The purpose of this project is to determine the requirements of implementing changes within an organisation in order to enhance the opportunity to attain business targets effectively. The scenario of this report has determined an analysis for the organisation that wants to implement changes in the internal and external business processes due to excessive competition in the industry.
- Distinguish various ways that help in analyzing the influence of changes over the business strategy and its operations.
- Analyze the impact of change drivers upon Starbucks and its organisation behavior.
- Evaluate the impact of barriers to change over the decision making of leadership in Starbucks and Costa Coffee.
- Clearly explain the application of the leadership approach at the time of introducing changes in an organisation.
Change is a process which is very essential for every business firm in order to grow and sustain in competitive market. There are many changes takes place in the environment in which firm operates or perform its operations. Ability to adapt with those changes leads business enterprise towards high growth and success (Aslan and Reigeluth, 2013). Manager needs to consider those factors which influence operations and activities of business. It assists them in formulating effective strategies and policies that supports in attaining predetermined goals and objectives in defined period of time. The present report is based on Costa Coffee and Starbucks which offers highest quality coffee to their customers. This assignment includes the ways in which change influence operations and strategies of an organisation. It also defines impact of change drivers on behaviour of firm. Apart from this, the way in which change barriers influence decision making process of leaders and application of leadership approaches to change initiative is defined in this project.
P1 Influence of change on operations and strategy of company
Change is a process that should be adopted by every business firm in order to ensure their sustainability in today's competitive market. Any change that takes place within firm influence functions and operations of business in both direct as well as indirect way. It may be occur in any form, either in the form of organisational culture, technology, market trends, leadership, preferences and needs of customers or if any change takes place in legal, political, economical and social environment. All such factors highly influence operations and activities of firm. It completely alters its processes and structures (Booth, Wade and Walker, 2014). So, it is required by managers and leaders of every business concern to understand changes and executes those within organisation in effective manner so that set objectives and goals can be attain successfully.
It is one of the well known coffee house chain which is headquartered in America and perform its operations all over the world. There are around 23,700 stores of Starbucks are located in different countries and offers high quality coffee products to customers. They provide excellent experience to customers and offer them coffee with good taste which is the factor that differentiate firm from its competitors. In year 1971, the company was established and now leads the coffee market. Baked products, smoothies, tea and coffee are offer by firm to their potential clients.
It is one of the multinational coffee house whose headquarters are located in Dunstable, England. It is a subsidiary of White Bread. It is the 2nd largest coffee shop after Starbucks in United Kingdom. The company has around 3,400 stores which are located in different parts of nation. Sandwiches, coffee, tea, ice drinks etc. are the products that firm offer to its customers (Carrington, Deppeler and Moss, 2010).
Some changes adopted by firm and their influence on its operations and strategies are defined below:
Change in Starbucks:
In Starbucks, it has been declared by CEO of Starbucks that he resign form his post. It highly influence policies of firm and new strategies and plans are framed by administrator as working style and thinking process of newly appointed CEO is distinct from existing one. One of the crucial step that are taken by management of company is to emphasize on technological changes.
Past and existing strategy:
In today's business environment, the mangers of Starbucks are not paying much attention towards their premier customer's group. Their strategy centres around targeting people of each group of income. But now, they develop new strategy which emphasize on premium segment of market (Clarke and Persaud, 2011). They also laid their interest on business expansion on several countries of world. They establish their stores in those countries which are developing like India. The main reason behind it is that market of India is unorganized and they are aware about its potential. It proves to be a positive strategy for firm and render huge benefit to Starbucks. Their strategy of penetration pricing is not utilized by firm as this is not suitable for premier segment.
Technological related changes are also considered by management of Starbucks and they believe in using those machineries which are of high technology to produce coffee. By this, they enable to offer high quality coffee to customers. Moreover, they also focus on updating their digital platform. Several new technologies are adopted by them which earlier is not part of long term strategy of company. But, due to frequent technological changes, digital platform is utilized by company for promoting their goods in market.
Changes in Costa Coffee:
Because of Brexit in United Kingdom, various political changes are takes place in country that put high impact on growth and strategies of firm. Increase in wage rate is one of the another change that forced Costa Coffee to made changes in their activities and operations.
Old and new strategy:
Costa Coffee is one of the fastest growing company and is well known for its expansion in various countries (Doppelt, 2017). But, Brexit is one of the factor that enforce firm to change their strategies. They are aware about various regulations and legislations made by government and they know that they must be comply with them. Brexit leads the firm to face various difficulties in opening their new stores. So, various new strategies are framed by firm that mainly emphasize on global level expansion. This strategy helps them in coping up changes in an effective and efficient way. They use high quality of coffee beans and promote them in market. Profits of firm are influenced negatively due to increase in minimum wages. Thus, a new strategy is adopted by enterprise in which they rise prices of their goods as a solution to deal with change. They ensure that resources are being optimally utilized and waste from production process is minimized.
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P2 Ways in which internal & external change drivers influence leadership and behaviour of individuals and team
There are various internal and external drivers of change that highly influence behaviour and leadership of team as well as individuals. These influence operations and functioning of business in both negative and positive way. The main change drivers are defined below:
Customer led drivers: They are the important part of business organisation as sustainability and growth of company highly rely on them. They contributes in increasing profit ratios of company. So, it is very necessary for firm to aware of changing needs and preferences of customers as if any change occurs in it, it directly affects sales as well as profits of firm (Fullan 2014). So, it is required by administrators of Starbucks to keep into consideration this driver to determine needs of customers and frame proper strategies accordingly.
Technology led drivers: It is an imperative component that impact the potential and competitiveness of business concern. It any transformations takes place in technology, it directly affect working and decisions of manager and leader. Utilization of enhanced technology administer various benefits to Starbucks. It facilitates them in offering items of good quality to their potential clients. Mangers should necessarily be consider this factor in order to gain competitive edge in market and ensure better results.
Competitors led drivers: Rivals of business firm specifically impacts on incomes of organization. Their are various competitors of Starbucks are exist in market that largely influences their sales (Fragouli and Ibidapo, 2015). Business operations and activities are impacted by strategies of rivals so consideration of this factor provides high advantage to company and assists managers in formulating new strategy.
Capital led drivers: Performance of every business organisation is influenced by their investors. As the investors of firm increase, their performance is also increase. Capital is fundamental for running activities of business easily. It is an essential variable required for carrying out operations effectively. Therefore, managers are require to manage adequate capital for performing effective operations of business.
Government led drivers: Regulations and legislations made by government influence activities of business. It is vital for venture to follow each of the enactments and laws made by legal authority and detail techniques as indicated by that keeping in mind the end goal to adequately adapt up to changes.
Above mentioned are the 5 major change drivers that influence functions of business. Apart from that, some other drivers are as follows:
Economy: There is a strong interlink between economic environment and business organisation. Business performance highly rely on its economic surroundings. Any kind of fluctuation related with the aspect of finance such as deflation and inflation may affect badly on operations of business (Fyke and Buzzanell, 2013).
Political: Variables included in this factor are government decisions, tax policies, political stability, ideology of parties, policies of government etc. All these factors may affect the environment of business either in positive or in negative way. It directly influence functioning and operations of company.
Resources: For providing high quality goods to customers on time, it is essential that firm have adequate amount of resources. This helps in smooth operations of business and assists Starbucks in deliver goods to customers on time.
Capabilities: Manpower is considered as the capability of firm. They contributes in growth and success of company by increasing its performance and productivity. Innovation is promoted in firm by the ability of creating opportunities (Gupta, 2011).
These are all the forces that are require to consider by administrator for coping up with changes in an effective and efficient way. These assists in administering better understanding top them as well as promotes enhanced working.
P3 Evaluation of measures taken by firm to minimise negative influence of change on behaviour of organisation
For lowering down the negative impact of change, various measures are taken by mangers of Starbucks and Costa Coffee. For this, various theories as well as models are implemented by company that helps them in identifying future results of change and render appropriate measures to lower down the negative impact on both performance and behaviour of firm and individual. Manange of Starbucks implement various theories and approaches that acts as remedial measures for declining negative influence of transformation on Firm's behaviour. Some models are discussed below:
Continuous improvement model:
For making continuous improvement in processes as well as operations of company, the model of continuous improvement is very essential. This model helps in bringing constant improvements in quality of goods and services. This model can be applied by firm in order to accomplish set targets and goals of enterprise in cost effective and efficient manner. For ensuring proper and successful execution of this approach, it is essential for manager to follow a cycle which is mentioned below:
PDCA Cycle: This is the cycle that is utilized by both the firms so as to enhance their productivity as well as performance and also for improving profitability (Hrebiniak, 2013). This cycle has four phases which are defined below:
Plan: This is the step that involves process of identification in which opportunities are determined and effective policies and plans are formulated by managers for bringing changes within the firm.
Do: At this phase, managers have the responsibility to implement change but initially these are executed at small level. They introduce change for the first in policies and practices of company.
Check: This is the phase in which managers measure performance and determine outcomes. After then, they measure it with set standards which assists in analysing results of implementing and adopting change.
Act: In this, success and failure of introducing change is analysed. If it is successful, helps in growth of company and allows manager to implement it at wide level. But, if executed change is not successful and fails to lowering down its negative effects then managers are responsible for introducing different model or approach to minimise the impact on behaviour of firm (Keppel and et. al., 2012).
It is one of the effective approach that assists in increasing motivation level of workforce and helps in encouraging them to perform in more better manner. For improving performance of firm as well as its employees, this approach is very useful for Starbucks. This assists in developing teams, increasing collective working and enhancing performance. Application of this model helps manager of firm in enhancing its revenues and profits.
Bohner and Arnold change effect analysis theory:
For reducing negative change on behaviour of firm, this theory is applied by manager of Starbucks. It helps them in identifying change outcomes. Some measures are also provided by this model to managers in order to accomplish expected results. They implement changer and after that measure the actual performance with the set standard. By the help of this approach, suitable strategies and plans developed by managers which administers direction to their staff members for adapting changes successfully and declining negative impact of transformation on behaviour of organisation or teams. This evaluation facilitates in determining risks that are associated with change (Malenfant, 2010).
P4 Different change barriers and their influence on leadership decision making
Force field analysis: This analysis helps administrators in those factors which are highly responsible for change. This approach centres around setting up an equilibrium among those variables that cause or refuse change. It allows managers to take strategic decisions. Some phases are included in this which are as follows:
Phase 1: Proposal for change
In this step, managers recognize the major cause behind change and determine goals and objectives. For example, Company wants to provide quick services to their customers by reducing their waiting time. For this, it is essential for firm to introduce change (Mukherjee and et. al., 2012).
Phase 2: Determine change forces
Internal & external forces are exist in business environment. These are exist within or outside the firm with influence its operations. Managers have to determine those variables that are the major cause for bringing change.
- Higher lead generation
- Minimize waiting time of clients.
- Declining team morale
- Avail benefits of technology.
- Gain high competitiveness in market.
- Increase customer loyalty.
Phase 3: Identify force against change
Under this stage, Starbucks needs to ascertain those drivers that limits firm to apply modification. It can also be ascertained in the kind of external & internal drivers.
- Whether change is accepted by employees or not.
- Clashing of thoughts of manpower (Parsons and Cornett, 2011).
- Structure of organisation.
- Government legislations.
- Political and economic instability.
- Obligation towards consumers.
Phase 4: Assign sources
In this phase, rating process is used in which components are rate on 1 to 5 scale according to their weaknesses and strengths. It supports firm in recognizing those variables that influence largely on its performance at the time when change is introduced.
Phase 5: Analyse and apply
In this, several forces are analysed by manager that influence business working. There are 2 ways in which this analysis is used (Suchman, Sluyter and Williamson, 2011).
1. To decide that whether it is advantageous to move forward with change or not.
- 2. To measure which favourable factor strengthen business practices & which promotes weaknesses.
Barriers to change:
Organisation complexity: Some organisations have very complex structure and this complexity becomes a huge barrier for workforce in order to adopt and manage change effectively. This restricts employees to understand change which put direct influence on decision making process of managers and it is a huge challenge for them.
Government: Sometimes, regulations and laws made by government highly influence functions of business in negative way. Laws regarding imports and exports impacts on their supply of coffee products. These policies and laws are the barrier for firm and influence decisions of leaders.