Organizational Change: Analysis of Wesfarmers' Structure and Learning

This report examines organizational change and learning within the context of Wesfarmers, a major Australian supermarket chain. It begins with an introduction to organizational change and learning, including single-loop, double-loop, and deuterolearning theories. The report then provides a description of Wesfarmers, including its history and diverse business operations, followed by internal and external analyses using SWOT and PESTLE frameworks. The core of the report focuses on the issue of the hierarchical organizational structure at Wesfarmers and the need for a transition to a functional structure. It delves into the dynamics of strategic organizational change, addressing the fears and resistances employees might experience. Finally, the report explores different approaches to change, including those by Kotter & Schlesinger, and highlights the roles of individuals, teams, and leaders in the change process. The report emphasizes the importance of leadership in communicating the vision and supporting employees through organizational transitions.

Running head: ORGANIZATIONAL CHANGE
Organizational learning and change
Name of the Student:
Nam of the University:
Author’s Note:

2ORGANIZATIONAL CHANGE
Introduction
Organizational change is needed so that the errors in the old and the existing set up of the
organization are recognized so that they can serve their customers in a better way (Georgalis et
al. 2015). Undertaking organization change helps the company to provide greater customer
satisfaction by improving the quality and also the number of their services
Theories of organizational learning
 Single loop learning: This is a system used by the organizations on getting any
unexpected results. E.g. when sales are down, marketing managers inquire into the cause,
and tweak the strategy to try to bring sales back on track.
 Double loop learning: This is a new set of ideas, rules, and policies formulated and used
by the organization in order to restructure an entire existing system. In the above
example, managers might rethink the entire marketing or sales process so that there will
be no (or fewer) such fluctuations in the future.
 Deuterolearning: This method refers to a total restructuring and rescheduling of not only
the existing ideas but also the method of learning about those ideas. For example, while
going through a transition from hierarchical to functional organizational setup,
Wesfarmers managers will not only formulate new dynamic ideas but also set up new
methods of taking feedbacks about the change. Essentially deuterolearning is, therefore
"learning how to learn."

3ORGANIZATIONAL CHANGE
Description of the organization
Wesfarmers is one of the leading and popular supermarket chains in Australia. Like every
other organization, Wesfarmers also tries to upgrade its system. However, Alvesson and
Sveningsson (2015) has suggested that bringing about a smooth organization change is not really
a very easy job. Three has to be a big effort put forward by all the managers so that all their
employees can understand the reasons behind the organizational change
(www.wesfarmers.com.au.2019). The company was established in the year 1914. Initially
known as Western Australian farmers' cooperative, worked hard a lot and followed the strategy
of constant improvement. Wesfarmers has now grown into one of Australia's largest listed
companies. The headquarters are located in Western Australia; its diverse business operations
include merchandise, chemicals, Energy fertilizers, and others. Wesfarmers have been
recognized as one of the best places for the employees.
Internal and external analysis of the organization
SWOT
Strength weakness
 Has an extensive network of stores all
over Australia so that they can gain a
good competitive advantage by catering
to a large number of customers
 The biggest player in the private sector
 They give sufficient importance to
community building by generating
 Communication Gaps
 All the business interests are not
properly met
 Large scale dependency only on the
local suppliers

4ORGANIZATIONAL CHANGE
huge employment opportunities
Opportunity Threat
 Utilizing the opportunity of growth by
diverging into new sectors
 Reducing carbon footprint by finding
out newer and alternative, cost reducing
sources of energy
 An extensive rate of competition in the
retail sector
PESTLE
Political Economical
 Weaknesses in the planning, zoning
and the trading hours
 Restrictions in the duration and the
hours of trading
 The rate of the growth in the industry is
much slower due to the issues existing
 Has to bear higher wage costs for
existing in the Global market
Social Technological
 Social norms differ from the
organization structure existing in the
organization.
 More investment in leisure products or
the experimental products than the age-
old traditional products must be the
 Good technological resource as
Australia is one of the technological
advanced economies o the world.
 Increase in the rate of online shopping
through mobile phones

5ORGANIZATIONAL CHANGE
concern of the company.
Legal Environmental
 Abide by the business laws and the
other strict political norms of the
organization
 They have to work over the reduction
of the carbon footprint by reducing the
rate of their emissions
Issue existing at the company
The main problem is the existence of the hierarchical organizational structure. Petrou,
Demerouti and Schaufeli (2018) have suggested that there can be a lack of proper
communication between the employees and also a low rate in the decision-making process. Thus
there is the need for bringing about some kinds of changes in the organizational structure of
Wesfarmers. Burke (2017) is of the opinion that there has to be some restructuring and re-
organization of the organization so that there can be greater transparency among all the
stakeholders working in the company. Thus it is suggested that the organizational structure
changes from hierarchical to functional structure for the betterment of the future.

6ORGANIZATIONAL CHANGE
Dynamics of strategic organizational change
There are many issues that the organizational faces while they are trying to implement the
organizational change. This is because employees suffer though a series of fears, tensions, and
doubts. Thus they expect that their leaders will always be there to support them and solve their
queries. Anderson (2016) has suggested in this context that the leaders or the company managers
have to proactively help their employees with proper moral support. Particularly in the case of
Wesfarmers, the change has to be brought within the existing organizational structure. Thus
there will be restructuring and also reshuffling of the different employees working in the
organization. Thus it is very common for the employees to resist the change as they will suffer
from the fear of loss of their job, the excessive power of authority and other such problems.
There are many other dynamics of change that occur in the path of exercising organizational
change.
Employees will feel awkward, ill-at-ease and self-conscious
As Wesfarmers follows a Hierarchical organizational structure, there is a chance that the
manager or the CEO will take up the authoritative role. They often dominate the employees and
this will naturally make them de-motivated or suffer from lack of encouragement. For instance,
employees working in the sales and marketing department can be shifted to the department of
production and manufacturing. This will naturally create a feeling of fear among the employees.
They might suffer from the lack of expertise or the training skill that is needed for fitting into the
newly designed job roles.

7ORGANIZATIONAL CHANGE
People initially focus on what they have to give up
Employees tend to focus more on the things that they will lose while they are being red-
shifted from one department to the other. Organizational change is a very risky and time-
consuming process. In case of a change or a transformation in the organizational structure, the
employees feel insecure. They often think about their past job role and the works that they had to
perform as part of their last job.
Employees suffer from loneliness
The employees often suffer from a feeling of loneliness when they are reshuffled or
rescheduled into different groups or teams. This makes them feel that they are left alone and
there is no one to support them in this phase. In the case of Wesfarmers, this issue will be
prevalent because the already existing hierarchical structure will make the employees feel
dominated under the authoritative rule of the manager or the CEO. They might find the managers
very harsh and also u approachable
Employees are at different levels of readiness for change
Employees have different kinds of mental preparation during the chase of the
organizational change. This is because different employees have different kinds of mindset.
Some of them are ready for the change while others are not. As Wesfarmers works with a
multicultural workforce there is a chance that different employees coming from different cultural
backgrounds will have a different attitude towards accepting the organizational change.

8ORGANIZATIONAL CHANGE
Wesfarmers include a large number of employees from the aboriginal or the indigenous
community. As they already belong from a less developed place, it will be tough for them to
understand the need for the change.
Employees suffer from lack of enough resources
Employees always suffer from a feeling of fear while they are passing through a phase of
organizational change. This is because they feel they will be incompetent to fulfill the new join
responsibilities that are assigned to them. As Wesfarmers currently have the hierarchical
organizational structure it will be tough for the employees to report their skill gaps to the
company head. Under the hierarchical structure, there will be only one head either the manager
or the CEO. The lack of communication within the members of the organization creates
confusion and the scope of improvement within the organization in relation to the role of the
employees is badly affected. Thus there will naturally be some communication gaps
Reasons for different approaches to change
There are different change approaches that are used in the organizational context for
successfully implementing the organizational change. The Change Approaches by Kotter &
Schlesinger provides six practical strategies to overcome resistance to change (Hughes 2016).
Augustsson et al. (2017) have suggested that there are different resistances or obstructions that
are forwarded by the employees while the company managers are trying to implement any new
kinds of changes in the organization.
The different approaches must be used in the Volatile organization or the Novel
organizational context as these organizations operate in a very less matured and highly

9ORGANIZATIONAL CHANGE
competitive market. They are threatened by the external forces at every single time. Wesfarmers
operates in a very novel or volatile environment as the supermarket chain is constantly
being threatened by the entry of the new firms. There are many other organizations like Aldi,
Coles, Asda and many other such firms that are posing a major threat. All these organizations are
trying their level best to use the latest technologies that will badly impact the organization. In
order to implement the change approaches it is important for the management to identify the
reasons or the specific occasions that require the application of such approaches.
 One important reason behind the organizational change approach is Misunderstanding
and Lack of Trust. The employees often suffer from a poor communication facility.
This is because under hierarchical organization set up as in case of Wesfarmers the
employees cannot easily reach out to their head. As there is only one head that is the CEO
or the company manager, the usually stays busy with many other works. Employees feel
that the manager is not being transparent with them and are not involving them in any
kinds of organizational decisions. For instance, in order to solve this issue, the
organization can use the following approaches by Kotter & Schlesinger.
 Low tolerance for change is another reason for applying the change approach strategy.
Employed always feel that there will be a kind of compulsion on them to take up the new
ways of working. Particularly Wesfarmers will be facing this problem while
implementing the organizational change as the employees suffer from a free flow of
communication system (Wentworth, Behson and Kelley 2018). As per the opinion of
Jung and Song (2015), under the hierarchical system, there is a strict authoritative or
autocratic rule develops in the organization. This often makes the managers or the CEO
impose their decisions over their employees without even listening to their opinions. This

10ORGANIZATIONAL CHANGE
will irritate the employees and they might get not be able to tolerate the changes that are
being implemented in the organization.
 Parochial Self-Interest is another reason that needs a proper change approach.
Employees usually tend to resist the change when they feel that they will have to lose
something valuable to them. This can refer to the old position, an old designation the pay
scale and other such things.
Individuals, teams, and leaders in the change process
Anderson (2016) has suggested that there is a relationship between the individuals, teams and
leaders in the change process all of them have to put forward a joint collaborative effort. Leaders
have to perform the following roles
Clarify the vision and communicate it effectively
Leaders have to use all the different forms of communication mediums in order to convey
the change and the new set of roles and responsibilities for the employees. The managers of
Wesfarmers have to utilize the social media apps and also other forms of communication and
spend at least 3 hours per day in order to convey the change to the employees and also take the
necessary feedbacks from them. They
Stay connected with employees
Leaders or managers have to make sure that they are making themselves approachable.
The hierarchical organizational structure existing in Wesfarmers made it tough for the employees
to carry on the proper communication system. They were also unable to freely convey their

11ORGANIZATIONAL CHANGE
concerns to their manager. Thus the managers have to develop a horizontal communication
system so that they can always stay in a proper connection with their employees. Using 360
Degree feedback system is also necessary for the purpose of taking regular feedbacks from
employees.
The role played by a team
The team members have to cooperate along with their managers and make sure that they
are abiding by the new rules and regulations that have been formed. They must make it a point to
move forward in a step by step manner. It is the responsibility of team members to forward all
their concerns to the respective departmental or functional heads.
Biblical frameworks
Ax and Greve (2017) has suggested that Biblical lessons can be used by the managers in
order to train to their employees in everyday life. For instance, the Ten Commandments
enlisted in the Bible can be used in the corporate organizational context. The organizational
learning process can be observed in the four-phase organizational learning model in the
Gospel of Luke. Of the 66 books in the Christian Bible to choose from, a variety of reasons lend
support to our choice to study the Gospel of Luke. First, we recognize that the life and teachings
of Jesus of Nazareth are said to have had an enormous impact on many people over the past two
millennia. The Gospel of Luke is one of four narrative books in the Bible that describe the life
and teachings of Jesus (the other three books are the Gospels of Matthew, Mark, and John).
Of these four Gospels in the Bible, the author Luke may have been the most sensitive to
the kinds of issues relevant for the management literature.

12ORGANIZATIONAL CHANGE
Ideation phase
Bock and Simpson (2017) have suggested an organizational change takes place only
when there is the emergence of new and innovative ideas. However, Feynman (2018) has argued
that new ideas do not really originate from any kind of vacuum. The new ideas always emerge
from past experiences. The new ideas are the experiences that are usually shared by the
employees in their communities or within their groups. Ideation is facilitated by the trust and
under tan ding among the colleagues.
Elaboration phase
This is the phase where the managers have to involve all the employees in order to
discuss the different ideas that have been suggested by all. Interpreting involves members in
conversation and dialogue. Interpreting allows principles to be articulated, named, and to become
part of the cognitive maps of various stakeholders.
Integration phase
The focus in this phase is on accomplishing coherent collective action and on taking
coordinated action through mutual adjustment Gunarathne and Lee (2015). The management has
to combine the newly gathered ideas along with the existing ones to formulate new rules and
policies.
Normalization phase