‘The Office’ business lesson: Don’t be anything like Dunder Mifflin

May 17, 2013

Most people enjoyed "The Office" most for the antics of boss Michael Scott, or the touching relationship between paper salesman Jim Halpert and erstwhile receptionist Pam Beesly. I liked the show, which aired its finale after nine seasons Thursday night, best when it gave us a window into the business practices of this particular office.

In short: Dunder Mifflin was a disaster as a business. And that was the reality that haunted the show — the underlying truth that created a lot of the tension always lurking for the characters. The show never would have worked if it had been set in a fast-rising Internet start-up or even a stable industry.


There's too much overhead in this 'Office.' (Tyler Golden/NBC)

There are many ways in which the Dunder Mifflin business model made no sense whatsoever. It is a retailer of office paper, which is the ultimate commodity, something that companies want to buy at the lowest possible cost. Yet Dunder Mifflin pairs this low-margin, commodity product with an expansive sales force. The Scranton office alone had four or five salespeople at any given time, calling on clients and working new leads.

The entire business seems premised on the idea that a personal touch and better service will be enough to make up for prices that are higher than at Staples or Office Depot. It's more likely that the office managers in charge of paper procurement at Scranton area businesses would be more annoyed by the constant harassment from their paper salesman than pleased by the enhanced service. If you’re selling a complex product essential to certain business operations, like software or key manufacturing equipment, it makes plenty of sense to have a large, talented staff of salespeople and customer relations experts. But this is just ... paper. Dunder Mifflin sells a commodity, but it's staffed like it sells something unique.

Then there's the overhead. If Dunder Mifflin somehow found a way to make the paper  work as a high-touch, sales-intensive business, it would still need to keep expenses as low as possible. But this company has a tremendous burden of white-collar staff who draw salaries but do not directly drive sales. It obviously has to employ a branch manager — Michael Scott, and later Andy Bernard -- because somebody has to be in charge of the sales force. But almost every other position at the Scranton branch is hard to justify.

There are three people in the accounting department (Angela, Kevin and Oscar), but bookkeeping should instead be centralized across all Dunder Mifflin’s branches. Why does an office of maybe 20 people need its own human resources person? The answer, of course, is that the managers have been walking human resources disasters. But that’s a reason to get new managers, not to employ Toby Flenderson as a full-time HR guy. Kelly Kapoor technically was in charge of “customer service” all those years, but shouldn’t that be the salespeoples’ jobs? What in the world do Creed (in charge of quality control) and Meredith (supplier relations) do all day? Darryl Philbin was promoted from running the warehouse to a white-collar management job in season six, but it was never clear why they needed yet another manager in this small office. Pam managed to give herself the title “office administrator” in the seventh season, despite all those other people already in place to administer the office. And, somehow, this is the only office in America where callers still have to go through a full-time receptionist to reach someone, rather than call the person directly.

That’s not even the end of it. In the early seasons of the show, this regional paper company that sells a low-margin, commodity good in markets like Scranton, Utica and Buffalo, located its headquarters not in some anonymous office park in one of those cities, but in . . . Midtown Manhattan, home of some of the highest rents on earth!

Add to all that, Dunder Mifflin, of course, is in a declining industry. As Michael Scott’s memorable slogan put it, “Limitless paper, in a paperless world.” It would be one thing if all this staffing were designed to accommodate future growth, but there is no reason to think that there's any growth to come.David Wallace, the chief financial officer of this monstrosity of a company, came across as one of the few competent leaders at Dunder Mifflin. But he runs an operation with staffing and overhead horribly ill-suited to its business model.

That is the greatest mystery of Dunder Mifflin. At a time when its business model would have, in reality, been collapsing upon itself, the company had remarkable stability. Most of the workers who appeared in the premier episode nine years ago were still there trudging along this week, ensuring that the people of Scranton could get their precious paper. In a modern workplace of constant churn, that may be the most unrealistic aspect of the whole show. But it is also what made this fictional company in a drab town in a boring business the stuff of great television for nine years.

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Sarah Kliff · May 17, 2013