Organisational Culture of J. Sainsbury Term Paper

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Fortress Culture: Employees don't know if they'll be laid off or not. These organisations often undergo massive reorganisation. There are many opportunities for those with timely, specialized skills. Examples are savings and loans, large car companies, etc."

According to research, Sainsbury's appears to be a fortress company, as it is struggling to find the right strategy and culture for its business.

Edgar Schein, a cultural analysis, has contributed a great deal of literature regarding aspects of organisations that seem irrational, frustrating, and intractable (Deal and Kennedy, 2000). According to Schein, p. 375): "The bottom line for leaders is that if they do not become conscious of the cultures in which they are embedded, those cultures will manage them." Because Schein uses open-systems concepts, it is understood that members of a group culture may also belong to subcultures within a company. Since organisations have a shared history, there will typically be at least a few values or assumptions common to the system in general. How, as the subcultures have had different experiences over time, their group learning produces various sets of basic assumptions.

Organisational culture is a type of organisational analysis that is rooted in the field of anthropology (Knopp, 2002). It was initially described as an organisational area of concern in 1979.While no single universally-accepted definition exists, the term organisational culture is accepted as referring to the shared meanings, beliefs, and understandings held by a specific group or organisation about its problems, practices, and goals.

The concept of organisational culture is frequently misunderstood and confused with the similar concepts of climate, ideology, and style. Culture can best be defined in terms of (Knopp, 2002):

Open organisational behavior

Organisational ideology and philosophy

Group and organisational norms

Espoused organisational values

Policies, procedures, and rules of socialization

Company climate

When considered in conjunction with employees' interaction patterns, language, themes of daily conversation, and daily routines, these terms seem to reflect elements of organisational culture (Knopp, 2002). However, culture is less conscious; it exists at a deeper level. None describe the "essence of culture" itself. The essence of culture is the basic assumptions and beliefs that are invented, discovered, or developed by all members of a group as it deals with its problems of external adaptation and internal integration and that are taught to new members as the correct way to perceive, think, and feel in relation to these problems.

Thorough evaluations of an organisation's culture generally require the efforts of those who are inside the culture on a daily basis, partnered with the more objective perceptions and observations of someone outside the daily culture (Miller, 2004). The outsiders are more likely to observe things that insiders take for granted. They can look for the patterns in behaviors and the surprises or unexpected events. The insiders can attempt to help the outsiders decipher what the events and surprises mean.

Organisational culture is intangible yet powerful (Miller, 2004). Good leaders do not underestimate the power of culture to support or hinder the implementation of strategy. Although cultural assessment is not easy, with the right combination of inside and outside assessors and a clear purpose and method, the process can yield information that will create a path for the success of any organisational change effort.

Organisational cultures emerge from the social practices of members of organisations and are, thus, socially created realities that live in the heads and minds of an organisation's member, as well as in the formal rules, policies, and procedures of organisational structures (Knopp, 2002). Culture is a constant process of reality construction, providing a pattern of understanding that helps members interpret events and give meaning to their working worlds.

Therefore, culture is an evolutionary and dynamic process that involves changing values, beliefs, and underlying assumptions in regards to (Knopp, 2002):

The nature of the relationship between organisation and environment (whether the organisation controls, is controlled by, or coexists with the environment);

The nature of reality and truth (what is right or wrong in terms of acquisition and use of information, time perspectives, physical environments, and social environments);

The nature of human nature (intrinsic nature and basic instincts of human beings);

The nature of human activity (active, passive, or in-between); and The nature of human relationships (the proper way for people to relate to one another)."

The list above represents fundamental assumptions about core and global realities that result in cultural predispositions that drive the more superficial cultural manifestations, including overt behavior, norms, espoused values, and more (Knopp, 2002).

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Organisational cultures are usually developed by the founders of organisations and subsequently are maintained by the founders' leadership team.

Founders build organisations based on personal beliefs about how to interact with the environment and about the natures of reality, people, activities, and relationships (Knopp, 2002). They make decisions about what the company should or should not be, what works or does not work, and what are appropriate or inappropriate organisational activities. Founders' goals, assumptions, and visions of reality are eventually shared by others in their organisations, especially the leaders. Over periods of time, shared realities transform into validated organisational cultures that become the "correct" ways of resolving organisational problems. In this light, organisational culture becomes the "norm" that makes it possible for people to derive meaning from their work, to work comfortably with others, and to focus on key organisational goals.

Today's successful organisations understand that learning issues and constant change are at the heart of organisational survival (McCartney, 2002). The problem is that too much training is disconnected from the real needs of managers and their organisations. Companies must embrace a more strategic approach to learning and understand that the orhanisational culture must change for the business to change. This must include the recognition that best learning takes place in live work situations and that training is at best a support for such learning.

By the mid-1990s, it was painfully clear that Sainbury's could no longer keep up with the competition. A well-established fixture for the UK's value-conscious shoppers, the grocery giant had been ousted by longtime rival Tesco and other competitors (Remedy, 2004). The organisation's 11 million customers were looking for more product choice, higher quality, more freshness, wider availability, better and more customized service -- and with better prices. Suppliers wanted better demand signals and more predictable order flow. And shareholders had already seen a 30% drop in earnings in a sector notorious for its paper-thin margins.

Executives at J. Sainsbury quickly determined where the blame lay. Behind the supermarket storefronts was an outdated supply chain infrastructure that no longer effective for a company that had to efficiently handle more than 2,000 suppliers, 35,000 product SKUs, and 800 million cases of product each year (Remedy, 2004). Warehouse pick lists were provided on paper. Inventory visibility was unclear not only in the warehouses but also in the stores, making basic replenishment an ineffective process. Management had little real-time data to make sound decisions. And performance measures meant that the company had to turn inventories faster every year.

At the time, J Sainsbury was using a 30-year-old mainframe-based warehouse management system (WMS) (Remedy, 2004). Its typical distribution center was just as old. Compared to the age of the average Tesco depot -- less than seven years -- Sainsbury's depots were coming to the end of their useful life. At the server level, utilization rates were as low as one percent. Many of the information technology (IT) systems were proprietary; the bulk of the software had been created and implemented in-house. As recently as 2000, the system was still very complex, with as many as 400 different supply chain software applications.

The consequences were clear: stock shortages were common, and on one occasion, all of the depot systems crashed when the company tried to order goods in a different way, according to Andy Banks, director of supply chain development (Remedy, 2004). A great deal of the technology budget was used to maintain the complex and older IT infrastructure; and it was especially difficult to launch new business initiatives. Sweeping changes were obviously needed.

Sainsbury's has a long-time reputation as a high-quality grocery chain in theUnited Kingdom (Remedy, 2004). Until Tesco assumed market supremacy, Sainsbury's was the largest in the segment. It is a worthy contender, with annual revenues of more than $27 billion from 450-plus stores supplied by 19 depots and 12 primary consolidation centers (PCCs).

The UK retail environment is extremely competitive, forcing retailers to constantly develop and enhance both their offerings and their formats," according to Bevan and Murphy (2001). "Probably the most significant changes taking place are coming from not the products being sold themselves, but rather when, how and where they are being sold. For example, new technologies such as the Internet, CD-Roms, electronic kiosks and digital television are opening up new opportunities for retailers through remote purchasing and delivery." It was clear that Sainsbury's needed a transformation.

The company's transformation.....

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