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Introduction

Change is the only permanent in life. Change can be a lot of things, but no matter how
the benefits are spelled out, it's often a scary proposition. A business cannot simply rely
on past successes to withstand the internal and external forces that may threaten its
profitability. So in order to retain a company's viability, its leadership must maintain a
forward-thinking vision, be vigilant in recognizing the need for change and have the skill
and leadership style to guide the organization through the process of change (, 1991).
Today's successful companies must change daily to keep up with their customers'
changing needs and the competition.
Organizational change can be defined as Anything that affects people, processes and
chains of accountability is organizational change" (, 2003). Regardless of the size of an
organization or the industry in which an organization resides, preparing for change is
the same.
The need for change is driven by market forces, a need to improve performance
internally, competitive situations, and rapid changes in technology. Managers see a
clear and positive impact to the financial bottom line or a boost in the performance and
morale of employees. But improvements to technology and business processes also
bring about human changes, which, if not managed effectively, can be the demise of
any implementation. Monitoring and managing the human changes that result from
changes to business processes and technology is what change management is all
about.
According to (2005), consistent change management is critical to a new system
implementation's success. Managing the implementation of these major changes is a
must if you are to survive in today's highly competitive environment. Attempting to
implement major changes without a well thought out plan will result in wasted efforts,
lost time, missed sales and lower profits. Major changes within organizations are
required for long-term survival. Getting these changes implemented as smoothly as
possible with a minimum of disruption is a difficult, but manageable task.
Change management involves the process of effectively restructuring an organization
to make it more responsive to its marketplace. It is the process consists of identifying
destabilizing forces, determining the present situation, selecting the methods for the
implementation of change, developing an effective strategy and applying these

strategies accurately (, 1997). It is also important to determine the external and internal
sources of the need to implement changes.
Changes are continually happening in the workplace, and it would be futile for both
supervisors and employees to resist it. Employees in general resist change because
they are comfortable with the status quo (, 2002). Downsizing, buy-outs and mergers
are occurring at dizzying speeds it seems. And "planned" change, the introduction of a
new way of doing things, can arouse resistance.
This paper attempts to analyze external and internal factors that affect to the choice of
7-Eleven to decide on organizational changes. Any company has undergone challenges
in their business operations and 7-Eleven is one of the companies that have
experienced these difficulties. For a company to sustain its competitiveness, it must be
sensitive to the necessary changes in the organization. Usually in implementing
changes, there are a number of persons on the organization that resist to these
changes. However, change is good for the company when properly planned.

Company Background
7-Eleven is an international company operating as a convenience store in eighteen countries which includes Canada,
United States, Mexico and Puerto Rico in the Americas; Norway, Sweden and Denmark in Europe; Taiwan (Republic
of China), Peoples Republic of China (China), Hong Kong, South Korea and Japan in East Asia; the Philippines,
Thailand, Malaysia and Singapore in Southeast Asia; and also Turkey and Australia.

History
7-Eleven was founded in 1927 in Oak Cliff, Texas, USA in which started using the name 7-Eleven in 1946. In 1964, 7Eleven enter the business of franchising when the company purchased a chain store named Speedee-Mart.

It was in 1991, Ito-Yokado a supermarket chain, which operates 7-Eleven stores in


Japan, purchased the majority interest of The Southland Corporation. In 1999, The
Southland Corporation changed its name to 7-Eleven, Inc.

Initially, these stores were open from 7 am to 11 pm, which was unprecedented at the
time, hence the name; however, most 7-Eleven stores are now open twenty-four hours
per day, seven days per week.
In November 2005, 7-Eleven has turned to a publicly traded Japanese conglomerate
when Seven and I Holdings Co. has completed its purchased of the company.

Vision
7-Elevens vision is to be recognized as a leader in providing time-conscious consumers with a full-range of products
and services that meet their ever-changing daily needs.

Mission Statement
7-Elevens mission is to offer time-conscious customers a full range of products and services that meet their everchanging daily needs through quality, speed, selection and value in a safe, friendly and pleasant environment.
Core Values
7-Eleven is a customer-preferred convenience store which value customer expectations through quality, speed,
selection and value safe and pleasant environment. The company treats employees with dignity and respect the
company also recognizes franchisees and suppliers as business partners. In addition, the company strives to be a
good corporate citizen.

External Analysis
There are factors that can stimulate changes. One of these sources is external to the
organization. This includes society, political or legal environment and technological
developments.
Society
These changes are affected by the beliefs, values, attitudes, opinions, and lifestyles
shift in society. In the case of 7-Eleven, with the increasing changes in consumers
preferences, changes in the management of the human resources is significantly

important especially with the nature of the business of 7-Eleven to have the quality
service to its customers. In business, consumers dictate the success of the company.
The society today is more demanding and is demanding for quality products and
services and the value to their money.
Political/legal environment
Another source of change is the governments policies. 7-Eleven is operating in different
parts of the globe which would probably face these challenges of different government
policies. With these, the company would likely to change how they work in each country
that would be according to the policies of the government in the country they
operate. Political decisions or events in a country will affect the business climate in such
a way that investors will lose money or not make as much money as they expected
when the investment was made.
Political factors that may affect the 7-Eleven may include government laws and
regulations. Restrictions on repatriation of capital, profit, and management fees can
affect the operations of the retail store. In addition, regulation on the price controls for
rooms and other charges in some of its products. Moreover, implementation of high
corporation tax on products can affect the 7-Eleven.
Technological developments
With the rapid change in the technology especially in the communications and
transportation, organizational change would likely to occur. In a global organization,
communication and transportation are of great importance.
With the presence of Internet retailing, 7-Eleven faces extensive competition. The
company must understand that with these competitors, changes would likely to be a
significant development to the company especially with their services. Services can be
delivered effectively to the customers when there would be significant changes in the
human resource management.

Competitive Analysis
7-Eleven is currently having various competitions which include superstores, hypermarkets, convenience stores and
even traditional markets. However, the biggest competitors of 7-Eleven today are Circle K convenience stores,
ParknShop and Wellcome. Currently, in Hong Kong there are already more than 600 supermarkets and convenience
stores.

ParknShop is associated with three other supermarkets by the name of Great, Taste, and Gourmet. These high-end
supermarkets are after the more affluent clientele. They are ideal outlets for innovative, quality and priced
international food products. These stores also carry a wide selection of organic products. Great adopts a stylish
international food hall concept and its flagship store offers over 46,000 gourmet items.

In addition Wellcome also is a competitor of 7-Eleven which is also is owned of Dairy Farm. Wellcome, will also be
opening an upscale supermarket in Hong Kongs central commercial area catering to the more affluent clientele. It will
be Hong Kongs largest retail outlet for organic and natural products. About 6,000 items or 70 percent of the items in
the store will be organic or natural products. The store will include an organic sector for baby products. Health and
natural are the key concepts of this store.

Name of
Retailer

Ownership

Food
Sales

No. of
Outlets

Location

Type of
Purchasing
agent

over $1
billion

261, 27 of
which are
superstores

Hong
Kong

Importers/Agents

over $1
billion

215, 45 of
which are
superstores*

Hong
Kong

Importers/Agents

US$

Wellcome

ParknShop

Hong Kong

Hong Kong

Exporters
Consolidators

Exporters
Consolidators

Source: (2006)

ParknShop and Wellcome account for almost 80 percent of the supermarket turnover. Both supermarkets are able to
work closely with real estate developers to open stores in strategic locations, thus maintaining their significant market

share. Because of their significant market share, they are able to make suppliers offer goods to them at very
competitive prices, so that they are able to set retail prices lower than their competitors. Consequently, it is difficult for
small competitors to survive and new players to enter into the market.

Moreover, a new development in 2003 is that ParknShop expanded into 24-hour


convenience store operations. The supermarket giant has opened a number of stores
under the name ParknShop Express on a trial scheme and may expand the network
across Hong Kong if the experiment succeeds. Currently, there are about ten Express
stores. ParknShop has intrinsic competitive advantages over its rivals because it can
use the leverage of the groups existing infrastructure to offer products at low prices.
The stores carry the products as other convenience stores such as cooked food, drinks,
newspapers and magazines. In a bid to lure customers, the 1,000 products offered by
ParknShop Express are priced at the same level as those being sold at ParknShop.
This is in contrast to other convenience store operators charging at a premium of up to
15 per cent from those selling at supermarkets.

In the convenience store, Circle K is the competitor of 7-Eleven. Circle K is continuing to expand.

Retailer
Name

Ownership

No. of Location
Outlets

Purchasing
Agents

Year
Established

Clients
Age

Circle K

Hong Kong

180

Importers

1985

15-35

HK

Agents
Source: (2006)

Internal Analysis

SWOT Analysis

Strengths
Majority of the goods that 7-Eleven Store are low prices sue to low cost of operations. Also, 7-Eleven is more
convenient to customers. Consumers could avoid the long checkout lines, crowded parking lots, and traffic. There are
many choices of shopping methods; browsing the aisles, using product search, and choosing from a shopping list
customized from frequently bought products. They could shop 24/7 since the store is open for 24 hours in 7 days.
The store also offers variety of selection from fresh to processed food and whatever shoppers would need.
Weaknesses
Increase in competition is a great threat to 7 Eleven. Also, with the increasing high levels of educated people,
consumers are now more skeptics and are more demanding. In addition, the traditional markets in which people can
purchase fresh fruits and vegetables are still in its popularity in Hong Kong. Moreover, 7-Eleven has high employee
turnover which is a sign of bad management.

Opportunities
7-Eleven has also some opportunities. With the problem of information dissemination, an opportunity to acquire new
technology for more efficient operations can now be possible. Also, 7 Eleven has been already known by the people
as a store open in 24 hours they have the advantage over it. In addition, the company also got the most strategic
locations of their stores. Moreover, the company can still expand their business and open some more stores
especially in China which got the opportunities of expansion with its large market.

Threats
However, despite the strengths, the store has also its weaknesses. One of which is inventory inefficiency in which
they would experience stock outs. Moreover, with the presence of superstores, their current marketing strategies
have been overshadowed. In addition, low performance of workers also has negative effect on the efficiency of the
store.

Identification of Problem/Issues

7-Eleven faces an intense competition. With the continuous globalization, it is important for 7 Eleven to maintain its
leadership in the convenience store industry. Superstores are already emerging which are mostly are also beginning
to open 24 hours.

From the SWOT analysis, the company faces various problems that are needed to have a solution. It is
recommended to concentrate on some areas. One of the areas that have a major impact on offering goods and
service is the efficiency and effectiveness of the people doing the work.

One of the major objectives that the company should concentrate is the improvement of their workers. A strategic
human resource development must be implemented within the company.

Human resource development (HRD) plays a vital function by maximizing employee expertise to achieve the main
objectives of an organization. Human resource development (HRD) has served the needs of organizations to provide

employees with up-to-date expertise. According to and (1994) Advances in HRD models and processes have kept
pace with the increasingly sophisticated information and production technologies that continue to diffuse throughout
our nation's most vital industries. During this period of rapid technological development, the HRD function could be
relied upon to support a broad range of business initiatives that required a competent workforce.

Critical business issues, from new marketing strategies to innovations in production technology, were based on,
among other factors, the performance capabilities of those expected to use these new work systems. As a factor
integral to business success, employee expertise itself has been expanded through effective programs of employee
development. According to (1994), expertise is defined as the optimal level at which a person is able and/or expected
to perform within a specialized realm of human activity.

However, according to and (1994), today's business environment requires that HRD not only support the business
strategies of organizations, but that it assumes a pivotal role in the shaping of business strategy. Business success
increasingly hinges on an organization's ability to use employee expertise as a factor in the shaping of business
strategy.

The rationale for using HRD interventions to support business objectives is to enhance employee expertise through
HRD increases the likelihood that business objectives will be achieved ( and , 1995; , 1994).

Training and other initiatives associated with total quality management have been critical in transforming marginal
manufacturing plants into successful facilities (, 1994). HRD continues to be a primary vehicle for assuring mandated
levels of employee competence and public safety in highly regulated sectors like the nuclear power industry (, 1994).

and (1995) posit the argument that "Organizations in the new economy have come to realize that employee
expertise is a vital and dynamic living treasure. The desire for employee expertise is meaningless unless an
organization can develop it in ways that respond to the business needs."

However, some Organizations have rushed to embrace information technology as a way to improve overall efficiency
and reduce costs. Yet, it is not the information technology itself, but the way information technology is thoroughly
integrated into major business processes, that represent the greatest opportunity for the successful transformation of
outdated business processes (, 1993). However, those who have successfully used information technology to

improve business performance will quickly point out that these advantages will not materialize without highly
competent people to both implement and utilize these innovative work systems.

The human capacity must exist to use information technology to maximize performance (., 2003). Employee expertise
is critical to an organization's ability to capitalize on the vast opportunities afforded by information technology. HRD is
then in a strategic position to assure that the required expertise is available and effectively utilized.

Organizations in market leadership positions realize sooner or later that human resources are ultimately the only
business resource with the creativity and adaptive power to sustain and renew an organization's success despite
changing market conditions (, 1993). The development of employee expertise provides a potentially inexhaustible
source of ideas for further innovation and increased productivity because the most basic output of the highly
competent employee knowledge is not used up in the process of producing it (, 1989). Developing employee
expertise at all levels of the organization and using knowledge as a catalyst for growth and competitive advantage
represents a major frontier in organizational performance that is only now beginning to be fully appreciated (, , , ,
and , 1994; , , and , 1995).

Resistance to Change

No matter how much analyzing, planning and employee participation you do, some of
your employees will resist the changes. The majority of human beings naturally resist
change (, 2002). Change takes employees (and some presidents) out of their comfort
zone and places them in an unknown situation. This results in resistance to the needed
changes.
According to (2002) resistance comes in two forms; overt and passive. Overt resistance
is the easiest to overcome. It comes from the employees who openly oppose the
changes. Allow these employees to speak their mind and then work with them to
overcome their concerns.
Passive resistance is much tougher to overcome. If you don't know it exists you cannot
overcome it. The most passive resistance comes from employees who have n opinion
when asked about the proposed changes. Everyone has an opinion; be very careful and

watchful of those who do not express it when asked. After passive resistance is
detected take immediate action to eliminate it.

No Change Scenario
If 7-Eleven would not change its human resource management, there would be an increasing number of staff
turnovers because mainly staff are not motivated and are unsatisfied with their work. In addition, because of lack of
expertise of most of its staff, more problems will prevail.

Change Scenario
When the company would adopt changes on its human resource management, the staff would likely to be motivated
and empower with their proper training and with their development and expertise with their job.

Conclusion
More than anything, human resource is important to any company. And its development would likely improve the
performance of any company. HRD serves a broad range of interests and outcomes in organizations. The primary
purposes to be served by HRD can range from programs intended to meet the personal development needs of
individuals such as identifying individual learning styles or personal financial planning to HRD programs necessary for
everyone in the organization such as programs addressing a new performance appraisal method or role changes
secondary to structural reorganization. HRD is a crucial antecedent to successful business strategy. In these
situations, HRD actively shapes strategy.

Some companies jump into deciding on application of technology however, it is important first to reorganize the
organization as a whole. Changes in the management of human resources should be the first at hand with the
company of 7-Eleven.