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Analysis and Evaluation of Nature of Change and Leadership Employed at Asda

Leading Strategic Change – SM 446 – Assignment May 2003 Vijay Kodandaraman Bysani - 1 -

Newcastle Business School

University of Northumbria

Newcastle

Name Vijay Kodandaraman Bysani Student I.D.Number 02913971 Course Master of Business Administration Unit Title Leading Strategic Change Unit Code SM 446 Unit Tutor Walter Fraser

Analysis and Evaluation of Nature of Change Assignment Topic and Leadership Employed at Asda



Table of Contents Particulars Page

1 List of Figures 3 2 List of Appendices 4 3 Executive Summary 5 4 Introduction 7 5 Introducing Change 8 6 Brief Introduction of Asda 10 7 Crisis Situation 11 8 Strategic Directions of Archie Norman 12

9.1 Theories and Frameworks in Relation to Asda 13 9.2 Theory E And Theory Y 13 9.3 Top-Down Transformation or Bottom-Up Change 14 9.4 The Change Cube 14

10.1 Change Elements 16 10.2 Cultural Change 16 10.3 Store and Policy Change 16 10.4 Mission Change 17 10.5 Company Values Defined 17

11 Classification of Change 18 12 Cultural Web 19 13 Leadership 23 14 Conclusion 25 15 Limitations of Report 27 16 References 41 17 Bibliography 46 18 Declaration 51



1. List of Figures Particulars Page

1 Figure 9.1.: The Change Cube 15 2 Figure 12.1.: Asda Cultural Web - Before Change Initiatives (1991) 21 3 Figure 12.2.: Asda Cultural Web - After Change Initiatives (1996) 22



2. List of Appendices Particulars Page Appendix 1 Asda's Business Philosophy in 1965 28 Appendix 2 Organization Chart Prior to Archie Norman's Reorganization (1991) 29 Appendix 3 Organization Chart Subsequent to Archie Norman's Reorganization (1992) 30 Appendix 4 Comparing Theories of Change 31 Appendix 5 Archie Norman's Speech 32 Appendix 6 Top-Down Transformation 33 Appendix 7 Bottom-Up Change 34 Appendix 8 Achieving The Asda Way of Working 35 Appendix 9 The Three Year Plan 36 Appendix 10 Asda's Strategy - 10 Change Objectives 37 Appendix 11 Asda's Company Values 38 Appendix 12 A typology of change strategies and conditions for their use 39 Appendix 13 Asda Group Financial Summary 40



3. EXECUTIVE SUMMARY

A successful strategy is one where it is designed to work with the current and future

environment. Strategic Change is not a crisis solution. Organizations can not rely on a

successful strategy for long. Organizations need to revitalize its competitive advantage

continuously as new market players enter and current competitors imitate the offerings.

However change is not always successful and the reasons may be abundant.

RESEARCH AIMS AND OBJECTIVES

The author attempts to apply theory to practise by applying relevant theories and frameworks

in analyzing the short-listed organization and its change in strategy. This report has three

main aims. First, it attempts to identify and discuss the nature of change. Second, it aims at

evaluating the way in which the change was managed. And finally, it explores the nature of

leadership in the change.

STRUCTURE OF THE REPORT

This report consists of parts, each of which is further divided into sub-sections covering

relevant areas to the topic under discussion.

The first part introduces the reader to the report and also outlines the structure and topics of

discussion.



The second part introduces theoretical background on change and change management.

The third part gives the reader background of the short-listed organization and leads into the

causes of change in strategy.

The forth part introduces the new changes in strategy and attempts to compare them with

relevant theories and frameworks. It furthermore attempts to provide insight into the

organization’s new changes and evaluate its effectiveness using frameworks like the cultural

web.

The fifth part dwells in the area of leadership employed by the CEO and how effective was

the CEO’s skills in the success or failure of the change initiatives.

The sixth part presents the highlights of this report and expresses the researcher’s limitation

to this report, along with the significance of the change initiatives and the author’s own

views.



4. INTRODUCTION

This report is an attempt to investigate one company, Asda, to gain an insight into how

change management is implemented and how it’s dealt with.

It’s a contribution to the understanding of change management and leadership in general, and

to the understanding of practical application in an international company in particular.

This report is divided into three main parts:

The first part is concerned with literature review. The literature review explains change

management and leadership in context to the organisation in addition to discussing the

theories relevant to each of the areas.

The second part consists of sub parts. The organization of discussion is introduced and

background information leading to the change initiatives is discussed. It ends with the

research findings and comments on the change initiatives and leadership displayed.

The final part summarises the outcome and limitations and explores future directions.



5. INTRODUCING CHANGE

Mintzberg (1998) quote ‘no intended strategy can ever be so precisely defined that it covers

every eventuality, realised strategies have emergent as well as deliberate characteristics’.

History has witnessed no organization being able to sustain its competitive edge for long

(Peters, 1989).

Daft (1983) discusses four types of change which affect organisations, i.e. technology,

product or service, administrative changes and people attitudes (culture). The author feels

any of these changes would affect the other and lead to a total change encompassing the

organisation. Although change is present everywhere and in every form, resistance to change

is not surprising (Kotter and Schlesinger, 1979).

The author finds organizational change like a cube but with innumerable sides to it.

Organizational change can be described as strategic or non-strategic change (Pettigre, 1987),

incremental or quantum change (Greenwood and Hinings, 1993), planned or emergent

change (Wilson, 1992), and change in relation to scale (Buchanna and Boddy, 1992). Change

typically touches upon process, design, culture, and politics (Cao, Clarke and Lehaney,

1999).

The key issues are participation, involvement and commitment (Thompson, 2001).

Management of change exhibits four key features, dissatisfaction with the present strategies,

vision of the better alternative, a strategy for implementing change and resistance to the

proposals at some stage (Margerison and Smith, 1989). Changes result from the impact of a



set of driving forces upon restraining forces. The extent to which change takes places is a

result of which force is stronger, the driving forces or the restraining forces (Lewin, 1951).



6. BRIEF INTRODUCTION OF ASDA

Asda had its modest beginnings in 1920 by a group of diary farmers in Yorkshire County for

a means to sell milk (Weber and Beer, 1998a). Asda expanded by acquiring and diversifying

into bakeries, meat processing plans, and non-food businesses before finally going public in

1949. Asda Stores Ltd. business philosophy was to be the lowest price with the customer in

mind always (Appendix 1). With this Asda pursued setting stores in out-of-town corners and

targeted value-conscious customers.

In 1981, Asda initiated to increase profits by reducing costs and offering higher-priced value-

added products. With this change, Asda lost the price-leadership position and eventually

started to loose its customers. The managing director was replaced following a series of

change initiatives. Along with store refurbishment programs and customer service

improvements, the company diversified and acquired businesses like Gateway Stores, Allied

Retailers, MFI and Maples a chain of furniture and carpet retailers (Weber and Beer, 1998a).



7. CRISIS SITUATION

In 1991, the £4.5 billion chain had a debt over £1 billion and Asda’s stock price had crashed

from over 100 pence to below 30 and the organization had become highly bureaucratic and

hierarchical (Appendix 2). Archie Norman was offered the position as the chief executive

(Weber and Beer, 1998a).

Asda had engulfed into a wide speculation of takeovers and rumours of survival. One article

stated, “In a decade of unparalleled prosperity for supermarkets, Asda has managed to make a

series of blunders which have weakened it to the point where its survival must be in doubt”

(The Daily Telegraph, 1991). Another subtitled The Rise and Fall of the Asda Group, stated,

“Critics blame one thing for Asda’s current difficulties – bad management for more than 10

years” (The Financial Times, 1991).



8. STRATEGIC DICECTIONS OF ARCHIE NORMAN

Organizational change has been defined as the ‘process of adjusting the organisation to

changes in the environment’ (Michael, 1982). Three dimensions used are depth of the change,

the pervasiveness of change and the complexity of the change (Ledford et al, 1989). The

changes implemented at Asda, in relative terms to dimensions of change, were deep, wide

and complex. Norman’s change initiatives involved change in the management starting with

recruitment of key personal and firing of personal related to previous failures including the

chief financial officer (Appendix 3).

One of the important highlights of Archie Norman’s strategy was to get to the bottom of the

issue. Norman didn’t attempt to buy support, but rather just got to the big picture which

helped in effective regeneration (Pascale, Millemann and Gioja, 1997).



9.1. THEORIES AND FRAMEWORKS IN RELATION TO ASDA

9.2. ‘THEORY E’ AND ‘THEORY Y’

Beer and Nohria (2000) argue that although organisations have been adopting planned and

emergent change at different degrees in their strategy, almost 70% of all change initiatives

fail. Most organisations follow ‘Theory E’ or ‘Theory Y’ (Appendix 4) or manage to apply

varying degrees of them together simultaneously or even one followed by the other as Jack

Welch did at General Electric during his two decade long change initiatives (Beer and

Nohria, 2000). Norman’s style of adopting both theories can be judged with his opening

speech (Appendix 5).

Norman broke the hierarchal layers of management and sold off loss making businesses apart

from working on the softer elements of change with a focus on the employees and building a

new organisation wide culture. Wal-Mart executives have described Asda as being “more like

Wal-Mart than we are” (Beer and Nohria, 2000).

Norman focused on restructuring the organization and declared a wage freeze (Weber and

Beer, 1998b). It’s not surprising that the organization did not see any special total-quality

programs. Norman set out a culture encouraging experimentation and evolution, through

innovation. For instance, the risk-free zone stores set up enabling managers to reorganise the

store structure, layout, and product ranges to improve the store turnover. Asda’s successful

trials were streamlined and rolled out to other stores. These efforts built confidence in

Norman’s initiatives, which show how theory E and O were synergized together leading to



commitment, coordination, communication and creativity leading to sustained competitive

advantage.

9.3. ‘TOP-DOWN TRANSFORMATION’ OR ‘BOTTOM-UP CHANGE’

Kotter’s (1995) ‘Eight Steps to Transforming Your Corporation’ adopts the Top-Down

Transformation (Appendix 6) while the ‘Six Steps to Effective Change (Beer, Eisenstat, and

Spector, 1990) follows the Bottom-Up Change (Appendix 7). As Mintzberg (1998) points out

there is no one way to follow and it depends on the organization and the organizational needs.

Norman synergized both by driving change from the top but effectively involved people at

the bottom, the store level, from planning to implement them. Norman set out to start with

going back to basics of Asda’s low price strategy which was its true competitive advantage

before the group lost focus. Although the direction was being set up from the top, Norman

unilaterally determined that change would begin at the store-level by having two

experimental store formats. Norman shifted power from the headquarters to the stores

declaring ‘I want everyone to be close to the stores. We must love the stores to death; that is

our business’ (Beer and Nohria, 2000).

9.4. THE CHANGE CUBE

In Asda, change was implemented across all dimensions as discussed by Mintzberg (1998) in

the change cube (Figure 9.1.) involving the abstract and tangible elements of the organisation.

Analyzing the changes with respect to the Map of Change Methods (Mintzberg, 1998) the

approach to the process of change is driven. The sequence of changes from micro to macro

change touches upon changing the strategic context, the organizational context and the

emotional context (Mintzberg, Ahlstrand and Lampel, 1998).



Figure 9.1: The Change Cube by Henry Mintzberg

Source: Adapted from Mintzberg, Ahlstrand and Lampel, 1998.



10.1. CHANGE ELEMENTS

10.2. CULTURAL CHANGE

Norman encouraged dialogue with employees and customers through colleagues and

customer circles with programs set up like ‘Tell Archie’ so people could voice their concerns

directly.

Norman emphasised ‘shopping should be fun’ and led the organization to focus on the

customer with illustration of placing his desk in the headquarters next to the customer

complaints desk, enabling him to understand the effectiveness of all the customer focused

goals (Kare-Silver, 1997). Chauffer driven cars were removed from the company except one

which was reserved for ‘employee of the week’ (Eccles, Nohria, and Berkley, 1992).

10.3. STORE AND POLICY CHANGE

Norman launched a store renewal program but carefully selected a low-performing store

headed by an average competent manager which was located in a competitive location along

with three other grocery chains. They worked closely with the store manager and helped him

break the chain’s taboos. They formulated a set of principles called the ‘ASDA Way of

Working’ helping to guide all employees and stores (Appendix 8).

Norman along with the new management team set out to develop and revitalize the

organization in every aspect with a new three year plan (Appendix 9) along with ten change

objectives (Appendix 10). The change objectives tried to realize developing new store



formats to focus on low cost. The three year plan tried to set out broad objectives of being

financially stable, clearing debts, hiving unrelated and unprofitable businesses and change

programs to improve and set a new workable culture.

10.4. MISSION CHANGE

Along with the recovery plan and the change objective’s Archie Norman and the new team

set out a new mission statement – “Britain’s Best Value Fresh Foods and Clothing

Superstore, By satisfying the weekly shopping needs of ordinary working people and their

families who demand value” (Weber and Beer, 1998a). This helped in setting goals and

achieving them. It also clearly defined Asda’s goal in terms of industries to focus on namely,

fresh foods and clothing, apart from clearly setting out to be the ‘best value superstore in

Britain and defined its target segment’.

10.5. COMPANY VALUES DEFINED

Implementing the renewal programs gave much needed insights into the needs of the

organization. Asda required more lively, local, friendly and responsive staff apart from being

less hierarchical. All these helped create the Asda Company Values (Appendix 11)



11. CLASSIFICATION OF CHANGE

Although there was an urgent need for change and transformation, the change strategy

adopted was something new and revolutionary if analyzed with the framework of Dunphy

and Stare (1988) (Appendix12). Did the change strategy adopt collaborative or coercive

method or was it incremental or radically transformative? Typically a firm would draw one

between the four options, but carefully analyzed, Asda did strike a balance between

participatory evolution building a good relation with all stakeholders over time, but at the

beginning, analyzing Norman’s opening speech with management, it was a dictatorial

strategy. But nevertheless, Norman did truly have his own charisma in blending his

management skills as required by the circumstances.



12. CULTURAL WEB

The cultural web of Asda is a brief snapshot of the path chosen (Figure 12.1. and Figure

12.2.). The power and organizational structure from being highly bureaucratic and

hierarchical with the overall presence of the class-oriented society in United Kingdom,

quickly transformed with the much needed efforts of Norman into an organization of all

employees across all levels being treated as one and that with respect by addressing everyone

as ‘colleagues’. The entourage which usually accompanied the CEO or any other executive

from the Asda-House to the stores, were all eliminated with Norman setting a personal

example by visiting the stores uninvited and uninformed and interacting openly with the store

staff at all levels and not just the divisional heads. This led to a culture of trust and respect

which is an important ingredient for being receptive to change.

Asda had a lot of rigidity and power structures with simple things like reserved parking and

addressing of executives with the salutations like ‘Mr.’ and executives in suits and ties. These

were all removed and a new culture swept through transforming it into a fun place to work

with recruitment policies designed to hire people with a passion for sales.

Board meetings were held at stores followed with lunch at the staff canteen which enabled

interaction among corporate executives and store staff and customers. Asda’s rigid and

controlled entrepreneurial spirit, were all loosened and decentralized.

This overall helped Asda transit from a corporate rigid directorate outlook which was slow in

adapting, with low employee morale apart from being on the verge of bankruptcy transform



successfully into a store-based outlook which was highly dynamic and responsive. Asda was

more customer-focused and receptive to continuous improvement and change, establishing

open communication and increasing employee morale. Most importantly Asda was profitable

and one among the major grocery retailers in the market.



Figure 12.1.: Asda Cultural Web – Before Change Initiatives (1991):



Figure 12.2.: Asda Cultural Web – After Change Initiatives (1996):



13. LEADERSHIP

The leadership demonstrated by Archie Norman is similar to the one endorsed by Bourgeois

and Brodwin (1984). Ghoshal and Caulkin (1998) stress organizations need people who

exercise power robustly but with wisdom, passion and constraint or checks to ensure that

people are not forgotten in the drive for change. As Quinn (1988) highlights the most difficult

part in strategic management is implementation as transition and change impact structures

and systems, organisation culture and power relationships. Norman follows the same.

Nadler & Tushman (1989), describe three common roles shared by leaders; envisioning,

energizing and enabling. Although it’s a brief description of leadership, its one of the most

important attributes and Norman certainly fits the picture.

A testament to the effectiveness of the change initiatives implemented by Norman is the

visible difference of Asda in 1991 and Asda in 1996 (Appendix 13). Sales had gone over a

third to £6 billion and stock price had quadrupled to over 100 pence (Appendix 10). Over 120

stores had been renewed and customer visits were up by 50% (Weber and Beer, 1998c). Asda

was the fastest growing grocery retailer for 44 consecutive months. Norman had over-turned

a potentially bankrupt company to a leading profit generating organization with high staff

morale. Norman was promoted as the company’s chairman. The transformation continued

with increased turnover of 15% during 1997.

Norman did not stop with that. The success of the change programs only led to new change

programs being designed and making the organization in a path to glory and success with



continuous change initiatives. Norman’s style of management and leadership meets the

‘Level 5 Leadership’ scale introduced by Collins (2001), where Norman displays himself as a

highly capable manager, an active team member, catalyzing commitment to and with a

vigorous pursuit of a clear and compelling vision stimulating the group to high performance

standards building enduring greatness through a paradoxical combination of personal

humility plus professional will. Norman’s leadership style possessed transparency, initiative,

optimism, sense of goal and achievements apart from being able to influence and developing

others and building teamwork and collaboration.



14. CONCLUSION

This report investigated if Asda has successfully implemented change strategies under Archie

Norman. The findings of the secondary research and data were compared to the literature

review and the research questions answered.

The fusion of Theory E and Theory Y and the synergies that it brings is not a prescribed

approach to effective strategic change handling. The author believes it’s a blend of the style

of leadership and the management skills and the approach taken by Norman in being able to

change top management effectively and buying in support from all the stakeholders at Asda

that made it a success.

The author can’t resist praising Norman’s leadership and sense of goal setting. The broad

objective of turning around Asda from bankruptcy was met and profitability restored.

Although the leadership and nature of changes initiated can be questioned for better

alternatives, it’s a matter of personal judgement and the author feels, a true testament is the

success of Asda today, a decade after nearly being bankrupt.

Asda was taken over in 1998 by Wal-Mart. At first glance this appears to throw some

negativity around, but the takeover was at a premium and the store has ever since improved

and increased its market value. These factors are the true success criteria for the leadership.



The author comes from the positivist paradigm and even though everything looks realistically

positive, the author has best tried to support the conclusions with relevant theoretical

frameworks and superior literature review.



15. LIMITATIONS OF REPORT

This report does not try to emphasize on the change initiatives implemented at ASDA or the

various changes in the organization implemented by Archie Norman during his tenure as the

CEO, but rather observe the nature of the change and leadership displayed. It has to be taken

into account that the subject of discussion is still evolving and emerging and can be highly

disputed.

This report is limited to the fact with considerations to time and information available on the

subject of discussion and the nature of change involved for the organization’s confidentiality

purpose, apart from the limitation set by the word limit prescribed for this report and tries to

briefly touch upon the most important change initiatives.

The author tries to emphasize on theoretical knowledge and empirical research and data

already available on the subject of discussion. The findings of case research, especially of a

single sample, are often considered not to be generalisable. The reliance on case research and

journals do not give a first hand insight but the author has been limited in having a direct

encounter with an organization undergone a major strategic change in recent past.



Appendix 1: Asda’s Business Philosophy in 1965.

“Nothing we sell will be at full, normal expected prices. Our aim is to sell as much as

possible at a smaller profit margin, rather than a little bit at a large profit. That is to the

mutual benefit of the housewives and ourselves”.

Source: Weber and Beer, 1998a.



Appendix 2: Organization Chart Prior to Archie Norman’s Reorganization (1991). Source: Weber and Beer, 1998a.



Appendix 3: Organization Structure Subsequent to Archie Norman’s Reorganization (1992). Source: Weber and Beer, 1998c.



Appendix 4: Comparing theories of Change Dimensions of Change

Theory E Theory O Theories E and O Combined

Goals Maximize shareholder value

Develop organizational capabilities

Explicitly embrace the paradox between economic value and organizational capability

Leadership Manage change from the top down

Encourage participation from the bottom up

Set directions from the top and engage the people below

Focus Emphasize structure and systems

Build up corporate culture: employees’ behaviour and attitudes

Focus simultaneously on the hard (structure and systems) and the soft (corporate culture)

Process Plan and establish programs

Experiment and evolve Plan for spontaneity

Reward System

Motivate through financial incentives

Motivate through commitment – use pay as fair exchange

Use incentive to reinforce change but not to drive it

Use of Consultants

Consultants analyze problems and shape solutions

Consultants support management in shaping their own solutions

Consultants are expert resources who empower employees

Source: Beer and Nohria, 2000.



Appendix 5: Archie Norman’s Speech.

“Our number one objective is to secure value for our shareholders and secure trading future

of the business. I am not coming in with any magical solutions. I intend to spend the next few

weeks listening and forming ideas for our precise direction….We need a culture built around

common ideas and goals that include listening, learning, and speed of response, from the

stores upwards. [But] there will be management reorganization. My objective is to establish a

clear focus on the stores, shorten lines of communication, and build one team”

Source: Weber and Beer, 1998c.



Appendix 6: Top-Down Transformation TOP-DOWN TRANSFORMATION “Eight Steps to Transforming Your Corporation” for its overall managers (from Kotter, 1995)

1) Establishing a sense of urgency: examining market and competitive realities; identifying and discussing crises, potential crises, or major opportunities.

2) Forming a powerful guiding coalition: assembling a group with enough power to lead the change effort; encouraging the group to work together as a team.

3) Creating a vision: creating a vision to help direct the change effort; developing strategies for achieving that vision.

4) Communicating the vision: using every vehicle possible to communicate the new vision and strategies; teaching new behaviours by the example of the guiding coalition.

5) Empowering others to act on the vision: getting rid of obstacles to change; changing systems or structures that seriously undermine the vision; encouraging risk taking and non-traditional ideas, activities, and actions.

6) Planning for and creating short-term wins: planning for visible performance improvements; creating those improvements; recognizing and rewarding employees involved in the improvements.

7) Consolidating improvements and producing still more changes: using increased credibility to change systems, structures, policies that don’t fit the vision; hiring, promoting, and developing employees who can implement that vision; reinvigorating the process with new projects, themes, and change agents.

8) Institutionalizing new approaches: articulating the connections between the new behaviours and corporation success; developing the means to ensure leadership development and succession.

Source: Mintzberg, Ahlstrand and Lampel, 1998.



Appendix 7: Bottom-Up Change BOTTOM-UP CHANGE “Six Steps to Effective Change” for managers at the business unit or plant level (From Beer, Eisenstat, and Spector, 1990) 1) Mobilize commitment to change through joint diagnosis of business problems…By

helping people develop a shared diagnosis of what is wrong in an organization and what can and must be improved, a general manager [of a unit] mobilizes the initial commitment that is necessary to begin the change process….

2) Develop a shared vision of how to organize and manage for competitiveness. Once a core group of people is committed to a particular analysis of the problem, the general manager can lead employees toward a task-aligned vision of the organization that defines new roles and responsibilities….

3) Foster consensus for the new vision, competence to enact it, and cohesion to move it along….

4) Spread revitalization to all departments without pushing it from the top. …The temptation to force newfound insights on the rest of the organization can be great, particularly when rapid change is needed, but it would be the same mistake that senior managers make when they try to push programmatic change throughout a company. It short-circuits the change process. It’s better to let each department “reinvent the wheel” – that is, to find its own way to the new organization….

5) Institutionalize revitalization through formal policies, systems, and structures….The new approach has to become entrenched….

6) Monitor and adjust strategies in response to problems in the revitalization process. The purpose is to create… a learning organization capable of adapting to a changing competitive environment….Some might say that this is the general manager’s responsibility. But monitoring the change process needs to be shared….

Source: Mintzberg, Ahlstrand and Lampel, 1998.



Appendix 8: Achieving the Asda Way of Working First Steps The general store manager understands and believes in the Asda Way

of Working: everyone understands the purpose of the stores and how they fit in, so that everyone acts with the same aim in mind.

Team-working Managers meet regularly and begin to act as a true team. Managers begin to listen to and communicate with colleagues so that everyone knows what to do and how to do it.

Managing Improvement

Things are improved continuously by the improvement cycle: everyone set personally demanding goals, reviews what they have done and learns what to do better next time. Managers “coach” rather than “instruct”.

Love Customers

Everyone gets closer and closer to the customers to learn more about what they want: the customer is then setting the business standards. The store is more responsive to customer needs as colleagues can work more flexibly.

Achieving AWW

When all of the above has been achieved and kept going for at least a year, then you will have truly become an Asda Way of Working store. Teams will be setting their own stretch goals and will be pushing Asda House! But remember, to truly succeed you will need the right people with the right talents and attitudes – especially in the management teams. This will mean taking action to train and develop colleagues and to ensure that you recruit the right sort of people.

Source: Weber and Beer, 1998c.



Appendix 9: The Three Year Plan

Year 1 Year 2 Year 3 Creating the Platform Evolution of Format Restoration of Growth

New team Organizational renewal Actively traded business Brand definition New trading style New and replcaement stores Radical experimentation Roll out of formats Completation of basic rollout Financial stability Productivity program Low cost status Source: Weber and Beer, 1998c.



Appendix 10: Asda’s Strategy – 10 Change Objectives We will concentrate on meeting the weekly shopping needs of ordinary working people and their families. We will re-establish our price reputation. We will develop new (store) formats. We will drive change through the store portfolio. We will compete through productivity improvements. We will pursue innovation in packaged groceries and drinks. We will exploit our investments in logistics. We will focus information technology on profit generation. We will reposition and redevelop clothing, home and leisure ranges. We will focus on fresh foods. Source: Weber and Beer, 1998c.



Appendix 11: Asda Company Values 1. Our staff are our colleagues and our colleagues are our staff. We need to start treating our people differently. 2. Selling will be a universal Asda responsibility. Everyone one of our 65000 employees is here to help the selling effort. 3. Through selling we will serve our customers better. We need, not just good, but legendry customer service. 4. What we sell is better than value. We can believe in it because by selling it we are doing our customers a favour. 5. We hate waste of any kind. Waste is not an allowable option, we must reduce waste to be lower cost and to provide better value. 6. And finally, our job is to improve the business. Everyone is here to help improve the business every day and in every way. Source: Weber and Beer, 1998c.



Appendix 12: A typology of change strategies and conditions for their use Incremental Change Strategies Transformative Change Strategies Collaborative

Modes Participative Evolution

Use when the organisation is in good condition but needs minor adjustment, or is not in good condition but time is available and key interest groups favour change.

Charismatic Transformation Use when the organisation is not in good condition and though there is little time for extensive participation there is support for radical change within the organisation.

Coercive Modes

Forced Evolution Use when the organisation is in good condition but needs minor adjustment, or when it is not in good condition and key interest groups oppose change, but times is available.

Dictatorial Transformation Use when the organisation is not in good condition, there is not time for extensive participation and no support within the organisation for radical change, but radical change is vital to organisational survival and fulfilment of its basic mission.

Source: Adapted from Dunphy and Stare, 1988. Appendix 13: Asda Group Financial Summary (£ millions)



1992 1993 1994 1995 1996 1997 Turnover, excluding VAT 4529.1 4613.8 4822.2 5285.3 6042.3 6952.2Results before exceptional items Operating profit 180 190 196.7 251.1 316.7 371.9 Interest receivable (95.3) (50.8) (15) (7.6) (15.2) (12) Other 2.1 1.2 1.3 2.7 3.1 - Profit before taxes 86.8 140.4 183 246.2 304.6 359.9 Results after exceptional items Operating profit 180 190 196.7 251.1 316.7 371.9 Net exceptional items (451.6) 65.2 (308.9) 11 6.9 45.3 Profit (loss) before taxes (364.8) 187.4 (125.9) 257.2 311.5 405.2 Source: Adapted from Asda Annual Report, 1997. 16. REFERENCES



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18. DECLARATION

Asda in this report represents Asda Stores Ltd., and Norman represents Archie Norman and is

used with minimal interchangeably to maintain reader’s clarity.

The word count does not include Tables, Figures, Graphs, Appendices, Headers, and

anything discussed in brackets. The Executive Summary, Limitations of Report, References,

Bibliography and the Declaration do not constitute part of the word limit.

The word count in the main text excluding the aforementioned points is 2347 words.

Report style has been adopted for presentation as per guideline and attempt has been made to

maintain the different parts and tasks as distinctive as possible but yet linking key elements

together to avoid repetition and to communicate the significance.



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