ASSESMENT 1

FOUNDATIONS OF MANAGEMENT
Foundations of Management

Table of Contents

1. INTRODUCTION.........................................................................................................................2
2. BACKGROUND..........................................................................................................................3
3. LITERATURE REVIEW.............................................................................................................4
4. DISCUSSION..............................................................................................................................6
5. CONCLUSION & RECOMMENDATION...............................................................................11
6. REFERENCES..........................................................................................................................13

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Foundations of Management

1. INTRODUCTION

Organizational transitional changes are widespread today, as businesses continue to

evolve or risk extinction in the uncertain economic and political conditions of the

world. The organizational environment is characterized as a collection of

characteristics that represent the organization and differentiate it from other

organizations over time, influencing employee behavior. Employees' operational

actions, patterns, and motivations are all influenced by these characteristics. These

characteristics essentially link the organization's internal work environment and

distinguish it as a distinct function.

The main purpose of this study is to find out that how organizations can manage

their structure and design during an environmental change. The mechanism of

organizational adaptation is shaped by the many powerful factors in these contexts,

such as competitiveness, technical advances, competence, and dynamics

(Druckman, 1997). The environment consists of an organization both influences that

it can easily manipulate and those that are completely beyond its control. Since the

general environment has such a significant impact on an organization's growth,

design, and structure, executives must keep track of patterns and developments

while they develop and attempt to predict their consequences.

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2. BACKGROUND

Tesco is the largest retail chain in the United Kingdom, established in 1919 by Jack

Cohen and dedicated to providing high-quality services to its customers. Tesco has

clashed with other stores by establishing a good market share. It is recognized as

the world's third-biggest department store (Bansal, 2020). Tesco, Asda, and

Morrison are the most popular supermarkets in the United Kingdom. They have a

large network of stores that sell both food and non-food products. These

supermarket stores are the industry leaders in the United Kingdom. Tesco, Asda,

and Morrison grew their market share to 65.4 percent of the £118.2 billion markets

and increased their sales by £3.3, compared to 63.6 percent in the previous year

(Tesco, 2020).

The external and internal conditions that influence the day-to-day activities of these

retail chains are referred to as the market environment (Fernando, 2011). It's also

likely that internal and external forces interact and ultimately combine to affect the

retail store business. Furthermore, certain external influences are far beyond the

retail’s influence.

When these retail stores communicate with their external environment and induce

transformation, which is consistent with organizational growth, they work more and

more efficiently (Senior and Fleming, 2006). The organization has a responsibility

and learn and understand the many environments and how they affect the retail

industry. The controllable and non-controllable environments are the two major types

of environments. Furthermore, the organization should think about how it interacts

with the environment, so any change in the environment would have a negative

impact.

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3. LITERATURE REVIEW

The literature review will begin with a background on organizational structure in

supermarkets, then define strategy concepts and discuss them. It would then

conclude with a summary of the report's most critical aspects. According to a wide

number of studies, organizational environments have a major impact on the

organizational design (Hawawini et al., 2003). A supermarket is a multi-form

framework and process open social action framework. The cyclic routine method

uses definite steps to turn input resources into value-added output resources. The

value of a product or service is primarily determined by the implementation of a

systematic procedure with defined consistent trends. Supermarket’s planning is

concerned with minimizing production uncertainty, and assessment of the context in

which they work decides the strategic choices be made.

The focus of research has been on what components can be used in the

environment and how to assess design success. The premise is that if an

environment has the right elements, and the relationships between them are

theoretically compatible and aligned with the organization's priorities, then the design

would work well (Russo and Harrison, 2005). Analysis has progressed over time by

being more precise in defining the elements that need to be aligned in the context of

a supermarket. As a result, debates about organizational design and environmental

conditions have become more complicated (Dunbar and Starbuck, 2006). According

to previous studies, the degree of environmental change is adversely linked to

supermarket organizational design (Anderson and Tushman, 2001). This point,

however, would not explicitly extend to organizational change since it is necessary to

consider the nature of transition in severity and sophistication. If the volume and

complexity of a struggling supermarket increase through a restructuring effort, it is

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more likely to improve. Lower uncertainty allows it simpler for management to

formulate and execute restructuring plans (Ray et al., 2000), and higher munificence

increases the likelihood of those strategies being compensated with additional sales.

A change in the environment during a restructuring would put more pressure on

management and push a store closer to failure (Som, 2008). External partners, for

example, can see environmental pressures as daunting and withdraw funding and

collaboration for recovery strategies.

Changes in the aggregate environment are expected to have a consistent impact on

the output of supermarkets in the retail sector. Variations in the degree of

transformation through supermarkets i.e. Tesco, Asda, Morrisons, can be closely

related to changes in their mission settings. Tesco has been identified as the best at

adapting to changes in organizational design and gaining a comparative edge over

Asda and Morrisons. With the powerful tactics used, their transition is not only the

first but also the most efficient and beneficial (Lacey and Senath, 2016).

Environmental changes often cause Asda and other major supermarkets to adjust

the organizational design, which adds value to the market and encourages

consumers to buy more often due to cheaper merchandise costs. As a result of this,

the business gains a comparative edge over other retailers to reap the benefits

(Stone, 2019). Supermarkets responded to the changing world and shifted it to their

advantage. Online markets, which are more affordable, are putting a lot of pressure

on retail stores and supermarkets. To succeed in the industry, supermarkets are

consistently making improvements to their organizational design (Canwell, 2005).

Some supermarkets, on the other hand, also lack knowledge about environmental

impacts and operate according to conventional organizational structures (Blattberg,

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Kim, and Neslin, 2008). The top supermarkets' positioning and turnaround plans are

addressed in the findings/discussion.

4. DISCUSSION

This gives insight into the indirect factors that influence Tesco, Asda, and Morrisons’

operations. They are uncontrollable and the companies cannot modify them, but the

environment will affect the organization's intermediate processes (Hamilton, 2015).

Because of the various aims and circumstances, an organization may be organized

in a variety of forms and types. The first claim in favor of the environment state,

which is a critical constraint when choosing an appropriate structure type.

Technology, politics, and laws are the remaining influences that are thought to affect

organizational systems.

Inside an organization, technology primarily refers to the mechanism from input to

output. Different management and teamwork criteria for the organizational design

are determined by the degree of assurance on the organization's technical

operations. The formalization and centralization of organizational design can be

aided by a high level of assurance. On the opposite, in this situation, the

organizational design has to be more flexible.

Technology is the method of transforming a mechanism to accomplish a mission in

an organization. Meeting the demands of consumers for output customization is a

critical problem in technology. This has an effect on the rate at which goods must be

replaced. When it comes to supermarkets, such as Tesco, Asda, and Morrisons, a

stable organizational design or layout is inadequate for managing the production

process when demand for product adjustment or performance customization is high.

An adaptive design is more effective and recommended for effectively meeting

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customization and transition needs. In the fierce business rivalry, for example,

Tesco's introduction of innovative technologies and services is a big mission.

Employees and teams must pay more attention to consumer demand and other

rivals to accomplish the target. As a result, a modular structure is required to take

appropriate environmental improvement management steps.

More mechanistic structures would be appropriate if outputs are uniform and

consumer deviations are few. Organizations with strong demands for output flexibility

or transition are likely to place a greater emphasis on successful problem solving,

while organizations with more stable transformation technologies place a greater

emphasis on productive efficiency. Employees are expected to take less training and

instruction in supermarkets with routine technology when the job is structured.

Employees with non-routine technology, for example, In Asda, an employee needs

technical training and related work experience. In comparison, a Tesco employee

may need more technical experience and skill preparation due to the store's

upgraded technologies.

Subordinates under a manager's or supervisor's control are referred to as the span

of control. In companies using various forms of technology, the scope of control

varies as well. The need for a boss to solve problems grows as technology becomes

more complicated. However, in an organization using non-routine technology, it

depends on skilled workers. For Example, Tesco's professional employees have

expert skills and personal expertise, allowing them to work well without constant

monitoring, allowing the management period to be extended. Retail stores with non-

routine technology i.e. Morrisons have a smaller control span than stores with routine

technologies.

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Furthermore, Apart from Organizational Structures, Due to high technology

penetration and densely populated cities, the UK was ideal for online grocery

shopping and home delivery. Tesco was able to seize the opportunity, transforming

its business model by launching Tesco Direct, an online grocery channel (Tesco

Direct, 2021). Tesco supplemented their business strategy by investing in ‘grocery

dotcom centers,' facilities dedicated exclusively to the fulfillment of internet orders

and fitted with cutting-edge ‘goods to individual' picking technologies. Tesco's

operating model faced difficulties as a result of the transition to a bricks and clicks

offering, including the sales gains. Heavy investment in the creation of an internet

marketplace, grocery dotcom centers, a home distribution labor force, and supply

chain ordering problems due to poor forecasts of online grocery orders leading to a

shortage of historical evidence. Tesco will need to use smartphone apps in the future

to digitally innovate the in-store consumer experience by arming consumers with

expertise. For example, the current Tesco App may be enhanced to assist

consumers in locating unique goods inside superstores and to substitute ‘scan as

you shop' systems with digital wallets for a more streamlined digital interface. By

further that in-store headcount and prices, this could generate an operational model

opportunity. Finally, Tesco could eliminate the problems that consumers have by

scanning barcodes in self-checkout devices by implementing advanced Toshiba

technology that eliminates the need for barcodes.

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Figure 1: Price Comparison 2020 (Source: Essex live)

In Contrast, Asda has built and implemented a data mining and EPOS framework in

each of its stores. The Net Framework infrastructure was used to facilitate fast and

reliable transactions between the company's websites and its customers. Asda has

made its live notification framework available to its online consumers 24 hours a day,

seven days a week (Asda, 2021). For database management and corporate

budgeting, Asda employs Oracle-based PeopleSoft HR tools. Owing through the use

of a digital interface, Asda increased the amount of own-brand retail sales by £6.8

million in the past year.

Lastly, Morrisons is attempting to increase quality and customer experience by using

artificial intelligence to stock its stores. Morrisons is deploying a device from Blue

Yonder that uses artificial intelligence and deep learning to anticipate precisely what

is expected in each of its 491 locations. Morrisons discovered that the technology

eliminated shelf gaps by 30%. Morrisons increased profits over the Christmas

season as a result of the algorithm, as trade conditions were more correctly forecast,

enabling the retailer to move more merchandise. In each shop where the experiment

was conducted, hours of work time were also saved.

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Figure 2: Share of UK Retail Stores 2019

Figure 3: Sales data 2020

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The success of a retail store is determined by how quickly consumers can access

the items that need customers. The organization has a highly developed website that

has seen its goods conveniently in according to the section and then given two

stages categories for describing the individual product itself, among other features.

Furthermore, the retail store can install navigational devices so that shoppers can

quickly locate the commodity and qualified labor should get hired to set those

devices. They can also set up a dedicated contact center facility to handle customer

questions about online shopping as well as questions about current orders and

deliveries.

5. CONCLUSION & RECOMMENDATION

Even though technical determinism is not considered an accurate framework for

expressing the relationship between organizational structure and technological

improvements, it has made a substantial contribution to the advancement of

organizational strategy. The execution and production of interpersonal behavior were

heavily influenced by the supermarket's organizational structure. The analysis of

organizational structure will assist us in determining how to create a retail chain that

is both profitable and practical.

The study's most important shift is the environmental change in how a superstore

handles technology in their market, which is focused on meeting consumers'

demands and increasing profits. Top supermarkets in the United Kingdom are

successfully handling technical progress in their organizational structure to succeed

in the industry and gain market share. The above study emphasis on its importance

for supermarkets as a whole by providing an adequate understanding of how

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different supermarkets' organizational designs vary and how they are important

components for the retail store industry in the Covid-19 situation to attract more

customers. An environmental review is used to enforce the transition and gain a

strategic edge by pursuing various technical tactics aimed at attracting customers

and increasing market share.

The insight can be seen in the retail shares in the United Kingdom, which have seen

a significant effect of technology in changing the industry. These technical elements

in the organizational structure are effective in grabbing the attention of customers.

Customers' needs are met as a result of these campaigns, increasing consumer

confidence in purchasing from their favorite supermarkets. This research has

provided insight into organizational redesigning, which is resulting in a revolution in

retail competition and profitability. The findings, on the other hand, are broadly

identifiable, and they may be studied further to learn more about the organizational

designs. This research assists in the identification of new advancements in the retail

industry, which helps in redesigning. The improved retail design will boost profitability

and customer loyalty to their favorite stores. Since it symbolizes the consumer

relationship and reflects on the retailer's benefit and sustainable change in a highly

competitive industry.

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6. REFERENCES

Asda (2021). Annual Report. Available at:

https://corporate.asda.com/newsroom/2020/12/11/asda-group-limited-publishes-

annual-statutory-accounts

Bansal, H. S. & Taylor, S. (2015). Investigating the Relationship Between Service

Quality, Satisfaction, and Switching Intentions. Proceedings of the 1997 Academy of

Marketing Science (AMS) Annual Conference, pp. 304-313.

Blattberg, R.C., Kim, B.-D. and Neslin, S.A. (2008). Database Marketing: Analyzing

and Managing Customers. [online] Google Books. Springer Science & Business

Media

Bloomberg.com. 2020. Bloomberg - Are you a robot?. [online] Available at:

https://www.bloomberg.com/news/articles/2020-10-03/walmart-s-u-k-retreat-leaves-

asda-with-new-owners-old-problems.

Canwell, D. and Sutherland, J. (2006). BTEC first business. Cheltenham: Nelson

Thornes.

Druckman, D., 1997. Enhancing organizational performance. Washington, D.C.:

National Academies Press.

Dunbar, Roger L. M. & Starbuck, William H. (2006). Learning to design organizations

and learning from designing them. Organization Science, 17(2), 171-178.

Fernando, A. C. (2011). Business environment. New Delhi: Pearson.

Hamilton, L., & Webster, P. (2015). The international business environment. Oxford

University Press.

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Hawawini, G., Subramanian, V. and Verdin, P. (2003). ‘Is performance driven by

industry or firm-specific factors? A new look at the evidence’. Strategic Management

Journal, 24, 1–16.

Pugh, R., 2018. The cheapest UK supermarket - and it's not Tesco or Asda. [online]

Manchester Evening News. Available at:

https://www.manchestereveningnews.co.uk/news/uk-news/cheapest-uk-

supermarket-asda-aldi-18780254

Ray, Sougata and Dixit, M R (2000). Strategic responses of firms to economic

liberalization: experiences of Indian firms. Management and Change, 4(2), 273-285.

Russo, M.V. and Harrison, N.S.(2005). Organizational design and environmental

performance: Clues from the electronics industry. Academy of Management Journal,

48(4), 582-593.

Senior, B., & Fleming, J. (2006). Organizational Change. London: Prentice Hall.

Som, Ashok (2008). Organizational re-design and Innovative HRM: Oxford University

Press

TESCO (2020). Annual Report. Available at: tescoplc.com/investors/reports-results-

and-presentations/annual-report-2020/

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