COVID-19, Good Company Index and Sri Lanka

We would assume that a company is good if it practices sustainability, pays a fair wage, and the CEO doesn’t get 800 times what the average worker gets

As usual COVID-19 is going to test everything in the world. There is no exception for Sri Lanka as well. The second wave of the coronavirus officially hit Sri Lanka by questioning certain human resource practices of leading companies in Sri Lanka. 

A few decades back we discussed a subject called ‘Personnel Management’. But it has changed into ‘Human Resource Management’ clamming that humans are invaluable resources for any company. Now we can see experts using different jargons such as ‘Human Capital Management’, etc. It is really worthwhile to have a discussion in society on the ‘actual value of human resource’ for any organisation. 

Nevertheless, we need to question this so-called ‘Human (as) Resource’ can be seen only in annual reports, journal articles, books and award ceremonies. There is a need for researchers to investigate the actual scenario in the corporate sector. And also we need to revisit Frederick W. Taylor’s scientific management which ignored ‘the human factor’ and reduced workers to machines!

In this context, it is interesting to see a ‘Good Company Index’ suggested by Marketing Guru Professor Philip Kotler by looking at the holistic perspective of business for sustainable competitive advantage.

In this Index, “We would assume that a company is good if it practices sustainability, pays a fair wage, and the CEO doesn’t get 800 times what the average worker gets,” Kotler says. That way, when consumers are deciding between two similar competing offers, they can choose to buy from the company that ranks higher on being good. The market shares of good companies would grow faster, creating a virtuous cycle. Over time, more companies would have to practice sustainability, pay a fair wage, and not overpay management if it wants its brands to be preferred. 

As Henry Ford recognised, if wage earners don’t share in growth, they will not be able to buy the goods and services that the business world produces.” (https://insight.kellogg.northwestern.edu/article/philip-kotler-on-marketings-higher-purpose).

As clearly mentioned in the article customers need to take a decision to define a ‘company that ranks higher on being good’. In this context, we need to take into consideration how the company treats employees. Moreover, a recent incident in Minuwangoda would be a good eye-opener for practitioners and authorities to have a serious discussion on Sri Lankan female employees in garments with long hours and unsafe working conditions. 

(The writer is Professor in Management Studies at Open University of Sri Lanka. You can reach Professor Abeysekera on [email protected].)