This article intends to provide insight into the way change management practices can be implemented at an organization, using the practical example of a corporation. The discussion is supported by the use of diagrams such as systems diagram, force field analysis and multiple cause diagram to outline the current position of a selected business. The organization selected for the report is Tesco which has been going through a declining phase. The diagrams have illustrated the present situation at Tesco. Moreover, the analysis of the company will be connected with the recommendations for the management that focus on bringing a positive change in the organization, identifying the approach to change that is relevant in the context. The report will highlight the recommended changes through business process and systems diagrams, while the threats and growth prospects would also be outlined. In short, the report will provide information about the current state of Tesco, the recommended change plan and the objectives it is expected to achieve in future.
Organization Background/Context
Tesco has been a focal point in the retail sector, owing to the decline in the leading retail organization, and the emergence of different problems that have contributed to the financial loss of the organization. According to Butler and Farrell (2014), the company has been facing decline in sales, thus making it necessary to adopt a different means of handling the business processes to generate a higher level of sales. The report will include information obtained from multiple sources such as company website and newspaper articles which will provide up-to-date information about the change process initiated at Tesco.
Diagrams:
a. Systems Diagram (Current State)
b. Multiple Cause Diagram
c. Force Field Diagram
Summary
The systems diagram of current state shows that the company’s main functions include Human Resource Management, supply chain management, marketing and accounts. Each of these functions are divided into smaller units of functions, illustrating the different activities being handles by each of these domains.
The multiple cause diagram has identified the causes that lead to the decline in the profitability at Tesco, highlighting the role played by poor organizational culture, low sales, decreasing employee morale and the involvement of Tesco in unethical business conduct. The ineffective organizational culture was connected with the issues of poor communication patterns, unproductive leadership and resistance to adoption of new ideas and processes. Moreover, the decline in sales was identified to be driven by various issues such as lack of quality relationship with suppliers, inability to focus on the demands of the customers, intense competition from the rival retail outlets, and low emphasis on further development of the online sales portals and e-commerce facilities (Duell, 2015; Sheffield, 2015).
The force field analysis was conducted to understand the factors that can support the company in the effective integration of the change initiative as well as classify the forces that can create barriers in successful change plan. The diagram depicts that the opportunity to gain an increase in sales and profitability would be the stronger driving force for the organization. The increased focus on following ethical business practices to rectify the poor relationship with suppliers and improve brand image also represent forces for change. The government regulations about accounting practices and ethical industry practices serve as the foundation of change for Tesco. On the other hand, the barriers that limit the change process were listed as negative attitude from personnel towards change, current supply chain processes, and cost incurred to implement the change. Furthermore, competitive rivalry was also observed as a force against change as the company would find it hard to maintain profitability and compete with rivals while implementing the changes effectively.
Recommended Change
Based on the above analysis, the recommended change for Tesco is related to the organizational culture, promoting a more ethical corporate culture. The management and employees at the organization can be encouraged to be a part of the integration of ethical work practices. This would enable Tesco to bring improvement in the declining sales and profitability and establish itself as a strong rival in the retail industry.
Change Approach
There are two broad categories of change approaches, soft and hard, which are used to integrate new means of handling work processes and organizational systems (Paton & McCalman, 2008). In the context of change management at Tesco, soft approach would be adopted. Soft approach to change is characterized by the underlying assumption that effectiveness of change is dependent on the degree of dedication of the personnel as it serves as the key driving force behind it. Moreover the soft approach indicates that organizations that consider employees as a means of gaining a competitive edge in the industry are able to gain long term benefit from this approach (Thompson & Martin, 2010). The change process will not only involve bringing alterations in the employee’s practices but would also include the business practices adopted by the leaders.
Gill (2002) has emphasized the inclusion of the management in the change process as it builds a framework for the organization to move towards the new means of performing and attain the change objectives in an effective manner. The integration of ethics in the corporate culture will follow the incremental change approach, as it allows the change leaders and followers to adapt with the alterations. Moreover, the concerns of the employees can be addressed in an effective manner through providing them with orientation about the change plan and the effect it had on their position and roles in the organization.
Among soft models of change, the framework presented by Kotter (1995) which encapsulated the change process into 8 phases, with each phase characterized by a different set of activities and focal point for the change agents. The company has identified ethical conduct as a central area of change (Tesco, 2015). The senior officials can serve as a change agent in the context of Tesco, encouraging the management and their subordinates to adopt new mechanisms of performing their workplace responsibilities with a heightened emphasis on ethical principles in all the business processes. Kotter (1995) has asserted that the collaboration between management and employees is essential to attain the change objectives, thus Tesco needs to work on forming constructive relationship between the employees at different levels of authority in the organization. The vision needs to be communicated with the employees and management so that they understand the end goal that needs to be achieved and the direction that needs to be taken to fulfil this goal. Since Tesco is facing significant issues in the retail industry due to the accounting scandal and the loss of credibility among the suppliers (Ruddick, 2016).
Another underlying feature of Kotter’s change model is the notion of employee empowerment, which serves as a positive source of change. Instead of forcing the change process on the employees, the management at Tesco can gain benefit from the input of the employees, while providing them with a sense of empowerment which motivates them to work diligently towards the change initiatives. The change model has identified the need to create short term objectives which not only serve as a milestone to monitor the change progress but also provide the change leaders and the followers with a sense of accomplishment, resulting in an increased motivation to implement further changes. It has been further highlighted the importance of offering reinforcement to the followers who have been able to play a positive role in the change initiatives and provide them with suitable incentives (Cameron & Green, 2015; Kotter, 1995). The management at Tesco needs to identify the personnel who have been actively involved in the integration of ethical business practices and supported the implementation of ethical corporate culture and reward them with appropriate mechanisms. Lastly, the notion of institutionalization of the changes asserts that the change needs to be internalized by the employees and management alike, creating a unified set of processes that support the organization. The practice of rewarding the employees for upholding ethical business conduct and offering incentives to management who have incorporated ethical culture in their teams and the departments could become a source of long-term benefit for the company.
Diagrams:
a. Business Process Diagram
The business process diagram presented above shows how the change implementation will be carried out in the organization, outlining the initiation of the changes and the different milestones that will be covered as a part of the change process. The business process reflects the notion of change management and implementation of responsible business practices among the employees.
The systems diagram presented above depicts the expected outcomes and the future organization of business processes and functions at Tesco. In the domains of HRM, Supply chain, marketing and accounts, the implications of change process can be seen in the form of improvements in the sub-functions. For instance, the HRM function is improved due to ethical leadership and ethical organizational culture. Moreover, the accounts function entails the future vision of adoption of accountability practice that minimize the chances of the occurrence of unethical accounting practices in future.
Risks and Opportunities
The risks involved in the change implementation process are reflected in the form of employee resistance and failure to comply with the change initiatives outlined by the top management. In addition to this, the organization has to invest in the employee development, offering them orientation into the change process and helping them in developing their competence for being able to follow the change plan.
As far as opportunities are concerned, the incorporation of ethical leadership and ethical corporate culture can provide Tesco with the opportunity to form stronger ties with its suppliers. The management has reflected the intention to focus on ethical conduct as a part of its brand management strategy and the focus on accountability can help the retail firm in this regard. The damaged brand reputation can be rectified and the company can place itself in a favourable position for the target market.
Conclusion
The change process requires careful planning from the management as the outcome of the change is dependent on the ability of the change leaders or change agents to gain support from the followers. The report has provided insight into the way illustrations can be used to identify the current position of an organization and the future state that reflects the expected change. The change process need to be a step by step process, taking support from the internal stakeholders such as employees and management to increase the likelihood of achieving successful application of change initiative. In case of bringing changes in the organizational culture, the involvement of employees and different levels of management is of critical importance. It can be concluded that Tesco can implement the change process using the 8 stage model, following the soft model of change approach, while emphasizing the incremental nature of change process.
References
Butler, S. & Farrell, S. (2014, September 26). Tesco must change culture and reinvent brand, new boss tells employees. The Guardian. Retrieved from http://www.theguardian.com/business/2014/sep/26/tesco-must-change-culture-reinvent-brand
Cameron, E., & Green, M. (2015). Making sense of change management: a complete guide to the models, tools and techniques of organizational change. UK: Kogan Page Publishers.
Duell, M. (2015, January 19). Tesco has lost the trust of customers and suffered a failure of leadership says former boss Sir Terry Leahy. Daily Mail. Retrieved from http://www.dailymail.co.uk/news/article-2917109/Tesco-lost-trust-customers-suffered-failure-leadership-says-former-boss-Sir-Terry-Leahy.html
Gill, R. (2002). Change management–or change leadership?. Journal of change management, 3(4), 307-318.
Kotter, J. P. (1995). Leading change: Why transformation efforts fail. Harvard business review, 73(2), 59-67.
Paton, R. A., & McCalman, J. (2008). Change management: A guide to effective implementation. UK: Sage.
Ruddick (2016, January 25). Tesco could be fined £500m over accounting scandal, say analysts. The Guardian. Retrieved from http://www.theguardian.com/business/2016/jan/25/tesco-could-face-500m-fine-accounting-scandal-analysts-say
Sheffield, H. (2015, April 22). Tesco results: the five reasons behind Tesco’s historic £6.4 billion loss. Independent. Retrieved from http://www.independent.co.uk/news/business/news/tesco-results-the-five-reasons-behind-tescos-historic-64-billion-loss-10194620.html
Tesco (2015). Annual Report. Tesco Plc. Retrieved from http://www.tescoplc.com/index.asp?pageid=548#ref_ar2015
Thompson, J. L., & Martin, F. (2010). Strategic management: awareness & change. USA: South-Western Cengage Learning.