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Change in general which indicate the act of making something different .there are different kind of change occurs in organisation like culture change , technological change , economical change , financial change etc. Every organisation need a change after certain period to improve their creativity and productivity. the main area to discuss in this essay is to identify an organisation after implementing a change .change should be implemented by the top level management and for that you should require a high level of degree. To implement the change what strategy or what kind style u are using that also play an important role to implement the change. After implementing a change what kind of effect it impacts on the people of the organisation that is also important. This essay is focusing on a British based company Tesco.
Tesco is Britain's largest international grocery and general merchandising retail chain. It is the largest British retailer and the world's third largest grocery retailer. Tesco life was started in 1929 by Jack Cohen in burnt hock , North London. The growth of tesco was continuing and in 1932 tesco became private ltd and in 1947 it became LTD and listed on stock exchange with a share price of 25p. After that it continuous growing and first superstore was opened by tesco in 1968.
In 1990 tesco was a small retail market in UK. Over the year tesco have start applying its strategy effectively and efficiently to became one of the biggest retailer in the world. To improve the customer services and to cover the more market share tesco decide to bring the change as a SELF CHECKOUT. What strategy tesco did to became a market leader that is discuss below.
Section 1 : Process for change :
Before implement the change Tesco was unfreezing by the complain of the customers. Customer were complaining that they have to waste their time in a long queue at the same the competitor of tesco like Sansbury's and Asda were providing good services to the customer. In order to improve the customer service tesco decide to bring Technological change in the organisation.
To improve the customer service and to retain on existing customers tesco decide to create more value for its customers. As a result tesco decide to implement the SELF CHECKOUT system for the customers. The reason to implement the change was tesco wanted to make the shopping experience to the existing customers. Another reason to implement the self checkout was technology. Tesco wanted to improve its technology because it is essentional for any organisation to change their technology if they wanted to successful. For every organisation the main aim is to maximising the profit and law labour coast. Tesco wanted to increase its operational capacity and at the same time want to reduce the labour cost.
To implement the change the management of tesco decide that on number of self checkout they were begin and in which stores they will begin first. The checkout leader was trained properly to operate the self checkout and to assist the customer. They also put the demo of the system which make the system user friendly and easy to understand. During the change there was a threat running in the employees of the organisation. Employees were thinking that the change will put their job in trouble. The managers have been trained to educate the cashier on purpose of self checkout and to show that what benefits it brings for the customer and for the organisation. The main reason to show the benefit of the change was to motivate the staff and get confident to welcome the change. As the system was implemented the customers were x]encouraged to use the self checkout with the help of trained assistant. The system have been observed by the management for a period of time to determine the number of customers and also get a feedback from the customers and staff as well. As a result the management got a positive feedback from the customer and staff which gave a green signal to implement the system in other stores.
The change management process of self checkout has had an amazing effect on entire organisation. It plays an important role on customers shopping experience and also effect on the sales of the organisation. After implement the self checkout system it attract more customers to get experience of the new system and somehow it help to increase the sale. 25% sale in UK is accounted by the self check out which mention in below chart.
75% Sales by cashier checkout
25% Sales by self check out
The self checkout has brought a good customer services for the customer in order to save the time of the customers. Boone and curtz 2006 has stated that the use of technology is one of the best way to improve the customer satisfaction. After getting a massive success in the annual report of 2006 tesco announced that 1.5 million customer like to use the self checkout in 200 stores every week.
Section 1 :
Topic 2 organisational context for change (culture web analysis)
The culture web was developed by Gerry Johnson and Kevan Scholes in 1992. Culture often became on focus when two company were merge and their culture crash. For example when existing culture became inappropriate and in more static environment. Culture issue is responsible for low morale and high staff turnover.
For the culture web analysis i am focusing on a case study of SAMSUNG - TESCO. In march 1994 after separating form Samsung group Samsung corporation was trying to enter in retail business. There was a little doubt that Samsung corporation was quite competitive because of its strong brand name and well management skills and capital. When Samsung open its first three stores , however the financial crises broke out and Samsung corporation was a step away from bankruptcy. To came out from this financial crises Samsung corporation decide to restructure his organisation and start searching for breakthrough strategy. At the same time after successfully established its business in Thailand Tesco PLC was looking for a partner which could provide strong background and capability of creating synergy for tesco. As the both partner met and established Samsung - Tesco in May 1,1999.
Stories & Myths :
After entering in retail business Samsung corporation was in financial crises and a step away from bankruptcy and having a loss of KRW 249 billion (US$ 200 billion). After having a big loss Samsung corporation about to lose its market reputation but to stay in market with its reputation Samsung corporation have decide to restructure his organisation and got ready to merge with Tesco Plc. After merge with Tesco Samsung corporation was able to rehire all of 1137 employees who were laid off during 1998. There are two big advantage of merger. The first advantage was the merger have saved Samsung corporation from bankruptcy and second advantage was to accesss to the advantage management skills and IT technology to compare with other world class rivals like Wal- mart , Costco etc.
Rituals & routines :
Samsung - Tesco have faced difficulties in 1999 right after the merger. The employees were disappointed due to the culture difference caused by merger , language barriers and communication difficulties. The major reason was that employees have received new management process of Samsung Tesco which is too rational and lack of humanity. To avoid the conflict between Tesco PLC and Samsung corporation Shinbaram task was launched by the CEO of Samsung Tesco. The concept of shinbaram is to consist of shinbaram and rationality. The main reason to shinbaram was to encourage teamwork and create the working environment where employees can surpass their limit. At the same time personal management team of Samsung Tesco have found that two different business culture were getting balance out. Personal management team added the next step to develop the philosophy between two different culture and start a functional skill training program which was quite helpful for the employees to communicate each other.
For every organisation Board (Top Management) is responsible for the control on the system of the company. Samsung Tesco has a group wide process for risk and responsible to the each level of management and controlled which are required and to be monitored. The subsidiary business are required by CEO which certify the way of annual governance returns. It also have to monitor that which part of the organisation in not performing well or poor in performance and what are the steps to be taken to improve the performance. This kind of decision should be taken by the top management. If there is no control of top management in organisation then the organisation might be collapsed.
In a simple way organisational structure is what define the way of organisation and arrange its employees and management, so that they can do efficient work and perform their targets and goal. The organisational structure of tesco reffered to develop or decentralised the structure.
Power structures :
In the all organisation CEO who is holding the main power in the organisation and he is the person who has authority make the any kind of change in the organisation.
For every organisation symbol is also an important. Symbol give the standard to the organisation. Sometimes people don't know the organisation but they know the company by the symbol.
Section 2 : Exploring Change :
Topic 1 : Drivers for change
To analysis the structure of the industry it should be undertaken on order to find the effective sources fo the competitive advantage. Therefore in 1985 PORTER has design the five forces to analyse the structure of the organisation. Porters five forces analysis the external factors of the company which impact in the organisation. It was design to show the attractiveness of the company and can spot that where the competition is the most in the company. In the current market tesco is leading the highest market share. We will see the how the five forces will help the tesco to increase its market share.
Above graph is showing the percentage of the market share in different organisation where tesco is holding a highest market share.
Porter's five forces
Threats of new enterance :
In UK the retail market is controlled by some retailers like Asda , Tesco , Sainsburys etc. Which are processing the 70% market share and some other small retailer like Somerfield , Waitrose , Lidal , Iceland which are controlling 10 to 15 % of the market share. In the case of retail industry as the profit is high it attracts some new organisation to enter in the market , but because of law price of the current organisation its makes impossible for the new company to enter in the market.
Barganning power of suppliers :
Every organisation has got suppliers for their raw materials. The power of suppliers in retail industries are depend on the retailer. A retailer can barganing on the prices at which they can get their raw materials and they can supply at a reasonable and profitable price. Suppliers can not do much barganing with the retailer because there are other suppliers in the market who are in competition and can supply easily to the retailer. Tesco is a market therefore he is able to do the negotiation in price with the supplier in compare to other competitior.
Threats of substitues product :
According to the porter's five forces substitues products are that which can be find in othrer industry and providing the same service of needs of the customer. If the customer can easily find the alternative products regarding their needs wothout less compromising they will ready to buy. In UK market tesco is a market leader and Asda ,Sainsbury , Lidl are the substitute for the tesco. Not only the big supermarket but small shops are also substitute for tesco. Sometimes the substitute product will give the price benefit to the customer.
Barganing power of buyers :
In every organisation buyer has a power of barganing because buyer who is bringing the money in organisation. Buyer is allow to do the barganing because he has a power and resaurce to swith to other competitiors who have better price value. In the retail industry customer are more switching to the low coast as they are more sensitive than brand loyal. This is the reason that they have more power in the retail industry.
Rivairy among existing customers :
Each other competition is always give the benefit to the organisation to gain the competitive advantage. Price are often restoresed when there is a low product differtiation in the industry. As teh Tesco , Asda and Sainsbury have not much differtiation in price but the incentive what tesco is giving to the customer is clubcard which attract the customer. As there are more exit barriers in the retail industry they have to stay in the competition rahter if they are not doing well. The best example of rivairy on customers is when tesco have launched his self checkout system in their stores in order to improve the customer services.
Topic 2 : Creativity and improvement
In this competitive world ever organisation need creativity and improvement because without improvement it is very difficult for the organisation to face the competition and to saty in the market. For example if we consider the mobile phone industry they are very creative about their product in order to stay in the market and to face the competition. If they stop to stop keep on changing in mobile phone then people would not buy it. Therefore improvement and development are neccessary after certain period.
How to improve the creativity and development in the organisation very nice model has been designed by the 14 CEO in 1988 to improve the management tools of European organisation. By the support of the European commission to improve the quality promotion of european organisation the memers have create the EFQM model.
How the EFQM will support the organisation that is discuss below.
Leadership meands some one who is holding a power of authority in the organisation or in other word we can call CEO who create the mission or vissin for the organisation. Leader of the organisation must need a attributes , qulities and characterisctis in order to take the decision. For example of tesco which is one of the biggest retail industry in uk is continuesly going on progress by a successful leadership of the CEO Terry Leahy who was just retired in last march 2011. After taking at a maximum level of progress the ceo of the tesco had decide to retired. It was a great leadership by terry leahy who help tesco to became market leader in uk.
People : (Staff)
For every organisation staff welfareness is also important. If the company don't care about staff environment then the employees were not able to perform well they might loose their courage which will effect on organisation. If the employees are fully satisfied then they put their extra effort to work. Regarding staff staff environment teaso have a good policy for the staff. After completing a year as a employee in tesco they offer a Priviledge card to the employees of tesco which give 10% discount on to the employes and clubcard point also. Some eligible staff have also extra staff discount with personal finance of tesco. This way tesco is giving the motivation to the staff to improve their productivity.
Policy and strategy :
To achive the goal , mission and vission every organisation has its own strategy and policy. Strategy is a pattern which integrate the goal of the organisation. Therefore the top management have to be very careful when they design any strategy to implement in the market and how it sruvive to their competitors. Tesco strategy is not only concentrate on its food business but also develop its non food business like clothing , electric . toys etc. In 1973 when the ceo of tesco Jack Cohen was resigned that time the image of tesco was very bad because John Cohen strategy was pile it high and sell it cheap that gave a bad image to tesco. After his resigned tesco launched its operation checkout with its price reduction and the result was that market share was increased by 4% in two months.
Partnership and resources :
Some organisation work in partnership firm in order to achieve their goal or the company have a less power to achive that goal. Partnership can be any way like either in finance or in material or in manpower. In order to finance tesco have worked with btirish red cross to help to collect the money to help the people who were affected by the natural crisis.
Process is nothing but a strategy to implement a change. When any organisation want to bring the change they have to design the process of chart that in what way and how they implement the change. For example when tesco decide to bring the change as a self chekout , firstly they gave training to the managers and staff after that they implement in few stores as an experiment. Aftet getting success they implement in other stores.
People Result :
When an organisation decide to bring the change they also have ti define that in what way staff is supporting to bring change because if the employees are unaware about change or any threat after implement the change then the employees will not support the organisation to bring the change. For example when tesco was decide to bring the self check out there was a threat in the employees that they might be loose theit job after implement the self checout.
Customer result :
After implementing the any kind of change organisation must need to know that how the customers are accepting the change and how it became helpful to the customer. To know the customer result they can ask for the feedback about the change. By feedback organisation can know the that the customers are satisfied or not because customer feedback is very important for any organisation.
Society results :
Every organisation have a social status in the market. Status will come from the brand of the company. If the company have a strong brand name then the status of the company is good. Brand give the identity to the company. People know the company by their brand. For example Apple ,Rolce Royce , Ferrari this are the strong brand name in the market. If the company have a strong brand name then it can charge a premium price to the customers.
Key performance results :
After passing threw the change of the process organistion should have to know that how it performing. The performance can be monitered by the sales of the product. Company have to recognise that after implement the change how much sales is increased in order to change. For example of tesco after implementing the self check out within two months sales was increased by 4 % that was a good sign for tesco.
Section 3 Impact of change on people :
Topic 1 : Surviving change
After implementing a change organisation must have to know that how the change is surviving. What are the out comes are coming out after implement the change and how the employees have accept that change. Another important part is that how the change will helpful to the organisation in future that also msut have to know. For example when tesco was about to implement the change as a self checkout by the time there was a threat in employees that they might be loose their job that was a bad impact on the employees about change. After implementing the change the organsiation and employees have got the benefit of change. Tesco sales was increased by 4 % in two months. Tesco want employees to work more in different section to improve the customer service. Self check out have helped tesco in a big way to reduce the labour cost.
Topic 2 : Tackling resistance to change
Managing change is one of the biggest challenge in mordern life. After implementing the change organisation have to face the stress and uncertanities to get the benefit of change process. Sometimes employes are also resist about the change because they have to learn something new. For example of samsung tesco when samsung corporation was merge with tesco right after the merger company face the difficulties and the moral of the employees was low due to culture difference , but company have tackle it very nice way and company have launched a progeam named shinbaram which allow the people to work over their limit and teh reason to launch was to motivate the staff. The result of it was quite good and employees were feel free to work in a better way .
Section 4 : Evaluating strategic change initiatives :
Before implement the change every organisation must have to analyse the current situation of the organisation. They have to decide that where they want to take the organisation in future and what are the tools needed for that. They have to create the goal or vision for the organisation and how they achieve that goal. For example of tesco before implement the self check out system the strategic direction of tesco was to became the market leader in uk. Aftet deciding the vision for the organisation tesco use the technology power as a tools to implement the self check out system. After implement the system over the decade the sales ratio of tesco was increased and now a days tesco is getting a 25% sales from self checkout. That was a major organisation change in tesco and it got a big success as a result today tesco is a market leader.