Managing strategic change Sainbury - Essay Example

Managing Strategic Change Sainbury is a giant UK retailer with 463 stores. Sainbury stores are departmentalized, single-story retail establishmentsthat offer a variety of food and nonfood items mostly on a self-service basis. The main competitors of Sainbury are Tesco, Safeway, A&P, and Sparr. The threat for Sainsbury was that the removal of physical barriers to trade and the new-found freedom of movement around the European market have served to catalyse European expansion and in so doing raise the degree of European trade.

To respond to new environment, the company introduced changes in management style which was brought by new executive. The new style of leadership was "more consensual, less hierarchical - but not in strategy or in corporate beliefs about the company's place in the market" (Owen, 2003). Another innovation made by Sainsbury was reorganization and restructuring aiming "to feature only supermarkets and convenience stores, with Central and Savacentre outlets joining the main estate" (Sainsbury's makes first ever loss, 2004).

In spite of planned actions, these changes failed because of inability of staff to manage change and lack of resources to adapt organization to the changes. It is possible to say that the strategy was ineffective for world's integration and for this reason it failed at the stage of implementation. Specification in Sainsbury was determined as a result of an organization's policy, which in turn resulted from decisions on its market policy, which in turn resulted from its consideration of the market or customer needs, requirements, and the activities of competitors.

The main mistake was an attempt to reorganize and restructure several organizational levels at the same time. In most cases, however, the introduction of change is more likely to be effective with a participative style of managerial behavior. If staff are kept fully informed of proposals, are encouraged to adopt a positive attitude and have personal involvement in the implementation of the change, there is a greater likelihood of their acceptance of the change. In Sainsbury changes in management style resulted in the failure, because employees were used to "an old" style of management and it was difficult for them to react to all changes took place in the organization.

Lack of assistance of the leader was the main weak point. Another mistake was lack of resources to implement changes at all levels during reorganization and restructuring of stores. Senior management was not able to develop a broad strategic vision, which called for redesigned business processes. The management looked for breakthroughs to lower costs and accelerated service that would enable the firm to regain its competitive stature in the consumer products industry. Sainsbury did not identify core business processes to be redesigned, focusing on those of minor payback.

Symptoms of inefficient processes included excessive data redundancy and reentering information, too much time spent handling exceptions and special cases. Justin King recently admitted "the firm had been failing to properly stock its shelves after struggling with faulty distribution systems" (Sainsbury's makes first ever loss, 2004). Innovations implemented at this level were the most effective helping the company to improve consistency at store level. The leadership style of new supply chain director did not differ greatly from the previous one, and allowed the company to achieve a 75% reduction in out-of-stocks and a 10% improvement in availability perception.

(Innovation to Drive Sainsbury's Growth. 2005.). The increasing need for change was created by internal need to improve technology and labor skills. The analysis tells that a change is a part of an integrated process which requires special attention to be made by all employees. Cost of change should be weighed against the costs of failure, either by wrong selection of change or by resistance to change by staff. In order to transform organizational process, the company should take into account resistance to change and take measure to leverage this resistance.

One of the most important factors in the successful implementation of organizational change is the style of managerial behavior. In certain situations, and with certain members of staff, it may be necessary for management to make use of hierarchical authority and to attempt to impose change through a coercive, autocratic style of behavior. Some members may actually prefer, and respond better, to a directed and controlled style of management. References 1. Innovation to Drive Sainsbury's Growth. 2005. Available at: http://www.igd.com/analysis/news/news_detail.

asparticleid=2256 2. Owen, G. Corporate Stratagy in UK food retailing. 2003. Available at: cep.lse.ac.uk/seminarpapers/ 24-05-04%20-%20Background%20paper%20by%20Geoffrey%20Owen.pdf 3. Sainsbury's makes first ever loss. 2004. Available at: http://news.bbc.co.uk/1/hi/business/4018407.stm