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Relating Vision-based Leadership to Sustainable Business Performance: A Thai Perspective

By Sooksan Kantabutra, Leadership Research Group, College of Management, Mahidol University

Academic Citation: Sooksan Kantabutra, "Relating Vision-based Leadership to Sustainable Business Performance: A Thai Perspective," Kravis Leadership Institute Leadership Review, Vol. 6, Spring 2006. pp. 37-53.

Keywords: vision components, visionary leadership, sufficiency economy, sustainability, performance measures

About the Author: A former management consultant from a global consulting firm, Sooksan Kantabutra is Group Leader of the Leadership Research Group, College of Management, Mahidol University in Bangkok. E-mail: sooksan.k@cmmu.net.

Abstract:

Research into vision-based leadership rarely considers the quality of the core vision, particularly one that brings about sustainable business performance. A research model is derived from the empirical and theoretical literature for relating visions to sustainable business performance, proposing that vision attributes (brevity, clarity, abstractness, challenge, future orientation, stability, and desirability), plus 'Sufficiency Economy' vision content (relating to moderation, reasonableness, the need for self-immunity mechanism, knowledge and morality) directly affect business performance and its sustainability. Mediated by five realization factors and three intervening variables, these factors also have indirect effects on business performance.

Since the 1980s, increasingly rapid change has had a fundamental impact on Thai business organizations, most of which operate on the Anglo/US capitalism model of short-term maximization of shareholder value. Some businesses have survived and thrived, but others have not. While economists around the globe often debate the impact of Anglo/US capitalism on national economies, they hardly investigate its effects on leadership inside individual firms, the foundation of any economy (Avery, 2005). This missing area of scrutiny is critical as political economists would agree that the prevailing model of Anglo/US capitalism influences the way corporate leaders lead their organizations. Therefore, leadership scholars have long quested for the kind of leadership needed for organizations to excel and sustain their performance in such a context. For many of them, leadership with vision as a core component is the answer (Bass, 1990; Conger, 1989; Conger and Kanungo, 1987; Tichy and Devanna, 1986). While often discussed as visionary or transformational leadership associated with a particular leader, more recently, a concept of organic leadership centred around a vision instilled in an organization's culture has emerged (e.g. Avery, 2004; Raelin, 2003).

In general, researchers have examined the relationship between vision-based leadership and performance outcomes, without taking the specific nature of the vision into account (e.g. Avery, 2004; Barling, Weber, and Kelloway, 1996; Howell and Avolio, 1993). This is unfortunate given that vision is considered the starting point of transformation processes (Collins and Porras, 1994; Doz and Prahalad, 1987; Hunt, 1991; Kotter, 1990; Robbins and Duncan, 1988; Sashkin, 1988). Thus, examining the link between vision-based leadership and business performance without controlling for the quality of the vision itself overlooks possible effects that a critical component of such leadership might have created.

In the sustainability literature, there have been efforts around the world to find an approach to organizational sustainability (Avery, 2005). In Thailand, the philosophy of a 'Sufficiency Economy' was introduced by His Majesty King Bhumibhol Adulyadej as a means toward more sustainable development to cope with critical challenges arising from changes occurring as a result of globalization (Avery, 2005), which appears to have empirical support from the broader literature. In this paper, I attempt to integrate the Sufficiency Economy philosophy into 'vision', with a rationale that when leaders espouse such a vision to guide their business choices and actions in the time of rapid change, their business performance will be sustainable. A model is derived from the leadership and sustainability literature showing how aspects of a vision, containing reference to the Sufficiency Economy philosophy, may sustain business performance. The paper also summarizes literature relating to the Sufficiency Economy philosophy, vision definitions, attributes and content, and develops a set of hypothesized vision realization and intervening variables. The paper then discusses measures of business performance, and introduces a prototype organization. It as a result proposes a model expressing the relationships between vision characteristics, vision realization and intervening variables, and business performance. Some directions for testing the model are also recommended.

SUFFICIENCY ECONOMY PHILOSOPHY

Thailand's 'Sufficiency Economy' philosophy stems from remarks made by His Majesty King Bhumibol Adulyadej throughout his 58 years of the throne (NESDB, 2004a). It stresses the 'middle' path as the overriding principle for Thai people's conduct and way of life at the individual, family, and community levels. Within the philosophical framework, choice of balanced development strategies for the nation in line with the forces of globalization is allowed, with the need for adequate protection from internal and external shocks. In particular, after the Asian economic crisis in 1997 in which numerous business organizations in Thailand went bankrupt, His Majesty reiterated the philosophy as the way to recovery that would lead to a more resilient and sustainable economy (NESDB, 2004b).

The Sufficiency Economy philosophy framework comprises three components and two underlying conditions (Piboolsravut, 2004). First, Sufficiency entails three components: moderation, reasonableness, and requirement for a self-immunity system, i.e. the ability to cope with shocks from internal and external changes. Second, two underlying conditions necessary to achieve Sufficiency are knowledge and morality. Sufficiency Economy requires breadth and thoroughness in planning, carefulness in applying knowledge, and the implementation of those plans. As for the moral/ethical condition, Sufficiency Economy enforces the conditions that people are to possess -- honesty and integrity -- while conducting their lives with perseverance, harmlessness and generosity. The Sufficiency Economy philosophy serves as a guide for the way of living/behaving for people of all levels, and is scalable with universal domain applicability, including business organizations (Piboolsravut, 2004).

Later empirical evidence in Thai business organizations exporting their products throughout the world (Kantabutra, 2005; Nuttavuthisit, 2005) also lends support to the anticipated result of applying the Sufficiency Economy philosophy to sustain business performance. The research investigated a jewellery business and a Thai paper product business that have been around successfully for over 30 years, weathering economic ups and downs. The findings suggested that many business activities these two businesses conducted were consistent with the three components and two underlying conditions of the Sufficiency Economy philosophy. Moreover, an additional study by Santiprabhob (2005) revealed that the two businesses operated under a long-term perspective and valued their human resources. They also genuinely focused on a wide rage of stakeholders, and embraced ethical, social and environmentally friendly practices. In comparison with the broader sustainability literature, these commonalities are consistent with recent findings from a major corporate sustainability study in the Western world by Avery (2005), which examined twenty-eight sustainable enterprises in Europe (e.g. Allianz, BMW, Nokia, Novartis, Porsche). Therefore, the Sufficiency Economy philosophy appears to have gained empirical support from the Western study by Avery (2005).

As a result, it can be expected that organizations in the corporate world that use the Sufficiency Economy philosophy to guide their business activities will be able sustain their business performance in the long run.

VISION

Vision is often regarded as a management tool for corporate leaders. In this section, literature relating to the vision definition, vision components of attributes and content is discussed.

Vision Definition

Vision is widely regarded as important in leadership, strategy implementation, and change (Collins and Porras, 1994; Doz and Prahalad, 1987; Hunt, 1991; Kotter, 1990; Robbins and Duncan, 1988; Sashkin, 1988). Nonetheless, there is no generally agreed upon definition of vision; this is a central issue for research, theorizing, teaching and practicing in the area. Vision is frequently confused with, or even deliberately combined with, terms like mission, goals, strategy, values and organizational philosophy (Levin, 2000), and when Baetz and Bart (1996) requested copies of mission statements from different organizations, they received documents containing a variety of titles including mission, vision, values, beliefs, principles, and strategic intent/direction. Later, Raynor (1998) concluded that these concepts are so tied together, that to speak of one is to involve them all.

Despite the often-diverging terms used for vision, many definitions share common characteristics, including:

1. vision is about a desirable future (Collins and Lazier, 1992; Collins and Porras, 1994; Greenwood and Hinings, 1988, 1993; Hinings and Greenwood, 1988; Jacobs and Jaques, 1990).
2. vision is essential for leadership (Bennis, 1990; Burns, 1978; Kouzes and Posner, 1987; Locke et al., 1991), a process of inducing others to act toward a common goal.
3. vision is basis for business strategy and planning (Bennis and Nanus, 1985; Collins and Porras, 1994; Hay and Williamson, 1997; Parikh and Neubauer, 1993).
4. vision creates a sense of direction for organizational members (Collins and Lazier, 1992; Collins and Porras, 1994; Davis and Meyer, 1998; Greenwood and Hinings, 1988, 1993; Hinings and Greenwood, 1988; Hunt, 1991; Jacobs and Jaques, 1990; Kotter, 1997; Levin, 2000; Lipton, 1996).

A pragmatic approach is to avoid the confusing definitional issue altogether, accepting whatever term for 'vision' each leader operates under, given that it is the leader's actual vision that guides his/her choices and actions (Baum et al., 1998). This may be the only feasible approach if leaders develop a vision in their own way, whether rationally and objectively or intuitively and subjectively (Nanus, 1992). Further, expecting visions to conform to a standard definition or format is probably unrealistic, since visionary leadership can vary from leader to leader in both the leader's style, content of the vision, and context in which it occurs (Westley and Mintzberg, 1989). In short, in investigating links between leader's vision and its impact on performance, it is appropriate to consider the visionary tools that the leader actually employs, rather than adopting some possibly unrelated theoretical definition. This approach of adopting what individual leaders regard as a vision was also adopted in Baum et al.'s (1998) and Kantabutra's (2003) research.

Empirical studies show that vision is important to performance in small, simple organizations (Baum et al., 1998; Filion, 1991), as well as in large, complex organizations (Kotter, 1990; Westley and Mintzberg, 1989). In particular, visions, as defined in the leaders' terms, were found to positively impact on venture growth in startup firms (Baum et al., 1998), and customer and staff satisfaction in a simple organizational setting (Kantabutra, 2003).

Vision Attributes

Views on the attributes characterizing an effective vision vary widely, ranging from opinions that an effective vision is inspiring, abstract, brief, stable, and motivating (Locke et al., 1991), strategic and well-communicated (Conger, 1989), to ideas that long-term and focus should be included (Jacobs and Jaques, 1990; Kouzes and Posner, 1987). Sashkin (1988) and Sims and Lorenzi (1992) propose that effective visions are inspirational, widely accepted, and integrated with visions of others.

In a search for effective attributes, seven commonly shared attributes can be gleaned from the diverse views, including: brevity (Avery, 2004; Baum et al., 1998; Kantabutra and Avery, 2003; Locke et al., 1991), clarity (Avery, 2004; Baum et al., 1998; Jacobs and Jaques, 1990; Kantabutra and Avery, 2003; Locke et al., 1991; Nanus, 1992; Sashkin, 1988; Sims and Lorenzi, 1992; Williams-Brinkley, 1999), future orientation (Avery, 2004; Baum et al., 1998; Jacobs and Jaques, 1990; Kantabutra and Avery, 2003; Kotter, 1990; Lipton, 1996; Locke et al., 1991; Senge, 1990; Williams-Brinkley, 1999), stability (Avery, 2004; Baum et al., 1998; Kantabutra and Avery, 2003; Locke et al., 1991), challenge (Avery, 2004; Baum et al., 1998; Kantabutra and Avery, 2003; Locke et al., 1991; Nanus, 1992; Sashkin, 1988; Sims and Lorenzi, 1992), abstractness (Avery, 2004; Baum et al., 1998; Kantabutra and Avery, 2003; Locke et al., 1991), and desirability or ability to inspire (Avery, 2004; Baum et al., 1998; Kantabutra and Avery, 2003; Locke et al., 1991; Sashkin, 1988; Sims and Lorenzi, 1992; Williams-Brinkley, 1999). Visions with these attributes are asserted to bring about more desirable performance outcomes than those without.

In his effort to develop a vision theory to fill in the gap of the prevailing vision-based leadership theories (Bass, 1990; Conger, 1989; Conger & Kanungo, 1987; Tichy & Divanna, 1986; Westley & Mintzberg, 1989), Kantabutra (2003) asserted that the seven vision attributes interact to create a significant impact on overall organizational performance firstly through follower satisfaction. A vision that is only brief will not significantly impact overall performance because it may not be clear to followers as to what needs to be done (e.g. Conrad, 1990; Pace & Faules, 1989), or it may not appear to challenge followers to do their best (Collins & Porras, 1994; Conger & Kanungo, 1987). A vision that is only clear will not significantly affect follower satisfaction because it may be too long, making it difficult for a leader to communicate it massively and frequently (e.g. Kotter, 1996; Yukl, 1998). It also may not be abstract, therefore possibly creating conflicts among groups with different specific purposes and making it difficult to form an effective group (Messick & Mackie, 1989) to carry out the vision. Moreover, abstractness reflects stability in the vision because it implies no radical change over time (e.g. Gabarro, 1987; Tichy & Devanna, 1986). A vision that is unstable suggests to the followers a lack of managerial integrity and commitment to the vision (Kouzes & Posner, 1987; Parikh & Neubauer, 1993), negatively affecting follower satisfaction. A vision that is brief, clear, abstract, challenging and stable will not draw follower commitment in working toward the vision unless it is inspiring or desirable (Morden, 1997). In addition, when a vision is not inspiring or desirable, it is unlikely to develop a shared vision (Parikh & Neubauer, 1993), found to be critical to performance outcomes (Kantabutra & Avery, 2005). An inspiring vision that is clear, brief, abstract, challenging, and stable will not be able to attract commitment from the followers because it does not offer a view of a desirable future (Nanus, 1992). Without a better future picture, followers are unlikely to be drawn from where they presently are to work toward the vision (Senge, 1990). Therefore, combining all seven vision attributes in a vision is expected to influence the vision's effectiveness.

Empirically, visions characterized by the attributes of brevity, clarity, abstractness, challenge, future orientation, stability, and desirability or ability to inspire have been found to indirectly relate to customer satisfaction (Kantabutra, 2003). Visions characterized by the seven attributes were also found to have a significant, direct relationship with organizational performance via staff satisfaction (Kantabutra, 2003) and venture growth (Baum et al., 1998).

For the present model, I define the seven attributes as follows to be consistent with previous researchers (Baum, 1994; Baum et al., 1998; Kantabutra, 2003; Locke et al., 1991). A vision should be brief, but brevity should not overrule the endeavour to state the vision definitively; at the same time, it should be clear and precise in such a way that it is understood and accepted. Clarity makes overarching goals understandable to everyone. Future orientation means a vision focuses on the long-term perspective of the organization and the environment in which it functions. It should guide the organization far into the future, while stability means a vision should be general and abstract enough not to be affected by most changes in the market or in technology. Challenging people to do their best, a vision should motivate people to work toward a desirable outcome. Abstractness means a representation of a general idea, as opposed to a specific achievement, or a narrow, one-time goal that can be met, then discarded. To be desirable or inspiring, a vision should represent an ideal that is worth working toward for the followers. If followers do not perceive the vision as an attractive goal, they are unlikely to commit to achieving it.

Vision Content

Without meaningful content, the vision attributes are unlikely to significantly impact business performance and its sustainability either. Therefore, its content or 'imagery' is critical to future of their organizations. Endorsing this view, Rafferty and Griffin (2004), drawing upon their study of a large Australian public sector organization, suggest that visions do not always create a positive impact on follower attitudes, and that one should distinguish between "strong" and "weak" visions as well as vision content to see their effectiveness. The content of a vision may focus on products, services, markets, the organization, or even shared ideas to form the central driving image (Westley and Mintzberg, 1989). The specific content of a vision, from here on referred to as 'imagery', needs to be considered given findings that imagery relating to venture growth was important to organizational growth (Baum et al., 1998), and that vision imageries of customer and staff satisfaction were related to customer satisfaction in Australian retail stores (Kantabutra, 2003). Despite relatively little research into the relationship between vision content and business performance, a successful strategic vision appears to take account of industry, customers, and an organization's specific competitive environment and competitive position in the industry (Pearson, 1989). Ideally, the content should differentiate visionary organizations (Collins and Porras, 1994).

In the Thai context, I propose the three conditions (moderation, reasonableness and the need for self-immunity mechanisms) and the two underlying conditions (morality and knowledge) of the Sufficiency Economy philosophy as necessary vision content. The rationale behind the inclusion is that when corporate leaders, guided by the Sufficiency Economy vision, conduct their business activities, they can be expected to be able to sustain their business performance in the long run, given support from the literature above. Therefore, vision content proposed for the present model contains reference to imageries about moderation, reasonableness, the need for self-immunity mechanisms, knowledge and morality.

Without meaningful content, the vision attributes are unlikely to significantly impact business performance and its sustainability either. The content of the vision in this present model, therefore, contains the five core elements of the Sufficiency Economy philosophy. Based on the literature above, the more a corporate leader imagines having moderation, reasonableness, the need for self-immunity mechanism, knowledge and morality in his/her vision, the more likely his/her business performance will be sustainable.

In conclusion, it can be anticipated that corporate leaders, who espouse vision characterized by the seven attributes and containing the five Sufficiency Economy imageries, will be able to sustain their business performance in the long run.

VISION REALIZATION FACTORS

Since vision is only 10% and its implementation is the rest (Jick, 2001), leaders are faced with realizing, or achieving, their visions, which moves the discussion beyond the attributes and content of the vision. The realization process has been extensively addressed in the literature, yielding five common themes. Visionary leaders:

(a) formulate strategies and plans to achieve their visions (Bass, 1985; Bennis and Nanus, 1985; Collins and Porras, 1994; Conger and Kanungo, 1987, 1988; Cowley and Domb, 1997; Doz and Prahalad, 1987; Hunt, 1991; Kotter, 1990; Locke et al., 1991; Nanus, 1992; Robbins and Duncan, 1988; Sashkin, 1988).

(b) communicate their visions to promote changes and widen support of the visions (Bass, 1985; Bennis and Nanus, 1985; Conger and Kanungo, 1987, 1988; Cowley and Domb, 1997; House, 1977; Kouzes and Posner, 1987; Larwood, Falbe, Kriger, and Miesling, 1995; Levin, 2000; Locke et al., 1991; Nanus, 1992; Tichy and Devanna, 1986; Williams-Brinkley, 1999). As a consequence, resistance to change will be minimized.

(c) align people and supporting systems to suit their visions (Kotter, 1990; Kouzes and Posner, 1987; Locke et al., 1991; Nanus, 1992) to ensure that structural and procedural obstacles to the attainment of the visions are minimized, and that people are allowed to act within their roles to turn the visions into reality.

(d) empower their people to act consistently with the new vision and help sustain commitment to it (Conger and Kanungo, 1987; Cowley and Domb, 1997; Nanus, 1992; Robbins and Duncan, 1987; Sashkin, 1988; Srivastva, Suresh, and Associates, 1983), so that they can do their best to carry out the vision.

(e) motivate their followers (Awamleh and Gardner, 1999; Bass, 1985; Conger and Kanungo, 1988; Cowley and Domb, 1997; Kotter, 1990; Kouzes and Posner, 1987; Locke et al., 1991; Nanus, 1992; Tichy and Devanna, 1986; Tvorik and McGivern, 1997) so that they will have a will to carry on, particularly when they are faced with audacious tasks.

In summary, the literature suggests that realizing visions requires corporate leaders to develop strategies and plans, communicate their visions, align people and supporting systems, empower people to act on the vision, and motivate their followers. With appropriate vision and the realization approach, corporate leaders are expected to bring about sustainable performance.

INTERVENING FACTORS

In addition to the five realization factors, three other sets of factors are expected to operate in the visionary leadership process: leader, follower, and external factors. These factors could create an impact on business performance and its sustainability. Each of these intervening factors is discussed below.

Three intervening factors stem from the leader. They are his/her passion for the vision (e.g. Kotter, 1996), and his/her emotional commitment to the vision (e.g. Bennis, 1984; Conger and Kanungo, 1988; Lipton, 1996) as demonstrated through his/her behavioral consistency (e.g. Bennis, 1984; Conger and Kanungo, 1988; Lipton, 1996).

Follower variables also appear to intervene in the visionary leadership process. These include the followers' use of vision to guide their work (Conger and Kanungo, 1988; Kantabutra, 2003; Lipton, 1996; Senge, 1990; Sergiovanni, 1990), their emotional commitment to the vision (Collins and Porras, 1994; Lipton, 1996), and their aligned personal visions (Kantabutra and Avery, 2005; Kantabutra, 2003; Reardon, 1991; Senge, 1990).

Ideally, internal organizational systems should align with the vision, as well as accommodate the external environment a business faces. External factors such as industry-wide government intervention and changes in the business environment could also intervene in the vision-performance process (e.g. Lawrence and Lorsch, 1967; Mintzberg, 1979; Westley and Mintzberg, 1989). While outside the direct control of most businesses, the influence of external factors can at least partially be controlled by researching within one specific industry, at a specific point in time, and under a specific set of organizational circumstances.

BUSINESS PERFORMANCE

To determine whether business performance is sustainable, performance measures are to be defined. Business performance measures adopted in this model are employee and customer satisfaction, and financial outcomes. These measures reflect outcomes, as opposed to activities used to generate them. The measures interrelate in that employee satisfaction has a direct impact on customer satisfaction, while customer satisfaction also directly impacts financial outcomes, as discussed below.

Employee Satisfaction

Many scholars cite employee satisfaction as a critical performance indicator for business organizations (Anderson, 1984; Barbin and Boles, 1996; van Dyck, 1996). Employee satisfaction is also mentioned as being closely related to customer satisfaction, and numerous publications suggest that employee satisfaction is associated with satisfied customers (e.g. Atchison, 1999; Faye and Diane, 1995; Hausfeld, Gibbons, Holtmeier, Knight, Schulte, Stadtmiller, and Yeary, 1994). One explanation for this is that customer satisfaction or dissatisfaction develops when a customer comes in contact with an employee of a company (Evans and Lindsay, 1996). Therefore, employee satisfaction has been adopted as a performance measure for the model.

Customer Satisfaction

Customer satisfaction has also been extensively cited as a key performance indicator (e.g. Bird, 1995; Gates, 2000; Sitzia and Wood, 1997). It is one of the most frequently cited non-financial strategic performance measurements (Gates, 2000). Generally, high customer satisfaction brings many benefits, including increased loyalty from current customers (translating into repurchasing), reduced price elasticities, insulation of current customers from competitive efforts, lower costs of future transactions, reduced failure costs, lower costs of attracting new customers, and an enhanced reputation for the firm (Fornell, 1992). Strong customer loyalty is said to affect the firm's economic returns because it ensures a steady stream of future cash flow (Reichheld and Sasser, 1990). Therefore, customer satisfaction is adopted as a measure in the model.

Financial Outcomes

Traditionally, measuring business performance has been based on financial criteria (Niven, 2002), which are usually regarded as precise and objective (Kaplan and Norton, 1997). Financial measures have the added advantage of long usage (Maltz, Shenhar, and Reilly, 2003). However, financial measures reflect the effects of leader's past behaviour on organizational performance, and have no predictive power in relation to the future (Niven, 2002). Nonetheless, together with employee and customer satisfaction measures, financial outcomes are proposed as another indicator of organizational performance in the model.

Since the present model is proposed to investigate the relationship between vision-based leadership and sustainable business performance, sustainable business performance is defined in this study as the extent to which a corporate leader can sustain employee and customer satisfaction, and financial outcomes in the long run.

The following section introduces a prototype organization that manages itself according to a Sufficiency Economy vision.

PROTOTYPE ORGANIZATION: SIAM CERAMIC THAILAND

The vision of Siam Ceramic Thailand "to be the best provider of ceramic tableware in the world through moderation, diversification and morality." To ensure attainment of the vision, Siam Ceramic Thailand leaders communicate the vision to organizational members who then interpret and use the vision to guide their daily decision-making and business activities. Siam Ceramic Thailand leaders also develop strategic business plans accordingly and redesign organizational systems (e.g. recruitment, performance appraisal, organizational structure) to suit the vision, thus empowering members to perform their relevant duties to achieve the vision. Those members who act consistently with the vision are rewarded accordingly.

In terms of the seven commonly shared vision attributes discussed above, this vision is brief and clear, pointing directly at a prime goal. While desirable, the vision is also stable, unlikely to be affected by technology and market change. No matter how far it is projected into the future, this vision will still be meaningful. The vision is also abstract since it is inclusive to all organizational interests. Anyone at Siam Ceramic Thailand can use the vision to guide his/her work. Clearly, the vision is future-oriented since it indicates a long-term perspective and the future environment in which it functions. Given the current status as the leading ceramic tableware in Thailand, aiming to be the best in the world is very challenging.

As for vision content, to be the best ceramic tableware provider is consistent with the components of reasonableness and self-immunity and the underlying condition of knowledge. Siam Ceramic Thailand reasonably focuses on its core competency or what they know and do best. In doing so, it develops a self-immunity mechanism for itself by minimizing risk possibly stemming from carelessly entering a new market with which it is not familiar. Yet, another aspect of the component of self-immunity is the introduction of some diversification. To deal with future unexpected issues arising from rapid changes in the market, law and regulation, Siam Ceramic Thailand diversifies its products and market to minimize risk from relying solely on a few markets or products. In addition, although there is a high market demand worldwide for its tableware products, Siam Ceramic Thailand refuses to take more orders when it does not have sufficient capacity to manufacture, consistent with the component of moderation. Siam Ceramic Thailand is genuinely concerned with a wide range of stakeholders, including employees, suppliers, customers, future generations, the environment and society at large. It takes care of these stakeholders well, even though doing so brings about higher cost and lower profitability. This practice of stakeholder focus is consistent with the underlying condition of morality.

Espousing such a vision, Siam Ceramic Thailand has been successfully exporting their products throughout the world for over 50 years, weathering economic ups and downs.

VISION-BASED LEADERSHIP - SUSTAINABLE BUSINESS PERFORMANCE MODEL

Figure 1 depicts the proposed model linking Sufficiency Economy visions to sustainable business performance. Although relationships between vision and sustainable business performance are not yet well understood, the model postulates three direct and indirect links between vision and sustainable business performance derived from factors emerging from the literature on Sufficiency Economy philosophy, vision, leadership, and business performance.

The model shows characteristics of Sufficiency Economy visions on the top, business performance measures on the bottom, and a set of vision realization and intervening variables between the two. Considering the vision characteristics first, two domains of variables ? vision attributes and content ? are depicted in Figure 1. The vision attributes domain includes the subvariables of brevity, clarity, abstractness, future orientation, stability, inspiring, and challenge identified above. The vision content domain encompasses the subvariables of moderation, reasonableness, the need for self-immunity mechanism, knowledge and morality imageries. Based on arguments presented above, both vision attributes and content are postulated to have direct effects on employee/customer satisfaction and financial outcomes, as shown by the bold lines in Figure 1.

FIGURE 1

Larger Version of Figure 1

Proposed Model Relating Vision-based Leadership to Sustainable Business Performance

Adapted from Kantabutra and Avery (2004). Filling in the Gap: An Inclusive Model Relating Vision-based Leadership and Organizational Performance. Proceedings: The 2004 European Applied Business Research Conference, Edinburgh, Scotland.

Thus the vision attributes and content path is proposed as a main effects path for vision variables with sustainable business performance - as measured by employee and customer satisfaction plus financial data - as the outcome variable.

However, a main effects model would oversimplify the situation. For example, the two vision domains do not necessarily exhaustively explain overall business performance, nor are measures of employee/customer satisfaction and financial outcomes likely to provide complete indicators of overall business performance. Most likely, indirect effects will operate, and these are represented by the dotted lines on the right of Figure 1, because it is not clear from the literature whether the realization factors and intervening variables are direct or indirect-effect path variables. The dotted lines link vision attributes and content to business performance measures via the five realization factors identified above. On the left of the model, intervening leader, follower, and external factors are depicted. The influence of the external factors (government intervention, changes in the business environment and industry, and size) can be controlled by applying the model to a single industry and time.

It is expected that individual realization factors will influence the vision-based leadership-sustainable business performance relationship to varying extents. Communication, probably the most widely cited realization factor, is likely to be a major intervening variable. The five realization factors and two intervening factors identified above are proposed as mediating variables, since each appears to have broad support in the literature.

Based on the model, the following propositions are advanced.

P1: Vision attributes of brevity, clarity, abstractness, challenge, future orientation, stability, and desirability are directly associated with employee and customer satisfaction, and financial outcomes.

P2: Vision content of moderation, reasonableness, the need for self-immunity mechanism, knowledge and morality imageries is directly associated with sustainable employee and customer satisfaction, and financial outcomes.

P3: Vision attributes and content are directly associated with sustainable employee and customer satisfaction, and financial outcomes.

P4: Vision attributes and content affect the sustainability of employee and customer satisfaction, and financial outcomes through the mediating effects of strategies/plan development, vision communication, organizational alignment, empowerment, and motivation, and intervening leader and follower factors.

DIRECTIONS FOR FUTURE RESEARCH

In designing future research, it is recommended that future researchers adopt a longitudinal research design for two reasons. First, the model is proposed to examine the relationships between Sufficiency Economy visions and sustainable business performance. In order to investigate whether performance of an organization is sustainable, it is imperative that performance be observed over a long period of time. More critically, unlike customer and employee satisfaction measures which are more responsive to leaders' behaviors within the short timeframe, financial outcomes are less responsive to leaders' behaviors in the short term. For example, the impact of a leader's behaviors on employee satisfaction can be assessed any time after the leader has taken on his/her role by asking the employee how he/she is satisfied with the leader. Assessing the leader's impact on profits or other financial outcomes would take more time.

Although derived from substantial literature, the four propositions require further testing. One prediction of the model requiring further examination is that visions characterized by brevity, clarity, abstractness, challenge, future orientation, stability, and desirability are always more associated with employee/customer satisfaction and financial outcomes than visions without these attributes. Similarly, one could test the prediction that visions with imageries about moderation, reasonableness, the need for self-immunity mechanisms, knowledge and morality are associated with sustainable employee/customer satisfaction and financial outcomes over visions without these imageries.

It would also be interesting to examine the extent to which vision affects employee/customer satisfaction and financial outcomes and the ability to sustain them through any or all of the proposed mediating variables, namely strategies and plans development, vision communication, organizational alignment, empowerment, and motivation, and the postulated intervening leader and follower factors. Whether effective visions should have some or all of these attributes, content and mediating variables, or what the optimal mix should be, also remains to be determined.

As a pilot study, one could also start examining SMEs that have been successful for a long time to determine whether their visions contain elements of the Sufficiency Economy philosophy. Moreover, future research might also explore past business activities of the SMEs, through the five vision realization factor framework, to determine whether they conducted their business activities in accordance with the Sufficiency Economy philosophy. For example, did their leaders communicate messages relevant to the Sufficiency Economy philosophy to their employees? Did they plan their marketing activities according to the underlying condition of morality? Did they adopt the middle path or moderation component of the Sufficiency Economy philosophy in planning their manufacturing?

Researchers, educators, and practitioners should benefit from refining the vision variables, realization factors, and leader and follower factors relating to sustainable business performance, and the relative importance and interrelation of vision attributes and content. For example, knowing which of the seven vision attributes is important may affect research efforts into future vision components. Educators may benefit from knowing what constitutes an 'effective' vision, while practitioners and managers should benefit from the practical implications of findings on 'effective' vision components. Future findings may also contribute to better understanding of sustainable leadership development, particularly in times of rapid change when corporations need to improve/sustain their performance (Arena, 2002), and visioning may be a way to achieve this. For example, identifying 'effective' vision attributes and content may help managers improve and sustain business performance inexpensively via employee/customer satisfaction and financial outcomes stemming from a vision containing the uncovered 'effective' vision attributes and content.

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