Protecting Your Customers and Profits From Your Employees

When operating business it is important that line management understands the direction executive officers and board have set for the company.  This includes high level policies and strategy which is communicated down to middle management, who in turn oversees business process and execution of work.  In order to properly operate a business the strategic, tactical and operational policies should be communicated and have signatures from all levels of employees.  Individual line managers should not be encouraged to “do their own thing” since this can endanger the company’s reputation and subject it and the executive suite to legal liability.

Today’s case study in poor corporate governance comes from Muvico Entertainment, LLC in Fort Lauderdale, FL.  At a theatre in Rosemont, IL Samantha Tumpach was arrested and held in jail for two nights.  What was her crime?  She was filming a birthday party at one of Muvico Entertainment’s theatres which isn’t a crime.  Filming her friends while the movie was running was the crime.  According to police she had less than 4 minutes of footage total.  Management at the theatre called the police and insisted that Tumpach go to jail for a felony.  The police seemed to think the theatre manager had overreacted, but apparently their operating policies do not allow them to refuse to arrest on the scene if the officer thinks the issue is trivial.  In such cases accuser must obtain a warrant have the suspect arrested later.  The judge handling her case released her on her own recognizance, which indicates he thinks it was a minor incident.  She may be facing up to 3 years of prison for having her camera on.  I doubt she will face any prison time since crimes involve motive and intent, neither of which exist here.

I would consider this to be a corporate bail out at the expense of the taxpayers.  Rather than sue Tumpach for damages using the company’s own funds, they decided to hoist the costs off on to the taxpayers.  Muvico Entertainment just gave the government an excuse to raise taxes on the surrounding businesses and residents.  Property and sales taxes fund the judicial system and the police department.  This adds one trivial case to the court system where police and judicial time could be used to fight violent crime.  Either you cut back on police and judicial services for trivial matters, or you hire more cops and judges to deal with both trivial and serious matters.  Muvico Entertainment is not the kind of neighbor I would want to have as a business or a resident, and certainly not one I would be a patron of.

The damage done to Muvico Entertainment’s reputation has mainly been in the media and on the internet.  People have been giving them 1 star ratings on Google Maps and Yelp which is going to hurt their sales when someone reads the review and sees a ton of 1 star ratings.  If they actually read the reviews they may dismiss the ratings or they may boycott the business based on poor decisions made by management.  There is nothing Muvico Entertainment can do to make these 1 star ratings disappear from Google or Yelp.  There is also nothing they can do to silence the blogosphere or the mainstream media.  In the end this may not hurt them financially, but their executive management has a large rotten egg splattered on their faces.

How do you prevent this kind of embarrassment in your business?  Define your company policies and train your employees.  In this case a policy stating that all arrests on behalf of the company must be approved by middle or executive management could have avoided this situation. There is also a question of ethics involved here.  Executive management of any company should have a code of ethics policy which forbids employees from taking payoffs from vendors.  In most cases your company may have a policy prohibiting employees with buying authority from taking free lunch, golf games, or sports tickets from their suppliers. If you don’t have a code of ethics policy in your business, you should get one approved.  Many publicly traded companies publish their code of ethics policy.  You can use one of those as a starting point.

The MPAA is offering a $500 bounty to any movie theatre employee that calls the police on a person operating a video camera in the movie theatre.  The MPAA bounty presents an incredible opportunity for a public relations nightmare and conflict of interest.  If you have a code of ethics policy it would be a good idea to use this situation as another example of prohibited behavior.  It definitely creates a conflict of interest between your employees and your customers and in my opinion is no different than a buyer taking a bribe from a supplier to become the vendor of choice.  Businesses should place the customer at a higher value than their suppliers.  Customers provide revenue, while suppliers contribute to expenses. If one movie studio goes out of business due to bootlegging there are others to buy your content from.  If your customers organize a boycott because you value your suppliers more than them you may be the one out of business.

UPDATE: After checking some MSM sources it appears that Muvico Entertainment is encouraging its employees to screw over their customers. 

"The motion picture industry has encouraged theater owners to adopt a ‘zero-tolerance’ policy prohibiting the video or audio recording of any portion of a movie," Muvico Entertainment, which oversees the theater, told HLN’s "Prime News."

What happens now? Muvico Entertainment says it’s up to local police to determine Tumpach’s future.

Zero-tolerance equals zero-commonsense.  I guess they collected their $500 bounty and are proud of themselves for it. 

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