Organisational Change Models In Tesco

Organisational Change Models In Tesco Introduction: Tesco is one of the leading global retailers and the UKs biggest retailer as well as third largest grocery retailer in the world operating across Europe, North America and Asia. This business has been started by Jack Cohen in 1919 and he used to sell groceries from a stall in the East London. In 1929, the first Tesco store was opened in North London, Middlesex. Later on, it has expanded its business by a combination of acquisition of new stores, retail services by concerning the customers need and satisfaction. Now, it operates 4,331 stores throughout the world with more than 470,000 workers to meet the requirement of the modern market and it is not limited with its usual product range of grocery and general merchandise, it has diversified its business with electronic goods, clothing, banking and insurance services, telephone airtime and equipment. Tesco moves towards one stop shopping which means customers can get all their purchasing requirements from one place. Tesco has also expa nded its customer base through online with tesco.com and tesco.net website which attracts more than one million regular users. In this time, Tesco is one of the successful retailers in the world. Behind this progression, Tesco has changed accordingly time to time. In this context, it has undergone a technological change self checkout system. Tesco introduced this self check system as a trail on 5 March 2003 from East Dereham, Norfolk superstore. Later, it increases the no of self checkout system gradually from different store. From this self checkout system, customer allows to scan and pay for their shopping without any intervention from staff which helps to customer to save their shopping time. Tesco believes that it helps to increase the efficiency and speed up the shopping process as well as improve customer service. Although, the key aim of this change is to cut down the cost which allows the company to maximize the profit. This study will be examined how Tesco applied this change initiative and developed a change strategy, used change implementations models as well as analysed an organizational response to change and evaluated the impact of this particular change strategy. entifying a range of organisational change models or frame work. Organizational change is a deliberate attempt to improve organisational performance by changing one or more aspects of the organisation. Change may be successful when the appropriate change process is applied. For change process, there are a lots of change models and theories have been formulated by various experts and management gurus but for this particular change initiative of Tesco this study is identified some change models which are as follows. Lewins change model. Lewin developed three step model of planned change which explained how to initiate, manage, and stabilize the change process. This model defines three steps in the process of change management. Source: www.ic-pod.typepad.com Step 1- Unfreezing This step involves the organisation unfreezing existing attitudes and behaviour. Employees go through a process of unlearning old habits, old ideas and old perception how change will affect them. Step 2- Change This step involves a behavioural change. Employees modify their old ways and take on new ways of thinking about change how it should be implemented and how it can be positive rather than negative. Step 3- Refreezing The final step involves process of maintaining the momentum of change through locking in the changes, stabilising the situation, building relationships, consolidating the system, evaluation and support, preventing any going back to the old ways. Beckhard and harries model Organizational change occurs in a three stage cycle: present state, transition state and future state- Beckhard and Harris (1987). From above statement, we can conclude that this model focused on three state of change: present, transition and future. This model recommended that organizational change consists of an organization moving from a present state through transition to a desired future state. Present state refers to the current situation of an organization which contain organizations structure, process, people and external and internal environment. By analysing current situation organization can decide weather the organization wish to change or not. If the situation is stable, tranquil or satisfactory organization may be interested in change and identify new role, function or structure that it needs to adopt but it has not agreement or idea of a direction of change. Transition state consists to the structure, processes, people and environment of an organization as it undergoes change. The transition state is nearly turbulent and unsatisfactory level where existing structure and process that worked previous do not work well anymore and new structure and process deliberate to operate in future are not in place yet. Future state is the final destination of whole change process. It is the stage of that the structure process, people and environment are placed and an organizational change is completed. The organization achieved its desired future in this state. Change equation model Change equation model is based on mathematical presentation of change process which is developed by Gleicher and also called Gleichers change formula. In this model the multiplicative nature of change equation is: D ÃÆ'- V ÃÆ'- S > R Where, D= Dissatisfaction of current state quo V= Clarity of vision S= First step to be taken R= Resistance to change According to equation, change is only possible when the multiplication of D, V and S is excess the R. In other hand, the product of dissatisfaction (D) with the current situation, a vision (V) or positive picture of what is possible in the future and real, achievable first steps (S) people can take toward reaching the resistance to change (R). If any of these D, V or S is zero or near to zero the product of these three will zero or near to zero which means there is no resistance to. Applying a range of creative problem solving techniques to address change challenges Managing change is not an easy process and it is not always successful and arises with challenges. In terms of addressing those challenges (i. e. resistance to change), change manager can implement various creative problem solving techniques according to nature of change. Some of techniques which are implemented for this particular change process by Tesco are discussed below. Change path: Change path refers to the types of change which can be classified by extent of change required and speed of change that need to be undertaken for the require change outcome to delivered. There are four types of change revolutionary, evolutionary, adoption and reconstruction. The speed of change is about the way that change is implemented. It may be the gradually step by step change and one time big bang change. The context of change contains of transformation or alignment. Tesco has implemented this self checkout system step by step incrementally with time framework through evolutionary change to minimize resistance. It has brought this change as a trail in superstore later it gradually increases no of self checkout system in different stores. Evolutionary change Adoption change Revolutionary change Reconstruction changeTransformation Alignment Incremental Big bang Change start point: This is the where change initiated and developed. It may be the top to down or button to up approach. According to Food and Drink European.com on 6 March 2003, the strategic manager of Tesco Richard Dobb announced this self checkout system. As per this press release the change start point of this change is top down approach. In this change initial the readiness of change is low among the employee so the strategic manager decided to implement change initiative from top to down. Change style: A Change style is the management style of implementation of change. These change styles may be the collaborative, consultative, directive, coercive etc. These change styles can implement according to nature of change. To minimize the challenges (i. e. resistance by employees), Tesco has implemented collaboration style because this model focuses on extensive involvement of employees in terms of what is the change and how deliver the change needs. This approach works by creating pull and achieving commitments through getting people to invest in the change. The strategic manager involved employees in this change initiative through face to face meeting with focus groups. Change interventions: Change intervention includes technological intervention, political intervention cultural intervention and interpersonal intervention. Change roles: In order to manage this particular change Tesco formed specialist change team including strategic manager, human resource manager and IT director of Tesco and strategic manger Richard Dobb plays vital role in this change process. Identifying and justifying change solutions that link to organizational strategic plan. Basically, Tesco has been adopting growth strategy since its establishment time. It has a well established and consistent strategy for growth. According to corporate website of Tesco (www.tescoplc.com) its strategic plan is: The rationale for the strategy is to broaden the scope of business to enable it to deliver strong, sustainable long term growth by following customer into large expanding markets at home such as financial services, non- food and telecoms and new markets aboard, initially in Central Europe and Asia and more recently in the United States. Tesco is aiming to expand business aggressively. It wants to grow the core UK business, strength non food retailing, develop diversified retail service such as Tesco personal finance, telecoms and tesco.com. as well as putting community and environment in the centre point what it does and it wishes to stand as a successful international retailer. 2.1 Evaluating a range of change implementation models Implementing change is not an easy task because it is gone through various obstacles in order to get desire future destination. For implementing change initiative there are various change model such as Kotter change model, Action research model, Beer et al six step model, Balance score card, EFQM, IIP etc. However, this project examine Kotters change model for this self checkout change project. Kotters change model This model is developed by John Kotter and also known as 8 steps model of change. The key aspect of this model is change goes through a series of stages with considerable time framework. Skipping steps creates only the illusion of speed and never produces satisfactory results and making critical mistake in any phases can have a developing impact, slowing momentum and negating hard won again. Kotter describes the change process in 8 steps as follows. Create sense of urgency In this stage organization develops sense of urgency around need for change. Organization can feel need of change through examination of market and competitors situation. Furthermore, Organization identifies and discusses key opportunities and potential threats and develops the scenarios presenting what could be happen in the future. Form a power coalition team In this step, to cope with change efforts organization builds a team with enough power and authority and encourages team to work together. Create a clear vision In this step, organization generates a clear vision that is central to the change levers and develops strategies to execute that vision. Communicate the vision In this step, organization communicates the new change vision and strategies by using every possible ways and educates new behaviour using example of the guiding coalition team. Empower other to act on the vision This step describes about removing of barriers to change. Organization change the system and structure which challenges new vision and focus on risk bearing and new ideas, activities and actions. Create short-term wins Short terms wins are the foundation of what needs to be done in order to get long term change. In this step, Organization plans for visible performance improvements and creates those improvements. Furthermore, reward people who help to meet the targets. Consolidate improvements and producing still more change In this step organization analyzes what went right and what needs for improvement. To get further improvement organization revises systems, structures and policies that unsuitable for vision and employ encourage and develop employees who can contribute to implement vision. In addition it reinforces the change process with new project themes and change agents. Institutionalise the new approaches The final step focuses on assembling the achieved change into concrete shape. For this, organization builds alignment between new behaviour and corporate culture and develops means to ensure leadership development and succession to substitute key leaders of change. This model is easy to follow because this model breaks down the entire change process into small steps clearly and it focus on the acceptance and preparedness for change rather than change itself that helps to get easier transition. Another point is that it focuses on incremental change through step by step with requiring time framework and suitable for small organizational change too. Its only con is skipping the step results the complete change process fails. 2.2 Identifying the criteria to be select a change implementation model that supports organizational change. Tesco wanted to implement self checkout system in comparatively short time incrementally to minimise the resistance to change and to increase competitive power. In order to implement change initiative strategic manager has chosen Kotters change model because the change initiative has to implement relatively in short time incrementally. Moreover, this change initiative contains small technological change and this change model is appropriate for small change too. Tesco has implemented change initiative as follows. Create sense of urgency After analyzing competitor, Tesco felt that it has to increase competitive power and improve customer service to stand as a market leader. Consequently it looked new technology that can reduce cost and improve customer service because technology is developing rapidly. In 2002 Market and Spencer brought new technology self checkout system it was closely observed by Tesco. So Tesco decided to adopt self checkout system as a change project. Form a power coalition team It formed group including area manager, supervisor and representative of trade union with enough power and authority to make the change relevant. Create a clear vision The new vision of company is: Be competitive, provide the best customer service and incorporate technology. Communicate the vision To communicate vision, the team used companys website and cascaded message through area manager to supervisor and supervisor conducted meeting with other staff to talk about what the goals mean. Empower other to act on vision Change manger conduct education and training programme to teach the benefit of self check out system in order to overcome from obstacle. Special education session has been provided to employees who was creating obstacle to go ahead. Company announced rewards to staff from each store that helped to move forward to make the aims real. Create short-term wins After the succession of trail project, Tesco put report on website and articles have been published in news. Consolidate improvements and producing still more change Institutionalise the new approaches 3.1 Demonstrating the use of analytical tools to monitor the change progress and the effect of change The change affected the employees both ways positively and negatively in terms of experiencing change and changing behaviour and these change effects are analysed and monitored through survey, meeting, interviews and seminar. To find out perception of employees regarding effect of change the strategic manager decided to conduct a survey and it was found that most of employees are in fear of job loss because they though that self scan system replace their job. Some of were happy about that they get extra time to chat with customer. Some of were excited to learn new technology and they feel it is great opportunity for them. Some of were scared about the new technology what it really do. Some of were worried about changing position and work store because technology friendly colleagues were replaced their position. In order to study change related dysfunctions meetings were organized with area manager. It was conquered that people were in some pressure that they did not want to adopt this change because of job loss, changing position and work store, new technology. Interviews were conducted with the employees who expressed their reservations about the self checkout system. Change team promised to employees that no one lose job, it does not affect the position of any staff and they give effective training programme to be technology friendly. To measure the progress monthly seminar were conducted. During these seminars many staff showed great deal of eagerness as they were keen to learn about self checkout system and most of staff showed willingness to move forward with this change. 3.2 Assessing monitoring and measurement techniques to change with in organization 3.3 Analysis strategies to minimise adverse effect of change Change leader decided to follow Kotter and Schlesinger model in order to overcome resistance to change. This model contains six approach education and communication, participation and involvement, facilitation and support, negotiation and agreement, manipulation and co-option and explicit and implicit coercion. In the phase of education and communication, the change team communicated the benefits of self checkout system and its necessity to company. They convinced employees that self checkout system wont be the cause of any job loss and changing position and employees can get extra time to chat with customer by giving example of Market and Spencer and work store and they offered comprehensive training programme for all staff. After this step some of employees again abused to move further so the change leader decided to involve the team leader of resistance group in change team. However, some of employee who are relatively mature again created obstacle to go ahead. The change team conducted special training and counselling programme for these employees. The change team also promised that they will give monetary reward if the change is completed. Thus the change team have overcome resistance to change to move further. 4.1 Identifying the process to review the impact of the change. 4.2 Analysing the results of the impact of review To analyse the results of the impact of review there is two approaches quantitative and qualitative. Quantitative approach is phenomena which independently observable and measurable.