Script Intercultural Management SS2006

Intercultural Management: 

Intercultural Management Fachhochschule Stuttgart Hochschule der Medien University of Applied Sciences Department Print Electronic Media Jaruwan Krengvittaya-Greilich Sommer Semester 2006

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Contents: • The Asian Pacific Area in western statistics • Hofstede's 5-D-Model • Germany, China, Japan and Thailand in the 5-D-Comparison • Value development in Germany 1950 to 2000 • Consequences in the Behaviour towards Thais • Thai Culture in Management • Roots of the Japanese Tradition • Features of Japanese Culture for Management • Western and Japanese Steering Features • Key values of Chinese Culture • Features of Chinese Culture for Management • Media and Communication in Comparison • Rules for Business Success in South East Asia • Cases • Appendix Intercultural Management Jaruwan Krengvittaya-Greilich

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Chart No. 1a Bibliography (part a) Jaruwan Krengvittaya-Greilich • Andres, Susanne, International corperate communication in the process of globalisation, Gabler, Wiesbaden 2004 • Chan, John, China Strreetsmart, What you must know to be effective and profitable in China, Prentice Hall 2003 • Dambmann, Gerhard, Instructions for Japan, Piper, Munich 1996 • Ederer, Günter, Das leise Lächeln des Siegers, C.H. Beck, Munich 1998 • Fussinger, R.-D.; Reincke, Intercultural Management, Gabler, Wiesbaden 2001 • Hofstede, Geert, Cultures and organizations-Software of the mind, Mc Graw Hill, New York 2005 • Hofstede, Geert, Cultural Constrains in Personnel Management, in Management International Review, Gabler, Munich 1998 • Hofstede, Geert & M.H. Bond, The Confucius Connection: From Cultural Roots to Economic Growth, in Organization Dynamics, 1998 • Jandt, Fred, Intercultural Communication, Sage Publications, Thousand Oaks 2004

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Chart No. 1b Bibliography (part b) Jaruwan Krengvittaya-Greilich • Klausner, W.J., Reflections on Thai Culture, The Siam Society, Bangkok 1987 • Kuhnert, Stephan, Management in Thailand, Compendium for successful conduct in the Thai business world, Bangkok 2002 • Kutschker, Michael; Schmid, Stefan, International Management, 4th edition Oldenbourg, Munich 2005 • Lang, Nicolaus-Sebastian, Interculturales Management in China, Deutscher Universität –Verlag, Wiesbaden 1998. • Lewis, Richard D., When cultures collide, Nicholes Brealey, London 2000 • Liu, Y., Kulturelle Besonderheiten bei deutsch-chinesischen Verhandlung von Unter-nehmen, Leipzig 2000 • Perlitz, Manfred, International Management, Lucius & Lucius, Stuttgart 1997 • Phongpachit; Pasuk; Baker, Chris, Thailand-Economy and Politics, Oxford University press, New York 2002. • Reincke R.-D.; Fussinger, Intercultural Management, Gabler, Wiesbaden 2001

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Chart No. 1c Bibliography (part c) Jaruwan Krengvittaya-Greilich • Reisach U.; Tauber Th.; Xueli Yuan, China - Business partner between wish and reality, Ueberreuther, Vienna and Frankfurt 1997 • Schneidewind, Dieter, Market and Marketing in Japan, C.H. Beck, Munich 1998 • Seligman; Scott, D., Business Etiquette: A Guide to protocol Manners and Cultures in the People´s republic of China, Warner Books 1999 • Thiele, Ulrike; Meid, K.H., Successful in the Japanese Business, Savings Bank Publisher, Stuttgart 1994 • Ting-Toomy, S., Communicating Across Culture, The Guildford Press, New York 1999 • Trompenaars; Fon; Hampden-Turner, Riding the waves of culture, Charles 1998 • Warthum, Nicole, Intercultural Communication in the Business, University Publisher Dr. N. Brodemeyer, Bochum 1997 • Weggel, Oskar, The Asians, dtv, Munich 1994 • Weggel, Oskar, China, C. H. Beck, Munich 2002

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Chart No. 2 Definition of Globalisation Jaruwan Krengvittaya-Greilich Globalisation is a process of interaction and integration among people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology. Globalisation is not new. For thousands of years, people – and, later corporations – have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. The current wave of globalisation has been driven by policies that have opened economies domestically and internationally. Technology has been the other principal driver of globalisation. Advances in information technology, in particular, have dramatically transformed economic life. Globalisation is deeply controversial, however. Proponents of globalisation argue that it allows poor countries and their citizens to develop economically and raise their standards of living, while opponents of globalisation claim that the creation of an unfettered international free market has benefited multinational corporations in the Western world.

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Nokia/Finland Chart No. 3 The Asian Pacific Area in western statistics ? Motorola/USA Mitsubishi/Japan Ericson/Sweden Sony/Japan Siemens/Germany Toshiba/Japan Co-operations in the year 2001 Western- Europe/USA South-East-Asia (Japan) 2 % * 14.6 % * 30.6 % * Jaruwan Krengvittaya-Greilich = market share world wide  1 % * 10.0 % * 6.5 % *  1 % *

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Chart No. 4 The Asian Pacific Area in western statistics Jaruwan Krengvittaya-Greilich 1992 1994 1996 1998 2000 2002 • • • • • 8 % 6 % 4 % 2 % • • • • • •            Asia worldwide List of References: ADB, Asian Development Bank, Manila, 2001 Changes to the previous year

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Inhabitants Mainly: Catholics and Protestants Mainly: Taoists (with Confucian philosophy) Mainly: Shintoists and Buddhists Mainly: Buddhists Jaruwan Krengvittaya-Greilich The East-Asian Area in German statistics Germany: 83 Million Inhabitants Thailand: 63 Million Inhabitants Chart No. 5 China: 1,300 Million Inhabitants Japan: 128 Million Inhabitants

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The Asian Pacific Area in western statistics Jaruwan Krengvittaya-Greilich Thailand Jan 1 New Year´s Day Jan 3 Substitttion for New Year´s Day Feb 23 Makha Bucha Day Apr 6 Chakri Day Apr 13-15 Songkran Days May 1 National Labour Day May 2 Substitttion for National Labour Day May 5 Coronation Day May 7 Ploughing Day May 22 Visakha Boucha Day May 23 Substitttion for Visakha Boucha Day Jul 20 Asarnha Bucha Day Jul 21 Buddhist Lent Day Aug 12 H.M. The Queen´s Birthday Oct 23 Chulalorngkorn Day Oct 24 Substitttion for Chulalorngkorn Day Dec 5 H.M. The King´s Birthday Dec 10 Constitution Day Dec 10 Substitution for Constitution Day Dec 31 New Year´s Eve Indonesia Jan 1 New Year´s Day Feb 21 Id-Al-Adha Feb 9 Chinese New Year´s Days Feb 10 Islamic New Year Mar 25 Good Friday - Easter (Christian) Apr 9 Hari Raya Nyepi (Hindu) Apr 21 Mouloud, Prophet’s Birthday May 5 Ascention Day (christian) May 22 Waisak Day (Buddhist) Aug 17 Indonesian Interpendence Sep 1 Ascention of the Prophet Nov 3 Id-Al-Fitr Dec 25 Christmas Day Singapore Jan 1 New Year´s Day Feb 9-10 Chinese New Year´s Days Mar 25 Good Friday May 1 Labour Day Aug 9 National Day Dec 25 Christmas Day Taiwan Jan 1 New Year´s Days Jan 2-3 New Year’s Holiday Feb 8 Chinese New Year’s Eve Feb 9-11 Chinese New Year´s Days Mar 29 Youth Day Apr 5 Ching Ming Festival May 1 Labour Day Jun 11 Tuen Ng Festival Jul 1 Bank Holiday Sep 18 Mid-Autumn Festival Sep 28 Teacher´s Day (Birthday of Confucius) Oct 10 National Day Oct 25 Taiwan Retrocession Day Oct 31 Birthday of Chiang Kai Shek Nov 12 Birthday of Dr. Sun Yan Sen Dec 25 Constituttion Day Australia Jan 1 New Year´s Day Jan 3 New Year‘s Holiday Jan 26 Australia Day Mar 25-28 Good Friday-Easter Apr 25 Anzac Day Chart No. 15 Chart No. 6

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The Asian Pacific Area in western statistics Jaruwan Krengvittaya-Greilich Jun 13 Queen´s Birthday Dec 25 Christmas Day Dec 26 Boxing Day Japan Jan 1 New Year´s Day (Gantan) Jan 2-3 New Year‘s Holiday Jan 10 Coming of Age Day Feb 11 National Foundation Day Mar 21 Vernal Equinox Day Apr 29 Greenery Day May 1 May Day May 3 Constitution Memorial Day May 4 National Holiday May 5 Children´s Day Jul 18 Marine Day Sep 19 Respect for the Aged Day Sep 23 Autumnal Equinox Day Oct 10 Health and Sports Day Nov 3 National Culture Day Nov 23 Labour Thanksgiving Day Dec 23 Emperor´s Birthday Dec 31 New Year‘s Eve Holiday China Jan 1 New Year´s Day Jan 29-31 Spring Festival Feb 9-11 Chinese New Year May 1-3 International Labor Day Oct 1-3 National Day Hong Kong Jan 1 New Year´s Day Feb 9-11 Chinese New Year´s Days Mar 26 Good Friday – Easter Mar 28 Easter Monday Apr 5 Ching Ming Festival May 1 Labour Day May 16 Buddha‘s Birthday Jun 11 Tuen Ng Festival Jul 1 SAR Establishment Day Sep 19 Day after Mid-Autumn Festival Oct 1 National Day Oct 11 Chung Yeung Festival Dec 22 Chinese Winter Solstice Dec 25 Christmas Day Dec 26-27 Christmas Holidays Philippines Jan 1 New Year´s Day Feb 22 EDSA Revolution Day Mar 24-27 Holy Thursday-Easter Apr 9 Bataan Day May 1 Labour Day Jun 12 Interpendence Day Jun 24 Manila Day Aug 28 National Heroes Day Nov 1 All Saints´Day Nov 3 Eid‘l Fitre Nov 30 Bonifacio´s Day Dec 25 Christmas Day Dec 30 Rizzal Day Dec 31 New Year‘s Eve Chart No. 7

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The Asian Pacific Area in western statistics Chart No. 15 Jaruwan Krengvittaya-Greilich Japan 19 18 1 Taiwan 18 12 6 Hong Kong 18 10 8 Thailand *) 17 12 5 Philippines 16 9 7 Indonesia 13 2 11 China 13 13 - Australia 9 4 5 Singapore 7 3 4 Germany **) 12 4 8 *) Thailand: 5 public holidays regarding the monarchy **) Bavaria and Baden-Wuerttemberg country holidays public holidays clerical holidays Chart No. 8

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Chart No. 9 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich The database was unusually extensive, covering employees in 38 occupations in 74 countries and regions: 67 countries, Belgium and Switzerland each with two language-regions, and three regions in Africa. Altogether more than 116,000 questionnaires with over 100 standardized questions each.  Answers from employees from subsidiaries of IBM corporation in different countries, were based on the same “paper-and-pencil” questions. Only the scores of the fifth dimension were based on the student samples in the the Chinese Value Servey study in thirty-eight countries and one region. For the questionnaire, an interval-scale with five answer alternatives was used. In his cross-national study, Geert Hofstede showed results for international distinctions using a large empirical market research survey: Hofstede´s comment: To the amazement of some people as to how employees of a specific corporation like IBM can serve as a sample for discovering about the culture of their countries as a whole, his answer: Samples for cross-national comparison need not be representative, as long as they are functionally equivalent.

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Chart No. 10 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich Power distance gives an indication of the extent to which the less powerful members of institutions and organisations expect and accept that power is distributed unequally. Uncertainty avoidance gives an indication of the extent to which people feel threatened by ambiguous or uncertain situations and have created beliefs and instructions which try avoid these.

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Chart No. 11 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich In individualistic societies people are supposed to look after themselves and their immediate family only. In collectivistic societies people belong to cohesive in-groups or collectivities which are supposed to look after them in exchange for unquestioning loyalty. In masculine societies important values in society are public and material success, fast and decisiveness. In feminine societies important values are to be modest and tender and concerned with caring for others and quality of life.

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Chart No. 12 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich This dimension shows to what extent different nationalities attach relative importance to certain values associated with Confucius’s teachings. His teachings are lessons in practical ethics without any religious content. The principles of Confucian teaching: • The "wu lun": The stability of society is based on unequal relationships between people. • The family is the prototype of all social organizations. • Virtuous behaviour towards others consists of not treating others as one would not like to be treated oneself. • Virtue with regard to one´s tasks in life consists of trying to acquire skills and education, working hard, not spending more than necessary, being patient, and persevering.

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Chart No. 13 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich Inequalities among people are expected and desired. Parents teach children obedience. Children are a source of old-age security to parents. Respect for parents and older relatives is a basic and lifelong virtue. Teachers should take all initiatives in class. Teachers are gurus who transfer personal wisdom. Inequalities among people should be minimized. Parents treat children as equals. Children play no role in old-age security of parents. Children treat parents and older relatives as equals. Teachers expect initiatives from students in class. Teachers are experts who transfer impersonal truths.

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Chart No. 14 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich Mostly poorer countries with a small middle class. The powerful should have privileges. Managers rely on superiors and on formal rules. Subordinates expect to be told what to do. The ideal boss is a benevolent autocrat. The way to change a political system is by changing the people at the top: revolution Mostly wealthier countries with a large middle class. All should have equal rights. Managers rely on their own experience and on subordinates. Subordinates expect to be consulted. The ideal boss is a resourceful democrat. The way to change a political system is by changing the rules: evolution

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Chart No. 15 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich Aggression and emotions should not be shown. Low stress and low anxiety. What is different is curious. Family life is relaxed. People have fewer worries about health and money. If commandments cannot be respected, they should be changed. Aggression and emotions may be ventilated. High stress and high anxiety. What is different is dangerous. Family life is stressful. People have more worries about health and money. If commandments cannot be respected, we are sinners and should repent.

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Chart No. 16 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich Time is a framework for orientation. Liberalism. Few and general laws and rules. Citizen protest is acceptable. Positive attitudes towards young people. Belief in generalists and common sense. Focus on decission process. Hard-working only when needed. Time is money. Conservatism, law and order. Many and precise laws and rules. Citizen protest should be repressed. Negative attitudes towards young people. Belief in experts and technical solutions. Focus on decission content. Need to be busy; inner urge to work hard.

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Chart No. 17 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich ‘We’ conscious. Use of the word ‘I’ is avoided. Purpose of education is learning how to do. High-context communication. Trespassing leads to shame and loss of face for self and group. Social network is the primary source of information. Harmony should always be maintained and direct confrontations avoided. ‘I’ conscious. Use of the word ‘I’ is encouraged. Purpose of education is learning how to learn. Low-context communication. Trespassing leads to guilt and loss of self- respect. Media is the primary source of information. Speaking one’s mind is a characteristic of an honest person.

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Chart No. 18 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich Collective interests prevail over individual interests. Private life is invaded by group(s). Opinions are predetermined by group membership. Relationship prevails over task. Management is management of groups. Per capita GNP tends to be lower. Harmony and consensus in society are ultimate goal. Individual interests prevail over collective interests. Everyone has a right to privacy. Everyone is expected to have a private opinion. Task prevails over relationship. Management is management of individuals. Per capita GNP tends to be higher. Self-actualization by every individual is an ultimate goal.

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Chart No. 19 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich Dominant values in society are caring for others and preservation. Jealousy of those who try to excel. Both men and women should be modest. Women and men shop for food and cars. Relationship and quality of life are important. Sympathy for the weak. Failing in school is a minor incident. Dominant values in society are material success and progress. Competition in class; trying to excel. Men should be assertive, ambitious, and tough. Women shop for food, men for cars. Challenge, earnings, recognition, and advancement are important. Sympathy for the strong. Failing in school is a disaster.

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Chart No. 20 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich People work in order to live. Welfare society ideal; help for the needy. Permissive society. Careers are optional for both genders. More leisure time is prefer over more money. International conflicts should be resolved by negotiation and compromise. People live in order to work. Corrective society. Performance society ideal; support for the strong. Careers are compulsory for men, optional for women. More money is prefer over more leisure time. International conflicts should be resolved by a show of strength or by fighting. • • •

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Chart No. 21 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich Small savings quote, little money for investment. Investment in mutual funds. Large savings quote, funds available for investment. Investment in real estate. Concern with personal adaptivness. Having a sense of shame. Perseverance, sustained efforts toward slow Children get gifts for education and Concern with personal stability. Concern with "face". Efforts should produce quick results. Children get gifts for fun and love. results. development.

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Chart No. 22 Hofstede’s 5-D-Model Jaruwan Krengvittaya-Greilich Main work values include freedom, rights, achievement, and thinking for oneself. Leisure time is important. Personal loyalties vary with business needs. Matter and spirit are separeted. If A is true, its opposite B must be false. Synthetic thinking. Main work values include learning, honesty, adaptiveness, accountability, and self-discipline. Leisure time is not important. Investment in lifelong personal networks, guanxi. Matter and spirit are integrated. If A is true, its opposite B can also be true. Analytical thinking.

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Chart No. 23 Germany, Thailand and Japan in the 5-D-Comparison Jaruwan Krengvittaya-Greilich  35 Scores  80 Scores  54 Scores  64 Scores On power distance Ger-many scores 35, i.e. below average, implying that a hierarchical order in which everybody has a place which needs no further justification is not accept-able to most Germans. Instead one strives for a certain degree of power equalisation one demands justification for power in-equalities. On power distance Thailand scores 64, i.e. above average, implying that a hierarchical order in which everybody has a place needs no further justification to most Thais as long as the power holders are being perceived as “good” fathers, who are not overtly emphasizing their power. On power distance Japan scores 54, i.e. just on the power distance side. Japanese subordinates expect be told what to do by their superiors but on the basis of mutual commitments in the group and consideration for others. On power distance China scores 80, i.e. above average, implying that a hierarchical order in which everybody has a place needs no further justi-fication to most Chinese. In the Chinese society of closed relationships deve-lopped the concept of „guanxi“, that is a network of contacts and personal relationships.

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Chart No. 24 Germany, Thailand and Japan in the 5-D-Comparison Jaruwan Krengvittaya-Greilich  65 Scores  30 Scores  92 Scores  64 Scores Germany scores 65, i.e. above average on uncertainty avoidance, implying that many German feel uncomfortable with uncertainty and ambiguity. This feeling leads them to belief promising certainty and to maintaining institutions protecting conformity. Thus those who can give certainty in life, such as philosophers, me-dical doctors and technical experts will receive deference. Thailand scores 64, i.e. above average on uncertainty avoidance, implying that Thai feel uncomfortable with unstructured situations. Uncertainty avoiding cultures try to minimise the possibility of such situations by e.g. adhering to strict laws and rules and on the philosophical and religious level and belief in absolute truth. Japan scores 92, i.e. extremely high on uncertain-ty avoidance. Japanese citizens are not only more dependent on the expertise of the government, but they also seem to feel that this is how things should be. Japan is a strong case for an implementing culture, who let the first supplying ideas other cultures and develop them further to put new products on the world market. China scores 30, i.e. below average on uncertainty avoidance, implying that in this country anxiety levels are relatively low. Aggressions and emotions are not supposed to be shown: people who behave emotionally or noisily are socialy disapproved of. This is also one of reasons for the high assessment in long-term orientation of every business.

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Chart No. 25 Germany, Thailand and Japan in the 5-D-Comparison Jaruwan Krengvittaya-Greilich  67 Scores  20 Scores  46 Scores  20 Scores The score for Germany on this dimension is 67. That is an individualistic score, but compared to other Western countries the score is not very high. Thus there is a preference for a loosely knitted social framework in society wherein individuals are supposed to take care to themselves and their immediate families only, and where self-interest is an important motivator. The score for Thailand on this dimension is 20. That is a highly collectivistic score. Thus, in Thailand there is a preference for a tightly knitted social frame-work in which individuals can expect their relatives or other in-group members to look after them in exchange for un-questioning loyalty. “Collec-tivism” is not used here to describe any particular political system. The score for Japan on this dimension is 46. That is a score just on the collectivism side. Employees will act in Japan according to the interest of the ingroup; self-effacement in the ingroup belongs to the normal expectations. If a Japanese belonging to a group from which he has infringed upon the rules of society will feel ashamed. The score for China on this dimension is 20. That is a highly collectivistic score. Thus, in China there is a preference for a rather tightly knitted social frame-work in which individuals can expect their relatives or other in-group members to look after them in exchange for unquestioning loyalty. China shows a relationship-based culture. China

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Chart No. 26 Germany, Thailand and Japan in the 5-D-Comparison Jaruwan Krengvittaya-Greilich  66 Scores  66 Scores  95 Scores  34 Scores Germany scores fairly high on masculinity 66, implying that there is a strong preference in the German society for achievement, heroism and material success. Thailand scores on the feminine side with a score of 34. In feminine societies, such as Thailand, social differentiation between the sexes is not being em-phasized. This means that some women can take assertive roles if they want to do, which in Thailand is true for the more well-to-do women, but especially that some women can assume relationship-oriented, mo-dest and caring roles. Japan scores extremely high on masculinity 95, implying that Japan shows the maximum on this dimen-sion. Challenging works, advancement and high earnings of money are characteristic attributes for the Japanese men. The most higher jobs are reserved for men, although women have often the same high education and qualification in Japan. China scores above average on masculinity 66, implying that there is a certain preference in the Chinese society for achievement and often for material success. There is a priority to have an opportunity for high earnings and for advancement to higher level jobs.

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Chart No. 27 Germany, Thailand and Japan in the 5-D-Comparison Jaruwan Krengvittaya-Greilich  31 Scores  118 Scores  80 Scores  56 Scores Germany scores 31 which is low compared to countries with dominant Chinese population and/or with a strong Chinese influence. Among the western coun-tries Germany occupies a middle position. This can be explained by the relative importance which Germany is attached to thrift and perseverance. Thailand scores 56 on the dimension Confucian Dyna-mism, implying that Thailand scores just on the dynamic side (Hong Kong with 96, Taiwan with 87 and South Korea with 75 scores.) The score of Thailand is not so high because in relative terms little importance is attri-buted to perseverance and very much importance is being attributed to protec-ting one’s face. Japan scores 80 on the dimension Confucian Dynamism, implying that Japan scores rather high on the dynamic side. The Japanese were known to value thrift and perse-verance and to believe in tradition. The correlation between certain Confucian values and economic growth over the past decades is also be right for Japan. China scores 118 (which exceeds 100, was added after the scale has been fixed.) on this dimension with extremely high on the dynamic side. The correlation between certain Confucian values and economic growth over the past decades is a sur-prising, even a sensational finding. May be that this explains the huge eco-nomic growth during the last 20 years in China.

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Chart No. 28 Value Development in Germany 1950 to 2000 Jaruwan Krengvittaya-Greilich Law and order Achievement and discipline Live in order to work Sense of duty The fifties The sixties *) Prosperity Financial wealth Social welfare Consumption Status thinking   Build up and maintain Possess and display List of references: Marketingjournal, Munich, January 2002 *) 1968: Students protests with consequences in the society

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Chart No. 29 Value Development in Germany 1950 to 2000 Jaruwan Krengvittaya-Greilich Alternative ways of life Self-realization Independence Criticism of consumption Social movements: peace, ecology, feminism The seventies The eighties “I”-orientation Event-orientation Superficiality Showmanship Hedonism   Exist and self-determination Possess and display Exist, possess, revel List of references: Marketingjournal, Munich, January 2002 The nineties Individualism Relationship/communication Authenticity Prosperity/achievement Flexibility Realism 

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Social Environments in Western Germany according to „SINUS“ Jaruwan Krengvittaya-Greilich Conservative, elevated Environment 10 % Modern bourgeois Environment 8 % List of references: Soll & Haben, Spiegel-Verlag, Hamburg 2000 Liberal-intellectual Environment 10 % Upper Class Middle Class Lower Class Posterior modern Environment 5 % Hedonistic Environment 11 % Ascent- orientated Environment 18 % Modern Worker Environment 7 % Untraditional Labourer Environment 11 % Traditional Labourer Environment 5 % Petty- bourgeois Environment 15 % Chart No. 30 Social Classes 

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Chart No. 31 Consequences in the Behaviour towards Thais Jaruwan Krengvittaya-Greilich religion of Theravada Buddhism: Calmness in every situation of life, i.e. neither overjoyed nor unfortunately Richness of agriculture: Until three rice harvests per year by fertile soil and monsoon climate Diplomacy instead of force of arms: The feminin society preserved its freedom by diplomacy, so that Thailand never became a colony religion of Theravada Buddhism richness of agriculture diplomacy instead of force of arms

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Chart No. 32 Consequences in the Behaviour towards Thais Jaruwan Krengvittaya-Greilich Thais prefer a more flexible approach to life which enables them to avoid confrontations. They have a preference for people with a “cool heart”, those who keep emotions under control. Avoiding loss of face and appeasing threatening outsiders is more important than the preoccupation with the ultimate “truth”. Thais are more strongly aware than Germans that the following happens to every body: • to be born, • to be ill, • to be old and • to die.

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Chart No. 33 Consequences in the Behaviour towards Thais Jaruwan Krengvittaya-Greilich Thus for Thais there is only one truth and that is that nothing is permanent. I.e. : • different times, • different places and • different situations require different solutions. Therefore according to Germans Thais change their mind all the time. Despite Thailand’s social mobility, people live and work in hierarchical structures in which loss the face is threatening. Assignments should be commensurate with age, schooling, experience and connections. Thais like the preference in groups, the avoidance of open competition among colleagues and the togetherness in a relaxed atmosphere called “sanuk”.

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Chart No. 34 Consequences in the Behaviour towards Thais Jaruwan Krengvittaya-Greilich Thais like to learn and to gain new experiences. If work becomes not enjoyment and if there is not enough “sanuk”, those who can afford it will move on. Thais expect that counterparts are willing to invest in a relationship with them. Building up relationships takes time, which in Germany might be considered as a waste of time, but which in Thailand represents an essential investment. Building up relations in Thailand implies establishing contacts not only with the person concerned but also with the group to which he or she belongs. Therefore ventilating individual opinions is less important and can even be counterproductive when those opinions are not shared by the group. One old proverb runs as follows: • “It is easier to find a friend to eat with than a friend to die with.”

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Chart No. 35 Consequences in the Behaviour towards Thais Jaruwan Krengvittaya-Greilich In Thailand one should under all circumstances avoid loss of face. Thus appraisal and correction of the activities of a subordinate should be done in a following way: • from person to person only in an indirect way, while making sure that nobody can see or overhear the conversation or indirect message, • by acting cool and aloof, • through the withdrawal of a favour and • through a third person as a go-between. Feelings of personal pride and honour are more important in Germany than in Thailand. When a Thai returns from a business trip he might well be asked: “Was it fun?” instead of “Was it successful?”

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Chart No. 36 Consequences in the Behaviour towards Thais Jaruwan Krengvittaya-Greilich The Western system of “hire and fire” does not at all fit Thai culture. Poor performance is normally no reason for the assignment of a different task. The relative high turnover of employees in Thailand is not so much caused by dismissal, but by the fact that employees leave their job for reasons of: • not enough respect being paid them, • not fitting into the work group, • not enough enjoyment and fun (“sanuk”) in the work situation, • not enough money. But most of these reasons boil down to • “loss of face”.

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Chart No. 37 Consequences in the Behaviour towards Thais Jaruwan Krengvittaya-Greilich Thais work and live together. Germans work together, but they do not live together. In Germany normally a strict division is maintained between work and private life, whereas the distinction in Thailand between working and private life is blurred. Thai culture claims: • respect for powerholders, • respect for parents, • respect for elders, • trust in wisdom, • harmony preferences and • Buddhism religion taboos.

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Chart No. 38 Consequences in the Behaviour towards Thais Jaruwan Krengvittaya-Greilich The Buddhism religion can be found anywhere in Thailand. For example, one comfortable hotel wishes its guests good night and pleasant dreams every night with small cards printed with sayings taken from the script of Buddhism: ”Happy we are indeed when we live without hate among the hateful.” “Blessed are they who earn their living without hurting others.” “The gift of truth excels all other gifts.” “Better is it truly to conquer oneself than to conquer others.” “Health is the greatest wealth; contentment is the greatest happiness.” “Tolerance, patience and understanding are the highest virtues one can develop.”

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Chart No. 39 Thai Culture in Management Jaruwan Krengvittaya-Greilich During meetings the Senior Officer is to recognize that:  he speaks first  he opens the meeting  he speaks most of all           he hands over his visiting-card by himself  he is the first person to go upstairs  he is the first person to go downstairs          he is seated at the head of the table  the next most important person is seated on the right side (e.g. the deputy or an important guest)  the second most important person is seated on the left side etc. (e.g. head of department in the seniority principle)  he makes the conclusion at the end of the meeting

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Chart No. 40 Thai Culture in Management Jaruwan Krengvittaya-Greilich How to make out the Senior Officer during the appointment? 1 Door Door 1 1 3 5 2 4 7 9 11 6 8 10 5 6 2 4 3 8 7

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Chart No. 41 Thai Culture in Management Jaruwan Krengvittaya-Greilich Basically, the workers, not impelled by the Calvinist work ethic of western industrial society, felt their responsibilities lay with their family and friends. Their family, social and religious obligations were paramount. Within this framework it was understandable that the workers would take their allowed “sick time”, whether they were sick or not, to take care of “personal business”. This might involve helping a friend prepare food for a wedding or merit ceremony; a visit to a sick relative; or a shopping expedition with a cousin just arrived from up-country. Allegiance, obligation and responsibility lay elsewhere than to the boss, job, factory. Social controls, which might operate effectively in a family or village context to assure conformity and obedience to traditionals norms of behaviour, were not transferred to the alien environment of a stop-gap cash job. More often than not, the employer will be told that the emergency trip back home will only be for a few days, and the employer waits patiently for the return. However, the intention is not to return, but, by this means, the employee avoids the embarrassment and conflict attendant on a direct, face to face avowal of a complete break.

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Chart No. 42 Thai Culture in Management Jaruwan Krengvittaya-Greilich E.g. the employee wants to avoid any uncomfortable emotional confrontation or actions that might hurt another person´s feelings. Sometimes, he or she will return many months or a year later, smiling and with deference, quite ready to continue employment as if nothing had happened. Given the Thai and farang (= foreigner), cultural road signs, it is understandable that the farang employer is hurt and puzzled because he or she cannot understand the indirect actions of their employees. The employees, on their part, feel they are being kind considerate and deferential in not overtly and directly breaking the relationship. For farangs, who are often somewhat uncomfortable in a master-employee relationship, the shock of perceived betrayal or ingratitude is often traumatic. The employee is treated often as a friend. He or she may be perplexed at being treated as a friend but will not feel the obligations, responsibilities or duties as a friend. Separation is easy. The benefits, other than cash, are received as the noblesse oblige duty of a wealthy superior.

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Chart No. 43 Thai Culture in Management Jaruwan Krengvittaya-Greilich Given the psychological imperative to avoid social confrontation, the employee will not bring grievances openly to the employer. The employee may smile, sulk, have an upset stomach, all to cover annoyance, anger, hurt. The sudden announcement that an employee is leaving within a few hours because of the ubiquitous grandmother´s imminent death may hide months of displeasure with the employer and job that had never been articulated. The farang may also been puzzled when approached for a loan just a few days after the employee has received his or her monthly salary. The employee, in all likelihood, has sent the major portion of the salary to the parents back in the village. It is back in the village where the obligations lie. While Thai employers will not treat their employees as friends, they will often say they have treated them as one of the family, as a child, a cousin. Whether this is a rationalisation or not, the employee does not view the relationship in this context and does not feel the obligations. Such non-cash benefits are received and viewed as one´s due. Thus, the Thai employer may also feel that ingratitude and irresponsibility have been shown. However, the Thai employer will in most cases “act out the play” and understand and accept the methods use.

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Chart No. 44 Thai Culture in Management Jaruwan Krengvittaya-Greilich A non-verbal communication, through symbolic gestures, has been principally described in terms of the signals used to differentiate respective positions on the socio-cultural ladder of status, prestige, seniority, and power. The wai, the prayer-like raising of the palms pressed together, which the Thai use not only to greet but to clarify the relative status and respect accorded to the parties concerned. Whether the hands are raised to the forehead, chin, chest, or even vaguely fluttered below that line, while the head and shoulders are similarly lowered or held erect, tells us volumes in well understood mime. How the Thai stand, sit, walk past someone, all have the clarity of semaphore flag language in terms of ‘social definition’. When, in the presence of a superior or one to whom respect should be accorded because of his status, the Thai keep a respectful distance and tend to hunch over slightly to allow the one revered to be relegated both symbolically and physically, to a higher plane.If officials are involved in such pantomime, subordinates will crouch slightly with hands cupped just below their waistline.

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Chart No. 45 Thai Culture in Management Jaruwan Krengvittaya-Greilich When one passes a superior on a stairway or sometimes even on the street one should, depending on the social distance involved, stop, stand at attention, and even make a slight bow with the head. This is to indicate respect. Farang will often cringe more than their servants when the ladder crawl on their knees as they serve food or work in the presence of their employers. It only causes psychological confusion and discomfort to the Thai servant, as well as diminution of respect. Ritual forms are maintained in Thailand intact. Even sitting can be complicated. One of the first cultural warnings are given when arrive in Thailand is not to point with their feet and, thus, abstain from sitting cross-legged. While this habitual western form of sitting is often impossible forego, one should try to avoid one’s slightly raised foot pointing directly to a Thai or group of Thais. While sitting on the floor, the culturally appropriate posture of women, and sometimes men, depending on the status of those present, is to sit with both legs folded back to one side.

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Chart No. 46 Thai Culture in Management Jaruwan Krengvittaya-Greilich Even how one sleeps has symbolic significance. For Thai, during sleep, the head should not face the west, with its obvious negative life force connotations. Generally, one should preserve a proper distance during conversation, varying to a degree depending on one’s status and position. Even among friends it is not deemed suitable to stare directly into another’s eyes for more than a brief moment or to touch or hold on to one’s friend’s arm or place a hand around his shoulders. Whether in elevators, buses, cocktail parties or conference rooms, the tendency is to avoid too close contact, to keep ‘one’s distance’. Body languages gestures are not the only sources of non-verbal communication. Ceremonial clothing and body decoration function to indicate rank, status, religious, tribal, clan affiliation and identification.

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Chart No. 47 Thai Culture in Management Jaruwan Krengvittaya-Greilich Cross cultural studies show not only market differences as to the institutional responses to resolving conflicts but in the positive and negative values given to avoidance of conflict and social confrontation. To the farang (= foreigner), confrontation and conflict are the norm. In Thai society, on the other hand, a positive value is given to avoiding confrontation and even the overt expression of anti-social emotions such as anger, hatred and annoyance. One of the most effective methods dealing with conflicts is to assure they do not occur at all. However, despite the Thai penchant for avoidance of confrontation, conflicts do arise which demand a response. In such cases, the Thai will seek to compromise the issue, e.g. if an accident occur on the crowed streets of Bangkok, the two parties may compromise on the spot, or, if agreement is not reached, a compromise will be encouraged by the police. The court will be the last resort. Many cases, even after the court procedure has begun, will be settled in the judge´s chambers on the basis of a compromise solution.

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Chart No. 48 Thai Culture in Management Jaruwan Krengvittaya-Greilich The spirit world may also be used to cool "hot hearts" and to apportion blame. Family quarrels may be muted since, if they become too acerbic, they may offend the family spirit and, thus, bring ill fortune to one and all. Generally, Thai patterns of resolving conflicts result in minimal grievance tension, a term used by anthropologists to denote the sense of grievance harboured by the party at fault in a dispute. If grievance tension is not kept to an acceptable level, future conflicts will arise. A means of resolving conflicts that implies more direct confrontation involves a swearing by oath ceremony, called "saban" in Thai. In urban Thailand, adversaries may be challenged as to whether they will "saban", or swear, whether they committed this or that wrong. If he refuses, guilt is established in the eyes of the community. If he agrees and falsely swears, then the wrath of the angels and spirits will cause him grave injury and even death.

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Chart No. 49 Thai Culture in Management Jaruwan Krengvittaya-Greilich Of course, the indirect methods of solving conflicts may sometimes be unproductive and grievance tension unreasonable high. At this point, the Thai may reap vengeance, either directly or indirectly. However, for the most part, the techniques of arbitration and compromise, of indirect accusation and voluntary restitution of wrongs, are successfully carried out. The farang must appreciate the bias of the Thai in using these techniques just as the Thai must appreciate the farang penchant for more direct confrontation, the use of the courts, and enforced punishment and restitution to the injured party.

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Chart No. 50 Thai Culture in Management Jaruwan Krengvittaya-Greilich During the past thirty years, Women´s Lib has tentatively tested the somewhat cool Thai political and cultural waters seeking equal rights and an end to legal discrimination. A law directed towards this end was officially promulgated to the dissolution of Parliament in October, 1976. Some injustices were righted and the legal rights, of men and women were placed on a more equal basis. However, despite the efforts of women Member of Parliaments and some gallant male supporters , the fight to have adultery of the husband listed as specific grounds for divorce was not successful. It is, however, clearly stated that the wife may seek a divorce on the grounds her husband ‘maintains, support or honours another women as though she were his wife’, legal terminology for the time-honoured “minor wife’ custom. As more Thai women become educated at the university level, both in Thailand and abroad, their expectations of a Thai husband´s behaviour will be bound to change. Such change in values on the part of Thai women will inevitably affect the cultural context in which judges render their decisions.

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Chart No. 51 Thai Culture in Management Jaruwan Krengvittaya-Greilich In 1993, the government, in reaction to pressure from women’s right groups, finally rescinded a regulation explicitly barring women from competing to become assistant district officers. After approval by the Civil Service Commission, it will be possible for women to become district officers. The opportunity for women to become provincial governors has also become official government policy. In the election in 2004 was a successful women in the Thai policy almost the winner for the most important position as a governor of Bangkok Metropolitan area. Women in Thailand have always been very active in business affairs, and as most foreigners know, it is the wife who usually handles house rental. Within the family, the wife will, more often than not, control the family purse strings and be responsible for the family budget. In some cases, she will actually dole out a daily allowance for her husband. One wonders if legal moonlighting activities and illegal corruption are not partly a means to obtain untraceable income for use by the husband. In terms of actually salary,

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Chart No. 52 Thai Culture in Management Jaruwan Krengvittaya-Greilich more and more families in Bangkok or in other big cities find the wife making a higher salary than the husband. Traditionally, the woman has deferred to the male in Thai society. It is said that men are comparable to the front legs of the elephant, women to the hind legs. The men think that they steer with the weak legs the life, however the women give the orders with the strong legs for the common life. But, as some people point out, the elephant seems to be walking backwards these days. One does not find Thai women today asking forgiveness for wrongs committed to their husbands in the traditional New Year`s forgiveness ceremony. Arranged marriages are a fast fading institution though girls will generally seek acceptance of their choice by their parents. If the parents refuse, there will be heartache and tantrums but usually acceptance of their parent´s decision. However, elopement is becoming more common.

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Chart No. 53 Thai Culture in Management Jaruwan Krengvittaya-Greilich Social scientists have pointed out the matriarchal bias of Thai society. Husbands, on marriage, must live for an initial period in the residence of the parents of the wife. Linguistically, there are the ubiquitous indications of matriarchal influence with mother compound words e.g.  mother of water = river,  mother of iron = magnet,  mother of cowries shell = head of a snake,  mother of strength = car jack and even  mother of force = military commander. Foreigners should appreciate both traditional patterns of male-female relationships as well as the changes in attitudes, values and customs that are affecting these relationships.

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Chart No. 54 Thai Culture in Management Jaruwan Krengvittaya-Greilich When Thai friends and their wives are invited by a farang-businessman to dinner, more often than not, only the husband would come. As for the wives, many have not been educated abroad and have little contact with foreigners. Thus, their English is wanting, and it is tiresome to spend an evening smiling sweetly and replying by set phrases to questions and views only vaguely comprehended. If a Thai wife is exceptionally at present, she does not take alcoholic drinks, and this would naturally take some of the social glow from a pre-dinner or after-dinner drink. Despite a number of invitations, the farang host was almost never invited to the house of his Thai guests. Sometimes, his Thai friends would invite him and his wife to a Chinese restaurant for a meal replete with good and never ending drink.

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Chart No. 55 Thai Culture in Management Jaruwan Krengvittaya-Greilich Many Thais live in far less grandiose homes than farang-businessmen their own. They are, therefore, somewhat embarrassed to invite such a distinguished guest to much humble surroundings. In many instances, the Thai home is more of a family compound, and a grandmother, uncle, a brother´s family may be hovering about. If one has a fair or passing command of the Thai language, a party with Thai friends can be even more of a delight. The Thais have an abiding curiosity abound and interest in language. Play on words, reversal of syllables, misunderstandings based on language or dialect peculiarities, all play a part in an evening´s entertainment.

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Chart No. 56 Thai Culture in Management Jaruwan Krengvittaya-Greilich A farang (= foreigner) should not be annoyed that Thais, who get a gift, e.g. on the occasion of an invitation to a wedding and dinner reception, had not had the courtesy to write a note of thanks for their gifts. If someone brought a gift, may be he would received with thanks or not but the gift would not opened. The puzzlement is understandable as in the West when one receives a gift one opens it with alacrity and expresses pleasure with the usual pomp and circumstances. The Thais, on the other hand, do not view it as proper to make such a public fuss of a gift. It is Thai culture, one should avoid showing too much emotion and should maintain an emotional equilibrium. Status and seniority can be both as a blessing and a burden where gift given is concerned. E.g. professors and specially a Faculty Dean receive many gifts from their disciples. Although they would try to discourage gifts being brought, e.g. on New Year´s day, it would be difficult to break this custom.

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Chart No. 57 Thai Culture in Management Jaruwan Krengvittaya-Greilich One of the most difficult Thai concepts for foreigners to comprehend is the behaviour pattern defined as krengjai. Often is to hear for translation of this word: „There is no English word because the foreigners do not krengjai“. Linguistically, the word is a compound composed of two separate words, kreng meaning to be in awe of, to fear and jai, meaning heart. When made into the compound krengjai, the word has the meaning of being reluctant to impose upon, to have consideration for. It is important to realise that krengjai must refer to an attitude toward someone else. In Thai society, with its emphasis on ‚social place‘ as expressed in elder-younger, subordinate-superior, patron-client-relationships, krengjai is, most often, an attitude displayed towards one higher in the rank, social status or age scale. It is difference, deference and consideration merged with respect. It is also proper and appropriate behaviour. To the foreigner with his emphasis on equality, frankness, and directness, the tendency to show deference and avoid imposing upon someone often appears to indicate a lack of initiative, weakness and subservience.

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Chart No. 58 Thai Culture in Management Jaruwan Krengvittaya-Greilich These qualities are ones which will hardly recommend one for advancement in the foreigner business world. Often, one will hesitate to visit someone at his house or invite him to a social function due to a reticence to impose on the elder or superior. This would not apply where the presence of the superior or elder is required for status purposes and is recognised as appropriate and acceptable to both parties as at a marriage ceremony. Krengjai is also observed in one‘s reticence to seek help or ask for something desired from a superior unless it is absolutely necessary. One may display similar reticence towards a friend or those of equal status if that person has already been especially generous or helpful. Such patterns of traditional Thai behaviour may be seen to be in transition as students argue with their teachers, labourers strike against management, civil servants protest against discrimination by their superiors. Traditional patterns of behaviour also break down in the modernised, technological world of business, however, the emotional strain and stress attendant on the change cannot be discounted.

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Chart No. 59 Thai Culture in Management Jaruwan Krengvittaya-Greilich Sanuk may be visualized as one of the closely interwoven threads, although a brightly coloured one, that gives shape to the intricate design of the Thai cultural fabric. Sanuk provides other signposts in the complicated maze of Thai culture. In a society where individualism constantly has to sublimate itself to the demands of social place, sanuk provides a respite, a release from the socially enforced constraints and demands imposed by the acceptance of one´s place in the social hierarchy. Sanuk – like fun and games – provides welcome relief from the tensions, pressures, and frustration attendant on this never-ending accommodation to power and hierarchy. Sanuk provides a highly valued mechanism for maintaining harmonious non-threatening social relations. In a pervasive atmosphere of jollity confrontation is easily avoidable. Thais become psychologically uncomfortable in face of overt expressions of hatred, annoyance, displeasure. Sanuk, on the other hand, provides the necessary social atmosphere for the heart to beat to a serene tempo and remain cool.

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Chart No. 60 Thai Culture in Management Jaruwan Krengvittaya-Greilich The Thai intelligentsia, on their part, have developed an amusing variation to the serious debate (to wathi), i.e. competition in damning with faint praise; a challenge as to who can be the most critical through the medium of excessive flattery and praise. Such irony is viewed to be less threatening than direct criticism. In rural Thailand, there is usually no sharp distinction between work and fun. Heavy agricultural tasks are often accompanied by music, songs, flirting, amusing repartee. The burden is somehow lightened as the mind, if not the body, escapes the arduous physical activity at hand. The Thais, as good Buddhists, appreciate that suffering is inevitable. One can ultimately overcome such suffering only by eliminating craving for that which is transitory. Thus, one must avoid attachment, emotional or material. In this context, the Thai tend to fun provides a necessary comic relief to the tragedy of life´s suffering while, at the same time, providing a most effective means to maintain one´s emotional distance and detachment.

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Chart No. 61 Thai Culture in Management Jaruwan Krengvittaya-Greilich To have fun is emotionally undemanding. One shuns being serious. Today, Thais must face the issue of the social viability of such an escape and safety-valve mechanism as sanuk in an increasingly competitive, impersonal, urbanized society. Population pressure, unemployment, pollution, widespread use of drugs, and violent crime become facts of everyday life. In such an environment, sanuk can quickly degenerate into violence, gang welfare, drunken brawls and student riots at sports events. Nevertheless, sanuk still plays a crucial role in keeping confrontation at bay and fostering social harmony. The safety-valve and relief sanuk provides in the Thai cultural context must be maintained , at present, if society is not to disintegrate. Viable, culturally acceptable alternative mechanism have yet to be devised.

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Chart No. 62 Thai Culture in Management Jaruwan Krengvittaya-Greilich “The face is lost when the individual, either through his action or that of other people closely related to him, fails to meet essential requirements placed upon him by virtue of the social position he occupies.” Definition: David Yau-Fai Ho, Hong Kong Basically, “face” describes the proper relationship with one´s social environment, which is as essential to a person and that person´s family as the front part of his/her head. The importance of face is the consequence of living in a society that is very conscious of social context. Collectivist cultures make more-or-less similar statements, like in Greece, for example, the word “philotimos” exists. Triandis writes: “A person is “philotimos” to the extent to which he conforms to the norms and values of his in-group. These include a variety of sacrifices that are appropriate for members of one´s family, friends, and others who are concerned with one´s welfare.”

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Chart No. 63 Thai Culture in Management Jaruwan Krengvittaya-Greilich Collectivist societies are shame cultures, individualist societies, on the contrary have been described as guilt cultures. In Asia applies the regular: “Give face, never take face, save face by yourselves.” The anxiety of “lost face” is widespread in Asia: • in China as “diào niân” or “shimian” (lost face), • in Korea as “shemion oll il ta” (lost face), • in Japan as “mentsuwo uschinau” (lost face), • in Thailand as “khai naa” (sold face), • in Kampuchea as “bak muk” (broken face), • in Vietnam as “sâu hô” (bad face), • in Philippine as “hiya” in the Tagalog language (give up oneself).

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. Chart No. 64 Thai Culture in Management Jaruwan Krengvittaya-Greilich Everybody has a social face: e.g. the business man has a business-man´s-face, the student has a student-face, and the interpreter has an interpreter-face. For example: The interpreter would lose his face if he was criticized about the quality of his translations in front of another person. Reasons for “losing face”: • open criticism, • allegedly “heart-to-heart talks”, • condescending treatment, • reprimands, • forgetting oneself.

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Chart No. 65 Thai Culture in Management Jaruwan Krengvittaya-Greilich People in Thailand follow a rule to save one´s face, by showing “kreng dschai” (thinking of other) and never “hen gä tua” (selfish thinking). In Thailand the virtue “dschai yen” is given to a person, who • never forgets himself, • never shows feelings, • never goes “through the roof”, if he was offended, • never weighs down others with his troubles. But he is always: • friendly and polite, • serene and smiles nonchalantly, • and shows stoic calmness.

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Thai Culture in Management Jaruwan Krengvittaya-Greilich • To show anger is impolite, Thais are not impatient but always smiling. • Conflict avoidance and self-control are important parts of education in Thailand. • The desire for harmony and respect is a major part of Thai lives. • Directly critic to another person is an exposure, espectially if other persons are present. • Critic should only be expressed diplomatic and sensitive to avoid conflicts. • Arguments and criticism in meetings are remembered by Thais long after the meeting finishes. This is unlike the Western culture where often the emotion in a meeting is forgotten when the meeting ends and no hard feelings continue. • Thai people expect that the chief is not only interested in the business affairs. Private contact is very important and it is not exceptional to invite the boss for private activites, for example birthdays, marriage or funeral. Chart No. 66

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Thai Culture in Management Jaruwan Krengvittaya-Greilich • The head of a person is considerd sacred and it is an insult to touch it. • Thailand has a hierarchic system and this is accepted. • The feet are considerd very impure, you should never point at a person with a foot or step over somebody. • In Thailand it is not common to touch one another. • It is normal to use the first name. • The person with the lower status is greeting at first. Before entering a house, move off your shoes Offering gifts or souvenirs is a kind of friendship and is seen as a token of appreciation in the relationship. Chart No. 67

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Chart No. 68 Case I: Barriers to acquisition in Thailand Jaruwan Krengvittaya-Greilich 1. Background: A medium-sized German company in women's fashion, up until now successful in the EU-market, decides that it is crucial for the objectives of the business to establish a presence in the South-East Asian market. Top management selected Thailand for a pilot project. A young German female graduate with a Master Degree - MBA - from a Swabian University was engaged as the new Marketing Manager, responsible for the Asian market. During a fortnight-trip to Thailand she should establish concrete business connections. Top management anticipate that she will take considerable orders with various prospects for further orders. After one week of large-scale appointments she had made only one small order and no prospects. For the second week she has only set up meetings with minor contacts, having already contacted the most important potential customers in the first intensive week. With such bad business results she will undermine her position as a Marketing Manager if she does not succeed in compensating in the second week. She is still convinced that her fashion collection is one of the best in its class and her personal appearance is very self-confident and success-orientated in American terms. 2. The task: What cultural influences will cause the business trip to fail completely or even become a fiasco? What exact steps must she undertake soon, if she wants to take successful orders in the second week?

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Chart No. 69 Case II: Problems with bureaucracy in Thailand Jaruwan Krengvittaya-Greilich 1. Background: A German building contractor would like to participate in the building boom in Thailand. A fully qualified lawyer from Germany, 55 years old and very experienced in Japanese business, is delegated to Bangkok to find out and tackle legal hurdles. From his first appointments he learns that there will be considerable problems in dealing with Thai public authorities. E.g.: he cannot contact the responsible people, competencies are rejected, promised meetings do not take place and he is constantly receiving new instructions. The German lawyer notices that the Italian and Japanese competitors manage to get quick, unbureaucratic orders in lucrative projects. Especially the Italian syndicate, which gains a large project, even though it has only been present in the Thai market for a short time. By gaining this contract the Italian syndicate can look forward to very interesting orders from the Thai public authorities for some years to come. Top management is starting to show impatience at not having gained any prospects, with the competitors working very successfully. A friend informed him that top management has started telling why a manager with long-term success in Japan is not getting any orders in Thailand. The German lawyer, who is used to a high standard of living in Asia would not like to lose his job by any means, and he is afraid of becoming unemployed. 2. The task: The German lawyer should arrive at a detailed strategy for dealing with the Thai public authorities, including short-term and medium-term orders with considerable volumes.

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Chart No. 70 Case III: Criticism of a Thai Co-worker Jaruwan Krengvittaya-Greilich 1. Background: A few months ago a young German mechanical engineer was recruited as sales manager for South-East-Asia in a family company producing switching gears and timer switches. She had not been informed of the departure of her predecessor after many years working with the company after differences of opinion with the new junior director. Her predecessor had a good relationship with the sales manager in Bangkok (his brother in law), a Thai gentleman with an English doctor’s degree, who runs the agency for the whole of South-East-Asia extremely successfully. During the first sales meeting, in the presence of a customer team from a very important client, the Thai sales manager with the doctor degree repeatedly undermines the German engineer, exposing her lack of knowledge of special switch technology and the English language. The appointment drags on for the whole day, without any decisions on the part of the customer. The young German woman cannot manage to speak to the sales manager alone, to take him to task. Finally, in the late afternoon the Thai sales manager points out to the customers that had the former sales manager been at the meeting, things would have been settled a long time ago. There is then a long, embarrassing silence. The clients look expectantly at the young German engineer. The Thai sales manager looks down at his papers on the table. 2. The task: How should the German woman react in order not to lose face in the presence of an important client else without offending the Thai sales manager, given her dependence on his connections and work.

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Chart No. 71 Case IV: The leading role of women in Thai management Jaruwan Krengvittaya-Greilich 1. Background: A young German manager with a Masters in Economics has been running the agency in Bangkok for two months for a German software house. At the end of a three months’ probation his company will decide whether he should assume final management of the agency. During the two months he has not brought in any orders only it does look like he will gain a large software order for the implementation of all new PCs in a major commercial bank. His most important contact person is the Deputy Director General, a lady in her early fifties who studied economics in England. The young German manager seems to be in her favour, because she not only invited him home for dinner but also to a concert. Both times they were escorted by her nice, pretty daughter, who had only just returned from the USA, where she had done a MBA at the renowned Michigan University. Soon after this she had gained a qualified position in an agency in Bangkok for an American Insurance Company. The young lady's mother repeatedly encourages the young German – even speaking explicitly in her name - to visit her house or to go out with her daughter. On the one hand, the German manager is already going steady with a girlfriend in Germany, who totally refused to come out to Asia, on the other, his foreign career heavily depends on the success of sales talks with the Deputy Director General. 2. The task: How should the German sales manager behave with regards to his business, i.e. opposite his contact, the Deputy General Manager, and other members of management at the bank and other employees in the agency, as well as with regards to his personal affairs?

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Chart No. 72 Management Case I: Strategic Controlling with Thais (part a) Jaruwan Krengvittaya-Greilich 1. Background: A German hotel group in the five-stars category were bought some couples of years by a Thai holding. The economic results of the year 2003 and half-year 2004 deviate significant from the planned targets. At the same time a renowned airways company terminated the longstanding contract for the flight crew, because the complaints about poor service increased more and more (in district north/west). On grounds of this negative development the top management of the Thai holding will come to Germany in order to discuss and define targets for the next two years. The following items will be in the focus: ROE *) Capacity utilization Personnel turnover quote in % in % in % planned 2003 2004 planned 2003 2004 planned 2003 2004 target target target • G-South/middle 4.0 3.5 2.5 65 60 55 5.0 7.5 10.0 • G-North/west 4.0 2.5 1.5 65 55 45 5.0 10.0 15.0 • G-East 3.0 2.0 1.0 55 50 40 3.0 5.0 6.0 *) ROE = Return on Equity

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Chart No. 73 Management Case I: Strategic Controlling with Thais (part b) Jaruwan Krengvittaya-Greilich As a benchmark the items of the Thai hotel holding: • ROE: 6 to 9 %, • Capacity utilization: 65 to 74 %, • Personnel turnover quote: 3 to 5 %. The Thai top management invited the following German managers to the workshop to Berlin: • Director General (responsible cross Germany) • General Manager S/M (responsible for district south/middle Germany ) • General Manager N/W (responsible for district north/west Germany) • General Manager E (responsible for district east Germany) • Controlling Manager (responsible cross Germany) • Personnel Manager (responsible cross Germany) The delegation of the Thai holding has following positions:

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Chart No. 74 Management Case I: Strategic Controlling with Thais (part c) Jaruwan Krengvittaya-Greilich • President of Board (owner in her early sixties) • Controlling Manager (niece of owner, graduate with MBA at Stanford University/USA) • Corporate Planning Manager (fellow student of the owner) • Personnel Manager (female part time lecturer at Chulalongkorn University, Bangkok) • Secretary of President (Englishman DCL, with doctor´s title in jurisprudence) 2. The task: Step 1: The two delegations should prepare the workshop in separated meetings. • Priority program for the Thai side: Package of measures to improve ROE, capacity utilization, and personnel turnover quote. • Priority program for the German side: Analyses, why the targets relating ROE, capacity utilization, and turnover quote deviate from the planned targets. Preparation a supporting program for the Thai delegation in Berlin. Step 2: The results of the different meetings should be discussed in the common workshop The Thai side has given a notice before that immediate steps will follow after the workshop. Please discuss the above mentioned items and conclusions with Thai culture in mind.

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Chart No. 75 Internet Case I: Partnership with an advertising agency in Thailand (part a) Jaruwan Krengvittaya-Greilich 1. Background: An important advertising agency, located in Hamburg, see to many clients, which export to Thailand or keep up subsidiaries companies in Thailand. This advertising agency runs the risk of loss its clients, if they do not offer an own agency in Thailand. The top management decided either to buy or to take part in a Thai advertising agency. The most important clients of the German agency belong to the following branches: • beverage industry • sweets industry • instant food industry • cosmetics industry • pharmaceuticals industry • kitchen appliance industry 2. The task: Step1: A trainee team get the job – by use of internet – to make investigations about advertising agencies in Thailand. Those agencies be a possibility which fulfil these prerequisites:  Must criteria: • the agency must be located in Bangkok metropolitan area, • the agency must have experience with at least two above mentioned branches,  Discretionary criteria: • the agency should have media and market research departments, • the agency should work longer than five years on the Thai market.

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Chart No. 76 Internet Case I: Partnership with an advertising agency in Thailand (part b) Jaruwan Krengvittaya-Greilich  Further information to advertising agencies: • Gross income in US$, • gross income per capita in US$, • proprietors, • names of key positions, • year of foundation, • subsidiaries in other South East Asian countries. Step 2: Draw up in a preparation conception with the following content: • Which advertising agencies can fulfil best the prerequisites? Who is number 1, 2, and 3? • Formulate some short statements towards the Thai side, which show advantages for the future co-operation or partnership. • What way will you go to contact your three advertising agencies?

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Chart No. 77 Internet Case I: Partnership with an advertising agency in Thailand (part c) Jaruwan Krengvittaya-Greilich Step 3: The spokesperson of the trainees shall attend the Director General to Thailand to have talks with the three selected advertising agencies. Roll out a realization conception with the following content considering Thai culture: Roll out a realization conception with the following content considering Thai culture: • visiting cards for the Director General and for the spokesperson of trainees, • suitable gifts for the meeting partners, • an adequate hotel for the overnight stay and appointments, • a convenient restaurant for further meetings in the evening, • a trustworthy interpreter, if your counterpart in an advertising agency prefer to negotiate in Thai language Please work out every step by supporting of internet. If necessary, include also Thai culture in every step of your concepts.

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The Asian Pacific Area in western statistics Chart No. 78 Jaruwan Krengvittaya-Greilich Inhabitants Gross National Product in Millions Growth Rate in % per Inhabitant in US-$ 2004 1980 to 2004 1995 2003 Europe Switzerland 7.2 15.8 43,640 48,905 Germany 82.5 5,0 30,100 32,870 France 60.4 9.4 26,710 30,700 Great Britain 59.4 5,0 19,260 23,380 Italy 57.3 1.4 19,150 21,520 Greece 11.4 10.1 11,250 14,280 Romania 22.3 1.7 1,407 1,730 List of References: Statistical Annual for Foreign Countries, Wiesbaden 2004, pages 211, 353, www.destatis.de 2005

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The Asian Pacific Area in western statistics Chart No. 79 Jaruwan Krengvittaya-Greilich Inhabitants Gross National Product in Millions Growth Rate in % per Inhabitant in US-$ 2004 1980 to 2004 1995 2003 Japan 127.8 8.9 40,910 45,568 Singapore 4.3 67.4 24,114 27,254 Hongkong 5.3 3.7 22,618 22,195 * Taiwan 22.8 --- 12,490 15,060 * Korea (Republic) 48.0 22.9 10,850 14,652 Malaysia 24.9 62.6 4,298 4,806 Thailand 63.5 37.8 2,828 3,174 China 1,294.4 27.7 574 1,090 Indonesia 222.6 45.2 1,038 1,060 Pakistan 157.3 69.8 470 518 Vietnam 82.5 47.1 273 413 Bangladesh 149.7 48.4 320 396 List of References: Statistical Annual for Foreign Countries, Wiesbaden 2001, page 354, www.destatis.de 2005, * in 1999

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Chart No. 80 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich They = the “others”. Foreigners belong above all to the “others”. T WE THEY SOCIAL SPACE The social space is filled with groups, almost in every case with Japanese. Family and very close friends. Roots of the Japanese tradition:  Rice farmer tradition (cultural- geographic roots)  Confucian philosophy (social- political roots)  Samurai-ethos (change into the economic ethos)

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Chart No. 81 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich The four main islands of Japan are Honshu, Shikoku, Kyushu and Hokkaido. But Japan consists of 3,325 islands what remains of the row of subsided mountain tops. That explains why the Japanese population has lived between these peaks for a long time. Such communal living in restricted spaces required strict rules. The communal living in Japan was and is characterized and regulated by the rice culture. During most months the climate is too cold for the cultivation of rice, despite Japan being situated on the same latitudes as the south of the Sahara and as the north of Venice.      

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Chart No. 82 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich As a result of these climate influences, the Japanese rice farmers were forced to plant the rice exactly at the right time. Since in the past, almost all villagers worked together on the rice fields. The Japanese have learned two things from this cultural-historical lesson: • "Every thing can and must be done in a certain period of time.” • "A job can and will be done only if a group follows the way of team work.” Also in the modern thinking Japanese are committed to the methods of teamwork.    

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Chart No. 83 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich Confucius - he is called Kontse in the Chinese language - was a philosopher and lived in the time from 551 to 479 B.C. The Confucianism formed by its hierarchical social order the rules of traditional groups. The Confucianism had a strong effect on the first constitution of the first Japanese empire. The Confucian scholar Hoyashi Razan described hierarchical relations as the natural, human relationships.    

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Chart No. 84 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich The Confucians commands have become the basis of the social order in Japan. Kaibara Ekiken (1630 to 1714) has written an important moral philosophy and instructions for the daily life. His manifestation is to find – at least on the outside impression – partly until at present, although many Japanese women are rather emancipated. To make a note: The rates of divorce increased in the last years by libel for divorce of the 40 to 60 years old Japanese women.    

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Chart No. 85 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich less than 5 years married 5 to 14 years married more than 15 years married List of references: JAPAN CLOSE UP, PHP Institute, Tokyo, December 2001 1970 1975 1985 1995 52% 37% 49% 34% 39% 38% 41% 34% 13% 25% 27% 11%

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Chart No. 86 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich The social law and order and political continuity of the Tokugawa state were guaranteed by a strong laid down order and an ethic justification. They had have only one unchanging social order, in which everybody possessed his fixed place and his security. The Confucian relationship from top to bottom enclose also the duty of welfare of the powerholders for their subjects. The Confucian hierarchical order served as a justification for the classes division within the whole nation: The four civil classes: shi – no – ko –sho.    

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Chart No. 87 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich The Eta describes a taboo topic and should not touched upon in Japan. The above mentioned civil classes – with the exception of Eta – do not be valid far-reaching at present, but with the exception of the teachers, etc. However a survey some years ago has shown the result that 90 % of the Japanese call themselves as members of the middle-classes. The Government of Singapore has done research in the eighties on the hierarchical Confucian relations. They wanted to know about the validity of the Confucian influence in their society order.    

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Chart No. 88  Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich Relation parents to children with the 1. Question: "Your aged parents want to move together with your family, however your spouse opposed it. How would you decide as an only child of your parents?” Relation husband to wife with the 2. Question: "A working woman get an offer of promotion, which would restrict essentially her free time with her husband. How should she behave?" Relation friend to friend with the 3. Question: "Two young people in the twenties be closed friends for some years. One day the young man want to get sexual contact with his girlfriend. How should she behave?"  

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Chart No. 89 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich The Samurai were, as soldiers, teachers and scholars, the backbone of the hierarchical Confucianism. In 1853 the American, Commodore Perry, appeared in front of the Japanese coast with his famous "black ships". With his ultimatum to open the Japanese harbours he caused a new epoch in the Japanese history. When the British fleet completely burned down Kagoshima followed a time of deep abasement, what influenced fundamentally the Japanese society. The Tokugawa era came to an end with the death of the last conservative emperor Komei. His son Mutsuhito became the new emperor and started up a new epoch.    

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Chart No. 90 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich Mutsuhito changed his name to Meiji to demonstrate the beginning of a new era. At the same time the feudal farming system collapsed, as a result of its insufficient flexibility. Japan had now opted for opening its borders. Many millions of Samurai became the large reservoir of the executive personnel for the industrial age. Many old–established and influential Daimyo- and Samurai-families founded industry enterprises in that time.     

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Chart No. 91 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich Furthermore, the Samurai ethos formed the behaviour between top management and executive personnel. The class development of Daimyo and Samurai are registered statistically in Japan: • 1880: 12 years after the Meiji reform former Daimyo and Samurai were made up often in exposed positions. • 1920: members of former Daimyo or Samurai families were also still often registered in key positions. This explains why the old aristocratic hierarchy predominates in the technical and modern firms.   

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Chart No. 92 Roots of the Japanese tradition Jaruwan Krengvittaya-Greilich The old aristocratic hierarchy implies that the large business is the modern successor of the old hierarchical system. The very influential Japanese bureaucratic elite also has its roots in the "service nobility" of the Tokugawa time. Since the beginning of the nineteen-nineties of last century, when Japan began experiencing continued economic stagnation, we can observe modifications to the traditional system. In large-sized enterprises is to find the effective system of buffer-mechanism.    

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Chart No. 93 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich Competitors generally treat each other according to the rules set by Japanese manners. Internally the Japanese talk about competitors as "enemies". This way of thinking leads to merciless competition. Already Japanese children are educated to reach high levels of achievement. Family pride knows no bounds if the son passes an important exam. The entire nation would like to be number one.      

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Chart No. 94 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich A meeting partner in Japan introduces generally himself using his business card. The coloured logo, and the full written name and address of the enterprise should be printed on the business card. The meeting partner´s position and the hierarchical standing of his profession should be clear from the business card. The business card should be printed on both sides. After the introduction the business cards should be exchanged and put on the table during conversation until the end of the appointment.

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Chart No. 95 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich Presents in Japan represent the social relationship and mutual esteem. Presents do not signify superficial enrichment or corruption. The selection of presents depends on different factors. The packing plays an important role. The esteem is as high as the packing is expensive and beautiful.    

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Chart No. 96 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich The packing has historical roots in Japan, which go back to the time when Japan paid tribute to China and received tributes from Korea. Today the Japanese say: "A person packs up with the packing not only the present but also his heart". Between friends, a present should be handed over at the end of a meeting. Among good friends, a present should be put down silently on a sideboard. Despite the loosening of the old customs, some Japanese still sigh over the “terror” of presents.     

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Chart No. 97 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich In the Japanese language, the word for customer means the same as for guest. From this, one can easier understand the ceremony of giving someone a present. Presents from Germany are in a great demand, if they have famous brand names.  

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Chart No. 98 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich Initially, the contract was not held in high regard in Japan. Nowadays, the Japanese reject loose legal matters with foreigners. Japanese are very much reserved with regards to lawsuits. At present, “the reminder” is of high importance in business. Japanese include reserves in contracts for complaints.     

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Chart No. 99 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich In western countries, a contract describes the closing of an order. Whereas in Japan a contract represents the beginning of a long-term business relationship. Any complaints are settled immediately and quickly. They discuss the costs later. Japanese know well that nobody should lose the face.     

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Chart No. 100 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich In Japan, human relationships are hardly based on ideological values. Japanese like to consider the usefulness of a business relationship. If a partner is the “namba wan” (number one) on the world market, he is the ideal business partner. Japanese closely observe their meeting partner in order to find out his character and his ability in his field. Japanese businessmen do not like mixing business with private life. The principle “give and take” comes first.      

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Chart No. 101 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich The American principle “the winner takes it all” is not viable for success in the long term in Japan. Conflicts in the network of relationships: formal level informal level = surface = background • conflicts do not exist officially are solved quietly and in the group by mutual agreement • conflicts no official concessions inofficial negotiation, on the outside no side is allowed to “lose face”  

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Chart No. 102 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich In Japan, for every 1,000 inhabitants there are 3.6 wholesaler and 13.2 retailer. That is double the amount of Germany. In Japan, there exist large universal commercial companies (keiretsu). The six most important universal trading companies (keiretsu) show the following structures: Trading enterprise Bank • Sumitomo Sumitomo Bank • C. Itoh Daiichi Kangyo Bank • Mitsui Sakura Bank • Mitsubishi Bank of Tokyo • Marubeni Fuiji Bank • Nissho Iwai Sanwa Bank   

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Chart No. 103 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich However, it can also be observed that the returns of the most important “keiretsu” have decreased in the last few years. The features of the “Keiretsu” have a lot of advantages. Specially foreign enterprises can have advantages by choosing “keiretsu”.   

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Chart No. 104 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich However, there can be also disadvantages for foreign enterprises, if they will use the “Keiretsu”-system. There are far-reaching consequences for foreign enterprises relating to “Keiretsu”.  

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Chart No. 105 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich Level Japanese Term Management Function 1st Level “Shacho” Executive • Managing Director Management • Director General • General Manager 2nd Level “Tori-shimariyaku Higher Management • Senior Vice-President or Senmu-tori- • Senior Head of Shimariyaku” Department 3rd Level “Bucho” Middle Management • Vice-Presidents, e.g. Head of Construction, “Jicho” of Finance Department 4th Level “Kacho” Lower Management • Group Leader, e.g. Head of the lab

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Chart No. 106 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich 1. muri desu Very hard to achieve!  Totally negative reply 2. muzukashi Difficult!  Refusal 3. mata renraku shimasu I will reply some time or other!  Definitely refusal 4. kangaete mimasu I will think about it!  The business is to forget 5. hai-hai Yes!  I hear you and I understand (but without contents) 6. wakarimashita I have understood!  Consent with the contents 7. mondai nai No problem!  Consent with some specific parts 8. kekko desu I approve!  Consent. The partial step can be verified

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Chart No. 107 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich How to make out the Senior Officer during the appointment? Door Door 1 1 3 5 2 4 7 9 11 6 8 10 8 2 3 5 7 4 6

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Chart No. 108 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich Typical mistakes made by foreigners:  Who speaks the most,  who speaks the English language best and  who knows the external habits best is treated as the direct reference-person. But he is no more than an ice-breaker. It is not allowed to draw conclusions to a high position.

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Chart No. 109 Features of Japanese culture for management Jaruwan Krengvittaya-Greilich During meetings the Senior Officer is to recognize that:  he speaks least of all  he speaks last  he does not hand over his visiting-card himself or he does not have a visiting-card  he is the last person to go upstairs  he is the first person to go downstairs  it is alright to fall asleep sometimes during meetings  he is seated opposite the door, in front of the sunk decoration-niche (“tokonoma”)

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Chart No. 110 Western and Japanese steering features Jaruwan Krengvittaya-Greilich  The ability to get one's way  being able to assume responsibility (too) quickly  the permanent demonstration of learning's and know-how  Attributes of the “hard sole fighter”  Mutual commitments  interdependences, by which commitments are built up  consideration for others  Attributes of reaching consensus

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Chart No. 111 Western and Japanese steering features Jaruwan Krengvittaya-Greilich  “Know-how is power” is not desirable, in stead knowledge is distributed for the over good of the company.  The individual person shows responsibility for his group, i.e. understanding for the weak, but no sympathy for lazy colleagues.  Fear of losing reputation with colleagues.  Competence of seniors is based on staff-assessment, i.e. including the employees in the decision-making process.  Investments in “social capital”, i.e. care of personal contacts.

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Chart No. 112 Western and Japanese steering features Jaruwan Krengvittaya-Greilich Japanese Managers and German Managers German Managers in Germany rate the in Japan rate the thresholds in Japan as: thresholds in Japan as: unimportant important unimportant important -1.0 -0.5 0 0.5 1.0 -1.0 -0.5 0 0.5 1.0  Competition  Recruitment of Managers  Language  Distribution Systems  Business Practices  Consumer Behaviour  Administrative Behaviour  Non-contractual, institutional barriers  Internal Management Problems  Quotas, Customs, legal Problems

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Chart No. 113 Western and Japanese steering features Jaruwan Krengvittaya-Greilich  Not correctly judging competitors,  Recruitment of managers and  Distribution systems and consumer behaviour.  Different legal regulations and  Different custom systems.  But these criteria are classified as insignificant, because it is easy to get information about them.

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Chart No. 114 Western and Japanese steering features Jaruwan Krengvittaya-Greilich Effective Entrance-Barriers are made by person-refered Criteria: In Japan there is therefore absolutely no other way than to get  cultural-historical information in keeping with the old Chinese proverb:  “If you want to arrive quickly, then you should take a roundabout way.”

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Western and Japanese steering features Jaruwan Krengvittaya-Greilich • Remember that normally all Japanese executives dress conservatively in blue or grey with a white shirt and dark tie. • Japanese like people who are clean, well-dressed, not too hairy, not too young, modest and of quiet voice and above all, polite. • Many Japanese businesspeople will ask you openly at the first meeting who are your board of directors, what is the capital of the company, and who are your chief customers. • Be punctual for appointments that means not to be late and also not to be early. • Pay a lot of attention to speeches and lectures and signalise a deep interest for professional contents. Japanese stick to their professional dues and would loose respect, if they realized you did not. • Do not leave lectures at the conference before their official end. • Japanese typically leave the office only after their superiors have done so. Do not expect to be free once the official working time is over. • Never say ‘no’; if you disagree, just be silent. Chart No. 115

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Western and Japanese steering features Jaruwan Krengvittaya-Greilich • If you are given compliments, it is good manner to neglect them in a shy way. • Business partners must not make compliments about the wives of their Japanese colleagues, this is respectless and might even be valued as a sexual offence. • Avoid body contact or eye-steering. It is not common and may be understood either as a sexual or an aggressive behaviour. • Learn some Japanese basic phrases. This will make good impression and can work as an „ice- breaker“. • It is not allowed to chew chewing gum at work or at formal meetings. • Japanese often compliment each other to promote good will, but it is polite to deny how well you speak Japanese, how nice you look, etc. • In Japan it is important to bring little presents when invited to someone house. • It is polite to bring some food or drinks when you visit someone. • It is polite to make believe that the present wasn’t as expensive as it actually was. Chart No. 116

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Western and Japanese steering features Jaruwan Krengvittaya-Greilich • If you give an expensive gift to someone you will receive a more expensive one at the next invitation. • Leave your shoes at the entrance of a home. • It is customary to sit on the floor in a tatami room. • If you need to blow your nose please leave the room. • Do not use your chopsticks to point at somebody as well as to skewer food and do not leave your chopsticks standing up out of your food. It is normal to make loud gulping noises when drinking. It is common to make noises while drinking tea and to slurp when eating a soup or noodles. • It is impolite to fill your own drink when eating with others. Fill your companion's drink and your companion fills yours. If you do not want drink anything more just leave your glass full. Chart No. 117

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Chart No. 118 METI: (Tsusansho)* Japan’s key position in the economy Jaruwan Krengvittaya-Greilich Same person in different periods * Ministry for Economic and Trade

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Chart No. 119 METI: Japan’s key key position in the economy Jaruwan Krengvittaya-Greilich

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Chart No. 120 METI: Japan’s key key position in the economy Jaruwan Krengvittaya-Greilich

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Chart No. 121 METI: Japan’s key position in the economy Jaruwan Krengvittaya-Greilich In the fifties: In the sixties: In the eighties: In the nineties: In the seventies:

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Chart No. 122 METI: Japan’s key position in the economy Jaruwan Krengvittaya-Greilich Politics Linking between Politics and Economy Economy Economy Linking between Economy and Banking Banking METI Steering of the economy by METI Economy • Protectionism • Subsidies • Preferences for special enterprises • Elimination of free market forces • Support of unprofitable enterprises • Endangering of the bank system • Neglect of globalisation • Limited flexibility • Conflicts in the international economy METI: Ministry for Economy and Trade (Tsusansho)

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Chart No. 123 METI: Japan’s key position in the economy Jaruwan Krengvittaya-Greilich 9/03/2006: 16,036.91 Logarithmic scale; List of references: Thomson Financial Datastream Handelsblatt graphic 1986 87 88 89 90 91 92 93 94 95 96 97 98 99 01 03 05 10,000 25,000 30,000 40,000 20,000 15,000 35,000 4/1/1990: 38,712.88 Nikkei Index

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Chart No. 124 Case V: Misunderstandings in the Japanese negotiation atmosphere Jaruwan Krengvittaya-Greilich 1. Background: A German company in the agricultural sector decided to gain sales in the huge Japanese market. A dele- gation of two workers had to set up meetings with some important departments stores in Japan, e.g.Mit-sukoshi, Sogo etc. Members of this delegation included the marketing manager in his mid-forties and a young marketing assistant, a Chinese Indonesian, who had lived in Germany since she was a child. She had a good command of English and Japanese as well as the German language. During the first meeting a situation occurred where the head of the Japanese counterpart replied to the significant German offer that had been made with "hai-hai". The Japanese interpreter translated this with only a "yes", without any further explanations. After that, the marketing manager was very pleased, as he assumed they had just won a significant order. He invited the six negotiating partners for dinner that evening in an excellent restaurant. When the head of the Japanese counterpart tried to decline the invita-tion, the German did not accept no for an answer because he thought this was only polite Japanese beha-viour. Only the young marketing assistant had the right knowledge to interpret the situation in the right way. However, she did not dare to interrupt her elder superior because of the seniority principle in Japan. 2. The task: How should the marketing assistant, who understood the sense of the incomplete translation "hai-hai“ have reacted. On the one hand, she did not want her superior to “lose his face”, on the other hand, she could not allow him to humiliate himself. How should the German delegation get out of this dilemma situation and still have a small chance of getting the order.

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Chart No. 125 Case VI: The masculine dominance in the Japanese society (part a) Jaruwan Krengvittaya-Greilich 1. Background: A German sales manager had been running an agency of a German pharmaceutical and cosmetics company in Sumatera Barat (Western Sumatra) for more than 10 years. She worked very successfully and brought her enterprise to a leading market position. After an American company took over the German enterprise, some sales agencies – also that agency in Indonesia - were closed for strategic reasons. The German sales manager lost her job after the agency was closed, but received an offer from the Americans to run their important agency in Yokohama on the Japanese main island Honshu. She felt in a dilemma situation being in her late forties, but accepted the new position, out of fear of becoming unemployed and then losing the high standard of living in Asia. The move to Japan was a culture shock for her. She was used to the social order within a traditional matriarchy in Sumatera Barat, where the women have the final say in every situation, where she gave up all consumption of alcohol, and where she became a vegetarian under the influence of her Indonesian friends in a Moslem culture, steps which were also as a result of her suffering from tropical diseases. In Japan she experienced a dominant masculine society. Her discerning partners expected her to spend the evenings doing business with opulent dinners and alcoholic drinks, e.g. “sake” and beer.

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Chart No. 126 Case VI: The masculine dominance in the Japanese society (part b) Jaruwan Krengvittaya-Greilich Her ascetic way of life did not find sympathy from those around her, and they began to talk behind her back. The business dinners scene became more and more unbearable for her. When her sales volume failed to reach its target after the first quarterly period, the first critical statements came from the head office in the USA. She also received warnings about the consequences for the second quarterly period, if she missed the target for a second time. She was alarmed by that criticism, which she had never been accustomed to before. 2. The task: How should the German sales manager, with the goal of attaining considerable orders, act in order to be successful at human relations within a dominant masculine society. The circumstances forced her to succeed, otherwise she will lose her job only three months later. But for reasons of health and firm belief she cannot change essential her way of life. What compromise does she have to make?

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Chart No. 127 Case VII: The problem with reclamations in business with Japanese Jaruwan Krengvittaya-Greilich 1. Background: A German family business produces machine tools for the automobile industry. A Japanese automobile company placed a huge order with this family business for the first time, after the involvement of another Japanese person, who is a close friend of the senior partner. Shortly after the delivered machine tools arrived in Japan, the German producer received a fax with the message of a defective delivery. The German top-management was convinced that the delivery to Japan was correct, because their machine tools are checked painstakingly and strictly. The entire management held talks during hectic meetings to discuss tactics of how to deal with the complaint from this important Japanese company. On the one hand, they were aware of the fact that an acceptance of the complaint would be an admission of a defective delivery, and that for the first order. Furthermore, an admission of guilt would result in heavy financial losses. On the other hand, it was feared that taking legal action would mean the loss of an important Japanese company for the future. 2. The task: The top- and middle-management voted by a majority to take legal action. However, the senior partner of this family business decided that his son, the junior partner and graduate with a Bachelor Degree from a Swabian Technical University, should fly out to Japan the next day. What general bargaining position should the father give to his son on his way to the Japanese Company?

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Chart No. 128 Case VIII: The problem of integration in the Japanese world of employment Jaruwan Krengvittaya-Greilich 1. Background: A German physicist is being promoted to professor in the subject area of nuclear physics. He received a half year scholarship at a renowned scientific institute in Tokyo. His entire behaviour and his casual dress are the result of his long university education and the subsequent doctorate-time at the same university. The essential part of his scientific work in Japan exists of a series of highly complicated endurance experiments. Teamwork is an essential part of his work. On his first day of work he astounded his Japanese colleagues with his young student-like manner, although he was already middle-aged. During his scientific career he had the habit of having uncompromising discussions and neglecting other views. Now, he displays the same habit with his new Japanese colleagues, most whom are much younger than him. Following the scientific disputes he does not feel like going out with the same colleagues. He dislikes their elitist way of life, e.g. they wear brand-name articles, visit cultivated restaurants etc. He prefers to spend his free time alone or with a German friend. One day he discovered that he had not received important information concerning results of the research. He also noticed that his colleagues no longer discussed things with him and he rarely received any invitations. He realized that the goals of his research work were endangered. 2. The task: The German physicist has already spent two months of his six months scholarship in Tokyo, but up until now without any results. How should the German react in order to be accepted in the group – if at all – as this a requirement for fulfilling the terms of reference within his scholarship.

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Chart No. 129 Management Case II: Strategic Marketing with Japanese (part a) Jaruwan Krengvittaya-Greilich 1. Background: An important Japanese company bought early in 2005 the English brewery, which was owner of two German steakhouse groups. The Japanese top management got halfway through the year the result that the chains A and B work in 2005 with negative margins. At the same time they received the results about the market shares by an ordered market research survey. Short time later an invitation arrived the German top management to come for report and justification to Osaka. The Japanese invited the following highly paid German ladies and gentlemen to Japan: • Director General • Product Manager A (responsible for steakhouse A) • Product Manager B (responsible for steakhouse B) • Marketing Manager (responsible for advertising, market research etc.) • Food and beverage Manager The German Director General gives some information to the members who are invited to Japan (note: in the past was the critical stage of the BSE-crisis!):

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Chart No. 130 Management Case II: Strategic Marketing with Japanese (part b) Jaruwan Krengvittaya-Greilich Market shares in % Advertising in US$ Market research in US$ 2001 2005 2001 2005 2001 2005 • Steakhouse A 20 19 2.0 2.5 0.2 0.15 - elegant atmosphere • Steakhouse B 24 15 2.0 1.0 0.3 0.02 - French atmosphere • Main competitor X 26 18 2.5 2.0 very active! - lumberjack atmosphere • Main competitor Y 9 12 1.5 2.0 very active! - Argentinean atmosphere • Others 21 36 2.0 3.5 no information! Total 100 100 10.0 11.0 A: 10 % *) A: 6 % *) B: 15 % *) B: 2 % *) *) Budget market research/ budget advertising

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Chart No. 131 Management Case II: Strategic Marketing with Japanese (part c) Jaruwan Krengvittaya-Greilich The male members of the Japanese management show following positions: • Director General (holding company) • Senior vice-president Controlling (cross-Europe) • Senior vice-president Corporate Planning (cross-Europe) • Senior vice-president Marketing (cross-Europe) • Assistants of above mentioned executives 2. The task: The items on the agenda: 1. Analysis and justification of each member of the German delegation, 2. Strategic conclusion of the point of view of today and of the middle-term future, 3. Definition of market research surveys to support product-, price-, service-, and com- munication-policy etc., 4. Straightaway consequences for a quick improvement relating to steakhouse A and B. Please discuss the above mentioned problems and conclusions with Japanese culture in mind.

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Chart No. 132 Management Case II: Strategic Marketing with Japanese (part d) Jaruwan Krengvittaya-Greilich Solution in the year 2006: Results after the market research and "relaunch" Market shares in % Advertising in US$ Market research in US$ 2001 2005 1) 2006 2) 2001 2005 2006 2001 2005 2006 • Steakhouse A 20 19 22 2.0 2.5 3,0 0.2 0.15 0,25 - elegant atmosphere (21 20 18 restaurants) • Steakhouse B 24 15 17 2.0 1.0 2,0 0.3 0.02 0,20 - French atmosphere (28 29 23 restaurants) • Main competitor X 26 18 18 2.5 2.0 2,0 very active! - lumberjack atmosphere (30 30 28 restaurants) • Main competitor Y 9 12 13 1.5 2.0 2,5 very active! - Argentinean atmosphere (8 12 14 restaurants) • Others 21 36 30 2.0 3.5 2,0 no information! - different styles (very much restaurants with decreasing tendency) Total 100 100 100 10.0 11.0 12.5 A: 10 % *) A: 6 % *) A: 8 % *) B: 15 % *) B: 2 % *) B: 10 % *) 1) first half year of 2005, 2) first half year of 2006 *) Budget market research/ budget advertising

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Chart No. 133 Internet Case II: Public relations campaign in Japan (part a) Jaruwan Krengvittaya-Greilich 1. Background: A public relations agency got the contract to improve significant the sales of German wine in Japan. A team of junior employees should prepare a fortnight-trip for the project manager and his legal advertiser, who will be attended by one member of the junior working team. The target of this trip should be by means of different contacts to improve medium term the turnover of German wine in Japan. The delegation should have during this fortnight-trip about twenty talks with important people. The meetings should take place only in the metropolitan area of Tokyo and Osaka/Kobe.  Acquisitive-orientated addresses of chain stores: • wholesalers, • department stores, • supermarkets, • specialized trades, and • hotels.  Strategic-orientated addresses: • METI, Ministry for Industry and Trade, Tokyo, • JETRO, Japan External Trade Organisation, and • German Embassy of the Federal Republic of Germany. The contract says also that the PR agency has to prepare an exhibition stand with special events on one of the next suitable fairs in Japan.

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Chart No. 134 Internet Case II: Public relations campaign in Japan (part b) Jaruwan Krengvittaya-Greilich 2. The task: Step 1: • Find out by internet the right acquisitive- and strategic-orientated addresses to get about twenty meetings. • Investigate the names of those ladies and gentlemen who are the responsible representa- tives for purchasing of food. • Fix the turnover of those companies, you will contact in Japan. • Search for further important information by internet about the chosen addresses. Step 2: You should know the degree of familiarity and the image of German wine in Japan. • Investigate by internet what three market research institutes you will contact for a quan- titative-orientated survey. • Find out, if you can expect English spoken business partners in the three market re- search institutes. • Look for the price of one announce (1/1, black/white) in an important newspaper and of the price of one TV spot (30 seconds). • Compare the advertising prices in Japan with these in Germany by the coefficient: price per 1,000 newspaper readers and per 1,000 TV viewer.

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Chart No. 135 Internet Case II: Public relations campaign in Japan (part c) Jaruwan Krengvittaya-Greilich Step 3: • Find out by internet, when and where the next suitable fair will occur in Japan. • Look for the names of the managers of the chosen fair company. • How much is the price for an exhibition stand (20 to 30 sqm.)? • Look for a convenient restaurant for further meetings in the evening, • How much you have to pay for a Japanese fair hostess per day? Please work out every step by supporting of internet. If necessary, include also Japanese culture in every step of your concepts.

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Italy 14 20 48 18 Germany 15 18 50 16 France 19 20 45 16 Great Britain 19 19 46 16 Romania 19 24 44 13 The Asian Pacific Area in western statistics Jaruwan Krengvittaya-Greilich List of References: Statistical Annual for Foreign Countries, Wiesbaden 2001, page 208 15 years 15 to 30 30 to 65 65 years and less years years and more - in % - Europe (2001) Chart No. 136

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Japan 15 20 48 17 Singapore 22 20 51 7 China 25 25 43 7 Indonesia 31 29 35 5 Bangladesh 35 33 29 3 Philippines 37 28 31 4 List of References: Statistical Annual for Foreign Countries, Wiesbaden 2001, page 208 The Asian Pacific Area in western statistics Jaruwan Krengvittaya-Greilich 15 years 15 to 30 30 to 65 65 years and less years years and more - in % - South East Asia (2001) Chart No. 137

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Chart No. 138 Growth of Townspeople 1983 to 1993 in % 1990 to 2000 in % Korea (Republic) 13 12.4 Indonesia 9 9.6 China 5 8.1 Malaysia 9 7.6 Hong Hong 3 -- *) Japan 1 1.5 Germany -- *) 2.2 The Asian Pacific Area in western statistics Jaruwan Krengvittaya-Greilich List of References: Clint Laurent, Asia Studies Ltd., Hong Kong, in Context 11/95, Statistical Annual for Foreign Countries, Wiesbaden 2001, page 218 *) no information

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The Asian Pacific Area in western statistics Chart No. 139 Jaruwan Krengvittaya-Greilich 1993 2000 Growth Rate in DM in € 1990 to 1999 in % Germany 42.67 25.81 20.0 Switzerland 39.64 19.33 12.9 Poland * - 4.48 - Czech Republic * 3.01 3.90 60.5 *** Hungary * 4.54 3.83 39.4 *** Romania * 1.34 1.51 54.6 *** Russia * 0.92 2.71 ** - * Former Comecon Countries ** Lithuania *** 1993 to 2000 List of References: Statistical Annual for Foreign Countries, Wiesbaden 1995 and 2001, page 339; FOCUS, 14/2004, page 26

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The Asian Pacific Area in western statistics Chart No. 140 Jaruwan Krengvittaya-Greilich 1993 1999 Growth Rate in DM in US$ 1990 to 1999 in % Japan --- 20.89 63.2 Singapore * 9.92 7.18 89.9 Korea (Republic) * 8.51 6.71 80.9 Taiwan * 8.48 5.62 43.0 Hong Kong * 7.45 5.44 70.0 Thailand ** 2.66 - - Malaysia ** 2.53 - - Indonesia ** 1.09 - - China 0.69 - - * Threshold Countries of the 1st Generation ** Threshold Countries of the 2nd Generation List of References: Statistical Annual for Foreign Countries, Wiesbaden 1995 and 2001, page 339

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Chart No. 141 Roots of the Chinese Tradition Jaruwan Krengvittaya-Greilich Confucian philosophy: social-political roots 5000 years old tradition: strict rules and decrees with a strong group- orientation economic communism: a new society kind of communism with economic orientation confucian philosophy economic communism 5000 years old tradition

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Chart No. 142 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Landmarks of a Chinese culture and some inventions which point to the future: about 3000 B.C.  investion of pottery about 2000 B.C.  investion of silkworm breeding 500 B.C.  investion of cast-iron plough 300 B.C.  investion of wheelbarrow 200 B.C.  investion of compass 100 A.D.  investion of paper 700 A.D.  investion of gunpowder 700 A.D.  investion of printing process 800 A.D.  investion of porcelain

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Chart No. 143 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Fallacy 1: “The today´s Chinese, at least with foreign contacts, are western-like. Any occured problems cannot be caused by intercultural distinctions.” The premise is not correct in this case at all. The alleged western lifestyle is at best superficial and does not concern the core of personality. Young Chinese hear perhaps the same rockbands like young Americans or Europeans and talk about the same themes. But nevertheless we have to hear them a short time later, e.g. with their parents or neighbours or superiors to recognize that a Chinese culture indepence is existing furthermore.

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Chart No. 144 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Fallacy 2: „If people know themselves enough for a long time, e.g. because they work together, then they also learn automatically to understand and to respect themselves.“ Also this „hypothesis of contacts“ is unfortunately wrong. If this hypothesis would be right, there would not exist the extreme problems neither in Northern Ireland nor in the Balkan in the last past, also the people of different cultures know themselves for a vey long time. E.g. Mr A. Laurant made a survey, in which he asked employees in pure French and pure American enterprises. The French answered in that survey with 57 % that the boss is responsible for everything, but the Americans agreed to the same question only with 18 %. In a second survey French and American employees in a common joint venture were asked about the same theme. The French agreed now with 73 % (they became „more French“) and the Americans answered only with 8 % (they became „more Americans“). The results of both cultures did not adapt by the daily seen friction.

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Chart No. 145 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Fallacy 3: „It is only the secondary importance if employees harmonize together in an optimal way or not in a mixed cultural enterprise, because this count to the soft facts in opposite to the hard facts , e.g. financing, legal safety, market anaylising etc.“ The analisis of mismanaged Joint ventures and projects gave evidence for the contrary. In most cases the soft facts are the reason for the breakdown, because the management was concentrated upon the hard facts. The answer for understanding intercultural distinctions is to find according the psychologist Clyde Kluckhohn:  „Every human being is in a way like all or like some persons or like no person“

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Chart No. 146 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Individual, cultural, and natural aspects of human beings: Like no person: Personality  Intelligence, talent, charm Like some persons: Trained subculture  Values, rituals, customs, symbols, education, etiquette, language, way of communication, dishes and eating habits, clothes, regulars for family setting up, heros, society, architecture, economy, technique, ordering of policy Like all persons: Nature, inborn  Instinct, five sences, feelings, will to servive, play instinct, sexuality, hunger and thirst, love and hope, social feeling, born and pass away

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Chart No. 147 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Individual, cultural, and natural aspects of human beings:  For the level „like all“ stands that Chinese and Germans resemble in the same manner, e.g. according to the human nature both feel regularly hunger and thirst, show will to servive, etc.  For the level „like some“ there are cultural-specific questions like, if people prefer to eat for the most part bread or rice, to use a knife and fork or chopsticks, etc. Just as Chinese and Germans distinguish in their idea of an adequate quantity of a delegation: only two or even twelve persons? In these cases necessities of nature do not exist, there are only social activities laid down on the surface of culture.  For the level „like no person“ stands the fact that every person possess an unmistakable personality. If a person likes innards, garlic or if somebody cheats his/her friends, these belongs to the individual bibliography of every one. Chinese and Germans are not to distinguish in this level.

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Chart No. 148 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich To make business with the Chinese, every one should take attention to three key values of Chinese culture, which are the concept of „face“ „Guanxi“ (relationship) „conflict avoidance“ „Face“ According to the example, the Chinese concept of „face“ is linked to the Confucian‘s notion of shame. Having face means having a high status in the eyes of one‘s peers, and is a mark of personal dignity. The Chinese are acutely sensitive to gaining and maintaining face in all aspects of social and business life. Causing someone to lose face could ruin business prospects or even invite recrimination. The easiest to cause someone to lose face is to insult an individual or criticize him infront of others. Another error can be treat someone as a subordinate when their status in an organization is high. Just a face can be lost, it can also be given by praising someone or should avoid saying „no“ in public.

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Chart No. 149 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich „Guanxi“ (relationship) The logical development of close relationships is the Chinese concept of guanxi (pronounced gwan shee). It means that people develop a network of contacts and personal relationships for whom they do favour and from whom they ask favors in return. It is cinsedered as „the chief asset“ in the world of Chinese business. Some examples for better understanding: „Chinese Networking“ „Western Networking“ • Resonal relationships and organizational • Clear distinctions between individual and relationships are interrelated organzation relationships • Personal- and trust-based • Contract-orientated • Symbiotic relationship between • High independence of networked organizations. networked organizations Motivated primarily by economic concerns • Flexibility and informality • Formality and clearly denined roles

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Chart No. 150 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Different from Western countries, trust is not based on contract but on personal relationships. The networking is more flexibility and informality. In order to build and maintain „Guanxi“, gift-giving is a way to express their interest in one another. Several times the value of a gift could be the sign to measure how much the interest is. So please attention! It is very important to choose the gift to your Chinese partner. Otherwise, „Guanxi“ needs continuous maintenance, you cannot take it for granted once established and you should keep in touch with friends and maintain relationships. Guanxi involves reciprocal gifts and favours. While this is a charming custom, it can also be a fraught with danger as the recipient of an usually expensive gift will almost certainly be asked shortly for a huge personal favour. It may well compromise a business situation and cause embarrassment to those who are closely restricted by their companies in the area of discounts, arbitrary pricing, etc. „Conflict avoidance“ The third topic is conflict avoidance. The Western culture, it is all right to encourage or initiate overt conflicts or open disagreement. But, in most Asian culture, overtly expression of conflict is systematically avoided due to the value of maintaining harmony, even if this is only superficial.

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Chart No. 151 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Some of the consequences of the Chinese strong Confusian beliefs and their age-old traditions are listed below: • Power distance is large. 4000 years of centralisation result in a tradition of obedience. • Inequalalities are expected and desired. • Less powerful people should be dependent on the powerful who must protect them and take care of their careers and welfare. • Parents, teachers, bosses, must all be obeyed. • Age brings seniority. • Their is a wide salary range between the top and bottom of the organisation. • The ideal boss is a benevolent autocrat. • Privileges for managers are expected and pupular. • Subordinates expect to be told what to do. • Individualism is taboo. • Relationships are more important than tasks. • Confrontation is avoided, harmony and consensus are ultimate goals. • The search for virtue is more important than the search for truth. A and B can both be right if both are virtuous. • Long-term orientation and goals.

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Chart No. 152 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich These six keys are essential to be taken into account when negotiating in China: Agenda As hosts, the Chinese take full advantage of their control of the negotiating process. First, they draw up the agenda. This forces the guests to work out their game plan, since their proposals are used as the starting point for all the proposals which follow. Patience The Chinese deliberately adopt a fairly attitude, taking great care not to show enthusiasm, hiding any impatience, playing their own game, without revealing themselves, to lead their adversaries to put their cards on the table first. Manipulation The Chinese do not hisitate to be very manipulative: attributing an exaggerated importance to a point of detail, in fact quite unimportant to them, or challenging points that seemed completely settled, in order to destabilise their adversary and in an attempt to obtain additional concessions in extremis.

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Chart No. 153 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Time „The Chinese use time shrewdly“, explains the head of a French company. „If they feel their opposite numbers are in a hurry they may slow down the negotiations and make tghe deadline a tactical advantage. ‚A little impatience ruins a great plan‘ is a saying of Confucius that we have had all the time in the world to meditate on.“ Slower in negotiation, they also take giving one‘s word very seriously. When they have signed an agreement beware anyone on the other side who fails to keep his promises. Friendship Where Americans see friendship in term of a „feeling based on mutual trade off“, the Chinese see friendship in terms of loyalty. The idea is that of lasting obligation. However, what the Chinese neglect in terms of reciprocity, they more than make up for in loyalty. They do not just keep their promises but they are are committted to establishing a positive and lasting relationship.

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Chart No. 154 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Preference to direct contact To persuade, pass on expertise or offer advice, never lose sight of the factthat education is based on universal tenets. More than beautiful documents, be the perfectly clear and well written, in China it is undoubtedly much better to make the maximum possible use of direct contact. It is also the moment to remember that a fundamental principle in education is the repetition of information. Every one must also be aware that in Asia a yes is not always frank and wholehearted. Making sure the person you are talking to is in agreement with you, that he has understood your message and that he will do what you asked, is never pointless. In China, as elsewhere, never forgot that the simplest way is not always the easiest way. Some technologies long used in France are not less relatively new in China: simplicity of implementation thus seems to make a complexity which may seem a little excessive to the Chinese. Finally, in China as in many countries „parallel hierarchies“ often exist and merit special attention, without which there is a risk that many significant factors will remain incomprehensible.

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Chart No. 155 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Conduct of negotiations If the phase of the mutual exchange is completed, the real negotiation begins. Besides, great importance has to be put on differences in the negotiation guidance between German and Chinese business partners. While the German official contacts lead their conservations first of all result orientated and with a fixed aim, the Chinese see in negotiation rather a process which smoothes gradually the way to the consensus. The construction of a stable connection is important for Chinese, it takes the first place. Western Style Chinese Style Result-orientated Orientated to process The aim is crucial The way is the aim Time is money Good work takes it‘s time Orientated to the topic only Orientated to conection Efficiency Compromises

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Chart No. 156 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich What to do and not to do at meetings and negotiations in China: Chinese prefer meetings to be formal, although dress is usually comfortable. Seatings will be according to hierarchy. Business cards are exchanged. The senior man must be shown great respect and attention at all times, even though he takes little part. The deputy or vicechairman is often the decision maker. The real decisions will be made outside the meeting, which is principally for information gathering. The pace will be slow and repetitious. The time frame is too long for westeners who may see the slow-down techniques as gargaining ploys. Politeness is observed at all times. Confrontation and loss of face (for both sides!) must be avoided. Chinese rarely say ‚no‘ – only hint at difficulties. All collective spirit prevails, nobody says ‚I‘, only ‚we‘. In a collectivist culture, accountability for decisions is avoided. Authority is not passed downwards from the leaders.

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Chart No. 157 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Decisions have a long-term orientation. Negotiations in China are important social occasions which one fosters relationships and decides if the people on the other side of the table are suitable partners in the long run. The Chinese, who have been doing business for 4000 years, certainly are. They consider you technically competent, otherwise inexperienced in business relations. They negotiate step by step in an unhurried manner. They prefer to open proceedings with a discussion of general principles mutual interest. That is probably enough for the first day. They dislike US eagerness to sign a contract. Deal-orientated Americans and many Europeans agree to perform specific tasks over an agreed period of time. Chinese, looking beyond the deal, prioritise mutual trust in the long term. They are thrifty, cautious, patient. You will have to match their patience and stamina, otherwise deals and opportunities will be lost. They combine flexibility with firmness and expect both these qualities in you. Once they have decided who, what, when and how is the best, they atre very trustworthy. They know the size of their market and use this in their pricing strategy.

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Chart No. 158 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich • How to make out the Senior Officer during the appointment? His place is in the middle, everyone shows great respect to him. • How to make out the deputy during the appointment? He is often the decision maker (spokesman). 1 1 2 2 China West Leader Spokesman Leader - accountable

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Chart No. 159 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Chinese are basically very welcoming people who extend generous hospitality and courtessy both to Asians and ‚barbarians‘. Sit-down dinners are the norm, usually lasting about two hours and ended by the host standing up. On those occasions you should try all the delicacies put in front of you by your host, without actually leaving any dish empty. Protocol is easy-going. Chinese slurp and make all sorts of noises when eating, they also indulge in smoking, at the table and have been known to spit on the floor. You are unlikely to disgrace yourself unless you are particularly inept with chopsticks, handle food with your fingers – or insist on paying the bill before your host has the xhance to do so. As fare as meetings are concerned it is often necessary to make appointments one or two weeks in advance with officials, only a day or so with entrepreneurs and acquaintances. You should turn up on time. Individual Chinese often arrive 15 minutes earlierand say they can finish the business before the meeting was scheduled to begin, so as not waste your time. You need not take punctuality to these lenghts but you should not be late. When saying farewell, Chinese mention their imminent departure early on in the meeting, as opposed to westerners who delay it till just before leaving. Chinese prolongs the farewell on the street, perhaps accompaying you part of your way.

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Chart No. 160 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Courtesy in China is also involves excessive humility and self-disparagement. All good Asians are self-effacing, but Chinese take it to ridiculous lenghts. You may try to fit into the picture by being a good listener, using deference and understatement. In your replies, never mentioning your impressive business or academic qualifications. Trying to get in the back row when someone takes a photograph.

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Chart No. 161 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich There were business cards already in the old China. The business cards are again popular and a symbol of the modern China since the economic reform and the opening to the west in the year 1978. Business cards are used very often, as well in the dealing with Chinese as with foreign business partners. They are in China a status symbol and testify to power, hierarchical standing and position in society. The business card should be printed on both sides: One side in Chinese and one side in English or German language. High quality of paper and a special design of the business card bring prestige and respect. Business cards for the People´s Republic of China should be printed with the so-called „short signs“. These are simplified signs, which are learnt at school in the People´s Republic of China. Business cards with „long signs“ are useful for Hongkong and Taiwan. There should be prepared various business cards for the mainland, Hongkong, and Taiwan, because there are different terms for positions and titles. Misunderstandings can happen with only one kind of business card for everywhere in China.

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Chart No. 162 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich The western names should be translated phonecally into the Chinese language to avoid misunderstandings. For normal names, e.g. Meier, Müller, Schmidt, etc. there are already fixed translations. You should take care that the Chinese translation of your name does not have a negative mind in the Chinese language. It is polite to hand over business cards not only to the leader of a group but also to every one of a group, of the delegation, etc. Business cards are handed over standing with both hands. It is important and polite to take the business cards also with both hands from your business partners. The business card should be handed over in a manner that your partner can read it. The business card must left on the table. When there are appointments over several days it is not allowed to left the business cards on the table during the night. Almost all Chinese surnames are monosyllabic. Chinese first names are for the most part two-syllabic. Besides: there are only about 120 Chinese surnames, the most normal surnames are about 30 to 40, e.g. Li, Wang, Zhang, etc.

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Chart No. 163 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich For private invitations: If somebody makes a visit for the first time presents should not be hand over, because it seems then that the host would be greedy for presents. Presents are only usually for the second or third visit. For business invitations: The presents are to hand over by business visits during the business lunch/ dinner or during the leave-taking. For Chinese: The presents should not be opened in presence of the giver, because somebody could be disappointed of the content and could intimate the disappointment. For Foreigners: Chinese expect that foreigners should open the presents at once and praise the presents excessively. It is to note in any case that Chinese have number and colour codes, all round things have also the meaning of luck.

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Chart No. 164 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich These presents are allowed to give away: In an album photos of common activities Camera, binoculars Cognac – is more in demand than brandy due to the nice names; but then two bottles. The quality should be XO and for important persons even the quality of XXO Food hamper with delicacies Chocolate, cookies, or cakes in two boxes Fruit and candy for children French perfume – perhaps in some miniature small bottles If a biro, then shining and not dull Something of the home country, e.g. Franconia wine of Wuerzburg or „Mozart“ chocolate of Salzburg; but in decorative packing For private visits: Money or gift token, but in a red envelope with the signature on the back. – normally an even amount, only for funerals an odd number

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Chart No. 165 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich These presents are never allowed to give away: Handkerchiefs – they associate leave-taking and cry Stork e.g. on a postcarde for the childbirth - association with the bird of death Knife or scisssors – association of separation Exeption: red Swiss officer penknife White flowers, only at illness or death (this custom is slowly changing) Wall clock – sounds like „funeral“ Exeption: cuckoo clock of the Black Forest (price highter than 100 €) Shoes - sound like „catastrophe“ Umbrella – sounds like say good bye/ separate Every presents in colours of mourning and numbers of mourning e.g. number 4 – sounds like „death“ or e.g. wool-white, nature-white, dark-blue, dark-green, and black announce pain and death

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Chart No. 166 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Policy and direction taking must be long term, otherwise one wastes one‘s time on relatively unimportant vetures. Westerners should bear in mind the following factors: You are dealing with people who place values and principles above money and expediency. The Chinese will not stray from their reference of Confucian views on order, family, and consensus. Show unqualified respect for these. The Chinese see their language not only as a cultural tool which has historically influenced Japan, Korea, Indo-China and other areas, but as a repository for transmitting cultural values. The undisputed link between language and culture gives them a strong motive to increase the currency of the Chinese language, at least on a regional basis. You would do well to have one or two individuals in your companyor organisation develop reasonable fluency in Chinese. Britain in Particular has a long experience in China and many connections in East Asia. Chinese also react favourable to Nordic calmness, German technology, and French ‚savoir faire‘. Europeans should study Buddhist and Confucian behaviour and show compassion for Chinese difficulties. It will pay off.

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Chart No. 167 Features of Chinese culture for management Jaruwan Krengvittaya-Greilich Final some ‘golden rules’: Be extremely deferential at all times. Combine courtesy with firmness. Show humility and respect for age and rank Do not overdo the logic. Prepare your meetings in detail. Do not speak in a loud voice or rush them. Know your Chinese history. Always keep your calm and remember that patience and allowing adequate time for reflection are the keys to make progress, however slow it may seem.

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Chart No 168 The Asian Pacific Area in western statistics Jaruwan Krengvittaya-Greilich Motorola (USA) Nokia (Finland) Bird (China) Source: FOCUS, No. 49, December 2003 36 40 % 30 % 20 % 10 % 32 2 2 TCL (China) 1st quarter 2002 3rd quarter 2002 2nd quarter 2003 27 19 6 10 15 10,5 11,5 16

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Chart No. 169 Case IX: Lost face in a business situation in China Jaruwan Krengvittaya-Greilich 1. Background: A German sales manager of a leading European chemicals group for the production of flavour enhancer visited repeatly his important customers in Being. He brouhgt for deepening of the interrelationship a professor to China, who is held in high repute for research and development of flavour enhancer. The professor gave a talk in front of more than thirty invited Chinese guests, who were customers and important representatives of the government. The interpreter for the German and Chinese language was a young Chinese lady, who was very good looking in her tight-fitting red silk dress. She studied both, languages and chemistry. After the performance the sales manager and the professor had some small talks in a lobby of the hotel. During the discussions the professor asked the young Chinese lady in an undertone in German language, if she would has a good mind to continue the conversation in his room. He was also ready to pay for her time. The young interpreter remained silently and went red. One of the Chinese guests, who stood near to them answered to the astonishment of the professor in German language. He said rather loudly that during his last stay more than twenty years ago in Karl-Marx-Stadt (at present again Chemnitz) it was impossible that a female interpreter could escort a guest in a room of a hotel. After this statement he turned to other guests and talked further in Chinese language, his emotions hardly suppressed. 2. The task: How should the German sales manager react after the professor and also himself lost their faces in front of his most important Chinese business partners?

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Chart No. 170 Case X: Problems of a representative in China (part a) Jaruwan Krengvittaya-Greilich 1. Background: A German important bank with international focuses expanded its activities also to the quickly growing market of Shanghai. A young female graduate in her late twenties was selected of the management-junior-worker program to set up the new branch in Shanghai, because she has as well a good bank know-how as intercultural ability of the East-Asian market. She studied as a guest-student in one of the most renowned universities of Japan, Kyoto University after her predicate examination in economics at a Swabian University of Applied Sciences. She was the second candidate since the best one refused his nomination because of the denial of his lifemate in going to the strange culture of China. The young bank employee was sent for her preparation in China to the branch in Singapore, where she could work one month in different departments. After that time she got a three-years contract to build up and run the branch in Shanghai. Problems cropped up from the beginning in China. She had difficulty communicating, because she could not speak any Mandarin language and did not know how to behave towards Chinese people, therefore she did not get any acceptance in her business. Moreover she did not get on with her work to set up the branch. She saw many harassments by the Chinese public authorities, e.g. unannounced searches of her office by the police force, nightly summons at the police station, delays and refusals of treatments by public authorities, etc. As longer she stood in China as awfuller her contact to the Chinese became, and it came along that she felt all alone.

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Chart No. 171 Case X: Problems of a representative in China (part b) Jaruwan Krengvittaya-Greilich She regretted more and more for her decision to go to Shanghai, where she felt very unhappy. If she would return to Germany she admitted to having her defeat in the Chinese business and she would surely bring to an end her bank career which was very successful up to now. 2. The task: What does the young female graduate have to make concerning to intercultural circumstances to find a satisfied solution in her dilemma situation? Should she continue her job to set up the branch in Shanghai or she should give up and return to Germany?

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Chart No. 172 China, Japan, Thailand and USA in management comparison Jaruwan Krengvittaya-Greilich 1. Leader acting as the head of a group (commitee) 2. Directive style (parents-child-relations, in trans-actional analysis terms) 3. Common values, empha-sis on harmony 4. Avoidance of confronta-tion 5. Communication top-down Leader acting as the decision maker and head of a group Directive style (strong, firm, determined) Often divergent values, individualism sometimes hindering cooperation Face-to-face confrontation common, emphasis on clarity Comunication primarily top-down 1. Leader acting as the head of a group 2. Directive style („good-father and child-rela-tions“) 3. Common values, coope-ration with harmony 4. Avoidance of confron-tation, emphasis on harmony 5. Communication top-down 1. Leader acting as a social facilitator and group member 2. Paternalistic style 3. Common values, facilita-ting cooperation 4. Avoidance of confronta-tion, sometimes leading to ambiguities; emphasis on harmony 5. Critical communication top-down and bottom-up; noncritical communi-cation often bottom-up

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Chart No. 173 China, Japan, Thailand and USA in management comparison Jaruwan Krengvittaya-Greilich 1. Mostly hired from school, fewer from other comapanies 2. Slow promotion – but regular salary increases 3. Lack of loyalty to both company and profession 4. Performance review usu-ally once a year 5. 5-year plan, otherwise short-term-targets 1. Mostly hired from school, but also from other companies 2. Mostly slow promotion – but regular salary in-creases 3. Loyalty to the superior and profession 4. Appraisal once a year common by the superior 5. Appraisal of long-term performance 1. Young people hired out of schools; hardly any mobility of people among companies 2. Slow promotion through the ranks 3. Loyalty to the company 4. Performance appraisal once or twice a year common 5. Appraisal of long-term performance 1. People hired out of schools and from other companies; frequent company changes 2. Rapid advancement high-ly desired and demand 3. Loyalty to the profession 4. Comprehensive perfor-mance evaluation, usu-ally once a year 5. Appraisal of short-term results

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Chart No. 174 China, Japan, Thailand and USA in management comparison Jaruwan Krengvittaya-Greilich 6. Promotion are supposed to be based on perfor-mance potential ability, and education . But fami-ly ties and with good relations with top 7. Training programs avai-able; state exam ad-ministrated for managers 8. Job security; virtually lifetime employment 6. Promotion based on long-term and individual performance; e.g.. on po-tential ability and edu-cation 7. Training and development consiered a long-term investment, but by the superior 8. Job security, common with „sanuk“ in company 6. Promotions based on long-term performance and other criteria 7. Training and develop-ment considered a long-term investment 8. Lifetime employment common in companies 6. Promotions based prima-rily on individual per-formance and often on relatively short-term per-formance 7. Training and develop-ment undertaken with hesitation (employee may switch to another firm) 8. Job insecurity prevailing

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Chart No. 175 Media and Communication: Media Situation in comparison Jaruwan Krengvittaya-Greilich Germany has 12,000 adver-tising agencies, from which 3,000 are registered in accor-dance with commercial law. In the 200 big agencies of GWA (Gesamtverband Werbe-agenturen) with a market share of about 80 % work 16,000 employees. The total German advertising budgets amount to 33 billions US$ = 1.1 % of the GDP (Gross domestic product). Japan has more than 4,000 advertising and PR-agencies, from which 90 % are pure advertising agents. There are processes of concentration to observe: the 15 top agencies are responsible for 60 % of the total advertising budgets, the two top agencies – Dentsu and Hakuhodo – for a third of the budgets. The Japanese advertising bud-gets run up to almost 30 billions US$ = 0.6 % of the GDP. China has more than 14,000 official registered advertising agencies, from the poster artist in his small apartment up to about 10 big international agencies. These international agencies are western predominated. Shanghai is the centre for advertising, where the agencies increased from 200 to 3,000 in the last ten years. The total Chinese advertising budgets amount to 16 billions US$ = 0.5 % of the GDP.

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Chart No. 176 Media and Communication: Advertising budgets in the Media Jaruwan Krengvittaya-Greilich in % 40 30 20 5 5 *) in % 21 **) 30 14 14 21 Newspapers Television Direct Marketing Magazines Others: Radio, cinema, poster etc. Total Budgets for ... 100 100 *) Without cinema, poster **) In the last years strongly rising

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Chart No. 177 Media and Communication: Advertising Media Television Jaruwan Krengvittaya-Greilich 2,500 ? • NTV *) • TBS • Fuji TV • Lelevi Asahi • Televi Tokyo 25 65 • RTL • ARD *) • ZDF *) • ARD III *) • SAT. 1 TV-Channels Market share of the top 5 channels in % Top 5 channels ... Average of daily TV-consumption *) Under public law (NTV = Nippon Hoso Kyokai) Channel 5 : Royal Thai Army, Channel 3 + 9 : The Mass Communication of Thailand, Channel 11: The Public Relation Department 7 95 • Channel 3 • Channel 5 • Channel 7 • Channel 9 • Channel 11 3 1/4 hours --- 1 1/3 hours

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Chart No. 178 Media and Communication: Ranking of some top Printing Media Jaruwan Krengvittaya-Greilich Bildzeitung (4.2 Mio. circulation) Westdeutsche Allgemeine Zeitung (1.1 Mio.) Süddeutsche Zeitung (0.4) Frankfurter Allgemeine Zeitung (0.4 Mio.) Spiegel (weekly, 1.1 Mio.) Focus (weekly, 0.8 Mio.)  A great variety of daily and weekly titles charac-terize the German printing market. Asahi Shimbun Yomiuri Shimbun Mainichi Shimbun Sankei Shimbun Nihon Keiza Shimbun  These five titles have a market share of 80 % of the daily 64 Mio. issues in Japan. People´s Daily Being (3 Mio. circulation) Xinmin Evening Post Shanghai (1.6 Mio.) Weekend Guangdong (1.3 Mio.) South China Morning Post, Hongkong (0.1 Mio.) Far Eastern Economic Review (0.1 Mio.)  All newspapers in China are under public law (owner: Communist Party of China).

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Chart No. 179 Media and Communication: Ranking of the top 10 Advertising Agencies Jaruwan Krengvittaya-Greilich Dentsu, Japan Hakuhodo, Japan Tokyu, Japan Daiko, Japan Asahi Tsushin-Sha, Japan Yomiuri Kokoku-Sha, Japan Daiichi Kikabu, Japan I & S, Japan Higashi Nihon Kikabu, Japan Mc Cann-Erickson, USA BBDO, USA Grey Global, USA Publicis, France Mc Cann-Erickson, USA Ogilvy Mather, GB Joung & Rubicam, GB Scholz & Friends, GB Springer & Jacoby, Germany BDB (Omnicom), USA J.W. Thompson, USA Lintas, USA Ogilvy & Mather, GB J.W. Thompson, USA Prakit & ECB, Thailand Mc Cann-Erickson, USA Leo Burnett, USA Dents, Y & R, Japan + GB Hakuhodo, Japan Saatchi & Saatchi, GB Euro RSCG, GB? *) The powerful Japanese advertising agencies with thousands of employees and with more than one thousands budgets at the same time do not know competition exclusion. About the half of the Japanese companies belong any way to the six huge "keiretsu".

Slide184: 

Chart No. 180 Media and Communication: General terms in the Japanese advertising Jaruwan Krengvittaya-Greilich Politeness, which is placed above the abstract truth Round and smooth take pleasant effects Atmosphere and mood have success Slogans, which catch on in a rich vocabulary (identical words with varying sense) Polite invitation in advertising "Let enjoy (or drink) Coca Cola" Know-it-all attitude Objects and persons with square demonstration (shikaku) take effect unpleasant Pushed offers for sale repel Pure translations out of other languages Aggressive appearance and dispara-ging manner "Drink Coca Cola"

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Chart No. 181 Media and Communication: Key terms in the Japanese advertising Jaruwan Krengvittaya-Greilich Mentsu = Saving face, dignity, respect, honour Characteristic features for daughters: beau- tiful and virtuous Characteristic features for sons: diligent and intelligent  Yasashii = soft, smooth, sensitive (e.g. for wives) Kawaii = cute, sweet (e.g. for babies and delicate art objects) Utsukushii = beautiful, aesthetic, pleasant life Suteki = elegant, attractive, pleasant life Hai fashon (high fashion) = exquisite taste Imeiji ga takai = great compli- ment in the sense of acknow- ledgement Dansei-rashi = masculine like vital and serious Makoto = honest, loyal, naive Yumei = famous (e.g. for men in their career, for women in their role in the family) Benri = useful, practical (e.g. useful in the enterprise, practical for objects which make easier in life)

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Chart No. 182 Media and Communication: Japanese target groups for advertising Jaruwan Krengvittaya-Greilich They manage the family income, from what three quarter is to pay for rent respectively mortgage loan and bringing up children. 60 % of them possess an own apartment or house. They have to calculate exactly, so as to buy reduced products in the basement of the department stores, what they do hidden for image reasons. As pensioners their budget become noticeable shorter of cash. Therefore the elder persons live secluded. Life ex-pectancy is on average 83 years. Fundamental other behaviour as elderly women over forty. They are spoiled as an only child, at least college qualifications, and mostly net income more than € 2,000 per month before they get married. They use their income as a single or later often as a childless wife for expensive brand-name articles and high travel expenses. Some of them let invite them for dinner almost every second day. They are called as "single nobility" (kizoku dokushin). They represent the beasts of burden of the nation, who spend until 14 hours in the place of work or in transportation. They get from the wife often only 250 € pocket money per month, what stands for a rather small budget. They do not have purchasing power or time or interest for shopping. Advertising target on the men only for: Magazines, alcoholic drinks, cigarettes, and personal accessories.

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Chart No. 183 Media and Communication: Potential mistakes in promotion actions in Japan Jaruwan Krengvittaya-Greilich  In the communication process should not brought into focus what a German person see as "German" in the modern image one has of oneself, like beach life on Sylt island, party style on ski circus, fashion of ESCADA etc.  It depends only, what the Japanese imagine for "German", and this are the old and some new stereo types, e.g.: • Neuschwanstein Castle • leather trousers • platter of cold cuts • foamy beer but also • Mercedes Benz • BMW and Porsche

Slide188: 

Chart No. 184 Jaruwan Krengvittaya-Greilich Asia is a job for the boss!  Top-management should lead the process  Contacts should usually be made with Board Executives  Contracts are drafted in foreign countries  Do not ask for risks, but ask what risks are involved in non- engagement Rules for business success in South East Asia

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Chart No. 185 Jaruwan Krengvittaya-Greilich Counting on “Quick Money” is a deadly mistake!  By starting with bad preparation and  Without clear vision  Will lead to disaster!  Each region requires a different strategy. Rules for business success in South East Asia

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Chart No. 186 Jaruwan Krengvittaya-Greilich Invest in the latest technology!  Leave at home shelf warmers  Asia is developing very quickly:  Yesterday without telephone, today already with the mobile! Rules for business success in South East Asia

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Chart No. 187 Jaruwan Krengvittaya-Greilich Take the business to the foreign country!  You can only export in the initial phase  In many branches production should take place in foreign countries  Asians are starting to prefer Asian products Rules for business success in South East Asia

Slide192: 

Chart No. 188 Rules for business success in South East Asia Jaruwan Krengvittaya-Greilich Better no partner than the wrong partner!  His strengths have to compensate your weaknesses  Joint-ventures only serve a purpose short term  Do not rely on contracts  Different values demand flexibility and tolerance, but do not show self-denial

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Chart No. 189 Appendix I Useful addresses for Thai relations Jaruwan Krengvittaya-Greilich 1. Addresses in Germany  The Royal Thai Embassy in Germany Lepsiusstraße 64 - 66 12163 Berlin  Royal Thai Honorary Consulate-General An der Alster 85 20099 Hamburg  Royal Thai Honorary Consulate-General Meglingerstraße 19 81477 München  Royal Thai Honorary Consulate Huberstraße 4 70174 Stuttgart  GTZ Gesellschaft für Technische Zusammenarbeit GmbH 65726 Eschborn Dag-Hammarskjöld-Weg 1–5

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Chart No. 190 Appendix II Useful addresses for Thai relations Jaruwan Krengvittaya-Greilich 2. Addresses in Thailand  Embassy of the Federal Republic of Germany 9 South Sathorn Road, Bangkok 10500  GTZ-Project Administration Service 193/63 Lake Ratchda Building (16th Floor) New Ratchadapisek Road, Bangkok 10110  Thai – German Institute (TGI) Ministry of Industry, Rama VI Road, Phayathai, Bangkok 10400  Asian Institute of Technology (AIT) G.P.O. Box 2754, Bangkok 10501  Advisory Assistance to Industry for Export Promotion (ESCAP) United Nation Building, Ratchadamnoen Nok Avenue, Bangkok 10200  National Economics and Social Development Board 962 Krung Kasem Road, Bangkok 10100  Ministry of University Affairs 328 Sri-Ayudhaya Road, Bangkok 10400

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Chart No. 191 Appendix III Useful addresses for Japanese relations Jaruwan Krengvittaya-Greilich 1. Addresses in Germany  Japanese Embassy in Germany Hiroschima Straße 6 10785 Berlin  Japanese Consulate-General in Düsseldorf, Frankfurt, Hamburg and Munich  Bundesstelle für Außenhandelsinformationen Postfach 84 5000 Köln  Deutsch-Japanisches Wirtschaftsförderungsbüro Oststraße 110 40210 Düsseldorf  Institut für Asienkunde Rothenbaumchaussee 23 20148 Hamburg  Ostasiatischer Verein Neuer Jungfernstieg 21 20354 Hamburg

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Chart No. 192 Appendix IV Useful addresses for Japanese relations Jaruwan Krengvittaya-Greilich 2. Addresses in Japan  Embassy of the Federal Republic of Germany Tokyo 106, Minato-Ku, 4 - 5 - 10 Minami Azabu  Deutsche Industrie- und Handelskammer in Japan (Zainichi Doitsu Shoko Kaigisho) Tokyo, Chiyoda-Ku, 2 - 14 - 3 Nagata-Cho, Akasaka Tokyu Bldg. 7th Floor and Osaka, Nakanoshima, 6 - 2 - 27, Kita-Ku  Jetro - Japan External Trade Organization (Nihon Boeki Shinkokei) Tokyo 105, Minato-Ku, 2 - 2 - 5 Toranomon  MITI - Ministry for International Trade and Industry (Tsusansho) Tokyo 100, Chiyoda-Ku, 1 - 3 - 1 Kasumigaseki  Nikkei´s Address Book of Japanese Companies in Europe Business Magazine Nihion Keizai Shimbun, Tokyo 100 - 66, Chiyoda-Ku, Ohtemachi 1 - 9 - 5  Journal of Japanese Trade & Industry Publicity, Inc., Tokyo 105, Minato-Ku, 2 - 8 Toranomon 1 - Chome

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Chart No. 193 Appendix V Useful addresses for Chinese relations Jaruwan Krengvittaya-Greilich 1. Addresses in Germany  Chinese Embassy in Germany Heinrich-Mann-Straße 8 13156 Berlin  Chinese Consulate-General in Hamburg and Munich  Bundesstelle für Außenhandelsinformationen Agrippinastraße 87-93 50676 Köln  China Council for the Promotion of International Trade (CCPIT) Düsseldorfer Straße 14 60329 Frankfurt  Deutsch-chinesische Wirtschaftsvereinigung Unter Sachsenhausen 10-26 50667 Köln  Deutsches Institut für Entwicklungspolitik (DIE) Hallerstraße 3 10772 Berlin

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Chart No. 194 Appendix VI Useful addresses for Chinese relations Jaruwan Krengvittaya-Greilich 2. Addresses in China  Embassy of the Federal Republic of Germany 5 Dongzhimenwai dajie, Chaoyang District , Beijing 100600  China Council for the Promotion of International Trade 1 Fuxingmenwai dajie, Bejing 100860  Delegation of German Industry and Commerce 5 F Shainghai Bund Center, 555 Zhongshan Dong Road, Shanghai 200010  German Centre for Industry and Trade 1233 Siping Iu, Shanghai 200092  Ministry of Foreign Trade and Economic Cooperation (MOFTEC) 2 Dong Changan jie, Beijing 100731  People‘s Insurance Company of China 410 Fuchengmennei dajie, Beijing 100034  China National Foreign Trade Advertising Association (CNFTAA) 12 Jianguomenwai dajie, Beijing 100022