BMG 857 Foundations in Management: Environmental Impact on ASDA

This report provides a detailed analysis of organisational design and management functions, focusing on the impact of environmental changes. It examines contemporary issues affecting management in organisations, using ASDA as a case study. The report applies Porter's Five Forces model and the Balanced Scorecard to assess ASDA's competitive position and performance. It covers aspects like organisational structure, technological advancements, economic factors, environmental concerns, political and legal influences, and ethical considerations. A SWOT analysis is conducted to evaluate ASDA's strengths, weaknesses, opportunities, and threats. The report concludes by highlighting the importance of adapting to environmental changes and maintaining ethical standards to achieve competitive advantages. Desklib offers a range of study tools and solved assignments for students.

Foundations in
Management

Table of Contents
Introduction .....................................................................................................................................3
MAIN BODY...................................................................................................................................3
scope and purpose of management and organisations................................................................3
Contemporary issues impacting on management in organisations.............................................4
Applying Porter’s five Forces Model.........................................................................................8
Applying the Balanced scorecard to Simulation.....................................................................10
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

How environmental changes have impacted on modern organisational design and the
management function.
Introduction
The external environment includes many factors that may posses a impact on the way
organisations are functioning. The first factor mainly includes external environment that is
related with the overall environmental stability. Internal environment is influenced by the
employee influence on the functioning (Macnamara, 2018). ASDA stores are one of the largest
British supermarket chains. Its headquarters are present in Leeds, England. It was founded in the
year 1949. Present report is based on making a detailed evaluation of the way environmental
changes have affected the way organisational design is being formulated and the overall
management functions.
MAIN BODY
scope and purpose of management and organisations
Organisation structure is defined the way organisation can achieve the objectives and
goals. There are different type of structures that a organisation can adopt as per requirement of
their functionality.
In ASDA it comprises of 10 members which is based on the hierarchical structure. At
store level they are having four layers of management it includes super stores, metro and extra
formats. Three or four management layers in the subtle store (Troup, 2020). The organisation
structure is at store level the main focus is on generation of collaboration and coordination
among various members. There are many advantages of having a hierarchy structure as it helps
in having clearly defined promotion plans and career paths with proper levels of control. Further
with changing customer needs as external factors there is encouraging of specialisation that leads
to serving customers in more effective manner. In ASDA there are approx 145,000 stores that are
dedicated to ASDA colleagues serving approx 18 million customers in the stores each week. The
estate has a range of formats that includes superstores and super-centres as smaller convenience
size supermarkets.

Contemporary issues impacting on management in organisations.
With the instances of rapid technological changes and globalisation over fast few times there are
many contemporary issues that are arising in the organisation. There is need of some specific
cognitive skills and organisation behaviour to enhance the aspect of critical thinking for the
purpose of producing efficient managers (Bak, Jordan and Midgley, 2019). In context of ASDA
being one of the large retail sector organisations it becomes more important to understand it as
per the way overall functioning of organisation is taking place.
STEEPLE analysis:
It is a model that is used for the purpose of analysing the various external factors that are
affecting the present functioning of business.

(Source: Greiner Growth Model, 2020)
Social: It is related with the cultural changes. Such as in the Present covid 19 impact there is a
shift in the way organisations are perceiving their functions because the social preference of
customers have changed. ASDA has complete focus on online delivery and online presence of
their outlet to maximise its digital presence.
Technological: the covid pandemic has created high amount of regulations and there is more
focus on Social distancing. ASDA has taken a quick shift towards home delivery so that there is
high adoption technology rates (Laurett and Ferreira, 2018). ASDA has augmented the operating
model by investing to grocery centres. In these situation ASDA has also created competitive
packs by offering a omni channel click and collect function
Economic: In the present scenario the economic structure of UK is affected because of COVID
impact. There is reduction in the personal disposable income of people because of reduction in
employment levels. People are focussing towards necessity products this has lead to ASDA
working towards having wide range of availability of grocery related items on online medium.
Environmental: The environmental aspect also has positive and negative impact on internal
functioning of ASDA. The organisation is working on initiatives to focus on using of non
recyclable plastic to explore the way it can support the positive contribution towards
environment saving (Bradford, Aboy and Liddell, 2020).
Political factors: There are a range of political events that are affecting the functioning of
ASDA. Such as the Brexit scenario has complete changed the internal policies in ASDA where
the management has to make changes as per required scenario of the present environment.
Legal factors: It includes the set of rules and regulations that have to be adhered by organisation
and has to be implemented in their internal functioning. Such as it includes health and safety at
work act 1974, national minimum wages act 1998, that are to be properly adhered by following
of legal regulations in the internal management of ASDA .
Ethical factors: In September 2019, ASDA Has scored best rating for the supply chain
management process. But in some of instances there is lower rating because of toxic chemical
that are used in the electronic products of ASDA that may be because of discharge of hazardous
chemicals (Andreasen and Gammelgaard, 2018). The requirement of society and the customer
preferences is creating a need for having proper ethical standards that are to be adhered.

Swot Analysis
According to this analysis it comprises about internal and external assessment that makes more
productivity and accessibility in perspective of company enhanced. In following the analysation
of ASDA company about their strength, weakness, opportunities and threats.
STRENGTH WEAKNESS
As ASDA is operates number of stores in
countries, where it operations within
countries such as United Kingdom, China,
Hungry and Ireland.
The marketing team of ASDA is very effective
and they controls the high level of
challenges in flexible manner to accomplish
their targets.
ASDA own their club card where in this existing
customer always having priorities to offer
them discounts and benefits to make them
engage for longer period of time
ASDA having global presence but some of
evidence of failures in USA and Japan
after trending in 9 years. ASDA had to
close its operations. The failure clearly
defines that ASDA did not understand
the market of Japan and USA in which
customer gets highly disappointed with
their services.
ASDA had face certain legal implications
where they fined on serious fraud
office in UK. The company has agreed
to pay specific amount which were in
millions to operate profit. It turns down
ASDA negative image to avoid
prosecution where whole scandal has
negatively impacted on company
image.
OPPORTUNITIES THREATS
There are number of emerging economic trends
where they explore countries such as
Indonesia. Further growth in UK is also
possible enough the company is making
cautions steps to change within customer
and uncertain Brexit climate.
Digital platform is one of major opportunities
ASDA is having high competition in
competitive retail marketplace. Asda,
Sainsbury, Marks and Spencer etc.
These are one of top leading retail
venture in United Kingdom.

generates where ASDA can easily attain
more customer. They can also provide job
opportunities which will helps to contribute
towards economical world.
Evaluation:
As per above Swot Analysation of ASDA is summarise that their strength has effective
competitive advantages and the impact of Modern organisation would help them to implement
better resources effectively. The management function creates more influence to enhance major
changes like environmental changes creates major impact on ASDA's goodwill. Because CSR
activities are implement by the ASDA and product and services get fulfilled effectively. Rules
and regulation of environment changes like Sustainability and ethics of ASDA help to attain
more competitive advantages.
Applying Porter’s five Forces Model
In context to the accomplishment of the ASDA strategies goal and contentious growth,
one of the most important organisation management tool is the Porter’s
five Forces Model. Which helps to assess the market competition and force related to that over
the organisation. With the help of which company can improve their strategies and task for
getting the higher competitive value on the market (Dobson and et. al., 2018). Below is brief
explanation and application of this model in context to the ASDA.
Porter’s five Forces Model- This is the framework which facilitate the effective
assessment of the five factors of the business industry, which determine the competitive
intensity. The five forces of the market competition are threat of the new entrants, bargaining
power of the buyers, bargaining power of the suppliers, threat of the substitute, and competitive
rivalry.

Threat of the new entrants – This is the type of competitive force factor, which is
involving the analysis of the numbers and level of the new entrant related to the organisation
services. Is the level of new entrants is high the this can be consider as the competitive force for
the organisation strategies changes and improvement. ASDA is having the higher competitive
force related to this external factor which influences then to make changes on the internal basis.
Such as implementation of the new innovative strategies for the product development and
customer interaction.
Bargaining power of the buyers- This is the type of external environment factor which
create pressure over the organization for the effective products and services at relevant price.
Customers are the key external factor for the organisation and their level of their bargaining
power impact the competitive force of the organisation. ASDA is facing the higher competitive
force due to the higher bargaining power of the customers, because in the market there are

multiple options for the customers. In context to this force ASDA is managing the internal
changes like cost effective pricing strategies (Singh and et. al., 2018).
Bargaining power of the suppliers- This is another important external factor of the
business, such as suppliers pricing, quality and assets supply bargaining power. The level of its
intensity make pressure on the organisation to implement more effective approaches of the
suppers. ASDA is having lower competitive force, and lower bargaining power of the suppliers
because this is managing the strong relationship with their suppliers and getting the assets
according to their contract.
Threat of the substitute- This is another organisation forcing competitive factor, such as
the level of the alternative modes of customers needs sanctification for the similar products and
services is can be consider as the substitute. ASDA is having higher level of the substitute there
due to the highly developing online retail stores and innovative retail enterprises. Which are
reducing the efficiency of the supermarket. In context management of this competitive factor
ASDA is extending itself to the different substitute method's of retailing.
Competitive rivalry- This one of the key external factor which impact the organisation
level of competitive force such as the presence of the competitors in the existing market with the
came business model and products. ASDA is having higher competitive rivalry due to the
presence of competitors like Walmart, ASDA and Sainsbury's. This is creating the force on
ASDA to make some innovative changes on their internal business structure. Which can be
unique from the competitors and attractive enough to retain customers (Bamel, Dhir and Sushil,
2019).
Applying the Balanced scorecard to Simulation
In context to the effective management and accomplishment of the business objective
there are the various factors and task which have to be effectively manage by the manager and
for that, ASDA manager use the balances scorecard model. Below is the brief explanation of the
model and its application in context to the ASDA.
Balanced scorecard approach - This is the type of holistic tool which helps in the
effective management and measurement of the performance in different area of the business
unite. This is the performance matrix, which facilitate the identification, improvement and
effective control of the various business functions and outcomes. This is involving the four

prospective such as the customers relationship, finance, internal process, education& growth
(Acquah and et. al.,2020).
Finance – This is one of the important balanced scorecard prospective according to
which organisation should implement the sustainable economic value development strategies of
finance. Along with this organisation have to effectively measure their financial functioning, in
context to the external factor of economy. ASDA is effectively managing and measuring their
financial system, such as managing their annual information and financial statement, consider the
new reports of the marketing strategies and economic which can impact the organisation internal
financial structure, operation, strategies and management. ASDA Steering Wheel manage the
effective financial system (Liu and et. al., 2018).
Internal business process- This is another important prospective of balanced scorecard
matrix, according to which organisation should work on the satisfaction of the stakeholders, with
the management of effective productivity, efficiency and quality. Such as the ASDA involve the
measurement of internal value chain for the management and incorporation of the effective
innovation. That how the organisation can identify the customers future needs. In context to the

operational unit organisation have to measure the quality, time and cost, in prospect to the post
sale services company should make sure the effective analysis of the defected and returns.
Customers relationship – In this prospective of the organisation function, organisation
have to manage that what customer require and what are the performance in context to their
satisfaction. This is the external factor which impact the internal production and operation
structure of the organisation. ASDA is working effectively in context to the customers
satisfaction, retention, and organization profitability, market shares. ASDA Steering Wheel
manage effective customer relationship by facilitating the 550,00 employees for their
multinational customers effective buying experience.
Education and growth- This is one of the key prospective of this organisation function
management tool. According to which organisation have to manage the effective employees
performance management system and support their better performance, through training and
growth. ASDA is including the measurement of peoples, such as training of the employees,
retention, skills, performance. Then in system organisation measure and make sure that front line
workers are getting real time information on the basis of their needs (Hedstrom, 2018).

Greiner model
Apart from this for the further purpose of making analysis there is use of Greiner model
based on the time factor. It is a descriptive model based on organisation marked against its size.
Phase 1: Growth through creativity: It is the initial phase where the organisation is
relatively small and young. In this stage organisation is informal and the employees are also
loyal. There is generally a flat organisational structure.
Phase 2: Growth through direction: It is the management phase where managers are
responsible and appointed for controlling of primary processes. This stage was when ASDA
started its operation and generally there were issues related with coordination as the organisation
was growing through direction.
Phase 3: Growth through delegation: In this phase entrepreneur is delegating their tasks
toward the middle management of the organisation. Results are generally aimed as middle
managers are responsible for achievement of operational and tactical objectives. ASDA is
working towards having efficient ways of completing business activity and tasks. The
advancements in technology is focussed by offering staff with more responsibilities. For this
purpose there is development of proper hierarchy structure.
Phase 4: growth through control and coordination: In this phase the emphasis is laid on
development of coordination among various units. In large diversified organisation the
departments have to work towards taking up strong position so that divisional managers can be
Managed properly. In year 2020 the changing external environment conditions that is the covid
19 pandemic led to difficulty in the process of managing the overall internal functioning of
ASDA. At this stage there was need of high amount of coordination in order to manage the 90
percent growth in the online business (Wijethilake, Munir and Appuhami, 2017).
Phase 5: Growth through cooperation: In this phase there is need of cooperation
between staff department and line that is aimed at creation of break between hierarchy
coordination forms that includes matrix structure or project organisation. In ASDA there have
been stronger growth that is boosted by acquisition of carry group and broker cash.

CONCLUSION
From the above made analysis it is summarized that strategy is very important for
organisation for the purpose of managing the impact of external Macro environment on their
overall functioning. The changing macro environment has created a need for organisations to
manage their internal functioning. There are contemporary issues that can arise in organisation
when there are constant changes which affect the overall functioning. So, in order to manage
such changes there is need to focus on effective development of organisation structure and
making required internal changes.

REFERENCES
Books and Journals
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management organisations–Assessing the claims from maturity models. Journal of
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Bak, O., Jordan, C. and Midgley, J., 2019. The adoption of soft skills in supply chain and
understanding their current role in supply chain management skills agenda: A UK
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Macnamara, J.R., 2018. Competence, competencies and/or capabilities for public
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Singh, M.K., and et. al., 2018. Analyzing the determinants affecting the industrial
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organisations-a case study of the NZ roading industry. Journal of Asia Entrepreneurship
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Online
Greiner Growth Model, 2020 [online], Available
through<https://www.toolshero.com/strategy/greiner-growth-model/>
ASDA Organizational Structure, 2020 [online], Available through<https://research-
methodology.net/ASDA-organizational-structure/#:~:text=>