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ABE Level 6 Diploma in Business Management

Assignment Cover Sheet

Student Name:

ABE Number:

Unit Title: LEADING STRATEGIC CHANGE

Assignment Title:

Word Count: Date: 01/02/2018

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Declaration:

I hereby declare that the assignment work entitled “leading strategic change” was carried out by

me for the level 6 business management under the guidance and supervision of

MS. SARAH KALEEM AHMED.

For the present assignment work, which I am submitting to the ASSOCIATION OF BUSINESS

EXECUTIVE (ABE), no degree or diploma or distinction has been conferred on me before, either

in this or in any other University.

Place: RIYADH- KSA Wajiha Nawaz

DATE: 01/02/2018 Level 6

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Acknowledgement:

Let me start off by saying that this assignment would not have been possible without the constant
blessing and strength from the almighty that helped me stay active to complete this work on
time. Before anybody else I would like to thank my mother who lifted me up when the
assignment stress let me down and my dad for helping me find information about my topic and
keep me motivated. I would also like to immensely thank my teacher Miss Sarah Kaleem, whose
constant assistance and guidance helped me to perfect and also complete my assignment on time.
I also truly respect her on how she cooperated and motivated me to do this assignment with
enthusiasm and zeal. Without her support, this assignment would have been nothing.

I would also like to appreciate the other staff members at my university who gave me much
inspiration to present a flawless output.
Lastly, I extend my deep gratitude towards my fellow mates who gave me endless suggestions,
feedback and also cleared my doubts on how to complete this assignment. They kept helping me
even when I pestered them with my constant doubts and questions
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Table of content:

Introduction……………………………………………………………………..5

Task 1
➔ Henry’s roadblocks…………………………………………….…………6
➔ Value based leadership……………………………………………….......7
➔ Diversity management………………………………………….………...8
➔ Continuation…………………………………………………….……….. 9

Task 2
➔ Kotter’s 8 step change model……………………………………….……..9
➔ Continuation………………………………………………………….…...10
➔ Continuation………………………………………………………….…...11
➔ Communication plan……………………………………………………...12

Task 3
➔ Power/interest matrix…………………………………………….………..13
➔ Impact analysis on stakeholders……………………………………….…..15
➔ How to monitor these impacts………………………………………….….16

Task 4
➔ Understanding and planning change……………………………………….17
➔ Managing resistance to change…………………………………………….18
➔ Implementing change………………………………………………………19
➔ Continuation …….…………………………………………………………19
➔ How they were improved…………………………….……………………..20

References…………………………………………………………………………..21
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INTRODUCTION
IKEA is a multinational ready to assemble furniture i.e. home ware, bedroom and kitchen
appliance private company that operates at tertiary sector and provides goods and services at low
prices. It was established in 1943 in Sweden by Ingvar Kamprad, its main headquarters are
situated in Leiden, Netherlands. The current chair man and Chief Executive Officer of IKEA
international group is Jesper Brodin, As of November 2017, IKEA operates its business in 38
countries while spreading its stores at 389 different locations with having 194000 employees of
different backgrounds and ethnicities from around the world making it the world`s largest
furniture retailers of unique and innovative products, their strategy idea revolves around
providing high quality goods and services at low prices. After the few years of successful
business IKEA has diversified its business into restaurant industry. IKEA`s restaurants and
bistros operates within the IKEA stores, they offers variety of healthy food such as seafood,
vegetables, traditional Swedish meatballs, pastries and beverages. Key competitors of IKEA
international includes Argos, Ashley Furniture Home stores, B and Q, Bob`s Discount, Daze
Furniture, Al Rugaib Furniture, Home and threats from countless new entrants in the market.

IKEA`S business operations classifies as:

 Franchising.
 Retailer.
 IKEA Restaurants.
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TASK#O1

PART A

OPPORTUNITES FOR:

ETHICAL BASED LEADERSHIP

Ethics is the vital constituent of an organization; leaders can create a positive ethical
environment by giving the attention to the staff moralities and personnel satisfaction. However,
according to Henrry`s Road-blocks to ethical leadership, ethics has its set of obstacles which
includes: pursuit for pleasure, professional and social pressure, pride or the need to win at any
cost, conflicting priorities and desire for power.

PROFESSIONAL AND SOCIAL PRESSURE:

IKEA has unique and remarkable reputation because of its cutting-edge strategies and diversified
atmosphere in addition to this IKEA has expanded its business operations throughout the world
successfully, which makes it utmost amongst its competition. Hence, in order to keep up with the
competition IKEA`S France management had hired the private detectives to investigate the
medical absenteeism (to know if they are pretending the extremity of their poor health) of
existing employees, spying on potential employees and also the customers who were dissatisfied
with the services of the store. France`s (STIC) police intelligence system, was being accused of
providing the private information of the employees as well as personal information of unhappy
customers to the detectives that includes ; cell phone number, bank account details and other
private documentation.
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By doing the act of spying IKEA France unit had breached the most fundamental principle of
employment i.e. `THE RIGHT OF PRIVACY` in conclusion did not respect the values of the
company`s internal as well as external stakeholders.

PRIDE OR THE NEED TO WIN AT ANY COST:

IKEA is known as one of the best global brands to work for due to its workplace culture,
competitive health care and retirement plans for employees as well as it promotes diversity. But
the leaders code of conduct in 1980`s was totally unacceptable. According to investigation report
conducted by Ernst and Young in 2012, management had taken the advantage of forced labor by
giving the contract to the former East Germany (GDR) Government due to few resources that
accommodated the company to sell furniture at very low price. Management had used political as
well as criminal prisoners as slave labors for the manufacturing of sofas, cupboards, chairs and
many other household products at a very low costs with bad working conditions i.e. Heavy
workload and extreme working hours while neglecting the health and safety issues. To fulfill the
demand of the market even if it had to be done unethically and immorally.

VALUE-BASED LEADERSHIP

The following table of seven level of leadership consciousness focuses on the

leadership transformation of IKEA.
Crisis Manager IKEA management has set the objectives and production targets
to fulfill the responsibility of creativity and run a well managed
business. Even at the initial stages of business activities IKEA
has given the tough time to the competitors by setting a low
pricing strategies for growth maintenance. Hence, gained the
share in the market and profit. IKEA had tackled the labor force
crisis and opened the factories in China for cheaper labor and
local sourcing of materials to produce high quality products for
low prices while eradicated unwanted components of production
cost and managed to set a successful price reduction strategy.
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Relationship Compatible and well balanced working condition has always

Manager been the main focus of the IKEA. The management of IKEA
strives to enhance the open communication by encouraging the
flat structure system and through team work so everyone can
exchange their suggestion before final decision and also to
improve the productivity of every employee. IKEA had launched
its IWAY code of conduct for suppliers in 2000, to improve its
communication to their sub-suppliers as well as the
consideration of customer’s outcomes and feedback to develop
the improved innovative products for customer’s loyalty.
Manager To achieve the long term prospect and deal with the short term
goals and issues. The management of IKEA has improved the
business strategies and increased the quality of innovation with
the help of personal transformation, encouraging employees in
decision-making, analytical skills, creativity, productivity and
organizing info. and examine results. Hence, the efficient
processes have led the company towards success.
Facilitator/Influencer IKEA acknowledges and motivates its staff and give equal
opportunities to its employees to help them achieve their goals
for the success of the company as well as encourage their staff to
participate in employees development program for career
advancement.
Hence, the leader Ingavar Kampard of IKEA followed the ‘FACILITATOR/INFLUENCER’ role
from seven level of leadership consciousness.

PART B

DIVERSITY MANAGEMENT
IKEA`S vision and values supports diversity and believes that diversity contributes in creativity
and growth. IKEA has employed people from different race, religious background, ethnic
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background race etc. Hence, has faced cultural as well as communication issues while setting
business operations in few regions.

COMMUNICATION ISSUES:
IKEA Saudi Arabia had faced communication problems while dealing with the customers to
explain and specify the services and products as most of the employees working in IKEA Saudi
Arabia are expatriates. Hence, language barrier had increased the misunderstanding, lack of
creative team work and stress at the workplace.

IKEA backpacker program has helped the expatriates to learn and understand company`s way of
working in order to grow professionally. In addition, IKEA Saudi has managed the language
barrier issues by providing the language classes and training to promote the comfortable
environment.

CULTURAL DIFFERENCES:
Cross-culture challenges occurred when IKEA expanded its operations to China, as Chinese
culture is more traditional and have unique belief system. Therefore, IKEA found it complex to
understand.

IKEA has done research to understand the unique culture of Chinese market as well as
supporting socio-economic conditions, focused group, meeting and surveys to understand the
lifestyle, proved as beneficial for IKEA`S marketing reposition strategy.

TASK#02

PLANNING AND COMMUNICATION PLAN

CAFÉ AND RESTAURANT WITHIN THE IKEA STORES

IKEA has opened the café and restaurants within every IKEA store that offers variety of
delicious meals e.g. Swedish apple cake, meatballs, salmon lasagna and much more at lower
prices by having a confidence that carrying the hunger of customers in a pleasant environment
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may help them gain the customers loyalty and aim to fit in different demographics. Since then,
this initiative has increased the sales and escalated the profitability and proved as a successful
implementation in a new and existing market. Also, it has proved as the optimistic change
initiative because leadership management had considered the every stakeholder for planning and
implementing change.

Moreover, Kotter`s framework of eight stages process for change model shows the structured
approach, planning and communication considered by IKEA.

STAGES KEY ACTIVITES

Establish a sense Conduction of surveys to distinguish their strengths and

weaknesses that is required for the opening of the café and
of urgency
restaurant in the IKEA stores. Encouraged teamwork, critical
thinking and open one to one communication between top and
bottom level of management in a friendly environment that let
each and every individual to share their ideas, reasoning and
views about any possible positive and negative aspects that could
happen in the market place. As well as the involvement of external
stakeholders (market research, changing customer’s needs and
competitors) to precisely understand the importance of strategic
change through feedbacks and suggestions to minimize risks that
are involved.
Creating a Premium leadership had identified the effective stakeholders to

guiding coalition create a powerful coalition and the atmosphere of team work to
gather the concrete information and involving their employees
from every department to plan a beneficial decision that are
sustainable for `FOOD IN IKEA` business strategy. Combining
right people at right time for appropriate level of work can push
the company towards the profitable change.
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Developing a After creating a powerful coalition leadership management tends

vision and to create an effective and focused vision which reflects the main
vision of the company i.e. helping people to create and live life by
strategy
progressively lowering prices for their customers, to attain the
corporate objectives and transformed the business. IKEA`S plan
to implement the strategic change process vision in their actions
was by reinvestment of the most of the profit in change
development program to give the most efficient and unique
experience to the customers while keeping the competitive
advantage for the company.
Communicating Change project leaders, CEO, senior VP, managers, chefs,

the change vision researchers and web designer developed a communication

strategy by using various methods and channels i.e. for internal
stakeholders meetings, numerous step by step presentation
through graphics, re communication of targeted messages through
emails and bulleted bold font list to spotlight the important
actions. Consideration of other important channels to
communicate with external stakeholders to explain and make the
services, offers of IKEA restaurants clear to the customers with
the help of IKEA website, advertisement and broachers.
Empowering Encouraging employees and minimizing the roadblocks to change

employees for is an important factor to develop the sense of responsibility and

prosperity in workforce. Employee’s empowerment is a
broad based
fundamental aspect for IKEA to maintain the effective change;
action
innovative ideas are appreciated and rewarded by incentives,
opportunities for promotion career and self growth to build the
skills. Tasks accomplishments are being recognized that acts as
the important motivating factors.
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Generating short Senior leadership management had set the short term goals to not

term wins to overload and pressure the workforce while maintaining the
momentum of change rhythmically and increase the confidence
among workforce. Quick short term wins keeps the company
encouraged to further develop the change strategies. By setting of
short term rewarded goals as the method to monitor the progress
efficiency of productivity has increased and cost of overtime has
decreased.
Consolidating Reasonable company`s efforts to win the short term goals of sit-

gains and down restaurant with a traditional healthy menu that reflects the
Swedish roots resulted in a notable increased revenue and profit.
producing more
Change has gained the remarkable acceptability, the ongoing
change
successful change had led the company to improve the policies
and planning that is useful to assist the vision to further growth
also making the culture of freedom of speech to make the
involvement of everyone.
Anchoring new Café and restaurant with in the IKEA stores has gained the

approaches in the massive success that the company is digging for further
improvement of constant development and approaches to give
culture
this change a priority to make it the core of the company`s
culture. Recruitment of chefs from around the world to create a
high quality food menu according to demographic areas. IKEA
consider every type of customers by taking the health trend in
consideration. Moreover, IKEA has improved the farm welfare in
terms of transparency through its species-specific welfare
policies.

(Fig. 02 own source)

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Hence, according to Kotter’s 8 stages of process to change model IKEA has successfully
implemented the planning and communicated the change in order to lead the strategic change.

TASK#03

PART A

POWER-INTEREST MATRIX
Menddelow`s power-interest model can act as a useful matrix to identify the key stakeholders of
the company.

Low Interest High Interest

Minimal Effort Keep Informed

Employees of Suppliers Competitors
Occasional customers Future recruit
Low power Out sourced staff Employees

Keep Satisfied Key Players

Government CEO
Media Press Senior executives
High Power Customers Interest groups
Shareholders
Board members
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(Fig.03 self source)

KEY PLAYERS (HIGH INFLUENCE / HIGH INTEREST)

Stakeholders of this category are the key players of IKEA as they have the high level of interest
and power. Board members, managers and senior executives holds great impact as they provide
the resources to run the project change as well as they manages the financial and operational
costs for creating and updating the policies, improving the quality of strategies and to achieve the
overall business activities while interest groups provide the support, influence the policies and
look-after the issues of the personnel. Shareholders on the other hand, if are not satisfied with the
way directors run the operations may influence the decision to not to re-elect the directors
because major decisions are approved by them. Also, they hold the share in the profit because
they provide the financial support to the company by purchasing the company`s shares.

KEEP SATISFIED (HIGH INFLUENCE / LOW INTEREST)

These stakeholders are not actively interested in business activities but they carry high influence.
Keeping them satisfied could help the IKEA to run the business operations without being
affected by their power. IKEA has maintained the good relationship with government because
government can influence business strategy by changing or updating the laws and regulations
and passing legislations to restrict the store construction at certain location, also, arise in VAT
and corporation tax. If customers are unsatisfied by the services provided by the IKEA they will
move to the competitors hence IKEA could lose the market value.

KEEP INFORMED (LOW INFLUENCE / HIGH INTEREST)

Employees and competitors have high interest and low influence. Employee’s posses’ high
interest due to job stability and growth opportunity they don’t have much power in high level of
strategic decisions however, management keeps them satisfied and informed to take part in
business activities. Competitors also gather knowledge of how IKEA evolves its strategy and
present innovative products in the market.
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MINIMAL EFFORT (LOW INFLUENCE / LOW INTERST)

These stakeholders are neither interested in business activities nor have power to control
business operations. They just need to be monitored to stay involved and to increase the support
of the business.

STAKEHOLDER ENGAGMENT AND IMPACT PLAN

KEY Organizational
STAKEHOLDERS INTEREST RESPONSE RISKS change
outcome

Employees Job security, Supportive Autocratic Positive for

encouragement, leadership stakeholder
Health and safety
affirmation,
satisfaction and
motivation,
encouragement,
training for career
development
Competitors developing more Dissatisfied loss of market Negative for
innovative product value, losing stakeholder
strategy to attract prospective
the customers, customers,
builds brand decreased market
reputation better share
than IKEA
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Shareholders Purchase of more Shareholders see Positive for

shares of company, Fair and no risk regarding stakeholder
profit from the contributory the change
investment, stability initiative it is an
of the market stocks opportunity for
them
Customers High quality low fear of first time Positive for
prices food menu, experience stakeholder
ethical way of
delivering services Supportive
Senior management Revenue generation, Fear of Neither positive
continuous competition nor negative for
innovation, gaining Supportive stakeholder
market share
Local community Concerned about Varied Fear of noise Neutral for
corporate social pollution and stakeholder
responsibility, traffic pollution
environmental
sustainability and its
impact on overall
community
(Fig.04 self source)

PART B
MEASURES TO EVALUATE STAKEHOLDERS EXPECTATIONS
AND REQUIREMENTS ARE MET
To assess the effectiveness and success of communicating change strategy to measure the impact
of strategic initiative, interest, response and requirements of stakeholders for the improvement of
strategic activities. These qualitative research methods are as follows;
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FOCUS GROUP MEETINGS

Focus group meeting is an effective search method to measure the influence of change on
stakeholders. As it allows the face to face communication with smaller group members to deepen
their involvement with strategic change and give them opportunity to share their honest views
and ideas on the targeted areas. It has helped the IKEA to improve the quality of strategic change
and to avoid any insufficient activities that could be responsible for the failure of strategy.

ADVANTAGES
 Detailed and vast scale of information from different opinions could be obtained.
 Unlike individual interview it is a expeditious and inexpensive method to gather
beneficial method.

DISADVANTAGES

 The focus may be divert from the targeted concern due to group of people if they show
disagreement

QUESTIONNAIRE AND SURVEY RESEARCH

IKEA uses questionnaires and surveys to measure the customer`s satisfaction level on food menu
these questionnaire is provided to the stakeholder at stores and through SMS. Questionnaires and
surveys are prepared accurately to obtain the direct answers.

ADVANTAGES
 Questionnaires give good amount of information in an affordable way.
 Large number of audience can be targeted as in this way they hold no pressure of face to
face answers.

DISADVANTAGES
 Possibility of fewer responses.
 Difficulty to understand the style of questions.
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TASK#04

PART A
Late Ingvar Kamprad had proposed the strategic change because he had realized the customers
changing expectations and the fact that change could bring the more market value and profit in
the business. The skills and competencies that change management possesses can be examined
through Kelly, Hoopes and Conner competencies model.

UNDERSTANDING CHANGE

FLEXIBLE THINKING
`Its difficult to do business with someone on an empty stomach` ~Ingvar Kamprad

Late Ingvar Kamprad had comprehended that IKEA is like a village for the customers, when
people come to shop they spend almost an entire day at IKEA so they could get hungry this
thinking gave him the idea to diversify the furniture industry into restaurant business within the
stores and that this initiative will grab the customers attention due to the fact that the leader of
IKEA values each and every need of their customers. And so company could reach to the wider
range of society with the help of the unique strategic operations and could use the opportunity to
increase the profit and makes the base of customer’s loyalty stronger.

PLANNING CHANGE

FOCUSES SENSE OF PURPOSE

Ingvar Kamprad planning to implement the vision of restaurant was to meet the primary needs of
the customers and enhance the value. Planning`s main focus was to provide healthy, traditional
and nutritious food that includes kid`s meal, organic and vegetarian items and Swedish food at
minimum prices. While IKEA`S health and sustainability team will maintain a sustainable food
system and good environmental conditions for animals i.e. better air quality for animals, natural
light, measures to improve the health of chickens and use of antibiotics etc along with that ideas,
instructions, financial and operational support for the restaurant product development team.
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MANAGING RESISTANCE TO CHANGE

ORGANISATINAL AMBIGUITY
He has developed the structured approach from the beginning of the change initiative to deal
with the employee’s conflicts. He had invested his efforts in communicating and motivating
those who were highly disposed in doing the work the way they were doing through clarity of the
planning, transparency of the strategies and encouragement, that change is beneficial not only for
the success of the company but also for them to develop and enhance their skills and overall
career.

IMPLEMENTING CHANGE
PROACTIVE EXPERIMENTATION

Ingvar Kamprad brilliant strategic and marketing skills along with the support of change
management had made the implementation of the change activities successful. Understanding
and implementing the demands of key stakeholders through continuous update in engagement
plans, market research and brainstorming had helped the change to move smoothly also tackling
the situations by setting small targeted goals. Moreover, taking the responsibility of corporate
social responsibility and environmental sustainability has helped them gain the loyalty of
customers.

SKILLS OF LEADERS
TRUST BUILDING
Ingvar Kamprad appreciable transparent way of running business and supportive behavior
towards employees by giving each and every employee equal rights despite their gender, race
and religious believes has helped him to gain the trust of his primary stakeholders. The brilliant
working conditions have benefited him to gain respect amongst his employees. For Kamprad the
basic principle is to have humanistic values, desire to create a positive working environment,
passion and consideration towards the opinions of his management. He has hired the most skilled
employees from around the world and gives them respect to share their ideas for problem solving
matters rather than implementing orders without listening to their opinions.

ORGANIZATION AND FOLLOW-THROUGH

To reach to the bigger opportunities for improvement Ingvar Kamprad hosts interaction
programs to maximize the interaction with different stakeholders for expanding their strategic
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activities and to have a follow-through to balance up the operational activities while eliminating
the risks of any future profit margin. Healthy debates between top and bottom level of
management is encouraged to follow through the issues related to the gaining commitment
because diverse opinions make a team strong. Senior leader engages with the suppliers, chefs,
project controllers, finance managers and marketing managers to gather data of resources, costs
and innovative products to make a decision and continue to conduct follow-through to gather the
reviews unless until strong action plan is being made.

PART B
After the death of Ingvar Kamprad in February 2018, most of the leadership plan is handled by
CEO Jasper Brodin he had made many decisions in developing change management and is also
as skilled as Ingvar Kamprad but to maintain the competition in the market further development
and improvements are needed to netter his skills by performing surveys to understand which part
of the skills and competencies needs improvement.

DEVELOPMENT OF MANAGEMENT SKILLS

Performance review and 360-feedback comes out as a helpful tool to enhance the leadership
skills.

360 FEED BACK SURVEYS

Time to time conduction of effective and constructive 360 feedback surveys with his workforce helped
him identifying the key areas where he needs improvement. Feedbacks are collected by all the
departments of the company. The result of the feedbacks showed that he needs to:

 Develop the strategy in simple language.

 Encourage weekly reviews of change objectives with workforce.
 Increase the time limit for productivity target that he sets.
 Solve the conflicts of employees through open discussion.
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Ikeacom. 2018. Ikeacom. [Online]. [March 2018].Available from:

http://www.ikea.com/us/en/catalog/categories/departments/food/

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Wikipediaorg. 2018. Wikipediaorg. [Online]. [March 2018]. Available from:

https://en.wikipedia.org/wiki/IKEA

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