Sasin study assesses firms' sustainability

       The sufficiency economy concept promoted by His Majesty the King has been touted as a philosophy for daily life, of living within one's means and striving for balance and sustainable growth.
       But the concept is applicable to companies as well, argue researchers from the Sasin Graduate Institute of Business Administration.
       Their project focuses on best practices in the application of the sufficiency economy philosophy by six companies, all winners in a sufficiency economy contest hosted by the Royal Development Projects Board: Nithi Foods, Bathroom Design, Chumphon Cabana, Somapas Engineering, Phiboonchai Mae Pranom and Nopadol Panich.
       Nick Pisalyaput, head of special projects at Sasin, said standard financial tools such as debt-to-equity ratios and turnover in account receivables were used to analyse small and medium-sized companies.
       "None of the six companies selected can be considered perfect," he said.
       The Sasin team has developed a questionnaire on corporate sustainability under the sufficiency economy philosophy to assess the concept in terms of business.
       Researchers, who expect the report to be completed within the next two months, examined company practices based on the three pillars of the sufficiency economy philosophy: reasonableness, or corporate governance; moderation, or sustainability; and selfimmunity, or risk management.
       For the concept of reasonableness,each of the companies had their governance practices, pricing, employee pay and community-development efforts screened. Moderation was assessed based on profitability ratios, debt-to-equity and time-interest expense to assess use of available resources. Self-immunity assessments were based on the company's risk management policies and product and customer diversification.
       He said he hoped that the assessment criteria could be used with listed companies on the Stock Exchange of Thailand.
       "Listed companies should have higher standards based on these principles than small and medium-sized companies,given that listed companies are already regulated under numerous rules," he said.
       Suvit Maesincee, director of the Sasin Institute for Global Affairs, said a commitment to the sufficiency economy could help achieve a sustainable, responsible model for global capitalism.
       The application of the sufficiency economy principles by local companies could be a lesson for global firms, he said.
       Sumet Tantivejkul, a former secretarygeneral of the National Economic and Social Development Board and now chairman of a development institute to promote the sufficiency economy philosophy, said large and small companies were in search of a new development model in the wake of the crisis. He urged business schools such as Sasin to apply the concepts to their curriculum in educating future business leaders.
       "Whether it be Western or Eastern countries, when the global economy collapses, it affects us all," said Dr Sumet.
       Dipak Jain, dean of the Kellogg School of Management at Northwestern University in Chicago, said business schools should pay more attention to the concepts of sufficiency economy, corporate social responsibility and governance.
       The global economic crisis was in part rooted in an excessive focus on performance, whether it be executive compensation or quarterly profits.
       "Personal success should not be the sole goal of MBA graduates," he said.