CUSTOMER SATISFACTION & EMPLOYEE EMPOWERMENT

SUBMITTED TO:

PAUL BREWSTER

SUBMITTED BY:
ASSIGNMENT#:

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CODE:

MGMT 411

DATE:
COURSE TITLE:

11TH MAY 2016
PERFORMANCE MEASUREMENT
&
EVALUATION

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Table of Contents

ABSTRACT..............................................................................................................2
1. Customer Satisfaction Process............................................................................3
1.1. What is Customer Satisfaction?....................................................................3
1.2. Key Factors of Customer Satisfaction Process.............................................3
2. Customer Retention.............................................................................................4
Customer Satisfaction Process and Customer Retention in Banking Industry..........5
3. Rationale for Empowerment...............................................................................5
4. Management’s Role in Empowerment................................................................6
Employee empowerment in PepsiCo International...................................................6
5. References...........................................................................................................6

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ABSTRACT

This assignment discusses the customer satisfaction and employee empowerment
on a wider scale. It is explained what customer satisfaction is and what is the
process of customer satisfaction. Afterward customer retention is explained in
detail. Customer satisfaction is very much necessary for customer retention.
Customer satisfaction is of key importance for the businesses that want to retain
their customer. The banking sector is a practical example where both the
phenomenon is of significant importance. Afterward , the rationale of employee
empowerment and management role played in empowering employees has been
discussed. It is important that management should realize that it is their core
responsibility to empower the employees. Lastly, the positive culture and strong
values at PepsiCo are discussed, just to see the practical implication of
empowerment of employees in today’s world.

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1. CUSTOMER SATISFACTION PROCESS
1.1. What is Customer Satisfaction?
Consumer satisfaction is the real articulation of the status of fulfillment will vary from
individual to individual and item/administration to item/benefit and is an examination of
how items and administrations of an organization get together or surpass client
expectation. Various physical and psychological behaviors are associated with the
satisfaction of a human being. According to Kotler (2000),
“A person’s feeling of pleasure or disappointment resulting from comparing a product’s
perceived performance (or outcome) in relation to his or her expectations”.
In the opinion of LaBarbera and Mazursky (1983), “Organizations can accomplish
customer satisfaction by satisfying their customers’ needs and wants”. In the modern
time period, it is essential for all the businesses whether small or large to satisfy their
customers in order to attain their ultimate goal of profit maximization.

1.2. Key Factors of Customer Satisfaction Process
The key factors that are important in satisfying a customer regardless of nature f the
business include reliability, quality assurance, timely delivery of the product/service and
price of the product. The below-mentioned figure is representing achievement customer
satisfaction by considering these four key elements.
CUSTOMER
Reliability

Quality
Assurance

Timely
Delivery

Price

SATISFACTION

It is very important for the organizations to properly plan that how to satisfy the
customers according to their demands, then execute the plan according to while keeping
a check on it and see what is going on and how. Lastly, it is also important to act
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according to on the gaps and points that are pointed out during the check step. The
picture below describes the general process that should be followed for satisfying the
customers.

2. CUSTOMER RETENTION
Attracting new customers is a tough job and important in marketing business but maintain the
current customers are also of equal importance and it is one of the most significant elements of
marketing. According to Wicks & Roethlein (2009),
“An organization that consistently satisfies its customers, enjoy higher retention levels and
greater profitability due to increasing customer loyalty”
With the increasing high competition day by day, the importance of retention plans for
companies cannot be ignored and it is very important to see that how much organizations are
ready to pay for the retention plans in order to maintain their existing customer circle to meet the
challenges of the competitive world.
According to the study of Woodruff (1997), the existing customers of any business are
considered as its most valuable asset. Similarly, in the opinion of Colgate, Stewart and Kinsella
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(1996) the customers that an organization retains are the most valuable asset of the firm.
Customer retention is not an easy task and different factors are considered while making the plan
to retain the customer. One of the most important factors that affect retention of existing
customer is customer satisfaction and if it is the primary driver of retention, a firm should
improve product or service quality or offer better prices.

CUSTOMER SATISFACTION PROCESS AND CUSTOMER RETENTION IN BANKING INDUSTRY
The banking industry has grown and the competition in this industry cannot be overlooked. The
phenomenon of customer satisfaction for any bank in the industry is of vital importance as the
customer is the one who brings in business. According to the study of Ravald and Grönroos,
(1996) a considerable number of banks in the industry were losing their current customer bases
at rates exceeding 30% despite practicing different relationship marketing strategies to retain
existing customers .Today, banks are trying hard to satisfy their customers and make them loyal.
It is well known that attracting new customers are of key importance in the banking sector but
with the increased competition, the banking sector has realized the importance of customer
retention and now almost every bank is paying equal attention for customer retention along with
the building of new relations. According to the study of Inkumsah (2013), the most important
construct was customer satisfaction, followed by a corporate image and switching barriers.

3. RATIONALE FOR EMPOWERMENT
In today's business age, organizations are searching for the additional edge to permit them to beat
their rivals and to pick up a piece of the pie by increasing their productivity or making their
services better and for this very purpose empowerment of employees is of limelight importance.
Empowerment of employees is a theory connected with genuine advantages for an association.
It's hidden rationale of giving workers the opportunity, adaptability, and energy to settle on
choices and take care of issues leaves a representative feeling stimulated, proficient, and resolved
to make the association effective.
As an outcome of this management rehearses, nature of work builds, worker fulfillment expands,
joint effort builds, representative profitability rises, and hierarchical costs diminish. These
advantages empower an association to accomplish an upper hand and to support its primary

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concern. Employee empowerment positively influences an organization’s performance,
productivity, and profitability by making employees happier.
4. MANAGEMENT’S ROLE IN EMPOWERMENT
There are a number of managers who accept the important role played by organizational culture
in customer satisfaction but only a few realize that they are the one who shape it. According to
Kane-Urrabazo (2006), the management team constantly remain under the amplifying glass, with
every activity precisely investigated by subordinates. They should practice alert when deciding,
guaranteeing that decency and even-handedness exist among staff and that moral guidelines are
maintained on a consistent premise. The four social segments, considered as Manager's trait of
trust and reliability, empowerment, consistency, and mentorship coincide at all times paying little
heed to the sort of society.
The old management manner in conventional businesses was meant for firm control of labor
force but now in new and contemporary businesses, the employees and labor force are
empowered to make their own choices and handle the affairs by themselves.
The simplest way in which managers can empower an employee is by involving him in any kind
of decision-making. In his book Covey (1991) explains the process of empowerment is like a
harvesting process for management. According to the opinion of McCormack (1984), mangers
should not ask others to do a task that they themselves are not willing to do.
Managers must realize their responsibility in empowering the employees and understand the
reality that they are the ones who are making the organizational culture.

EMPLOYEE EMPOWERMENT IN PEPSICO INTERNATIONAL
The organizational culture of PepsiCo international is very healthy. It is a composite of
inspirational leadership along with empathetic and empowered workers which make the
experience of the customer great. People at PepsiCo are motivated and empowered. The
organizational culture of PepsiCo is an example of positive culture and strong values.

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5. REFERENCES
Aghayar C. 2007. "Enabling Staff And Empowering organization".

Colgate, M., Stewart, K. and Kinsella, R. (1996). Customer defection: a study of the student
market in Ireland. Intl Jnl of Bank Marketing, 14(3), pp.23-29.

Covey, S. (1991). Principle-centered leadership. New York: Summit Books.

Inkumsah, W. (2013). Factors That Impacted Customer Retention of Banks. A Study of Recently Acquired
Banks in the UPSA Area of Madina, Accra (Specifically Access Bank). Journal of Marketing and
Consumer Research, 1.

Kotler, P. (2000). Marketing management. Upper Saddle River, N.J.: Prentice Hall.

KANE-URRABAZO, C. (2006). Management's role in shaping organizational culture. J Nurs
Manag, 14(3), pp.188-194.

LaBarbera, P., and Mazursky, D. (1983). A Longitudinal Assessment of Consumer
Satisfaction/Dissatisfaction: The Dynamic Aspect of the Cognitive Process. Journal of
Marketing Research, 20(4), p.393.

McCormack, M. (1984). What they don't teach you at Harvard Business School. Toronto:
Bantam Books.

Ravald, A. and Grönroos, C. (1996). The value concept and relationship marketing. European
Journal of Marketing, 30(2), pp.19-30.

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Woodruff, R. (1997). Customer value: The next source of competitive advantage. J. of the Acad.
Mark. Sci., 25(2), pp.139-153.

Wicks, A. M., & Roethlein, C. J. (2009). A Satisfaction-Based Definition of Quality
Journal of Business & Economic Studies, 15(1) 82-97.

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