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Organizational Change Management On Woolworths

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Question:

Discuss about the Organizational Change Management on Woolworths.
 
 

Answer:

Introduction

Change management is an approach which directs the transitions in the organization. A change in management affects overall productivity in the organization. These are the tools which describe significant overall restructuring of the company. Organizational change Management helps in implementing the changes. Its principles include all the tools which focus on individual restructuring (McCalman, Paton, and Siebert, 2015). Change management focuses on how an organization is affected by the majority of decisions. It deals with various aspects from behavioral and social science to information technology. The Organizational environment helps in removing irrelevant issues in good faith (Goolsby and Reeds, 2016). Changes are essential for the growth of an organization. In order to survive in a long run, it is essential to bring a change in strategies. Woolworths provides the best experience to its customers through its loyalty programs and other priorities services.

Needs

It is believed that the successful management is the key to the success of any organization. In this high competitive business environment, a good management structure helps in existence. Change management is an important tool towards making better changes (Todmen, 2007). Woolworths has faced a recent structural change. A major section of its senior employees left the organization loosing trust in its operations. Woolworths is facing a major change in its subsidiary companies. Some of its subsidiaries are struggling hard to survive in the market. The majority of the problems are occurring in the SAP structure. The company is failing to deliver its customers their requirements; a loss of faith in management has caused a significant change in employee’s structure. An overambitious goal by management compels employees to quit the organization. Continuous loses has caused downfall in morale. Woolworths recently has faced a mass departure of its senior executives. More focus is shifted over revival of sick units by cost cutting. It has recently announced a cut down in 400 executive jobs. It has lost a majority of its senior support due to implementation of reorganization plan. It is putting its entire savings in reviving the sales. Due to its current situation, Woolworths is losing customer relationship, marketing, and loyalty (Mitchell, 2016).

 

Reason for change in management:

Increasing market pressure has forced companies to change its management structure. When an organization faces excessive pressure from its competitors’, it tends to breakdown. In recent times Woolworths is facing too much market pressure from its competitors like Cole, Mark & Spenser etc.

The retail sector in Australia has employed a maximum number of people. Woolworths is facing a drastic change in its share price. The price of the share is decreasing which has caused a huge loss. In order to revive its operations, Woolworths is implementing its savings in other areas. The cost cutting measures are utilized to bring back trust in customers (Hyam and Ong, 2016).

The majority of its stores are closed due to high loss. Some of its units are closed due to lack of income. The Company is unable to manage its operations into various segments. It has caused a serious loss to the retail industry. Even Cole faced the same situation 10 years ago.

Woolworth is failing to satisfy the customer expectations. All of them are losing faith in the brand. They are switching to other brands to assure their needs. The purpose of an organization is to fulfill its customer needs. Woolworths is failing on that parameter has caused a decline in profits.

Another factor is due to attack from its rival companies. Woolworths is known for providing cheap goods to its customers. In recent years it is failing on its motive. Where other brands like David Jones, Waitrose, Mark & Spenser are supplying to its customers goods at a cheap rate. Aldi from Germany and Costco from the US are providing ultra cheap brands to the customers (Treadgold, 2015).

Need and opportunity are the techniques which are enforced seeing various aspects. A change is essential for an organization to survive. The changes need to be reinforced to get the maximum results (Rhodie, 2000). Employees are an important asset for an organization. An organization needs to focus its mission statement for achieving various objectives. It is essential to bring in the notice the reasons for incorporating change. The organization needs to provide its employees with the power to bring the change. A company needs to create short term goals for the long term survival. One can only achieve if he/she are persistent with the goals. It is necessary to incorporate the change permanently in the mission of the organization (Cameron and Green, 2004).

Woolworths need to adopt the policy which is persistent in nature. To achieve in a long run Woolworths has to bring back faith in the senior executive. The management is losing faith in the organization which is affecting the employee’s sustainability. It has recently announced a loss of $ 1.235 billion for the financial year 2016 on Thursday, 25. The loss has occurred due to failure in Master business and Big W business. They faced the biggest loss in last 20 years (Chung, 2016).

The intervention and diagnostic approach focuses on bringing the required changes in the organization. Woolworths need a change in its internal and external policies. Recently it is going through a serious restructuring. There is a need to bring the changes to draw back the attention of the customers in recent time it has lost customer faith. The trends are visible in the annual report. There is an urgency to initiate an intervention method into the company. The two interventions are mentioned in the report are the human resource, and the technology. Woolworths needs to compete with others to sustain in the market (Treadgold, 2015). It is losing the majority of its customers to the brands like Aldi, Coles, Mark & Spenser’s, etc. Sustainability is an important aspect while implementing the plan. The major challenge is to revive the stores which are causing regular loss to the company (Low, 2016).

Interventions

Interventions are those business strategies which aim at making a difference to an organization. Business interventions are done to bring a change. It helps in increasing the efficiency and capacity of the organization (Ryall and Bramson, 2013).

First Intervention: Technology adds value to an organization. Technology brings people close to each other. In a competitive atmosphere, it has become an important instrument to succeed. Customers are mostly inclined to those organizations which are technology upgraded. In this era of e-commerce technology plays an important role in satisfying the objective. An organization which is technologically handicapped can’t survive in a long run. The trend shows, a large number of sections are buying goods online. An organization which is providing easy and smooth flow of technology is the best organization.  

Name: EziBuy

 It is a subsidiary company of Woolworths who has its operation in Australia and New Zealand. It is providing a wide clothing range to its customers through online services. In the era of technology, EziBuy is giving their customers a great experience. They are providing goods at their doorstep. People prefer ordering goods online rather than physical purchases. Currently, the most viewed section of the online platform is women clothing. Their major priority is to satisfy the customer interest, when it’s losing a great market position (EziBuy, 2012). EziBuy is currently the largest fashion and home ware retailer in Australia and New Zealand. Their major sales are carried out through publishing catalogues. It processes more than 1.75 million orders annually (Meadows, 2013)

 

Technological intervention

Technology plays important role in enhancing the overall capacity. It is an added advantage in our day today life; technological intervention helps in improving the overall performance. In a phase of cut-throat competition, technological interference will add an edge. Customers prefer buying goods online. Most of the selling of EziBuy is online based. It has become important regarding customer satisfaction. When competing with other brands it has become important to focus on the technological strategies. In the case of EziBuy which is the largest customer brand in Australia and New Zealand. It is necessary to center on the online marketing strategies, by revamping the old tools. The technological intervention will help in providing an overall improvement in the sale.

Diagnostic model and explanation:

The four-frame model of Bolman and Dela (2003) helps in understanding the issues related to organizational diagnosis, development, and changes. Various researchers have viewed an organizational structure in 4 frames (Bolman and Deal, 2013).

Structural (factories or machines)

 It focuses on the architecture of the organization. It includes goal, structure, technology, role and coordination of them. All the responsibility, division of work labor, rules, policies are related to the structural frame of the organization. Reorganization and redesigning help in the restructuring of the organization (Bolman and Deal, 2013).

Political

It sees an organization as the jungle. It focuses on power, competition and winning over scarce resources. Individual belief, behavior, interest defines the political frame of the organization. The main interest of this frame is to focus on the power and recognition. Effective management and leadership skills help in governing the individual interest (Bolman and Deal, 2013).

Symbolic

It treats an organization in a symbolic form. According to this theory, an organization is a theater. This frame focuses on meaning and faith. This builds a passionate and creative relationship in the organization. It focuses on creating a leader who can maintain faith, beauty and meaning (Bolman and Deal, 2013).

Every frame defined in this structure is equal to the mental model. It helps in understanding and assembles information in a logical way. This helps in providing the true picture of the current situation.

Human Resources

It helps in understanding the people relationship with each other. Every individual has a different set of needs and requirements. This frame helps in understanding the organization in the perspective of the human resource frame. One can understand individual needs and train the individual to fulfill the organizational needs. The job is done by one who feels good about their job. The metaphor for the human resource frame is family (Bolman and Deal, 2013).

EziBuy focuses on satisfying their customers by providing the best services. They are focused on building the good relationship with its customers. Human resource theory focuses on understanding the customer’s wants. The only interest of the organization is to satisfy the customers’ needs. This frame helps in understanding the need of understanding the valued customers. EziBuy focuses on establishing a long time relationship with its customers in Australia and New Zealand. They are more focused toward building a great environment. Customers will only buy if they are satisfied with the services of the products. Else there are various brands in the market which are satisfying the same purpose. EziBuy is known for providing a clothing range to the doorstep. The sale is only due to hardcore customer satisfaction. Customers will only buy, if they are satisfied with the online facility. In the era of globalization, the whole market has become a small place. More people are inclining towards the online purchases. With the entrance of the new competitive brand, it has become difficult to compete. Hence EziBuy needs to focus on the policies of customer satisfaction by providing the goods at the doorstep.

Review: Woolworths is focused in providing overall best experience to the customers. It can only provide its services in a better way if it focuses its effort on improving the overall market experience. Woolworths needs to implement the policies carefully due to the recent changes. Four frame models of Bolman and Dela helps in understanding the situation; the company is going through. The main aim of an organization is to satisfy the needs of the customers. The global competition has made it difficult to survive. EziBuy needs to focus its strategies carefully at one place .It needs to focus on emphasize the necessity of relationships with customers. Every individual have needs feelings, skills, and opportunities. This frame is essential to be focused. The main purpose of a job is to serve the basic need of its customers. A person can only perform well if it has a certain motive. EziBuy needs to focus its strategies on the customer. Developing human relation will help it to make profit. Global competition makes it difficult to survive. Taking care of customer convenience is an essential tool to survive. Customer only wants to buy if they find the services interesting and easy (Defoe, 2013).

 

Second intervention:

Woolworths rewards:

 It is the most attractive reward system by the organization to hold its customers. Woolworths reward point’s focuses on attracting more customers. This scheme has generated a team of loyal customer force. This scheme is giving discounts to the loyal customers who are with Woolworths since a very long time. Woolworths is launching various programs like the orange bill to enhance the sale. These are the catchy scheme launched by the organization to hold its customers. Woolworths strategy is to reward each of its customers who are spending dollars to purchase. They have introduced multiple redemption schemes which are: money off shopping, Qantas points and saving for Christmas. Woolworths is also providing fuel rewards and exclusive member deal to make their customers happy. These strategies are very helpful in holding the customers. Customers buy those goods where they get huge discounts. Reward point is a good strategy to pay back to the loyal customers. This helps in generating a good customer tally (Rewards, 2016).

Intervention type:

Human resource intervention:

It deals with the issues with the social processes happening among organization member; these are the occurring due to change in the organizational structure. It is necessary to understand the overall dynamics of the organization. Human resource intervention is a necessary step towards combining the overall efforts of the organization. It looks forward to its interest. Rewards points are an initiative for accelerating the sales. Customer’s service is an important aspect of the human resource intervention. The more focus is towards the overall growth (Zhao and Liu 2010).

Diagnosis:

A 7s model is a tool developed by McKinsey helps an organization to evaluate and improve performance. The 7s model (waterman, peters & Philips 1980) is used to enhance the overall performance in a simpler manner (Abbott and Booth, 2014).

The various elements of the 7s model are as follows:

Structure: it tells how the organizations units are interrelated. It provides the data in a sequential format. It is the central force in an organization.

System: it defines how the work should be done. There are certain standards which govern the operations in an organization.

Staff: the employees are inter-related to the performance of the organization. An organization can only perform well if it has employees.

Style: leadership style affects the overall performance of an organization. The kind of style practiced is an important attribute.

Skills: an organization can only grow if it has skilled employees. It is due to their efforts organization makes remarkable changes.

Shared valued: An organization based on fair values grow on long run .Mission and vision statement of an organization define its goal (Abbott and Booth, 2014) (Anderson and Anderson, 2010).

Woolworths need to match resources to the opportunity available in the market. Reward point is a strategy to create an advantage over its other competitors. Reward point has made an important initiative to fight against the current competitors’. Customer loyalty is an important aspect in this competitive global atmosphere. It is necessary to understand the customer basic motive. Woolworths need to make their strategy more customers focused to hold its old loyal customer. To attract more customers it is necessary to focus on its customer’s loyalty advantages.

Review: An organization needs to focus on building a strong internal alignment .All the resources of the organization should focus on creating competitive advantages. Survival is only possible if the company understands how to compete with the other competitor. Woolworths need to match its resources with the opportunities. It needs to accelerate its resources to establish good customer relationships. Time to the time change in the internal policy is an important measure to bring the change. Woolworths current market position is very poor. It is losing its best customer to the other competitive brands. In this scenario, it is necessary to incorporate a good reward strategy to attract more customers and to keep the old one. The major change in the senior executive and a drop down in the previous year’s profit has made an incredible difference to the organization. It is facing a huge internal change. A majority of stores are closed because they are not performing well. It needs to focus on saving techniques rather than investing on other places. It should focus on its core strengths for survival. Woolworths reward point can prove to be a major strategy to incorporate majority of changes.

In this global scenario of excessive competition, the organization needs to focus on the resources. In the case of Woolworths which is facing a significant change, it is necessary to focus all its resources in a fruitful place. It is essential for an organization to adapt the environmental changes. In the absence of appropriate changes a firm may lose an important segment. Firms are affected by the general change in the market. It changes almost every aspect of the business. It is due to change in customers taste, reformative policies.

 

Recommendation

Firstly Woolworths need to implement a structured model in its daily working. Instead of spending their income in other sectors it should focus its savings in rejuvenating the sick unit. It should shut down all those units which are incurring losses. It should shut down all those units which are not making profits.

Secondly, it needs to build customer-centric policies. Their major focus should be on the existing customers. There are certain brands which are providing goods at a very cheap rate. Woolworths need to change its pricing policies. They need to keep very competitive price so that they could compete with the other brands.

Thirdly, major focus need to be given on the online services. Major sections of the society are buying goods online. Woolworths need to focus on its online sales. This will help in adding the new customers to the organization.

Fourthly, Woolworths has to focus on creating a competitive advantage over other brands. It needs to focus all its resources carefully in building a well known customer brand. It needs to focus on each of its subsidiary to make huge profits. Woolworths has to focus on building long term relationship with its partners. A structured plan needs to be implemented to procure profits.

Conclusion

The report focuses on the change in management which is caused due to the recent events in Woolworths. It suggests various strategies and intervention technique through which the sick unit can be revived. The two intervention techniques introduced were technological and human resource intervention. These techniques are an important instrument to revive the sick units. Woolworths is facing a significant change in the market. It has recently faced huge losses. The report also includes various diagnosis models to focus on revival and restructuring. Woolworths has to focus on its core competency to survive on a long run. It needs to focus all its carefully to perform well. 

 

References

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