E-Business in Thailand: Social and Culture Issues

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Authors Index

Issues and Trends of IT Management in Contemporary Organizations 443

E-Business in Thailand:
Social and Culture Issues
S. Jantavongso and K. Y. R. Li
School of Business Systems and School of Multimedia Systems, Monash University, Australia, Raymond.Li@monash.edu.au

ABSTRACT
Surveys of literature indicate that, in general, there are seven key factors that contribute to a successful e-business. They are management,
IT infrastructure, design, content, e-business systems, marketing and customer service. Businesses that want to be successful in the new
economy must undertake careful planning in these areas before launching their e-business endeavours. However, to date there has been
no examination of the social and cultural issues associated with e-business (Singh, 1998). The purpose of this paper is to highlight the
need to include these two factors for businesses operating in countries such as Thailand that have different cultural and social frameworks
to the Western world. A survey of Thai business executives was conducted. The survey findings confirm that culture and social issues do
have significant impacts on the adoption and the success of e-business in Thailand. Twenty social and cultural factors are identified and
examined. Organization infrastructure and English literacy are reported to be the major internal and external barriers respectively to the
adoption of e-business in Thailand. This research provides the foundation for future research to develop a holistic framework to guide
businesses in Thailand, or other similar countries, on how to adopt e-business that produces positive outcomes.

PREAMBLE veys indicate that businesses that succeed in this new economy under-
take careful planning in the following seven key factors:
Over the past few years the widespread use of the Internet has
a) Management commitment: Having a clear focus on what the
lead to tremendous expansion in electronic business (e-business) world-
companies hope to achieve will set the path to developing a
wide and especially in South East Asian countries (Input, 1999). E-
successful e-business. The tough task for management is to align
business over the Internet is a new, fast-growing way of conducting
business strategies, processes, and applications to the new busi-
business. Though only a few years old, it is rapidly developing into a
ness platform.
major economic activity (Legard, 2000). It can link companies within
b) IT infrastructure availability: Global Electronic Business depends
the global market such that geographical boundaries and location are
upon a modern, seamless, global telecommunications network and
no longer hindrances to business transactions.
upon the computers and information appliances that connect to it
E-business, in this study, is defined as any form of commercial
(National Computer Board, 2001). Genuine market opening will lead
transaction involving goods and services of any kind, conducted over
to increased competition, improved telecommunications infrastruc-
a computer network (Evans, 2000). It includes the buying and selling
tures, more customer choice, lower prices and increased and im-
of products and services over the Internet; services required for online
proved services.
transactions to be carried out; and services that facilitate the dissemi-
c) Design of resources on the Internet: The usability of WebPages
nation of information over the Internet and the online interaction of
is a key factor in determining the success of e-business. Visual
buyers and sellers. This requires the support of the delivery of goods
appeal is essential in the online world. Dedicated graphic design-
and services.
ers replace technologists when creating e-business sites (Hayes,
Thailand, which has just entered the trial and error stage of its
2000). The design & development stage requires ensuring pro-
development of e-business activities, was selected as the subject for
fessional design, seamless navigation, and consistent branding.
this study (Business in Thailand, 1998). Thailand has a good mixture
At this stage, the emphasis should primarily be on clear naviga-
of foreign and local investors, a high demand for and supply of imports
tion, fast response time, familiar terminology, and relevant con-
and exports, and an existing strong business environment. It has its
tent - the four most important factors that affect web brand
own culture and is a unique society. As in other countries in Asia, e-
loyalty (Vora, 2000).
business activities in Thailand are growing at a rapid rate.
d) Web Content: A Web site’s informational content provides its rich-
ness and attracts its viewers. Finding, creating, and maintaining this
THE RESEARCH METHODOLOGY content forms a major portion of any e-business project (Hayes,
A survey was conducted with business executives in Thailand. 2000).
The majority of the surveyed companies were traditional companies e) e-business systems: The ultimate aim of e-business is to enable cus-
(non-technology or the Internet) in key industries such as manufactur- tomers to serve themselves and to complete the entire transaction,
ing, retail, wholesale, financial services, travel, government, informa- from start to finish, without having to go offline (O’Brien, 2000).
tion and communications. It was a qualitative survey, which included This requires building trust, providing secure transactions and fulfill-
20 in-depth interviews conducted in person with senior executives and ing customer demand.
20 conducted over the telephone. The objective of the survey was to f) Marketing: Without effective marketing, the most advanced and
identify issues that were considered by Thai Business to be important technically superb e-business site will only be a cash drain (Offshore
and the barriers to the adoption of e-business in the country. Press, 2000). Marketing a site is a combination of traditional mar-
keting and some marketing methods that are unique to the new
SUCCESSFUL E-BUSINESS REQUIRES medium.
g) Customer service: The heart of e-business is interconnectivity and
CAREFUL PLANNING IN SEVEN KEY interaction. The ability to reach more people while sharing informa-
FACTORS tion of increasing richness creates new opportunities for value cre-
ation in areas such as marketing, customer service, and operations.
E-business is the complex fusion of business processes, enterprise
However, equal access to information eliminates long-held advan-
applications, emerging technologies, and organizational structures nec-
tages in business relationships and drives pricing to commodity lev-
essary to create a high-performance business model. Literature sur-
els.
Authors Index

444 Issues and Trends of IT Management in Contemporary Organizations

E-BUSINESS IN THAILAND Figure 3: Companies surveyed industries


E-business is not something new to Thai businesses, as it has
existed for some decades (Koanantakool, 2000). Earlier forms of e-
business were conducted though closed networks, for example, internal W h oles ale
networks (Intranet), mainly in the form of electronic data interchange Tr a v e l 10 %
10 % IT
(EDI) and electronic fund transfer (EFT). 40 %
With rapid developments in the Internet, recent attention has Inf or ma tion
been focused on e-business conducted over the Internet. In response 10 %
Go v e rn me nt
to this, many Thai companies have started exploring the various e- 10 % Fin an c ial Ed uc atio n
business methodologies and attempting to identify issues associated 10 % 10 %
with the adoption of e-business in the organization. Some are working
collaboratively to develop a framework for e-business implementation

THE HYPOTHESIS
The seven factors identified are derived from findings based on was still in its initial stages. Most believed that e-business was here to
businesses in western countries. Thailand, like other countries in Asia, stay and will not be a passing fad. They agree that e-business would
has its own unique education, culture and social frameworks. There- increase competition.
fore, education, social and culture issues should have a strong influence The survey showed that approximately 56% of the organizations
on the adoption of e-business and e-business activities in Thailand. had short and long-term plans for e-business. The remainder had no
immediate plans to introduce e-business activities. There is currently
no support from the Thai government for e-business activities to the
THE SURVEY SAMPLE private sector.
Thai businesses were randomly selected and 40 companies finally According to the survey, the main reasons for Thai organizations
agreed to participate. More than half of the survey companies were to start e-business initiatives were market expansion (33.3%); gaining
small and medium-sized enterprises (SMEs). Around 20% can be con- advantage over competitors (16.7%); and real-time response to meet
sidered to be large firms (See Figure 1). About 50% had IT staff of less customer demand (11.1%).
than 10 (See Figure 2).
The largest proportion of the companies surveyed were in the
Information Technology (IT) industry (40 %); the remaining 60% SPECIFIC FINDINGS
were divided equally among the finance, education, wholesale, travel, a) Issues Associated with e-business in Thailand. The survey revealed
government, and information provider sectors (See Figure 3). that education and culture were the main issues for e-business activi-
ties in Thailand. Thai executives believed that, sooner or later, e-
GENERAL FINDINGS Table 1: E-business initiatives reasons
All senior executives agreed with the definition of e-business on
Page 1. All executives interviewed agreed that e-business in Thailand
Market expansion - Advertisement 33.3%

Competition 16.7%
Figure 1: Number of employees
Real-time response to meet the customer demand 11.1%

501 over Company’s image 5.6%

Cost efficiency 5.6%


301 to 500

101 to 300 Increased profitability 5.6%

51 to 100
Information fulfillment 5.6%

1 to 50 Internet requirement from end users 5.6%

Catching up with technology 5.6%


0% 10% 20% 30% 40% 50%
Common Practice 5.6%

Figure 2: Number of IT professionals


Table 2: E-business issues

On Call
Education & Culture 28.57%

Unspecified Banking Practice including secure transaction 23.81%

20 over Legal and regulations 19.05%

11 to 20 Accessibility to Computer & regional differences 9.52%

1 to 10 Telecommunication & Technology 9.52%

0% 10% 20% 30% 40% 50% Delivery Systems 4.76%

Government Support 4.76%


Authors Index

Issues and Trends of IT Management in Contemporary Organizations 445

business technology in Thailand would be able to catch up with the companies (10.31%). The use of particular fonts, colors and diagrams
rest of the world. They also expressed a strong desire for further in WebPage presentation can express the national and business culture
research in education and culture in relation to e-business activities. of an organization. Graphics such as charts, diagrams and illustrations
b) The Impact of Cultural Issues on e-business Activities and Applica- need the support of text and color. The letters of the alphabet and
tions. About 67% of Thai executives agreed that cultural issues had numbers can be presented using various typeface styles. Each typeface
an impact on running e-business activities. As businesses went online, style is designed to cater for different requirements. Some are created
cross-cultural issues became more important. for legibility so as to be easy on the eyes. Some styles are created to
c) Cultural Factors that effect e-business Activities. Twenty factors make use of space efficiently. Colors have the power and ability to
were identified and the survey findings revealed that business culture influence emotions, perceptions and moods. They can alter behavior
and WebPage presentation were considered by the Thai executives and trigger different emotional responses.
to be the main factors determining the success of Thai e-business Below are examples of how fonts, colors and diagrams were used
companies. They agreed that e-business applications must be devel- to illustrate the national and business culture in e-business WebPage
oped in such a way as to incorporate cultural factors. applications. Various WebPage presentations from the Makro Asia
d) e-business Language Support. Surprisingly, English was the main lan- company chain, (which operates in various) different countries were
guage of e-business WebPages in Thailand. used. Makro Asia is a distributor for food and non-food products in the
e) e-business Security. As expected, the survey revealed that most of the Asian region.
Thai executives claimed that their e-business activities were secure.
However, of these, about 37% are not sure how security is achieved.
Figure 4: Thai local firms – makro (Source: http://
IMPACT OF CULTURAL FACTORS – www.siammakro.co.th)
FONTS, COLOR AND DIAGRAMS
The survey findings revealed that WebPage presentation was one
of the main factors in determining the success of Thai e-business

Table 3: Culture factors


Business Culture (After Sale Services, Warranty, Refund Policy,
Information Secrecy) 12.37%

WebPages Presentation (Color, Format, Layout, Font) 10.31%

Price (Including Credit Card & Delivery Charge) 9.28%

Payment (Including Credit Card, Banking systems) 6.19%

Response Time 6.19%

Trust & Sincerity 6.19%

WebPages Contents 6.19% Figure 5: makro in Taiwan (Source: http://www.makrotw.com.tw)


Government Support 5.15%

Security 5.15%
Company’s Image (Including Creditability, Location, Product
Brand) 4.12%

Convenience 4.12%

Education 4.12%

Product Category (Variety) 4.12%

Cross Culture 3.09%

Delivery 3.09%

Languages 3.09%

Laws (Including Copyright) 3.09%

Technological Apprehension 2.06% Figure 4 is a screen capture of the “Siam makro” retailer WebPage
application. It is designed for local Thai consumers using Thai cultural
Fashion 1.03% and social contexts. The lady performs the traditional Thai greeting
WebPages Address (Easy to remember) 1.03% Wai. Wai is a way of saying hello and also of showing thanks or respect
to people. In this case it means “Welcome”. The smile is used to
express friendliness. The background color is used to create an atmo-
sphere of warmth. Text fonts used are in the Thai language.
Table 4: Language used
In contrast, the WebPages designed by the same company for
English 47.06% Taiwan, the Philippines and Indonesia differ significantly from those
of Thailand. In this case, there are clearly cultural issues involved.
Thai 29.41% Although different fonts, color and diagrams are used, these WebPages
Others: Malaysian, Chinese, Swedish, Norwegian, Danish 29.41% still identify the “makro” company chain.
Authors Index

446 Issues and Trends of IT Management in Contemporary Organizations

Figure 6: makro in the Philippines (Source: http:// CONCLUSION


www.makro.com.ph) e-business has emerged as an important strategic tool that can
drive down operational costs and open the door to new business oppor-
tunities. This survey reveals that one of the biggest challenges to the
development of e-business is that there is a strong need for a study of
the social and cultural issues involved in the globalized market. Busi-
nesses are at present approaching e-business primarily as an economic,
technological, legal and regulatory issue. There is at present no exami-
nation of the social and cultural issues associated with electronic busi-
ness. The business and technology focus needs to be complemented by
greater attention to the social and cultural factors associated with the
use of electronic business.

REFERENCES
Business in Thailand (1999) On A Slow Boat to E-Business (Welcome to
Business in Thailand Magazine) Available: http://
www.businessinthailandmag.com/archive/july99/4_editor.html (Ac-
cessed: 2000, August 21).
Figure 7: Figure 7: makro in Indonesia (http://www.makro.co.id) Evans C (2000) E-Strategy: A Framework for e-business (WORLD
CAPITAL FORUM) Available: http://www.worldcapitalforum.com/
esframforeb.html (Accessed: 2001, January 21)
Hayes I (2000, May 8 – last update) Seven Steps to e-business Success
(Software Magazine) Available: http://www.softwaremag.com/archive/
2000feb/SevenSteps.html (Accessed: 2001, October 15).
Input (1999, August) Buyers’ Guide to Electronic Commerce in South
Asia (Input) Available: http://www.input.com/buyers_guide/pc19s/
pc19s_main.cfm (Accessed: 2001, October 10)
Koanantakool T (2000) Electronic Commerce Development in Thai-
land {Online} Available: http://www.nectec.or.th/users/htk/e-com-
merce/intro.html (Accessed: 2001, December 17).
Legard D (2000, February 20) Outlook strong for Asia-Pacific E-Com-
merce (IDG News Service) Available: http://www.security-
informer.com/english/crd_data_439563.html (Accessed: 2001, Sep-
tember 17)
National Computer Board (Mauritius) (2001, January 17 – last update)
Electronic Commerce (Mauritius E-Commerce Hub) Available: http:/
THE MAIN DIFFICULTIES ENCOUNTERED /ncb.intnet.mu/ncb/ecom/lmbarriers.htm (Accessed: 2001, June 22)
O’Brien T (2000) E-Commerce Handbook Melbourne: Tri Obi Produc-
IN PLANNING FOR E-BUSINESS tions Pty Ltd
INITIATIVES Offshore Press (2000) Global e-Commerce Marketing (Offshore Press)
Available: http://www.rpifs.com/ecommerce/ecommarketing.htm
Interestingly, the main difficulties in planning for e-business ini-
(Accessed: 2001, October 15).
tiatives came from internal factors (45%) due to organizational infra-
Singh S (1998) Electronic Commerce in the APEC Region Melbourne:
structure (20% of overall). Most of the companies surveyed operated
CIRCIT Ltd
as family businesses in which the owner was the decision-maker for the
Vora P (2000) Designing Usable E-Commerce Sites (Optavia Corpora-
organization. Most Thai executives did not want things to be changed
tion) Available: http://www.optavia.com/events/aus0600e.htm (Ac-
if they were currently operating effectively.
cessed: 2001, October 15).
Of the external factors, education and English literacy played an
important role (15% of total). English and education, especially in
computer literacy, were the main concern of Thai executives.

Table 5: E-business initiatives difficulties


Internal Factors 45%
Organization infrastructure 20%
Employees 10%
WebPages development 10%
Capital Investment 5%
External Factors 35%
Education - including English literacy 15%
Communication Infrastructure - including online payment 10%
Customer 10%
No difficulties 20%

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