Innovative Business Ideas

The Nation: Thai Business Families Proactively Managing Change

18 September 2000

Proactive

Editor: In 2004, Edwin Sim established Human Capital Alliance, Thailand’s  Premier Executive Search & Senior Corporate Advisory Firm. Between 1997-2003, Edwin Sim was Managing Partner of Korn Ferry Thailand.  This article was first published in the Nation in September 2000.

K I Woo speaks to several leading management consultants about the changing management structures of Thai corporations.

A recent report by a major consulting firm, widely disseminated throughout the region, has been interpreted by many observers as indicating that many large overseas Chinese family businesses in the region, including those in Thailand , are doomed to the scrap heap.

The study purportedly inferred that western firms will quickly supplant these family-owned firms in the new economy because their existing hierarchal structures can’t embrace the Internet e-commerce world.

A main argument against the continued prominence of family dominated companies is their reluctance to surrender management control by hiring experienced IT-savvy professional managers from outside of their extended families.

Over the past several months, The Nation has talked with many family company officials on how they plan to compete and succeed in the laser-paced world of the e-commerce revolution. Several management consultants and head-hunters have also articulated what their clients have been telling them.

Without a doubt, Thai family owned companies aren’t burying their heads in the sand. They wouldn’t have achieved their current size and economic dominance if they were inclined to sit idly by and allow outsiders to seize their hard-earned market positions without a fight.

Edwin Sim, CEO of head-hunter Korn Ferry Thailand, said many of his clients, which are Thai and regional family owned businesses listed on the New York Stock Exchange, have repeatedly asked him to find experienced executives who can help in the new Internet e-commerce era. “Every family-company owner has told me that their company won’t thrive in the New Economy without top class professional managers who can execute the company’s new Internet e-commerce strategy,” he said.

Unlike in the past, Sim said most major shareholders of sizeable family owned companies know that their companies will require huge inputs from non-family outside managers. “A major Thai company owner told me that he wouldn’t be surprised if foreign managers dominate the next generation of Thai company managers,” he said.

At the same time however, the e-commerce economy’s sudden onslaught, has made Thai company owners aware that this country’s education system has failed miserably in producing enough talent to manage and run companies in the New Economy.

Bank of Asia CEO Chulakorn Singhakowin suggests that in the short run Thai companies will have to import experienced overseas talent to cover the shortfall. “This country’s restructuring companies are all facing the same dilemma, finding IT-savvy managers to lead them into the new millennium,” he said.

He suggested that this country’s leaders must amend restrictive immigration laws so that companies can recruit engineers and IT professionals from countries such as China and India , which annually graduate thousands of IT professionals.

Chulakorn, who is also this year’s Thai Bankers Association chairman said that Thai companies in all industrial sectors now realise that the new global competitive environment mandates an immediate need for this tier of much-needed managerial talent.

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