The Management of Whole Foods Market - Coursework Example

? Case-5 Assignment I.D. of the Case-5 Assignment Part The two most important critical feedback loops in the context of the management of Whole Foods Market are reinforcing loop and balancing loop. Moreover, these loops can be identified as to be functional in most of today’s corporate organizations. (See Kampmann, 2004 and Notter and Grant, 2011) Selection and description of each feedback loop “Reinforcing loops are system dynamics that end up reinforcing the effect of a certain action or set of actions causing growth and acceleration.” (Notter and Grantt, 2011, p. 133) A reinforcing loop generally develops the market value of a company along with its policy framework and a clear cut course of action. For instance in the case of a company like Whole Foods Market, the management is actively implementing the core value of satisfying and gratifying their customers with an intention to retain them. This is giving rise to a reinforcing loop. The loop starts at the core value specification, which can be diagnosed as the causal factor. The loop is processed through the organization’s customer oriented activities culminating at customer centric relationship management. The loop is then reinforced by the returning customers. This happens in consequence to the causal policy that finally results into its reiteration by the virtue of the company’s active and deployable business methods. “Balancing loops are system processes triggered to bring the system back to a preestablished norm” (Notter and Grantt, 2011, p. 133) A balancing loop is a kind of automatic control within the organization which may bring about considerable damage if not terminated in proper time. This is a case in which a system is constrained within highly tacit parameters (Notter and Grant, 2011; Sterman, 2000). Some companies like Whole Foods Market try to overstress the importance of distributing high quality products; a policy that eventually pressurizes its supply chain. In the case of Whole Foods Market, the management is continuously pressurizing the employees to select and distribute high quality food products. Not only that, they are even trying to avoid to market the food products which are likely to contain genetically engineered material. This oversensitivity in establishing one of the primary core values to deal with the marketing processes appears to be causing a balancing loop. The loop is executing through the unopposed policy specification and then exposing the organization to tougher competition. Figure – 1: The Reinforcement Loop formed due to Customer Centric Management Figure – 2: Setting product quality specifications with excessive stringency may lead to a negative balancing loop Part 2 Traditionally, scholars and professionals in the field of management and business research used to accept the notion of organizational learning, but its definition and theory remained unclear for a considerable period of time. However, as early as 1985, Fiol and Lyles (1985, p. 804) pointed out that “Some agreement exists that distinctions must be made between individual and organizational learning.” Consequently, it becomes an imperative to contemplate on the concept that individual learning is vital for an organization, but organizational learning cannot be regarded as merely the sum total of each member’s erudition. An organization, unlike an individual, builds up and maintains learning mechanisms. These mechanisms influence the organization’s immediate members. Moreover, these mechanisms help in transmitting the learning outcomes to others by the means of organizational histories, paradigms, and norms. (Notter and Grant, 2011; Argyris, 1990; Fiol and Lyles, 1985) So the theory of organizational learning has emerged on the fundamentals of the earlier works regarding organizational processes and needs. In providing a summary on the most important information on organizational learning (especially at the executive level), reviewing the works of Dixon (1999) can be highly rewarding. The main points of the theory of organizational learning can be concisely explained as the following: Widespread information generation across the various departments and levels of the organization must be achieved. Local and latest pieces of relevant information/news should always be appended to the organization’s core knowledge base. Collective interpretation of information generated and/or gathered insofar should be facilitated. This will infuse collectivity at the systemic level. According to Dixon (1999), a productive way of achieving collective interpretation is encouraging organizational dialog. Another way is to change the “tacit organizational assumptions” (see Dixon, 1999, pp. 110-116). At the final stage of organizational learning, actions must be taken as per the implications of the collectively interpreted information. The paradigm explained under the preceding bullet points can be used as a common ground for systematic organizational learning and refine the existing managerial practices. Part 3 In general, learning activities adopted by Whole Foods Market appear to have dual use implications. With more focus on customer centric business management, the organization has embarked on a customer satisfaction and retention based business management program. This program has been carefully adjusted with wealth creation, employee education, and increased interdependence. This is a strategy that will increase the company’s customer base directly. On one hand, the company stresses its urge to handle socially responsible and addressable issues that can help the organization to create not only money but also value. Instead of highlighting mission and vision statements, the organization is creating a centralized policy framework wherein it has placed certain values at the core. The active reinforcing loop is assisting the organization’s policy makers to expose their workforce toward direct customer contact. In this way, understanding market psychology is the most important implication of the reinforcement loop. It is continuously providing both the workers and managers with valuable feedback over customer services which are likely to culminate into a rewarding learning technique. However, the largely undetected balancing loop appears to have taken drive toward a very negative direction since the managers are excessively selective in procurement and distribution of products. Although it cannot be denied that community care is important, it is unwise to neglect the happiness of employees. The goal behavior of the company becomes highly ambitious since it wants to please its suppliers too. Under the pressure of satisfying both the customer and suppliers alike, what the policy makers overlook is work life balance of the staffs. Yet, the balancing loop has a better side too. It is likely to give rise to a long term planning paradigm. Due to the balancing loop, the company has already started to learn about the environmental issues, avoid genetically engineered products, and develop a proactive plan to handle future environmental regulations. Part 4 Opportunities and organizational learning The study reveals that the two feedback loops have very different effects on Whole Foods Market. The reinforcing loop is creating considerable opportunity for the company and its employees. The core value of customer centric administration is providing both the employees and managers with opportunity for strategic management by increasing concentration on the issues like customer loyalty, customer expectation, and customer satisfaction. Moreover, Whole Foods Market also stresses the importance of interdependence and employee education. Now the question is: Is the most significant opportunity to improve the company’s business strategy has some learning value too? The answer is that the reinforcement loop is functional in an area of growth, and this area of growth is all about expanding the company’s customer base. Consequently, the employees are getting more exposure to customer handling and therefore they are also learning the most important real time customer service techniques. On the other hand, media organizations like Freedom Press allege that Whole Foods Market’s business practices “essentially mirror those of the conventional retail sector” (Corporate Watch, 2011). Even though the company is excessively emphasizing on food quality issues, it is unable to please all its critics. So the balancing loop is functional due to the management’s ambition to satisfy almost all the stakeholders in the industry … customers, suppliers, nutrition experts, regulatory bodies, etc. So what is the position of the employees? By detecting and analyzing the balancing loop, Whole Foods Market can generate significant learning opportunity for its managers and help them to create a more pleasant environment for the workers (particularly those who are doing customer service). Logic behind the feedback process in organizational context Real world industry situation demands that the feedback loops be understood as intricately as possible. Feedback loops not only manifest in the form of the company’s overall performance. Rather, they provide an analytical roadmap for organizational erudition and growth. Analysis of reinforcement loop helps to diagnose and learn the existing best practices. Analysis of balancing loop helps to learn and address the key drawbacks. For example, yearly employee specific performance evaluation helps to establish an organized way of gathering system feedback (Lumley, 2012). Consequently, these sort of erudite business practices help the policy makers to acquire adequate information that can be used to exploit the different feedback loops from a broader perspective and improve performance. References Argyris, C. (1990). Overcoming Organizational Defenses. Needham Heights: Alyn and Bacon. Dixon, N. (1999). The Organizational Learning Cycle: How We Can Learn Collectivity. Burlington: Gower Publishing. Corporate Watch. (2011). Case Study – Whole Foods Market. Freedom Press, London. Retrieved January 25, 2013, from http://www.corporatewatch.org/?lid=4013. Fiol, C., & Lyles, M. (1985). Organizational Learning. The Academy of Management Review, 10, 803-813. Kampmann, C. (2004). Feedback Loop Gains and System Behavior (Originally published in the Proceedings of 1996 International System Dynamics Conference, Cambridge MA, United States) Copenhagen: CAMS, Copenhagen Business School. Lumley, S. (2012, January 12). Feedback Loophole: Are Formal Employee Evaluations Worth the Effort? | Apple Capital Group Blog. Apple Capital Group Blog. Retrieved January 25, 2013, from http://blog.applecapitalgroup.com/feedback-loophole-are-formal-employee-evaluations-worth-the-effort/. Notter, J., & Grant, M. (2011). Humanize: How People-Centric Organizations Succeed in a Social World. Indianapolis: Que Publishing. Sterman, J. (2000). Business Dynamics: Systems Thinking and Modeling for a Complex World. Boston: Irwin/McGraw-Hill. Read More