Organizational Change: Tesco and Sainsbury - Unit 17 Report

This report provides a comprehensive analysis of organizational change, focusing on the strategies and experiences of Tesco and Sainsbury. It begins with an introduction to organizational change and its impact on strategy and operations, followed by an examination of internal and external factors influencing leadership, individual, and team behavior, including SWOT and PEST analyses. The report then explores the barriers to change and their influence on decision-making. It delves into different leadership approaches and change management models, concluding with a comparative analysis of Tesco and Sainsbury's responses to change, including the impact of social, legal, and economic factors. The report also analyzes the types of organizational change and their effects, providing valuable insights into the complexities of managing change in large retail organizations. The report also compares and contrasts the two organizations, highlighting their successes and failures in adapting to a dynamic business environment and discusses the importance of leadership in navigating change.

Unit 17 - Understanding and
Leading Change

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK1.............................................................................................................................................3
Ways in which change impacts on an organization's strategy and operations............................3
Effects of Internal and External factors influencing leadership, individual and team behaviour5
Measures to be taken to reduce negative impact on organisational behaviour............................9
TASK2...........................................................................................................................................11
Barriers of change and their influence on learnership decision-making...................................11
TASK3...........................................................................................................................................14
Different leadership approaches and change management model.............................................14
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION
The study is on organisational change which means that an organisation is bringing a change
in its way of working, its internal processes or its use of technology which effects the employees
and way of doing business. The study will take in account two organisations namely Tesco and
Sainsbury to gauge the effects of organisational change. Tesco is a British multinational selling
grocery along with merchandise and is one of the biggest retail chains in UK. Sainsbury again is
a UK MNC which specialises in fresh food products along with packaged food products. The
comparisons between the two on organisational change and who has coped better will be
evaluated on internal and external drivers of change, theories and concepts affecting
organisational change, how leadership overcomes the barriers to change with decision-making
and leadership approaches applied for a change initiative.
TASK1
Ways in which change impacts on an organization's strategy and operations
Two organizations which is chosen are Tesco and Sainsbury
Tesco is a multinational grocery and retail company, having its headquarters in England. Jack
Cohen founded this company in 1919. Company has its presence globally with more than 11
countries. Along with grocery they have established itself in clothing, furniture, financial service,
books, telecoms etc. Tesco have its website through which online shopping can be done.
Company also provide club card facility to the customers so that they can get discounts.
Sainsbury is the supermarket's chain having its headquarter in United Kingdom. Company is
founded by John James Sainsbury in 1869 (Vlados, 2019). It is also listed on London stock
exchange. In its initial days they were fresh foods retailer and then moved to groceries. Their
purpose is to provide good quality of food at reasonable price. They protect environment and
make sure that not doing pollution or wastage which harm the environment.
Tesco and Sainsbury are chosen because they are the biggest retailers of UK. Both belief in
protecting the environment and customer satisfaction is their priority. They do research and
development to launch innovative products in the market. They offer good quality of products at
the fair and reasonable price.

Changes affected Tesco and Sainsbury:
One of the important factor which affected Tesco is the social factor. It can include age, gender
etc. If a child is born than it will open a new market for the company because their parents will
buy toys, baby products etc. from Tesco. Tesco gives equal rights to their employees which come
under legal factor. Gender has also influenced the company. Company consider male and female
workers equally they are also selling products for both male and female. Religion is also the
factor which is affecting Tesco while income is the another factor. Sainsbury wants to gain large
customer base for that company had made one strategy but that strategy fails reducing the sales
of the company. Company has done merger with its rival company Asda which is become a big
fail. Sainsbury also brought the change in which they will focus on reducing food wastage, water
waste, carbon emissions etc (Bayliss and et.al., 2020).
Response of each organization for the change
Tesco is satisfied with the social factor. Company knows that if a kid is born than what he or she
will require so company focusing on their requirement while making products. From their toys to
baby products, they are making everything and when they grow they will need books and school
uniforms which are also manufactured by the company. Company had understood that they
should grab every opportunity and make profit from that. Religion factor affected the company,
so they had started giving importance to every religion and also trained their employees to
respect every religion so that none of the sentiments of any religion got hurt. Legal factors also
brought major changes in the company. Tesco gives their employees the equal rights whether
male or female, they believe that everyone is equal in the eye of company because they are
selling both male and female products (Phadermrod, Crowder and Wills, 2019). Earlier company
was making major products for high class only but now they have understood that if they want to
generate more revenue than they have to make products for middle class as well. Sainsbury is
revising on their strategy and has appointed expert who can guide them while making sale
strategies. Company now consider all the aspect before doing merger because its fail can cost
huge. Aspects can be its market share, customer behaviour, brand value etc. Sainsbury's change
for protection for environment is a success because they build customer trust for them.
Types of organizational change in both organization
People: Tesco believe in people culture in which training is given to the employees that how to
handle the customers and solve their queries. They believe that customer problems should be

solved at the priority level while in Sainsbury workers have to work on customer's satisfaction.
They trust in the saying that customer is everything.
Process: Tesco had adopted such process in which they can fulfil each demand of the customer.
Innovation is the one thing through which company is retained in the market. They believe in the
power of innovation and timely do that whereas Sainsbury having research and development
team who find out that what is the customer prefeWays in which change impacts on an
organization's strategy and operationsrence and the market trends (Rusk, Vella-Brodrick and
Waters, 2018).
Strategy: Both companies focus a lot while making strategies, they make such strategy which can
help them to be in the market for long time by gaining customer's trust and brand loyalty.
Strategies which are adopted by them are related to costs, expense, customers etc.
Structural: Structure of both the organization is flexible which is easily understood by their
employees and consumers.
Transformational factors: These factors are concerned with the characteristics and processes of
the organization. Any change with these factors will affect the complete organization. External
environment affect these factors (Hussain and et.al., 2018).
Transactional factors: These factors refers to the everyday operations in the organization.
Management can affect these factors but leadership can't do that. Changes in this factors can lead
to many changes in the organization.
Ways in which change impacts on an organization's strategy and operations
Effects of Internal and External factors influencing leadership, individual and team behaviour
An organisation is affected by various factors internally and externally like a company's human
resource issue will be an internal factor while changing market trends an external factor affecting
the business. SWOT and PEST Analysis are two tools giving an insight into these factors.
SWOT Analysis of Tesco and Sainsbury
Ways in which change impacts on an organization's strategy and operations

Strengths
Tesco stands to be one of the largest retail chain selling grocery and merchandise in UK and has
a global presence. Tesco has brought in superior technology and introduced a mobile payment
app of its own to support digital payments. Tesco has an efficient supply network and a good
distribution range within UK (Chocholáč, 2017).
Sainsbury is a diversified business with strong market position. It started earlier as a fresh
food store and increased its product range to packaged food products. Sainsbury is known for its
quality products. Sainsbury has a large diversified employee base to deliver quality service to the
customers.
Weaknesses
Tesco has misrepresented its profits in account statements leading to a loss of reputation. Debt
has increased due to credit card payments being overdue. Low pricing has sometimes resulted in
loss of revenue.
Sainsbury is facing problems due to rising food prices which has demotivated customers
as they have the habit of purchasing at low prices. Low margins have influenced the revenues
and its expansion (Sparks, 2019).
Opportunities
Tesco can enter into strategic alliances with other competing brands for mutual product
promotion, can enter in joint ventures with local stores to increase market presence. Tesco has
introduced a new store named Jacks which gives discount coupons and is performing well.
Sainsbury has an opportunity to increase its market presence in rural areas as demand for
branded products has grown in rural areas too with onset of electronic media in homes. It can be
a game changer for Sainsbury. Self check out vending machines installation at the place of public
visits can increase sales.

Threats
Tesco faces stiff competition from other big retailers like Walmart with each wanting to expand
its market share. Also UK exit from European Union has added to the woes of Tesco with
additional tariffs imposed.
Sainsbury too has to face tough competition in its own arena where it has to continuously
source out financially viable goods for its customers. Local players also eat up market share
where its presence is limited (Yamoah, 2019).
Impact of SWOT analysis on organisations
Tesco introduced superior technology with its own barcode system and mobile app which
changed the way of payments with digital interface. The leadership welcomes it as a positive
change but it has a two way impact on the employees. Employees who are used to deal
personally in billing may feel their work burden lowering due to technology while others may
judge it as their role of responsibility going down. The managers have to instil the same
confidence in them by revealing it as a helping tool in billing section.
Talking of Sainsbury the opportunity of expansion in rural areas may be looked upon as a
business expansion policy for management but change may not be accepted well with employees
who are not willing to relocate to rural background. Leadership can chalk out service in rural
sector on a rotational basis for employees thus not making a permanent move for them.
PEST Analysis of Tesco and Sainsbury
Political factors

Political support for retail brands regarding relaxation in tax rates for in store shopping has gone
well with Tesco. UK government encourages retail brands like Tesco to employ a large
workforce owing to the current financial crisis thus helping company in business expansion
(Chocholáč, 2017).
Sainsbury also being a large retail chain employs a diverse workforce and gets help in
business loans by the UK government n business expansion. However exit of UK from European
Union has increased tariff rates and Sainsbury is finding it difficult to keep a low pricing policy.
Economic factors
Tesco has to keep update with change in economic policies of the country as major base of the
company is in UK. Change in tax rates, financial crisis may affect the business and company has
to keep a provision for such risks. Purchasing power decline among customers has to be judged
and product pricing has to be done accordingly (Sparks, 2019).
Sainsbury keeping pace with change in economics of the nation also has to cater to rising
salary needs of its large base of employees. An increase in salaries will impact the product
pricing or the gross revenues which the company has to watch out for.
Social factors
Tesco has to keep aware of the social culture of the nation in terms of shopping which is now
bulk buying. People now like to purchase their need products in one go. Tesco has thus
diversified in a range of products which are of home care other than grocery (Yamoah, 2019).
Sainsbury considering the social aspect of food habits of people have to sell diet
conscious products as people get more health conscious and avoid junk food. Customers also
want the know how of the process food product has gone through to know originality of the
product.

Technological factors
Tesco with advent of online shopping has launched its own barcode system and mobile app to
increase the digital interface and develop a customer base who don't get enough time to do in
store shopping. This has also helped make billing process simple.
Sainsbury has also kept in pace with technology that online shopping may be new in
business for food and grocery but expanding base slowly in UK (Mowat, 2018).
Measures to be taken to reduce negative impact on organisational behaviour
Change can bring in changes positive as well as negative on an organisation. The leadership as
well as employees are effected by changes occurring in different aspects such as technology,
external market factors of slowdown, government's policies etc. Some measures which can be
taken to reduce negative impact are:
 Employees not feeling comfortable with change in technology can be motivated by
giving ample training and make them understand that it will make their work simpler.
 Economic slowdown should not bear much upon the morale of employees and they can
be paid salaries accordingly to keep momentum going.
 Company expanding its business in rural sector will have to motivate employees to spend
some duration at rotational basis. At the same time they can give referrals of their friends
or relatives residing there to join the organisation.
Bohner and Arnold Change Impact Analysis: Impact analysis are done to identify the reason of
a change and bringing the solution that will modify change. Impact analysis are of three types
which are-
Traceability Impact analysis: Traceability Impact analysis help the company to see the link
between specifications, test, requirements, design elements and evaluating their relationships to

find out the scope for the change and manually finding that what is affected by the change, which
sometimes can be time-consuming if the projects are complex. That is why there is a need for the
requirements management software (Small and et.al., 2016). This software is installed by both
the companies because Tesco and Sainsbury both are the big companies and have complex
projects only so can't deal manually because it takes time. This analysis is very important to be
done because it will show the link between various factors.
Dependency Impact analysis: This impact analysis is used to find out the deep impact on the
system. Company believes that depth have to consider first because than only problem can be
solved from the root. If depth will not consider than problem will not solve permanently.
Experiential Impact analysis: Experiential Impact analysis are used to study that what is
happened in the same situations in past to find out that what can be happened in the future.
Company believes that past analysis are very important because than only planning can be made
for the future.
Burke-Litwen model:This is also known as the performance and change model. It is a tool that is
used to understand components of the organization and with the change in time how they are
relating to each other. This model says that there are four groups in an organization, which are-
External environment: This will tell us about the factors which are outside from the organization
and are affecting organization's process (Robinet and et.al., 2018). Tesco also consider these
factors because if internal environment is important than external environment is more4
important for the company to get success they want. Sainsbury says that change in the consumer
behaviour also affects the business.
Performance: This shows the overall result of the organization. It can be checked in different
ways like seeing productivity, turnover, customer satisfaction etc. Both company agrees on that
the performance of their employees is the key to their success. They provide training to their
employees so that they become skilled and their performance improve. If company takes care
about the demand and preferences of the customer than they will attain customer satisfaction
easily.

Transformational factors: These factors are concerned with the characteristics and processes of
the organization. Any change with these factors will affect the complete organization. External
environment affect these factors (Hussain and et.al., 2018).
Transactional factors: These factors refers to the everyday operations in the organization.
Management can affect these factors but leadership can't do that. Changes in this factors can lead
to many changes in the organization.
TASK2
Barriers of change and their influence on learnership decision-making
Currently many factors exist in the business environment of Sainsbury which can become
barriers to the change management process and also influence to the decision making of
leadership with company (Clarke, Jhamb and Bennett, 2019). On the other side, upper
management of this retail business have to be very for making a specific plan in order to
systematically deal with these all barriers and issues of change management process. There are
some major barriers of change and their influence of the decision-making of leadership has been
discussed below;
Lack of employee involvement
This is one of the major issues or barriers for the change implementation process of a
company. Basically, lack of employee involvement very negatively affects to change and also
influence to decision-making process of leader in workplace. That’s why upper management of
this business have to be very active in order to remove this barrier from workplace. Day to day
competition in market place is increasing, and the company need to implement change in very
proper manner for gaining effective outcomes in market place. In this situation, upper
management of company should identify those all barriers of change for removing them from the
implementation process. This is really necessary task to upper management for achieving very
positive results from this change process.
This barrier can influence to leader of Sainsbury for taking steps towards increasing the
involvement of employees in the workplace (SMITH, 2015). Basically, employees are the best
source to Sainsbury for successfully implementing change in workplace, in which if it not has

effective involvement of employees, then it cannot implement its change in effective way.
Currently there are many innovative ways are simply available to Sainsbury for increasing the
involvement of employees. For example; leader can take decision for maintaining effective
employee relations in the workplace. Leader at Sainsbury can properly communicate with its
existing employees or workers for informing them about the change, etc. After using these all
ways, leaders of Sainsburys can easily resolve its one barrier of change, called; lack of employee
involvement.
Lack of effective communication
Lack of proper or effective communication is another major barrier to change, and this
can also influence to decision-making process of existing leader of Sainsbury. Basically,
communication is one of the best ways to employer for systematically informing their employees
about what they have to do in workplace, and which type of practices they need to avoid in the
workplace. This is the main reason that, upper management of company have to think about this
barrier or issue as well, otherwise this barrier also can badly affect to the change implementation
process of Sainsbury. In this dynamic and modern world, there are many ways and methods
simply available to resolve this barrier of change (Panda, 2016). For example; leader and
manager can take decision providing appropriate training and development sessions to their
employees, in which after participating in the training and development sessions, employees or
people or Sainsbury can simply improve their different skills and abilities including
communication.
Basically, when an organisation takes steps towards implementing change, then it needs
to remove all communication errors from the process of implementation, in which well-
developed skills of communication is the best way that organisation for removing different errors
from the workplace. This barrier will definitely influence leader of company for improving
communication skills of all people who will be participated in the process of change
management. In this situation, when all people or employees has well-developed skills of
communication, then Sainsbury can simply deal with the barrier of lack of effective
communication.
Poor leadership