Alejandro’s Tale: What Happens When Management Doesn’t Have the Authority

Introduction

My 5 month-old iPhone 13 just suddenly died just after Christmas. I didn't drop it. I didn't dunk it. It just plain died! Despite all the help from the “amateur tech support” (my two adult sons and their significant others) gathered at our house for the holidays and from my wireless carrier’s tech support, the phone was simply dead, for no apparent or easily solvable reason. And so I began my journey to get a replacement phone, something I assumed would just take an hour or two at the local outlet for the wireless carrier. But as Lee Corso famously says, “Not so fast my friend!” No, you can’t get a replacement iPhone from the local store, but we’ll ship one to you!

No problem I thought, I’ll have my new phone maybe the next day, or the following day at the worst! But you know what happens when you assume… Well, it took me well past New Year’s Day to get a new one from my carrier as the mega wireless company shipped it the slowest way possible - in the regular mail, not even Priority Mail (which is mystifying to me as the package with the iPhone was not trackable!). And yes, in 2023, we live in a world where overnight or at least two-day shipping has become the expectation today for consumers, not a week!

Now let there be no mistake, I have been a very loyal customer of my cell phone company, and yes, it is one of the big ones! I could identify which one it is right here, right now, and I would love to do so! But whether the wireless company’s name begins with an “A” or a “T” or a “V,” that is not the point of this article. Rather, what I will rant about here is not the fact that it took me so long to get my new phone, but rather what happened when I ventured to the carrier’s local store to try to get personal assistance in activating my new phone that replaced the defective one I bought just 5 months before from, checks notes, directly from that wireless carrier (and yes, I have 18 more months of payments left on it!).

That visit to the store - and the whole experience since I woke up to a dead iPhone - has indeed made me question for how long - and maybe even if - I will continue to be a customer of the giant wireless company that begins with an “A,” a “T,” or a “V.” But even more importantly, it provided me, as a strategic management professor and consultant, with a perfect illustration - an absolute gem of a case study and learning moment for you, the reader, and for my students/clients in the future - about one of the most important management principles out there. This is namely the need to equip managers with a balance of authority and responsibility - the latitude if you will - to do their jobs effectively all up and down the organization.

Balancing Authority and Responsibility

If you are a manager - of anything - at any level in an organization of any size - there’s one thing that is absolutely critical for you to be able to ultimately be successful in your position: You have to have the authority to carry out the responsibilities that come with the job - period, full stop! There’s simply no debating this fact. Iffffff you are a manager - whether you happen to be in any managerial role, from a front-line supervisor to a location manager to even a regional manager or indeed, a top executive for a company - and you don’t have the authority to effectively perform the job - well, you are in an impossible, untenable situation. And likely - very likely, you won’t be in that position for long, whether the ending comes of your own volition or at the hands of a higher-up! Either you will choose to leave the organization based on your own frustration with the situation, or you will get a call, email, text from your boss - well, hopefully an actual (or at least a Zoom meeting invite) with him or her as well - telling you that it’s time for you to go! And if the situation doesn’t change for the next occupant of that position, their fate will be the same, and the cycle will repeat itself again and again as management higher-ups fail to understand the very vital, and delicate, relationship between authority and responsibility in a managerial role.

The idea that a manager’s authority must be in balance with his or her responsibility is a principle that dates back now over a century! In fact, Henri Fayol, the French management practitioner and pioneer, first published his groundbreaking work on what became known as “administrative theory” (which looks at the organization from a top-down perspective and sets out steps for managers on how to get the best from their employees and how to run an enterprise efficiently) in his book, Administration Industrielle et Générale, way back in 1916. Most students of management know Fayol - well, they hopefully know Fayol - for his 14 Principles of Management. Number two on his list of administrative principles for running any organization of any size - not just a business - was the need for “parity” between all manager’s authority and his

or her responsibility - for all managers, up and down the organization. As you can see by looking at Table 1 (Fayol’s Perspective on Balancing Authority and Responsibility) below, simply put, you have to have this balance to make management jobs workable - and more importantly, for management to effectively work in any business or organization.

Table 1: Fayol’s Perspective on Balancing Authority and Responsibility

Source: Henri Fayol’s 14 Principles of Management, No date (Used with permission)

And so when I visited my local outlet of this major, well-known and well-advertised wireless carrier a few days ago, I quickly - well, after waiting a full 30 minutes to be “helped” after my appointment time - was prompted to think about Fayol’s second principle of management in dealing with Alejandro, who yes, just happened to be the store manager as well. When my name was finally called, Alejandro did greet me warmly and apologized for the delay - a good way to start any customer encounter! Well, it then proceeded to go downhill - quickly - from there.

I explained the chronology of what had transpired over the past ten days since I had discovered my dead iPhone and decided to come to the cell phone carrier’s store to get assistance in getting my almost new (yes, it was certified refurbished - “good as new,” at least that was how the label described it) phone setup. And by the way, that was an option that was encouraged for customers to take in having their phone initialized listed on the company’s website. Well, when I “closed” my tale of woe with my “ask” to have him - or another store worker - to provide that assistance, he informed me that the help was available - but it would cost me $29.99! In that instant, I felt my blood pressure rise just a bit and my heart rate accelerate by a few (or more) beats per minute, as I thought that we might just have a “situation” here!

Now, I am not one to get angry at any retail or service worker, as I learned early on in my adulthood, even before I studied management, that going ballistic really doesn't serve to accomplish anything, and that a little understanding, empathy, and even humor can get you what you want or need far, far more effectively than making a scene (or even risking arrest!). And so as I quickly composed in my mind what to say back to Alejandro, I reminded myself what my goal was simply to get my phone working (and trust me, when you are thrust back into the “dark ages” without a cell phone - which is your only working phone when you have no home phone, you miss it - and the business and personal calls/texts from people needing/wanting to reach you, including both work and medical calls and messages - for well over a week, your frustration level is already at an “11!”). So, I had to temper my “ask” to deal with the help that I needed at the moment, not what had transpired in the past number of days. And so while I did remind Alejandro that I had been without a phone for a long period of time due to his company shipping it in the slowest manner possible, I just asked him finally: “Given all of that, can you waive the fee for in-store assistance?” He responded tersely: “No, it’s company policy.” I asked him again, still in what I will say (and I can assure you that it was) a friendly manner: “You mean to say that with all that I’ve experienced, you can’t simply help me at no cost?” Alejandro replied, again curtly, and not with anger, but with a sense of frustration: “No, I’m not given that latitude.”

Ahhhh, latitude! That’s when I thought to myself about Fayol’s second principle of management that talked about the absolute need to balance a manager’s authority and responsibility. And as fate would have it, another customer at the service counter at the same time was a gentleman obviously much older than I (and I have to be very careful about saying such things since I am nearing 60 myself!). Even though he had just spent over $800 on a new iPhone himself - as a new customer, mind you, he too was being told that it would cost him $29.99 to have her (the store employee) actually help him to set-up his phone! And so yes, obviously this was indeed a company policy, and just as obviously, from the regular employees to the store manager, no one had any latitude - authority - to give any customer any “free” service, no matter what the circumstances might be.

As I processed all of this, whatever anger I had inside quickly turned to compassion for Alejandro - and for everyone who worked at this sole outlet for the major wireless company - and yes, it shall go unnamed - here in Hammond, Louisiana! He simply didn’t have the latitude to do his job as store manager in the best way he could - and in the best interests of the company - if he couldn’t simply waive a $29.99 to satisfy either a new or an existing customer. And if he didn’t have the managerial discretion to do that small thing, how many other ways did his giant employer hamstring him from doing what was best for the company in dealing with customers - and with his employees? One could safely assume that if Alejandro didn’t have the latitude to do this one simple thing - a thirty dollar charge, then there were most likely a whole lot of other things that he was constrained to not do for his customers and for those that he managed in the Hammond store!

I quickly changed my approach in the conversation from trying to get what I wanted - and still needed done (getting the phone setup) - to attempt, as one who teaches and consults about management - to try and better understand Alejandro’s predicament. I proceeded to ask him just how he could do his job without the proper latitude to serve customers. And he responded that yes, it was very frustrating to him and to his employees, as their corporate policy to get $29.99 out of their customers, with no exceptions, kept them from really being able to satisfy their customers. He went on to say that many of their customers became visibly - and audibly - angry and even quite agitated with them having to stick with the set-up charge, simply because it was “company policy,” regardless of a customer’s individual situation - with absolutely no exceptions. And of course, in an age when companies send out satisfaction surveys on every purchase made, service received, maintenance provided, etc. to any customer, he had seen that his store’s customer satisfaction scores had trailed off since the policy was made absolute by corporate management! That has led to “issues” for him with his store workers and for him with his regional manager. He said that there have been employees quit - or have had to be fired - over this policy. Alejandro added that he too was, like many, many workers today, assessing his own career options as this policy - along with unenumerated “other” policies and management practices as well - have worked to make him dissatisfied as well.

And so while Alejandro wished me well and gave me an instruction sheet to help me set-up my phone on my own (although, truth be told, it didn’t fit my particular situation because I wasn’t simply transferring service from one iPhone to another, since mine was dead!), I did come away a chastened customer of that major wireless company. Your wireless bill is likely like mine: Too much! We have a family of four with four iPhones, and so if you cost out what we pay each month for our cell phone service (and in paying off iPhones with 0% interest over 24 months, well, it amounts to a couple of hundred dollars each and every month!). And so in the course of a year, that means we pay over a couple of thousand dollars to that unnamed wireless company, whose name begins with an “A” or a “T” or a “V.” When you cost out that $29.99 charge, that is approximately just at a little under 1% of what we pay them each year! If you’re sitting in a fancy corner office or boardroom at that megacorporation, is it really, really worth losing loyal customers - and employees who want to be loyal to you as well - over that amount of revenue? Clearly, the right answer is not just no, but in academic terms, “Hell No!:” And no, you don’t need to spend millions of dollars on high-priced consultants to tell you that, rather than just giving your managers - or better yet, your frontline customer service employees - the ability to waive that troublesome charge!

Analysis

And so I have done something highly unusual in this article and provided the reader with a customer service experience drawn from my real life! But as a management consultant and educator, “Alejandro’s Tale” provides you - and those with whom you might work and even those you manage (or are managed by) - with an instructive, insightful and cautionary case study about what is, no doubt, an important management principle. The situation that Alejandro and his employees at our local store - and likely hundreds more store managers like him in charge of thousands of store personnel - have been put in is really an untenable one in the world that we live in today. Every customer is an asset to the organization that should be cultivated and cared for. The data is clear: It will cost any business far more to acquire a new customer than to retain an existing one. How many customers has that mammoth cell phone company, whose name begins with an “A” or a “T” or a “V,” lost over $30 - thirty dollars? And for new customers like the older gentleman next to me at the service counter, how many of them bolted when told that in addition to the $800 phone that you just bought and the contract that you are entering into to pay $40, $50, $60,... maybe even a hundred dollars a month for your wireless plan for the next 2 or more years, well, we’re going to charge you thirty more dollars just to get your phone set-up? I’d say that the wireless company loses more than a few folks at this point even before they officially become "customers!"

The moral of this story then is this. All in management should think - really think - about the policies, procedures and processes that they have in place and ask themselves a simple question: Are we giving our managers the authority they really need to carry out the responsibilities that they have? And even more importantly, don’t have this discussion only in the well-appointed conference room at the corporate headquarters and only with the top executives in the organization. The larger the organization is, the more critical it will be to have this conversation - a very real and robust conversation - throughout the managerial ranks, from the boardroom all the way down to the front lines. Even in the best run organizations, there will be gaps to be found between what managers need to do and what they are allowed to do; what they want to be able to do - for customers and for their workers as well that will help keep them on board - and what they organization’s policies, procedures and processes. And in the less than stellar-run organizations, that list will likely grow quite long!

However, if the management team - with a strong commitment from the organization’s top leadership, of a company, of a government agency, of a hospital, of a school system, or even a college or university, is willing to go through such a self-examination process - and to then act on it, they will be far-better off for doing so, even if it will likely be a painful self-examination! The old sports adage is: “No pain, no gain!” And this will almost assuredly ring quite true in this instance. But by really identifying - and then fixing - the policies, procedures and processes that are holding the organization back from better serving its customers and being a better place to work - and in which to manage. By asking the right questions - and not being afraid of the answers you will find and having a commitment to act to make things “right,” then the company, the not-for-profit organization, the educational entity, or the government agency will be better positioned for success in the days, months and years ahead.

So, when are you going to start this conversation in your organization? The sooner, the better as the saying goes!

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About David Wyld

David Wyld is a Professor of Strategic Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, publisher, executive educator, and experienced expert witness. You can view all of his work at https://authory.com/DavidWyld.

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