Assessment 1: Leadership Simulation
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Table of Contents
External and Internal Driven Needs for Change 4
Introduction
Leadership is an essential aspect for any business organisation, whether it is small, medium or large domain. Further, one of the critical tasks for any leader is organisational change management. The change is inevitable and is required more frequently in every organisation due to several challenges. Some of the problems that are faced are corruption, mismanagement, lack of productivity, wasteful depletion of resources, and adapting to change and volatile market environments with competition (Mendy 2018). Change is considered an essential factor to face some of the challenges. Change refers to the transformation process that an individual, group, the organisation goes through in the inside and outside environment (Vlados 2019, pp. 230). Therefore, change management is vital for any leader to make an organisation successful.
Organisation Description
ABC organisation is the biggest retailer for grocery and household with multiple chains of stores. The headquarters is situated in Welwyn Garden City, Hertfordshire, England, United Kingdom. It was established in the year 1919 by Jack Cohen as a simple grocery shop. Further, the organisation now has approximately 100 local stores. There are other services which also provided by the company besides food and beverages. Other products and services include electronic equipment, selling and renting of DVD/CD, internet service providers, telecommunications, medical, and dental insurance, toys, books, and clothing. The company operates in almost 12 countries with the world’s third-largest supermarket group, and more than twenty-seven million people using globally (Winterman, 2013). As per the annual report, an operational benefit for the organisation is considered as 28.4% in the year 2018. However, competition with other more prominent brands can also be seen within two years. Sainsbury and Morrison are considered the most significant competition with a market share of 16.1 per cent and 10.7 per cent successfully (Bhasin, 2018). Thus, comparative analysis shows that ABC as enough competitors in the market. However, specific problems in the financial department can be seen in the organisation. In the year 2014, fraud of accounting misstatements was found with approximately 263 million (Kukreja & Gupta 2016). Hence, change management in the finance department is required to make improvements. Organisational change can be in the form of a new strategy to improve work processes.
External and Internal Driven Needs for Change
The ABC organisation must also consider internal and external driven needs for change. Internal and external factors play a vital role in the change and have an impact on making bigger decisions for the leader (The Telegraph 2016). The external and internal driven needs with be explained through a sophisticated model such as the Burke-Litwin Model.
Source (Mulder, 2019).
From the above diagram, it is clear that external and internal factors are essential for the company. The external environment depicts how people approach the ABC organisation of household activities. How they want to purchase something or not is another consideration. Leadership is another activity that demonstrates how leaders work in the change management process. The leaders should consider how and why change is effective or successful to others. Organisation culture reflects how culture is still maintained in the companies. ABC still require a diverse culture to learn and explore something new. The systems are a logical structure that shows how the company works effectively. Individual needs and value shows how they are kept while making changes in the activities. For example, people who will learn new finance software are happy or not. Next, individual, organisational performance is another task that makes it difficult. One performance of an employee directly impacts another one.
Motivation is another critical activity that reflects how people are enthusiasm for change management. Other vital factors are work unit climate and management practices. These are other important aspects of change management. Mission and Strategy are other aspects that determine whether people have the same goals or not. Henceforth, internal and external forces are essential for any company to consider. As the leadership activity, effects for changes are crucial.
Optimisation Outcome
Change management for ABC organisation is considered so that the best optimal outcome can be achieved. Delayering is a cost-cutting strategy that downsizes various layers in the organisational hierarchy for the increment of operational efficiency. ABC can implement delayering for the downsizing of a number of middle-level hierarchical people. Currently, several companies have an oversized and complex organisational structure. This complexity increases several issues for customer responsiveness, product development lifecycle, and decision making speed (Shaw & Schneier 1993). Therefore, delayering is an effective strategy that is cost-cutting and supports organisational change. It is clear that change management within the ABC organisation is much needed due to specific issues. For example, fraud in financial records could affect the company’s work process, reputation, and more importantly customers. Therefore, delayering within the hierarchical organisational tree is essential. Instead of multiple finance managers, a single manager must be appointed over the department. Further, other employees should work under the manager. This will make the operational process less complicated and provide stability to departments.
Furthermore, delayering will help understand the critical problems of the ABC organisation. There are several benefits to this approach, such as speed for the decision-making process, improve communication between the financial department and owner, as well as build accountability, and morale. For example, the owner will be transparent with the managers over-spending and other money investments successfully.
Organisation Readiness
Change management can be implemented in the organisation when people are completely ready. To gather whether organisation ABC is prepared for change is an important aspect. The organisation readiness assessment is a process through which preparedness can be measured before the change takes place. To accomplish this readiness, a procedure for measurement should be implemented. Hence, force-field analysis is one of the processes to check organisational availability for ABC organisation. Kurt Lewin proposed force-field analysis as a model for checking forces that influence corporate activities. According to his theory, for making any changes, the balance between forces must be taken into consideration.
Further, what forces are pushed towards the change and what pulls back is also important to assist. In this manner, organisational readiness can be achieved successfully. Let’s consider the diagram below to check organisation readiness effectively.
The left-hand side of the force field analysis shows positive forces for change. Whereas, the right-hand side shows negative energies or restraining the change forces. Further, in the centre, the present state or desired state can be seen. ABC organisation has gone through negative and fraud issues in its finance department. The current state company is going through several problems with its customers, vendors, suppliers and other stakeholders. Therefore, it is considered as a significant obstacle. Now, change management strategies are considered for resolving various issues. Hence, let’s analyse the negative and positive forces for the ABC organisation with the help of the above method.
Driving Forces
The driving forces for making a change are already discussed in the above section. The internal forces which lead to change management are technology, finance management, organisational culture, employee morale, customer delivery, and competition. These are driving forces that make ABC quite successful towards the desired state. Consider one example. Currently, the organisation does not have any new technologies for employees in the financial aspect. However, ERP systems are quite resourceful and thus will make their work easy. On the contrary, external forces are considered, such as political influence, economy, and customer satisfaction. Therefore, the desired state can be achieved for ABC successfully.
Restraining Forces
The forces that restrain the change management is considered as obstacles to change. Furthermore, these obstacles make several issues for other people. For example, one of the challenges is user resistance for change. The managers at ABC are against implementing new technologies. The employees also oppose learning and higher class technologies.
Present State
The state in which the company is right now. The company is currently embarrassing, where they require a new strategy. The finance issues are making their business affect negatively.
Desired State
The state in which the company wants to be shortly. Shortly, ABC will incorporate technological change. ERP system implementation is considered the most significant asset here.
Source (Connelly 2017)
Leadership Readiness
As a leader, it is crucial to understand why change management is required for any organisation. Without any definite possibility, it is difficult to gather what change is and how it could help companies in the long run. According to Steve Jobs’s vision statement, he wanted to build a high tech computer that could contribute shortly. Thus, lead change requires vision which will depict what should be long term goals for the organisation. Leader vision can be defined as the capacity of a leader to identify a picture of the future revolving around organisational values (Pick et al., 2015). Therefore, imagining the after-effects of specific changes is taken into consideration. Furthermore, whether change management will be beneficial or not should also be understood by the company leaders. Hence, for making change management more sustainable in the organisation ABC, vision is required.
The steps for taking vision is also essential for leaders before making any change in management strategies. The vision statement for ABC organisation is as follows.
Step 1: Need for Change:
The financial conditions of the organisation are deplorable due to a lack of coordination and collaboration. Furthermore, fraud for business expenses and statements is another reason. The vision of ABC is to develop a change management strategy so that the finance department can be handled. Therefore, to improve the financial department and their working process, change is essential.
Step 2: Future State and Benefits
The future state for organisational change will be better management, customer satisfaction, zero possibility for a mistake in human resources, finance, and other departments. Lower operational cost is one of the reasons where ERP is implemented with a one-time purchase (Elmonem 2016).
Step 3: Changes for People
The change will be helpful for the employees working on the ABC. The people will work without making any single mistakes in the balance sheet.
Step 4: Current and Desired State
The current state does not have software implemented; however, to reach desired state software, pieces of training will be provided to the employee.
Step 5: Change Vision
The change vision is compelling for making change sustain in the organisation in a successful manner.
Conclusion
To conclude, leadership is an essential aspect of any business organisation to look after. Further, one of the reasons leadership is necessary is in change management. The change is an important process that makes the organisation much better. Without any change strategies, the organisation goes through several issues. ABC organisation is a grocery and household store that provides services of retail to the customers in the UK and 11 other countries. However, they went through fraud issues in the financial department. These errors cost them nearly a million euros.
Further, internal and external drivers for change should also be considered. Burke Litwin Model is an effective way to study why change is required for the organisation. Additionally, to gather organisational readiness, force field analysis is discussed in this report adequately. Therefore, change management is an effective way to make a difference. Further, ABC requires such change so that it could face a competitive advantage in the marketplace.
References
Bhasin, H. (2018). Top 9 Tesco Competitors – 9 Competitors of Tesco. [online] Marketing91. Available at: https://www.marketing91.com/top-9-tesco-competitors/ [Accessed 4 Nov. 2019].
Connelly, M. (2017). Lewin’s Force Field Analysis Explained. [online] Change Management Coach. Available at: https://www.change-management-coach.com/force-field-analysis.html [Accessed 4 Nov. 2019].
Elmonem, M.A.A., Nasr, E.S. and Geith, M.H., 2016. Benefits and challenges of cloud ERP systems–A systematic literature review. Future Computing and Informatics Journal, 1(1-2), pp.1-9.
Kukreja, G. and Gupta, S., 2016. Tesco Accounting Misstatements: Myopic Ideologies Overshadowing Larger Organisational Interests. SDMIMD Journal of Management, 7(1), pp.9-18.
Mendy, J., (2018). Reflections on Employees’ Lived Experiences of Organisational Change.
Mulder, P. (2019). Burke Litwin Model of Organisational Change | ToolsHero. [online] tools here. Available at: https://www.toolshero.com/change-management/burke-litwin-model/ [Accessed 4 Nov. 2019].
Pick, D., Teo, S.T., Tummers, L., Newton, C., Bish, A. and Johnston, K., 2015. Leader vision and diffusion of HR policy during change. Journal of Organizational Change Management.
Shaw, D.G. and Schneier, C.E., 1993. Making organisation change happen: the keys to successful delayering. People and Strategy, 16(1), p.1.
The Telegraph. (2016). UK business leaders must adapt and change. [online] Available at: https://www.telegraph.co.uk/business/events/uk-business-leaders-must-adapt/ [Accessed 4 Nov. 2019].
Winterman, D. (2013). How Tesco came to dominate. [online] BBC News. Available at: https://www.bbc.com/news/magazine-23988795 [Accessed 4 Nov. 2019].
Vlados, C., (2019). Change Management and Innovation in the living Organisation’: The Stra. Tech. Man Approach. Management Dynamics in the Knowledge Economy, 7(2), pp.229-256.