Asda Stores Limited Company’s Management Issues

Subject: Case Studies
Pages: 6
Words: 1653
Reading time:
6 min
Study level: PhD

Abstract

Being a grocery store focusing on the needs of blue-collar (poor) customers, ASDA upper management has initiated several structural changes to attract upscale (wealthier) consumers. However, because of implementing the poorly developed strategies, the network not only lost most of the blue-collar clients but also found itself in a severe crisis because wealthy people demonstrated no interest in its products. Outperformed by competitors and facing a headlong fall of its business operations, ASDA hired an outside professional – Archie Norman – hoping he would help to avoid potential bankruptcy. Investigating the situation, the new employee concluded that the decision to increase prices and switch to upscale customers, as well as the focus on non-grocery products, was a mistake. Because of the idea to grant more autonomy to each of the stores, it is critical to developing guidelines for fostering communication with the upper management and developing leadership, which will become the primary objective of the paper at hand.

In only 3 hours we’ll deliver a custom Asda Stores Limited Company’s Management Issues essay written 100% from scratch Get help

Introduction

ASDA is a grocery store, employing around 65 thousand people and operating 205 stores across the United States. At the very beginning of its operation, it was one of the most successful grocery store networks because of the specificities of its customer focus. Paying special attention to the needs of blue-collar workers and specializing in low pieces, ASDA made it impossible for other networks to outperform it, as their prices were significantly higher. However, for the same reason (giving preference to the interests of the blue-collar workers), ASDA stores were unattractive to wealthy customers, who commonly chose ASDA’s competitors. Once upper management decided to expand ASDA’s customer base and solicit upscale (wealthy) customers, it faced the need to increase prices. However, the location of the stores remained unchanged. So, the blue-collar customers could not afford to buy needed products in once preferred place, while the upscale people still avoided it. Poorly developed changes led the company into a severe crisis, making it critical to hire an outside professional to cope with the existing challenges and help to avoid bankruptcy (Spector, 2013). In this way, the case of ASDA is a perfect example for understanding the criticality of well-developed management strategies as well as the proof that the implementation of any novelties is inseparable from a thorough market analysis and a detailed assessment of a company compared to its competitors.

Therefore, the objective of the paper at hand is to pay special attention to the changes in the ASDA way of working. The idea is to make the major focus on developing ASDA-specific guidelines for reversing failures of upward communication – one of the changes offered and adopted by the outside professional Archie Norman. The second goal is to identify leadership features that are imperative for reporting customer information from each of the 205 stores to upper management of the grocery store network. Finally, the paper aims at designing an efficient program for leadership development. In this way, the abovementioned sections will make up three separate sections of the paper with the introduction and conclusion as supplemental sections, setting the scene and recalling lessons learned and recommendations, respectively.

Guidelines for Reversing Failure of Upward Communication

To begin with, it is critical to mention that the first specificity of ASDA’s new strategy was the isolation of the upper management from the stores. It means that the upper management located far from the stores was the only authority, making crucial decisions. More than that, it ignored any ideas and suggestions of store managers. In addition, the only focus of the upper management was on increasing the financial outcomes of the operations (investing in offices and entertainment) regardless of potential consequences, such as potential bankruptcy due to the loss of blue-collar customers. That is why Archie Norman suggested that it would be beneficial to grant more autonomy to stores (Spector, 2013). However, because of the existing communication challenges, this step is inseparable from the development of company-wide guidelines aimed at fostering upward communication.

To enable upward communication, first and foremost, it is imperative to make the upper management realize that its representatives are not familiar with the peculiarities of stores operation, especially if they are far from stores locations and never communicated with store managers or ignored their offers. In this way, they do not know real risks and challenges because numerical data is the only information to work with, but it cannot represent the specificities of customers and their needs (Fischhoff, Brewer, & Downs, 2012). The next crucial step in the development of formal channels of upward communication. Here, it is essential to determine the type of acceptable documents (reports, notes, etc.) and their format as well as the system for reviewing them (gathering commissions of managers or involving outside professionals). However, it is of significant importance to note that even the implementation of the first two steps is inseparable from extremely high risks of receiving inadequate and irrelevant information from store managers. From this perspective, it is significant to make sure to guarantee that the checking of all reports guarantees their relevance (Blumer, 2015). Finally, it is essential to implement efficient feedback measures that would let store managers know that their messages are received and the information is valuable. In other words, the final recommendation for enabling upward communication is designing channels for downward feedback, including potential steps for turning information into productive internal changes.

Leadership Characteristics for Reporting Customer Information to Upper Management

To report customer information to upper management and make sure that upper management considers it, it is essential to possess several leadership characteristics. Because, in the case of ASDA, there is a significant gap between lower and upper management, it is critical to guarantee that lower managers can provide measurable information because upper management operates in terms of figures. Moreover, leaders should be able to present only relevant and up-to-date information to make upper management willing to review the provided data and process it. In addition, leaders should be familiar with the mission and vision of the company, as well as the specificities of the corporate culture, to know what customer information is relevant and how to address recommendations to upper managers (Rothaermel, 2017). Finally, these leaders should be charismatic and inspire their teams – people who work directly with the customers – because they see existing challenges and risks and can help to formulate them more clearly (Williams, 2012).

Recommended Leadership Development Program

To begin with, it is essential to recall the fact that the upper management of ASDA consisted of poor leaders. Their only objective was the increase of revenues regardless of the influence of poorly developed initiatives of the further development of the grocery stores network (Spector, 2013). For this reason, Archie Norman suggested that replacing some of the managers with an outside professional would be beneficial. However, it is impossible to replace all of the currently employed professionals. That is why it is of paramount importance to design a universal leadership development program applicable to leaders at all levels from the lowest to the upper ones. Here, it is critical to note that the program should focus on developing such characteristics that would help leaders to pay specific attention to customer interests as well as make them responsive to staff’s needs. From this perspective, these programs should center on the abovementioned needs.

Academic experts
available
We will write a custom Case Studies essay specifically for you for only $16.00 $11/page Learn more

Moreover, regardless of the overall inefficiency of leadership development programs in most companies, there are still some effective practices that can make up a perfect foundation for the ASDA program. The first constituent of the potentially productive program is the transfer of responsibilities for making decisions and controlling employees to individual leaders. It was the initial idea of the newly hired manager. However, to make it effective, it is critical to implement support measures (for instance, virtual leadership) to guarantee that there are no inconsistencies in leadership development and all challenges and relevantly addressed. Moreover, this step is associated with control measures, as lower leaders are inseparable from upper ones. In addition, it is advisable to pay special attention to action learning – utilizing real-life situations – and experience-based activities for boosting leadership development. All in all, the focus should be made on the atmosphere in the development program. Because leaders, for the most part, operate in a complex environment and deal with numerous ambiguous tasks, it is essential to imitate it while designing the program (Ardichvili, Dag, & Manderscheid, 2016).

Finally, it is essential to design and embody the system for quantitative and qualitative measurement of leadership development. For instance, a comparison of employee productivity (connected to inspiration and motivation) or volumes of sales (based on proposed and adopted strategies) before and after the implementation of the program are advisable. The rationale for this statement is the fact that these programs are commonly expensive ones. That is why it is imperative to estimate their effectiveness (P. Phillips, J. Phillips, & Ray, 2015).

Conclusion

Keeping in mind all the facts mentioned above, as well as the undergone transformations (after hiring the outside professional), it is evident that ASDA may become a powerful network again and outperform influential competitors. However, to achieve the desired success, it is critical to follow several major recommendations. For instance, the most significant step is making stores and lower managers visible by enabling upward communication and guaranteeing that their needs are the foundation of internal changes. More than that, special attention should be paid to blue-collar customers because they are the key to the stable growth of the network. Still, to make sure that the suggested recommendations and initiatives are productive, one of the most critical steps is the implementation of efficient leadership development programs aimed at fostering needed skills. The rationale for pointing to this statement is the fact that these are people that contribute to the growth and success of the organization, but they can do so only in case of being valued and inspired by a charismatic leader.

References

Ardichvili, A., Dag, K. N., & Manderscheid, S. (2016). Leadership development: Current and emerging models and practices. Advances in Developing Human Resources, 18(3), 1-11.

Fischhoff, B., Brewer, N. T., & Downs, J. S. (2012). Communicating risks and benefits: An evidence-based user’s guide. Silver Spring, MD: Food and Drug Administration.

Phillips, P. P., Phillips, J. J., & Ray, R. (2015). Measuring the success of leadership development: A step-by-step guide for measuring impact and calculating ROI. Alexandria, VA: Association for Talent Development.

Rothaermel, F. T. (2017). Strategic management (3rd ed.). New York, NY: McGraw-Hill.

15% OFF Get your very first custom-written academic paper with 15% off Get discount

Spector, B. (2013). Implementing organizational change: Theory into practice. Boston, MA: Pearson.

Williams, C. (2012). Management (7th ed.). Mason, OH: Cengage.