Tuesday, November 24, 2015

DirecTV Customer Complaint Crisis (2010)

DirecTV logo
DirecTV may be a powerhouse in the digital television broadcasting industry, but due to poor business practices. Through the years, many recipients of DirecTV's service have complained about a variety of reasons including; lack of sales disclosures, contractual changes, and cancellation fees. One customer, a woman named Lynnae McCoy took us through her frustrating experience with DirecTV. Lynnae had originally agreed to an 18-month contract of 200+ channels for $44.99, with an 18 dollar rebate and no premium packages included. Lynnae decided to call the company's customer service when she noticed some inconsistencies in her bill. She was charged for Starz and Showtime, and her basic package had gone up to $62.99. In an attempt to sort her bill, Lynnae was told that she would have to pay a $17 probate, even though she never agreed to pay for the premium packages. Growing more frustrated Lynnae began looking into ways in which she could get out of her agreement, to which she was told that there would be a $320 charge since she was on a 24-month contract, that of which was also not agreed on. This is not the only case like that, there are countless other complaints belittling the company for its poor service.
It is discouraging knowing that customers are being treated like Lynnae McCoy, even though the company had reached an agreement with 22 states in 2005, and another agreement with all 50 states worth up to $14 million five years later in 2010. The better business bureau is an organization that aims to instill a common understanding of trust into their customers, by creating an environment where buyers and sellers operate under ethical business practices. It comes to no surprise that DirecTV is not accredited by the BBB, but businesses are under no obligation to seek accreditation. In just the past few years the BBB has issued DirecTV its lowest grade of F twice, and a low grade of D, for overall poor service and allegedly ignoring customer complaints.

Michael White, CEO of DirecTV
The main stakeholders in this DirecTV case are the customers, employees, and the company board of representatives. The customers of DirecTV are the most direct stakeholders because they are the ones being treated unethically by the company. The employees are also stakeholders because although many of them may not want any difficulties in dealing with customers, they are following the guidelines given to them by the company on how to handle certain situations. The last stakeholder, in this case, is DirecTV's board of representatives because they are the people that control the systems and processes of how everything works in the company, good or bad, ethically or unethically.

Milton Friedman's concept of individualism is basically the right for anyone to pursue whatever they desire, and no one else has the right to make that decision for them. Friedman also believed, "the only goal of a business is to profit, so the only obligation that the business person has is to maximize profit for the owner or the stockholders" (Salazar 2-12) At first glance analyzing this theory, an individualist would say that DirecTV was acting ethically in their primary goal was to profit. The problem here is that there have been so many complaints, some of the constraints of the law, while others not, so there is no way to directly tell if they were acting within the constraints of the law. It can be said for some not all cases, the company DirecTV treated customers unethically prior to the settlements of 2010. Although the main goal was still to profit, they failed to do this withing the constraints of the law. Although there have still been many complaints made recently towards DirecTV, an individualist could argue that post-settlement 2010, the company has been ethical, by having a primary goal of profit, while operating under the constraints of the law.

The ethical theory of utilitarianism takes the main points of egoism and altruism and combine them into one concept, to maximize happiness in yourself and others. Utilitarians consider more than just the company or one individual; they consider the cost and benefits of everyone affected by the action. A utilitarian would begin analyzing this through the perspectives of each of the stakeholders. First, the customers are most directly affected, in being given poor services and support by the company, making many customers increasingly frustrated.Next, the employees benefit from these actions by doing their job to earn a salary. Finally, the company board benefited the most by making a profit while not having to deal with customers. Since not all of the stakeholders were left happy, as a result of the business practice a utilitarian would deem these actions as unethical.

The Better Business Bureau (BBB) logo

Developed by Immanuel Kant, this theory is based on the concepts of rationality and good will. There are four basic principals found in Kant's book, Groundwork of the Metaphysics of Morals, act rationally, allow people to act rationally in their own decisions, respect others, and have the will to do right. Analyzing this case, a Kantian would say that DirecTV failed the categorical imperative by treating customers as a means for profit, and prior to 2010, failing to follow company law and regulatory framework. As a result of their actions, categorical imperative would label this as unacceptable.

Virtue Theory
The virtue theory was developed through Aristotle's ethics and is an approach to ethics that says an individual's character is the key component to ethical thinking. In this theory courage, honesty, temperance, and justice are the four main virtues. Analyzing this through a virtue theory perspective, DirecTV showed no signs of the virtue courage and honesty in misleading or hiding information from people in their advertisements. The virtue temperance was abused by the company, by setting unreasonable cancellation fees for customers when their service was having reoccurring problems that could not be fixed. The final virtue justice, one could argue that the company did treat their employees just, but the company has not treated many of their customers justly, which ha resulted in a steady income of complaints about the company. A virtue theorist would say this company has unethical business practices due to failing to comply with any of the key virtues and only having a main goal of profit.

Justified Ethics Evaluation
I think that DirecTV has been failing to provide some but not all of their customers the support and services that go along with a premium product. If DirecTV wants to become a more ethical company, they need to focus on becoming a more complete business. By this, I mean that although the company already has a high profitability, the company is lacking the ethical background which is very important in any business. Seeing as though the company reached multiple agreements on the same thing over a span of five years, should show some light on how much of a conscientious effort the company is making to better itself. I believe that is a result of the higher ups in the company lack of interest in ethics, for sole pursuit of profit. If this company is ever going to make an effort in improving their overall ethics, it is not going to happen overnight, something to this extent will take a time to heal the minds of the public, due to the countless years of profit-crazed management. It is strange seeing the success of the company knowing its questionable business practices. In my opinion, DirecTV owes many of its customer an apology and possibly a refund, due to years of bad business practices that make you question the core values of the company and its motivation.

"It Might Be Legal, but It Sure Isn’t Ethical!" BeingFrugalnet RSS. 18 Feb. 2009. Web. 24 Oct. 2015.

"Better Business Bureau. Start with Trust®." DirecTV, Inc. Business Review in El Segundo, CA. Web. 24 Oct. 2015.

"Consumer Complaints Against DIRECTV Lead to $14 Million Settlement - DailyFinance." DailyFinance.com. Web. 24 Oct. 2015.

"About Us : Company Profile." DIRECTV. Web. 24 Oct. 2015.

Kant, Immanuel, Groundwork of the Metaphysics of Morals, Ed. and translated by Mary J. Gregor, Cambridge University Press, Apr 23, 1998.

Salazar, Heather. The Business Ethics Case Manual: The Authoritative Step-by-Step Guide to Understanding and Improving the Ethics of Any Business. Print.

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