The Nation: Foreign buyers keen to retain Thai identity
06 September 1999
Editor: In 2004, Edwin Sim established Human Capital Alliance, Thailand’s Premier Executive Search & Recruitment Firm. Between 1997-2003, Edwin Sim was Managing Partner of Korn Ferry Thailand. This article was first published in the Nation in September 1999.
Recent takeovers of Thai corporations by huge foreign multinationals have created a whole new landscape for the country’s professional business managers. K I Woo explores the impact of restructuring on management.
Dutch retailer Royal Ahold has acquired Central Department Store’s supermarket chain and renamed it Tops’ Supermarkets. France’s Casino took over Big C and the UK ’s Tesco Plc tool over CP Group’s Lotus Superstores.
Many Foreign strategic shareholders also acquired Thai companies in the banking, industrial and telecommunications sectors.
Despite fears that foreign companies would permanently replace Thai managers with expats and completely revolutionalise the country’s corporate culture, a leading corporate headhunter says reality is proving otherwise.
Edwin Sim, country manager for Korn Ferry Thailand , said that most of his clients who had acquired an interest in or control of local companies during the current recession had expressed clear-cut, long-term plans to localize their operations.
“Most of our strategic-investor clients say that Thailand is Thailand . At the end of the day, they want to localize by having Thai nationals running and operating the businesses,” he said.
Several of Sim’s takeover clients had told him form the onset of their planned acquisitions that they had tandem localization succession plans in place. The usual practice is for multinationals to bring in restructuring management specialists to transform the business model and operating platform immediately after the acquisition.
These foreign specialists had mandates to bring the Thai operations close to or up to international standards, Sim said.
They would usually be given two or three years to bring the company up to standard and prepare it for a local successor. “These managers operate in all the world’s major regions so they know what the kind of operation the company ultimately wants.” he said.
Several of his multinational takeover clients had parachuted in restructuring management specialists who had been in comparable situations.
“They said that existing local managers in most countries often had difficulty in making some of the tough restructuring decisions,” he said. “Rationalizing and streamlining local subsidiaries will be part-and-parcel of the new competitive paradigm.”
Competent Thai management professionals affected by restructuring should not fear the future, Sim said.
“Businesses and conditions change and many laid-off managers will have the expertise to go elsewhere into other industries,” he said.
Sim is optimistic about the cross industry employability of Thai managers. He said local and foreign commercial banks were hunting furiously for consumer-banking product managers who could lead them into selling mortgages, insurance and other related products.
“The opening up of the financial services market offers vast opportunities for people who understand consumers,” he said. Thai financial institutions were now hiring consumer product managers from many industries. “Half of Citibank’s people here are from Proctor and Gamble,” he said.
During the recent recession, many multinationals had taken the opportunity to buy into previously restricted or semi-closed Thai industries. These global players would invariably want to ensure that their new subsidiaries operated at world class standards.
Thai managers, particularly foreign-trained managers who spent their early years abroad, have been most sought after by the multinationals.