Organisational Change: Leadership, PESTLE, and SWOT Analysis Report

This report provides a comprehensive analysis of organisational change, focusing on the retail giant Tesco. It begins with an introduction to organisational change and its significance, followed by a detailed examination of external factors using PESTLE analysis, covering political, economic, social, technological, legal, and environmental influences. A SWOT analysis is then conducted to evaluate Tesco's internal strengths and weaknesses, alongside external opportunities and threats. The report further explores real-world examples, comparing the impact of change on Tesco and its competitor, Aldi. It also examines the internal and external drivers of change, and their effects on leadership, team, and individual behaviours. The report concludes by outlining strategies to minimize the negative impacts of organisational change and discussing various leadership approaches to change initiatives, providing a well-rounded understanding of the topic.

Understanding and Leading
Change

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
PESTLE & SWOT Analysis........................................................................................................3
Examples Showcasing and Comparing Impact on Change within Business Organisations.......6
Drivers of Change and Impact of Organisational Change on Leadership, Team and Individual
Behaviours...................................................................................................................................7
Minimise Negative Impact of Organisational Change................................................................8
Barriers to changes influence leadership’s decision making.......................................................9
Range of leadership approaches to change initiative.................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Organisational change is the business process through which growth, transformation or
decline occurs within a business organisation. Organisational change is a natural process as all
the operations and functions of all business organisational operating in varying industries across
the world are required to change with time (Elsmore, 2017). This report assesses organisational
changes within the retail business organisation Tesco. Tesco is a global retail business
organisation that operates within the retail industries and specialises in selling general
merchandises and groceries to its customers. Tesco was founded in 1919, an astonishing 101
years ago and currently operates from its headquarters in Hertfordshire, UK. Having operated
within the retail industries of UK for such a prolonged period of time in a successful manner, has
presented the operations of Tesco with numerous opportunities to grow and expand the business
operations to global markets in an effort to diversify their business operations and increase their
operational productivity, profitability, customer base and market share. Tesco currently operates
close to 6,800 distinct retail establishments in 11 different countries around the world and
employees close to half a million different individuals at various positions within its hierarchical
structure in order to successfully conduct its various operations.
MAIN BODY
PESTLE & SWOT Analysis
PESTLE Analysis
In order to assess the external factors that can have an impact on the various operations of
a business organisation such as Tesco and drive organisational change, a PESTLE analysis can
be conducted. PESTLE analysis showcases the various political, economical, social,
technological, legal and environmental factors that are present within the external environment
of Tesco which can have an impact and drive organisational change within Tesco.
Political Factors: These are political factors present in the external environments of Tesco that
can influence, impact the operations of Tesco and drive organisational change within. The most
prevalent political factor that impact the operations of Tesco relates to Brexit. The current
instability in UK owing to Brexit can have an immense impact on the operations of Tesco. As the
exact changes to policies and regulations post Brexit still haven't been made clear to the public
and are debated on by economists and analysts. Brexit can have a positive impact on the
operations of Tesco within the retail industries of UK as it would inevitably involve the

switching of current complex and opaque international trading laws and regulation with simpler,
transparent ones that would increase the efficiency with which the international trading
operations of Tesco are conducted within the retail industries of UK.
Economical Factors: There are also present various economic factors that can influence and
impact the operations of Tesco within the retail markets of UK. The most significant economical
factor to impact the operations of Tesco relates to the decrease in the corporate taxes announced
by the government of UK (Burnes, Hughes and By, 2018). The UK government has recently
announced a decrease in the amount of corporate tax charged on a business's profits generated,
from 19% to 18% that is to be applied from April 2020 onwards. This has an immensely positive
impact on the overall profitability of Tesco within the retail markets of UK as they would be able
to generate greater amounts of profits from April onwards even if their number of customers
serviced within the retail markets of UK stays the same as they would now have to effectively
pay less taxes to the UK government.
Social Factors: There are also present various social factors in the external environment of
Tesco that can massively influence its operations and functions. The current social trend relating
to customers in the retail markets of UK consistently preferring and choosing to conduct their
shopping operations through digital stores on the internet, has a massively positive impact on the
overall productivity, profitability, customer base and market share of Tesco within the retail
markets of UK. Through this social trend, Tesco has the opportunity to effectively increase their
productivity, profitability, customer base and market share by servicing retail customers from
their own digital stores on the internet and capture a new market segment that is captured within
the retail markets of UK.
Technological Factors: There are also various technological factors that can immensely impact
the operations and functions of Tesco. Technological factors such as new and improved
manufacturing machines and equipment can have an immensely positive impact on Tesco's
operational performance, efficiency, productivity, profitability, customer base and market share
within the retail markets of UK (Rosenbaum, More and Steane, 2018). Should Tesco's leadership
and management choose to install and upgrade their existing manufacturing equipments and
machine within modern technological solutions which are able to produce Tesco's products at
increased rate with efficiency while also consuming less input power, then Tesco can effectively

increase their operational performance, efficiency, productivity and profitability in the retail
markets of UK.
Environmental Factors: There are also present environmental factors within the external
environments of Tesco that can have an impact on its operations and functions. Any kinds of
changes to the environmental laws and regulations, which are created, mandated and enforced by
the UK government, which Tesco has to adhere through its operations and functions can have a
negative impact on the current performance, efficiency, productivity and profitability of Tesco
within the retail markets of UK.
Legal Factors: Legal factors such as alterations or changes to the various legally mandated rules
and regulations that Tesco has to adhere to in its daily operations can have an immense impact
on the current operations, productivity and profitability of Tesco within the retail markets of UK.
Changes to legally mandated laws and regulations such as Health and Safety at workplace Act,
Minimum Wages Act, Employee laws etc., can have a negative impact on the operations of
Tesco.
SWOT Analysis
In order to examine and analyse the internal strengths and weakness of a business
organisation in addition to the opportunities and threats present to it from the external
environments, we can conduct a SWOT analysis. The SWOT analysis for Tesco's operations
within the retail industries of UK are as follows:
Strengths: Brand: Tesco enjoys great brand awareness, value and reputation metrics against its
perceived competitors within the retail industry of UK on account of its sustained
successful operations for over hundred years (Waddell and et.al., 2019). Developed Infrastructure: Having operated successfully within the retail industries of
UK for a sustained period of time has allowed Tesco to invest into and develop its
operational infrastructure the likes of which are not available to its competitors.
Weaknesses: Supplier Relations: Tesco does not have amicable and productive long term relations
with any of its suppliers from which it procures raw materials necessary for the
operations of Tesco.

 Acquisitions: In the past, Tesco has been unable to effectively acquire the operations of
other business organisations within retail markets of UK and absorb them into Tesco's
operations in order to grow and expand their operations.
Opportunities: Online Stores: Due to the current social and customer trend of retail customers preferring
to conduct their shopping operations online due to the convenience of online shopping,
Tesco has the opportunity to effectively increase its customer base, market share,
productivity and profitability in the retail markets of UK through its online digital stores. Technological Solutions: New technological solutions such as advanced manufacturing
equipments can effectively increase the current operational performance, efficiency,
productivity and profitability of Tesco within the retail market of UK.
Threats: Inflation: Inflation within the economy of UK can result in decrease in the purchasing
power of customers within the retail industries of UK, which would be an immense threat
to the current operations of Tesco.
 Competition: Tesco faces intense competition from other business organisations that are
also operating within the retail industries of UK with the objectives of increasing their
performance, efficiency, productivity, profitability, customer base and market share.
Examples Showcasing and Comparing Impact on Change within Business Organisations
There are several examples where organisational change within a business organisation
has had an impact on the strategies and operations of the business organisation. For example, the
organisational change to implement a new operational structure within Tesco owing to the
growth and expansion of Tesco within the retail markets of UK had an immense impact on the
performance, efficiency, productivity and profitability of Tesco within the retail markets of UK.
The driver of this organisational change within Tesco was its expansion (Rotenstein and et.al.,
2019). This structural organisational change within Tesco had an immense impact, as its entire
hierarchical structure had to be changed by its management in order to be able to effectively
incorporate additional employee within that were now essential for Tesco's success owing to its
expanded operations.
In comparison, Aldi, a competitor of Tesco, also incorporated organisational change
through its installation of new operational manufacturing machines and equipments that

significantly increase its operational performance and efficiency with which it is able to
manufacture products to be sold within the retail markets of UK, while also using less energy.
The primary driver for this organisational change is technology (Bigdeli and et.al., 2017). This
organisational change has had an immense impact on the operational performance, efficiency,
productivity and profitability of Aldi within retail markets of UK as it is now able to manufacture
products at increased rate with efficiency while also using less energy, thus decreasing its energy
costs and increasing its overall profitability. This change also resulted in Aldi changing its
operational strategies to better make use of their new and advanced manufacturing equipment.
Drivers of Change and Impact of Organisational Change on Leadership, Team and Individual
Behaviours
Internal drivers of change include factors present within the business organisation such
as Tesco, on which the business has some amount of control over, that help drive organisational
change within the organisation. Examples of such internal drivers of change include limited
financial resources or cultural differences within employees etc. (Day, Crown and Ivany, 2017).
For example cultural differences have an immense impact on the Tesco's leadership, individual
and team behaviours as all team and individual interactions of Tesco's employees with each other
are dependent on their cultural upbringing and the leadership of Tesco is required to take into
account the various cultural differences that might be present amongst Tesco employees and
work towards this driver of change not impacting the operations and behaviours of individuals
and teams within the organisation in a negative manner.
External drivers of change include factors present in the external environments of
business such as Tesco, which the business has no control over, driving an organisational change
within the organisation. For example various PESTLE factors discussed before. Technological
drivers present in the external environment of Tesco have huge impact on its leadership,
individual and team behaviours. Organisational changes due to external technological drivers
force the leadership of Tesco to rethink their organisational strategies implemented in order to
make use of the new technological solutions present (Caroli, Greenan and Guellec, 2020). These
also impact the individual and team behaviours of Tesco's employees as they would now have to
learn or be trained in the use of the new technological solutions implemented at Tesco.

Minimise Negative Impact of Organisational Change
The negative impact of organisational change within Tesco can be minimised by the
following ways:
 The negative impact of organisational change within Tesco can only be minimised
through competent leadership techniques by its operational leaders, who encourage
changes within Tesco and do not oppose them in addition to encouraging the employees
of Tesco to accept organisational change.
 The negative impacts of organisational changes can also be minimised by conducting
thorough training and development of Tesco employees, whose job operations have been
impacted directly by the organisational change.
In order to minimise the negative impacts of organisational change, Tesco's management
is recommended to use and implement the PDCA model that was strategically created for
organisations to carry out organisational changes in a positive manner (Narayanan and Adams,
2017). Its four steps include: Plan: Tesco's leadership is required to analyse the issues and challenges towards
organisational change and plan appropriate strategies to counter them. Do: Implement appropriate strategies and solutions in order to minimise the effect of
identified challenges and problems. Check: Check whether the proposed solutions work or not in effective implementation of
organisational change.
 Act: Address ideas and suggestions for different types of organisational problems related
to change for better future decision making.
Recommendation
Company can easily bring changes or modify its organisational structure by using
different leadership approaches so that employees can be motivated and influence to work hard
or adapt changes so that company can attain its respective objectives. Tesco manager through
clearly stating roles can reduce chance of conflict and motivated to work together as a new team
for achievement of goals.
Barriers to changes influence leadership’s decision making
Tesco is planning to bring change in its organisational structure so that various external
changes are easily acceptable by company so that it can gain competitive advantages in retail

industry. There are various barriers or resistance to different external changes but leaders through
effectively making crucial decision have brought changes and contributed in growth and success
of firm (Berg Danilova, 2019). Therefore, force field analysis model can be used to analysis and
evaluates various barriers to changes and the way they have been removed by effective decision
making of leaders. Such as:
Changes that Tesco want to bring: Tesco manager have planned to modify organisational
structure of company so that various changes can be easily accepted and overall goals can be
achieved. It wants to have matrix organisational structure in order to cope by with its increase in
market share and customers needs and demand. It will helps in better production or effective
coordination between different stores of firm that are located across worldwide. Overall
production and profitability will be increased due to modification in organisational structure of
Tesco.
Driving Forces: There are many driving forces that inspired manager of firm to bring changes
such as increase number of customers, expansion of business across different countries,
continuous increase in external changes. Therefore, Tesco in order to survive, sustain and grow
in competitive market have make changes in its organisational structure.
Restraining Forces: It can also be stated that various barrier in effective implementation of
organisational structure changes are employees or staff members. Most of the employees in
Tesco are resisting to new organisation structure as they are comfortable with interrelationship
and positioning of task that need to be performed. Employees have strong relationship with each
other that also act as restrain forces to adapt changes in organisation structure of Tesco (Rannisto
and Saloranta, 2019). Cost is another resentencing force that has impacted in implementation of
changes that have hinder growth and success of organisation. Conflict and confusion between
employees have been increased that have reduces motivation level and morale of individual to
work hard. New policies and rules, regulation that need to be planned by manager so that
employees can easily work but it is too time consuming. Organisational trends and attitude of
people have also resulted in barriers in modification of organisational structure.
Therefore key barrier in effective implementation of changes is cost, and employees are
not ready to accept changes thus it have hinder growth of enterprise.

Evaluation of driving forces and restraining forces: Tesco in order to expand its market share
and effective make optimum utilisation of available opportunities have to plan strategies to
remove one of the most crucial and important challenges for growth and success of enterprise in
competitive market. Second restraining factors are cost and time involved in planning and
management of changes so that firm can fulfilled needs and requirements of customers and
achieve its goals (RAAJALAKSHMI and RAJAM, 2020). Attitude of people and diverse
individual is Tesco is third resisting factor on the other hand flexible organisation can helps in
increasing profit margin of enterprise.
Review the Forces: Manager of Tesco has effectively reviewed both forces such as resistance
and driving in order to plan definite strategies so that particular outcome can be achieved.
Review forces has helped manager to identify problem that need to be solved on urgent basis so
that organisation structure can be modify and it can easily expand its market share.
Strategies: Tesco manager have planned in advance activities that need to be performed by each
member and their respective position, interrelationship within organisation so that maximum
outcome can be gained. Different theories of leadership and motivation are used by manager of
Tesco so that they can be influenced and motivated to work hard so that firm can attain its
objectives. Manager through resolving their problem and leaders by explaining long term vision
of firm, guiding task that need to be performed by each employees have helped in removing one
of the crucial barriers (Dobel, 2017). Proper guidance to individual have contributed in
development of self- confidence and inspired them to adapt to new position and interrelationship
so that overall goals can be achieved.
Prioritize action steps: At this stage Tesco manager and leaders have prioritize activities that
need to be performed by each individual so that definite goals can be achieved. Such as it have
prioritize to retain highly skilled and talented employees within organisation at the same time
plan effective plan their new roles, responsibilities and task that need to be performed so that
Tesco can expand its market share (Clack, 2020).
Range of leadership approaches to change initiative
Leadership is a special quality of individual that helps it to easily influence other people to
work in an particular manner so that common objectives of Tesco can be attained. There are
various leadership approaches that are used by leaders of firm in order to motivated employees to

accept change and work effective for smooth operation of enterprise. Therefore various
leadership approaches that are used by leaders of Tesco can be illustrated as follows:
Autocratic leadership: In this types of leadership styles leaders of firm have solely right to take
all crucial decision for operation of activities and achievement of goals. In another term leader is
boss and have control and command over decision making so that task can be completed within
limited time frame and cost. Leaders of Tesco in order to bring changes have make minimum use
of autocratic leadership styles as it reduce level of employees satisfaction and creative to accept
new changes (Hill, 2017). It has taken some of the important decision for benefits of all
employees so that task can be completed within limited time frame and customer’s requirements
can be fulfilled. Therefore it can be stated that Autocratic leadership styles have helped
leaders of Tesco to use its knowledge and capabilities so that changes can be implemented
within limited time and cost.
Laissez faire leadership approached: It is just opposite of autocratic leadership styles as
leader’s delegate responsibilities and authority to take all crucial decision of firm to each
employee. Leaders of Tesco while making changes in organisational structure have delegated
responsibilities and authority to team member of employees that are highly motivated and
dedicated to perform task so that changes can be effectively and efficiently implemented in the
organisation. It provides limited guideline and direction to team member as they know about
their respective duties and have knowledge to perform task that contributed in smooth operation
of business (Peate, 2019). Tesco leaders have not delegated responsibilities to employees
that are lazy or new to organisation as they does not have capabilities to take correct
decision for growth and expansion of business. Therefore it can be stated that laissez faire
leadership approached have contributed in adapt external changes and growth of
enterprise in competitive environment.
Democratic or participative leadership approached: It is such types of leadership styles in
which leader before taking any decision consult its team member or employees of firm so that
best outcome can be gained. It is combination of people and task oriented leadership styles that
help in better coordination and cooperation of employees towards various activities and effective
achievements of goals. Leaders of Tesco have consult employees about their interest in
particular area, or what responsibilities, roles that they would prefer after changes in

organisational structure. It have encourages people to share their idea, views regarding recent
changes so that customers needs can be fulfilled and Tesco is able to retain its market
positioning. Leaders of Tesco have also provided proper guidance and direction to employees so
that they cannot be confused and faced difficulty in performing different task with firm.
Therefore it can be stated that proper guidance have helped employees to easily perform
their respective task so that overall objectives can be attained. This leadership approached
have provided various benefits to company such as effective adaptation of changes, overall
increment in outcome level of organisation (Flanagan and Gregory, 2019). At the same time
employees loyalty and morale have been increased thus manager and leaders of Tesco have to
spend less time and money to bring changes and satisfied needs of customers. So, it can be
stated that participative leadership styles is one of the best styles that induce or motivated
employees to work hard and adapt various changes of environment so that Tesco can able
to retain its market positioning.
Contingency leadership: It refers to such leadership styles in which leaders of Tesco need to
changes its style as per external condition so that people or employees can quickly adapted
to external changes of environment. Cost, time and efforts can easily managed and overall
objectives of firm can be achieved.
CONCLUSION
It can be concluded that there are various drivers of changes that have impacted overall
Tesco strategy and operation as manager have redistributed activities, interrelationship so that
task can be completed effectively. Both internal and external drivers have influenced Tesco
manager to plan strategies so that organisational structure can be modified and customer’s
requirements can be fulfilled. It can also be concluded from above report that there are various
barriers of changes that have been influenced by leaders of Tesco through effective decision
making. At last it can be stated that different leadership approached have contributed leaders of
Tesco to retain employee’s satisfaction and loyalty so that organisation can grow and expand its
market share for long term.

REFERENCES
Books and Journals
Berg Danilova, K., 2019. Leading change across the organization. Berg Danilova, K., 2019.
Leading change across the organization.
Bigdeli, A.Z. and et.al., 2017. Organisational change towards servitization: a theoretical
framework. Competitiveness Review: An International Business Journal.
Burnes, B., Hughes, M. and By, R.T., 2018. Reimagining organisational change leadership.
Leadership. 14(2). pp.141-158.
Caroli, E., Greenan, N. and Guellec, D., 2020. Organisational change and human capital
accumulation.
Clack, L., 2020. Leading Positive Change. In New Horizons in Positive Leadership and
Change (pp. 175-188). Springer, Cham.
Day, A., Crown, S.N. and Ivany, M., 2017. Organisational change and employee burnout: The
moderating effects of support and job control. Safety science. 100. pp.4-12.
Dobel, J. P., 2017. Public virtue and the ethical dimensions of leading. Radical Thoughts on
Ethical Leadership, p.21.
Elsmore, P., 2017. Organisational Culture: Organisational Change?: Organisational Change?.
Routledge.
Flanagan, K. and Gregory, D., 2019. Leading your team through change?: Don't forget the
unchanging. Governance Directions, 71(5). p.279.
Hill, D., 2017. Leading through Following: Understanding the Intersection of Followership,
Leadership and Collaboration. School, p.32.
Narayanan, V. and Adams, C.A., 2017. Transformative change towards sustainability: the
interaction between organisational discourses and organisational practices. Accounting
and Business Research. 47(3). pp.344-368.
Peate, I., 2019. Leading and Managing Care Provision. Learning to Care E-Book: The Nurse
Associate, p.118.
RAAJALAKSHMI, R. and RAJAM, V. A., 2020. Leading Change through Transformational
Leadership in Organization: A Conceptual Framework. Studies in Indian Place
Names, 40(23). pp.559-565.
Rannisto, P. H. and Saloranta, A., 2019. Evaluation as a Tool for Leading Change. Leading
Change in a Complex World: Transdisciplinary Perspectives.
Rosenbaum, D., More, E. and Steane, P., 2018. Planned organisational change management.
Journal of Organizational Change Management.
Rotenstein, L.S. and et.al., 2019. Burnout in healthcare: the case for organisational change. BMJ,
p.366.
Waddell, D. and et.al., 2019. Organisational change: Development and transformation. Cengage
AU.
1

2