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Woolworths case study: Analysis of Organizational Change Management

Question

Objective: The primary purpose of this assessment is to assist you to develop skills in the use of change processes and management theories and models in the analysis of a business situation that has organisation and structural change and development concerns. The assignment requires you to analyse the current situation of the organisation and to identify any subsequent challenges or problems that it may face.  You are then to recommend practical solutions that will enable the organisation to address the identified challenges.

The secondary purpose of this assignment is to give you the opportunity to apply your research, analysis, critical thinking and written communication skills, particularly the ability to write an organisational analysis report.

Task: Students will undertake an analysis of an organisational case study. The chosen organisation is Woolworths Supermarket. The case study is selected due to recent proposed changes and reforms for implementation by the company.

  1. Students are required to undertake the following in developing responses to this assessment task:
  2. Review and analyse the most recent annual report of the company.  A company annual report typically outlines the organisations performance, challenges, organisational strategy and governance arrangements.
  3. Review both the company's internal news and other media releases that relate to the company's performance, leadership, human resources and changes.  Students are also encouraged to review other documents available on the company's website to understand their performance and contributing factors.
  4. Analyse and evaluate Woolworths Supermarket current situation focusing on key change management theories, models and concepts.

Once you have reviewed and analysed the various information sources prepare a report which analyses the following issues.  Use key change management models, concepts and theories as an analytical frame.

  1. a) Outline key changes and reforms that have already been implemented by Woolworths Supermarkets.  Identify also those changes and strategies that have proposed for future implementation.
  2. b) Identify and discuss those factors that are driving the need for change.
  3. c) Identify human resource development strategies that have been implemented and/or proposed by Woolworths Supermarkets to overcome any resistance to change.  
  4. d) Analyse how Woolworths Supermarkets has aligned its future strategies to manage change and innovation in a global business environment?
  5. e) Reflect on your own personal learnings and insights as a result of analysing the Woolworths Supermarkets case study?  In developing your perspective or position when identifying personal insights, discussions must be supported with academic literature. 

Answer

Introduction
The current Woolworths case study illustrates that the organizations often undergo significant changes in order to accomplish its business objectives. It becomes essential to manage organizational changes using systematic approach in order to deal with transformation or transition of an organizational processes, goals or technologies. However, it is a known fact that changes are never welcomed with being subject to resistances. In order to endure the changes, the members of the business enterprises are required to integrate innovation or new policies into their daily operations. This Woolworths case study throws prominent light on outlining the reforms and key changes implemented by Woolworth Supermarket. It focuses on identification of the changes and strategies proposed for future implementation. Potential discussion is held on the factors that fuels the need for change. The study pinpoints on the strategies in relation to human resource development that is incorporated by Woolworths Supermarket in order to manage resistance to change successfully. The alignment of future strategies for effective management of innovation and change in context of global business environment is critically analyzed in this paper. It provides a reflective version concerning personal insights and learning on analysis of the Woolworths case study concerning company’s Supermarket. This report attempts to support its contents with the assistence of relevant academic literature. The present Woolworths case study ends with suitable conclusions by drawing inferences from the report.

Identification of reforms and key changes implemented by Woolsworth Supermarket
Woolworths Supermarket is observed to undeergo significant restructuring for magnifying the experience of customers. The Woolworths case study reflects that the new structure of the organization is observed to focus on construction of new departments, which included ‘fresh convenience and ‘fresh service’ in all its stores (Gillespie, 2019). The restructuring supported the concept of one manager associated with full ownership in relation to fresh service. This has led to the replacement of staffs as well as other managers of Woolworths Supermarket who separately managed deli, butchery and seafood. Therefore, significant traces of layoff are evident from the restructuring case of the given organization. Some of the managers are found to provide with the opportunity of reapplying for non-managerial positions at reduced remuneration. This exemplifies enormous wage cut for the staffs of Woolworths Supermarket creating inconvenience for the workers in supporting their respective facilities and meeting the obligations of mortgages. It is evident that implantation of restructuring process resulted in redundancy of approximately 10000 managers nationwide. Prior restructuring of Woolworths Supermarket, the operations of each store is ascertained to be managed by 10 to 15 managers and team leaders, whose roles became highly vulnerable to redundancy. The change in the concerned organization is marked by the contest of such 10 to 15 managers per store for the fix or six jobs in the restructured organization. This also led to change in the number of employees as many of the employees lost their job in the restructuring process. This also led to change in the number of employees as many of the employees lost their job in the restructuring process. The restructuring process of Woolworths Supermarket demonstrates better consumer facing leadership roles that attempts in delivery of enhanced services to the customers through satisfaction of fluctuating shopping needs (Medhora, 2019). In short, after analyzing the above context of Woolworths case study it could the said that major changes are seen in form of layoffs, incurrence of redundancy obligations and introduction of departments, which included ‘fresh convenience and ‘fresh service’.

The change in the organizations often results in stress and uncertainty for its employees (Rogiest, Segers & van Witteloostuijn, 2015). In order to reduce the intensity of stress and handle resistance to change effectively, the report on Woolworths case study affirms that Wooworths Supermarket adopted the following strategy for its future implementation. In this parlance, it is gathered from the words of Fernandez & Rainey (2017), the vision or idea for establishing proposed change in the organization, it is essential to be transformed into strategy or course of action for achieving it. The Woolworths case study demonstrates that new strategy focuses on no net reduction in the number of employees. For this purpose, the management team of the said organization is found to work sincerely with impacted organizational members for identification of potential opportunities in relation to redeployment of employees in business. Even though the revised structure of Woolworths Supermarket might not be appealing to every organizational member, the proposed strategy intendeds to be incorporated in future would attempt to support such employees in their transition. The estimate of compensation by management is expected to be paid to third parties as well as landlord’s realties to premature termination of contracts (Woolworthsgroup, 2019).

How Woolworths case study discuss and outline the factors driving the need for change?
The major factor that accelerated the need for change in Woolworths Supermarket is the effort to cope up with the changing needs of the customers. In order to meet the demand of the customers in relation to fresh products that is observed to be growing at exponential rate, the drive of the given supermarket in delivering the best possible services to the customers is kindled. In this parlance, it is ascertained that organizational success bears direct proportion with satisfaction of needs of the customers (Gopaldas, 2015). Hence, it could be interpreted that maintenance of competitive advantage in the retail market has driven Woolworths Supermarket in the attainment of organizational change. The desire to enhance the convenience of the customers, forced Woolworths Supermarket to act as more customer focused than ever before. The focus on time poor customers accompanied with choices that could be termed as wellbeing and healthy is overseen to exert a potential drive to the concerned supermarket for undergoing significant restructuring in its organization ("Woolworths plans store restructure and addition of two new departments - Inside Retail", 2019). The intention of the given Woolworths case study analysis is to meet the expectation of the consumers regarding the well informed staffs required it to incorporate restructuring in the organization. In order to ensure that the staffs are associated with sound understanding of products proposed to be sold, assist shoppers in deciding on the suitable cut of meat and helping with the cooking procedures, it spent $10 million in training its staffs ("Huge change coming to Woolies", 2019).

Identification of the implemented human resource development strategies
It is evident from the decisions of Woolworth’s supermarket that in the course of restructuring the organization there is a risk associated with redundancy liability. In this regard, it is inevitable for the HR cell to be in a delicate position as they are supposed to manage the consequences of severe employment layoffs. Moreover, despite their Masters stores are trading for few months, it is in a critical condition as the HR managers are dependent upon other entities to buy the business in order redeploy the staffs seamlessly. During the period of valuating their hardware business, the supermarket giant has instructed their HR managers to function for acquiring Lowe’s shares (Lowe is the joint venture partner of Woolworths) in order to prevent the funds from draining. However, from the following discussion of Woolworths case study, the two major challenges that the HR managers of Woolworths are facing is associated with redundancy liability and managing redeployment respectively (Bendell, 2016).

This dire condition is intensified by the resistance to change inherent in the employees and even in the exponents of executive positions. However, the priority in terms of HR strategies is to find out a buyer to sell the hardware business while redeploying the employees seamlessly. Furthermore, they are also thinking of revising the leadership positions in order to communicate the visions of this impending change while making the subordinates endorse that. In terms of endorsement, the major issue highlighted in the analysis of Woolworths case study is emerging from the cost of redundancies and the next objectives of the HR executives are to restrain the costs to a considerable limit (Bailey, 2017). Apart from that, the HR executives are investing a considerable endeavour to find out alternative offers in order to prevent the redundancy costs to rise unusually. Apart from these corporeal actions, the minor objectives of the strategies are to boost the employee morale in order to retain the staffs in favour of change. Apart from that, finding alternatives have become the key priorities in order to minimise the uncertainty and threat of job roles among the employees (Spillan & Ling, 2015).

Woolworths case study Analysis of the future strategies in alignment with change management and innovation
Despite the fact that the strategic faculty of Woolworths is investing much of their endeavour to manage redeployment and responding to the redundancy liabilities (both are short-term objectives), it is also true that the management have several future strategies. It is a fact that these future strategies can only be analysed on the grounds of its association with innovation and change management respectively. For instance, it is evident that the cardinal issues associated with the strategies of change management is employee entitlement where the core objective is to dilute the uncertainty in terms of job cut. Furthermore, quite contrary to their inherent attitude, the employees appear to loathe this decision of change management since, according to the petition they submitted to Fair Work Commission (FWC) and Shop, Distributive and Allied Employees Association (SDA), the company has not felt the necessity to have the opinions of the employees (Parkinson, 2018). In this regard, through revising the executive positions and employing a visionary executive, the unit can seamlessly communicate the necessity and foreseeable consequences of the impending change. On the other hand, the decision to restructure the entire operating model is principally driven by the necessity to transform it into customer-centric stores (Methner, Hamann & Nilsson, 2015). In this regard, one of the central focuses of the entity is to ensure convenient customer service and fresh even as a competitive edge against other influential supermarkets such as Cole or ALDI respectively. In terms of innovation, the present Woolworths case study states that the future strategies of Woolworths regarding customer-focused operating model come with their vision to endorse good regarding health, wellbeing and planet. In terms of corporate social responsibility, declaring these objectives that resonate with the resolutions of the Food & Grocery Conference (AFGC), it ensures a superior position of the entity. In terms of innovation, it is fascinating since it has been able to boost the employee morale amidst this dearth.

Personal learning and insights
Deriving insights from the nuances of the Woolworths case study, it is evident that there are certain faults committed from the side of the management of Woolworths, which is responsible for the change management process being such difficult. For instance, in accordance with the petition by FWC, the decisions of change have been taken without prior information and affiliation from the employees and, as per the apprehensions of Merrett (2019), it is a sign of utter callousness exercised by the exponents in the executive positions. Apart from the legal obligation, theories associated with employee retention suggests expecting opinions from the employees is directly proportional to the employee morale since, as psychology suggests, it offers her/him a sense of belonging. However, in the course of struggling with redundancy liabilities and redeployment management after initiating the plan of restructuring, the HR managers seem to be in the right path. As noted in the analysis of Woolworths case study, Kotter’s model of change management recommends about the formation of a powerful coalition in order to implement the change seamlessly (Fernando, 2018). In this regard, while retaining the trade of the hardware business, the HR managers have suggested the unit to go into a strong alliance with their joint venture partner (Lowe’s) which will prevent their revenue generation from being drained. Moreover, considerable revision of the executive positions will assist to create a strong vision of change while ensuring the communication of that vision properly (Mortimer, 2017). Kotter also suggested to go about by setting short-term triumphs and, in this context, the short-term objectives is the urge to manage redeployment and the executives are quite adamant to ensure appropriate employee entitlement.

Conclusion
In the light of the above discussion on Woolworths case study, it is evident due to certain callousness the change management process of restructuring the operational model of Woolworths cannot be seamless. One of the major reason behind that is that the decision-making faculty of the company has not cared about incorporating the opinions of the employees and thus the vision for change has not communicated properly. In order to prevent the severe consequences like employment cuts and other layoffs, Woolworths case study analyzes that the HR managers encouraged a strong coalition with their JV partner Lowe while coping to ensure employee entitlements by offering them alternatives. 

References
Merrett, D. T. (2019). The Making of Australia's Supermarket Duopoly, 1958–2000. Australian Economic History Review.

Bendell, T. (2016). Woolworths case study Building anti-fragile organisations: Risk, opportunity and governance in a turbulent world. Routledge.

Bailey, M. (2017). Absorptive capacity, international business knowledge transfer, and local adaptation: establishing discount department stores in Australia. Australian Economic History Review, 57(2), 194-216.

Parkinson, M. M. (2018). Case Study 4: Woolworths Group plc. In Corporate Governance in Transition (pp. 203-221). Palgrave Macmillan, Cham.

Methner, N., Hamann, R., & Nilsson, W. (2015). The evolution of a sustainability leader: The development of strategic and boundary spanning organizational innovation capabilities in Woolworths. In The Business of Social and Environmental Innovation (pp. 87-104). Springer, Cham.

Fernando, M. (2018). LEADING CHANGE. Leadership: Regional and Global Perspectives, 280.

Mortimer, G. (2017). Why Australian supermarkets continue to look to the UK for leadership. The Conversation, (20).

Spillan, J. E., & Ling, H. G. (2015). Woolworths: An Adizes Corporate Lifecycle Perspective. In Business History Conference. Business and Economic History On-line: Papers Presented at the BHC Annual Meeting (Vol. 13, p. 1). Woolworths case study Business History Conference.

Woolworthsgroup (2019). Retrieved 4 October 2019, from https://www.woolworthsgroup.com.au/icms_docs/195582_annual-report-2019.pdf

Gillespie, K. (2019). Blow to workers as Woolworths announce restructure plans. Retrieved 4 October 2019, from https://www.standard.net.au/story/6205062/blow-to-workers-as-woolworths-announce-restructure-plan

Medhora, S. (2019). Woolworths restructure could mean job losses, union warns. Woolworths case study Retrieved 4 October 2019, from https://www.abc.net.au/triplej/programs/hack/unions-warn-woolworths-restructure-could-cost-jobs/11210782

Fernandez, S., & Rainey, H. G. (2017). Managing successful organizational change in the public sector. In Debating Public Administration (pp. 7-26). Routledge.

http://johnjay.jjay.cuny.edu/files/ManagingChange.pdf

Woolworths plans store restructure and addition of two new departments - Inside Retail. (2019). Retrieved 4 October 2019, from https://www.insideretail.com.au/news/woolworths-plans-store-restructure-and-addition-of-two-new-departments-201906

Gopaldas, A. (2015). Creating firm, customer, and societal value: Toward a theory of positive marketing. Journal of Business Research, 68(12), 2446-2451.

http://charsoomarketing.com/wp-content/uploads/downloads/2016/04/Creating-firm-customer-and-societal-value-Toward-a-theory-of-positive-marketing.pdf

Huge change coming to Woolies. (2019). Retrieved 4 October 2019, from https://www.news.com.au/finance/business/retail/woolworths-investing-10-million-on-training-and-store-restructures/news-story/b140f1b4b1c7bfd4c1d6c9becd8a7f5c

Rogiest, S., Segers, J., & van Witteloostuijn, A. (2015). Woolworths case study Climate, communication and participation impacting commitment to change. Journal of Organizational Change Management, 28(6), 1094-1106.

https://repository.uantwerpen.be/docman/irua/12f01c/128226.pdf

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