Business Series 1:
What Colours them Green? An Enquiry into the Drivers of Corporate
Environmentalism in Business Organizations in Developing and Developed Countries
Dr. Sukhbir Sandhu
This study discusses the major drivers of environmental business practices in developing and
developed countries. I agree that environmental practices are more intensive in developed
countries than developing countries.
This research is well applicable to all businesses
worldwide, including Thailand, since we are now facing global warming as the result of the
business operations and human behavior.
The study states that businesses realize that they are major contributors of environmental
degradation which is true in the current business environment. Centre for Social Markets
(2003) supports that companies need to understand their roles and business impacts on the
economy, society and the environment along a business value chain and also need to consider
the stakeholders’ desires.
For example, firms can lessen environmental impacts on the production process, such as
through the reduction of harmful resources, waste control and usage of recycled materials
(Pun 2006).
This is also true in Thailand; thus, Thai government promotes the public
awareness for electric savings and environmental preservation. Many stores persuade
customers to bring reusable bags, not to use plastic bags, similar practices to other countries,
including Australia. However, it is not widely practiced and there is no law enforcement
regarding this issue yet in Thailand.
Thai corporations and consumers have become more responsive to environmental problems,
and thus, many companies initiate environmental-related strategies (Johri & Sahasakmontri
1998). Dr. Somkid Jatusripitak, Former Finance Minister of Thailand, also states that
companies need to look beyond profitability and find the means to provide positive returns to
society and stakeholders (Asian Labour News 2004). There is also a green label in Thailand,
entitled “Thai Green Label”; Thai Green Label awards introduced in August 1994 by the
Thailand Environment Institute given to products having minimum environmental impacts.
In conclusion, this study holds true for the environmental consciousness and practices in
Thailand. Social responsibility practices have been voluntary progressed in Thailand.
Stakeholder theory is also practiced in Thailand as Thai corporations consider the demand
from various stakeholders. For example, they consider the wellbeing of customers,
employees, trading partners, shareholders, etc.
However, environmental regulations in
Thailand are not yet strong. Some companies may not pay attention to the environmental
problems. Thus, Thai government should impose more stringent environmental regulations.
Business Series 2:
The Relationship between Management Control System and Strategy in Not-for-Profit
Sector
Dr. Basil Tucker & Lee Parker
This study focuses on the relationship between management control system (MCS) and
strategy in not-for-profit (NFP) organizations. MCS is considered as one of the important
mechanisms of organizations, for profit and NFP organizations. MCS has been utilized as
quality control mechanisms by many corporations in Thailand as well. However, MCS is
practiced more widely in profit oriented organizations, rather than NFP organizations.
This study did not specify any types of MCS applied in NFP organizations. Thus, it is difficult
to get a clear picture regarding the type of MCS applied by NFP organizations. In practice,
MCS can be employed in many departments within the organizations such as human
resources and finance to measure the firms’ performance in order to appropriately allocate
resources.
Anthony (2007) mentions that MCS provides a mechanism for the firm’s
managers to induce corporate strategies in order to reach its objectives. In Thailand, many
organizations employ MCS with respect to balanced score card, total quality management
(TQM) and just-in-time (JIT), for both formal and informal practices. In general, if there is no
regulatory control or requirements imposed by the government, trading partners or other
stakeholders, the MCS tends to be practiced informally.
This study discovers that the MCS is used to measure the end result which is the overall
performance of the organization but not used for resource allocation. Besides, corporate
strategies are not considered when designing MCS.
I think this is also true in Thai
corporations; most corporations focus more on performance based evaluation.
High
performing departments within the organizations may not be given high resource allocation.
The strategic decisions mainly derive from the top management within the Thai organizations
and MCS should be in line with its corporate strategies.
In conclusion, I think that MCS is one of the important tools for any organization. However, it
may be applied more heavily in profit organizations, rather than NFP organizations.
Companies need to decide the type of MCS tools that are appropriate for their organizations.
Then, they need to apply and evaluate MCS correctly and effectively.
Business Series 3:
A Cross Country Study of the Determinants of Sustainability Reporting and Assurance
Dr. Roger Burritt and Dr. Paul Shum
It is true that there is an increasing demand for sustainability reports, especially in developed
countries. There is also a growing interest in producing sustainability reports in developing
country, including Thailand. However, the intensity of sustainability reports in Thailand is
still very limited since there is no regulatory requirement to produce sustainability reports.
Some big companies in Thailand produce sustainability reports separately from their financial
reports, entitled corporate social responsibility (CSR) reports. Assurance of the accuracy of
the information is also a problematic area in Thailand which is consistent with this study. The
main purpose of producing reports is public relation. Thus, companies may tend to report
more information than the actual practices.
Similar to this study, investors in Thailand do not express strong demand for sustainability
reports since they tend to be profit oriented. However, the Stock Exchange of Thailand (SET)
has established the guidelines for good governance for Thai listed companies to promote good
corporate practices. The Good Governance Center was established in 2002 to help listed
companies to develop good governance system.
SET also initiated good corporate
governance awards for firms that meet the criteria. This may help ensure the quality and the
accuracy of sustainability reports.
This study also mentions about the agency theory stating that the accredited auditors help
improve the accuracy of sustainability reports. However, there are still problems regarding the
professional ethics of auditing companies. For example, Arthur Andersen, a well-known
accounting firm, has also been accused for providing wrong information to the public for
companies, such as Enron and WorldCom, resulting in the bankruptcy of these companies.
This study also reveals that public has increased demand in social and environmental concern.
They integrate social and environmental performance, besides economic performance, into
consideration when they evaluate the firms’ performance. I strongly agree with this study that
credibility and assurance of the reports is very important for stakeholders to utilize the
information in order to correctly evaluate the firms’ performance.
In addition, a non-profit organization was established, Thailand Business Council for
Sustainable Development (TBCSD), in November 1993, by Mr. Anand Panyarachun, a
former Prime Minister of Thailand, with the main purpose to elevate environmental
consciousness aiming to reach sustainability. This shows that many organizations in Thailand
place more concern on sustainable development.
In conclusion, sustainability reports can be one of the important tools for stakeholders to
evaluate the performance of the firms. However, the readers of sustainability reports need to
make appropriate judgment about the accuracy of the reports. One way to help protect
malfunctions of the markets and ensure the accuracy of the published data is the regulation.
Therefore, sustainability reports should be regulated.
Business Series 4
Laws of Growth
Byron Sharp
This study discusses that existing theories may not hold true in the practical world. The
theories without supporting laws seem to be wrong. The study reveals that the laws of
marketing provide ‘meaning to metrics’ because they are based on the real observations of
consumer behavior. This study provides valuable ground theories, such as double jeopardy,
polygamous loyalty, duplication of purchase law, 60/20, to support consumer behaviors which
are very valuable and practical for the interested parties.
Theories state that big brands generally have more customers and more customer royalty;
thus, they have more market share. However, in reality, the study shows that small brands
have equal market share as big brands. Thus, loyalty is not much different among big and
small brands. I think that this may not be absolutely true in Thailand as Thai customers seem
to have high brand royalty towards products, especially products that are related to their five
necessities and products are not homogeneous in nature. Thai customers tend to be repeated
buyers if the products offer them enough satisfactory e.g. taste, prestige, etc. However, if
products can be easily substituted, Thai customers may switch brands for their convenience
which is consistent with the finding of this study.
Further, some theories stipulate that companies can gain more sales by retaining customers
and maintaining customer royalty. However, the findings reveal that the growth of customers
does not derive from customer royalty. It also discloses that acquiring new customers is
cheaper than retaining existing customers. I believe that Thai companies generally focus more
on maintaining customers by creating brand awareness and brand royalty. Attracting new
customers usually applies when companies launch new product lines.
According to the theories, big brands can retain more customers. However, in the real world,
all brands can lose customers; smaller brands tend to lose more customers. I believe that this
is true in Thailand. The study reveals that mass marketing is more important than target
marketing. If the companies want to grow, they need to aim at ‘light buyers, more medium
buyers and few more heavy buyers’. Thus, companies should try to do mass marketing to
reach the targeted growth and maintain market share. I believe that if the products are
homogeneous, this holds true. If not, it may not be true in Thailand.
In conclusion, based on the findings of this study, companies, practitioners and marketers
need to think twice when applying existing theories into practices. What states in the theories
may not hold true in reality. Thus, they need to clearly understand consumer behavior to
accurately position themselves or initiate new strategic plans.
Business Series 5
HR and the Line: Devolving People Management Activities to Line Managers
Carol T. Kulik
Many organizations have changed the ways they manage people in their organizations. This
study discusses about the relationship between devolution and effectiveness (People
Management Effectiveness: PME). Devolution refers to decentralizing HR activities to line
managers. Devolution trends include remuneration, performance management, promotion,
recruitment, HR planning, training career development, job design, coaching, succession
planning, leadership development, culture, industrial relations, etc.
There is the same evidence in the organization where I teach, a reputed private university. For
example, activities such as performance management, remuneration, and promotion are
proposed by the line manager, immediate boss, chairpersons responsible for the respective
departments, because they are the ones who evaluate teaching performance and they know
their subordinates better than anyone else. Recruitment is conducted by a panel of line
managers from different departments which I believe this method yields a better PME. The
reason is that chairpersons have more knowledge in job description and experts in the
academic areas; thus, they can effectively recruit new qualified faculty members and place
them in the right job. Career path and succession planning are also proposed by the
chairperson and approved by the president of the university. Job design and coaching is a
responsibility of the chairperson who can assign coordinators to assist in this matter.
In conclusion, I agree that devolution with line manager’ support can lead to PME. In
Thailand, many activities are outsourced such as training and organizational culture
development. However, I disagree that devolution enhance HR reputation. The success of the
department, under a particular faculty, does not depend on HRM. It is due to the effectiveness
of the line managers, chairpersons, who take good care of the departments. Thus, I agree that
PME is increased when there is less HR involvement. HR activities include functions that
involve all people within the university, for example, a faculty annual seminar. I strongly
believe that whether or not to adopt devolution depends largely on the decision of the top
management of the organizations.
References
Centre for Social Markets (CSM) 2003, Giving something back: social responsibility and
South Asian businesses in the United Kingdom: an exploratory study, viewed 15 November
2007, <http://www.csmworld.org/public/balcdCSMGiving%20Something%20Back%20report.pdf >.
Pun, KF 2006, ‘Determinants of environmentally responsible operations: a review’,
International Journal of Quality and Reliability Management, vol. 23, no. 3, pp. 279–297.
Johri, LM & Sahasakmontri, K 1998, ‘Green marketing of cosmetics and toiletries in
Thailand’, The Journal of Consumer Marketing, vol. 15, no. 3, p. 265–275.
Asian Labour News 2004, Thailand: CSR as philanthropy?, 13 July, viewed 1 March 2005,
<http://www.asianlabour.org/archives/001818.php>.
Anthony, R. and Govindarajan, V., 2007. Management Control Systems, Chicago, Mc-GrawHill IRWIN.