racoma.com.phJ. Angelo Racoma on technology, economics, writing, problogging, and getting things done

Goodwill.

Ask any entrepreneur or businessman worth his/her salt about the
concept of goodwill, and the response would most likely be that this is
essential in any business undertaking.  Accountants even put a
monetary value to goodwill.  Economists will consider it an
“economic” benefit (what can be said as a psychic income, as opposed to
only a financial one).

But some people just don’t get it.

To some, it’s always, always about the money.

Let me tell you about an experience I have with these entrepreneurs who
started up a pre-school and tutorial service a couple of years
ago.  Their business model seemed to revolve around the following
points:

1. getting as many students to enroll in their classes;
2. charging as high a tuition / tutorial fee as they could;
3. paying their teachers and employees as low as possible;
4. overworking their teachers and other employees–getting the most out of them in an unfair way; sulit in Filipino parlance;
5. mitigating, as much as possible, the fees paid to authorities for business licensing, taxes, and other permits;
6. Treating clients/parents in a biased manner.

Now the first and second point don’t jive, IMHO, especially when one considers quality of education.  Imagine cramming more than 20 pre-school
students in a classroom.  That’s toddler hell for both the teacher
and the students.  The quality of education (or even at least the
learning experience) takes a nose dive when you pass a certain
teacher-to-student ratio.  And yet they keep on welcoming, and
even pressing for additional enrolees, even right smack in the middle
of the school year, or even towards the end.

These guys should think about setting up additional classrooms and
hiring additional faculty.  But no.  They’d rather not.

All for money.

On to the third and fourth points.  Business
is business, I understand.  But the human resource factor in the
education industry is indispensable in ensuring the quality of
teaching.  I won’t dare send my children to schools that don’t
take this into consideration.  Overworked and underpaid teachers
will simply lose the drive and passion to provide an effective learning
environment–more so especially in the formative pre-school ages.

With the high tuition charged, it’s simply a mismatch.  I could
not imagine how a school that charges almost PhP 50,000 per year per
student could manage to pay its teachers only a couple of thousand
pesos above the minimum wage.  And without decent HR practices
such as a sound leave policy (no work, no pay), reasonable overtime
pay, among others, it’s simply disheartening.

All for money.

Fifth, rules are rules. 
While some rules are meant to be bent or even broken, I could not
understand why the establishment in question blatantly disregards some
essential considerations in setting up a business.  I don’t think
they pay the proper taxes if at all, or if they remit to the proper
authorities the funds amounting to tax witheld from employees. Talk
about setting a bad example.

All for money.

Sixth, bad P.R. is bad P.R. 
An entrepreneur in his/her right mind shouldn’t have to be biased
towards only the clients paying more money.  Good rapport
established with everyone (including those who could only afford to
avail the lower-end services/goods) goes a long way.  I could not
understand the logic behind treating children of well-off parents well,
while handling roughly the kids of those who don’t seem to be doing as
well.  It seems that these school owners only welcome children
whose parents they can squeeze the best buck off.

All for money.

Yes, these acts will ensure bug bucks in perhaps the first few years of
operation.  But this is unsustainable.  I won’t be surprised
if these guys close shop after a couple more years.  Once the
staffers get fed up with the insensitivities of their employers, and
once the parents learn of the bad service ensuing from this, and the
crappy mentality of the owners, money will stop flowing in.

Yes, business is business.  But I would treat a school
differently, especially a preschool.  I would look for an
environment that would best address the developmental needs of the
students.  A certain positive holistic aura brought about by
positive people is one sure way of attaining this.  And this has
to start from the top.

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