I’m going to have to stop using that joke, the one that goes ‘He has more holidays than Thomas Cook’. Perhaps I can insert the name of another travel agent, Hays would be a good fit. Not that the demise of the UK’s oldest travel company is anything to laugh about.
The passing of any company is always of concern but one that has tens of thousands of employees and hundreds of thousands of live customers sends shivers through the economy. Thomas Cook invented the package holiday and so what happened?
I’m nowhere near close enough to know what went wrong with the company though I have read that their issues go way back to the rise of online holiday bookings and its lack of response yet this is not what I wanted to talk about. Instead I wanted to address some of the ethical issues around what has transpired.
I am not defending the directors’ actions leading up to the collapse of the company but am left wondering if they were defenceless against the inevitable. Take their remuneration for example. You could argue that they should not have taken such large bonuses, you could argue that they shouldn’t anyway, but declining them would have sent a clear signal that the company was in trouble. This would have spooked the market even more than it was. If the directors don’t believe in the company then why should investors?
It is a similar issues with bookings. Should the company have continued to sell holidays knowing that it was likely to go bust. Again, stopping selling, or reducing sales would have exacerbated their cash flow problems and also sent disturbing signals to the market. Both would have resulted in hastening its demise and prevented the company from trading out of its problems.
Another issue and perhaps the most ethically questionable is the development of communities abroad almost totally dependent upon the trade from Thoams Cook for their survival. The collapse of the company means that the hotels have had to fold and all the businesses and people that have relied upon that trade for their income have no alternative. The hotel companies should have diversified and Thomas Cook should have ensured that they never put a company in that position
The issue therefore goes back, in my opinion, to the very early days when the company made the wrong decisions about the way that the market was moving and its dominant position within it.
Are these questions of business ethics? Yes, I think so, though they are extremely difficult to unravel.