Page last updated at 04:15 Asia/Manila, Monday, 03 November 2014 PH
A most effective way of addressing the evils of unbridled capitalism is to make sure that business people do not put "labor" in the same category as land, capital and technology. I must admit that we economists have been mainly responsible for creating a mind set among people in business, or for that matter policy makers in government, that human beings can be considered as a "factor of production" just like the other three. Time and again, we must remind ourselves that the workers or employees in a business are much more than a "factor of production." They are "individuals with a conscience, freedom and numerous possibilities for self-realization," to quote from a book by IESE Business School professor Domenec Mele enttiled "Management Ethics: Placing Ethics at the Core of Good Management." Ethical practices in management must start with the clear principle that every worker is a person, a living being endowed with emotions, rationality and freedom.
This truth about labor should lead to the centrality of the person in management. According to Dr. Mele, we can deduce at least four consequences from this self-evident fact. The first concerns a human quality in dealing with people. This is especially applicable to Philippine culture since the proverbial "calidad humana" is a competitive advantage of Filipinos, whether working in the Philippines or abroad. There can be different degrees by which employers can take account of this human quality. There can be mistreatment, which entails a blatant injustice; indifference toward persons, which is disrespect for people; respectful treatment, which is that required by justice; concern for people's interests, or care; and finally, a friendship-based reciprocity, in which a great consideration of the person exists. This friendship is expressed in terms of mutual esteem among people, and willingness for cooperation and service toward the common good. Given the smooth, interpersonal relationships common in Philippine society, the latter two degrees must be the bases for people management, going beyond justice and showing intelligent love.
The second consequence of making the person the center of business is to consider the firm as a community of persons with a specific mission. Business cannot be considered merely as a set of contracts in a system of vested interests. The business firm must be viewed as made up of people bonded together by the common purpose of producing certain goods and services, and simultaneously achieving their own respective goals. Within the community of persons that every business is, there are different types of power. The exercise of power, however, requires responsibility and its legitimacy comes from contributing to the common good. For example, the exorbitant compensation given to some CEOs is clearly an abuse of power.
The third consequence refers to the work people do and how work is organized within the firm. Communication based on truthfulness and transparency is necessary for a sound organization of work. Understanding the human being as a person endowed with intellect and free will enable the managers to create a system of motivations that can appeal, not only to the economic and social needs of the workers but also to their noblest inclination for integral human development and to contribute to the common good. The organizational structure is crucial in considering the centrality of the person and in favoring personal growth.
Finally, the fourth consequence of the centrality of the person is the need to build a corporate culture that is indeed centered on the person. As Professor Mele recommends, such a culture can be promoted by (1) recruiting, selecting and promoting people who are not only competent but who have a human quality (calidad humana); (2) consistently ensuring the centrality of the person in corporate missions and values, strategies, policies and decision-making; (3) developing person-oriented organizational and power structures; (4) designing and operating with fair and caring control systems; (5) acting with justice and intelligent love in dealing with people, and (6) considering the centrality of the person in ceremonies and events, stories and symbols. In my more than forty years of doing strategic management consulting with Philippine firms, both large and small, I can say that there are numerous local firms that have really made the person the very center of management practice and corporate culture. These Philippine firms--such as the Ayalas, the Aboitizes, UNILAB, PHINMA, Insular Life, Alaska and the Chiongbians, should export their corporate culture to other countries in Asia to help humanize capitalism in these other countries. Within the Philippines, these person-centered corporate cultures should be transferred to the burgeoning BPO/KPO sector where there is a real danger that our Filipino employees are being treated just as productive factors of production, "human resources", whose total human welfare is sacrificed on the altar of cost competitiveness and productivity in the global outsourcing industry. For comments, my email address is firstname.lastname@example.org.