Organization culture

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Contents

Executive summary. 1

Introduction. 2

Company overview.. 2

Changes in organization culture at Tesco. 3

The nature of organizational change brought about by innovation (multi-channel digital strategy) 4

The main drivers (motivation) for this change. 5

The main objectives to be achieved by the change. 5

Key stakeholders impacted by the change. 6

Innovation resistance. 7

Resistance to change. 7

Causes of employee resistance to changes in organizational culture. 8

The change management strategies to employ when implementing the strategy. 9

Various types of organizational change. 10

How to measure the success of change management process. 15

References. 17

Executive summary

Organization culture is a concept that is used to refer to a collection of organizational beliefs, values, general demeanor and policies that are critical to the daily running of companies (Mullins,2010). The concept is used to refer to the general context of all activities that are done within a given firm. In this paper, we explore the concept of change management within Tesco due to the possible resistance to changes in its organizational culture. The strategic change in this case is the adoption of a multi-channel digital strategy within the operations of the retail chain. The methods of implementing this strategic change are evaluated as well as the ways of measuring the success of the suggested change management strategies.

 

Introduction

Organization culture is a concept that is used to refer to a collection of organizational beliefs, values, general demeanor and policies that are critical to the daily running of companies (Mullins,2010). The concept is used to refer to the general context of all activities that are done within a given firm. In this paper, we explore the concept of change management within Tesco due to the possible resistance to changes in its organizational culture. The strategic change in this case is the adoption of a multi-channel digital strategy within the operations of the retail chain. The methods of implementing this strategic change are evaluated as well as the ways of measuring the success of the suggested change management strategies.

Company overview

Tesco PLC is a leading UK general merchandise and grocery retailer. It is also the 3rd largest grocery retailer worldwide (Potter,2011). The company controls over 30% market share within the UK market where its closes rivals are ASDA, Sainsbury’s, Morrison’s and the Co-operative Food. Tesco is famous for its excellent loyalty and endless dedication to its clients. The company’s workplace and staff policies tailored to create an excellent shopping experience. For  the sake of achieving excellence, the employees at Tesco PLC are encouraged to be extremely courteous, friendly and polite with good mannerism being a mandatory requirement.

The organization also strives a creating an excellent operating environment that is professional and yet formal. All these are reflective of the personal touch, affordability and quality nature of their product offerings. Additionally, Tesco’s organization structure has a great emphasis on organization culture. The organization structure at Tesco is hierarchical with a top down operating structure. Briefly, the organization structure at Tesco PLC is autocratic as well as formal. This organization structure and culture are what makes Tesco one of the best performing retailers worldwide.

Changes in organization culture at Tesco

Experts in organizational behavior, note the concept of organizational culture change to be a necessary element of every company.  For performance to be optimal, adjustments must be made to existing organizational cultures. Companies must ensure that they adopt completely new changes for them to remain competitive within the contemporary and future marketplace. Armstrong (2009), for instance, reiterated that change is the only element in an organization that is constant. Kotter (2000), however, indicated that companies are in a state of constant flux. Mullins (2010) noted that the inescapability of  organizational change is a constant element of every firm as a result of the quest by these firms to adapt to the new and emerging business challenges, technological  innovations and new ways of doing business. Market forces such as the dynamism of products and services are what forces firms to adapt to changes. Organizational change is therefore an element that must be taken into account in the formulation of new business strategy as well as the creation of new insights. Several forces can initiate organizations within Tesco. In this paper, we concentrate on their need to align their business and marketing strategy by the adoption of a multi-channel digital strategy. This in itself is a technological innovation that can create serious changes to Tesco’s organizational culture.

The nature of organizational change brought about by innovation (multi-channel digital strategy)

The work of Ellen, Bearden and Sharma (1991) argued that even though technological innovations can be seen as one of the main keys of success and survival for several firms, it can also be a key source of employee resistance. Hitachi Consulting UK noted that the adoption of a multichannel strategy is the only sure ways for UK retailers to maintain competitiveness within the current and future market place (Hitachi, 2012). The company issued a strong warning to all UK companies to adopt a strategic multi-channel approach in order for them to survive. Customers must first be taught how to engage these multichannel strategies. This must then proceeded by an effective re-orientation of the entire business operation in order to successfully deliver the identified engagement. The manner in which technology can be used in facilitating the engagement then becomes the final step. The process is noted by Hitachi Consulting Group to be greater than any other existing information technology platform initiative and should include people, system processes as well as technology changes across the entire business units such as e-commerce, marketing, customer service as well as social media (Hitachi,2012). This means that the implementation of the strategy would be enterprise-wide.

For Tesco PLC to realize this goal, it must ask itself pretty hard questions since its traditional organizational boundaries as well as responsibilities would be highly challenged.  All areas of Tesco’s business (supply chain, buying and retailing operations, merchandising, finance, IT and human resources) would be affected by this change.  The quest for a seamless consumer experiences as well as constant brand image would cause serious changes to Tesco’s organizational culture. Resistance to this change is therefore obvious.

The main drivers (motivation) for this change

            As noted earlier, the main driver for this change is the need to remain relevant and competitive within an increasingly competitive UK and global market place. Hitachi Consulting UK noted that the adoption of a multichannel strategy is the only sure ways for UK retailers to maintain competitiveness within the current and future market place (Hitachi, 2012). The company issued a strong warning to all UK companies to adopt a strategic multi-channel approach in order for them to survive. Customers must first be taught how to engage these multichannel strategies. This must then proceeded by an effective re-orientation of the entire business operation in order to successfully deliver the identified engagement. The manner in which technology can be used in facilitating the engagement then becomes the final step.

The main objectives to be achieved by the change

The multi-channel approach would allow Tesco’s customers to shop from wherever they want (be it in-store, at home, from the company’s online catalogue, through their Smartphone or PCs). The system would allow consumers to locate their preferred products easily and shop online as well as order their products for delivery right straight to their doorsteps. All of the company’s digital marketing as well as PR initiatives would seamlessly be integrated. An elaborate mix of multi-channel strategies such as in-store advertisements, search engine optimization approaches, search engine marketing strategies, pay per click advertising as well as social media would be employed. The advantages of using this a multi-channel approach are improved sales and business performance, the ability to share all forms of actionable information as the ability to come up with a better attribution model that can help Tesco to gain a better strategic foresight. After all, the future of shopping is argued by Deloitte to lie within the digital realm. According to a research carried out by Deloitte, multi-channel customers spend about 82% (averagely £116) more money in each of their transactions as compared to the in-store ones. The contemporary multi-channel consumer is claimed by Deloitte to be well informed about their shopping and this, ultimately results in higher volume and value of their purchases.

Key stakeholders impacted by the change

In order to determine the key stakeholders who would be impacted by the change, a stakeholders analysis is quite necessary. A stakeholder analysis is a process that helps us to determine the various individuals who would be affected by the introduction of the multi-channel digital strategy within the operations of Tesco PLC. A quick look at the scenario indicates that the implementation of the multi-channel digital strategy would be enterprise-wide. The specific areas whose operations would be directly affected in the company are supply chain, buying and retailing operations, merchandising, finance, IT and human resources. This means that the key stakeholders who would be impacted by the change are Tesco employees from various departments and customers.  It is therefore important to evaluate the impact that this change would have on these key stakeholders.

As noted earlier, technological innovation is often seen as the secret to success and survival for most companies. This is regardless of whether such a technology is to be used for internal or external users. The adoption of any technological innovation should and must take consideration of the final user’s reaction. According to the work of Mahajan, Muller, and Wind (2000), a vast majority of technological innovations have experienced great failure in the marketplace. This has happened without regard to the benefits that they have or may have brought to the firms or the economy. One of the main causes of innovation failure in the marketplace is customer resistance to these innovations (Sheth, 1981). A multi-channel strategy is a concept that relies on a multiplicity of technological innovations.

Innovation resistance

            According to Gatignon and Robertson (1989), resistance to innovation is a perfect case of resistance to institutional or organizational change. This is for the reason that innovation is a cause of changes in consumption as well as production. Resistance to change is defined by Zaltman and Duncan (1977) as any behavior aimed at maintaining the current state of affairs in the presence of great pressure to modify the current state. Resistance to organizational change is therefore, a purely normal process or reaction of people to any changes that may interfere with the prevailing equilibrium of organizational activities as noted by Watson (1971). Innovation resistance on the other hand takes place when people resist the various changes that are associated with a given innovation but not the rejection of the innovation in itself.  During the course of innovation diffusion, resistance is normally experienced at the stage right before adoption, as indicated in the work of Woodside and Biemans (2005). If the vendor of a given innovation is incapable of overcoming the resistance, then its adoption may be delayed or completely fail. Chances of multi-channel digital innovation creating resistance within Tesco are therefore real.

Resistance to change

            The contemporary global economy is rife with changes within the participating organizations. The changes are continuous and swift. Due to the reason that change is part of organizational dynamism, employees and customers who resist these changes may ultimately impede the operations of these companies. Individuals can never change overnight. People change gradually and it takes them time to acclimatize to the new behavior set as well as work-defined patterns. In this paper, our focus is the effect of organizational change on employees and how to manage the resistance associated with the adoption of new changes within Tesco as an organization. Care must be taken to manage organizational culture change due to the fact that the process can create resistance and skepticism and thereby make it impossible to successfully implement various organizational improvements (such as the adoption of a multi-channel strategy) (Folger & Skarlicki, 1999).

Causes of employee resistance to changes in organizational culture

There are several causes of resistance to change within an organizational setting. These particular factors can be categorized into two main groups- organizational and individual sources. The individual sources of resistance emanate from fundamental human traits like needs, perceptions, personalities as well as needs. These categories of human traits are inherently ingrained deeply into a person’s behaviors and core beliefs. They are also not easy to manipulate. For instance, there are employees who believe that the adoption of any kind of technological innovation would result in layoffs and forceful retrenchments.  The adoption of a multi-channel digital strategy could therefore, be perceived as a threat to their jobs. Other examples of individual sources of resistance to change are fear of the unknown, security, economic reasons as well as selective processing of information. Security in this case refers to an individual’s need to experience safety within their working environment (Robbins & Judge, 2010).Issues like job security are therefore what migh.............


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