Author:Sura, Kanchana
Position:One tumbon, one product - Essay

The objectives of this study are to analyze the managerial potential of "One Tumbon, One Product" (OTOP) leaders based on the sufficiency economy philosophy, to study the managerial potential of OTOP leaders, and to suggest guidelines to enhance the managerial potential of these leaders based on the sufficiency economy philosophy. Quantitative research was used to evaluate the managerial potential based on the sufficiency economy of OTOP leaders in Chiang Mai. The population consisted of leaders of 124 groups from 25 Chiang Mai districts who had registered with the Department of Community Development to join OTOP projects. The sample was selected from leaders of OTOP business groups divided in accordance with types of products. This study finds that most leaders, sponsored and assisted by many other organizations, were enthusiastic about using this opportunity to better themselves but were initially unaware of and unconcerned with the sufficiency economy in their work. Furthermore, the potential of most OTOP leaders in production, human resources, and financial, organizational, and marketing management, based on the sufficiency economy philosophy, was greatly augmented by attending the development project. On completion, the study recommended that OTOP leaders should apply the sufficiency economy in their management approach and should also conduct their work based on the middle path.


"One Tumbon, One Product" (OTOP) has been an important policy in the overall economic planning in Thailand ("Tumbon" is the Thai word for subdistrict). This approach was initiated in Japan in 1999, (1) but the Thai government adopted the idea following then Prime Minister Thaksin's official visit to Japan during that year. (2) The main concept of OTOP emphasizes creating income by directing each Tumbon to make one particular product from its local resources. Thailand has been trying to tackle the problem of poverty by concentrating on the rural rather than the suburban districts. In 2000, the rural population in the country accounted for 93 percent of the total number of people, 68 percent of whom were classified as "poor." (3) As a result, the Royal Thai Government tried to help poor people living in rural agricultural regions with a set of programs and policies at the grassroots level, among them the OTOP policy, which emphasizes self-reliance and encourages each Tumbon to make marketable products by drawing from its local talents and using its own identity as well as local materials, thus helping poor people in the community to have a sufficient income, alleviating the problems associated with poor people having to migrate to cities for work while reducing the overall level of rural poverty.

OTOP is Thailand's community-based, private-sector and market-oriented policy that is consistent with the philosophy of economic self-sufficiency espoused by His Majesty King Bhumibol Adulyadej as early as 1974. At the heart of this philosophy is human development toward the general well-being of the people with an emphasis on self-reliance, self-protection, reason, knowledge, and morality. (4) Inherent in the philosophy are three basic principles that Thailand should pursue: (a) independence in the economic sector whenever its resource base makes it reasonable to do so, (b) development of policies that are family-centered and community-based, and (c) projects aimed at the grass-roots level and involving local people as leaders and participants. (5) Ultimately, it is hoped that such policy will lead to a more resilient, balanced, and sustainable development. The OTOP enterprises are designed in accordance with such principles and policy orientation.

Chiang Mai, a province in northern Thailand, has played a leading role in implementing the OTOP policy. Its local entrepreneurs have participated in the OTOP projects; by 2014, 1,181 of them had registered. (6) OTOP community businesses in Chiang Mai have raised the income of local participants on an annual basis. For example, in 2012, Chiang Mai generated 5,100 million Baht of income from the OTOP projects, and the number increased to 6,500 million Baht the following year. (7) It should be noted, however, that not all the OTOP projects in Chiang Mai have relied on local resources for their products, resulting in a diluted local identity. (8) To address these problems, it is essential to develop human resources in creating and sustaining businesses, a task that both community and business leaders should play an important role to fulfill. Doing so is consistent with Prasopchoke Mongsawad's emphasis on improving human resources to ensure self-help, aside from making economic gains. (9)

This study is intended to examine the OTOP leaders in Chiang Mai province in Thailand including their management approach and the impact of their operations by evaluating their merits and flaws against the "economic sufficiency" principles in order to provide some guidelines for other OTOP leaders whose role in Thai economic development is pivotal in the process of massive globalization. Further, the study assesses the impacts and effectiveness of development projects, consisting of workshops, or seminars, applying the sufficiency economy concept in management for OTOP leaders over a period of two months.

The aim of the development project is to provide to OTOP leaders knowledge concerning the sufficiency economy concept, exchanging information, opinions, and guidelines with them in order to enable them to apply this concept in their management. The program also offers an inspection tour of community business groups that have succeeded in applying the sufficiency economy concept in management. The program is conducted by experts from the Department of Community Development, the Sufficiency Economy Learning Center, by lecturers specializing in management from universities, and by community business groups that have succeeded in applying the sufficiency economy concept in their management activities.


  1. The Principle of "One Tumbon, One Product" and Business Operations

    Needless to say, the fundamental factors in business operations and management include input, process, and output, along with production, human resources, marketing, and financial management. (10) The principles of OTOP business operations envisage four main types of activities, namely production, marketing, finance, and human resources, and are thereby similar to the concepts of business operations as a whole. As human resource management is one of the main ingredients of OTOP business operation, the level of the latter's success depends on the qualities and capabilities of the individuals involved. Therefore, it is necessary for the firms to develop human resources in order to manage their work efficiently. Doing so is essential in realizing one of the fundamental concepts of OTOP, which places a great deal of emphasis on developing human capital. (11) Although any business naturally needs to be concerned with profits, the OTOP undertakings do not, and should not, aim exclusively at profit maximization. Instead, they should involve giving, sharing, and helping members of communities.

  2. The Principle of Economic Sufficiency and Business Management

    The rapid pace of globalization has had profound influences on economic development across the world. Businesses have been compelled to make adjustments and to improve their operations in order to maximize their gains, including those outside of the financial realm. One of the important improvements that most businesses have to make is in the area of management, including the management of production, marketing, human resources, and finance. In addition, corporations also have to exercise social responsibility in order to achieve long-term economic growth through providing their employees with learning opportunities as well as transparent financial accounting. (12)

    Furthermore, it is also necessary to apply the concept of economic sufficiency in business operations by increasing ethical behavior and social responsibility. Some Thai scholars, such as Wiruchanipawan, have observed that business organizations are able to better deal with the challenges of rapid globalization if they are socially responsible and abide by the code of ethics and moral conduct. There are eight principles enshrined in the theory of sufficiency economy management. (13) They are as follows:

    1) Moderation: individuals and communities should practice moderation in their production and consumption in order to achieve sustainability. An example of this at a personal level would be emphasizing the freedom to carry on a simple, minimal production and consumption way of life without succumbing to rampant materialism and consumerism. At the community level, a progressive sufficiency economy involves encouraging cooperation with other communities and organizations throughout the country, including large businesses, banks, and research centers, thus facilitating the exchange of knowledge, ideas, and experience, and achieving the goal of sustainability.

    2) Rationality: decisions made by individuals and communities with regard to sustainable living should be made in a careful and rational way by taking into consideration all the relevant factors and possible outcomes.

    3) Self-protection: members of the community must constantly search for the latest information and knowledge for self-protection and self-preservation and anticipate the impact of various changes while maintaining the flexibility and adaptability...

To continue reading