Casual Loop Analysis
Executive summary
Starbuck is among the few corporations that do not have a dedicated customer care department. The responsibility of ensuring proper consumer services was shared among Starbuck managers. This approaches posed significant challenge to the growth plan vision by Starbucks. To understand the specifics of issues facing Starbucks customer service system thinking can be integrated to better predict future outcomes—based not on past Starbuck’s customers’ events. Integrating system thinking enable the management to examine how existing or past systems and structure at Starbucks contributed to the customer service issue, and how best it can be solved for future productivity.
Casual loop
A causal loop diagram may be thought of as a “snapshot of all the connections that are important.” Essentially, a flowchart is a visual depiction of significant variables such as components, situations, procedures and existing relationship. Several variables are depicted as texts in these diagrams, and the causal links between them are represented as arrows (Haraldsson, 2004). The causal loop analysis has been used to assess the root cause(s) of the low customer satisfaction being experienced by Starbucks. The image below outlines the causal loop analysis for the main challenge that faced Starbucks.
Causes
One of the main problems that faced Starbucks customer service relates to the fact that customers could customize their coffee, thus resulting in tension between product quality and customer focus. The apparent answer was to recruit additional baristas to share the burden, but the firm had been hesitant to do so in recent years, especially considering the economic slump. Starbucks outlets tended to be situated in metropolitan areas with high pay rates, and labor was already the company’s top expenditure item in North America (Moon & Quelch, 2003). Instead, the business concentrated on improving barista productivity by eliminating non-value-added operations, streamlining the beverage manufacturing process, and tweaking the facility architecture to remove bottlenecks. This challenge caused significant limitations to Starbucks’s ability to maintain the growing personalized needs of the consumers. Due to increased customization and personalization of services, customers demand increased substantially. However, the growth of customer-based was faced by the challenge of insufficient employees’ number to provide optimal services.
According to Forbes, Starbucks, while being one of the world’s most successful marketing firms, was notable for lacking a formalized strategic marketing division. However, there was no chief marketing officer. The company’s marketing department was divided into three groups: a market research group, which collected and analyzed market data on behalf of the various business units, a category group that developed new products and managed the menu and margins, and a marketing group that developed the company’s quarterly promotional plans (Clancy, 2018). Starbucks’ top executives were all required to take on marketing-related activities as a result of this organizational structure. This means that the customer- the market date was likely overlooked. Day, the company CEO, was quoted stating that the management did not use the data collected from the consumers to make decisive decisions. The failure to have a dedicated department focusing on the needs of the consumers hindered Starbuck’s leadership from “seeing the bigger picture.” For instance, Starbucks management was concerned with expanding operations while overlooking the brand or image of the company. Starbucks had a huge presence and was very easy to get to, but there was not much difference in image or product quality between Starbucks and the smaller coffee chains. This lack of differentiation negatively impacted the growth and image of Starbucks.
Why did you choose this particular archetype?
Archetypes are beneficial for acquiring insight into the “nature” of the underlying issue since they provide a fundamental framework or foundation upon which a model may be further developed or formed. In and of itself, archetypes are seldom adequate models for a given situation. They are generic, and, as a result, they often fail to show essential factors that are a part of the genuine system structure of a particular organization. It is difficult for managers to identify precise leverage points where changes in structure might result in long-term changes in system behavior if they are not explicitly aware of these genuine factors. Braun (2002) had detailed numerous Systems Archetypes, which can be used to describe organizational behaviors.
Archetypes are useful diagnostic tools because they give insight into the underlying structures that underlie both long-term behavior and discrete occurrences. They serve as predictive tools, alerting managers to the possibility of unexpected repercussions in the future. Thus, the suitable Archetypes which can be used to describe the organizational behavior of Starbucks is Limits to Growth (aka Limits to Success). This type of archetype explains the limiting factors that hinder the growth of Starbucks. More so, the Limits to Growth outlines the challenges or limiting constructs that prevent Starbuck’ performance from “plateauing” or collapsing over time. Overall, Limits to Growth archetypes show activities that have been overlooked by Starbucks management that negatively affected the growth performance of customer experience.
Causal loop analysis
The low customer satisfaction experienced by Starbucks customers can be linked to the imbalance between the experienced increased consumer population and dwindling staff shortage. The Starbucks management introduced new programs that sought to improve customer experience, specifically introducing customization of coffee served. This proposition increased the population of customers visiting the Starbucks outlets, which in turn overwhelms baristas working in the various outlets. The increased workload placed immense work pressure on Starbucks employees. Ideally, overworked workers tend to perform their duties poorly. Studies have shown that employees’ productivity is high when they work for an average of forty years. In contrast, staff who work for an extended period exceeding fifty hours per week had reduced performance.
Reference
Braun, William. The System Archetypes . 2002, www.albany.edu/faculty/gpr/PAD724/724WebArticles/sys_archetypes.pdf.
Clancy, T. (2018). Systems thinking: Three system archetypes every manager should know. IEEE Engineering Management Review, 46(2), 32-41.
Haraldsson, H. V. (2004). Introduction to system thinking and causal loop diagrams (pp. 3-4). Lund, Sweden: Department of chemical engineering, Lund University.
Moon, Y., & Quelch, J. A. (2003). Starbucks: Delivering customer service. Harvard Business School.
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