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Suriyankietkaew, S.; Krittayaruangroj, K.; , . Sustainable Leadership Practices and Competencies of SMEs. Encyclopedia. Available online: https://encyclopedia.pub/entry/24044 (accessed on 22 December 2024).
Suriyankietkaew S, Krittayaruangroj K,  . Sustainable Leadership Practices and Competencies of SMEs. Encyclopedia. Available at: https://encyclopedia.pub/entry/24044. Accessed December 22, 2024.
Suriyankietkaew, Suparak, Krittawit Krittayaruangroj,  . "Sustainable Leadership Practices and Competencies of SMEs" Encyclopedia, https://encyclopedia.pub/entry/24044 (accessed December 22, 2024).
Suriyankietkaew, S., Krittayaruangroj, K., & , . (2022, June 15). Sustainable Leadership Practices and Competencies of SMEs. In Encyclopedia. https://encyclopedia.pub/entry/24044
Suriyankietkaew, Suparak, et al. "Sustainable Leadership Practices and Competencies of SMEs." Encyclopedia. Web. 15 June, 2022.
Sustainable Leadership Practices and Competencies of SMEs
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This entry is adapted from the peer-reviewed paper 10.3390/su14105762

Sustainability leadership has gained much popularity as an emergent multidisciplinary area in the recent literature. Worldwide scholars call for more sustainability studies as an important leadership agenda . Modern leaders need to strategically lead their businesses beyond profit-maximization or economic performance and maneuver their vision and strategy toward environmental protection and social responsibility. The literature urges future leaders and managers to purposefully develop value-oriented sustainable leadership and sustainability competencies in their business practices as well as to balance the economic performance and socio-environmental responsibility to thrive for long-term success. The latest empirical research also indicates that sustainability leadership is a key determinant of long-term success and sustainability performance outcomes. The topic strategically becomes critical to achieve corporate resilience, longevity and sustainable futures.

sustainability leadership sustainable leadership sustainable entrepreneurship social entrepreneurship community-based social enterprise social enterprise SME community-based tourism corporate sustainability sustainable development resilience SDG

1. Critical Review of the Literature

The topic of sustainability or sustainable development originated in the World Commission on Economic Development (WCED), or the Brundtland Report, over 30 years ago [1]. Since September 2015, the United Nations has set a 2030 agenda for sustainable development or Sustainable Development Goals (SDGs). These global goals cover three pillars of sustainability, specifically, people (social goals), prosperity (economic goals), planet (environmental goals) dimensions, along with peace and partnership, with the aim to create a better world for future generations [2]. The world still faces diverse sustainability problems, e.g., climate change, environmental hazards, poverty, inequalities and political instability. In fact, these sustainability challenges require leadership and strategic foresight from multi-lateral parities and stakeholder orientation to take corrective and transformative actions toward balancing social-economic and ecological development [3][4][5]. Furthermore, the literature suggests that relevant value-based competencies, including strategic (management) competence, systems thinking competence, anticipatory (foresight thinking) competence, interpersonal competence and ethical competence, are needed to support the development of sustainability leadership and sustainable entrepreneurship in business, as suggested by the foregoing literature [6][7][8][9]. Further, firms need to incorporate societal and environmental responsibility while meeting the needs of all stakeholders and future generations [10][11]. Hence, sustainability leadership has strategically become critical to achieve sustainable goals and futures.
In the literature, the sustainability interests in the leadership field have increasingly grown in recent times. Diverse strategic leadership approaches for business sustainability have been proposed in the past three decades. Previous research [12][13] summarizes the differences and similarities. For instance, “stakeholder-based leadership”, with the focus on stakeholder relationships and triple-bottom-line criteria [14][15][16][17], “ethical leadership”, with emphasis on ethical business standards [18][19][20], “sufficiency leadership”, with the focus on a more ecological-economic-societal balancing approach toward sustainable development [21][22][23] and “sustainable leadership”, centered around the multidimensional nature of leadership behaviors and management systems to create long-term business sustainability and resilience [12][24][25][26][27].
A recent bibliometric review of sustainable leadership from worldwide scholarship by Halliger & Suriyankietkaew indicates the rapid development of new theoretical models of leadership and sustainability over the past few decades. The existing trend highlights the theoretical development of six schools of thought, comprising “sustainable Leadership”, “leadership for corporate sustainability”, “managerial leadership”, “responsible leadership”, “ethical and transformational leadership” and “leadership for sustainable change” [28]. They relate to how leadership contributes to sustainability in organizations and societies. The prominent ones are referred to as “sustainability leadership” [29][30][31][32], or, alternatively, “sustainable leadership” [12][13][24][25][26][27][33][34][35][36][37]. These theoretical notions are used interchangeably for parsimony and clarity. The review also reinforces the growing major trend of the theoretical advancement of sustainable leadership, with a balanced view of sustainability values towards sustainable futures [28].

2. Sustainable Leadership Research Framework

Sustainability leadership is a process of influence that delivers direction, alignment and commitment and aims to address environmental, social and long-term sustainable development [38][39][40]. Various terms in the literature such as “green leadership”, “eco-sensitive leadership”, “sustainability leadership” and “globally responsible leadership” are used interchangeably and convey the same concept of sustainable leadership [39][40][41]. The researchers here primarily use the term sustainable leadership (SL). SL comprises those behaviors and practices that create lasting value for all stakeholders, such as the society, environment and future generations at large [24][25].
Built on the Rhineland capitalism approach [42], Avery first introduced 19 SL practices. The 19 practices were derived from a study of 28 global corporations, in which 13 were European corporations (Germany and Switzerland) and the remaining 15 corporations stemmed from developed economies (Australia, Hong Kong, Japan, South Africa and the USA) [34]. Later, Avery & Bergsteiner expanded the list of practices and identified 4 additional practices to generate a set of 23 sustainable leadership practices or “Honeybee” leadership approaches in 2010 [24]. The four additional practices added in the latest sustainable leadership are trust, innovation, staff engagement and self-management.
The 23 practices are interdependent and reinforce one another within the levels [24]. The 23 practices are categorized as foundation, higher-level and key performance drivers. The outcomes of the Honeybee leadership model, which Avery & Bergsteiner introduced, go beyond the triple bottom line, with results that enhance brands, customer satisfaction and long and short-term financial viability while providing long-term value for all stakeholders. Avery & Bergsteiner arranged the 23 leadership practices into three structural levels of SL practices as follows. Firstly, the foundation practices consist of 14 practices including developing people, labor relations, retaining staff, succession planning, valuing staff, CEO and top team, ethical behavior, long-term perspective, organizational change, financial markets orientation, environmental responsibility, corporate social responsibility (CSR), stakeholders and the vision’s role in the business. Secondly, higher-level practices have been developed based on the idea that when foundation practices are in place, they facilitate and support the initiation of higher-level practices. The six practices include consensual and devolved decision making, creating self-managing employees, team orientation, cultivating a trusting atmosphere, forming an organizational culture that enables sustainable leadership and sharing and retaining the organization’s knowledge. Thirdly, SL indicates that three key performance drivers, namely, innovation, staff engagement and quality, can drive organizational performance.
A synthesis of the previous bibliometric review also reveals several common features that conform to the theoretical SL framework. They include emphasis on leadership as a management system, a long-term vision with broader goals that link organizations to society, ethical behavior, corporate social-environmental responsibilities, innovation capacity, systemic change and stakeholder orientation [28]. These values underlie both the vision that leaders and stakeholders strive to achieve through corporate sustainability and the resilience.
Research indicates that firms adopting the SL principles create sustainable performance outcomes and resilience in the long run. Empirical research also suggests that the 23 SL practices are significantly associated with diverse organizational outcomes, such as financial performance [12][26], customer satisfaction [27] and stakeholder satisfaction [37]. Yet, most studies were conducted in developed countries [24][25], and previous case studies mostly examine the SL practices in large or listed corporations [43][44]. More evidence-based case studies are needed in future research [45]. Responding to the literature call for further theoretical advancement in this emerging field, this research adopts SL to investigate how the SL theoretical framework can be applied in practice, specifically in the context of community-based social enterprises.

3. The Concept of Community-Based Social Enterprise (CBSE)

The introduction of the “Social Business” concept by the 2006 Nobel Prize winner Muhammad Yunus through his work on social microfinance in poverty alleviation was a conceptual starting point for social enterprises. The topic of social enterprise (SE) has gained global significance and has attracted worldwide attention from academic researchers, practitioners and policymakers [46]. SE is defined as the businesses or organizations that primarily focus on delivering social or environmental benefits in a self-sustaining way [47]. It has been regarded as a more sustainable approach compared to a non-profit organization, which mainly relies on philanthropic charities and donations [48]. It can fill the gap that the public or private sector cannot provide. Therefore, it is essential for economic growth and advances sustainable development.
Community-based social enterprise (CBSE) is a typical form of social enterprise. CBSEs are non-profit, independent organizations with a solid geographical characteristic that earns income from community-owned-and-operated activities as well as contributes to the local development and well-being of communities [49][50][51][52]. It differs from other social enterprise concepts due to the following two unique attributes: (1) its solid local engagement from community members through a self-managed, community-driven governance structure in the development of an organization’s direction or objectives, and (2) its multifunctional organizations with strategic decisions that focus on local priorities [49].
Several terms have similar meanings to CBSE but appear in various research disciplines. They are “community enterprise” [52][53][54], “community-led social enterprise” [55][56] and “small and micro community enterprise” [57][58]. All these terms are interchangeable.
The researchers' literature review suggests that CBSE has five essential characteristics [49][50][51][52]. First, it is community-owned, by which assets belong to a community and cannot be sold for personal gains. Second, it must be operated and managed by community members. Third, the profits from the enterprise are shared among members or re-invested in the community business. Fourth, it aims to solve the social and environmental problems whilst delivering long term benefits to the community. Lastly, it is financially self-sustaining or minimizes the dependence from government funding, grants and donations.
While each CBSE case may vary based on their distinctive contexts, the literature identifies several underlying common success factors in the development of CBSE. These include leadership [59][60][61], local ownership [51], community participation and partnership support from within and outside the community [62][63][64], plus benefit-sharing [65][66]. In fact, CBSE represents a transformational change from traditional top-down to bottom-up participatory leadership approaches, and an absence of necessary leadership support may adversely affect CBSE progression toward sustainability [67]. Importantly, the literature puts the emphasis on leadership as the key driver to help CBSE recognize opportunities and risks and mobilize capital and capacities to achieve social benefits [60]. Hence, the research focuses on examining how the theoretical sustainable leadership practices are pragmatically implemented in the underdeveloped CBSE context.

4. Integration of Sustainable Leadership (SL) and Community-Based Social Enterprise (CBSE)

This research intends to advance the currently limited research regarding SL in the CBSE context. How the theoretical framework of SL is relevant to and may be integrated into the CBSE context can be explained in Table 1. Table 1 provides functional descriptions of how these sustainable practices fit into the CBSE context. Each leadership element addresses issues and challenges that CBSE leaders may face when implementing the practices to achieve sustainability and resilience.
Table 1. Integrative relevance of SL and CBSE.
Leadership Elements SL Theoretical Framework Relevance in the CBSE Context
Foundations practices  
Developing people Develops everyone continuously Developing people is key to sustainable CBSEs.
Labor relation Seeks cooperation Sustainable CBSEs care for their staff and embed amicable labor relationships.
Retaining staffs Values long tenure at all levels CBSEs value their community members and staff. They tend to retain long-term staff for sustainable community development.
Succession planning Promotes from within wherever possible Succession planning and internal promotion is essential to develop long-term continuity and sustainable growth in CBSEs.
Valuing staff Is concerned about employees’ welfare Sustainable CBSEs value and care for the well-being and welfare of the community members and the locals.
CEO and top team CEO works as top team member or speaker Shared or participative leadership and decision-making among its top-team community committees, members and/or stakeholders are key for sustainable CBSEs.
Ethical behavior “Doing the right thing” as an explicit core value Sustainable CBSEs comply with high ethics, morals and values, extending beyond the law’s requirements.
Long-term or short-term perspective Prefers the long term over the short term Long-term orientation (e.g., long-term thinking, planning decisions and strategies) instead of the short-term goals is critical to develop sustainable impacts in CBSEs.
Organizational change Change is an evolving and considered process CBSEs are susceptible to external environmental impacts (e.g., economic, political, social and pandemic). They should adapt to systemic change to survive and thrive.
Financial market orientation Seeks maximum independence from others CBSEs should be independent from external market pressures, but financial supports from governmental or external institutional funding may be needed, depending on the varied CBSE developmental stages.
Responsibility for the environment Protects the environment Sustainable CBSEs pay respect to their environment and stay responsible for their environmental impacts.
Social responsibility Values people and the community Social and cultural sustainability in local communities are taken into account for sustainable CBSEs.
Stakeholder consideration Everyone matters Caring for stakeholders becomes a key to successful and sustainable CBSEs.
Vision’s role in the business Shared view of future is an essential strategic tool A strong and shared vision in CBSEs is a strategic management tool toward success and sustainability.
Higher level practices  
Decision-making Is consensual and devolved Decision-making should be driven by community enterprise committees and teams to benefit sustainable development in successful CBSEs.
Self-management Staff are mostly self-managing In successful CBSEs, community leaders and members are likely to be self-managed and engage in community-driven governance. They commit to take responsibilities toward community development.
Team orientation Teams are extensive and empowered Strong teamwork and committed participation from community members become critical for sustainable CBSEs.
Culture Fosters an enabling, widely shared culture Shared and strong community culture and values drive longevity, resilience and long-term success in CBSEs.
Knowledge-sharing and retention Spreads throughout the organization Knowledge-sharing and management is key to sustainable community development and resilience. Regular meetings and continuous communication among community members are essential for successful CBSEs.
Trust High trust through relationships and goodwill Trust between community leaders and all stakeholders become key to successful CBSEs. Trust enhances bonding among all community members and improves social capital toward sustainability.
Key performance driver  
Innovation Strong, systemic, strategic innovation evident at all levels Innovation is critical for sustainable CBSEs due to intense competition and unexpected changes. Successful CBSEs should co-design or co-create social innovation for the long-term benefits of the community development.
Staff engagement Values emotionally committed staff and the resulting commitment Successful CBSEs need to emotionally engage with their members to create a sense of place or local ownership toward sustainable enterprises.
Quality Is embedded in the culture Sustainable CBSEs should produce superior quality products and services as well as embed high quality in all things they do to enhance long-term success.
In addition, this research responds to a call for more evidence-based case studies to advance the SL theoretical research in the CBSE context. To answer the research inquiry, the research examines the 23 sustainable practices built by Rhineland’s previous sustainability leadership research framework [43][45]. The SL practices are thus grouped into six categories: long-term perspective, people priority, organizational culture, innovation, social and environmental responsibility and ethics [43]. Additionally, the researchers further examine other relevant value-based sustainability leadership competencies, including strategic (management) competence, systems thinking competence, anticipatory (foresight thinking) competence, interpersonal competence and ethical competence [6][7][8][9], to advance the theoretical development of SL in business.

4.1. Long-Term Perspective

The literature indicates that organizations should consider long-term perspectives rather than short-term views for sustainable growth [68]. Hofstede & Minkov’s cultural study also indicates that long-term orientation is prominent in Asian cultures and becomes crucial for the economic development [69]. Research indicates that a sustainable enterprise must focus on the long term over the short term to achieve sustainability and resilience [24][25][70]. Leaders and members with the long-term orientation tend to emphasize the long-term future actions and outcomes, including thinking, planning decisions and strategies, instead of the short-term goals [43]. Built on the previous studies, the long-term orientation also requires diverse sustainability leadership competencies, namely, strategic (management) competence, systems thinking competence and anticipatory (foresight thinking) competence [6][7][8][9]. These sustainability leadership competencies incorporate the ability to think strategically and systematically in order to analyze complex systems toward sustainability strategies and future transformation. The competencies also help anticipate potential consequences for future sustainability issues and decisions made by the enterprise at present.
Apart from its long-term thinking and management orientation, building long-term stakeholder relationships with related stakeholders (i.e., suppliers, customers, employees and the community) helps enhance future business wellbeing and the prosperity of SMEs [26]. The word “sustainability” clearly implies the long-term span over time. In the CBSE context, community leaders and their members are held accountable for their decisions and actions that affect related stakeholders in both the short and long term [71]. Every decision-maker must consider long-term impacts. The long-term orientation can improve the CBSE sustainability when all stakeholders are satisfied and a compromise between short- and long-term goals in all prudent decision-making are prudentially considered [12][34][36]. Long-term orientation allows organizations to outperform their competitors with the short-term thinking [72]. Recent studies [12][26][36][73] indicate that companies with long-term thinking and investments outperform their counterparties.
In light of the literature, the long-term orientation is a critical practice to create sustainable impacts in CBSEs. Hence, this research intends to investigate this SL element and the related competencies to advance the scanty research. It also seeks to understand how these values and practices can support the socio-economic and ecological development of a real-life CBSE setting, particularly during the COVID-19 era.

4.2. People Priority

People are core to organizational sustainability, and human capital is essential to socio-economic development [70]. Continuous people development or human resource development (HRD) is fundamental to human capital through various forms of education and skills trainings [24][25]. In practice, human resource management (HRM), comprising positive relationships with laborers, valuing people, staff retention and succession planning, is key to creating sustainable well-being and success in businesses, consistent with the literature [24][25] and sustainable HRM research [74]. The literature also stresses the importance of people priority and long-term staff retention within the community to create sustainable enterprises [45].
Importantly, people priority also extends to care for stakeholder orientation. Leaders care for all employees and stakeholders in sustainable firms [12][36]. Sustainability leadership works toward establishing good stakeholder relationships and partnerships with both internal and external stakeholders (e.g., staff, customers, suppliers, locals, academics, NGOs and governments) [14][26][32]. Stakeholder engagement and capacity building are imperative for sustainable leadership [28]. From a strategic management for sustainability perspective, stakeholder management and partnerships become vital for sustainable development [3]. A SME study also reveals that caring for stakeholders is a significantly positive driver for enhanced long-term financial performance [12][36].
Furthermore, the literature puts forward the importance of building sustainability leadership capabilities, particularly strategic (management) competence, systems thinking competence, anticipatory (foresight thinking) competence, interpersonal competence and ethical competence. [6][7][8][9]. These competencies strategically and systematically enhance people engagement, stakeholder interdependence and organizational ethical values, which can help transform future sustainability leadership and enterprises.
Previous research suggests that a sustainable CBSE should value and care for the people, including the community members, the locals and other stakeholders. The key purpose is to improve their well-being and support progressive socio-economic development in the CBSE. Hence, the research hopes to study this SL element and relevant competencies to advance the researchers' currently limited knowledge in this sphere in the CBSE context.

4.3. Organizational Culture

Sustainable leadership theory puts emphasis on building a strong organizational culture. Scholars signify that a shared, strong culture and values drive longevity, resilience and long-term corporate success [12][36]. Underlying values and beliefs in a culture suggest how people should behave and help employees identify desirable behaviors. Collins & Porras’s (1996) study shows that “built-to-last” companies shared strong cultures with their people, which make them the “special place to work” [75]. Empirical research also suggests that a strong and shared culture is a significant predictor of employee satisfaction [27]. The recent literature suggests that sustainability leaders should strategically and systematically enable people to develop “personal connection” and “empowerment to act” to achieve sustainability in business [6]. Despite the strategic and systemic thinking competence, the organizational culture also requires interpersonal and ethical competence to build sustainability leadership and organizations [8][9].
Based on the SL theory, sustainable enterprises foster a strong organizational culture with a shared vision. Culture is often managed through statements of vision, values and/or philosophy, statements intended to express direction, core beliefs and informal guidelines to influence the behavior of organizational members [44]. A vision is defined as a psychological image of the desired future for a community [76]. A meaningful and powerful vision can empower organization members’ sense of ownership, emotional commitment, engagement and accountability toward sustainable goals [77][78]. Empirical research also supports the idea that the strong and shared vision can positively drive long-term financial performance [27]. In total, sharing a strong vision with employees is vital to create sustainable enterprises [12][36][43].
From the preceding discussion, it is expected that a strong culture with vision-sharing among all organizational members is key to sustainable enterprises. This reesarch thus hopes to explore the SL element and the associated competencies to advance the SL theory as well as explain how a CBSE business may apply the theory to create sustainability and resilience.

4.4. Innovation

Sustainability leaders must rely on innovation to build successful enterprises. Rhineland’s sustainable enterprises use innovation as a critical competitive advantage to lead their respective markets [34]. Continuing innovative organizations can lead to long-term growth and sustainable results [12][36][72]. Sustainable enterprises rely heavily on innovation in teams where shared leadership and collaboration among members are presented [24][79]. The research states that SMEs need to cultivate an empowered culture to create innovation capability [80]. Innovation and trusting team members are important for SMEs [81], and small enterprises should rely on their teams’ abilities to be innovative and achieve competitive advantages [82]. In recent research, a trusting, innovative team is a significantly positive driver for enhanced sustainability performance outcomes, particularly long-term financial performance and stakeholder satisfaction, in the SME and entrepreneurial contexts [12][13]. In total, innovation is key to sustainable firms and socio-economic development. Researchers also indicate that social innovation can drive long-term success and sustainability in small community enterprises [83][84].
The literature also highlights that building sustainability leadership with innovation requires diverse competencies. They are the strategic management, systems thinking, anticipatory and ethical competencies. The sustainability leaders are required to think strategically and manage their innovation initiatives in anticipation of future sustainability needs and ethical-oriented values to achieve a balancing socio-economic and environmental responsibility [6][8][9].
Furthermore, the recent literature indicates that social innovation enhances sustainable development in community enterprises [85]. Social innovation is referred to as a “distinctive and effective response to address unmet needs motivated by a social purpose which enhances social assets and capabilities” [86] (p. 471). The social innovation can be developed or grown from their traditional cultural and/or rich environmental heritage [87]. Community members normally decide on initiatives and solutions that are best for them by their own without external pressure. Collectively, the community members try to solve a particular issue or problem by innovating positive solutions that are expected to happen and processing through their collective group innovation [88].
Existing research in the area of sustainability-oriented innovation in the CBSE context in this area is still underdeveloped. This research thus intends to explore the lacking topic of how a CBSE business can embrace or enable continuing and social innovation to support community development and sustainability.

4.5. Social and Environmental Responsibility

Social and environmental responsibility is the core to develop sustainability leadership in sustainable enterprises. Sustainable businesses should positively contribute to society to grow social responsibility, preserve cultural heritage and promote ecological conservation [24]. The literature stresses the importance of anticipatory and ethical competence in thinking about how to pave sustainable paths forward with foresight as well as to enable social and environmental responsibility toward sustainable futures [6][9]. Ethical values and norms—specifically, the pro-environmental behaviors and values with a focus on strict social and environmental responsibilities—become the crucial element in a sustainable entrepreneurship model [9]. Scholars also call for the balancing of personal ethical values and business objectives when planning and implementing social-and-environmental responsibility activities [8].
The sustainability leaders often go beyond what the law and society require in their social and environmental responsibilities. Being socially and environmentally responsible pays off by increasing sustainability performance outcomes [45]. Social responsibility is also found to be the significant key predictor of long-term financial performance in SMEs [26]. Researchers show that sustainable enterprises that operate businesses beyond minimum regulatory requirements with sustainability orientation can outperform those without [45][89]. SME firms with care for socio-economic and environmental focus can enhance profitability and competitive gains [81][90]. Recent studies also affirm an upcoming trend towards a green ideology and socio-environmental sustainability [91][92].
According to the SL theory, sustainable enterprises are primarily concerned about social and environmental responsibilities. In the CBSE context, enterprises do not solely focus on generating economic benefits but also gear toward social and ecological benefits to support the community [49]. Therefore, this research intends to examine the SL element in practice and how a CBSE business can survive and thrive for sustainability and resilience during the COVID-19 pandemic crisis.

4.6. Ethical Behavior

Ethical values and behaviors are essential for sustainability leadership to build sustainable firms. Leadership principles should stem from ethics and moral principles as the foundation for business sustainability [23][93]. A moral purpose and ethics must be embedded in enterprises to create corporate sustainability [94]. Ethics help create positive organizational impacts (e.g., integrity, loyalty and fairness at work) as well as promote equitable and virtuous environments with justice, equality and human rights [95][96]. Scholars [97][98] highlight that enterprises need to support ethical leadership to foster a strong ethical culture and create corporate values that drive sustainable performance outcomes. In the literature, ethical enterprises are found to enhance employee satisfaction, a superior business performance competitive advantage [23][37][94]. A meta-analysis indicates that leadership and ethics should go hand in hand as the strategic elements to support organizational strategies and drive the balancing of socio-ecological and economic values for long-term sustainability [99].
Diverse researchers also put forward the significance of ethical competence with moral values in developing sustainability leadership in business [6][9][100]. Osagie et al. suggest that sustainability leaders should apply personal ethics to a business situation, called “personal value-driven competencies”, in order “to strike an appropriate balance between idealism and pragmatism” [8]. The literature also highlights the magnitude of motivation or “the moral transformation from a passive attitude with respect to sustainability issues into an active and engaged attitude” [8]. Furthermore, pro-environmental behaviors and values with a strict focus on social and environmental responsibilities are key to developing sustainability leadership in business [6][9]. As a result, ethics become critical for creating a sustainable entrepreneurship model [9].
According to the literature, ethics are key to corporate sustainability and resilience. Yet, evidence-based research that investigates ethics and sustainability in the CBSE setting is still lacking. Therefore, this research aims to study this SL element and the associated competencies to advance the SL theory in this sphere as well as to explore how these ethical and moral values are operated to develop sustainability leadership and build a sustainable CBSE.

5. Community-Based Social Enterprise (CBSE) in Thailand

Historically, the concept of social enterprises has a long history in Thailand stretching back over a century ago. It originated from a cooperative form of business, called a “co-op” for short, by low-income farmer communities in rural areas to expand markets and gain financial access [101]. The government of Thailand has recognized the social enterprise model as an alternative means for promoting community development and driving sustainable socio-economic growth. In May 2009, the Social Enterprise Promotion Act was launched to promote, register and provide grants and loans for registered social enterprises [102], and the Social Enterprise Thailand Association or SE Thailand was established with aims to build a network among social enterprises and work collaboratively with other sectors to boost social and environmental impacts [103][104]. According to the Social Enterprise Promotion Act 2019, social enterprises that want to register with the Office of Social Enterprise Promotion (OSEP) must meet the following criteria: (1) have a clear social purpose and good governance, (2) generate at least 50% of revenue from selling community-based products or services and (3) reinvest at least 70% of profit into social purposes. The registered social enterprises benefit from tax allowance, and their sponsors are also eligible for a tax reduction. As of February 2021, there were 148 registered social enterprises under the new Act [104][105].
Expanding from the traditional view of social enterprises, the concept of community-based social enterprise (CBSE) in Thailand is increasingly recognized as a sustainable solution for socio-economic development at the community level and in the bottom of the pyramid setting. Since 2001, the Thai government has developed One Tambon One Product (OTOP) as a project initiative to promote the CBSE concept to the public. According to the Community Development Department (CDD), Ministry of Interior, the initiative intends to create one community-based product or service per municipality to support poverty alleviation and increase prosperity in every Thai village [106]. The government provides funding, technical assistance, business consultancies and market access to both domestic and international markets. Yet, the local communities have their rights and accountability on every business decision, ranging from product development and marketing to sales. In fact, OTOP is regarded as an instrument to build up social entrepreneurial activities among the grassroots. The government introduced a grant of one million Baht to fund the project accordingly and allocated its budget to 74,989 villages during the third phase of its project implementation [106][107].
Later in 2005, the Community Enterprise Promotion Act was enacted with an aim of supporting and promoting CBSEs in Thailand. Later, this act evolved to the Unity Civil Society Policy or “Pracharat Rak Samakki” in 2015 [107]. Then, the Department of Agricultural Extension, Ministry of Agriculture and Cooperative oversees registration and administrative support for the community enterprises. Thus far, there are 116,298 registered community enterprises, but only 520 of them were officially registered as legal entities or companies as of 2021 [104][108].
According to Sakolnakan & Naipinit [109], there are three levels of community enterprises in Thailand.
  • Primary Level. At this level, the community enterprises produce their own goods for their own consumption on a small scale, such as consumables such as soap, shampoo and dishwashing liquid, and the produced goods can be locally sold to community members at lower prices than those of large manufacturers. This can help lessen the cost of living for people in the community.
  • Development level. Community enterprises at the development level have the capacity to develop their new market channels. Additional goods and services are primarily sold to neighboring communities and other people who visit the communities. The revenues and profits from those transactions return to their community.
  • Progressive Level. At the progressive level, community enterprises produce their goods and services for mass markets. They better understand the market mechanism and continuously expand to other external markets and the general public. Profits are used to grow their businesses for community development and sustainability.
In addition, the literature identifies many challenges and obstacles found in CBSEs in Thailand that hinder their business success. For example, poor leadership and organizational management, limited production capabilities because of old machinery and the high cost of labor [110], accounting and financial management [111][112] and marketing and product development in terms of product design, trademark, labeling, packaging, pricing and proper distribution channels [113][114][115].

6. Discussion & Implications

This research intends to broaden the scholarly knowledge and advance the SL theoretical development. The research puts forward that the sustainable leadership practices and sustainability competencies are necessary for capability building and human capital development toward sustainable futures in the CBSE context. An alternative sustainable business model for CBSE, built on the previous research of Hallinger & Suriyankietakew’s [5] sustainable leadership model and Suriyankietakew & Petison’s [6] strategic management for sustainability model, is thus proposed, as depicted in Figure 1. Figure 1 illustrates the proposed model that encapsulates the integrative development of the future of sustainability leadership via incorporating the six-category SL practices and five sustainability leadership competencies altogether to achieve overall corporate sustainability outputs and outcomes. The proposed model may unfold how the advanced SL theory connects to practice.

In practice, the researchers suggest that sustainability leaders, sustainable entrepreneurs and modern managers should apply the alternative sustainable business model in their business to achieve sustainable results, as depicted in Figure 1. They can pragmatically apply the essential six-category SL practices (i.e., long-term perspective, people priority, organizational culture, innovation, social and environmental responsibility and ethical behavior) together with the key competencies (i.e., strategic, system thinking, anticipatory, interpersonal and ethical competencies) to their firms. As a result, they can achieve the sustainability outputs (i.e., sustainable competitive advantage, performance impact and triple-bottom-line benefit) and gain from diverse sustainability outcomes toward future balance, resilience and sustainable development.

Further, this research offers the following managerial suggestions. The researchers recommend that modern sustainability leaders, entrepreneurs and managers in Thailand and possibly other developing countries or emerging economies should embrace and embed the essential value-based sustainable leadership practices and necessary competencies to withstand all weathers, such as the COVID-19 pandemic crisis, as well as achieve corporate sustainability and resilience. Here are the following how-to guidelines.

Firstly, they should adopt a long-term perspective and strategies for organization-wide management practices to achieve corporate sustainability and resilience in the long run. Secondly, they should set people as the top priority by enabling team orientation from the humanistic management and sustainable development perspective, such as sustainable HRM to HRD, with the focus on the satisfaction of all stakeholders. The researchers put emphasis on enabling human capital with care for stakeholders as a key to drive all-inclusive sustainable growth. Thirdly, they need to cultivate a sustaining organizational culture through strong values and a shared vision to support the ecological conservation and cultural heritage preservation that can be transferred from this generation to the next. Next, they must foster shared social innovation in conjunction with high quality and systemic knowledge-sharing or retention to support sustainable growth. This research also highlights that continuing social innovation is critical for sustainable CBSEs due to intense competition and unexpected changes in today’s environment. Additionally, successful CBSE leaders, entrepreneurs and team members should co-design or co-create social innovation for long-term sustainable benefits for the community. Fifthly, they must integrate pro-environmental behavior, social responsibility and sustainability-oriented actions to support the natural ecosystems as well as to develop lasting triple-bottom-line benefits to all stakeholders. Lastly, they need to establish strong ethical principles, moral behaviors and altruism conduct in all business decision-making and management activities to achieve sustainable results and create long-lasting sustainable enterprises. It is thus suggested that high ethical and moral values should be regularly practiced in sustainable CBSEs. Further, successful social enterprises need to go beyond the regulatory and law requirements to benefit its community growth, resilience and sustainable development.

Furthermore, the research proposes that the sustainability leaders and sustainable entrepreneurs should be the change agents and become the key players in bringing about change to the business and society as a whole. Additionally, they should invest in developing the necessary competencies to create ongoing sustainability and resilience in firms. They need to purposefully and systematically build in the strategic (management) competence in their socio-environmental strategies as well as integrate sustainability criteria into business processes and all management systems to balance the triple-bottom-line benefits. They need to put emphasis on the importance of systems thinking competence, so that everyone understands how their parts are related to sustainability values and behaviors. Moreover, they can contribute accordingly to create corporate success and sustainability in the long run. They should also develop anticipatory (foresight thinking) competence to set a strong and shared long-term sustainability vision as well as be mindful of their impending actions that create impacts or forge ahead sustainable futures.

Finally, the existing sustainability challenges require sustainability leadership and strategic foresights from multi-lateral parities and diverse stakeholders to take corrective and transformative actions for sustainable growth. For policy-makers, this evidence-based research may be a foundation for the further development of sustainability leadership programs (e.g., social innovation capacity-building or sustainable HR management and development) in the SME sector, particularly in the community-based social enterprises at the bottom of the pyramid settings. The research also implies that an integrative sustainability development policy for the social enterprises is required and should be incorporated in national plans and strategies for sustainable futures. In particular, the key policy should center on systemic and strategic sustainability implementations for all-inclusive capacity-building and social human capital development. Lastly, the researchers' proposed model may be an alternative sustainable business model that can guide and support balancing social-economic and ecological progression in the society toward achieving the UN SDGs or the researchers' global common goals toward sustainable futures together.

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