Leading Change at Tesco: Internal, External Drivers and Strategies

This report provides a comprehensive analysis of change management within Tesco, a major British multinational grocery retailer. It examines the impact of change on Tesco's operations and strategies, including the influence of internal and external drivers such as technology, social trends, competition, and economic factors. The report delves into the application of change models and leadership theories to effectively implement change, minimize negative impacts on organizational behavior, and address barriers to change. It also explores the psychological impacts of change on employees and team dynamics, providing insights into how Tesco can adapt to market shifts, including competition and external events like Brexit, and implement strategies to maintain and improve its market position.

Understanding and Leading
Change

Executive Summary
Change is a constant process that is require to be done by every organisation in order to
grow and sustain in market for long term. Proper understanding of change is very essential for
managers as it helps them in formulating appropriate strategies which leads the organisation
towards attainment of goals and objectives. This present assignment is based on Tesco which is
one of the largest British multinational grocery retail company of United Kingdom. This report
discusses about of impact of change on strategies and operations of firm. Various internal and
external drivers are defined that impact on leadership and behaviour of team. Application of
different change models and leadership theories is also applied for implementing change within
organisation effectively.

Table of Contents
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact of change on organisation's operations and strategy..................................................1
M1 Analysis of internal and external change drivers..................................................................2
TASK 2............................................................................................................................................4
P2 Ways in which internal and external change drivers leadership, individual and team
behaviour ....................................................................................................................................4
P3 Measures to minimize negative influence of change on organisational behaviour...............5
M2 Application of models and theories to assess organisational response to change................6
D1 Conclusion and recommendation for effectively planning change.......................................7
TASK 3............................................................................................................................................7
P4 Barriers to change and their impact on leadership decision making.....................................7
M3 Application of force field analysis to identify driving and resisting forces and their impact
on decision making.....................................................................................................................8
D2 Use of force field analysis in meeting organisational objectives..........................................9
TASK 4..........................................................................................................................................10
P5 Application of different leadership approaches to deal with change...................................10
M4 Extent to which leadership theories can deliver organisational change effectively...........11
D3 Effectiveness of leadership models and approaches of change management.....................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Change is a continuous process that takes place very frequently within business
environment. It is required by every organisation to keep aware with all these alterations in order
to acquire high growth and long term sustainability in market. Various changes takes place in
surroundings where firm perform its activities and operations (Bayramov, 2013). The ability to
adapt with such changes provides competitive edge to company in market. In the present
assignment, chosen organisation is Tesco which is a well known British multinational grocery
retailer of United Kingdom. This report covers impact of change on operations and strategy of
organisation as well as influence of change drivers on its behaviour. Apart from this, various
theories and models are discussed to minimize the negative impact of change and barriers are
defined that influence leadership decision making. At last, application of different leadership
theories to a change initiative is defined in this project.
TASK 1
P1 Impact of change on organisation's operations and strategy
Change is a constant requirement of every organisation in order to grow and sustain in
competitive market. In a business organisation, occurrence of any change will surely influence
its strategies and operations directly or indirectly. It may takes place in any form such as market
trends, technology, organisational culture, taste and preferences of clients, leadership or if it
occurs in social, legal, political and economical environment. All these forces pose high impact
on operations and strategies of Tesco and Sainsbury. It completely alter their processes and
structures (Díaz, 2013).
Tesco:
Tesco is one of the largest retailer in United Kingdom and was recognized as symbol of
success. However, firm's performance started to decline due of recession in year 2008. This is
because of the fact that adverse influence of recession drained shopper's income. Therefore, they
started to switch to other retailers that offer better deals. Consequently, consumers preferred
competitors of Tesco in terms of shopping experience, quality, better price and customer service.
The main reasons identified for such problem are underinvestment and less emphasis of Tesco in
market operations of United Kingdom as company focus more on its international market
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operations. It creates marketing and operational issues and reduction in staff. Consequently, firm
started to experience declination in market share.
Change in Tesco and its impact:
In order to overcome with above mentioned situation, firm introduced change within
organisation and come up with a new strategy which integrating six components: provide
training to staff, restoration of stores, enhancing value, improving their dot com channel,
increasing range of offering and providing best price offers. This strategy helps company in
improving its operations as well as in increasing its market share. Firm also introduced self
checkout system that can be said as strategic change. Implementation of this system helps
company in improving shopping experience of customers and make it easy for them. This
strategy of company results in increase in sales and cost effective processes. Self checkout
system helps in saving labour cost and improving satisfaction level of customers.
Sainsbury:
Sainsbury is a well known supermarket chain of United Kingdom which was established
in year 1869. Company running its operations successfully in market of UK and enjoyed high
profit in market but while its growth story, it is affected by various exogenous factors. Recession
of year 2008 falls down its sales. It also declines market share of firm and developed a bad
reputation in market. Price war is the biggest challenge that company face as there are many
competitors exist in retail industry.
Change in Sainsbury and its impact:
In order to overcome this situation, firm change its pricing strategy and cut down prices
of its everyday products. Instead of running promotional campaigns, firm invest in making
improvements in its stores. Pricing strategy of company helps in attracting large number of
customers. It also helps firm in increasing its market share as well as profit and sales ratios and
gaining competitive advantage as well.
M1 Analysis of internal and external change drivers
Drivers of change:
There are some change drivers which may be internal or external that impacts leadership
and behaviour of teams and individuals. Operations and functions of business are impacted by
these in negative or positive manner. Some of these are defined below:
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Technology led driver: This change driver influence the competitiveness and potential of
firm. Any alterations in technology directly impacts leader's decisions and working. Utilization
of high end technology in business process helps Tesco in gaining competitive advantage and
improving productivity (İnandıklıoğlu and et. al., 2012).
Social driver: Lifestyle of people, their education, attitudes, beliefs etc. are the factors
that influence decisions of leaders and managers of Tesco. With increase incidents of terrorism
activists in United Kingdom, Tesco have tighten by their security levels. Also leaders and
managers are now emphasising on providing its staff with training to deal with such situations by
using emergency alerts, codes etc.
Government led driver: Policies and laws of government highly influence functioning of
Tesco. It influences decisions of managers or leaders in designing appropriate practices for firm.
So, it is essential for them to follow all the enactments made by government for performing
business operations smoothly.
Political driver: Tax policies, government policies, ideologies of parties and political
stability are the variables involved in it. Business functioning and operations of Tesco influence
highly by political drivers (Isenhour, O’Reilly and Yocum, 2016).
Economic driver: Strong link is existing between business concern and economic
environment. Any sort of fluctuation regarding financial aspect like inflation and deflation rate
may negatively impact performance and operations of company.
Customer led driver: They play vital part in company as its growth and success rely on
them. Awareness regarding changing needs of clients is necessary for leader and manager of
Tesco for improving profit ratios of firm. Any change occurs in customer's needs directly
influence sales of company.
Competitors led driver: Incomes of firm highly impacted by its rivals. In UK market,
various competitors of Tesco are existing in market that affects its sales. So, managers and
leaders are requiring to keep aware with rival's strategies. This will help them in formulating
appropriate strategy.
Bohner and Arnold change effect analysis theory:
This theory is often applied by organisations for minimizing the negative impact of
change on its behaviour. Tesco can implement this theory as it assists in determining the
outcomes of change. This theory provides certain measures to administrators for accomplishing
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expected outcomes. In this, change is implemented and actual performance is measured against
standard criteria. According to that, appropriate plans and strategies can be designed by manager
that provides guidance to manpower to adapt with change successfully and reduce its negative
influence on teams and individual behaviour. By the help of this assessment, managers can
determine risk associated with change (Jayson-Quashigah, Addo and Kodzo, 2013).
TASK 2
P2 Ways in which internal and external change drivers leadership, individual and team behaviour
Psychological impact of change on organisational behaviour:
The psychological impact of change on people is due to the fact that every alteration
creates resistance within firm. Employees who go through change process or the procedure that
is unknown to them, then they afraid of it. They do not want to adapt with changes as they think
that their life will be more difficult than before. Apart from this, it causes economic uncertainty
and fears of new situation and threat to interpersonal relations that employees develop during
their organisational life. Probably, implementation of change or new system within Tesco will
bring new rules and people requires to adapt with these. Integrate themselves with new
procedures may creates a doubt among them regarding their competencies and they have fear of
failure. In this manner, every change takes place within firm pose multiple effects on psychology
of employees (Kutter and Westby, 2014).
Impact of change on team dynamics:
Team dynamics refers to the psychological unconscious forces that impact the direction
of performance and behaviour of group. It is developed by team's nature of work, personalities
within it, their working relations with others and working environment. If any change takes place
in team then it strongly impacts on its members either in positive or negative manner. Existing
working can have strong effect on whole team of Tesco. Whereas, when any change is
implemented, other people may feel excluded from working, thus results in dividing the group
into two. These changes can be managed by implementation of change management models such
as continuous improvement, Burke-Litwen change model etc. Manager of Tesco also requires to
motivate employees by providing them training regarding how to deal with change in an
effective way. This enables manpower in adapting with changes and deal with them
appropriately.
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Internal and external impact of change:
Tesco's £4bn takeover of Booker that has done, both organization said on Monday,
developing an unique powerhouse in Britain's approx £200bn-a-year food marketplace. The
shares and cash trade to combine Tesco, Britain's largest merchandiser, with Booker, the nation's
biggest distributor, received court permission on Friday and is present in effect.
Brexit: The output of the British referendum that has afraid the entire globe. All the
same, it must be recollected that an formal withdrawal from the European Union has not seized
place yet, modification in laws, taxes, regulations and many other legal situations are hard to
computing at the moment. It effect on the business when they open their new outlets in different
countries.
Increased competition: It is another impact on business operations and activities of
Tesco. In marketplace, there are various number of Tesco competitors such as Sainsbury, Asda,
Aldi and many other that deals in same industry. In order to buying Bookers, that there is more
risk of jobs that effect on business growth and development in a direct manner.
Reducing pre tax profit margins: In case of sales growth, business entity can increase
their profits via cost saving. It is refer as a goal and objective of organisation to build sales while
decreasing expenses. In order to reduce pre tax profit margin which is essential and beneficial for
the success and development of organisation within predetermined time duration.
P3 Measures to minimize negative influence of change on organisational behaviour
Continuous improvement model:
In order to made constant enhancements in business operations and processes, continuous
improvement model plays vital role. It assists an organisation in bringing continual
enhancements in product and service quality. Application of this model ensures attainment of set
objectives and goals in an effective manner (Li and et. al., 2018). To insure successful
implementation of continuous improvement model, manager of Tesco needs to follow a cycle
which is defined below:
More staff commitment: Committed staff members state added value to an enterprise via
their proactive support, determination, awareness of quality and relatively high productivity.
Thus, it is essential for the Tesco because it lightly maximise competitive nature and benefits of
company.
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More communication: It is another part of continues development for an organisation. It
is nearly impossible in order to go via a day without the use of communication. It is important
part for the success and development of company at large scale. In this business manager play
vital role in providing accurate information about their product, process and services to the
customers. Therefore, it move to assist an organisation to enhance their profitability and
productivity level within predetermined time duration.
Better leadership and incentives: It is another important part for the business to improve
their profit and development. Beside this, business manager play vital role for providing
incentives to the workers as per its performance and work in the organisation. Apart from this
leader play effective role for guiding and leading their employees towards achievement of better
results.
Better responsibilities with sufficient authority: It is a role of Tesco manager is to allot
roles and responsibility to the employees as per its work and performance in the organisation.
Company has better responsibility for giving duties to the employees to complete work on giving
time period.
Using Burke Litwin model: It is refer as an effective change and performance model which was
developed by two organisational change consultants in 1992. It is identify as a best tool or
techniques used to known an organisation's element aspects and how they linked with together in
a time of change. It is essential model for the success and growth of an enterprise within preset
time duration.
Pro and cons of Burke Litwin model:
Pro Cons
This model help an organisation to measure
performance of their employees by providing
incentives and many other benefits.
Sometime this model create conflict among
staff members which is not good for the
success and growth of an organisation.
Use open systems: It is identify as an effective system that has external interactions. Thus, such
type of interactions can take the way of data, energy and material transfer out of or into the
system boundary. It is mainly relay on the discipline which briefly defines the concept.
Pro and cons of open system:
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Pro Cons
It is a easiest open cage-free system that is
used by the Tesco to manage information about
their customers.
This system is does not let confinement of
transfer and pullets.
PDCA Cycle:
Both the firms can use this cycle for improving their productivity and performance and in
minimizing negative impact of change on behaviour of organisation. Four phases are included in
this cycle which are as follows:
Plan: Under this, opportunities are identified by manager to formulate effective plans and
policies for introducing change within organisation.
Do: In this, managers are responsible to execute change at small level. Initially, changes
are executed in practices and policies of firm.
Check: This stage includes performance measurement and determination of outcomes.
Here, manager measure performance against set standards that helps them in assessing results of
executing change.
Act: Under this, impact of change is analyse by manager. If influence of change is
positive, it will be implemented at large level. But, if it fails to minimize negative impact of
change then different approach will be apply by manager to reduce its influence on
organisational behaviour.
System Theory:
This approach is an effective one to be implement by manager of Tesco as it helps them
in increasing motivation of manpower and encouraging them to perform their duties more
effectively (Mattjus, 2018). Application of this approach proves to be beneficial in terms of
increasing employees as well as organisational performance. It helps company in developing
teams, encouraging team working and increasing productivity. Implementation of system theory
can help manager in improving profits and revenues of company.
M2 Application of models and theories to assess organisational response to change
Burke-Litwen change model:
This model is defined as a mechanism that depicts the primary variables which requires
to be consider in attempt to anticipate and explicate the total behavioural output of firm, most
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important interactions among these components and how they impact change. Four group of
elements are present in an organisation which are defined below:
External environment:
It represents any conditions or forces outside the company that will influence its
processes. For example: Market situation or consumer behaviour (Murthy and Paul, 2017).
Individual and organisational performance:
It is the overall output of company and can be represented in distinct ways like,
productivity, turnover, customer satisfaction etc.
Transformational factors:
These are deeply embedded characteristics and processes of company. Any change takes
place in these forces will have significant consequences to rest of the firm.
Leadership: This factor provides direction to overall organisation. In Tesco, leaders are
responsible for creating a vision and motivating their team members to achieve it.
Mission and strategy: It defines about the purpose of Tesco as well as the processes that
depicts about how it will be attain.
Organisation culture: It depicts about norms and values of firm. They are less formal in
comparison to mission and strategy, but still it will be exist implicitly all over the company.
Transactional factors:
These are defined as day to day operations of business organisation. Any change in these
variables is only leads to lasting alteration if in turn, transformational components are also
influenced (Nath and Behera, 2011).
Management practices: Activities and behaviours of administrators, usually aligned to
carry out overall strategy.
Structure: Organisation structure is breakdown in departments, hierarchy and reporting
channels.
Systems: These are the policies and procedures that put into place to support and help
workforce. For example: Reward and legal system.
Work unit climate: It involves working environment of team. For instance: how well
group members cooperate, goals are set and employees are rewarded.
Motivation: Here, goals are set to direct and inspire employees.
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