Leadership Theories at Woolworths

This document discusses the leadership theories and practices at Woolworths, one of the largest retail chains in Australia. It analyzes the impact of leadership on the organization's performance and suggests alternate solutions and recommendations for improvement. The document also explores the strengths and weaknesses of leadership practices and provides insights into the importance of effective leadership in an organization.

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LEADERSHIP THEORIES AT WOOLWORTHS

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Table of Contents
Introduction................................................................................................................................3
Analysis of the leadership in Woolworths.................................................................................3
Literature Review- Overview of application theories to the identified issue.............................5
Alternate solutions to the situation.............................................................................................6
Recommendations......................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Organization Brief
Woolworths is one of the largest retail chains in Australia which is popular for its
quality of products and services provided to the customers (Woolworths Group, 2019). The
organization has been sustaining the competition by way of identifying strategies that
differentiate it from its competitors. However, the skill of leadership is considered to be
missing from Woolworths. As opined by Rosenbach (2018), organizations need strong
leadership for attaining maximum effectiveness. As suggested by Gordon (2017), the trait of
leadership can either be inbuilt or acquired. Leadership in an organization requires
developing the leadership skills and abilities in order to manage the operations of the
business. This means, a leader will be able to manage hard situations and still focus on
growing within the organization. There is a clear distinction between managers and leaders
where a manager manages the business operations whereas a leader has the potential to
control the group of individuals. As opined by Blanchard (2018), leadership is an essential
component of management, the behavior of leaders also helps to build an effective
organization. Organizational leadership involves all the possible ways that lead to
achievement of the organizational goals. Leadership quality will be able to map where the
organization wants to be, where it is at the current situation and what can be done to achieve
that position. A leader must set direction, utilize management skills to motivate and inspire
people in the organization and direct them towards the direction of gaining profitability. As
mentioned by Jones (2015), Woolworths has been facing leadership issues and identifying
new strategies can improve its marketing leadership position in the Australian Marketplace.
A leader requires to be dedicated, motivated and able to manage any situations with ease. The
following assessment discusses on the leadership theories and leadership or behavioral issues
prevailing within the organization. A brief literature review has been provided relating to
Woolworths managerial style. From the literature review, possible alternative solutions will
be identified to improve the present situation of Woolworths.
Leadership Practice at Woolworths
As suggested by Antonakis & Day (2017), leadership is a process of directing and
influencing the behavior of people towards the achievement of the goals. The business
landscape in the current century is extremely competitive and demands the leaders to possess
extraordinary skills in order to manage the people and business operations. Leaders are
suggested to be transformative and act as role models for the coming generation. As

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identified in the case of Woolworths, the organization was criticized once for its poor trading
performance. It is justified that there are issues in retail industry, but the leadership issues has
impacted the level of motivation of employees of the organization. Many have believed like
PYMNTS (2015) that the organization would require streamlining the management team and
innovative marketing strategies to regain a competitive position in the market. It is also seen
that, the lack of leadership qualities of the senior leaders, can be a cause of delay in
identifying solutions for the problems arising. However, it is the responsibility of business
leaders to understand the challenges and provide with relevant solutions. As suggested by
Girma (2016), leadership comprises of several aspects such as strategic planning, employee
motivation and fostering change management within the organization. This requires the
business leaders to cover every aspect facing the challenge in order to demonstrate a strong
leadership quality.
There is a significant impact of on the performance of the employees. According to
Kew & Wessels (2019), the senior management and the leaders of Woolworths have lack of
transformational leadership style that may impact on the motivation of employees thereby
affecting their performance. Generally a transformational leader is self-motivated and leads
others towards the organizational vision. Hawkins (2017) suggests that in transformational
leadership, the employees are encouraged by creating trust respect towards the leaders. When
employees are motivated they perform better which leads to job satisfaction. However, in
case of Woolworths, the retail managers have not shown sufficient leadership qualities in
order to gain better outcomes. As the leadership style influences the performance of
employees both internally and externally, it allows them to create a better working
environment. Transformational leaders provide employees with freedom and make them
learn their responsibilities towards the organization, team members and themselves.
As opined by Rosenbach (2018), Transactional leadership is one kind of leadership
style where the leaders are concerned with the completion of tasks and rewards are to be
given to the performing employees. But there are both positive and negative repercussions of
this leadership style. The leaders often utilize promotions as well as monetary benefits for the
performance of the employees. This type of leadership style is not right for Woolworths as
the employees require proper communication process between them and the leaders. The lack
of strategic leadership styles has led to lower productivity, lack of innovation and inability to
achieve performance targets by Woolworths. But according to many researches, majority of

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employees have supported the transactional leadership in comparison to transformational
leadership. This is because of the fact that transactional leaders offer with reward systems.
Strengths and Weaknesses of Leadership practices
Leadership is one of the most important factors for the success of an organization.
The ever increasing changes in the market, technology and preferences of customers has led
to not very stable environment within any organization. Even when organizations have
business leaders and team of experts to manage the issues, organization itself need to harness
skills, enthusiasm for the success of the entire organization. According to Northouse (2017),
successful leadership requires capitalizing on strengths and managing the weaknesses. There
are many theories of leadership which organizations prefer to follow according to their
organization structure and management. In the case of Woolworths, the organization has
recently shown a decline in its market share led to a situation of crisis and customers stopped
referring the product and services of Woolworths. This became a great advantage for other
retail giants like Coles to take the competitive position in the market. It has been identified
that, senior management of this retail chain lacked management skills to organize the
business activities in an effective manner. However, this contradicts with the actual definition
of leadership as it takes lot of time to build a position for the organization. The lack of
appropriate leadership skills within the senior management resulted in the degrading
performance.
In the case of Woolworths, the Trait theory can be applied. As per Hetland, J.,
Hetland, Bakker & Demerouti (2018), the Trait model of leadership is based on the
characteristics of leaders usually this theory is used to predict the effectiveness of leadership.
Successful leaders possess good abilities, and personality traits. However, this kind of
leadership theory gives rise to the question whether leaders are born or made. But on the
contrary, simply having natural talent does not mean that the person realizes their leadership
qualities. They might often need some encouragement and motivation that will help them to
achieve their goals. There are many theories of leadership and change management but
according to the Woolworths' situation, the trait theory, behavioral theory and great man
theory have been identified. Since all these theories are interconnected to each other, they
will be able to identify the most appropriate theory for the organization. When an
organization is facing challenges, it is the responsibility of the leaders to identify the issues
and that determines their behavioral conduct. The ability to manage challenging situations

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qualify such individuals to become the leaders of tomorrow. As per Phillips & Phillips
(2016), the behavioral theory changes the nature, personality and behavior of an individual.
In case of Woolworth, the senior management however have applied effective management
techniques to make the organization successful. The organization also needs changes for the
betterment which can be started from the senior management as they are in the decision
making position. Great man theory can be applied here.
Alternate solutions to the situation
The word leadership represents the image of great people who have done
commendable job in moments of crisis, taking the right decisions in the right direction.
However, according to the general perception of people, leaders are considered to be people
you can accomplish any given work. Some can be born leaders and some inculcate the
qualities of leadership within them by practice. Looking at the situation of Woolworths, it is
clarified that the organization is in need of effective strategies to improve the internal
management of the organization. This can be accomplished by effective leadership from the
senior management. There can be several challenges by any organization other internally or
externally but effective leadership can overcome these challenges. The most relevant solution
for the management of the company is to develop a personal leadership style. The
organization can conduct leadership program and hire mentors in order to encourage the
senior leaders to manage the ongoing situations. Learning from experience is also a
leadership trait. In the case of Woolworths, it must remember the mistakes that has been
committed due to lack of strategic planning. In the recent years, Woolworth has lost the trust
and confidence of its customers which made them lose their dominant position in the market.
Therefore, it can be analyzed that, the organization could have observe the situations from a
different perspective and identified solutions to the problems faced. Even when the
organization has a compelling vision, the senior management should always try to strategies
in alignment with the vision. During a crisis, a leader is perceived as someone who can keep
things in place instead of falling apart.
As identified by Australian Food News (2015), Woolworths has faced challenges to
retain their customers which shows that the organization requires a customer centric
approach. However it all starts from implementing great interpersonal skills within the
organization so that people are able to understand each other first and then understand the
needs of their customers. The solution is for the leaders to listen to their employees,

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understand the issues they are facing and provide with relevant solutions in order to improve
the internal communication and management. This will again improve relationship of the
leader with the employees. A leader must be self-motivated in order to motivate others. But
in the case of Woolworth, the senior management and the middle level management lack the
sense of motivation which failed to keep the employees motivated thereby leading to a
reduction in performance. On the contrary, Woolworths has been aware of their crisis and did
not hide to face the repercussions. The leaders however accepted the issues they were facing
and were determined to manage the issues as early as possible. This was a good sign for
inspiring companies to face their challenges rather than hiding away from those. Even when
Woolworth has lacked leadership, the organization has been trying to rectify the mistakes and
making efforts to be more productive and effective in the retail industry.
Recommendations
In order to implement a good leadership style into Woolworths, it is important to
understand that the organization has been a dominant player in the market and would require
strategic planning to establish itself again and retain its lost customers. Woolworths has
aimed to transform its culture which was the vision of the new CEO, Brad Banducci. The
sluggish growth of the company was unacceptable by the new CEO in command and
identified the root cause of such performance. In support of his strategy, it is recommended
that the internal management can only be improved if they it to work together and towards
the achievement of the organizational goal. The management needs to come out on the floors
to understand where they are going wrong and that is when they would understand the issues.
The organization has been criticized having an inward looking culture which have
contributed to its downfall. But it is recommended for the organization to look beyond and
rectify the issues as early as possible.
As a part of recommendation, the employees must be empowered by developing the
teams an individual skills of the employees. When employees are valued and recognised, they
are motivated to perform better thereby contributing to the overall performance of the
organization. The organization must try to ignite the potential of its employees as well as the
leaders make them feel a part of the organization. Along with that, transactional leadership
can be implemented in Woolworths. This is because currently the organization requires to
direct their efforts for the achievement of specific goals. The implementation of transactional
leadership allows the leader to provide contingent awards, provide necessary resources, set

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SMART objectives and mutually sets the goals. In the current situation of crisis,
Woolworth’s leaders would require to monitor the work of their employees and expect them
not to deviate from the predetermined objectives and standards. However, the passive
management must only be applied in response to any unacceptable performance. Situations
where the employee can be improved, should be considered. It is recommended that, the
leader should have friendly relations with its employees but the decision making power must
not be given to them to ensure they do not lack direction. A proper leadership style will help
motivate the employees in their job and retain them for a longer period of time.
Conclusion
Leadership is an important element of the directing function of an organization. An
organization requires a common goal and vision and therefore some kind of leadership
becomes important. Leadership becomes the ability to foster confidence among the
employees in order to keep them motivated and contribute towards the overall productivity of
the organization. A successful leader possesses different characteristics. Different situations
demand different kinds of leadership and strategies. There can be formal or informal leaders
depends on the senior management to identify the type of work culture within the
organization. The following report has stated the importance of leadership in any
organization and how the lack of it can be difficult at times of crisis. In this assessment, the
leadership style of retail giant Woolworths has been analyzed which highlighted that the
organization is in need of new strategies to improve its marketing leadership position in the
Australian Marketplace. A detailed analysis of the leadership style in Woolworths has also
been provided which states that the organization can adopt a transactional leadership style.
The overview of application theories of the identified issues have also been provided which
summarises the fact that the issue lies with the internal management and requires to be
rectified. The alternate solutions to the situation state that even when the organization has
faced so many challenges, it must keep it self-motivated and transparent in terms of
managing their internal management. The recommendations suggest that, a proper leadership
style will be feasible in the current situation of Woolworths.

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References
Antonakis, J., & Day, D. V. (Eds.). (2017). The nature of leadership. 2nd ed. California, USA:
Sage publications.
Australian Food News. (2015). Woolworths announces new strategies to win over grocery
shoppers, AFN reveals full detail. Retrieved from
http://www.ausfoodnews.com.au/2015/05/06/woolworths-announces-new-strategies-
to-win-over-grocery-shoppers-afn-reveals-full-detail.html
Blanchard, K. (2018). Leading at a higher level: Blanchard on leadership and creating high
performing organizations. 3rd ed. New Jersey, USA: FT Press.
Girma, S. (2016). The relationship between leadership style, job satisfaction and culture of
the organization. International Journal of Applied Research, 2(4), 35-45.
Gordon, T. (2017). What every leader should know. Retrieved from
http://www.gordontraining.com/wp-content/uploads/What-Every-Leader-Should-
Know-2018.pdf
Hawkins, P. (2017). Leadership team coaching: Developing collective transformational
leadership. 5th ed. London, UK: Kogan Page Publishers.
Hetland, J., Hetland, H., Bakker, A. B., & Demerouti, E. (2018). Daily transformational
leadership and employee job crafting: The role of promotion focus. European
Management Journal, 36(6), 746-756.
Jones, S. (2015). Woolworths: Where did it go wrong? Retrieved from
https://mumbrella.com.au/woolworths-where-did-it-go-wrong-308694
Kew, J. & Wessels, V. (2019). Woolworths Australia CEO Exit Shows Unit's Lack of
Stability. Retrieved from
https://www.bloomberg.com/news/articles/2019-02-07/woolworths-australia-ceo-
quits-in-wake-of-505-million-writedown
Northouse, P. G. (2017). Introduction to leadership: Concepts and practice. 3rd ed.
California, USA: Sage Publications.
Phillips, A. S., & Phillips, C. R. (2016). Behavioral styles of path-goal theory: An exercise
for developing leadership skills. Management Teaching Review, 1(3), 148-154.

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PYMNTS. (2015). Australia’s Woolworths Chooses Supply Chain Management Platform.
Retrieved from https://www.pymnts.com/news/b2b-payments/2015/australias-
woolworths-choose-supply-chain-management-platform/
Rosenbach, W. E. (2018). Contemporary issues in leadership. 4th ed. Abingdon, UK:
Routledge.
Woolworths Group. (2019). Woolworths Supermarkets. Retrieved from
https://www.woolworthsgroup.com.au/page/about-us/our-brands/supermarkets/
Woolworths

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