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Feedback Loops. Types of Organizational Feedback Loops Report

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Updated: Dec 7th, 2021

Introduction

A feedback loop in an organization refers to an informal path that pilots from the preliminary invention of the feedback signal to the ensuing change of event. Feedback explains how an output from a circumstance may influence the same event in the near future or now. Large organizations are characterized by multiple objectives including profitability, social responsibility, customer care, and etc. to ensure that these objectives are achieved successfully there needs to be an evaluation criterion designed by the organization specifically to deal with this issue to provide a feedback to the entire management. (Ashish, 2009)

The feedback provided can either be positive or negative. In the case of the former the organization would set necessary procedures to ensure that the standard is maintained and where the latter is the scenario, an investigation would be carried out to identify potential weaknesses inherent in the system warranting such performances. (Richard, 1995)

An organization that has a good coordination will definitely have sufficient mechanisms to assess its performance over time. In an organization there are different components i.e. people, tasks, machines and equipment, communication, outside, and leadership. All these components need to be coordinated to ensure an effective performance. If there appears to be a mismatch then the desired objective may not be effectively achieved. The responsibility therefore lies with the management to provide a proper mechanism that will not only ensure smooth running of the organization but also accrue benefits to all the stakeholders in the organization. The following can be identified as feedback loops in an organization; marketing research, performance appraisals, financial audit, and shareholders meeting. (Peter, 2009)

Marketing research

This is a technique used to identify new and existing market opportunities for an organization’s products and services. In a case where a firm wants to create a new product a market research must be done to identify the needs of a market. This will provide important information to be used by the firm in the production of new products and services. A market research is as a feedback between the organization’s expected clientele and the organization itself, to establish interdependency between the organization and its already existing customers as far as the product needs are concerned. (Peter, 2009)

Financial Audit

Organizations carry out numerous transactions involving exchange of large sums of money between different parties. Financial audits will form a basis on which auditors will express their opinion about the preparation and presentation of financial statements and whether they give a true and fair view in accordance with the international accounting standards. The purpose of financial audit is to provide an assurance that organizational transactions are valid, transparent, and credible and meet the required standard. (Richard, 1995)

This will provide the management with a lot of confidence in handling tremendous commercial transactions.

Performance Appraisals

A performance appraisal refers to a review and evaluation of employees’ performance on a regular basis and rewarding them accordingly. This is a very critical activity in an organization especially in a dynamic environment where competition is a real force to reckon with and the firm is experiencing a high staff turnover. Performance appraisal will provide an opportunity for an organization to assess whether its employees are meeting the standard by having the necessary competence or not. It will also reveal to the firm the different types of training needs that employees need to undertake. Generally the purpose of performance appraisals is to help the organization identify whether its investment in human resources is worthwhile. (Peter, 2009)

Shareholders meetings

Shareholders will always meet to discuss strategic issues affecting their investment. This will entail identifying whether the company is able to generate sufficient profits to compensate them or to discuss the manner in which the company is meeting its core functional objectives and to identify new strategies to counter rivals. The most crucial one is that their shares are managed wisely. Shareholders’ meetings are always regarded as mediums in which the general performance of an organization is assessed. (Richard, 1995)

Effects on short and long term

Feedback loops provide important information to the organization on whether the organization is meeting its standard for performance or not. Good managers are those who make quick and rational decisions especially in hard times. Where an organization realizes that its human resource department is not functioning well then it takes a corrective measure by making the necessary steps to change it very fast. For instance in the above-discussed scenarios; (Peter, 2009)

Financial Audit: if it comes to the attention of auditors that there is a misrepresentation and inadequate disclosure of information that in their view is perceived to be material then the responsibility of the auditors is to disqualify the report on the basis of inadequate disclosure and misapplication of accounting standards. This will provide shareholders with the information that something is actually wrong and requires urgent attention. Prompt response will save the situation in the short run and provide a framework for dealing with such problems in the future and hence long-term solutions. (Ashish, 2009)

Market research

Where a firm realizes that its marketing strategies are ineffective and that it’s not yielding a favorable result, then the responsibility is to increase its marketing activities and effectiveness by adopting the right policies and procedures. This will make the firm strategically position itself to capture the market attention. By doing this the organization will have solve problems arising as a result of poor marketing in the short and will ensure that there adequate measures to tackle such cases in the event of one happening. (Peter, 2009)

Opportunities for learning organizations

The current business environment requires that organizations become more and more innovative in order to meet the needs of the changing market circumstances. This is the reason behind learning. Learning organizations are better equipped to handle volatile situations in the marketplace. (Richard, 1995)

In a competitive market learning can provide a very powerful tool for sustainable performance and therefore help a firm in strategically positioning itself. In big organizations learning can be used to embrace professionalism and innovativeness in groups and teams. Remember that highly skilled teams who are motivated enough can drive an organization to a spectacular performance. (Ashish, 2009)

Learning organizations are also better placed to acquire a sense of group commitment to shared values, visions and missions of the future and give guidance into making such dreams materialize. Learning may also define an organizational design and structure by considering whether to change to adapt to prevailing environment or not. (Peter, 2009)

Conclusion

An organization with a properly defined and organized structure should be able to devise mechanisms for assessing it’s operational, technical as well as the financial objectives. This will provide a platform for making any relevant adjustments to warrant present and future performance. But the most important aspect of a strategic management process is that it allows room for acquisition of new skills that will redefine the overall organizational performance. Organizations should therefore continue learning.

References

Ashish, K. (2009) How to Compete by Becoming a learning Organization. Web.

Peter, M. (2009) Learning organization partnership. Web.

Richard, K. (1995).Why a learning Organization? Web.

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