Leadership and Change: A Comparative Report on IKEA and ALDI

This report delves into the dynamics of organizational change, focusing on the strategies employed by IKEA and ALDI, two prominent retail giants. It begins by comparing their approaches to change management, highlighting how internal and external drivers influence their strategic decisions. The report analyzes the impact of change on organizational strategies and operations, examining how ALDI and IKEA adapt to market fluctuations, customer preferences, and technological advancements. Furthermore, it explores the internal and external drivers of change affecting leadership, teams, and individuals within these organizations. The report also investigates the barriers to change and their impact on decision-making, employing force field analysis to assess driving and resisting forces. It then examines various leadership approaches to deal with change, evaluating their effectiveness in delivering organizational change. The report concludes with recommendations for effective change management, drawing on the case studies of IKEA and ALDI to provide practical insights into leading and navigating organizational transformation.

Understanding and Leading
change

INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
P1 Comparison between two organization where there is influence of change on strategy.......4
P2 Ways by which internal and external drivers of change affect leadership, team and
individual.....................................................................................................................................6
P3 Measures taken to minimize negative impact of change on organization behaviour............7
M1 Drivers of change and types of organizational change.........................................................8
M2 Theories and models for organization to respond towards change......................................8
D1 Recommendation...................................................................................................................8
TASK 2............................................................................................................................................9
P4 Barriers to change and its influence on decision making......................................................9
M3 Force field analysis to assess the driving and resisting forces...........................................10
D2 Use of force field analysis for meeting organizational objectives......................................10
TASK 3..........................................................................................................................................10
P5 Leadership approaches to deal with change.........................................................................10
M4 Extent to which leadership approaches can deliver organizational change........................11
D3 Effectiveness of leadership approaches and models of change management.....................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Change is a continuous process which is inevitable in nature for making things different
as well as to cope up with current demand. However, corporate world are coming up with
numerous of new things at marketplace with distinct motives. For example; reformation in
current transaction process due to the advancement of technology as well as for short procedure
(Kotter, 2012). Therefore, project is going to highlight the need of changes at workplace and
drivers which enforce company to be attentive towards alteration procedure. Basically, report
will compare the organizational strategy of IKEA and ALDI which are seen as top most retail
association of UK for understanding the adoption of single change in two distinct ways.
Furthermore, various barriers and approaches which are used by leaders for managing negative
impacts of change are also outlined in the project.
TASK 1
P1 Comparison between two organization where there is influence of change on strategy
Organization’s strategy is a term which shows planning of a company to attain long term
benefits by considering necessary factors. For example; using work breakdown structure for
distributing roles and responsibilities between various staff members in order to minimize the
work pressure from single member. ALDI is a most successful association in retail industry and
having around 10000 stores across the international boundaries for maximizing their profit level
(Doppelt, 2017). In fact, this company also believes in modification but there is a difference of
implementation process. For example; ALDI takes immediate decision after getting aware about
the fluctuating market whereas IKEA might take some time to react and make judgement by
analysing competitor’s strategies also. Therefore, some of the examples which shows the impact
of changes on IKEA and ALDI organizational strategies and operations are discussed as follows-
ALDI IKEA
Organization
al strategy
Executives of ALDI rarely give
interviews as they don’t want to
disclose much data about their
methods. Basically, ALDI believes in
renting smaller stores, employ
smaller number of people, pay
On the other hand, IKEA believes
that globalization is current trend for
maximum number of companies.
However, most famous strategy of
this organization is that; they believe
in designing and developing products

minimum amount of rent and energy
costs. In fact, company believes in
selling very limited amount of items
in their single stores for cutting down
the unusual cost. As a result, Aldi
offers incredibly lower prices as
compared with IKEA or any other
competitors (JESSICA LEIGH
MATTERN, 2017).
As per the strategy of ALDI
employees are influenced by
company policies which show in
their work. An organisational
strategy is the sum up of all the
actions of ALDI which intends to
achieve long terms goals. When all
these actions are made together its
result in framing strategic plan. For
example; employees of an
organization also believes in storing
minimum stock as well as focussed
in acquiring maximum rate of return.
As well as, when strategy is formed
properly it will help employees in
doing their work in proper manner
because they known what they have
to achieve.
Throughout the analysis, it has been
understood that significant rate of
change is occurred at workplace
because this company is following
as per the customer choices on the
daily basis. Along with this, offers on
a low price but more attractive and
reliable products. Mainly,
“sustainability” has been at the root
of this firm throughout its existence
by using numerous of strategies and
changed according to the situation
(Finnigan and Stewart, 2010). It
shows that employees of an
organization also trying to cope up
with current changes by coming up
with creative product in order to
sustain in new marketplace.
According to Bohner and Arnold
1996, determining the potential
outcome of change as well as
estimating what requirements needs
to be modified for accomplishing a
change. On the other hand, Pfleeger
and Atlee always focussed on
uncertainty associated with changes.
It shows that moderate rate of change
is occurring in an organization. IKEA
is using globalization organisational
strategy which result several
modifications related to policies and
procedure within respective company.
Such changes sometimes gives
negative impact on the working of
employees.

each or every change.
Operational Retailers of Aldi are having various
outlets where customers walking in
to purchase specific goods either by
cash or card. However, retail supply
chain consists of various activities
and members who are involved in
this are aiming to reduce and
distribute rights product to the right
outlets in a given time frame. Entire
process is managed through IT with
the use of ERP (enterprise resource
planning) software which allows
visibility to track and observe all the
stakeholder levels. Along with this,
emergence of various competitors
also enforces an organization to
modify their process for smooth
functioning of an association. Hence,
company is now preferring modern
technology for converting their raw
materials into finished goods such as;
using lean production of minimizing
the amount of wastage in their
operational process. Operational
strategy is important to be frame in
proper manner because employees
are the one who do day to day
operations.
On contrary to this, operational
process of IKEA is really
commendable but still there are some
loopholes in the procedure. Most
foremost issue which comes out is
inventory storage of company due to
which warehousing cost is very much
high. Along with this, it creates
wastage of products also. Major
reason behind this operational issue is
that company is getting failed in
replacing the previous stock and still
design the new stock as per the
consumer demand. Thus, company is
now focussing in their operational
loopholes by using advanced
technology for overcoming the issue
of stock wastage. Furthermore,
process of an association fluctuates as
per the current changes in functioning
of an association. For instance; they
are also using six sigma technologies
in their operational process for
reducing the waste materials but
somehow failed in implementing it in
proper manner which resulted in
loophole in company operational
process.

Change impact analysis:
This analysis was stated by Bohner and Arnold to identify and analyse the consequences
associated with change. Along with it, this analysis helps in estimating the modifications which
are needed to be carried out to accomplish a change.
Types of impact analysis techniques:
 Trace: In this aspect links between design element, specification and requirement are
captured. These factors are analysed to evaluate the scope of initiating changes.
In case of ALDI, company prefers to own and design small stores at multiple locations with
limited supplies. This will helps company in catering the needs of customers in accordance with
their geographical needs and preference. As stocks will be limited and ordered according to
preference of customers, wastage will be eliminated. IKEA prefers to produce and distribute
affordable products according to the requirements of customers. As products will be affordable
and in matches the requirements of company, sales of company will increase. Outlets of IKEA
are well themed and designed to attract large number of customers because of their ambience.
 Dependency: In this technique link between variable, modules, part and logic are
analysed to determine potential consequences. Managers in IKEA tries to analyse
consequences of changes by applying different logic and components such as credit
policies, products availability, sales etc. Case of IKEA is different, managers in IKEA
identifies consequences of change by analysing raw material, budget availability and
warehouse costings.
 Experimental: In this analysis technique effect of change is determined with the help of
expert design knowledge. Team discussion and individual judgements are used to
determine modification's consequences. To calculate the impact of change management
of ALDI prefer to arrange meetings on regular basis. In these meetings, discussions are
carried out regarding consequences of modifications and aspects which are needed to
modified. In case of IKEA, a research panel is constituted whenever a change is required
to formulated. According to the findings of that committee, consequences due to
modifications are analysed.

P2 Ways by which internal and external drivers of change affect leadership, team and individual
Internal drivers are considered as those elements which are easily control by an
organization such as; customers, suppliers, shareholders and employees. On the other external
drivers are not controlled or managed by an association. In fact, company needs to change their
policies as per the external change such as; political norms, economy change, environment,
technology, social and legal. Internal and external drivers are interconnected with each other as
single changes in one factor enforce other to make changes. For example; changes in current
trends affects the choice or preferences of customers like; arrival of foreign or unique product
change the mind of consumers, positive goodwill of brand make the customer loyal towards
particular company (Anderson and Anderson, 2010). Aldi and IKEA both are well established
organization at marketplace but both are affected differently with the internal and external
drivers of change which are discussed as follows-
Internal- Drivers which are existing within an enterprise enforce an organization towards
changes such as; employees demand, fluctuation in consumer taste or preferences and suppliers
policies. Therefore, influence of these drivers are expressed as follows-
 Employees- Leaders of aldi make their decision by considering team members because
every employee who is working is highly skilled and talented. Thus, for after seeing the
environment and protest of employees, leaders are treated them in very polite manner. As
a result, it has been understood that leaders of ALDI are following democratic style of
leadership which aids them in creating positive relations with staff members (Tang, Lu
and Hallinger, 2014). On the other hand, IKEA is having lots of stores by offering
maximum amount of items in one store due to which coordination between leaders and
employees gets mismanaged. In fact, sometime they get failed in coping up with
environmental change and treat employees in a rude manner which resulted in labour
strike at workplace. It shows that, leaders of IKEA are very autocratic because sometime
they get very rude with their employees while managing business operations.
 Customers - Current demand of customers enforces entire team to work in collaboration
for fulfilling their demand. As a result, team of distinct Aldi stores get engaged to deal
with sudden change in demand. On the other hand, IKEA always believes in designing
new products as per consumer requirement due to which team of company are already
prepared for these kinds of changes. According to the response of customers, leaders of

organisation implement the production and operational tactics. Sometimes, changes in
preference of customers comes at a fast rate. In that case stress on individual employees
and team increase due to which sometimes mismanagement takes place if not considered
properly.
 Organization policy/shareholder decision- Reformation in organizational policies of
Aldi enforces employees to work accordingly such as; offer limited stock in a single
store. Whereas, staff members of IKEA know that company believes in designing
products as per consumer demand then they all are always prepare for instant services. As
per share holder decision IKEA and ALDI needs to change their way to carry-out
business activities. Employees faces short term issues due to this. (Emira, 2010).
SWOT analysis of IKEA -
Strength Weakness
 Strong global brand
 target different people
 good quality of product at low price
 Size of global business could means
hard to control standards and quality.
 Need to display good environmental
activities due to the size of
organisation.
Opportunity Threat
 A growing demand for low price
products.
 Demand for reduced water usage and
lower carbon footprints.
 More competitors are entering with low
price households and furnishings.
 Social trends get slowdown when first
time buyers entering in the housing
market.
External drivers- Factors which falls under external elements are not under control of an
organization. In fact these changes are affecting an association in various manner. However,
some of the major elements which helps in understanding the changes through external elements
are PEST which is discussed as follows-
1. Political factor- Governing bodies of UK have enacted numerous of laws related with
employees due to which leaders of Aldi are bound to follow that rules while handling a

team. Whereas, heads of IKEA is also trying to follow each or every norms which are set
by government but somehow due to number of stores they get failed in doing so
(Hrebiniak, 2013). Due to these changing norms leadership behaviour of both companies
chnages accordingly. Leader in ALDI and IKEA needs to formulate new strategies for
employees and teams in order to sustain a firm position within marketplace.
2. Legal- There is some rules are designed by legitimate bodies which need to be followed
while working as a team such as; each or every team member is bounded in a single rules.
Therefore, teammates of aldi stores know about these things and work accordingly like;
limited inventory in a single store. On the other hand, disputes might arise between group
members of IKEA because of loopholes in their few departments just like operational
process.
3. Technology - Technology advancement enforce individuals of Aldi towards due to which
marketing manager is preferring modern method of advertisement to cope up with current
changes. On contrary to this, members of IKEA are also reacting according to the current
requirement such as; demand of hike in salary because of market changes (Fyke and
Buzzanell, 2013). If these conditions and demands of employees will not be fulfilled by
leader, working productivity of company will reduce and leader needs to become strict.
This can results in grievances and issues of employees with company.
4. Social- Demand of society always changes due to the arrival of foreign companies and
close substitutes. Therefore, in order to cope up with these changes, ALDI and IKEA
both are trying to come up with creative concept and some other new products for
capturing minds of distinct clients. It shows that societal changes enforce associations
towards creating something new for gaining competitive advantage at marketplace by
satisfying the needs of clients or whole community.
5. Economic- Fluctuation in economy of a nation influences the sales performance of an
organization by minimizing the customer demand. For example; if there is a change in
currency rate of nation then an organization needs to follow up with their current and
future contract and act accordingly. Along with this, inflation and deflation also enforce
an association to act as per the current marketplace. Leaders in IKEA must analyse these
economic aspects properly, if these aspects are not given consideration company can face
severe losses. Also, employees will feel mislead while performing business operations.

6. Environmental – It include factors like weather, green & ethical issues, pollution , waste
and recycling. When these get changes it give wide impact in positive as well as negative
manner on the working of IKEA. Leader in IKEA needs to consider these factors before
formulating policies and must guide employees in accordance with the changes so that
desired results can be achieved.
P3 Measures that can be taken to minimize negative impact of change on organization behaviour
Changes are not easily acceptable by the enterprise because it creates numerous issues
such as; disturbed the whole environment, culture, policies, working style and so on. In fact,
somehow affects the performance of employees also because few unskilled employees will never
like to use modern technology to perform their job role. Aldi and IKEA both are largest retail
organization by having maximum number of employees in their association. Thus, it is not easy
to both of them to control the negative influence of change from organization behaviour (Glass
and Cook, 2016). Therefore, some of the necessary measures which are taken by Aldi and IKEA
to control negativity are discussed below-
ALDI IKEA
Honest and thorough- Managers of Aldi
believes in sharing the real information with
their staff members to minimize the
possibilities of rumours and wrongful
assumptions of employees.
IKEA follows an appropriate procedure before
implementing change.
Clear description- Initially, managers of
IKEA clearly define the type of change which
is going to incurred at workplace in order to
make them prepare for specific modification.
Make an-Encompassing announcement- It
means, managers or board of directors are
explaining the whole change in clear manner
instead of short announcement. For example;
announcing “we are moving in a new
building” is vague but saying clear
information in which necessary data will
include such as; time, area of new building,
reason and everything provides more detail
Determining impact- After analysing the
change, company is going to highlight the
impact of specific modification on the
employees as well as entire corporation for
making them understand.

(Quinn and et. al., 2012).
Highlight personal upside to staffers-
Changes affect the employees very much
because they are concerned with their
workstation. Thus, Aldi always show the
opportunities of growth to their staff
members before introducing any change.
Provide effective training- Face to face
training is helpful for the success of entire
changes. Along with this, it helps in forming
the potentiality of entire organization which
resulted in positive environment at workplace
(Stanleigh, 2013).
Apart from all the above steps, an organization can also consider some of the major
elements for minimizing the negative influence of changes are discussed below-
 Involvement of employees in change process- As per this element, ALDI and IKEA
both has the opportunity to gain confidence level of their staff members. For example;
company needs to enforce their employees to take part in a change process by expressing
their opinions upon specific subject. As a result, it helps in maintaining clear or
transparent relations with management and employees and it will be beneficial for
company while implementing change.
 Expansion of communication channels- Interaction between employees and all the
members whosoever are available at workplace is really indispensable for minimizing the
probabilities of disputes.
 Discuss employees regarding their feelings- This element support an organization in
promoting employee retention at workplace by understanding the feelings of employees
and make them realise that they are also important person of an organization.
Kurt lewin model is one of the most appropriate theory which is used by an
organization for managing change as well as aids to respond towards modification that incurred
at workplace. It helps an association by managing things in three steps as well as aids in
controlling probabilities of negative impact. However, by reducing negativity an organization
can easily manage all the things which is newly implemented at workplace. For example;
convincing employees by getting involved with them in healthy discussion and aids in
establishing positivity across the workplace. Additionally, it aids an association in getting
succeded in attaining their set objectives or goals in a defined time period by satisfying the
clients of distinct customers.

Hence, it has been understood that reduction of negative impact is very much beneficial
for the success of an organization because it helps in minimizing the possibilities of maximum
benefits. Along with this, aids in establishing positive image of an association at marketplace by
implementing change in perfect manner as per current demand and trends. However, negativity
of an organization act as an obstacle in the success by resisting change. Therefore, minimizing
negativity is highly beneficial because this will help an enterprise in implementing new things in
better manner in order to cope up with recent changes.
ADKAR Model – It is the most popular model which is implemented by the company
for managing changes. ADKAR model created by the Jeffrey Hiatt, respective model assist
facilitate changes on individual level since change is often less about own as well as more to
people reaction. ADKAR implemented in IKEA are as follows :-
 Awareness – Identifying or knowing the requirement of change
 Desire – Support the required modification
 Knowledge – Determining the process of implementing changes
 Ability – capability of implementing changes
 Reinforcement – It is for sustaining the changes
Hence, Success of changes in the IKEA is totally depended upon their employees, it is
important for to have clear knowledge about the modification to staff members. So that, changes
become successful and result in accomplishing goals as well as objectives of the IKEA.
M1 Drivers of change and types of organizational change
There are two types of drivers are identified in which various drivers are fall such as;
internal and external are two main drivers of change that are encountered by an organization. For
example; internal organization change are; policies of company, working hours, employees terms
and conditions, decisions of shareholders and so on. Whereas, external organizational change
are; economic policies, fluctuation in currency, legal norms of registering enterprise and so on
(Hintz and Bahia, 2013).
M2 Theories and models for organization to respond towards change
ALDI and IKEA both are successful organization and having they are style to respond
towards changes. But there are few models and theories which must used by company to react on
certain modification. For example; Kurt Lewin model, Stephen covey’s seven habits model,