Corporate Social And Environmental Responsibility External Analysis

ABSTRACT

Sprint Nextel’s social corporate responsibility has been analyzed from an external standpoint. The following report contains relevant information in the areas of Sprint Nextel’s employees and customers, community and environment involvement, and ethics and governance. Disclosed information composed by external analysts are compiled and summarized. This external information is critical to capture a company’s true image.

Sprint Nextel:

Corporate Social and Environmental Responsibility External Analysis

Customer service does not seem to be in Sprint Nextel’s top priorities. Sprint Nextel is ranked number twelve on Wanderlist’s (2008) “Worst Companies in America to Deal With.” J.D. Power & Associates scored Sprint Nextel two out of five Power Circle ratings in customer care. (Goudreau, 2008) That was the fourth time Sprint Nextel received the lowest ranking among the largest mobile phone service providers. (Goudreau, 2008) According to a poll taken by MSN Money (2007), 40% of respondents gave Sprint Nextel a “poor” rating. Complaints from message boards on MSN Money about Sprint Nextel’s customer service were centered on money and time.

Spencer E. Ante (2007), a columnist of Business Week, reported on a personal complaint of Sprint Nextel. He claims that he has tried several times to cancel his service with the company but he has not been successful. After his first request of cancellation, he still kept being billed for service that he has not even used. Ante’s (2007) customer service experience with Sprint Nextel was described as being on the phone for ten hours within a six week period with his problem still unsolved. He is not the only customer that has had this same issue with Sprint Nextel. Their customer care representatives make it so difficult to cancel their subscription. Sprint Nextel has several lawsuits to worry about. The attorney general of Minnesota has filed a class lawsuit against the company alleging that Sprint Nextel has extended contracts for small changes to their service. Allegations of other law suits include how Sprint Nextel has extended contracts without customer consent. (Ante, 2008)

Spencer E. Ante (2008) reported, “In the fourth quarter of 2007, Sprint reported a loss of 683,000 premium subscribers who sign up for long-term contracts.” Sprint Nextel uses the term “churn” as a “key metric measuring the percentage of customers who leave the company.” (Ante, 2008) Their churn was flat at 2.3% and is expected to increase by .2% to .3% in the first quarter of the current year. (Ante, 2008)

In an effort to correct their customer service, Business Week reported that the CEO of Sprint Nextel announced that their customer service will be the No. 1 priority of the company. (Ante, 2008) “Churn” will also be one of their top priorities for the company. Triangle Business Journal (2007) stated that Sprint Nextel will launch new policies to improve customer service. Such policies include courtesy calls when customers activate new plans and a 30-day risk free guarantee for new customers.

Not all of Sprint Nextel’s interaction with its customers is appalling. In an effort to protect customer data, Sprint Nextel has filed several lawsuits against companies such as 1st Source Information Specialists Inc. and San Marco & Associate Private Investigations. (Gohring, 2006) Sprint Nextel accused these companies of “using fraudulent tactics such as pretexting, the practice of obtaining personal information under false pretenses, to access mobile phone logs and numbers.” (Gross, 2006) Sprint Nextel successfully won the injunction and these companies are no longer allowed to sell call records from Sprint Nextel customers.

Sprint Nextel offers CapTel for their Hard of Hearing customers. “CapTel is an assistive technology aimed at easing communications for more than 24 million Americans who are hard of hearing, have experienced hearing loss later in life or are deaf individuals with good vocalization skills.” (TMCnet, 2005) These types of phones are very useful and available 24/7. Sprint Nextel offers these phones to their challenged customers in 25 states. (TMCnet, 2005)

The employees are one of the most important elements in a company. What their employees do and how they feel affects the company. Sprint Nextel merged in 2005 and has had several problems with their employees since then. Ellen McCarthy (2005), from Washington Post, states, “executives decided the most egalitarian way to staff the new company would be to put all the positions up for grabs and let workers from both firms duke it out.” Employees were not happy to hear that they had to compete for their job. Kim Hart (2007) reported that the two different corporate cultures have “resulted in clashes in everything from advertising strategy to cell phone technologies.” Nextel and Sprint employees felt that they could not agree on anything and blamed each other for their deteriorating network. (Hart, 2007) A former employee of Nextel, Paula Pryor, recalls the first months after the merge. She claims managers began tracking what she was doing on her computer, overtime pay was impossible, and was constantly pressured to keep customer calls short. She also claimed that bathroom trips were monitored. (Ante, 2008) Gayle R. Romero, also a former Sprint Nextel employee, claimed that she also felt pressure. She recalls a manager saying, “If you don’t think you can handle this, I hear McDonald’s is hiring.” She said that “everyone was scared.” (Ante, 2008) Employees also alleged that their job was more difficult because they had to go back and forth between systems and sometimes couldn’t access some information for the customers. In 2006, employees were required to hit targets of 600 to 900 renewal contracts per month. (Ante, 2008) Paula Pryor said, “The numbers driven management approach implemented after the combination led to poor morale and deteriorating customer service.” (Ante, 2008) In addition, an insider of Sprint Nextel said that the employees that were caught contributing to online blogs would be “researched, identified, and documented via Corporate Security team and fired.” This was taken from a message sent from