Critical Analysis Of Change Management In Tesco Essay.

Background of the Chosen organization

 Applying suitable analytical frameworks, and in relation to an organisation (UK) that you are familiar with, critically evaluate the way in which the organisation managed, or is currently managing, strategic change.

This assignment seeks a deep insight on the change management process implemented by Tesco for satisfying the perceived needs and demands of the consumers in a successful manner. The implementation of self-check system provided timely service to the consumers and gained much hype in the competitive market. Tesco always preferred positive employees who were flexible in nature and could cope with the changing environment of the organization in an efficient way. It is identified that the change management brought in Tesco was pre-planned by nature, which significantly contributed towards the performance of the organization in the competitive market. The organization applied models and theories from various angles and perspectives for meeting the objective oriented outcomes of the research. Employees are resistant to change upon implementation of the change management process. However, it is the responsibility to the leader to motivate the employees and impart them valuable information about the potential benefits.

The assignment seeks a deep insight on the strategic change management of the chosen organization Tesco for gaining supremacy in the competitive market. In the contemporary scenario, organizations are highly advanced systems and the employees of the organization are usually clinical to change in the working atmosphere, as they do not want to fall under an uncharted territory (Benn, Dunphy and Griffiths 2014). It is the perception of individuals to be comfortable and no one perceives to be comfortable being uncomfortable even for shorter distance of time. The researcher would implement suitable analytical frameworks for Tesco and take active participation in evaluating how the organization is managing the strategic change. The researcher would also recommend whether the organization has tasted success during implementation of the strategic change management.

Tesco refers to a multinational chain of UK retail stores with its headquarters in “United Kingdom”. The primary objective of the organization is to meet the perceived needs and changing requirements of the consumers. In the year 2008, Tesco became the fourth highest retailer of the world, replacing the previous position holder “Metro AG”. The brand excels in producing a wide range of products for the consumers such as “drinks”, “foods”, “electronics”, “financial services’, “compact discs”, “digital download”, “internet service”, “telecommunications”, “medical insurance” and “software”.

Organizations that gain supremacy in the competitive market takes active participation in changing the business environment, which is subjected to “economic globalization”, “reconstructing”, “relationship between employers and employees”, “downsizing” and “technological implosion”, thus being ready to implement significant changes in the way they operate (Brown and Osborne 2012). Organizations could experience change in various segments. For example, changes could be identified in terms of attitude and behaviour, technology and major organizational changes (Cook 2014). Despite being one of the giant corporations in the UK retail market, Tesco went through turmoil and therefore, implemented change management for enhancing the profitability of the organization in the competitive market.

Need for organizational change at Tesco

Organizational change refers to the capability to adapt to different organizational transformations affected by the internal and external environment, through learning process. In the contemporary scenario, Tesco probed for change management in terms of introduction and implementation of “self- service check out system” throughout their network. The strategic implementation of the newly adapted payment system was a clear indication of change management (Ebenstein et al. 2014). This is because the checkout system is an authentic approach and it differs from the traditional payment systems in accordance to monetary transactions. The checkout system was implemented by the organization as a time saving approach, as it did not required any cashier for financial transactions. The check out system served the needs and demands of the consumers in an effective ways, as they would require less time to spend at the store (Vakola 2013).

The primary ideology for the organization is to assist the consumers as they incur memorable shopping experience and necessitates the consumers with an easy application of shopping (Eckel and Irlacher 2015). The implementation of the strategic plan aimed to develop a strong interaction between the consumers and employees of the organization. The consumers visiting the stores could make effective utilisation of the checkout system by scanning, scan and payment of the items. The main objective of this assignment is to identify the application of change management as a strategic shift for organizational success (Hayes 2014). The checkout system aimed to enhance the checkout processes and restrict labour costs in accordance to the retail market.

In accordance to the contemporary scenario, Tesco implemented a substantial change in terms of identification and incorporation of self-service checkout system throughout the organizational boundary. The change in organizational culture takes effect, when accompany shifts its focus from the present state to the desired future state for gaining supremacy in the competitive market (Jones, Hole and Zavaleta 2012). Management of organizational change refers to the activity of planning and incorporating change in organizations in a way to reduce employee persistence and cost, while enhancing on the acquisition of the proposed changed effort. Therefore, the strategic change management of the organization rotates around the incorporation of the check out system.

The contemporary business scenario urges the organizations to implement effective change management in accordance to the changing needs and desire of the consumers in the competitive market (Michael, Neubert, and Michael 2012). Economic globalization and advancement of technological innovation influences the business activities to respond for survival. Business acquisitions are often fluctuated or affected due to “higher rates of change from various sources, internal pressure coming from the managers and employees”, and the “external pressure coming from legal, economic and technological factors”. In accordance to Tesco, both the internal and external environment of the organization was responsible for the implementation of change management (Millar, Hind and Magala 2012).

Management for organizational Change

The initiatives taken up for implementation of strategic change management often arise out of the problems faced by the organization. A visible change in the overall development procedure is experienced, when an organization faces difficulty. However, successful intervention of strategic change management is more about opportunities and possibilities in contrast to the difficulties faced by the organization in the competitive market. Identification of performance gap often provides a huge platform for change management, as  the employees always aims to enhance performance aligning with the objectives oriented  outcomes (Springer et al. 2012). There are usually four areas of organizational change: strategy, technology, structure and people. Tesco faced several issues while implementing change management because most of the employees were unaware of the actual process, thus giving birth to complexity in the organizational culture.

 Tesco, always preferred positive employees who were flexible in nature and could cope with the changing environment of the organization in a successful manner (Stringer 2013). The management of Tesco introduced a set of objectives for implementing change management such as “enhancement of sales”, “consumer satisfaction” and “cost effectiveness”. “Strategy, technology”, “structure” and “target audience” would often allow the organization to gain supremacy in the competitive market. Business strategies often tend to alter owing to the demand of the target market. The main reason that underpins the implementation of change management for Tesco is the urgency to cater the competitive market through identification of a unique checkout system (Sutherland et al. 2012)

Change is a common thread that is inherent in all business activities regardless of their industrial size and distribution. The world is changing at an alarming rate and the organizational aims and objectives should change according to the changing needs and interest of the targeted consumers. Organizations that successfully handle changes thrive well in the competitive market, while others fail to impress.

One of the most adaptable methods for change management underlines the identification of the “Lewin’s Change management model” developed by “Kurt Lewin” in the year 1950. The basic traits of this model are unfreezing, change and refreeze leading to organizational success in the competitive market. Identification of the change management process with changes at distinctive stages allows the management to anticipate what is coming in the way and take an effective step for handling the situation in an orderly manner (Vaccaro et al. 2012). For a successful change management to take place, it is very much necessary to identify why the organization is probing for relative changes. As for Tesco, the implementation of the self-check systems was cost effective in nature as it reduced labour costs and satisfied the consumers through timely assistance of service (Wiek et al. 2012).

Figure: Lewin’s Change Management Model

(Source: Sutherland et al. 2012)

The first stage of change involves arranging the organization to accept the fact that changes are necessary, which alters the existing status of the organization before implementing the change management process. Tesco aimed to alter the operation of cash handling systems for introducing the concept of “automated self-check systems”. Organizations struggling with low sales figures, lesser economical outputs, and dissatisfied customers makes the scenario appropriate for an organizational change (Amis and Aassaoui 2013). The first step of the change management is one of the most complex and stressful process of the model. The model takes active participation in cutting down the “ways things are done” and puts everything and everyone off balance. Upon implementation of the change management by Tesco, the employees strongly reacted and that was very much predictable from the organizational perspective.

Upon implementation of uncertainty in the unfreeze stage, the change stage allows individuals to resolution the hesitation and identify new ways of adopting changes. Upon implementation of the change management process, the employees finally got accustomed with the self-check systems of Tesco and started assisting the changes. The transformation from unfreeze to change does not work out in a miracle manner. Individuals take time to get accustomed to the new scenario and act in a proactive manner. In order to identify the change process properly, individuals need to identify how the changes turn out to be fruitful for the employees (Anon 2014). In accordance to the change management implemented by Tesco, not all employees supported the acquisition of self-check systems. However, such pitfalls should be avoided for gaining supremacy in the competitive market.

When the changes have brought productivity for the organization, and the employees have started working with a collaborative approach, the organization was ready to refreeze again. The refreeze stage also requires helping the individuals and the organization to internalize or institutionalise the changes (Beekmans and Goessling 2015). The overall scenario suggests that changes are necessary and it may happen again in accordance to the nature of the business activities. Upon implementation of the previous changes, the employees of the organization would welcome changes in the mere future. The employees of Tesco were satisfied with the acquisition of self-check systems and stayed positive for upcoming changes in the mere future (Bielinska-Kwapisz 2014).

It is identified that the change management brought in Tesco was pre-planned by nature, which significantly contributed towards the performance of the organization in the competitive market. The organizational change implemented in Tesco primarily focused on the satisfaction level of employees and profitability of the organization n the competitive market (Bourne and Bourne 2012). In accordance to Tesco, the “Action Research Model” contributed nine integral steps for organizational development. In the beginning, the management seeks a deep insight in identifying the issues that affected the profitability of the organization in the competitive market. Upon identification of the issues, the management conducted a survey and collected primary data from the consumers in accordance to the research issues.

Figure: Action Research Model

(Source: Millar, Hind and Magala 2012)

Organizations also made it clear that feedback is taken from the consumers even after implementation of the change management in order to make sure that the change remains implemented in the mere future (Bresnen 2016). Improvement of consumer services and making the employees adapted to change management were the key objectives of Tesco. Organizational development allows the employees of the organization to measure the issues and handle it in a proactive manner. The evidence of organizational development not only enhances the performance of the organization and its value is interpreted based on outcomes (Burnes 2014). Te model is highly unpredictable by nature and therefore, Tesco should identify its utility on objective basis.

Identification of the success driven factors and reaction of individuals is critical for successful implementation of the change management process. It is a portion of the human nature to resist change. Individuals favour the security of recognizable surroundings and often react negatively to changes in the working environment. Resistance to change often articulates typical shapes and forms (Bush 2014). One of the most practised ways is denial, which individuals often decide in order to protect themselves.

The managers of the organization often perceive that if someone were aware of the potential benefits, then they would not resist changing. The employees of Tesco perceived necessary changes, which may not be the ones included in the plan. The employees of the organization often anticipate individual changes, which often contradict with that of the organization. Upon implementation of self-checkout systems, some employees of the organization were confident about the change management process, while others felt that the implementation was manipulative in nature and resulted in the productivity of the organization only from the organizational perspective. Some employees of Tesco also felt that it is a complicated act and consume lots of energy (Cameron and Green 2012). At an earlier stage, any change management act may look a bit complex, but ultimately all the members of the organization may make it an emerging success upon successful implementation of a collaborative approach.

The strictly structured change management process of Tesco often avoids the embedded human resistance to change. This step crested fuss amongst the employees and resulted in de-motivation (Dawson 2014). They started spending much of their time for figuring out the change management act and then tried their level best in order to restrict the progress of the change management process. However, many of the employees started identifying the productivity of the self-check systems as it created havoc by meeting the perceived needs and demands of the consumers (Shaw 2015). Lesser information about the driving force behind the change management process and the potential benefits often cause distress amongst the employees of the organization in the competitive market. The managers of Tesco implemented the change management process for the welfare of the organization in terms of employees, consumers and the company itself (De Matos and Clegg 2013). However, employees had a narrow mentality and focused on serving their self-interest. Successful strategies often consider an understanding of the employee emotions in the respective workforce (Whyte, Stasis and Lindkvist 2016). In accordance to Tesco, the managers educated the employees regarding the usability of self-check systems and the extent to which it can lead towards consumer satisfaction. Ultimately, the change management process was a huge success, leading to huge profitable measures for the organizational success (Gartner 2013).

There is an essentiality of effective planning for any organization in order to gain advantage in the competitive market. The management of Tesco had to choose upon the number of self-checkout systems to start with in the respective outlets of Tesco. The leaders of the checkout systems were trained about the utilisation of the checkout system, although the system provides a screen demo regarding user manual (Ha 2014). The user manual provides all the necessary information and guidelines that assist the consumers to operate the newly introduced self-checkout systems. There was a sense of fear amongst many cashiers as inclusion of an automation system could take away their jobs at the respective Tesco Store. An automation system usually evacuates the manual handling of cash, which generates an element of insecurity amongst the cashiers (Kelly 2014).

The managers of the organization took active participation in educating the consumers regarding the usability and potentiality of the automated checkout systems and its ability to satisfy the needs of the consumers and organization as a whole. The purpose of the management was to motivate the cashiers in order to become confident and welcome the change management process. The early incorporation accounted for feasibility analysis. The consumers got favourable assistance from the trained personnel regarding the operation and usability of the self-checkout systems. The management of the organization monitored the progress of the self-checkout systems and took feedback from the consumers regarding its durability (Klaussner 2012). The positive word of mouth gave green signal to the management for introducing further systems in the Tesco Stores.

Leadership plays a vital role for success intervention of the organization in the change management process. Successful leaders motivate the employees and reduce the chances of resistance to change. There are usually five types of leadership styles implemented by organizations namely “Autocratic”, “democratic”, “Laisezz- faire”, “transactional”, “transformational” leadership. In accordance to Tesco, the organization had incorporated the transactional leadership skills, where the leaders take reactive measurements. The organization had faced certain issues with the attrition rate of employees and sales, which was mainly due to ineffective human resource management. The contemporary scenario had forced the organization to change the structure and practise employee engagement in a successful manner (Nworie, Haughton and Oprandi 2012). The overall scenario suggests that Tesco follows transactional leadership styles. The transactional leadership aims to satisfy the employees’ rewards upon achievement of their given targets.

The self-check systems aim to support the consumers to a higher extent through exquisite service excellence. This situation often builds a strong interaction between the employees and the consumers, thus allowing them to fulfil their individual targets upon quality service to the consumers. Transactional leadership is identical for change management as it mainly focuses on short-term goals in contrast to the achievement of organizational outcomes in the longer run (Quinteiro, Passos and Curral 2014).  The management avoided autocratic leadership style as it may affect the organizational culture to a higher extent. The laissez-faire leadership style considers highly involved employee participation at the very beginning, which may not align with the implementation of change management process.

“Path Goal Theory” plays an identical role in the organizational change management process, which allows the leader to impart valuable information and data to employees. The implementation of the path goal theory allows the leader to develop a strong communication with the employees of the organization (Qureshi 2012). The leaders of Tesco impart valuable information about the self- check systems and ways it facilitates the consumers and employees of the organization. At times of change management implemented by the organization, employees often gear of losing their jobs. The leaders communicate with the employees and make them understand about the potential advantages of change management.

 The management of the organization adopted suitable communication techniques such as the “employee forum” which allowed the employees to share their creative thoughts and ideas to various levels of management. The Path- Goal theory focuses on the behaviour of the leaders and the intended outcomes in an effective manner. Some leaders of the organization also adopted “supportive” and “participative” leadership styles, where leaders are motivated to enhance their performance and adapt to changes in order to reflect on the profitability of the organization (Rao and Rao 2012).

Figure: Path goal Theory

(Source: Bourne, M. and Bourne, P., 2012)

 The implementation of “achievement-oriented leadership” has a direct impact on the productivity of the employees, but it may also risk declination in their motivation level upon disapproval of their expectations. Factors of environmental contingency and personal characteristics play an integral role in influencing the outcomes of the Path-goal theory.

The implementation of self- checkout system incorporated an impactful effect on the operation and functioning of the entire organization as it refers to a major role in accordance to consumer shopping experience and reflects successfully on the profitability of the organization in the competitive market. The potential advantages and benefits of the checkout system for fulfilling the needs and demands of the consumers are as follows:

In the contemporary marketing area, consumer focus is the main target of the marketers. Consumers tend to be happy when they receive a timely and hassle free service from the organizational perspectives. The UK based giant cooperation comprise of 3000 self- checkouts in 800 stores. This is a noticeable improvement since the checkout process is being implemented. The stores with the availability of checkout systems attract many consumers due to their excellence in timely service. The inclusion of self-checkout systems have shown a positive impact on the sales figures of the organization, which was heightened by 24%. This suggests that near about a quarter of the Tesco sales could draw positive outputs by the implementation of change management though the self-checkout systems. Tesco aims to implement more self-checkout systems in numbers for addressing to the needs and demands of the consumers in an efficient way.

Cost effectiveness constitutes an integral factor to consider when executing any change management process for Tesco. The implementation of self-checkout systems seeks a deep insight in saving the labour costs, as the newly implemented system does not require the involvement of cashiers. Cost effectiveness is inversely proportional to the profitability of the organization in the competitive market. The implementation of self-checkout systems has the ability to compensate for the shortage of staff in the organization during recession period. However, if case of malfunctioning and technical issues, the supervisor of the organization may need to assist the consumers with manual handling of cash.

The implementation of self—checkout systems provides quality assistance to the consumers and wins over their hearts in terms of service excellence. One of the greatest advantages of the newly implemented system is its ability to provide time saving service to the consumers. Tesco mastered the way of implementing technological innovation in their change management process for meeting the changing needs and demands of the consumers. In accordance to the annual and financial report of Tesco, more than 1.6 million consumers showed interest in using the self-checkout systems as a measure of time saving service. The satisfaction levels of the consumers generate a positive word of mouth, thus contributing to the profit margin of the organization in a successful manner.

Conclusion

The implementation of the self-checkout systems as a change management process is well accepted by the retailers and consumers of Tesco, UK. However, there are dew difficulties perceived upon acquisition of the self-checkout systems. For example, if a consumer wants to buy a fresh pair of Oranges in a loos paper bag without a barcode, the pricing would matter in terms of weight. In this scenario, the consumers had to go through the menu list of the self-checkout systems, which often confuses a consumer lacking knowledge of information technology. Another issue perceived by the consumers refers to the warning signal given by the system, upon selection of a single product and not placing it in the bagging area. Technical issues and malfunctioning could also irritate the consumers due to delay in the delivery of the products. Minors often utilize the self-checkout systems to buy beer and alcohol, which may cause issues to Tesco in terms of licensing. However, the organization excelled in their service in terms of service quality and productivity and promises to impress in the immediate future.

In accordance to the issues faced upon implementation of the self-checkout systems, there is an essentiality that a supervisor, technician and an expert staff positions itself near the check out area for handling any difficulties faced by the consumers visiting the stores of Tesco. These members should be present near the checkout area from the opening time until the time the store is closed. The members should be bestowed with the right of handling any delays in the transaction process and check the ID of anyone alleged to be a minor. The manufacturers and technicians should seek a deep insight for further up gradation of the checkout systems for providing a user-friendly experience to the consumers.

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