Managing Change in Tesco Organization
It is the fact that any type of change, including the well-planned and most useful do not occur in the organization itself, they must be controlled. Change management often seems to be more complex and complicated rather than planning, designing and implementation. Changes in the organizations are often accompanied with the sore processes, which include resistance by personnel which in turn impede the firm to facilitate necessary change and thus affects its smooth functioning (Baum and Wally, 2003).
Today’s business organizations are required to undergo changes constantly f they intends to remain competitive. Factor such as technological advancement and globalization of markets has compelled the businesses to respond accordingly in order to survive. Business changes may be relatively minor like installing new programs or quite major like restructuring overall organization. Modern companies are bombarded by incredibly higher rate of changes; internal pressure comes from lower level of employees and top management who push for change. External; pressure arises from competitive, legal, economical and technological factors (Managing Change in organizations, 2013).
The present report underlines managing the change in Tesco. In the company context, both internal as well as external factors play in facilitating change. The report attempts to change management in organization including nature of change, issues that arises during the change implementation, effectively managing the resistance to change etc.
Nature of change and organizational background
In today’s highly competitive and dynamic business environment, to survive and grow is relatively very complex. With a view to sustain in such a market place organizations need to adapt themselves with the changing business trends. Therefore, they need to engender changes in major business operations and varied activities. A firm needs to determine changes and reach accordingly with global market so as to become successful in international marketplace. A review of academic literary sources determines that organizational change is complicated phenomena and the pace of change since last few years has compelled the firm to adapt with change (Anderson and Media, 2013).
There are varied types of organizational changes such as incremental change, transformational change and strategic change. Considering the intense competition from rivals, Strategic change deemed to be appropriate; it deals with long term, broad and organization-wide issues. The ability of firm to determine and understand the competitive forces and how they change linked to the efficacy of business to capitalize and manage the resources essential for suitable competitive response.
Strategic change is the result of varied reasons and occurs in the form of change in business plans, strategies and policies. It can be brought in organization by number of ways; nevertheless, mainly it is enforced because of change in organizational strategy. Tesco adopts change management decisions in order to transform it present business strategy so as to sustain continuously in ever-changing marketplace with available resources and attain maximum customer satisfaction. Strategic change managements commence with formulation of vision and mission statement as it provides strategic directions that further lead the organization towards the path of success.
Tesco, a leading multinational retailer is having its business network all across the globe and offers diverse products range to customers. The company has more than 4000 stores and employs around 440000 of people worldwide. Globally, Tesco is the third largest chain in the world having its operations in more than 14 nations. The company operates its retail stores business operations in various formats such as Extra, Express, Superstore, Metro, Oneshop and Homeplus.
Apart from that Tesco.com is the online retain chain that facilitate the delivery of products such as grocery to buyer’s door step. The firm faces competitions from four giant global retail players namely Asda, Morrison and Sainsbury’s. In order to move ahead in changing conditions of market and to gain competitive advantage in long run, the company needs to change its business operations (Delivering Success: How Tesco is managing, Measuring and maximizing its performance, 2009).
Main drivers for change impacting upon organization and their relationship to the need for change The drivers for change in organization may be either internal or external. Internal factors include people, process, organizational structure, management, task and technology. In addition to this, there are certain external forces which comprises of
There are several factors that have lead to strategic change in organization; these drives are as discussed below implication of highly globalized market place, continuously changing economic conditions and the like. Some of main drivers for change are as discussed below:
- Changing economic conditions: The economic conditions are continually changing in the market and have led the business organizations in very critical position. The recent economic downturn has compelled many large conglomerates to restructure their operational process and also the way in which the business is managed. Acute change in economic conditions such as change in exchange rates, global competition, fluctuation in credit rates and level of macro-economic activities has forced the firm to address their issues effectively by introducing innovative products, providing value for money offers to customers in order to survive in market. Tesco has adopted its business operations as well as the product range with the changing economic conditions. For instance, various offers, discounts and value for money packages are made available to the customer. As well, the company makes every efforts to provide fresh and health food items at very affordable prices. However, the firm stills need to formulate effective strategies to entice more and more customers (Tupper, C.S. and Deszca, 2008).
- Increased competition: In the consistently changing business environment and advancement in technology, the competition has become even more intensified and fierce. Presently, Tesco is facing stiff rivalry from competitors like Morrison, Sainsbury and Asda. Additionally, the corporation is facing severe complexity in managing its operations in domestic market. for this reason, it is important for the firm to develop its product and introduce new product in market so as to offset competition (Vermaak, H. and Caluwé, 2003).
- More demanding customers: Needs, preferences, demands and expectations of the customers are continually changing with the time. Moreover, consumer behavior has become uncertain, diverse as well as unpredictable which in turn has made it significant for the companies to optimally identify their needs and meet them. In this regard, Tesco needs to redesign its plans, policies, way of conducting business as well as marketing taking into considerations the needs and preferences of local customers. The company has its network all over the world and its serves varied type of customers having distinct demands and expectation, therefore, it is essential for Tesco to understand diverse demands of each and every customer segment effectively and hence strategize its activities (Shoham, S. and Perry, 2009).
Main objectives to be achieved by change
Tesco mission statement underlines company’s aim to create value for customers and to earn their lifetime loyalty. In order to achieve this aim, there are certain strategic objectives that have been developed. These strategic objectives of Tesco are as mentioned below:
- To become successful global retailer
- To expand the core United Kingdom business
- To become competitively strong in food as well as non-food items.
In the free market, consumer is considered as the King having lots of options with him. They survival of the business greatly depends on them and their level of satisfaction. To gain the customer satisfaction, the company introduced four major aspects in its consumer approach which includes listening to customers, addressing every challenge to change. Thirdly aspects states that developing loyalty is essential to enjoy long term and short term gains and final aspect concerns with motivating employees to anticipate the current trends and also to give them boost for facilitating innovation (Holbeche, ).
By implementing these four aspects in business, Tesco has achieved shift fro2006m product-oriented approach to customer-oriented approach that has further helped the company to entice customers towards the firm. In this regard, to remain competitive in the market and to retain long term customer loyalty, Tesco introduced CRM i.e. customer relationship management programme. Since then, the company employed every possible strategies and policies to attract and retain customers (Clarke, I. and et.al., 1994).
Key stakeholders impacted by change and stakeholder analysis to assess their influence and interests
Stakeholders are all those people, firms and groups how have some interest in organization such as employees, customers, investors and suppliers. Stakeholders have direct and indirect link with the organization while going for any change consideration of these stakeholders is vital for management (Zajac and et. al., 2000). Changes made within the organization make direct or indirect impact on stakeholders interests and thus, communicating the change with them is must.
In case of Tesco, management needs to communicate with its customers, employees, suppliers, investors and non-governmental organizations. These all are the key stakeholders of Tesco. The engagement of stakeholder is one of the critical factors of successful change management. The engagement of stakeholders can be identified by following framework:
Different stakeholders play important role in order to manage change. First of all employees are the key stakeholders who has to be an active part of change. They plays most vital role in implementing the plans into action. The decision of strategic change vastly influences the interest of employees. The process of change planning and stakeholders engagement can be divided into several parts (Greenwood, M. and Van-Buren, 2010). First of all undertake decision in context of change by involving personas from senior level, so that information about change process along with its advances and effect on stakeholders’ interest can be provided. On the stage information regarding change is need to communicate with all the stakeholders and then give in attention to evaluate the need for planned strategies. On the final stage management need to look for acquiring advices regarding change and stakeholders engagement (Frooman, 1999).
How change management team would seek to identify main issues they face and develop plan for change
Change management is complex process that includes several issues. These issues can not only affect the process of change management but can vastly affect the results too. Managing change is a tough task due to issues involved in it. These issues can be defined in four factors that are duration, integrity, commitment and efforts. In most of the cases company make mistake in predicting the required time for implementing the change. A proper timescale including each action is a good option for solving this problem (Reiss, 2012). The pressure of time consuming is always their in change management and managers need to complete each task on time.
Another issue is integrity that presents the ability of managers to bring the change on time. The skills and abilities of members determine the successful implementation of change on time. The implementation of change includes several sub activities that can be integrated with each other to finish the task on time. Another major issue is commitment. As defined that change management is a complex task and so the commitment of every member is vital for its succession. Managers are there to make effective decisions but it is employee who impellent a plan into action. So commitment of managers as well as employees in required for successful change management. The last issue is regarding efforts that are expected from every member to make. In order to manage a strategic change efforts are need to be made by every member (Pratt and Harrison, 1992).
In order to ensure the successful implantation of change BPR model can be used by the company. This model includes five major tasks that are planning, analyses, process designing, and enforcement of reengineered processes and enhance consistently. This model helps in undertaking the tough decisions targeting towards the identified issues.
- Planning: This is the very first step that includes formulation of cross functional team. While selecting the team for change management their integration must be ensured. Integrality and time management two major issues that can affect the process of change management but Tesco can overcome from these issues by selecting a well developed and strongly integrated team. The skills and abilities of selected participants must be good enough to make their contribution in change management. This step also includes the identification of objective of change and development of change purpose based on these objectives (Bevington and Samson, 2012).
- As-Is Process: On this step managers need to analyze the entire process of the company. Along with this managers also need to develop the activity model that includes each and every task of change management with their time frame (Griffin, 2007).
- Design to be Process – On the stage manager need to build aims, policies and objectives different business units of Tesco. The establishment of aims, policies and objectives is based on the standards which are defied by assessment of other similar organizations or competitors. On this stage role of participants are also defined to perform duties properly.
- Enforcement of reengineered processes – At this level the entire process is re-evaluated to denitrified the issues and overcome from them. It is the most curtail step as it takes most of the time and identified major drawbacks. Participants must be awarded from the change process and their role in this task. If any issue is identified on this level, managers need to resolve it before going on to next level (Hoisington and Vaneswaran, 2005).
- Enhance consistently – Undertaking this process at once is not enough. In order to identify and remove issues, the consistence use of this BPR model is required. Monitoring is the most vital part of this process which facilities identification of barriers so that they can be removed and change can be managed and implemented successfully (Cennamo and et.al., 2009).
How to measure the success of change
Monitoring the change process on regular basis is important to ensure the succession. By doing the issues can be identified and targeted so that chances of error in change management process can be minimized. Monitoring is a significant tool of measuring the performance of the process. In order to monitor a process effectively it needs to be closely matched with the assessment of a project (Change Management, 2013). It is one of the most frequently and commonly sued techniques for short term as well long term measurement. This measurement compare the current level of process with budget one and analyze its effectiveness. Monitoring the process on regular base is vital in Tesco for brining the successful strategic change. It is the systematic acquisition and assessment of information that will aid in to measuring progress of change management (Todnem, 2005).
In order to remove any kind of issues or mistakes the monitoring of change should be continued even after the implementation. Thus, the process of monitoring should be started with change management process and continue after implementation. The monitoring of change after implantation is also important as there are several factors that can impact the change later (Sharma, 2006). The best possible way to measure the change is benchmarking in which a standard of change is established and measurement is done. There are several other ways of measurement as follows:
- Goal based evaluation: It is a conductive way of monitoring the progress during process of change management. This method can be sued by Tesco when change is taking place.
- Outcome based evolution: In order to implement the change this method focuses on checking the progress when change is taking place (Vermaak, H. and Caluwé, 2003).
- Regular reports: In order to measure the progress Tesco can set up a monitoring team that provides a report of progress on regular basis. By evaluating this report top managers can identify the possible barriers and measure the progress of change management.
- Meetings: The coalition teams can conduct meetings with each other on regular basis to know how the changes are taking place and what factors are affecting these changes. The results of meetings can not only address the identified factors but can also help to develop the expected change (Zajac and et. al., 2000).
- Progress reviews: In this technique the report provided by team is evaluated by managers once and after that it is reviewed by top managers to monitor the progress and ensure the effectiveness of process.
- Milestones: This is another commonly used technique in which managers set up a milestone for the coalition team who will work for the expected change. This milestone helps managers in monitoring the progress. On the other hand this milestone encourages the team for working with their maximum efforts (Waddock and McIntosh, 2009).
From the above discussion, it can be inferred as that managing change in organization is the crucial step for ensuring the firm’s success. Due to rapid globalization and advent of technologies, significant amount of focus and attention is needed to be given to facilitate change. Change management helps individual and the organization to adapt with potential change.
Journey of business transformation of Tesco has taken over several years, but was driven by strong determination as well as compelling vision of the top management and the employees. The company understands the significance of retaining and effectively satisfying customers so as to remain competitive. For this reason, it has introduced varied type of innovative plans and strategies to maintain the change and implement optimally. This has further helped the firm to maintain its leading position in highly intensified market place (Tupper and Deszca, 2008).
Books and Journals
- Baum, R. J. and Wally, S., 2003. Strategic Decision Speed and Firm Performance. Strategic Management Journal, 24(11), pp.1107-1129.
- Bevington, T. and Samson, D., 2012. Implementing Strategic Change: Managing Processes and Interfaces to Develop a Highly Productive Organization. Kogan Page Publishers.
- Cennamo, C., Berrone, P. and Gomez-Mejia, L.R. 2009. Does stakeholder management have a dark side? Journal of Business Ethics. 89, pp. 491-507.
- Clarke, I. and et.al., 1994. The dynamics of UK grocery retailing at local Scale. International Journal of Retail & Distribution Management. 22(6). Pp. 11-20.
- Duhaime, M. I. and Barker, L. V, 1998. Strategic change in the turnaround process: theory and empirical evidence. Strategic Management Journal. 18(1). pp.13-38.
- Fleming, J. and Senior, B., 2006. Organizational Change. 3rd ed. Prentice Hall.
- Frooman, J. 1999. Stakeholder influence strategies. Academy of Management Review. 24(2), pp. 1 – 205