Thai economy linked to foreign companies Part 1

Although foreign owned and operated companies are just a minority, their economic influence is significant. So just to entertain the thought for a moment, what would happen if they just decided they had enough of Thailand.

Before we start in on this entry, Connecting the Dots wants to say that this is just to tickle your mind by pointing out some things. There has been no research into the numbers of foreign companies, or how much they contribute financially to Thailand’s overall economy. But what would happen if they all closed shop is very real based on Thai management practices.

Talk to any non Thai that has worked for a Thai company and you will hear one horror story after another. Thai managements approach is harsh, raw, demanding and ultimately self destructive. Company plans are often not well thought out and the typical description of Thai companies is two steps forward and one step back. If you have ever watched a Thai construction project closely, you will note they spend nearly as much time ripping down the new build as putting it up because someone failed to read the blue prints provided by the architect.

Unfortunately for the Thais, this is a bit of an embarrassing signature when viewed by non Thais and potential customers. This practice simply bleeds cash from company profits where seemingly between 25% and 50% is complete waste. That in comparison is in complete contrast to foreign owned and managed companies that strive for 0% waste. Even the Japanese companies are models of efficiency. Because of that excessive bleeding, it places Thai owned and operated businesses at a huge disadvantage for being competitive in the global market.

Also part of that self destructive Thai business mentality is they tend to look at getting all they can in profits, and simply see their customers as disposable. The foreign management mentality is to build a relationship with the customers so they will have repeat customers. Tourism is a big part of Thailand, and that contributes to the one time customer mentality of ‘get them for all you can.’ In that market customers do tend to be only one time, and it seems the Thais have yet to figure out the non tourist market is very different.

So looking at the foreign owned companies in Thailand from the smallest bar or restaurant, to big factories that produce anything from hard drives to cars, and you will see the problems that tend to pop up are quickly dealt with. Most of the problems have to do with workmanship and not process. Many of the products made are not for domestic use and add to Thailand’s exports. Outside of agriculture, garments and crafts it is hard to think of Thai products that have a global customer base of the average consumer.

So generally speaking if all the foreign owned businesses in Thailand finally got tired of the double standard that reflects the ‘get them for all you can’ mentality and picked up and move to another country, Thailand would simply find itself out of the global market in short order. Even looking at take overs of foreign companies by Thais has been a bit of a disaster.

Continued in Part 2

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