Retail India: Analysis and Evaluation of Nature of Change and Leadership Employed at Asda
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Name Vijay Kodandaraman Bysani Student I.D.Number 02913971 Course Master of Business Administration Unit Title Leading Strategic Change Unit Code SM 446 Unit Tutor Walter Fraser Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani
- 2 - Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani Table of Contents Particulars Page 1 List of Figures 3 2 List of Appendices 4 3 Executive Summary 5 4 Introduction 7 5 Introducing Change 8 6 Brief Introduction of Asda 10 7 Crisis Situation 11 8 Strategic Directions of Archie Norman 12 9.1 Theories and Frameworks in Relation to Asda 13 9.2 Theory E And Theory Y 13 9.3 Top-Down Transformation or Bottom-Up Change 14 9.4 The Change Cube 14 10.1 Change Elements 16 10.2 Cultural Change 16 10.3 Store and Policy Change 16 10.4 Mission Change 17 10.5 Company Values Defined 17 11 Classification of Change 18 12 Cultural Web 19 13 Leadership 23 14 Conclusion 25 15 Limitations of Report 27 16 References 41 17 Bibliography 46 18 Declaration 51
- 3 - 1 1. List of Figures Particulars Page
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Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani
- 4 - Appendix 1 28 Appendix 2 29 Appendix 3 30 Appendix 4 31 Appendix 5 32 Appendix 6 33 Appendix 7 34 Appendix 8 35 Appendix 9 36 Appendix 10 37 Appendix 11 38 Appendix 12 39 Appendix 13 40 Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani 2. List of Appendices Particulars Page
- 5 - 3. EXECUTIVE SUMMARY
A successful strategy is one where it is designed to work with the current and future environment. Strategic Change is not a crisis solution. Organizations can not rely on a successful strategy for long. Organizations need to revitalize its competitive advantage continuously as new market players enter and current competitors imitate the offerings. However change is not always successful and the reasons may be abundant. RESEARCH AIMS AND OBJECTIVES
The author attempts to apply theory to practise by applying relevant theories and frameworks in analyzing the short-listed organization and its change in strategy. This report has three main aims. First, it attempts to identify and discuss the nature of change. Second, it aims at evaluating the way in which the change was managed. And finally, it explores the nature of leadership in the change. STRUCTURE OF THE REPORT
This report consists of parts, each of which is further divided into sub-sections covering relevant areas to the topic under discussion. The first part introduces the reader to the report and also outlines the structure and topics of discussion. Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani
- 6 - Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani The second part introduces theoretical background on change and change management. The third part gives the reader background of the short-listed organization and leads into the causes of change in strategy. The forth part introduces the new changes in strategy and attempts to compare them with relevant theories and frameworks. It furthermore attempts to provide insight into the organization’s new changes and evaluate its effectiveness using frameworks like the cultural web. The fifth part dwells in the area of leadership employed by the CEO and how effective was the CEO’s skills in the success or failure of the change initiatives. The sixth part presents the highlights of this report and expresses the researcher’s limitation to this report, along with the significance of the change initiatives and the author’s own views.
- 7 - 4. INTRODUCTION
This report is an attempt to investigate one company, Asda, to gain an insight into how change management is implemented and how it’s dealt with. It’s a contribution to the understanding of change management and leadership in general, and to the understanding of practical application in an international company in particular. This report is divided into three main parts: The first part is concerned with literature review. The literature review explains change management and leadership in context to the organisation in addition to discussing the theories relevant to each of the areas. The second part consists of sub parts. The organization of discussion is introduced and background information leading to the change initiatives is discussed. It ends with the research findings and comments on the change initiatives and leadership displayed. The final part summarises the outcome and limitations and explores future directions. Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani
- 8 - 5. INTRODUCING CHANGE
Mintzberg (1998) quote ‘no intended strategy can ever be so precisely defined that it covers every eventuality, realised strategies have emergent as well as deliberate characteristics’. History has witnessed no organization being able to sustain its competitive edge for long (Peters, 1989). Daft (1983) discusses four types of change which affect organisations, i.e. technology, product or service, administrative changes and people attitudes (culture). The author feels any of these changes would affect the other and lead to a total change encompassing the organisation. Although change is present everywhere and in every form, resistance to change is not surprising (Kotter and Schlesinger, 1979). The author finds organizational change like a cube but with innumerable sides to it. Organizational change can be described as strategic or non-strategic change (Pettigre, 1987), incremental or quantum change (Greenwood and Hinings, 1993), planned or emergent change (Wilson, 1992), and change in relation to scale (Buchanna and Boddy, 1992). Change typically touches upon process, design, culture, and politics (Cao, Clarke and Lehaney, 1999). The key issues are participation, involvement and commitment (Thompson, 2001). Management of change exhibits four key features, dissatisfaction with the present strategies, vision of the better alternative, a strategy for implementing change and resistance to the proposals at some stage (Margerison and Smith, 1989). Changes result from the impact of a Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani
- 9 - Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani set of driving forces upon restraining forces. The extent to which change takes places is a result of which force is stronger, the driving forces or the restraining forces (Lewin, 1951).
- 10 - 6. BRIEF INTRODUCTION OF ASDA
Asda had its modest beginnings in 1920 by a group of diary farmers in Yorkshire County for a means to sell milk (Weber and Beer, 1998a). Asda expanded by acquiring and diversifying into bakeries, meat processing plans, and non-food businesses before finally going public in 1949. Asda Stores Ltd. business philosophy was to be the lowest price with the customer in mind always (Appendix 1). With this Asda pursued setting stores in out-of-town corners and targeted value-conscious customers. In 1981, Asda initiated to increase profits by reducing costs and offering higher-priced valueadded products. With this change, Asda lost the price-leadership position and eventually started to loose its customers. The managing director was replaced following a series of change initiatives. Along with store refurbishment programs and customer service improvements, the company diversified and acquired businesses like Gateway Stores, Allied Retailers, MFI and Maples a chain of furniture and carpet retailers (Weber and Beer, 1998a). Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani
- 11 - 7. CRISIS SITUATION
In 1991, the £4.5 billion chain had a debt over £1 billion and Asda’s stock price had crashed from over 100 pence to below 30 and the organization had become highly bureaucratic and hierarchical (Appendix 2). Archie Norman was offered the position as the chief executive (Weber and Beer, 1998a). Asda had engulfed into a wide speculation of takeovers and rumours of survival. One article stated, “In a decade of unparalleled prosperity for supermarkets, Asda has managed to make a series of blunders which have weakened it to the point where its survival must be in doubt” (The Daily Telegraph, 1991). Another subtitled The Rise and Fall of the Asda Group, stated, “Critics blame one thing for Asda’s current difficulties – bad management for more than 10 years” (The Financial Times, 1991). Analysis and Evaluation of Nature of Change and Leadership Employed at Asda Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani
- 12 - 8. STRATEGIC DICECTIONS OF ARCHIE NORMAN
Organizational change has been defined as the ‘process of adjusting the organisation to changes in the environment’ (Michael, 1982). Three dimensions used are depth of the change, the pervasiveness of change and the complexity of the change (Ledford et al, 1989). The changes implemented at Asda, in relative terms to dimensions of change, were deep, wide and complex. Norman’s change initiatives involved change in the management starting with recruitment of key personal and firing of personal related to previous failures including the chief financial officer (Appendix 3). One of the important highlights of Archie Norman’s strategy was to get to the bottom of the issue. Norman didn’t attempt to buy support, but rather just got to the big picture which helped in effective regeneration (Pascale, Millemann and Gioja, 1997).
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