University MGT600 Assessment 3 Part A: Aldi Australia Report

This report examines Aldi Australia's approach to strategic people management, focusing on creating an ethical organization, leveraging culture and diversity, fostering innovation, and achieving competitive advantage. The analysis draws on various management theories and real-world examples, such as Aldi's relationship with suppliers, its diverse workforce management, implementation of self-checkout systems, and its 'weekly special' strategy. The report highlights how Aldi's practices, including above-industry pay rates, career progression opportunities, and innovative marketing strategies, contribute to employee motivation, customer loyalty, and overall business success. The study provides valuable insights for managers and students seeking to understand and implement effective people management strategies in a dynamic business environment. The report also includes a comprehensive list of references to support the findings.

Running head: PART A
Part A: "Competitive Advantage through Strategic People Management"
[Aldi Australia]
Name of the student:
Name of the university:
Author note:

1PART A
Table of Contents
Topics..............................................................................................................................................2
Creating an ethical organization..................................................................................................2
Leveraging culture and diversity.................................................................................................2
Competitive advantage through strategic people management...................................................3
Fostering innovation....................................................................................................................3
Lesson Learnt...................................................................................................................................3
References........................................................................................................................................5

2PART A
Topics
Creating an ethical organization
The research of Murtaza et al. (2016) say that for developing an ethically correct
corporate image an organization will need to be good in a few areas such as communication with
the stakeholders and effective handling of a challenging business situation. Contrary to these
findings, major companies generally struggle with maintaining an ethical image. It goes the same
for the supermarket brands in Australia also as these companies face many barriers to their good
ethical identity such as ineffective relationship management with suppliers. However, Aldi,
unlike Woolworths and Coles, has good terms with its suppliers because they make their
payments in small numbers; however, within the committed timeframe (Corporate.aldi.com.au,
2020).
Leveraging culture and diversity
Contemporary organizations as according to Mande & Awiti (2019) give huge
importance to fostering a diversified culture as they see many benefits in having a diversified
workforce. However, managing a diverse workforce is a big hurdle for many organizations. The
hurdles get increased when the organizational culture is not that supportive. In such
circumstances, leaders can work on a new set of goals to lead a continuous improvement process
to repair the workplace culture as well as workforce management.
As per Vroom’s Theory of Expectancy, one of the ways to keep the employees highly
productive as well as motivated is to value their hard works with a good benefits package (Lloyd
& Mertens, 2018). Indeed, Aldi pays its people at above industry rates. It effectively maintains
pay equality regardless of demographic characteristics and gender (Aldiunpacked.com.au, 2020).

3PART A
Competitive advantage through strategic people management
One can find a good example of people management in Aldi. To reduce the work burden
from employees, Aldi facilitated the ‘Self-Checkout’ system that effectively increases the speed
and efficiency of checkout (Choice.com.au, 2020). The self-checkout system resolved Aldi's
people management challenge at the counters as more work pressure was transferred to this
system. According to Herzberg’s Two Factor Theory, growth opportunities provided to
employees keep them highly motivated and increasingly satisfied (Alshmemri, Shahwan-Akl &
Maude, 2017). Aldi keeps its employees highly motivated even under huge work pressure by
proving them effective career progression opportunities (Aldiunpacked.com.au, 2020).
Fostering innovation
Aldi offers ‘the weekly special’ instead of everyday low price (EDLP) strategy as
practiced by Woolworths and Coles in particular. In this offer, Aldi slashes the prices of items
massively. During the event, Australians won't get the same offer as offered in Aldi (Retailbiz,
2020). This innovative strategy of Aldi can be understood from the lens of the theory of
innovation. According to the “Diffusion of Innovation (DOI) Theory”, an innovative idea over
the times becomes popular or gets diffused through a specific population (Akça & Özer, 2014).
Aldi's weekly special is building very stronger customer loyalty for the company.
Lesson Learnt
The findings of this study can be highly helpful for me in my career as the manager of a
company. The way Aldi leverages its organizational culture and diversity, fosters innovation,

4PART A
maintains an image of the ethically correct corporate and manages its people are the bulk of
managerial knowledge for me. These things would enhance my knowledge of the essential
elements of an organization such as those discussed in this study.

5PART A
References
Akça, Y., & Özer, G. (2014). Diffusion of innovation theory and an implementation on
enterprise resource planning systems. International Journal of Business and
Management, 9(4), 92.
Aldiunpacked.com.au. (2020). Taking the lead as Employer of Choice. Retrieved 15 April 2020,
from https://www.aldiunpacked.com.au/taking-the-lead-as-employer-of-choice/
Alshmemri, M., Shahwan-Akl, L., & Maude, P. (2017). Herzberg’s two-factor theory. Life
Science Journal, 14(5), 12-16.
Choice.com.au. (2020). 2019 supermarket survey: Aldi, Coles, Woolworths, IGA and more -
CHOICE. Retrieved 15 April 2020, from https://www.choice.com.au/shopping/everyday-
shopping/supermarkets/articles/which-is-the-best-supermarket-satisfaction-survey
Corporate.aldi.com.au. (2020). Supply Chain - ALDI Australia. Retrieved 16 April 2020, from
https://corporate.aldi.com.au/en/corporate-responsibility/supply-chain/
Lloyd, R. A., & Mertens, D. (2018). Expecting more out of Expectancy Theory: History urges
inclusion of the social context. International Management Review, 14(1), 28-43.
Mande, W., & Awiti, L. (2019). Leveraging Workforce Diversity to improve Employee
Performance in Kenya. INTERNATIONAL JOURNAL OF ACADEMIC RESEARCH IN
BUSINESS AND SOCIAL SCIENCES, 9(7).
Murtaza, G., Abbas, M., Raja, U., Roques, O., Khalid, A., & Mushtaq, R. (2016). Impact of
Islamic work ethics on organizational citizenship behaviors and knowledge-sharing
behaviors. Journal of Business Ethics, 133(2), 325-333.

6PART A
Retailbiz. (2020). Two things every retailer can learn from Aldi’s business model - retailbiz.
Retrieved 16 April 2020, from https://www.retailbiz.com.au/contributor/can-learn-aldis-
business-model/