Thailand Business Practices
The Fundamental Principles of Business Culture
Thai business culture bears some of the characteristics of the work etiquette of other countries in Southeast Asia. However, as Thailand was never colonised, the business culture has been influenced to a lesser extent by Western culture. Some of the traits Thai business culture shares with neighbouring countries include collectivism, courtesy, saving 'face' and a strong hierarchy. The business culture has also been shaped by the concept of 'sanuk', the effort to achieve satisfaction in whatever one does and make the most of any situation. 'Mai Pen Rai' ("never mind") is a Thai expression that characterises the general focus of life and approach to business. Therefore, while Thais are productive and hard-working they are also content with what they have.
Hierarchies define not just the working environment but the Thai society as a whole. Individual status (i.e. age, level of education, seniority, rank within the firm) is always taken into consideration in social and business interactions. Therefore, Thais may also ask foreigners personal questions to get a better understanding of their status to ensure they address them correctly and behave appropriately. The highest level of respect is reserved for the king and the monastic community. Thais do not tend to challenge the hierarchical structure and consequently not question decisions coming from senior management. They are most likely to observe the chain of authority, which is clearly defined within firms. This long chain also causes the decision-making process to be rather slow.
Personal relationships are key to a successful deal in Thailand and the level of closeness with Thai professionals may take precedence over the offer. As top management is often family, especially in medium and small-sized corporations, it is important to get to know them personally. The concept of 'face' is also crucial in business interactions, as people seek to maintain their reputation and those of their business and others. Foreigners should avoid embarrassing situations or putting their Thai counterparts in a difficult position.
First Contact
Appointments for formal business meetings should be made well in advance by a written invitation that is often followed up by a phone call. It is also a good idea to reconfirm the meeting the day before the arranged day. Due to the difficulty of travelling around large Thai cities, foreign professionals should not schedule more than two meetings per day. Furthermore, it is also advisable to schedule meetings between November and March, if possible, as most Thai business people go on holiday in April and May when there are many Buddhist holidays. Thais, especially those who have not studied abroad, tend to not be very proficient in English, therefore it is a good idea to check whether an interpreter will be necessary.
Time Management
Punctuality is appreciated and foreigners are expected to arrive on time to meetings and social gatherings. It is therefore advisable to check the traffic situation in large cities, especially in Bangkok, as regular traffic jams and roadworks can cause severe delays. While foreigners are expected to arrive on time, meetings may not always start on time. Furthermore, meetings are rarely timed and tend to run overtime, as procedure is considered more important than content.
Greetings and Titles
Wai is the most common form of greeting in Thailand for both men and women, and applies both to professional and social encounters. The Wai gesture is performed by placing the palms of the hands together, raising them to the face with the fingertips at eye level and inclining the head slightly. There is great formality in the “wai” and the level at which the hands are placed has a great significance. Foreign business contacts are not expected to initiate a “wai”, but it is an insult not to return the wai. If a wai is not offered, it is appropriate to shake hands with men and nod to women. Alternatively, a Thai professional could simply extend their hand instead of offering a wai gesture. Wai gestures are offered to a person of equal or greater status. Subordinates should offer a wai first.
Thais often address one another by their first names and titles, while surnames are reserved for very formal occasions and written communications. Thai first names are preceded by Khun, unless they carry an academic title, such as doctor. Khun is used for men and women, married or single. When being introduced or when greeting someone, men say “Sawatdee-krap” and women say “Sawatdee-kah”. People are introduced in order of seniority. For instance, a secretary is introduced before her boss.
Gift Policy
Gift-giving is common but more Westernised, with less formality than elsewhere in East and Southeast Asia. It is advisable to bring a gift from your home country. Shareable gifts, including fruits, sweets or snacks, are recommended, as every attendee in a meeting should be able to receive part of your gift. Other small items such as books and pens may also be appropriate. Gifts should be given and received with the right hand and a wai gesture (place your hands in front, as if in prayer, and bow your head to the point where your nose touches your thumb). Gifts are usually not opened in front of the giver.
Dress Code
While the business attire is not strictly formal, it is important to wear a suitable outfit that will allow you to be taken seriously by Thai business partners. Conservative coloured suits with shirt and tie are appropriate for men. Jackets are not a must but are good to have, especially for meetings with senior partners. Long trousers or a skirt that covers the knees and a blouse or shirt are appropriate for women. Tight fitting and sleeveless attire should be avoided. Shoes need to be taken off in some offices and most homes, therefore it is a good idea to wear shoes that are easy to slip on and off. Smart casual is acceptable for business entertaining events.
Business Cards
Thai professionals attach great importance to business cards, which are seen as the 'face' of a person and a representation of their status. Cards are usually exchanged at the first meeting and it is advisable to give and receive cards with your right hand (or both hands). Business cards should be of high quality and have Thai on one side and English on the other. Academic titles are also used on the card. Degrees, especially from internationally acknowledged universities, bring status and Thais may include these on their business card. It is important to examine the business card carefully before storing it. Cards should be stored in a cardholder or left on the table during the meeting and not be put in the back pocket.
Meetings Management
As the first meeting usually serves the purpose of establishing rapport, important decisions are only made in subsequent meetings. Small talk is expected before meetings and it is considered rude to directly delve into negotiations.
Status, connections and power tend to be more important than content in negotiations. Thais respect foreign businesspeople with strong connections in the country and will be more willing to accept their offers. While Thailand has a pro-business attitude, decisions are reached quite slowly and only after several meetings have taken place with more senior partners. Thus, it is important to remain patient. Pressure tactics are to be avoided. Planning is usually short-term, therefore it is a good idea to emphasise the immediate benefits of the offer.
Thais do not prefer direct communication and are unlikely to openly say 'no' to offers, as in most other East Asian cultures. They tend to give vague answers to remain courteous and expect foreigners to be subtle as well, especially when responding with a negative reply. Saving 'face' is paramount for Thai professionals, as people seek to maintain their reputation and those of their business and others. Sensitive or difficult conversations are usually initiated from more senior managers. Thais are good listeners and will rarely interrupt a speaker. Foreigners should also avoid interrupting Thais when speaking. Moments of silence are common as responses are considered carefully and foreigners should not appear too hasty to get an answer. It is also important for foreigners not to put their hands in their pockets while talking to someone. Waving hands while talking is to be avoided, as this gives Thais the impression that the person is angry.
Business entertaining is common, as it is seen to be an important aspect of building relationships. Business may or may not be discussed. It is important to let the Thai counterparts tackle the issue first. Foreigners should also wait before eating and drinking until the oldest/most senior person around the table has been served. The most honoured position is at the middle of the table and the honoured guest sits on the side of the table that is farthest from the door.