Question

Calculating the Cost of Conscience The Situation Product quality and cost affect every firm’s reputation and profitability, as well as the satisfaction of customers. As director of quality for a major appliance manufacturer, Ruth was reporting to the executive committee on the results of a program for correcting problems with a newly redesigned compressor (the motor that cools the refrigerator) that the company had recently begun using in its refrigerators. Following several customer complaints, the quality lab had determined that some of the new compressor units ran more loudly than expected, although they still effectively cooled the units. The Decision Faced with this information, Ruth has been asked to recommend a strategy for the company. One corrective option was simply waiting until customers complained and responding to each complaint if and when it occurred. Fixing noisy units could be expensive, but the company wishes to maintain its high-quality image. Ruth, however, decided that this approach was inconsistent with the company’s policy of being the high-quality leader in the industry. Insisting on a proactive, “pro-quality” approach, Ruth suggests a program for contacting all customers who had purchased refrigerators containing the new compressor. Unfortunately, the “quality-and-customers-first” policy will be expensive. Service representatives nationwide will have to phone every customer, make appointments for home visits, and replace original compressors with a newer model. Because replacement time is only 30 minutes, customers will hardly be inconvenienced, and food will stay refrigerated without interruption. Others have even suggested that the company require consumers to pay a part of the cost of repairing the noisy compressor because the compressors still meet all expectations with respect to cooling, and this is the primary function of the refrigerator. Advocates of this position argue that the new compressors will extend the life of the refrigerator and customers will benefit.

Which is the best of the three options in the short-term? What about in the long-term?

How could the company have avoided this situation?

Answer 1

I think contacting all the customers is best of three options in short term. Only those compressors should be replaced where some problems might be recognized by the customers . In this way, customers may have very good confident about suggesting other to purchase new offerings of this appliances manufacturers.

In long run , quality and customer first will offer a no. of benefits to becoming a brand. Customers will place word of mouth publicity. To avoid the situation of customers complaints, this customer first policy should be implemented on ground level. Those customers who are making regular complaints first of all they should be given full priorities in solving the major challenges. A seperate field plus in office team should be created who will receive complaints and offer appropriate time to customers that they will be get their services request fullfilled. Company should hire some part time service engineers in each locality who understands the time urgency and assist customers in nearby locality.