Dell’s full scale ethical meltdown

Here’s one they’ll be studying in business school ethics classes for years to come: The story of how Dell, one of the world’s leading computer manufacturers, morphed from being an industry icon to the latest ethics-challenged poster company.

As reported by Ashlee Vance for the New York Times, a major lawsuit against Dell is unearthing a corporate cover-up campaign that concealed from customers serious malfunctions in millions of computers sold between 2003 and 2005.  After shipping desktop computers “riddled with faulty electrical components that were leaking chemicals and causing the malfunctions,” Dell then tried to hide the truth from customers who were calling with complaints, even though it knew of systemic problems:

Documents recently unsealed in a three-year-old lawsuit against Dell show that the company’s employees were actually aware that the computers were likely to break. Still, the employees tried to play down the problem to customers and allowed customers to rely on trouble-prone machines, putting their businesses at risk. Even the firm defending Dell in the lawsuit was affected when Dell balked at fixing 1,000 suspect computers, according to e-mail messages revealed in the dispute.

Over and again, Dell misled customers who reported problems with their machines and kept the truth from those who had not contacted them:

“They were fixing bad computers with bad computers and were misleading customers at the same time,” said Ira Winkler, a former computer analyst for the National Security Agency and a technology consultant. “They knew millions of computers would be out there causing inevitable damage and were not giving people an opportunity to fix that damage.”

Okay, some finger-wagging

Yup, I know there are lawyers out there who will dream up trumped-up consumer lawsuits to squeeze out settlements and walk away with some easy money.  But here we have another example of how the legal system can help to shine a light on unethical business practices.  The discovery process of this lawsuit is bringing Dell’s business practices to public scrutiny after the company engaged in a deliberate cover-up with its customers.  We need that check and balance on powerful corporations, because it’s obvious the bad apples won’t police themselves.

2 responses

  1. Damn! My office and my home office are Dell. I’ve enjoyed their reliability of service for some years, now, however I have noticed a marked fall off in customer responsiveness and understanding in the past two years. Their business model seems to be moving toward pushing insurance and contact extensions, while their call centers increasingly offer fewer people who understand what to do. (I am a “power user” at work, and I build my second home computer, from scratch.)
    This information puts me in a quandry, going forward.

  2. Pingback: Dell’s full scale ethical meltdown (via Minding the Workplace) « Pilant's Business Ethics Blog

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