Analysis of Sainsbury's UK Business Context: A Comprehensive Report

This report provides a detailed analysis of Sainsbury's UK, examining its business context, leadership styles, management practices, and organizational culture. The report begins with an overview of the company, its vision, and its market position as the third-largest supermarket chain in the UK. It then delves into the various leadership styles observed throughout Sainsbury's history, including authoritarian, participative, and transformational approaches, highlighting how these styles have influenced the company's operations and performance. The report also explores the management practices employed by Sainsbury's, differentiating between hard and soft approaches and their impact on operational efficiency. Furthermore, the analysis includes an examination of Sainsbury's organizational culture, emphasizing its values and how they contribute to the company's objectives. The report concludes with recommendations for Sainsbury's, emphasizing the importance of adapting to changes and avoiding past mistakes. This report aims to provide a comprehensive understanding of Sainsbury's business strategies and their impact on the company's success, making it a valuable resource for students studying business development and management practices. The report is contributed by a student and published on Desklib, a platform providing AI-based study tools.

CONTEXT OF
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Company Overview.....................................................................................................................1
Vision...........................................................................................................................................1
Leadership Style and Management Practices..............................................................................2
Organisational Culture.................................................................................................................5
Recommendations........................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
A business is an entity which includes a set of commercial activities that are generally
undertaken by it with a motive to maximise wealth for its shareholders and gain profits at the
same time. For a business to be successful, it is important to have complete awareness about the
internal as well as external environment. This helps the business in maintaining its competitive
advantage over the years and delivering exceptional customer value simultaneously. This report
aims to analyse the organisational culture of Sainsbury's UK by specifically assessing the
leadership style and management practices adopted by the company over the years. Additionally,
the report provides valuable recommendations regarding the same.
MAIN BODY
Company Overview
Sainsbury's is a public limited retailing company that is mainly based as the third largest
supermarket chain in the United Kingdom with a market share of 16.9%. It was established in
1869 by John James Sainsbury's. It is understood as one of the earliest example of self-service
retailing in UK. Its initial business model is mainly inclusive of providing high or perfect quality
products at lowest of prices. Some of the main areas in which Sainsbury's operates are
supermarkets, online, property and Bank. The company believes in rendering a strong sense of
social, environmental and economic responsibility. With its founding roots placed in poverty, the
company continually strives to eradicate poverty, malnutrition, and obesity both in UK as well as
worldwide. For this purpose, the company has associated themselves with the UN Sustainable
Development Goals and is also engaged in overcoming climate change, unfairness and inequity.
Vision
A Vision of a company is a statement that depicts a multidimensional view by describing
where a business would wants a community or the world to be through the services rendered by
business entity to the society as a whole. It is important to have a clear vision as it helps in
looking at the bigger picture and helps in the development of motivation, inspiration and mutual
responsibility that define the success rate of a company in present as well as in future.
In the context of given case scenario, Sainsbury's envisions to “be the most trusted
retailer, where people love to work and shop”. It aims to achieve this by “putting customers at
the heart of everything” they do including investing in their stores. Also, it visualizes its
1

colleagues and channels “to offer the best possible shopping experience” to its customers
(Company Vision, 2019).
In order to realize its vision, the business needs to create an atmosphere within the
organisation that not only enables actions but also decision-making. Hence, the business has
been able to maintain strong relationships with its stakeholders so as to build trust, reduce
operation costs, extenuate risks and retain its employees in a sustainable manner by undertaking
actions regarding the same.
The rationale behind choosing Sainsbury's is its ability to operate for 150 years and the
preceding reputation that the company has established for itself. Apart from this, the availability
of adequate information that could successfully address the tasks in the context of domestic as
well as international business.
Leadership Style and Management Practices
 Leadership Styles:
Leadership can be defined as an ability to guide and motivate a certain group of people to
achieve certain goals and objectives of an organisation. A leadership style, as the name
suggests, is the technique adopted by a person, generally known as the leader, to direct,
implement and control various courses of actions and plans by motivating a definite set of people
who follow such individuals (Yahaya and Ebrahim, 2016). Hence, different leaders have
different leadership styles such as Authoritarian, Participative, Transformational and
Transactional among others. Most of which are of a derivative nature and include some of the
personality traits and other inhibitions that are present in the leader themselves.
In the context of Sainsbury's, the leadership styles that have been observed since its
inception are discussed as under:
 Authoritarian Leadership Style: With high-quality deliverance of products as one of its
priorities, the Authoritarian or Autocratic Leadership Style has been observed widely in
the actions of the company. It is method which results in only one individual being in
possession of decision making power. This also means that there is a complete
dictatorship as far as policies and procedures are concerned. To some extent, it can be
observed in the operations of business, especially in 1969 when John Davan Sainsbury
became the Chairman of the company (John Davan Sainsbury, 2019). At this time, by
2

introducing self-service retailing, the business placed more focus on the production and
efficiency rather than on the people or staff engaged in carrying out the operations itself.
However, in the present scenario, this has been confined to certain tasks, thus, converting it to be
more of a task-oriented approach rather than an aggressive style adopted by Sainsbury's. This is
due to the fact that in the earlier days there was only a single individual who was responsible for
all the strategy formulation and decision-making practices. However, as the company expanded,
this leadership style became vaguer. Since it is impossible for an individual to take decisions in
isolation for a span of tasks that are included in a business as big as Sainsbury's. Also, as this
leadership style is more relevant if implemented for a short-period of time, reduction in its
applicability over the years has helped Sainsbury's to grow sustainably.
 Participative Style of Leadership: The Democratic or Participative leadership style was
evident in the actions of Sainsbury when David Sainsbury took over the operations of the
company in 1993, right after JD Sainsbury retired. David's leadership style included a
consensual and less hierarchical approach at the time even though the strategies or
corporate belief of Sainsbury remained aggressive in nature (David Sainsbury, 2019).
This also resulted in a change brought about in the composition of Sainsbury's Top-
management as more creative individuals became a part of the authoritative upper hand
and those individuals who would merely consent to anything faded. This resulted in the
overall change in the internal structure of the company. The company also introduced
values that focused on team work and service driven sales. Even though the company
succeeded to a certain extent, the failure to adopt change with the advent of technology in
the 1990s such as rejection of Loyalty programs resulted in Sainsbury's incurring losses,
especially of market share. As a result, Tesco overtook its position as one of the first
choices of suppliers.
Thus, one can observe that inability to take a strong stance and adapt to dynamic business
environment, Sainsbury had to face hardships even when the leader was more democratic in
nature. It was also observed that Sainsbury's had been struggling with implementing effective
positioning strategies that helped in communicating value for money to its customers. Therefore,
one can say that even though Sainsbury's was in the right hands as far as leadership was
concerned, the company was unable to transition from formulating strategies and implementing
them.
3

 Transformational Style of Leadership:
In the recent years, leadership styles has evolved with the introduction or expansion of
complexities in the businesses all around the world. One of them is related to transformational
style of leadership (Arnold and et.al., 2015) . Under this style, a transformational leader would
focus on goal setting, its clear communication across all the organisational levels as well as
boosting the morale of employees by continuously motivating them. Sainsbury's got to
experience this leadership style with the ascension of Justin King in 2004 as the company's
newly appointed CEO.
One of the first strategies adopted by King was to undertake a Direct Mail Campaign which
targeted one million customers (Justin King, 2019). This campaign spanned for a period of six-
months wherein the customers were asked to review Sainsbury's and provide feedback in regards
to the areas where the company could improve. Mr. King also helped in regaining Sainsbury's
market share of 17% by surpassing Asda from third to second position.
Thus, one can state that Justin King is an exceptional example of Transformational leadership
wherein he was able to rejuvenate Sainsbury's vision of empowering customers and employees
through trust-building and helped in reviving company's fortune in the later years.
 Management Practices:
A management practice refers to the innovative working methodologies undertaken to
improve the overall operational efficiency of a business entity. This can be mainly achieved by
undertaking effective human resource management practices. Thus, for Sainsbury's, the
Management Practices undertaken by the business included hard and soft approach. This can also
be seen from the leadership styles discussed above wherein aggressive, democratic and
transformational styles were observed in the business since its inception. These practices have
been explained as follows:
 Hard Approach:
Under this approach, the company employs a management practice that ensures development and
setting-up of structures that enable performance monitoring on a continuous basis. This
management practice is founded on the grounds of consistency and credential assessment. It is
rigorous in nature with most of the focus on cost minimization. In the initial years of Sainsbury's,
this approach can be seen clearly wherein the Authoritarian Style of Leadership was employed to
undertake decision-making by the top-management.
4

 Soft Approach:
On the other hand, this management approach is more resilient and focused on increasing level
of commitment, flexibility and quality in the organisation (Noe and et.al., 2017). To a certain
extent, this type of approach can be mainly seen in the case of Justin King who was focused on
transformation of the company by establishing a strong internal framework.
Thus, one can say that a management practice that includes a combination of both hard
and soft approaches is the most ideal in case of Sainsbury's making its operations more effective
and efficient.
Organisational Culture
Organisational Culture is the most versatile component of a business. It differs from place
to place and company to company. Corporate culture plays a key role in determining the level of
effectiveness and performance achieved by the employees and the company altogether (Driskill,
2018). One of the main objectives of Sainsbury's is to develop a place for the community
wherein there is trust and synchronization. Hence, the company's values are closely linked to its
organisational objectives. For this purpose, Sainsbury's has been primarily emphasizing on the
local (UK) businesses to build upon profitable investments and gain financial returns to its
external as well as internal stakeholders. It follows strict policy wherein the employees need to
wear a uniform which also varies among departments. For instance, those working in cold
storage areas such as freezers need to wear jackets and gloves of certain colour which differs
from those working on tills. This showcases the level of commitment and strictness that
Sainsbury's has embedded in its corporate culture.
Recommendations
Sainsbury's needs to ensure that there is a continual adaptation of policies and procedures
that help in the realization of its vision in the most effective manner. Rejection of ideas without
experimenting them is one of the gravest mistakes incurred by the company in its previous
decades. Hence, it is recommended that Sainsbury's must try to avoid such errors in the future,
especially when Artificial Intelligence and Data Driven Decision-making practices have taken
over.
5

CONCLUSION
From the above discussion it can be concluded that it is important for a business to adapt
to changes over the time in order to remain relevant as well as profitable. Thus, in order to do so,
a commercial enterprise needs to continually analyze the needs of its internal environment in the
context of the external environment as well as emerging trends. Failure to do so, usually, leads to
loss of market share or the customer base along with the deterioration of competitive advantage
as the business loses its visions in the long-run.
6

REFERENCES
Books and Journal
Arnold, K. A. and et.al., 2015. Leadership styles, emotion regulation, and burnout. Journal of
Occupational Health Psychology. 20(4). p.481.
Driskill, G. W., 2018. Organizational culture in action: A cultural analysis workbook.
Routledge.
Noe, R. A. and et.al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Yahaya, R. and Ebrahim, F., 2016. Leadership styles and organizational commitment: literature
review. Journal of Management Development. 35(2). pp.190-216.
Online
Company Vision. 2019. [Online]. Available Through:
<https://www.about.sainsburys.co.uk/about-us/our-vision>
John Davan Sainsbury. 2019. [Online]. Available Through:
<https://sainsburyarchive.org.uk/people/the-people-that-made-sainsburys/dsuk152-
sainsbury-lord-john-davan-1927-present-baron-sainsbury-of-preston-candover-kg-
sainsbury-family-sainsburys-president>
David Sainsbury. 2019. [Online]. Available Through:
<https://sainsburyarchive.org.uk/people/the-people-that-made-sainsburys/p273-
sainsbury-david-john-1940-present-baron-sainsbury-of-turville-sainsbury-family-
sainsburys-chairman-politician>
Justin King. 2019. [Online]. Available Through:
<https://www.bbc.com/news/magazine-25960491>
7