For this assignment I have chosen TESCO plc as a business organisation, which is the largest retailer in the UK and one of the world's largest retailers and has been changing lot since it was opened TESCO stands at no. 4 according to "The global powers of retailing report 2010" published by Deloitte on Jan 2010. TESCO plc was founded by John Edward Cohen in 1924. It is the largest food retailer in the UK and the fourth largest in the whole world after Wall-mart (US), Carrefour (France) and Metro (Germany) according to Deloitte's "Global Powers of Retailing 2010 Report". It is an international retailer. According to TESCO plc Annual Report Oct 2010 it employs 472,000 staffs worldwide, 5008 stores and currently operates in 14 different countries; Republic of Ireland, Hungary, Czech Republic, Slovakia, Turkey and Poland, China, Japan, Malaysia, South Korea, Thailand, India and USA. (TESCO plc, 2010) Food retailing is the main activity of TESCO plc.
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Besides selling only food and groceries items in 1990s TESCO has started other business service. It introduced Pharmacy in some outlets, introduced improved financial services like Visa Card, mortgages, insurance and bank account with union with the RBS. In addition TESCO offers entertainment goods, electronic and computing items, furthermore TESCO has various household products and wide range of clothing. TESCO Direct is an online shop, where people can buy item from home and gets goods at home.
In this report we are going to see theoretical perspective of organisation and change management. Thus lets begin with the introduction of organisation behaviour and importance of change management.
Change is the law of nature. Those who change, survive; those who do not, perish. (Source Unknown)
Change is some how a part of human life. Change is the only a real permanence in the world. We can see all shorts of changes around us - culture change, season change, change in nature, changes in organisation, biologically change and so on. Our whole society is some how changing in a both way either better or worst. Therefore, in our culture, society or even in an organisation, we can not deny of any new changes, instead ignoring or refusing, we always try to cope up with new changes, and try to adjust or incorporate changes in the organisation. Prasad, L.M. (2006)
Any organisation can be easily affected by nature of personal or group behaviour. Therefore it is important to change behaviour which will help organisation for better performance and outcomes. Globalisation, Economical boom, technological innovation, new business and marketing trend are some of the example how change management in organisation is important. Bernard, B, (2004a)
Prasad, L.M. (2006) refers that when change occurs in an organisation it disturbs the old equilibrium and harmony, and new development required in order to maintain the organisational harmony. Any changes in an organisation can affect whole organisation, and some part even affected more. However, change in organisation is a continuous process, some minor changes can be adopted easily without any problem, but some problems may have big impact and they may need big effort in order to maintain equilibrium and harmony in the organisation.
In an organisation, if there will be rare change then there will be rare changes in culture, values, styles, organisational structure and paradigm and son on. Thus, organisational structure, functional strategies, systems and management roles, empowerment, objective base management, performance base management and organisational policy are some of the common types of changes in the organisation. Moreover, new marketing operations, HR policies and structural division are the common type of changes Prasad, L.M. (2006) Finally, organisational tasks, job enrichment, training, functional strategies and computerisation of systems are very common type of organisational changes.
Environmental Adaptive: People by nature first oppose changes but eventually adopt changes. Basically building new organisation is changing structure and people from the old on one to the new one.
Rational - Empirical: according to the literature Prasad, L.M. (2006) people are rational and they like to act how they like to do. Only rational arguments can persuade them in order to change their behaviour.
Power - Coercive: by nature people are compliant and generally do what they have been told to do. Exercise of authority and decline of authority will make them to change.
Always on Time
Marked to Standard
Normative - Reductive: Naturally people are social living beings they are bond with the cultural norms and values. If there will be revaluating system, then that would make them to change.
Factors in organisational change:
Organisation has to be always ready to accommodate both internal and external factors in-order to achieve organisational goal. Thus there are various factors which can change in an organisation.
Every organisation has to deal with various factors. Each has to interact with other organisations and individuals for example; suppliers, government, shareholders, unions and so on. Today trend and business scenario is dynamic and frequently changing. Various changes in politics, society, economic, technology and legal issues make organisation to change in order to cope with this new changes.
List of all aspects of Change Management
Changing structures, system and technology
One of the other important changes is in structure/hierarchal change, system change or technology change. In case if organisation required radical improvement and change than they should be considering changing structure, system and technology. In case of TESCO we can found that how TESCO has been changing since it was started, initially it was just grocery store and have only handful of store. Now after adopting structural, policy and technological change they are expanding and running their store in 14 different countries. Success started since TESCO started changing.
One of the most important way of change is to changing people's behaviour. In every level personality change could bring new ideas, vision and which will be helpful for organisation. Here TESCO also hiring new young people and trying to get some new innovative ideas in order to take TESCO in next level.
People can be change when they are in different place. Deliberately moving people one place to another will compel to change their behaviour and they have to adopt in new culture. Therefore many companies in Japan and America frequently shuffle their staff from one sector to another. Haberberg, A. and Rieple, A. (2001, p579)
Changing believes and attitudes
People have own beliefs and attitudes, and some time it is too complex and difficult to change this behaviour. This kind of individual nature can be harmful for an organisation, thus by observation, interacting, participating and communicating can change these people's behaviour and which will help fulfil organization objectives and aims. Training programmes and participating and socialising participant into new values and beliefs will also help them to change. Thus TESCO is highly recommended to apply this method in order to change their staffs mind set, so that they can be more dedicative and enthusiastic during working hours.
Introducing new technology and methods will not sufficient some time to change organisational culture but personal behaviour can be change by providing training and motivation can change people's beliefs and will help to know their capabilities. Exchanging task with other staff can be helpful to realise the importance of staff and their role in the organisation. Haberberg, A. and Rieple, A. (2001, p580) it is the reason why TESCO is frequently swapping peoples task so that people can realise that every role is so important.
Social, Political and Legal Changes:
Social change means changes on peoples habits, their needs, and there way of perceive. Because of globalisation, education, urbanisation, and impact of international and source of new information make society change so frequently. This frequent change in society also could be problem for an organisation; there it is important to cope with this issue. Also political and legal changes can be a problem for the organisation.
Question-2: What are the reasons and Importance of change in organisation?
(source Prashad) Changes often bring disequilibrium/inharmony in the organisation. In order to maintain and gain equilibrium and harmony, organisation has to adopt or start modifying many aspects of the organisation. Theory says that (prashad) al these aspects are interrelated. For example if an organisation can not compete in the market because of its old technique of production to the new techniques. In order to cope with this situation, an organisation has to install or adopt new technology and and this will change job content in the organisation completely. This changes in organisation requires those people who can operate this new technology machine. Moreover, old jobs might be replaced by the new jobs and the old employee might replace by the new employee. This can be done either by recruiting new employee or giving training to the old employees for the new job.
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Note: Barriers to change:
Individual (page 539PHD) Fear or the new, fear of incompetence, change fatigure, emotional and rational resistance
In the heterogeneous environment there will be always different opinion, thus not all will think change is good for them and organisation. Our human personal nature always finds difficulties coping new changes easily. Human have only limited capacity to cope with the new things and it give stress to the individual. We are different and our personality is different too so in one case change is unbearable for some and acceptable for other. When the level of change is self-inflicted then coping is easy but when change will be imposed then it will be difficult to cope. (phd 539) in the following paragraph we will see some of the reasons why change is resisted by individuals.
Fear of new: whenever we see changing some thing creates some doubts whether it will work or not. Human behaviour requires some short of instability and security, whenever things changed around them makes them insecurity, anxiety and stress. Now if we think our future is different than our worries starts acting.
Fear of incompetence: lack of confidence nature can be also a barrier managing change. Some people wants to what they are doing and they fear try new things. For example introduction of computer in accounting department in an organisation and it will create fear, anxiety and insecurity for some employe whether they can be able to cope with this new changes.
Emotional and rational resistance: beside fear or change, incompetence, or fatique, people also get fear phychologically. ?????? Haberberg, A. and Rieple, A. (2001, p543)
Organisational: dominanat logic and the paradigm, culture, structures and system. (545phd)
Most organisations have their own principles and culture and employee has to adopt this culture. Initially there can be more individuals who acts differently and eventually as they spent time within an organisation they become homogenous and start acting towards organisational needs. Haberberg, A. and Rieple, A. (2001, p545)
Change in an organisation can be some time difficult. For example, if management wants to change in structure or system that could be beneficial for the organisation, initially they could face some hurdles in order to implementation of the new changes.
Justify the reason why organisation has to adopt
Question-3: What are the processes in-order to be success after the change
Power Culture: This type of culture mainly found in small business forms, basically power culture relies on central power, informl communication and trust. (brooks),
This type of culture is highly guided by bureaucracy and formality. Every small group is control by their upper levels and they are highly guided. Rules, procedures and job descriptions are the norm. (brooks)
This type of culture is usually found in matrix typed organisations where power resides at the intersection of responsibilities. In this culture employ suppose to hold joint or multi task responsibilities and work relatively autonomously. Here, any operational decisions can happen quickly because they do not have to wait for upper level.
In this culture individual work together and person quality and ability is the main factor. Usually team of professional adopt this culture. Here, is no any formal or hierarchical structure can be find.
Organisational culture and need of change: Thus organisational culture is now important part of an organisation and it can be reason to fight with an obstacles to change or it is the reason for organisational success or failure.
Question-4: How the all stakeholders can be accommodate after the change in case in TESCO
It is necessary to understand what would be the consequences not having any change or what can be the result for the all organisation stakeholder after the change. In the organisation there are many departments and hierarchy, small change in any department can impact other stakeholders in the organisation, thus it is also impotant to solve or accommodate change for all stakeholders. Moreover, elation between the stakeholder and the organisation is one of the stakeholder theory (Clarkson, 1995; Rowley 1997). Thus, it is important for any organisation to manage change to maintain equilibrium amongst all external and internal stakeholders. Haberberg and Rieple, 2001)
Customers are one of the key actors for any organisation. Customer can may lose their regular supplier if company decides to change. Also if the customers and supplier relation is very strong and change could hamper their long term relationship than there is possibility to review the changing decision.
Because of change customers move to different market place, therefore change can also affect supplier.
government will be more concern if a organisation is changing. If organisation expanding than tax and legal issue has to review, if company is joining with international partner with new management then government has to be more concern.
Organisational rivals or competitors are also affected by any change in the organisation. This new change can make organisation more effective in the business therefore this is the biggest threat or challenge for the competitors. furthermore, these competitors also have to adopt change in order to compete.
Question-5: Recommend a strategy that TESCO can adopt for its successful change management.
In order to decide whether change is required or not for the company's future business. This can be evaluate by PEST analysis.
Political: TESCO's business style can be affected by political changes, forexample government policies, monopolies, government stability, taxation policies, foreign trade regulations, local political alignments, regional political alignments and national or international political alignments.
Economic: Economic is also significant part of the factor of change. GDP, GNP, interest rates, inflation, consumer expenditure, infrastructure costs have important impact in organisational change.
Social Cultural: Local education level, health system, social attitudes, environment, income distribution, demography, and consumerism can be the factors of change and TESCO has understand these factors and makes changes in order to address these factors so that it will have always positive impact.
Technology: adoption of new technology, new product design and development, research in products, obsolescence of current technology.
Legislation: Labour law, company law, patent and copy right law, industry law and regulations, taxation are also factors which can influence change.
Ecological: environmental policies, pollution control, transport law and policies, disposal of waste materials, planning policies are some factors, 'such analysis needs to be supplemented with an understanding of general market trends within the industry and the dynamics of competition. (Kotler, et. Al, 1998)
Factors that Influence Individual change in TESCO:
Force for: a) Nothing to lose b) Fear of future c) Boredom d) Lack of Money e) Adventurous risk-taking personality f) Pressure from family/ friends/ colleagues.
Forces Against: a) Fear of unknown, b) Uncertainty of outcome e) Lack of energy f) Complacency g) Comfortable lifestyle (Haberberg and Rieple, 2001)
second, the battle to make Clubcard work was as much an internal as an external battle. It required a culture change strategy within TESCO. There is good coverage of the leadership stagnation, reinvigoration, company infighting and teamwork across TESCO's history since its establishment in London's East End in the 1930s. Clubcard has been both part of TESCO's tradition of innovation, and an escape from its stagnation. (google scholar)
Barrier for new changes:
There are in many situation stakeholders may try to pose obstacles toward change in the organisation.
They can lobby with external stakeholders like pressure groups, customers, suppliers, governments and local communities,
They can stop changes through strikes or other type of refusal what they suppose to do.
Stakeholders may can ignore the new changes and task and quietly do their existing old routine task.
However, there will be some people in the organisation who may be enthusiastic about new change and happy to try new thing. Depending upon size and influence of this 'early adopter' group, it can be a powerful force in favour of change (Haberberg, and Rieple 2001)