Case Study the ASDA Way of Working essay

Download this essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from essay:

ASDA Way of Working

Archie Norman's approach to "renewal" of the ASDA stores was very much in alignment with that of any consultant group. Because Norman did not have direct experience with retail grocery stores, he needed to come up to speed quickly and he approached his challenges as he would any consultant assignment. Whether this was prudent is perhaps a moot point -- it was what Norman knew how to do. Further, Norman brought his colleagues from McKinsey & Company into the fray, basically setting up a frontline campaign as if he were in a war zone.

The First Steps

Norman established three pillars as he assumed leadership of Asda: (1) An immediate fiscal and operational revamping; (2) a strategic plan for recovering market share; and (3) a comprehensive culture change. These changes happened against a background of communication issues best described as chimneys or silos. The departments of the organization more or less kept to themselves, failed to share critical information, and lacked any cohesive vision that would cause the corporate efforts to "pull together."

Communicating the problem. One of Norman's early tactics was to shake the company out of its complacency and use a "tough love" approach to facing the realities of their fiscal situation. It seems that communication in Asda was sufficiently fragmented that Asda associates across the organization were not clear about the dire straits the company had created for itself. Norman tackled this head-on with the same sort of straight talk that he might have provided a client in his McKinsey & Company days in an effort to convince the client of the need for his services and justify the costs of the changes recommended. Norman basically ignored any attempts to soft-pedal his discussion of the problems. They were exigencies and Norman needed the associates at the company, the Board of Directors, and the stockholders to understand that the matter was urgent and deep. One of his goals was to buy time to fix the problem, methodically and systematically, considering all the implications and developing a comprehensive plan -- just as he would have done countless times for clients while he was employed as a consultant at McKinsey & Company.

Communicating the strategy. It is understandable that Norman would consider the entire organization dysfunctional -- he had no stake in the previous operations and he had a consultant's mentality, which basically dictates that you find every possible thing wrong with an organization that you can as that is the way to a comprehensive consulting engagement. However, this approach is not necessarily the avenue that change agents -- in the softer organization development use of the term -- would employ. The stakeholders in the company don't go away like the CEO who was fired and the chief officers who were replaced. The stakeholders remain in place and they are ultimately responsible for the effectively executing the change orders (Heracleous, 2001). It is difficult to get the stakeholders from the place where they have all been informed that they are completely stupid and ruining the company, to the place where they embrace the new culture that is being overlaid on their previously misguided orientation.

One very astute move that Norman made -- which made transparent his understanding of change processes -- was the decision to empower associates in the organization. While Norman might have experienced deep resistance to change and resentment at being identified as part of the problem that the "boys" from McKinsey & Company were trying to fix, Norman smartly told the associates that they would experience a new level of control over their work and the corporation's success. Although Norman pole-vaulted over the customary strategic planning processes designed to elicit buy-in from employees -- no collectively developed vision, no collective assertion of value, no mission statement exhibiting the collective wisdom of the workers -- he did convey that this was the best plan he could imagine at this time, and that he had gotten the best help that he could afford and arrange to bring to the workers this strategic plan for the future (Cadwell, 2005). Its successful implementation was in their hands -- and this last point was underscored by the ready-made Statement of Values that was to become the aim star for the company. It is interesting, though predictable, that Norman did not feel he had sufficient expertise in the organization to rely on for the high level strategic planning that commenced.

Conducting the operational change. Norman was not a stranger to revamping operational change and he went about it with the enthusiasm and deep-cutting scalpel of a managing director in a private equity firm that has just infused a company with a huge corpus of investment fund dollars. There were going to be immediate changes and they were going to impact the bottom line. Replacing existing leadership is a common strategy, and private equity firms know that, well-placed, this can be very effective (Berry-Whelan, 2003). The main consideration is that the new people understand that their energies must be directed toward profitability -- this was precisely what was needed for the first pillar of the renewal strategy: An immediate fiscal and operational revamping. Norman replaced key personnel that he was confident would understand the game plan and not act as resistors to change in critical functional areas of the company. Further, fiscal steps including selling off non-food operations or shutting them down, reducing the headcount at the corporate headquarters by 30%, cutting by 10% in-store middle manager positions, and establishing an 18-month pay freeze for all employees that would prevent raises or bonuses. For in-store employees, the loss of headcount at headquarters would be viewed as a favorable change, and the loss of some middle manager positions could be offset by granting new levels of autonomy and responsibility to store managers (Mishra, et al., 2007).

Orchestrating the cultural change. The primary focus of Norman and his officers over the next 18 months will need to be focused on the long-term efforts required of sustainable culture change. Naturally, if the operational changes and the structural changes made by Norman have resulted in an improved profit margin, then Asda associates will look on other required changes with more favor. The urgency of turning around Asda's fiscal situation would have been recognized at this point in time -- six months into the renewal -- and associates would be actively engaged in bringing about much of the needed changes. A useful heuristic is to think of the change efforts at Asda as a U-shaped curve. There had to be immediate and steep changes made to operations and the finances. This is the first pillar. As those steps accomplished increased stability for the company, the organization must gather momentum (the resting point of the curves) and then work diligently to change the culture. This is the third pillar: A comprehensive culture change. And it began with the first announcements by Norman, continued with the release and implementation of the statement of values, and continues as the in-store changes occur.

Asda underwent huge shifts in position, first during the declining years when it attempted to become an upscale grocery chain through the corrections when it returned to its original focus -- an everyday store for an everyday working person. This is the realm of the second pillar: A strategic plan for recovering market share. Going forward, Asda can contemplate any changes that it might wish to make, do the requisite market research, and test changes in single stores at select locations. And Asda will need to bring about the physical plant changes required by years of neglect. It may be that the company continues in its present niche, or it may decide that it actually does want to capture some of the market share of the…[continue]

Cite This Essay:

"Case Study The ASDA Way Of Working" (2011, November 06) Retrieved December 10, 2016, from

"Case Study The ASDA Way Of Working" 06 November 2011. Web.10 December. 2016. <>

"Case Study The ASDA Way Of Working", 06 November 2011, Accessed.10 December. 2016,

Other Documents Pertaining To This Topic

  • Employee Satisfaction and Productivity a Case Study Based on the...

    Employee Satisfaction And Productivity employee satisfaction and productivity ASTRACT Employee satisfaction directly links to organizational excellence and/or productivity. Maybe… Maybe not… Researchers regularly debate exactly what components contributing to employee satisfaction and the company's and/or organization's productivity. Similarly, employers and employees do not typically agree on the reason/s an employee stays committed to a company or what factors contribute to an employee's satisfaction with the company. During the mixed-method case study, the researcher focuses

  • Wal Mart Inc Under Attack

    Wal-Mart may find that it is not able to "rollback prices" to compete with discount underwriters. One key opportunity for Wal-Mart is to focus on social welfare to improve their stature within the various communities Wal-Mart is located. Problem Definition As was stated at the outset Wal-Mart is one of the most reviled corporations within the United States. For the various reasons previously stated, Wal-Mart has attained a vastly negative reputation

  • Organisational Culture of J Sainsbury

    Fortress Culture: Employees don't know if they'll be laid off or not. These organisations often undergo massive reorganisation. There are many opportunities for those with timely, specialized skills. Examples are savings and loans, large car companies, etc." According to research, Sainsbury's appears to be a fortress company, as it is struggling to find the right strategy and culture for its business. Edgar Schein, a cultural analysis, has contributed a great deal of

  • Wal Mart Over the Last Several Years

    Wal Mart Over the last several years, Wal Mart has been a story that is focused on continuing successes and challenges. This is because the company was impacted by issues such as employee rights, costs and fierce competition. Yet, at the same time, they were able to experience continuing increases in their bottom line results. This is despite the fact that consumer spending has remained stagnant in the aftermath of the

  • Consumers Attitudes Towards the Environmental

    In a report on recent research in this area, Hickman (2008) states that, "Although the public recycle newspapers and bottles, only one eighth of clothes are recycled through charity shops About 70 per cent goes straight to landfill or incineration" (Hickman). This is telling example, of the way that Fast Fashion can affect the environment. The fact that these fashions are relatively cheap means that they are more easily discarded that

  • Sainsbury s Business Environment Mission Vision Objectives Goals...

    Sainsbury's Business Environment Mission, vision, objectives, goals and core competence Sainsbury's chain of supermarkets is the leading store of food retailing in Britain. A single store offers approximately thirty-two thousand varieties of products among them fresh produce and own brand comprising of fifty percent total products. A variety of grocery products and quality foods are sold by the chain of supermarkets. Additionally, they offer other services and products such as petrol stations,

  • Difficulties With Marketing Varies From Organization to

    difficulties with marketing varies from organization to organization and the first matter to learn when dealing with the marketing of any organization is to understand the nature of functioning of the organization and then decide on the methods of marketing that will be applicable. Present position Let us hear from Sainsbury's as to what they are: "We're a leading UK food retailer with interests in financial services. J Sainsbury plc consists

Read Full Essay
Copyright 2016 . All Rights Reserved