Organizational Learning and Change at Tesco

This report discusses the organizational learning and change at Tesco, one of the largest retail store chains in the world. It analyzes the internal and external factors affecting Tesco's business operations and suggests possible change strategies for the company.

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Tesco
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ORGANIZATIONAL LEARNING AND CHNAGE 1
Introduction
Tesco is considered as one of the biggest international chain of retail stores in the world
with headquarter located in United Kingdom. It is also known as one of the largest retail store
chain in the Britain (Tesco, 2019). Tesco was able to gain the fourth position in the retail
business on global level in 2008. In addition to this, this organization was able to manage fifth
position in Metro AG distribution. It was considered as one of the biggest move which a retail
company has every made from 2003 (Gurdain, 2010). This organization is operation on large
segment of business particularly in food and drinks. In fact it has also diversified its area beyond
food and drinks and has also included clothing, monetary services, electronics, renting and
selling DVD and so on. After analyzing the present business world this organization has also
entered in digital instrument such as internet services, software related to medical and dental care
and telecommunications (EEPH, 2019). This organization is able to manage their business on
global level by expanding their business in all the parts of the organization with having almost
than 4 lakh employees working for the meeting the satisfaction level of the customers.
Internal analysis of Tesco
Strength
One of the main aspects which helped this organization to extend their business is their
strength. Strength offers this organization both protections as well as new opportunities which
help them to remain sustainable in the business market. One of the most important strength of
this company is their highly trained skilled workers which has the capability of solving any
complex in the organization (Bull et al., 2016). These workforces are highly motivated which
helps the organization to perform better. Another important strength is their focus on continuous
improvement in their products in order to capture existing market. Another important strength of
Tesco is high level of customer satisfaction with the help of branded products in the business
market. Brand Portfolio of this organization is so strong that customer does not prefer to visit to
other stores because of their high quality product and services. They are good in promoting their
new product in the existing market with the help of new strategies (Phadermrod et al., 2019).
Tesco is having strong base of suppliers which offered them raw material on timely base with the
help of their effective supply chain strategy which helps them to avoid bottlenecks.
Weakness
Despite being successful for many years, still this company has some weakness which are
creating barrier in their business operations. One of the biggest barriers for this company is they
have to keep more inventory as compared to their rivals which is increasing their overhead cost.
This cost can impact their business in ling run. Another weakness of this company is that this
company is not effective in integrating those companies which are having different background
from them (Blockeel et al., 2016). Net contribution of Tesco and their profitability ratio is below
average as compared to other companies. Another weakness is gap within the product range

ORGANIZATIONAL LEARNING AND CHNAGE 2
which is being sold by the company which impacts the choice of the potential customer. One of
the biggest weaknesses this company is having is that this company is investing very less amount
in their research and development department as compared to other competitors in the market.
This has impacted their business hold as compared to new leading player in the market which is
using innovation as strategic tool (Abdel-Basset et al., 2018). The company is not able to create
clear USP for their product in terms of positioning. Company is in deep need of investing more
capital in their technology in order to integrate their process on global level.
Opportunity
After lot of struggle related to economic recession and industry slow growth rate, finally
Tesco has an opportunity to develop new customers and expand their market. Another important
opportunity for Tesco is invest money on online platform in order to expand business by opening
new market and channels for this company. This will help the company in known taste of their
potential customer with the help of data analysis (Wang & Li, 2016). Currently market is facing
low inflation rate which can offer more stability in the existing market. This will help in
decreasing credit rates related to customers. In recent years, decrease in transportation cost has
been seen related to shipping price which will boost profitability in terms of market gain.
Policies related to changing environment are offering new opportunities to put their strategic
technology formation related to new product. Free trade policies adopted by various
governments have given opportunity to this company to enter in to new developing market.
Threats
Laws related to different countries are changing due to trade war between them and this
can produce risk for Tesco business related to product standards. Company is not able to offer
innovative product in the market on regular base which can provide opportunity for the rival
company (Jiang et al., 2018). Due to dynamic business, customer purchasing behaviour is
changing continuously which is creating risk like environment for Tesco business. Use of new
technology by rivals is also creating threat for Tesco business operations. Large numbers of
companies are entering in the same market because of which profit margin is getting reduced on
regular base.
External analysis of Tesco
Political
Political factors are playing a very important role in signifying the business decisions of
Tesco. Recently company observed the fear of Britain exit from the European Union program
which has really panic the company related to their business in other European countries because
if Britain leave the European Union then there is ample possibility that there will be fluctuation
in the currency which will directly impact the business operation of Tesco company (Lawande &

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Singhal, 2018). In addition to this, China is at trade war with US, therefore there are chances that
this policy will also impact Tesco in the business market.
Economical
Economic factors are considered as one of the most important aspect in business because
it is directly connected with the buying behaviour of the customer. Before Brexit economy of
Britain was stable but after spreading of Brexit news, market has become volatile in nature and
has directly impacted the employment connected to retail business in UK. This news has
impacted mostly on businesses which are linked with retail business (Terblanche, 2018). This
news has transferred power in the hands of people both in terms of sale and margin connected to
brand value. But due to delay in this decision, market is able to maintain their stability to some
extent which is good news for Tesco.
Social
Individual are part of community and is continuously connected with social aspect. At
present people are very concerns about the social value of the product as well as the organization
(Turk, Kitapci & Dortyol, 2014). Therefore it is an opportunity for Tesco to connect their
product with the social value of the community which will offer them unique image in the
market. In this situation, company must focus their business operation in the direction of social
needs.
Technology
Currently technology advance has become essential part of the organization in terms of
development and growth. In this situation, it is very important for Tesco Company to connect
their business operation with the advance technology in order to gain competitive advantage over
other competitors (Vlaeminck, Jiang & Vranken, 2014).). Technology has open new trend of
shopping and it has been found that around 60% of UK youth are moving towards online
shopping which has started impact Tesco sale. In this situation, company must think something
new in order to remain sustainable in the present market.
Environment
Tesco Company has well managed the environment aspect in their business operation by
connecting their product with greener living design. In this program company motivates their
customer to support the theory of reducing waste in terms of carbon footprint emission
(Levidow, 2015).
Legal

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In UK, minimum wage rate has increased up to 15.5% which has forced Tesco to reform
their wage budget related to their workforce (Salmon et al., 2015). In addition, UK government
has also increased GST related to sales which has changed buying behaviour of customers.
Change requirement
From the above analysis, it has been very clear that company is in need of structure
change in order to handle the external forces from the business environment which is
continuously hitting the business operation of Tesco not only in UK but also in other country
where company is operating their business operations.
Literature review
According to this Stouten, Rousseau and De Cremer, 2018, change management is
considered as doing things in diverse pattern as per the emerging need of the business
environment. They believe that change is the part of the organization and must be considered in
similar manner. Changes are mainly of two types one is active and other is proactive. In
proactive change, things must be planned in advance in order to face the possible challenges
which can arise during the process. In active change, organization does not plan anything in
advance, it just moves regularly with the business operations.
As per this Galli, 2018, change management must be considered as structural approach
which is linked with transitioning individuals, team and corporates. It is also connected with the
transfer of current state of organization in to desired future state. Change management is based
on various theoretical frameworks such as Lewins change management model; kotters change
theory, McKinsey 7-S model, ADKAR and so on. Change management is also connected with
the benefits of all individuals which are linked with this organization change management. The
main objective of this change management is to reduce possibility of resistance against change in
the organization. At present success of organization is completely dependent on the success rate
of implement change in their organization structure.
As per this Rosenbaum, More and Steane, 2018, Lewins change theory change
management is divided in to three phases one is unfreezing, change and freezing. Unfreezing is
considered as initial stage of the change management in which present state of the organization is
disturbed in order to bring improvement in the present structure of the organization. In this
process individuals are made aware about the change so that they can be convinced to work with
new structure or framework to improve performance. In change stage, people are made ready for
accepting change and then change is implemented. This phase is connected with proper planning,
motivation and effective communication in order to offer easiness to this transformation process.
In freezing phase, implemented change program is offered a close loop platform in order to offer
restriction to the new organization structure. This phase helps ensure that new structure will not
return to its previous stage in any situation.

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According to this author, Kotters change consists of eight steps which decide the change
in the organization. First step is creating need of urgency in the organization by conveying the
individuals about need for this change. Second step is collaborating all the important aspects of
the change management like internal capability, critical alliance and impact linked with the
implementation team. Third step is generating a clear vision related to this change need in terms
of future image in the business position. Fourth step is conveying this change message to every
individual of the organization in order to avoid any kind of conflict in the implementing process.
Fifth step is eliminating any kind of restrict which do not support this change management
process from the organization structure. Sixth step is dividing the overall objective of change
management in to short term objective in order to maintain continuity in the success process.
Seventh step is combining small win and try to implement more change in the organization as
per the situation. Eighth step is communicating the positive impact of this change with the
employee of the organization in order to motivate them towards change process.
According to this Cohen and Andrade, 2018, ADKAR change model is five step
processes. First is make people aware about the need of this change, then connect desire with this
change, then offer knowledge about this topic to the people which are connected with this
change, then explore the ability of the management related to this change and final is reinforce
the individual to adopt this change as their new organization structure.
Possible change strategy
In this situation, various change strategy can be suitable as per the present requirement of
the Tesco Company. Kotler change model can be applied in the form of seven steps. As per this
strategy, company must first try to generate the need for the change by informing the individuals
present in the organization the exact need and benefits associated with this change. Then
management of the company must try to collect all the important elements which can help in
successfully implementing this change in the business operations such as internal ability of the
organization, requirement of skills and new knowledge (Chichirez & Purcărea, 2018). Then
management of the company must offer a clear vision to individuals linked with this change
process or which will be affected with this change process. Then company must try to eliminate
all the possible restricts present in the process of change so that a smooth change process can be
implementing in effective way. Then management must try to divide the main objective of the
change process in small goal so that a continuous success can be achieved in the organization.
Another option which will fit best in this situation will be Lewins change model. In this
change model the change process will be divided in three phase unfreezing, implement change
and then freezing the new change. This will help organization in effectively implement change
process in the business organization. In addition to this the management can use two types of
pattern in support of change (Rolland, 2018). One is continuous change and other will be
discontinuous change. In continuous change the individual which will be impacted with this
change will be informed about the change so that they can prepared them self for this new

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situation. If management will feel that informing about change in the organization can create
panic situation in the organization, then management can make use of discontinuous change
process. In this change will be directly implemented in the business operation without informing
the individual about the change so that they can get learn to adjust in the changing environment.
Another best option which can be brought in to use is ADKAR change model. This
model will work in the similar pattern just like kotler change model by it adopt very precise steps
related to change process. In this model, desire of the individuals is being connected with the
need of the change in terms of learning and development (Das, 2019). Then capability of the
individual are tested on the base of this change process so that chances of mismatch can be
eliminated in this change process. Then the people whom are going to be affected from this
change process will be reinforced to adjust this change in their regular schedule in order to
improve the overall performance of the organization.
Best suitable strategy
After analyzing the present situation of Tesco, the best suitable change model in this
situation will be Lewins change model because this model has the capability to bring all the
important factors together which can create positive impact on the overall business process along
with individual connected with this change. The change process will be divided in to three phase,
first phase will be disturbing the existing process. Before implementing any change in the
business process it is very important to bring out individual from their comfort zone, otherwise
they will oppose the change process. When the individual are brought from stable position to
dynamic position, they will be well aware about the need of this change and will offer full
support to this process. After gaining trust of the individual, the management must focus on
implementing their change process in short but continuous term so that it may not feel
uncomfortable for the employees to get adjusted to a new change. After gain positive outcome,
the management of the company must continuous this process until the main objective of the
organization will be achieved. Many strategies failed because organization was not able to
maintain the change process for long term. In this situation, Tesco management must focus on
closing the change process loop in order to maintain the sustainability of the strategy for long
term. This will help the organization to restrict the individual to leave the new change process to
make reentry in their old business process. By this Tesco management will be able to offer a
suitable platform to innovation and creativity by offering suitable strategic platform which will
ensure efficiency and effectiveness at the same time.

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Conclusion
Due to heavy competition in the retail industry, it is not easy for organization which
belongs to this industry to remain sustainable in this dynamic business environment. These
external forces are continuously pressuring the organization to adopt new changes in their
business operation to remain in the competition. Same situation is being faced by Tesco
organization which is in great need of change in their organization structure to keep sustainable
in the business environment. In this situation, Lewins change model will be the best option to
implement change in the organization because it will help in connecting the desire of the
individual with the objective of the change. In addition, this model will help in making people
aware about the need of this change because in most of the cases change process is always
opposed if its purpose will not be clear. This situation is clearly eliminated in this model because
people which will be impacted by this process are already aware of this change and will offer
their full support if they feel that this change can bring improvement in their career development.
This model will help the individual how to adjust in this changing business environment which
will act as competitive advantage over the other companies present in the same environment.

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