ASDA: A New Way of Working
James C. Soriano
Management 616 Term 4
Professor Troy Roland
May 26, 2013
ASDA, originally founded as Associated Dairies and Farm Stores Limited, is an American owned, British supermarket chain. It was the fourth largest grocery chain in the United Kingdom that catered to “blue-collar” areas (Spector, 2012, p.17). However, it’s strategic renewal to venture into wealthier suburban locations and non-food retail operations negatively impacted profits. In addition, top management represented a lavished corporate profile, which increased overhead spending and price of products. By 1991, ASDA was ...view middle of the document...
Strategic Renewal: a change in an organization’s strategy involving some combination of new product or service, a new market and a new business model.
Organizational Capabilities: the collective talents and skills of a firm’s employees.
Discontinuous Change: large scale, long-term reorientation of most or all aspects of organizational life.
As earlier mentioned in the opening paragraph, the trigger event can be identified by ASDA’s financial crisis and demoralized workforce. Archie Norman’s change implementation occurred during his meeting with top management addressing revitalization of the organization. The dysfunctional group of executive did not realize how serious the company’s financial difficulties were. With stakeholder’s agreement, his initial three-year plan called for short-term sacrifices for long-term profitability (Spector, 2012, p.18). Norman recruited Allen Leighton and Phil Cox as Vice President for Marketing and Chief Financial Officer, respectively. Tony Campbell was retained as Vice President for Trading (Spector, 2012, p18). The reorganization of top management eliminated bureaucracy and hierarchal institution. To hedge against supporters of the old regime, anything of significant organizational change required the approval of Norman and/or Leighton. Along with top management terminations, forced pay freezes, discontinued non-food operations and reduced middle management were steps to raise funding (Spector, 2012, p19). These initial steps supported the strategic renewal, which Norman redefined as supplying the weekly shopping need of ordinary working families – a shift away from the old ASDA regime. It was a pull back to the basic core values and strategy.
As strategic renewal was implemented, discontinuous change occurred as a renewal process. Norman introduced corporate strategy, company values and a blueprint for what came to be known as the ASDA Way of Working. This was a top-down approach to the change process. Simultaneously, Norman’s organizational capability is characterized as a bottom-up approach. There was no reinvestment strategy made by the previous management. The 205 stores were programmed for retooling and culture change. Store manager were allowed to provide recommendations for improvement and make decisions on store operations. Eliminating stovepipe communications, employees had to opportunity to embrace of new culture and core values of listening and learning. ASDA was transforming into a people-oriented business. Archie Norman’s actions contributed to effective organizational change. The focus of hiring key executive, restructuring the company and creating a favorable work environment were directed at creating a lasting alterations in patterns of employee behavior in order to support strategic renewal. Norman’s change methods can be classified into the broad categories of the three faces of change.
Three Faces of Change
Each face has a different target area -...