Leading Change in Retail: Tesco, ASDA, and Organizational Impact

This report provides a comprehensive analysis of change management within the retail sector, specifically focusing on the case studies of Tesco and ASDA. It examines how internal and external factors, such as political, economic, social, and technological influences (PEST analysis), drive organizational change and impact business strategies and operations. The report delves into how these drivers affect leadership, individual, and team behavior, highlighting the importance of effective communication, employee engagement, and training to mitigate adverse effects. It identifies various barriers to change and their influence on leadership decision-making, emphasizing the need for proactive measures like environment audits and support structures. Furthermore, the report explores different leadership approaches suitable for navigating change and concludes with recommendations for successful change implementation. The analysis underscores the significance of understanding and adapting to change for maintaining a competitive advantage in the dynamic retail environment. The report also looks at the impact of globalization, customer demand and competition on business practices.

Understanding and Leading
Change

TABLE OF CONTENT
TASK 1............................................................................................................................................1
P1. Comparing different organisational example where there has been impact of change on
business strategy and operations............................................................................................1
P2. Way internal and external drivers of change affect leadership, individual and team
behaviour................................................................................................................................2
P3. Measures which can be taken to reduce adverse effect of change on organizational
behaviour................................................................................................................................4
TASK 2............................................................................................................................................5
P4. Different barriers for change and determining the way they influence leadership decision
making....................................................................................................................................5
TASK 3............................................................................................................................................8
P5 Different leadership approaches........................................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Change is defined as an act through which positive as well as drastic improvement can be
bought at workplace. Organizational change can be referred to as complete change within an
enterprise. It is very much important to make modifications in business structure, culture,
working pattern etc. Continuous improvement in business operations will assist firm in maintain
its position in the market. Understanding and developing knowledge about change is necessary
for firm as this strategy will assist an organization in gaining competitive advantage in market.
Manager by gaining the knowledge about change can transform business procedures or system in
successful manner.
The present report has focus on analysing the impact of change on two different organisations
that is Tesco and ASDA. Both the organisations are operating their business in retail industry. It
will also highlight the different drivers of change. Assignment also emphasizes on identifying the
various barriers which might occur in implementing successful change at workplace.
TASK 1
P1. Comparing different organisational example where there has been impact of change on
business strategy and operations
Tesco and ASDA both companies are operating in retail industry. Little change in internal
as well as external factors have great as well as significant effect on business strategies. It also
has significant influence on routine business operations. The change in business environment
may impact both the firms in different ways as they have dissimilar business structure and
system.
For instance, change in legislation especially employment law has direct as well as
significant effect on human resource strategies, policies and practices. Earlier, Tesco
organization used to hire employees at low wages. Workers in an organization were treated
badly, due to which an enterprise has to face the legal obligations which has direct as well as
significant impact on its brand image. Change in laws also have great impact on other business
policies, practices and operations. Tesco in order to avoid legal obligations and other issues has
planned to bring improvement in its business operations. In addition to this Tesco company has
been greatly affected by changes in political factors. Government has introduced new fiscal
policy which has assisted has provided new source of finance to company. Change in economic

factors have effected Tesco in negative way, increase in tax rate, inflation in the prices of
products has badly affected the final performance of an enterprise. Technological advancement
and increase in online shopping by customers has forced retailers to compete heavily on delivery
prices. Technological advancement has enabled business entity to bring improvement in quality
of goods and services.
Impact of IT transformation on the performance of the Tesco. Due to advancement in
technology has forced company to implement technology at workplace which has lead to
increase in costs. This factor has negative effect on the profitability of an organisation.
Asda has been greatly affected by changes in environmental factor. These variables have
direct as well as significant effect on the quality of products that are offered by Asda to its
customers. Due to poor quality of goods, Asda has to face high number of customer complaints
regarding quality of products and services. This factor has significant and negative impact on
Asda brand image and also on sales (Boyatzis and Cavanagh, 2018.). Increase in globalization
has positive impact on the growth and business plan of firm. It has enabled Asda to expand its
business operations. Asda in order to improve its customer services have planned to re-
engineered customer service mechanism.
In addition to this, there has been tremendous increase in sales of Asda which is considered
to be as positive impact of economic factors. At the same time changes in pricing strategy by
competitors has forced business entity to reduce profit margin.
There are mainly four big organizations such as Sainsbury, Tesco, Morrison’s and Asda
have suffered some big losses due to changes in business environment. Not only this but some
favorable changes such as inflation has supported firms in increasing profit margin. In addition
to this, increase in competition has forced business entity to reduce the prices of products and
services. Changes in social factors as well as change in demand of customers in the market has
encouraged business entity to facilitate innovation and launch new products in the market.
Deflation or economic crisis in the country has badly affected the financial performance of
company (Burke, 2017). Changes in internal as well as external environmental forces have
significant effect on the strategic plan of an enterprise.
P2. Way internal and external drivers of change affect leadership, individual and team behaviour
There are various forces which encourage management in an organization to bring positive
change at workplace. Some internal variables which encourages firm to do transformation are

relationship between employees, performance of workers etc. External variables which assist an
enterprise to bring improvement in business policies and practices are increase in competition,
change in demand by customers etc.
Internal factor such as employees’ performance, followers’ actions as well as relationship
between workers have direct as well as significant influence on leaders’ behavior and decisions.
It is required by manager in Tesco and Asda to develop an effective culture which should be
based on team work, mutual respect as this strategy will assist firm in increasing productivity. It
will also enable business entity to concentrate on improving customer service (Dorac-Kakabadse,
2017).
PEST ANALYSIS
Political factors- the changes in political factors and amendments in laws is considered
to be as major drivers of change in business. It is very much important for leaders in both
companies such as Asda and Tesco to educate and make themselves aware about their customers,
competitors, suppliers. Political factors have direct influence on the way leaders accomplish their
goals.
Economic factors- these factor have direct as well as significant impact on the behavior
of people in the company. If employees in Tesco and Asda are not provided with the monetary
benefits or incentives, sufficient salary or wages then in such situation, they will not work for the
benefit of an organization. Such activities by workers have direct as well as significant impact on
decision taken by leaders.
Social factor- Customer demand is considered to be as external driver of change which
force firm to bring positive transformation in business plans, policies and system. It is important
for both the organizations Tesco and Asda to remain update with recent changes in an industry or
market (Hayes, 2018). If in case, company is not aware about the change than there is great
threat to its sustainability.
Technological factor- Technology is other major factor which has great influence on
employees’ behavior. This is the variable which can assist employees in increasing their working
efficiency. Technological advance generally has positive impact on employees’ behavior at
workplace. Use of technology helps employees in making the work easier and enables them to
get high level of satisfaction from their Job. This is the reason employees in Asda and Tesco

organization always encourage firm to implement new technology at workplace. But at the same
time, workers feel the need of training to operate such technologies.
The changes in internal as well as external factors have direct as well as significant
influence on leaders’ behavior and decisions. These variable effect leaders as they have to make
strategic business plans.
It is very much important for leaders or managers in an organization to inform workers
about change in an organization. If workers are not informed about the improvement, then they
might resist or not support change. This factor will have adverse effect on the relationship
between leaders and followers. Manager in Tesco and Asda should communicate all details about
change to their staff members as this strategy will assist management in bringing positive change
at workplace. This strategy will also help leaders in gaining the support from their followers in
bringing positive transformation at workplace. Leaders or managers are considered to be as the
big drivers of change. These people take high initiatives to bring transformation as they have
responsibility to drive firm towards success.
Sometime frequent or unknown changes in organization can become major reason for
conflicts among team members which have negative influence on individual and team behavior
(Pearce, 2018). Uninformed or Unknown change can lead to the high level of stress on workers.
Leaders might also feel high level of stress related to work. There might be lack of trust between
employer and employees. Workers due to frequent changes and work pressure might feel
dissatisfied. It has been analyzed that Change is expected in organizations, and when it occurs,
leadership often underestimates the effect of those changes have on employees.
P3. Measures which can be taken to reduce adverse effect of change on organizational behaviour
Define change and Align Goals: First of all, it is required by manager in an enterprise to
form flexible as well as some effective strategies. As this activity will assist business entities in
providing an appropriate response to changes. In addition to this, manager or leader in Asda need
to inform staff about the purpose and type of change which management is planning to bring.
This strategy will assist business entity in avoiding the conflicts at workplace. If the employees
will be unaware about the change within an organization, they will not support the procedure due
which management might face difficulty in implementing change. An Effective communication
strategy as well as coordination between employees is very much crucial in order to reduce the

negative impact of change on Organizational behavior. It is required by manager or leader to
communicate or inform employees about the change.
Environment audit: Both companies are required to conduct timely internal as well as
external audit. As this will help an organization in determining the changes which are taking
place in the market. It will also assist management in formulating an effective strategy for
reducing the adverse effect of change on organizational behavior (Low, 2018). Market research
strategy will assist management in identifying those factors which have major effect on
organizational behavior. Executing market research will assist business entity in eliminating the
negative effect of changes in external factors on profitability. It will also aid business entity in
preventing legal obligations.
Reviewing the impact of change on different business units and developing
understanding about the way it effects organizational behavior will assist business entity in
identifying suitable ways for reducing the same.
The other strategy which can be adopted by business entities is that they can provide
appropriate training to their workers. As this will help employees in developing the potential
which is required for providing suitable responses to changes. It also enables workers to possess
skills, knowledge and capacity to deal with difficult situations (Wylie, Miller and Jackson,
2017).
Another effective strategy is that organization should implement support structure as this
will assist management in measuring the impact of changes. It is also important for management
to prepare and evaluate their change management plan, this will assist business entity in reducing
the impact of change on organizational behavior. Firm can facilitate innovation timely which will
assist business entity in dealing with change in an effective manner.
TASK 2
P4. Different barriers for change and determining the way they influence leadership decision
making
It is very much important for management in Tesco to develop understanding about the
various factors or things which can create barriers in implementing change at workplace. As poor
change management can lead to negative consequences, for instance, Tesco might have to face

short as well as long term losses. An ineffective change management procedure might have
adverse effect on customer services, quality of products, employee’s morale, productivity etc.
Tesco is planning to implement technology at workplace. There are several barriers which can
occur in implementing successful change at workplace which are:
Force field analysis
Force field analysis is recognized as a framework which helps in identifying the factors
which influence situations. It is also considered to be as a decision making tool which assists an
entrepreneur in developing the understanding about the forces which drives change.
Fear of Unknown change: This is considered to be as major factor which can create
barrier in implementing successful change at workplace. Employees may resist change when
they are not informed about changes at workplace. The reason for resistance of change by
employees is that they might have fear of losing job. Failure to involve workers in change
process is considered to be as biggest mistake done by Tesco (Schedlitzki and Edwards, 2017).
This is the reason management in an enterprise fails, to gain support from workers and has failed
to bring positive change at workplace.
This factor might have direct influence on leaders’ decisions related to bringing change
within Tesco. If more number of staff will resist, then in such case leaders will take decision
related to adopting new techniques for encouraging workers to support change. Leaders in order
to inspire people to involve in change manger process might have to take decision regarding
formation of strict policies.
Implementation of
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Undue
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Ineffective leadership: This is another major which can create big hurdle in bringing
positive change within TESCO. A person who has responsibility to bring change at workplace
should have experience, skills and knowledge about change management process.
Ineffective communication: It is very much important to communicate effectively during
change management process. As ineffective communication might lead to confusion as well as
misunderstanding which might result in failure of implementing change.
This factor has direct effect on leaders’ decisions. As if there is ineffective
communication or flow of information between people involved in change management
procedure then in such situation manager have to identify new communication system in order to
fill communication gap (Doppelt, 2017).
Undue complexity: lengthy and complicated change management process are considered
to be as another major barrier which might occur in implementing successful change at
workplace.
It also has direct effect on leader’s decisions. Manager or leaders in an organization has
to take decision related to type of change required to be implemented in business system or
change management procedure.
Lack of clear scope: This is considered to be as common barrier which might occur in
implementing successful change at workplace. If managers himself is not clear about the scope
and objective of transformation, then they will not be able to provide clear direction to
employees which will create major hurdles in bringing improvement.
This is the major responsibility of leaders to define the scope of change and decide the
area which actually requires change. Due to lack of clear scope manager in an enterprise has to
take big decision related to the continuity of process.
Lack of resources: The change management require lots and different types of
resources. Lack of sufficient amount of resources can create major barrier in implementation of
successful change at workplace.
Poor planning: This is the most common barrier which creates big hurdles in bringing
transformation. If in case, strategic or planning team does not consider the effect that change
might have on team and they also fail to define the roles as well as responsibilities of an
individual, this create barriers in implementation of change.

It is required by management team in a Tesco to formulate an effective change
management plan, timely review the same and make modifications in the same according to
situations.
Unknown current state: if strategic or planning team does not have knowledge about
the current situations of an organization then they will not able to make an effective plan which
will create barriers in implementation.
Continue change in internal as well as external factor has direct as well as significant
influence on decision by leaders. Actually leaders’ decision regarding bringing the change in
workplace is completely based on current state of company (Northouse, 2017).
It is important for a person who is planning to bring transformation is that they should
completely understand the current state of Tesco. As this strategy will assist business entity in
identifying the areas which actually require improvement. It will also become easier for firm to
make proper plan for bringing successful as well as positive change at workplace.
The force field can be utilized by manager in TESco for making important business
decisions. Force field analysis can be utilized by management in an organization for motivating
people to support change. It is considered to be as important tool transforming the company or
implementing change at workplace.
TASK 3
P5. Different leadership approaches
Leadership is defined as an action of leading people. Manager or leader in Tesco
organisation has important role to play in change management process without which
transformation within an organisation is not possible. They provide suitable direction as well as
resources to workers which is very much important to bring successful change at workplace. The
various leadership approaches which are required to deal with changes in organisational context
are:
Trait approach –This leadership approaches states that role of leaders is to implement
change within an organisation. As per this approach, it is very much important for Leadership in
Tesco to develop such potential and skills through which they can adapt or deal with change.
Leaders is required to increase their knowledge and they need to get update themselves about the

recent changes as this will assist them in providing training to their team. This is the best
approach for dealing with continuous change.
Situational Approach- As per this leadership theory, there is no single leadership style
which can be adopted by leaders in all situations. It is very much important for leader to consider
the needs by followers as well as situation before selecting any style. For instance, during the
transformation process, it is required by leaders in Tesco to adopt either supportive or directional
leadership style (Situational leadership, 2018 ) As this will assist leaders in managing change in
successful manner. Leaders with these types of leadership approaches are supportive. They
provide direction as well as support to their team members. This leadership approach is
effective, as it helps in ensuring successful implementation of change at workplace.
Figure 1: Situational leadership
(Source: Situational leadership, 2018)
Functional approach – this leadership approach emphasizes on the things or activities
which are required to be executed by leader during specific situation. For instance, when plan
has been made related to the bringing change in business policies or system, in such situations,
leaders in Tesco have to inform the followers about the same. As per this approach, in change

management process, there are different functions which are required to be performed by leaders
these are planning, organising people, controlling the activities of followers, evaluating result,
motivating people, setting an example etc. This leadership approach helps in eliminating the
barriers which might occur in implementation of change.
Relational approach – This leadership approach has focus on analysing the relation
which exit between leaders and followers. It is very much important for leaders in Tesco to
develop good relationship with followers. As this strategy will assist leaders or management in
gaining the support from workers in change management process. It will also enable leaders to
inspire people to get involved in transformation procedure. Relationship approach will aid
leaders in eliminating barriers as well as conflicts which might hinder the change management
procedure. This leadership approchj is that it enables leaders to develop strong relation ship with
followers which is very much crucial in order to motivate them to support change.
Transformational approach – Leaders with this type of leadership approach have
concentration on supporting an individual in developing skills as well as potential to participate
in change management process. In this approach, leaders in Tesco is required to evaluate their
followers’ capacity to satisfy the organisational needs (Carnall, 2018). Manager or leader in
Tesco organisation provides rewards to their employees for making significant contribution in
change management or other procedure.
Transformational leadership emphasizes on array of exchanges which takes between
followers and leaders, as this factor has direct as well as significant effect on change
management procedure. Leaders with this type of approach participate in the process with
workers in order to motivate them to increase their participation in bringing positive change at
workplace.
Transformational leadership is considered to be as suitable for Tesco organisation as by
adopting this, leader in Tesco can support workers and can encourage them to participate in
change management procedure. Transformational leadership approach is suitable as it will assist
an organisation in improving business performance. It will provide benefit to all that is leaders,
workers and an enterprise. The effectiveness of transformational leadership is that It promotes
enthusiasm. It helps in creating enthusiastic working environment and drives a company with
changes and innovations.