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The name Tesco was first initiated in 1919 by John Edward Cohen who invested in his small grocery in the East End of London as a market trader. Cohen become a successful trader and he decided to brunch out to the other market traders. In 1929 the Tesco store limited was officially founded , where by the name originally was given to a private-label brand of tea in which Cohen sold, created from the initials of T.E. Stockwell, a merchant from whom he bought tea, and the initial two letters of his sir name(Datamonitor 2004).
In general tesco deals with foods and non- food retailer in the world including gasoline, clothing, electric goods, house wares and alcoholic beverages , It also provides complete online services through its subsidiary , Tesco.com including Tescodirect .com and tesco.net. However, in recent the company has introduced the Clubcard loyalty card called Clubcard Plus, a Tesco Visa Card, and a Tesco saving account.(referenceforbusiness 2007).
Due to diversity of products and apart from the online service offered as mentioned above, Tesco operates under the four banners which are Extra, Superstore, Metro and Express(Datamonitor 2004).
In 1995 Tesco compete Srainsbury's as the UK largest supermarket with the market share of 15.6% of grocery retail market up to 2001 and was the market leader. holds the leading position among the Grocery retailers in Great Britain with market share that exceeds to 28% in 2004 (tescoplc 2010).
Besides of the supermarkets the company runs its business in England, Scotland and Wales, also the company operates many super stores in the rest of Europe, US ,Asia such as in Northern Ireland, Republic of Ireland, Hungary, Malaysia, Turkey, Poland, Thailand, Japan, Czech republic and Slovakia both operates under the Tesco brand names.(Tescoplc 2010).
A SWOT analysis can help to analyse the effectiveness and performance of the company,by examining the internal and external forces that occurs in the company (Mullins 2007),
In SWOT ,analyses the strengths and Weakness of the company in relation to threats and opportunities that can occur in the company, and the impact of the said analysis, the company must put much effort to overcome the threats and weaknesses with the basis of decision making and problem solving and on the other hand, to create a room for increasing Opportunity and Strengths for the survival of the company as well as to be in competitive position.
According to Zain,M(2008) stated that. SWOT analysis help the company management to formulate strategies, and those strategies will foster to increase profit of company and at the same times makes the employees to adapt changes .
Therefore, the internal forces within the company will lead weather the strengths or weaknesses and the external forces will drives the opportunity or threats of the company.
The following are the SWOT analysis of Tesco company, by (Datamonitor 2010)
Leading retailer win back the lost market share to discounters except Tesco
High cost of growth in central European markets compare to competitors
Building sustainable business model
Gaining market share in non-food
Investment in IT to operate efficiency
Low growth market reduces sells in non- food product.
Strong growth in Asia markets
Increasing market share through online channel
Strong private label portfolio enables the company to effectively differentiate
Focus on fresh produce and convenience store format.
Figure 1:SWOT analysis of Tesco company.
Building a sustainable business model
Tesco has successfully maintain its strategy of building business model through diversification of new geography to expand business market areas, and innovation of new product and services that attract market demand.
Tesco increases operating business 8%GDP in 2000 up to 53% in this year 2010,on gain profit for the international business Tesco generate 1.8% in 1997 to 22% early this year 2010. this strategy made the company to grow faster and improve shareholder returns. On the other hand, Tesco maintain the sustainability through the customer as its strategy, Tesco's customer attracted through the unique way of using low price ranges, discount brands and club cards program which make the sales growth partially by 150-200 basis point compare to year ago(Datamonitor 2010).
Gaining market share in non food
Tesco has developed strategy as to be strong in Non - food product as in food with the quality, and affordable price for the customers (Tesco plc 2010).and as being international retailer, Tesco was able to undertaking new non - food merchandise with competitive prices, the company grew its presence through continuous selling non- food products and maintain competitive advantage over the others retailer in the UK market like Morrison and Sainsbury,
Non- food product is the leading grocery will make Tesco improve its market share and lead for the primary growth of the Tesco company(Datamonitor 2010).
Since the customers are differ in their need and availability for shopping, Tesco company had offer more than one way of shopping like Tesco Personal Finance which dealing with Visa card, home insurance, motor insurance, pet insurance and travel insurance. Other services called Tesco Telecoms which include Tesco mobile and Tesco talk and also the use of online services called tesco.com.(tesco plc 2010).By introducing variety of retailing services will enable the customer to provide the simplicity to a complex market and provide the services on real time basis, on the other hand, the Tesco will drive margin and provides incremental sells.
Investment in IT to operate efficiency
Tesco has invested Information technology system to provide great performance to the customer services and cost efficiency by implementing self-service checkout which lead to less waiting lines for the customer as well as the using of loyalty card in their phones. Furthermore, tesco implements an in-house designed supply chain application. more efficient ordering system and designed in-store monitoring system which enable to monitor the availability of product in store and reduce warehouse stock. Also Tesco invested a "Tesco digital" a kind of software placed in help desk to respond customer queries and problem which crop up, so as to improve customer service and customer experience, and enable Tesco to retain customer as a key competitive advantage.
Leading retailer win back the lost market share to discounters except Tesco
During the downturn in UK, Tesco company left in disadvantageous position and was unable to gain the lost market share after the four leading market in UK which is Asda, Sainsbury and Morrison boosted their shares. The biggest gain came from Morrison, taking its main users to 14.5% from 12.6% where as Tesco lost its share 0.2% to 30.9%
High cost of growth in central European markets compare to competitors
Tesco operates a high capital intensive model in Central Europe compare to the other competitors which lead to lower capital turnover that pressurize the Return on Investment Capital (Datamonitor 2010).
Strong growth in South Korea, Chinese and Indian markets
Due to the company analysis information via (Datamonitor 2010)has reported that, Asia is estimated to lead the world in terms of growth rates, the estimated retail sales seems to increases especially in China, South Korea and India where by those said country Tesco has several invests, and they may made presents strong opportunity for Tesco. Example in china the retail sales rose to 17.9% in January and February 2010,the growth in India since owing large population is a factor that makes the retail sales will grow from $353.0 billion in 2010 to $543.2 billion by 2014.
Increasing market share through online channel
Tesco online customers has graduals increases and made the Tesco to gain popularity .Over one millions of customers uses online shopping due to the busy live and sometimes the difficult of transport(Tesco plc 2010).
The online channel made the Tesco to be the profitable online retailer in the world, and expected to increase the growth of $48.8 billion by 2013(Data monitor 2010).
The company uses Tesco direct and Tesco .com, and they are about to established two news addresses for clothing and entertainment.(Data monitor 2010 ).
Strong private label portfolio enables the company to effectively differentiate.
According to Datamonitor (2010:12) has stated that, Tesco continue to innovate to private label segment with over 2,6000 new or improved food lines, which are goods, better and best ranges, and sell to price sensitive to customer base. However customer likes to switch over to the premium range. Through the innovation of private label brands enable Tesco to curve a niche in the market and effectively differentiate and hence, will make Tesco to improve the revenue and create competitive advantage.
Focus on fresh produce and convenience store format.
Tesco has invested stores ranges from small local Tesco Express sites to large Tesco Extras and superstores, for the purpose of satisfies customer needs.
According to thetimes100 (n.d) has tried to show the ranges of store according to the convenience of customers or how the customers are benefited.
The following are the store format operated in Tesco retail company (Tesco plc 2010).
Express: for convenience and value, fresh food located mostly near homes and offices
Metro: Convenience in town city centres lots of food lines, designed and targeted towars busy customer
Super store: convenience for a wide non- food lines, such as DVD's and book
Extra: A wide range of food and non food lines that varies from electrical to home wares. health and beauty, including seasonal items such as garden furniture
Since the customer behaviour changes times to times, trend of eating at home from the scratch, health and nutrition, as well as fresh fruits and vegetables, all are available at Tesco company with the best quality. Tesco company won the 'Fresh producer retailer of the year' Award in 2009.(Datamonitor 2010).The store formats effectively address the increasing popularity of convenience store.
Tesco company still faces the hard times of economic downturn, especially with the company competitors like Morrison, Asda, Sainsbury and even Waitrose by loosing the customer base. Tesco work hard to maintain customers base by discount range and sharper promotions to defend itself against formidable competition, on the other hand, the company tends to loose market share(Data monitor 2010)
Additionally, bbcnews (2009) reported that,Tesco's share of the UK market dropped to 30.6% in the 12 weeks to 19 April, from 31.1% during the same period in 2008, due to the recession where as other "big four" supermarkets, Sainsbury's, Asda, and Morrisons all gained market share. Sainsbury's grew from 16.1% to 16.3% of the market and Morrison increased to 11.5%, from 11.4%.
Low growth market reduces sells in non- food products.
The Uk retail market is expected to low growth rates in the short term. In 2009 the market reduced by 0.4% and in marginal growth of 1.3%.The low growth market will shrink the Tesco's sells and revenue as well as competition in which several players compete in a small market growth.
The Tesco - SWOT Analysis company is the essential source for top-level company data and information that enable them to make proper decision, and to overcome the weaknesses and threats and increases the opportunity in order to provide company performance in the rivalry .
In tesco, Analysis examines the company's key business structure and operations, and products. In operation, it seems that the economic recession is the major factor for tesco to drop in market share but in slightly, not only Tesco company, but also its competitors, but due to its discount's strategy, it might the reasons why the company loosed small market share, as shown in the threats as reported in bbc above.
For Tesco and other major competitors ,Asda, Morrisons, and Sainsbary , Tesco's expansion outside the UK increasingly focuses on smaller grocery retailing formats and through internet retailing, makes the tesco's major opportunities, that makes higher position compare to other company.
Mullins(2007) explained Organisation structure is the pattern and relationship among position in the organization and among members of the organization .It define tasks and responsibilities, work roles and relationships and channel of communication
Organization structure is the way a business is organized into different functions or operational units, with lines of managerial responsibility.(The times100 2010)
Both two's definition above, stated the Organization structure organized pattern where peoples do their roles according to their skills and responsibilities , communicate each other to facilitate working relation ship between various section of the organization, for the purpose of achieving organization goal, hence, the wrong organization structure will delay the success of the organization
The organization structure depends on the organization's objectives and the chosen strategies required to achieve them
Since tesco purpose is to save its customer, therefore., Its organisational structure has the customer at the top level of this structure as shown in the fig.2 below (The times100 2010).
Work level 1
Work level 2
Work level 3
Work level 4
Work level 5
Work level 6
Figure 2: Organisation Structure of Tesco Company
The organization structure of tesco company is comprised by division of work and grouping of peoples in which there are six work levels within the organization, gives a clear structure for managing and controlling the organization .
The following are the brief descriptions of each work level in Tesco company (The times 100 2010).
Description of Work level
Work level 1
frontline jobs working directly with customers. Various in-store tasks, such as filling shelves with stock. Requires the ability to work accurately and with enthusiasm and to interact well with others
Work level 2
leading a team of employees who deal directly with customers. Requires the ability to manage resources, to set targets, to manage and motivate others
Work level 3
running an operating unit. Requires management skills, including planning, target setting and reporting
Work level 4
- supporting operating units and recommending strategic change. Requires good knowledge of the business, the skills to analyse information and to make decisions, and the ability to lead others
Work level 5
responsible for the performance of Tesco as a whole. Requires the ability to lead and direct others, and to make major decisions
Work level 6
creating the purpose, values and goals for Tesco plc. Responsibility for Tesco's performance. Requires a good overview of retailing, and the ability to build a vision for the future and lead the whole organization
Therefore, these are the basic activities of Tesco company which complete the productive process and hence produce the required end result.
Decentralization of Tesco Company
Due to its geographical separation of different parts that tesco group operates, Tesco uses Decentralization organization as sksowe (2009) has stated in its online articles when try to explain the difference in decision making between centralized structure and decentralized structure, "An example of a decentralized structure is Tesco the supermarket chain. Each store of Tesco has a store manager who can make certain decisions concerning their store. The store manager is responsible to a regional manager".
Therefore, the decision making power for Tesco company will spread responsibility for specific decision due to its division of work and grouping activities as well as geographical separation of companies business in Asia, India, USA and Europe. Where as In a centralized organization structure, the decision making power is concentrated in the top layer of the management and tight control is exercised over departments and divisions.
For the company likes Tesco which operates under Private limited Company , Decentralization is easier to implement because there is a great demand for the accountability of their operations, regularity of procedures and uniformity of treatment, compare with the public sector organization (Mullins 2007)
A decentralised organisational structure has the following advantages: senior managers can concentrate on the most crucial decisions, decision making empowers and hence motivates the staff and increases their output, it gives people a better understanding of their work environment, including the colleagues and the customers and increases their knowledge and experience, responses to challenges and changes are much faster in a decentralised organisational structure and empowerment brings more responsibilities and brighter changes of accepting them and carrying them out more successfully.
Span of control
Span of control is a term used to describes the number of subordinates who report directly to a given manager or supervisor (Mullins 2007).
The span of control become difficult to supervise effectively, if superior is in charge of many employees who lead stress on the manager and resulting in slowness to adapt to change. On the other hand, If the span of control is too narrow, may present a problem in coordination and consistency in decision making (Mullins 2007).Additionally, for the manager to supervise subordinates effectively, the number of subordinates in organization structure, at most should not exceed 6, according to Mullins, V. A. Graicunas has developed a formula for the span of control which help to determine the number of interrelationship for the manager or supervisor to be attention with. The formula is:
R = n (2n/2 + n - 1)
Where R is the number of interrelationships and
n is the number of subordinates
Since tesco organization structure presented in Pyramid shape as shown in figure:2 above, usually, In Most of the Organization the pyramid shape represents the combination of span of control and chain of command but it is difficult to identify the exactly number of span of control as in hierarchical structure format (Mullins 2007), with this scenario the Tesco company it has the span of control since the company published the organization structure in Pyramid shape, therefore, it is difficult to identify the exactly numbers of span of control but the company has got six (6) levels. The levels represent the chain of command
According to Mullins (2007 ; 578) has defined the chain of command, refers to the number of different levels in the structure of the organization, the chain or lines, of hierarchical command, sometimes known as scalar chain. additionally, the chain of command establishes the vertical graduation of authority and responsibility.
There fore, for this aspect, the Tesco organization structure have six (6) chain of command or line of authority, as it shown in figure 2, that contains six lines of work level. The line of authority is necessary for the effectives of the operation and provide proper decision making of Tesco company.
In every aspect of organization structure, the organization structure can be Tall or Flat structure. The distinction of these two's structure is the representation of layers of command. For tall organization structure, if the organization structure have several layers of command or line of authority, The number of layers decreases the span of control and each superior is responsible for few subordinates where as Flat organization structure means the structure have few layer of chain of command and each superior has responsible for a large number of subordinates (the times100 2010).
Tesco company operates in Flat /tallorganization structure
The store manager has span of control over all the deputies who have span of control of their section. When some thing needs to be done the store manager would ask his deputies who would divide the work between other workers following the chain of command. Tesco controls its own massive empire. This could leave some weaknesses due to the huge span of control and can suffer from bureaucracy
According to Thompson ( 2002) has defined the Organisation strategies are the means to ends, and those ends concern the purpose and objectives of the organisation. They are the things that business do, the paths they follow, and the decisions they take, in order to reach certain point of success.
It is difficult to run the organization without strategy, the organization strategies will help the clients to focus on business strategies for those dealing with business arena (company)or organization strategies. The correct implementation of business strategy is essential step of achieving high performance of organization or company regarding as the design of organization structure is relies with business goals or organization goals.
Additionally, According to the Accenture(2010) stated that, the impact of a merger or acquisition is powerful and long-lasting. Designing an appropriate post-merger organization will help organizations to reach the longer-term effects of a merger and realize the predictable output. In order for the organization to attain its objectives as well as organization goal, it is necessary to develop strategies that lead the organization.
On the other hand, the company may have good strategies and designing appropriate post - merger, but the company fail to achieve them due to the bad execution , decisiveness, follow-through, delivering on commitments. Fortune Magazine dated 21 June 1999 reported that 70.% of 10 CEOs fails to achieve the desired result because of bad execution (Charan & Colvin1999).
For the company operates in the company rivalry and to successful it has to choose to the strategies which is distinctive to the other competitors.
According Markides, (2004) explained that, "A company has to decide on three main issues: who will be its targeted customers and who it will not target; what products or services it will offer its chosen customers and what it will not offer them; and how it will go about achieving all this -what activities it will perform and what activities it will not perform "
Tesco company strategy
Tesco company has well established and comes up with the the Growth strategy (Tesco plc 2010). The Growth strategy has strengthen the business starting in central Europe, and starts to expand its market share to Asia and recently in USA for the purpose of delivering and maintain long term growth.
The strategy for broaden the scope of business was started 1997.Through its Growth strategy ,Tesco comes up with the following objectives (Tesco pls 2010).
To be successful International retailer
To grow the core UK business
To be strong in non food as in food
To develop retailing services such as Tesco personnel finance, Telecoms and tesco.com
To put community at the heart of what we do
Source: Tesco corporate website (Tesco plc 2010).
The strategic business unit organizational structure provides Tesco with flexibility to expand its operations in many different directions - it can expand its electronics line in the Non-Food SBU without disturbing the policies, practices or resources devoted to the International or Core UK strategy which allows it a large degree of flexibility and customization capability within the organization. It also allows the company to be successful internationally, as it can choose its market entry strategy to account for the needs of the new market, rather than simply mimicking the existing competitors or using the home country marketing, branding and business operation techniques (Tesco plc 2010)
Organization culture is also among the one's which affect the implementation of organization goals and objectives in addition with organization Structure and Organization strategy, Organization culture help to account for variation among organization and managers both nationally and internationally, It helps to explain why different groups of people perceive things in their own way and perform things differently from other groups. Every organization have its own unique culture therefore Tesco company have observed to have the following different cultures. (Mullins 2007).
Furthermore, Mullins (2007) defined Organization culture as the collections of traditions, norms, values, policies, believes and altitudes that constitute perverseness context for every thing the organization do and think.
Also, The article on Value Based Management (2010) cited Sheins (1996 )who defined the meaning of Organization culture "as a basic tacit assumption about how the world is and ought to be that group of people share and that determines their perceptions, thought, feeling and their avert behavior"
There are numbers of ways in which to classify different type of organization culture. Mullins (2007)mentioned four types of culture as shown below
Types of Culture
This type of culture depend on central power source with the rays of influence, Power and influence spread out from a central figure or group within organization. Within a power culture, control is the key element which start from the center into key individuals
However, this culture has its problems, lack of consultation can lead to staff feeling undervalued and de-motivated, which can also lead to high staff turnover(learn Managment2 n.d). Power Cultures have few rules and little bureaucracy. Power culture usually found on small intrapreneurial organization and relies on trust.
According to (Learn management 2 n.d) stated that the type of culture is common to most organization, due to the hirachichal beaurecracy , organization is splits into various function and assigned to the individual as a role.
The role culture has the benefit organization specialization, in which each employees works and do the individual roles according with the job description. and hence, provide the productivity of the company. Role culture ussualy organized in large company.
This based to complete particular task, like in the organization , they provide a project to complete particular task on date. A task culture offer some benefits for the staff to feel motivated because they are empowered to make decisions within their team, and also feel valued because they may have been selected within that team and given the responsibility to bring the task to a successful end.(learn management 2 n.d).
Is where the individual is the central focus and any structure exists to serve the individual within it. In this Person Culture, survival can become difficult in the organizations, since the group of people knows that it is in their own interest to band together to do their own thing and share office space or clerical assistance. Example a group of architects, doctors or consultant.
On the other hand, in the organization culture there are three levels of culture (Mullins cited Schein (1996)). as shown in the figure2 below.
Three level of culture (Schain)
Visual organizational structures and process
Strategies, goals and philosophy
Unconscious taken from granted believes, perception, thoughts and feelings.
Basic underlying assumption
Figure 2: Three levels of cultures (Schain)
Source: Value Based Management (2010).
The description of each level in the figure 2 above can be describes as:
Level 1: Is the most visible level of the culture called artifact and creation the constructed physical and social environment, such as Dress, tools, appliance, Written and spoken language and the overt behavior of group members.
Level 2: This level called espouse values, the culture reflects from learning from someone's original values, solution of how to deal with original task, solution from problem then can transform on belief. value and belief can justify action and behaviors toward strategies and goals of the organization.
Level 3: The last level categorized in Basic underlying assumption, these are implicit assumption which guide behavior and determine how group member perceive, think and feel about things
Tesco company Culture
In the context of globalization, and Tesco is a globally and a huge company it is very important for Tesco to develop cultures in two aspects of culture, the organizational culture and the culture outside the organization since a company operates its business globally , also it has adapt the local culture of outside country.
Generally, Tesco cultures apply to the way they deals with customers and also to the employees of how the company treat their employees, the company has the following cultures (Tesco n.d).
Tesco company offers training opportunity for their people so as to suit with the skills and ambitions, and if the graduate choose to apply in the Tesco company, there is a guarantee that there'll always be someone there to support the new employee every step of the way.
Tesco company's rule is " like to treat everyone the way they would like to be treated" .This means that the aim is to give support to each other through sharing knowledge, working as one team, enjoying work and celebrating success.
Tesco Company provides a working environment to their employees by giving them the chance to make the most of employees potential. And giving them the chance to build a rewarding career.
Also Tesco provide the culture to deliver customers and employees promises in three easy steps, making everything Better, Simpler and Cheaper:
Better - for the customers by helping them with their shopping experience which in turn means they want to keep coming back to us.
Simpler - for the staff to make the work more efficiently and with less stress
Cheaper - by keeping Tesco's customers loyal and their staff happy.
However, In order Tesco company to provide good performance and to maintain the business growth internationally, the company have to adapt different culture of different country in which Tesco has invested. Mullins(2007) argued that, "with greater International competition, an understanding of national culture has become increasing importance for managers with". By this scenario Tesco also managed to accept other countries culture to provide business Growth as one among its International strategy.
Example, the tesco operated in Thailand, the company developed a culture where customers used to shopping at traditional wet markets, interacting with vendors and rummaging through piles of produce to choose what they want. Rather than adopting the Western approach of neatly packaged, convenient portions. The Rama IV store in Bangkok tries to meet local customers' expectations.(Tesco Plc 2010).
Identify Tesco Culture with Edgar Schein three levels model of culture
From the figure 2 above which mentioned three levels of organization structure, Tesco company also has identified that, there are culture which are also have classified according to levels. These are:
Artifacts include tools, appliances and clothes
Tesco introduced the self-checkout system in 2002, in order to save staff costs and brings convenience to customers.
Tesco pride themselves on their staff uniforms with employees' names on.
Tesco has a strong concept of category.
Every store, they used to wear orange color
They used Slogans for customer advertising and to motivate employees with the words"Every little help".
Example of the Scenario of espouse value in the level 2, in the case study, Tesco used to apply in selection process in which company cope from the other large organization procedures of the selection processes.
Example, The selection process in Tesco company
During the process of acceptance for the new employees Tesco conduct Psychometric test and interview, in which Tesco company has follow this pattern by many large organization. More importantly for Tesco, is to test the interviewee if fit for Tesco culture , there fore, The interviewee is not undergoing a quantitative test, but they are certainly being assessed for cultural fit.
These are the Basic assumption which describes deeper dimension of human existence, such as activity reality and truth. In this case study, the basic assumption is external culture.
Internal culture is not the only issue that Tesco should deal with, but also the external culture. External culture is playing more important role in companies' oversea expansion. International supermarket should adapt the different local culture in the world. So they can save the work of training staffs to adapt the local culture, and the aim of using local manpower
Tesco company emphasis that to know the Tesco culture in advance before applying for the job in Tesco company is important thing that will make successes in the application. as the Tesco recruitment page says "We aim to make the selection process thorough and challenging for a number of reasons. Firstly, to make sure we employ only those people who are right for the role and, just as important, who will fit in with Tesco culture."(Tesco n.d) . there fore through advertising,
Change Management is the study of why organization need to change, how change affects, and how to respond to changes in the environment.
Change management is an organized approach to dealing with transformation, both from the viewpoint of an organization and on the individual level.
In any organization, changes can be happen so as to improve performance of organization, change can be studied in term of its effect at the individual, group, organization, society , national or international level,
In this paper,
Forces of changes
According to Mullins, (2007) organization can perform effectively through the interaction of external environment in which the structure and functioning of organization can perform. There are factors that interrupt the organization environment and hence lead to reduce the performance of organization. There fore , The organization must be responsible to change so as to ensure the survival and success of the organization.
Mullins, (2007) has mentioned the factors which forces the changes from disturbing external environment of the organization, these are:
Globalization and fierce word competition
The level of government intervention
Rapid development of new technology and information age
Uncertain economic condition.
Further more Mullins added that there other forces of change other then of those caused by external environment as mentioned above, Also there are other factors which caused by external demand of the organization it self, so for the successful and organization rivalry, the organization has to adapt with those external demands, these are:
Increase demand for quality and high levels of customer service and satisfaction.
The changing nature and composition of workforce
Greater flexibility of the structure of the work organizations and patterns of management
Conflict from within the organization.
Also changes within organization can happen within the organization itself due to the ageing of material resource such as buildings, human resource get older, or skills and abilities become outdated
Effective Management of change
Within the organization change can be initiated by managers and it can evolve slowly in the department(Mullins 2007), which require thoughtful planning and sensitive implementation, together with consultation with, and involvement of, the people affected by the changes, without proper consultation the problem may arise. Additionally, for the manager who is responsible for change, has to make sure that Change must be realistic, achievable and measurable for the purpose of achieving desired goals. (Chapman 2010).
I n order to secure effective change in the organization there are steps or action should be followed, according to Mullins 2007 cited on Kotter and Cohen, There are eight's steps for successful large scale change.
Create sense of urgency
This means that, what ever the nature or size of the organization, you have to talk or convince among the relevant people, make the people understand the need to change, talk to them the risk and opportunity that may occur before and after change respectively. and also get the advise from the peoples regarding change.
Build a guiding team
After accepting the idea of change, the process starts, you build a team with credibility, connection, reputations and different skills and experience, that help to provide change leadership.
By having the organization goals , you develop visions which are sensible and having a picture for the organization, clear and sets the strategies, along with visions.
After you create a vision, make the people understand about the vision by explain to them, publicity the created vision and strategy in the organization, in order to induce understanding and commitment.
Make sure the important people support the change so as to make change persist by bring the change manager in the organization. And remove obstacles that stop people acting on the vision.
Produce short term wins
Set aims that are easy to achieve - in bite-size chunks. Manageable numbers of initiatives. Finish current stages before starting new ones
Don't let up
Foster and encourage determination and persistence - ongoing change - encourage ongoing progress reporting, highlight achieved and future milestones
Make change stick
Reinforce the value of successful change via recruitment, promotion, new change leaders. Nurturing a new culture and developing group norms of behaviour and shared values.
The Kotter's ideas is helpful in understanding the pressures of change on people, and people's reactions to change Each stage acknowledges a key principle identified by Kotter relating to people's response and approach to change, in which people see, feel and then change(Chapmen 2010)
What caused the change in Tesco
ere are some rules for effective management of change. Managing organizational change will be more successful if you apply these simple principles. Achieving personal change will be more successful too if you use the same approach where relevant. Change management entails thoughtful planning and sensitive implementation, and above all, consultation with, and involvement of, the people affected by the changes. If you force change on people normally problems arise. Change must be realistic, achievable and measurable. These aspects are especially relevant to managing personal change. Before starting organizational change, ask yourself: What do we want to achieve with this change, why, and how will we know that the change has been achieved? Who is affected by this change, and how will they react to it? How much of this change can we achieve ourselves, and what parts of the change do we need help with? These aspects also relate strongly to the management of personal as well as organizational change.
See also the modern principles which underpin successful change.
Refer also to Psychological Contract theory, which helps explain the complex relationship between an organization and its employees.
Do not 'sell' change to people as a way of accelerating 'agreement' and implementation. 'Selling' change to people is not a sustainable strategy for success, unless your aim is to be bitten on the bum at some time in the future when you least expect it. When people listen to a management high-up 'selling' them a change, decent diligent folk will generally smile and appear to accede, but quietly to themselves, they're thinking, "No bloody chance mate, if you think I'm standing for that load of old bollocks you've another think comingâ€¦" (And that's just the amenable types - the other more recalcitrant types will be well on the way to making their own particular transition from gamekeepers to poachers.)
Instead, change needs to be understood and managed in a way that people can cope effectively with it. Change can be unsettling, so the manager logically needs to be a settling influence.
Check that people affected by the change agree with, or at least understand, the need for change, and have a chance to decide how the change will be managed, and to be involved in the planning and implementation of the change. Use face-to-face communications to handle sensitive aspects of organisational change management (see Mehrabian's research on conveying meaning and understanding). Encourage your managers to communicate face-to-face with their people too if they are helping you manage an organizational change. Email and written notices are extremely weak at conveying and developing understanding.
If you think that you need to make a change quickly, probe the reasons - is the urgency real? Will the effects of agreeing a more sensible time-frame really be more disastrous than presiding over a disastrous change? Quick change prevents proper consultation and involvement, which leads to difficulties that take time to resolve.
For complex changes, refer to the process of project management, and ensure that you augment this with consultative communications to agree and gain support for the reasons for the change. Involving and informing people also creates opportunities for others to participate in planning and implementing the changes, which lightens your burden, spreads the organizational load, and creates a sense of ownership and familiarity among the people affected.
See also the excellent free decision-making template, designed by Sharon Drew Morgen, with facilitative questions for personal and organizational innovation and change.
To understand more about people's personalities, and how different people react differently to change, see the personality styles section.
For organizational change that entails new actions, objectives and processes for a group or team of people, use workshops to achieve understanding, involvement, plans, measurable aims, actions and commitment. Encourage your management team to use workshops with their people too if they are helping you to manage the change.
You should even apply these principles to very tough change like making people redundant, closures and integrating merged or acquired organizations. Bad news needs even more careful management than routine change. Hiding behind memos and middle managers will make matters worse. Consulting with people, and helping them to understand does not weaken your position - it strengthens it. Leaders who fail to consult and involve their people in managing bad news are perceived as weak and lacking in integrity. Treat people with humanity and respect and they will reciprocate.
Be mindful that the chief insecurity of most staff is change itself. See the process of personal change theory to see how people react to change. Senior managers and directors responsible for managing organizational change do not, as a rule, fear change - they generally thrive on it. So remember that your people do not relish change, they find it deeply disturbing and threatening. Your people's fear of change is as great as your own fear of failure. alan chapman 2005-2010