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The Asda Effect - Assignment Example

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The assignment “The Asda Effect” discusses the problems that Archie Norman and his retail business faced in 1991 and suggests what measures he should have taken and in what order, emphasizing on the top priorities: the urgent need for cash, maintaining a competitive advantage - minimum prices etc…
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The Asda Effect
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Download file to see previous pages Everything changed all of a sudden as Asda found itself with demoralized employees, slow growth in sales, and declining profits in 1991. It had been a 1 billion pounds cash surplus supermarket chain in 1987, and by 1991 it had a debt of over 1 billion pounds. That was precisely the state of affairs at Asda when Archie Norman entered into the scene as Chief Executive Officer (CEO).
The main reasons of the problems that Asda and Archie Norman had to face were due to complex organizational inefficiencies that they had to solve as soon as possible, right away, in order to survive, and at the same time, Asda had to become an efficient organization once again.   Among the different reasons behind Asda’s failures by mid-1991 were the following:  Asda as an organization with its own culture had become a bureaucratic and hierarchical institution beginning in the 1980s.  As a direct result of this rigid functioning structure in the company, any kind of innovation was stopped from being encouraged or implemented.  Without any innovation, Asda was unable to keep its competitive advantages in the retail market in the United Kingdom.  (Weber and Beer, 1998a:  p. 6).  So Asda and Archie Norman had to face the challenge of transforming the superstore in relation to its management style of doing things as well as implementing a sense of culture based on the core values of Asda.  Management and leadership had to change significantly in order to create a new productive and efficient organization.       ...Download file to see next pagesRead More
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