Understanding and Leading Change in Tesco: Impact on Strategy and Operations

This report discusses the impact of change on Tesco's strategy and operations due to internal and external factors. It covers the influence of drivers and barriers of change on organisational behaviour through SWOT and PEST analysis. The report also discusses leadership approaches to deal with change. The subject is Understanding and Leading Change and the course code is not mentioned. The college/university is not mentioned.

Understanding and
leading change

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Compare ways by which change impacts on the organisation's strategy and operations.......1
TASK 2............................................................................................................................................5
Discuss the influence of the drivers of change on organisational behaviour SWOT Analysis5
TASK 3............................................................................................................................................8
Discuss the influence of barriers of change on leadership and decision making...................8
Force field analysis of Tesco .................................................................................................9
TASK 4..........................................................................................................................................11
Discuss the leadership approaches to deal with change.......................................................11
CONCLUSION..............................................................................................................................13
References:.....................................................................................................................................14

INTRODUCTION
Changes are defined as the modifications or alterations in business culture, policies,
strategies and technologies for the purpose of improving organisational efficiency and
effectiveness. There are various types of changes are adopted by the business like structural
changes, remedial as well as transformational changes that lead business towards growth and
development (Lyman and et. al., 2020). Changes are implement in business to transform from
current status to future desirable situation. In this report chosen organisation is Tesco which is
British multinational retailing organisation founded in the year of 1919 by Jack Cohen.
Headquarter of organisation situated in Hertfordshire, England, UK. Respective organisation
provides diversify products such as clothing, financial services and other items. In this report
changes in business and impacts of internal as well as external factors in business are mentioned.
Apart from that barriers in changes that affect leader's decision-making are covered. Various
leadership approaches that initiate changes in business are discussed in this project report.
TASK 1
Compare ways by which change impacts on the organisation's strategy and operations
Organisational change is the terms that defines the alteration of existing business
operations due to some reasons or to enhance the current operation in order to stay competitive
and to sustain the competitive market. Organisation change not only bring impact to the
operations but to the strategies as well (Hosking and Anderson eds., 2018).
Currently due to the global pandemic COVID-19 there is huge change faced by the
organisations of retail industry as the pandemic has caused crisis to the profitability and impacted
supply change, labour etc. Tesco and Sainsbury are the top most organisations of the retail
industry and tends to create some changes which has impacted the operations and strategies of
the company. The below table will compare the changes among these two organisations along
with the impact of that on company's strategy and operations:
Organisation 1: Tesco
Company Changes-
PEST/SWOT
Drivers of
change
Impact on strategy Impact on
operations
Tesco By analysing the For this change in This has impacted This has changed
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companies strength of
huge diversified
product portfolio and
social factors of macro
environment the
company has executed
the change in product
portfolio by adding the
new products that are
completely vegan and
organic. The company
has also added healthy,
nutrients and immunity
rich drinks and food
and at last company has
introduced the “ready
to eat” food packages
for the customers. This
change of product
portfolio is important to
meet the customer
trends, resolve their
issues and also to bring
innovation in the
product by expanding
the product portfolio.
Tesco there are
many drivers but
the key driver for
this change is the
increasing change
in customer
preferences and
changing
customer eating
habits. The
customers are
more leaning
towards healthy,
immunity rich,
vegan food after
the major impact
of Covid-19. Also
with growing
busy schedule and
long working
culture customers
more prefer ready
to eat food.
the low price
strategy of the
Tesco as the new
product of Tesco
are not only
expensive but
highly good in
quality (Bartsch,
and et. al., 2020).
The company
highly prefer low
price for their
products but as the
new products are
organic, ready to
eat and vegan
therefore the raw
materials supplied
by the suppliers
are also high in
cost and their
production cost is
also high.
the company's
current
operations of
unhealthy, fried
chips and other
tasty and less
healthy food
supply. This has
impacted the
regular supply
chain with
suppliers as for
this company has
to connect with
new suppliers
that sell
vegetarian vegan
raw materials.
By analysing
technological factors
and companies
opportunities, In Tesco
there is change of
Behind this
change of Tesco
the reason is
growing
technology and
This change has
impacted the
strategy of the
Tesco positively as
the technological
This has
impacted the all
the usual
operations of the
Tesco at the
2

regular shopping
methods as company
has adopted the
technology to bring the
changes of online
shopping for
customers for this
company has enhanced
the website, shopping
app and also executed
the digital payment
methods etc. the
company has adopted
the change of
digitalization.
Company has also
introduced online
delivery. This digital
development is
essential for the retail
organisation after the
Covid-19 as the people
are more preferring
contactless shopping
experience to minimize
the spread of the
disease (Hosking and
Anderson, eds., 2019).
the increase of
technology
expansion among
the competitors.
This reason has
droved the Tesco
to implement this
change in order to
stay competitive.
The another
driver is the
Covid-19 as the
to reduce the
spread of covid-
19 the retail
sectors is forced
to turn
digitalization in
payment methods,
delivery options
etc.
changes are
considered as the
boon in the current
business
environment
(Herath and
Herath, 2020).
Tesco has also
implemented new
strategies related
tot he safety of the
online customers
and also to reduce
the threat of data
breaching within
the organisation.
store as the new
operations are
added such as
online delivery
has changed the
pattern of
payment and on
the store billing
etc. the change in
website, online
shopping app has
also eased the
working as this
has speed up the
Tesco
operations.
Company Changes-
PEST/SWOT
Drivers of Impact on Impact on
3

change strategy operations
Sainsbury By analysing the
companies threat
and social
changes in the
external
environment the
company has
adopted the safety
measures. In
Sainsbury there
is operational
change in which
workers are
asked to wear
masks, gloves
and get sanitized
regularly for the
safety. For the
safety from
spread of corona
virus company
has also installed
internal testing
system for the
workers and other
higher level
employees.
This change of
Sainsbury is
completed due to
the spread of the
COVID-19. The
legal factors
regarding the
safety of the
employees and
the government
strict rules has
forced the
company to
implement all
these changes
(Lu,
Papagiannidis and
Alamanos, 2018)
.
This change has
shifted the
concern and
strategy of the
Sainsbury from
other employees
relations and
human resource
planning to the
enhancement of
the safety of the
employees at the
stores and offices
of the Sainsbury.
The companies
operations are
highly impacted
with this change
as the company
has to establish
sanitization
machine at each
department,
provide the
workers with new
gloves and mask
daily. Also by this
company has to
hire new doctor
and nurses for the
test of Covid-19.
On the basis of
the growing
Behind this
change in
This change of
Sainsbury has
This has impacted
the HR operations
4

technology the
Sainsbury has
changed its
training methods.
To introduce the
skills among the
employees related
to new
technology
Sainsbury has
introduced the
changes in the
recruitment,
training and
hiring tactics.
Sainsbury the key
driver is the
technology and
need of the
organisation for
the talented and
skilled employees
in order to gain
competitive
advantage.
directly impacted
the HR strategies
related to the
training and
development of
the employees of
the Sainsbury.
With the
technology
changes in the
company, the HR
department is
forced to
implement the
technology based
training to
educate the
employees about
new technology.
as the HR has to
be more aware
about he
technology based
operations in
order to train the
employees. Also
the individuals
hired are required
to fulfil the
technical
requirements
(Lyman and et.
al., 2020).
TASK 2
Discuss the influence of the drivers of change on organisational behaviour SWOT Analysis
Strength- Strengths are the part of internal environment which defines some productive
features of any of the industry or organization. In case of Tesco, it has its diversified product
portfolio which is very helpful for the company to increase the profit and production. Also if we
focus on the financial situation of a company which is very good and which is very helpful for
the company as it is helping in returning a very good investments and huge production (Wood
and Bischoff, 2019).
Weakness- These are the negative factors and part of internal environment which
minimize the strength of company. In relation to Tesco, it has so much of gap in range of product
5

which are sold by company, this will result in a new competitor in the market. Also it is having
lack of innovation which results in cutting costs as this is considered as main way to boost
income.
Opportunity- This is a part of external environment where a business could exploit to its
advantage. In context to Tesco, if we talk about its technology of it then it can provide the great
opportunity through online shopping and digitally payment system which can help every citizens
to maintain a proper hygiene due to Covid situations.
Threat- This is a part of external environment which can cause trouble for the business.
In Tesco, Covid 19 is becoming a great warning for this company as it is affecting the supply
chain of the company which is very important for every company (Wiesner, Chadee and Best,
2018).
PEST Analysis
Political- This factor is related to the government rules or regulations and their legal
issues which can impact firm's ability to be successful. In Tesco, political factors like tax rates,
acts of legislation etc. affects this company as it increases the demand of commodities and
diversify its workforce.
Economic- This is the main factor for any of the company which includes inflation rate,
economic growth etc. plays a vital role in success of the company. In case of Tesco, it contains
various economic factors that can affect its sales,profit,cost etc. which decrease the demand for
many goods that can impact the demand required to produce goods (Viswanadham, 2018).
Social- With this factor, a firm can analyse socio-economic environment of the market to
understand customer's needs in the market and also can examine cultural trends, demographics
etc. In case of Tesco, it can include the habits of customers like if a customer is a vegetarian or a
customer is demanding for healthy eatable products. Also in this busy schedule, most of the
people prefer readily made food to eat. So this factor is also definitely affecting the market.
Technology- This factor is impacting the business in a very positive way which includes
technological advancements, role of internet etc. In context to Tesco, its pair-up with the amazon
created a great advantage with online shopping and hassle free billing which will help the
customers to save their time. This is helping the customers with their convenience and company's
reducing of costs (Van Rijmenam and et. al., 2019).
6

Change Internal
/
external
Impact on leadership
behaviour
Impact on team/
departmental
behaviour
Impact on
individual
behaviour
measures to
minimise
negative
impacts
Technolo
gical
change
Internal This change has
majorly the leadership
behaviour of the
leaders and managers
of the Tesco. Due to
this change the leaders
have to provide proper
training and guidance
to the employees
regarding the new
technology based
systems (Ma and
Kurscheidt, 2019).
Also the leadership
style for this is
changed to
transformational in
order to make people
comfortable with the
changes. Leaders of
Tesco now use
technology to monitor
the employees
performance and
customer satisfaction.
This huge change
of technology
based online
shopping, e-
payment and
online delivery
has impacted the
departments like
IT, Finance,
operations etc. the
responsibility and
functional of IT
department has
increased due to
these changes and
also they are
required to hire
more skilled
employees. The
finance team has
been impacted as
they have to keep
e- records of e-
money. The
logistics and
operational team
has to hire.
The individual
employees of
the Tesco
faced a huge
differentiation
in the
company's
daily
operations.
The IT
individuals
highly
impacted with
the work load.
The customers
were
positively
influence as
they found
online
shopping, e-
payments and
online delivery
convenient,
less time
consuming an
productive
form of
To reduce the
negative
impact on
employees
such as work
load company
is suggested to
hire new
employees and
also use
divisional
organisational
structure by
installing IT
department in
each
functional area
(Mahmoudian,
F. and et. al.,
2021).
7

change in
Tesco.
Operatio
nal
change
External The huge change in
product portfolio has
impacted the leaders
of Tesco as they have
to lead the producers
to pay huge attention
to every detail of
hygiene and healthy
raw materials. Also the
leaders have to take
care of
commercialization of
these product and also
to take care of price,
quality and taste along
with its healthiness.
The leaders have to
mange the huge
portfolio again.
With this change
the most impact
team of Tesco is
the production
team as they have
to produce new
product that can
met the customer
demand and also
can bring
profitability to the
organisation. The
marketing team is
also impacted as
they have
important role in
commercializatio
n of new product
(Nikhashemi,
Jebarajakirthy and
Nusair, 2019).
This has
majorly
created the
impact on the
customers
those who are
not vegan and
only prefer to
eat tasty and
packed food as
they may not
like the taste
and show
resistance for
the new
products. The
customers who
prefer vegan
and healthy
food will be
positively
influenced
with this
change of the
Tesco.
To minimize
the negative
impact the
company must
test the
product in
niche market
before the
launching. The
company must
keep the price
low and
quality high in
order to attract
customers for
good sales.
8

TASK 3
Discuss the influence of barriers of change on leadership and decision making
Discussion of force field theory
Force field theory is define as the framework that is implement by the organisation to
identify the factors that influence business in positive as well as negative manner. According to
this change theory, there are various forces are exist in business environment that either support
the changes or create barriers or problems to implement changes in business (Bartsch and et. al.,
2020). The theory ensures effective implementation of changes that facilitates business to gain
competitive advantages then other competitors. Unfreeze is defined as the force or barrier that
develops quasi-equilibrium in organisation. Next step of theory represents imbalance through
increasing drivers by reducing the changes among various obstacles. In last step of theory,
changes are implemented to improve organisational efficiency. Main objective of this theory is to
determine the factors that facilitates business to enhances effectiveness of management changes
as well as identify the factors that are essential for to address changes.
Changes that are introduced by the Tesco
There are various changes are done by the Tesco according to business environment to
remain competitive and sustain for longer period of time. Respective organisation develop digital
capabilities during the pandemic of Covid-19. There are various own websites are developed by
organisation to enhance revenue and online buying. It provides competitive advantages to Tesco
during the pandemic.
 Tesco bring changes in its product portfolio through including various innovative
products. Organisation includes vegan and organic products that are healthy and
good in taste that attract customers. Organisation also stretching its product line
through providing ready to eat products that are beneficial for working customers.
Commercialisation of these products enhance organisational customer base and
market share.
Tesco implement various safety measures in organisation to ensure safety of its
customers and employees. In-house testing and one-in-one-out system is adopted by the
organisation that reduce the spread rate of coronavirus. Respective organisation provides various
protective equipments like disposable gloves, face covers and alcohol based hand gel that
enhance brand image (Nikhashemi, Jebarajakirthy and Nusair, 2019).
9

Force field analysis of Tesco
 Brainstorm all the possible forces
Tesco's driving forces and obstacles-
The following company adopted two major changes like technological change where they sell
their products more on online and this is also consider as beneficial in pandemic situation.
Secondly, Tesco involve organic and vegan food items in their food portfolio to attract more
customers because most of the customers prefer to have healthy food items to maintain their
health.
Driving forces-
Technological advancement- It is essential to adopt advanced and modern tools and machines
for having more commercialization business in Tesco. Hence, adopting new and updated
machines and software, Tesco gain benefit to sell more products and gain the advantage of
technological advancement.
Attract more customers- Tesco also adopt changes in their product portfolio and introduce to
have healthy food items which is a attraction point for those customers who are health conscious.
Today most of the customers are searching those food products which will help them to maintain
their health and also have taste to have interest to eat such food items. Hence, the change of
Tesco to involve vegan and organic food items in their portfolio will help them to increase the
number of customers as well as brand image in the market (Ma and Kurscheidt, 2019).
Restrain forces-
Costly- For having changes and adopt new and advanced technology, Tesco have to invest high
and it become costly foe them to promote their business for commercialization changes. It does
not only involve to purchase new machines and tools but it also involve to train employees to
operate those machines and tools. Hence, it is costly for them to make changes and in their
technological factor.
High bargaining power of suppliers- In context of adopting changes related to develop new
portfolio and adopt organic and vegan food items, the bargaining power of suppliers is high
because there are few suppliers who supply organic and vegan food items. Hence, they will
charge prices according to them selves.
The ways by which Tesco can reduce their obstacles-
10

Tesco can adopt those tools and machines which are actually required in their organisation.
Secondly, they can also analyse the skills and talents of their workforce and adopt technologies
according to their skills which will reduce the expense of training. They can also prepare a fixed
budget and work accordingly. This will help to control over expenses. For reducing the high
bargaining power of suppliers it is essential for Tesco to purchase food items from more than one
or few suppliers so that in case any supplier refuses to supply their product to company then they
will quickly switch to another supplier.
Achieving organisational goal by reducing obstacles-
Tesco is able to achieve their organisational goal by adopting new technology and promote their
commercialization business. Customer satisfaction is one of the main objective of Tesco which
they gain by selling their products to their customers through online mode. Secondly, Tesco also
achieve their organisational goal of gaining more customers by attracting health conscious
customers by offering them vegan and organic food items. These changes will help Tesco to
grow well in Pandemic situation.
Reflection
Using the force field analysing I am able to analysed that technology acts as the key
driver for the changes in the organisation. Therefore, it is recommended to the company like
Tesco to use the technological advancements as their strength in order to meet the company's
objective of innovating new products that can meet the customers needs at low cost. Also
through different analytical frameworks the Tesco should analyse its drivers of forces and
external environment in order to exploit market opportunities that can meet the organisational
objectives and also increase the efficiency of organisational behaviour.
TASK 4
Discuss the leadership approaches to deal with change
Intended change in organisation
Tesco has adopted operational and technological changes in its business in order to
sustain and stay competitive. The company has adopted the change of product portfolio in order
to meet the customer habits of eating and also to introduce differentiation of its products from the
competitors (Nikhashemi, Jebarajakirthy and Nusair, 2019). This change of Tesco is useful in
increasing the sales after the covid-19 and will also help in meeting customer trends. The Tesco
11

has also brought the change of online shopping, digital payments and online delivery. All these
technological changes has exploited the market opportunity of Tesco and also helped the Tesco
to create the safety for customers from COVID-19. The change of digitalization in Tesco is good
in achieving the competitive advantage and also e-commerce will increase the sales of
organisation, market share, sustainability and increase customer base and loyalty.
Drivers for change and importance of these change
Technological advancement: the change of digitalization such as online shopping website, app,
online payments, and online delivery executed by Tesco are all due to the technological
advancements. The technology is the key driver for these changes implemented by the Tesco.
This change is highly helpful to Tesco in improving their online presence among customers and
also increase the sales and profitability. Through this company will have ease of operations and
also their will be contactless shopping for customers during and after covid-19.
Changing customer habits: the change in the diversified portfolio is due to the changing
customer habits of eating. The customers after highly concerned for their health and therefore
changed the eating habits towards healthy and immunity rich food. Many customers are
transformed into vegan therefore there is increasing demand of vegan food products. This change
is beneficial for Tesco as by this company will increase the loyalty among customers as they will
meet customer preferences and demands. This will also create product differentiation and help in
gaining competitive advantage.
Lewin's model of organisational change
The Kurt Lewin's change management model consist of three stages to for the successful
implementation of the changes. In context of the Tesco, the Lewin's change model is used and
discussed below:
Unfreeze: In this stage the behaviour of individual is analysed in respect of the changes as a
quasi equilibrium state. For the Tesco it is important to understand the behaviour of employees
and their resistance for the change (Wu, Ai and Cheng, 2019). Because resolving issues is
essential before starting the change execution. In this stage Tesco spread awareness of changes in
the organisation among the employees and also state the reasons to do so. During this stage the
employees are provided open communication to present their perspective for the change and
their issues are also resolved for the successful process of change implementation.
12

Change process: In this stage the Tesco will implant the changes in the organisation with the
complete resources, understanding, labours and the process. Tesco started to execute the changes
in the shopping format by introducing new technology oriented e- commerce shopping portal.
Tesco has derived a business plan to implement the changes effectively in order to achieve
competitive advantage.
Refreeze: the stage in which company implemented all the changes as per the plan and
converted them as the permanent and stable changes of the company. Tesco has executed the
technology efefctively within the organisation to incrsae the working speed and execution of the
resources optimally (Wiener, Hoßbach and Saunders, 2018).
CONCLUSION
From the above report it is concluded that Change is common word in current business
environment as with the growing technology, globalisation and many other drivers are changing
businesses rapidly. It is analysed that Tesco has faced the huge changes in its operations, product
portfolio, technology etc. due to the drivers like customer habits, technological advancements,
competitive rivalry. Hence, the changes of Tesco has helped the company to increase its sales
and profitability after the impact of COVID-19. The changes has provided the customers a
satisfaction of convenient shopping and new products has increased the customer base.
Therefore, to implement the changes effectively in organisation by resolving resistance forces
company has used the Kurt Lewin's change management model.
13

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