Business Culture in Thailand from a Western Point of View

I started my Thailand related series of blogs a month ago. In my first blog I wrote about the issues to consider before starting a business in Thailand. You can find the blog here. My second blog was about empowering microentrepreneurs.

Today, I’m focusing on business culture in Thailand. It’s good to keep in mind that we are always looking other cultures from our personal point of view. I’m born and raised in Finland, thus it should be understood that I’m writing from a Finnish perspective. Furthermore, as a startup company, Tapp is by default a very casual working environment.

Thai business culture is conservative

Traditional Thai business culture is seen as formal and hierarchical. Relationships are important but built slowly. Seniority is respected heavily and titles are important. There are exceptions, however. Startups and millenials are rocking the business culture also in Thailand. Younger people are leading businesses and there are many women in management. Business culture in Thailand is like Bangkok, it has many faces.

Hierarchy

Decisions are made on top of the hierarchy. You need to arrange meetings with the right people to be able to get things forward. According to Geert Hofstede’s cultural dimensions’ theory power distance is much higher in Thailand (64) than, for example, in Finland (33) where I’m from. In everyday business this is visible in various ways. Relationship between managers and employees is often much more formal and hierarchical in Thailand than in Finland. Information flow is different, it’s not that easy to speak to management and express you concern. In meetings titles are important to understand your place in company hierarchy.

Groups vs. individuals

Another big difference compared to Finnish business culture is collectivism. Thailand is highly collectivist country. Belonging to a group is important and losing face in front of the group can be a big shame. In Hofstede’s individualism index Thailand has grade 20, Finland 63. Whereas Finland is an I culture, Thailand is a we culture.

Language

I haven’t confronted many language barriers while doing business in Thailand. I have been in various meetings and only once I couldn’t join the conversation because the person we were meeting didn’t speak English. On management level the language skills are normally quite good. When example hiring field sales force it might be a different issue, then communication in English might be impossible. In our case it was clear that our country manager will be local, it makes things much easier.

Practicalities

Here are some practicalities to keep in mind when doing business in Thailand.

  • Networking is important: build long-term relationships for successful business.
  • Smile can mean many things, don’t always take it as an acceptance. It’s hard to say no.
  • Be polite in every occasion, don’t let your counterpart to lose face.
  • Senior person in a team should be introduced first.
  • Dress conservatively, especially when meeting with government officials or large corporations. If you are meeting startups then the atmosphere is probably quite casual.
  • Business cards are important in Thailand as everywhere in Asia. Don’t forget to take them with you and present the card with your both hands. Remember to handle the card respectively and do not put it into your back pocket after receiving it.

 

Heini Saari is leading Tapp Commerce’s market expansion to Thailand. She loves exploring new countries & cultures and thinks she has the best job in Finland. Follow Heini on Twitter.