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Assessing The Economic Performance Of Asda Business Essay

Paper Type: Free Essay Subject: Business
Wordcount: 4232 words Published: 1st Jan 2015

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ASDA Group Ltd is UK number one largest food retailers. It sold variety of items like food, books, apparel, CD’s, electronics and house hold items. Earlier they have started as just superstore and today they have expanded themselves globally.

Goal of ASDA

The main aim of any organization is to survive or exit in the market .for this they believe in Value for money – Competitive prices – Meeting Consumer needs – Progressive returns on investment. ASDA aims to make goods and services more affordable for the people.

Mission statement of ASDA

The mission statement of ASDA is to be the “Britain’s best value retailer exceeding customer needs always”. It has shown that it value a lot for the respect of the individual, customer service and excellence.

Marketing strategy of ASDA

ASDA is playing on low price/low cost strategy in the market. They have lowered down their operating cost as well as carbon foot-printing with the help of sustainable development programmes. They are using the strategy in which they are trying to use the best quality products but with the lowered price so that maximum number of customers can be attracted. They have tried their best to maintain a good relationship with the customers. They have improved a lot in the customer services. They have played a strategy of ASDA price guarantee to win the trust of the customers to a large extent.

Organization behaviour

Organizational behaviour basically deals with the deep study of the impact of all the activities of individuals and groups within the behaviour of the organization. It also deals with the study of the impact of organizational structure on human behaviour. In organizational behaviour there is a integration of many other studies like sociology, psychology, social psychology and economics. Organizational behaviour aims with the study of contribution of human behaviour towards achieving greater efficiency and growth of the organization.

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Organization behaviour can be defined as “systematic study of actions and attitudes that people exhibit within the organization” (Stephen P. Robin)

Taking the impact of different fields on the organization behaviour it’s seen that the study sociology deals with the group dynamics. It shows the impact on the group behaviour to a large extent. It also deals with the roles played by the individuals in the organization, power, status, communication, conflict management, group processes, formal organizational theories, group decision-making and norms.

Psychology has impacted the organization in studies like job-satisfaction, leadership, individual decision-making, performance appraisal, and work stress and ego state. With the help of study of psychology it helps the organization to change the attitude, improving personal skills and generating positive approach for the development of the organization. Even psychology is also considered important for the selection of the employees as it helps in reading the mind of the person, doing the measurement of the personality aptitude and attitude.

As the organization need to keep an eye over the government rules and regulations. Political science helps the company in knowing the position for financial investment, employment and expansion and doing the promotion of international business. Social psychology is the blend of the psychology and sociology to obtain better human behaviour in the organization. It contributes to the ability of the people in the organization, maintenance of the social norms, group decision-making and managing the change. Anthropology takes into account the cultural and environmental framework for the human behaviour study.

People, structure and technology are the three main components of the organization. For the achievement of the goal of the company they need to focus on these three factors. The company should fulfil the desired needs of their employees as well as maintain a good relationship with them. Teams and groups also play vital role in achieving goal of the company. The organization could have formal and informal structure. The formal structures do have some proper set of objectives set to priories whereas informal structure does not have any such objectives to be taken care of.

So basically organization behaviour includes the study which involves the management of interpersonal relationship, identification of the needs of the people and application of the appropriate strategies to obtain the best result.


Organization culture of ASDA

Organization culture reflects the personality of an organization. ASDA believes that they have a very unique culture. They have defined their values to their customers, employees and to do best of them. For ASDA their customers are the main entity for them. They try to create an understandable and positive environment for their customers. The employees are also allowed to freely present their views for the betterment of the company. The employees participate in different programmes held by the ASDA so that they can very well mix up among themselves and with the top level management. ASDA always try to motivate their employees by giving different schemes and trips. So ASDA have a positive culture with some rules and regulation made to achieve the objective of the company. they also follow all the legal laws and try to produce good variety of product keeping in mind the health of their customers.

Organizational change in ASDA



Kurt lewin proposed a three stage theory of change known as unfreeze, change, and refreeze.

Stage 1

The unfreezing stage is one of the crucial stages for any organisation. This stage is about getting ready to change. It is basically feeling the presence of necessary change to be made in the company and getting ready to move from current comfort zone. It is said that the more we feel that change is necessary, the more urgent it is, and the more motivated we are to make the change.

Unfreezing and getting motivated for the change is all about weighing up the ‘pro’s’ and ‘con’s’ and deciding if the ‘pro’s’ outnumber the ‘con’s’ before you take any action. This is the basis of what Kurt Lewin called the Force Field Analysis.

Force Field Analysis is a fancy way of saying that there are lots of different factors for and against making change that we need to be aware of. If the factors for change outweigh the factors against change we’ll make the change. If not, then there’s low motivation to change and if we feel pushed.

Stage 2: Change – or Transition

The next step after unfreezing is the change or transition. It is the inner movement or journey we make in reaction to a change. This second stage occurs as we make the changes that are needed. It is often said that this is the hardest step as people are unsure or even fearful.

It’s not a easy time as people are learning about the changes and need to be given time to understand and work with them. Members are being supported by providing a full training and coaching. Using role models and allowing people to develop their own solutions also help to make the changes. It’s also really useful to keep communicating a clear picture of the desired change and the benefits to everyone in the organization.

Stage 3: Freezing (or Refreezing)

Kurt Lewin refers to this stage as freezing although a lot of people refer to it as ‘refreezing’. As the name suggests this stage is about establishing stability once the changes have been made. The changes are accepted and become the new norm. People form new relationships and become comfortable with their routines. It could take a lot of time.

In today’s world of change the next new change could happen in weeks or less. There is just no time to settle into comfortable routines. The rigidity of freezing does not fit with modern thinking about change being a continuous, sometimes chaotic process in which great flexibility is demanded.

Organization change in ASDA

ASDA was the second largest supermarket store in the United Kingdom in 2005. ASDA has positioned itself as a value for money store in the market. Slowly they expanded themselves into apparel, books, CD’s, groceries, and other various household items. In the same year they got award for the lowest price supermarket. The competitors of ASDA like Tesco and J. Sainsbury were also trying to increase the market position by expanding themselves into the financial products, newspaper, pharmaceutical products, clothes and petrol. ASDA were having the hierarchical structure. There were eight levels up to the CEO of the store. These were layered like staff members, supervisor, department manager, general store manager, regional operations controller, division director, operations director, joint managing director and chief executive.

ASDA were having the formal way of organizing culture of the organization. They were using the bureaucratic way of management. The staff members are kept in separate part of the headquarters to the top executives. The major issues were handled by the top executives only. It was seen that the communication pattern between the head office and the stores was one way with top-down management style. They were using the centralised distribution but still there customer number was declining rapidly. Regarding the quality of food they had tried their best to provide fresh food to the customers but still they were not able to convince the customer up to the expected levels. So they were facing the complexity problem in the management. ASDA did work on recognising their strength through using well IT, up to date effective distribution system and good operating management.

To improve the ASDA management they tried to remove the too many layers of the management and creating narrow structure to better understand the organization. They bring in many changes in the organization like:

They started working on increasing the price competitiveness

Redirection the range and breakthrough in store productivity

ASDA started generating the higher volumes to improve in terms of trading

Restoring the customer flow

They tried to reduce the fixed cost % to sales and increase the traffic sensitive purchases


As the market is not stable, it’s changing every day. The organization needs to be such flexible that it can maintain its position in the market. Looking at the ASDA they have well established themselves. With the changes in the economy they are changing their strategy and competing in the market. Analysing the competitor’s strategy ASDA has adopted the different strategy of low price. They have stabled themselves in creating higher volume of products with low prices to gain majority of the customer in the market.



McGregor Theory

According to McGregor, manager of organization posses two different assumptions about the human nature. He explained these two assumptions in two different theories: Theory X and Theory Y

According to theory X

The human being has always being inherited for the disliking of the work. They always try to avoid the work either they can do or not. According to him, managers always think that their employees are lazy. Manager has to forced, direct and controlled his people to do work. In this management, usually managers use to punish and threatened their employees to get the work done. They already have thinking that people avoid taking the responsibilities for the work.

Whereas in theory Y the manager uses a positive way of approach to get the work done. According to them just the external threatening and punishment is not just the way to bring efforts to achieve the objectives of the organization. They have a mind set about their employees that they are responsible for their work and they take the responsibilities by themselves.

Leadership in ASDA

ASDA believes in developing its people. They provided lots of opportunities to its people to develop the leadership quality. They believe in McGregor theory y. They totally have a positive approach towards their employee handling. ASDA arranges many programmes for the development of their people. They create awareness among their employees to gather information about different fields. The employees working as ASDA either individually or working as a team learn to face challenges. The different method adopted by ASDA is that they make different teams and make them competitor among themselves by providing the same task and hence see their performance by the results gained for the betterment of the company. So like this ASDA do lots of efforts in bringing their employees the self-esteem.

Critical analysis

Looking at the approaches adopted by ASDA to get leadership quality in their employees it could be analysed that they are working for the people. They are successfully achieving their target of making the profit, good image and relationship with their customers as well as employees.



Frederick Herzberg was a well respected American who proposed the theory behind the managers thinking about motivation at work. He has given a content theory which explains the factors of an individual’s motivation by identifying their needs and desires, what satisfies their needs and desires and by establishing the aims that they pursue to satisfy these desires.

He aims to determine work situations where the subjects were highly motivated and satisfied rather than where the opposite was true and his research was later paired with many studies involving a broader sampling of professionals. Herzberg split his factors of motivation into two parts called Hygiene factors and Motivation factors. 

The Hygiene factors can de-motivate or cause dissatisfaction if they are not present, but do not very often create satisfaction when they are present; however, Motivation factors do motivate or create satisfaction and are rarely the cause of dissatisfaction.  The two types of factors may be listed as follows in order of importance:

Hygiene Factors (leading to dissatisfaction):

Company Policy


Relationship with Boss

Work Conditions


Relationship with Peers

Motivators (leading to satisfaction):



The work itself




The dissatisfiers are hygiene factors in the sense that they are maintenance factors required to avoid dissatisfaction and stop workers from being unhappy, but do not create satisfaction in themselves.  They can be avoided by using ‘hygienic’ methods to prevent them.

From the above It is clear that the factors in each are not actually opposing i.e. the satisfiers are not the opposite of the dissatisfiers. The opposite of satisfaction isn’t dissatisfaction but is ‘no satisfaction’.  Both lists contain factors that lead to motivation, but to a differing extent because they fulfil different needs.  The Hygiene factors have an end which once fulfilled then cease to be motivating factors while the Motivation factors are much more open-ended and this is why they continue to motivate.

He also developed the concept that there are two distinct human needs:

1) Physiological needs: avoiding unpleasantness or discomfort

2) Psychological needs: the need for personal development fulfilled by activities which cause one to grow.

Herzberg believed that the Hygiene factors causing no satisfaction are not applicable to the task an employee undertakes but are external to that task.  They are the Adam part of the concept where an incentive may be attributed to a fear of punishment or increase in discomfort or as he phrased it ‘A Kick up the Ass’ (KITA).  He thought that these did work but only as short term motivators e.g. constantly increasing someone’s salary to motivate them will merely encourage them to look for the next wage rise and nothing else; however, salary may also be a de-motivator where the employee perceives it to be too low or low compared to that of their peers.  The long term motivators are the Abraham part of the concept that lead to satisfaction and are intrinsic to the job itself and the job design. 

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It is important to understand that the two types of factors are not mutually exclusive and that management must try to fulfil both types of need for an employee to be truly satisfied with their job.  Once the Hygiene factors have been satisfied providing more of them will not create further motivation but not satisfying them may cause de-motivation; unlike the Motivation factors where management may not fulfil all of them but the workers may still feel motivated.  Major companies have recognised this situation when designing their methods of reward and recognition.

Probably one of the most important ideas that Herzberg postulated based on his findings of satisfaction is that of ‘job enrichment’. This is the addition of different tasks to a job to provide greater involvement and interaction with that job.  It is obviously a continuous management process:

The job must use the full ability of the employee and provide them with sufficient challenge

Any employee who demonstrates an increasing level of ability should be given correspondingly increasing levels of responsibility

If a job cannot be designed to use an employee’s full ability management should consider employing someone of lesser skills or perhaps automation of the task.  If a person’s skills cannot be used to the full they will experience problems with motivation.

Motivation at ASDA

The employees at ASDA are being motivated intervaly. The organization makes sure that that all the needs of the members are fulfilled and they are satisfied so that they can work properly without any fear of demand of the economy. The ASDA gives the worker on job training which let them know more about the new technologies being used and helps in building their self-esteem. If the persons self-esteem is achieved the person has a thinking that he has gained in his life all the desires he wish to have.

Critical analysis

ASDA has done good job in motivating its employees but it could do more by providing many options in front of them. They can motivate their employees more by increasing the slary time to time and according to the level of the job done by the person. They can give various gifts to their employees which will help ASDA to make good relationship with the employees.

Well I believe Tesco had done a great job in terms of motivating their employees. If the basic need of a person is fulfilled properly he is able to perform well at his/her work. Tesco is making their full effort to fulfil their employees need by providing them various schemes and gifts. Due to this their employees are working properly.

Training and development

a)Theory behind training and development

Frederick W. Taylor. Taylor was the first modern efficiency expert in world history. Around the Twentieth Century, he formalized the principles of Scientific Management and developed a set of ideas designed to get employees in manufacturing industries to produce more output. Scientific training is one of the most important principles of scientific management. According to Taylor an organization should trained its employees more of scientifically rather than leaving it to themselves because Workers do not naturally enjoy work and so need close supervision and control. Taylor’s approach matches with the concept of an autocratic management style (managers take all the decisions and simply give orders to those below them) and Macgregor’s Theory X approach to workers (workers are viewed as lazy and wish to avoid responsibility). It aims to unearth and cultivate workmen’s endowment, let them have the best performance in their work and obtain the highest efficiency farthest. At crew level there is considerable initial and ongoing training that is consistently applied to everybody in the business, whether part, full time, hourly paid staff or salaried managers undergoing their compulsory restaurant training? Scientific management has become a more powerful asset for a company to increase its efficiency.

Training and development at ASDA

ASDA has a strong belief on providing training to its employees. It has always tried to develop some new skill in the employee so that it can do its best in the future and becomes the member of the company for its betterment. When a new employee is hired there is a proper induction programme held in which the employee is introduced to the organization and to the other members. Then there is a 12-week on job training provided by ASDA trainer who tries to generate the appropriate skills required to do the different job in the store. Even during the training the employee is made to sit with the manager and see how they work in the company. once the training of the particular department of the person is finished the trainer makes sure that the employee is also ensure about the other valuable knowledge required to become the part of the company. Once the employee is trained, ASDA don’t feel that the job is done it tries to update their employees on the regular basis and see how they are performing. For the development of the people, several programmes are held by the company.


ASDA is spending a lot on providing training to its employees. They are taking training and development as an important part of their business. With the help of proper training and development its employees are more comfortable with the environment and they are able to handle the customers very well.


I believe that first of all customers create some expectation of value and then they start to make a purchase on a belief that whatever they perceive the product or service , must gives benefit in terms of the total cost involved. This may include not only the time, but may be some efforts and difficulties. Therefore a better customer value is provided when the buyer is favorable in the product received from us in comparison to the same product with the competitors. And ASDA has proven this when compared to Sainsbury or tesco.

Taking into account the objectives of ASDA I felt that to a large extent they had fulfilled their objectives. As one of their important objective is to be globally accepted by the customers. They are placing a good image in front of the customers by maintaining a good relationship and keeping in mind the health of their customers as priority.


I examined the organization and the nature of the work in the ASDA stores, the employment relationship and the characteristics of the workforce in U K.

After doing research on the organizational behavioural issues at ASDA I believe they should more emphasize on human requirement and performance standard because that would help human resource in making better job description and job specification. Increasing transparency can help clarify rumours and allow people to understand the ASDA very well.

As far as I have seen ASDA is using trend analysis method for future forecasting if computerized forecasting is done in place of it , they could save time as well as they would know better about their employees through computerized system.

Moreover the recruiting and selection process in ASDA is very fine but still I believe that while recruiting communication skill of the employee must be the first priority as it’s a field in which communication with customer’s demands a lot in making good relationship with customers.


ASDA has always tried to capture the major market by concentrating on the lower class and middle class people. With the help of this strategy they are able to compete with the other major player in the market like TESCO. Most of all the greatest advantage is the vision or the dream with which the company was started. Sustaining this dream over the years is any companies’ greatest advantage. A brand usually revolves around this vision sustaining this vision and working in lieu with it is a great SCA. The vision was to provide quick service, cheap products and quality satisfaction. Although the work offered at ASDA have some positive elements, but very often people choose employment there in context of having few attractive options. ASDA manages the employee’s relationship by a complete spectrum of controls, from simple, direct controls to the management of subjectivity.


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