Importance of Change Management
Globalization leads the business organization to face internal and external changes. In order to deal with the changing environment change management is necessary for a business. Change management improves the performance of the employees in an organization. However, organizational change enables the employees to be flexible with the new environment. Bringing change in an organization the management will be able to make a dynamic work culture in an organization (Kuipers et al., 2014). The performance of a firm is influenced positively by the change management process. Any change in the organizational system leads the organization to gain a competitive advantage in the global market. This study deals with the impact of change management on the performance of Woolworths.
Background of the study
Woolworths is the popular retail organization in Australia. It has large grocery chain across Australia and global market. Woolworths mostly provides groceries, household products, beauty products and health products (Woolworths.com.au, 2018). It has 100 stores and 986 supermarkets across Australia. Due to high competition in global retail industry retailers focus on bringing changes in their organization. Change management is considered as an approach to direct the transition in an organization. Change management leaves an overall impact on the productivity of the organization. For every organization change is necessary to restructure the organization to deal with the changing environment. In the recent years, there is a huge competition in the global retail industry. Thus, incorporate something new in traditional business process becomes important for the retailers.
Australian retail landscape is going through a structural shift by incorporating technological disruption in retail ecosystem (Doppelt, 2017). They focus on the communication process with consumers by restructuring their organization. Consumers prefer to interact through online and offline. At present, it becomes a major challenge for the retailers to navigate the emerging technology in retail industry. Changing technology leads the retailers to conduct their business in a new environment. However, it is crucial for all business to identify the way through which they can leverage the new changes in their organization. Restructuring of the organization leads the retailers to make a balance between the supply and demand. Change management reveals that how the organization is influenced by the majority of decision. In the recent years, Woolworths has faced structural changes in their organization to strengthen their existence in a highly competitive environment.
The major issue that is faced by Woolworths is the inability to deliver the service based on the customer demand. This is due to the inappropriate SAP (system, application, and product) structure of this organization. Increased market pressure leads Woolworths to bring changes in its management structure. Previously Woolworth had cut its operation cost by reducing 400 executives. This led the organization to face high turnover of senior employees as many seniors lost their trust in Woolworth’s operation system. At present Woolworths has implemented lean retail operating model to invest efficiently along with saving money (Woolworthsgroup.com.au, 2018). This model also helped them to improve the customer experience.
Factors Influencing Organizational Change
Problem Statement
In the recent years, huge market pressure is a big reason, which leads the business organization to alter their existing system. However, the poor organizational structure hampers the customer satisfaction in a business (Price, 2016). Woolworths failed to deliver excellent customer service due to its inappropriate SAP structure. Losses of customer and employee faith are the major reasons, which influence an organization in to implement change. On the other hand, old system, as well as the structure of an organization, is a big issue to incorporate emerging technology. In the recent years, technology is very rapid in Australia. For this reason, every organization has to incorporate new technology into their system to cope up with the globalization. Hence, due to the traditional system, it is difficult to implement new technology in an organization.
Huge market pressure due to globalization is a big issue that influences the change management. In order to gain sustainable business organization needs to cope up with the globalization. Globalization forces the organization to implement new changes in their organization (Fleming & Measham, 2015). In the context of Woolworths, the share price is fallen and they failed to deliver satisfactory service to their customers. Due to high market pressure, Woolworths are forced to close their many stores as they faced high operation cost.
At present high competition in Australian retail market leads the retailers to cut the cost. In the year 2016, Woolworths has faced a huge loss of $1.235 billion in their Australian food and petrol business (News.com.au, 2018). This was the first time for Woolworths to face loss in their 23 years business. Such loss occurred due to poor customer satisfaction and high competition in Australian retail industry. Thus, change became necessary for Woolworths to deal with such market challenges.
Research Aim
This research study aims to evaluate the impact of change management on Woolworth’s performance.
Research objectives
- To identify the potential factors of change management in an organization
- To what extent change management influences the organizational performance of Woolworths
- To recommend the ways to improve the change management process in Woolworths
Research questions
- What are the reasons to implement a change in an organization?
- What are the major impacts of change management on Woolworths?
- What are the techniques to improve change management in Woolworths?
Concept of change management
Change management is a technique to manage the human resources to gain the desired business outcomes (Kuiper et al., 2014). However, change management incorporates many tools and techniques in the existing system of an organization. This allows the individuals to carry out a personal transition. Change management allows an organization to move from their current state to the transition state and finally the desired state. Change management focuses on the workforces that are affected by the new change in an organization. To cope up with the dynamic world any organization needs to change constantly. This will help them to understand the customer needs that are changing over the time. However, change management refers to the adaption of needs of the current market. Change management is beneficial for the organization to gain competitive advantages on the other hand; it may create many challenges during its implementation.
Role of Technology in Change Management
Factors influencing changes in an organization
Various factors are involved in influencing the changes in an organization. One of the major factors is management function, which affects the changes in an organization. Changes in the position of board director or CEO often lead the organization to bring changes in their existing strategy (Kuipers et al., 2014). However, the incoming members of the management team review the existing strategies and generate new ideas to improve the strategies. On the other hand, structural transformation is another factor which facilitates the new changes in an organization. Structural transformation is done to expand the business in the international market. This type of transformation alters the market structure, capital ownership, management and market structure of an organization. For the retailers, structural transformation acts as the major factor to implement new changes in their organization. For an organization, it is important to be flexible with the existing strategy besides developing the new strategies.
Market competition is another factor of change management in an organization. As argued by Hornstein, (2015), rising competition in the target market forces an organization to review their existing strategy to gain competitive advantages. At current years one of the major challenges in Australian retail sector is the product limitation and alternative product by the competitors. Many competitors offer the product at low price and often high demand of consumers leads the organization to face product limitation. Such huge competition in the market influences the business organization to change their current strategies. However, changing strategy helps the organization to take necessary actions based on their current weakness and threats.
Changing demand of the consumers is a vital factor of organizational change. However, the demand and need of the consumers often change, which leads the marketers to change their business procedures and incorporate new business model. In the retail industry, market trend changes over the time that creates a big challenge for the marketers. Social and cultural factors play an important role in bringing changes in an organization. However, the cultural and social profile of an organization brings changes in their strategic management. As commented by Rosenbaum, More & Steane, (2018), strategic orientation of any business should be aligned with the cultural and demographic sensitivities. As for example, when a retailer is entering a new market then it is important for them to review the cultural and social trends of such country. To align their business with the social trend of the market organization focuses on incorporating changes in their business.
Benefits and Challenges of Change Management
Laws and legislation are involved in bringing changes in an organization. Any change in law such as environment and tax-related law brings changes in the strategic management of an organization (Van der Voet & Vermeeren, 2017). To conduct a business operation without facing any legal obligation every organization needs to incorporate the legal requirements in their existing system. This causes changes in an organization. On the other hand, due to lack of technology or availability of technology influences an organization to bring changes in their strategy. In the recent years growing information technology makes changes in the strategic management of any business organization.
Lewin’s Change Management model
Among the various models of change management, Lewin’s change management model is very popular. This model focuses on the structural changes in an organization (Cummings, Bridgman & Brown, 2016). Unfreeze; change and freeze are the three major stages of this model. The unfreeze stage focuses on the preparation of the change in an organization. In the change phase, real transition takes place. During this phase, the people of an organization prepare themselves to receive new changes in an organization. Next phase is the refreeze stage. In this phase, the introduced changes are embraced and implemented completely. By following this model the organization is able to understand the structural changes. Therefore, this model allows the organization to implement new changes step by step in their workplace. Any organization gets a clear idea of how the change is implemented and its significance for an organization. Lewin’s change management model reveals that good communication and effective leadership are the two major elements to carry out a change in an organization. Often employees become resistant to change. Application of this model allows an organization to influence the employees to accept the change by revealing the profit of a change.
Impact of change management on organizational performance
Studies show that change is related to the performance of an organization. Change in the organizational strategy increases the profitability of the organization. Therefore, change management is directly associated with customer satisfaction, service delivery, improved productivity and market growth (Al-Jaradat et al., 2013). Change brings new opportunity for the employees to maximize their performance. Therefore, change encourages innovation process in an organization, which allows the organization to compete in global market. In order to improve the organizational efficiency, change management is necessary for the organization (Ndahiro, Shukla & Oduor, 2015). If an organization is able to manage the implemented change properly then efficiency of the work process can be increased. Employee behavior is also influenced by change management process.
Lewin’s Change Management Model
Managing a change in an organization leads the business to stay current with the new trend of the industry. As argued by Thomas, (2014), employee resistance is a big barrier while managing changes in an organization. Often the employees do not accept any change in the existing system. Therefore, to manage organizational changes business owner has to expend more. On the other hand, lack of adequate support causes the failure of change management process. Hence, it can be evaluated that change management brings both opportunities and threat for an organization.
Research philosophy, design and approach
Research methodology is a crucial part of every research study. In This research study, positivism philosophy will be taken. This philosophy will help the research to make the research in a logical way and to represent it critically (Taylor, Bogdan & DeVault, 2015). This current study is based on the impact of change management in organizational performance of Woolworths. Hence, by applying positivism philosophy the researcher will be able to exhibit the data in a logical way. Research approach is another crucial part of research methodology. Deductive and inductive approaches are two major research approaches. Among these two approaches, deductive approach will be selected by the researcher. Deductive approach follows the existing theories and models. Hence, by applying deductive approach the researcher will be able to review the existing models and theories to collect authentic data for the selected topic.
Maximum researchers avoid the inductive approach as application of this approach requires development of new theories (Flick, 2015). Deductive approach will allow the researcher to analyze the collected data with support of relevant theories. Research design needs to follow in a research study to analyze the variables of the topic. Selection descriptive design will be effective for this study. In order to develop research hypothesis, descriptive design is required. The current research topic has two variables thus descriptive design will allow the researcher to create hypothesis based on the variables.
Sampling method and sample size
Sampling technique focuses on the selection of sample size. Sampling technique is categorized in probability and non-probability technique (Lewis, 2015). In this current study, probability sampling technique will be chosen by the researcher. The researcher will focus on simple random sampling technique to select the sample size. To conduct this research 75 employees of Woolworths will be taken for survey and 3 managers of Woolworths will be chosen to take interview. Such sample size will be suitable for this study to collect authentic feedbacks.
Woolworths: A Case Study
Data collection method and data analysis
Primary research methodology will be selected to collect data from the sample size. This study will include both quantitative and qualitative method, thus it will be called mixed method. Mixed method is beneficial for a research study to collect valid and reliable data (Silverman, 2016). Most of the research study follows mixed method. Quantitative method includes survey and qualitative method will be used to conduct the interview. Quantitative data collection is crucial to obtain real-time data. For quantitative study questionnaire will be used. Through conducting the survey the researcher will be able to acquire real-time data from the participants. For every research primary and secondary research need to be carried out. The literature review section will be based on the secondary research method. Journal review will be used as the strategy of secondary data collection. For every research collected data needs to analyze in a proper way as it gives a clear idea to the reader about the presented information.
Accessibility and validity issue
Accessibility, reliability and validity are issues often occur while conducting a research. During the conduction of research the researcher will face data accessibility issue. Many journals are in paid version, which will resist the researcher to gather information from such journals. On the other hand, it will be often difficult for the researcher to get valid and reliable data. The researcher has to use current data, which will create challenges as current information is often not reliable.
Ethical consideration
The researcher needs to follow ethical requirements while carrying out a research. The researcher needs to keep confidentiality of the information that is obtained from survey and interview. For this purpose the researcher needs to follow Data Protection Act. The researcher should not force the candidates to involve in survey. Therefore, the researcher cannot raise any personal question to the interviewees, which can affect their sentiments. The entire personal information of every candidate should be protected. Therefore, during the literature review proper citation is required.
From the entire analysis it can be said that change management will make big change in the context of Woolworths. Structural change will help an organization to sustain in the global market. The major issue highlights the external changes, which insists an organization to introduce new changes in an organization. Implementation of lean retail model will be a big change in this organization, which needs to manage properly. Proper management of lean retail model will allow Woolworths to increase their productivity along with good customer experience. Poor level of customer satisfaction was the major factors that led Woolworths to implement new model in their business. Based on the literature review it can be said that new change in Woolworths will bring opportunity to deal with current market challenges.
References
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Woolworths.com.au. (2018). Woolworths. Retrieved 12 April 2018, from https://www.woolworths.com.au/
Woolworthsgroup.com.au. (2018). Lean Retail Model to drive three-year growth plans. Retrieved 12 April 2018, from https://www.woolworthsgroup.com.au/page/media/Latest_News/Lean_Retail_Model_to_drive_three-year_growth_plans/
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