Situational American Morality

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A new study from the University of Illinois at Chicago has implications for both politicians and advertisers — and should scare anyone who cares about ethics.

The study involved having consumers

. . . read a political monologue about federal funding for Planned Parenthood that they believed was previously aired over public radio.

Respondents were randomly assigned one of two feedback conditions where upon completion they were informed that the monologue they had just read was either true or false.

Consumers were then asked whether they felt the monologue was justified. The bottom line:

  1. If the consumer agreed with the monologue, they were less critical of it, regardless of whether they were told it was true or false.
  2. If the consumer disagreed with the monologue, they were more critical of it regardless of whether they were told it was true or false.

In other words, in today’s America, it doesn’t matter if someone is telling the truth or lying as long as the consumer agrees with what they are saying. Functionally, that’s a blank check for a politician or advertiser to say anything as long as it includes something the consumer wants to hear.

Unfortunately, this “culture of lying” has consequences. It affects where people want to live, work and spend their money.

As an Airbnb host, we’ve been getting an earful from foreign travelers who don’t want to live here as well as workers who are asking for transfer back to their home countries. We have a doctor who views the level of medical errors in the US as unacceptable and disgusting. We have the Irani who says that, if she becomes ill, she will return to Iran for treatment rather than seek treatment in the US. We have a mother from Europe who is leaving so her daughter won’t become “Americanized”. We have the black teacher who grew up in the US and now works in Saudi Arabia, and says that her quality of life is better there than it ever was in the US.

We have the realtor from Kansas who lives in an American enclave near Mexico City and has seen a 41% increase in sales to Americans moving south this year. Mexico claims that it has 2 million Yanquis living there, most undocumented immigrants. South Korea has close to 1 million Yankee civilians; there are other large pockets in UK, Saudi Arabia, Costa Rica, Australia and other countries. The US Government itself is mum on the number of Americans leaving the country. (All of these numbers exclude military and government personnel stationed outside the US.)

A primary complaint among expats is that they want to escape what the US political culture has become. That brings us back to our topic — the moral acceptability of lying.

For some of us, lying remains unacceptable regardless of the excuse.


Sources:

  1. Allison B. Mueller, Linda J. Skitka. Liars, Damned Liars, and Zealots. Social Psychological and Personality Science, 2017; 194855061772027 DOI: 10.1177/1948550617720272
  2. University of Illinois at Chicago. “We tolerate political lies for shared views, study suggests.” ScienceDaily. ScienceDaily, 3 August 2017. <www.sciencedaily.com/releases/2017/08/170803145640.htm>

Dissing the Customer

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Some things are so obvious, you wonder what business executives are thinking. If they are.

A business of any size exists for its customers. Without the revenue from their purchases, there is  no business. Companies can leverage laws to force customers to buy from them, but even that effect is limited. A cable company may have a virtual monopoly is a specific service area, but it can’t force customers to pony up for optional services such as pay-per-view. And most customers don’t. Tick people off and they find ways of getting back at you.

In fairness, companies face a tug-of-war between profits and costs, and most executives see customer service as a cost. For that reason, they

  • Replace people with automated voice response or call direction systems — which consumers hate with a passion.
  • Reduce staffing at call centers. (“Your call is important to us. Please hold for the next available agent.  Your wait time will be approximately 45 minutes.”)
  • Replace experienced field service personnel with lower pay, semi-trained and less dedicated contract employees. (As an employer, you get what your pay for.)

As a researcher, one of my very first projects was for a Midwestern utility that had raised customer management to an art form. Literally. Customers who called with billing problems or service outages were happier with the utility than those that had no reason to call.

That’s because the utility understood what customers really want:

  • Prompt attention, and
  • Keeping people informed on the status of actions being taken on their behalf.

Consumers are realistic; they don’t expect perfection. That just doesn’t happen where humans are concerned. How you handle problems when they occur makes all the difference.

Smart managers learn that some shortcuts just aren’t.  If you lose customers, or if you increase the number of service calls to solve a problem, then the shortcut you took doesn’t save you anything. In fact it may increase your costs substantially.

Thus it was with amusement that I read the list of US companies with the poorest ratings for customer service.  The list includes almost every cable and wireless provider.  The cable companies are shaded; Sprint, T-Mobile and AT&T are on this list, and Verizon is very close to inclusion.

Other notable companies are

  • K-Mart (financially struggling)
  • Bank of America
  • Wal-Mart

There’s no great surprise about who is here.

The chicken-and-the-egg question: Does cost cutting inevitably cause poor customer service? Or does poor customer service inevitably create the need for cost cutting? And where are companies using the resources that should be put int0 rebuilding relationships with customers?

Worst_service

 


Sources:

  1. Evan Comen, Samuel Stebbins and Thomas C. Frohlich, “The Customer Service Hall of Shame,” 24/7WallSt., 23 August 2016. http://247wallst.com/special-report/2016/08/23/customer-service-hall-of-shame-4/7/

 

Merchant of Death

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f22raptorThe US spends more on weapons than do other developed countries that are not actually at war.

In the US, 3.3% of GDP (2015) goes to military spending. In Russia (still considered a “developing country” economically, it’s 5%; in China, it’s 2%. In the EU, it’s 2.8%.

The big spenders on weapons are the Arab states, led by the Saudis. The Saudis spend approximately 14% of annual GDP on weapons, the highest percentage in the world.

The US also sells more weapons to other countries than does anyone else.

Out of 197 countries, 12 of the largest 25 weapons manufacturers are based in the US. Here’s the top 10 (2015 data, as not all companies have closed their 2016 fiscal year):

  1. Lockheed Martin (US) $40 billion
  2. Boeing (US) $29 billion
  3. BAE Systems (UK) $25 billion
  4. Raytheon (US) $22 billion
  5. General Dynamics (US) $19 billion
  6. Northrop Grumman (US) $18 billion
  7. Airbus (The Netherlands) $15 billion
  8. United Technologies (US) $13 billion
  9. Finmeccanica (Italy) $11 billion
  10. L-3 Communications (US) $10 billion (1)

In addition to domestic purchases, the US is a major provider of weapons to other countries (2). The major buyers are

  1. Saudi Arabia, $1.9 billion from US out of $3 billion in total arms imports
  2. Iraq, $893 million in purchases from the US (51.5% of total arms imports)
  3. Australia, $869 million from US (82% of total arms imports)
  4. United Arab Emirates, $773 million from US (61%)
  5. Qatar, $595 million from US (66%)
  6. Israel, $526 million from US (87%)
  7. Italy, $511 million from US (59%)
  8. South Korea, $501 million (37%)
  9. Japan, $307 million (93%)
  10. Mexico, $280 million (72%)

Oddly, current foreign policy in the Middle East and towards Mexico could put much of this weapons revenue at risk. In World War II, the US was “the arsenal of democracy.” That’s no longer the case since most of the major buyers are monarchies.

 


Sources:

  1. http://ceoworld.biz/2016/02/17/the-top-25-largest-defense-companies-in-the-world-2015
  2. http://247wallst.com/special-report/2017/02/24/countries-buying-the-most-weapons-from-the-us-government/2/
  3. “Military Expenditure,” http://data.worldbank.org/indicator/MS.MIL.XPND.GD.ZS

 

Best and Worst States for Business

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24/7 Wall Street has published a lengthy article assessing the business climate in the %) total-county-population-change-2016.pngUS states.  It’s a fairly comprehensive analysis, looking at 50 different criteria, including taxes, labor force characteristics, infrastructure, etc.

The bottom five states are fairly predictable.  The top five aren’t, including political polar opposites.

Best five states for business:

  1. Utah
  2. Massachusetts
  3. Idaho
  4. Colorado
  5. North Dakota

Utah, Massachusetts and Colorado benefit in particular from a  highly educated labor force.  That’s important for the technology sector that’s likely to drive economic growth in the future.  Idaho and North Dakota are pro-business in the sense of having weak unions and low wages.

Massachusetts is the one state in the Northeast that isn’t losing population.

Five worst states for business, starting from the bottom:

  1. Louisiana
  2. Mississippi
  3. West Virginia
  4. Maine
  5. Pennsylvania

The bottom states share a common lack of an educated work force.  Fewer than 1/4 of workers in Louisiana and Mississippi have bachelors degrees, and the percent employed in science and technology is in the very low single digits.  West Virginia and Maine share these problems, just to less of an extreme.  The local economies suffer from high poverty rates.  Given the trend to robotize unskilled labor positions, the future in these states is scary.  All five states are losing population.

Pennsylvania represents a special case of self-inflicted problems.  The state has a poorly maintained highway infrastructure which is a drag on business growth.  Pennsylvania really is bipolar.  There are highly educated nuclei in Philadelphia, Pittsburgh and State College, and then there’s everywhere else.  It’s the modern version of Lincoln’s “house divided against itself”.


Sources: