Reference no: EM13938707

It is 6 o'clock in the morning on the 45th floor of the Bayoke Suite Hotel, which lies in the shadow of the great tower overlooking Bangkok. This early March morning is already full of noisy city life. It is difficult to even see through the persistent opaque fog to view the outstanding urban landscape below. Even now at dawn, the neighbourhood wholesalers and tailors are at work. Tourists have a complete wardrobe made by these workers for a mere two to four hundred dollars, in only three days and two fittings. The view from the hotel spans more than 180 degrees, and is mineral and cottony. A few major towers are in sight, and cranes stand, still inactive since the 1997-1998 financial crisis. The various levels of building show the divisions of the layers of the clouds of pollution. Below lies a maze of urban toll roads and subway lines. Fresh air is increasingly limited as the motor traffic becomes denser every year.

Jerôme has well understood that his pleasant condominium on the riverside can only be reached by taxi, as it is located further west of the city. For eight years now, he has chosen to live in this noisy city. He was put in charge of establishing the first offices here of the marketing research company he works for. The offices are located in the heart of an impersonal business district, similar in many ways to that of major Western modern cities. Still he inaugurated the offices in a traditional way, according to Buddhist rituals, having a monk bless the new location of the business. This was followed by a friendly lunch meeting to bring together the first employees of the company.

A few hours later, that same Saturday morning in March, Jerome heads to the middle district of Silom, in central Bangkok. He goes to a comfortable hotel with simple decorating, which is quite in keeping with the tastes of the new middle class, who have been gradually re-discovering their previous standard of living since the crisis. Being here, for Jerome, is clearly, to demonstrate his interest in the work of his staff. Jerôme's employees are very responsible and autonomous, and he refrains from exercising control over them. Immediately it is evident from the entrance hall that everything is in place: Dao (the young associate director) and the investigators of his team assemble in small groups. In each group there are young women who have been invited to evaluate the new refrigerator model. Their input is needed because Thailand wishes to begin selling home appliances from a major European manufacturer. This test process is similar to many others which Jerôme organises in partnership with leading global market research companies.

In Thailand now, consumption is booming at an annual rate greater than the 6% annual growth rate. Thus, marketing research, in its basic forms, has gained momentum. However, the world's leading FMCG (fast moving consumer goods), meaning consumer products, have tended towards tightening their budgets to defend their margins which have been increasingly eroded by supermarkets.

In searching for new concepts, a better understanding of consumer behaviour is needed for South East Asia, especially in Thailand. The opportunities available in these fast-growing economies are not to be missed, especially now that growth in the rich West has slowed. The global brand names of the West could soon be challenged by new competitors from emerging countries like Thailand. Korea, for instance, has performed well in competing with well-known international brands in recent years, as Japan also did two decades ago. Jerôme was born in Algeria to a family involved in the military. He was tossed from one country to another, throughout his childhood and adolescence. These moves were because of various assignments his father received. His father was a naval officer with a background in the field of market research, although originally a journalist. During his 80 years, his father gained experience in Europe, and later in Africa, and, finally, in Asia. Like many young people of his generation, his professional debut had been somewhat relaxed. Many distant travels, in more than 20 countries, enabled him to cater to his taste for discovery exotic landscapes and cultural diversity like his father had done. He ended up working in specialist marketing by accident, really. First had successively been a handler, social worker, teacher and creator of SMEs. He finally found his ‘true' vocation as a result of a survey to a business magazine!

It is the agency that sponsored the study article that hired him. He then moved up the ranks until becoming its director. Later he was recruited by one of the world leaders in the sector to become one of the managers of their French structure. A few years after, he was given the opportunity to take the lead in the subsidiary of the grules and requirements are much less strict that in the West. For many companies, the views of customers and consumers are far from paramount. Much more important is to develop relations with government bodies, to obtain concessions, for example in telecoms, or to receive regulatory and administrative benefits. These relationships with authorities can make the difference between whether a company's new products will be authorised or denied by the local Food and Drug Administration, for example. The decisions of such organisations can seem surprising, and sometimes almost inexplicable, without knowing the importance of these connections between the government and businesses.This does not mean that things do not change, as evidenced by the steady increase of animosity towards the Prime Minister, Taskin Shinavatra which led to his dismissal. The prime minister was both a businessman and politician, similar to Berlusconi according to many. He managed to approve the sale of Thailand's communications -his personal property- to a foreign trader for several billion dollars, with no taxes charged thanks to a clever manipulation of the system. This transaction caused an unprecedented anger in urban areas and in rural areas, which are traditionally legalistic. His testimony, in the late summer of 2006, where a military coup used the same logic, is somewhat surprising from Westerners point of view.

But fundamentally, in this country that escaped colonization through the diplomatic skill of its rulers and whose last armed conflict was in the late eighteenth century, the truth is that it traditionally seeks harmony. Thai people see collective needs as more important than individual needs. They find Western society somewhat disturbing in its focus on the individual, as in accordance with Buddhist philosophy, the "I" is an illusion. Individuals should therefore guard against preferences, and seek to blend into the community in which
they reside. For the Thai, sensitive truths that might disturb others are not to be highlighted.

The community consists of households of families, in which all generations of the family live together. In a broader sense, the community is made up of neighbourhoods: it is not uncommon for some occupants of houses in the same neighbourhood, the so called «soï»  to make some purchases together and share their vehicles. With this communal sense, who should be considered as the decision maker for purchase of consumer products like food? How can the possible impact of a new advertising campaign be measured, and to whom should it be directed? There are so many different scenarios for which the answer and, most importantly, the method will be different.

It is important to distinguish what is consumed individually, as beverages that are purchased during the day to satisfy a small thirst, whereas those that are collectively consumed and have a certain issue of status. It is noteworthy that, in most cases, while observing a group of people, often all consume the same product and the same brand. Jerôme believes it is the image that the group wants to give, to themselves as well as to the others, that dictates their choices.Indeed, it is often attitudes and behaviours that most distinctly show the differences between Western and Asian cultures - without prejudice to even more pronounced differences between countries. Thus, whereas in Europe rules tend to apply to behaviour (‘do' or ‘do not'), in Asia, especially in Thailand, the rules apply more to attitudes: being drunk is, in itself, not serious, as it is to be seen when you are drunk. The implications of this distinction are enormous from a marketing point of view. While the French would choose a certain brand to differentiate themselves, for the Thai it would be, on the contrary, to show how much they are alike. The beauty of Thailand is not in a process of seduction, as is the case in the West. Thai people are urged to be a beautiful element of the grand and pleasant whole. This leads, as highlights Jerôme, to Westerners having to «rebuild our systems understanding» in order to comprehend the ways of the Thai people. Then there is the exquisite politeness of Thais who, even more than many Asians who excel, like the Japanese, in the subtle art of refusal, not only refrain from formally say «no» but even try to act ahead of the expectations of the offerer. When receiving an inquirer at home , it would be shocking to expose it to an affront. For example, when a test on new product achieves little more than 50% of positive intentions to buy -which is encouraging in our latitudes, such a result suggests a commercial catastrophe! It is better to reach 90% if you wish to envisage launching a new product....

This context raises many ethical and methodological problems for professional studies: for example, it is not uncommon for the client's representative to intervene before the final presentation of results and demand changes for not calling sharply enough into question the too widely shared beliefs in the company. For some providers the essential function of the study would be, even more precisely, to reinforce the decisions already taken internally, most often in a concerted manner.

Beyond customer expectations, the collection and interpretation of data require specific approaches, both quantitatively and qualitatively. It was therefore necessary to Jerôme and his team's great inventive spirit to forge tools for collecting and analysing relevant beyond approximation, especially in this sprawling capital. No one knows the precise population figures, as reliable databases must be created for measurement. The population can only be estimated, by, for example, counting the number of rooftops in aerial photographs in some neighbourhoods.In an environment where the importance of the individual goes behind the group, «scientific», «universal» methods, practised in the West, involving a «margin of error» or «confidence interval» need to be substituted with ethnographic methods. These methods are based on direct observation of behaviour in schools, in offices, even in families, sometimes with a camera, in order to understand how they prepare meals, how they watch television, how they buy... This unavoidably requires periods of insertion, and therefore substantial costs, in order to identify the drives, which are in most cases, unconscious and automatic.

And beware of the hasty generalizations: what is true for Thailand is not necessarily the case for neighbouring countries. Although the importance of the collective is found there, as in many emerging countries, huge differences are revealed, such as in the religions, history, and world views. But, despite these difficulties of apprehension, and even because of them, «business» is not lacking here. Growth has resumed, again close to 6% per annum, with a rate of debt which has more than doubled in just over two years- to about 30%, according to foreign bankers; this is far less extreme, however, than the debt rates of 75% in Malaysia and 95% of Korea. Even though they live closely in accordance with their traditions, the Thai cares little about the past, let alone the future. In a country where sex is on the same footing as gastronomy, the only reference is the present. These same foreign bankers also point to the growing prevalence of credit cards in creating «bad debts». Credit cards are accessible to all, from manager to employee, and they are commonly used in stores and shopping malls. However, bad debts which were still adversely affecting some, such as local banks, which exceeded 30%, would soon return to below 10%.

Domestic consumption and exportation are the main engines of the re-growth. Massive training projects were promised by the Prime Minister before he was elected. However, when re-elected into his second term, many observers saw these projects as wishful thinking, given the gap between objectives and achievements of during his first term. But it would be a mistake to consider the Thais, above all, enjoy life; they are also hard workers, as used to daily observe many of whom , such as Jerôme, are leaders of foreign companies -from banking to large retailers, in various relocated business activities. In the case of latter, campaigns to recruit a workforce are not characterized by exceptional productivity. The great deference and docility of the workers was able to attract many multinational companies who continue to view Thailand, as its neighbouring countries of South East Asia, even India, as a needed alternative compared to the too exclusive attractions of the great Chinese neighbour.

In the service sector which Jerome works, he can only admire the working capacity of its officers and employees. Of course, he pays them four times more than the competition, so they work with great efficiency. In this country, hierarchies and the caste system tend to
perpetuate; the sons of privileged families attend the best universities and willingly leave to study abroad. A new elite class is asserting itself. There is no need to closely regulate these carefully selected collaborators, they must be trusted. In Jerome's view, they are perfectly capable, having a clear vision of the objective to achieve, to perform miracles to each the goal.

It took him years to understand and adjust to them, which contributed powerfully to their self-motivation: passing a lot of time explaining what we wants to happen, but not worrying too much about implementation. If employees ask that two people are allocated
to performing a task, let them do that, although it is estimated that only one would be sufficient. In making their confidence, we will be surprised to see the extraordinary collective intelligence and positive attitude that this will generate. If a client called Friday night for the completion of a study on weekends, no problem. If a car is brought up to the fifth floor of a hotel, even for a «car clinic» comparison, you must accept ignoring how your team has achieved this feat. If you had put your nose in, you can be sure it would not work.

The Thais work in an atmosphere of joy; they are almost spontaneous and carefree. It is surprising that in the construction of a building, engineers do not seem to pay attention to instructions and are not bothered to look at the building plans. Yet in the end, the walls are straight. They do not make mistakes, especially in the field of studies which is unique in that they never express disapproval against anyone at the outset, to prevent concealment and to generate a rapid rise of information. They impose on all the idea that if the error is inevitable, it must be identified and corrected as soon as possible after diagnosis.This requires, of course, here as elsewhere, ensuring quality employees, spending a lot of time in hiring, explaining the company, its project and understanding the motivations and
expectations of the newcomer. In addition to the legal contract, there is a moral contract. Jerôme also considers it necessary to pay the greatest attention to small decisions and follow-them up with care: a promotion makes one person happy and ten feel unfortunate if the choice is not properly and sufficiently explained. Management should be in following with the precept of wise Tao To King of Lao-Tze, «we should govern men like one would cook small fish, without shaking the pan too hard».

In a «people business» like Jerôme's, without machines, where nothing is - or recurring tasks, or processes- it's inevitable and requires avoiding any «colonialist» drift, believing that such a decision will be better because it will correspond to its own values or will be part of their own cultural practices. As those who believe some English people are smarter, «more equal» than the others, because they have a better knowledge of their language and its insidious practice of different speeds. Conversely, in this environment of business English, language handicap here should be an advantage for a French expatriate: forced to have more patience, unless emotion and nuance, mutual understanding will be deeper paradoxically, no one using his mother tongue. If it loses in subtlety, it also losesfortunately- in arrogance.

But it is not, however, easy for Jerôme to impose the family model that would be applied to his business. He wishes to have short distances in a hierarchical society that is not egalitarian. His style of management is striving to eliminate this distance as much as possible, to avoid the bureaucratic formalism, banning meetings of executives' routine. They tend, instead, to focus on the «measure» to facilitate accessibility to encourage direct talks, spontaneous memos, and e-mails. Being sensitive to events in the personal lives of members of his team is crucial: to celebrate birthdays, attend weddings, and join in the grief of loss.

We must not fall into the excesses of «us, we are different», although, as pointed out by Jerôme with humour. Marx himself quickly saw his analysis unapplicable the Western way to the Far East and that Freud would have had trouble in adapting his approach to one where sex is less repressed than in his narrow Viennese company reference.Finally, for him, what counts here, as everywhere, is empathy: considering the situation from the other's viewpoint. And this is similar for marketing studies and for management. For Jerôme, it's the fact of being in a cultural context that allows some shifts to better apply, in the absolute, universal rules of management. And, for himself, to embrace Thailand, the foundation for a professional happiness, and also personal, he shared, in fact, with his Thai companion, who he just married.

QUESTIONS:

Adjusting entry strategy to target country environment

1. To what extent, Thailand could provide a priority entry point for South East Asia for a market study company market? For a French
company (see Hofstede 1983)

2. Which would be the pros and cons of partnership, Greenfield (organic growth) or brownfield (external growth) venture to become more familiar with the Thai environment (see Kogut et al. 1988)?

3. Which type of relationship -autonomy or day to day reporting- would you recommend between the French headquarters and the Thai
structure?

4. Which past professional experiences Jerome has prepared to undertake the responsibility of the Thai affiliated company (see
Kirkman & al. 2006)?

5. To which marketing challenges Jerome was confronted to deal with Thai cultural and economic specificities?

6. To which management challenges Jerome had to deal within the company with his team ? Which kind of answer has he provided to
secure the local corporate growth?