DBN 508 - Tesco Case Study: Leadership, Power & Change Management

This case study examines leadership and power dynamics within Tesco, focusing on the application of five types of power: reward, coercive, legitimate, referent, and expert power. It discusses how Tesco's managers can utilize these powers to enhance efficiency and resolve conflicts. The analysis further explores how leadership influences equality, positivity, democracy, and commitment within the organization, contributing to a positive organizational culture. Finally, the study addresses common resistances to change, such as fear of the unknown, job security concerns, and faulty implementation approaches, suggesting strategies for leaders to mitigate these resistances effectively. This document is available on Desklib, a platform offering a wide range of study tools and solved assignments for students.

Leadership in Business

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Five types of Power which can be applied at Tesco
Question 2
Power is usually considered to be the authority of the individual to influence the decision and
activities that are performed with the organisation (Seaton & Waterson, 2013). It is also
understood to be as the ability to impact others and it is usually illegitimate or not need to be
legitimate. In any organisation there are several ways in which an organisation has
distributed power within the organisation. It has a great relationship with the organisational
structure that is used within the Tesco. There are various kinds of powers that exist in Tesco
as classified by John French and Bertram Raven. All this type of power can be utilised by the
managers of Tesco so as to bring efficiency in the work process. It also helps in making sure
that no kinds of conflicts arise among the stakeholders of the firm because of unrealistic
distribution of power. In many ways it is also seen that there are many people who enjoys
power sitting at the top of the Tesco management. Raven and French have properly
descried and differentiated the type of powers (Daft, 2014). They both suggested that
manager draws power from five distinct sources. They described that there are five types or
sources of power that can be used by the managers of Tesco are as follows:
Reward power: It is usually understood to be as the ability of manager or agents to control
the rewards that employees expects from the company. It is usually considered as the ability
to ensure benefit for the organisation by limiting the price that has to be paid in terms of
rewards that is usually demanded by the employees (Samantara & Sharma, 2015). For
example Tesco’s managers could use it for controlling the additional costing on rewards in
terms of bonuses, promotions or increase in salary. It is usually found that workers demand
for extremely high salaries and bonuses and managers of Tesco can use their reward power
to limit it.
Coercive power: It is another kind of power that is usually considered to be somewhat
opposite from the reward power. It is usually understood to be the ability of the manager to
bring an unpleasant experience for its employees. This kind of power is usually used in
almost all the organisations. In the organisational situation, it can be in the form of taking
certain kind of action against anything wrong or threatening him with suspension and
demotion for the individuals that are working in firm (Samantara & Sharma, 2014). For
example the managers of Tesco can use it in the case when employees do not work as per
the guidelines or are very unprofessional towards conducting operations within the firm. This
is used by the Berian who is a bakery manager at Tesco to make sure that people work in

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the way their management wants them to work. Coercive power usually is a negative power
but is highly efficient in getting things done on time.
Legitimate power: This is understood to be the power that is based on the mutual
agreement as well as position they are in within the organisation. The higher the position of
the manager in the firm, the higher the legitimate power he or she has. It is a kind of mutual
consent where the agent and the target agree that the agent has the right to impact on the
workers (Barratt, 2013). This power is generally in the form of authority that is delegated to
the organisational position of the members of the Tesco. For example when a person
becomes general manager at Tesco, it is the mutual consent between him and the workers
below him that he is capable of influencing all other stakeholders below them.
Referent power: It is a power that is usually considered to be elusive and is based on the
interpersonal attraction. This kind of power is very hard to be described as it is present but
cannot be directly or indirectly felt. The individuals that are charismatic in nature are often
understood to have the referent power. This is because they have the charisma to influence
the people by different modes such as their speech, thoughts, business and decision making
skills as well as other kinds of skills. People usually understand them to be ideal and hence
get influenced by the things they want to do. When they understand anybody to be ideal they
start behaving accordingly up to certain stages. This is a kind of power that is not forced on
the targets, they themselves comes under the influence of others (Mason & Evans, 2015).
Their behaviour gets shaped in the same way as their influencer behaves. For example the
personality of John Allan is very influential as he is known for one of the best strategist. He is
also known for person who asks difficult things from their employee. Such kind of
management skills also motivates other individuals to do their task accordingly. His rapid
approach towards his work also motivates other people to follow the same while doing their
task.
Expert power: It is a very unique kind of power that can be used inside the Tesco. This
gives the power to the managers or agents to have information and knowledge that is
needed by the target. It usually revolves around the fact that Knowledge is Power. There are
three conditions that need to be fulfilled when this power can be utilised. First is that the
target must have trust that the information provided by the agent is correct and accurate.
Second is that the information that any agent has must be relevant and useful to the target
people (Barret, 2015). Third is that the target must understand the agent to be the expert in
that area. For example at the retail store if the employee faces any kinds of problem in
managing the sales or any dispute arise then they can take the help of Stephen who is a
store manager at Tesco as he has an experience of working there for 10 years.

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All these powers are necessary at various stages of organisational structure and must be
used to bring smoothness in the work process. It’s the position of the people that decides
who will enjoy how much power of these kinds.
Leading Change in an organization
Question 3
a) As mentioned in the case study Tesco is one of the biggest retailers present in the
international market. In order to properly manage the activities of the organization,
the company requires using adequate measures of leadership to develop its
organizational structure in the environment. Further, it should be noted that the
leadership structure in an organization influence many aspects including the culture
of the organization. The leaders of Tesco plays major role in influencing the
employees of the company and building good relationship between them.
Furthermore, four ways in which the company adequately used the leadership style
to organize activities of the business are discussed below:
Leadership influencing equality: The leaders of the company initiate their
leadership skills in such a way that it increases equality in the business. The leaders
of the company plays the role of treating the employees in such a way that a way it
generates equal opportunity for all of them to work in the organization. The company
does not believe in discrimination the people on the basis of their age, sex, religion
etc. Resulting to which, the leaders treat each and every people with respect in the
organization so as to ensure that the organization is a great place to work. So, the
leaders at Tesco similar kind of approach at all levels and encourage the employees
to work for their benefits so that subsequently the motive of organization is improved
(Mason & Evans, 2015).
Leadership influencing positivity: The leaders of the company aim to increase
positivity in the company as well. The leaders of the organization use this approach
in such a way that all the problems are solved easily and productivity is maintained.
The employers use this approach to introduce positivity in the organization. The
leaders adequately identify the skills and capabilities of the employees and aims to
eliminate issues that results to increase in positivity for the organization.
Leadership influencing democracy in business: democracy is the best way to satisfy
the employees in the market. While implementing a decision in the organization, the
leaders at Tesco ask for the advice of all the employees so that they can easily gain
more innovative opinion and implement the best suited decision for the company.

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Thus, with the use of democratic approach of leadership, the leaders in the company
implement good organizational culture activities (Yukl, 2013).
Leadership in influencing commitment: The leaders in the organization commit to the
employees and ask the employees to commit to the organization to always work for
their betterment. Resulting to which, a bond of trust in increased in the company.
This bond initiates good workplace environment. With the act of commitment, the
employees start to trust on the organization due to which their satisfaction
subsequently increases that give rise to positivity in the organizational culture.
From, the above mentioned examples mentioned above, it should be noted that
adequately make use of leadership in business to influence good organizational
culture. The leaders at the workplace environment aim to increase positivity,
democracy, commitment and reduces indiscrimination and issues in such a way that
the environment become and positive and healthy for employees to survive.
b) Four resistances to change are described here. There are various types of changes
that are going on inside Tesco and most of the time the changes are resisted by the
employees. These resistances to change that can be affected by leadership are
illustrated here.
Surprise and fear of unknown is one of the most common resistances to change.
Most of the time employees resist changing as they have the fear that what could
happen. Leaders by communicating with their employees and stating the objectives
can easily resist these changes (Tanner, 2018). The fear generally arises due to the
confusions that get generated in the minds of the people working there. It is generally
cause because they are very uncertain about the things that are associated with it. It
is always crucial that an employee has the confidence that the change will not affect
their future.
Job security is another reason for resistance to change. Employee resist changes
as they feel that there can be job loss due to the changes that are made within the
organisation. In Tesco it happens when there is new technology adoption as
technologies generally reduces the workforce. The leaders can ensure this as they
can apply different means so as to ensure that all people would lose their job while
the changes are made. This can be done by making plans for the people who are
generally replaced while the changes are taking place. For example training can help
the employees to learn the things that could help them in gaining knowledge
regarding something else so that they can be placed at some other place.
Faulty Implementation Approach: faulty implementation approach is one of the
biggest reasons that make the leaders to resist towards change in an organization.
The implementation approach in the organization are created and implemented by

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the leaders of the organization, and at times the leaders also face difficulty to apply
these approaches in the organization due to which they fail in applying these correct
decisions or approaches. Resulting to which faulty implementation approaches in the
past resists them to initiate changes in the organization. The leaders’ faces this threat
that what if they again implement an approach for change in the organization and it
becomes ineffective due to their faulty implementation. Resulting to which they feel
that they might lose the current position as well due to which they do not initiate to
make changes in the organization. As change is the only constant, so it should be
noted that the leaders at Tesco should overcome their threat of change otherwise it
will make them incompetent in the target market. An organization needs to implement
changes in order to maintain their position in the market (Pioch, & Gerhard, 2014).
Climate of mistrust: This is the most common reason for resistance to change in the
organisation. It should be noted that a leader becomes a leader only when they gain
the trust of the employees in the organization. So, the company Tesco might face
failure in future prospect if the employees will not trust on the activities of the leader
in the environment. As if the leader is not trusted then they will never initiate changes
in the organization because they will feel that they are not being heard by the
employees which will make them insecure as well.
Eight differences between transactional and transformational leadership
Question 4
There are various kinds of leadership style that exist within the organisations like Tesco who
have to face a lot of situations on their daily basis. Style of leadership has a great potential to
influence the behaviour or person working at the firm.
Transformational leadership is usually considered to be as the leadership style where the
leaders utilise his or her influencing power and enthusiasm for motivating the people under
them. This leadership influences them to work for the benefit of the firm (Ebrary, 2018). On
the other hand in transactional style, leadership takes use of punishments and rewards for
achieving the objectives and goals set by them previously. It emphasize on enhancing the
current situation of Tesco (Henson, 2016).
Their differences can be understood by following points:
Modes used for doing work
Both the type of leadership uses various modes or activities so as to influence the people
and hence completing their task on time. Transactional leadership is generally understood to

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be as the type of leadership where the leaders are using various kinds of rewards and
punishments for getting things done. On the other hand transformational leadership is a
leadership style in which leaders use their own charisma or the enthusiasm for influencing
the people under them.
What they stress on
Transactional leadership is generally stresses on his relationship with the people under them
(Toolshero, 2018). It is very essential for maintaining the healthy employee relations. Tesco
also use it for getting things done at their stores without any conflicts. On the other hand
transformational leadership lays stress on the beliefs, values and requirements of the people
under them. It is also very beneficial as it avoids any kind of conflicts between the
employees.
Activeness
Transactional leadership is usually understood as the style in which leaders are generally
reactive i.e. they react over any situation that gets arisen within the firm. This is helpful in the
case when any specific kinds of problems arise in the workplace. On the other hand
transformational leadership is considered to highly proactive in nature (Surbhi, 2015). It can
be understood by the fact that in transformational leadership, store managers of Tesco
thinks about the problems that may arise in future hence they are proactive in avoiding any
kind of situation.
Suitability in environment
There are various types of environment that is present within the organisation from time to
time. At various situations different kind of leadership is used by managers. Transactional
leadership is good in the case when there is settled environment. For example the day to
day activities carried out at the Tesco Stores. On the other hand transformational leadership
is better in the case when there is turbulent environment at the workplace. For example if
there is staffing problems persisting at the workplace on daily basis then they can effectively
plan for managing the human resource (Iqbal, Anwar, & Haider, 2015).
Focus
The leaders in the transactional type of leadership focuses on planning and executive the
events or the objective prepared by them whereas in the case of transformational type of
leadership, the leaders focuses on promoting innovation in all the activities that they perform
in the organization. The transactional leaders are focused on completing the event

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successfully whereas the leaders who use the transformation type of leadership aim to
complete the task by using innovative activities in the environment. Talking about the
company Tesco, the leaders uses the transactional type of leadership under this case as
they are not interested in initiating all the activities innovatively. They only rely on completing
the task successfully.
Number of leaders
There is presence only one transaction leader in the organisation whereas there can be
more than one leader in the organization using transformational leadership style. The work
that a transactional leader perform do not require other leadership for support in the
company where in the case of transformation leadership style, just like the leader at Tesco,
all have different groups, work and style according to which they work in the organization.
Goals of leaders using leadership
The leaders using the transactional type of leadership works for improving the present
condition of the organization whereas, the leaders using the transformational type of
leadership work for changing the present condition of the environment. There is a huge
difference between changing and improving the environment. Relating both the types of
leadership style to the styles used by the leaders present at Tesco, it should be noted that
the leaders of the organization believe that they do not have an environment that they need
to change completely instead improving the environmental conditions of the company can
help them in a better way (Cushman, & Burke, 2014). The leaders at the organization work
to improve the present workplace environment and bring positivity in it. Thus, it should be
noted that the leaders who are working at Tesco works with an objective to improve the
environmental conditions of the company using the transformation type of leadership.
Motivation to followers
Under the transactional type of leadership, the leader focuses on motivating the followers to
put self-interest first in the organization. Whereas in the case of transformational type of
leadership, the leader motivates the employees to put the interest of the organization at first
place and then motivate the employees to fulfil their self-interest out of the outcomes
received by the organization. The leaders under the transactional type of leadership motivate
the employees to work until their objectives are fulfilled whereas under the transformational
type of leadership, the leader in the organization focuses on helping the employees to
collectively grow so that the company along with the employees receive the benefits. The
leaders of Tesco use this type of leadership in the organization (Ndungu, 2014).

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