Feedback Loops at Whole Foods Market

Whole Foods Market Inc. is a US based company that focuses on the business of organic and natural foods. The public company has more than four hundred stores all over the US and Europe with beach supermarket serving the needs of the target market. Over the years, the company has employed different and unique strategies thus ensuring its successful growth. Top among these strategies is the process of minimizing competition by buying out emerging competitors. For instance, the company acquired Wild Oats Market which posed the biggest competition challenge to the company. As such, it has employed more than 9000 employees making it one of the largest chain store employers. The main output of the company is well captured in the motto, “whole foods, whole people, and whole planet”. The company therefore strives to meet the whole food needs of the population that it serves.

In meeting its targets, Whole Foods Market exploits both the reinforcing and balancing feedback loops. Through the two feedback loops systems, the company is able to analyze difficult and complex problems facing the company (Morecroft, 2007). This assertion may seem a bit farfetched but the use of feedback loops may ignite the hypothesis of realistic solutions to problems that may have appeared impossible to solve before.  Before one can understand how these feedback loops are applied at Whole Foods Market, it is important that they understand the difference. Feedback loops occur when changes in one aspect of the company returns to cause a further change in the same thing (Meadows, 2009). A reinforcing loop occurs when the new changes occur in the same direction thereby producing positive results. On the contrary, a balancing loop occurs when the new changes are inverse to the original input thereby producing negative results.

There is clear evidence of a reinforcing feedback loop within the company. Specifically, the reinforcing loop is concentrated in the area of the company’s output and the input that it achieves. The choice of this area is due to the company’s continued growth even in the face of competition. Every year, more branches and stores of the company are opened up in diverse locations in the world. The growth strategy of the company is nothing short of impressive and requires to be studied for better comprehension. At Whole Food Markets, an increase in the number of employees results in improved production of goods. This increase is because of the improved labor that the employees provide to the company. Essentially, more labor hours are used in the process of production therefore increasing the yields. When more goods are produced, the number of customers increases resulting in more sales. As the company increases its production, more customers are attracted to its products and thus leading to more sales.

Additionally, these customers may refer clients to the stores due to the good customer service extended to them. Eventually, improved sales result in more profits for the company as it exploits the economies of scale.  The profits earned by the company then offer an incentive for employee retention. In addition, the company is able to pull more employees to its stores thereby increasing the production again. The cycle then goes round and round until it reaches its limit. The limit in this case could be the number of ranches that can be opened within an area thereby putting a cap on the number of employees that the company can sustain.

The company does not only have a positive feedback loop however. Rather, it is confronted by a negative feedback loop that is majorly in the area of competition. The choice of competition in coming up with the balancing feedback loop is ideal due to the success of the company bin wading off competition from other stores. When the company was started, it was the first original store in the United States. However, as the business grew and more customers demanded whole food products, new businesses emerged creating competition for the company. This is a scenario that faced the company way back when it was starting. Today, the same challenge of competition faces the company only now to a great extent. It is therefore important that the management of the company understands the fore goings if they harbor any chance of solving the problem.

Whenever the company is involved in business, it improves the output thereby generating more profits. Normally, part of the profit is reinvested back in the company and thereby stimulating growth of the company. As part of this growth, the company further improves the customer base for these products and reaches a point where it cannot meet all the demands of the customers for the products. In such a situation, other companies emerge ready to compete with the original company. This is the normal business cycle and cannot be wished away. However, the reaction that the company puts is influential in determining the success of the company. In the face of competition, the company is faced with the choice of action or one of inaction. If it choose the former, as Whole Foods Market has usually done, then its customer base will not be affected and so will its operations. However, if the company does not act, competition will eat into its business thereby stimulating a negative feedback loop. The more the competition, the poor the business performs.

Whole Foods Market is privy to the importance of organizational learning as numerous examples have shown. The management has continuously employed organizational learning to improve the prospects of the business becoming more successful. Organizational learning is basically a product of organizational inquiry (Fiol & Lyles, 1985). This is to say that in cases of inconsistencies between expected and actual outcomes, an employee engages in questioning to get to know and solve the inconsistencies. In the process of this questioning, the individual or group interacts with other employees within the organization resulting in a learning process. Ideally, therefore, learning is a result of the process of organizational inquiry.

The theory of organizational learning asserts that for organizations to remain as competitive as their rivals in dynamic sorrounding, they ought to shift their objectives and goals. The management of such organizations must therefore create an environment of learning for success to be achieved. According to Cummings & Worley (2015), there are three levels of learning present within any institution. The first type of learning consists of a single feedback loop when an unexpected error results in modification of a strategy. Double loop learning is one that results to a shift in theory-in-use. The occurrence of single loop learning leads to changees in the values, assumptions and strategies that govern actions in the organization. The third type of learning involves the improvement of the learning system as a whole. In this type of learning, structural and behavioral components determine how learning occurs within the organization.

Organizational learning is achieved in three stages the first of which involves data acquisition. Data collected may be on the environmental conditions and the probabilities of outcomes. This process creates a memory within the organization through which to predict outcomes. The second stage in the organizational learning process involves the interpretation of the data collected. The management of the organization must continuously compare the expected and actual results and adds the same to the created memory. In case of unexpected or erroneous results, they must be probed for the causes and actions needed to avert their future occurrence. However this stage does not involve any action. In the final stage of adaptation and action, the organization absorbs the achieved knowledge and utilizes it in selection of new actions suitable to the new conditions. The stage is a continuous process of adapting to the changes in the business environment.

One of the main reasons why Whole Foods Market has remained afloat is due to the appreciation of organizational learning. Way back from when the company was started, it has used every challenge as a learning opportunity and thus propelling its growth further. One thing that the company has learned is the importance of customer satisfaction. In this regard, their stores do not stock foods with artificial colors, preservatives or flavors. The uniqueness in the nature of products stocked has built customer loyalty thus ending up with satisfied customers. The importance of this uniqueness is reflected in the enforcing loop and the success of its growth. Every year, the company through its stores reaches out to more customers thereby improving its growth.

Another important lesson for the company is in the empowerment of teams that approve most of the decisions made at the different units. The decentralization of operations and management is also an important lesson that other companies should learn. The company realizes the importance of having small groups to help in the management of the units’ operations. The lesson was attained as a result of hitches in communications between the top management and the casual staff. As the company grew, the management found that it was becoming more difficult to implement decisions and policies made. This called for the setting up of smaller units down the management hierarchy to aid in the effective implementation of these policies. For instance, teams are the only ones who have the power to approve full time vacancies and employees. The importance of this is in the fact that the teams are at the ground and have better insights on the company’s operations as compared to the top management who rarely get into contact with the daily operations in the stores.

As the company continues to grow and venture into new markets, there is a challenge of competition from other rival stores. The company must therefore engage in organizational learning to fight off competition from other players. For instance, the company must engage in active inquiry of new trends in the market and analyze how new businesses are conducting themselves. Essentially, better and informed strategies should then be put in place to ensure the success of the business even in times of stiff competition. Moreover, the company should take organizational learning very seriously with regards to creativity and innovation. The management must not lie in a comfort zone and assume that the systems in place can guarantee the company’s growth. The dynamic nature of the market requires that new technologies be put in place to meet the growing customer demands. Feedback channels should thus be laid in place to ensure effective bottom up communication is achieved.



Cummings, T. G., & Worley, C. G. (2015). Organization development & change.

Fiol, C. M., & Lyles, M. A. (1985). Organizational learning. Academy of management review, 10(4), 803-813.

Meadows, D. H., & Wright, D. (2009). Thinking in systems: A primer. London: Earthscan.

Morecroft, J. D. W. (2007). Strategic modelling and business dynamics: A feedback systems approach. Chichester, England: J. Wiley & Sons.