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PART I
Introduction
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1
Introduction
Tim G. Andrews
• Introduction
• Background
• Rationale
• Structure and style
• Content: chapter previews
• Disclaimer
Introduction
Towards the end of August 2008, just as I was settling down to redraft this introductory preface, the first of two emails I had been tagging as ‘Thai alerts’ hit my inbox. The first was a note informing me that Thailand’s capital, Bangkok, had just been voted the World’s Best City 2008 by Travel and Leisure magazine. Given that the scoring was evaluated on characteristics that included ‘sights’, ‘culture and art’, ‘restaurants and food’ and ‘people and value’, this nomination is undeniably quite an achievement. In the context of the past twelve months it builds, clearly, on Thailand’s nomination as the ‘best value’ destination in the highly respected 2007 Futurebrand survey (see Bechter’s chapters below for related discussion). More substantively, given the country’s traditional post-war reputation as a cheap, male-oriented, ‘sex-and-golf’ resort from just a few years back, this continuing turnaround of the country’s overall image is nothing short of astonishing.
Literally no more than thirty minutes later I was to receive the second of these alerts. Emanating from a different source, and on a different topic entirely, this message was (sadly, I may add) not quite the surprise of the first and significantly darker in tone: ‘Thailand declares state of emergency’, ‘Tourists stranded by airport blockades’, ‘Bangkok under siege’ ran the headlines.
Several weeks later these seemingly contradictory facets of contemporary Thailand were also alluded to in a commentary from the Financial Times under the heading ‘Surreal Thailand’.1 Portraying the country as a ‘dynamic economy’, a ‘big power in Southeast Asia’ and an ‘important tourist destination’ on the one hand, the writer remarks on the ‘deep vein of silliness in the country’s public life’ on the other. Moreover, the recent resignation of Prime Minister Samak Sundaravej for his guest appearance on a television cookery programme is depicted as being ‘typically Thai’.
Taken together, such new reports – though expressive of a relatively extreme set of situational circumstances – may be taken as some indication of the inherent complexities that managers of foreign-based companies (in particular) need to address on a daily basis in this deceptively passive, happy-go-lucky nation.
Background
Against a recent history comprising successive periods of explosive economic growth, cataclysmic financial collapse and gradual, albeit troubled, resurgence (respectively), the current troubled juncture in Thailand’s business development should come as no surprise. During the period 1986 to 1996 Thailand was the archetypal Asian economic powerhouse with the world’s fastest rate of economic growth for each of those eleven heady years. Yet, in the first few hours of July 1997 – literally overnight – the wheels upon this export-fuelled juggernaut came to a shuddering halt. Sliding from 25 to 53 baht to the dollar, the flotation/devaluation of the Thai currency was to precipitate a global-scale financial crisis – Asia’s worst in four decades. Wreaking havoc on corporate balance sheets,
On a social level the rural migrant workers who had flocked to Bangkok en masse during the boom years found themselves unemployed and unable to find alternative work. As their six-month severance payments quickly dried up the vast majority returned to their families and back to ploughing the land. However, in contrast to their less fortunate neighbours of the period (Indonesia, for example) Thailand’s agricultural sector – traditionally the backbone of the nation’s subsistence – was again to play a critical role. The underlying strength and resilience of the nation’s farming community networks afforded, by and large, a means to survive the downturn as the crisis bottomed out and slowly gave way to recovery.
A decade on and, by all accounts, Thailand’s positioning at the epicentre of a global-scale financial crisis should be an experience never to be repeated. The restitution of the country’s international reserves, its underlying macro-economic performance indicators and revised (often imported) management techniques – all supported by the more robust global financial regulatory framework – means that, in the longer term, Thailand is set to continue its trajectory into becoming a major regional power. Nonetheless, the rollercoaster ride for Thailand’s corporate sector in recent years – both for foreign investors and indigenous firms – provides us with invaluable lessons for the future. With the twin advantages of experience and hindsight, this tumultuous decade since 1997 merits a close and detailed examination – particularly of the underlying forces that have shaped the current managerial environment.
As many of our managerial respondents were to observe, the crisis, in many ways, was a cathartic event to have engendered both unforeseen and beneficial ramifications of a profound and wide-ranging nature. In the words of one resident Western expatriate:
Rationale
This edited collection examines the changing nature of business management in Thailand during a pivotal decade in the country’s business and economic development. Our aim has been to combine academic explanatory frameworks with incisive practitioner insight and experience synergistically in order to better understand the driving forces behind the range of management functions, issues and practices which together shape the Thai-based corporate context.
Adhering to the spirit and ethos of the Working in Asia series, we have given due prominence to managerial ‘voice’ and the opinions and experiences of practitioners throughout the chapters herein – principally through the use of case studies, boxed text, vignettes and/or quotations. Given the wide range of issues examined by our contributors, the nature of this ‘voice’ is necessarily multi-level, dependent partly on the perspective of the authors and partly on the scope of the subject material covered. Accordingly, whereas for Chapter 3 (‘Political Backdrop’) the managerial implications are presented through outlining the private and public sector reforms to impact upon the business environment, within Chapter 11 (‘Corporate Women Managers’) this is accomplished more directly through the use of linked managerial quotes.
Structure and style
Structurally the book comprises four main sections: (i) Introduction, (ii) Macro-management Forces, (iii) Managerial Functions, and (iv) Management Issues. The Introduction, in addition to this current overview, comprises a succinct but invaluable guide to doing business in Thailand from a practitioner’s perspective – specifically from two executive members of the British Chamber of Commerce in Thailand, one of the country’s largest and longest-standing foreign chambers. Part II then provides a detailed look at the factors which, together, provide us with the broad contours of the macro-environmental forces impacting on the Thai corporate sector.
Part III covers the key managerial functions – specifically marketing, HRM and finance. Part IV then looks at a range of salient issues that affect the management functions as a whole – e-communication, public sector management, corporate women managers, corporate governance and the Thailand Brand. The book concludes with a summary chapter delineating pointers for the future.
Across this diverse range of subjects the authors provide us with a wealth of contrasting perspectives, approaches, opinions, expertise and stylistic preferences. Accordingly, whereas there are convincing arguments both for and against the rigid use of consistency rules, we have allowed each contributor to play to his or her strengths through the relatively ‘hands-off’ editorial approach we have chosen to adopt. In practical terms, from very early in the drafting process, the decision was made not to force-fit our authors into a structural or stylistic straitjacket but to give them the degree of leeway we felt they deserved. In a similar way the lack of a formal review process for the chapters contained below is both a weakness and, given our objectives, also a strength. In keeping with the spirit of the Working in Asia series, what we wanted above all were stimulating insights and discussions with a practitioner-oriented approach. We were, from the outset, less concerned with the testing of theories or the verification of ‘facts’.
Finally it should be noted that the title for this book, The Changing Face of Management in Thailand, is deliberate and an indication of the scope we have sought to cover. Specifically, we were not content with the originally suggested title of Thai Management because we wanted the dual perspective to come from both indigenous managers and companies and those from outside. Indeed, if anything, our overriding focus has been on the latter – and, in particular, that of incoming Western MNEs.
Content: chapter previews
A distinctive feature of the Working in Asia series is the incorporation of managerial ‘voice’, a means by which practitioners can enlighten students as to the on-the-ground, day-to-day challenges facing managers in the region. In keeping with this tenet, the second chapter of this Introduction comprises a practitioner-oriented overview of business in Thailand. Composed by Stephen Frost and Greg Watkins from the British Chamber of Commerce Thailand (BCCT), this chapter provides a concise and illuminating summary of the core factors that continue to influence business management in Thailand. Following a brief introduction, the authors focus, firstly, on the family bedrock of Thai business culture against which the treatment of both non-family members and foreigners within the majority of traditional indigenous enterprises can be understood. The major section of the chapter – ‘Developmental challenges’ – then delineates the major barriers to the future competitiveness facing the Thai corporate sector and, indeed, the country as a whole. Particular attention is given to skills shortages (i.e. English language and IT capabilities), protectionist local business laws and the regional financial crisis (with its multiple ramifications). This section ends with a commercial take on the political developments to have occurred in the wake of the crisis, particularly the damage and stagnation that political events can inflict on the business environment. The authors conclude with a succinct overview of the opportunities that lie ahead for the Thai business environment, coupled with some sensible suggestions for their realization.
Part II examines a range of macro-management forces to have impacted on the Thai business environment from 1997 to the present. In Chapter 3 Kesboonchoo-Mead and Wanasathop provide a detailed and insightful overview of the political context to the decade in question. The authors begin by charting the historical evolution of politics in Thailand. This is followed by some insights into the regional economic crisis of 1997–98 based on an understanding of the actions of the political actors involved. The chapter’s nexus – the rise, reign and fall of Thaksin Shinawatra – i...
