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9792Downloads1 I Published: 24 Mar ,2020
Change refers to transformation of a function, practice or anything from its past stage to something better in its present state. In this present era of dynamic environment it becomes pivotal for an organization to introduce, accept and manage changes in reference to changing market scenario. Thus in context of an organization change leads to modification or introduction in process, organization structure, system or in job roles impact of which can be both negative as well as positive. Thus, it becomes crucially significant fore a comp nay to implement strategies that can effectively implement, control and support people to adapt to change (Al-Haddad and Kotnour, 2015).
Adidas and Nike are the two leading sports goods industries managing their operations worldwide.
The project undertaken will give a brief about how these companies are impacted by change, how internal and external environment affects leadership, team and employees behaviour. Moreover synopsis about barriers to change and various measures to be adopted to reduce negative impact of it will be given.
P1 Impact of change on an organisation’s strategy and operations
Change refers to alteration in a firm's procedure, structure, policies , tools and techniques of an organization in order to cope up with new emerging competencies be it to be more competitive, customer oriented or more efficient so as to be ahead of business rivals and be market leader. Changes can be introduced both internally and externally to enhance the efficiency and performance of a firm. Internal drives of changes involves alteration in organisation culture, technology capacity , management of various department etc. (Brown, 2012). External drives of change are because of political condition, social, technological, economical, environmental etc.
Nike and Adidas are the two market leaders over the decades has become synonym for sports industry. Both these companies initially started off as athletic footwear and sportswear manufacturers. But with the span of time and due dynamic environment full of heavy competition and with frequently changing customers need and aspirations they recognize opportunities in diversifying its operations by focusing on both product attributes and brand values than merely on sportswear and equipments Adopting themselves and their business operations with emerging changes has lead both these companies to be world's leading brands in their industry.
Nike: It is an American multinational company which is engaged in designing and manufacturing of footwear, apparel, equipment, accessories etc. More than 44000 employees are working to deliver their products effectively to end customers. In 2017, brand value of Nike is calculated as $ 29.6 billion. It is one of the largest supplier and manufacturer of sports equipment in world.
Adidas: Adidas is the 2nd largest multinational brand deali8ng in designing and manufacturing of shoes, clothings and accessories. It was established in 1924 in Germany and is considered as one of the biggest sportswear manufacturer in Europe with a revenue of around € 19.29 billion as observed in 2016 (Doppelt, 2017) .
Nike and Adidas both are successfully runn9ing their operations all across the globe which is the indicator that there are various external factors that have an impact on their business operations. Although both companies ahead strong internal operations base which is a major reason behind managing change successfully. Mentioned below are the comparison between the strategies that both these companies follow to tackle change and to remain competitive :
Nike acquiring 18th position according to top 100 Global Brand Report 2017, is the one of the leading designer and supplier of sportswear worldwide. Both female and male between age group 18 to 35 years old and the football players forms the target audience of Nike. It has different advertising and promotional activities for men and women and Gen Y according to their nationality, race and age. By implementing innovative and creative marketing strategies like providing the option to customers to design their own shoes as per their requirements , using celebrities for sponsoring and promoting their products and so on company focuses to capture the market of Europe where Adidas has large market share.
Adidas forms one of the leading competitor of Adidas as its market share has tremendously increased by 11% according to NPD data,2017. Adidas was able too cater the needs of more than 50% of UK population comprising target audience between 18 to 30 years and sports such as handball, rugby and volleyball. By using various promotional stargates through TV commercials, sport panorama, magazines, billboards and sponsoring football matches maintains a close competition with NIKE.
Nike pricing strategy is based on vertical integration and the company has maintained its pricing structure in a way that it is competitive to its business rivals in terms of price as a well as quality .
ADIDAS is second largest organisation after NIKE. In order to capture the attention of customers and to take a lead in market share company need to work on its pricing strategy and focus on catering the need of moderate income groups.
P2. Impact of internal and external drivers of change on leadership, team and individual behaviour
Business environment is amalgamation of a number of internal ans external factors that influences the working and decision making of a firm (Fullan, 2014). Internal factors comprises those attributes that are in control of company to manage and modify as per the changes occurring in the market. These factors involves organizational culture, management, employees etc. External factors are those that are beyond the control of a business and thus firm has to find out a way to deal with it. Thus, to survive in a long run and to maintain the productivity and profitability of its business operation all transnational accompanies like Nike and Adidas requires to formulate or adopt policies and strategies which are in accordance with the market trends of a particular country to be figurehead in its industry. To accomplish this a firm is required to analysis both its internal and external factors in the light of market competencies so as to formulate the most appropriate policies , procedures and strategies that can be supportive in achieving targets and objectives and to get maximum returns with higher profits (Fyke and Buzzanell, 2013). Every alteration or change introduced in a business significantly affects its leadership, teams and individual behaviour which is responsibility of a manger to coordinate for its success. Mentioned below are the internal and external drives regarding Nike and Adidas are described below:-
Internal drivers of change
External Factors driving to change
P3 Measures regarding minimising the negative impact of change
One of the most baffling issue faced by every firm, while implementing change is the resistance from its employees which is inevitable. Change if not introduced effectively may negatively influence the firms giving rise to issues like reduction in outcome, employees absenteeism or turnovers, request for transfers, strikes and so on which all will ultimately hamper the functioning of a n enterprise operation's leading to losses (Salmela, Eriksson and Fagerström, 2012). Thus, to avoid any adverse effect it is responsibility of every management to be pro active in focusing on developing strategies for change management which will help the firm to convince its employees about the need and benefits that the particular change when applied will bring. Following are some steps that if adopted by an enterprise will help it to handle resistance from change from its workforce:-
PDCA Cycle: This cycle involves various functions define below:
P4 Different barriers for change and determine how they influence leadership decision-making
Trait Theory: This theory is mainly taken into account in order to predict effectiveness of leadership. It can be applied at all organisational level. This theory is based on the assumption that people are either born as successful leader or made with certain attributes that will makes them excel in their respective leadership roles. The theory laid stress on analysing physical, social an mental characteristics in order gain to gain more understanding about particular situation. This theory is suitable when company undergo change. Nike always believes that in order to gain high competitive advantage in overseas market they need to develop a culture of change within their organisation. They create the expectation among workers that change comes regularly and this motivates everyone in Nike to contribute more effectively and efficiently towards achieving business objective. However, leader play great role in such type of situation. It become easier for them to adapt changes because of their special traits and characteristics which also inspire their followers to act accordingly as per the change.
Contingency Theory: This leadership approach deals with finding the suitable match between a leader and a situation. Under this theory, the success of leader is a function of various contingencies in the form of task or group. When Nike undergo change management, they select leader that is going deal with various situation on the basis of skill and knowledge. Selecting right leader plays key role in organisational success and growth.
Transactional Leadership Theory: This theory is based on the assumption that company can motivate employees by paying them great reward and benefits on the basis of their work performance. This mainly deals with directing and motivating followers mainly through appealing to their own sell-interest. The main objective of follower is to follow the path instruct by its leaders. When Nike changes its organisational culture, it enable employee to change its workings style and this can only be possible with the proper guidance and direction of motivated leaders. Leaders possess the ability to shape the working of their followers. Therefore, the entire working of followers depend upon the way they get the direction or guidance from its leaders or managers (Wells and Nieuwenhuis, 2014).
Situational Leadership: The theory was prosed by Paul Hersey and Kenneth Blanchard. Under this type of leadership, manager or leader of a company must change or adjust style to fit the development level of the employees he is trying to influence. Basically under this, leaders need to change its style not the workers or followers to adapt to the leader's style. The style may change on frequent basis so as to accomplish organisational objectives in cost-effective and timely manner. For example: When Nike experience cultural change they expect their leaders or managers to change or adjust his style accordingly. Company undergo change so as to gain high competitive advantage in overseas market but its success depend upon how employees perceive the change.
P5 Contribution of different leadership approaches regarding organisational change
Leadership is the ability of a person to influence other people and make them work towards achieving set objectives. It has a direct cause and effect relationship with the funbctionb9onhg and success of and enterprise. The role of leader is very significant in introducing change in an organization. It is because they are people who shapes business strategies starting from their execution to making them effectively implemented. There are various leadership theories in management that describes leaders on basis of their traits and power an d authority that they possess over others (van der Voet, Kuipers and Groeneveld, 2015). It thus become critical for an organization to identify the individual qualities of its leaders and then choose the most appropriate leadership style to attain company's objectives with specific time frame giving maximum outcomes. Following are some leadership theory that can be taken into consideration while
Situational Leadership Style :- It is a leadership theory applies that there is no perfect way or style of leadership. It is the capability and efforts of leader to understand needs of individual or group they are going to lead and then mould his leadership style to meet those requirements. This theory includes four behaviour types:-
Transactional leadership: The main function of this leadership theory is to focus on managerial functions comprising controlling, organizing and short term planning to achieve pre determined targets within specific time limits. Leaders applying this theory motivates its employees to give best of their efforts by using a system of rewards and punishments. If employee perform as per desired resulted he is motivated by giving rewards.
Transformational Leadership :- It is the leadership style in which leaders and subordinates work together to identify the changes that are need to be implemented, creating its vision and mission for guidance, ascertaining the probable difficulties that employees might face with their solutions and executing change allowing leader to align subordinates with tasks that enhance their performance.
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From the assignment undertaken it can be concluded that, change is a significant attribute in determining the success and growth of an enterprise. Thus is becomes highly important for organization to be attentive and adoptive to such frequently occurring changes in market. Moreover there are various approaches adopted by management of Adidas and Nike for developing leadership among its workforce. Apart from that there are various internal and external factors like political, economical, social, technological, legal that majorly influences decision making process of an enterprise. There are various approaches that can be adopted along with PDCA cycle to minimise the negative effects of changes that are been applied. In A firm can also make use of various leadership approaches for motivating and developing knowledge and skills of employees for achieving predetermined goals.
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