A Failure

 

I

R&M Machinery had for years provided XYZ with sophisticated equipment and reliable repair service. XYZ returned a failed piece of equipment. A meeting was held which included Archie Hunter, a representative from XYZ; Norm Nash, R&M's returned goods area representative, and, Walt Winters, an R&M engineer intimately acquainted with the kind of equipment XYZ had returned.

Norm Nash represented R&M's "official position": the piece of equipment is all right. However, during the course of the meeting it becomes apparent to Walt Winters that the problem has to be R&M's. He suspects that the equipment was not properly tested out by R&M, and that it failed because of an internal problem.

Should Walt say anything about this in the presence of the customer, or should he wait until after the meeting to discuss this with Norm Nash?

 

II

Walt keeps silent during the meeting. After the meeting he talks with Norm about his diagnosis. He suggests they tell XYZ that the problem is R&M's fault, and that R&M will replace the defective equipment. Norm replies, "I don't think it's wise to acknowledge that it's our fault. There's no need to hang out our wash and lessen XYZ's confidence in the quality of our work. A 'good will' gesture to replace the equipment should suffice."

R&M management decides to tell XYZ that they will adjust to the customer's needs "because you have been such a good customer all these years." Although R&M replaces the equipment at its own exprense, it does not tell XYZ the real nature of the problem.

Discuss R&M resolution of the problem. Should R&M's way of handling the problem be of any concern to Walt Winters at this point, or is it basically a "management problem"?