Good Company Index for 2017

In business, we are always concerned about quality assurance and competitive advantage with better performance. At present, many companies practice different methods to perform better, using the services of consultants as they have to provide better services as well as goods to their customers. At the same time, they should care about their company and their employees. 

Last week, we had a long discussion about Corporate Social Responsibility (CSR) in a business forum. Most of us were of the opinion that (or our operational definition of CSR) CSR was a mandatory requirement for a Company Annual report and/or do something (such as charity) to the society. Broader definition of CSR has been identified as:

• Environmental efforts: One primary focus of Corporate Social Responsibility is the environment. Businesses regardless of size have a large carbon footprint. Any steps they can take to reduce those footprints are considered both good for the company and society as a whole.
• Philanthropy: Businesses also practice social responsibility by donating to national and local charities. Businesses have a lot of resources that can benefit by engaging in charities and local community programs.
• Ethical labour practices: By treating employees fairly and ethically, companies can also demonstrate their Corporate Social Responsibility. This is especially true of businesses that operate in international locations with labour laws that differ from those in the United States.
• Volunteering: Attending volunteer events says a lot about a company’s sincerity. By doing good deeds without expecting anything in return, companies are able to express their concern for specific issues and support for certain organisations. (Caramela, 2016)

It is clear that there can be many facets of CSR.  Treating employees also play a vital role in this scenario. Anyway, consciously or unconsciously, most businesses try to address this opportunity in a myopic manner.

Interestingly, Marketing Guru Professor Philip Kotler has suggested a Good Company Index by looking at the holistic perspective of competitive factors with customer empowerment. Refer below:

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.”

In the same article of Kotler on “Marketing’s Higher Purpose”, he argued that with information about corporate behaviour more accessible than ever before, customers are no longer passive agents in the marketing process. Increasingly, they have a role in driving corporate social change.

In this setting you get a customer who is always concerned about “everything” for his /her buying with sustainability. This is really essential in current global arena which we can see many red oceans (cut throat competition) and “marketing gimmicks” without understanding the word “sustainability”. No matter what you have strategised, to increase your market share by satisfying your stakeholders, you should be ultimately responsible for the betterment of the world. More importantly, you need to have a “heart” for your business with “brain”. 

Think about this and it would be a perfect way to start 2017!

(The writer is a Senior Lecturer and Chartered Marketer .You can reach Dr. Abeysekera on [email protected].)