1UNDERSTANDING ORGANIZATION Introduction Woolworths is facing the problem of sales decline that can have a bad impact on the future of the company. The aggressive promotion that is carried out by the competitors has given rise to the organizational issue within Woolworths Group Limited. It has been found that the operating profit of the company hasdeclined that has a detrimental effect on the company. Woolworths Group Limited is the name of an Australian company that has retail interest within Australia and the New Zealand. Woolworths Group helps in looking after the trusted brands of Australia and the company wants to create world-class experience for the peoplelivingacrosstheworld(Woolworthsgroup.com.au2019).Woolworthsisthe supermarket chain and it operates 995 stores in Australia. The company has 115000 team members who are instrumental in providing the customers with the superior service that proves to be of benefit for customers. The company has distribution centers along with the support services that works for the convenience of the people. The company works closely with the farmers of Australia that helps in taking care of the fact that best products are made available to the people. The organizational structure consists of the Board of Directors, Group Executive Committee along with the Board Committees who looks after the operations of the company.Thisreportdiscussesabouttheissueprevailinginthecompanyandthe organizational theories that can prove to be useful in analysing the case. The report elaborates on the organizational culture along with the institutional theory that can be applied to that of Woolworths Group Limited. The report also talks about the limitations of the organizational theories and the lessons that can be learned by a manager after analysing the case of Woolworths Group Limited. Organisation Theory Organisational Culture and the Institutional Theory are the two theories that can prove to be of great use in analysing the case of Woolworths Group Limited. Organisational culture helps in encompassing the values along with the behaviours that can contribute to the social and the psychological environment of a company. It influences the manner of interaction of people along with context in which knowledge can be created. Organizational culture is indicative of collective values, beliefs along with the principles of the members of an organization. The organizational culture can be said to be determined by the market, technology, management style along with the kind of the employees in a company (Alvesson and Sveningsson 2015). The organisational culture can be said to be appropriate as it can
2UNDERSTANDING ORGANIZATION prove to be a useful lens that can help in explaining the reasons behind the decline in the sales of Woolworths Group Limited. The management in the company did not give attention on the marketingeffortsthat has brought down the salesof the company. The lack of the engagement on the part of management has reduced the quality of the products that has adversely affected the sales of the company (Bortolotti, Boscari and Danese 2015). Institutional theory refers to the resilient aspects of the social structure that acts as the authoritative guidelines in relation to the social behaviour. Institutional theory talks about how the deliberate along with the accidental choices can make the institutions mirror norms along with the values of that of organizational field. Institutional theory helps in emphasizing on normative effect of environment on that of the organizational activity (Cornelissen et al. 2015). The institutional theory can be applied to the case of Woolworths as it can help in providing a complex view of an organization. The primary theme of the Institutional Theory is that the organizational structures within the framework of the industrialized countries are made owing to the policy makers that can have enormous amount of effect on the companies. The organizations can be said to be the agencies of the state and they are entrusted with the responsibility of carrying out the research activities that can help in the development of a company (Lok 2019). The external pressures have been responsible for the changes in the policies of the company that have taken the attention away from that of the performance of the tasks. There have been assumptions on the part of senior management of Woolworths that has reduced the performance of the company. Application of the theories to the Organizational Issue The organizational culture indicates the manner of performing things in a company which reflects the personality of the company. The shared basic assumptions prevalent in a company can have effect on the performance that is delivered by the employees of an organization. Performance potential of the sales leadership team can be said to be elevated owing to corporate alignment of the values of the employees (Driskill 2018). It can be said that organizational culture can pave the path for increased performance as it can help in providing inspiration to the employees. The good culture present in a company can help in the generation of competitive advantage of a company over the other companies. The CEO of the company has not created a vision in front of the employees that can persuade the team of carrying out the best work in the company. The people in the executive leadership of the company has not made communication a priority that has a negative effect
3UNDERSTANDING ORGANIZATION on performance of employees. The company lacks in regard to a structured communication system that can help in connecting the stakeholders in Woolworths Group Limited. The leaders of Woolworths lack the accountability and the self-discipline which can have positive consequences for the company. There exists the lack of the element of alignment and the employees have disagreements with the leaders that affects the sales of the company (Naranjo-Valencia, Jiménez-Jiménez and Sanz-Valle 2016). The compensation system in Woolworths Group Limited does not inspire the employees that has badly affected the sales department of the company. The leaders in the company does not have a dynamic approach that has effect on the sales of the company. The workers in Woolworths Supermarkets are not appreciated for the efforts that demoralises them in the company. The employees cannot communicate well on account of the lack of co-ordination existing among the various levels of the management in the company (Körner et al. 2015). The poor communication of management of Woolworths Group Limited has resulted in the inefficiency that has paved the path for the loss of the profits of the company. The employees of Woolworths cannot express themselves fully to the senior management of the company and the gap in the communication has proved to be dismal for the performance of the company. It has failed in getting the attention of clients that has caused the loss for the company. The organizational culture within Woolworths Group Limited has not given opportunity to the employees of expressing their ideas to the management that has hampered the growth of company. The institutional theory can help in bringing about the sustainable practices within the framework of the supply chain that can help in increasing the profitability of a retail store. The institutional theory can help in the exploration of role of the supermarkets that can help in the developing of the sustainable practices within the supply chain (van Wijk et al. 2019). The need of the sustainable practices within food supply chain can be said to be of immense importance. Food industry has to face various kinds of competing pressures and it is hence important that a company takes recourse to the sustainable practices that can improve the sales of the company. The element of sustainability is an important consideration for the retail stores that can augment the profits that are made by the stores (Cardinale 2018). It can have a negative effect on the local farming along with the system of the indigenous knowledge that is crucial for any country. It has been found that around 63 % of the Australians are above that of the healthy weight that has given rise to health hazards for the Australians. The major supermarkets of Australia has a negative effect on the health of the public as they encourage consumption of
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4UNDERSTANDING ORGANIZATION the food products that have poor nutritional value. The promotional strategies of the company has a bad effect on the area of sales of the company. It has been found that in the catalogues along with the promotions there are advertisements of the discretionary foods that has tainted the reputation of the company in front of the public. The food of Woolworths are high in fat and the sugar that has proved to be detrimental for the health of the people. Woolworths has been responsible for promoting the consumption of the unhealthy items within the store that has brought down the profits that have been made by the company. The unhealthy items are highly visible and they have been placed in the convenient positions in the store so that it can catch the attention of the people (Zhao et al. 2017). It has been found with the help of research that 50 % of the packaged foods within the supermarkets are the discretionary products and the convenience foods are ultra-processed that has caught the attention of the people of Australia in the recent times. The food that is produced in the Woolworths supermarkets can be said to be inconsistent with that of the national dietary guidelines. This has reduced the popularity of the supermarket that has badly affected the marketing of the company. The cheap and the unhealthy snacks are displayed in Australia that has negative repercussions on the sales of the company. The balance sheet of Woolworths Group Limited does not take into consideration the ‘hidden cost’ that the products of the company has on the environment and the health of the people that has affected the people in the community of Australia. Limitations of the organizational culture and institutional theory There are limitations in relation to the theory of the organizational culture. The disadvantage of a strong culture can be perceived in the fact that it can resist the element of the change in a company. The new economy has made change a common norm in the society and the organizations should be flexible so that they can adapt easily to the external influences. A new perspective has to be inculcated in the employees of the company so that they can successfully adjust themselves to the process of innovation in a company. The weakness exists in the theory in relation to the organizational issue as there are diverse employees in the company and the engagement strategies of the workers can vary on the basis of each individual. There are challenges in relation to the institutional theory and the institutional researchers have to adopt a new perspective that can help in solving the problems within an organization. The theorists have studied the outcome or the products of the institutional
5UNDERSTANDING ORGANIZATION influences (Smith and Tracey 2016). They have however not laid focus on the inner workings within a company. It is of great significance that the institutional researchers adopt a different kind of internal perspective that can help in bringing benefits for a company. Institutional theory proves to be useful in describing the elements of the social structure however the reduction in the sales of Woolworths Group Limited have taken place primarily on account of the internal factors in the company. Conclusion There has been decline in the sales of Woolworths Group Limited that can badly affect the future of company. Aggressive promotion which have been carried out by the competitors have been responsible for the loss that has been suffered by the company. Operating profit of retailer have suffered decline on account of the bad organizational culture of the retailer. Organisational culture is a useful theory that can be instrumental in explaining the reason of the loss of the company. Marketing efforts had been neglected by the company that has been responsible for decrease in sales of company. The supermarkets of Australia encourage the people in consuming the unhealthy food having poor nutritional value that has createdabadopinionaboutthesupermarketsbeforethepeople.Theadvertisements pertaining to the discretionary foods in catalogues have harmed reputation of company. There are various lessons that can be learned by the manager with the help of the organizational problem in Woolworths Group Limited. The managers have to build a strong organizational culture that can help the employees in maximising their performance. The organizational culture can help the managers in providing the employees with the right environment that can help them in performing the activities in an effective manner. The managers should take recourse to the sustainable practices that can aid in the process of long- term growth of a company.
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7UNDERSTANDING ORGANIZATION Zhao, E.Y., Fisher, G., Lounsbury, M. and Miller, D., 2017. Optimal distinctiveness: Broadening the interface between institutional theory and strategic management.Strategic Management Journal,38(1), pp.93-113.