General eletrics case study

What is the construct that GE is trying to measure? The construct that GE is trying to measure is customer satisfaction. In the book, the article refers to the net-promoter concept used by GE. This concept provides GE with a “net-promoter score” which is used to track customer attitude. This score, however, is mainly focused around the question “How likely are you to recommend us to a friend? ” While this score may be focused around this one question, it is not the only criteria they ask customers to rate. GE also asks a number of other questions relating to their performance such as “How would you rate our processes?

” or “How would you rate the cost of doing business with us? ” Overall, the main goal of GE is to gain information about customer satisfaction in order to get a better sense of what needs improvement. With this information, GE hopes to address these issues in a timely manner to make their service the best it can be. How might GE assess construct validity? There is two statistical measures of construct validity: convergent validity and discriminant validity. Convergent validity is defined in the textbook as the degree of correlation among different measurement instruments that claim to measure the same construct.

Discriminant validity is defined in the textbook as a measure of the lack of association among constructs that are supposed to be different. The best way GE could assess their construct validity is by measuring convergent validity. GE could do this by administering the questions designed to provide information about customer satisfaction to a sample of respondents. Based on the information gathered, they should come to the conclusion that each question accurately relates to the construct topic, proving that there is in fact construct validity. Does “service recovery” play a big role in customer satisfaction?

Service recovery does play a big role in customer satisfaction. The book referred to one customer in particular and how his experience affected how GE operated. In this example, Mark Dillon was one of many customers who had suffered from poor service by GE. He had waited six months for GE’s Capital Solutions group to approve a loan for him to open up a restaurant. GE called Dillon soon after to follow-up on the service. When asked how likely they were to recommend GE to a friend on a scale of one to ten, Dillon and many others responded with very low scores and negative feedback.

GE took this information and changed their service, in this case streamlining their loan process, to better meet the needs of the consumer. This improvement can be labeled as “service recovery” because as a result of GE’s failure and subsequent improvement, Dillon continued to use GE’s services for more than 120 restaurant projects in the future. He described the change in service as “refreshing” which most likely played a large part in his customer satisfaction. When service recovery occurs, it shows customers that the business really cares about their satisfaction and is taking concrete steps to improve it in order to keep their business.

Overall, service recovery plays a huge part in customer satisfaction because it often makes the customer feel more attended to and often times leads to a higher rating than before the failure. What is the operational definition of the construct? Customer satisfaction is the Net Promoter Score (ranging from likely to unlikely on a ten point scale), which tracks how likely a customer would be to recommend General Electric Co. to a friend. Does the scale adequately address the underlying construct? The scale adequately addresses the underlying construct of customer service.

GE focused its survey questions on problem in which the company understood only vaguely, and as a result, customer satisfaction has increased. Simple loans, for example, are processed (on average) in five days or less. The “net-promoter” score promises both simplicity and insight in that likelihood-to-recommend data collected are used to compute the difference between brand promoters and brand dissuaders. What level of measurement is being used in the research? Could a higher level have been used? Of the four levels of measurement; nominal, ordinal, interval and ratio, GE uses an interval scale for their research.

GE asks customers to rate on an itemized rating scale of 0-10 how likely they would be to recommend the company to a friend. They then employ nominal measurement tactics by classifying those who rate GE a 9 or 10 as promoters, 7 or 8 as passives, and 6 or lower as detractors. To create their “net-promoter” score, General Electric subtracts the detractors from the promoters. Because this scale does not have an absolute zero (it has an arbitrary zero), a ratio level of measurement would not have worked for this study, and therefore, a higher level could not have been used.