ASSIGNMENT 1

Qualification BTEC Level 5 HND Diploma in Business

Unit number and title Unit 17: Understanding and Leading Change (529)

Submission date Date Received 1st submission

Re-submission Date Date Received 2nd submission

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1. Đàm Hoàng Anh – GBH17012 Hoàng Anh

Group number:
2. Nguyễn Như Phượng – GBH16338 Phượng

3. Trần Thị Thủy Tiên – GBH16259 Tiên

Class GBH0505 Assessor name Nguyễn Ánh Lợi

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I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I understand that making a false declaration is
a form of malpractice.

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Table of Contents

Introduction ..................................................................................................................................... 7

Types of organizational change ...................................................................................................... 7

Evaluate the ways in which internal and external drivers of change affect leadership, team and
individual behaviours within an organization…………………………………………………… 13

Recommendation………………………………………………………………………………... 16

References ..................................................................................................................................... 20

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Introduction

_____________________________________________________________________________

Generally, this assignment aims to determine organizational change and evaluate their impacts on
organizational behaviour. There are two main parts. Whereas the first one is estimating change
and its impacts on retail industry’s strategy and operations, the second part will evaluate influences
that drivers of change have on organizational behaviour. Additionally, in order to give an
illustration, this assignment will apply to Amazon, eBay and Walmart as a case study.

There are several ways to define the term ‘change’ which basically, is the transaction of things
from old state to a new one (French et. al, 2000). Various drivers of change can be named, which
is divided into 2 terms: external driver and internal driver. In general, there are two approaches
that an organization uses to change, which are calm water metaphor and while-water metaphor
(Hiatt and Creasey, 2012). Each of these driver or approach has great and different impacts on an
organization. So, in order to have deeper look, these sector below will be the application in the
case of retail industry.

Types of organizational change

_____________________________________________________________________________

As suggested by Robbins and Coulter (2018), organizational change is divided into three types:
structure change, technology change and people change. The first type is structure change
defining as the ways to fulfil works and the persons who take responsibilities. The second type is
technological change which refers to the new application of equipment, tools and automation.
Technological change can be seen very clearly with traditional brick and mortar businesses making
transition to the digital age. The last type is people change including changing attitudes,
expectations, and perspective (Ignatius, 2011). To identify which change happening within an
organisation, it is necessary to determine the drivers of change.

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Drivers of change

Managing triggers still is one of the best ways to directly minimize risks from change and, in
practical operation, how most changes are initiated within an organization. The triggers for
organizational change are put into two groups: external and internal triggers. Therefore, this
assignment will be applied in three cases: Amazon, eBay and Walmart.

Amazon, Walmart and eBay are all Fortune 500 companies operating in the retail industry. While
Amazon and eBay are tech-based firms born during the dot com bubble, Walmart started out as a
traditional brick and mortar retail chain in the 60s. At the beginning, Amazon, eBay and Walmart
are not direct competitors but the dominant players at their own industry: online retail, auction
market and traditional retail respectively. With the growth of the market and new opportunities
opened up by technology, the boundary between these markets disappears. These selections are
not to analyse how these three companies compete with each other but to have a better comparative
perspective of how different organizations respond to change under similar circumstances. Indeed,
all of these three giant retails have changing technology. In order to give an overlook, these
paragraphs below will illustrate the drivers of change.

External environment

Political

Trump Administration’s policy for boosting domestic production is benefiting US businesses

greatly, with tax cuts and more barriers for goods and services from outside of the US. Besides,
deregulation is also speeding up at record rate saves billions of dollars and time for businesses.
Additionally, with current withdrawal from TPP, trade war with China and neighbouring countries
and Countering America's Adversaries Through Sanctions Act, the US is pushing itself from free
trade and likely to face retaliation from other countries.

Generally, all of these three companies benefit massively from tax cuts in the US market. Both
Amazon and Walmart raised wages for their workers, partially to control bad PR recently of
terrible working condition. Walmart and eBay also took the opportunity to buy several new tech
companies, especially for Walmart with the biggest acquisition in the history of ecommerce. On

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the other hand, Walmart also took a big hit due to the on-going trade war with China where it
imports lots of different products. Amazon and eBay, however, are facing pressure from the EU
on anti-trust related issues.

Economy

Economic stability in developed countries is expected to remain while developing countries’ rapid
growth creates huge demand and opportunities for the retail industry. People have more disposable
income and these economic trends are going to benefit the retail industry. E-retail, in the US alone,
grew by a whopping 23% in 2015 while the global retail industry is predicted to have grown to
$28 trillion by 2020. The recovery of the economy is also boosting entrepreneurship especially in
the US with thousands of new tech start-ups, becoming the driving force for innovation and new
technology.

Instead of the radical shift from physical to digital, the retail industry is growing across the board
and open new opportunities for both traditional and digital retailers to expand their territories. This
allows Amazon to make the strategic decision to open its own physical stores and expand its
product categories by acquiring Whole Foods. While Amazon is going physical, Walmart is
spending billions to improve its digital online shopping experience. Ebay, realizing the potential
is also moving from being an auction site to be an online retailer to meet customer’s new demand.

Social

Socially, the rising online activity reflects widespread Internet access and the increasing number
of online users worldwide. Availability of smartphone, 4G and other technologies has also boosted
the sales of the retailers. Online shopping is also expanding to new territories like grocery and
becoming more popular to young and busy people. Huge emphasis on healthy lifestyles and new
expectations among young customers also create demand for better experience. Young consumers
are also paying attention to matters like equality and diversity and ready to take action against bad
business practices.

New customer preference and expectation pose real challenges and ask businesses to innovate and
change to remain relevant. Amazon decides to improve customer experience by letting customers
make purchases with voice using Alexa or invent new kind of experience with its cashier-less

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stores. EBay embraces post computer era by launching a brand-new version of its mobile app with
improved speed and user experience. Walmart also focus on improving in store customer
experience by deploying automation technology to make check out faster and digital experience
by acquiring ‘smart cart’ technology.

Technology

Doubtless, technological innovation has become the key to success in this day and age, for both
digital and brick and mortar businesses. Availability of mobile devices, fast internet connection
and great user experience are making online shopping a lot more convenient and efficient. Besides,
Start-ups is now the driving force for new technology and innovation when AI, automation, cloud
computing and other advanced tech are now becoming more accessible and reliable, at a much
lower cost and easily scalable. Big data allows retailers understand customers more than they
understand themselves, making marketing, logistic and other aspects of those businesses become
more efficient.

Over the last decades, new technology is changing the fundamental nature of business, inside out.
Fast improvement in communication technology transform the way companies do customer
service and marketing. As customers are spending part of their time online, social media platforms
like Twitter are used by all three companies to monitor perception of customers and provide
support in real time. New technology like AI and big data create a huge opportunity for these
companies to develop new markets, products and experience. Amazon is using AI and big data to
create new products such as Amazon Web Service or cashier-less stores. EBay is experimenting
with the world’s first virtual reality store while Walmart is also developing its automated grocery
kiosks. New technology is also helping these companies to be a lot more efficient and remain
competitive. Amazon and Walmart are extremely aggressive in adopting automation in their
warehouses and stores while eBay is developing its AR technology for better management of
customer experience.

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Internal triggers

As the results, external environment impacts on the inside of its organisation. In other words, it
influences each company’s strengths and weaknesses which are also potential to create
opportunities and threats as well.

Amazon Walmart eBay

 The world’s largest  Good brand image

Strengths  Strong profitable
company by with its global
organisation
revenue and the presence
 Strong technology
largest retailer  Large network of
and CRM
 Access to capital buyers and sellers
 Huge portfolio of
 Huge number of  Newly acquired
investment on tech
physical locations technologies
start-ups
across the globe  Access to customer
 Protection from the
 Great economy of insight due to huge
US government
scale compared to capability in big
 Access to customer
its rivals data
insight due to huge
 Protection from the  No direct
capability in big
US government competition with
data
 Newly acquired its users
 Access to capital
and exclusive  Access to capital
 Scalable technology
technologies that  Protection from the
would provide US government
competitive
advantages

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  High employee  Inexperience in
Weaknesses  Free shipping
turnover terms of retail
leads to huge cost
 Lack of compared to Amazon
 Weak operating
experience in and Walmart
margin
adopting and  Technical
 Lack of
deploying new issues with its website
experience with
technology  Lack of control
running brick and
 Lack of over customer
mortar shops
experience investing experience
 Business
and managing its tech  Bad history of
ambition puts pressure
investments investment on other
on its people and lower
 Cannot keep up tech firms
working condition
with changes in the
retail environment
 High turnover
rate and dissatisfy
employees
 Expansion  Expansion
Opportunities  Expansion from online
from traditional to from auction to retail
to physical retailing,
online retail market
and other industries
 Increase  Diversification
 More new
spending for and acquisitions
technology and
technology and  Mobile
innovation
innovation platform
 More incentives
 Improve  Investment in
from the government
management strategy marketing
 Creation of new
 Grow organic
products/services/
products
experience that meet
 Improve
new demands
operation efficiency

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  The transaction  Intensive
Threats  Price competition
to online retail competition
could damage business
 Intensive price  Bad investment
 Bad PR and
competition management
culture clash
 Bad PR and  Low customer
 Customers’
culture clash satisfaction and
expectation
 Bad customer lawsuits for the
 Regulatory
satisfaction  Lack of
pressures in technology
 New expertise and
 High failure rate
competition from technology in retail
of start-ups
online retailers  New
 Retaliation from
 Retaliation competition from
trade wars for US
from trade wars for niche players like
businesses
US businesses GumTree

Internal triggers consist of product service design innovations; low performance and morale, new
management team, inadequate skills and knowledge or new innovation in delivering goods and
services.

Amazon is known as the leading commerce brand globally and the leading player in the cloud
industry, resulted in a lot of data of customer /seller insight. In combination with advanced
technology if AI and automation, the company creates new customer experience through its new
virtual assistant Alexa that allows customers order with their voice and use other Amazon services.
The new cashier-less convenient stores in the US create a whole new way to shop for grocery,
quickly and efficiently. These new applications would help Amazon remains its competitive edge
in terms of price and experience. In order keep up with Amazon in terms of customer experience,
Walmart has spent $3.3 billion to take over e-commerce start-up Jet.com and brought over its
unique "smart cart" technology. This allows Walmart to offer free two-day delivery on orders over
$35, nearly on par with Amazon. To compete with Amazon and Walmart, eBay is now thinking
more like a retailer instead of an auction website, firstly by redesign its search function to make
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finding items more “structured”, encourage buyers to post product reviews and give sellers more
tools and data to help them grow their businesses. AR technology is also being develop to give
users better control over its experience.

Evaluate the ways in which internal and external drivers of change affect
leadership, team and individual behaviours within an organization.

_____________________________________________________________________________

Amazon

Leadership

In combination with the increasing speed of change, leaders need to constantly evaluate external
environment and utilize internal strengths to create competitive advantage. For Amazon, to
constantly evaluate the surrounding environment, the task force named ‘S-team’ of senior
managers holds frequent meetings with the CEO Jeff Bezos where they consume six-page printed
memos in total silence for as long as 30 minutes before starting any discussion. The CEO is also
very vocal about his ideology of customer obsession and make it one of the leadership principles
at Amazon, emphasizing the need to pay close attention to the changing customer demand and
preference.

Mission and strategy

Amazon’s mission is to be Earth’s most customer-centric company emphasize the company’s

priority on customer experience and benefit. Many of the new technologies it deploys is to make
existing service better such as making order with voice, or create new experience with cashier-less
stores that save customers time. Favourable political climate, tax cuts, having a big brand and
growth in the retail market across the board definitely give Amazon the confidence it needs to do
things many people would say counterintuitive: expanding its operation to the physical world. This

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move will be a giant leap to help Amazon achieve its vision of being the store of everything. Its
strength in terms capturing and processing data also give it a huge advantage as it allows Amazon
to be a truly customer insight driven company.

In order to move fast and capture the opportunity, Amazon has reinvented automation, following
the lean principle of “autonomation”: keep the humans for high-value, complex work and use
machines to support those tasks. More than a hundred thousand robots are now ding physically
demanding and repetitive tasks, and warehouse workers who used to do the job are now become
more like technician responsible for servicing those robots. In case of Amazon, its CEO has done
a particularly good job in creating and communicating of a vision, which is considered to be one
of the core elements in the success of any change program (Kotter, 1995), as well as establish
compelling and legitimate business reasons for change (Moran and Brightman, 2000)

Organizational culture

Amazon culture of customer obsession is practical and built upon its mission and leadership
principles. To cope with the fast-changing environment, teams at Amazon are kept small, designed
to move fast, innovate, and eventually automate themselves so they can move to more interesting
projects. Teams are also encouraged to resist the temptation to wait for perfect decisions. Instead
optimize for fast iterations over perfect attempts. The culture of Amazon is a combination of
multiple improvement efforts increasing the focus on the customer, improving and managing work
processes, and strengthening employee involvement that would increase possibility of success
(Moran and Brightman, 2000).

Walmart

Leadership

New demands and expectation from customer also ask Walmart to shift its focus on the highest
levels. Walmart created of a new executive, Chief Customer Office, role aimed solely to improve
customer service, caring for and connecting both the in-person and e-commerce aspects of the
customer relationship and hopefully help Walmart navigate this change much more successfully.
The company also let go of some of the senior executives in key positions from the brick and
mortar era and hire new executives with better understanding of new technology and online retail.

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Mission and strategy

Seeing the influence of new technology in business today, Walmart doubles down on its
transformation into a technology led company. During the last shareholders meeting, the
company’s CEO continually referred to Walmart as a technology company. The company has
partnered with two of those tech leaders – Microsoft for cloud computing and Google for voice-
activated shopping and some of the biggest start-ups acquisition in the history of ecommerce. This
would obviously help to improve its weakness in terms of technology and reduce the risk of such
radical transformation.

Organizational culture

Change must be top-down to provide vision and create structure, and bottom-up to encourage
participation and generate support (Moran and Brightman, 2000). Instead of just rolling out culture
from the top, Walmart has also involved frontline leaders to support and live the company culture
and deliver its values to customer. To also keep up with high tech firm, Walmart is building its
culture to attracts and retains the type of talent that’s helped make Amazon, Google, Facebook
such as building a learning organization and giving its people opportunities for personal growth
with Walmart Academy.

Ebay

Leadership

Due to its inexperience in retail compared to Amazon or Walmart, the company’s CEO wants it to
be a winner in discovery-based shopping, as he explains: being known as the place where people
think of first for the things they love, not just the things they need. He also emphasis on the idea
of getting away from being a me-too brand to Amazon.

Mission and strategy

To take advantage of the growing retail market, eBay is focusing on new efforts to think more as
"merchandiser or retailer" as opposed to just an open marketplace. Ebay has restructured itself by
combining global product and technology team; and seller and buyer organization. These
combinations are intended to help eBay accelerate innovation, optimize and ensure a seamless end-
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to-end customer experience for sellers and buyers. The company also try to address issues related
to bad management. By separating with PayPal, the company hope to focus their effort and
investment on making eBay a better retailer.

Organisational culture

Similar to Amazon, eBay has developed a culture of experimentation to quickly cope with changes
in the environment. This kind of culture creates a safe environment for employee participation and
critical questioning to take place (Moran and Brightman, 2000). Having a safe environment is also
helping people through the neutral zone by increasing the dialogue within the organization.
Inviting staff to ask questions make suggestions and come up with ideas to make the final transition
(Mclean, 2011). To adapt with the wave of new technology, eBay CEO had also started to clear
out people who were wedded to the legacy and started the process of putting technologists into
positions of power, which has been a huge positive for the company's ability to execute on
innovation.

Recommendations

_____________________________________________________________________________

From the system theory standpoint, organizations are open to and exchange with the environment
to remain their competitiveness. However, as the environment is unpredictable, leaders need to be
constantly aware of what is going on in the market to make better decision, or in this case, to make
necessary changes in time.

One of the most rapid changing fields that poses opportunities and threats for organization is
technology. The exponential technological advancement in recent years allows businesses to go
global, find new niche markets, reduce risks and gain access to capital (Markovic, 2007). Besides
developing their own tech, big corporations including Amazon, eBay and Walmart are spending a
lot of money on acquiring new tech start-ups to remain their competitive edge.

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 Over nearly two decades, Amazon has invested billions of dollars in at least 128 companies ranging
from transportation to artificial intelligence while eBay is also one of the most aggressive start-up
buyers, acquiring 12 companies in 2011 alone. Walmart has recently made headline by acquiring
Flipkart for $16 billion in world’s largest ecommerce deal to date. However, picking the right start-
ups to acquire or invest in isn’t easy as the cost of investment is huge, the majority of start-ups
fails and many of the new technologies are total flops or just do not fit with current products. For
example, in 2005 eBay spent $2.6 billion to acquire Skype believing that Skype would allow better
communication between sellers and buyers. However, the company later found out that people
prefer anonymity, and they don’t necessarily want to talk with the person on the other end. Four
years later, eBay sold Skype for $1.9 billion. It is important that technologies are applied carefully
and are driven by end users, not technologists (Marković, 2005). Therefore, these 3 companies
should carefully study their customer’s actual needs before adopting any new technology,
avoiding waste of resources and effort on changes that do not benefit their customers.

 Recommendation

Even though Amazon, Walmart and eBay has been using multiple initiatives to deal with changes
effectively, there are certain things those three company can do to improve its change efforts

Making better vision / mission

One of the most important aspect at the beginning of any change is to set up a new vision. Kotter
(1995), in his article on why change fails, identified the creation and communication of a vision
as being core elements in the success of any change program. That vision must also be presented
in a clear manner, with concrete terms that everyone can understand. While everyone at Amazon
can understand its vision and mission as they are written a simple day to day language, Walmart
vision to be a technology company or eBay discovery-based shopping experience might be too
complex and abstract, especially for low level frontline employees. Therefore, rewriting its vision
and mission in a clearer manner would definitely help in communication and deployment of any
change later. Moran and Brightman (2000) suggested that listening to the words employees use to
describe the change and try to adjust the specifics of change to be most meaningful and acceptable
to them.

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Considering human factor

The organizations that succeed at change do so by considering the people who are affected by, will
have to live with, and are often crucial to effecting the change in question. Marković (2005)
suggested that managing the human aspects of an organizational change initiative help ensure the
successful implementation and use of the technical solution, and sets the groundwork for
implementing future solutions. McLean (2011) added that the psychological re-adjustment to
change is of paramount importance in ensuring sustainability of change. Fisher (2005) proposed
that how company handle the past plays a vitally important and proposed change should be placed
in context of past successes, failures, policy decisions, and changes in the market-place. In this
sense, all three company, particularly Walmart should consider and find a way to integrate culture
and traditions of start-ups they acquired. Avoid forcing its big corporate culture to young dynamic
start-ups as it might cause resentment, frustration and even sabotage (Craine, 2007).

Communication

Strategic employee communication can help reducing resistance and facilitating major changes
within organization. In case of Amazon, the resistance to change and fear at Whole Foods are
caused mostly by the misunderstanding of the company’s strategy. People are afraid of loosing
their jobs to robots while in fact Amazon’s massive fleet of robots hasn’t slowed down its
employment of humans. In reality, its employee headcount has also held steady at between 30%
and 50% growth per year. To avoid resistance to change, Amazon and other companies that are
embracing automation should communicate its strategy in an easily understandable way that makes
clear what is expected and what the future looks like as suggested by Fisher (2005). Having a
support infrastructure in place to help and inform employees as they progress through the process
would also make their transition to the new job smoother (Fisher, 2005).

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References

______________________________________________________________________________

Boudreau, J. (2008). Ebay signs deal with Vietnam start-up. Reading in The Meccury News.
Available at: https://www.mercurynews.com/2008/06/17/ebay-signs-deal-with-vietnam-start-up/

Buckley, C., Defina, P. & Root, L. (2016). Walmart vs Amazon.

French, Wendell & Bell, H. C. (1999) jr. Organization Development. Pranctice Hall. New Jersey
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Grander, T. (2014). Walmart targets Vietnam as fruitful product source. Reading in VIR.
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Hiatt, J. M. & Creasey, T. J. (2012). Change Management. The People Side of Change. Prosci
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Available at: https://www.citypassguide.com/en/travel/vietnam/shopping/blog/amazon-makes-
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Kanter, R.M. (1992). The change masters: Corporate entrepreneurs at work. London:George
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Kanter, R.M., Stein, B.A. and Jick, T.D. (1992) The Challenge of Organizational Change: How
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https://www.businessinsider.com/amazon-to-enter-vietnam-2018-3

Markovíc, M. R. (2007). Effective organisational change management. Serbian Journal of

Management 3 (1). pp.119 – 125.

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Robbins, S. P. & Coulter, M. K. (2016). Management. 13th edition. Boston: Pearson.

Saigonner. (2018). It’s Official: Amazon Will Be in Vietnam This Year. Reading in Saigoneer.
Available at: https://saigoneer.com/vietnam-news/12749-it-s-official-amazon-will-be-in-vietnam-
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