NATIONAL ECONOMIC UNIVERSITY

BUSINESS SCHOOL

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REPORT: THAILAND’S CULTURE AND

FACTORS FOR BUSINESS

Group member:

Nguyễn Cường Thịnh 11194906

Nguyễn Cẩm Linh 11192878

Nguyễn Đức Hoàng 11192077

Đặng Quốc Hưng 11192206

Phan Xuân Kỳ 11192639

Group 8 - Class: EBDB1

HANOI, 2022
 Table of content
I) Introduction........................................................................................................................................3

II) Culture Profile..................................................................................................................................3

1, Language.......................................................................................................................................3

2, Religion.........................................................................................................................................3

3, Custom...........................................................................................................................................4

III) Factors and guidelines for doing business in Thailand....................................................................4

1, Value.............................................................................................................................................4

1.1 Collectivism.............................................................................................................................4

1.2 Power Distance........................................................................................................................4

1.3 Social Relationship..................................................................................................................5

1.4 Uncertainty Avoidance............................................................................................................5

1.5 Long-Term Orientation............................................................................................................5

2, Context..........................................................................................................................................6

3, Formality.......................................................................................................................................6

3.1 Greeting...................................................................................................................................6

3.2 Business card...........................................................................................................................7

3.3 Clothes.....................................................................................................................................7

3.4 Corporate culture.....................................................................................................................8

4, Verbal communication...................................................................................................................9

4.1 Indirectness..............................................................................................................................9

4.2 Tone of voice...........................................................................................................................9

5, Non-verbal communication.........................................................................................................10

5.1. Gestures...............................................................................................................................10

5.2. Personal space.......................................................................................................................10

III) Conclusion.....................................................................................................................................10

IV) Reference......................................................................................................................................11

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I) Introduction

Thailand is the country with the second-largest economy in ASEAN and a newly
industrialized country (it was a traditional agricultural country before).

Due to its well-developed infrastructure, free-market system, and investment-friendly

legislation, Thailand has a robust economy. Thanks to globalization, multinational
corporations, companies, and small and medium enterprises have easy access to
international markets. However, this also poses challenges regarding a multicultural,
multi-ethnic working environment. So businesses need to learn about cultural
differences to succeed in international trade.

In the era of globalization, international integration is a necessity. Understanding the

local people or local culture is extremely important for any business that wants to
expand its business. Especially for a country rich in cultural identity like Thailand.

In the next section, we will go through aspects of Thailand's culture and see how can
we do to adapt to Thailand’s culture in business.

II) Culture Profile

1, Language

The most spoken language in the country is Thai. There are 4 dialects across the
country which are Central Thai, Isaan, Southern Thai, and Northern Thai. However,
the official language of commerce in many corporate settings is English, which is
particularly common in Bangkok, the Thai capital.

2, Religion

"Never raise your voice to Thai people and never urge them to do something quickly."
It's not because they're so weak that they can't hear the scolding. And it's not because
they're tired and sluggish that they don't like being urged to do something quickly.
With most of the population following Buddhism, Thai people enjoy a peaceful,

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leisurely, free, and unhurried life. Since Thai people follow Buddhism and are deeply
absorbed in the ideas of this religion. They bring the good teachings into real life, not
follow the religion just for a temporary psychological reassurance or go to the temple
to expect the Buddha's blessing.

3, Custom

In Thailand, raising your voice is improper and seen as a sign of losing control. You
won't accomplish anything by acting abrasively or loudly. The ideal course of action
in any circumstance is to maintain a cool-hearted attitude rather than a hot-hearted
one. Finally, In pointing is frowned upon. Don't, however, point at monks or images
of any member of the Royal Family, and generally speaking, don't point at individuals
to make a point about them. If you need to point someone out, bend your hand
downward, fingers pointing toward the floor, palm facing upward, rather than
extending your finger.

III) Factors and guidelines for doing business in Thailand

1, Value

1.1 Collectivism

Thais prefer to be in groups. Individual tendencies are regarded as less essential than
belonging to a group and maintaining harmony among members. As a result, people
will be reassured that they will not do anything other or think differently from the rest
of the group. In the economic world, Thais prefer to work with people they already
know and respect. As a result, they will only engage in meaningful discussion if they
are at ease with their coworkers.

1.2 Power Distance

Thai people revere hierarchy in their society and will pay respect to elders and persons
of higher social standing. Showing respect to those of higher status and elders is a

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vital habit in Thai society, and failing to do so is considered exceedingly impolite.
Therefore, employees in higher positions are expected to treat their superiors with
courtesy and devotion.

1.3 Social Relationship

Thai people place higher importance on interpersonal relationships and life's potential
than they do on competitiveness and accomplishment. According to the National
Institute of Development Administration, Thai people are very courteous, friendly,
and indecisive, all of which are important aspects of Thai society.

1.4 Uncertainty Avoidance

Thais are not readily perplexed by unclear situations. On the contrary, they feel more
secure when they follow the rules and laws and are quite anxious when facing
difficulties they do not want to happen. Furthermore, Thais avoid doing things that put
them in danger. For example, Thai people will frequently select safe employment such
as working for the government over high-risk jobs such as musicians. Finally, Thais
prefer to invest in things that provide immediate rewards and outcomes. As a result,
we rarely see Thai entrepreneurs; instead, we see foreign businesses striving for
success and those patiently waiting for great prospective earnings.

1.5 Long-Term Orientation

Most Thais value hard work and self-discipline in their daily lives because they
believe that if they work hard and give all their work, they will be rewarded for their
efforts. Furthermore, interpersonal networking is an important component of Thai
society. Most Thais do not form close relationships with people they do not know or
are not used to meeting for the first time since they need more time to get to know
them. However, they will sustain a long-term relationship once they become
accustomed to such individuals.

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2, Context

Thai people often pay attention to hidden words and gestures instead of saying their
thoughts directly, like in European countries, which means Thailand is a high-context
culture. In other words, Thai people's thoughts are often conveyed indirectly,
especially in bad news; for example, they do not directly praise or criticize or express
their views. Instead, they tend to agree with the majority in meetings or public
discussions. Moreover, during a conversation, Thais tend to have down-casting eyes to
show respect and use a nod to express agreement or to let the opponent know they are
listening.

In addition, they attach great importance to the value of saving face because most
Thais in particular and people in high-context cultures, in general, want to maintain a
harmonious atmosphere and less argue, even when deep disagreements are not
expressed. As a result, Thais can agree even to things they disagree with and follow
certain rules instead of resorting to litigation to resolve conflicts.

In a high-context culture like Thailand, some important rules must be kept in mind.
First, Thai people are especially sensitive about touching the head because, the head is
the most important, as well as the most sacred part of the body. Therefore, touching
the head is an act that is considered extremely taboo and offensive to Thai people.
Besides, using feet to point at or touch someone's body is also considered offensive to
Thai people. In Thai culture, the foot is the part of the body that is in direct touch with
the ground, which means that it is a part of the body that is considered dirty. In
addition, taking off shoes is a must when entering sacred places of worship or simply
entering the home of an indigenous Thai.

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3, Formality

3.1 Greeting

Khun is the Thai word for "Mr." or "Mrs." or “Ms”, respectively. Thai people
frequently preface names with the term Khun while speaking to others. . Most Thai
people have a unique nickname, which is frequently used in place of the first name.

Wai displays a tremendous deal of seriousness, and the height at which the hand is
raised conveys importance. As a result, persons of lower status and younger people
frequently had to do wai before people of greater status.

Thai people will shake hands with foreign partners even though they typically greet
each other with wai rather than a handshake. Even after getting a wai from a Thai
partner, foreign business people do not necessarily need to return the gesture; all that
is required is a simple grin and a nod of approval. Wai is preferable to be used in
response to your companion as you become more accustomed to this Thai custom.

3.2 Business card

Giving a business card is a must whenever you meet someone for the first time. Better
yet, include further information on the back of the business card in Thai. When
handing out business cards, use your right hand or both of your hands. Similarly, you
must accept business cards with your right hand or both hands. Instead of immediately
placing a business card in your pocket or on the table after receiving one, spend some
time reading it. It's acceptable to put your partner's business card on the table in front
of you during major meetings.

3.3 Clothes

Thai business people typically dress professionally. Men should wear a shirt, tie, and
shoes for meetings (no sandals). Never dress casually for business meetings.

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3.4 Corporate culture

To be successful in Thailand's business, developing relationships is crucial. In general,

Before disclosing information or committing to a relationship, Thais tend to spend a
lot of time getting to know their partners. In Thailand, talking about everyday issues at
business meetings is extremely prevalent. To foster intimacy, your Thai companions
may inquire about your age, family, and educational background.

Thai people typically won't acknowledge that they don't comprehend what you say out
of fear of offending you. Additionally, they won't respond negatively or overtly
disagree with your inquiries. As a result, when the meeting is ended, foreign
businesses can believe they have struck a deal, only to be humiliated when they
discover they haven't. To ensure successful communication, you need an interpreter.

Senior employees and business people will want to see representatives in positions
similar to them, not representatives at lesser levels, as hierarchy and seniority are
crucial in Thailand. Contact the most senior person in all situations.

Thai people are simple to bargain with. This demonstrates the Thai people's
adaptability and desire to work with commercial partners. The capacity to bargain and
come to a fair agreement is a good indicator of business savvy. Sometimes, when a
contract is signed, the agreement may differ from when it was first negotiated,
especially if the circumstances drastically change (in which case both parties have
flexibility).

In Thailand, giving and receiving gifts is a standard practice in business, and you must
always return gifts. To show their affection and hospitality, Thai people frequently
present gifts to foreign guests. Don't open a present right away after receiving it.
Giving gifts doesn't have to cost a lot, yet giving fosters positive relationships with
partners.

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4, Verbal communication

4.1 Indirectness

Direct opposition is thought to be a not-suitable way, it’s better to ask open questions
and speak in an indirect way. To answer, they usually say “Yes” only to show respect
and indicate to the person next to them that they heard what they said, not sure they
precisely agree with you. So to avoid confusion, when speaking to Thai people, you
should ask for confirmation that the answer is “true, Yes, I strongly agree”. On the
other hand, “No” is considered to be an impolite way to respond and in Thailand, we
would rarely hear it in business transactions and social encounters. They prefer
implying or suggesting your point rather than directly stating it.

Thai people will usually slience when wanting to leave the meeting because the
silence helps them to withdraw from the conversation and stop any upcoming
debation. In addition, Thai people considered remaining silent to be a good thing
which reduces stress, stops further eroding of respect.

4.2 Tone of voice

Thai people frequently have a soft tone of voice. They consider those who make loud
noises to be disorganized. Raising one's voice is typically discouraged since it
suggests losing control of the situation and might make someone look bad. Bangkok
natives, on the other hand, frequently talk quicker and louder.

5, Non-verbal communication

5.1. Gestures

Thai people can determine a person's mood through body language instead of voice.
When communicating, we should keep eye contact with moderate intensity or it will
be considered impolite. In addition, we should laugh in moderation and avoid extreme
hand gestures. However, keeping your hands in your pockets is considered rude.

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5.2. Personal space

Invading personal space or touching the opposite gender in public is not acceptable.
Be especially careful with elders, teachers, and monks, who are said to be at the top of
the hierarchy and need more personal space than others. In addition, the head and feet
are the most and least sacred parts of the body, so never touch the top of the head or
use your feet to touch others. Also, women are not allowed to touch monks.

III) Conclusion

Thai people often focus on etiquette in communication, they consider communication

gestures more important than words. In order to build connections, constantly have a
respectful and polite approach when speaking with others. connections that are
peaceful, which is particularly crucial when conducting business in Thailand. Thai
people also value working with respected individuals. Building relationships is
therefore a crucial and essential component if you want to be successful in business in
Thailand. Thai business relationships are highly respected, thus you must constantly
uphold the standards and reputation of your organization. Customer trust is mostly
strengthened through social connections.

IV) Reference

1. IOR. 2019. Thailand - IOR. [online] Available at:

<https://www.iorworld.com/resources/thailand/>
2. Lothar, K (2007). Negotiating International Business
3. Selvarajaha, C., Meyerb, D., Donovan, J. (2013). Cultural context and its
influence on managerial leadership in Thailand. Asia Pacific Business Review,
19(3). doi: 10.1080/13602381.2012.714630
4. Cultural Atlas. 2020. Thai Culture. [online] Available at:
<https://culturalatlas.sbs.com.au/thai-culture/thai-culture-communication>
5. Hoinhap.org.vn. 2022. Cẩm nang kinh doanh tại Thái Lan - Trung tâm hỗ trợ
Hội nhập WTO Tp HCM. [online] Available at:

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 <https://www.hoinhap.org.vn/tiep-can-thi-truong/thi-truong-asean/8557-cam-
nang-kinh-doanh-tai-thai-lan.html>
6. Hoinhap.org.vn. 2022. Cẩm nang kinh doanh tại Thái Lan - Trung tâm hỗ trợ
Hội nhập WTO Tp HCM. [online] Available at:
<https://www.hoinhap.org.vn/tiep-can-thi-truong/thi-truong-asean/8557-cam-
nang-kinh-doanh-tai-thai-lan.html>
7. www.referenceforbusiness.com. (n.d.). Thailand, Doing Business in. [online]
Available at:
https://www.referenceforbusiness.com/encyclopedia/Str-The/Thailand-Doing-
Business-in.html.
8. sites.google.com. (n.d.). 1.3 Thai Communication Styles - Thailand and
Ireland. [online] Available at:
https://sites.google.com/site/thailandandireland/1-thailand/1-3-thai-
communication-styles.
9. Business Culture in Thailand. (n.d.). Verbal & Non-verbal Communication.
[online] Available at: https://thaibusinessculture.weebly.com/verbal--non-
verbal-communication.html.

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