Impact of Change in Organizational Strategy and Operations: A Comparative Study of Sainsbury and Tesco

This study compares the impact of change in organizational strategy and operations at Sainsbury and Tesco, evaluating internal and external drivers, measures to minimize negative impacts, barriers to change, and leadership approaches.

CONTENTS
INTRODUCTION................................................................................................................................3
P1 - COMPARE DIFFERENT ORGANISATIONAL EXAMPLES WHERE THERE HAS BEEN AN IMPACT
OF CHANGE IN AN ORGANISATION'S STRATEGY AND OPERATIONS..............................................4
P2- EVALUATE THE WAYS IN WHICH INTERNAL AND EXTERNAL DRIVERS OF CHANGE AFFECT
LEADERSHIP, TEAM AND INDIVIDUAL BEHAVIOURS WITHIN AN ORGANISATION.........................6
P3 - EVALUATE MEASURES THAT CAN BE TAKEN TO MINIMIZE NEGATIVE IMPACTS OF CHANGE
ON ORGANIZATIONAL BEHAVIOR....................................................................................................8
P4 - EXPLAIN DIFFERENT BARRIERS TO CHANGE AND DETERMINE HOW THEY INFLUENCE
LEADERSHIP DECISION MAKING IN A GIVEN ORGANISATIONAL CONTEXT..................................10
P5 - APPLY DIFFERENT LEADERSHIP APPROACHES TO DEALING WITH CHANGE IN A RANGE OF
ORGANISATIONAL CONTEXTS........................................................................................................12
CONCLUSION.................................................................................................................................14
REFERENCES...................................................................................................................................15
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INTRODUCTION
An organization's success is totally depended upon the transformation and adapting to change
in transformation. It is important that an organization develops a strong culture within its
environment so that all members of an organization working in an environment which helps in
nurturing the individuals and take them to the path of success. An organization consists of
many departments that constitute to form an organization (Sheehan & Cooper, 2011). It is
important that these departments are well managed for the overall success and smooth
functioning of an organization. Several departments include Operations Department, Human
Resource Department etc (Leonard, 2011). All these departments are managed and operated
by employees and each employee is assigned a specific job role for the smooth functioning of a
department. A department in an organization has a leader that leads a team and thus
leadership becomes an important part of the organization. An organization must strive to move
forward despite the fact that internal and external changes may hinder its growth and
developments in the long run. In this assignment, a comparison is made between the two
organizations, namely Sainsbury and Tesco for understanding the changes in organizations and
various measures taken by these organizations in response to change.
Sainsbury PLC is one of the largest chains of supermarkets in England and was founded in 1869
by Mr. David Tyler, whereas Tesco is a multinational retail company founded in the year 1919
by Mr. Jack Cohen.
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P1 IMPACT OF CHANGE IN BOTH ORGANISATION'S STRATEGY AND
OPERATIONS
Change is inevitable and same can be applied to small and big sized organizations. Increase in
competition in the retail industry, including the retail stores, supermarkets forces an
organization to make changes in its business model in order to sustain in the market (Fleisher
and Bensoussan, 2015). In case of Sainsbury, this organization is also compelled to make changes
in its policies and business model to improve its pricing and revenue.
Major changes in Sainsbury’s operational model include changes in the pricing segment. The
company is cutting the job roles in several departments in order to match up to the increased
budget of the organization. The company is shifting employees from one department to
another and assigning multiple responsibilities to staff members. This way the company has cut
more than 500 jobs, thereby increasing the job responsibilities of more than 4000 employees
across several departments.
Another change in method of operations includes Change in Shift Timings of the employees
across 140 supermarkets, as employees are offered night shifts, early morning shifts and late
evening shifts, these changes affect the morale and create disturbance in the mindset of
workers and employees across all departments which in turn accounts to an operational
concern for an organization.
There are several retail concerns for Sainsbury as the buying trends are continuously changing
in the entire UK. This, in turn, is forcing Sainsbury to cut more jobs in order to accommodate
buying trends in the current market. The company is focusing to hire only those employees who
understand the current market trends for gaining the interest of customers.
These changes in an organizational model are necessary for not only Sainsbury but all retailers
with a focus for future developments and reducing the redundancies in the operational
framework. These changes will help Sainsbury to improve the quality of its product and services
which can be easily accessed by the customers at affordable prices.
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On the other hand, Tesco also made several changes with respect to how it runs its several
stores. Tesco is aiming to provide better customer experience by bringing different service
desks at one place which will enable customers to get all their needs in one single place. The
company is planning to simplify its operational structures so that it can save more capital for its
business. But these operational changes are made on account of risking the jobs of 1700
employees which is subject to change. Tesco has changed its approach towards marketing by
identifying that there is no use of mass marketing campaigns like ‘buy one get one free offers'
for the public as people are less interested in such offers due to quality constraints and mostly
rely on fresh products. Tesco is coming with new market initiatives such as ‘Food Love Stories’
of which the most popular is ‘Alice Peacemaking Cupcakes’. ‘Food Love Stories' is a banner
under which there are several campaigns each featuring a member of different families, in
which a set dish is made for a specific reason. This way Tesco is popularizing its brand
awareness among people by making them realize as to how it can solve family problems
through its products.
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P2- WAYS IN WHICH INTERNAL AND EXTERNAL DRIVERS OF CHANGE
AFFECT LEADERSHIP, TEAM AND INDIVIDUAL BEHAVIOURS
The main strategy of Sainsbury is to enhance its performance in the segment of Supermarkets. While
doing so, the company is focusing to expand its reach in other markets. The company is making all
possible efforts to manage change that affects the organizations by employing various statutory factors
of growth, like quality control measures at each stage of the development process. On the other hand,
Tesco is focusing on its competitors, suppliers, change in government regulations and many other
factors that affect the businesses of Tesco PLC. For effective management, Tesco is focused on quality of
products being delivered to its end customer and ensuring it follows all the guidelines set by the
government so that its processes do not get affected at a stage of its operations (Babatunde and
Adebisi, 2012). Operations of both the companies are, however, affected by external and internal
factors as discussed below.
EXTERNAL FACTORS
Political: These factors are solely determined with respect to changes in government policies
and the impact of the recession in the country (Granovetter, 2010). Sainsbury must be
economically stable in order to remain stable against the political factors. In terms of Tesco, the
company is one of the fastest growing retailer companies and thus helps in improving the
economic condition by reducing the level of employment (Morgan, 2012). .
Social: Organizations have social impacts too, because of the changing needs of the customers
across demographic boundaries. It becomes essentially important for both the companies to
understand the value and culture of societies where they are operating and hence make
changes in their service model accordingly (Li & Ferreira, 2010).
Technological: Implementing the use of newer technologies will help both organizations to
evolve new products and processes according to the modern era. Both companies can make
use of technologies like bar-coding, online shopping, computer designing of products, etc. for
providing better service to its customers.
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INTERNAL FACTORS
For getting optimum results TESCO AND SAINSBURY must refer different business models and
make changes in their strategies for better yield in their businesses (Wilson & Gilligan, 2012).
Both companies need to analyze their strengths and weaknesses so that it is ready to face
future challenges and threats.
Strength
Tesco is one of the largest grocery retailers has the biggest strength in the market as it has
emerged as a brand name for its business in the eyes of the customers. The presence of Tesco
at domestic and international level widens its reach accounting to more than 1 million
workforces. Tesco has won various awards and recognition from several governing bodies
because of providing quality services and following all corporate guidelines in its methods of
operation (Teece, 2010). Similarly, Sainsbury also is emerging as a brand name for huge traders
as currently, it is operating with 509 supermarkets and nearly 280 stores across the globe.
Sainsbury believes in ‘Customer is King’ principle and has developed a customer base which is
difficult to break.
Weaknesses
Bad economic conditions become one of the major weaknesses in the operations of Sainsbury
and Tesco. The rise in the cost of living and lower income of the masses lessens the demands of
goods that are high in prices which do not meet economic standards of people. This makes the
companies build products that are cheaper and affordable for the common people.
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P3 - MEASURES THAT CAN BE TAKEN TO MINIMIZE NEGATIVE IMPACTS
OF CHANGE ON BEHAVIOUR OF BOTH THE ORGANISATIONS
Changes in organizations occur because of transition from one phase to another. It is important
that organizations make changes in their methods of operation, but it becomes equally
important that these changes have minimal impact on organizational behavior (Allen, et al.,
2010). Change in organizational behaviour occurs due to the implementation of different
policies and strategies, these changes are necessary in order to minimize the employee
resistance and simultaneously decreasing the cost to the company.
SOME MEASURES NEEDED TO MINIMIZE THE CHANGES IN ORGANIZATIONAL BEHAVIORS OF
SAINSBURY AND TESCO
Communication: It must be the strength of an organization where all employees are given a
chance to share their opinions and views about the impact of changes they are witnessing in
the current scenario. No matter how big or small the changes are but taking the consent of all
employees before arriving at any conclusion must be implemented. This will keep all employees
motivated and aware of the changes that are happening within the organization. Management
of Sainsbury and Tesco must also motivate its employees by encouraging them to participate in
the community programs and several other events which engage members of all departments
in communication.
Bad Leadership Approach: A leader of an organization must be a motivator and if the
employees do not embrace the new challenges and instructions given by the leader then it
becomes difficult for organizations to lead to the path of success (Skakon, et al., 2010). If the best
leadership approaches are followed within the organization, then there is no denying the fact
that employees become a valuable asset for organizations. For effective leadership, a leader
must motivate other employees to become the future leaders for the organization so that they
become replacements and are ready to handle the responsibilities of an effective leader.
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Making Changes in an orderly Manner: If changes are not made in order, then the downfall of
an organization is certain, from the moment changes are made in the first place. Hence, it
becomes essentially important to draw a plan and allocate resources in such a manner so that
transition is managed effectively. It can also be done if both organizations employ a senior
person or a leader within the organization and allocate resources under his command for
managing changes.
Understanding the current state of organization: It is important to identify the current
problems that both companies are facing at any level, whether it is on employee level or
managerial level or any other level in the organizational hierarchy. Then the proper assessment
must be made and tasks must be assigned while keeping the interest of the employees.
Thinking at ground level: It is important that organizations formulate and amend policies
keeping in view the interest of the people living near the cities. It is essential for businesses to
have a good relationship with the nearby communities so that they give their opinion and views
and join hands with the organizational groups for its better operability.
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P4 - BARRIERS TO CHANGE AND HOW THEY INFLUENCE LEADERSHIP
DECISION MAKING
The performance of an organization and change in its structure and operation can be broadly
explained via the Burke & Litwin Model. This model provides a framework in order to
demonstrate and study various organizational dimensions which become a barrier to change.
SOME IMPORTANT KEY POINTS OF BURKE & LITWIN MODEL
Communication: It is one of the prime factors for the success of an organization as it leads the
organization to the path of success. Effective communication is essential for all employees
within an organization so that an understanding is developed which would be helpful in leading
the organization to the path of success. In case of ineffective communication, there are changes
within an organization that may relate to misinformation, conflicts and ambiguities. So it
becomes essentially important that companies like Sainsbury and Tesco realize the importance
of communication and implement the same with respect to a barrier to change in the
organizational context.
Structure: The structure of an organization must not be interpreted as only the hierarchical
structure rather should be considered a structure that focuses on responsibilities across several
departments within the organization (Schmitz & Ganesan, 2014). The structure of an
organization must be formed among its people by giving responsibilities and authoritative
power to all individuals across all departments. Following this structure ensures that all
employees working in the organization are given equal importance regardless of their grades or
positions (Robbins & Judge, 2012).
Strategy: The top management of an organization must make strategic decisions, keeping in
view the goals and objectives of the organizations. It should ensure that these strategies are
properly defined for all individuals working in the organization.
Leadership: It is important for Sainsbury and Tesco to educate their employees about the
importance of leadership and how it can maximize the efficiency of an organization. Both
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organizations must motivate its employees to become leaders by communicating the policies
and objectives to their subordinates for achieving organizational goals and objectives.
Boosting Morale of Employees: It is important for both the organizations to boost the morale
of their employees as and when required. Boosting the morale of employees can be done by
leaders, by winning their trust so that the employees perform to the best of their abilities to
achieve organizational goals.
Organization Culture and Environment: Organizations must have a stable and sound
environment so that employees can work with full efficiency and concentration. The
organization must realize the potential risk factors that are affecting its business externally and
its impact must be properly examined for future concerns so that proper counter-strategies are
made in advance to deal with such factors. Another important aspect includes the culture of an
organization which should incorporate best ideologies and principles as it affects the work life
and personal life of employees within the organization.
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P5 - LEADERSHIP APPROACHES TO DEALING WITH CHANGE
A good organizational leader is one who can direct and take control of all aspects of operations in an
organization. A leader operates through the hierarchal structure within the organization. An
organization is never stable in the present operational surroundings and faces continuous challenges
from the consumers and emerging technologies (Ganz, 2010). Hence it becomes important that
organizations adopt effective leadership approaches in its business model as per the changing needs and
future concerns.
VARIOUS TYPES OF LEADERSHIP APPROACHES THAT CAN BRING CHANGE IN THE WORKING OF TESCO
AND SAINSBURY
Change Leadership
It is the ability of an individual or a leader to drive changes in the behaviour and attitude of
people within the organization so that they remain motivated and enthusiast and become a
valuable resource for the company. Change leadership approach helps to motivate employees
within an organization by driving them towards results, thereby achieving optimum results for
an organization. It also helps in satisfying various investors and analyst according to their
specific needs and demands which helps in smooth functioning of an organization.
Hersey Blanchard Situational Leadership Theory
This theory urges leaders to have an approach that should cater to changing needs and trends
prevailing in the present market scenario. The term situation here refers to adapting to changes
that occur when organizations implement and form policies based on situational circumstances.
For instance, there can be several considerations to form better HR policies for employees
working with organizations like Sainsbury and Tesco. But it must be noticed that these
leadership approaches must be used carefully implemented keeping in view the interest of
employees, organizations goals and objectives (Schein, 2010).
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Autocratic Leadership
It is a form of leadership approach in which all strategies and decisions are made by an
individual leader who forwards these decisions to its subordinates. It is a one-dimensional
leadership approach in which one person becomes the boss and the rest follow the instructions
set by the boss (Rafiq & Mahmood, 2010). This form of leadership approach is rarely followed as it
can damage an organization structure because there is no scope of transparency between the
employees and the leader in terms of decision making and formulating policies.
Charismatic leadership
This is one of the most popular and valued leadership approaches followed by most
organizations. This leadership approach motivates and encourages varied personalities within
the organizational context. This type of leadership approach helps employees with their tasks
and provides necessary help as and when required. This leadership approach motivates
employees and staff to work solely for the betterment of the organization in order to achieve
company’s aims and objectives. A charismatic leader has an ability to influence its team
members working under him and also develop strong emotions in their work ethics (Levay,
2010). Organizations like Sainsbury and Tesco must follow this leadership approach so that all its
leaders and managers can better handle employees and task force employed across several
departments within the organization (Battilana, et al., 2010).
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CONCLUSION
The assignment concludes that change is necessary for organizations like Sainsbury and Tesco in
order to survive in the present market conditions. Change is also essential for organizations to
grow and expand so as to become a successful brand one day just like Sainsbury and Tesco.
Impact of Globalization, technological advancements and demographic trends also force
organizations to make changes in order to get success from the final component in a successful
management strategy. Considering the current market trends and change in consumer
behaviour, it becomes important for organizations to make rapid changes in its business
decisions at a must faster rate than they had ever before.
In this assignment strength and weaknesses of both the organizations are also discussed which
helps in realizing the future scope and opportunities for both the businesses. In this
assignment, it is concluded that managing these changes, generate profit for the companies as
well as employees. The assignment covers various external and internal factors that drive
changes in organizational behaviour and operations. The assignment also covers various
barriers to change with respect to organizational context and its influence on employees and
stakeholders. In the later sections of this assignment, several leadership approaches have been
discussed which determine its importance and need for implementation in both the
organizations.
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