Coursework 2: Leadership and Change in The Lego Group - Case Study

This case study analyzes the leadership and change initiatives implemented by The Lego Group, particularly focusing on the period since Jorgen Vig Knudstorp took over as CEO in 2004. The assignment evaluates the changes made within the organization, such as the shift in production and distribution, the focus on core products, and the integration of various business areas to improve supply chain management. It also discusses and evaluates Knudstorp's leadership style, including his emphasis on listening, clear communication, and taking responsibility, and how he applied leadership theories like trait and situational leadership to drive organizational success. Furthermore, the assignment provides recommendations for the Lego Group to sustain its success in the future, considering the dynamic market environment and the need for continued innovation and adaptation. The analysis is supported by relevant leadership and change theories, along with references to academic sources.

Leadership and change
INTRODUCTION......................................................................................................................2
1. Use leadership and/or change theory and also assess change mage in Lego Group since
2004........................................................................................................................................2
2. Discuss and evaluate Jorgen Vig Knudstorp’s leadership of The Lego Group. Use
leadership theory as the basis for your answer.......................................................................5
3. Using your understanding of leadership and change, and using the information in the
case study, what recommendations would you gives to the Lego Group to continue their
success in the future...............................................................................................................7
CONCLUSION..........................................................................................................................8
REFERENCES...........................................................................................................................9
Books and Journals.................................................................................................................9

INTRODUCTION
Leadership and change is very important for the success or growth of business
organisation. The leader focuses on encouraging its subordinate for accomplishing vision as
well as mission of organisation in stipulated period of time. Apart from this, the duty of
leader is to provide appropriate track to its employees for carry out their work in good way.
In this report it is necessary to evaluate or assess the changes which are made in the Lego
group since 2004. There are various changes which are made in the Lego group since 2004.
For example in retail sector there are 12 outlets that are open as per the strategy or tactics that
increases the experience level of customer in relation to Lego product. There are 15 outlets
which are increased in 2004 that increases the profit margin of the company. Apart from
these 15 shops in relation to test and there are various shops which is opened in parks. Their
main focus is to introduce 300 stores in order to achieve the objective of retail sector during
the particular phase of time period. Therefore it is necessary to bring changes within business
organisation. Their explanation regarding the changes as well is leadership Theory which is
also discussed in this report. Apart from this it is necessary to give recommendation to the
organisation in context of change which bring within business organisation during the
particular phase of time period (Holmes, 2017).
1. Use leadership and/or change theory and also assess change mage in Lego Group since
2004
There are several changes which are made in the Lego group since 2004. The
company focused on its core products and introduced the Duplo label at the end of 2004.
Since 2004, the production has moved to Mexico and the distribution has moved from
Billund to the Czech Republic. Lebo able to make these changes in bring back the company
in profitable position through change the CEO and focused on its core product which was to
make toys playable for all kids. Additional to this; to improve profits from available revenue,
company focused on improving its supply chain management through integrating four
business areas; corporate finance, corporate center, markets and products, and community of
LEGO group together. It has made strong ERP system of supply chain process, which helps
company in increasing its revenues by 11%; company also consolidated multiple HR
platforms into one global system which helps CEO in focus more in less time. The new
product lifecycle management (PLM) system boosts sales revenue of the company through
quickly launching its new products in the market.

They did this because; one of the main reasons behind the failure of LEGO was taking
advice from all experts and unnecessary putting their leg into innovation which was not
accepted by people. It gets diverted from its core objective which was to make toys playable
by children and also spread knowledge through creative toys. LEGO was known for its
creativity and have wonderful staff but this change costs much to the company and they face
failure until the end of 2004.
Company is hoping to keep away from adopting digital strategy in future preference
because according to CEO Jorgon Knudstorp; the transformation that had accompanied the
implementation of the Lego enterprise platform had developed important capabilities that
positioned the company to leverage digitalization.
The above change has altered the culture in Lego; like previously company was
focused on innovation but after 2004; the new culture of creativity helps organization to
recover its financial strength. LEGO starts thinking on global collaborative culture, which
brings all global branches with the help of ERP integration tool. Additional to this, company
focused on supply chain process through adopting integration system among departments
which helps it in making strong management system and avoid slow process and unnecessary
wastages. It changes the structure of organization by integration and builds coordination
between various departments and branches. It was emergent change; as company was to
declare bankrupt. Thus CEO reviewed the cause of failure and take immediate action to
recover from present deficit.
For example in retail sector there are 12 outlets that are open as per the strategy or
tactics that increases the experience level of customer in relation to Lego product. There are
15 outlets which are increased in 2004 that increases the profit margin of the company. Apart
from these 15 shops in relation to test and there are various shops which is opened in parks
(Borgmann, Rowold.and Bormann, 2016). Therefore, it has been analysed that Lego
Company launch 5 branded shop as well as four outlet shop. In addition to this, there are
various expansion in relation to brand store that also be expected by the owner of the
company since 2004. Their main focus is to introduce 300 stores in order to achieve the
objective of retail sector during the particular phase of time period. Position of Lego in 2004
was at diminshing level & it was due to their strugling nature of understadning what
conumers wanted. Moreover, the copmpany was founded because of principle of binding
bricks on basis of 'system of play'.

Further there were certain changes which were adopted like-
Strategies- They change their way of strategies of dealing with consumers as they
started using surverys for understadning needs of consumers.
Human Resource- new and efficient human resource were hired who uses different
types of techniques to hire potential employees. Moroever, they formulated new policies for
development of business.
Therefore it is necessary to bring changes within business organisation. To launch the
own brand outlet, there is a distraction to administration as well as to the core business. There
is different kind of skill which is necessary to achieve the objective of the organisation in
relation to its customer. There is various retailing shop such as Wal-Mart, Kmart that is using
own brand concept. Therefore the Lego business focuses on increasing their profit margin as
well as performance level in outlet for shops therefore it is necessary to have good skill that
help in increasing or expansion of the theme parks that provide the whole direction to the
organisation for success and growth in future period of time There are various leadership as
well as change theory which is applied by the organisation that is going to be mentioned
below:
Leadership theories
Trait theory It signifies the characteristic in relation to personality of leader in an
appropriate manner. The theory focuses on quality that must be present in the leader. The
quality such as intelligence, responsibility & creativity and so on that focuses on assessing
the social, physical as well as mental features of an individual person for increasing the
knowledge regarding what characteristic is considered as a common among leaders. They are
various traits which must be present in the leader such as patients,’ innovation this is related
to the personality traits and also the leader focuses on tasks related traits such as they are
allotted the work to its staff and also motivate them to perform them in better manner. As
Jorgen has a trait of creativity and thinking in a smart manner which helps company in grab
new opportunity from the market. It is significant for leader to possess the intellectual skill in
order to tackle the different situation in an appropriate manner.
It involves knowledge, capability as well as emotional attributes that must have in the
leader. Therefore the traits are considered as an important within business organisation in

order to build effective relation among the staff of the organisation in an appropriate manner.
(Feng, Huang and Zhang, 2016).
Situation theory this theory specify the style of leadership is completely based on the
maturity of an individual person. There are various things that are included in this theory such
as telling, selling, delegating as well as participating. The leader mainly focuses on
participating leadership style in which they provide opportunity to the individual person in
order to take decision which will be beneficial for organisation. It increases the confidence
level of an individual person in future period of time. In context of Lego group, the leader of
the organisation focuses on involving the employees of company in order to take effective
decision in upcoming period of time (Visser, 2017).
2. Discuss and evaluate Jorgen Vig Knudstorp’s leadership of The Lego Group. Use
leadership theory as the basis for your answer.
Lego Company focuses on leadership that is under the Jorgen Vig Knudstorp’s. They
focus on the value as well as a product of business organisation. The leadership style focuses
on increasing the profitability of business organisation. There is the strategy related to
premium pricing that increases the sales of Organisation in future period of time. The core
value includes the quality of product, Legacy as well as value of money that must be
provided to the retail customer (Kulich, Iacoviello and Lorenzi-Cioldi, 2018).Therefore they
focus on adopting those kinds of leadership style in which the customer is satisfied in good
manner (Von Weitershausen, 2016). They also offer innovative or unique product with
customer at relatively less price in order to attract them towards their product. They adopt
situation leadership within business organisation that is given below:
Situation Leadership theory this theory specify the style of leadership is completely
based on the maturity of an individual person. There are various things that are included in
this theory such as telling, selling, delegating as well as participating. The leader mainly
focuses on participating leadership style in which they provide opportunity to the individual
person in order to take decision which will be beneficial for organisation (Hrabowski, 2019).
It increases the confidence level of an individual person in future period of time. In context of
Lego group, the leader of the organisation focuses on involving the employees of company in
order to take effective decision in upcoming period of time. For example- Jorgen use this
leadership style to understand the change which he made in 2006 after continous level of
dimishing of profit. This style is suitable because it increases the critical thinking of leader

and allows them to make new changes accoridng to situations. This style is beneficial as it
assist in development of growth by following trends of market.
There are various ways through which the leader implement the leadership theories in
business organisation that increases profit margin in future period of time. There are various
leadership skills which is going to be mentioned below that must have in the leader in order
to implement the leadership style that is going to be mentioned below:
Listen and learn it is the responsibility of leader of Lego group to listen the problem
or issues of their employees in order to resolve them. It increases the productivity or
performance level of an individual person within business organisation. Therefore it is
necessary to have a skill in relation to listen to their employees is necessary for implementing
the leadership style within business organisation. In addition to this, it is also necessary for
leader to learn unique things that help in bringing in changes within business organisation
(Kulich, Iacoviello and Lorenzi-Cioldi, 2018).
Communicate clearly it is the responsibility of leader to communicate their messages
to its employees in good way. It helped them in adopting the effective leadership style as per
the situation arises at workplace.
Take responsibility here in the leader of Lego group focuses on taking responsibility
in order to perform different work in an appropriate manner. It increases the profit margin
and sales of business organisation in future period of time. The main purpose is to implement
leadership style in workplace for increasing profit margin during the particular phase of time
period. These are important because it helps in increasing confidence level at higher scale as
well as make indvdiual independent. Advantages is that it makes person aware about self role
and in professional life. Drawback is that it makes it makes person nervous to perfrom multi
tasking.
Implementation of Situational theory by Lego group
It is the situation arises where leader adopts situational theory in which there are
various changes which are made in the Lego group since 2004. For example in retail sector
there are 12 outlets that are open as per the strategy or tactics that increases the experience
level of customer in relation to Lego product. There are 15 outlets which are increased in
2004 that increases the profit margin of the company. Apart from these 15 shops in relation to
test and there are various shops which is opened in parks. Therefore it has been analysed that

Lego Company launch 5 branded shop as well as four outlet shop. Moroever, with this style
they chooses mopst appropriste location for their shops so that customers are easilty
accesible. Furthermore, it helps them in using os strategies in most efficient manner through
which it was easiy to use this type of leadership style at wider level.
There are various situations in which the organisation adopts situation leadership.
Therefore in case of destruction of the administration as well as business it is necessary for
organisation to have large capital in order to carry out the work in an appropriate manner.
There are various skills which are needed to have for achieving goal as well as objective of
business organisation. It is also helpful in increasing the satisfaction level of customer in
particular phase of time period. In context of Lego group, in case of lack of stock turn as well
as performance margin in relation to the product that is offered in outlet. Here in the
organisation adopts situation theory and tackle the situation in an appropriate manner during
the particular phase of time period (Bolden, Gulati and Edwards, 2019). This help them to
make deicison making in proper way. Also, it is benfificla for their business in longer period
of time.
The other issue which arises at workplace and they adopt the situational theory. They
want to expand their business Administration magazine in 2003 and they continue suffer
losses of 30% within one year. They also decline regularly in 2004 with approx 10%.
Therefore here in the organisation faces loss of 40% sales during the particular phase of time
period so that they are in loss as well as it imposes negative impact on the company.
Therefore the top management of business organisation focuses on stability of sales they
want to cut down the cost of the product with 40% in order to attract the large number of
customer at in better manner. In addition to this there are various issues which is faced by the
customer that is communicated to the top management of the company. For establish the
situation they focus on lower down the cost of the particular product that help in increasing
the profit margin and in future period of time (Groves, 2020).
3. Using your understanding of leadership and change, and using the information in the case
study, what recommendations would you gives to the Lego Group to continue their
success in the future.
There are various recommendations which are followed by Lego group in order to
continue success as well as growth of the organisation in future period of time that is going to
be mentioned below:

It is necessary for the Lego group to implement innovative technology in order to
provide unique or specific product and services to its customers at relatively low cost in order
to gain competitive advantage over rivalries at Marketplace. The main purpose is to lower
down the cost of the product in order to increase the sales as well as profit margin in
upcoming time period. Main benefit is that it they are able to access large number of
customers. Main drawback is that it is cost expensive in nature (Marshall and Broome,
2016).
The other recommendation is that it is necessary for the organisation to make
appropriate strategy in order to offer the product that is more good or superior than the
competitive products that must be provided to its customers at affordable price. It increases
the profit margin and sales of the organisation in future period of time. Therefore, the main
purpose of leader is to make appropriate strategy in order to assess the strategy which is
implemented by the competitive firm and implement premium pricing strategy in order to
attract large number of customer at Marketplace. Advantage is that it helps in making
decision effectively. Main limitation is that it is time consuming process. Here, LEGO need
to identify latest trends in the market like which superhero is become favourite of kids, what
actually parents wants (either knowledge or just engaging their kids), which sports getting
more TRP and how much development has come into this new generation. All this answers
will bring the idea of what to build and help in deciding the appropriate design for the same.
Furthermore they focus on launching the innovative store in global areas in order to
achieve leading position at market place. They also make appropriate strategy in order to
launch 300 outlets for achieving the goal as well as objective in relation to retail sector which
is necessary for success as well as growth of the organisation in future period of time. Main
benefit is that it makes them increases their global presence. Limitation is that it is diffucult
to manage all stores with same profitability.
By focusing on their sustainability development, Lego can improve their way of doing
business which will also leads to higher growth. To do this, they can provide environment
friendly toys by prohibiting usage of plastic. It is beneficial it leads to increase of business
stability. Whereas its drawbacks are that it requires high level of expertise to adopt innovative
changes (Bolden, Gulati and Edwards, 2019).

CONCLUSION
On the basis of above mentioned analysis it has been assessed that it is necessary to
bring changes within business organisation in order to perform their work in an appropriate
manner. The leader ship is very important for organisation because it motivates or encourages
employees to carry out their work in a good way. In this report it is necessary to evaluate or
assess the changes which are made in the Lego group since 2004. There are various changes
which are made in the Lego group since 2004. For example in retail sector there are 12
outlets that are open as per the strategy or tactics that increases the experience level of
customer in relation to Lego product. There are 15 outlets which are increased in 2004 that
increases the profit margin of the company. Apart from these 15 shops in relation to test and
there are various shops which is opened in parks. Their main focus is to introduce 300 stores
in order to achieve the objective of retail sector during the particular phase of time period.
Their explanation regarding the changes as well is leadership Theory which is also discussed
in this report. Apart from this it is necessary to give recommendation to the organisation in
context of change which bring within business organisation during the particular phase of
time period.

REFERENCES
Books and Journals
Holmes, J., 2017. Leadership and change management: Examining gender, cultural and ‘hero
leader’stereotypes. In Challenging Leadership Stereotypes through Discourse (pp. 15-
43). Springer, Singapore.
Feng, C., Huang, X. and Zhang, L., 2016. A multilevel study of transformational leadership,
dual organizational change and innovative behavior in groups. Journal of
Organizational Change Management.
Hrabowski III, F.A., 2019. The empowered university: shared leadership, culture change,
and academic success. JHU Press.
Visser, W., 2017. Sustainable frontiers: Unlocking change through business, leadership and
innovation. Routledge.
Von Weitershausen, I., 2016. German leadership between change and continuity: reflections
on the possible effects of “Brexit”. Global Affairs, 2(5), pp.513-520.
Kulich, C., Iacoviello, V. and Lorenzi-Cioldi, F., 2018. Solving the crisis: When agency is
the preferred leadership for implementing change. The Leadership Quarterly, 29(2),
pp.295-308.
Bolden, R., Gulati, A. and Edwards, G., 2019. Mobilizing change in public services: Insights
from a systems leadership development intervention. International Journal of Public
Administration.
Groves, K.S., 2020. Testing a moderated mediation model of transformational leadership,
values, and organization change. Journal of Leadership & Organizational
Studies, 27(1), pp.35-48.
Borgmann, L., Rowold, J. and Bormann, K.C., 2016. Integrating leadership research: A meta-
analytical test of Yukl’s meta-categories of leadership. Personnel Review.
Marshall, E.S. and Broome, M.E., 2016. Understanding contexts for transformational
leadership: Complexity, change, and strategic planning. Transformational Leadership
in Nursing: From Expert Clinician to Influential Leader, p.37.