Academic journal article International Journal of Business

Economic Developments, Business Culture and Its Links to Business Practice: Is There a Thai Style of Management?

Academic journal article International Journal of Business

Economic Developments, Business Culture and Its Links to Business Practice: Is There a Thai Style of Management?

Article excerpt


It is widely thought that East Asian culture has contributed to the rapid growth of the area. Paradoxically, the financial crisis and slowdown in the late 1990s may be attributed to some of the same cultural factors. This paper summarizes the results of a survey study of business culture and practice in Thailand. From the perspective of economics, we hypothesize that business practices are related to, but can be distinguished from, broad cultural considerations. Many respondents believe that Thai firms practice a Thai style of management based on Asian cultural values. This involves top-down centralized management, compromise, personal relationships, and less focus on formal performance measures than in Western-managed firms. This appears to be a culture-specific matter although it may also be related to the prevalence of family-owned or controlled firms in the region. The business practices observed may have been helpful in the socio-legal setting that prevailed during the East Asian boom, but they may have contributed to the financial crisis and they may be a barrier to adjustment in the future.


Keywords: Business culture; Values; Personal objectives; Business practice


Following the 1997 East Asian crisis, students of East Asian management face a curious paradox. On one hand, many of them had been accustomed for many years to explain the rapid growth of the East Asian economies, the East Asian "miracle", as a phenomenon related to Asian cultural values. More recently, on the other hand, cultural factors have been held responsible for the breakdown of the growth process and the crisis in East Asia. Paradoxically, some of the very qualities that had been praised so highly, now appear to have caused the collapse.

From the perspective of economics, the critical issue is not so much the role of broad societal or personal values that have been a primary focus of culture scholarship, as the nature of East Asian business practices. There is little doubt that societies differ in their cultural values, both those professed for the society as a whole and those representing personal objectives. The success or failure of business, before and after the crisis, depends on the how cultural values are implemented in business practice. This suggests an area of study that calls for additional research, the characteristics of business practice and the relationships between values and business practices in East Asia. Such research potentially throws additional light on economic developments in the region.

We study values and management practices in Thailand, widely seen as one of the more entrepreneurial East Asian economies. We draw on a detailed questionnaire survey carried out in August 2000, after the East Asian crisis. This work is an extension of a series of questionnaire studies carried out over a number of years focused on cultural factors and business sentiment. Our earlier work, Adams and Vernon (2000), had suggested that there is perceived to be a Thai style of management but did not attempt to relate management style or aspects of business practice to broadly defined cultural attributes.

The basic hypothesis of the present study is that cultural considerations, in themselves, are not likely to translate directly into business effectiveness. It is necessary to consider their impact on the way in which businesses are operated. This contrasts sharply with Hofstede (1998) who sees organizational culture affecting performance but finds little linkage between cultural factors and business practice, except possibly for communications-related variables.

Our survey seeks to investigate the respondents' views about cultural factors and their employers' business practices. (1) The objective of our work was to determine whether, as most survey responses suggest, there is a distinct Thai style of doing business. Does it correspond to popular perceptions of an "Asian" style of management? …

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