Sainsbury's Performance Management: Analysis and Recommendations

This case study provides an in-depth analysis of Sainsbury's organisational performance management (OPM) system, examining various aspects such as performance measurement, stakeholder communication, risk management, quality management, financial performance, customer perspectives, and people perspectives. The analysis identifies implementation issues related to political conditions and employee resistance to change. The report highlights Sainsbury's strengths, including its financial stability and stakeholder support from Qatar Investment Authority, while also addressing challenges like maintaining product quality and adapting to changing customer preferences. Based on the analysis, the case study recommends improvements in customer communication, quality management through benchmarking against competitors like Tesco, and a systematic approach to implementing changes to mitigate employee resistance. The ultimate goal is to enhance Sainsbury's competitive advantage and maintain customer loyalty.

Running head: MANAGING ORGANISATIONAL HEALTH
Managing Organisational Health
Name of Student
Name of University
Author Note

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Table of Contents
Introduction................................................................................................................................2
Analysis of Existing Organisational Performance Management System..................................2
Organisational Performance Management and Performance Measurement..........................2
Communicating Performance to Stakeholders.......................................................................3
Risk Management...................................................................................................................4
Quality Management and Improvement.................................................................................5
Financial Performance............................................................................................................5
Customer and Client Perspectives..........................................................................................6
People Perspectives................................................................................................................6
Implementation Issues............................................................................................................7
Recommendation........................................................................................................................7
Conclusion..................................................................................................................................8
Reference....................................................................................................................................9

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Introduction
The assignment focuses on the current organisational performance management
system obtained by a reputed company. The assignment analysis other attributes such as
communication of performance with the stakeholders, risk management, quality management
along with financial performance and so on. The focus of the assignment is on Sainsbury's, a
retail company in the UK. The assignment analysis the organisational performance
management used in Sainsbury's and provides a recommendation for its improvement.
Sainsbury’s is one of the most reputed retail companies situated in London. It is a
public limited company with a 16.9% share of the supermarket. John James Sainsbury
founded the company in 1869 and within 1922; it became the largest grocery retailer in the
country (Sainsburys.co.uk 2018). Currently, the company has over 1812 stores located all
across Europe and the UK within employee strength of 162,000 (Sainsburys.co.uk 2018). As
per recent reports, the company is listed on the London Stock Exchange with about 21.99%
of the share of the company being held by Qatar Investment Authority. Reports also claim
that Sainsbury’s is the second largest retail company in the UK behind only to Tesco
(Sainsburys.co.uk 2018).
Analysis of Existing Organisational Performance Management System
Organisational Performance Management and Performance Measurement
According to Van Dooren, Bouckaert and Halligan (2015), organisational
performance management and measurement is the most important analysis that brings into
focus the capabilities of a public sector enterprise. It is a systematic approach to improve the
existing quality of performance in an organisation. Normally performance management is
measured by the economic condition, the efficiency and the effectiveness of a particular

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company. In the case of Sainsbury's the organisational performance management system
takes into account the challenges and opportunities of the modern day. These include
technical challenges and financial challenges (Buckingham and Goodall 2015). For
Sainsbury’s the financial capability of the company is stable as it earns a net income of £471
million. This accounts for the company to be financially viable and ensure that the needs of
the employees are fulfilled.
The introduction of new technology in the market poses a challenge for the company,
as timely delivery of information is one of the biggest challenges that companies often face.
In the case of Sainsbury's, this is a threat as the company have its stores spread across the
country. The exchange of information from one store to another need to be done in a proper
manner so that customer and employee satisfaction can be upheld (Pulakos et al. 2015).
Based on this analysis, it can be said that Sainsbury’s the organisational performance
management and measurement system of Sainsbury’s focus on improving the technical
expertise of the company. This is usually done by conducting a proper analysis of the market.
The current system takes into account the environmental challenges that are faced by
companies in the market.
Communicating Performance to Stakeholders
Stakeholders are the group of entities that take into the account the interests of a
company (Shields et al. 2015). It can be in the form of internal as well as external that
provide support for the betterment and existence of a company. The decisions of the
stakeholders can affect the outcome of a business. Likewise, decisions that are taken by a
business organisation also affect the outcome of the stakeholders. Normally, the stakeholders
of a company include the employees, customers, suppliers and traders. The support from
these groups is important as it can provide a company with the necessary requirements for

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success. According to Arnaboldi, Lapsley and Steccolini (2015), the support from the
Government is equally important to gain the trust of the customers and evade taxes.
In the case of Sainsbury’s the major stakeholder of the company is Qatar Investment
Authority. Sainsbury's is a private sector and it is important that the Government and
investors play a major role in the success of the company. As observed by Mone and London
(2014) communicating with these stakeholders is done by using emails. In the modern day,
this is an effective mode of communication as report details can be shared with ease.
Meetings are also scheduled between the owners and the investment officers to discuss the
possible changes that may be brought about for the benefit of the company. Thus, the existing
form of communication performance of the company to the stakeholders is done via the
modern method of communication.
Risk Management
Managing risk is one of the most important concepts that exist in the modern business
world. Although Gerrish (2016) stated that without taking risks, an organisation cannot
succeed in the manner that it expects, yet the risks have to be taken in a manner that provides
an opportunity for mitigation. In the modern day, it is seen that the risks normally occur due
to finances, technological and poor promotion. These risks are interconnected as a poor
investment on technology or mode of promotion provides a disadvantage for an organisation.
In the case of Sainsbury’s, one of the most important risk management that the company
needs to consider is the health of the employees as well as the customers (DeNisi and Smith
2014).
This is because the expectation from a retail store normally warrants for fresh
products that can be used diligently. Hence, risk management process regarding the use of
such fresh products needs to be undertaken so that the company can gain back the top

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position in the retail market from Tesco. In the matter of investment, Sainsbury’s can be
considered as safe due to the support it receives from Qatar Investment Authority. Thus, the
risk management process of the company highlights a cautious approach towards treading
with customers.
Quality Management and Improvement
According to DeNisi and Murphy (2017), to gain the trust and loyalty of the
customers, it is necessary to improve and manage the quality of products and services offered
by a company. The satisfaction of the customers is attained by providing them with the best
quality of products that exist in the market. In the case of retail stores, the quality is important
as the customers expect a fresh and good quality of edible products from the stores. To
maintain their position as the second best retail store in the UK and to improve upon it, it is
necessary that Sainsbury improve the quality of products. However, currently, the company
adopts Total Quality Management process to maintain the quality of the products (Koprić
2016). It is seen that the investment by the Qatar Investment Authority is based on the good
quality of products manufactured and served by the company. Hence, it is necessary for
Sainsbury's to make improvements to the quality of products of the company.
Financial Performance
To succeed in the international market it is necessary for companies to develop a
financial stability. The financial stability needs to be maintained keeping in mind the nature
of the business and the fluctuation in the economy of the country. As stated by Van Dooren
and Van de Walle (2016) the financial performance of a company is mainly analysed by the
improvements it makes in the technological as well as the infrastructure. The revenue and the
net income of a company define the stability of the company. In the case of Sainsbury's the
company enjoys a healthy £471 million net income. This indicates that the current financial
performance of the company is high and it provides an opportunity for Sainsbury’s to conduct

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experiments related to developing its resources. As stated by Kroll and Moynihan (2015) the
financial performance of Sainsbury’s is dictated by the stakeholders that invest for the
improvement of the company.
Customer and Client Perspectives
Ljungholm (2015) stated that satisfying customers and changing the perceptions of
the clients are two of the most important aspects that need to be taken into consideration by
every organisation. Customers and client constitute the stakeholders of a company and it is
necessary for managers to formulate a plan that can help in understanding the manner in
which satisfaction of the customers can be obtained. In the case of Sainsbury’s the company
need to ensure that the perspectives of the client regarding the products of the company are
changed and satisfaction of the customers are attained by using proper means of manufacture
and services. Currently, the company follows up with its customers via their websites and
provides them with an opportunity to interact with the customers on a daily basis. This
ensures that regular feedback is obtained and the perceptions of the customers regarding the
company are analysed (George et al. 2016).
People Perspectives
According to Ülgen and Forslund (2015), one of the elements of the marketing mix is
people. People normally constitute the target market of a company and the satisfaction of the
target market is important for the success of a company. Perceptions of people vary due to
various reasons. One such reason is the loyalty of the people. Most people tend to remain
loyal to the brand or company that they prefer. This sometimes provides negative feedback
for other companies thereby, ruining the possibility of creating a reputation in the market. For
Sainsbury’s, it is important for the company to ensure that the people of the country do not
maintain a bad perception of the company. Currently, the company indulges in maintaining
communication with the people by conducting regular communication with the customers.

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With a large number of stores spread across the country, this becomes convenient for the
company as it provides Sainsbury’s with an ability to become a diverse organisation.
Implementation Issues
As stated by According to Van Dooren, Bouckaert and Halligan (2015) formulating
strategies can help organisations prepare for future outcomes that may play occur due to
factors related to the environment. However, implementing the strategies poses a challenge
for most companies as it becomes difficult to mitigate the issues that exist while
implementing. In the case of Sainsbury's the political condition of UK may pose a serious
threat to the implementation of new strategies formulated by the company. Buckingham and
Goodall (2015) observed that Sainsbury's does not have to worry about the financial
capability that may play a significant role for the implementation plan for other companies
due to the external support in investments that the company receives. However, changes in
the organisation may be opposed by the employees due to the fear of change in the cultural
and work style of the organisation. Along with this, the political factor of the UK sets certain
rules that require permission from the Government while indulging in trade activities with
other countries.
Recommendation
Based on the analysis of the current organisational performance management of
Sainsbury’s, it can be said that the company needs to improve its method of communicating
with the customers. Regular feedback needs to be obtained from the customers to identify the
change in tastes of the target market. In order to maintain the loyalty of the customers, it is
important the Sainsbury's maintain the quality of the products. Adoption of total quality
management may help the company to succeed, however, benchmarking can be considered as
the best way in which Sainsbury’s can improve its quality. Sainsbury’s can benchmark the

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products and service qualities offered in Tesco and elevate it by applying innovative tactics.
The implementation of the strategies needs to be done in a manner that provides Sainsbury's
with a competitive advantage. The resistance of the employees regarding the changes can be
mitigated by applying the required changes in a systematic manner. With the investments
made by the company by Qatar Investment Authority, Sainsbury's can implement the
recommended changes in the organisations without disrupting the support provided by the
stakeholders.
Conclusion
Thus, it can be concluded that Sainsbury's need to maintain a proper quality of
products and services to maintain the loyalty of the customers. The current organisational
performance management system of the organisation can help the company to maintain its
second position in the market. However, to reach the pinnacle of the UK market,
implementation of the recommended changes is required so that it can reach the customers
and become the leader among retail stores in the UK.

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