Impact of Change on Organizations: Leadership and Strategy Report

This report provides a comprehensive analysis of change management within organizations, focusing on the impact of change on organizational strategy and operations. It examines both internal and external drivers of change, detailing their effects on leadership, team dynamics, and individual behavior. The report further explores strategies to minimize the negative impacts of change on organizational behavior, including an assessment of barriers to change and their influence on leadership decision-making. Various leadership approaches are discussed in the context of organizational change, providing practical insights and examples from case studies of Flannel and Fenchurch, two UK-based organizations. The report emphasizes the importance of adapting to changing customer needs, technological advancements, and the broader business environment to ensure organizational success and sustainability. Additionally, the report covers promotional strategies, pricing strategies, and operational considerations for adapting to change.

UNDERSTANDING
AND LEADING
CHANGES

Table of Contents
Introduction......................................................................................................................................3
TASK 1 ..........................................................................................................................................3
P1. Impact of change on an organisations strategy and operations........................................3
P2. Internal and external drivers of change affects leadership, team and individual behaviour
in organisation........................................................................................................................6
P3. Measures that can minimise negative impacts of change on organisational behaviour...9
TASK 2..........................................................................................................................................11
P.4 Barriers Changes in Organisation.................................................................................11
TASK 3..........................................................................................................................................14
P.5 Leadership approaches to deal with changes in range of organisational context...........14
CONCLUSION .............................................................................................................................16
REFRENCES.................................................................................................................................16
Books and Journals...............................................................................................................16

Introduction
Understanding leading change prepares organisation to meet the difficulty that comes
with initiating and implementing change. Organisations change management have become
permanent features of the business scenery. This change also can improve performance, save
money and increase employee morale (Understanding and leading change. 2018). Organisations
will identify why change initiatives can fail and learn how to deal with resistance as well as
identify the factors of successful change. Organisation undertaken in this report is Flannel which
is a public organisation of UK which was founded in 1976. For implementing changes, the
another organisation taken is Fenchurch which was founded in 2000 and deals in consumer
goods in UK. It is a designer store which produces luxury clothes, footwear and accessories for
men and women. In this report, comparison of different organisations is done with impact of
change on organisation's strategy and operations. Evaluation of internal and external drivers is
done with their effect on individual, team and leadership. Further more, various measures will be
discussed for minimising negative effect on organisation behaviour. Later part of the report
describes the barriers for change and their influence on leadership decision making is done.
Different leadership approaches are discussed in context of organisation.
TASK 1
P1. Impact of change on an organisations strategy and operations.
Organisations change is process in which an organisation changes its structure, strategies,
operational methods, technologies to affect change within the organisation. An organisation must
develop itself such that it can adapt to change otherwise it will either be left backside or swept
away by the power of change (Kotter,2012). In today's competitive business world, effective
employees need to understand the difference between operational and strategy side of business.
Organisation strategy guides all managerial decisions from front line to the board room. Strategy
and operations can work parallel with one another and will drive better performance and
competitiveness for the organisation. Operation part of the business is concerned with the
production, logistics, IT, marketing, sales , services, etc. activities. Strategy part is concerned
with growth, secure opportunities, improved services for customers, greater market share, etc. It
takes lot of effort for organisation to manage theses two that drive successful business in forward
direction. For better understating of operations and strategy and their impact of change in

different organisations, lets take an example of two organisation. One is Flannel which is a
public organisation and deals in clothing and other one is Fenchurch which is a consumer goods
industry and deals in clothing only. As customer needs regarding fashion changes on daily basis
and organisations need to meet those changes as quickly as possible and for these changes
organisation will need to change and update their strategies and operational functions (Doppelt,
2017). Both the companies are of UK and deals in clothing so to meet customer demands which
are very peculiar now a days, organisation will frame and develop strategies which will help
them to meet the customer expectations. Strategies and operational change of both the
organisations are discussed below:-
Basis Flannel Fenchurch
Strategy Change in strategies is
necessary because being the
producer of luxury products, it
is very important to retain
customers. Customers needs
and preferences fluctuate with
the changing environment so
organisation will adopt the
strategies which will easily be
adaptable and workable with
needs of target market.
Promotional strategies
Internet marketing : -In this
all the items are displayed on
the official website of the
company and promoted on
various platforms via multiple
approaches.
Paid advertising:- In this
competitive world, multiple
approaches for marketing are
Strategies used by this
organisation are different from
the Flannel which helps them
to operate in changing world of
business. Being the public
organisation and distributor,
they usually followed the
labour intensive techniques but
to compete in the market and
increase its sell it adopted
capital intensive techniques
which increased the production
and market share.
Promotional strategies
Word of mouth:- It is
traditionally the most crucial
type of strategy as being heard
is most important in business
world. When customers are
satisfied with both quality and
price, they will promote the

used like TVCs and print
media.
Pricing strategies
Premium pricing :- As this
organisation produces luxury
products for men and women,
with premium pricing it sets
costs higher then their
competitors (Yoder-Wise,
2014). As customers perceive
that goods with higher price
are more unique and attractive,
so organisation must work
hard to create value
perception.
Psychology pricing :- It is
technique that organisation
uses to encourage customers to
respond emotional level rather
then logical one. For
example :- setting price of a
women watch at £99 will
attract more customers
then setting it at £100.
organisation.
Diversity marketing:- It
covers different aspects like
cultural, belief, attitude,
specific needs, etc. and finally
leads to customisation of
products and services
accordingly.
Pricing strategies
Bundle pricing:- With this, it
sells multiple products at lower
price to consumers compared
to if they purchase each
product individually. It
increases value perception in
mind of consumers and helps
organisation to clean the stock.
Market penetration :- It aims
to attract buyers by offering
lower prices on goods and
services. Organisation adapt
this in changing environment
to draw attention of customers
away from their competitors.
Operational In this, organisation will
conduct research on customer
needs and demands. For
producing products they can
hire expert designers for
making innovative and
In this, as it is a Business to
Business approach....where
they sell their products to the
different retails. For increasing
their sales and profits they can
introduce mobile application

creative products. and sell their products online to
the direct customers which will
not only increase profit but
also minimises the cost.
There are various drivers for change which are to be considered while implementing
change in the organisations and they are discussed below :
 New technology : Technology is very important in present business world. They affect
the business organisation in a way that with the changes, technology is also updated and
upgraded versions are used which provides better results. Also labour intensive
techniques are shifted to capital intensive methods.
 Human resources : They are the people in the organisation who poses certain skills and
knowledge which helps in accomplishing goals and objectives. They have crucial role in
internal driver for change as changes in organisation will require highly skilled and
knowledgeable manpower who have the potential to implement the change effectively
and efficiently.
 Systems and process in the organisation : Implementing change will also have
influence in the system and procedure of the company. This can transform its procedure
so that they can be more responsive to the external environment.
 Environmental protection : It is one of the most important element which is to be
considered and organisation will follow and adopt various environmental laws to assure
that the activities of the company does not harm or affect the surroundings. For instance,
waste generated in the company must be dumped in garbage vehicle, using renewable
sources of energy like solar power, etc.
For making changes cost effective, organisations will use attractive pricing strategies
which are discussed above. Apart from that, they can opt for various advertising methods such as
internet, email marketing, social media platform, etc. as they are free of cost and covers mass
pool of population to attract people. This will be very beneficial as it will reduce the time and lot
of cost of advertising.

P2. Internal and external drivers of change affects leadership, team and individual behaviour in
organisation.
Changes comes in various form and sharp and brainy leaders of organisation continually
search ways to modify strategies and transform their operations to enhance growth. Changes
affects not only organisation but also leadership and individual behaviours are affected (Salmela,
Eriksson and Fagerström, 2012). People are resistance to adopt change in their style,
organisation and working. Business live, develop or decline depending upon the changing
behaviour of the employees. Most changes trouble the individual state of affairs of situation and
environment in which the individual and group exist. If a change is detrimental to the interest of
individuals or group, they will resist the change. Business environment of Flannel is the totality
of all such factors which influence the working decision making of an organisation. These are
things, event or situations that may occur in positive or negative way through working of
business operations. These are called driving forces and these forces can be internal or external.
Flannel must develop itself into a learning organisation that is continuously expanding its
capacity to create its future by regularly learning new ways of doing things and forgetting the old
ones. Following are the detailed discussion of drivers of change in Flannel organisation :-
Internal drivers :- These are the forces which occur inside the organisation and are
controllable. As such, it is the internal environment that will influence organizational activities,
decisions, and employee behaviour and attitudes. Changes in the leadership style, the
organization's mission, or culture will have impact on the organization. These changes are
discussed below which is needed in Flannel:-
 Innovation :- This led Flannel to produce variations in its design and create unique
products which will satisfy the customers. Innovation is very crucial in every
organisation as customers wants fluctuate and organisation must adapt with this
fluctuation to stay in the market.
 Organisation culture :- Organisational behaviour can be characterized as the organized
study of the action and position of both individual and group within the organisation.
Organisations that have a powerful prosperity feeling and always embrace change and
listen to staff and customers are said to be forward looking.
 Employee morale :- The level of authority and capability of a person or group is very
important (Hrebiniak, 2013). For increasing employee morale Flannel introduced many

programs so that employees are satisfied with their company and job and contribute to
their best.
 Goal setting: This is the primary aim of the company to set goal which are needed to be
modified with the changes in business. It will affect the leadership styles like in case of
quick changes the leader will opt for autocratic leadership style and in case of slow
changes in the organisation, they will go for democratic leadership style.
 Poor delivery :- Low or poor delivery of customer service is a worldwide problem that
affects the profitability in all types of businesses, industries and services. Flannel must
provide services to their customers which includes proper listening, understanding their
query and generates quick response, apart from this it must have proper return and
exchange policies which are very important for an organisation.
External drivers :- These are the forces that occur outside the business organisation and
generally are uncontrollable by the organisation. These forces of change are simple in concept
but difficult to manage. Even though the external environment occurs outside an organization, it
can have a significant influence on its current transaction, development and long-term
sustainability. Following are the external driver which Flannel must take into account for
efficient and smooth functioning of its operations and they are :-
 Economy :- There is a close relationship between business firm and economic
environment. At any type of financial fluctuations like inflation or deflation, affects the
financial stability of the organisation.
 Technology :- The business organisation has to keep itself informed with the
technological changes. It is an essential aspect as it shapes the business environment in
long run. So, Flannel will adopt modern and latest technology otherwise they could not
compete in business world.
 Political influence :- These forces include legislative changes and policy initiatives that
can impact business (Wagner, 2016). Government policies, decisions, taxation, etc.
affects the business in negative and positive ways.
 Customer satisfaction :- It is a measure of how products and services supplied by
organisation meet or excel customer expectation. It is a key execution signal within
business. Funnel organisation, for customer satisfaction introduces new products,

attractive packing, adopting new technology, attractive schemes, offers etc. as this will
allow them to exist in the competitive world.
 Monitoring and controlling : It is one of the most important function of leadership and
management. This will have a influence on leaders as they will have to monitor the
activities of external environment. They will investigate that changes are executed as per
planned and any deviation occurs will be controlled by leaders with the effective
measures and solutions.
 Great speakers and integrity : Leadership are the great speakers who are accountable
for communicating the changes to the audience such that people will be clear about the
mission and vision of the company and work in accordance with it. Thus, it ensures
integrity in the process of the company.
Impact of external and internal drivers on leadership , individual and groups behaviour
External and internal environment has a great impact on leadership, individual and group
behaviours. They are discussed below :-
Environment Leadership Individual Team
Internal Leadership styles will
be such that will help
maintaining the
friendly environment
and leader will
communicate
effectively and
efficiently to the
employees about all
the policies and
programs. For this,
leader may follow
democratic leadership
style in which
suggestions and advice
from employees is
Individual must be
motivated through
various financial and
non financial benefits
which will contribute
in accomplishment of
organisational goals
and objectives. They
must feel secure in
terms of job, health,
etc.
Team must work in
harmony and proper
conflict resolution
techniques will be
followed for people
working in team and
solutions will be based
on win- win situations
so that no one will be
hurt or disappointed.

taken and they will
feel motivated.
External As these environment
are outside the control
of organisation,
leadership style will be
such that will define
the proper vision to the
employees and
autocratic leadership
style can be followed
under this as external
changes require quick
response.
Individuals are
resistance to change so
they will be provide
efficient training on
changing and updating
technological
developments such
that they will be
delighted with new
ways of working and
contribute to the
growth and
sustainability.
Group or team will be
very important to
handle in this as
individual cannot cope
up with the external
drivers and group
efforts are important
for smooth working on
research and
development, meeting
competition in the
market, handling
inflation and deflation
conditions, etc.
P3. Measures that can minimise negative impacts of change on organisational behaviour.
While change is unavoidable, people manage it in contrasting ways. Some are warm and
grasp the opportunities for new challenges others are dreadful or set in their structure and resist
change (Brown, 2012). The key to minimising the negative impact on organisational behaviour
and protecting team spirit at the workplace is to assure that separated employees at every level
are treated with self-esteem and respect. Flannel organisation can use various methods for
minimising the negative impact and they are :-
Create a culture of learning :- Creating a culture where individuals can take on new challenges
and evolve their functional and leadership skills which will set them up for future success for the
organisation.
Employee communication and training :-Proper communication of rules, programs, policies
will be discussed with employees and organisation will ensure that each and every employee is
familiar with the change (Stanleigh, 2013). For adapting this changes employees will be properly
trained so that they can follow the change in organisations.

Organisational readiness :- . Rather than relying on organisation internal feeling to measuring
system whether or not people are accepting the required changes, individual will need objective
and quantitative implementation of measuring employee readiness. This will be done with a
order of online surveys and direct groups multiple times throughout the process so that can
determine how the organizational change pointer is moving.
Provide career transformation support :- Working with a career adviser provides individuals
with an chance to think over on their strength, elucidate the goals and create a strategy that will
help them to grow superior in their job.
Performance appraisal :- By evaluating the performance of employees and understanding their
abilities for further growth and development, performance appraisal is an important determinant.
Interview employees regarding their feelings : Taking interview of employees regarding the
acceptance or rejection of change will help the company in analysing how people will react. This
will be beneficial for the organisation in developing future needs and requirements of the people.
Keep a positive attitude : Organisation will keep positive attitude regarding the change
implemented. For this purpose, they will inspire and motivate the people by making them
understand the importance of accepting changes so that they will work with full zeal and
confidence with positive attitude.
Expand communication channel : Communication is very important in implementing changes.
Organisation will further expand the channel by adopting various communication strategies like
horizontal, vertical, etc. This will be useful in effectively communicating the issues, aims and
how work and objectives of changes to be implemented and executed.
Furthermore, there are various theories and models which are helpful in minimising the
negative impact in organisation and they are :-
Plan do check act model (PDCA)
It is a four stage model for constant betterment in organisation. It is implemented to
modify the quality and effectiveness of processes. In this model,
 P : P stands for defining the problem, collection of relevant information and analysing the
main cause of problem. It establishes goals and objectives of the task which is to be
improved or developed (Hintz and Bahia, 2013). Clear description of task is to be done
with proper specifications. Record the data to be used, resources that will be required,
cost estimations are to be made, risk factors and minimising steps are to be determined.

And finally after considering all the points, implementation plan is made by breaking the
task, owner, outcome,etc.
 D : D stands for developing and implementing solutions which will decide upon its
measuring effectiveness. As per the implementation plan, task is to be performed. In this
process, stakeholders must be informed about all the policies and programs.
 C : C stands for checking and reviewing the results by comparing before and after
implementation of plans. Identify variations, deviations, best practices, etc.
 A: A stands for acting upon the results, informing about the changes and develop
recommendations for the problem which is to be addressed in the PDCA cycle.
This model is used when new change is implemented, developing improved designs,
products or services. It defines the repetitive work process. It helps organisation to work towards
continuous improvements.
Source : Plan-Do-Check-Act Cycle Come ,2019
Lewin's 3 stage change model
Kurtz Lewin developed a change model which involves 3 steps. This model represents
very simple and practical model for understanding the change process. Following are the 3
steps :-
Illustration 1: Plan-Do-Check-Act Cycle Come

Unfreezing : This stage involves organisation to accept that change is necessary for functioning
of organisation (MacKian and Simons, 2013). The main aim is that more people will know
about the change, more they will feel necessity to adopt that change.
Changing : At this stage change becomes real. If people will be prepare at this stage they will be
able to compete more and grab the opportunities.
Refreezing : At this stage, changes made to organizational processes, goals, structure, offerings
or people are recognised and refrozen as the new standard. Lewin found the refreezing step to be
peculiarly crucial to assure that people do not return back to their old ways of thinking or doing
prior to the execution of the change.
TASK 2
P.4 Barriers Changes in Organisation.
To run a organisation smoothly leader should know the ways to deal with barriers. Any
change that company wants to do it always comes up with barrier. Barriers effect the entire
change in decision-making of a leader (Alvesson and Sveningsson, 2015) . Companies should
determines those barrier which effect their performance and overcome all those barriers to
implement the changes. Flannel retailer is a medium sized organisation, if they want to expand
there are a lot of barrier which effects the companies growth and performance. Barriers are of
external or within organisation. Organisational barrier by which flow of information became
hindrance among the employee which declines the growth of a organisation. External barriers are
those by which are effected due to the government rules and technology. There are the barriers
which effect growth:-
 Integration:- Changes can happen anytime, flannel retailer have to implement the
process which will support the changes. If company changes its organisational structure
then in parallel employee turnover and wages rate also get effected. Its a internal
organisational barrier (Blewitt, 2012). If company wants to expand the production will
increase then company have to increase their employee pay as well. As they have to
increase the number employee as well then it will be the barrier for them to increase the
wages rate of a existing employee.

 Rules and regulation:- Its a external barrier which effects the changes that are about
implement in the organisation. The rules and regulation of government will effect the
decision-making of leader within the organisation (Hintz, 2012). Flannel retailer leader
made a new policy related to increase the price of wool and yarn as they want to expand.
But government had made a rule & regulation related to price so any changes that leader
wants to implemented that can't be happen and meanwhile their decision-making also get
effected.
 Adaption of new technology:- To grow in the market companies have to adapt the new
technologies and techniques for production as well as for distribution. To adapt new ways
& techniques of production companies required skilled and qualified employee. The
barrier is that existing employees are not ready to accept the changes and not ready to
learn the new skills. To adapt new techniques company require huge investment which
also affects the changes in technology to be implemented or decision of leader related to
change.
 Planning:- It is also considered as a barriers in implementing the changes in
organisation. The leader need to plan properly otherwise changes are difficult to
implement in organisation. The appropriate strategies are required to make so that
changes can be implemented in organisation.
 Lack of Consensus:- It means when leader have to take everyone opinion in
implementing changes in organisation. The leader faced a lot difficulty in and consensus
in implement theoretical into practical terms.
 Employee Resistance:- When leader wants to implement changes according to their
style then employees are become more frustrated and stressed. To control these and make
employee retain in organisation the leader have to take concern and also considered their
opinion.
Five force model
Five force model is used in planning and implementing the changes in organisation. The
company use this model to inform the decision making related to the changes are going to be
implemented (Burke, 2017). Its a influential and powerful method for company to gain a
comprehensive views from the different forces which have a huge impact on a potential
organisation changes. The Flannel retailer hires the designer to design the cloths which is a big

change to implement in the company. Due to this some forces are in favour for changes and
some are against the changes in the product and market development.
Forces are in favour for changes:-
The forces which are in favour for change they actually want the changes to be happen in
the company and the designer should be hire by the company to develop new & trendy cloths. As
fashion keeps on changing (Ashley and Empson, 2013). These forces will help the organisation
to achieve the objectives. Here are the forces which are in favour for changes:-
 Customer want new products:- As fashion keeps on changing and new trends are
introduce in very short span of life. The customer always want new products which are
influence by the trend and new fashion. The customer force will always in favour to
accept the changes. If Flannel retailer hires fashion designer the price of cloths increase
but customer are ready to pay whatever amount is demanded by them as they want cloths
should be trendy and fashionable. The change is easily accepted by the customer.
Company can implement the changes in the organisation there is no hindrances.
 Reduce training time:- To introduce new cloths company is going to hire the fashion
designer then time to train them will be reduce as they already skilled and qualified. The
company can easily accept the changes.
 Low maintenance cost:- Company has its own fashion designer so from now they are
not required to maintain the warehouse (Mayfield, 2014). Whenever fashion change the
production will automatically change according to customer need and preferences. If they
don't maintain any warehouse and inventory then maintenance cost will automatically
declines.
Forces against the changes:-
There are a lot of forces which are against the changes to be implemented in the
organisation. Company implement the changes in cloth will be according to the customer need
and preferences so, here are the forces which against to this change, these are hindrances which
organisation have to face while achieving its objective. The forces are:-
 Cost increase:- Flannel retailer hires the fashion designer which increase the cost of
production as the fashion & trend change cloths should also change which increase the
price of production because new technologies have to be adopt by the company to
compete in the market.

 Staff fear of new technology:- New technologies have to be adapt by the company to
manufacture the cloths according to the trend and fashion. It become very difficult for the
company to make their employees technology friendly (Aguirre and Alpern, 2014). This
force will be against while implementing changes in the organisation. The company
employees have a fear from new technologies, if company adapt it became very difficult
for them to accept the technological.
TASK 3
P.5 Leadership approaches to deal with changes in range of organisational context.
For a leader it is essential to applies different leadership style in a organisation to
overcome or resolve the different situation in the business. There are some leaders who face
difficulty to work with the high degree followers or employees who take part in decision making.
Some employers have lack of ability or desire to assume the responsibility. To solve these
situations there are different leadership styles to be applied. Not every style fits in every situation
for different situation there is a different leadership style to be implemented. Here are the
leadership style which deals with different changes to implemented.
 Autocratic leadership style:- In this leadership style company is controlled by the boss.
The leader holds all the responsibility and authority to make decision as well as changes
which are required to be implemented in a organisation. The leader sets prescribe
guidelines, policies and the procedure. To implement the changes in cloths Flannel
retailer leader will adopt the autocratic leadership style to grow in the market. Through
this leadership style employee have to follow the guidelines and rules related to the
change in organisation. For example when employees are not well trained and well
skilled then leader is need to follow the autocratic leadership style to implement the
changes in organisation.
 Transformational leadership style:- This leadership encourage the changes in
organisation, oneself and in the groups. These type leaders motives their employee to do
work more effectively & efficiently. Fashion keeps on changing, so the customer demand
& preferences. The company is required to change the clothing style according to the
customer. Flannel leader can chose this leadership style to influence and motivate its

employee to implement the changes in cloths. For example the leader follow this style
when employees are don't changes and market demand the changes.
 Transactional leadership style:- In this leadership style employees get immediate
rewards for carry out the leaders order and punishment for not follow the leader's order.
As flannel retailer wants to changes the cloths in accordance to the customer need and
preference. When its mandatory to do the changes then company follow this type of
leadership style. For example when leader wants work should be done on time and
provide rewards for particular situation in organisation.
 Charismatic leadership style:- In this style leader will inspire and motives their
employee to be better in terms of status as they don't want to transform the organisation.
These leader improve the organisation situation. The Flannel leader use this leadership
when they wants to improve their market condition and companies situation in terms of
revenue. This style is followed by leader when their employees are not skilled as well as
not well trained.
CONCLUSION
Form the above report it would be concluded that changes are required to be implemented
in the organisation to improve the potential performance of a company. These changes will help
the organisation to improve and enhance the knowledge and skills. If strategies and operations
changes in business puts a huge impact on the individual, team and all the employees related to
the organisation. Changes also effects the operation process, organisation structure and the
system of the company. For operational change company conduct the analysis related to demand
and need of a customer. Through the analysis company finds out the forces which are in favour
or against to the changes. The leader will chose different leadership style by which changes that
customer want will be implemented.
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