Analysis and Application of Dynamic Patterns within the Context of Complaint Management

Diploma Thesis, 2010

68 Pages, Grade: 1,7


List of Content

List of Abbreviations

List of Pictures

List of Tables

1 Motivation
1.1 Selection of Topic
1.2 Structure

2 Literature Review

3 Conceptual Framework
3.1 Theoretical Background
3.2 Direct Complaint Management Process
3.2.1 Complaint Stimulation
3.2.2 Complaint Acceptance
3.2.3 Complaint Processing
3.2.4 Complaint Reaction
3.3 System Dynamics
3.3.1 History and Acceptance of System Dynamics
3.3.2 Patterns and System Dynamics
3.3.3 Examples for Application of System Dynamics

4 Specific Situations within Complaint Management and Application of Corresponding Patterns
4.1 The Need for Complaint Management
4.1.1 Analysis of the Situation
4.1.2 Application of Pattern “Balancing Process with Delay”
4.1.3 Flowchart Analysis Development of Complaints Development of Company ignoring Complaints Development of Customer Loyalty
4.1.4 Comparison and Managerial Implications
4.2 Multichannel Customer Management
4.2.1 Analysis of the Situation
4.2.2 Application of Pattern “Success to the Successful”
4.2.3 Flowchart Development of Allocation of Resources Development of Success of Shop Development of Success of Hotline
4.2.4 Comparison and Managerial Implications
4.3 Empowerment of Staff
4.3.1 Analysis of the Situation
4.3.2 Application of Pattern “Shifting the Burden to the Intervenor”
4.3.3 Flowchart Analysis Decrease of Capabilities of Internal Actors Development of Internal Solution
4.3.4 Comparison and Managerial Implications
4.4 Amount of Compensation
4.4.1 Analysis of the Situation
4.4.2 Application of Pattern “Fixes that Fail”
4.4.3 Flowchart Analysis Development of Compensation Development of Expectations Development of Customer Disaffection
4.4.4 Comparison and Managerial Implications
4.5 Review of Results

5 Conclusion and Further Research
5.1 Summary of Main Findings
5.2 Limitations and Suggestions for Future Research

Appendix A: Additional Information

A.1 Journal Overview for Complaint Management / Customer Relationship Management
A.2 Journal Overview for System Dynamics
A.3 Journal Overview for Patterns and Archetypes
A.4 Model Equations for the Pattern “Balancing Process with Delay”
A.5 Model Equations for the Pattern “Success to the Successful”
A.6 Model Equations for the Pattern “Shifting the Burden to the Intervenor”
A.7 Model Equations for the Pattern “Fixes that Fail”


List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of Pictures

Picture 3-1 Development of System Dynamics Review 1985-2009
Picture 3-2 Escalation between Coca-Cola and Pepsi

Picture 4-1 Pattern Balancing Process with Delay
Picture 4-2 Flowchart Balancing Process with Delay
Picture 4-3 Complaints
Picture 4-4 Company ignoring Complaints
Picture 4-5 Customer Loyalty
Picture 4-6 Pattern Success to the Successful
Picture 4-7 Flowchart Success to the Successful
Picture 4-8 Allocation to Shop instead of Hotline
Picture 4-9 Success of Shop
Picture 4-10 Success of Hotline
Picture 4-11 Pattern Shifting the Burden to the Intervenor
Picture 4-12 Flowchart Shifting the Burden to the Intervenor
Picture 4-13 Decrease of Capabilities of internal Actors
Picture 4-14 Internal Solution
Picture 4-15 Pattern Fixes that Fail
Picture 4-16 Flowchart Fixes that Fail
Picture 4-17 Compensation
Picture 4-18 Increase of Expectations
Picture 4-19 Customer Disaffection

List of Tables

Table 2-1 Topics and Journals

Table 4-1 Patterns and Effects Covered
Table 4-2 Evaluation of Results

1 Motivation

Problem solving or decision-making affects life everyday. According to Simon (1978, p. 271), "problem solving is a nearly ubiquitous human activity; it is doubtful whether anyone spends an hour of his life without doing at least a little of it." And human beings are said to be quick problem solvers. Kirkwood (1998, p. 1) refers to the evolutionary standpoint and the example of the saber-toothed tiger: When suddenly facing a saber-toothed tiger, man had to decide quickly what to do, because otherwise he wouldn’t be around for long. Thus, it’s the quick problem solvers who survived. People try to figure out the causal relationship between event and problem, and usually conclude that the cause is another event. For example, if customers are unhappy with the product (problem), it’s likely to be because of the poor quality of the product (cause of the problem). While this simple approach works for simple problem situa- tions, cross-functional and strategic business contexts that are more complex due to interper- sonal actions and non-rational behavior, require a more comprehensive model that enables a better understanding of difficult management problems.

That also applies to complaint management, a critical part of customer relationship management, since decisions made in this context need to be well considered. By now, complaints are commonly regarded as useful and important feedback and more effort is put into analysis of customer behavior (cp. Boshoff 1999). But still, only little research lays its focus on the actions of managers and possible improvements.

1.1 Selection of Topic

The aim of this paper is to illustrate common situations within the context of complaint man- agement and to provide solution concepts with focus on management decisions and actions. Therefore, we refer to a dynamic approach by applying so-called patterns, using System Dy- namic (SD) in order to provide managers with a better understanding for common situations. Our target is to demonstrate how to build up an understanding for long-term or side effects that yet do not experience the necessary attention. In this case, we describe the situation itself, explain how responsible managers usually react (and why) and identify corresponding pat- terns.

The reason why we decided to use patterns for this special purpose are the advantages that come along with their application. One the one hand, patterns enable us to identify existing mental models and decision structures. Thus, this knowledge makes it possible to develop actions that can be used to fasten and improve decision-making. On the other hand, we are able to analyze risks and failure options. This helps us to devise actions that ensure the sustainability of decisions.

Looking at the decisions complaint managers have to make everyday it seems obvious that we need to find a way that shows us how to improve decision-making. Considering the bounded rationality of humans, the target is to show ways that consider not only first thoughts but also the side or long-term effects of actions. By this, there is a certain focus on effects people are kind of “unable” to think of at once, such as multiple feedback loops. The approach illustrated in this paper is completely new. Though the design of complaint management has been topic of several research actions and focus of papers, nobody applied dynamic patterns particularly to this context until now. Current and past research often focused on what went wrong and how you could improve, but that kind of approach does not meet the needs of managers who want to know and understand why the decision they made eventually turned out to fail. The application of known patterns shall help to build a comprehensive understanding for the decision-making in the context of complaint management.

1.2 Structure

This paper is divided into five chapters. Within the second chapter “Literature Review”, we summarize shortly the structure of our literature research, pointing out search words, sources used and difficulties we thereby faced.

The following chapter, “Conceptual Framework”, contains useful basic information, which is necessary for the understanding of the application of the patterns. Thus, we give a short over- view of the direct complaint management process, describing each step shortly, followed by an introduction to SD. We start with a summary of the development and acceptance of SD, illustrate an example, similar to the applications later, and demonstrate some possible applica- tion areas.

The fourth chapter, “Specific Situations within Complaint Management and Application of Corresponding Patterns”, covers the main part of this paper. It is divided into five parts, and the first four parts equal regarding the structure: Firstly, we describe a situation that is likely to appear within the context of complaint management. We thereby do not evaluate the ac- tions taken, but leave it to the reader to build a personal opinion on it. In the following chap- ter, we analyze the situation illustrated before and provide the reader with some additional information regarding reasons and actions taken. We then apply a corresponding pattern to the situation in order to build up an understanding for existing feedback loops, side effects and long-term effects. The next step consists of transferring this pattern into a dynamic flowchart and running several simulations with different focuses. In the last part, we analyze the results of these simulations and provide the reader with a comparison of the results and managerial implications. The fifth part of chapter four consists of an overall comparison.

Within the last chapter, “Conclusion and Further Research”, we sum up our results, refer to the limitations we faced and indicate further research fields.

2 Literature Review

Within this chapter, we summarize the structure of our literature research. Therefore, we name the main research topics for this paper, sources we used, search words, and provide a table containing journals we referred to for each topic.

The literature research for this paper required to investigate information covering three main topics: complaint management (as a part of customer relationship management), its structure, and common problems or decision situations; development and application fields of SD; suit- able patterns or archetypes that could be applied to problems within a complaint management context.

Therefore, we dealt with online sources such as SSRN, JSTOR, Google Scholar, the online library of the University of Augsburg, and also checked the literature sources other authors used (pyramid scheme). In this regard, we made use of the following search words (and also combinations of it): archetypes, balancing process with delay, causal loop diagram, compen- sation, complaint management, complaint, customer management, customer satisfaction, de- cision, empowerment, fixes that fail, multichannel customer management, patterns, service recovery, shifting the burden, success to the successful, and System Dynamics.

The table below illustrates journals containing papers we referred to with regard to the topic. In order to ensure a clear arrangement, we decided to mention only those journals within this table we referred to at least twice. A comprehensive overview of all journals and the respective authors may be found in appendices A.1, A.2 and A.3.

Abbildung in dieser Leseprobe nicht enthalten

Table 2-1 Topics and Journals

Regarding complaint management we tried to mainly focus on established literature, e.g. as provided by Stauss and Seidel (2007) and also referred to high-rated journals, e.g. “Journal of Marketing” or “Journal of Marketing Research”. In order to verify and explain common expressions such as “complaint” or “complaint management” our aim was to provide a comprehensive overview delivering different definitions from the last 20 years.

During the research for SD, we were able to access a wide range of differentiated and high quality papers, mainly provided by the B-rated journal “System Dynamics Review”. Besides, we made use of specialized literature as provided by Forrester and Sterman. The references may be found in the chapter “Literature”.

Our research for patterns and archetypes revealed that despite the availability of literature covering the topic in general, it was hard to provide papers that focused on the combination with complaint management. And in special, no literature resource could be found that focused on a topic similar to that analyzed within this paper. This can be seen as another important motivation for writing this paper.

3 Conceptual Framework

The aim of this chapter is to provide the necessary conceptual basics for the models illustrated later within the case studies. Primarily, an overview of the process of the direct complaint management is given, followed by definitions of core expressions, namely complaint, complaint management, patterns and archetypes, service recovery, and system.

3.1 Theoretical Background

Complaints , key element of complaint management and service recovery, are regarded as be- havioral expression of dissatisfaction (Kowalski 1996, p. 179). Since not every dissatisfied customer complains, current research points out that actually communicated complaints need to be appreciated as “important proxies of latent dissatisfaction” (Knox and van Oest 2010, p. 2).

Following Stauss and Seidel (2007, p. 8), complaint management is “the most important func- tional area of retention and customer relationship management” and it mainly “aids in the stabilization of endangered customer relationships and is consequently a fundamental element of the type of relationship management that is oriented toward external customers.” On the other side, Fornell and Wernerfelt (1988, p. 287) regard complaint management as a so-called defensive marketing strategy, whereas the “defensive strategy in this sense is concerned with reducing customer turnover or patronage switching.” They define complaint management “as a system, set up by the firm, that offers an opportunity for customers to have their grievances resolved” (Fornell and Wernerfelt 1988, p. 288). When it comes to validating the success of modern complaint management, Johnston and Mehra (1993, p. 145) state, “most customers are dissatisfied with the way organizations handle their complaints.” Thus, complaint man- agement needs to be seen as a major - but maybe still underestimated - part of customer rela- tionship management.

Regarding the application of SD models it is necessary to settle the use and meaning of the common phrases patterns and archetypes as the meaning of these two expressions is not yet defined consistently within relevant research literature. We therefore provide some explanation for both and then refer afterwards to the definition used within this paper.

A general definition describes patterns as “a perceptual structure” or as “a model considered worthy of imitation” (Webster’s Online Dictionary 2010). Kelso (1995, p. 3) considers human beings as “exceptional at detecting patterns even when the patterns are embedded in a field of randomness and disorder.” He also refers to Alan M. Turing (Turing 1952, pp. 71-22) who once wrote that “most of an organism most of the time is developing from one pattern to an- other not from homogeneity into a pattern.” In the context of systems, in this case System Dynamics, authors refer to those patterns as so-called archetypes. Wolstenholme (2003, p. 7) thinks of archetypes as “generic causal loop structures” that aim to be “free standing devices to aid model conceptualisation” on the one hand, and on the other hand, disseminate insights arising from models. He (Wolstenholme 2003, p. 8) described system archetypes as “formal and free-standing way of classifying structures responsible for generic patterns of behaviour over time, particularly counter-intuitive behaviour.” In 1994, Lane and Smart (p. 68) referred to archetypes as the “behavioural characteristics which are commonly apparent in complex systems,” and later continued that “generic structures were not invented but evolved gradu- ally” (Lane and Smart 1996, p. 88). Summing up, patterns are a general expression while on the other hand, archetypes describe to the application of patterns with the context of System Dynamics. As we refer to the advantages and application both in general and in relation of System Dynamics, we agree on the usage of the term patterns in this paper.

A very broad and comprehensive definition of service recovery is provided by Boshoff et al. (2005, p. 3):

“ Service recovery refers to the actions taken by an organization in response to a service fail- ure. It is a thought-out, planned process for returning aggrieved customers to a state of satis- faction with the firm after a service or product has failed to live up to expectations. It can take place before the occurrence, on the spot, during the delivery of the service, or after a com- plaint has been lodged, and it can be related to a specific transaction or to the business rela- tionship in general. ”

According to Gronroos (1988, p. 11) “service recovery refers to the actions a service provider takes in response to a service failure.“ Kelley and Davis (1994, p. 52) define service recovery as “the response a provider makes to a service failure.” Though the provided definitions refer to a time range from 1988 to 2005, they all agree on one certain fact: response to service fail- ure.

A system is a complex whole; an integrated entity of heterogeneous elements that act in a co- ordinated way (Burke 2000, p. 14). Following Forrester (1998, p. 2), only “few people realize that systems exist everywhere. Systems influence everything we do. Systems create the puz- zling difficulties that confront us every day.” He thinks of systems as “a structure of interact- ing functions” (Forrester 1967, p. 1). If you want to describe a system, you “must describe not only the separate functions but their method of interconnection. To identify the structure of a specific system, one should understand the fundamental nature of the structure common to all dynamic systems.” A so-called dynamic system is one that “changes with the progress of time. The parts interact to create a progression of system conditions. There is a basic structure common to all such systems, whether they be the systems encountered in engineering, in management, in economics, in nature, in psychology, or in any purposeful relationship of components” (Forrester 1967, p. 1).

3.2 Direct Complaint Management Process

The focus of this paper lies on management actions that directly involve the complainant. Thus, we solely illustrate the direct complaint management process within this chapter.

The direct complaint management process includes all actions that are directly involving or affecting the company’s customer. According to Stauss and Seidel (2007) it is divided into the steps complaint stimulation, complaint acceptance, complaint processing and finally com- plaint reaction. In order to build a basic understanding of complaint management as a process, the aim of this chapter is to illustrate the several steps of the complaint management as well as its functions. Therefore, all of these steps are comprehensively described in the following chapters.

3.2.1 Complaint Stimulation

The first step within the complaint management process according to Stauss and Seidel (2007) is named complaint stimulation. The focus is laid on the problem that the “majority of dissatisfied customers do not complain” (Stauss and Seidel 2007, p. 36). One reason might be that in order to complain, people have to reveal a peace of their self-confidence. But it is a hard thing to share feelings with others unless some relationship is established (Plymire 1993, p. 39). This leads to the effect that the company may not be aware of the problem situation at all - and therefore is not able to react. If there is no such thing like encouraging the customers to communicate complaints, or if the accessibility of responsible staff for the complainant is weak, “it could be that customers have a resigned attitude, because in their experience, com- plaining is not ‘worth it’” (Stauss and Seidel 2007, p. 36). Customers are moreover likely to “talk about their negative experiences with friends, relatives or co-workers, or they immedi- ately switch to another provider” (Stauss and Seidel 2007, p. 36); or as Plymire (1993, p. 39) named it: vote with their feet. Thus, the goal of complaint stimulation is to show that com- plainants are important for the companies as they show lacks within the business process and give precious hints how to improve it.

3.2.2 Complaint Acceptance

The following step is called complaint acceptance (Stauss and Seidel 2007, p. 53). It includes actions that need to be taken when a dissatisfied customer comes to the company with a com- plaint. For once, the company has to organize the receipt of the complaint, which includes a clear structure of responsibility and the preparation of all associated colleagues. In addition to that, they need to provide a documentation of the complaint information, which means that all relevant information of the complaints must be documented. The combination of stored com- plaint records with transaction data can provide a “low-cost but meaningful way to trade off competing recovery options on the basis of financial impact” (Knox and van Oest 2010, p. 2). Analyzing keys of best-practice complaint management, Johnston and Mehra (1993, p. 153) point out that “reports of complaint issues and learning points need to be widely circulated throughout an organization” in order to create a common understanding of the issues and problems.

3.2.3 Complaint Processing

Complaint processing on the other hand mainly focuses on the question “Who does what, when, and in what order?” (Stauss and Seidel 2007, p. 73) For this purpose, the complaint processing related actions concern the organization of the complaint-processing procedures and definition of responsibilities, the determination of deadlines, installation of monitoring mechanisms and finally the design of the internal communication between the interacting units as well as the log of the complaint-processing history. Complaint processing can be seen as a defensive tool, it addresses the issue of “how to manage grievances from current custom- ers in such a way that the dissatisfied customer does not desert the firm” (Fornell and Werner- felt 1988, p. 288). However, current research mentions that internal processing guidelines and procedures are often defined incompletely (Stauss and Schoeler 2004, p. 149).

3.2.4 Complaint Reaction

The last step within the complaint management process is called complaint reaction. It refers to “all the complaint management activities that the customer perceives during the complaint handling process and that have a direct effect on the customer’s complaint satisfaction” (Stauss and Seidel 2007, p. 92). It therefore encompasses basic behavior rules for complaint handling, the application of these rules to specific types of complainants and complaints, the actual decision on the solution of the case, as well as the communication with the complainant during and after the complaint processing. When speaking of complaint reaction, feedback needs to be regarded as a key factor. Though the feedback factor is already known in the serv- ice recovery context, its practical relevance is not recognized yet. In 1999, Boshoff (p. 240) conducted a study with service executives who agreed regarding the importance of feedback in general, but also mentioned that “service firms often fail in this regard”. Johnston and Me- hra (1993, p. 146) enhanced the feedback topic by describing a systematic follow-up as a fur- ther key element of best practice complaint management. They suggest implementing follow- up procedures “to check with customers to see if the resolution was satisfactory.”

3.3 System Dynamics

In order to demonstrate the complaint management situations and the patterns later, it is necessary to apply a model that enables the target reader to realize not only “quick solutions” but also see long-term or side effects. The question we’d like to answer within this chapter is why System Dynamics is best suited to meet these requirements and thus to illustrate those situations. We therefore explain the history and the basics of the model as well as some possible applications within different business and branch contexts. Since the focus of this paper lies on the application of patterns, we presuppose a certain knowledge regarding the modeling notation and thereby refer to Sterman (2000).

All models illustrated within this paper are created by using Vensim® PLE for Macintosh Version 5.10a, Copyright© 1988-2010 Ventana Systems, Inc.

3.3.1 History and Acceptance of System Dynamics

The field that is now known as System Dynamics has been developed by Jay W. Forrester, Professor Emeritus and Senior Lecturer at the Sloan School of Management, MIT. According to his understanding, “system dynamics combines theory, methods, and philosophy for ana- lyzing the behavior of systems” (Forrester 1998, p. 3). Being asked to give a description of the development of System Dynamics at a banquet talk of the System Dynamics Society 1989 in Stuttgart, Germany, he explained that everything he has ever done “has converged to be- come system dynamics” (Forrester 1989, p. 2). It was when he tried to find a way to explain some managers from GE the current hiring and inventory decisions and their consequences when he identified an unstable system. This system was completely internally determined due to given policies and conditions that were to follow. Forrester asserts, “that first inventory control system with pencil and paper simulation was the beginning of system dynamics” (1989, p. 6). For his work “Industrial Dynamics” (Forrester 1958) he asked his colleague Richard Bennett, an expert computer programmer, to build up a code in order to run the simu- lation on a computer. But Bennett then developed a compiler that would automatically create computer code and named it “SIMPLE” meaning “Simulation of Industrial Management Problems with Lots of Equations.” Bennett’s compiler is said to be “another of the important turning points” (Forrester 1989, p. 6) as it accelerated the later modeling of this fast-expanded system.

Though facing some negative reactions after publishing “Urban Dynamics”, Forrester contin- ued work and research on the topic of system structures and system dynamics. He regarded the “usual, simple, static viewpoint” of people as the greatest barrier when trying to under- stand dynamic complexity. But his next work, “World Dynamics” (Forrester 1971a) was a great success, same as “Limits to Growth” (Forrester 1971b), which was published nine months later.

Today, SD experiences great acceptance among researchers worldwide. The increasing circu- lation of the journal System Dynamics Review over the last 25 years is proper indicator. Start- ing 1985 with just one journal per year with 138 pages, in 2008 there are four journals per year with almost 500 pages in total, indicating the increased number of published papers.

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Picture 3-1 Development of System Dynamics Review 1985-2009

Another point supporting the increasing acceptance and importance of System Dynamics can be seen in the introduction of the “European Master Programme in System Dynamics” (Euro- pean System Dynamics 2009), officially opened in Bergen, Norway. This two-year Master’s program started in September 2010 with a group of 24 students coming from 19 different countries. The website states that “some day, learning about dynamic systems may become part of our general education”, referring to the ongoing effort in the U.S. to use SD in primary and secondary schools.

Finally, the prestigious JOURQAL rating (VHB 2008) also provides support. Among 666 rated journals in total, the System Dynamics Review was rated “B”, number 137. This is a remarkable development, since the first JOURQUAL rating in 2003 did not mention the System Dynamics Review at all; 2008, for the second rating, it was already rated “B”.

3.3.2 Patterns and System Dynamics

Now that we have provided a general overview of System Dynamics, its development and reputation, the set goal of this chapter is to introduce the reader to the actual usage of SD with an example by applying a pattern to a common business related situation. Therefore, we have a closer look at the so-called “cola wars”, involving Pepsi Incorporated and Coca-Cola Company, that took place in the soft drink industry between the 1970s and the 1990s.

Coca-Cola and Pepsi have battled each other for market share from the very beginning (Bar- ney 1995, p. 57). The intensity of the "cola wars" increased with Pepsi introducing the so- called "Pepsi Challenge" in 1975. The aim of this campaign was to offer customers two blank cups, one filled with Pepsi and one with Coca-Cola. The people were then asked to taste both and select the one they liked better. According to the Pepsi representatives, most of the test takers in America preferred Pepsi. Of course, Coca-Cola replied to this campaign with own marketing initiatives, trying to battle Pepsi and to convince the customers. The “wars” contin- ued for another 15 years, with no significant advantages regarding market share for both Pepsi and Coca-Cola. Finally, both began to “recognize the futility of going head to head against an equally skilled competitor in a battle for market share to gain competitive advantages“ (Bar- ney 1995, p. 58).

When identifying a system structure, the first thing to do is to generalize or to simplify from given specific events to considering patterns that are suitable to characterize the situation. The actions of these two components lead to an ongoing battle and enhancing decrease of their prices, resulting from the action of the competitor. This situation is driven by a typical vicious circle; also called “escalation”:

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Picture 3-2 Escalation between Coca-Cola and Pepsi

Having identified the pattern, it is possible to look for the system structure that is known to cause that pattern. In order to eliminate the problem pattern, it is necessary to find and modify this system structure. In this case, the problem is that none of the companies is willing (or able) to step back as both feel that they have to continue this run, because otherwise their competitor might “win”. Senge (1990, p. 395) therefore suggests to create a win-win-situation for both companies or to achieve their objectives. As a management principle, he moreover insists that one side should “unilaterally reverse the vicious spiral by taking overtly aggressive ‘peaceful’ actions that cause the other to feel less threatened” (Senge 1990, p. 395). In the example given, Pepsi and Coca-Cola decided to stop their fight for market share and rather focused on different resources. While Coca-Cola targets older consumers and continues its traditional focus on the soft drink industry, Pepsi focuses on attracting younger consumers and begins diversifying into fast food restaurants and other related businesses (Barney 1995, p. 58).

3.3.3 Examples for Application of System Dynamics

Speaking of the applicability of SD, John D. Sterman, Director of MIT’s System Dyamics Group, mentioned that “system dynamics has been applied to issues ranging from corporate strategy to the dynamics of diabetes, from the cold war arms race between the US and the USSR to the combat between HIV and the human immune system. System dynamics can be applied to any dynamic system, with any time and spatial scale” (Sterman 2000, pp. 41-42).

Thus, there is a wide range of possible and actual application branches and fields for SD. The aim of this chapter is to give an overview of a few specific examples covering different application approaches, and thus to strengthen the understanding of SD as a multifunctional modeling technique with factual practical benefit. For the selection of the examples we decided to present papers covering totally different topics and approaches:

Organizational learning : Local decision making and individual autonomy lead to manage- ment anarchy unless managers account for the interconnections and long-term side-effects of their local decisions. SD simulation is an important element of successful learning laborato- ries to develop systems thinking and promote organizational learning (Senge and Sterman 1992).

Small satellite projects : At the Institute of Astronautics of the Technische Universitaet Muenchen a modular approach for modeling and dynamic simulation of satellite systems has been developed, called dynamic system simulation. It is based on a platform independent description language to model a small satellite project with respect to the system composition and dynamic behavior (Raif et al. 2010).

Cognitive growth : The SD model is used to describe cognitive growth as a system of suppor- tive and competitive interactions between growers. Therefore, models of normal logistic growth, U-shaped growth, bootstrap growth, and competitive growth are presented (van Geert 1991).

Urban transformation : A SD model was applied the course of a group model-building project about new housing construction, urban renewal and the impact in both processes on a regional social housing market. The model yielded several counterintuitive insights, helped the stakeholders to settle a contentious issue and was used in flight simulator workshops with managers and policy makers (Eskinasi et al. 2009).

4 Specific Situations within Complaint Management and Application of Corresponding Patterns

Within this chapter, we will present four different case studies, each with focus on one selected aspect of complaint management. The first case study deals with the need of complaint management in general, the second one illustrates the difficulties that come along with multichannel customer management, the third one indicates the effects of external intervention on the capabilities of internal actors, and the last case study focuses on the unintended consequences of disproportionate compensation.

In the beginning of each sub-chapter, we describe an exemplary situation, which is likely to appear within the context of complaint management. Then, in order to provide the reader with a better understanding for the situation, we analyze the situation itself in detail, with a special focus on the actions taken and the results. The next step consists of applying a corresponding pattern to this situation, afterwards transferring the pattern to a flowchart and showing those effects that could not directly be seen in first place. Finally, we provide a comparison and some suggestions regarding the managerial implications. Within the last part of chapter four an evaluation of the four case studies is given and it contains furthermore a table providing a summary of the results.

Prior to that, we explain our approach regarding the selection of the patterns.

Today, a wide range of patterns and archetypes is known (cp. Senge 1990, Wolstenholme 2003). But when applying a pattern to a situation one must be aware that it is not possible to apply any existing pattern to any given situation. Each pattern possesses some specific charac- teristics regarding stakeholders, covered aspects and structure. Thus, in order to guarantee the application of a pattern, which is truly corresponding, it is necessary to classify the patterns and the effects covered first.

We therefore examined the effects that typically occurred in each situation and clustered them. After that, we analyzed which patterns are possibly suitable to cover those effects. Thereby, we referred to relevant literature describing SD patterns and to the findings of estab- lished authors and their evaluation of the patterns. We then assigned the patterns with respect to these results.

The table below now includes all patterns described in this paper as well as the effects covered by them. Following, we will give a short description of each effect, thereby referring to relevant literature.

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Table 4-1 Patterns and Effects Covered

The effect adjustment refers to actions taken that lead to any kind of adjustment, modification or correction of behavior. According to Schneier (1994, p. 34) “adjustment processes are a universal feature of complex human and social systems (…) However, adjustment mechanisms can also become the source of unintended and unwanted instabilities, especially when there are long delays between action and consequence.” According to Schneier (1994), Senge (1990) and Wolstenholme (2003), the adjustment effect is covered by the patterns “shifting the burden”, “success to the successful” and “fixes that fail.”

Symptomatic vs. fundamental solution is an effect that appears within situations when the short-term solution (symptomatic) affects the long-term solution (fundamental) in a negative way. The fundamental solution is capable of reducing the problem symptom to a greater degree than that of the symptomatic solution, however there is a delay in the time it takes for the fundamental solution to take effect (Dowling et al. 1995, p. 458). This effect is typical for the pattern “shifting the burden” (Dowling et al. 1995, Senge 1990).

Feedback loops describe situations in which an action leads to another action and then even- tually effects the initial action. There can be positive (self-reinforcing) or negative (self- correcting) feedback (Sterman 2000, p. 13), which may be intended or unintended (Wolsten- holme 2003, p. 10). Feedback loops appear within the patterns “balancing process with de- lay”, “success to the successful” and “fixes that fail” (Senge 1990, Wolstenholme 2003, Dowling et al. 1995).

We refer to delay when there is a time gap between the moment of taking a decision and its actual effects on the state of the system (Sterman 2000, p. 21). Delays are said to be occurring within the patterns “balancing process with delay”, “shifting the burden” and “fixes that fail” (Senge 1990).

The effect short-term affects long-term describes a certain kind of situation in which the solution provided is effective in the short-term, but comes along with unexpected long-term consequences. It applies to both “shifting the burden” (Senge 1990, Dowling et al. 1995) and “fixes that fail” (Senge 1990, Dowling et al. 1995).


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Anwendung sog. "patterns" (Verhaltensmuster) auf typische Probleme im Bereich Complaint Management / Beschwerdemanagement unter Zuhilfenahme von System Dynamics. Untersuchung folgender Aspekte: The Need for Complaint Management, Multichannel Customer Management, Empowerment of Staff, Amount of Compensation. Die einzelnen Punkte werden anhand eines Modells (System Dynamics) dargestellt und anschließend unter Bezugnahme auf die Fachliteratur analysiert und Lösungsvorschläge werden präsentiert. Modellvariablen sind im Anhang enthalten
Beschwerdemanagement, Complaint Management, System Dynamics, Patterns, Verhaltensmuster, Customer, Compensation, Satisfaction, Kundenzufriedenheit, Modelle, Beschwerden, Kunden, Entschädigung, Mitarbeiterzufriedenheit, Behavior, Bounded Rationality, Simon, Marketing, CRM
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Martina Müller (Author), 2010, Analysis and Application of Dynamic Patterns within the Context of Complaint Management, Munich, GRIN Verlag,


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Title: Analysis and Application of Dynamic Patterns within the Context of Complaint Management

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