The Impact of Large-Scale Change on Tesco and Nokia's Strategy and Operations

This essay examines the impact of large-scale change on the strategy and operations of Tesco and Nokia, and how they managed the change process. It discusses the reasons for their decline, the drivers for change, and the importance of involving teams in the change decisions. It also explores different change evaluation models and recommends monitoring and extrapolating current quantitative analysis to avoid future mis-happenings.

Assignment title

Table of Contents
Task 1 – The impact that large-scale change has had upon Tesco and Nokia’s strategy
and operations...................................................................................................................1
Task 2 – Change management and leadership................................................................6
References.......................................................................................................................11

Task 1 – The impact that large-scale change has had upon Tesco and
Nokia’s strategy and operations
Change is the only constant factor, even in markets and business units. To manage
change it is very important to analyze and measure the degree of influence the change
might have on the organization. Certain changes are self-initiated, certain are a result of
forces from external environment. This essay is an insight on the impact of large scale
changes the companies Nokia and Tesco had to undergo and managing its operations
and business strategy to accommodate the required change.
Tesco, a multinational groceries and merchandise retailer from UK, is the ninth largest
retail service provider by revenue. The company dropped from its merit ranking and
started observing continuous market share loss even though it was the brightest
innovators in retailing business. Another top grossing company, Nokia, faced a severe
market and customer fallout with their reluctance to change to the new idea of
communication. As a result, the company lost its dominance and its market share had
reduced to less than 3% by the end of 2013. In both these cases, the primary reason of
decline is observed as the inefficiency in adopting the change management process,
where Tesco failed to adjust to the rapid internationalization strategy and Nokia failed to
respond to the changing forces in the industry (Hayes, 2018).
Tesco’s loss was majorly an external force driven failure, that the company was not able
to contain. To recover from the loss in reputation and customer loyalty, the organization
adjusted its change process by aligning strategic decisions in proximity with operations,
to adhere to shifting demands (Al-Haddad & Kotnour, 2015). It started focusing at the
technological advantage it can gain, continuing its innovation streak. Implementation of
NFC Contactless payment procedures and other e-wallet advancements enabled it to
restore its market value. Here the driver for change was the recession scenario and the
company contained the concern with the method of incremental change process.
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Nokia on the other hand suffered a customer drain due to acceptance of different idea
offered by a strong competitor like Apple. New method of communication and use of
internet through smart devices was a strategic advantage that the competitor had, which
Nokia failed to implement in time. Later when Microsoft bought Nokia, they expanded
the objectives and developed a similar feature of its own, empowering Nokia. Nokia has
now relaunched itself with new and technologically scaled mobile phones supported by
Microsoft products. The major driver for change here was customer perception and the
effective change process was transformational type.
Driving forces for change management are different for both of these companies.
Although majorly the forces of change are majorly external in both the scenarios, the
internal factors do play an important role in introducing the type of change required
(Fernandez & Rainey, 2017). Not only does the strategic actions face turmoil but the
teams and human resources associated to the companies also face the heat. For both
Nokia and Tesco, the fall in market value and customer acquisition by contenders, the
top management leaders faced the most severe challenges. In the process of
reestablishing themselves, two of the most reputed CEOs of Tesco resigned from their
posts and the teams suffered leadership setback. With Nokia, the acquisition brought
the control structure under the Microsoft’s governance, changing the culture and
organizational structure.
Change process, although are necessary and crucial, and are expected to have positive
outcomes under the small evolution phase, yet there are certain negative setbacks.
These negative affects can be controlled or minimized by certain efforts that can
prevent the drastic change process and make the change swift for adoption. The teams
play crucial role in implementing the change, therefore it is always important to involve
the teams into the change decisions (Van der Voet & Vermeeren, 2017). This not only
keeps things transparent, but also wins confidence of employees removing the fear of
termination and unexpected company closure. Another technique of team confidence
building is the frequent management interaction, asking for opinions, feedback and
ideas from the staff to inculcate strong cultural bond between the leaders and team
members (Von Elverfeldt, et al., 2016).
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In change management, when the strategic and operational decisions are finalized, the
teams are reinforced with change decisions, the evaluation of the change process and
its increments should be controlled and monitored (Hosking & Anderson, 2018). There
are various theories and models to evaluate and analyze the response to the change in
effect. One of them is the Systems theory which focuses on a holistic change
implementation process for a successful change. Another important concept is the
continuous improvement model that supports the ongoing change procedure for better
results. Another important change evaluation model is the Burke-Litwin model that
measures and analyzes change progress over 12 different parameters for a deeper and
realistic response observation (Holten & Brenner, 2015).
Implementing Systems theory, for Tesco and Nokia, the change response can be
observed organization wide, rather than a limited functional unit of the company. Since
the organizations are large with heavy resources and assets, the implications would
also be high in number, whether positive or negative (Ainsworth & E. Feyerherm, 2016).
But, the advantage of implementing the change all-together in these companies would
enable the company to stand out and become highly efficient with all units working at
equal power. All the components of people, tasks, design, strategy, technology and
culture would get upscaled if implemented effectively (Singh & Singh, 2015).
Fig1: Continuous Improvement Model
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Source: https://leankit.com/learn/lean/3-key-concepts-of-lean-process-improvement/
The continuous improvement model is an incremental approach of improvement, where
the organization brings in small strategic change, implements it, views its affects and
considers the learnings to make the next phase of change smoother (Pakdil & Leonard,
2015). For Tesco and Nokia, the approach of continuous improvement is a best
alternative given the size of the companies. But as there was a very less response time
window for both, the strategy of continuous improvement would fall under planned
change management, which was not sought. As both the organizations targeted the
prevention of fallout from markets quickly, the continuous model would have remained
ineffective (Hussain, et al., 2018). Given Nokia’s current market strategy, it does appear
that the company is using the technique to get back its customer share.
Fig2: Burke-Litwin Model
Source: https://www.slideshare.net/manumelwin/burke-litwin-change-model/
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The Burke-Litwin model is a 12-component model categorizing organizational variable
under external environment, organization performance and individual performance, all
linked to one another. These factors not only distinguish between culture and climate
but also portrays the dynamics of directions after change implementation (Engle, et al.,
2017). For Tesco, the analysis can help and measure the distance between targeted
goals and actual performance, whereas for Nokia, the model can help create a strong
path for reestablishing themselves by strengthening all the components. As the external
environment is a factor that is out of control for any organization, the only disadvantage
the model offer is the level of uncertainty in the process.
Therefore, in summary, to implement a successful change, a company must perform
analysis of its internal and external strengths. The analysis should also contain backup
contingency plans in case of any alterations in the external factors. The only
recommendation is to monitor and extrapolate the current quantitative analysis to
measure and consider the change factors that would intervene in the long run, to avoid
any other mis-happening.
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Task 2 – Change management and leadership
Change management is a process that requires attention and close execution for
desired results. Even with careful planning and reinforcement, there are certain barriers
to change, that act as a preventing force against positive change. These barriers vary in
power, from a human resourcing perspective, because of associated risk levels
(Cameron & Green, 2015).
There are various models in change management process, that help to establish the
varies components of forces enabling or limiting the change. These forces can be
internal or external, depending upon the activity it performs. Mostly these can be
classified as either driving forces or restraining forces, as per the effect they have on an
organization’s strategic planning. One of the models that considers these forces and
draws a strong framework to understand barriers is the Force-Field Analysis model. By
definition, driving forces are the ones that pushes organization’s towards positive
change and restraining ones prevent a positive change. The model aims at maintaining
an equilibrium balance of power between the two forces for a positive push towards
accepting and implementing change in organizations (Clarke, et al., 2016). Below is an
explanatory diagram representing the two forces working against each other. In order to
bring in successful change, the driving forces must be powerful against the restraining
forces.
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Fig3: Force Field Analysis - Example
Source: https://www.mindtools.com/pages/article/newTED_06.htm
In the category of disruptive forces, there can be various barriers that may prevent the
change. The most common barrier is the fear and reluctance to adapt to something
new. Adjusting into a new setting is always a little uncomfortable, therefore it becomes a
barrier. Some organizations have very rigid policies and structures that ultimately makes
it difficult to bring in the change (Small, et al., 2016). Many a times, certain
organizational commitments and political factors like legislations also become shackles
in the path of change, which are outside the control of organization as well.
The organizational objectives for change with Tesco and Nokia have been to regain
their market shares and customers from the loss. The forces that act as restraining
forces become the critical challenges for the management, leaders and change agents.
The leadership of the organization therefore should design and realize solutions to
settle in the negative forces that prevent the change to take place. Techniques to
convey and convince people, removing the barriers in the mind against change, is an
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actionable that change leaders can help in removing, by working closely with the teams
and convincing them of the positive effects of bringing in the change.
Models in change management has played an important role in analyzing the leadership
style and has helped in evaluating the business style as well. The models give a basic
leadership style framework that identifies the core competencies it offers (Yukl, et al.,
2019). There are many popular models that have evolved over a course of time,
considering the various variables in the process. Among one of the popular leadership
style models, is the situational leadership model. Also known as the life cycle theory of
leadership, the concept was realized and presented by Paul Hersey and Ken Blanchard
in the year 1969. It emphasizes that the leader must adjust and accommodate itself in
the environment and according to the potential of the followers (Appelbaum, et al.,
2015). These adjustments must be made in order to achieve the objective, without
increasing inner resistance from change. Nokia’s CEO Stephen Elop in 2011 share a
small memo with the organization’s team, confronting the existing problems and
addressing the truths about the company (Pai, 2015). He adjusted to the people’s swing
with ethics and took accountability. While in Tesco, the visionary leader shared his
views and plans of internationalization with the teams, to make the decision transparent
and involve teams.
Another important change model is the Kurt-Lewin’s change model that considers the
three-phase technique of introducing and implementing change. The phases include un-
freeze the zone requiring change, bring in the necessary change and re-freeze the
change (Cummings, et al., 2016). The model has helped the company Tesco to design
a three-step procedure, for initiating the change, managing it and stabilizing the overall
change process. The change is directional and focused towards the attainment of
customers and expansion strategies.
Yet another important change management and leadership model is the Kotter’s 8-step
model. This model is derived on the experiences of successful change management
leaders. These steps determine a strong plan of action for change. The steps include
creating urgency, building coalition, forming strategies, enlisting armies of volunteers,
enabling team and removing barriers, generating short term milestones, sustaining
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progress, and instituting change. All of these steps have been used by Nokia, with
detailed analysis and strategic planning to regain its performance, transform itself as an
entity and stand back in the market.
Fig4: Kotter’s 8 step Model
Source: https://www.kotterinc.com/8-steps-process-for-leading-change/
No matter how strong the planning of change may take place, change is successful and
attains its objectives only if it is implemented through right leadership steps and in an
effective manner (Basile & Faraci, 2015). These leadership approaches that makes the
change sustainable in the long run are driven by approaches, that may carry various
leadership styles. From a traits of leader approach to a more functional approach the
qualities in leaders may vary. Apart from these there are other behavioral approaches
as well (Kobus, et al., 2017). All these approaches have their own advantages and
limitations. Contingency modelling not only measure the feasibility and strategic
planning technique, but also considers the variable forces in change acceptance. But on
the other hand, the approach does not form mitigation plans and risk controlling
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techniques to limit or audit the changes. Leadership with these style approaches may
add to the change process or may limit it.
In summary, change management is a technique of enabling an organization to attain
various goals. Change management process therefore is a crucial activity and the role
of leadership in bringing the change is important. Various models and approaches can
be used and have shown significant success over the course of time. For demonstration
purposes, Nokia and Tesco have been analyzed in this essay under the scope of
leadership and change management.
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References
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Hayes, J., 2018. The theory and practice of change management. s.l.:Palgrave.
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