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Corporate bureaucracy is the worst bureaucracy

Bruce Bartlett has something to say about the public's frustration and resentment toward government bureaucrats:

Very true. And I'll add one other difference. Government bureaucrats at least want to do the right thing. They often fail for a variety of reasons: budget and staffing shortfalls, regulatory capture, plain old laziness, rules they have no control over, and so forth. But they largely start off from a point of wanting to help.

Compare that corporate bureaucracy, which is frequently set up explicitly to help customers as little as possible without losing them. Wait times are long, and this is deliberate. Support is outsourced to undertrained call center workers in India solely to save money even though it increases frustration. Corporate rules and penalties are handed down as gospel, and nothing a customer says can change them. Try arguing with an insurance company sometime. They make even the chronically understaffed IRS look like a Swiss watch.

This doesn't apply to all companies, of course. For starters, this is mostly big company behavior. And some companies genuinely want to provide good service. But not many, and competition obviously doesn't change this. In some cases (cable providers, insurance companies) you're stuck with them no matter how bad their service is. In other cases competition doesn't matter because customers have no real way of judging service before they buy something. And in yet other cases, companies in similar industries have entered into a toxic equilibrium where all of them offer lousy service in identical ways.

I'll bet that most of us spend way more frustrating hours on the phone with banks and cable companies than we do with the IRS or Social Security.¹ We just remember the battles with government bureaucrats more sharply because—let's face it—they often matter more. But that doesn't mean the government folks are any worse. They're probably not.

¹I'd love to see some reliable stats on this, but I'll bet they don't exist.

51 thoughts on “Corporate bureaucracy is the worst bureaucracy

  1. dilbert dogbert

    We received a notice from the IRS about a change in our tax situation. It said we had until today to pay. After 2 hours on hold I got confirmation that it was a robot notice and we had till Oct 16 to pay. This year we will pay down a significant part of the National Debt. Wanna leave that money making more money till the last possible instant.

    1. johnbroughton2013

      The IRS apologized for sending out incorrect letters - https://www.irs.gov/newsroom/irs-statement-on-california-mailing-of-balance-due-notices . At least in the case of taxpayers in California, the confusion - at the IRS - probably came because the deadline was moved to May 15 (flooding), and then moved again to October 15.

      The larger issue is that the IRS has been chronically underfunded by Congress - specifically, by Republican majorities (or filibuster-proof minorities), which means that archaic computer systems have been retained, and they are not easy to reprogram.

      Regardless, the point that Kevin made is valid - no one in the IRS benefited from sending out the erroneous CP14 notices.

      1. J. Frank Parnell

        Republicans say they will continue to cut the IRS budget until performance improves. Sorta the same kind of thinking as "the beatings will continue till morale improves".

      2. dilbert dogbert

        My late wife worked at the San Jose office of the IRS during the mid 1980's. Part time at first then full time.
        She told me that communicating via computer to the Fresno office was about as fast as sending the message by homing pigeon.
        She quit when they asked her to lie on TV.
        Smart woman.

  2. rick_jones

    They make even the chronically understaffed IRS look like a Swiss watch.

    How often have you tried to call or contact the IRS lately?

    1. Pittsburgh Mike

      Actually, I had to call the IRS back in December, and it was almost a pleasant experience. I registered my phone # for a callback, they called back, I gave them the letter number and my explanation of why the label on an income source was mislabeled, and they resolved the whole thing in maybe 15 minutes.

        1. JimFive

          The hardest part of contacting the IRS (4 years ago) was getting the phone tree to get me to a person. Once I cleared that hurdle, dealing with the person and the problem was easy.

    2. johnbroughton2013

      In mid April, the IRS said that its average wait time for phone calls was 4 minutes:

      https://www.nydailynews.com/news/national/ny-irs-reduced-phone-wait-times-4-minutes-was-27-deadline-april-18-20230417-n6btonjjrvf4fpxsuu6roo733y-story.html

      Republicans love to tell horror stories about the IRS, and then try to gut the funding for the agency, because ... [insert non-sequitur here about the agency needing to be more efficient before it gets more funding]

    3. ak_liberal

      So the bookkeeper at the company I work for made a mistake and filed our employee withholding taxes late with the IRS. We got a notice of the problem and a not insubstantial penalty. I didn't completely understand the notice and the amount we were required to pay, so I called. The agent explained the issue, but since we had already made good on the payment owed and hadn't had any prior late filings, he dropped the penalty. Try getting anybody in the private sector to drop a penalty.

        1. dilbert dogbert

          Edit: My late wife was asked for by name when attorneys, accountants and CPAs called the help line at the IRS.

  3. realrobmac

    I think this whole discussion conflates customer service with bureaucracy. Customer service is only one small part of bureaucracy in any large or even medium-sized organization.

    Bureaucracy is, fundamentally, what makes it possible to even have a large organization of any kind. I don't think it stretches the point to say that the invention of bureaucracy is what made civilization possible. There is a line in the Caine Mutiny that is something like this. "The US Navy is an institution designed by geniuses so that it can be run by idiots." That's bureaucracy, baby, and without it we'd all be living in thatched huts.

    1. museumatt

      Came here to say the same. Bureaucracy gets a moderately well earned, but still unfair, bad reputation. It is indeed bureaucracy that allows civilization to grow and prosper. Someone needs to collect taxes, track trade goods, keep property records, pay government officials, feed and equip armies, etc, For all the Hammurabi codes and Rosetta Stones from ancient civilizations, its the account books, tax rolls, property maps, and other mundane forms that tell us the most about a culture.

      1. Larry Jones

        Bureaucracy is not bad of itself. What's bad is that:

        ✅ managers are often hired as managers, and don't have prior experience on the front lines, and ...
        ✅ the rules and procedures are created by said managers who are not on the front lines trying to get work done, and...
        ✅ once the rules are in place, front line workers must comply or get disciplined in some way, up to and including termination, and...
        ✅ no one in a bureaucracy knows what anyone else is doing.

        As mentioned elsewhere in this thread, we couldn't have large governments or private organizations without bureaucracy. But it's like communism: It's a great idea, until humans get involved.

    2. D_Ohrk_E1

      Customer service seems like the external interface bureaucracy as opposed to internal bureaucracy that regulates an organization's entropy.

  4. rescher

    Lousy customer service may be an unintended consequence of capitalism. Customers who tolerate lousy customer service are cheaper to service than those that don’t. Customers who don’t tolerate lousy customer service go elsewhere. This reduces the company’s costs, albeit by slightly reducing their customer base. Overtime, the company ends up with a smaller, more compliant, and less costly customer base. Those lost customers may get serviced by niche companies, maybe at a higher price but with better service.

    1. J. Frank Parnell

      Many companies have an "asshole warrentee" policy. Nice customers get stiffed and go away. The jerks who keep coming back and complaining loudly eventually get their problem addressed.

  5. Brian Smith

    Arguments like this do more to reveal one's prior assumptions than anything else. I've had both good and bad experiences with both corporate and government bureaucracies.

    The worst 2 examples I've ever had involved the government. In one, a government office sent me a notice ("Final Notice" for a start) that I owed some money. They provided a phone number to contact. I tried the phone number - it was busy. I tried multiple additional times - busy every time. I tried the next day, beginning 10 minutes before opening time. At opening time, the line went from "no answer" to busy. Same experience the next few days. I followed up with a letter, and got another threatening form letter one month later. Only when I contacted my congressional representative did I get a response.

    In the other, the IRS claimed I had no tax return filed for 2021 (they had no problem taking my payment for 2021). I called the customer service line, and was referred (by recording) to a different line. The second line referred me back to the first. I tried the listed numbers for local IRS offices, which also had recordings referring me back to the first customer service line. I contacted my congressional representative, and his office was unable to help until I had filled out various forms.

    The third worst experience I had was with my health insurance company, which changed their policy on medication coverage, then didn't apply the policy as it was announced. Customer service people gave me nonsense answers. Supervisors gave the same nonsense answers. The manager gave the same nonsense answers. I was eventually able to escalate the issue to a Director who agreed that the policy as implemented didn't match the policy as announced, and didn't make any sense.

    Individual government bureaucrats may want to help, but only within the scope of the rules. And the rules are generally set up to protect the interests of the people who work for the agency, not the public. Warren Meyer at CoyoteBlog has written at length on this.

    But I guess, in order to talk meaningfully about the issue, we need to define which "bureaucrats" we're talking about, and in what capacity. Some government bureaucrats feel free to creatively redefine existing laws and regulations, and threaten enforcement at the peril of government prosecution or lawsuit. This is a level of power that few corporations can approach.

    1. rrhersh

      I work in a law office and often have to call insurance companies. The trend in recent years has been for them to actively make it difficult to reach the adjuster, even when I have the adjuster's name. Often the contact information on the adjuster's acknowledgement letter includes what purports to be their telephone number but is actually the company's main number, with no apparent way to get from that number to the individual. And this is for communications between professionals.

      The government bureaucracy I interact with the most in my work is court clerks. They are nearly always easily reachable, and professional and helpful. In the larger jurisdictions there may be a bit of milling about to find the right person, but I have never sense that this is malicious.

  6. cephalopod

    All my family works in gov't. I have always worked in the private sector. Their stories of bureaucracy seem pretty similar to those I've dealt with from my own employers. Conflict-averse managers never fire people that they ought to fire. IT is often running massively outdated systems. The people at the top are so full of themselves that they demand that everything goes through them, no matter how small, gumming up the entire works. No one tells the customer-facing staff anything they need to know to do their jobs.

    At least my conversations with the IRS have been very pleasant and quick. Airlines, on the other hand, are probably the worst.

  7. MikeTheMathGuy

    Amen. I was the executor of the estate of a good friend who died unexpectedly two years ago. As such, I made the phone calls to all the utilities, credit card companies, taxing authorities, banks, retirement fund management companies, etc., etc. There were exceptions, of course, but in general the offices of the state and local governments were more efficient, friendlier, and more willing to help resolve occasionally messy situations than their counterparts in the private sector. They were also far less bound by complicated and sometimes nonsensical rules and procedures. I was very grateful to all the public sector employees who helped us out.

    1. rrhersh

      Also, Registers of Wills offices are used to dealing with people learning as they go along, in a stressful situation. I'm sure it varies, but the ones I have dealt with are incredibly helpful.

  8. Jerry O'Brien

    For me, both government and business phone inquiries have mostly gone well. In particular, I got speedy clarification for an IRS issue about ten years ago. Reaching further back, the worst customer service I ever got was from MCI when they were my long-distance phone company. I'm not sure their approach was good for their business.

  9. CaliforniaDreaming

    Anytime you have large complex organizations, you tend to get a mess, because it’s a large complex organization. Those of you complaining about the IRS, I once spent all day trying to pay ATT because they messed up my service when I cancelled my landline. They then raised my prices, over the next 2 years, so the money I saved for dropping the landline, was taken away and I was paying the same, and more, because the base fees and DSL fees kept going up.

    I’ve also worked in both, I’ve seen messes and incompetence, in both. However, while I believe there is pure evil in government, most of us just want to get through our day. We aren’t Wells Fargo, Comcast or some other corporate entity trying to rip you off.

    I’ll add one other thing, so many people think they have the answers, “if only they’d do this”. I’ve heard that crap so many times, and it’s like, gosh, golly gee willikers, that sure was smart, why we never considered this most brilliant of solutions. Sometimes that is true, but most of the time, it’s not.

    Shit gets complex for lots of reasons.

  10. JC

    I'm here to tell you there has been a sea change in government customer service in the many decades I have dealt with issues. The typical bureaucrat back in the day was rude, impatient and generally annoyed at having to speak to you. My experiences in recent years have been so much more pleasant that I am truly gobsmacked sometimes.

  11. gdanning

    A relevant anecdote: Several months ago, I got a strange bill from my health insurer. I called to inquire, and the nice person on the phone submitted an inquiry and said they would get back to me. Two weeks later, having heard nothing, I called to check the status, and again was told that the guy had checked with his supervisor and I would hear soon. That was repeated two more times. I then sent an appeal in writing by certified mail. A month later, having not even gotten an acknowledgment of receipt, I called. Eventually I was told by the person on the phone that the person in charge of my appeal said that the charge was high because a new contract went into effect. "Will you be sending that reply in writing?", I asked. "Oh no, it is coded as an inquiry; we don't give written replies to those."

    Meanwhile, while on hold, I emailed the CA Department of Corrections and Rehabilitation to ask for an inmate's parole hearing transcript. Forty minutes later, the transcript arrived. It was, btw, 7:45 am Pacific time.

  12. Creigh Gordon

    One thing that is overlooked is that governments are often attempting things that are extremely difficult, like "establishing justice".

  13. stilesroasters

    I had to deal with Medicare a couple times on behalf of my father and to my surprise it was AMAZING! They have implemented a truly user friendly process, with clear attention to the needs and limitations of many seniors.

    A+

    1. martinmc

      I turned 65 last year and I agree that Social Security and Medicare were extremely helpful and it went very smoothly.

      1. DButch

        Same for my wife and I. Only glitch was a very obscure issue. I was born of US Citizens in American Samoa. When I came of age and applied to the State department for a passport it was a very smooth process.

        But, when I started retirement and applied to Social Security for my benefits, I had to come in for an in person interview at the Bellevue, WA SS office. My US citizenship was in doubt!

        The reason it was in doubt was that I still had my original social security card, issued in Samoa. The fact that it survived 18+ years of tropical climates, 5 years in college in MA, 26 years working in New England, and 19 years working in the Seattle metropolitan area without disintegrating was a minor miracle. BUT - it turned out there was a long standing glitch that somehow stuck me in citizenship limbo that would have been automatically corrected if I had ever applied for a replacement SS card!

        Fortunately it only took about 10 minutes for the examiner to figure out the obscure problem, correct my entry, and off I went. He was still shaking his head over my indestructible SS card. Which is still in my wallet 5 years later.

  14. James B. Shearer

    "I'll bet that most of us spend way more frustrating hours on the phone with banks and cable companies than we do with the IRS or Social Security.¹ ..."

    This is not my experience at all. My worst customer service experience by far was with the California income tax people. They sent me a large check in error and when I finally convinced them of this they tried to charge me interest (although I had not cashed the check). The situation was finally resolved when I called the taxpayer advocate number which apparently exists because the regular process is so terrible. And you can't blame this on the Republicans because the Democrats run California.

    I have also had bad experiences with Amtrak (months to get a refund after my train was cancelled) and the SEC (years to get a payout from a fair fund).

  15. PaulDavisThe1st

    The traditional libertarian position on why government bureaucracy sucks so much harder than corporate bureaucracy is: there's only one government.

    Want to fix a problem (as many commenters report) with your state or federal taxes? There's only 1 possible organization to deal with.

    Want to fix a problem with your phone bill? You have choices!

    Not saying that I buy this argument in any way, but it's an important one to be able to rebut. I'm too busy with my volunteer firefighter training to do that 🙂

    1. SC-Dem

      I'm not saying this is an iron-clad rebuttal, but here goes: I've had good and bad experiences with both public and private entities. Way more good than bad. But if the problem is with a public entity I can at least complain to a congressman or state legislator. With a private company I usually have no real recourse.

      Most of my really bad experiences have been with health insurance companies and health care providers. The health insurance companies have been chosen by my employers, and since those employers are "self insured" they can really call the shots if they want to, using the insurance company as a screen. I've seen it done to other employees; it's been done to me. Under Federal law the state has no jurisdiction over self insured company plans. After exhausting whatever appeal process the insurers have, I can lawyer up and sue in federal court. Federal courts are expensive and generally the friend of corporations.

      The companies that own health care providers can be dishonest or incompetent. I spent 8 months fighting with the Medical University of South Carolina over a $1300 dollar bill that the insurance company said they would pay if MUSC would file a claim. MUSC said they couldn't refile the claim unless the insurance company rejected it for some reason. The insurance company said they never got the claim in the first place, so they couldn't reject it. I could write 30 pages about this shit.

      Anyway, as I recall Sanders' single payer system takes the patient out of the conflict and makes it between the government insurer and the provider. Under that plan, if I'm unhappy I can at least complain to a politician and vote against him if he doesn't help.

      1. DButch

        I was fortunate to work for two BIG companies, DEC and EMC (which merged with Dell). I also worked with a startup that incorporated in CO to take advantage of health insurance consortiums CO had set up so we got rates as good as the big bulls.

        DEC, EMC, and Dell/EMC self insured. The health insurers acting as the companies agents were treated as hired help. (I liked that attitude). It was very satisfying when the an insurer tried to play games with treatment codes or other little traps. I could just call the section of HR responsible for insurer relations and suddenly no dunning calls about bills, treatment refusals reversed within a day or two, etc.

    2. ScentOfViolets

      Well, the traditional libertarian position is also mind your own business and don't go after the transgendered, but so much for the traditional libertarian position.

  16. D_Ohrk_E1

    OT:

    Dozens of Democratic strategists gathered on Zoom on Wednesday for a novel meeting. The topic: How to combat an expected explosion of AI-generated fake content flooding TV airwaves and mailboxes in 2024. -- Politico

    I don't think people are prepared for the scale and breadth of this threat, made possible by current technologies. That Politico article reflects just how limited the imagination is in this sphere (and in general) -- generative text to flood the zone is the floor of what's possible.

    - Deep fake video (ref: Roop: Videos purportedly of an elected official giving false information (eg fake Biden draft notice) causing confusion, particularly on election day, that could again be targeted on social media to specific demographics.
    - TTS Deep fake (ref: Speechify: An automated voice message delivered to targeted individuals (using state voter data) delivers false voter information by a trusted individual like the state SOS or governor. Alternatively, a leaked audio ostensibly of an interaction between an elected official and a candidate in collusion to a crime.
    - Generative image manipulation/creation (ref:Midjourney: This is trivial stuff. That deep fake of the Pope was generated by just a few prompts using Midjourney. All of the images generated in this block are 100% fake, created by simple prompts: "Smiling Electrician working on an electrical panel outside home, wearing a yellow electrician helmet and blue bright shirt, it is a nice day, photorealistic, 8k, commercial website quality photo, Leica Elmarit - M 28 f/ 2. 8 ASPH. , --v 5.1 --style raw --style raw"

    What's capable right now will pale in comparison to what will be available in one year. This is not hyperbole. Developers are flocking to AI, building tools through those AI (OpenAI, Midjourney, etc) APIs.

    My intention is to drive people to focus on what's coming so that we don't end up with postmortems decrying what we should have done ahead of the election.

  17. illilillili

    Maybe, but... Waiting at the Social Security that one time was a PITA. The DMV can be a PITA. And Passports sure take a long time to process. And collecting Covid unemployment was nearly incomprehensible, even though I never had to wait in line or talk on the phone to anyone.

    A lot more automation and staffing is needed. Thank god AI is coming to help us out.

    1. PaulDavisThe1st

      It's all anecdata, but my experience at the NM DMV places I've been has been at least as good or better than visiting a cell phone carrier's store. And my passports (UK and US) always arrive faster than I expect them too.

    2. DButch

      When we were living in MA the DMV visits were annoying exercises in line waiting. Then, sometime in the late 80s they started doing a lot of work via mail. I think it was in the early 90s that they started rolling out some early web interfaces.

      The first time I walked in to a DMV to see the rope lines snaking around the waiting area and found myself looking at an empty room except for me and three clerks was a shock. One of them waved me to go around the lines. I held up my hand and said: "I'm going to savor this!" And walked the maze as they howled in laughter. Very nice day...

  18. martinmc

    One of the few things that will actually make me lose my temper and scream at someone is "customer service." Went through it again yesterday.
    Probably the most infuriating thing is they are never allowed to admit the company made a mistake. So they just can't say, "I'm sorry, that was a mistake on our part, let's see if we can fix it."
    Instead you can hear them flipping through pages of scripts, trying to find the proper non-response response.
    I really don't want to yell at these people, they have a crappy job and it is not their fault the company doesn't do better, but if they can't transfer me to someone who knows how to fix the problem, or even someone else to yell at, their day is just going to get that much worse.

  19. ScentOfViolets

    Alphabet would seem to bear this out in spades. Look at its product rollouts and support; clearly this is a company whose left hand doesn't know what it's right is doing. Same for Microsoft, albeit, to a lesser extent. I could reel off the names of literally dozens of rumdum corporations, but a) it would still be anecdotal, and b) you can read all you like and more on just thist topic over at Ars Technica, Y-combinator, etc.

  20. DButch

    Today's Seattle Times reprinted an article from WaPo. Title - AI-generated child sex images a nightmare for law enforcement. Not good.

  21. Pingback: Amazon is being sued for making it ridiculously hard to cancel a Prime subscription – Kevin Drum

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