Higher Nationals Unit 17: Organisational Change Report for ALDI

This report provides a comprehensive analysis of organisational change, focusing on ALDI as a case study. The introduction sets the stage by defining change and its importance for business sustainability, specifically within the context of ALDI's operations across multiple countries. LO1 examines the impact of change on organisational strategy by comparing ALDI with TESCO, highlighting strategic differences and the influence of external factors like Brexit. The report further explores the types of organisational change, including structural, strategic, and people-oriented changes, along with the PESTEL framework. LO2 delves into how internal and external drivers of change affect leadership, team, and individual behaviour, discussing psychological impacts and measures to mitigate negative consequences. It also includes a force field analysis of ALDI, evaluating leadership approaches in various contexts and assessing the effectiveness of change management models. The report also discusses the application of Bohner and Arnold change impact analysis. The conclusion summarises the key findings and the importance of adapting to change to maintain a strong market position and achieve strategic goals. The report is a detailed exploration of change management principles and their practical application in a real-world business setting.

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Table of Contents
INTRODUCTION ..........................................................................................................................3
LO 1 ................................................................................................................................................3
Comparison between two organization where there is influence of change on strategy............3
Drivers of change and types of organizational change...............................................................8
LO2 ............................................................................................................................................9
Ways by which internal and external drivers of change affect leadership, team and individual
behaviour...................................................................................................................................10
Evaluate measures that can be taken to minimise negative impacts of change on organisational
behaviour...................................................................................................................................12

ALDI applying force field analysis to analyse the driving and resisting forces and show how
they influence decision-making................................................................................................16
Apply different leadership approaches to dealing with change in a range of organisational
contexts.....................................................................................................................................17
Effectiveness of leadership approaches and models of change management at ALDI:............19
CONCLUSION .............................................................................................................................20
REFERENCES .............................................................................................................................21

INTRODUCTION
In order to sustain a strong position within marketplace, every organisation is
required to adopt required changes. For getting desired outcomes, business owners
have to understand change and change management in a proper manner. Change is
defined as a phenomenon which leads towards measurable shifts in business position
of an organisation. This measurable shift can either be advantageous or
disadvantageous for an organisation depending upon the type of change initiated by
business (Alavi and Gill, 2017). This assignment is written in context with ALDI which is
a Germany based supermarket chain headquartered in Essen and Mulheim. At present
company is successfully operating at 10,000 stores in more than 20 countries.
Company has a combined turnover of more than 50 billion euros. This report will cover
different organisational examples where change has been carried out in organisational
operation and strategy. Different ways are evaluated in which external and internal
drivers of change can impact leadership, team and individual behaviour. Beside this,
measures are discussed that can reduce negative impact of change. Various barriers
for change are discussed along with different leadership approaches to deal with
change in range of organisational contexts.
Change management is an important aspect in business which is required by
every company. As in ALDI company there were some issues related with sales and
revenue due BREXIT and increased environmental degradation. These issues can be
alter by making changes in goals and plans for future. In this context company is going
to change some of their strategies and operations.
LO 1
Comparison between two organization where there is influence of change on
strategy
CHANGE:
Organisational strategy is defined as a dynamic long term procedure which maps the
direction that will benefits the company in achieving its vision and goals. Basically, it is
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an expression that describes the manner in which a company is required to evolve over
a time period so that its expectations and desires can be fulfilled.
Change in organisational strategy can benefits ALDI towards new strategic directions
which can help the firm in gaining competitive advantage over rival companies. Change
in strategy can benefit a firm in achieving high growth rates and customer base due to
which high profitability can be attained by company.
Change in strategy can be well defined by comparing different organisational examples.
In this regard, ALDI and TESCO is compared with one another (Alkahtani and et. al.,
2011). In case of ALDI, company prefers to take fast decisions so that control on market
can be maintained where as manager in TESCO prefers to watch out the strategies of
rivals before taking a decision so that high advantage can be enjoyed by company. In
this regard, a comparison chart is mentioned below:
ALDI TESCO
Organizational strategy Due to Brexit there are
many political change
which are faced by UK in a
desired manner. Due to this
purchasing power of people
and revenues of company
has also reduced. In this
regard, company has
adopted the strategy to
have small stores where
every employee gives
proper consideration
towards the needs of
customers. To cut their
unusual costs, company
sells only limited items in
their single store. Due to
TESCO believes that to
attain desired outcomes, a
firm is required to sustain a
strong presence in
international market. But
due to Brexit, UK has faced
political changes this has
impacted market share and
profitability of company. To
overcome this change,
Major strategy adopted by
TESCO is to offer those
products to customers
which are in high demand.
Company offers discounts
on that products due to
which customers prefer to
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this products and services
of ALDI are low priced as
compared to other rivals
like IKEA and TESCO.
Other than that, there are
environmental changes
which are faced by
company as people are
getting more concerned
about environment.
Because of environmental
changes, workforce of
company also prefers to
collect limited stock in their
stores so that maximum
rate of return can be
achieved. It is analysed that
company is getting high
benefits as policies and
strategies of company are
changed on a regular basis
in accordance with the
situation. Other change in
strategy carried out by ALDI
is providing garden
furniture, kitchen and
bathroom accessories at
their stores on special days.
As these products are not
usually available on grocery
stores, sales will expand
buy them in large quantity.
Prices of products offered
by TESCO are genuine due
to which sales of company
are good. In order to deal
with environmental
changes, strategy initiated
by TESCO is adoption of
measures that will results in
sustainability. In order to
adopt these change,
company introduces new
products in market which
are environment friendly
and do not impact the
health of individuals on their
usage (Anderson, 2016).
Company has also adopted
market development as a
strategic change where
their existing products will
be sold in new market place
due to which sales and
customer base will be
enhanced considerably.
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considerably.
Operations Due to political and
environmental changes,
Products of ALDI are
available at different
operational stores where
customers can buy them
either by cash or cards.
Distribution system of
company has become
robust where customers are
provided required product
on right place in a timely
manner. This whole
process is managed by
company with the help of
MIS and ERP software that
helps in storing all required
information about
customers. Due to good
performance of
competitors, manager in
ALDI has to change the
operations of company by
modifying them according
to the changing trends. In
this regard, organisation is
adopting modern
technology by updating its
machines and software so
that raw material can be
To reduce the impact of
environmental and political
change, company has
adopted some operational
changes. Operational
processes in TESCO are
organised but there are
some issues which are
faced by company. One of
them is overflow of
inventory that results in high
costs of warehouse. This
problem takes place
because manager of
company orders new stock
on customer demand
without clearing up the old
stock. This has resulted in
excessive wastage of
products. To overcome this
situation, company has
adopted some operational
changes such as adoption
of lean methodology. This
will helps the company in
reducing their wastage
without performing any
complex procedure.
Company is also enhancing
its presence on digital
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transformed into final
products in a simplified
manner. Company has
adopted six sigma so that
defects and errors in final
product can be reduced
due to which satisfaction
level of customer can be
enhanced.
media, so that customers
can get easily access to
products and services
without physically
appearing at stores. In this
regard, company has
formulated different mobile
applications which have
different sections in
accordance with the
products (Bevan Plsek and
Winstanley, 2013).
Due to the carried out changes, there is considerable impact which is faced by
ALDI in terms of revenue, profitability and market share. These changes benefits the
company in enhancing their market reputation and position in a desired manner. Due to
these changes, company is able to enhance its market shares in a considerable
manner. Joint market-share of Lidl and ALDI faces a rise of 12% due to the changes in
organisational strategy and operations.
Source: (Kantar worldpanel, 2017)
Types of organisational change: In this there are different types of changes such as
structural & strategic and people & processes.
Structural and strategic: Any organization find mandatory to redesign structure of
their company due to external environment influence. Structural changes include
goals, administrative procedures, management system and structural
characteristics. Sometimes in normal business operation, it is required for
management to fit firm's strategy to reach goals of that company or sometimes even
to alter mission statement of company in order to demand of external environment.
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People and processes: This kind of change fluctuates behaviour, performance,
skill and attitudes of employees in any organization. As changing people requires
motivating, interacting in group and leading. Company may require to re-engineer
processes in order to accomplish optimum productivity and workflow.
PESTEL
Political factors- This includes employment rate, governmental activities etc. which
affects the business at wider level. In relation with ALDI, due to involvement of
governmental activities growth and development of business is becoming slower.
Economical- In this, tax rates, inflation and deflation rate etc. are included. These are
not controllable by firm and affects the structure of business as firm revenues
increases it has to give higher taxes to the government.
Social- This comprises of standard of living and income of the people etc. In relation with
ALDI, they target people with lower, medium and higher class and which makes them easier to
acquire larger market share growth.
Technological- Further, technological factor also has changed the business sector. In relevance
with ALDI, they use advanced online management system which helps them to keep in touch
with customers on regular basis.
Environmental- This comprises of pollution, climate change etc. So, ALDI make ensures that
all the packaging of products and goods is done without using plastic. Hence, they focus on
environmental factors too.
Legal- In this, contract, agreement etc. are involved. At the time of partnership ALDI ensure that
all that firm follows and maintain their policies and procedures under laws and legislations.
Drivers of change and types of organizational change
In an organisation, there are two kinds of change which can be widely
encountered. These are internal and external drivers of change. Internal drivers include
policies of organisation, employee law and contracts, working hours etc. External
drivers involves societal norms, fluctuation in current, varied interest rates, change in
technology, political implications etc.
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Types of organisational changes
Transformational change: In these change, company implement strategy which
is in favour of both comTimes new romanpany and new change. In case of ALDI,
company can terminate its extra workforce so that new strategies can be implement
without facing shortage of money.
Organisational wide change: In this, firm changes its internal process on a
large scale in accordance with the change so that only advantageous policies and
strategies can be adopted (Doppelt, 2017).
Planned and emergent change at ALDI:
Planned changes are those changes which are controllable. These changes
have a clear middle, beginning or end and these changes are driven by management. In
case of ALDI, company have taken some changes in its operation and strategy. These
changes are planned changes as company has taken them to reduce the impact of
Brexit and other environmental changes. Emergent changes are continual process
related with adaptation & experimentation. These changes have unpredictable impact.
Strategies for change at ALDI:
Due to political change and Brexit purchasing power of people have reduced. In
this context, company has adopted the strategy to have small stores where every
employee gives proper consideration towards the needs of customers. To manager
environmental change, company has joined initiative like keep Britain clean etc.
Application of Bohner and Arnold change impact analysis:
Model given by Bohner and Arnold will helps ALDI in identifying the
consequences of changes along with other requirements so that change can be carried
out in a proper manner. There are different kind of impact analysis techniques which are
Trace, Dependency, Experimental.
LO2
Change and the impact on organisational behaviour:
psychological impact of change on people at ALDI:
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Any kind of change in ALDI was having impact on organization as well as
employees. It was very difficult for employees to deal with that sudden change it was
impacting on their performance and work. They were not able to accept this kind of
alternation. It was easy when they were given some training according to change and
motivated to perform well as they it was helping them to develop different skill sand
knowledge.
How change impacts on team dynamics and how people are led and managed at ALDI:
At first, it is difficult for employees of an organisation to adopt and implement
change as it they are not properly acknowledged about the change and its impact. In
case of ALDI, employees in starting faced issues while adopting those change and due
to this they faces some conflicts and problems while performing their duties as an
individual or team. But then these changes seem profitable due to which team dynamics
became stronger and they adopt change in a positive manner. In this regard, manager
of company provide required training to workforce so that they can manage change in a
proper manner and company can get advantage out of it.
Ways by which internal and external drivers of change affect leadership, team
and individual behaviour
Different external and internal drivers of change can considerably impacts the
leadership, individual behaviour and team behaviour in a direct manner. In respect with
ALDI, different internal and external drivers are mentioned below:
Internal drivers:
 Financial management: Capital and funds are vital needs for a company in
order to perform their business operations in a desired manner. Shortage of
funds and finance can impacts the working of individuals and teams in a negative
manner as they will not be able to work in an organised manner. Appropriate
financial resources will results in proper leadership my manager due to which
organisational productivity of company will enhance. In relation with TESCO,
financial management has force the firm to adopts the change in management
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because of requirement of resources and to do marketing of their product in
appropriate manner.
 Resources: They directly impacts the leadership, team and individual behaviour
within a firm. If company have appropriate resources then all the work can be
carried out in a timely and systematic manner due to which workforce will deliver
their duties in a proper way either as a team or individual. If company faces
shortage of resources, then it will became difficult for ALDI to perform its
business activities due to which organisational productivity will reduce that will
impacts team and individual behaviour in a negative manner (Espedal, 2017). In
relevance with TESCO, as they are operating at global level shortage of
resources is tend to occur which makes it difficult for entity to operate their
business and which affects the stricture of business.
 Culture: It involves belief, faith and values that are followed by people working in
a workplace. Improper culture at ALDI will demotivate employees to perform well
as an individual or team. Also, if culture will not be suitable, leader will not be
able to manage workforce appropriately due to which organisational productivity
and profitability will reduce in a considerable manner. Whereas TESCO,
organisation culture also affect their management at wider level. This also means
that culture at workplace has deep impact on business.
External drivers:
 Political: Change in political aspects can impact the funds and resources. ALDI
is required to follow different policies and rules that are formulated by
government. If these laws will not be followed then company may have to pay
fine and taxes that will results in reduced brand image of company. This will
reduces the individual and team performance of employees due to which
profitability will reduce considerably. In relevance with TESCO, with they have
good relationship with government but in some situation government involvement
in business become problem for firm. Economical: These aspects involve customer behaviour, inflation rate, interest
rate etc. that can impacts the leadership, team and individual behaviour.
Performance of individual and team is reduced when purchasing power of
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consumers in less. Due to changes in economic conditions, company can cut
down its expenses of hiring new employees. Whereas TESCO, get affected by
economic factor at deeper level and which means that to run business smoothly
they need to provide fair wages to workers.
 Social: These factors impacts the needs and requirements of products in
marketplace. As demands of services & products changes on a considerable
basis, due to this leader in a company is required to change its strategies
according to market demand. This will benefits the company in gaining
competitive advantage due to which individual and team behaviour will improve
that will results in improved productivity (Fyke and Buzzanell, 2013). In relation
with TESCO, they targets all scale people from lower to higher class people
which affects their decision making in firm.
Source: (PEST analysis, 2018)
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Illustration 1: PEST analysis, 2018