Organizational Change and Leadership: A Report on Tesco's Strategies

This report provides a comprehensive analysis of organizational change within Tesco, a multinational grocery retailer. It examines various internal and external drivers influencing Tesco's strategy and operations, including organizational structure, employment practices, technology, pricing, and culture. The report explores how these drivers impact leadership, teams, and individual behaviors, providing insights into Tesco's responses to political, economic, sociological, and technological factors. It also discusses measures to mitigate negative impacts on organizational behavior, such as training, employee morale, clear business goals, and communication. Furthermore, the report investigates barriers to change and their influence on decision-making processes, concluding with an overview of leadership approaches employed by Tesco to manage change effectively.

Understanding and Leading
Change

Table of Contents
Introduction .....................................................................................................................................3
Task 1...............................................................................................................................................3
P1: Different types of drivers and how it affects organization strategy and operations.............3
Task 2...............................................................................................................................................5
P2: Ways in which internal and external drivers affects leadership, teams and individual
behaviours...................................................................................................................................5
P3: Measure that can be taken to decrease negative impacts on organization behaviour...........8
Task 3...............................................................................................................................................9
P4: Different barriers for change and how it influence decision making process......................9
Task 4.............................................................................................................................................10
P5: Leadership approaches to deal with change.......................................................................10
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

Introduction
Organisational change refers to change in company's operations, technologies, structure
due to enhancement in profitability and productivity. It helps the company to become adaptable
in critical situations as external environment changes very often. In this report, Tesco is taken for
discussion. It is a multinational company which deals in groceries, books, clothing etc and
headquarters in Hertfordshire, England. Different types of drivers which affects the organization
strategy and operations and how it influences the behaviour of organisation is discussed. Barriers
and how it affects the leadership decision making is also explained. Application of leadership
approaches with functional example is scrutinized in context of Tesco.
Task 1
P1: Different types of drivers and how it affects organization strategy and operations
External environment changes very often and to tackle it company has to become
adaptable by changing their strategy's and operations. Company strategy refers to blue print of
the actions taken by company in future to attain their objectives and purpose of existence. It
should be made according to external environment and their competitors plan by considering
consumers need and demand (Doppelt, 2017). Company operations means distinct practices use
to maximize their resources to achieve highest efficiency. Drivers which affects strategy and
operations of different companies are given below,
Basis Tesco Marks and Spencer
Organization structure Tesco follows Hierarchical
structure which is in pyramid
shape due to large number of
employees. Promotions and
incentives are based on
performance of employees
which motivates them to work
harder which leads to increase
in overall productivity of
company.
Company follows flat
organizational structure as it
motivates employees by
engaging in decision making
process. It helps M&S to
decrease their operation's
budget by reducing number of
middle management
employees.

Employment practices Tesco motivates employees by
giving training, workshops,
classes etc through which
proper skills and capabilities
inculcate to individual which
helps them to perform with
their best efficiency.
M&S gives on the job training
to their employees through
which they will understand
culture and climate of
company. All the employees
have their chances of
contributing in decision
making and while making
staregies as employees have
ground knowledge which
upper management doesn't
have.
Latest technology Advanced technology always
plays a key part in the success
of the organisation. Due to
which company prefers to use
latest technology like RFID or
PayQwiq to enhance the
customer engagement and use
of BYOD for staff (Wagner,
2016). It helps Tesco to gain
competitive advantage over
other competitors.
To improve the shopping
experience of customers, M&S
has installed tablets in their
stores to help the them while
shopping. Consumers can
search products and scan their
product barcode in it to save
their time while checking out.
Pricing strategies Tesco prefers to change their
prices according to demand of
products. If product has high
demand then they uses
Skimming prices and then
switches to other accordingly.
Tesco also use psychological
M&S changes their pricing
according to the festival
seasons. At the peak time,
company uses competitive
pricing in which prices are set
according to competitors and
in off season they uses low

pricing while attracting
consumers.
prices so to attract more
customer thus increase in
customer base and
profitability.
Culture Tesco uses hierarchy culture in
which work assigned to
employees are according to
their skills and position they
holds in organisation.
Employees have to follow
rules and regulations set by
management due to which
there effectivity and efficiency
improves gradually.
M&S uses market culture in
which more focus is given to
finishing work through any
means. Employees are
competitive in nature which
motivates employees to work
harder but chances of conflicts
is also high.
Task 2
P2: Ways in which internal and external drivers affects leadership, teams and individual
behaviours
Internal and external drivers affects overall efficiency of company in different ways. Internal
drivers are those which happens within an organisation and monitored by company itself.
External drivers are those which is not under control of company and fluctuates according to the
external environment. Different types of drivers in context of Tesco is explained below,
Internal drivers
Organisation culture: Culture is an combination of beliefs, values and ethics shared by
the employees working in an organisation (Hayes, 2018). If Tesco culture is healthy or
motivating then it affects the productivity of company in positive way. Leadership: Leaders opt their leadership styles according to the culture of company. If
culture of Tesco is motivating. trust between their employees and leader is good, open
communication within workplace etc then it improves performance of employees. It will
lead to increase in overall efficiency of Tesco (Bascia and Hargreaves, 2014).

 Teams: Team leader should use supportive or participative leadership skills while
managing the team. If employees are taking part in decision making process then it
motivates them to work harder and think innovative as it promotes equality in team. But
if leader uses autocratic style then it demotivates the employees and it decrease their
effectivity while working.
 Individual behaviour: Culture greatly impacts individual behaviour in an organization. If
Tesco has culture which motivates open communication, innovation, individual learning
etc then it increase individual performance which will improve overall effectivity of
Tesco.
Available resources: Resources includes human resources, raw materials, technology etc
which uses by company to transform the raw materials into final product. Leadership: Tesco leader work is to manage the resources according to the skill set
available within company and align them with mission and vision of Tesco. If proper
allocation is done according to the requirements then it will enhance the overall
productivity of Tesco. But if it is not done then employees potential could be hampered in
negative way (Daft and Marcic, 2016). Teams: Different task is divided and allotted to team according to their skills and
capabilities. If resources required while completing the task is not available then it will
decrease the motivation and productivity of employees. On the other hand if it is
available then it will maximize utilization of resources to its fullest which will reduce
wastage and improves the overall profitability of Tesco.
 Individual behaviour: Different task is given to different employees according to the
skills and knowledge they have. If employees could not use their skills and knowledge
due to lack of resources in Tesco that it will affect the working style of employee in
negative way and if it is available then it will enhance total potential of Tesco (Bushe,
and Marshak, 2016).
External drivers
Political: Political factors includes stability of local government, labour law, tax policy
etc.

 Leadership: Leaders make strategies in considerations of policies made by the local
government where Tesco is operating. If policies are changing very frequently then it
directly affects the strategies which will hamper the decision making potential of leader. Teams: If the strategies set by leader is changing then automatically goals given to team
also changed. Since task is changing regularly their priorities will also changed which
will create negative impact on the performance of Tesco.
 Individual behaviour: Due to changing task individual wont be able to give their full
potential while working which will leads to decrease in motivation and efficiency
(Alvesson and Sveningsson, 2015).
Economical: Economical factors includes economic growth, currency fluctuation,
disposable income etc. These factors directly affects the purchasing power of people living in
UK. Leadership: Due to rise in inflation or currency degradation the purchasing power of
consumers decrease and to tackle this Tesco has to cut their prices according to the
situation. Due to low prices, margin earn by company is also decrease which affects the
financial situation of Tesco. Teams: Company can not provide high salary to their employees as Tesco is not earning
up to the expectations of their vision. Decrease in order will left unused potential of
teams.
 Individual behaviour: Due to low salary individual motivation will decrease to a certain
level and which will affect their performance while working. Low salary will lead to low
motivation which will shackle their productivity and efficiency.
Sociological: It includes growth rate, population age, attitudes, lifestyle etc. If Tesco is
providing high demand products with less price then its competitor then sales and profitability
will increase gradually (Cummings and Worley, 2014). Leadership: If sales and profitability is increasing due to high demand of products then
Tesco leader could invest their earning for acquiring latest technology which will help
company to gain competitive advantage. Team: Challenging task will be assign to the team due to high demand of products which
will test their skills to its fullest.

 Individual behaviour: If individual is performing with their top potential then employees
motivation will improve which will persuade to better effectivity and efficiency.

Technological: It includes acquiring latest technology, doing innovation with the help of R&D
etc. Leadership: With the help of latest technology, Tesco can produce something unique
which will differentiate it to other competitor. It can help Tesco to improve their brand
awareness and equity. Team: If latest technology is provided to the teams to accomplish the task then there
performance and efficiency will increase automatically.
 Individual behaviour: Due to latest technology employees ability to perform will
increase.
P3: Measure that can be taken to decrease negative impacts on organization behaviour
Changes always affect the employees performance as there psychology won't allow them to work
due to resistance to change. Different techniques use by Tesco to minimize the negative impact is
discussed below,
Proper training: Employees resist to change due to change in process while working. If
they are fully equipped with proper skills and techniques then they can perform their task with
full potential. Tesco should provide training to new and old employees to improve overall
knowledge of the company. If workers are knowledgable then their efficiency while working will
also increase (Burke, 2017).
Employees morale: Due to change in organisation, employees motivation decreases
gradually. Its Tesco responsibility to give training sessions, group activities, informal parties,
authority to employees etc to increase their motivation which will results in high morale.
Business goals should be clearly defined: Task assign to employees should be clear as
then it they will plan their working to achieve their pre set goals. Its Tesco leader responsibility
to opt participative style and help their workers to achieve their personal and company's goal by
removing hindrance which could affect employee performance (Wilkinson and Kemmis, 2015).
Communication among employees and leaders: Communication plays an important
part in making the environment healthy and work friendly. Tesco should promote open
communication as if employees are facing any grievance then they can contact upper
management for the solution. Employees should participate in decision making process as their
opinions are important for company to survive change without affecting productivity.

Task 3
P4: Different barriers for change and how it influence decision making process
Change in organization affects company's policy making and decision making abilities.
Tesco is one of the largest retail chain in UK and sells more than 100 brands product in their
store but they don't have variety of home products. As producing home products on their own
have larger margin of profit as compare to selling other brand's products with lower margin.
Force field analysis is an approach for monitoring and analysing factors which is in favour and
against of change (Aguirre and Alpern, 2014). Approach in context of Tesco is explained below,
Driving forces: These are the kind of forces which includes strengths of Tesco and how it helps
to support change.
 Tesco has huge amount of customer and market base as Tesco has been operating for
more than 60 years in different countries. (2 points)
 Tesco has good brand image in the mind of customer and is one of the reliable retail
chain in UK. (1 points)
 Tesco has ample of funds which can help them to introduce latest technology in their
production. It can help them to increase quality of products and reduce price which will
attract customers. (4 points)
Restraining forces: These are the forces which are against the change in Tesco which includes
weakness of company.
 Tesco can use these funds to invest in technology so to enhance customer experience
which will give better ROI than produce their own products. (2 points)
 Chances of getting failed in production business is high as there are many big competitors
who already has huge market share. External factors like laws, government policies,
change in technology increase investment cost.(3 points)
 If Tesco start selling their home products then it will create conflicts between other
companies who are selling their products in Tesco chain. (1 points)
More points is allotted to driving forces rather than restraining forces so it can be concluded that
Tesco should start their production business as it will help them to increase their profitability and
sales.

Task 4
P5: Leadership approaches to deal with change
Change is necessary for organization as external environment changes quickly and to
cope up with that company has to change. Kurt lewin proposed change model which states that
company and its employees can survive change without affecting their productivity if change is
smoothly implemented. Different process use in this model with functional example of Tesco is
explained below,
 Unfreeze: This is the first step in which changes is introduce in Tesco for first time.
Tesco leader should use transformational leadership style in which they help and
motivates their employees. Leader should set challenging target to their employees so to
increase their efficiency while handling critical situations. They should use their
interpersonal skills and knowledge to improve employees performance and prepare them
for uncertainties (Benn, Edwards and Williams, 2014).
 Change: It is the stage where employees are now ready to face change and mould
themselves according to the requirements of situation. Tesco leader should use
participative style in which they help the employees to clear their hindrance so that
employees would achieve their target with full potential.
 Unfreeze: In this stage, employees are now aware of their roles and responsibilities
assigned to them. Now Tesco leader work is to support and motivate their employees by
giving incentives and bonuses to their employees according to their performance. If the
employees are happy with the change and work then overall efficiency of Tesco after
change will increase (Lawrence, 2014).
Conclusion
From this report it can be concluded that, change is important for any company to
increase their sales and customer base over time. There are different types of drivers which
affects the change in organization and it should be regularly analysed and removed by company
to ehnace their efficiency. Techniques like PEST should be use by company to scan the external
environment and make strategies accordingly so to gain competitive advantage over others.
Company should motivate their employees, give training to their employees to remove negative
impacts of change. There are different barriers which resist change and to tackle this company

should use models like force field analysis to see the impact of change on company's
performance. Leader should be flexible enough to opt different types of leadership styles to
tackle hindrance and increase productivity of employee's to its fullest.