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Organizational Transformation Morrisons plc Case Study Consultancy Report Presented to: Board of Morrisons plc By Adnan
Organizational Transformation Morrisons plc Case Study Consultancy Report Presented to: Board of Morrisons plc By Adnan

Organizational Transformation Morrisons plc

Case Study

Consultancy Report

Presented to: Board of Morrisons plc

By

Adnan Taha

(L0016SZTSZT0616)

Submitted to: Dr. Agnes Taylor

2016

Consultancy Report

Page #

Executive summary

1

Performance gap

2

Six Sigma model

3

value propositions for the change proposed

8

Leading the change proposed

10

The benefits of the change for Morrisons

10

The risk of not implementing the change

10

The risks perceived in implementing the change

11

Plan for implementation of the change proposed

11

Evidence review

13

Reflection

21

Bibliography

23

Appendix

25

1.Executive Summary

This consultancy report focuses the light on the change proposed. The purpose of this change is to ensure that Morrisons will be successful company in the long run through tackling the most significant problems that the company suffers from. This can be achieved by training salespeople to improve their attitude and make them acquire interpersonal skills, besides, increasing their salary and adopting the strategy of employee engagement. Moreover, Morrisons has to be more competitive by reengineering the process of “made by Morrisons” products. Furthermore, Morrisons should put the focus on distribution channels, online channel and convenience stores, by choosing the most profitable locations to the convenience stores through conducting a survey to ask customers questions about the best locations to them. For the online channel, a specialist company should undertake this task. The problem of increased absent rate can be tackled by eliminating the process of manager-centred decision making and giving line managers the authority of decision making.

This will bring a lot of benefits to Morrisons such as increasing market share, profits, the number of customers and the share price. Also, the cost of production and absence rate will

decrease. Furthermore, employees’ productivity and customers’ loyalty will go up and the company will be able to attract rivals ‘customers.

2.Introduction

The main objective of this consultancy report is to propose agenda for change to Morrisons by focusing on the most significant problems that Morrisons is suffering from. This can be done through the following:

1-

Improving salespeople’s interpersonal skills and their way of communicating with customers.

2-

Increasing Morrisons’ competitiveness by reengineering the process of “made by

Morrisons” products.

  • 3- Rebuilding online channel and convenience stores.

    • 4- Giving line managers the decision-making authority.

  • 2.1 Morrisons’ Background and introduction to the grocery industry in UK.

Morrisons holds fourth position in the grocery industry in UK. Tesco comes first, then it is followed by Sainsbury’s, while Asda comes third. In 1899, William Morrisons established his small shop for selling egg and butter in Bradford where the headquarter lies there now. By the years of 2004, Morrisons has started to increase its presence in Wales, Scotland, besides to London. In that year, Morrisons took over Safeway as well. The number of staff is about 117000 employees, while the number of stores is 569. Morrisons ‘market share is 10,4%. Tesco comes first at 28.1%. It is followed by Sainsbury’s (15.9%), while Asda holds third Position at 15.7% (Statista,2016).

The industry has experienced price war among Tesco, Sainsbury’s, Morrisons and Asda. This war has caused loss because of the intense competition. This war reached its peak between 2013 and 2015. The intensity of rivalry has started to reduce now. Retail think tank (2014) performed study on the consumer behaviour in the grocery industry in UK. The findings have pointed out that online channel and convenience stores will be the best channels for shoppers who like avoiding congested roads and saving time. Wharton (2007) did research into retail customer dissatisfaction and the finding was that unwelcoming salespeople and word-of- mouth lead to losing business.

3. Situation analysis

  • 3.1 Performance gap.

Morrisons aims to close any gap between the actual performance and the goal(desired)

performance or reducing it for making sure that this gap will disappear for a long time. Closing or reducing the gap can be doing by making changes(improvements). Morrisons experiences the following gaps:

1- Morrisons aims at serving customers better through concentrating on technology and

2-

helpful employees. Actually, salespeople working in Morrisons are unwelcoming and the clients cannot be served well. The firm is eager to be competitive. In real, Morrisons is not competitive and the

companys market share has experienced a decline. 3- The company’s mission is making Morrisons distinguished from other rivals. Actually, Morrisons cannot differentiate itself form the competitors with the poor channels, namely online channel and convenience stores. 4- Morrisons has reduced the leadership team from 110 to 65 and the number of head office has declined from 3500 to 2000 to build a culture on speed and team work. The

gap is that line managers have sent employee absence reports to managers and there is a delay in processing these reports because line managers are not entitled to make decisions (Morrisons annual report,2015).

3.2 Six Sigma

Six sigma is a model used for organizational transformation or change to a firm willing to change. Generally speaking, organizational transformation is making change at all organization levels but change is making improvements in some sides. Six sigma, as a model for change, is divided into five levels of performance as the following:

1-

Define. In this phase of performance, we would know the most significant problems that exist in the company. The problems are as the following:

1- Unwelcoming salespeople. According to a study performed by Wharton (2007), this type of salespeople and word of mouth lead to losing business. This problem poses a real risk to Morrisons because of dissatisfied customers. The effect of this problem is devastating such as making loss instead of profits, a decline in Morrisons’ share price, the problem of illiquidity will get worse, Morrisons will be unable to pay creditors and suppliers and the company’s market share will decrease over time because of the

number of customers will decrease.

  • 2- Morrisons is not competitive in the market, whereas Tesco, the second largest retailer in the entire world, is operating in the market. If Morrisons cannot be competitive, this means that the company will lose more customers and Morrisons will be unable to acquire new customers. Also, this means a decline in the market share and in the share price as well.

    • 3- Channel constraints because Morrisons’ online channel does not work well compared to the rivals. Also, Morrisons closed all the convenience stores as well. Ignorance of this problem will result in disastrous consequences because there has been a change in consumer behaviour in UK. Online shopping and shopping at convenience stores will be the best shopping pattern to customers in UK. We have to be realistic about this problem that poses a real threat to Morrisons as a brand equity.

4- Line managers have sent reports to their managers to make decisions about the subordinates’ absence. These reports need a long time to be processed by managers. This delay pushes some employees in other departments to take the matter lightly. So, some of them have become absent from their work without reasonable excuse. This will increase the labour cost that all organizations aim to reduce it and this problem has become worse because employees from other departments take it lightly. So, employees’ productivity and employees’ loyalty to the company will go down.

  • 2- Measure. This stage answers the questions about the sources of information gathered about the problems (measurements) to judge confidently that there is a problem or problems. In other words, how is the process measured? what is its current performance now? This is to know the shortcomings in the processes. For the first problem, apart from other problems such as the intense competition between the retailers in the grocery industry, it is noticeable that salespeople are not welcoming. The information gathered about this problem is based on number of problems observed between salespeople and customers (75 problems observed), number of complaints against salespeople (85 complaints) and number of notes taken by line managers about salespeople’s attitude and their way of communicating with customers (36 notes). It is clear now that salespeople’s attitude poses a real risk to Morrisons.

On the second problem, Morrisons is not competitive because. Morrisons ‘share

market has experienced a decline from 11.9% in

2012

to

10.4%

in

2016

(statista,2016). This means that Morrisons is not competitive enough. Morrisons, therefore, has to think out of the box to enhance the competitiveness.

Regarding to the third problem, Channel constraints. Morrisons closed all non- profitable stores (Morrisons annual report,2015). Morrisons did not state in the annual report that the company sold all the convenience stores of 25 million pounds because of the bad location that caused huge loss (Simpson,2015). Furthermore, Morrisons has witnessed poor sales because its online channel has not worked well (Jim,2015) and the company did not state that in the annual report. This disagrees with the combined code that urges firms to exercise honesty, frankness and transparency. The consequences of channel constraints are clear because sale figures have seen a decline from18.116 million pounds in 2013 to 16.816 million pounds in 2015

(Morningstar.2016).

For the fourth problem, the reports about subordinates’ absence are available in top managers’ desks and line managers’ desks (90 absence cases). This problem is risky because absence without reasonable excuse may become a habit for employees working in other departments. Also, the cost of staffing will increase; productivity will decrease and many employees become disloyal to the company.

  • 3- Analysis. This phase of performance answers the question about the root cause of the problems at hand and the major reasons for the emergence of the problems. The major reason for salespeople’s attitude is attributed to their lack of interpersonal skills and salespeople get paid low salaries compared to employees working in other departments. Each employee has the right to get paid a good salary to live in a good standard of living. The absence of good materialistic incentive pushes the employees to underperform. On the second problem, Morrisons is eager to be competitive. In real, Morrisons is not competitive enough and the company’s market share has witnessed a decline over the last five years. The principal reason for this is that Morrisons has to exploit its competitive advantage that is “made by Morrisons” products. Morrisons manufactures about 50% of the food products sold to customers. This can be a real chance to make

Morrisons more competitive than other rivals.

Regarding to the problem of channel constraints (convenience stores and online channels) is attributed to not conducting questionnaires to ask the customers about the best location to the convenience store. Also, Morrisons has no specialists in the locations. For online channels, the major reason for the underperforming online channel is that Morrisons did not choose a good specialist company able to undertake this task.

For the fourth problem, the reason is that the authority of making decisions is concentrated in the top managers and this causes a delay. Line mangers have sent reports about their subordinate’s absence and the managers are busy with other matters, while line managers are not entitled to make decisions about this issue.

  • 4- Improve. In this stage of performance, we have to take the best actions to ensure that the problems will be tackled and the root causes of them will be removed. For the salespeople, Morrisons should train the salespeople for acquiring the required skills. Also, Morrisons has to motivate salespeople by materialistic incentive through increasing the salary from 9 pounds for work hour to 11 pounds for work hour to make them pay more attention to their work. Active salespeople mean shorter waiting time and this will enhance customer satisfaction, while unwelcoming salespeople mean that there are a lot of employees who do not prioritize their work. Therefore, the healing practice for this problem is employee engagement. Sadly, only 17 % of companies in UK adopt this strategy although it is a profitable one and the consequences of adopting the strategy are encouraging. This change will support employee value and the outcome will be encouraging such increasing sales and profits. The solution for Morrisons to become competitive is to reengineer the competitive advantage “made by Morrisons” by expanding in manufacturing other food products to sell them in Sweden and sell them to other huge supermarkets in other lands where the demand for this type of goods is high. By reengineering this process, Morrisons can bring the following benefits:

1-

Increasing cash flow, especially all retailers, operating in this industry, are

suffering from illiquidity because they buy the products from suppliers on credit. 2- The cost of production will decrease because of the increased production, especially the company has skilled workers and high quality of machines.

  • 3- Avoiding the risk coming from suppliers who may stop providing Morrisons with

the food products. 4- Manufacturing food products will be cheaper than outsourcing, especially the European suppliers after Brexit. 5- The cost of the process will include freight cost and other reasonable expenses because the gulf countries do not impose high tax on imports. The constraint on expanding in manufacturing other food products is financial resources but this will not need so much cash if Morrisons will start with foods that do not need new machines. Over time, this process will make cash available to Morrisons that can purchase the new required machines. By reengineering this process, Morrisons can be more competitive and the cost of production will

reduce, then the company can offer this type of products at competitive prices compared to the rivals. This process will make the customers more satisfied and the customer will prefer the company’s products to other companies’ products. Also, the company will be more competitive and the share market will increase.

On the third problem, Morrisons has to establish his convenience store in profitable locations. So, Morrisons must ask the customers about the best location by conducting a survey. Morrisons failed to avoid or mitigate the physical risk (location) that caused loss and the company should be aware of that now. Also, Morrisons should find a specialized company to undertake the online channel. The online channel should be distinguished and effective to compete with the rivals’ online channel. This improvement will increase customer value because the products become easily obtainable.

The company should face the fourth problem by changing this culture, the concentration of decision making in top managers, should be changed by giving line managers the authority of decision making. Also, employee engagement has a positive impact on employee absence rates because highly engaged workers mean less absence rate and more employees ‘productivity. Also, the company will increase customer value because this solution means shorter waiting time. 5-Control. In order to maintain and monitor the actions (improvements) that

should be measurable through giving them metrics (performance measurement). This is to make sure that the actual performance matches the desired performance after making corrections. To gauge the improvements, the model used for measuring the performance is shown in the table (1) in appendix (1). The methods are policies that if the company implements them, then it will reach the sub-targets. If the company reaches their sub-targets, this means that the company achieves its final target. For the first problem, If Morrisons implements training, salary increases and employee engagement that are methods, then the number of complaints against the salespeople and the number of problems observed between the customers and salespeople will reduce, reaching less than 3 problems for each. This will enable the company to reach its final target that is improving salespeople’s attitude. The same goes for the other problems.

3.3 value propositions for the change proposed

Any organizational transformation proposed means that these improvements will positively reflect on the stakeholders but customers comes in the first place. So, we will explain the effects of the improvements proposed on the customers, the employees, the suppliers and the shareholders. Improving salespeople ‘s attitude will encourage the current customers to shop at Morrisons. Also, this improvement will attract new customers (rivals’ customers) to shop at Morrisons. So, sales will increase. Reengineering the process of “made by Morrisons” will allow Morrisons to sell the products at competitive prices and this will enhance customer value. So, sales and the market share will increase. Convenience stores and online channel will contribute to enhancing customer satisfaction because the products are easily obtainable. Hence, sales and profits will go up. For the fourth improvement, the operations will be done quickly and this will reflect on customer satisfaction such as shorter waiting time. The effects of these improvements will reflect on the employees as well. The salespeople will pay more attention to their work and treat with the customers tactfully. Also, after adopting employee engagement, the engaged employees will be more loyal to the company and their performance and their productivity will increase too. Absence rates and the cost of staffing will go down as well. Shareholders ‘value will increase as a result of an increase in share price due to an increase in sales and the market share. As a result of the improvements, the company will be able to pay suppliers on time and supplier relationship management will plays an important role in purchasing goods at competitive prices. These improvements will enhance customer

value and keep the company’s health in the long run and this is the core of the organizational

transformation.

As shown below in the conceptual model, the problems, such as salespeople’ attitude and the problem of competitiveness, are symbolized as square. The root causes of these problems are shown as rectangle such as lack of interpersonal skills and low salary, while the solutions are symbolized as rounded rectangle such as training and increasing salary. The risk is represented as oval such as financial resources for convenience stores, online channel and the reengineered process, while the risk of location for the convenience stores. The target is shown as diamond. The target is proposing agenda for change and the results of reaching the target are symbolized as circle such as an increase in sales, share price, market share and employee’s productivity.

Training and Lack of Employe Interpersonal Salespeople’s engagement skills attitiude Low salary Increase in salary Not
Training and
Lack of
Employe
Interpersonal
Salespeople’s
engagement
skills
attitiude
Low salary
Increase
in salary
Not exploiting
Morrisons is not
competitive
enough
Agenda
Reengine
Made by
for
ering the
Morrisons
change
process
Conducting
channe
Location for
a survey
convenience
Channels
for
stores
constraints
locations
Not effective
Highly
online channel
Specialist
Delays in
company
processing
Decision making
absence reports
concentration
Decision
making
financial
by line
resources
manager
Customer
retention,
Location
attracting
An increase in
competitiveness,
share price,
market share
and employees
new
‘productivity
customers

The diagram illustrates the conceptual model for the problems and the solutions.

4. Leading the change proposed

For the first improvement, Human resources management(HR) will lead this improvement by training the salespeople and make them acquire the interpersonal skills. If Morrisons has no qualified people, a specialist company will undertake the task and HR should choose a company that is able to perform it at a good price and a high quality. For the second and the third improvement, channels and reengineering the process, cross-functional team will lead these improvements because both of them need a lot of functions such as procurement, customer service, logistics, information technology(IT) and marketing. The board of directors will lead the fourth improvement that is giving line managers decision making authority.

5.The benefits of the change for Morrisons.

The effects of the improvements on Morrisons will be encouraging as the following:

1- Improving salespeople’s attitude. This will lead to customer retention and word-of- mouth will help Morrisons to attract rivals’ customers. Salespeople will be more loyal to their company and their productivity will increase too. So, revenue will go up.

2- Reengineering made by Morrisons will result in an increase in market share, profits and cash. Also, Morrisons can sell the products at a competitive price.

  • 3- Convenience stores and online channel. This improvement is very important because

of the change in consumer behaviour. Morrisons can attract new customers (rivals’ customers). Also, the company can increase profits and its market share. Furthermore, the company will satisfy shareholders value by increasing the share price. 4- Giving line managers the authority of decision making. The improvement will decrease the cost of staffing and absence rates. This improvement will make the employees more loyal to their company, especially after adopting employee

engagement and their productivity will increase as well.

6. The risk of not implementing the change.

Morrisons will lose more customers because of salespeople’s attitude. Word of mouth will have a negative impact on the company. Also, the company cannot attract rivals’ customers. So, market share and profit will decrease. If Morrisons does not reengineer the process (made by Morrisons), the company cannot be competitive. Therefore, the market share will decline. The consequences of not rebuilding the convenience stores and online

channel are devastating. Profits, market share and sales will decrease and the company will lose the current customers because of the problems with accessibility. Not giving line manager decision making authority means an increase in labour cost and many employees will be absent from their work without reasonable excuse. So, many employees will be disloyal to the company and the productivity will go down. Customers waiting time will increase too.

7. The risks perceived in implementing the change and ways to overcome these risks.

The first improvement, improving salespeople’s attitude, may be costly if the company has no qualified people who are capable of performing it. In this case, the company should find a specialist company at a good price and a high quality. For the second change, reengineering the process of “made by Morrisons” may need cash. So, the company has to expand in manufacturing goods that do not need new machines. Over time, the company can purchase the new required machines from money can be available from this process. Rebuilding convenience stores need a lot of cash. Therefore, Morrisons should start with the most profitable locations. In this way, the company can finance the next convenience stores from these profits. The new Online channel may be expensive and the company has to find a company that is able to undertake this task at a reasonable price and a high quality.

8. Plan for implementation of the change proposed.

Please see the next page number (12).

Change/improvement

Target

Leading

Timeline

   

change

2017

2018

2019

Improving

Less

than

3

HR

or

2017

-

-

salespeople’ attitude

complaints, less

specialist

than 3 problems

institution

observed

and

less than 3 notes

taken

by

line

managers

Expanding

in

made

-An increase in

Cross-

2017

2018

 

by Morrisons

market share

functional

 

from (10,4%) to

team

(13%).

This

means that the total revenue will go up too.

-sales

from

other countries comprise 8% of

total sale

 

Convenience store

Sales

comprise

Cross-

2017

2018

2019

15%

of

total

functional

sale

team

Online-channel

 

Sales

constitute

Cross-

2017

   
 

20%

of

total

functional

sale

team

Line

managers’

Absence

rate

The

board

2017

   

decision

making

decreases

by

of directors

authority

90%

The table shows the plan for the change proposed.

Second: Evidence review

A company’s share price is no longer the compelling evidence that the company will succeed in the long run. Therefore, a company should be curious about organizational transformation

to face the external changes related to costs, skills, customer’s expectation …etcetera and to

face the intense competition as well. The company should review its businesses to discover the gaps, then work on them to close or reduce them. Also, it has to transform from reactive company that is concerned with solving the current problems to a proactive one that is able to expect the coming problems to tackle them. This brings many benefits such as reducing costs

and eliminating duplication. In this section. We will focus the light on the following topics:

1-Organizational Transformation. 2-Gap analysis.

3- Six Sigma model.

4-Business process reengineering (BPR). 5-Employee Engagement 6-Organizational culture change.

Six Sigma
Six Sigma
Organizational culture Gap Organizational Analysis Transformation Employee Engagement Business Process reengineering (BPR)
Organizational
culture
Gap
Organizational
Analysis
Transformation
Employee
Engagement
Business Process
reengineering
(BPR)

The diagram explains Organizational Transformation and its tools.

As shown, organizational transformation aims to make a company proactive through making the operations easier and tackling the most significant problems that the company suffers

from. This requires that the firm identifies gaps between the current performance (actual performance) and the expected one to close them. This can be achieved by many means such as organizational culture change, business process reengineering and Employee Engagement. A model for change should be taken into account. So, Six Sigma one of the models used for organizational transformation or change.

First: Organizational Transformation and gap analysis

Mckinsey & company (2011) stated that organizational transformation is a way to make a company strive and grow through aligning its strategy, people, technology and business processes. The purpose of organizational transformation is to maintain a firm’s performance at a high level in order to face the following:

1-External changes. Firms are operating in a changing world and this may put a firm’s existence at risk. Therefore, the firm should proactively act to survive and grow.

2- Intense competition: The intensity of competition among companies which belong to the same industry is increasing over time and it cannot be overlooked or ignored. So, the company is forced to transform from its current state to required state. The company’s share price does not mean that it will survive for ever and it should manage itself in this changing world through focusing on company’s long-run health by renewing, aligning and executing faster than rivals.

PWC (2014) asserted that gap performance is between strategy intent and strategy performance. This gap poses a real threat to firms that should align their strategy in order to make long and short-term profits. PWC conducted a survey on US firms’ readiness for organizational transformation and the findings have pointed out that only 50 % of firms are ready for it in response to the competition and the environmental change. The firms are successful when they pay more attention to strategy alignment because companies should leverage its operations to increase customers’ value. Unable companies to align its business units will result in more dissatisfied customers and increase costs.

Consulting research group (2010) stated that the purpose of organizational transformation is to reduce cost, increase profits, eliminating duplication and processes that cannot create value. organizational transformation goes through phases as the following:

  • 1- Organizational assessment.

2-

The company is assessed from top to bottom in relation to risks, leadership commitment, organizational requirements (plans, experienced staff …etcetera) and human resources (HR) to align HR to the strategic objectives. Transforming. It means transforming a company from current state to required state. The success of this step depends on HR alignment with the strategic objectives. In other words, allocating HR needed and other resources to processes that create value.

  • 3- Performance monitor. To know shortcomings in processes and explore opportunities available in processes as well through exploring the root cause of each problem.

    • 4- Process improvement. Through giving solutions to each problem to tackle the company’s problems

      • 5- Performance review. By giving processes indicators (metrics) to be reviewable.

We should notice that the programme used for organizational transformation is different from firm to another but all of them follow the same guidelines such as the problems, the major reasons for the problems, improvements(solutions) and giving metrics to the improvements for monitoring them. After implementing the organizational transformation, the company transforms into one efficient team that manages the strategic objectives with focusing on sustainability for the future. Also, we have to pay more attention to the concept of organizational transformation and change management. Change management means making improvements by implementing limited initiatives that may not include all aspects of the organization, while organizational transformations means a radical change by implementing a lot of initiatives to reinvent the firm. Organizational transformation is riskier than change management.

Mckinsey & company (2011) argued that the successful organisation transformation answers the following questions:

  • 1- What are the actions taken to improve the firm’s performance?

    • 2- What are the underlying risks of transforming the firm and how can the firm mitigate or overcome them?

      • 3- How can the firm ensure that these improvements will last?

        • 4- How can the company create a culture of persistent change to stay on top for long time?

5-

How can the company create a sustainable competitive advantage?

Consulting research group (2010) asserted that the success of organizational transformation relies on many criteria. Some of them are the following:

  • 1- Transformation risk assessment: This means that performance management evaluates processes’ progress, stakeholder’s satisfaction and regulations.

    • 2- Strategy: developing strategy to ensure that the company is proactive and allow it to increase the company’s performance.

      • 3- Organizational alliance: The key to success in organizational transformation is that human resources(HR) works in harmony with the strategy and HR should be aligned with the strategy that is tied up with metrics to develop the process.

        • 4- Team: the company should institute cross-functional team (employees from all departments) to make the organizational transformation succeed because the team will implement the strategy.

          • 5- Employee training and development: Successful organizational transformation needs well-trained employees to increase their performance. This will increase their productivity and reduce costs as well.

Second: Six Sigma. This model is used when a company decides to make a change or to adopt the organizational transformation. Thomas etal (2009) stated that Six Sigma is a strategy that aims to reduce costs and create improvements in the company through concentrating on customer satisfaction and cost saving. The purpose of Six Sigma is to improve the internal process that makes service/product offered to customers better. This model is divided into five levels of performance as the following:

  • 1- Define. Who are the targeted customers? What are the company’s priorities? What are the problems that a company suffers from? What are the most significant problems?

    • 2- Measure. What are the processes in the company? How can the processes be measured? What are the shortcomings in the processes?

      • 3- Analyse. What are the root causes of these shortcomings that lead to underperformance?

        • 4- Improve. What are the best solutions(improvements) to tackle the problems?

          • 5- Control. How can the firm follow up the processes to make sure that the solutions work smoothly? Metrics should be taken into account.

Dumitresu and Dumitrache (2011) asserted that Six Sigma aims to improve the financial performance to the company through focusing on reengineering the processes to produce distinguished products/services. This model is interested to meet customers ‘needs through offering products/ services at a competitive price and a good quality. Motorola developed six- sigma in 1981 in order to rise up the quality and to get rid of the root causes of defects and to decrease variation and defects resulting from manufacturing. Motorola could rise up its competitiveness and increase its value through increasing customer satisfaction as a result of developing the six-sigma model. Motorola could save about 17 billion dollars as well.

Jarrar and Neely (2008) stated that the critics of the model believe that the model is designed to apply the scientific management but not all organizations are used to applying the scientific methods of six sigma. Also, the model inhibits innovation because it has proven successful in reducing variance, eliminating waste and increasing profits and productivity. So, when the model becomes part of organization’s culture, it will prevent the employees and managers from thinking in an innovative way. In addition to that, the companies that succeeded by applying the model such as Motorola and GE did not document their cases in a scientific manner. Therefore, the success may be accidental.

Third: Business Process Reengineering (BPR)

Neill (1999) argued that because of the intensity of competition for costs, quality, flexibility and responsiveness, BPR has attracted managers ‘interest. The reason for this is that BPR plays a crucial role in creating sustainable competitive advantage. BPR greatly contributes to supporting a company’s performance. Making improvements in processes help any company as the following:

  • 1- It helps the company with customers who are aware of products ‘alternatives.

    • 2- It assists the company in relation to competition that is intense to meet customers needs.

      • 3- It helps the company with change that has become continual to a company.

The role of BPR is to facilitate matching between market opportunities and firm’s capabilities

to make the firm grow over time. BPR is related to outsourcing because if the firm decides to

manufacture a product instead of purchasing it from suppliers, this will reflect on costs. The company can use BPR if the company suffers from severe problems, the company that expects risks or the company that likes to take advantage of opportunities to differentiate itself from rivals.

The success of BPR relies on the following:

  • 1- Committed managers to firm’s objectives and vision.

    • 2- Where can the change be done? What is expected after making the change?

      • 3- Decision making should not be centred in the top managers.

        • 4- Adopting teamwork that has the same objectives and can think innovatively.

Hernaus (2008) stated that BPR is a new approach to the firm’s design to get solutions for problems related to competitiveness. The purpose of organizational change is to offer better customer service, higher quality, faster delivery, lower inventory and to fulfil orders on time. There is intense correlation between the organizational transformation and BPR. BPR is part of organizational transformation. BPR assists the company to be more capable of competing with its rivals.

Edwards and Peppard (1997) stated that any company should opt the process or processes that bring benefits to a firm after reengineering it or them and BPR takes many months. The operational processes are mostly the most profitable ones and they are the core of BPR.

Fourth: Employee Engagement.

It means that employees’ desire and their ability to assist their firm to make success through doubling their best efforts to make the firm gain sustainable competitive advantage. Others define employee engagement as employees involvement and making them feel enthusiastic for their work. Management literature differentiates between employee engagement and job satisfaction. The latter is used as a basis for employee engagement. All management literature agrees that employee engagement focuses on the relationship between employees and

employers. So, some of them state that Employee engagement means employees’ loyalty to

employers. This concept is based on organizational citizenship behaviour (OCB) that means employees ‘behaviour is focused on company’s progress. Also, the notion of employee engagement is based on commitment to firm’s strategic objectives. There are five drivers should be available to make employees highly engaged as the following:

  • 1- Employees effort should support the strategy.

    • 2- Employees should be given the authority of decision making.

      • 3- Work should be based on collaboration and team work.

        • 4- The company encourages employees to grow and develop (positions, new skills).

5-

Recognition and support(incentives).

The best consulting firm at employee engagement, Gallup, has found out that the success of employee engagement depends on manager and his way of communicating with his employees. Also, most drivers are not financial ones (Markos and sieve, 2010).

The Henry Miller group (2014) argued that a company with highly engaged employees has experienced an increase in satisfied customer’s rates and this firm can make more profits than a firm with less engaged employees. Also, well engaged employees put all the focus on their work where tasks can be done in a short time. Furthermore, this firm has less turnover rates and less safety incidents as well. Less absence rates among employees and less theft rates too. Moreover, highly-engaged employees are interested in the quality of products offered to customers.

Fifth: Organizational culture change.

Organizational culture is assumptions are taught by employees in the company about how to solve problems. These assumptions become more familiar, valid and accepted among the employees over time. Also, the assumptions will be taught by the new employees as well.

The organizational culture reflects the following:

  • 1- How do the employees understand firm’s mission and strategy?

  • 2- How do staff think of their organization, customers and other organizations?

    • 3- How do employees conduct their daily business?

The above-mentioned points reflect the personality of a company. Organizational culture is very important to any company because it may be a constructive factor or a destructive one because the culture plays a big role in shaping the following:

  • 1- The right decisions.

    • 2- Employees’ behaviour and their interaction with each other in the firm.

      • 3- Team work and how individuals perform their work.

        • 4- Organizations’ ability to accept or reject any change.

          • 5- Stakeholders’ attitude.

So, Organizational culture may support or hinder the strategic objectives (Desson and clouthier, 2010).

Muscalu (2014) asserted that there are reasons for changing the organizational culture as the following:

  • 1- If a company faces a reduction in performance.

    • 2- If there is a change in the company’s vision or mission.

      • 3- When there is a change in top management.

        • 4- If the managerspriorities change (paying more attention to new issues).

          • 5- When the managers want to face the crises as a quick response to incidents.

            • 6- When the company is unable to adapt to the environmental changes.

DBA research perspectives.

  • 1- The role of organizational transformation in facing the international financial crisis in the grocery industry, especially a lot of experts warn of coming crises.

    • 2- How can organizational transformation rescue the firms operating in the grocery industry that is suffering from severe problems?

Third: Reflection

  • 1- Knowledge gained.

I have gained too muck knowledge of organizational transformation. All managers should put the focus on company’s health in the long run. This means lasting successful company. So, the topic of performance gap is important to any company because of transforming it from current state to better state. Also, Managers should pay attention to a

company’s share price but this does not mean that the company will succeed for ever.

Improvements in processes, risk management, internals factors and external ones should be taken into account. Managers should think in an innovative way by reengineering processes, especially the operational processes that enhance the company’s performance and add value to customers.

The organizational culture plays a crucial role in the success of any company. This culture should be reviewed and assessed to change it if a company needs that because a lot of mistakes could be made because of this culture. Also, the organizational culture reflects the company’s personality. Moreover, in addition to the materialistic incentives, the nature of the relationship between employees and employers is more important than other incentives. A lot of studies have stated that employee engagement is very important to make any company successful and it does not mean materialistic incentives only. Furthermore, Human resources (HR) are very important ones to any company that strives to transform into better state because HR are the basis for any organizational transformation and change. Also, the organizational transformation is concerned with people (customers, suppliers, managers). Performance measurement is important to monitor the improvements and the company should concentrate on them.

This module is useful because any researcher should follow the logical thinking such as identifying the most significant problems, the root causes of the problems, solutions and monitoring. Also, I have learned from this module that I have to propose agenda for change in my personal life. I mean that I have to make improvements in my working life such as new skills and new knowledge because the labour market is competitive.

2-

Challenges

I have some difficulties when making this assignment. The subject of organizational transformation covers many topics such as performance gap, models for change, organizational culture and others. So, I have to read deeply about these topics. Also, I have difficulty in identifying the problems that the company is suffering from because the problems should be significant. The problems that affect the company’s performance in the long run because we talk about company’s health and sustainability. Furthermore, the model used for change. There are a lot of models used for change such as six sigma and gap model. So, I have to read many models to choose the fittest one.

For the performance measurement, the model of six sigma requires that the company has to monitor and control the improvements in the processes by giving metrics. The metric depends on the nature of improvement. Hence, I have to read about it and think of the most suitable performance metric for each change. Moreover, the term of conceptual model is not new to me but I should read about it to draw my own conceptual model

related to the problems, the root cause of each problem, the solution for each problem, the risk resulting from each solution and the expected outcome of implementing the solutions. So, it was not easy task but I have studied hard to achieve the task.

Moreover, identifying the process that brings benefits to the company after reengineering it and how I can expect the process after reengineering it is the most challenging task. I am convinced that the notion of business process reengineering should be applied in this assignment. So, I read a lot of articles about it.

Sadly, I am looking forward to achieving this task completely. Therefore, I emailed Morrisons to get information about the cost of convenience store and the online channel to make the cost appear in the plan in the company report but no one answered me.

  • 3- Employability skills.

    • I do not say that I am highly experienced but I have gained too much knowledge of how a

company can transform from current state to better state. This can be done by identifying gap performance between the goal performance and the actual performance. The point is to know the root causes of the problems to work on solving them, then giving metrics (performance measurement) to monitor them. I plan, as a leader, to use this knowledge efficiently to greatly contribute to the company’s progress. Also, I have a good background on performance measurement now to monitor organization’s performance and it is a vital one to any firm, especially the global one. This will benefit the company where I will work in.

In addition to that, I have benefitted from this module a lot because this subject gives the way of logical thinking to solve any problems. This will differentiate my performance, as

a leader, in any workplace. In my working life or in any workplace, as a leader, I will focus on the most significant problems that affect a company’s health in the long run and

  • I will put all my focus on this type of problems. Also, sustainability should be taken into account because the gap should be closed or reduced for the long run.

Moreover, I will think in an innovative way to solve the problems that a company suffers from using some strategies that have proven successful such as business process reengineering and employee engagement. Furthermore, I will focus, as a leader, not only on the problems but also on the profitable processes that can create better value after reengineering them. In this way, a company can acquire new customers and increase customer value.

To sum up, I have learned from this module that a leader should formulate the problems in his own conceptual model to broaden his horizon about the problems, risks and the solutions and I will follow this way in my working life. The subject of organizational transformation is very wide and I plan to read about it more to gain too much knowledge of this area due to the effects of global crisis.

Bibliography

Ashkenas, R.2015. We are still don’t know the difference between change and transformation.

Harvard business Review.

Consulting research group. 2010.organizational transformation what is it? why do it? and how? [online]. British Columbia: Canada. Available at: consulting research group Database [accessed :15 November 2016]

Desson, K. and clouthier, M.2010. organization culture -why does it matter. In Symposium on international atomic energy agency. Vienna: Austria.

Dumitrescu, C. and Dumitrache, M.2011. the impact of lean six sigma on the overall result of companies. Journal of economa. Seria management 14(2),pp.536-544.

Edward ,C. and peppard, j.1997. a critical issue in business process reengineering: focusing the initiative. Centre for Business Performance, cranefield school of management.

Hemanus ,T .2008 .generic process transformation model transition to process-based organization. EFZG working paper series/EF2G.Serijia clanaka. pp.1-16.

Jarrar, Y. and Neely, A., 2008. Six SigmaFriend or Foe? Centre for Business Performance, Cranfield School of Management

Jim, K.2015. Morrisons sales down as store loses out in convenience store and online shopping. Cityam21 January 2015.

Markos, s and sridevi, M .2010. employee engagement: the key to improving performance. International journal of business and management 5(12),pp.89-94

Mckinsey & company.2011. how do I transform my organization’s performance? [online]. Texas: Mckinsey. Available at: Mckinsey Database [accessed: 25 November 2016].

Morningstar.2016.key ratios[Online]. Chicago: Morningstar. Available at: Morningstar Database [Accessed 24 November 2016].

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supermarket

plc.2015.

Annual

report

and

financial

statements.

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Morrisons.

Muscalu, E.2014, Organizational culture change in the organization. land forces academy review 19(4). pp 392-396.

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business process reengineering a review of recent literature.

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PWC. 2014.closing the gap between strategy and execution[online]. New York: PWC. Available at: PWC Database [ Accessed 20 November 2016].

Retail think tank(RTT).2016, The future of the grocery sector in the u[Online]. London: RTT. Available at: RTT Database [accessed 22 September 2016].

Simpson, E .2015.Morrisons sells its chain of convenience stores. BBC. 9 November 2016.

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Statista Database [accessed 29 October 2016].

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The serious pursuit of happiness.

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Wharton, A. 2007.retail customer dissatisfaction. University of Pennsylvania review.

Appendix (1)

Methods

Sub-targets

Final target

Training, increasing the

 

-Number of problems

Improving salespeople ’s

 

observed will decrease,

attitude

salary and employee engagement

reaching less than 3 -Number of complaints against salespeople will reduce, reaching less than 3 -Number of notes taken by line managers about

 

salespeople’s attitude and

their way of communicating with customers will go down, reaching less than 3

Reengineering the process of

-An increase in the market

Increasing

Morrisons’

“made by Morrisons”

 

share from 10.4 %

to 13%.

competitiveness.

 
 

This means the total revenue will increase.

 

-Sales coming

from

the

process from other countries comprise 8% of total revenue.

Rebuilding

Morrisons

-Online

channel

sales

Making

Morrisons

channels

(online

and

constitute 15% of total sale.

differentiated

from

other

convenience stores)

-Convenience store sales comprise 20%of total sale.

rivals.

-Giving line managers the authority of making decision (Change in organizational culture) and employee engagement. Also, employee engagement

Absence rate fells by 90%.

Speeding up the operation.

The table explains the metrics used for monitoring the change proposed.