Understanding and Leading Change: Analysis of Tesco and Microsoft
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This report analyzes the change management strategies of Tesco and Microsoft through SWOT and PESTEL analysis, force field analysis, and leadership approaches. It also evaluates the impact of drivers of change on the organizations and provides recommendations for effective planning for change.
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UNDERSTANDING AND LEADING CHANGE
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Table of Contents INTRODUCTION....................................................................................................................3 PART 1......................................................................................................................................3 Overview of companies and type of change they went through............................................3 SWOT and PESTEL analysis to identify internal and external drivers of change................4 Comparison of how drivers of change affected each company’s leadership and overall organization............................................................................................................................9 Evaluation of long-term implication of drivers of change within each company..................9 Conclusion and recommendations for effective planning for change..................................10 PART 2....................................................................................................................................12 Brief introduction of case study company...........................................................................12 Application of force field analysis and how they affect decision making. Recommendation for course of actions which will help in achieving organizational objective with evaluation of use of force field analysis in meeting targets...................................................................12 Evaluation of leadership approaches and models of change management to deal with change with examples..........................................................................................................14 CONCLUSION.......................................................................................................................15 REFERENCES.......................................................................................................................16
INTRODUCTION Leadership is the ability of an individual to inspire and evaluate their fellow members throughwhichtheycanbeguidedtowardsrightdirectionandfocusonmeeting organizational objective (Alavi and Gill, 2017). Organizational strategy is the course of action which supports business in managing their resources through which continuous business activities can be performed. The change catalyst for an organisation can belong to internalandexternalbusinessenvironmentwhereleadershipapproaches,management operations, business strategies and functions can be affected. Tesco is a largest retail brand which has been operating all around the globe. The company is offering grocery through their supermarket chain. Microsoft is a technology company which is offering their eservices all around the globe. This report will discuss leadership and management approaches in 2 sections where Part 1 will give overview of different companies and the change they had undergone through. Further, Part 1 will outline internal and external drivers of change with appropriate framework which will be followed by how drivers of change affected companies and their leadership approaches. Lastly, Part 1 will be concluded with suggestions which can help selected organization for effectively planning for change. In Part2, the paper will outline force field analysis and will recommend strategy which will help in achieving organizational objectives. Lastly, this section will evaluate leadership approaches and change models. PART 1 Overview of companies and type of change they went through Organizational change is the action of company where they alter major components and functions of business, such as-culture, technology, infrastructure and their internal process (Boyatzis and Cavanagh, 2018). Change in an organization can be driven through internal and external factors and the drivers of change can create positive as well as negative impact on business and its profitability. Some of the examples of impact of change on business strategy and their operations of different companies are outlined underneath: Tesco- Tesco is one of the largest multinational food retail or supermarket company which is operating across the globe. The change process of Tesco was based on restructuring the organizational structure and drive innovative approaches in business through which they can retain their competitive position within the industry. The change process of Tesco introduced online shopping page where customers can click and collect products and also introduced self-checkouts systems through which customers can purchase and do self-
checkout by scanning the bar code of the products which have been purchased by them (Tesco announces huge change, 2021). Such change will help organization in attracting customers where they can easily shop for products from their website/ application through which the company can retain their customers in such dynamic business environment. Microsoft-Microsoft is an American Technology company which offers consumer electronics, personal computer, computer software and other related services. The company has been undergone through successfully change management initiative which enhanced the performanceandproductivityofbusiness.SatyaNadellatookcontrolofmanagerial operations of Microsoft in 2014 where he analysed lack of communication and high competitionamongdifferentdepartmentsofthecompany(MicrosoftCEOGearsthe Company for Change, 2014).In order to resolve the issues among different departments and to synchronize the business activities of each department of the organization, he planned to bring change in organization structure of the company. In order to bring change, internal divisionsindifferentdepartmentsweredevelopedwhichsupportedinencouraging employees to collectively work towards the achievement of planned goals. SWOT and PESTEL analysis to identify internal and external drivers of change SWOT analysis Tesco:In context of Tesco, a comprehensive study of SWOT analysis of company is discussed below: STRENGTHS Innovation-Tescoimplementednew techniquesthroughouttheglobal pandemic,suchasoptimisingthe deliverysystemtomeetcustomer expectationswhichresultedinhigher sale of products and incline in profit margin.Thishasbeenasourceof bringingchangeintheorganization where a company can adopt innovative strategythroughwhichtheycan generate higher revenues. Strong performance amid pandemic- WEAKNESS Shortageofproducts-Tescoface shortage of products which has been a weakness for organization. The inability of organisation to manage their products andmangeinventoryhasbeena weaknessfortheorganization. Therefore, it also creates an impact on the ability of an organization to meet.
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Despite the crisis, Tesco has managed to increase its market share by providing their products and services via online platforms in order to satisfy consumer expectationsandincreasecustomer engagement and retention. OPPORTUNITIES Emergence of online market-Tesco could take advantage of the changing market or consumer trend and emphasis onestablishingastrongbusiness throughonlineplatforminorderto attract a larger number of consumers and gettheirattention(Donnelly,2020). Thiswillbringadvantagetothe company where they can bring change andadaptstrategiestooperatetheir business in online market through which profitabilityofbusinesscanbe enhanced. THREATS Competitive industry-Tesco may face significant obstacles and risks from competitorssuch as ASDA, Morrisons, Walmart,Aldi,Lidlandothers.Such competitivebusinessenvironmentcan createadetrimentalimpactonthe company's market share. Microsoft STRENGTHS Leading software company-Microsoft is aglobalmarketleaderinsoftware technologycompanyandisworld’s largestdeveloperwhichisservingall aroundtheglobe.Duetotheirmajor involvement in the industry and overall economy, the company has been one of the leading software companies which can offerdifferentproductsandservice throughwhichconsumerdemandsand WEAKNESS Cybercrimetheft-Theinclinein cybercrimehasmadebusinessface various vulnerable threats and this has beenweaknessforMicrosoftasthe company is not able to protect the data of their employees and consumer which acts as weakness for the organization (SWOT Analysis of Microsoft, 2021).
business profitability can be met. Vastmarketreach-Microsoftis operatinginvariouscountriesandthis offersthemvastmarketreachthrough which they connect with greater number of customers. The international presence ofthecompanysupportsthesoftware company in connecting with customers at larger level. OPPORTUNITY Innovation and AI- Microsoft can gain various opportunities through investing in AI and more innovative areas such as game technology.Such befitswillbe helpfulinenhancingbusiness profitability as this will be helpful in adopting new and innovative approaches throughwhichanorganizationcan sustainforlongerperiodandmake progress in creating a strong and loyal customer base. THREATS Aggressivecompetition-Microsoftis facinghighcompetitionwithcompanies, such as- Google and Apple (Doppelt and McDonough,2017).Theserivalry companiespossesshugethreatforthe company which can adversely affect profit margin of Microsoft. PESTEL analysis Tesco: In context of Tesco, a detailed PESTEL analysis is addressed underneath: Political factors-The political factors, such as- tax rates, acts of legislation, political stabilityandfinancialinstabilityaresomeofthepoliticalfactorswhichaffectsthe performance of Tesco. Tesco has been doing business in a more stablepolitical climate (Chng and Mårtensson, 2020). The corporation can successfully function under existing and future regulations and change its business, marketing, and business strategies to meet political demands. Economicfactors- SomeoftheeconomicfactorswhichinfluenceTescoare- leveragecost,demand,profitandpricesareresponsibletocreateanimpactonthe
profitabilityandsustainabilityofcompanieswithintheindustryandinternational marketplace. Due to the worldwide pandemic, people's income has been negatively impacted, resulting in lower spending and expensing possibilities, as well as increased consumer switching to alternative less expensive and economical brands which has been negatively influencing profit margin of Tesco (Eoyang and Holladay, 2020). Economic considerations such as rising labour costs have had an impact on the operations and profitability of Tesco. Social factors-Due to different social changes, trends and consumer demands, these are some of the socio-cultural factors which can influence the revenues and customer base of Tesco. Tesco will consider different form of social elements as it will be able to meet customerdemands based on the region or state in which it operates, resulting in increased customer engagement and retention. Technological factors-Technological factors has been a major factor for driving opportunitiesforbusinessgrowthandopportunities.IncaseofTesco,thecompany introducedloyaltycardsandself-checkoutsystemsthroughwhichgreaternumberof customers can be attracted. Such drivers and upgradation in technology has driven positive change in the company through which they can generate higher revenues and enhance their brand image in the industry. Environmental factors-Tesco is concerned about the rise in environmental issues as it has placed pressure on managementwhich has affected operations. Tesco announced a number of steps to deal with the issue, the majority of which focused on lowering the usage of plastic and minimising plastic waste. By the year 2020, the company aimed to reduce the usage of plastic packaging which supported the organization in brining successful change by making use of paper or jute bags through which plastic consumption was reduced. Legal factors-The legal factors such as- government policies and legislations, Food RetailingCommission(FRC)aresomeofthelegalfactorswhichinfluenceTesco’s performance(PESTLE Analysis for Tesco, 2014). Tesco is adversely affected by government laws and regulations. The corporation has seen several failures and disputes as a result of complaints of misleading customers. The company cannot also partner with a rival of the same size, since this would compromise the company's ability to maintain a competitive business environment. Microsoft
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Politicalfactors-Thepoliticalfactors,suchas-politicalstabilityandincline governmental support for automation drives opportunity for business and profitability of the business. The company also gathered retention of government officials by their antitrust related issues (Gregory and et.al, 2019). In the European market, while operating under monopolist organization, this can cause low customer’s profile and create more difficulties for them. Economic factors- The economic factors, such as- economic stability of developed countries, high growth of developing countries and disposable income of middle-class families bring opportunities for Microsoft to manage their sales, revenues and portability of the organization in highly dynamic and competitive industry (Microsoft Corporation’s PESTEL/PESTLE Analysis, 2017). Other economic factors are- GDP, disposable income and many other factors are also responsible for influencing the performance of Microsoft. Social factors-. Lack of innovation in business practices can create huge impact on business profitability where Microsoft can focus on introducing smart phones through which they can increase their sales and maximise profit margin. Technologicalfactors-Microsoftistechnologicalinnovationcompanywhich introduced operating systems (Heinz and Fleming, 2019). The rapid adoption of technology, incline in volume of online transactions can bring opportunity as well as threat for Microsoft. Whereas, the in cline in automation business will bring opportunity for Microsoft through which they can generate higher revenues and maximize the profitability of the venture. Environmental factors- Some of the environmental factors, such as incline in preference of green products, focus on sustainability and more use of recycled products will be helpful for Microsoft for making an effort towards the betterment of society and environment which will also enhance the customer base and brand image of the company. The influence of ecological issues due to hardware and software of customers has been rapidly increasing which are observed by Microsoft. Legal factors-As Microsoft is operating in various countries, this can make the company face various legal issues and actions which can hamper performance and overall productivity of an organization. In case of Microsoft, the company has been facing various issues and lawsuits due to their discrimination and harassment in workplace and factors which created a negative organisational culture.
Comparison of how drivers of change affected each company’s leadership and overall organization TescoMicrosoft Change is an essential part of the growth of everycompanyfortheirgrowthand development.Thereisaperpendicular impact on the company’s team efficiency andproductivity(Hughes,2016).The change that Tesco has inhibited has brought a highly positive impacted and enhanced the operations,leaderships,teamwork, individualandoverallefficiencyofthe organisation.Moreover,internaland externalfactorssupportedbusinessin adopting new techniques and changes which canbeincorporatedthrougheffective leadershipqualitiesandmanagement.By bringing self-checkout, this supported the organization in attracting customer attention and create a strong customer base through which profitability and competitive position of company can be strengthened. With the powerful and effective leadership traitsofSatyaNadella,Microsoftwent through successful change which supported thebrandinavoidingclashesin organizationalcultureandenhanced employeecollaborationamongdifferent department. Different internal and external forces help in understanding the demands of employees and customers at internal and externallevelthroughwhichsuccessful restricting change was driven. By bringing thechangethroughrestrictingthe organization,thissupportedMicrosoftin enhancetheflowofinformationby developingcommunicationskillswithin differentdepartmentthroughwhichtheir performance was improved. Evaluation of long-term implication of drivers of change within each company TescoMicrosoft The implementation of every driver in any company brings new changes, those changes can be in favour or in some cases not. In the case of TESCO, the implication of drivers for long term depends on the internal and external factors of the company (Kilu and et.al, 2020). The internal factors. Innovation &businessdevelopmentopportunities As per the long-term implication of change inMicrosoftcanbeseenthrough collaboration and enhanced communication among different departments which helps theorganizationincreatingsynergyand meetingorganizationalobjectives.The long-termimplicationoftechnological advancementshasbeensupportingthe
impactspositivelyatthesametimethe increase in competition can hamper business growthofTesco.Thecompanywillbe drivinginnovativeapproachesandwill bring change in their technological activities which will be helpful in creating a positive long-term impact. This further will assist Tescoinmeetingcustomerdemands throughwhichtheycanretainhigher numberofcustomersandshareright directiontoemployeeswhichwillboost tehrimotivationlevelandretaingreater number of employees with the brand for longerperiod(GaubatzandEnsminger, 2017). Therefore, by bringing the change I checkoutsystems,wherecustomerscan make self-checkouts, the adoption of such technology will support Tesco in making proper use of development through which businesscansustainintheindustryfor longer period. companyingeneratinghigherrevenues where the brand is also following measures throughwhichtheycanmeettheir responsibilitiestowardsenvironmentas well. Conclusion and recommendations for effective planning for change From the above stated information, it can be stated that business environment is the bubble which has been created with internal and external environment factors. Such factors are responsible to create an impact which can make an organization bring change in their approaches and operations. Change is the catalyst for an organization to develop or can hamper their operations. Therefore, both the companies (Tesco and Microsoft) considered in the report have been undergone through successful change which supported the companies in enhancing business performance and increasing profitability of the companies. Recommendations
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Some of the suggestions which can be followed for effective planning of change are listed below: Offer training and development opportunities- Through offering training and development opportunities, this can help an organisation in enhancing employee skills and competencies which will support in enhancing their performance (Lawrence, 2015). Tesco must evaluate the training and development opportunities which can be helpful in driving change in the organization. In case of Tesco, the company can put an information paper stick near to the self-checkout systems, through which their customers can easily make purchased and checkoutfromtheirstore.Thecompanymustalsooffertraininganddevelopment opportunities for their employees as well which will be helpful in assisting customers through which customer engagement and retention can be increased. Fostereffectivecommunication-Thoughbuildingeffectivecommunication,thiswill support Microsoft in bringing clarity for the needs to change within an organization through which all employees can understand organizational values and objectives. Such clear communication will assist Microsoft in maintaining positive organizational culture where employees are aware of their roles and responsibilities and can focus on meeting the planned targets through which change can be successfully driven in an organization.
PART 2 Brief introduction of case study company Tesco is a British international grocery merchandiser which has been based in England. Tesco is the third largest retail company which was started by Jack Cohen in the year 1919 in east London. The company is currently operating with various subsidiary companies, such as- Tesco Mobile, Tesco Bank, Tesco Ireland, Booker Group, Budgens and many more (Tesco website, 2022). Tesco expanded their business ay global level since 1990s where they are operating in around 11 countries. The company is operating in various domains, such as- retailing of books, clothing, furniture, toys, petrol, software, electronics, telecomservices,internetservicesandfinancialservices.Tescoisperformingtheir operations in UK, Ireland, Hungary, Czech Republic and Slovakia by offering their products and services through supermarket, hypermarket, superstore and convenience shop. Application of force field analysis and how they affect decision making. Recommendation for course of actions which will help in achieving organizational objective with evaluation of use of force field analysis in meeting targets Barriers Some of the barriers to change or restraining forces which has been faced by Tesco are addressed below: Lack of communication- This has been one of the major concerns of Tesco as the company have been facing various barriers in proposing a change in the organisation. In relation to Tesco, this has created an adverse impact on the employee engagement and interest in managerial activities (Nelson-Brantley and et.al, 2018). Therefore, due to poor communication, such restraining factors to change has been a major concern for decision making and leadership activities of an organization. Organizational culture- The working scenario of any organization creates a huge impact on the employee performance, engagement and in overall organizational productivity. Therefore, the restraining force to change can bring chaos to the work place. This will create barrier for Tesco and will create an adverse impact on the values, beliefs, assumptions and ethics of the company. Such restraining forces to change are responsible to hamper the successfully change initiation strategy. Force field analysis
Force field analysis is a framework which is used by an organization to calculate proposed change. This framework was proposed by Kurt Lewin which is used to evaluate the pressure which exist for and against to change (Maccoby, 2015). This approach is based on driving and restraining forces, here these forces define how an organization drive towards change and how change is restrained in any company. This framework is helpful in forming decisions as driving and restraining forces for change can be evaluated which can support in forming decisions (Mackey and et.al, 2015). The driving and restraining forces are the factors which are responsible to bring change to the decisions of an organization. Due to the restraining factors, the organization needs to reconsider their decisions which can make business face challenges. In context of Tesco, a study of force field analysis, in relation to Tesco is addressed below: Driving forces- The firm employs over 50,000 people worldwide who play a crucial role in achieving the company's goals. Tesco's Club Card, experience in the United States, Japanand Europe, as well as a $2.3 trillion investment in India's economy, cultural awareness of alliance partners, a new version of the Club Card in India, THL 12 megastores, and a coalition to implement changeare some of the driving forces that help Tesco make the necessarychanges.Tescobroughself-checkoutssystemsandofferedtrainingand development to their employees and promoted it through different mediums through which they can attract greater number of customers and maximize business profitability. Restraining forces-One of the most important variables in opposing strategy change is past failures. As a result, stakeholders and Indian trade ruleswhich create a barrier for continuous operations and restrict change in the organisationare some of the other reasons that oppose change. The lack of employee interest and participation, financial resources and government policies are some of the restraining forces which can restrict the decisions of Tesco in bringing such change to their systems. Recommendations Through force field analysis, some of strategies which can be used for achieving the organizational objectives are explained underneath: Developing innovative strategies- The company must formulate and implement new ways for implementing change that will assist to improve the company's brand image and competitive position in the industry (Nguyen and et.al, 2019). In the case of Tesco, the company must develop unique methods to retain its competitive position in the industry,
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as well as to effectively manage the competitive business environment. The innovative strategies of developing self-checkout systems and click and collect products will be helpful in maintain the driving change successfully through which the competitive position of company can be maintained in dynamic business environment. Creating targets and sharing them- In the case of Tesco Plc, the company must recognize and define the organisational objectives that must be metand they must be properly communicated to the human capital so that the entire organisation can work together to achieve those goals. Through developing and communicating the targets will behelpfulfor Tescoindrivingtheiremployeestoacceptchangethroughwhich successful change strategies can be driven in the organization for better performance and competitiveness of the company. Evaluation of leadership approaches and models of change management to deal with change with examples Leadership approaches Situational leadership-Situational leadership is an adaptable leadership style that encourages leaders to grow their employees and their workforce.This leadership style is more adaptable and helps a company meet shifting demand (NHS England, 2017).In terms of Tesco, by adopting various strategies and approaches of self-checkouts and click and collect products will be managed with the help of situational leadership through which Tesco can manage to face the competition within dynamic and complex business environment which keeps on rapidly changing. Advantages-This leadership style aids in the development of a favourable working environmentinwhichemployeemotivationandperformancestandardsmaybe maintained. This leadership technique is also beneficial in raising leaders' awareness which increases their productivity. Disadvantages- For some leaders, this leadership style may not provide accurate and relevant information because they may be unable to generate acceptable responses in specific situations, which might hinder their capacity to achieve corporate goals. This leadershipskillalsocreatescorporatedependency,whichleadstoincreased dependence on the leader. This is a serious concern since it will result in poor organisational performance and inability to meet objectives. Models of change management
Lewin change management model Kurt Lewin introduced the Lewin changer management model in 1951and it is a three-stage change management approach that includes unfreeze, changeand refreeze stages which offers a basic and simple knowledge of how change happens. The following are the three stages of the Lewin Change Management model in relation to Tesco: Stage 1- Unfreeze:This is the first step of the change management modeland it is one of the most key aspects of the overall model. This phase includes driving people out of their comfort zones to increase their awareness and desire to accept and implement change (Pautz, 2016).Inthisstage,Tescowillincreaseawarenessoftheneedforchangeintheir organization and will motivate their employees to accept the required change. This stage also establishes the importance of communication and people's participation in the transformation process. Stage 2- Change:This is the second stage of the change management model; the change strategy of Tesco will be put into actionand acceptance of the change is required. In this stage, Tesco will focus on detailed planning, clear communicationand encouragement of others to support the change. Stage 3- Refreeze:The state of equilibrium can be established at this step of the change management model. Management accepts or internalises the change at this pointand new connections are formed (Thompson, 2016). In this stage, Tesco will focus on rewarding and acknowledging their employees which will aid in reinforcing the changed working practises and will also reinforce new change successfully. CONCLUSION According to the project report, it may be concluded that there are different kinds of change drivers: internal and external variables. As can be seen, there are a variety of leadership techniques and change management models that may assist organisations in understanding and implementing the necessary change in order to improve organisational efficiency and production. It can be observed that change can be driven through effective and systematicplanningthroughwhichanorganizationcanbringrequiredchangeand successfully maintain their position within industry.
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