Analysis of Corporate Strategy and Governance at ASDA PLC: A Report

This report provides a comprehensive analysis of corporate strategy and governance at ASDA PLC. It begins with an introduction outlining the background, problem review, and literature review. The methodology section details the primary and secondary research methods employed, including sampling techniques and data analysis. The report presents the findings through a Gantt chart and thematic analysis, addressing key themes such as ASDA's adherence to corporate governance codes, incorporation of applicable principles, major strategic issues, and compliance with the grocery supply code of practice. The analysis includes interpretations of survey results from ASDA employees and explores strategies to minimize corporate strategy issues, including employee participation. The report concludes with recommendations and an action plan, supported by references and appendices. The research identifies oversight issues, supplier relations, and the need for improved corporate governance practices within ASDA. The report highlights the need for ASDA to improve its corporate strategies and practices to satisfy its stakeholders, including investors, customers, and suppliers. The report also examines the need for ASDA to improve its recognition towards development sustainable relationship with its suppliers for resolving issues related to corporate governance and strategy.

Corporate Strategy and
Governance

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Background of the study.........................................................................................................1
Review of problem faced by organisation..............................................................................2
Literature Review...................................................................................................................3
Proposed primary and secondary research methods...............................................................3
Gantt chart..............................................................................................................................4
LITERATURE REVIEW ...............................................................................................................5
Primary and secondary research undertaken .................................................................................10
Critical analysis of results..............................................................................................................13
Recommendation and action plan .................................................................................................22
CONCLUSION .............................................................................................................................24
Appendix........................................................................................................................................25
REFERENCES..............................................................................................................................27

INTRODUCTION
Corporate governance is considered as mechanisms, processes and relations through
which the corporations are controlled and directed towards achievement of business operations.
Governance structure and principles tend to identify distribution of rights and responsibilities
among different participants in the corporation (Kraakman and Hansmann, 2017).
This concept has been created by organisation to develop strategic plan for operations. It
also involves systems and procedures, which are designed to structure authority, balance of
responsibilities and providing major accountabilities to stakeholders. Corporate strategy clearly
discussed a long-term vision that organisation develop, seeking to create corporate value and
providing motivation to workforce for implementation of proper actions to attain customer
satisfaction (Stout and Blair, 2017).
Present report is based on analysis of Asda PLC to determine the overall scope and
direction along with the ways in which its various business operations work together to achieve
specific goals and objectives.
ASDA is a British supermarket chain headquartered in West Yorkshire. At present,
company deals in providing wide range of grocery products and service to its customers. This
research is carried out with an aim to determine problems faced by organisation in regulating
corporate strategy and governance.
Background of the study
Corporate strategy and governance is analysed as important techniques which are adopted
by organisation for development of action plan. It is also analysed as important part of business
that create recognition in organisation and also analysed as important for any company its
business operations.
In competitive business environment, it is important for every business to create effective
strategies, which enables them to sustain their position in market (Tricker and Tricker, 2015).
Corporate Governance is analysed as interaction between various participants in shaping
corporation's performance and its proceeding. Moreover, relationship between owners and
managers of an organisation must be positive and there should be no conflict between them too.
In addition to this, corporate governance enables an organisation to carry out business as
per desires of stakeholders. It mainly deals with determining ways in order to take effective
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strategic decisions. It also provides ultimate and effective authorities to organisation to sustain its
position in market and resolving problems (Allen, 2017).
In this research, the scholar has aims to carry out analysis of corporate strategy and
governance in corporation which helps in developing action plan for regulation of business.
ASDA Limited is selected by researcher which is international retail business enterprise has its
operations across various countries.
Various strategic decisions have been taken by managers in Asda to carry out business
operations and appropriate strategies to attain economic growth and development. Research will
also provide clear understanding about problems faced by organisation in regulation of business
operations.
Review of problem faced by organisation
Effective corporate governance requires Board of Directors to have substantial analysis
of company’s policies and practices. Management should have awareness about daily operations
of organisation and ways in which its objectives are being achieved. ASDA is mainly owned and
controlled by Walmart (McCahery, Sautner and Starks, 2016). However, various issues have
been faced by organisation in market which has influenced in business operations and
recognition among customers.
ASDA is named as the worst supermarket in treatment of suppliers. Shareholders have
placed ASDA below Morrisons as it named as worst retailer at complying with its code of
conduct. It has been named as the worst retailer of UK's major supermarkets in its treatment of
suppliers.
However, major oversight issues have been faced by ASDA in its corporate governance
because management does not have information about its operations. With effective business
management, this organisation must understand the requirements of customers. About 12% of
suppliers have stated that, ASDA rarely never complied with the Grocery Supply code of
practice. (Yu and et.al, 2016).
Issues have been raised by various suppliers that company is making incorrect deduction
from invoices without notice, requesting lumps sums to make up profit margins and conducting
abusive forensic audits of suppliers.
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Literature Review
According to Tricker and Tricker, (2015), corporate governance is analysed as system of
rules, practices and processes through which organisation is directed and controlled. It involves
balancing the interest of organisation' stakeholders such as shareholders, management, customers
suppliers, government, financiers and community etc.
Good corporate governance is considered as important for every business enterprise to
sustain its position and recognition in market. However, it encompasses practically every sphere
of management from the basis of action plans and internal controls to performance measurement
along with corporate disclosure. Yu and et. al., (2016) stated that, corporate strategy is
formulated to monitor progress and resolving issues that influence business goodwill and
performance in market.
Proposed primary and secondary research methods
Sampling: It is considered as process of selection of sample population from the large number of
population for collection of data in order to accomplish study in appropriate manner. Sampling
techniques have been divided in two categories such as probabilistic and non-probabilistic
(Aguilera, Judge and Terjesen, 2018). Simple random sampling will be used by research for
selection of sample size, which is considered as part of probabilistic sampling.
Data collection: It is also a process which is used for collection of data from various sources to
carry out study on corporate strategies and governance (Armstrong and et.al, 2015). There are
two important methods of data collection such as primary and secondary method.
In this research, both primary and secondary methods of data collection are used to
collect information on corporate strategies and governance. Questionnaire will be made from
collection of information from respondents. Books, journals and articles will also be used in
secondary analysis.
Data analysis: It is also analysed as process of interpretation and analysis of results, which is
carried out from the data collected on corporate governance and strategies. There are two-
methods of data analysis such as Qualitative and Quantitative analysis. In this research, scholar
will use thematic analysis method for interpretation of results.
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Gantt chart
Activities 1st
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k
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3rd
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4th
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Selection of
research
topic
Aims and
objectives
and
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Analysis of
problem
statement
Literature
review
Research
methodolog
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Completion
of proposal
Questionnai
re design
and pilot
survey
Documentat
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measures
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and records
Recommen
dation and
conclusions
Final
editing and
Completion
LITERATURE REVIEW
Concept of corporate strategy and governance
According to Klettner, Clarke and Boersma (2014), Corporate governance is mainly
regarded as a key driver for organisation performance. It is a concept that emerged from the
growth of business enterprises in the 20th century. After the crash of stock market in the year
1929, researcher began to argue for corporate governance mechanism which would allow
shareholders to keep in stock.
In latter half 20th Century this continued, corporate governance structures were being
introduced to control managers and ensuring that their actions are in line with the interests of
stakeholders.
In strategic management, it refers to the set of internal rules and policies that clearly
determine how company can be directed. However, corporate strategy is concerned with the
ways through which a firm can create its values across different business. Governance essentially
involves balancing of interests of an organisation's many stakeholders, such as shareholders,
employees, suppliers and management along with government as well as community. These
stakeholders have their important roles in developing effective corporate strategies for
organisation so that it will be able to create its values in marketplace.
As per the view of Tricker and Tricker (2015), Corporate strategy is aligned with the
ways through which companies like retail sector organisations create their values across their
competitors in market. For creating a competitive advantage, firms in retail sector needs to make
investments in a valuable set of resources, should craft business portfolio and also design
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structure of organisation, systems and corporate functions in order to share activities or transfer
skills across business.
Effective corporate strategy tends to create positive influence on growth of organisation
because it provides them competencies to retain their customers, increase sales and sustain its
market share. However, presently continuous decline in growth of retail sector clearly points out
ineffectiveness of their corporate strategy and governance.
Importance of good corporate strategy and governance in retail sector
According to Shamir (2017), for achievement of growth and sustainability in market, it
is essential for every retail sector organisation to create effective corporate strategies. Moreover,
appropriate strategies embrace capabilities of organisation in creating values of competitors.
Below given points clearly determine importance of good corporate strategy and governance.
 Managing and controlling operations: Pechlaner, Volgger and Herntrei (2012)
describes that creates good strategies and maintaining appropriate governance plays an
important role in controlling business operations. With effective strategy, managers will
be delegate and monitor the task performed by employees at workplace. Good corporate
governance tends to promote effective leadership, which enables employees to perform
their task with appropriate guidelines and achieve support in resolution of issues.
 Innovative ideas: According to Rothaermel (2015), Organisation's having appropriate
control or governance provides importance to their employees and focuses on developing
their potential so that they will provide innovative ideas for improvement of existing
products and services. Innovative ideas also influence stakeholders in retail sector to
provide their support in growth of company.
 Issues resolutions: As per the view of Morden (2016), development of effective
corporate strategy is important for resolving issues like decline in profitability, sales,
demands of product, employees participation etc. Issues related to maintaining
competitive advantage in market also enables employers to sustain its growth and
recognition in market. On contrary to this Du Plessis, Hargovan and Harris (2018), Good
governance is also important for resolution of issues like relationship with suppliers,
shareholders and performance of organisation in market. It alters the focus of
management to protect benefits of its stakeholders along with maximizing profitability.
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 Implementation of business plan: Goal oriented corporate strategy helps the
organisation in implementation of business plan effectively and achievement of goals.
This view has persisted in retail sector where strategies are conceived as plans to
accomplish specific goals. By improving corporate strategy, management will be able to
review its business plan timely and analyse its progress. On contrary Fernando, (2012),
Good governance and leadership also have extensive importance in implementation of
business plan and also monitor its progress.
Corporate governance issues faced by organisation in retail sector.
There are various important issues in corporate governance that play a great role. These
problems are interrelated and dependent on each other to be resolved. Amran, Lee and Devi
(2014) stated that each issue is connected with the corporate governance and have different
priorities and responsibilities in each retail business enterprise. Five main issues of corporate
governance are analysed such as conflict of interest, oversight issues, Accountability issues,
transparency issues and ethical Violations.
Brammer, Jackson and Matten (2012) stated that, these issues occur within the
framework of corporate governance when the managers and other authoritative officers or other
controlling members of corporation has the financial interest which directly conflicts within the
objectives of organisation. Bad corporate governance tends to create conflicts between teams
and employees in interest in business enterprise Phillips & Muir (2016). For example: A board
members of solar organisation who own a important amount of stock in an oil company has
conflicts of interest as, While the whom they serve on represents the creation of clean energy,
they also have financial stake in the success of oil industry, they must have a financial stake
within the success of the oil industry.
Grant (2016) stated that, effective and appropriate corporate governance in organisation
requires the board of directors to have an appropriate oversight or analysis of organisation's
policies, practices and procedures. It is considered as broad term that encompasses the executive
staff reporting to the management and the awareness of management of daily operations of
company and the way in which objectives have been achieved. Trong Tuan (2012) stated that
management needs to protect interest of stakeholders such as Suppliers, shareholders, employees,
acting as a check and balance against the executive staff. Without the oversight, Corporate staff
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organisation might start violating the state or federal law, facing issues, substantial fines from
regulatory agencies and suffering the reputation al issues with the public. For example: ASDA is
also facing some oversights due to its ineffective corporate governance after being a part of
Walmart. It is considered as Worst supermarket chain in treatment of its suppliers. According to
Schaltegger, Lüdeke-Freund and Hansen (2012), 12% of suppliers have stated that Walmart
owned supply chain rarely never complied with the Grocery Supply code of practice. ASDA is
making incorrect deduction from their invoices without notice, requesting lumps sums to make
up profit margins and conducting abusive forensic audits of suppliers.
Cheney and et.al (2014) specified that, It is considered as necessary for appropriate and
effective corporate governance in every firm. From top management to operational level
workers, every level and department of organisation should report and tends to be accountable
to another as a framework of checking and balancing. In contrast to this Doppelt (2017), stated
that actions of every employee in organisation in accountable to the shareholders and public.
Without accountability, they can endanger the success of overall business enterprise or influence
stakeholders to lose the desire to continue their financial investment.
In order to be transparent, it is essential for company to report gains and losses
accurately and provides these reports to stakeholder or investors of organisation. Moreover,
over inflation of profits and minimizing the losses will mainly provide negative influence on
relationship of organisation with their stockholders when they recognise that they were enticed
to under false pretences. However, lack of transparency in organisation can also expose the
organisation to get punishment or fines from regulatory bodies in UK.
According to this Bendell (2017), members of the executive board needs to have ethical
duty in order to make decisions and those who invest in their company under false presentness.
Moreover, every business enterprise must have an ethical duty to safeguard social welfare of
others which are involved in the retail industry. Minimizing the pollution and eschewing
manufacturing in organisation which don not adhere to similar labour standards as the US are
both considered as major example of corporate governance, ethics and social welfare etc.
Influence of corporate strategy and governance on performance of organisation.
According to Rothaermel (2015), evaluation of performance is based on analysis of
leadership and control within enterprise as it provide reflection about strategic decisions and
capabilities of management to achieve objective.
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Good corporate governance tends to create growth of organisation is market and also
enables company to obtain profitability. Further. If decision are taken by participation of
employees in organisation then it is considered as effective. It tends to promote corporation and
coordination between management as well as employees which tends to attain growth and
development.
As per the view of Burns (2016), effective corporate provides positive influence on
business performance because it provides opportunities for company to sustain its competitive
position in market. Highly productive and goal oriented strategy always influence employees to
perform task in such as manner that objectives of company will be accomplished in specified
time duration.
Brammer, Jackson and Matten (2012), Business performance related with stability and
capabilities of organisation to sustain and maximizing high profitability in market in comparison
with stakeholders. Good corporate governance involves participation of employees in
formulating corporate strategies and decisions. Effective corporate strategies and governance
tends to improve potential and competencies of organisation in market which has increased its
performance and competencies. However, bad corporate governance involves authoritative style
of leaderships in management does not provide importance to employees in making strategies.
They focus upon maximizing high profitability and growth apart from providing emphasis upon
the benefit of organisation.
According to Grant (2016), Poor governance is related with ineffective strategies and
decisions of enterprise that results in decline of their profitability and growth in market.
Recently, some enterprises in retail industry have faced issues like decline in sales turnover,
recognition, Good will and legal restrictions due to non compliance with laws. These issues
highlight continuous decline in business performance of enterprise.
Resolution undertaken by organisation to resolve corporate governance issues.
There are various important resolutions have been analysed such as value based corporate
culture, holistic view, compliance with laws, disclosure and accountability and corporate
governance and HRM.
According to Sadgrove (2016), for regulation of business operations in effective way, it is
required to have some ethics and values. For resolution of these issues, organisation needs to
develop an ethical corporate culture within enterprise. Management should provide importance
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to their employees and protect benefits of its stakeholder to prevent or retail positive business
relationship.
This holistic view and religious attitude is more important for regulating business
enterprise, however, it is not easier for firm to adopt it, they need to make special efforts and
once implemented, it will lead to development of nobility and regulation of positive
relationship.
As per the view of Morden (2016), if company in retail sector mainly requires progress,
posses ethical values and also have desire to regulate long run business operations, then they
should abide and comply with laws such as Grocery Supply code of practice, investment laws,
foreign regulation act, competition act, cyber laws and employment regulations etc.
According to Du Plessis, Hargovan and Harris (2018), disclosure and transparency is
considered as major aspect of good corporate governance. For resolving the transparency issues,
timely and accurate information must be disclosed by business enterprise on the matters like the
financial position, performance etc. Moreover, transparency is required to state government
should have faith of retail sector enterprise and consequently it reduces the corporate tax rates
from 30% today as compared to previous years (Fernando, 2012). However, it can be said that
transparency is much needed in the corporate bodies so that due to major competition in the
market place, customers generally have various choices that is why they cannot shift another
corporate bodies.
As per the view of Amran, Lee and Devi (2014) For the corporate body, the employees
and requires are just like family. For resolution of corporate governance issues, Human resource
management plays vital role because they both these aspects interrelated with each other. For
resolution of issues such as ethical, compliance with laws and conflict of interest, HR department
needs to formulate effective strategies. This aids the management in maintaining its position and
high business performance in market.
Primary and secondary research undertaken
For undertaking research, it is essential for scholar to analyse and apply appropriate
method which helps in collection of data, resolving problems and achievement of aim &
objectives in appropriate manner. Research methodology is eventually regarded as term which
means the science of how research is being carried scientifically. Further, it is way to
systematically and logically resolve issues, and understanding the whole process along with
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