Strategies, and Change Processes Adopted by Coles Company - Case Study Example

Change management Student’s Name: Instructor’s Name: Course Code: Date of Submission: Executive Summary This report discusses the change management and how Coles Company responds to both internal and external environments. The report further analyses the issues that face Cole Company and how it has been performing in the market. The company has been facing some challenges like high competition which led to some changes in the organization. Without observing the changes, the company could be easily driven out of the competitive market. Among the changes that being adopted by the company includes changes in technology to introduction of ecommerce, creating a relationship between the company and the stakeholders. This report also discusses the various strategies implemented by the Coles Company in the management of change which are self driven and change intervention strategies. The report also summarizes the need to implement change in the organization and the results of the change intervention. Table of Contents Executive Summary 2 Table of Contents 3 Company Background 3 4.1 Self Driven Strategy 10 4.2 Process Interventions 11 5.0 Change Implementation Process 11 5.1 Barriers to change implementation 11 5.2 Result of the change 12 6.0 Conclusion 12 7.0 Recommendations 12 References 13 Company Background Coles Company was founded in the year 1914 and the first retail outlet was opened in Melbourne. Coles Company is a company in Australia that operates many retail chains. It was the second largest retailer in Australia until the year 2007 when it transferred its ownership. The company was founded by George Coles and managed the business with his family (O’Sullivan 2013). By the year 1970 the company had established retail outlets all over the cities of Australia like Sydney. The company was also quoted on the stock exchange market of Australia. The company has been accused of engaging in unfair trade practices by other retailers. The research which was conducted in the year 2004, it was founded that the company has been exploiting stakeholders like the suppliers by applying practices which lowered the market price of the materials they bought from the suppliers (O’Sullivan 2013). In this regard, the company management decided to introduce change in the organization to end the ant-competitive prices as explained by Ian McLeod the manager. 1. Introduction In the recent years, Coles Company has been undergoing changes due to some external and internal forces which compelled the company to change their strategies so that they can achieve their goals. Change is necessary for any organization which wants to excel in the market because competition is high and only the organization which has good strategies can manage to have the competitive advantage (Beer &Nohria 2000). Coles had to change the unfair practices which exploited the stakeholders so that the reputation of the company could be good. This report focuses on the environmental framework under which Coles operates, the internal and external drivers of change, the change interventions being implemented by the company, the strategies and processes involved in the implementation of the change intervention, the challenges encountered in the implementation of change and finally the results of change. Finally the report will give some recommendations on how to improve the change management. 2. Coles company and the organizational change For any industry there has to be competition and competition is health in business terms. Among the competitors of Coles Company include Woolworths which is also the leader in the retail industry and followed by Coles. Due to this competition, Coles had to review its strategies so that it can be able to compete and remain relevant in the business. It had to establish good relationship with the stakeholders of the company especially the suppliers. Change interventions cannot be evaded because Coles has to attract and maintain customers as well achieving the objectives of the organization (Bryan 2005) Change interventions can be classified into two categories which are first order change and the second order change. First order change consists of the minor changes that take place in the organization like adjusting the marketing strategies and improving other dimensions in the organization (Child &McGrath 2001). Second order change is the overall change in the organization that transforms the management of the organization for instance changing the corporate culture of the organization and changing the structure of the organization. Coles Company undergoes both these changes. 2.1 Environmental framework Coles Company operates under internal and external business environment. The external business environment includes political, economical, technological, environmental and legal framework and competition. For a long time now Australia has been experiencing political stability and this enabled the company to find a favorable business environment and that is why the company grew fast (Dunford et al 2007). Without political stability the company could have not managed to open new retail chains as the business operations could have been interrupted regularly. The economy of Australia has been growing tremendously and the consumption rate of the consumers has gone high hence the company revenues increased as well. The high consumer income improved the rate at which the consumers purchased the products (Schilling & Steensma 2001). The company also operates under certain technological phenomenal. The Coles Company has been able to attract and maintain customers because it managed to communicate with customers through internet communication and also doing sourcing online. The social environment also favored the operations of Coles Company. The cultural aspect of the Australian people does not hinder the consumption of the products being distributed by the company. In addition, the company has segmented the consumers into various categories like the high income earners and low income earners so that it is easier to distribute the products depending on the consumption rate of the geographical area (Beer & Nohria 2000). Finally the company operations have been favored by the government policy. The government of Australia supports and encourages such kind of investments thus the operations of the company are favored by the government policy. Another environment under which Coles Company operates is the task environment. This is the environment with which the company interacts with the stakeholders who include the supplier, the customers and the competitors. The company could not exist if there are no suppliers of the materials to the organization (Beer &Nohria 2000). They play a great role to ensure continuity in the manufacturing and distribution process. On the other hand, the customers also ensure growth of Coles as they purchase their products. Finally, the competitors enable the company to design more cost effective strategies which could enable it to compete effectively in the market and gain competitive advantage. Therefore, the company has to develop good strategies to create good relationship with its stakeholders and also offer quality services to satisfy the customers’ needs. 2.2 Key drivers for change The late changes made by the management of Coles Company have enabled the company to be positioned better in the market. There are various drivers which have led to changes being adopted by Coles. The following are the drivers for the change; When change occurs, there must be procedures and policies to be followed. The organizational culture of Coles states clearly the procedures and policies which should be followed when change is being implemented (Stace &Dunphy 2001). The company had the policies of dealing with competition and among the policies is the change intervention. The policy of the company is that it has to change its strategies to meet the customers’ demands. In this regard, the company introduced online ordering which could improve communication between the company and the customers. Organizational culture greatly determines the change policies which need to be implemented. The organizational culture of Coles is not too rigid and the policies can accommodate change thus the management of the company had less constraints in implementing the change interventions. Another driver of change is the level of technological change. Technology change can compel an organization to change its strategies to accommodate the new change in technology. Coles Company was forced to change its strategies of serving the customers by introducing electronic systems which served customers faster than the manual way of serving the customers (Bryan 2005). Without copying up with technology change, the company could not compete effectively in the market because customers will not be satisfied with the quality of services and products they receive thus they abandon the products of the company therefore technology capacity can lead to change intervention in the organization. In addition, employee morale also can lead to changes in an organization. The employees of Coles Company were motivated and were encouraged to offer their best skills and be innovative. When the employees are motivated they can come up with good ideas of doing things hence enable the organization to be effective (O’Reilly &Tushman 2004). For instance, Coles Company motivated its employees through incentives such as rewards and this promoted the corporate social responsibility at work place. The employees in turn acted with the best interest of the company and created good relationships with other stakeholders like the suppliers. The political aspects can also lead to change interventions. From the research which was conducted in the year 2004, it was found out that Coles Company engaged in unfair practices and exploited the suppliers. The government policy quickly intervened and protected the suppliers from being exploited (Bryan 2005). Therefore, the company was forced to change its management style by the policy so as to stop exploiting the suppliers. Another driver of change that compelled Coles to implement change intervention is higher level of competition. There has been high competition in the retail industry and Coles had to change its strategies to ensure that it maintains its reputation and the market share. In this effort, the company changed its marketing strategies and decided not to exploit stakeholders anymore like the consumers (O’Reilly &Tushman 2004). The company decided to create good relationship with the stakeholders so that it becomes a good citizen in the society. Therefore change came as a result of the high degree of competition in the retail industry. On the other hand, global economy enabled the company to change its strategies. In the recent years, world economy has been stable and Coles Company found it easy to expand its operations in the market. Without good economy the company could gave not opened new stores and outlets but because the global economy has been good the consumption rate of the customers became high increasing the sales of the company (O’Reilly &Tushman 2004). As the organization grows, the management tasks become more complex because new strategies have to be designed to accommodate the new changes in the organization. In this regard therefore, it can be said that the state of global economy also determines the change interventions in an organization. In addition, the retail industry can be a source of change for Coles Company. The industry has been faced by various challenges like the logistics which have led to some changes which also affect the organizations themselves (Schilling & Steensma 2001). Any organization which operates under a certain industry must observe the rules and regulations of the industry. Coles Company changed its systems because the industry set new regulations and therefore the company had to follow them. Furthermore, change interventions came as a result of political interferences. For a long time the Coles Company has been criticized of exploiting its stakeholders like the suppliers. It applies unfair trade practices to get the materials at low prices from the suppliers because the company has more bargaining power than the suppliers (Jackson 2000). The suppliers were protected by the government intervention which set clear objectives on the buyers and suppliers should conduct their business so that the suppliers are not exploited. This forced the company to change its tactics and strategies of dealing with customers and suppliers so that it can be a win win situation. The political interference forced the company to implement change in its operations. Effective financial management can lead to change in an organization. When the financial resources of the company are managed effectively, there are high chances of introducing some changes in the organization. For instance Coles Company had huge financial base of which it used to adopt ecommerce where the stakeholders could communicate with the organization without going to the organizations premises (Schilling & Steensma 2001). Ecommerce requires huge capital to implement it because the company has to purchase equipment and also train the employees on how to use the new technology. Without effective financial resource management the company could not be able to implement ecommerce successfully hence effective financial management can enable an organization to have funds to implement ecommerce. 3. Change interventions implemented Coles Company is implementing various changes in its management. To start with there is the strategic change which involves all the transformations which ensure that the organization remains competitive in the market and also has maintained its market position. These strategies include ecommerce where the customers and the company communicate through the internet hence increasing the efficiency of the transactions (Stace &Dunphy 2001). The company improved the strategic changes by creating a good relationship between the suppliers and the company itself which ensures that there is no exploitation and unethical practices are eliminated. This change improved the performance of the company. Another change intervention which Coles Company has implemented is the change in technology. The company introduced ecommerce which helps to improve customer services delivery by aligning it with the strategic goals of the organization. The company is contemplating on how to gain competitive advantage through technology. With the introduction of ecommerce, the company will be able to attract and maintain more customers by making communication problem not anymore hence sharing of information. The next change intervention being implemented by Coles is the implementation of interpersonal skills and issues. The company has strategies for developing the skills of the employees through orientation and training of the new comers to the organization (Stace &Dunphy 2001). The company is implementing this issue because when the employees are given chance to develop their skills, they will offer their best skills besides becoming innovative. The quality of the products and services offered to customers are of high quality thus can enable Coles Company to gain competitive advantage. The employees of the organization are very vital for the success of the company because if the employees are not motivated, they cannot offer their best skills and some will resign from their jobs leading to lack of retention of the skills therefore the company is implementing interpersonal strategy. 4. Strategies and change processes adopted by Coles Company The strategy that has been applied by Coles Company in the change management process is the self design strategy. For any company to succeed in the implementation of change there has to be an effective strategy. For instance Coles Company applied the strategy of self driven strategy which enabled it to successfully implement the change management in their organization. The following are the strategies that the company apply in the change management; 4.1 Self Driven Strategy This is the strategy the company apply in the change management whereby the policies and structure of the organization are reviewed every time and make some adjustments with the aim of improving the performance of the organization and the competitiveness (Ross 2005). The processes are continuously monitored and evaluated and some improvements are made at each level which is not performing well. This strategy enabled Coles Company to incorporate the organizational objectives to meet the current customer or stakeholders needs. In this strategy, the members of the organization are given information on the need for change so that they can learn to start appreciating the change. The first stage of self driven strategy is to lay foundation of the strategy and the aspects that will help to manage change. The second stage is to design the support required to implement the change and communicated throughout the organization so that all the members of the organization are aware of the change to be implemented. Finally, the last stage is the implementation stage where the strategy is being implemented. After the strategy has been implemented, it is evaluated and monitored to determine the viability or the success of the strategy. 4.2 Process Interventions This is the strategy whereby all the processes of the company are being evaluated and necessary adjustments made. This is the performance management where appraisals are done to ascertain the success of change at each level of management (Ross 2005). This strategy is more concerned with the welfare of the employees and the company with its stakeholders. Through performance management, Coles Company was able to know that areas which required change like the relationship with its stakeholders hence made adjustments to improve on them. 5.0 Change Implementation Process Change implementation has the following steps; the first one is to identify the need for the change and why the change is necessary. After identifying the need for change the next step is to seek coalition from all the parties to be involved in the change process like the employees and the suppliers so that the change cannot be resisted as they will understand why the change is needed. The next step is to create vision and communicate it to the employees and other parties involved. This will help to explain why the change is needed in the organization. The next one is the identification of barriers and eliminating them and ensures there is commitment from the stakeholders. Then the strategy is implemented in accordance with action plan. Finally, the change is monitored and evaluated to determine the success of the change and where necessary make adjustments (Palmer 2007). 5.1 Barriers to change implementation Resistance from the employees. At first the employees resisted the change because they felt that it was not necessary as they did not understand the importance of change. They felt that their jobs were not secure if the change was implemented hence resisted (Ross 2005). Another barrier that led to resistance is lack of consensus. If the change is to be successful, there is need to include everyone in the company. All the management team should be included in the change as they will act as role models to other employees to emulate (Ross 2005). Another issue that led to resistance is the communication breakdown. There are some rumors which go on around the organization and the employees fear they might loose their jobs. This led to resistance but the management cleared the rumors and promoted good communication. 5.2 Result of the change Change brought many benefits in the organization. First it led to technological advancements. Coles Company improved the application of technology by introducing ecommerce which improved customer service delivery. This improved the performance of the organization in the global market (Palmer &Dunford 2002). Coles Company created a good relationship with its stakeholders. The company developed clear policies to eliminate stakeholder exploitation like the supplier exploitation (Palmer 2007). This improved the corporate image of the organization thus gained competitive advantage. The company improved its performance in the market. Through change, Coles Company was able to meet the customer needs in terms of quality and quantity hence it attracted and maintained many customers (Palmer 2007). The change enabled the company to gain competitive advantage and as a result improved its market share. Through change implementation, the company was able to manage risks that are associated with the business (Palmer &Dunford 2002). For instance the company was able to manage the operational risks like the change in the customer demands thus the company was able to focus on the changing demands leading to better competitive advantage. 6.0 Conclusion Coles Company has managed to focus on the environmental changes which are as a result of the internal and external factors. The external factors that led to changes include change in technology, organizational culture, management systems and financial resource management. The strategies for implementing change include self driven and change intervention. Change implementation brought about technological advancements, improved the market share of Coles Company and improved the organizational culture. 7.0 Recommendations The following are the recommendations based on the above findings; Coles Company should encourage the employees to be creative. This will enable the company employees to develop alternative strategies of accomplishing tasks hence change the ways tasks are carried out in the organization. There should be clear performance appraisal policies to monitor the performance of the change. This will enable the management of the organization to ensure that the company is implementing the right strategies which will improve the performance of the organization. The company should design policies for learning and development so that the employees can advance their skills and be innovative. Through these skills the organization can develop new strategies for conducting operations hence bring change in the company. 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