Feedback loops for PetMeds: effects on organizational effectiveness

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Feedback Loops of PetMed Express

Feedback loops can be explained as the feedback and actions of the management, which they are gained from the external environment or the organization outputs and sent back these feedbacks to the input system in the form of input data (Galbraith, 1999). This feedback is the instructions for the organization to improve their present organizational system and strategies according to the change and competition in the industry (Patti, 2004). This feedback can be negative or positive. If the feedback product in the reverse direction, it can be considered as negative feedback. There are mainly two types of feedback loops in the organization, which are known as balancing loop and reinforcing loop.

In an organization, the balance loop can be explained as the procedure, which helps the management to achieve the pre-establish goals in an effective manner (Patti, 2004). This is a definite situation of the organization in which the management follows the decision without any change (Galbraith, 1999). For instance, the decision of the company to increase the sales by 10% in a year or to increase the staff by 10% in a year can be considered as a balancing loop (Patti, 2004). Galbraith describes that there are mainly two kinds of conditions in balancing loops desire state and current state (Galbraith, 1999). The interaction between these states produces a gap; this gap acts as the motivating factor for performing the action (Patti, 2004, pg. 161). The main functioning area of balancing loop is goal seeking behavior.

Financial Performance of PetMed Express: The annual report of 2008 of the company describes that the company the company net income and profitability is really good and high. The revenue of the company was $10 million in 2001 and it has been reached at $108.4 million in 2005. That was a skyrocketed performance of the firm (PetMed Express (PETS), 2006). At the end of fiscal year 2008, net income of the company is $20,022,231 (PetMed Express: 2008 Annual Report, 2009). The accounting policies of the company are also very critical and effective. This is the balancing loop of the organization, because it helps the management to make a balance among all the strategies and programs (PetMed Express: Our Company, 2009).
Reasons for the Selection: The main reason behind selecting this balancing feedback loop is to explain the effective strategies of the company to provide safe and ...