A S Watson

Change Management and Leadership

 Leadership and Change
Management

Table of Contents
1. Background………………………………………………………………………………………………………….. 3
2. Analysis and Evaluation……………………………………………………………………………………….. 5
3. Leadership Style and Theories implemented by Watson group……………………………. 7
4. Analysis of the implemented theories…………………………………………………………………..8
5. Issues faced when implementing theories and impact on change ………………………..9
6. Implication and Evaluation of both Theories……………………………………………………… 10
7. Conclusion…………………………………………………………………………………………………………. 13
8. Refences…………………………………………………………………………………………………………….15

2
 Leadership and Change
Management

Background and Introduction

Organizational change coupled with strategic management leads to finding new ways and tools
of management whilst providing strategic solutions to existing business problems.
Organizational change is the result of managerial action. The main challenge of strategic
management is not achieving goals but finding effective solutions for the retention of goals.
Modern-day business environments are very volatile and they require organizations to
construct their organizational mechanisms in such a way that would allow modifying
organizational goals without the loss of any key resources. This case study reflects on the
management styles and practices used to rectify internal issues at A.S Watson Group.

Organizations can only prosper when change management is effectively practiced. Leadership
also plays a vital role to ensure best practices in organizations, empowering employees to
eventually result in organizational growth, which is the ultimate goal. These processes when
integrated together will ensure that the organization prospers in the given market structure.
Successful change programs focus on a number of aspects of structural changes and the
development of leadership.

The history of the case points to a few different management and leadership styles with their
ongoing business processes. A.S. Watson's growth strategy can be explained comprising of
market penetration (e.g. the expansion of chain store network in the existing markets) as well
as markets developed through expansion into previously unexplored territories. Since 1987, the
company has been successful in entering Asian and European markets. It is stated that A.S.
Watson primarily expands its business through organic growth. "Organic growth plays a major
part in our expansion", Ian F. Wade said when he was the group’s managing director.

Eventually, A.S. Watson indulged in joint ventures to explore it’s horizon and penetrate into a
larger market share. A.S. Watson also made acquisitions. An example is the acquisition of the
Kruidvat Group which transformed Watson Group to the third largest beauty retailer in the

3
 Leadership and Change
Management

world This merger helped Watson group to show their presence in the ever growing European
market.

4
 Leadership and Change
Management

Analysis and Evaluation

A.S. Watson were aware of the conditions specific to every region they were operating in which
allowed them to pin point what services and products were being demanded by their customers.
A universal approach could not have been applied to markets of different regions as different
markets represented different buyer characteristics. Having one approach towards all the regions
would have eventually resulted in failing. This in fact was the factor which led Watson group to
differentiate from their competitors. A complete change management preposition enabled the
company to effectively process region specific information of the customers’ needs and buying
patterns. By acquiring a wide array of brands, it allowed Watson group to take different products
under their umbrella and enabled the company’s expansion grow exponentially. The Krudivat
acquisition is a good example as it opened doors for expansion into the ever-growing Eastern
Market which was ranked highly in terms of GDP and growth.

Due to the ever-growing cultural changes, this enabled the company’s management to
acknowledge the problems they experienced and what solutions could be implanted in order to
rectify those problems. Change management process consists of multiple steps from planning,
implementing, working out feasibility, attainability and keeping track of what changes it is
bringing to the system. The last step is really important because one has to keep a close on eye to
what reactions are being caused by the newly implemented change strategies. It is necessary to
rectify negative reactions which are not according to the desired results.

Organisations sometime fail to recognise the fact that leadership and change management as
interrelated and interdependent aspects. The common misconception is that both these
elements are treated separately. Change in culture cannot be brought without the leadership
taking a charge and being involved. This is to be carried out at every managerial level to ensure
that it is embedded within every employee of the organisation that they have to embrace this
change and work together towards achieving that goal. Empowered employees are the backbone
of every organisation and it is the leader’s duty to ensure that they are. The organisation has to

5
 Leadership and Change
Management

clearly communicate what the culture of a business entails. If the employees are clear on what
the brand’s image is and what it promises to deliver, only then they will be able to meet the
demands of the customer in a complete manner.

6
 Leadership and Change
Management

Leadership Style and Theories

implemented by Watson Group
The Watson group intending on expanding from being a local pharmacy to a complete beauty
store which entailed a completely different managerial challenge in the workplace. Team
leaders have to take charge in this situation and come up with workable solutions that project a
strong outlook and monitoring of the internal and external factors involved in the implication.
The main responsibility entails that the leaders of the organization have to influence their
employees towards a strategic direction. Training of the employees is the route that can be
taken by the management to ensure that they perform better and have a global mindset for the
company. The most essential part in expanding your business globally is coming up with better
strategies, include competency and testing one’s skillset. There are numerous theories of
leadership style that shed light on the role and responsibilities of the leaders and how their
behaviors and attitudes influence those of the employees in the organization. An agile and
effective leader boosts up the morale of the employees and also helps establishing a complete
organization. Transformational leadership theory helps in syncing between the leaders and
employees and the creation of a chain-like structure working both ways. Meaning that the
feedback and input of employees were also taken into consideration by the higher
management. This brings a sense of belonging in the employees in an organization when they
think that they also have a say in the organization's practices. This creates complete
transparency between the employees and their leaders. In case of a conflict of any sort of risk, a
clear channel of communication between them will lead to the problem being solved easily and
though mutual discussion.

Analysis of the Implemented Theories

7
 Leadership and Change
Management

The Watson group has generated a complete concise strategic plan to be implemented in a way
that their goals align with the goals of their employees. This required the generation of a
comprehensive managerial plan focusing mainly on training of employees and value addition so
the company is ranked highly on customer retention, resulting in keeping the competitors at a
distance. For excelling in retail sales, creative and innovative management is the prerequisite
base for the organization to flourish in the market. The company needs to have a clear
understanding of its brand and the value it needs to project. Leadership has to be aligned with
these practices to maximize profits.In order to examine the different market criteria,
empowered employees and a strong management plan in place will pave the way for
situational analysis and implications. Having a competitive edge and a strong culture within the
organization is necessary in order to better achieve efficiency, retaining employees and
increasing employee motivation.

Issues Faced When Implementing Theories

and impact on Change
In order to create a friction-free change process, it is vital that the organization is fully aware of
the customer's needs and the threats it is facing by its competitors. It is imperative to note that
the actions are in sync with the criteria of the organization. The first important process

8
 Leadership and Change
Management

incorporated by the Watson group is advantage over their competition and the second being
employee empowerment practices, which provide the employees with suitable knowledge
about the market dynamics. The competitive advantage acts as the focal point for the entire
application of the market. The employees receiving complete information about the market
and the aims of the company are more aware of the customers' needs (van Rossum et al. 2016).
Planning, providing employees with all kinds of information regarding the products and services
implies the best strategy for the organization. When the employees have proper knowledge, it
provides a better ground for the managerial staff in order to proceed towards successful
factors. If the organization understands the importance of employee training and development
criteria, only then it will be able to build a better customer experience overall. The values of
leadership and work-based criteria should be in sync with the challenges they are facing in the
market. Employees need to be educated about how important it is for them to understand the
impact they have in the organization. Their duties as an employee should be stated clearly to
them. By providing employees with a sense of belonging to the organization, the chances of
them understanding goes higher. Team building activities can also play a pivotal role in making
the employees more and more aware and building strong bonds between them and the
organization.

Implication and Evaluation of both

Theories

9
 Leadership and Change
Management

Change was embraced well within the Watson Group, by leaders and employees equally. The
change in culture was required to adapt to the mentality that Watson Group was now bigger
than ever and their services and customer experience had improved by a great deal.

Facing competition in the market from different development and growth criteria ensure that
different market bases are catered with suitable and appropriate solutions. One solution
cannot be expected to work on each and every segment. Every market segment has unique
attributes such as preferences, buying power, etc. The company has created great quality
products and services, which provide a competitive edge in the market. Employees are being
provided with proper training so that their goals are aligned with the goals of the organization,
which is the most important factor for the organization to reach its goals. The different
strategic factors accompanied by programmed job rotations find the best mix for the
organization to stay ahead of the competition and continue doing so. Offering different
products is the unique selling point incorporated into the organization's strategy to prove that
they are a stand out seller in the market. This provides them a competitive edge as consumers
come to them due to the wide array of product and service options they are offering. A cost
leadership technique, is an effective technique which created increased awareness of the
particular market in which the operations are being run. Based on a complete understanding of
the nature of the market, a company can find out its competitive edge. It also allows companies
to stay on top on whatever is going on in today’s everchanging market.

Operational effectiveness strategy means using any practices which enable an organization to
better utilize it’s inputs. This can include any process which can be recitified or made more
efficient. A successful company invests and focuses on technological advancements, data
processing, and culture-based management styles. In Asian cultures, it is necessary to have lean
and transparent processes in order to achieve maximum productivity and profitability. This
variety of issues generate when an organization fails to imply the strategy chosen for them.
When the systems are not in place appropriately, the company will not be able to maintain its
competitive edge which will result in the company to lose its competitive edge.

10
 Leadership and Change
Management

Cost leadership strategy means that a company intends to gain competitive edge and gain
higher profit margins by offering products and services at the lowest rates in the whole market.
This strategy can be implemented in organization’s like Watson Group which have a wide list of
services and products and are big enough to store stock in higher quantities.

An innovative strategy entails a plan used by a company which encourages advancement in

advancements in technology. Research and Development is one of the major components of
any organization. Those who tend to neglect this are proven examples that the world will forget
you and move on. This usually means that the company is spending money into looking how to
speed up their processes using technology. It also gives valuable insights as to what threats that
any company is facing from it’s competitive. To be able to gain a competitive edge one has to
stay up to date of the latest advancements and adapt quickly.

The superior product quality of the company is USP of the Watson group. A USP helps in
differentiating anything from it’s competitors. Their high product quality, wide number of
products and services have given them the competitive edge and that is the reason of the high
customer retention.

Operational effectiveness strategy ensures that the organization is always going internally. It
strives to always keep improving is what set the Watson’s apart. The vision of a leader is most
important in a planning and implementing phase. The leadership style especially needs to be
coincide with the culture based management style. Especially in the case of A.S Watson and
their expansion in different Asian markets.

11
 Leadership and Change
Management

Conclusion
It is relatively evident from this case study that A.S Watson Group has adhered to a style of
management support system that not only helps them plan better but implement their
projections of the market and customer well.
What is ‘Change Management’? Change Management is primarily used for one reason which is
to ensure highest success of the business. Without change management businesses are prone
to project failures, risking project objectives and can primarily threaten the entire future of a
business. In today’s day and age, any business lacking effective, thorough and timely change
management is at a very high risk of collapsing or failing.

12
 Leadership and Change
Management

The conclusion is clear. Change is not a singular entity. It requires interactivity of every realm
and sphere of an organization. All contributors, leaders, tools etc. have to work together to
make change management successful.

A.S Watson has successfully formed an effective leadership style that is both beneficial for the
employees as well as the customers. The style of leadership is projected in such a manner so as
to generate a) better experiences for employees and b) support of management groups. These
are essential to look at the bigger picture; business expansion criteria. This aids the organization
with their planning. Planning being done for business perfectives is also helpful in two folds. It
firstly helps with the coaching and monitoring of employees and secondly it creates a well
planned and executed structure. The organization identified a problem and found a suitable
solution, which in this case was a merger which automatically opened up new markets and
diversified audiences.
They were then able to expand their business and move to a beauty and health store from a
normal sized pharmacy. Leadership styles were quickly adapted by the higher management,
keeping in mind the internal and external factors being faced. This led to creating harmony
between the company and its employees. Which in turn resulted in the smooth transition of
expansion of the business. Employees took on the newer roles and the responsibilities it
brought. They were putting in their best efforts in order to provide the best of experiences to
the customers. The company was aware of how it can maintain a competitive edge in the
market as the expansion resulted in Watson competing for a bigger share in the overall market.
The USPs of the organization were strengthened which led them to stand out from the
competition. Change is always hard for people as well as organizations to cope up with. It is
necessary to keep up with the modern changes in technology, cultures and the trends of the
market. Firms need to be aware of any changes going inside or outside which will directly
impact them. Being aware isn’t enough; they need to able to analyze, improvise and adapt their
processes. The market is competitive than ever and those who fail to keep up usually fade away
in no time.

13
 Leadership and Change
Management

References

LaClair, J. and Rao, R. Helping Employees Embrace Change, McKinsey Quarterly, 2002, Number 4.

Murphy, M. Why CEOs get fired, Leadership Excellence, September, 2005. (research by LeadershipIQ)

Abrahamson, E. (2000, July/August). Change without pain. Harvard Business Review, 83(4), 75–79.

Balogun, J., & Hailey, V. (2008). Exploring strategic change (3rd ed.). London, England: Prentice-Hall.

14
 Leadership and Change
Management

Bennett, J. (2000). Leading the edge of change: Building individual and organizational capacity for the
evolving nature of change. Mooresville, NC: Paw Print Press.

Jorgensen, H., Owen L. and Neus, A. Making Change Work Study, IBM Global Services, 2008.

Hamel, G., & Prahalad, C. K. (1994). Competing for the future. Boston, MA: Harvard Business School
Press.

Hammer, M. (2004, April). Deep change: How operational innovation can transform your
company. Harvard Business Review, 82(4), 85–93.

Hardy, B. (2007). Linking trust, change, leadership and innovation. Knowledge Management Review,
10(5), 18–24.

Kilmann, R. (1989). Managing beyond the quick fix. San Francisco, CA: Jossey-Bass.

Schein, E. (1985). Organizational culture and leadership. San Francisco, CA: Jossey-Bass.

Higgins, J., & McAllaster, C. (2004). If you want strategic change, don’t forget to change your cultural
artifacts. Journal of Change Management, 4(1), 63–74.

Kotter, J. (1995, March/April). Leading change: Why transformation efforts fail. Harvard Business
Review, 73(2), 59–67.

Schriefer, A., & Sales, M. (2006). Creating strategic advantage with dynamic scenarios. Strategy and
Leadership, 34, 31–42.

Higgs, M., & Rowland, D. (2005). All changes great and small: Exploring approaches to change and its
leadership. Journal of Change Management, 5(2), 121–151.

15
 Leadership and Change
Management

Kuhl, S., Schnelle, T., & Tillmann, F.–J. (2005). Lateral leadership: An organizational approach to
change. Journal of Change Management, 5(2), 177–190.

16