| Leadership, Motivation & Change | Assignment | | Linda Blears – ble05084149 | 5/24/2013 |

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CONTENTS

Page

Task 1 2

Task 2 8

Task 3 12

Task 4 18

References 20

Bibliography 21

TASK 1
Since the first store was opened in the German town of Essen in 1913, by Karl and Theo Albrecht, Albrecht Discount has continued to flourish into the successful, global organisation we know as Aldi. Aldi has over 8000 stores worldwide and continues to expand in Europe, North America and Australia. The finance section of The Telegraph (October, 2012) reported that Aldi hope to have 500 stores open in the UK by the end of 2013, 40 of them new stores with an estimated cost of £181m, will create 4,500 new jobs.

Despite hours of research on Aldi, it proved extremely difficult to find their mission statement. As an international organisation they have many websites but none appear to display their mission statement; nor does their Corporate Responsibility Policy (Aldi, UK 2013). The reason for this difficulty became clear with the discovery of a book, Bare Essentials: The Aldi Way to Retail Success, Brandes and Brandes (2012). Dieter Brandes contributed for many years to the policies which brought success to Aldi; he was initially a regional general manager and then for 10 years, until he left in 1993, was a managing director for the Executive Board. In his book, he explains how Aldi never had a mission statement, because they never needed one. The company’s goals of lowest prices and best quality are sensible, understandable and simple, so how could anyone else write anything which would make them any clearer? Understandable goals, meet with understanding from employees. So, it would appear that Aldi’s goals have been adopted as their mission statement by others; that mission statement or goal, as explained by Brandes (2012), is indeed simple:
‘to provide value and quality to our customers by being fair and efficient in all we do’.
Everything they do is focussed around providing value for money to customers. (Times 100 Business Case Studies, no date)

By being efficient and cutting costs, Aldi then invest profits back into the business, which allow them to meet their business objectives for growth. Lean thinking is a process constantly employed by Aldi in order to improve efficiency and quality, while reducing costs, time, space and effort; this leads to an investment programme which develops new properties and suppliers and provide benefits for employees. For Aldi, lean thinking is not just about reducing business costs; it is about passing these savings to customers, in value for money products.

Source: The Times 100

Aldi apply some of the principles of The 7 Wastes lean methodology to their strategy.
The 7 wastes are: * Overproduction * Inventory * Wait time * Transportation * Processing * Motion * Defects

In relation to overproduction, Aldi favour ‘Just in time’ production – products are received just as they are required, which eradicates the necessity to maintain high stock levels.
Wait time is reduced by Aldi with time based management, an approach that aims to reduce time wasted in business operations. In order to succeed this requires a multi skilled and flexible workforce.
Transportation is also subject of the time based management approach. Around 60% of Aldi’s fruit and vegetables are locally sourced where possible, which reduces the need for long, costly delivery runs and is kinder to the environment.
Processing – the time based management approach also applies to Aldi product range. They sell fewer variations of each product allowing them to take advantage of economies of scale, sourcing products in a more cost effective manner. By taking this approach Aldi need less space which is why Aldi stores are much smaller than larger supermarkets.
Motion – Any movement, of people, machines or materials that does not add value to a product. Aldi adopt a number of approaches to ensure waste is kept to a minimum; minimising waste reduces costs. * Aldi shopping trolleys have a £1 deposit system – this ensures trolleys are returned after use, resulting in fewer trolleys having to be replaced due to loss or damage and eliminating the need to employ someone to collect them. * Aldi eliminate waste in their opening hours. They trade during busiest times over a shorter period and are, therefore, more productive during trading hours. It is only in the last couple of years that Aldi extended their opening hours to 12 hours per day, 8am – 8pm, Monday to Saturday and 10am – 4pm on Sunday; a complete contrast to many competitors who are moving towards 24/7/365 opening. Aldi have no plans to introduce 24/7 opening at this time. Consumption of utilities for power and heating are also reduced by trading during busiest times and Aldi globally encourage all staff to turn off lights during the daytime in rooms not being used, thus extending cost watching to all areas of the value chain. * Shoppers cannot pay with a credit card so that Aldi do not have to pass on more cost to the shopper by way of the 3-5% per transaction charge. * Carrier bags are not free, which encourages shoppers to adopt the bag for life theory. * Shoppers who complain about supermarkets making a big fuss about loyalty cards, when they could simply cut prices, should note Aldi do exactly that. No loyalty cards, no gimmicks, no vouchers. However, despite the lack of loyalty cards, Aldi toppled Waitrose from the top spot in a supermarket loyalty league in April 2013. The store scored 38 out of 50 points and voters marked it high on price and quality. Dragging behind, with a 14 point difference at 24, was Waitrose. Ten supermarkets were voted on and, as might be expected, the list contained the top 4 - Tesco, Sainsbury, Asda and Morrison’s – 10th place went to M&S with an astonishing minus 38 points (The Grocer Magazine, April 2013). * Shoppers do not pack bags at the till. The till operator is trained to get customers through the till with lightning speed; products go back into the trolley and are packed by the customer at the packing station found in every store. It is an efficient method of getting more customers through the store in the course of a day’s business and is one of the reasons few stores have baskets. * Defects – poor quality drives up costs in wasted materials and labour – Aldi strive for continuous improvement through a culture whereby all employees are involved in making improvements to quality. Total Quality Management (TQM) is a quality assurance ideal in which all employees have a responsibility for getting it ‘right first time’.
Aldi has 3 core values, simplicity, consistency and responsibility and lean production ties in closely with them. * Simplicity creates efficiency, clarity and clear orientation towards customers and within the organisation. * Consistency leads to reliability. They mean what they say and are consistent in day to day dealings with people, products, price and all aspects of professional life. * Responsibility equates to their commitment to their people, customers, partners and the environment. It also includes the principles of honesty, openness, fairness, service orientation and friendliness.
Aldi’s founders, the Albrecht brothers, have impacted strongly on its organisational culture; their philosophy of promising customers high quality products at low prices is still maintained today, resulting in policies that are well matched to their corporate objectives and a company which operates like a ‘well-oiled machine’.
Aldi describe their organisational structure as simple. Globally they maintain a decentralised structure, with smaller operating units and clearly defined areas of responsibility; promoting fewer reports and faster resolutions. (aldiuscareers.com)

Source: University of Huddersfield Repository, 2011
For Aldi UK, the purchasing department is based in the Midlands and is the only function that could be classed as centralised. Only a very small regional team support the stores and logistics team; all this is aimed at making store managers accountable for staff and store management, which allows them to react promptly to functions related to stock, quality control issues and customer service. To underpin their principles, Aldi requires competent staff. Employees are paid market leading salaries within the grocery industry and a comprehensive training programme teaches them to become multi-skilled, allowing staff to undertake a number of roles within each store, which leads to greater flexibility. Training, high wages and a diverse job role help to motivate staff, leading to lower sickness levels and a more empowered team. Aldi sets great store on developing its people and over 85% of their directors have been recruited from within the company. This makes it a business of choice for ambitious teens and top graduates and is what places Aldi in the Top 5 in The Times Top 100 Graduate Employers and the Graduate Employer of Choice for 2012 for General Management (Times 100). Bearing all this in mind, it would be logical to describe Aldi as a decentralised structure, with hierarchical reporting lines and plenty of self-sufficient management. This would not be problem free and weaknesses are likely to occur, but imposing a weightier centralised method, similar to other well-known retailers, is a compromise and cost that Aldi are not prepared to take. In order to avoid systems, processes and operating practice gaps, small committees, made up of line management staff with key capabilities or specialist knowledge in their field, monitor the systems in order to identify factors that could affect Aldi’s overall business. Above all this, still residing in Essen, Germany, resides a very small but exceptionally powerful Group Administration Board, which governs the principal aspects of this global organisation (Elmsall, 2011)

TASK 2
An online ‘click and deliver’ would not work for Aldi. It would stretch the company on so many different levels and has the potential to destroy one, if not all of the 3 core values. Simplicity, consistency and responsibility factor in their values since the store began back in 1913. To introduce click and deliver, removes the simplicity. Transport logistics alone would be a potential nightmare and again, contradicts the company ethos of reducing transportation costs and their carbon footprint.
Aldi, as the chosen supermarket, presents a difficulty in completing this assignment task, because the company’s strategic intent and goals are not designed to take on board all the directives. In order to follow the task there needs to be compromise and a hypothetical approach, therefore we will assume Aldi are going to introduce a ‘click and collect’ service.
This service has been chosen because it could be introduced in specially selected stores, as opposed to all stores. Aldi do offer food, clothing, white and brown goods, music and entertainment, household, gardening and sports goods however, cafeteria, travel agent, optician and insurance would be impossible for them to achieve ‘in store’ because Aldi average floor size is around 10,000 sq.ft. Aldi believe these types of facilities all have to be paid for in some way so, therefore, will add to the end cost, thus breaching the company goal. However Aldi did introduce Aldi Travel, an online travel subsidiary in early 2009, but stopped taking bookings after just one year of trading, admitting that increasingly competitive travel sector made it hard to offer market-beating prices; even though the holidays proved popular with customers.
Insurance could be offered online by Aldi, but in light of the withdrawal of Aldi Travel and given the number of banks and insurance brokers who already offer insurance, why would Aldi want to compete? They are, when all is said and done, a discount supermarket.
Aldi.
Aldi have recently taken the plunge in opening their first high street convenience store in Kilburn, London. It is smaller than their usual stores, with just 7000 sq.ft, and does not have a car park. It demonstrates that Aldi is keen to challenge rivals such as Tesco and Sainsbury in the convenience market. The new store will keep longer opening hours from 7am until 10pm so it is feasible that more of these stores, in busy London and other strategic areas nationally, could trial a 24/7 click and collect service, as long as parking spaces can be obtained. Indeed, Aldi could consider utilising some of the many sites which are now defunct petrol stations, turning pump areas into parking spaces.
The service would not be free and would centre around a minimum order value, and a one off or percentage bill value charge.
Aldi do not have an abundance of stock, as has been previously detailed in this essay, and aim for a quick turnover. Special offer food and non-food items are what draw customers to stores every Thursday and Sunday; these offers can vary hugely from week to week - a 60” LCD TV one week, a top of the range PC the next. These goods cannot be pre-reserved at the present time because they are limited stock and sold on a first come, first served basis to customers attending the store. In order to stop bulk purchases for re-sale and maintain footfall in stores, online click and collect orders would require close monitoring and quantity stipulations or even, exclusion of promotion offers.
Aldi’s stores are currently run by small teams consisting store manager, assistant (duty) managers and shop floor staff, a typical store can have 6 – 8 members of staff on duty in any given day and all are required to be flexible and adaptable to different areas. New staff for the click and collect service would run alongside, but completely separate from, the regular store staff; in other words, they would deal specifically with the click and collect service, both in terms of acting as personal shopper for each order and replenishing stock on the shop floor. This employment would be ideally suited, during the daytime, to part time work for people with school age children, because it could offer flexible working hours. The personal shopper team would require 3 team leaders: one for the day shift, one for evening shift and one day off. The team leaders would manage online retrieval of orders, distribute them to the shoppers, quality assess orders, time manage shoppers, in line with Aldi’s policies and supervise customer collection. They would use a democratic leadership style in order to engage with their team which would consequently lead to the team feeling valued and empowered and therefore, motivated and creative. This would, hopefully, negate the need for delegation because everyone is already motivated and empowered enough to deal with their tasks to a high standard.

TASK 3

The presentation can be viewed in its original format by visiting the following link on the internet:

http://prezi.com/jaavir_p6v1g/aldi-click-and-collect-presentation-for-lmc/

Task 4 My personal reflection of the module using Gibbs’ Reflective Cycle Unfortunately, due to ill health, I missed some of the taught sessions of the module for Leadership, Motivation and Change and found it hard to piece the module together, because I needed the practical activities of each lesson in order to make it more logical in my mind. The gaps between the taught lessons and the Blackboard Power Points made the assignment difficult and, as a result, I have spent hours on the internet researching each weekly session so that I was confident I had a strong grasp of the concepts taught in each lesson. Even though lecturers kindly posted activities for later viewing, they didn’t make an awful lot of sense if I wasn’t in the lesson. It meant I approached the assignment in an emotional panic, rather than with confidence. So, from this I have learned the value of attending lectures regularly and how it affects me if I cannot do so, despite it being unavoidable on these occasions. My key areas of learning with this module have been delegation, change management and resistance to change. I found these areas particularly interesting because I realised they appeared to overlap with the PDP2 module on Teamwork, which I have just completed. On a Belbin Team Role questionnaire I was, much to my astonishment, correctly placed as a completer-finisher; this category have a reluctance to delegate, nit-pick and have a tendency to worry unduly – a perfect description of me! I have researched delegation further, because I know I am poor when it comes to delegating; I am a perfectionist and have to confess I find it hard to relinquish a task to someone else, fearing they will not accomplish it to my standards. I do not mean this in a conceited way, because it more than likely relates to slight OCD tendencies. I know I need to learn to delegate, particularly if I go ahead with my own business plans. Change management and resistance to change were a further interest, particularly because being effective with change management and resistance to change can be closely related to understanding and using Emotional Intelligence, a subject I had never heard of until the PDP2 module, but which I found fascinating. Prior to being made redundant two years ago, I worked for 16 years in an emergency services dispatch centre. For the first few years I loved my job, despite it being stressful and pressurised. However, with constantly changing policies and senior management, some of whom openly showed total disregard for staff views and feelings with their autocratic approach; motivation, enthusiasm and staff morale declined to alarming levels. Because I have experienced these feelings first hand, I can better appreciate how effective change management and correctly dealing with resistance to change can improve a situation for all concerned. Finally, I was part way through my assignment, had put in hours and hours of research on Aldi, when I felt I had chosen the wrong supermarket. I reached a point where I contemplated scrapping the work I had done so far and starting all over again with a different subject. I had a dilemma and didn’t know how to deal with it, so assignment work stopped for a couple of days to allow me some thinking time. Aldi had become a problem because I could not find a way to incorporate them into task 2. Throughout all the research about Aldi, I did not realise how intent I had become on discovering how they operate and why. What I did realise was that based on their goals, strategies and principles Aldi are extremely unlikely to offer 24/7 online shopping. So, how was I going to complete task 2 without being openly controversial in my answer? My first reaction was to start from scratch and begin research on Morrison’s instead, but I initially chose Aldi to deliberately avoid the top four. I continued with Aldi for 2 reasons – I had invested too much time and effort into the research, which I found very interesting, to scrap it; and I find it difficult to walk away from a challenge. So I needed to find a way to avoid my controversial feelings about the task and deal with it from another angle. This is where I learned another valuable lesson; read the task/question properly. When I did so, I spotted the all-important clue: ASSUME! If I had really read the task instead of scanning it or believing I knew it without re-reading, I would have saved myself 2 days pondering and had no dilemma. So, the task was dealt with based on assumption rather than genuine belief that it could either work, or ever occur. An embarrassing reflection; but one which highlights a valuable lesson for future assignments.

REFERENCES

Aldi UK, (2013). Corporate Responsibility Policy. Online at: https://corporate.aldi.co.uk/en/responsibility/corporate-responsibility/ [Accessed 12 May 2013].

Aldi US Careers (2012). Divisional Structure. Online at: http://www.aldiuscareers.com/divisionalstructure.aspx [Accessed 15 May 2013].

Brandes, D and Brandes, N (2012), Bare Essentials: The Aldi Way to Retail Success, 2nd ed. UK, Books on Demand gmbH

Emsell, Peter (2011), Aldi – “The No Frills Retailer”. Case Study: University of Huddersfield. (Unpublished) Gibbs, G (1988) Learning by doing: a guide to teaching and learning methods. Oxford: Further Education Unit, Oxford Polytechnic.

Lewin, K. (1951). Field theory in social science. New York: Harper & Row. Sparkes, M. (2012). Finance:Aldi to create 4,500 jobs as it doubles UK stores. The Telegraph online. Online at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9578309/Aldi-to-create-4500-jobs-as-it-doubles-UK-stores.html [Accessed 15 May 2013].

The Times 100 (n.d.). Aldi: Business Case Study. Online at: http://businesscasestudies.co.uk/aldi/competitive-advantage-through-efficiency/introduction.html#axzz2U1c6xBq8 [Accessed 15 May 2013].

BIBLIOGRAPHY

Huczynski, A. and Buchanan, D (1991). Organizational Behaviour: An Introductory Text, 2nd ed. Hemel Hempstead: Prentice Hall International (UK) Ltd. Business Essentials (2010). Organisations and Behaviour. London: BPP Learning Media Ltd. Bratton, J. (2007). Work and Organizational Behaviour. Hampshire: Palgrave MacMillan.