Understanding and Leading Change: A Case Study of Tesco PLC and ASDA

Desklib provides past papers and solved assignments for students. This report analyzes change management strategies at Tesco and ASDA.

UNDERSTANDING AND THE LEADING
CHANGE
1

Contents
Table of figures.............................................................................................................................. 3
INTRODUCTION......................................................................................................................... 4
L01................................................................................................................................................. 5
P1: Compare different organizational examples where there has been an impact of change on
an organization’s strategy and operations..................................................................................5
M1: Different drivers for changes and types of organizational change they have affected........7
L02................................................................................................................................................ 8
P2: Methods by which drivers of change affect team, leadership, and individual behaviour:....8
P3 and M2: Measures to minimize the negative impacts of changes.......................................13
L03............................................................................................................................................... 15
P4 :Different Barriers to change and how they affect leadership decision making:.................15
M3 Use force field analysis to analyze the driving and resisting forces and show how they
influence decision-making.......................................................................................................16
L04.............................................................................................................................................. 18
P5 and M4: Different leadership approaches to dealing with change in a range of
organizational contexts:........................................................................................................... 18
CONCLUSION:.......................................................................................................................... 22
REFERENCES............................................................................................................................ 23
2

Table of figures
Figure 1-Burke-Litwin Model......................................................................................................14
Figure 2- Force field Analysis..................................................................................................... 16
Figure 3- Kurte Lewin Model......................................................................................................20
Figure 4- Kottler's Model.............................................................................................................20
3

INTRODUCTION
Changes are very important to challenge the status quo. Changes are important for both an
individual and an organization to adapt to the evolving environment. There are various factors
which affect the functioning of an organization. This assignment will assess the drivers and
factors of changes and how they affect the strategies of an organization. This assignment will
also assess different types of individual and organizational changes and their impact. It will also
suggest different ways to manage those changes. It will also assess different resistance to
changes and adoption of different models to adopt those changes to suggest an effective strategy
for an organization to attain their desired goals (Vaara et al., 2016).
This assignment will assess, anticipate and suggest the effective strategies for bringing in
changes in the Tesco PLC and ASDA. It will compare the different strategies has been adopted
by these two companies to overcome the external and internal factors affecting the company’s
performance. Moreover, this assignment will also identify the potential negative and positive
impacts of adopting the changes in the organization and how they affect the individual's
behaviour (Kral and Kralova, 2016).
Tesco PLC is the leading groceries and general merchandise retailer based in the UK founded in
1919 by Jack Cohen. It has many branches across Europe. And it is the third largest retailer in
the UK by gross revenue. Tesco has diversified its business into various areas as books, financial
services, electronics and internet services. ASDA is a leading supermarket chain in the UK. It
was founded in 1949 and it is one of the highest growing companies in the UK. It has also
diversified its business into clothing, mobile and financial services. It fulfils its corporate social
responsibility by promoting ethical hacking, running various educational campaigns and working
towards creating energy efficient equipment (Mak and Chang, 2019).
4

L01
P1: Compare different organizational examples where there has been an impact of
change on an organization’s strategy and operations.
Changes in an organization take place to increase efficiency and effectiveness. Sometimes, the
changes can be planned and sometimes forced by some external or internal factors with any
anticipation. Changes can be made in the structure of an organization, in the size of an
organization by business expansion or diversification. And by the adoption of technologies and
other services changes can also be made in an organization. The motivation behind the changes
in the changes may be due to multiple reasons (Kral and Kralova, 2016).
For instance, Tesco has introduced some changes in an organizational structure. It has introduced
new payment check out system to its customer which enhanced their shopping experience. In this
new payment, check-out system customer can get one token or form from the product shelves
and then scan it and make payments for their shopping on their own. By offering such self-
service to its customers Tesco is single change not only adopted the change in its structure by
cutting down the labour cost but also adopted advanced technology to enhance the user's
experience. Customer's felt more connected with the use of payment self- service of Tesco (Benn
et al., 2018).
But such organizational changes put the challenge of managing them and sustaining them. But
Tesco devised a proper plan and strategy as labour cost deduction, sales increment, cost-
effectiveness and customer satisfaction before bringing the change. Still, there were some
challenges which were shared jointly by the top and bottom workforce effectively. Top
management in Tesco identified and defined the problem and the subordinate workforce
effectively rectified those problems jointly with the free flow of information and feedbacks.
Feedbacks and involvement from the lower layer of employees help in modifying the solution.
Tesco adapted with changes successfully and it led to the increase of sales and deduction in
labour cost for its products (Guo and Wang, 2019).
US-based Wal-Mart acquired UK's supermarket chain ASDA in 1999 with the aim to lead some
culture and organizational change. ASDA was required to transform its whole system according
to Wal-Mart's structure. And provide training to the employees as per the changing need.
5

Initially, the primary challenge before ASDA was to accommodate the culture change and keep
cohesiveness of its employees. And ASDA transit from the old system to the new system
successfully by taking constant feedbacks from its customers and modifying the solution
accordingly (Mak and Chang, 2019).
The strategic plan devised after a complete analysis of internal and external factors affecting the
functioning of ASDA, and reducing labour cost by the adoption of its services in the system can
be attributed to ASDA's successful accommodation of change. Additionally, ASDA's legal team
has also studied all relevant laws of the land like Service laws, competition laws and laws related
to health. And then ASDA prepared its planning model in which it included solutions to all these
possible challenges (Kral and Kralova, 2016).
So, in both these scenario changes took place in Tesco it was an organizational change which
with the involvement of both top and bottom workforce and constant modification in the solution
led reduction in product cost and enhancement in customer's satisfaction. On the other hand,
ASDA brought cultural change by acquiring proper knowledge of all those dimensions which
may affect its transition (Benn et al., 2018).
6

M1: Different drivers for changes and types of organizational change they have
affected
There are different drivers of changes that have affected the different factors in both these
organizations. Drivers that led to change in an organization can be of different types: internal and
external. Internal drivers of changes are the organization's culture, employee's ethics and market
competition. And external drivers of changes are Political influence, technological aspect and
customer satisfaction. Such changes driver can affect the organization in different ways. It can be
Product or Service change, Strategy and structure change, technology change and culture change
(Adgebite et al., 2018).
 Strategy and structure change: The change internal and external drivers of change is
affecting the core structure of an organization. Tesco and ASDA have changed the
structure of an organization. In which policies, structure and business operations have
been changed. It has also affected the employee's behaviour.
 Product and service change: When an organization due to drivers of changes decided to
bring some changes in its products or services or diversify its business then it can be
attributed as product and service change. Tesco and ASDA have brought many changes
in their product and services. Change in product and services also affected individual
behaviour (Rosenbaum et al., 2018).
 Culture change: The change drivers have brought the concept of change in an
organization. ASDA has adopted the culture of change which also included the change in
the internal culture. Individual behaviour was also affected by the adoption of the
individual mission. Individual missions led to increased cohesiveness and commitment
among employees. And it turned the organization more inclusive (Change Management,
2018).
 Technology change: change in technology can be influenced by both internal and external
changes. Technology change can be defined as the adoption of advanced equipment and
integration of IT-enabled services into the system. Tesco has adopted changes in the
financial system and turned it into a centralized system which increases customer’s
satisfaction. (Lewis, 2019).
7

L02
P2: Methods by which drivers of change affect team, leadership, and individual
behaviour:
There are different drivers of changes that have affected the different factors in both these
organizations. Drivers that led to change in an organization can be of different types: internal and
external. Internal drivers of changes are the organization's culture, employee's ethics and market
competition. And external drivers of changes are Political influence, technological aspect and
customer satisfaction. Such changes driver can affect the organization in different ways (Benn et
al., 2018).
The internal drivers of change led to a change in the internal structure policies and function of an
organization. These changes led to maximization of profit, reduced labour cost and changes in
the organization structure. They also help to remove ambiguities in the system, increase
productivity (Adgebite et al., 2018).
These change drivers are:
 Technology capacity
 Market competition
 Poor delivery of product and services
 Ethical standards of employees
 Organizational culture (Mak and Chang, 2019).
External drivers of changes can be defined as the changes which an organization faces from the
outside. Operations, policies and some other market forces led event can be attributed as external
drivers of change. These are as follows:
 Political influence
 The economic stability of the business
 New rivals
 Customer satisfaction (Lewis, 2019).
8

Strengths:
Tesco
 Customer diversification: It helped
Tesco in creating strong distribution
links.
 Patent and license agreement: Such
agreements helped it earn more revenue
and gain a competitive edge in the
market.
 Strong product portfolio: Wider range
of product portfolios helped in business
growth and diversification (Guo and
Wang, 2019).
ASDA
 The efficient supply chain helped
inefficient and quick delivery of
services.
 Cost-Effective and budget-friendly
products helped in business growth and
revenue generation.
 The effective business operation helped
in economic growth and customer
satisfaction (Guo and Wang, 2019).
Weakness:
Tesco:
 Ever increasing conflicts related to the
violation of patent and trade laws.
 Impact on the business economy due to
its geographical spread (Guo and
Wang, 2019).
ASDA:
 Lack of investment in research and
development led to less attraction for
potential customers.
 Poor customer satisfaction.
 Trade disputes due to poor compliance
or negligence of trade laws (Guo and
Wang, 2019).
Opportunities:
Tesco:
 Improvement in customer services.
Threat:
Tesco:
 The threat to a centralized financial
9

 Reduction of ambiguities.
 Business diversification and
enhancement of operational efficiency.
 Efficient distribution network (Mak and
Chang, 2019).
ASDA:
 Effective supply chain management.
 Business diversification and effective
resource management
 Planned resource diversion.
system due to fraudulent transactions.
 Lack of budget-friendly services due to
increased production cost.
 Controversies are due to overlooking
some best trade practices (Mak and
Chang, 2019).
ASDA:
 Sometimes, a lack of customer
satisfaction.
 Increased rivalries
 Poor compliance of competition laws.
PEST analysis:
Political Economical
Tesco
 Political instability and Brexit affected
companies functioning for a while. For
employment generation, the
government asked Tesco to create job
opportunities in labour-intensive areas.
China's entry into WTO helped Tesco
to expand its business globally. It is
also benefitted by cheap labour and
purchasing free trade blocs at a
comparatively low price (Mak and
Tesco:
 Tesco concentrates more on customers
buying behaviour to predict the need
for the addition of new dimensions into
the business. Tesco being a food
retailer was less affected by the
recession of 2008. It also helped the
expansion of business as people cut
down eating outside and preferred
homemade food which in turn
increased grocery business (Mak and
10

Chang, 2019).
ASDA
 ASDA being supermarket chain was
less affected by Brexit and any other
political instability in the UK. Despite,
the government's decision to liberate
trade rules helped ASDA positively
(Mak and Chang, 2019).
Chang, 2019).
ASDA
 ASDA was benefitted positively by the
rate of cuts by BoE. ASDA being food
retailer was less affected by the
recession of 2008. It also helped the
expansion of business as people cut
down eating outside and preferred
homemade food which in turn
increased grocery business (The
Economist, 2018).
Social Technological
Tesco:
 The elderly population is the major part
of the customer base in the UK put
Tesco at a disadvantage. As the elderly
eat less and even they are digitally less
literate. So, they offer less business and
workforce for Tesco. And increasing
attraction for low fats and organic food
also challenges the business strategy of
Tesco (Process.st, 2019).
ASDA:
 The increasing attraction for organic
food and changing dieting habits of the
population is affecting its business
negatively. And also a high proportion
of senior citizen in the UK's population
also poses a potential challenge for
Tesco:
 Technology is an important part of
effective supply chain management and
self- check-out system. It also helped in
improvement in delivery services by
adopting advanced technologies. Tesco
also improved its distribution network.
It also helped in increasing market
share for Tesco (Guo and Wang, 2019).
ASDA:
 By adoption of advanced technologies
in its business, ASDA improved its
distribution network. It also helped in
increasing market share for it. It is also
increased customer satisfaction. IT-
enabled services to offer the best
payment gateways and increase
11

future growth and highlights the need
for business diversion (Guo and Wang,
2019).
customer satisfaction (Process.st,
2019).
Changes evaluation that affects the leadership, individual and team behaviour with two
organizations
Changes in an organization have led to changes in the overall structure of an organization and its
top leadership. Restructuring always comes with many difficulties. And it may also lead to
dissatisfaction in the workforce. So, employees should be kept engaged and motivated by using
appropriate actions and events. The changes in an organization have also led to the formation of
strong leadership. Changing situations gave rise to situational leadership and participative
leadership. And the individual is kept involved with their feedbacks then they will help
effectively in product modification. So, changes in the organization led to the formation of an
effective team and strong leadership (Vaara et al., 2016).
Practical and psychological impact:
Pre-business or individual changes there is always a perception that changes are not good. And
employees of all level show resistance to the changes. So, it requires strong leadership and
tolerance in the system to turn those negative sentiments into positive ones. And to accommodate
those changes workforce should always be dealt with to reduce their Psychological resistance to
changes (Benn et al., 2018).
12