Thailand, formerly known as Siam, is one of the most important trading nations in Southeast Asia. At just under 200,000 square miles, Thailand is approximately three-fourths the size of Texas. Thailand has a population of approximately 57 million (or 3.3 times Texas's population). This makes Thailand among the world's most densely populated nations.
Thailand, until 1997, was one of the most rapidly developing nations in the world. In July 1997, however, the Thai economy was shaken to its foundations. The July 1997 collapse of the baht (Thailand's currency) soon spread beyond Thailand, where it became known as the East Asian economic crisis.
Thailand's economic collapse resulted from several factors, not the least of which was that virtually no one had thought a collapse was possible. Because of Thailand's historic stability, the 1997 economic collapse caught most observers by surprise. Thailand had for decades shown remarkable growth. Thus, while in the 1980s Thailand emerged as one of the strongest developing economies in world trade, its growth was not unprecedented.
Beginning in the 1960s and throughout the 1970s Thailand sustained an annual economic growth rate exceeding 7 percent. Following the double-digit growth of the 1980s, Thailand had seemingly stabilized at the still quite respectable annual gross domestic product (GDP) of 8 percent. Moreover, even during the political instability in the nation in 1991 and 1992, the Thai economy remained healthy.
During the last decade before the crash, Thailand's exports more than doubled, making major inroads in the global marketplace in manufactured goods ranging from textiles to integrated circuitry. Even in agriculture, the nation had shown a shift from rice to processed food exports such as canned fruit and fish.
It was, however, during the last four years of the 1980s that Thailand took its role as one of Asia's economic tigers. During those four years, Thailand's averaged annual economic growth rate had reached 10 percent, with a growth in GDP of 18.2 percent. While political difficulties had reduced that GDP by the 1990s, Thailand still averaged over 8 percent for most of the decade. By the end of 1997 that figure had fallen to -0.4 percent.
The signs of trouble were difficult to see before 1997. At the beginning of the 1990s, Thailand's banks and larger companies began to borrow in dollars and did not maintain fallback positions. They adopted this position precisely because the nation was economically so robust that few people recognized the possibility of any exchange rate risk. The resultant investment capital was, in turn, used to fuel a real estate boom. Within a few years, the property speculation leveled out.
The slowing of the overheated real estate market, however, was not in itself a bad sign, and had in fact been anticipated to some extent. The timing of the downturn, however, was significant. By the mid1990s many foreign investors began to grow cautious of investment throughout Southeast Asia as they waited to see the results of Hong Kong's repatriation with China in 1997. This caution, in turn, began to slow Thailand's export growth, the engine that drove the Thai economic miracle.
By 1996 many financial analysts began to question whether the Bank of Thailand could continue to tie the baht to the U.S. dollar. In response, the Bank of Thailand attempted to shore up the exchange rate, seriously compromising its foreign exchange reserves. Finding this course of action untenable, the Bank of Thailand in 1997 floated the exchange rate. What followed was one of the most dramatic currency readjustments in history, with the baht falling by 27 percent against the dollar in a single day.
The result was a dramatic leap in foreign liabilities that Thai firms could not repay. The result in July 1997 was the Thai economic collapse.
Thailand's prime minister at the time, Chavalit Yongchaiyudh entered into a $14 billion agreement with the International Monetary Fund (IMF) to rebuild economic stability and to augment foreign exchange reserves. The economy, however, continued to weaken, and Chawalit Yongchaiyudh resigned. His successor as prime minister, Chuan Likphai, strictly followed the IMF program. By February 1998 the Thai economy seemed to have stabilized.
While the East Asian economic crisis began in Thailand, it is notable that Thailand was among the first nations to have at least moderately begun to recover. This can be attributed to a number of factors too, ranging from strictly adhering to the IMF program to confidence in the king. Most significantly, though, is that, despite the collapse of its currency, Thailand's economy remained basically sound.
Thailand has long held a reputation as the world's leading rice exporter, and it still controls more than a third of all rice exports. Additionally, Thailand remains a major producer of tapioca (second in the world), as well as sugar, coconuts, and cotton. As a result, two-thirds of the nation's labor force still remains tied to agriculture. Also, Thailand is a leading producer of gemstones, notably sapphires. All of these areas have remained stable.
The economic crisis affected primarily the manufacturing and service sectors that had fueled Thailand's spectacular growth. By 1998 Thailand's economy had once again stabilized but the nation remains in deep recession.
Thailand is not a homogeneous nation. Approximately 75 percent of Thailand's population are ethnic Thais. This group itself is not homogeneous—dividing into the dominant central Thais (or Siamese) of the Chao Phraya Delta and the nearly equally populous Thai-Lao of the northeastern part of the country near the border with Laos. The ethnic Thais also include the less numerous Northern Thais as well as several ethnically distinct Thai-speaking groups, such as the Shan, the Phuan, and the Yaw peoples. Each of these groups has its own dialect and, to some extent, its own business behavior and cultural variations. Still the vast majority of interaction that the farang —foreigner—will have in business will be among the culturally and economically dominant central Thais.
Much more important for the farang —at least in terms of business—than the distinctions among Thai-speaking groups is Thailand's important Chinese minority. Between 12 and 14 percent of Thailand's population is comprised of ethnic Chinese. As with Thailand's neighbors in Southeast Asia, the ethnic-Chinese presence and influence in business far exceeds their numbers in the population. In distinct contrast to the Philippines, Malaysia, Indonesia, and other Asian nations where the Chinese play a significant economic role, however, Thailand has experienced very little ethnic tensions between the two groups, and ethnic-Chinese groups have been harmoniously integrated into day-to-day life in Thailand. This is particularly significant when compared to neighboring Indonesia where anti-Chinese riots and persecutions took place in 1997 and 1998, when the Thai economic crisis spread there.
Both of Thailand's two major business cultures, the Thais and the ethnic Chinese, have their own customs, traditional dress, and usually distinctive names. It is, however, important to note that the ethnic Chinese in Thailand have assimilated into Thai culture at a level unequaled in anywhere else in Southeast Asia. In part this assimilation may be explained on the Thai side by the cultural value Thais place on tolerance of any farangs, not just the Chinese. Equally important are the two cultures' common ties to Buddhism. In part, assimilation may be explained on the Chinese side by the fact that the Chinese in Thailand never experienced prolonged persecution. Moreover, while the Chinese were traditionally prohibited from owning land or participating in government in Thailand, such bans are no longer practiced. In short, the Chinese may have assimilated more readily in Thailand than elsewhere in Southeast Asia simply because the ability to do so was open to them.
Indeed, intermarriage between Thais and ethnic Chinese is not uncommon and many leading Thai families have at least some Chinese ancestry. Even King Taksin, the 18th-century Thai military leader (and later monarch), who was the avenger of the sack of Ayutthaya, had a Chinese mother. Such Chinese-Thai unions have made it more difficult (and arguably less important) to define clearly who is ethnically pure Thai or pure Chinese. Today, the two cultures live together harmoniously in Bangkok and other cities with large Chinese communities.
Despite harmonious ties and religious similarities with the ethnic-Thai majority, Thailand's ethnic Chinese remain a distinctive group. Because of laws that were in force well into the 20th century prohibiting ethnic-Chinese land ownership and participation in government service, Thailand's Chinese gravitated toward trade and service industries, where they still play a force far disproportionate to their numbers.
Regardless of their position in society, the Chinese are not newcomers to Thailand. The Thais themselves came to Thailand in the tenth century A.D. from southwest China. Throughout the thirteenth through 19th centuries, Chinese had been present in small numbers in Thailand for trade purposes and as a counterbalance first to Burmese then later Portuguese threats.
It was not until 1824, however, that Chinese immigrants came in large numbers to Thailand. It was in that year that Rama III granted the Chinese tinmining and sugar plantation rights to counterbalance British and U.S. colonial schemes in the region. While this laid the foundation for the Chinese presence in Thailand, the Chinese still entered Thailand from a position of a strong home nation. By contrast, most Chinese emigration to Thailand came only after China's social and economic collapse that followed the European, Japanese, and U.S. colonial incursions there in the second half of the 19th century. This massive Chinese immigration to Thailand continued unabated throughout the 19th and early 20th centuries and did not end until World War II and the closing of postrevolutionary China's borders.
The Chinese themselves are not a single ethnic group. Five major Chinese subcommunities exist in Thailand, each speaking mutually unintelligible dialects. These, in turn, form their own subcommunity ties and loyalties. The five major groups are Hokkien, Yueh or Cantonese, Hakka, Wu or Shanghaiese, and Hainanese. Additionally, many members of the other Chinese dialect groups are present in smaller numbers as well.
An additional 3.5 percent of the population consists of ethnic Malays, most of whom are Moslems and most of whom live near Thailand's border with Malaysia. While numerous, Thailand's ethnic Malays have not played a major role in business and are regionally isolated, and so will not be addressed in this article. Their behavior follows that of ethnic Malays.
Another 5 percent of the population consists of small non-Thai-speaking communities. These consist of non-Thai regional groups such as the Semang, the Htin, the Khamu, and the Moken (or "sea gypsies"— chao leh). This figure would also include the hundreds of thousands of refugees from Vietnam, Kampuchea (Cambodia), and Burma (Myanmar) to whom since 1975 Thailand has maintained an open-door policy of political asylum. For its provision of such asylum, Thailand has received widespread praise from numerous international humanitarian organizations. Moreover, these groups are of some marginal importance in regional trade, and may prove more so as the communist nations such as Vietnam enter more into the global trade arena.
Finally, just over 3 percent of the people consist of the members of the 20 or so hill tribes of the north, such as the Hmong, the Akha, the Karen, the Lisu, the Lahu, and the Yao peoples. These groups are important in Thailand's growing tourism industry and in the manufacture of handcrafted items, but aside from these two areas play little part in the business world. While each of these groups represent unique and important cultures, with different customs, languages, and religions, they remain relatively unimportant in international trade and so are not addressed further in this article.
As with English names, Thai names have a first name that is the individual's personal name and a second surname that is the family name. Unlike English names, however, Thai names attach the title to the first or personal name, not to the surname.
The standard Thai title is Khun. Unlike English titles, Khun applies equally to men or women. Moreover, while Thai women do take on their husband's surnames, they will continue to be addressed by their first names. Thus, a woman named Rungludi Kasetsiri would be addressed as Khun Rungludi. Her husband Anand Kasetsiri would be addressed as Khun Anand.
Unlike the English titles of Mr. or Ms., however, Khun is not clearly an indicator of formality. One uses Khun when speaking of someone in the third person as a sign of respect and one uses Khun directly in conversation with another person when that person is a relative stranger. Thais quickly move to drop Khun when speaking with those they know well. In such cases, they use only the person's first or personal name. This use of the first name, however, does not have the same level of informality of first-name use in English because Khun itself is always attached to the person's first name.
Additionally, Khun is not used when the individual addressed has a professional or academic title. Thus if a man named Prasert Pibulsonggram were a Ph.D. or M.D., he would be addressed as Dokter Prasert. If he were a military officer he would be Muad' Prasert, and so on. These titles, unlike Khun, do carry additional formality and respect and would be less likely to be dropped as quickly as Khun among those of lower status.
Many Thais, particularly in government, have royal titles. Preceding Thai royal names are (listed here in descending rank) the abbreviations M.C. (Mom Chao), M.R. (Mom Rachawong) and M.L. (Mom Luang). All of these royal titles are nonhereditary so that the child of one rank is born at the next lowest rank. Thus the child of someone with the title Mom Rachawong will have the next lowest title Mom Luang. The child of someone with the lowest title, in turn, will be born with no royal title at all.
Additionally, all Thais have nicknames. Unlike English, in which some people have nicknames and others do not, Thais without exception have a nickname. Also, unlike English, Thai nicknames are much less a sign of informality than English nicknames. English nicknames are used only among close friends and in relatively informal situations. Thai nicknames are used by even casual acquaintances and are used in all but the most formal settings. Thai nicknames mean something in Thai and some Thais will translate their names for use in English. This can be disquieting since the meanings often seem insulting in English, ranging as they do from animals (such as Pig or Cow) to physical features (such as Fat One or Shorty). Thai nicknames are, in general, shorter than Thai first names and so actually make names a bit simpler for farangs.
When addressing farangs, Thais will usually use the foreigner's first name or Khun with the foreigner's first name. Thais well acquainted with English-speakers, however, may attempt to use English naming practice. This is particularly the case with Thais acquainted with farangs who do not come from the United States or Australia, where first name use is as common as in Thailand. Thus, a person named Ralph Griffiths would customarily be addressed as Khun Ralph or simply Ralph. As a sign of cross-cultural sensitivity, however, a Thai might address him as Mr. Griffiths. The Thai, would, in either case, still expect to be addressed in the Thai manner back, using his or her personal name. The farang, even if addressed by Mr. or Ms. and a last name, should address the Thai by his or her first (personal) name, probably preceded by Khun.
The large ethnic-Chinese community of Thailand poses an additional naming problem for the foreigner. This is particularly so in the case of those in Thailand for business, in which the Chinese community plays so dominant a position.
Due to government pressure to make the ethnic Chinese adopt Thai names (by making a Thai name a prerequisite to obtaining government documents, scholarships, and so forth), many ethnic Chinese have done so. Indeed, a number of Chinese and those of Chinese-Thai mixed ancestry may have only Thai names. As a result, unlike other ethnic-Chinese communities in the rest of Southeast Asia, many Chinese in Thailand use the same address system as the rest of the country. Thus most ethnic Chinese use the Thai title Khun or professional titles in the same manner as the ethnic Thais.
Nevertheless, one title, Aa-sia', is used in the Thai naming system specifically to show respect for important or powerful Chinese merchants. Thus an ethnic-Thai merchant named Prasert Tantiyanon, even if important or powerful, would still be addressed as Khun Prasert while his or her Chinese counterpart even with the identical Thai name might likely be addressed as Aa-sia' Prasert.
It should not be assumed, however, that all ethnic Chinese have or even prefer Thai names. Many ethnic Chinese have two names. They are likely to have Thai names with which they conduct business with ethnic Thais and with foreigners and a second Chinese name that they use in the Chinese community. Farang businesspeople may in fact achieve an advantage not readily open to ethnic Thais in using the Chinese name of such person. The Thai would be expected to use the Thai addressing system. Farangs, by contrast, can show respect for their ethnic-Chinese counterpart's traditions and community because they have chosen to use the Chinese address system. Finally, as with the rest of Southeast Asia, many ethnic Chinese do not follow the local naming system, and have only a Chinese name. In the Chinese naming system, the person using a Chinese name should be aware that the individual's family name comes first. After this comes the generation name and the personal name, usually hyphenated when written in English. Thus, Wu Kwok-wen is Mr. Wu. Calling him Mr. Kwok-wen would be very insulting. Because Chinese traditionally are extremely reluctant to use personal names in any but the most intimate relationships, many ethnic Chinese have adopted additional Thai nicknames or—for foreigners—English names so that their ethnic Thai or U.S. counterparts can have the illusion of being on a first name basis without insulting anyone. Thus, Wu Kwok-wen may select the English name Ralph. His English-language card might even show the name as "Ralph" Wu Kwok-Wen. His U.S. business counterparts would then know to call him Ralph, Khun Ralph, or Mr. Wu, as they felt appropriate.
Most Chinese women do not adopt the names of their husbands after marriage. Thus, Lee Mei-Ling could easily be the wife of Wu Kwok-Wen. For business purposes, with English-speakers, she may allow herself to be called Mrs. Wu, but most people will know her as Ms. Lee or by her Thai name.
The attitudes of both of Thailand's major ethnic groups regarding technology significantly differs from that of the United States. The United States is a control culture, meaning that U.S. culture views technology as consistently positive and reinforces a belief that people can control their environment to conform to their needs. By contrast, both ethnic-Thai and ethnic-Chinese culture in Thailand are more accurately described as a harmonization culture. Here the emphasis is on one's integration into a natural order rather than one's control of that order. This is most evident in the Thai concept of spirit forces, ghosts, and the charms and rites used to placate or direct these forces. The Thai Buddhist concept of karma pervades Thai life as well and has within it the notion of a harmony between good and evil. This notion is summarized in the commonly used Thai proverb: "Do good, get good; do evil, get evil." As a result, in Thai culture, the environment is not (as it is in U.S. culture) something to be conquered, but something to be kept in balance.
This harmonization orientation toward technology and the environment is even more clearly expressed by the ethnic Chinese following of feng shui (ancient geomancy dealing with the balance of spiritual forces). The importance of location, lucky or unlucky dates, and numerous other factors determined by feng shui experts guide most of Thailand's traditional Chinese community. For example, many Chinese would confer with a feng shui expert before deciding on an office location or signing an important agreement.
Considerations for maintaining good relations with spirits, balancing karma, and following feng shui are often looked down on by ethnocentric or religiously bigoted foreigners unfamiliar with them. Regardless of the foreigner's own beliefs, however, he or she should be aware that such practices are important to those who adhere to them. These practices should be accorded the same respect one would give to any Western religious practice, rather than be misinterpreted as the equivalent of minor superstition.
Following World War II, approximately 70 percent of Thailand was still covered in forest and woodlands. By the late 1980s, only 20 to no more than 30 percent could be considered forested. Deforestation had been conducted so haphazardly that in 1988 a major disaster occurred when hundreds of tons of cut lumber slid down hillsides cleared of their trees and buried several villages. Hundreds were killed and more were left homeless. In 1989, responding to the disaster, Thailand outlawed all logging and related industries. Timber imports are strictly monitored and the construction industry must even request government approval to use timber salvaged from existing structures.
Social organizational factors in Thailand affecting business include the political structure and climate of the nation, the importance of the king, the role of Buddhism in all aspects of life, and the concept of the work ethic.
Thailand's political system has never been particularly stable since the 1932 coup d'état that overthrew King Pokklao (Rama VII), Thailand's last absolute monarch. Since the advent of constitutional monarchy, Thailand has undergone ten successful coups, nine unsuccessful coup attempts, and a partial occupation by the Japanese (during World War II). Yet the stability of the Thai legal courts and the unifying respect for the monarchy—constitutionally limited or otherwise—have customarily sustained Thai economic stability and political consistency on the day-to-day level until fairly recent times.
On February 23, 1991, Thailand's longest modern period of stability was shaken when the government was overthrown by a bloodless military coup. In May 1992 antigovernment demonstrators demanded the military leader's resignation. The military killed dozens of the protesters and hundreds more were injured in the incident. These incidents have raised concerns among foreign investors and manufacturers regarding Thailand's political stability.
The power of the absolute monarchy of the Thai king was ended with the forced abdication of King Pokklao in the 1932 pro-democracy coup. While theoretically the king holds little direct power (he appoints the members of the Supreme Court and advises in a ceremonial capacity), in reality the monarchy is far stronger than any other constitutional monarchy in the world.
The king and the royal family are revered by the vast majority of Thailand's people, who view the monarch as a sort of demigod. Even the Thai constitution expressly indicates that the monarch be "enthroned in a position of revered worship." Not only is open criticism of the monarch and royal family illegal, but the vast majority of the Thai people will not tolerate even mildly negative comments regarding them. As a result, the foreigner conducting business in Thailand should avoid all negative comments regarding Thai royalty.
One side point to this is the unintentional insult many U.S. movie fans often make in referencing the unfortunate U.S. motion picture The King and L. This classic Hollywood musical was newly released in a cartoon version in 1999. Both versions of the film depict the Thai monarch Rama IV (King Mongkut the Great) as backward and naive, and needing to be educated to behave in a civilized manner by his Western tutor. Thais universally consider the film or reference to it to be an insult to the monarchy and Thailand.
The current king, Bhumibol Adulyadej (Rama IX) celebrated his 73rd birthday in December 1998. While the king is nearly universally revered, the issue of his age has increasingly become an issue since his son, the Crown Prince Maha Vajiralongkorn, may not share the same popularity. As a result, the king agreed to modify the royal succession law to enable his highly popular second daughter, Princess Chakri Sirindhorn, to succeed him if the court of regents so chooses at the time of the king's death. Consequently, the princess has been given the same status as the crown prince.
The decision is not a light one, since the king personally restored the respect and strength of the monarchy. Moreover, while the king constitutionally has little direct power, in reality his influence is difficult to overestimate. Many attribute his intervention for calm as having helped avert an even worse disaster during the 1997 economic crisis.
Relatedly, Thais are highly patriotic. It is a serious offense to belittle the nation or insult shows of nationalism. For instance, the Thai national anthem is played each morning and each early evening through loudspeakers set up for the purpose in most Thai villages. Thais stop their activities and stand to show respect. For the foreigner, failure to stand may show lack of respect. While this widespread practice is not carried on in much of Bangkok, its counterpart exists when the anthem is played in movie theaters and other public gatherings.
Approximately 95 percent of Thailand's population—ethnic Thai, ethnic Chinese, and others—practice Buddhism. As Buddhism is a lifestyle as much as a religion, its near universal practice in Thailand has an effect on business as it does on all aspects of life. While Buddhism cannot adequately be summarized in a few paragraphs here, it is possible at least to point to areas where Buddhism will have an influence on business that would contrast with standard U.S. business practice.
First, the United States emphasizes to a large degree the importance of individual achievement. The average U.S. businessperson is motivated by a desire to succeed and a craving to get ahead. This a very foreign notion to Buddhism, which teaches that all desires result only in suffering. What one achieves is the sum total of one's meritorious and evil behavior in both this life and stored up from past life—this state of what happens to one is called karma. A Thai's success (or failure), therefore, is usually viewed as entirely apart from what one actually does—it is a function of good or bad karma. Thus, the U.S. notion of making one's own opportunities contrasts with the Thai notion of making the most of situations as (or if) they present themselves.
The Buddhist concept of the process of change also contrasts markedly with how change is viewed in the United States. Both Thai and U.S. cultures embrace change—but for entirely different reasons. The United States is a culture primarily of immigrants who believed in the positive nature of change. In the United States, however, change must be created; the average U.S. businessperson is—by Thai standards—almost obsessed with trying to change things as they are by force of will. For Thais, by contrast, change is inevitable. In Buddhism, change is the most fundamental principle—all things must change. As a result, Thais feel much less concerned than their U.S. counterparts precisely because change will occur regardless of one's efforts. To attempt to direct the change would be futile—whether that change is trying to stop the change of state from death to life or in any other event, including business.
Thailand and the United States are both nations with a strong emphasis on tolerance. This too, however, differs fundamentally between the two cultures. Those from the United States emphasize tolerance on the belief that all people are of equal importance. Thais do not share in the U.S. belief in equality. Instead, Thais emphasize tolerance based on the opposite rationale—the Buddhist precept that all things, including people, are essentially unimportant.
Finally, most Thai men, even fairly Westernized or relatively secularized Thais, will have spent a period as a monk. This explains the throngs of orange-robed monks one sees throughout the country from the most urban parts of Bangkok to the most rural northern villages. Again, while many monks buat phra (enter the monkhood— sangha) for a lifetime, it is the average people—not the exceptionally religious individuals—who make up the majority of the monks in the nation. Many Thais buat phra for only a few days, but the majority buat phra for at least three months, and many for considerably longer. One usually enters the monkhood just before marriage or before taking on a first major job. Monkhood is often seen as a sort of way to enter into the more responsible positions of work and family life. Nevertheless, Thais may enter the monkhood several times in their lives and for any number of reasons. The practice is so common that banks and government jobs are required to give leave for employees to make merit as monks, a practice followed by many Thai companies as well. Leaves are taken for men to undergo the Buddhist monkhood to fulfill parental obligations, for dukkha (or mourning), and to give recognition for kae bon (to achieve goals in the Thai sense of the phrase).
The nature of the work ethic among ethnic Thais and ethnic Chinese differ from one another and both differ from that practiced generally in the United States.
Most ethnic Thais are good and loyal workers. They are not, however, motivated, as are most people from the United States, by work itself as a prime object. For most North Americans, work in and of itself is considered to be a good thing. Most Americans identify themselves by their jobs and a common introductory question in North America is "What do you do?"—a rather un-Thai question.
Ethnic Thais see work as a part of life, but not an end in itself. Work per se is not good of its own accord. Work—as all things—must have an element of enjoyment in it. This need to have a good time—called sanu 'ke —has almost the same attribute of being considered good in itself as North Americans tend to give the notion of work. In short, work without sanu'ke is unacceptable, while sanu'ke without work is acceptable. For Americans, work without fun is not only acceptable but arguably the norm and possibly even culturally preferable. A Thai, in short, must enjoy his or her job. The foreign manager must take this into account to manage a Thai workforce well.
The ethnic Chinese do not share the ethnic-Thai drive for sanu'ke. Assuredly, the average Chinese will not eschew enjoyment in the workplace, but it is not a prerequisite there or in any other arena of life.
The ethnic Chinese, though Buddhist, are markedly influenced by the ethical principles of Confucianism. The Confucianist obligations to family and clan are strong in the workplace. These obligations tie family member to family member and clan member to clan member in a web of obligations known in Chinese as guanxi. This web of relationships motivates the ethnic Chinese to fulfill the needs of those to whom he or she is tied. Guanxi, also leads to a greater group identification than is practiced among ethnic Thais and (even more so) than U.S. businesspeople. The Confucianist influence on Chinese life tends to lead the individual Chinese to see himself or herself first as a member of a larger kinship structure and only secondly as an individual. This is exactly the opposite notion of U.S. individualism, where the individual is always seen as primary and motivation is at its highest form in reaching self-actualization of one's individual goals. Such U.S.-style individualism is very foreign to most of Thailand's ethnic Chinese.
A second Confucianist notion differentiates ethnic-Chinese behavior from ethnic-Thai or U.S. behavior. This is the notion that one lives on in the memory of others after death, and that attachment to the memory of one's ancestors is good. In traditional Buddhism as practiced by ethnic Thais, any attachment is bad—including attachment to the memory of one's ancestors. In customary U.S. Judeo-Christian notions, one goes to heaven after one dies. One lives on in heaven, not in the memory of one's descendants. Being remembered after death is generally perceived as good in the United States, but it is not a religious precept. For the Confucianist-influenced Chinese, however, being remembered is one's afterlife. As a result, the traditional Chinese practice is to do as much as possible while alive so that one will be more likely to be remembered. The notion of overwork does not, per se, exist in the Chinese conception. One can work too much so that, by exhaustion, one becomes ill or one overlooks important obligations—but overwork as a state is not an understandable concept. By contrast, the U.S. notion of work rests on the Judeo-Christian notion of work as a punishment for sin in the Garden of Eden. Adam's punishment upon his banishment from Eden was work. When one works too much, in the United States, one is said to be a "glutton for punishment." Such notions traditionally have no counterpart in the ethnic-Chinese community.
Thailand is a high context society and the United States is a low context culture. This means that Thais are more likely to rely on implicit communication rather than on explicit messages. Thais as a result read more into what is said than the words themselves may actually mean. For most Thais, what is meant matters more than what is actually said.
In Thailand, meaning is usually communicated indirectly, especially in the delivery of bad news. As a result, Thais are likely to agree to things with which they disagree, allowing the context of the discussion or past relationship to convey their disagreement. This is clear to Thais but to those from low context cultures such as the United States, such indirect communication is often misread as dishonesty. Conversely, the direct style of communication practiced by most U.S. businesspeople in Thailand is perceived as rude and often causes others to lose face.
Thais, as a high context culture, place a strong value on value on face-saving, while most Americans place little emphasis on face-saving. Most Thais are motivated by a desire to maintain surface harmony, even if disagreement brews beneath the surface. By contrast, low context U.S. business practice encourages individuals to say exactly what they think.
This also affects the U.S. and Thai approach to the law. U.S. business behavior is controlled by following the law and adherence to written agreements. In Thailand, one commonly holds to a contract to maintain harmony in the workplace rather than from fear of a lawsuit. The American businessperson in Thailand is thus viewed as threatening to this carefully balanced harmony. Additionally, U.S. low context businesspeople are viewed as lacking tact (and are therefore unpleasant to deal with), having no sense of face, and being needlessly litigious. The Thais in turn are viewed by their American counterparts as dishonoring their promises and ignoring their own laws. In reality both perceptions are accurate when viewed through the contexting values of the other's culture.
Still, to succeed in business in Thailand, the foreigner will need to view contracts and other legally binding arrangements as ongoing rather than definitive. Moreover, the foreigner will have to be willing to allow some inconsistencies to stand at times to maintain appearance and avoid shaming the Thais who would otherwise terminate the business relationship.
Thailand is a polychronic culture. Time is more fluid than in monochronic societies such as the United States. The Thais value friendship, personal commitments, and the completion of tasks at hand at the expense of preset schedules.
Time is seen as malleable. Appointment times are approximate. Work hours are variable. Consequently, the monochronic foreigner needs to adjust his or her concepts of scheduling, deadlines, and other time-linked activities in Thailand.
Additionally, many North Americans hold a short-term view of time. U.S. and Canadian business practice is driven by a sense of urgency. In part, this is motivated by the needs for quarterly progress built into the system of stockholdership in the United States and Canada. In part, however, quarterly reports have little to do with this urgency—it is a cultural impatience for immediate gratification and the individual drive to bring about visible change.
By contrast, both of Thailand's major business ethnic groups hold a long-term view of time, although for different reasons. The ethnic-Chinese view of time is essentially Confucianist. Time is viewed in generational—not quarterly—terms. The ethnic Chinese view commitments and needs over a long-term view of actions spanning a lifetime as remembered by one's descendants. The ethnic-Thai view of time is equally long-term, but more Buddhist in motivation. Everything is in constant change as part of the endless life cycle that has always gone on before one was born and will continue to go on after one dies. Change is inevitable so one feels no need to force the change ahead of time. Generally Thais believe that things have a way of working out, so there is no need to pressure the end result. To do so would be presumptuous and probably disruptive.
[ David A. Victor ]
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