Change Management, A case study of Tesco Shopping Mall

1.1   Introduction

In this essay the author has described the stakeholders by selecting the retail supermarket “Tesco” and described the stakeholder groups and then explained the different stakeholders of the selected organization. In this essay author has described the importance of stakeholders to the organization and their impact on the business activities and also described the way to identify stakeholder’s expectations, requirements and their interest and to manage them by fulfilling their needs and requirements to make growth and to achieve competitive advantages.

1.1.1        Tesco Background

Tesco was founded by Mr. Jack Cohen in 1919 and gradually it makes growth in retail industry and sustained its growth because of its effective business strategies. Tesco is leader organization in grocery and merchandizing in retail industry in UK and doing its business in global market and sustained its competitive position by offering its financial services and high quality of its products in no food items at lowest prices to its customers. Tesco is the market leader in United Kingdom retail industry and second largest globally in terms of revenue. Tesco has its business operations in USA, Asia and Europe. Tesco has captured the 31% market share from the targeted market. There are about 370,000 employees employed by Tesco in all over the world and it’s more than 80% sales revenue is generated from United Kingdom and only 30% of its business share is spread outside the United Kingdom (Tesco, 2014).

1.1.1    Stakeholders

According to Capron & Glazer, (2010) that stakeholders can be defined as the people, an individual or group of people or an institution that can be affected or have an impact on the business operations of an organization. Kotler & Schlesinger, (2007) stated that stakeholders may be include owner, employees, investors, media, customers and consumers, suppliers, local community, banks, financial institutions, employee union, competitors, government, industry and business partners (Acemoglu & Jackson, 2013). Tesco stakeholders have their impacts on its business operation in the following way employees have impact on the success of organization if they have no productive attitude and do not agree with organizational objectives. Similarly, the managers have their own impact on the decision making (Kotler & Schlesinger, 2007) if they do not develop and design effective business strategies (Acemoglu & Jackson, 2013) and decision in this way Tesco could not achieve its objectives (Benfield, 2012). If the Tesco suppliers supply the material and furnished products with low quality customers may angry and there will be low sales volume and Tesco could not achieve targeted sales volume (Byars, 2010). Similarly, if the credit terms and conditions changed by the Tesco to the suppliers that may delay in the delivery of raw material and products and in other supplies like electricity and gas. Additionally, ultimately there will be no more sales and Tesco could not achieve its targets. New laws designed by the government (Kotler & Schlesinger, 2007) have their own impact on the profitability of the organization (Cooper, 2010) for example if the government raise the wage rate and also raise the tax rate in this way Tesco could not achieve its targets Tesco needs to increase the prices and customers may not accept these changes in price and may switched (Byars, 2010) to other retail stores. If the banks, creditors or lenders may raise the interest rate in this way there will be a negative impact on the Tesco business operations (Benfield, 2012).

1.1.2    Customers

According to Locke, (2009) that Tesco customers are the main stakeholders of organization because they want the quality of products at cheap prices to overcome their needs and wants and become satisfy by consuming their products. Being social responsible Tesco is offering products and services at cheap prices and in this way customer’s buying power is increasing and they can buy more products from the Tesco. Tesco is also taking care for the environment and has been offering the products those have low carbon emission in the atmosphere. Customers are more interested in offers, more high quality of products at cheap prices from Tesco. Tesco consider their interests while making its business strategies (Capron & Glazer, 2010).

1.1.3    Suppliers

Tesco suppliers are the stakeholders, because the suppliers are earning profit from Tesco by supplying their products and services and the quality of raw material or furnished products also have an impact on the business of Tesco. Tesco pay them money and they are earning profit from Tesco and paying wages and their expenses by earning from Tesco (Jan, 2011). Gas and electricity providers, telephone and internet providers are also the main suppliers of Tesco and raw material and furnished products are also supplied by the different organizations and Tesco has very good relationship with them. Their main interests with Tesco are including more business, more revenue, better and long term relationship, more revenue, more profit (Cooper, 2010).

1.1.4    Employee

Employees are the human resources for an organization, Tesco believes in that human resource is an asset for it and Tesco is investing large investment in equipping them with good skills and training to them (Thompson, 2010). Tesco work placement environment is friendly and health and safety issues are also always consider while developing business strategies (Kotler & Schlesinger, 2007). Tesco is offering good wages as according to the labour law of UK government. Tesco is also compensating its employees with paid holidays, holidays, flexible working hours, incentives, extra working hours, medical insurance, pension and special discounts. Tesco has compliance with rules and regulations and there is no discrimination based on religion, race, sex, color and disabilities all employees have equal opportunity rights (Thompson, 2010). Employees are always interested in flexible working hours, handsome salaries, extra working hours, pension, life insurance, medical allowance, job security, equal opportunity rights, career development and incentives (Johnson & Scholes, 2010).

1.1.5    Government

United Kingdom is the main stakeholder of Tesco. Tesco is the source of revenue for the government in the country where it is operating its business and government is also offering and providing facilities to the Tesco to conduct its business successfully. For example government has established rules and regulations for the business organizations to conduct the business inside the country and also grant the permissions to do business in global market and facilitate them and ensure them as well (Locke, 2009). Government establish policies related with labour wages, working hours, check and balance on the quality of products, facilitate them and enforce suppliers to honor their promises while making an agreement with Tesco. Tesco always compliance with UK government rules and regulation and also honor its promises made by it with the other stakeholders. UK government has the interest to generate more and more revenue from Tesco and Tesco must compliance by all the rules and regulations (Kotler, 2010).   

1.1.6    Media

Media now a day is the main stakeholder of an organization (Thompson, 2010). Media is also generating revenue from the business organizations like Tesco. Tesco launch its marketing and promotion campaign and advertise its products through different media channels including electronic media channel, print media channel and electronic media channel. Media want more advertisement and orders to publish Tesco products in newspapers and broadcast its advertisement on TV and electronic media has interest in domain registration and in offering its services as well to communicate with its stakeholders and generate revenue for its employees in order to meet its expenses to achieve organizational objectives (Putnam, 2010).

1.1.7    Investors

Investors are the main stakeholder of an organization like Tesco because investors are the creditors and they need to earn money by investing their money. They wish to receive more money on their investments (Thompson, 2010). They are always interested in the well reputation and well business operations of the business organizations, more products will be produced by the organization and more sales will be generated and in this way Tesco will make more profit and investors will also receive more dividends on their investments. So investors always interested in true financial information of business organization (Robinson et al., 2000).

1.1.8    Environment

Environment is the major stakeholder of Tesco organization because of business operation it had bad impact on the environment, due to carbon emission, noise, gas emission, heat is produced that have negative impact on the atmosphere and wild life and humans. People also through the wastage and it cause the soil pollution and water pollution. So environment has direct impact because of Tesco business operations. Similarly deforestation is another negative impact on the environment and other communities (Thompson, 2010). Tesco has started to produce product with low carbon emission in the air and also paying its focus on the small packaging as well in order to save the environment from pollution. According to Acemoglu & Jackson, (2013) that environment always needs to be saved by the business organizations and there should be low carbon emission and minimum heat should be produced and business organizations should adopt new technologies to recycle their wastage to avoid air and water pollution. As the mission of the Tesco is to create loyalty and satisfaction among the stakeholders by identifying their expectations and by fulfilling their needs to make and sustain business growth (Tesco, 2014).

As Tesco has adopted the fair trade policy has been designed and implemented and it is generating much revenue from all over the world by focusing the 3rd world countries as well and by creating loyalty, happiness and satisfaction among its customers and consumers and stakeholders are also happy with the fair trade policy. Tesco is generating more revenue and making good profit and shareholders are also receiving handsome returns on their investments (Byars, 2010). Similarly, Tesco has very good relations and effective communication with its suppliers and put order well before time for the supplies and also as the effective means of transportation to reach the deliveries in its stores. Tesco has very good image and its brand is famous because Tesco is offering excellent quality of products to its customers and in this way its image is good in the mind of customers and consumers and because of all this creditors, lenders and bankers have believe in Tesco policies and they are also happy, Tesco always provide them all necessary true financial information and engage them while making and decision. Tesco share prices are very high in the London stoke exchange and this is also a good chance for the investors to make good money as according to Benfield, (2012) that stakeholders expect more returns on their investments.

1.2   Conflicts and how conflict may help or hinder the attainment of organizational goals

First of all there is conflict between the Tesco and its workers, fuel drivers want job security and increases in their salaries, because of their job plan they will be transferred to another organization from the Wincanton. Because of this conflict there will be a negative impact on the organizational goals and objectives, they will plan and go for strike and the Tesco supplies will be delay and in this way Tesco may face financial problem and customers could not receive products at right time and sales volume will go down. Tesco has another conflict with its shareholders and this is a major conflict, basically Tesco want to bring some changes in the terms and conditions for the fired board members and want to save their jobs at high salaries whereas the share holders are against this change (Capron & Glazer, 2010). In this way there is negative impact on the Tesco operations because investors are sure that in this way they may have no choice to elect as board member and they may want to get back their investments from Tesco, but as because of media pressure that Tesco is growing fast, so investors are not taking back their money. There is a conflict between Tesco and its customers the actual conflict is the Tescopoly that has gone completely against the Tesco. Tesco has been prevailed in all over the market. There are more than 3700 Tesco stores in all over the world and the small retailers are disturbed by its Tescopoly because they could not earn much money because of Tesco price leadership (Tesco, 2014). The customers want that the money should be circulate among the small retailers as well and they can be benefited from this. It has negative impact on the brand image of Tesco and secondly in this way the customers will be unhappy and they will stop to buy more from Tesco and sales revenue will be dropped and Tesco could not achieve its financial targets. Small retailers are trying their best to provide negative image of Tesco to the consumers but Tesco has believe in customer’s loyalty.

There is also another conflict between Tesco and its supplier (a bakery in Manchester), Tesco want to maximize its supplies from the other bakeries and this bakery is going to closed and more than 200 employees will lose their jobs. In this way workers are not happy with the Tesco decision and they are going to be jobless because of Tesco decision and they are unhappy. There is another conflict between the Tesco and local community as around 130 local citizen casted vote against Tesco developments in local community council. Now the Tesco need to have another store in the same area and there will be a huge investment required to open a new store that will take time and money (Capron & Glazer, 2010). Being a social responsible it may have a bad impact on the Tesco policy and people when talked to their friends and family friends about their job story they might tell others and in this way Tesco reputation may be lose and people may switch from Tesco to another superstore (Benfield, 2012) and Tesco may lose its sales revenue (Cooper, 2010).

Part 2

2.     How the leadership style adopted by a manager may either facilitate or hinder change in organisations

2.1         Introduction

According to (Byars, 2010) that there are a variety of leadership styles now a day and no one is perfect to meet employees demand to achieve Tesco aims and objectives by facilitating or hindering the changes in Tesco. In order to fulfill the employee’s desires and Tesco organization the management always find the new ways to achieve organizational objectives. Only the effective leaders or managers are able to change their way of controlling the change circumstances at Tesco through their effective adopted leadership style (Jan, 2011).

2.1.1    Analysis of Classic Leadership Styles

In this way manager at Tesco need to give small directions to its subordinators and allocate them necessary resources to carry out daily tasks (Jan, 2011), this leadership style is only good when the subordinators are highly qualified and highly trained and they have high productivity attitude (Johnson & Scholes, 2010). Whereas the autocratic style of leadership is that where the leaders or managers can exert control over the work and they instruct the workers to carry out their assignments (Kotler & Schlesinger, 2007). In the participative leadership style stall members are always invited by the managers to share their experience, problems and knowledge to solve a specific problem to achieve organizational objectives (Johnson & Scholes, 2010).

2.1.2    Analysis of Transformational Leadership Styles

According to Capron & Glazer, (2010) that the theories transformational leaders/ managers always have vision in their mind and they always inspired other through their own work and also inspire their team workers as well. Transformational leaders can do their best work in innovative business organizations (Cooper, 2010) because they possess the qualities and vision and have also the charisma in their personality (Kotler & Schlesinger, 2007).

2.1.3    Analysis of Participative Leadership Styles

According to Kotler, (2010) that some managers or leaders always focus on the participation and this is called participative styles the first one is democratic style in this way the manager or leader always use employee’s knowledge, experience and skills and helped them in achieving organizational objective in right direction (Locke, 2009). This leadership style is appropriate when the organization can be possible to go in wrong direction (Putnam, 2010). The second leadership style in participative styles is affiliative style in this way the leader focus on team work rather than group work. In this way the manager increase the moral values of the teamwork and made effective communication strategies  (Robinson et al., 2000) so that team workers can communicate with each other and help each other in solving any problem that they might faced at the work placement and in this way they can collectively achieve the organizational objectives (Kotler, 2010). 

2.2   Reasons for change

With the change in technology and development in societies there is change in demand of new products (Thompson, 2010) and these changes enforce the business organizations to make changes in their procedures, products, operations and activities and competitions always exists. There are following factors of change in Tesco (Locke, 2009).

2.2.1    Competition

Due to new entrants in the market force the Tesco to bring change in its business policies and marketing plans or the competitors some time change their policies (Acemoglu & Jackson, 2013) and adopted new ways to do marketing and manufacturing the products to increase their market share (Benfield, 2012) that enforce the organization to adopt the change as according to same strategy that bring changes in the business policies and marketing strategies (Putnam, 2010).

2.2.2    Technology

Tesco sometime enforced by the new innovation in technology to adopt changes in work placement and also leads towards new trainings to the employees (Byars, 2010) as well and to install the new technology in the business operations. For example the new shopping trends adopted by customers were online shopping (Capron & Glazer, 2010) and Tesco has adopted that change and started its website shopping and provided that facility to its customers and trained the employees to book orders and deliver the items at door (Cooper, 2010). Similarly, Tesco has started heat sensors to reduce the long queues (Jan, 2011) and now the customers buy and scan their product at automatic tills and pay by cards and cash. Now there are no long queues on the manual tills (Robinson et al., 2000).

2.2.3    Growth desire

According to (Johnson & Scholes, 2010) Tesco is achieving competitive advantages and want to sustain the competitive advantages and for achieving competitive positions and sustaining its position in market Tesco adopt changes to increase quality of products and to low the cost. So to make growth Tesco need to make changes in its procedures and ways of doing business (Thompson, 2010).

2.2.4    Improve the process

In order to eliminate the waste and to reduce the wastage of resources organizations always improve their procedures that bring value and better in quality of products and reduce the cost as well  (Kotler & Schlesinger, 2007). For example Tesco has been started to manufacture products those emit low carbon emission because of value chain process that has been improved (Kotler, 2010). So changes in the procedures always have impact on the efficiency of the organizational effectiveness and also force the organization to make changes in the operations (Tesco, 2014).

2.2.5    Government regulations

Sometimes governments announced the changes in regulations and organizations needs to bring changes in their business operations (Locke, 2009), for example government passed a bill to bring new changes in the work placement regarding health and safety of workers than the organizations need to compliance with those regulations and they need to bring some changes (Acemoglu & Jackson, 2013).

2.3   Change Management Theories and Models and their advantages and disadvantages

According to Putnam, (2010) that there are main three theories or model of change management

2.3.1    Lewin’s change management Model

The first change management model was given by the Kurt Lewin in 1950s and he recognized three main stages of change in an organization (Benfield, 2012).

2.3.1.1 Unfreeze

In this stage people resist to change to overcome this problem organization must motivate employees towards change, this is called unfreeze stage (Byars, 2010).

2.3.1.2 Transition

Ager unfreeze stage organizations must go in transition stage, here the leaders or management must make it sure that processes for change are in right direction (Capron & Glazer, 2010). 

2.3.1.3 Refreeze

After the transition stage the organizations need to follow the guidelines to get benefit from the change (Cooper, 2010).

2.3.1.4 Advantages and disadvantages of Lewin’s Change Management Theory

Advantages

It is easy and simple to understand and implement (Jan, 2011).

Easy to plan the need of change

Limitations

It is very complex to put change in freezing situation

There is no concept of politics and power in this model

There are no transformational and radical changes

2.3.2    McKinsey 2-S Model

Mr. Richard Pascal, Mr. Robert Waterman and Tom Peter have given the McKinsey 7S model for change. They stated that there are major seven factors called as change agents including shared values, strategy, structure, system, style, staff and skills (Johnson & Scholes, 2010).

2.3.2.1 Advantages of McKinsey Model

According to Jan, (2011) that there are following benefits of this model of change

It is effective way to analyze and understand the organization

This model offer proper method of change in organization

Both emotional and rational methods are combined in this model of change

2.3.2.2 Drawbacks of this model

 Dissimilarities have been totally ignored in this method

This is not easy to understand and adopted by organization (due to its complexities)

Failure chances are high (if an organization adopts this model for change)

2.3.3    Kotter’s 8 step change management model

John Kotter professor at Harvard University given this change management model and according to him that leaders should convince the employees towards change and then employees should be hired by the organizations in the change, basically there are 8 steps in this model (Kotler & Schlesinger, 2007).

Source: Author

2.3.3.1 Advantages and disadvantages of this Model

According to Johnson & Scholes, (2010) that there are following advantages and disadvantages of this model

Easy and understandable

It pays complete focus on accepting change rather than to actual change in organization

It is easy to convert the changes in this way

2.3.3.2 Disadvantages of this Model

Organizations could not amend or skip any step

It takes maximum time (Johnson & Scholes, 2010).

2.4   Impact of politics, conflicts and power on organizational effectiveness

Politics, conflicts and power always play their role in the business efficiency (Robinson et al., 2000), to execute business operations, management make decisions so that employees can communicate with each others at work placement and carried out their routine work effectively (Kotler, 2010). It is up to employees that both they use the power in positive or negative form to influence their colleagues and subordinators politics has the direct impact on the organizational culture and also increase the productivity attitude of employees (Acemoglu & Jackson, 2013). To achieve organizational objectives employees often face challenges and conflicts produced between employees while achieving challenges to achieve organization’s mission. Employees become frustrated because of conflicts and their productive attitude becomes reduced and it had negative impact on the productivity of an organization (Benfield, 2012). Employees feel stress and they do not perform well as according to their abilities and they feel headache, loose appetite and feel problem with sleep and could not perform well and conflicts also generate violence and people leave the organizations and organizations have to face legal problems as well (Locke, 2009). There are some positive aspects on conflicts in organizations for example it provide a chance to the employees to brainstorm their ideas (Byars, 2010) that bring new ideas and innovations in solving problems, because of conflicts employee pay more attention towards work and achieve organizational objectives, while there are conflicts in the organization (Capron & Glazer, 2010), management find out the real roots and improve its procedures for future and make sure that there will be no conflicts among the employees. According to Cooper, (2010) that If the people in organization use the power positively they increase productivity among employees and built confidence among employees and people achieve their targets effectively that increase organizational performance (Locke, 2009), and if the people use power negatively they discourage the employees and conflicts may arise at work placement (Putnam, 2010). Due to negative use of power organizational employees turnover always become high (Jan, 2011), according to Johnson & Scholes, (2010) that employees those navigate the organizational politics always play their role with productive attitude and achieve their targets. According to Kotler & Schlesinger, (2007) that if employees positively understand the policies of organization can easily find out their answers and they can enable to perform with more productive attitude. And if the people fall in negative politics in an organization they suffer from conflicts (Kotler, 2010) and their productive attitude always decreases and they could not perform well and could not achieve their targets and lose quality of work (Robinson et al., 2000).

2.5   Impact of motivated workforce towards organizational performance

According to Robinson et al., (2000) that motivated workforce always contributed towards the productivity of an organization because motivated workforce means workforce of an organization with more commitment (Thompson, 2010), with more energies, abilities to face challenges and abilities to create new ways to solve problems (Acemoglu & Jackson, 2013). These all attributes of employees enforce them in achieving organizational objectives positively and tackling unforeseen challenges and obstacles and they easily achieve their targets assigned by higher management (Benfield, 2012). According to Byars, (2010) that workforce with motivation always feel their responsibilities and they perform well as according to their skills and abilities and handle the situation and find out the best solution of the problems (Thompson, 2010).

Published by MALI

Writer is post-graduated in Computer science, Business Administration, Marketing and Innovation. He has 10 years of business academic research writing experience.

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