Sufficiency economy 'has been with us for some time, but piecemeal'

Nophakhun Limsamarnphun

Is the sufficiency-economy philosophy anti-globalisation or anti-profit maximisation?

For Pipat Yodprudtikan, director of the Thaipat Institute, a non-profit organisation working on the sufficiency-economy philosophy with a group of 13 large Thai and multinational firms, the answer is an unequivocal "no".

"In fact, we must start from the premise that the sufficiency-economy philosophy is not new, because virtually all businesses have been practising some elements of it for quite some time," he told a seminar on "The Sufficiency Economy: A Path to Sustainable Growth" held by CNBC yesterday.

"For instance, the concepts of EVA [economic value added], balanced score-card, risk management, scenario planning and KPI [key performance indicator] have been around in modern management for years," he said.

"Virtually every firm has been using one or two or more of these concepts to improve performance lately, but these ideas are being adopted piece by piece. It's not a holistic approach like the sufficiency-economy philosophy."

In agriculture, His Majesty the King introduced a "new theory" for Thai farmers by recommending they divide their land into four parts for integrated farming and sustainable development.

"Hence, the sufficiency-economy philosophy is already prominent in agriculture, but not yet in business as far as modern management is concerned," Pipat said.

"For instance, MBA courses are mostly taught departmentally, with an emphasis on internal stakeholders like company shareholders and employees, but we often forget external stakeholders like the communities where the companies operate, the broader environment, customers, suppliers, quality of life etc.

"When it comes to profit-making, we should focus on economic profit rather than just accounting profit, as the former has a broader definition fitting the sufficiency-economy philosophy.

"So the sufficiency-economy philosophy is not against making a profit at all. Instead, you can optimise your profit-making capability with the philosophy via greater efficiency and effectiveness," Pipat said.

"I also believe the philosophy does not run counter to trends in globalisation, as it is not anti-growth. The sufficiency-economy philosophy also enhances your capability to adapt to rapid changes resulting from globalisation, which produce both winners and losers.

"In other words, the sufficiency-economy philosophy minimises the downside risks of globalisation while optimising its upside potential."

The Thaipat Institute is working with large companies in the food, printing, finance/insurance and energy sectors on applying the philosophy in corporate social responsibility programmes.

The institute is collecting data from these firms to show they could improve their performance further if they adopted changes in a holistic manner consistent with the philosophy.


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