Coercive Control or Cost, Productivity & Convenience
11 Aug, 2009 by James L. Clark in Articles & Papers, Business, Strategy
Question Pondered:
To what extent has the implementation of customer relationship management moved away from coercive control of staff and a preoccupation with cost, productivity and convenience?
Possible Answer:
Despite what many would have us believe, there have been no significant developments and certainly no major paradigm shifts in terms of how members of staff who work in customer relations are controlled or how costs, productivity, and convenience are viewed and prioritized in corporate environments. As to convenience, one might ask, ‘to whom is it we are referring’. If anything, upper-level managers are using ‘superficial’ changes to bring about an ‘appearance’ which suggests that modifications have been made to ‘improve’ the freedom of employees. But in reality, this is just another form of control – they are manipulating employees into believing that things are ‘better’ than they used to be. Ultimately, managers are concerned with one thing… the bottom line. Coercive control – control in all its forms – is the only way to be sure that what you expect to be done is actually done by employees. Freedom is a luxury for the laid-back entrepreneurial environments found in Berkley and Santa Cruz, not in real corporate governance.
Kanter (1983) argues that the change agents in modern corporations require ‘power skills’ that help them effectively overcome resistance. She suggests the ‘waiting them out’, ‘wearing them down’, ‘inviting them in’, ‘warning them off’, and sending emissaries’ as techniques to negotiate, manipulate, and coerce employees into doing things you want.
Without question, companies want to provide ‘better’ customer service. The hyper-competitive business environment of the new millennium has forced organizations to increase their emphasis on service quality. Things are ‘sink or swim’ out there and customers are not nearly as loyal as they used to be. As a result, a variety of ‘management’ and ‘customer relations’ models have been proposed by academic and industry writers will do and say almost anything to get on the band wagon to satisfy a plethora of personal motivations such as being recognized as an ‘industry leader’ or just to increase their own profitability via publishing.
If we look back to the mid 1980s we begin to see some changes in this area with the introduction of the ‘internal customer’ concept. Not unlike now, this was a time of economic hardship and many organizations were trying to simultaneously improve quality and reduce costs (Davis, 1991). Reducing costs often came by eliminating people through downsizing. Because of the understated importance of internal operations, quality was often sacrificed for short-term cost savings. The internal customer service model emerged to counter the negative impact of downsizing and became a rallying cry for enhancing an organization’s quality efforts. This still happens today; nothing has changed in this respect. Ultimately, all management really wants from their employees is productivity. They want to get the most out of them possible to make the customer happy so that they will keep coming back again and spend more money. They want to develop ‘loyalty’ and true loyalty is defined by a high relative attitude in addition to high repeat purchase; this is an extremely valuable asset to any company.
It has been suggested that strong customer relationships with a company’s service personnel lead to true customer loyalty to the service firm, as positive attitudes towards service staff are transferred directly to the company. In situations where a strong relationship develops between the customer and only one particular service worker, true loyalty to the service firm will be an outcome of high personal loyalty and therefore be dependent on the continued availability of the service worker. To assist managers in encouraging relationship development between high value customers and their service personnel, potential antecedents of relationship strength have been identified. These include: the amount of perceived benefits/rewards the customer receives from the service worker, the age of their relationship, the service contact intensity, the customer’s perceived risk in acquiring the service, the customer’s interpersonal orientation and the service worker’s customer orientation as perceived by the customer (Bove, 2000). But what does this mean exactly? It means control results in productivity which makes a profit.
The only way to assure this is to have ‘capable’ staff who can deliver desired results; to have staff who will guarantee, if you will, a customer’s happiness. Control, in all of its forms, facilitates this by assuring that what they want done, gets done. As such, profitability is maximized.
However, it is important to note that ‘capable’ isn’t necessarily synonymous with ‘free to do as they like’ in the corporate setting. Most organizations are still tremendously ‘top-down’ in their management style. There may be little ‘title’ changes in the customer relations section that might suggest otherwise, such as in the airline industry where all customer service representatives are called ‘customer service managers’. But at the end of the day, these ‘first line’ employees still report to the next group on the ladder – the real managers – who supervise the staff’s actions daily and make sure they work within given parameters. I’ll explain a little more about where I got this.
Since little empirical data exists in this area, I decided to interview a number of people working in customer relations. This portion of the essay should therefore be seen as an ideographic exploratory study of the topical question posed. By speaking with people who actually work in this area, I was given considerable insight as to what is actually happening in corporate organizational environments and the opportunity to develop and formulate new insights; to ask questions and to assess phenomena in a new light (Robson, 1993). As we know, data is not inherently quantitative as it can be bits and pieces of almost anything: words, images, impressions, gestures, or tones which represent real events or reality as it is seen symbolically or sociologically. Qualitative research uses unreconstructed logic to get at what is really real — the quality, meaning, context, or image of reality in what people actually do, not what they say they do as so often found in questionnaires. Speculation, conjecture, and guesswork may be okay for the ‘hypothetical’ example in an essay, but to add any real credence to my assertion that there hasn’t been any significant move away from coercive control, I knew that going to the ‘source’ would prove beneficial; in this sense, my essay has a phenomenological philosophy instead of a positivism philosophy underpinning it (Saunders, 2000).
I started this exploration with Continental Airlines, a US based company with its customer service offices in Texas. An associate of mine works for them and we decided that I would call and make a complaint to ‘test’ if the person helping me could be pushed to work outwith the boundaries given to them by upper-level management. Having worked as an intelligence consultant, I have conducted scores of operations like this for corporate managers to assess policy and security.
In this case, I spoke to a man who I will call ‘Mike’ about an imaginary flight I had taken. I explained that I was tremendously unhappy with the way I had been treated during the flight; that and that I had been sitting very near a steward who consistently made racial jokes and used inappropriate slurs. I further complicated it by saying that after making complaints to the individual and the employee’s immediately supervisor on the flight, I was treated poorly for the remainder of the flight. To make a long story short, after considerable complaining and manipulation I ended up getting the ‘manager’ to give me travel vouchers to the exact limit he was authorized by corporate policy. I made every attempt I could to get him to go beyond it, but he wouldn’t budge. I even asked to speak with his supervisor, wherein he categorically denied that there was anyone over him. According to my associate at the company, they have an ‘acceptable loss’ policy. That is, they budget for ‘payouts’ that will assure customer loyalty and reduce potential litigation. But the so-called managers are only allowed to work within strict parameters. Based upon this conversation, I would submit that this employee and others like him are very limited in terms of what they can and cannot do.
Automated process control is vital to this efficiency and ultimately to profitability in virtually any industry. You name it… food, pharmaceuticals, chemicals, petroleum, plastics and many more. At the end of the day, if your customer isn’t happy, then they do not spend their money with you; they choose a competitor. So, you would think that staff would be given more flexibility to make decisions that would lead to better customer service and relationship development. But it is actually very rare to see any semblance of this theory being put into practice in industry. In fact, all of my interviews confirmed this.
The second person I spoke with was a woman who works for a travel agency on the high street in Dundee. After encouraging her over her initial hesitation, she was more than willing to discuss her job and what she was allowed to do. At first she suggested that her and the others on the ‘team’ had total freedom, but once pressed into a few scenarios, she quickly demonstrated that she too had ‘rules’ to follow. For example, she was allowed to discount travel packages by up to 10% but she couldn’t take off the insurance part of the package under any circumstances. In fact, the company would likely ‘sack’ her for doing such a thing. When I asked her why, she said that the insurance was a big money maker for the company.
I then spoke with a person at BT’s customer relations for domestic telephone service. He too was hesitant to speak with me, but after a few jokes opened up. During the conversation he explained to me that there were set procedures, specifically, time that he was allowed to spend with a customer. He wouldn’t tell me exactly how much time he was allowed to have, but suggested that it was very small. He also told me that first-line workers were not allowed to give out any credits as all requests of that nature had to be diverted to billing; he didn’t even have access to that part of the computer. What he explained to me is that his job was really to just act as a ‘door’ or ‘filter’ to the company. Despite being a customer service representative, he really couldn’t do much.
Next I called my wife who works in retail and asked her about what she is allowed to do in terms of customer relations. ‘Not much’, she told me. Then she explained that all interaction with customers is rather superficial. If refunds are wanted, she can put them through but only for the value and only if the customer has a receipt. I asked her if there were any circumstances in which she could refund an item without a receipt and was told, ‘None. The company is very strict about that.’ Even though my wife is a ‘senior’ customer service rep, and she has key and complete access to the store and registers, she has no freedom to make decisions outside of that which the company has dictated to her.
But does any of this indicate that there hasn’t been a shift away from control and a preoccupation with cost, productivity, and convenience? Perhaps it does not directly conclude this, but what it does do is give support to my assertions.
From a productivity perspective, especially within the conceptual and methodological domain of marketing, the question of how to improve customer service, its scope, measurement and management, has received considerable attention in recent years. Evidence shows that improving the quality of customer service is a key to achieving a competitive advantage; a good ‘product’ is necessary, but not sufficient to compete in today’s marketplace (Barnes, 1993; Coyne, 1989). To me, that would suggest a ‘preoccupation’ with ‘productivity’ is alive and well today.
The reality is customer service is done simultaneously to maximizing the use of resources to increase productivity and cost efficiency. Only through effective management (read control) of resources can a balance between the cost and quality of human resources can be achieved. Customer service is the key to success for an organization and a successful customer-focused organizations: do what they say; make what matters to the customer their priority; find ways to improve; make positive personal contact with the customer; and have well-trained and motivated staff who work well together (Macaulay, 1993). This too supports my assertions… there hasn’t been any significant change. Companies still focus on cost and productivity and achieve them only through control.
But maybe this is only seen here in the West. Or is it? If one takes a look at the Japanese management styles, you will see a tremendous amount of coercive control with regard to how staff is handled… in any area of expertise, not just customer relations.
In the US, Japanese expatriates assigned to overseas affiliates must manage and communicate with local staff and others on a daily basis. That is, they are living examples of how Japanese management styles may or may not be suitable or effective in the workplace. In an effort to learn more about Japanese management styles, several studies have illustrated how these practices are modified in overseas affiliates of Japanese-owned companies (Bowman, 1986). This illustration will clearly express the relevance to the question at hand… these men are very controlling and those who work under them have very little freedom to make decisions.
Let’s take for example the roll of women in such companies. In reviewing the literature dealing with Japanese management styles there is little, if anything, which sheds light on this area. The women I refer to are not second-generation Japanese-Americans, but rather women who have grown up and been socialized in Japan, particularly by attending Japanese schools until their mid to late teens. While Japanese women may have greater career opportunities in the US compared to Japan, cultural expectations and related management styles imported into affiliates of Japanese companies in the US and abroad prohibit many Japanese women from reaching their full potential; they are marginalized within the company’s organizational structure. Thus, any woman working in a customer relations roll is subjected to this structure. This is one angle that supports the fact that there has been little change.
The most obvious patterns which stick out are the expectations on the part of expatriate managers that women are not suited to managerial positions, simply because they are women. This is reinforced by the way women are spoken to in Japanese. For example, the terms of address used when speaking to token female managers are less formal and carry a less respectful connotation than those used when addressing male managers. In the realm of human resources, from the screening process to job evaluations to promotions, Japanese men have an edge which is sustained during their careers.
Most male managers come from an office environment in which women’s roles in the company are completely separate from those of male employees. Despite equal opportunity laws passed in the mid-1980s in Japan, most companies in Japan operate with a two-tier system, where women are generally excluded from managerial track positions. This creates and fosters a mindset which relegates women to support roles, mostly in administrative type positions with no great responsibility, sense of accountability, or chance for advancement.
Interestingly, it is not uncommon for a male Japanese local hire to come to a company with no more experience than waiting at tables at a local Japanese restaurant and then to work his way up to a management position within five years or so. This contrasts with the cases of many Japanese women who are hired based on their academic background, bilingual proficiency, and skills in a particular field, but who do not receive a salary comparable with male Japanese local hires, nor do they have the same prospects of promotion, even after several years of service. Again, this is a social measure of control that assures a specific cultural environment. There is absolutely no suggestion here that there is any shift whatsoever away from control.
It should be noted that this is a practice in most Japanese companies, be it in Japan, the US, the UK, or elsewhere. It is a system of control that does not permit deviation. In truth, much of the way Japanese people conduct business internally is a subtle form of social control.
The so-called ‘Japanese way of communicating, such as the roundabout expression of opinions and the use of vague or ambiguous wording, rather than direct expressions of like or dislike – which in the West is common. In addition, requests are often made through the use of silences and non-verbal cues such as body language, especially bowing or nodding of the head. One aspect of Japanese management is the expectation that subordinates will anticipate the needs of their superior, without detailed, articulated, explicit instructions.
Such ‘guidelines’ of control, in all accounts mentioned in this essay, assure that the company will have an environment that they believe will lead their company to its goal: profit. And they are as concerned now with cost and productivity as they have ever been. The movement in business towards ‘relationship management’ can easily be accused of being merely old practices repackaged and sold as new. In an effort to counter this assumption and continuously improve organizational performance, empirical research is needed. While the concept of allowing customer service representatives more freedom to ‘please’ the customer makes intuitive sense, there is little, if any, evidence to support the claim.
– o0o –
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