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Home Articles Cultural Challenges for International Companies in Southeast Asia
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Cultural Challenges for International Companies in Southeast Asia

April 17, 2018

Southeast Asia is an exciting destination for tourists and somewhat of a haven for startups or businesses looking to get ahead with their product or service. In the case of travel, Thailand is particularly popular with pristine islands, sublime food and cultured experiences offering endless encounters. However, these same cultural experiences are differences which are often a challenge to navigate for international companies in Southeast Asia.


In this sense, awareness is often key to establishing healthy business relations in Southeast Asia and the following introduction should outline some of the most important aspects in this process.

Recruitment and Why International Businesses Choose Southeast Asia

In case you may be asking yourself, the popularity of Southeast Asia for startups is largely attributed to funding opportunities. That is to say, venture capitalists are often enticed to this region by various government initiatives and then compelled to stay due to some very favorable business conditions. However, recruitment is also an exciting prospect in this region; such is the appealing nature of Southeast Asia to top talent all over the world.


Golden Gate Ventures and Jungles Ventures are merely examples of these VC funds and beyond this funding,Southeast Asia is extremely cost-effective for a business yearning for a better cash-flow. Furthermore, executive recruiters have little trouble finding top talent and the lifestyle is luxurious in comparison to other locations. Needless to say, this last point is why tourists are often attracted to the region but then these benefits are also easily accessed by business owners and employees.

Complications and Challenges with Culture in Southeast Asia

At the same time, while the exciting culture in Bangkok or Ho Chi Minh is always appreciated by the intrepid traveler, these cultural differences are often obstacles for international companies. In many instances, subtle contrasts go unnoticed and this alone can pose unnecessary complications. Here are just a few of the key cultural differences which can unexpectedly impact international companies in Southeast Asia.

Gestures in Southeast Asia

Needless to say, subtle gestures are often unnoticed by the traveler but when it comes to business, these gestures are rather important. In much the same way, there are also distinct contrasts between behavior in Southeast Asia and the Western World from which many international companies arrive to do business. For example, smiling is considered a sign of approval in one and a sign of misunderstanding or embarrassment in the other. Furthermore, while hand movements may seem casual or unimportant to the visitor, hand gestures are usually a sign of anger in Southeast Asia.
Indeed, none of these oversights are intended or malicious but they are certainly issues with which international businesses need to become accustomed before arriving in the region.

Approach to Hierarchy and Mentality

Although hierarchy and authority are well established in this region, Southeast Asia is still a largely progressive place for international businesses. As you might expect, strong emphasis is placed on technology and innovation while adapting to change is also embraced for the most part.
To be even more specific, the view organizations or identity in Southeast Asia is usually that of a group mentality and recruitment will always take this into account. In this respect, the group welfare is far more important than any individual and this is often ignored in a western world where standing out or getting ahead of the pack is quite a common mentality.

Decisions and Perception of employees.

While the hierarchy is respectful of employees, the decision-making process for a business in Southeast Asia is clear. While idea generation is certainly not restricted, top management makes decisions and the happiness of employees. is most often nurtured by financial reward and a safe working environment.

Relationships and Value

In Southeast Asia, emotion is viewed as a distraction in the business world. However, personal or business relationships are still valued over anything monetary and this is usually the focus when meeting with an international company. Interestingly, recruitment in smaller businesses is most often based on the relationship between hierarchy and employees. That is to say, regardless of performance, employees. are often hired or dismissed in accordance with the closeness or state of this relationship.
As you should know, this is merely an introduction to cultural differences which can impact international companies in Southeast Asia. While certain contrasts may seem unnecessary or even prove frustrating, recruitment is favorable and the above differences are a small sacrifice to avail of the benefits to doing business in the region. Furthermore, this patient and graceful way of business is surely more admirable than the approach which is often rushed in the western world and at the end of the day, cultural differences exist and we should seek to respect these customs before trying to get ahead in business.