Organisational Change and its Impact: A Tesco Company Report

This report provides a comprehensive analysis of organisational change within Tesco, a multinational grocery and general merchandise retailer. The introduction highlights the importance of adaptability in the business environment, emphasizing the need for companies to bring about organizational change to adapt to market conditions, customer demand, and competition. The report delves into the definition of organizational change, exploring its impact on management structure and business processes, with a focus on Tesco's implementation of self-service checkout systems and its expansion strategies, including acquisitions. It examines both internal and external pressures that drive these changes, such as the need to improve customer satisfaction and expand market share. The report includes a SWOT analysis to identify Tesco's strengths, weaknesses, opportunities, and threats. It highlights the company's market position, customer service initiatives, and expansion plans and concludes by summarizing the impact of these changes on Tesco's overall business strategy.

Organisational Change

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Question 1........................................................................................................................................1
Question 2........................................................................................................................................4
(a)............................................................................................................................................4
(b)...........................................................................................................................................4
(c)............................................................................................................................................5
Question 3........................................................................................................................................6
(a)............................................................................................................................................6
(b)...........................................................................................................................................7
Question 4........................................................................................................................................7
Question 5........................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
In this business environment, there exists a lot of organisation but there are very few of
them who are able to make profits for the long term. Those who are successful do something
which is different and have creativity in it. They invest a lot of money at their Research and
Development (R&D) and through this they are able to identify the areas at which they have to
bring changes. Business conditions are not same all the time so the factors which makes the
business environment change should be identified. It is necessary for the companies to bring
organisational change to adapt into the conditions (Bain, Walker & Chan, 2011). Changes can be
because of the economic climate, customer demand & behaviours, new technologies, competitive
marketplace and government policies. There can be change in the mission & strategy, policies &
agreements, their structure, processes, personnel, culture, products and technology. These
changes have to be done by keeping various internal and external factors in mind (Bhasin, 2012).
They should analyse and identify their impacts on the customers, employees, shareholders and
etc. This all report will be dealing with various aspects organisational change and for this Tesco
company will be taken in the scenario.
Question 1
There are various definition of the organisational change and if it is defined on the basis
of theoretical prospective will give a better insight about the change which has occurred in the
company. Organisational change is the process in which there is any modification in various
areas of the firm. Depending upon the changes which is going to come briefs about its scenario.
In the general case, it is the reviewing and modification in any department (den Exter, Lenhart,
& Kern, 2015). In this we will be defining the changes in the terms of management structure and
business processes. To make sure that the small businesses survive in competitive environment
they should adapt into changes through designing their flexible strategies. To gain competitive
advantage they have to bring new methods and process of doing things more efficiently and
bring cost effectively. Although, this they can bring positive and negative impact on the business
o0f the company but they do not need to worry about it and should understand that for the
growth of the business organisational change is necessary (Firth, 2013). They are competing with
big player who have large market share so in order to give something different they bring the
required changes.
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It is a process in which the small or large-scale companies bring changes in the
organisational structure is defined as the organisational change. Tesco which is a British
multinational grocery and general merchandise has come across a crucial change in terms of
introducing and implementing a self-service check out system throughout its network. This is a
strategic plan change because self-check out system is a new concept and is quite different from
the traditional payment methods when the transitions are made (Flodgren and et. al., 2010). It
reduces the time of the customer while standing in the long lines for the transition at the billing
counter. Consumers select the products they want to buy and move to self checkout. There they
scan those items and do pay for the items which they are willing to buy. This change will be
defined as change in the technology adopted by the Tesco.
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Illustration 1: Benefits of organisational change,
(Source: What is organizational change? Definition and meaning, 2017)

On the other side changeside change is the integration of the TESCO with the other
small company so that they can increase their market share drastically. They have felt the need to
improve their services and cater more number of people in Australia. It is a new market so they
have to change the things and set a new benchmark (What is organizational change? Definition
and meaning, 2017).
Both the change has a link with each other because they are following the expansion plan
in which they are going to acquire small scale industries who are doing business in the same
segment. When they will provide their services to larger number of people they can face
difficulty as a lot of people will be shopping from their stores (Flodgren and et. al., 2011). So, to
ensure that the consumers which are coming to the store of Tesco does not have to wait in the
long lines at the billing counter they are brining self-service system.
Question 2
(a)
Change which we are analysing here is of the TESCO company which is a UK based
grocery and general merchandise retailer. It was founded in the year 1919 by Jack Cohen. Today,
if it is evaluating on the basis of profit Tesco is their largest retailer in the world. They have
presence in the Asian and European market. In all these continents, they have almost 6,550 stores
and these business areas revolve around retailing of books, clothing, electronic, furniture, toys,
petrol and software. Other than this they also have the financial survives, telecoms and the
internet services (Gibb, Haskins & Robertson, 2012). A lot of people are depended upon this
company as they are giving employment to approx. 476000 people at their various stores all
around the world. They are satisfying the needs of the customers through delivering product by
following the interests and demand of the travellers. They are making sure that the customer who
are visiting the store does not face any difficulty and can easily shop at the stores. For this they
are continuously putting their efforts top bring changes in the organisation.
(b)
Organisation changes happens through result of the external and internal pressure. With
this they are preparing themselves to develop and deal with the new situations which can arise in
their businesses. As they are introducing the self-service system at their stores it will be
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important that what techniques they are adopting to implement this strategy (Junaid Ashraf &
Uddin, 2013). The implementation of this is a strategic plan and it brings new facility for the
consumers of Tesco and this way they are improving their image in the eyes of customers. The
intended effect is the synergy of both the self-checkout and the cashier checkout. With this they
analyse Tesco's self-service machine. The aim of this step was to speed up the process and
reduce labour cost which are related with the retail outlets (How to Really Drive Organizational
Change. 2016) For the experimentation procedure, they will put these machines in the few stores
only because they will get an idea whether this change can be successful or not (Leeuwis &
Aarts, 2011). This will also impact the employees who are working there because now the self-
service system is introduced which will encourage the company to reduce the employees so there
will be cut in the staff numbers.
In the acquisition process of the small companies of the same sector they are aiming at
expanding their business. For this the top research team has a key role because they will
investigate all the market and look for organisations which has potential to make them world
leader in the retail sector. All the data and the past record of the company will be analysed and
this will give them a detail knowledge of the organisation's market status. This activity is
necessary because if the company which they are taking over is in any legal problem which has
been ignored during the acquisition process will hamper their business after few time.
(c)
These changes can be linked to the definition of the organisation change which has been
highlighted above. The purpose of the change is to bring efficiency and bring more satisfaction
to the customer. With the changes, they are willing to expand their market share in the new areas
where they don't have any existence. As discussed in the first question definition of
organisational change is all about making modification in the various areas of the company and
bring newer technology to attract more customers towards their business. With the acquisition of
the small firms they will modify their organisation and now the Tesco will be bigger in terms of
revenues, capital and profits (Mackillop, 2014). They are taking this step because they know
there is crucial requirement of the growth in the unknown market but they know it is a time-
consuming process and will require a lot research and capital. But with the acquisition method
they are easily able to expand.
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Introduction of the self-service system can be linked to the organisational change because
with this they are doing something unique and giving an extra advantage to the customers who
are buying something from the Tesco stores. Organisational change is defined through the
introducing flexible strategy and making something which can bring new ways of work
procedure.
Question 3
(a)
No firms do the changes in their businesses till they don't feel that they are suffering from
any problem. They also try to bring the change in the various department they operate because
their rivals are giving them tough competition so they have to come out with something new,
they have to set the goals and objectives which will act a mission which they want to achieve.
Tesco should identify their strengths because these are the elements which will act as assets and
help them in achieving their business targets (Martinez and et. al., 2010). They also have some
weaknesses which can hamper their business process. To identify their strengths and weakness
they can conduct a SWOT analysis.
Strengths
Tesco holds a big market in the European and
Asian sub-continent. It gives certain services
which makes them unique in the eyes of
customers. Those people who are shopping
form the Tesco stores get benefit of insurance
services and Club card. At the same time with
this they can earn points during any purchase.
They also give banking services and it is
leading the internet market. It has become the
world's biggest online supermarket. Products
produced by them is of great quality and those
will want to purchase anything can easily find
the Tesco store because they have focused on
the location setting. With the aim of increasing
Weaknesses
Tesco relies heavily on the UK market for their
success. This is not good because variations in
the UK market can impact their business in
negative way. Their business operations will
find it difficult to operate because all the
profits are dependent on the UK market. Their
expansion plan is so aggressive thus resulting
in little free cash for any other activity. They
also use traditional ways of the billing system
and payment services this way the customer
coming to the stores have to wait for the long.
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their customer base they have expanded their
business in almost all parts of the world.
Opportunities
With the expansion plan they are also willing
to operate their services in other countries like
Australia and African and this has opened up
better avenues for the company in terms of
trade hurdles and international market. Tesco
will become flexible in meeting the demands
of the foreign costumers and they will they will
not face difficulty for the trade across the
countries. They were the first retailer to
provide online shopping to their customers.
Threats
They require a lot of investments and
marketing for entering into the Australian
markets. They have to face the high land prices
and other expenses which are required for their
activity. They are facing the crises so they their
debt may increase. If their values do not match
with the Australian market they may face
losses right from the beginning. They have to
face the tough competition form Woolworths
and Wesfarmers Ltd.
Analysing all strengths and weaknesses of Tesco managers has identified that they have
potential to grow and expands in the Australian market because they are flexible in adopting
changes. Although they are the one of the biggest player in the retail sector but if they want to
become a global leader in this segment they need to implement the changes. They are willing to
expand in Australia which can bring a lot of benefits to them (Nutbeam, Harris & Wise, 2010).
As discussed above they need to change the things and bring new ways of delivering the
products to the customers. They are focusing on the customer satisfaction so they are designing
the strategies by keeping interest of the targeted consumers in mind.
(b)
SWOT analysis is the most appropriate way to know the current status of the company.
Tesco has conducted a SWOT analysis to know their strengths and weaknesses and this way they
are able to monitor the changes which are taking place. There is lots of benefits of this like now
they can design strategy and brings changes according to it (Olins, 2017). But at the same time
there are also disadvantages of this that although they will implement the changes but there
might be chances that the business conditions can change or a new factor may be introduced.
This way whatever change has been implemented will go in waste.
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Question 4
Change is an essential part of any organisation so there should be change on regular
interval. There are lots of people like the managers who are included in this process. All the
change should be implemented through the change agents. He is the individual who starts the
change process in the firm to increase company's effectiveness. Change can be in the form
individuals, structure and technology. Variations in the all process is overcome by the change
agent who has the role of motivating the employees to accept the change. Tesco's internal
management takes the help of external consultants in introducing planned change. So, this it can
be identified that there can be internal and external change agent (Pelling, 2010). External
change agent is the person who is the consultant for the firm and he or she devise their change
planes. Internal change agents are part of the change procedure and they work for the Tesco and
they are selected from various areas of the company. It is observed that they are generally the
managers and are trained by the certain consultants. They make sure that the employees who are
part of the organisations follows the change process through taking party in it. For a certain
period of time each department will be given an advisor. Change agent try to convince the
employees of the Tesco to adapt to the changes made and work according to it. To bring the
things on track they promote behavioural skills and make sure that the implementation process
does not face any hurdle in between. Whatever advices he gives should have diagnostic skills,
behaviour kills, he should have attitude ton accept the things because he is the responsible
person. He should have some quality deliver emotional support to the people and employees.
External change agent looks at the company as a system and they also not have much to do with
the policies of the organisation.
Role of the change agent cannot be described for all organisation because it various
depending upon the nature, problem and the management they have. In Tesco, change agent
identified and briefed that there is need for the change in the firm. They become aware about the
current situation of the Tesco and look at the change which has occurred in the environment.
They make sure that Tesco company gets adapted into the changing environment (Pettigrew,
2013). He convince people that self-service system is an advantage for them and now they don't
need to stand in long queues. The external agent trains the internal agent and ask him to process
the change further in the organisation. He uses its experience to handle various emotional and
social problem of the staff of Tesco who are feeling difficultly in implementing change.
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So, it could be said that a change agent i.e., manager at Tesco will be a facilitator who
will bring awareness that change is the important for the organisational success. Based on the
diagnostic skills he designs crucial plan for change for Tesco and also will act as counsellor
because he has studied attitudes, personality, perception and the expectations of Tesco. It
depends on the Change Agent of Tesco that how he or she want to make the things happen and
they also need to set a coordination with top management. They will ask them about the
resources which are required for implementing the change which has been made. Changes can be
uncertain and it can affect the working of the employees at Tesco so they should be made ready
for any type of changes occurring. Now they are acquiring the new company who are dealing in
the same sector so the work load on the employees will drastically increase (Stocker, 2014). To
make them flexible for handling any work and bringing efficiency during the work load they will
be given training. This way they can acquire knowledge about the various issues which are
important to know for the success of Tesco expansion. As the part of the organisational change
they are introducing self-service at their various stores. This will give them competitive
advantage and help them in gaining benefit in the new market.
Question 5
There are lots of methods which can be used to make changes at Tesco but it is necessary
that these should be productive and successful. So, for that they can analyse different models or
methods of change.
Problem centric approach to change is the way through which change can implemented
through taking the real-life problems faced by Tesco. They can learn what all issues they are
facing and this give them better insight about their position in the market. Problem faced by them
forms the skills in the organisation and new knowledge can imparted. For example; an employee
who is part of the Tesco has just completed his probation period and he is asked to deal with the
real-life problems. When the change of self service system was made things were tested on paper
but adopting problem centric approach things were made into practical implementation
(Stummer & Zuchi, 2010). There are various benefits of problem centric which Tesco can gain if
they adopt this method: -
Long term experience retention: Tesco revise their past experience because they will be
going through all the experience they had and by this they will be able to retain their facts and
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ideas. With the discussion with the change agent they can promote long term changes and will
also boost the confidence of the employees.
Use of various instruction types: Whatever problems or issues are coming can be
discussed and they can know the real situation involving certain challenges and ideas.
Continuous Engagement: This brings the interest of the employees of Tesco as they will
get more chances to engage in the discussion and give their suggestion for the changes which is
need to be done.
New Skills: With the change Tesco management can know what are the issues that are
troubling the changes which has to be implemented. With this they can improve their skills and
can also develop new things.
With this there are some disadvantage also. Focusing more on the problems will bring
low performance of the Tesco and every time they will spot some or other issues impacting their
business. This task requires a lot of knowledge and preparation has to be done from the
beginning and if it they do not do it can cost them negatively. It is the time-consuming effort.
With the dialogic change approach Tesco will focus more on the change on the mindset
and not simply on the behaviour. According to the Bushe and Marshak there are three
transformational processes that happens in order to change to be implemented and accepted.
First is the breaking of the social construction and shows that change is required and if the Tesco
will use the old methods then the efforts will be wasted. In the second process which includes a
change to one or more of the core narratives. If these are changed then it logically follows that
change will occur due to the fact that what was accepted previously will no longer be accepted.
In the final, there is introduction of the new ways of behaving as the Tesco is coming with the
new service system.
There are benefits of using this purpose for Tesco because with this they can adapt into
the new markets where they don't have any existence. This will also benefit their management as
they will easily able to bring manage and encourage their staff. With this they Tesco can create a
vision and execute the change in more appropriate manner.
This approach can only be used for the mature organisation and the experienced people
who are part of this. Without the proper planning and knowledge from the change agent can kill
their aims and objects.
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CONCLUSION
From the above report, it has been concluded that Tesco which is one of the largest retail
organisation has potential to grow their market but for that they have they have to bring change
in their system. Self-service checkout is well appreciated by the retailers and the consumer. They
have to face the various challenges so for that they have to decided which change model will be
suitable for them.
REFERENCES
Books and Journal
Bain, A., Walker, A & Chan, A. (2011). Self-organisation and capacity building: Sustaining the
change. Journal of Educational Administration. 49(6). 701-719.
Bhasin, S. (2012). An appropriate change strategy for lean success. Management Decision.
50(3), 439-458.
den Exter, R., Lenhart, J & Kern, K. (2015). Governing climate change in Dutch cities:
anchoring local climate strategies in organisation, policy and practical implementation.
Local Environment. 20(9). 1062-1080.
Firth, R. (2013). Elements of social organisation. Routledge.
Flodgren and et. al., (2010). Interventions to change the behaviour of health professionals and the
organisation of care to promote weight reduction in overweight and obese adults. The
Cochrane Library.
Flodgren, G and et. al., (2011). Effectiveness of external inspection of compliance with standards
in improving healthcare organisation behaviour, healthcare professional behaviour or
patient outcomes. Cochrane Database Syst Rev. 11.
Gibb, A., Haskins, G & Robertson, I. (2012). Leading the entrepreneurial university: Meeting the
entrepreneurial development needs of higher education institutions. In Universities in
change (pp. 9-45). Springer New York.
Junaid Ashraf, M & Uddin, S. (2013). A consulting giant; a disgruntled client: A ‘failed ‘attempt
to change management controls in a public-sector organisation. Financial Accountability
& Management. 29(2). 186-205.
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