The ASDA case



ASDA Company, Overview:

ASDA is a British business firm of large distribution with food prevalence. The purchase of Gateway superstore rival enterprise for £705million, which expanded the company, has created more difficulties for ASDA. Because of trying to sell too many different products, its leaders were obliged to collect money from shareholders in both 1991 and 1993. (Corporate Watch UK. 2004)

Who is Norman ARCHIE?

After studying and getting his MBA degree at Harvard Business School, he joined the management consulting firm "McKinsey", which had a very strong professional culture always putting clients before personal gain. In order to evaluate the background and the capabilities of Norman ARCHIE we need to examine the recruitment policy of McKinsey which consists in attracting future graduates of the best schools. In addition to that McKinsey alumni are very present in the British economic elite; they all have jobs with high responsibilities within large and leading British companies. In 1991, he left Kingfisher in which he was a finance director for ASDA. The old Associated Dairies supermarket firm was on a downward spiral, highly panicking and close to bankruptcy. For that reason he was the only applicant for the job. (Van Devliet, A.1995)


Diagnostic tools & key change issues:

In order to improve their organisational system through effective change implementation, organisations' managers make sure they have the right tools to start diagnosing and understanding the downfall (or the beginning of the downfall) of their enterprises. However, Senior & Fleming (2006) state that even if some diagnostic tools are helpful, diagnosing is not an exact science.

While referring on the theory learned in HRSCM module, various diagnostic tools can be put into practice to determine which kind of change is best to adapt within reason to ASDA crisis situation. The combination of two or more analysis tools can prove to be useful to diagnose an organisation.

  • The SWOT analysis, whose main objective is to understand why the planning of a company fails, has become today a universal decision-making aid tool; the principle of this method consists in dividing the information within the organisation into internal and external factors, then into positive and negative factors.
  • Another tool to analyse a company is the GREINER model which is a useful way of thinking about the crises experienced by organisations as they expand. "The Greiner model of the organisational life cycle is useful for drawing attention to periods when organisational change is likely to be needed.'' (Senior & Fleming, 2006, p.57).

Morgan notes: ''If managers can anticipate where their organisation is in the overall cycle, they may be able to anticipate and deal with upcoming crises.'' (1989, p.97)

  • TROPICS Model: in order to detect the nature of the problem and the best type of change to implement, we must be guided by the tropics test. This test led us to the conclusion that ASDA is a SOFT complexity situation.

Kirk (1995) suggests that with the soft approach systems, the incorporation of the human elements are importantly needed at the beginning of the process and that all categories of people are involved in developing a solution. Everybody admits that ASDA business was a recognised failure and facing bankruptcy. Such were the problems facing ASDA that it was crucial for Norman ARCHIE to classify the key change issues in order of priority before implementing change. Listed below are the most important problems facing the change strategy of the company:

  1. Uncertainty;
  2. Demoralised workforce;
  3. Low morale;
  4. Lack of free initiative;
  5. Lack of direction;
  6. Lack of fund;
  7. Customer dissatisfaction
  8. Collapsing stock price;
  9. Loss of "the lowest price grocer position";
  10. Lack of communication;
  11. Highly-centralized and hierarchical company;
  12. Bureaucratic organisation and culture;
  13. Businesses become bankrupt;
  14. Overtrading.
Different Types of change:

After having emphasised all problems facing Norman ARCHIE, it is clear that ASDA must undergo a radical change which is inevitable for this organisation. There are different types of change and each type has its own characteristics. In order to implement and successfully carry out one of them, we must associate the most adequate strategy to the key change issues facing the organisation.

Having understood the nature of the change we wish to implement and the milieu in which we are working, it will be easy to establish an appropriate strategy.

While Grundy (1993) sees three types of change (Smooth Incremental, Bumpy Incremental and Discontinuous Change), ''Balogun and Hope Hailey's identification of change (2004)'' (Senior & Fleming, 2006, p.46) is one step more as follow:

  1. Incremental: Adaptive and Evolutionary;
  2. Big Bang: Reconstruction and Revolution.

In addition to the two models seen above, Tucker (2007) has distinguished three types of change: developmental, transitional and transformational.

  • DEVELOPMENTAL: It is a change that develops or corrects the on-hand aspects of a company and focuses on the enhancement of aptitudes and methods.
  • Developmental change occurs when a company makes an upgrading to its current business which is not the case for ASDA company.

  • TRANSITIONAL: leads to accomplishing a known preferred state that is ifferent from the on-hand one. Through transitional change we replace existing processes or procedures with something that is entirely innovative to the company.
  • TRANSFORMATIONAL: Which is the most appropriate to implement for ASDA organisation, requires a variety in assumptions made by the company and its members. When companies are facing too many problems and if either developmental or transitional don't give the solution needed by the organisation, they may be forced to radically transform themselves.
  • Senior & Fleming (2006) discuss the methodology used to conceptualise any organisational change and argue that there is a correlation between organisation's environment and the type of change to implement.


Every organisational change is achievable and can be successful providing the right change management tools, organisational structure and more importantly the right change management and leadership approach. Jenkins (2009).

Hammer & Champy (1993) suggest that reengineering a company is neither patching up what exists nor modifying it for the umpteenth time without touching the basic structure, it consists in giving up the Long time established procedures without trying to devote time for making superficial adjustments.

Without motivation change will never happen. This is usually the most complex part of the change procedure and opposition to change is present even when the objectives are highly attractive to everyone.

Sharing the vision of the organisation's senior leaders can facilitate to reduce the impact of some of the opposition to change. Unsurprisingly, employees always refuse to go along with change but are more apt to accept the change if they can view top managers keeping them clued-up and supporting them throughout the change process.

The most important issue facing the managers before any change implementation is that they should be primed to get employees involvement in all phases of the transition and then get their commitment. Furthermore, Schmitt (2003) sees that currently, many organisations manage according to a command-and-control system, which is totally wrong because strategy is developed and spread from the top to the front lines in an atmosphere of apprehension. However, listening to employees' experiences will be gratifying with a more contented, more helpful and more positive workforce.

In the same way, ''performance management may contribute to organisational change'' (Thornhill et al. 2000, p.133).

According to Thornhill (ibid), there are several ways to make this contribution effective.

  • Communicating the organisation's missions;
  • Linking employees' objectives to the organisation ones;
  • Get involved employees in decision-making;
  • Close relationship employee rewards / individual performance;
  • Reduced trade union influence as possible.

Change management and HR best strategy for change

Before starting any change implementation, managers must ask some questions.

  • What to Change (Structure, Technological, People)?
  • How to Change (Process and Planning)?
  • Where should be the focus and in what order?
  • (Stores, Trading, Finance, Logistics, Workforce)

  • What should be done about key people and the structure of the organization?
  • Should he bring in new people?
  • How many people should he bring in?
  • How could he attract them?
  • What should he said to shareholders and employees?
Formal and informal structure:

The formal structure of an organisation is all that is defined on documents such as responsibilities, management, objectives, strategies and methods. However, in every organisation there is what we call informal structure. Sometimes informal structure could be beneficial, favorable and complementary for the formal one. If managers want to get high levels of inspiration for the staff implicated in this change they have to take care of these informal groups and mould them to the formal ones.

Good and spontaneous managers must learn how to use both by adapting the formal structures to add in enhancements which outcome from the everyday life of the informal structures.

Raising the power of the driving forces of the change and decreasing the forces which were against is very important if we want to resolve a problem in a successful way.

''If the causes of resistance are understood, then strategies to overcome it become clearer.'' (Swanson & Holton 2009. p319)

When Norman Archie joined Asda in 1991, 82% of staff were members of the GMB union. By the time he left the company in 1999, only 13% were members of the trade union, in the same time share prices were up. The change he is implementing is to Re-energise the company. He strongly believe that ''No pain no gain''. Highly performed manager must take the situation from the beginning and then progress from there.

His first observation was that middle managers were the biggest threat because they often cover the truth of what was really going on in the company from their superiors and were strongly resistant to change, which can lead to total uncreative command and control.

Because they began to fear for their jobs people did not want to call attention. This led to a complete stoppage of any innovation. They were not permitted to pay attention to what was happening to the business. In order to make real progress he decided to engage everyone and at all levels.

Dr Dixon (2005) states that within any organisation, everybody is thinking about the cost-benefit while the most important thing that we must think about is the cost of human being.

ASDA situation was so disastrous that in 1988 one human resource manager stated: "The top managers at Asda knew the company had lost focus, but they didn't seem to care. They seemed more interested in creating the kind of company that they wanted to work at, rather than focusing on what Asda was."

The structure was a formal, top-down hierarchy with managers spending most of their time sitting in offices and since the mid-1980s the bureaucracy had reached such a level that it was difficult to get anything carried out.

The highly dominant control from the top had caused the loss of some good people. Command and control is dead even in military organisation. It has been said that US Marine chiefs are now explaining tactics, taking feedback, and assigning tasks by consultation rather than by command and control.

Because of the bad vertical communication, management has to be about humility and good manager has to balance between being good friend and authoritarian with putting things into their contexts.

We are faced to both bad quality of management, unwillingness and demotivation, a good manager must make best use of the talent that existed.

According to Norman ARCHIE, in order to bring properly change into the organisation, people must be connected with the strategy and share the vision because they believe that you are going to make their world a better place.

Personality of leadership has been defined in different ways.


Change can go through ways:

  • If people are involved early.
  • If there is a constant communication about what is going on.
  • If we plan properly.
  • If we don't let up.
  1. Changing the Management Structure:
  2. If peoples' jobs are more related to task oriented rather than positional and whatever was required at the time, you will never hear anyone say, 'that is not my responsibility". Everyone will be galvanised and motivated by this transitional structure.

  3. Evaluating individual capabilities: it can be measured through tests
    • Methodical and intellectual capability
    • Interpersonal efficacy
    • Approach of problem-solving
    • How to deal with ambiguous situation (information)
    • ability to act alone
  4. Developing a new culture:
  5. Culture and change issue is seen through two different aspects, the weight of working within the on-hand culture when trying to achieve any change; and how to deal with changing the culture itself. Identifying the culture in which the organisation is operating can be a useful starting point for the appropriate type of change and the strategy approach to progress through change process.

    Implementing transformational change without taking into account cultural differences can prove to be dangerous for the organisation and change achievement will be more difficult. However, working with it can help facilitate change. Dearlove (1997)

    Taking into account change through culture, the change quadrants model considers the organisational culture and the nature of the change and characterising each as either warm or cold. A cold change is easier to speak about than a warm one.

    When Norman was interviewed by Steve Tappin (co-author of THE SECRET OF CEO'S), he clearly said that if we want to change culture, we must change people and keep only those who fit with the strategy. In the first five years he changed 190 of the top 200 managers. Blackhurst (2007)

    Top manager's requirements as seen by Norman ARCHIE:

    • Business creators.
    • Highly motivated.
    • Highly disciplined.
    • Fast moving.
  6. Continuous Improvement Methods: ''getting improvement all the time''.
  7. There is a close relationship between continuous improvement and standardisation

    (The Management System) which prevents the organisation from backsliding.

    Improvement is not limited to quality initiatives but it is to perform everywhere within the organisation: Business strategy, Business results, Customer service, Employee motivation and Business relationships.

  8. Motivation:
  9. In every organisation ''authority has to be legitimated and management has to have a reason'' Norman Archie (cited in Tappin. S, 2008). Motivation and self-esteem are the key of productivity. In tough time managing motivation is more important. After selecting the right people, motivating them the right way, their commitment to the business will be high. The best example is that ASDA end up with a lower absenteeism than any food retailers' competitors and the reason was the motivation and not the pay (the pay was less than in Tesco and Sainsbury's).

    If people are treated with respect, and feel proud of what they do, they feel part of the organisation which is far more important but far more difficult to achieve.

    Management is enabling other people to become successful and through their success organisation will be successful.

  10. Recruitment:
  11. In tough times, a good manager must be seen by people as not depressed, not stopping his natural activities which consist in promoting and recruiting, then the development of the company's capability is going to continue. Keeping recruitment people means that the manager is dealing with underperformance and showing his people that they are making progress.

    If the workforce is unsuitably skilled and there are not enough resources, workforce restructuration with recruitment proves to be essential. Dawson (1996)

  12. Reward & Performance Management:
  13. "You get more of the behavior you reward. You don't get what you hope for, ask for, wish for or beg for. You get what you reward." Michael le Boeuf

    Reward based on progressing through position in a function is out to date, successful performance requests individual reward. Le Boeuf (1985).


From 1991 to 1999 Norman Archie ran ASDA for eight legendary years during which he transformed it into an organisation willing to take risk at any time providing good strategy and best managers. ASDA has become an entrepreneurial organisation whose two main criteria are:

  1. Well structured organisation: Given the right information and needed tools, all members are allowed to take advantage, each at his level, of opportunities stemmed by solutions.
  2. The existing environment in the company pushes people to take individual initiative, and errors and failures that happen while taking initiative are in fact considered as progress in the personal and organisational seek for excellence.

Change management cannot be limited to the only change process. The leading practices of how to implement and carry out the change were considerably evolved. From the simple training of the employees to the psycho-sociological actions, there are several approaches to carry out such a project, but they are all necessary to the success of the change.

Commitment can not be obtained without informing the employees and explaining the cogency of the changes. Having informed and explained that, all energies will be mobilised for the same objective: Transform the company and against the same enemy to fight: resistance to change.

Finally ASDA must be grateful and say thanks to the top managers who anticipated at an earlier stage of the crisis by thinking and bringing Norman Archie to diagnose, plan and carry out a successful change which turned the company from bankruptcy into a competitive supermarket heavyweight.


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