ASDA Organisational Culture, Leadership, and Management Report

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BUSINESS
REPORT
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Table of Contents
INTRODUCTION........................................................................................................................3
1. HISTORY AND SUMMARY..................................................................................................4
2. DISCUSS LEADERSHIP STYLE, VISION AND MANAGEMENT PRACTICES OF ASDA..............5
3. ANALYSIS OF MANAGEMENT STYLE AND CULTURE OF ASDA AFFECT ITS BUSINESS
FUNCTION AND STRATEGIES AND BUSINESS EXAMPLES..........................................................7
4. RECOMMENDATIONS AND IMPROVEMENTS FOR ASDA...................................................9
CONCLUSION.......................................................................................................................... 10
REFERENCES........................................................................................................................... 11
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INTRODUCTION
This report is based on organisation culture, leadership and management of the
organisation as a whole in the retail industry. There are various types of leadership styles,
management styles and different organisational culture but the one which ASDA follows are
to be discussed here in the assignment. Firstly in this assignment the brief history of ASDA
will be discussed, what are the vision, management style, leadership style of ASDA with its
organisational culture is to be identified. How the chosen management style of ASDA affects
the functioning and revenues of ASDA, assisted with some recommendations and some
improvements are to be explained here.
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1. HISTORY AND SUMMARY
Figure 1- ASDA logo
Source- ASDA, 2019.
ASDA was founded in 1960 in Yorkshire, based on retail industry ASDA is a part of Wal-Mart
and is amongst UK’s leading retail sector company that have diversified products and a very
large network that involves a range of supermarkets, stores, online service stores,
superstores, living stores, petrol stations and supercentres. ASDA has a very large market
share in the UK where it serves 98% of the UK homes currently and the customer base is
extended to 18 million customers for ASDA. ASDA earlier in the 1920s it had only 2 branches
in the UK by Asquith family who ran a butchers shop and dairy the business grew and in
1963 they opened the first self-service supermarket and finally in 1965 ASDA was born.
ASDA became very famous for its clothing brand George that offered clothings at very less
and affordable prices and their 100-day challenge where George guarantee that if there is
any reason for dissatisfaction among the customers. ASDA has launched 1000 new lines
including all the home accessories, and every other home product also premature baby
brands including furniture and the products range starting from just £1. In 2015 ASDA had
its 50th birthday and have opened up to 600 stores in total with crossing turnover of £1
billion. Currently, the ASDA is awarded the grocer gold Award as the cheapest store in the
UK from the last 20 years in a row. ASDA is also known for Centrica top 100 Apprenticeship
employer of UK.
ASDA is chosen as the retail industry for this report because the company is UK’s leading
brands that have a 98% of customer base with a high number of stores and a very significant
market share and also contribute in employment and GDP of UK. ASDA also has an
international presence through capital investment in different countries of the world.
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2. DISCUSS LEADERSHIP STYLE, VISION AND MANAGEMENT
PRACTICES OF ASDA
VISION – ASDA’s only mission is to help families to save money and live better and the aims
to provide the best quality and price value to its customers.
LEADERSHIP STYLE -
At ASDA the leadership team is very precise and simple where there are well-known
personalities of the retailing sector. ASDA has its current CEO and president Roger Burnley
who believes that every customer is special and their requirements are to be fulfilled by
ASDA.
ASDA is a retail-based company that is owned by the world’s largest retailing company Wal-
Mart and is the second largest retail chain of companies in the UK, so it has to follow the
leadership style of Wal-Mart. At ASDA the leadership style followed is the democratic
leadership style that involves the invitation to employees and team members to provide
their suggestion and ideas at the time of decision making in the company. The democratic
style of leadership is helpful in motivating the employees and helps in building up their
confidence that directly increase their productivity and efficiency at the workplace. Through
a democratic leadership style not only the employees are benefited the innovative and
creative ideas to solve the problems are beneficial for ASDA. This innovation creates a
competitive advantage to ASDA from its competitors like Tesco and Sainsbury (Bhatti et al.,
2012).
MANAGEMENT PRACTICES
ASDA have the 39% of the market share in the grocery store industry and is having a
significant presence in UK’s market and since it is the subsidiary of the Wal-Mart so it has to
follow the management practises followed by Wal-Mart. ASDA believes that if employees
are satisfied then they will be making the customers satisfied with their good quality of
services. The customer orientation management practise is followed at all the stores of
ASDA where the customer is king and all the possible desires to create high value will be
fulfilled.
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ORGANISATIONAL CULTURE
Organisational culture means the flow of information and communication practices within
the organisational campus, the beliefs and values of the organisation. There are various
ways in which the information flows in an organisation like hierarchical organisational
culture, adhocracy, and clan and market organisational culture.
At ASDA the organisational culture which is followed is the hierarchy model where there is a
predefined structure for transferring the information in the organisation. It starts from the
company's CEO to management than to manager further to his subordinates and
supervisors than to retail store managers and goes on until the store staff. Although these
retail store managers are called colleagues at ASDA, where every employee enjoy working at
ASDA due to its healthy culture. As there are around 165000 employees at ASDA and to
manage the same is a very big task so the hierarchy system is apt for ASDA. There are
various levels in ASDA further segmentation is according to the departments and retail
stores of ASDA. In order to pass the information to the store manager, it has to be discussed
and passed with many people in the store. The flow of information is like the worker has to
report to his superior which is supervisor the supervisor than shares the information and
reports to the assistant manager and the assistant manager then communicates to the store
manager for the same problem or issue, this is because if the problems are not solved at the
lower levels than the store manager has to come in to picture, sometimes the case is that
the decision is to be made with the authority of the store manager. The store manager has
several tasks and several responsibilities so his scope is not limited to the employees and
their problems; it is expanded to being able to deal with suppliers, buyers, and other
external people. The monitoring and controlling are done in the hierarchical levels and the
superiors have the right and authority to take decisions on stores’ behalf (Wagstyl et al.,
2015).
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3. ANALYSIS OF MANAGEMENT STYLE AND CULTURE OF ASDA
AFFECT ITS BUSINESS FUNCTION AND STRATEGIES AND
BUSINESS EXAMPLES
At ASDA Hofstede model of cultural dimensions is followed. In this management style, there
are 6 factors that define the organisational culture.
1. Power distance index- this factor refers to the quantity or the measure of inequality
that exists in the organisation. Where the high PDI refers to a centralised system and
more complex hierarchies and lower PDI represents a flatter organisational
structure. At ASDA the power distance index is high because there is and hierarchy
system followed at ASDA (Hofstede, 2011).
2. Individual versus collectivism- this ratio is based on the relations of people within the
organisation. Whether they take the responsibilities of others or not. The high ratio
the fewer people believe in teamwork and taking responsibilities of colleagues, at
ASDA people believe in taking responsibilities of others and they work
cooperatively (Hofstede, 2011).
3. Masculinity vs. femininity - this refers to the discrimination between men and
women so the high ratio high will be the discrimination at the workplace but at ASDA
there is no discrimination between men and women (Hofstede, 2011).
4. Uncertainty avoidability index- this index refers to redundancy for risk-taking ability
towards changes in the environment within the organisation. At Asda there is always
a preference to change, innovation and employees believe in creating new
opportunities for Asda and its customers (Hofstede, 2011).
5. Long term vs short term orientation- this index depicts the management strategies
of the organisation are focused on short term or long term basis, at ASDA there is
more of a long term approach followed as ASDA believe in the sustainability of itself
and the environment (Hofstede, 2011).
6. Indulgence Versus Restraint (IVR) – this index means that if there is high indulgence
there is freedom of speech and high level of optimism. At ASDA the employees have
freedom of speech and have a high level of optimism (Hofstede, 2011).
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Impact of the management style of ASDA and culture of ASDA-
1. Increase in productivity- the healthy environmental culture of ASDA will increase
motivation amongst the employees and will create enthusiasm for work. Thus the
working efficiency of the employees will increase so does their productivity (Al-
Bahussin and El-Garaihy, 2013).
2. The decrease in labour turnover- every employee search for a job that is able to
provide a good working environment and satisfactory working culture with proper
monetary benefits will help in gaining employee engagement hence will reduce the
employee turnover in the company and its retail stores (Al-Bahussin and El-Garaihy,
2013).
3. Competitive advantage- through the democratic leadership style the employees or
the staff at ASDA will provide new and creative ideas for operations and better
service quality for the customers. This will indirectly affect the goodwill of ASDA, and
ASDA will be able to create a competitive advantage over its competitors (Al-
Bahussin and El-Garaihy, 2013).
4. High customer satisfaction- The innovation and creativity in the functioning and
operations of ASDA will increase the customer level of satisfaction and will also help
in building loyal customers for ASDA (Al-Bahussin and El-Garaihy, 2013).
6.
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4. RECOMMENDATIONS AND IMPROVEMENTS FOR ASDA
ASDA is having a good and healthy organisational structure, a choice of good management
and leadership style but there is some weakness in the organisational structure and
management style at ASDA that need to be controlled and overcome before competitors
take advantage of the same.
Recommendations are –
At ASDA stores there should be a little bit of a flat organisational structure where if the
employees are not satisfied with their superior they can directly report to the manager of
the store for their problems and even if they have so ideas that can improve the
functionality then the employees can directly communicate to the store manager for the
same.
At ASDA since there are a large number of employees so their needs to be proper training
for the employees for their job roles at ASDA and they have to be communicated with the
policies and organisational structure at ASDA and volition of the norms in any case will be a
punishable offence and the employer breaking employability laws will also be punished for
the same.
ASDA needs to promote more innovation and creativity in the working culture as the
changing environment the competitors are more involved in providing more innovative
products and services that can increase their customer base but as ASDA have the strengths
and experience it can use this experience to regain its customer base and reposition itself
with higher rank than before (Høyrup, 2010).
ASDA has to motivate its employees for improving their customer delivery services to
increase their customer loyalty and goodwill also in order to retain in the competitive
environment proper analysis of the competitors need to be done.
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CONCLUSION
It can be concluded from the above-mentioned report is that the organisational culture of
ASDA is hierarchy structure which is good and satisfactory as there are lacks of employees to
be managed so a formal protocol is necessary. The management style followed by ASDA is
also appropriate and it helps ASDA to achieve its goal of being the cheapest provider of
products and make the customers live a better life. At ASDA the democratic style of
leadership is followed which increase employee productivity. At ASDA the employees are
satisfied and they but still the recommendations for improvements at ASDA are also being
provided in this report.
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REFERENCES
Al-Bahussin, S.A. and El-Garaihy, W.H., 2013. The impact of human resource management
practices, organisational culture, organisational innovation and knowledge management on
organisational performance in large Saudi organisations: structural equation modeling with
conceptual framework. International Journal of Business and management, 8(22), p.1.
ASDA, 2019. About ASDA. (Online) Available at: https://corporate.asda.com/our-story
(Accessed on 7 May 2019).
Bhatti, N., Maitlo, G.M., Shaikh, N., Hashmi, M.A. and Shaikh, F.M., 2012. The impact of
autocratic and democratic leadership style on job satisfaction. International Business
Research, 5(2), p.192.
Hofstede, G., 2011. Dimensionalizing cultures: The Hofstede model in context. Online
readings in psychology and culture, 2(1), p.8.
Høyrup, S., 2010. Employee-driven innovation and workplace learning: basic concepts,
approaches and themes.
Wagstyl, K., Ronan, L., Goodyer, I.M. and Fletcher, P.C., 2015. Cortical thickness gradients in
structural hierarchies. Neuroimage, 111, pp.241-250.
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