Understanding and Leading Change in Organizations

This report discusses the impact of change on organization's strategy and operations, drivers of change, and ways to minimize negative impacts. It also explores the effects of internal and external drivers of change on leadership, team, and individual behavior. The report includes a critical evaluation of organizational response to change and recommendations to minimize negative impacts.

Understanding and
Leading Change

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Organisations where there has been an impact on organisation's strategy and operations3
M1 Different drivers of change along with the types of organisational changes...................5
TASK 2............................................................................................................................................6
P2 Ways in which internal and external drivers of change affect leadership, team and
individual behaviour...............................................................................................................6
M2 Theories and models to critically evaluate organisational response to change...............7
P3 Measures to minimize negative impacts of change...........................................................8
D1 Conclusions and recommendations with valid justifications...........................................8
TASK 3............................................................................................................................................9
P4 Barriers for change and their influence on leadership decision-making...........................9
D2 Critical evaluation of use of force field analysis............................................................11
TASK 4..........................................................................................................................................11
P5 Leadership approaches to dealing with change...............................................................11
M4 Evaluation of the extent to which leadership approaches can deliver organisational change
..............................................................................................................................................12
D3 Critical evaluation of effectiveness of leadership approaches and models of change
management..........................................................................................................................12
CONCLUSION..............................................................................................................................12
REFERENCES .............................................................................................................................14

INTRODUCTION
Change is an important concept which needs to be implemented by all the companies so
that they can sustainably survive in the ever-changing market conditions which also include
changing consumer taste and preferences. Due to increase in globalization and evolving
technology businesses are forced to change their methods, strategies, processes etc. so that they
can minimize organisational cost while enhancing their profits (Al-Haddad and Kotnour, 2015).
This report is based on two companies dealing in similar sector H&M and Arcadia Group Ltd.
which will help in understanding how organisations lead change so that they can survive
successfully in the market. Arcadia Group Ltd. is an international retailing company located in
London, UK which manages fashion retail stores and outlets along with owning the high street
clothing retailers like Burton, Dorothy etc. H&M is a multinational clothing retail company
which is known for its fast fashion clothing for all the people. This report will discuss about the
drivers of change along with their impact on organisation's strategy and operations. Further the
barriers of change are also discussed and their influence on leadership decision-making so that
changes can be dealt with in an appropriate manner.
TASK 1
P1 Organisations where there has been an impact on organisation's strategy and operations
Organisational strategies are the set of plans, actions, structures which are formed based
on the vision and mission of company so that the long-term goals can be achieved. It is important
that an effective strategy is formulated by the company so that it can gain a competitive
advantage in the market which will help it in increasing its sales and thereby its profits. The
dynamic business situations must be analysed so that effective strategies can be adopted which
can help it in dealing with the changes by formulating efficient organisational strategies
(Cacciolatti and Lee, 2016). A comparison between organisation's strategy are described as
follows:
Basis Arcadia Group Ltd. H&M
Political
changes
Impact: Due to the uncertainty of Brexit,
the political situation of UK has been
unstable which has affected the retail
Impact: Due to Brexit the prices of the
company products may rise and also
the delivery of products in UK will be

market as the trade between EU has
become expensive, consumer spending
has reduced on consumer goods and the
fluctuation in currency has also affected
the retail sector.
Strategic changes: As the prices has
increased in all the sectors due to Brexit
the company must change its strategy so
as to make things available to customers
at low prices so that the sales of company
continue to increase. For this the pricing
strategy of company must change from
premium pricing to economic pricing so
that branded clothes can be made
available to customers at low prices
(Cummings, Bridgman and Brown,
2016).
Operational changes: The company can
sell its products on the online platform
which will help it in increasing its sales
and also save itself from inventory costs
due to low customer spending.
delayed which might affect the
company's business in UK. This has
also affected the company's sales and
revenue.
Strategic changes: The company has
adopted a transformation strategy
through which it is offering its products
online, through physical stores and
digital marketplaces. This has helped
the company in increasing its sales
even with the uncertainty in Brexit
which might have affected company
profits.
Operational changes: The company
has increased its focus on developing
customer focused techniques so that
maximum customer satisfaction can be
obtained through feedbacks, use of AI
etc.
Social
changes
Impact: The customer's spending pattern
has changed recently with an increased
focus on spending on studies and
vacations than on consumer goods which
has affected the company sales. Also the
uncertainty in Brexit has decreased the
willingness of people to spend more on
clothes.
Strategic changes: The company needs
Impact: As the number of brands in the
market are increasing the customers
focus are getting distributed among all
the competitors present in the market.
This has affected the company sales
and decreased its revenue (Dawson and
Andriopoulos, 2014).

to change its pricing policy so that they
can be offered clothes at low prices along
with an increased focus on CRM which
will help in maintaining loyal customers
so that a competitive advantage can be
gained.
Operational change: The company must
include refund and return policies so that
the shopping experience of people can be
enhanced along with encouraging people
to spend more.
Strategic changes: The company can
promote its online retail branding so
that it can efficiently position its brand
in the market. Also regular offers and
discounts can help it in attracting the
attention of customers.
Operational change: The company
can maintain good customer relations
by focusing its strategies, store design,
online marketing design etc. in a
customer friendly manner so as to
attract more attention of customers.
M1 Different drivers of change along with the types of organisational changes
There are both internal and external drivers of change which force the business to change
their strategies and processes so that their sustainability can be maintained over a long time while
maintaining its competitiveness. In reference to Arcadia Group Ltd. There are two types of
changes which include:
Internal: These are the internal factors of a company which influence the business to
implement change such as resources, structure, people, policies etc.
External: These are the external factors which influence the business to implement
change like governmental policies, changing customer demands, competitors, evolving
technology etc.
Types of organisational changes: Remedial changes: These changes can be adopted by Arcadia Group Ltd. when there is a
decrease in company's performance due to financial distress or due to some other factors.
These are remedial changes which are done to correct the strategies which were
previously fruitful for the company but now are detrimental (Dick and et. al., 2018).
 Transformational changes: These changes can be adopted by Arcadia Group Ltd. so that
the company can change its strategies with the changing environmental condition. These

changes are important to be made so as to remain competitive in the marketplace by
regularly examining the cultural trends, understanding the change in customer demands,
tracking the technological advancements etc.
TASK 2
P2 Ways in which internal and external drivers of change affect leadership, team and individual
behaviour
The organisations have to make changes in their strategies, processes and structures
because of the influence of internal and external drivers of change which also affect the
behaviour of all the employees linked to the company. The psychological factors and attributes
of individuals affect team dynamics and leadership in the company which also create an impact
on their performance. Arcadia Group Ltd. In order to implement effective change in ther
company needs to identify the internal and external factors which can affect the company and
can force it to maker changes in its strategies (Doppelt, 2017).
SWOT analysis : This helps in analysing the internal business environment of the company and
help it in identifying the strengths and weaknesses of the company along with the identification
of threats and opportunities present in the market.
Strengths Weaknesses
 The company has a large customer base
and also deals in renowned fashion
brands.
 The customer service provided to its
customers helps it in building its
customer base and also increase in its
customers (Hayes, 2018).
 The company sell its products at high
prices which focus its products to
specific section of society.
 The financial management of company
is weak which affects the growth of
company.
Opportunities Threats
 The company can sell its products on
the online platforms which will help in
increasing its sales.
 The company can expand its stores in
 There is an increase in competition
from other fashion brands like H&M.
 There is an increased change in the
customer preferences and tastes

untapped markets. regarding fashion clothing.
PEST analysis: This analysis help in understanding the external factors which influence the
company to make changes in the company strategies and functions:
Political factor Economic factor
The change in economic conditions of UK due
to uncertainty in Brexit has affected the
company and can also affect the company to
change its strategies so tat it can survive in the
market.
Due to increased inflation and uncertainty in
Brexit the prices of company products have
increased which has decreased company sales
(Komives, 2016).
Social factors Technological factor
As the spending pattern of people is changing
due to their changing preference of purchasing
consumer goods the company needs to change
its pricing strategy so as to increase company
sales.
As there is a dynamic change in the technology
the company needs to change its strategies so
that the company can gain a competitive edge
in market and can decrease its cost thereby
increasing its profits.
M2 Theories and models to critically evaluate organisational response to change
The Burke Litwin model of organisational change defines and establish a cause and effect
relationship between the drivers of change on organisation. The model shows various drivers of
change and ranks them in terms of their importance (Lawrence, 2015). This model was
developed in 1960 by George H. Litwin and W. Warner Burke. This model helps the leaders of
company in identifying the most important factor which can lead to changes in the company so
tat they can take appropriate steps which will help in minimising the negative effect of such
factors. This model is based on assessing the organisational and environmental factors so that
changes can be adopted in the company successfully. The most important factor which affect the
company to make changes in company are the external factors due to which companies haver to
change their mission and strategy along with the organisational structure and culture so that
changes can be effectively implemented in the company. The external factors must be analysed
so that potential threats can be efficiently dealt with along with taking the opportunities

prevailing in the market. Thus this model can be effectively used by Arcadia Group Ltd. so that
changes can be efficiently applied which help it in gaining a competitive advantage in the
market.
P3 Measures to minimize negative impacts of change
As changes are implemented in the organisation there are various kinds of behaviour of
all the employees associated with the company. In order to minimize the negative impact of
change in the company so that employees can be motivated to perform their work in an efficient
manner which will help the company in achieving a competitive advantage in the market are: Employee engagement: In order to decrease the negative impact of implementing change
there should be an increased participation of employees in decision-making which will
help them in adopting the change in an efficient manner. Also as the value and worth of
their views and opinions will increase in company their involvement in the organisational
activities will increase and they will adapt to change easily. They will also be encouraged
to participate in organisational activities and using their skills in an efficient manner
which will help in reducing the negative impact of change (Maccoby, 2015).
 Effective communication: Communication is an important tool which will help in
spreading the information in an efficient manner to all the employees so that they can
interpret the information in the manner desired. This help in increasing their
understanding about the reason for change along with influencing them to adapt to
change so that organisation can remain competitive in the changing business
environment.
D1 Conclusions and recommendations with valid justifications
Change impact analysis was developed by Bohner and Arnold which helps in identifying
the consequences of change along with estimating the need to bring changes in the company. The
risk of implementing change can be estimated by analysing the effect of such change resources,
efforts and schedules. From the above discussion it can be analysed that there are various internal
and external drivers which affect the company due to which changes are to be brought so that the
sustainability of company can be maintained (Muldoon, 2018). The internal factors can be
changes and controlled by the managers of company while the external factors lead to change in
existing company strategies. Effectively implementing change in firm's internal organisation of
work along with technological advancement can help Arcadia Group Ltd. In gaining their goals

and objectives in the changing business environment. Following are the recommendations
through which implementation of change can be efficiently done in the company:
 The managers and leaders of company need to effectively monitor and manage resistance
among employees due to change so that they can positively adapt to the changer and
improve their performance according to the changing business environment.
 The dependencies of changes need to be analysed so that all the factors on which change
depends can be known so that change can be efficiently implemented in the company.
 The participation of employees in decision-making must be increased so that they can
efficiently adopt the changes and use their skills to implement such changes.
 Effective communication must be implemented in the company so that all the information
related to change can flow between all the employees and they can know about the
importance of change and how they need to execute their task (Salman and Broten,
2017)).
TASK 3
P4 Barriers for change and their influence on leadership decision-making
The time when company's manger implements a change in the business they face a lot of
barrier in implementation process and for that they have to deal suitably to get the changes
effectively in the business. There are various barrier that influence the leadership decision-
making that are as follows:
 Unknown current state: Arcadia Group Ltd must take care about the current situations
and condition of the business and then changes will be implemented after the complete
analysis.
 Ineffective communication: To implement the change it is need that Arcadia Group Ltd
must communicate that with all the members by which they also easily accept the change
and use their skills and ability to accomplish the goals and objective of the company.
 Complexity: Complex environment will be created when the changes, process, product is
not cleared to the employees. This barrier have the negative impact of the growth of
Arcadia Group Ltd.
 Less employee involvement: It is important factor for Arcadia Group Ltd that whenever
the changes is introduced it is clearly reached to the employees and they easily

understand that as well. The main focus of company is to take the feedback of the
employee and get assured that they accept the change.
M3 Use force field analysis.
Force field analysis is the analysis that provides a brief about the change behaviour which
is important for the company to get to know that what is in favour of the company or what is not.
The driving and restraining force are the two forces in this frame and there is no change required
in equilibrium condition between the two forces. The manager of Arcadia Group Ltd balance the
driving and restraining force in the organisation to minimise the force resistance. Thus it helps
the company to implement the change in effective and efficient manner. This also helps the
company for decision -making process and the effective rules will be formed to emphasis the
driving force by which employee can easily accept the change and works with the positive
attitude and it introduce a positive change for the organisation as well.
Illustration 1: Force Field Analysis - Kurt Lewin. 2017
Source : Force Field Analysis - Kurt Lewin. 2017
D2 Critical evaluation of use of force field analysis
The force field analysis provides a clear brief about the various forces that shows the
positive and negative impact of the changes in the organisation. That helps the manger for plan

and implement the decision effectively in the company that leads to fulfil the company's goals
and objectives. It also analyses the influencing factors that introduce at the time of
implementation of change. Also measures the strength and weakness that helps the manager in
the decision-making process. It also helpful to vanish the communication barrier by which there
is a formation of smooth channel for communicating. Furthermore, get the feedback of the
employee also leads the effective medium and helps in decision-making process, making clear
understanding goals for the employee. And there is a collective efforts of all that company
achieve their targeted goals at a specified period of time.
TASK 4
P5 Leadership approaches to dealing with change
The manager of Arcadia Group Ltd uses effective leadership approaches to deal with the
changes that helps the company to implement the change successfully. The different approaches
of leadership helps to influence, motivate,control the employees to deals with the changes and
also makes sure that changes brings the positive impact in the Arcadia Group Ltd. The
leadership approaches that uses to manage the workforce and to deal with change in a effective
manner are as follows: Democratic leadership: This is the most impressive leadership style that gave permit to
the lower level employee to take part in decision-making process of the company. This
leadership theory deals with the fact that all the employee of the Arcadia Group Ltd are
equal as everyone takes part in the growth and development of the company thus
company takes feedback of all the employees (Sammut‐Bonnici and Galea, 2015). This
helped to create the employee engagement by equating them equal and considered
everyone's point and then make the decisions. It is a systematic integration of each
individual's efforts to accomplish the goals and target of the company. There are some
negative impact as it takes a lot of time to take feedback of all and then made the decision
and somehow it is impossible to match everyone thinking and that creates conflict in the
company.
 Situational leadership: It is the approach that deals with the different situations of the
company. Arcadia Group Ltd uses situational leadership to implement the change and to
deal the different situations as well and comes with the best result. It is the most
comfortable approach as it can be applied at every situation and comes with effective

result. Sometimes shows the negative impact as well like it is used for to deal with on
time situation and doesn't applied for to achieve long term goals.
M4 Evaluation of the extent to which leadership approaches can deliver organisational change
Arcadia Group Ltd manager's applies Lewin's change management model in their
company to follow the changes in an effective manner and the manager also knows about the
different changes that affect the company policy and working structure. This model defines three
factors unfreezing, changes and refreezing. Unfreezing means to initiate and accept the change
process and also keep boost, motivate the employee to accept the change too (Scott, 2018).
Change is a factor where company works with the different leadership styles to communicate
with all the members of the company. The last is refreezing that describes that the change is
successfully applied in the company and everyone is comfortable towards the implemented
change. There is negative impact also because it needs a formation of structure to implement the
change and that is time- consuming as it need market analysis to apply the change for effective
result.
D3 Critical evaluation of effectiveness of leadership approaches and models of change
management
It is analysed that situational leadership is the most effective leadership approach to
implement the change in the Arcadia Group Ltd. This leadership style includes the participation
of every employee of the company and it develops the healthy environment for all to work. It
also deals with employee engagement that include strong communication base that motivates the
employee to work with even more commitment. And sometime it has negative impact as well
because it creates confusion to accept the change in an effective manner.

CONCLUSION
From the above report it can be analysed change implementation is important in an
organisation so that they can deal with the changing market conditions in an efficient manner
which will help them in gaining a competitive edge in the market. Also it can be seen that there
are various internal and external drivers which force the organisation to implement change so
that they can survive in the market. Implementation of change can have both positive and
negative impact on employees of company and the negative impact can be dealt by applying
several approaches, theories and models which also help the managers in taking efficient
decisions. Leadership styles that are adopted by the leaders of company can help in effectively
implementing change and managing the workers so that change management can become easier.

REFERENCES
Books & Journals
Al-Haddad, S. and Kotnour, T., 2015. Integrating the organizational change literature: a model
for successful change. Journal of Organizational Change Management. 28(2). pp.234-
262.
Cacciolatti, L. and Lee, S.H., 2016. Revisiting the relationship between marketing capabilities
and firm performance: The moderating role of market orientation, marketing strategy
and organisational power. Journal of Business Research. 69(12). pp.5597-5610.
Cummings, S., Bridgman, T. and Brown, K. G., 2016. Unfreezing change as three steps:
Rethinking Kurt Lewin’s legacy for change management. Human relations. 69(1).
pp.33-60.
Dawson, P. and Andriopoulos, C., 2014. Managing change, creativity and innovation. Sage.
Dick, T. B. and et. al., 2018. Fundamentals of leading, tools for managing, and strategies for
sustaining change. American Journal of Health-System Pharmacy. 75(19). pp.1450-
1455.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Hayes, J., 2018. The theory and practice of change management. Palgrave.
Komives, S.R., 2016. Leadership for a better world: Understanding the social change model of
leadership development. John Wiley & Sons.
Lawrence, P., 2015. Leading change–Insights into how leaders actually approach the challenge
of complexity. Journal of Change Management. 15(3). pp.231-252.
Maccoby, M., 2015. Strategic intelligence: Conceptual tools for leading change. Oxford
University Press, USA.
Muldoon, J., 2018. Kurt Lewin: Organizational Change. The Palgrave Handbook of
Management History, pp.1-18.
Salman, Y. and Broten, N., 2017. Leading Change. Macat Library.
Sammut‐Bonnici, T. and Galea, D., 2015. SWOT analysis. Wiley Encyclopedia of Management,
pp.1-8.
Scott, E.S., 2018. Leading change. Leading and Managing in Nursing-E-Book, p.320.
Online
Force Field Analysis - Kurt Lewin. 2017 .[Online] Available through:<https://www.change-
management-coach.com/force-field-analysis.html>