarily convey a negative message. Instead.’ as does a ‘yes’ that sounds hesitant or weak. not that they agree with it. Direct confrontation is inappropriate. Communication The official language of the country is Thai. or equal strongly influences behaviors. Never lose control of your emotions or be overly assertive. Pointing with the index finger or the full hand is considered rude. and it is better to ask open questions instead of closed ones. You rarely hear a direct ‘no. Thais are usually very friendly and polite. Keep your cool and never show openly that you are upset. Never touch someone’s head. In Thailand’s business culture. Thai people usually speak in quiet. modesty. Loud and boisterous behavior is perceived as a lack of self-control. When responding to a direct question. Admired personal traits include politeness.’ Each of these could mean ‘no. although not always well. just as they will be watching you. It is beneficial to use a similarly indirect approach when dealing with Thais. The importance of diplomatic restraint and tact cannot be overestimated. Conversations may include periods of silence. simple sentences and avoid using jargon and slang.
It is vital that teams be well aligned. touching your body lightly somewhere between your chest and forehead. especially if you have the seniority to make decisions. schedule meetings at least four weeks in advance. Westerners may sometimes observe Thai people smiling or laughing at what they might consider inappropriate moments. offer your business card to everyone present. Displaying anger if you have to wait. Choose your representation carefully to ensure that they can accomplish what you expect them to do. such a change can bring negotiations to a complete halt. Accordingly. with the other side translated into Thai. Business cards should be of high quality and printed in English. Conducting negotiations in Thailand with a team of negotiators instead of relying on a single individual may speed up the negotiation process. there is normally some small talk. with the Thai side facing the recipient. Introduce and greet older people first. then examine the card carefully. such as grimacing or shaking your head. Academic and professional titles are highly valued and must be used. After the introductions. This allows participants to become personally acquainted. Avoid being more than 10 to 15 minutes late. allowing you to conduct business with greater effectiveness. The local greeting is the wai : the hands are held together as if praying. Show doctorate degrees on your card and make sure that it clearly states your professional title. In Bangkok with its oftenchaotic traffic and resulting considerable delays. it is highly advantageous to identify and engage a local representative who can make the initial contact. Not reading someone’s card can be an insult. reflects very poorly on you. The 12 . allow plenty of time to get to an appointment. At the beginning of a meeting. Next. even seemingly simple things such as getting items through customs can become very difficult and frustrating. and other feelings of distress. Never stuff someone’s card into your back pocket or otherwise treat it disrespectfully. Similarly. accept others’ cards using only the right hand. Frequently. Smile while doing so. Present your card with your right hand. even though you may not always get one in return. Negotiation Initial Contacts and Meetings Before initiating business negotiations in Thailand. disapproval. which happens often. with roles clearly assigned to each member. Thai people do not expect foreigners to smile as oft en as they do. remark upon the card and then place it on the table in front of you or into your card case. Restrain your emotions and avoid any facial expressions that may suggest disagreement. This person will help bridge the cultural and communications gap. Thais generally expect foreign visitors to be punctual.straight in the eye. they may mask embarrassment. Never write on a person’s business card. Without such an agent or business partner. If possible. Smiles and laughter do not always indicate amusement or approval. Worst case. Thais use hand shake only to greet foreigners. Not having a card as a foreigner is viewed as unprofessional. It is best to let the local side set the pace and follow along. Changing a team member may require the relationship building process to start over and should therefore be avoided.
Personal feelings and experiences weigh much more strongly than empirical evidence and other objective facts do. Decision Making The country’s business culture is extremely hierarchical and superiors enjoy enormous deference. Decision makers also rarely delegate their authority. and the military. If you expect them to support a risky decision. with good and clear visuals. It is unrealistic to expect initial meetings to lead to straight decisions. While each party is expected to pursue their best interests. it can be advantageous to share some information as a way to build trust. The primary negotiation style is cooperative and people may be open to compromising if viewed helpful in order to move the negotiation forward. When making decisions. You are much more likely to succeed if the relationship with your counterparts is strong and you managed to win their trust. you may need to find ways for them to become comfortable with it first. To Thai businesspeople. Use diagrams and pictures wherever feasible. so it is important to deal with senior executives. Thais are often reluctant to take risks. many of whom could strongly influence the final decision. Gaining access to top managers can be difficult.’ It is important to come prepared to deal with these outside forces. They may consult with others before making the call. Subordinates may be reluctant to accept responsibility. Agreements and Contracts Capturing and exchanging written understandings after meetings and at key negotiation stages is 13 . A number of criminal groups exist as well. However. While the buyer is in a superior position. Doing business in the country can become extremely difficult and very unpleasant without the support of the ‘powers. They expect long-term commitments from their business partners and will focus mostly on long-term benefits.primary purpose of the first meeting is to become acquainted and build relationships. avoiding confrontation and always leaving a way out for the other. both sides in a business deal own the responsibility to reach agreement. Decision making is a very slow and deliberate process in Thailand. Thai businesspeople may not rely much on rules or laws. All of them wield considerable influence across many industries. many of which are led by high-ranking army officers. They usually consider the specific situation rather than applying universal principles. Attitudes and Styles Leveraging relationship is an important element when negotiating in Thailand. Presentation materials should be very attractive. and avoid complicated expressions. Having your handout materials translated to Thai is not a must. Frequent meeting interruptions are normal and do not signal a lack of interest. In Thailand’s still-shaky political and economic environment. though. Decision makers are usually senior executives who consider the best interest of the group or organization. but do not try to hurry along with your agenda. Thais may prefer compromising even if there is no real need to compromise. keep in mind that there are often Chinese cultural influences that can affect negotiation styles. Business may be discussed. company decisions are rarely independent of outside influences. The bargaining stage of a negotiation can be extensive. Maintaining harmonious relationships throughout the process is vitally important. negotiating is usually a joint problem-solving process.to-be. but it helps in getting your messages across. bureaucrats. Never underestimate the role of government officials. In fact. You may first have to deal with layers of subordinates. since the locals believe that privileged information creates bargaining advantages. Thais disapprove of competitiveness and strive to find win-win solutions. Sharing of Information is rarely shared freely. However. Prices often move more than 40 percent between initial offers and final agreement. cut down on words.
This depends to no small degree on the strength of the continuing relationship between the contract partners. but mostly trainings programs which were conducted formally were behavior skills as they were easy to conduct because of the use of less time (1-2 days) and low budget. good communication. Skills for better work performance. do not bring your attorney to the negotiation table as it may be viewed as a sign of mistrust.Writing and signing the contract is a formality. managers. Business partners usually expect the other side to remain somewhat flexible if conditions change. Interviewed personnel managers on training Most of them indicated that they understood the importance of training. work under supervision. While oral commitments may be legally binding. Out-door training tended to be for soft skills.attitude to work. Thais expect to sett le all disputes out of court. leadership. Signed contracts may not always be honored. QA.useful. group activities. games and so on. trait. reporting & cultural understanding. Do not rely on interim agreements to be final. spirit. work collaborate with colleagues. positive thinking. which may include agreeing to modify contract terms. 14 . formal training. role play. said that it was not easy to conduct formal training because they had to organize each shift carefully. Thais believe that the primary strength of an agreement lies in the partners’ commitment rather than in its written documentation. and time management From interviewing director. for instance. It is recommended to consult a local legal expert before signing a contract. Training programs in workplaces by outside trainers. in particular technical skills. Any part of an agreement may still change significantly before both parties sign the final contract. it takes time and affects to work process. personality improvement. However. capturing only the primary aspects. Skills for using Information Technology –access and interpret information. trustfully. Electronics. Written contracts are usually kept high-level. It is strongly advisable to continue staying in touch and maintaining the trust of your Thai business partner. the researcher found that employers needed their employees to train on: Teamwork and developed management such as QC. balance scorecard. ISO. and teamwork to form and develop skills of labors. car industrial. Skills for making decisions. For technical training. and conditions of the agreement. they are rarely enforceable and may sound stronger than what your Thai counterparts may be willing to put in writing. passion.TQM. language. motive. terms.behavior skills . problem-solving. food processing. Training programs in workplaces Most of the selected factories used training like on the job training.
Thais try to live in harmony with nature. both people can make realistic assessments and flexible adjustments as they search for ways to solve problems of mutual concern. distrust of power and authority . they tend to resist outside control and have high personal independence. As the influence of Buddhism. At the individual or national level. has more of vertical orientation.Comparison of Thais and Americans Basic Similarities Thailand and the United States are known as the country of freedom.nature as a background for mankind .egalitarian social order .lineal concept of time Thais .decentralized power. Thailand is only one country in Southeast Asia that was not under western control during colonized period. American pragmatism reflects practical human skill more concerned with doing the real things than creating theories.humans as a part of Nature .complex hierarchy . Key Differences Americans . characterized by a concentration of power at the top of 15 . Thailand.deference to authority .control of natural environment .cyclical time sense The relationship of land and people Authority and power Social structure Concept of time A horizontal orientation in American society is a constant attempt to distribute and disperse power and authority to as broad an extent as possible and an accompanying tendency to level differences in status by insisting on an informal egalitarianism in social relations.natural disasters beyond control . both of them seem to be freedom-loving. Even Thai pragmatism parallels American approach. in contrast.
family role.tend to diffuse their conflict .tend to be more compartmentalized . suitable. obedience. or accurate? . or occupational status . involving a show of respect. correct. separate time for work from time for fun Thais . distinguish individual from another . or reciprocity. contentment. There are differences in pace and perspective of social relations which can be summarized in the table below.social status is determined by occupation. or proper? .tend to work hard.smile covers a multitude of emotions: happiness.tend to express emotions 100% .tend to react more to the totality of other individuals . achievement. Social Relations They have similar concept about friendship that a friend must be reliable and will give honest. or sadness .tend to be nonassertive. Americans . try to be in groups .tend to keep emotions under control .a tendency to try to ‘make up’.tend to be assertive. prefer to ‘forget and forgive’ humor and laughter as a good thing Attitudes toward Work Americans .the social structure and a hierarchical social order featuring a series of superior/subordinate relationships.is it honest. and earnings Thais .tend to work and have fun in the same time 16 . considered advice.is it fitting.dichotomy between two unequal positions: age difference.
is based on order and and coordination protocol Superior subordinate . it is shown American and Thai approaches in Business.horizontal coordination . and dead) tend to work one step below their actual capacity . men could change everything in their life .initiate will come from the one who needs help .tend to avoid conflicts Assistance Confrontation Personal and Business . chief has right 17 . these attitudes are based on different concepts in their cultures. allow social or personal time within work hours Cross-Cultural Dimensions in Business Many firms in Bangkok adapted Western management styles but it is not easy to apply all issues to Thai company. “nothing ventured.try to keep things in good order. Both Thai and American companies have to be aware of each other when they have to do business together.superior is ‘side that gives’ . tend to improve their position .risk-taking.try to make thing well organized.paternalism. illness. As it was discussed before.wealth and power will bring only unhappiness ..is characterized by an . Thais and Americans have different perceptions of work. mainly look up and down . life is still in its cycle(birth.is based on organization . nothing gained” .like comfort and security than all-out individual achievement Relations at Work Organization structure Americans .ambition is a good thing. In the following table. getting older. often look sideways .like challenging work .vertical respect .do not consider work to be all of life.prefer to bring problems out and discuss in a frank manner .no matter how much human changes thing. American Thai Work pattern . Americans tend to be task-oriented while Thai preference is relationship.life centers on one’s job Thais .life is short.
can help one another pick and choose the right thing which will improve the quality of life of both countries. there are two basic differences: (1) different attitudes toward time and natural environment and (2) different social structures and concepts of authority. and Negotiation According to Hofstadter’s research (Hoecklin. In the same way. Thais and Americans use the up-to-date technical expertise and Western management techniques but they also know when and how to adapt and apply them. and Americans and Thais.is made by the leader . It is mentioned in Trompenaars’s research (Hoecklin. 1994) that Thailand tends to be in particularism part and the United States is in universalism. American negotiation tends to get to the point whereas Thai approach is to build up a personal relationship.tend to use personal relationship . facts-oriented method .flexible Plan Learning from One Another Though Thais and Americans have a common core of values. it is unnecessary to have a plan. That means Thais focus is more on relationships and Americans more on their plans and schedule. These cultures complement each other.systematic. working together as partners. Decision making. they have a fix schedule and plan for the future. comparing with American companies that have both long-termed and short-termed plan. American and Thai values are the key to understanding how and why certain basic ideas are played out so differently in each of the two societies.relationship Appraisal and Promotion Decision making Negotiation Easy going informality . Thailand scores 64 on the high power distance side and USA scores 40 on the low power distance side. 1994). the way of flexibility and congeniality . Thais tend to view that everything in future can change.human relationship. “let’s get down to business” . As the consequence from decision making and planning. 18 . it is mentioned in this book that American managers seem to make decision after consulting with subordinates and Thai managers seem to use their power in decision making. Planning.is based on work performance . As an influence from Buddhist.fit into a schedule to order but also has duty to protect and assist . Planning is not common in traditional Thai companies. Contrast with American way.precision. directness and productive use of time.
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