Thai Culture and impacts on business

Culture plays a huge influence on how companies interact and conduct business with each other. With more and more businesses expanding internationally, effective intercultural communication has become imperative to a business’ success in the global market.

The following graph provides a visual comparison of Thailand and Australia’s culture, as theorised by Hofstede’s five dimensions of culture.

Hofstede defines power distance as the degree of which inequality exists and is accepted amongst a culture (Hofstede’s Cultural Dimensions, n.d.).

 

UntitledThailand has a high power distance index, indicating that Thai people have great respect for seniority and hierarchy in the workplace. This could be influenced by the high importanceThai society places on its ruling monarchy. High power distance also means that in the Thai workplace, the flow of information must go through a chain of command, and respect for superiors is highly regarded. On the other hand, Australia has a low pow
er index, suggesting a more participatory culture, where employees and superiors are able to communicate informally, and information is shared frequently amongst the organisation.Another key cultural difference is the value of time. For Thai people, time is a fluid concept so deadlines and priorities can easily be shifted (IOR World, 2015). A case study from Asialink Business documenting the relationship between Australian company GreenCo Water and Thai manufacturer Srithai Superware noted that:

“Thais view time as cyclical, whereas Australians view time in a linear, sequential fashion. As a result, completion dates in Thailand may not be as strongly adhered to as in Australia. This can be a significant issue when products need to be produced and delivered by set dates (Asialink, 2014: pg 7).”

Despite the various differences between Thai and Australian culture, both countries have been able to create a mutually beneficial relationship and strive through cultural similarities. A study by Pimpa and Moore found that both Thai and Australian public sectors value leaders who are goal oriented, can set common goals for followers and implement strategies in support of public services (Pimpa and Moore, 2012).

Furthermore, Australian expats with managerial roles in Thai companies use a combination of standardization and adaptation strategies to adapt to Thai culture, and appeal to their subordinates. Novotel Executive Assistant Manager Jon Cannon noted that because Thai employees value group welfare and harmony within an organisation (IOR World, 2015), money is not a huge motivator. Instead, building relationships between executives, department heads and staff through outings, staff parties, and dinners are what makes Novotel’s Thai employees feel valued by the company and motivate them to work better. Through adaptation by submission (Apetrei et al, 2015), Jon is able to create a company culture that is compatible with Thai values and beliefs, and brings success to the business. Another element of Jon’s managerial style is the use of adaptation by indifference, where authority is delegated to local employees (the Thai department heads) so that orders are passed down clearly by a local, instead of what could be an intimidating Western authority figure (Apetrei et al, 2015).

Thailand is an important player in Australia’s economy. Since the establishment of the Thailand-Australia Free Trade Agreement (TAFTA) in 2005, Thai and Australian economic relations have flourished, with Thai investment in Australia reaching $6.575 billion and Australian investment in Thailand reaching $.3.02 billion in 2014 (Australia Thailand Business Council, 2015). One of the main reasons for the success of Thai and Australian business relationship is to the willingness of both countries to learn about each other’s cultural differences. As Foreign Minister Julie Bishop said, “it’s that intangible that is so important, understanding each other, getting greater perspectives and insights on the cultural, political, economic life in each other’s country (Doorstop interview, Bangkok, Thailand, 2015)”.

References:

Apetrei, A., Kureshi, N., and Horodnic, I. (2015). When culture shapes international business. Journal of Business Research. Vol 68, Issue 7, pages 1519 – 1521

Australia Thailand Business Council. (2015). Welcome to the ATBC. Viewed 23/07/2016 http://www.aust-thai.org.au/

Asialink. (2014). Case Study – GreenCo Water. Viewed 29/07/2016 http://asialink.unimelb.edu.au/__data/assets/pdf_file/0011/1554572/ALB0030_Casestudy_GreencoWater_v3.pdf

Doorstop interview, Bangkok, Thailand. (2015). Viewed 29/07/2016

http://foreignminister.gov.au/transcripts/Pages/2015/jb_tr_150509.aspx?w=tb1CaGpkPX%2FlS0K%2Bg9ZKEg%3D%3D

Geert Hofstede. (n.d.) Thailand and Australia. Viewed 25/07/2016 https://geert-hofstede.com/thailand.html

Hofstede’s Cultural Dimensions. (n.d.) Viewed 25/07/2016. https://www.oregon.gov/doc/ADMIN/docs/pdf/Diversity%20and%20Inclusion/Cultural%20Dimensions.pdf

IOR WORLD. (2015) Thailand. Viewed 29/07/2016 http://www.iorworld.com/thailand-pages-559.php

Pimpa, N. and Moore, T. (2012). Leadership styles: a study of Australian and Thai public sectors. Asian Academy of Management Journal, Vol. 17, No. 2, 21-31.

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