The 3 Cornerstones Of Doing Business In Thailand
Updated: Jun 17
Thailand is being reported as the 21st easiest place for doing business in the entire world as per World Bank's 2020 ranking. An article on Why Thailand Is A Good Business Destination outlines the key reasons as to why businesses and start-ups should think about setting up shop in this tropical paradise.
In Thailand, first impressions, respect, body language, and building long-lasting relationships are of utmost importance. Having spent over 3 years of my life living and working in this beautiful country, I picked up some useful tips that I would like to share with you on ways you can effectively do business in Thailand.
1. Respect For Hierarchies
Respect for hierarchies is one of the most important cornerstones in Thai culture and society. Managers are superior to their subordinates, as are parents to their children. Not understanding how these hierarchical structures function in Thai society can put you at a huge disadvantage, especially when doing business.
Back in 2012, I attended an informal end of week meeting with my Thai and Western colleagues. Our (Thai) executive manager was late and we were all on a rigid schedule that day, so the westerners suggested we get started without him. Our Thai colleagues just smiled and nodded so we proceeded. About 10-15 minutes in, the executive manager arrived and sat down. The rest of the meeting went fine but the days/weeks that followed didn’t.
There was an extremely uncomfortable and awkward atmosphere in the office in the weeks that followed and we felt as though our manager was being surprisingly short with us. After about a week of walking on eggshells, I pulled aside a close Thai colleague and asked her what was wrong. She then went on to explain that the executive manager was angry that we started the meeting without him, but they were too afraid to say something. She then explained the importance of respect for hierarchies in Thai culture and that you should never start a meeting until everyone (especially the managers and executives) is present. As you can see, our little cultural misunderstanding meant we spent weeks trying to rebuild bridges. We lost trust for one another, and most importantly, we lost respect. Understanding how hierarchies work in different countries can save you a lot of time and hassle later on down the line.
Meetings And Greetings
Thai’s don’t tend to shake hands, but ‘wai’ (pronounced ‘why’) instead. The wai consists of a slight bow, with the palms pressed together in a prayer-like fashion. It is a sign of respect and is used in multiple situations, such as saying hello, goodbye, apologizing, and saying thank-you.
Thai’s know what a handshake is, and they don’t mind shaking hands when doing business with foreigners, but taking that time to learn the significance and execution of the ‘wai’ will put you in their good books and will create a great first impression. Remember, formalities and niceties are important in Thai culture, and they’re the building blocks in forming strong, positive business relationships.
The ‘wai’ is fairly complex in terms of how it changes depending on the person you’re greeting and the context you’re in. The positioning of the hands and how low you bow is determined by the status of the person you’re interacting with. The video below explains how the ‘wai’ changes depending on who it is you’re speaking to.
3. Patience And Face
Building relationships with Thai people is a slow process. They’re very patient by nature and it takes some time for them to establish a relationship with another person especially in a business context.
I remember one of my American colleagues correcting her Thai colleague in front of a large room of people. She had made a mistake with her English and my American colleague thought she would take the initiative to correct her. Harmless, right?
Wrong. You see, the way a Thai person interprets it is that you have actually questioned their competence and authority, and the fact that you did it in front of other people implies you did it to make them look bad. The consequence of this action was that these 2 colleagues could no longer work and collaborate together. The tension in the room was unbearable and all trust had been lost.
Like many other Asian cultures, losing face or confrontation should be avoided at all costs. Make sure you’re respectful and always courteous when dealing with others. In Thai, they even have a phrase for this which they call Jai Yen or ‘cool heart’.
If a Thai colleague of yours makes a mistake that needs to be rectified, pull them to one side in private rather than addressing the problem in front of others. Be careful and mindful about how you correct their mistake, and try to not come across as too direct when doing so.
Learning more about business etiquette in any country you’re working in is a huge step in the right direction. Doing a little research can save you a lot of time and trouble in the long haul, and can even lead to new business ventures and stronger working relationships. If there is one thing I’d like for you to take away from this article about doing business in Thailand, it is respect. Always show respect, always be kind, courteous, patient, and be extra careful in how you deal with problems and mistakes. Planning on doing business in Thailand? Schedule a free 20-minute discovery call with me and let’s talk about how you can make a great impression in the land of smiles: https://app.acuityscheduling.com/schedule.php?owner=16729726&appointmentType=8272187