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Answer & Explanation:Dish network the meanest company in America.docx
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Dish network the meanest company in America
For 2012, the website 24/7 Wall St. determined that the worst company to work for in America
was the Dish Network, the Engle-wood (Colo.)-based company that provides satellite TV to
more than 14 million subscribers. To pick its winner, the site began by sifting entries on glass
door.com , an online service where people gossip about their jobs. It was hardly the most
scientific of methods. Still, the volume of miserable tales about Dish is impressive; 346 former
or current employees had taken the time to write not-so-nice things about the company. On a
scale of 1 to 5, they ranked their company an average of 2.2, beating Dillard’s and RadioShack
(RSH) for the spot at the bottom. The most common com-plaints were long hours, lack of paid
holidays, and way too much mandatory overtime. Some posts suggest that merely setting foot
in Dish’s headquarters is a danger to the soul. “Quit” was the recommendation to one Dish
employee who sought management advice. “You’re part of a poisonous environment . . . go
find a job where you can use your talents for good rather than evil.” The roundup noted one
other thing: The share price was up more than 30 percent for most of the year. Much of the
malice, and value generation, can be traced to one man: Charlie Ergen, 59, the founder and
chairman of Dish. Although he turned over the role of chief executive officer to former Sirius
XM Radio head Joseph Clayton in 2011, Ergen remains the core of Dish—and its largest
shareholder, with 53.2 percent of the outstand-ing shares and 90.4 percent of the voting rights.
Ergen founded Dish more than 30 years ago, installing satellite systems with partner Jim
DeFranco. Dish is now the sec-ond-largest satellite TV provider in the U.S., with 26,000
employees. Ergen, according to the Bloomberg Billionaires Index, has an estimated net worth of
$11 billion. Michael Neuman knew the risks going in when he accepted Ergen’s offer to be
Dish’s president and chief operating officer in 2005. Before Neuman, no president had lasted
more than four years. Still, for Neuman, a man who’d known Ergen for more than a decade and
had run a Dish-like satellite service in Canada, the opportunity was too tempting to pass up.
Unlike its major competitor, DirecTV (DTV), Dish was fully integrated: It engineered, built, and
sold all its own set-top boxes and ran its own installation fleet and customer service. (The
company split in 2008, with EchoStar [SATS] building the boxes and Dish doing everything else.
Ergen remains chairman of both companies.) “If you’re a student of management like I am, it
was irresistible,” says Neuman. At first, Neuman loved working at Dish but over time he came
to realize why former presidents such as John Reardon, who lasted less than a year, described
Ergen as “pounding people into submission.” The hours were long, yes, but it was Ergen’s habit
of unilaterally making decisions that most irked Neuman. Although Dish had more than 100
people employed in its marketing department and reams of customer data to analyze, when it
came time to figure out how much it was going to charge for satellite service, Ergen went into
his office and came up with the final number alone. “It would be like the CEO of Kraft getting up
in the morning and determining how much they were going to charge at retail for 12 slices of
American cheese,” says Neuman. “It wasn’t that he didn’t invite input or share his thought
process, because he did both. It’s just that he’d had his hands on the wheel for so long that he
trusted his own judgment the best.” What made it worse, Neuman says, is that Ergen was
almost always right. Eight months after accepting the job, Neuman resigned. Judianne Atencio
left Dish not long after. As head of communications for a decade, she had witnessed some of
the company’s biggest triumphs, including the successful launch of its satellites and the signing
of its 10 millionth subscriber. She had also been around for some of its most crushing defeats,
such as Murdoch’s last-minute cancellation of a planned merger and the federal government’s
denial of another with competitor DirecTV. “I didn’t have a life for 10 years,” she says. “I
couldn’t even have a dog.” There were times when Ergen screamed so loud at Atencio that she
packed up her stuff and had to be persuaded in the parking lot to return to work by an
apologetic board member. A friend who had worked in the White House even tried to comfort
her by saying, “Charlie’s like Clinton—he only screams at the ones he cares about.” A selfdescribed “country boy from Tennessee,” Ergen is capable of a Warren Buffett–style folksy
charm. He often packs his own brown bag lunch and has lived in the same house for 20 years.
Ergen and his four siblings grew up in Oak Ridge. His father was an Austrian-born nuclear
physicist who worked on the Manhattan Project. Ergen’s first real job out of school was as an
accountant at Frito-Lay. He quit to work as a professional gambler, with black- jack his
preferred game. He was so good at counting cards that he has told reporters he was once
tossed out of a Las Vegas casino. At Dish, he still keeps a counter’s eye on the numbers. Up until
a few years ago, as he noted at a recent talk at the University of Colorado, Ergen signed every
check that left Dish headquarters, a process that took him three to four hours a week and left
him with an un-paralleled understanding of how money was moving out of the company. He
still signs company checks today, though now that Dish has $14.3 billion in annual revenue and
$2.4 billion in operating expenses, Ergen reserves his signature for anything over $100,000. At
Dish headquarters in Engle-wood, a suburb of Denver, the day begins no later than 9 a.m.
Badges used to be the preferred method of entry into the building. But a few years ago, after
noticing that some employees were taking advantage of the system by having others badge-in
for them, Ergen upgraded to finger-print scanners. If a worker is late, an e-mail is immediately
sent to human resources, which then sends another to that person’s boss, and sometimes
directly to Ergen. Multiple ex-employees say it’s not uncommon to see Ergen publicly berate an
executive for scanning in a few minutes late, even if that executive had spent the previous 12
hours at home working through the night. Neumann, when he was still president, refused to
implement Ergen’s pro-posed strict badge-in policy. He worried it might be “demoralizing.”
Employees, both current and former, describe an Ergen created culture of condescension and
dis-trust. Vikas Arora, a manager on Dish’s international content acquisition team, had never
worked anywhere else in the U.S. until he left the company last year. That’s when he
discovered that “outside of Dish, people are actually treated like adults.” Whereas many
companies are doing their best to cater to millennials who demand flexibility among other
benefits, Dish doesn’t allow its employees to work from home. It offers no company credit
cards. And according to a former regional manager, for many years, if an employee expensed a
meal where they’d tipped more than 15 per-cent, the extra amount was then subtracted from
his paycheck, even if he’d only gone over by a nickel. Turnover is said by many employees to be
constant, and while no one knows exactly how many employees are laid off during regular
quarterly culling’s, all employees are aware of the company’s euphemism for the blood-baths:
“talent upgrades.” There’s a running joke on glassdoor.com that Dish is an acronym for “Did I
sleep here? “We’re a one-trick pony,” Ergen has said of Dish, which has a sole product: satellite
TV. In a November earnings call, Ergen talked about how his five kids—most of whom don’t
even have cable subscriptions—think he’s “crazy” to be in the pay TV business. To address that,
Ergen has spent nearly $3 billion in the past two years buying wireless spectrum from bankrupt
companies and just received word of a favor-able Federal Communications Com-mission
decision that may allow him to deliver video to tablets and cell phones. He’s also made it clear
that he’d like to try again to merge with DirecTV and have his own mobile network to compete
with telecom giants such as AT&T and Verizon, though a succession of recent wire-less industry
consolidations has possibly imperiled those plans. Since Ergen relinquished the CEO role, Dish
employees say the company has relaxed some. It is, according to the former regional manager,
now possible to leave a 17 percent tip without incurring a personal charge. But austerity and
meanness still have their place. In response to the economic down-turn, it takes longer to
accrue vacation days, and holiday parties have been scaled back. The company reports earnings
on February 22. It’s beaten estimates five out of the last eight quarters.
Questions
1. How would you describe CEO Ergen’s approach to output control? Give examples to support
your view.
2. How would you describe CEO Ergen’s approach to behavior control? Give examples to
support your view.
3. Given his approach to control, what kind of values, norms, and organizational culture has he
created for Dish?
…
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