Change means simply modification of structure or process of a system. Change may be good or bad for an organisation but changes are done to achieve the organisational goal at right time. Every moment outside and inside environment of organisation is ever changing socially and politically we are looking for newer and better way of doing things. Also stakeholders are looking for more benefit from the organisation that is why they press the organisation to move forward. Technology and competition among the organisation are also responsible for changing organisational structure.
According to Stephen P. Robbins, Change is concerned with making thing different. Things must be different because they change constantly.
Change has always been a feature of organisational life, though many would argue that the frequency and magnitude of change are greater now than ever before.
Change can be defined as, "when an organisational system is disturbed by some internal or external force, change frequently occurs. Change as a process, is simply modification of the structure or process of a system". It may affect positively or negatively to the organisation. Manager's decision is crucial in this situation. They have the ability to take decision at the right time to the right place.
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The carbon trust and the energy services technology and association point out that," Managing change is a very important factor in the success of every business. This guide will help the managers to think creatively about how they manage change, whilst avoiding many of the pitfalls that other companies have encountered".
In this assignment, I took Tesco plc as my case study.
Company Profile of Tesco
Tesco PLC is a UK based supermarket chain. It is the largest British retailers, both by global sales and domestic market share, and the fourth largest retailers in the world behind Wal-Mart of USA, Care four of France and the Home Depot of the USA. TESCO has a long- term strategy for growth based on four key parts: growth in the core UK business expand by growing internationally, be as strong in non-food as in food and to follow customers into new retailing services. TESCO expanded their branches in several countries like Czech Republic(1996), Hungary(1994), Poland(1998), Republic of Ireland(1997), Slovakia(1996), Turkey(2003), China(2004), Japan(2003),Malaysia(2001), South Korea (1999), Taiwan (2000), Thailand (1998).
Background to Change
Significance of change
The process of change in an organisation help in testing the resources of an organisation .It makes the organisation review the strength and weaknesses. One of the greatest challenges for those involved in managing change is to ensure that change is not just a temporary phase. Therefore in order to make it a permanent one it must stop being seen as something new and different from normal practice. It must become the normality for the organisational people. In other words, it must become an integral part of the day -to-day working.
The following are the important factors which affect the organisational change. They are:
Some of the internal factors are listed below:
Change in leadership
Implementation of new technology
Decline in profitability
Change in employee profile
Changes in the economy
Cost of raw materials
Scarcity of labour
Bureaucracy refers to a particular form and style of administrative organisation. In other words, bureaucracy is a combined organisational structure, procedures, protocols and set of regulations in place to manage activity usually in large organisations. I t appears both in private and public organisation and it exists in majority of industrial organisations in the world. Ideally bureaucracy is characterised by hierarchical authority relations, defined spheres of competence subject to impersonal rules, recruitment by competence and fixed salaries. Most of the bureaucrats are rational, efficient and professional. German sociologist, Max Webber was the most important student of bureaucracy and he described bureaucracy as technically superior to all other forms of organisations.
The following are the advantages of bureaucracy. They are:
Always on Time
Marked to Standard
1. Efficient, predictable, smooth and simplified work
2. Rules for designing hierarchy.
3. Increased accountability and reduced transaction costs
4. Clear description of authority, equal opportunities for advancement
5. Increased integration
6. Clear documentation of actions and decisions
7. Bureaucratic control systems include job security, recruitment, performance appraisal, and other system.
1. Decision making process is very slowly and increases the cost due to tall and centralised hierarchy
2. Difficult to meet stakeholder's needs due to too many rules
3. Bureaucratic policies are less sufficient.
4. Practical implications of lie policies is very difficult
5. There is a shift from internal labour mart techniques to external techniques.
In a hierarchical organisation employee are ranked at various levels within the organisation each level is one above the other. At each stage in the chain one person has a number of workers directly under them within their span of control. A tall hierarchical organisation has many levels and a flat hierarchical organisation has only a few steps.
1. Authority and responsibilities are clearly defined
2. Clearly defined promotion path.
3. There are specialist's managers and the hierarchical environment promotes the effective one of specialist managers
4. Employees are loyal to their department
1. In a hierarchical organisation can respond slowly to changing the customer needs of the particular organisation.
2. Lack of communication among the workers especially horizontal communication
3. Departments can make decisions in favour of them rather than the business especially if there is inter-departmental rivalry.
Two different forms of organisational change development
There are different forms of organisational change development. It includes planned versus unplanned organisation -wide versus change primarily to one part of the organisation, incremental (slow, gradual change) versus transformational (radical, fundamental) etc.
Remedial versus developmental change
Change can be try to correct the current situation, for example, to improve the poor performance of a product or entire organisation , reduce burnout in the workplace, help the organisation to become much more proactive and less reactive, or address larger budget deficits . This project seems more focused and urgent because they are addressing a current, major problem. Certainly it is easier to determine the success of these projects by way checking the problem is solved or not.
On the contrary, change, can be developmental- to make a successful situation even more successful. For instance, expansion of customer services or duplicate. Successful products or services. Developmental projects can see more general and vague than remedial, depending on how specific aims are and how significant it is for members of the organisation to attain those goals.
Obviously, people might have different opinions of what is a remedial change versus a developmental change. They might see that if developmental changes are not faster then there will be need for remedial changes. Besides this, organisations may recognise current remedial issues and then establish a developmental vision to address the issues. In such situations, projects are still remedial because they were conducted primarily to address the current issues.
System for Understanding and Involving Others in the Process of Change
Stakeholders are the specific people, groups, or organisation that has direct or indirect stake in an organisation because it can affect organisation's action, objective and policies. Key stakeholders in a business organisation include creditors, customers, directors, employees, government (and its agencies), owners (shareholders), suppliers, unions and the community from which the business collect its resources.
The identified stakeholders in Tesco:
The following are the stakeholders of Tesco
Groups: In Tesco, specific group of people looking for a wide range of products. So they can quality products at competitive prices.
Customers: customers are the most valuable asset of Tesco, because they provide money for the store to be successful. Tesco provides different types of products at affordable price. It attracts the customers and it increases the profitability of Tesco.
Suppliers: Suppliers are probably the third important part in a business. Suppliers are not that important in decision making in Tesco because they are scared of losing their contract with Tesco. The suppliers sell fresh stock daily at market price.
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Employees: Staffs has a very big interest in Tesco. They have an interest in the form of wages, bonuses, discounts and holiday pensions.
Owner: Owners are most important people in business. The owner of the Tesco setting the rules and controlling their business. This is due to they can earn good profit and respectable customers.
Bank ers : Bank have an important role Tesco's business. The cash and cheques are paid in daily and expect the owner of Tesco to repay loans and overdrafts.
Sponsors: Tesco making profit not only for itself but also Tesco sponsors a charity. It shows that the store is responsible and people will visit more.
Local and National communities: Tesco collect information before starting a new store in a locality whether it favourable or not.
Pressure group: pressure groups are important when building a new store of Tesco. They will check whether it is good for the people and environment or not.
Tax collection authorities: Tax collection authority regulates the Tesco business by law.
Measures or Processes
The following are some measures which helps the business to ensure the stakeholder participation. They are:
Identify the ability of employee
In the diagnosis studies stakeholders to define the problem and to decide what needs to be found out in order to solve the problems. Shared knowledge is essential among the stakeholders to work as partners in project implementation.
Among the various participatory research methods for development practice, the most important one is Participatory Rural Appraisal (PRA).
Effectiveness of Communication
Nowadays organisations are undergoing dramatic changes as stakeholder groups exert an ever increasing influence on the place and responsibilities of organisation in society. By effective way of stakeholders can know the environmental movement, the search for total quality management, the concept of sustainable development, ethics and organisational learning .So communication is bridges the gap between organisation and stakeholders.
Effectiveness of Training
By giving training to staff, increases the productivity of the organisation .There is direct connection between training strategy and hierarchy performance outcomes, learning, behaviour change and performance improvement. Training and development is also means to provide employees relevant skills so as to improve the efficiency of the organisation.
Implement Models for Ensuring Ongoing Change
Two most important models for change
Change models are used for increasing the efficiency of the organisation and also organisational development. There are two models for change they are discussed below:
Business Process Reengineering:
The concept of BPR is first introduced by Michael Hammer and James Champy with the publication of the 1993 book Re - engineering the corporation: A Manifesto for Business Revolution.
BPR look at the entire business process at basic level. The significance of this wider approach is that, it incorporates all the work and the non-work (delays, storage, wastage, error-correction etc) associated with the sequence of tasks involved. Apart from that, it involves the communication process between the various departments or functions involved in process, and the rules and regulation and bureaucracies that surrounded it. It bridges the gap between customer and the product by way of new product design, BP involving, marketing, research and development staff, designers and production engineers. In other words, BPR is customer focused model. Recently, some of the more successful business corporation in the world seems to take incredible solution through BPR.
Example: Wall - Mart reduces restocking time from six weeks to thirty six hours.
The kaizen method is originated from a Japanese management concept for continuous incremental change. It is actually a way of life philosophy assuming that every aspect of our life deserves to be constantly improved. This philosophy has a close connection with total quality control, quality circles, small group activities and labour relations. T he important factors of kaizen are quality, effort, involvement with all the employees, willingness to change and communication.
The foundation of kaizen method consists of five elements. They are listed below:
Suggestion for improvement
Out of these element, the key three factors are: Elimination of waste, and inefficiency, standardisation and the kaizen Five's' framework for good housekeeping. They are
Seiri - tidiness
Seiketsu- standardised clean up
Steps for the planning implementation
Implementation steps of Business Reengineering Process:
The implementation process of Business Process Re- engineering faces a lot of difficulties. Most of the reengineering process is not eco-friendly. So we have to face opposition from pressure groups. Certainly, there are some other steps for implementation those are the smooth and top way of BPR. These are preparation for Business Process Re-engineering, map and analyse as it process, design to be bench mark, implement and improve continuously. Some identified steps are listed below
Modulate implementation plan
Prototype and simulate transition plan
Initiate training programs
Implement transition plan
Implementation steps of kaizen:
In kaizen implementation primary focused on actual improvement, although some additional measurement and analysis may be required. The following are the some steps
Find out problem and goal of the event.
Analyse the facts
Create some possible solution
Check and secure the solution
Through a better kaizen implementation an organisation performance can be improved in the following way
In my opinion,
If Tesco may use paper bags instead of polythene bags then they can meet their environment objective successfully.
If any positive changes is happened in the international market, if Tesco may adopt that changes to their business it may increase the efficiency, productivity, profitability and reputation of the business.
If Tesco introduce some diverse products in the market .It may attract the customers because every people like changes.
Tesco can use the two models for change that is, BPR and Kaizen for analysing their efficiency, productivity, quality and control.
As companies continue to compete for excellence, the need for change becomes more and more of a factor. Managing change is crucial for everyone both in public and private sector .Planning for changing requires an organisation to understand the barrier or road locks presented with their department or facility. In my opinion, change is inevitable and all organisation must change to survive with this, any organisation must know "why to change", "what to change" and "how the change" depend up on the type of organisation.