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THAI BUSINESS CULTURE
Thai Business Hierarchy


Thai society has very strict rules defining everyone’s position in a rigid hierarchical structure and this extends into the corporate world. Many businesses or departments are run like old-fashioned families, with the patriarch dictating everything to his subservient kin. It is an antiquated top-down management style that discourages anything other than blind obedience. With such a well-established system forming the core of Thai society, is it any wonder that democracy struggles to take on any meaningful significance in Thailand?

While most managers feel that their experience, background or training qualifies them to know what is best in a particular situation, it is impractical to assume an exclusively autocratic viewpoint on all business affairs within an organization. It is a failed manager who does not trust his staff well enough to be able to delegate not only tasks, but also decisions. In the past, such a patriarchal system may have worked with reasonable success in a small family business with limited scope or ambition for expansion, but it is doomed to fail in a modern, growing, forward-thinking corporation competing in a global marketplace. At least, this is the view that a farang would take, but does this hold true in Thai business culture?

During almost 10 years in Thailand, I have worked under and alongside Thai managers, and I have managed Thai staff. This has helped me to gain a 360 degree perspective of the hierarchical structure of Thai business culture. Certainly, assuming a dictatorial approach with farangs is counter-productive, but with Thai staff, it merits some further investigation.

At first hand, I have seen Thai managers who took on the patriarchal role with their Thai staff. That’s not to say that there was no levity in the workplace, but it would always be the manager who instigated it. Everyone knew who the boss was and what was expected of them. Nobody was to question any directive that came from above, nor were they expected to contribute anything other than what they were assigned to do. As I observed this system, I found it difficult to accept. It was like an old-fashioned school teacher ordering children around or a strict father with his wayward offspring. While it fell short of Dickensian proportions, I know that some Thai managers still take the approach to such extremes.

Thai employees under a Thai manager’s supervision are subordinates in the most profound sense of the word. In addition to the dictatorial approach to work, staff will be expected to act as minions performing the dirty deeds of their boss. I have seen employees making drinks, going to the bank, picking up groceries and performing other personal errands for their Thai manager as routine practice. I have managed people of many nationalities, and I would never dream of making such demands of anybody under my supervision. Most farangs would agree that such behaviour is demeaning or patronising, and constitutes absolute abuse of power, yet in Thailand it appears to be the norm.

The autocratic approach is employed in organizations or departments of all sizes where the employees are exclusively Thai. It is no longer the exclusive preserve of the family business. Even if it is the local branch of an international conglomerate, the vertical system reigns with Thai managers and staff. When farangs enter the equation, the system becomes toned down in varying degrees, depending on the authority of the Thai and farang managers, but it never truly disappears when there are Thai managers and Thai subordinates.

As dismayed as I was to observe this system, I was equally shocked and disappointed when I witnessed it taken to its opposite extreme. Following the departure of an autocratic Thai boss in one company where I worked, a member of staff was promoted to assume the manager’s position. This new manager had performed well but suffered silently under dictatorial bosses and was determined to take a different approach. The family factor remained, but instead of a strict father, the new manager took the role of a close sibling with her staff. Morale improved tangibly, staff turnover decreased dramatically, autocracy was replaced with a fledgling democracy and productivity plummeted!

With no cat for them to fear, the mice had a field day every day. They needed a dictator to tell them what to do and when to do it. Left to their own devices, they took the softest option every time. It was like a school classroom when the teacher is away, except that the teacher wasn’t away. She had merely regressed to her own childhood. It was a failed experiment in Thai business democracy that is, unfortunately, not an isolated case. I have observed this style of management attempted on more than one occasion, but I have only ever seen one outcome. Failure!

When a farang becomes the manager of Thais, there are a number of possible outcomes, depending largely on the nationality of the farang and the length of time he/she has already spent in Thailand and working with Thais. However, we also have to consider the degree of Thai business culture the farang has assimilated against their level of dogmatic resistance to change. Cross-cultural training can help, but a farang who has lived in Thailand will have an infinitely better chance of success than an expat transferred by his international company for a 2-year stint in Bangkok.

Taking a purely dictatorial approach may be effective with Thais, but it is not a managerial style that sits easily with many farangs. However, if we suddenly introduce a more horizontal hierarchical structure, we are liable to first encounter confusion from the freshly liberated serfs as they struggle to come to terms with what they perceive as a lack of leadership. If allowed to continue, this state of affairs will likely deteriorate until the office resembles a non-productive social club. As with most things in life, the middle ground seems to work best.

For a farang to successfully manage Thais, it is important to first lay some ground rules. Let them know that you are in charge, yet at the same time make it clear that you value their efforts and welcome their input. They may well be confused by or mistrusting of the concept of having them share their ideas at first, especially if they have only worked with Thai managers, but with time they will warm to the opportunity of expressing their creativity.

Once the parameters have been established, lighten up and introduce an element of fun into the workplace. Many farangs make the mistake of doing this too early and they never gain the respect that is essential to their success. Thais need to know who the boss is and what is expected of them. If you try to instil such discipline after they think you are a pushover, it will be an uphill struggle. Fun is important to Thais, even in the workplace, and surely we all want to be in an office where we can share a joke, but first we have to earn that right by being productive.

There are, of course, some expat bosses who come in with a very regimented approach to management that fails because there is no bond with the staff. Balance is needed. Even Thai dictators have to win the staff over before they can add their respect to their fear.

Having spoken to many Thais about this topic, almost all of them prefer the horizontal farang style of management. The dictator belongs to the old school of Thai management that is gradually dieing out in one of the better results of globalisation affecting Thailand.

In most Thai organizations, promotion is based almost exclusively on length of service and not productivity. Respect is not necessarily earned through deeds but accumulated with age. I once conducted a language proficiency interview with a recently promoted senior executive in a Thai company. When I congratulated him on his promotion and suggested that he must be very good at his job, his frank reply was, “Not really. It’s just because I’ve been here a long time.”

If you need any further proof of how structured Thai hierarchical systems are, consider this final point. I once attended a cross-cultural training seminar where the Thai speaker asked us how many personal pronouns there were for the second person singular in English. The answer is, of course, one: you. Then she asked us how many there were in Thai, at which point the audience of mixed farangs and Thais began to quickly run out of fingers to record the options: phi, nong, khun... The list is long for the simple reason that Thais need to address people with the appropriate level of respect that their status merits. Unfortunately, the criteria for garnering respect are, in my opinion and by Western standards, seriously flawed.

Back to Working and Doing Business in Thailand

 

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Have your say...

CirCus
31 Oct 2010, 19:54
It's a very useful text.Thx a lot
Dr CJ
04 Apr 2011, 06:20
Well as one of 2 farang Thai Government Officers who teaches at NIDA I will back you 60% - the other 40% that is completely wrong is how you point out time of service. I have had many students - male and female - who leap frogged their bosses due to the fact they had a Masters or PhD. REMEMBER!!! Its all about face and if khun boss sees you look better then khun loong well you get the job. Good reading - you can buy my book at Chula book - 6 years of psychological research into Thai thinking - best seller (not sure if it was in the horror section or not)
dan loder
18 Nov 2011, 00:22
At times we get so close to the forest we can not see the trees. An old saying, yes but worth thinking about. Also, no one wants to be wrong. I would like to live and take part in Thailand. The reason, in traveling to Asia for 30 years, your neighbor Vietnam is surpassing you. They have many of the same systematic infrastructure- however they saw what the world wanted, clean non chemical added food. They are now one of only 7 countries on Earth that satisfy what is known as ISO 9001. A quality standard. The US, CHINA< Australia are not one of the seven. There are places to grow academically, economically, while bringin pride back to an entire nation. I choose Thailand to return to and hopefully live. But I need help. After all do your students know you are all descendants of China. Moving south while China was warring between different factions. The agrarian culture they knew they transplanted into Laos, Vietnam and Thailand
Babu
04 Jan 2013, 04:26
Depends on where you buy them and what is on the cards. You can get picture post cards with tosuirt sights for about $.40 Canadian. You can bargain with the people who are selling so get the best price.
Ryan
17 Jul 2013, 01:11
Nice post! I also find Thai hierarchy frustrating at times. I don't think it's taught me anything valuable like other aspects of Thai society. The only thing I've gained from it is an irrational fear of older female Thai bosses, who seem like a kind of black widow to me.

One point, don't get me wrong but the text on your blog is really small and it was pretty hard to read.
DP
25 Aug 2013, 02:05
Spanning 10 years, I have been associated with two multinationals with offices in Thailand. I am also married to Thai.

Your comments are quite accurate, except I would like at a tidbit about productivity. The staff managed by Thai's are 5 to 10 times less productive than the American peers. Thai managers know how to be a boss. But, they do not know how to plan, organize and lead. Leadership is something that cannot be learned in school and Thai's have so few examples of leaders.
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