Contemporary Management Issues: How Sainsbury Responded to Change Drivers

This report discusses how Sainsbury's has responded to change drivers with consideration for the nature of the pressures for change, specifically the impact of technological development on strategic decision making and commercial and operational activities. The report includes a PESTLE analysis and SWOT analysis of Sainsbury's, as well as a discussion of the impact of the Argos takeover on the company's performance.

Contemporary
Management Issues

Table of Contents
INTRODUCTION...............................................................................................................3
MAIN BODY......................................................................................................................3
Discuss how Sainsbury has responded towards the change drivers with consideration
for the nature of the pressures for change....................................................................................4
Response towards change drivers..................................................................................10
Conclusion.........................................................................................................................14
References..........................................................................................................................15
CONCLUSION..................................................................................................................17
REFERENCES..................................................................................................................17

INTRODUCTION
Management refers to that process where organising and planning the resources and
activities of a business to achieve particular targets in the most efficient and effective manner
possible. Under management, contemporary issues are those issues which is currently affecting
places or people and that remains unresolved (Shariff and Ahmad, 2019). Sainsbury's has been
taken into consideration in the present report. Sainsbury's is the second largest chain of
supermarkets in the United Kingdom with a 16% share of the supermarket sector. The company
was founded in the year of 1869 by John James Sainsbury's with a shop in London. Sainsburry's
offer delicious and great quality food at competitive prices and their focus is on convenient
shopping. Company's values are to live healthier lives, source with integrity and respect the
environment into positive manner. According to case study, Argos takeover has boosted the
Sainsbury's trading. The company has been boosted by takeover of catalogue retailer Argos. The
present report covers discussion about how Sainsbury's has strategically responded to drivers of
change with consideration for the nature of pressures for change. In addition to this, the present
report covers analysis about on recommendation how the organisation might enhance its
responses.
MAIN BODY
Case study scenario
According to case study scenario, Argos takeover has boosted Sainsburry's
trading. With support of takeover of catalogue retailer Argos, Sainsburry's have been boosted by
their half year results. According to retailer, cost savings improve profits while adding Argos
outlets to Sainsburry's stores was driving an increase in trading intensity. Chief executive of
Sainsbury's Mike coupe also said that grocery market remained extremely competitive.
According to him these are the results of against a difficult market backdrop which is largely
driven by acquisition synergies from the Argos business. He also said that during the time of
BREXIT, company has to face challenges with respect to availability of stock. It has been
observed that thirty percent of goods that Sainsburry's sold came from the European Union.

Strategy Formulation
Strategy formulation is the process of using available knowledge to document the
intended direction of a business and the actionable steps to reach to its goals. Strategy
formulation is required because it sets the direction and establishes priorities for the organisation.
Mergers and takeovers are regarded as the famous popular business strategies that
organisation are seeking for fulfilling the objectives in terms of expanding the market (Colonne,
2020).
Sainsbury's has strategically responded to these drivers of change with consideration for
the nature of the pressures for change.
Discuss how Sainsbury has responded towards the change drivers with consideration for the
nature of the pressures for change
PESTLE Analysis
PESTLE analysis is helpful in determining political conditions of the country and their
effects on the market. It is also helpful in finding out culture affecting the markets and about the
prevalent economic factors.
This model is also helpful in terms of finding out technological inventions which are
trending in the market and also about future possibilities as well. This framework is supportive in
terms of finding out current legislations that regulates the industry and also about environmental
concerns for the industry (Hilal and Jamaludin, 2019). With respect to case study, the Argos
takeover on Sainsburry's has affected the future performance of the company and this can be
analysed through factors of PESTLE analysis.
Political Factor: This is a factor which involves the relationship between business and
the government. It helps in identifying the political conditions of the country and their effects on
the market (Sapizi, Zharif, Norelmi and Asyikin, 2019). It includes tax, laws and political
stability. With respect to case study, BREXIT issue act as challenge for the company because
thirty percent of the goods sold came from European Union countries.
Economical Factors: It is related to the elements such as inflation, GDP, cost, demand,
supply and more. Economical conditions of a company gets affected by unforeseen events. It
further affects the level of demand and supply in the market. In Sainsbury, the sales of the

company iss affected due to the ongoing pandemic and economic conditions of UK. Due to the
COVID-19, purchasing power of the customers has been decreased that has direct association
with the revenue of the business entity.
Social Factors: This is a factor which include cultural expectations and norms, health
consciousness, population, growth rates, age distribution, career attitudes, health and safety.
These factors are helpful for companies to better plan their marketing strategy and analytics . It
is also helpful in finding out culture affecting the markets and about the prevalent economic
factors (Moutinho, 2018). With respect to case study, Sainsburry's has focused on providing
quality food to their consumers. So company has targeted on those products which can provide
healthy lifestyle to their consumers. The products that have been imported from European
countries majorly involves healthy food products.
Technological Factors: This element is about technological advancement and
upgradation to meet with enhanced needs of the customers. Technical evolution affects the
function of a company profoundly. In this context, Sainsbury is using latest technology such as
AI, self –check outs and more. Main reason of using such efficient techniques is to ensure future
growth of business.
Legal Factors: Here, the rules and regulations laid by the higher authorities are included.
These compliances are prepared for maintaining authenticity in business setting. Implementation
of rules allows a company to operate business in a regulated way (Salleh and Suki, 2019). In
reference of Sainsbury, they obey different rules and regulations in order to operate the business
in a systematic way.
Environmental Factors: In current time, environmental concern had become
fundamental requirement of each and every business. It is concern with using recycle, reusing
and other such practice in order to ensure the positive influence on the environment
(Kinkhabwala and Bhavesh, 2019). In context of Sainsbury, they make sure to follow
environmental friendly approaches which also help in maintaining positive image of the business
entity.
SWOT Analysis

It is a type of analysis which act as internal analytical tool which is used to
manage the understanding from different perspective that can assist Argos and Sainsburry's
together in accomplishing the competitive advantage at the market place.
STRENGTHS
 Sainsbury's is the second largest
supermarket in the country of UK. The
company has sold out many of the
products coming from European union
countries.
 The takeover done by Argos company
has increases the performance of
Sainsburry's company (Wilkinson and
Dundon, 2021).
 This takeover contributed in terms of
increasing profits of Sainsburry's
company with support of cost savings.
WEAKNESS
 This takeover is the result against a
difficult market backdrop.
 It is difficult for Sainsburry's company
to maintain stock for themselves.
 Although this takeover is helpful for
the company through Argos outlets but
it has created a different mindset in the
consumers with respect to image of the
company.
OPPORTUNITIES
 This takeover has helped the company
to grow in financial aspect.
 This takeover create an opportunity for
the company to expand themselves on a
larger scale with new offerings
 With support of e-commerce and social
media platforms Argo and Sainsburry's
can offer new products and services to
their consumers
THREATS
 There are lots of competitors in this
retail sector market like TESCO, Asda,
Ikea who have higher market share and
this can give tough competition to the
takeover of Argos and Sainsburry's
 From future perspective the issue of
BREXIT can create problems in terms
of relation between UK and European
Union countries (Rosenbach, 2018).
 The BREXIT issue act as threat for the
company to maintain its standard in this
competitive international market.

Drivers for change: There are different kinds of drivers of change that requires better
change in the organisation. A change driver is basically an external or internal pressure that
shapes change to an organisation. It includes change to strategy, design, plans, products,
operations and services. There are some important drivers that have affected Sainsburry and
Argos in terms of strategic decision- making process Change drivers are related to internal as
well as external factors that facilitate changes in the existing working conditions. It included
change in the current business practices, strategies, plans products and so on. Here, external
factors cause change in the business environment. For instance, change in current political,
economical condition have direct influence on the working practices of the business entity. On
other side, internal factors also caused changes in the existing business setting. These internal
factors are related to change in existing working conditions, change in management style and
more (Hrustek, Furjan and Pihir, 2019). However, external elements are the main cause of
change. It includes elements such as technological development, business growth and more.
These factors have a major impact on business but it cannot control by managers. In addition,
external elements facilitate changes in existing business policies, norms and more. It is important
to modify the existing business practices according to the changes coming in the external
environment. In this situation, it is important to understand different change drivers and prepare
suitable strategies accordingly. In current scenario, there are several changes are being faced by
the Sainsbury due to the takeover of Argos. The takeover affected the existing practices of the
entity. Here, it is important for the entity to take suitable steps in order to address the impact of
changes effectively. Effective analysis of changes will guide the managers in taking appropriate
business decisions with an aim to improve the efficiency of the company.
Technological development: now, the technology is considered as highly important
component for the business success and growth. It is related to development of creative and
innovative ways to produce a particular product or service. In addition to this, technological
development also plays a crucial role in getting an edge in competitive market place. It allows
company to produce different products which prefer by customers. In current time, technology
has become a crucial part of business. It is not possible to run a business entity without
developing efficient technology. To survive in the current competitive environment, it is highly
important to embark latest and advanced technology in business (Cai and Li, 2018).

Technology is one of the crucial change drivers. Now, it is important for the companies
to adopt new and unique approaches of work so that they can offer unique products to the
customers. It is not possible to continue the business with traditional approaches. Here, it is
important to analyze the recent trends in order to improve the business practices accordingly.
Main aim of technological development is to bring efficiency in production which makes a
company enable to produce quality products in an effective way. It facilitated efficiency that is
important for the success of a company. It is not possible to evolve an advance technique in
short period of time (Bapat, 2018). Technological development is a complete process which
benefitted the company in future. In current Scenario, Sainsbury is highly affected with the
technological development due to the takeover of Argos. It acquire Argos for nearly 1.3 billion.
The takeover helped the company in business expansion by enlarging the current product
portfolio. With this, the company is able to target huge number of customers. Now, they have
nearly 100000 products and 2000 stores across the country. In addition to this, the deal enhanced
online presence of the entity. It improved the efficiency of the organization to use the
technology. As a result the online presence of the business entity enhanced which make them
capable enough to handle the online order receiving from the customers. Post takeover, nearly 25
million customers were able to buy the products online (Sainsbury's bets on Argos takeover for
digital age, 2021). Strong technical infrastructure of Argos helped Sainsbury in meeting with the
demand of customers to buy the products online. The association of both companies is
considered as one of the strongest sales and delivery network in Britain. Hence, the merger
benefitted Sainsbury by enhancing the technical infrastructure. It will bring changes in the
current work setting but also help in maintaining an adequate level of profit in the present
uncertain time. The technical development will help the organization in using e-commerce
platform in order to meet with the requirements of the customers in timely manner.
Impact on strategic decision making: Technological development has a major impact
on strategic decision making of the respective company. It is identified that the respective change
driver will cause changes in the current working environment of the organization. It will affect
the working practice of employees which might become a reason of employee resistance in
future (Olofsson, Hoveskog and Halila, 2018). In this context, it is important for Sainsbury to
take suitable decision so that they can minimize the negative impact of technical development. In
addition to this, they need to analyze the technological advancements constantly in order to take

appropriate decisions for future betterment. Here, they need to make sure to provide extra
benefits to the employees in order to get their consent to work in a changing environment.
Impact on commercial and operational activities: Each and every business entity
generates the revenue through commercial activities. It is about performing daily functions for
the future betterment and enlargement. In current scenario, Sainsbury has been takeover Argos
that will affect the future operations of the entity. Here, Argos is a renowned catalogue retailer
that executes sales via online and offline medium. Technological advancements have a major
impact on daily operations of Sainsbury. It will bring efficiency in production and help the
company in offering quality products to the customers in affordable price. Technology is a
crucial change driver that has major impact on the commercial and operational activities of the
business.
To respond towards technical changes Sainsbury is looking forward to modify its current
practices. For this purpose, they will incorporate advance and unique techniques in business in
order to run the business efficiently. In addition to this, they will also provide suitable training to
the employees so that they can easily cope up with the changes in order to work in an enhanced
and better environment.
Business growth: In business growth, organization expands the operations in order to
earn substantial amount of profit. Here, companies grow the business so that they can earn more
revenue by targeting large customer base. It is possible to achieve business growth via merger,
takeover, expansion, alliances and more. It helps the company to earn high profit and also
strengthen the market position. In addition to this, business growth also enlarges the existing
market share and improves the brand awareness significantly (Green, McKinney Heppard and
Garcia,2018).
Business growth is considered as one of the crucial elements that cause changes in the
organization. It has direct influence on production and profitability. While embarking the
growth, current practices of the entity get change. It also influences the roles and responsibilities
of the employees. In addition to this, business growth can also become the reason of employee
lay off. If an organization expand business at international level then staff need to work in a new
environment, culture that is not easy for them. In present scenario, the Argos is takeover by
Sainsbury with an aim to grow the business. Here, main aim of the entity is to enlarge the

existing customer base with an aim to earn high profit margin in an efficient manner. After the
deal, Sainsbury was able to enlarge its existing product portfolio in order to offer wide range of
products to the customers. It enhanced the revenue of the entity and enable them to offer high
earning per share to the investors.
Impact on strategic decision making: Business growth directly affects the decision
making process of a company. Here, the organization needs to analyze the potential impact of
decisions of the business setting before reaching at the final conclusion. Sainsbury acquired
Argos with an aim to grow the business (Emhmed, Ali and Al-Yousif, 2019). Further, the deal
affected employees, profitability, revenue and daily practices of the company. For this purpose,
administration of Sainsbury need to evaluate the future consequences while taking the business
related decisions. It is important to minimize the negative effect for the betterment of the entity
Impact on commercialization and operation: Business growth is directly associated
with the enhancement in operations of the entity. It is identified that growth enhances the daily
operations of the organization. Here, business growth improves the efficiency of the business
entity and makes the company enable to perform different activities in an appropriate way. In
current scenario, Sainsbury is acquired Argos with an aim to grow and enlarge the business. Post
takeover, they opened several branches of the company and also enlarges the existing product
portfolio. However, the company fired nearly 3500 workers after the takeover with Argos
(Sainsbury's to cut 3,500 jobs and close 420 Argos stores, 2020). It affected the supply chain
practices of the business entity. With use of suitable online tools and techniques, company was
able to deliver the products to the customers timely.
In response of the business growth, Sainsbury needs to analyze the current situation and
take appropriate decision accordingly. To meet with the negative impact of the respective change
driver, they will provide training to the employees and maintain proper communication with
them in order to change their attitude and behaviour towards change practices.
Response towards change drivers
According to the above mentioned information, business growth as well as technological
development has been identified as the change drive that are impacting the company. In context
of Sainsbury, they are responding towards changes in an effective way. For this purpose, the

company has been adopted a model call Lewin change model, components of which are briefly
explained below.
Unfreezing: It is the first step of the respective change management model. This step is
related to develop willingness among employees so they get ready to work in a transformed
situation. Here, the major challenge is to take out the employees from their comfort zone (Abd
El-Shafy and et. al., 2019). In Sainsbury, managers communicate with employees in order to
develop willingness among them regarding changes. In addition, they also motivate workers by
communicating them about the positive impact of changes. Here, managers maintain proper
communication with staff members and make sure that they willingly expect the change
practices. Therefore, proper communication and motivation help manager in create a positive
approach among employees regarding change mechanism in business setting.
Change: It is the second but most crucial stage of change management process. In
this ,changes which are planned in the previous stages are implemented in actual environment.
At this stage, employees actually started to work in a transformed environment (Memon, Shah
and Khoso, 2021). In Sainsbury, managers of the company ensure that employees willingly
accept the new and transformed ways of work. For this purpose, they make the plan and also
communicate it to teammates. Additionally, they also stimulate employees by appropriate
techniques such as monetary and non monetary. However, it is not easy to get support and
acceptance from employees as they are not confident enough regarding the consequences of
change practices.
Refreezing: Under this stage, employees accept the changes but the major challenge is to
retain those changes in the work empowerment for longer period of time (Crosby, 2021). In
context of Sainsbury, managers offer positive reinforcement to the employees so that they not
only willingly accept the changes but also stay with those changes for longer period of time. For
this purpose, they offered positive reinforcement such as rewards, recognition acknowledgement
and more to the employees.
After going through with the above discussion, it is monitored that Sainsbury is
responding efficiently towards the changes. Effective implementation of Lewin change
management model will help the company in introducing and implementing change practices in
an efficient manner. It will allow company to introduce changes and get consent and support of
employees to work in a change atmosphere.

Recommend how the organization could enhance its response
Sainsbury is facing several challenges due to the changes caused by the takeover of
Argos. The major change drivers have been identified as business growth and technological
development. The major challenges which are being faced by the company are resistance of
employees, change an existing working conditions and more. In this situation, it is important to
improve the working conditions so that company can maintain positive environment at
workplace. The response of Sainsbury could be improved by implementing the following ways.
 Employees are highly affected with the changes that are being introduced in the
company. Due to the impact of changes, they need to work in a transformed environment.
Hence, employees are likely to resist the changes as they are in fear from the
consequences of changes (Bamberg and Schulte, 2018). In this situation, Sainsbury needs
to maintain proper interaction with the employees so that they can understand the issues
that are being faced by the employees. It will help the managers to maintain a strong
bond with the workers that will allow them to work as a team in order to meet with future
uncertainties.
 The response of the Sainsbury could be improved through analysis of the impact of
change drivers. With this anlysis, company could formulate appropriate strategies in
order to face the situation in best possible way. It will help the company negative
consequences of change practices.
 In response of the changes, company needs to arrange appropriate training programs for
employees. These training programs only improve the efficiency of employees but also
prepare team to work in a change environment. Here, training will improve the efficiency
and knowledge of employees which further make them capable enough to cope up with
the change practices in an efficient manner.
 The response of Sainsbury could be improved through planning. Here the company need
to anticipate the future situations so that they can prepare up to breed plants accounting
Lee. Planning plays an imperative role in minimising the future uncertainty and also
helps in business success. Through proper planning, company could handle the situation
in an effective way.
It is monitored that Sainsbury could have been improved its response by effective
implementation of above stated recommendations. Proper training programs, forecasting,

planning could prove helpful for the company to meet with the changes in meaningful manner.
With the implementation of the respective recommendations, company could have been faced
the situation in best possible way in order to ensure long term survival in current competitor and
challenging environment.

Conclusion
It is analyzed out of above mentioned data that there are numerous issues related to
contemporary management are emerging in current time. These issues are uncertainty about the
future, hiring and recruiting right employees, wellbeing of employees and more. The above study
is based on the takeover of Argos by Sainsbury for the business growth and expansion. In the
above study, technological development and business growth have been selected as the major \
change drivers. There is discussion regarding the impact of these change drivers on strategic
decision making and commercialization and operations of the company. It is summarized that
company could respond towards the changes effectively by implementing Lewin change
management model in business setting. It is concluded that the response of the company could
have been improved through proper planning training of employees forecasting and more.

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Online
Sainsbury's to cut 3,500 jobs and close 420 Argos stores, 2020. [Online] Available
through: < https://www.bbc.com/news/business-54818644 />
Sainsbury's bets on Argos takeover for digital age, 2021. [Online] Available through:<
https://www.reuters.com/article/uk-home-retail-m-a-sainsburys-idUKKCN0VB0HL