Academic journal article Journal of Business and Behavior Sciences

Philosophy of Sufficiency Economy and Business Sustainability: A Framework for Operational Implications

Academic journal article Journal of Business and Behavior Sciences

Philosophy of Sufficiency Economy and Business Sustainability: A Framework for Operational Implications

Article excerpt

INTRODUCTION

The speed of change is a challenge for every business organization today. Economic meltdown, climate uncertainties and social upheaval challenge companies to use resources wisely in order to create competitive advantage today and into the future. Successful business cases show that business longevity is often enhanced by shifting from a sole focus on maximizing shareholder profits to include social and environmental considerations with a broader group of stakeholders, including consumers, employees, suppliers, and local community (Kotier et al. 2010). Balancing stakeholder needs and benefits with shareholder profits is a highly relevant challenge for corporations seeking to create shareholder value in the long run.

Today there is widespread agreement that the philosophy of sufficiency economy (PSE), as formulated by His Majesty the King of Thailand, is an approach to sustainable development. The links between PSE and sustainability have been increasingly studied and seen a wide range of inteipretation and application. Despite this variety of research, there are several limitations to appropriately explaining and measuring the relationship between PSE theory and sustainability practice. Previous studies in sufficiency economy simply justified that it has a direct effect on an organization's performance (e.g., Isarangkun & Pootrakool 2002, Kantabura & Sievenhuner 2011, Pruetipibultham 2010, Sasin Graduate Institute 2010, Wattanasupachoke 2009). However, these studies did not frame the philosophy within a business context. There is still no clarity on how PSE and the practice of "sufficiency" can be a critical pathway for business sustainability.

This study attempts to advance understanding of the complex relationship between PSE and business sustainability. PSE can be viewed as an orientation for practices within organizations. The philosophy posits three elements necessary for the practice of sufficiency: (1) moderation, (2) reasonableness, and (3) selfimmunity. In addition, two conditions are required: (1) knowledge and (2) morality. This is also generally known as the "three rings and two conditions" model. According to resource-based view theory, a firm's superior performance depends on possessing ideal capabilities (Barney 1991, Ghemawat & Costa 1993, Lubatkin et al. 2006). Therefore, if we take the three rings and two conditions as supporting resources, a firm's practices could not lead to businesses sustainability without appropriate philosophical elements and conditions in place.

As a critical source of long-term business success, companies face the paradox of using their resources for near-term operations while simultaneously exploring new territory and being adaptable to changes in the future environment (Birkinshaw & Gibson 2004, Duncan 1976, Gibson & Birkinshaw 2004, March 1991, Tushman & O'Reilly 1996). The study proposes "organizational ambidexterity"-the capability of simultaneously exploiting existing competencies and exploring opportunities (Levinthal & March 1993, March 1991, O'Reilly & Tushman 2004, Raisch & Birkinshaw 2008, Raisch et al. 2009)-as a required capability for business sustainability (Han 2007, Han & Celly 2008). Hence, the study proposes that embedding PSE into organizations will increase organizational ambidexterity and lead to business sustainability. Organizational ambidexterity is proposed as the capability that mediates the relationship.

In addition, although operational definitions for assessing PSE outcomes have been introduced, they are not correlated with the specific elements (moderation, reasonableness, self immunity) and conditions (knowledge, morality) of PSE. While business sustainability combines economic, social, and environmental pillars (Avery 2005, Brown et al. 2006, Robinson et al. 2006), previous literatures on PSE focused only on the economic (Kantabura & Sievenhuner 2011, Wattanasupachoke 2009). …

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