Introduction

An understanding of general Thai culture will be useful to you as a foreign negotiator, as it has significant influence in the business environment and will impact your relationships with negotiating counterparts. Thailand is a nearly entirely Theravada Buddhist society, with a fundamental cultural concept of “face" or dignity: it is of utmost importance to Thais that both they and you maintain face at all times. They will therefore be unlikely to intentionally embarrass or humiliate you, or to allow you to feel tricked or used, and they will expect you to behave likewise. Additionally, if you make them feel like cogs in a machine, interchangeable and uninteresting as individuals, this will be perceived as the ultimate loss of face. Younger Thais, especially those who have been educated in the West, are inclined to be more competitive than the older, more religious generation. Bear these characteristics in mind as you approach the negotiation process.

Goal of Negotiations

In Thailand, the business relationship is of paramount importance. Business is conducted only between people who know and trust one another, so foreign businesspeople are well advised to focus on relationship-building strategies. This typically involves an introduction by a local, well-positioned, third-party contact; several initial social meetings; as well as sessions of honest, friendly, small talk preceding and following each business meeting. Once fundamental trust is established between you and your Thai counterpart, a sense of loyalty will develop as a result.

Business relationships are formed between individuals rather than between the firms they represent. Adding members or replacements to your negotiating team will be met with resistance, and the relationship-building process will have to begin anew.

Decisions to enter into a business partnership are often more influenced by your Thai counterparts’ personal impressions of you than by the empirical evidence you present to them in support of your proposal. Be calm, patient, friendly, and respectful, and convey to them your commitment to a long-term relationship with them.

Attitude

Thais view negotiations as joint problem-solving endeavors, with both sides expected to cooperate, compromise, and to reach a mutually beneficial agreement. Their fundamental negotiation style is cooperative, and they have a win-win attitude.

Thais are usually ready to compromise and to agree to concessions in order to advance agreement on a deal. They may even offer compromises when there is no real need to do so. They have an extreme dislike of competitiveness and confrontation, and they strive to maintain a harmonious relationship throughout the negotiation process.

Thais typically focus on long-term objectives.

Personal Style

Thais typically afford respect to people depending on their age and rank. Whether someone is of inferior, superior, or of the same rank will influence the formality of the communication. Titles are of utmost significance in Thailand.

There are many formalities observed in the country. For example, you should always wait for your host to seat you, and you should not sit down until your host is seated. Table manners are very important. For example, do not rush to eat, and always leave a little bit of uneaten food on your plate.

You are expected to always remain calm and to speak in a low tone. Boisterous behavior is frowned upon. Thais typically keep body language to a minimum and rarely touch one another when speaking. Despite the humid heat of Bangkok, businessmen are expected to wear formal, dark-colored suits with long-sleeved shirts and ties, and businesswomen typically wear long skirts and blouses that cover their shoulders.

You may be asked personal questions that are considered polite according to Thai culture, but not according to your own. For example, you may be asked how old you are. Be careful not to offend, but if you do not wish to answer, either smile or give a general, indirect answer.

Communication Style

Thais engage in slightly less indirect communication than other Asian countries. They avoid confrontation and any type of blaming at all costs. In order to convey disapproval or constructive feedback, it is best to utilize a third-party contact. Thais will always tell a superior, whether from their own firm or yours, what they believe that superior wishes to hear.

They are unlikely to say “no" or to disagree with a proposal in a clear way. Instead, they tend to give ambiguous answers, such as “I am not sure," “maybe," or “I will think about it." These answers, in addition to a weak or uncertain-sounding “yes," probably indicate no. When reluctant to say no, Thais frequently pretend that they do not understand what was said, or else ignore the question. It is up to you to read between the lines, and to pay close attention to nonverbal communication. 

Keep in mind that Thais have deep-seated dislike of conveying bad news. This has the unfortunate effect of dragging out negotiations while they wait for you to understand without them saying so that they are no longer interested in the deal. Another similar problem that may therefore arise is that serious hitches sometimes never come to the attention of a senior manager until it is too late.

You may notice that your Thai counterparts engage in stalling techniques. This may indicate that they are assessing other alternatives or that they have become uninterested in doing business with you but are unwilling to say so. If they begin to focus on minor details, understand that there may well be a larger problem they are unwilling to confront you about. Do not ask them directly, but ask questions around the topic in order to identify the real issue.

Thais often use defensive tactics during negotiations, such as blocking, distracting, making promises, or changing the subject.

Keep in mind that Thais dislike direct eye contact, and have a tendency to smile and laugh frequently. This may indicate approval, but can just as easily indicate their embarrassment and disapproval. Thais are restrained in their body language, and it is advisable that you follow suit during negotiations. Do not grimace or shake your head, and never raise your voice. Other than shaking hands with your Thai counterparts, it is best not to touch them in any way.

Thai is the official language, but a basic grasp of English is typical among businesspeople. It is worthwhile checking ahead of time whether an interpreter should be engaged. When negotiating in English, it is recommended that you speak in simple, brief sentences and that you speak slowly and summarize often, in order to maximize understanding.

Time Sensitivity

According to Buddhist teachings, time is slow, fluid, and cyclical. What hasn’t been achieved today can be achieved tomorrow or next week. Accordingly, Thais are not highly sensitive to time issues. They normally expect foreign businesspeople to make several trips in order to finalize a deal. The processes of relationship building, bargaining, negotiating, and decision making typically take more time than Westerners expect. Expect delays, and show patience.

Although Thais are not usually punctual when it comes to meetings, they are offended if foreign businesspeople arrive more than 10 to 15 minutes late to a meeting. When invited to a business dinner or lunch, it is advisable to arrive on time as a group.

Deadlines are not typically taken seriously, and efficiency may be lower than Western standards.

Big firms located in Bangkok tend to have a more Western-influenced attitude toward time, and are more likely to be punctual and efficient.

Emotionalism

Thai culture is very strong on emotional restraint. Harmony, or an appearance of harmony, is paramount. Causing a scene can be disastrous for a person’s reputation and social standing. Similarly, causing embarrassment to someone else (for example, by direct criticism) is considered to cause a loss of face for all involved.

An impression of you as a worthwhile business partner depends to a large extent on how friendly, calm, diplomatic, and tactful you are during the course of negotiations. You should always be polite and never be overly assertive, boisterous, or lose control of your emotions. Speak in quiet, gentle tones.

It is customary to leverage personal relationships while negotiating. Thai negotiators commonly use emotional techniques, such as attitudinal bargaining and guilt tactics, and you should feel free to reciprocate. However, be careful not to become aggressive or confrontational, or to do anything that may lead your counterparts to feel that they have lost face. This could seriously jeopardize the deal.

Risk Taking

Thais are not typically high risk takers in business. They may be encouraged to take risks only when they have a deep trust in their partners. This trust can be gained slowly, with many face-to-face meetings, as well as by consistently behaving in a courteous, calm, respectful way. Your Thai counterparts’ feelings about you have great weight when they evaluate whether or not they can take a risk with you. Use social situations as informal negotiating sessions during which you prove your loyalty and steady character.

Facts and statistics will help, but also stress long-term objectives rather than the short-term gains of any proposal. Always come prepared with contingency plans, guarantees, and warranties wherever possible to mitigate the risk.

Team Organization

Thailand’s culture is very much group-oriented. Negotiations are almost always conducted with a team, and team members are typically well aligned, with clear roles. Conforming to the norms of one’s group, and making efforts to maintain harmony, are practiced more commonly than expressing individual preferences. Team members and subordinates will almost always defer to the opinion of their team leader and the most superior executive present.

Business leaders in Thailand tend to be autocratic and authoritarian.

Agreement-Building Process

Agreement building in Thailand usually begins with general expressions of each party’s expectations and responsibilities. Final agreements are not usually highly detailed, and are designed to leave room for flexibility.

Thais are not usually forthcoming when it comes to sharing information, as they view privileged information as power. However, they will share information as a method of building trust. Thais like to haggle, and this stage of negotiations is typically extensive. Note that initial offers and final agreement on prices may differ by as much as 40 percent. When you make a concession, it is both acceptable and expected that you request that your Thai counterparts reciprocate.

It is not advisable to use pressure tactics, such as opening with your best offer. Opening with an extreme offer may be successful, as it leaves you plenty of room to make concessions. However, if the opening offer is too high, you risk offending your Thai counterpart. If you make an expiring offer, Thais will become suspicious that you are not committed to developing a long-term relationship with them.

Conflicts and disputes are difficult to resolve, as Thais are typically reluctant to admit to them. Your best recourse is to remain friendly, calm, and patient, and to use a mediator (preferably the third party who introduced you) to clarify and solve the issue.

Beware of copyright and patent infringement, which is rife in Thailand. You may need an explicit guarantee for protection.

Agreement Form

Thais usually draft their agreements in general terms. Any interim agreements are not considered final, and oral commitments are rarely enforceable. The fundamental conditions and terms of an agreement are outlined in a contract, and both parties must sign. Consult a legal expert before signing, but do not bring your attorney to the negotiation table, as this conveys distrust.

The strength of the relationship, and not the specificity of the clauses in a contract, will usually determine how closely an agreement is adhered to and how ultimately successful a business relationship is.

Thais typically consider themselves obligated by the contract only as long as a good relationship is maintained between the parties. Business partners are usually expected to modify contract terms if post-contract conditions change.

The assessments detailed in this article are intended for informational purposes only. They reflect typical attitudes within a given country or culture, and are not intended to describe any specific individual or business. World Trade Press is not responsible for any action taken on the basis of the information contained herein.

World Trade Press would like to acknowledge the research of Jeswald W. Salacuse (“Ten Ways That Culture Affects Negotiating Style: Some Survey Results,” Negotiation Journal, July 1998, Plenum Publishing Corporation) as the basis, with modifications, for the assessment categories described in this article.