Implications for organisations
The material you have studied this week begins to expand on the foundational theories of
organisational design and strategic change management, and to examine the ways that
those theories can be implemented in the workplace. The key concept that emerges from
this material can be usefully summarised in the following statement:
Organisations can best prepare themselves for sustainable growth and development by
managing according to a cycle of environmental change-adjusted strategy-revised
structure-amended decision processes-enhanced organisational culture-environmental
change. An organisation that embraces this model will focus its managerial strategies on its
core business model, the distribution of its resources in support of that business model and
the ways in which it engages with its workforce in pursuit of its ambitions.
This Key Concept Exercise requires you to reflect on the degree to which your own
organisation, or an alternative organisation with which you are familiar, has adopted a
structure that meets the requirements of the philosophy expressed in the above proposition.
To what extent does the organisation’s current structure support a future in which
continuous and iterative change is a dominant feature?
The ever changing environment calls for organisations to take no chances. The technological
advancement, new legislations, competition and other factor have compelled organisations to
adopt new structures in order to survive. However, management is faced with challenges when
choosing the best organisational structure to adopt. As management adopt a structure in response
of environment change it results to changes in organisational decisions, culture and affects the
environment organisation operates. The paper will focus on Iceland supermarket, a leading food
retailer with over 860 branches throughout UK and other franchised and owned in Europe
(Iceland supermarket 2016)
The supermarket was started in 1970 by Malcolm Walker. They started by selling loose frozen
food until they built their freezer and branded their products. The supermarket has adopted
Organisational structure 2
functional organisational structure where workers are grouped according to the specific duties
they perform. The organisation has had a fair share of profits and losses. Iceland recorded
massive losses in the year 2001 to 2004, but sprung to profitability from the year 2005 onwards
(Iceland supermarket 2016).
The retail market for Iceland supermarket environment is characterized with competition,
legislations which call for organisation structure which can support adjusting of strategies and
decision making processes. Iceland supermarket faces stiff competition from other leading food
retailers. For Iceland to competitive in the market, strategies need to be formulated and
implemented. Iceland supermarket functional organisational structure supports adjusting of
strategies. The structure is organized to departments such as marketing, finance and research and
development. Departments such as research and development assess the market environment and
formulate marketing strategies which will increase sales of company products. The strategies
formulated by research and development department are approved by the management when they
access and consider them viable. The approved strategies are directed to marketing department
for implementation (Aghina 2014).
However, the functional structure is limited in supporting all strategies the organisation will
implement in future. Iceland supermarket environment is hard to predict, ranging from new
legislation and change of customers preference. The organisation has opened branches outside
UK and has plans of opening in other places. The current structure will not be able to support the
strategy. Adding new branches increases the number of employee which calls for a structure
which will ensure smooth flow of information across the organisation (Atkinson 2013).
Organisational structure 3
Fabac (2010) notes due to uncertainty of operating environment organisations are supposed to
use adaptive business intelligence. Adaptive business intelligence helps the organisation not to
worry about the future by providing decisions which solve new demands. Due to ever changing
environment Iceland supermarket can adopt adaptive business intelligence to get decisions which
will address new demands brought about by the changing environment. In addition, adoption of
Adaptive business Intelligence will help Iceland in getting timely decisions.
Mayfield (2014) argues the goal of change is developing of new habits however; organisation
should follow certain approaches to assist in developing the new habits. Changes in organisations
often compel development of new habits to support the change. As changes in organisation are
inevitable, organisation are required to adopt mechanisms and structures which support
development of habits and cultures which favor successful implementation of organisation
The paper concludes by noting, Iceland supermarket has managed to undertake various
strategies to be competitive in the market. However, uncertain environment calls for the
organisation to adopt a structure which will support adjusting of strategy and amending of
Organisational structure 4
Aghina, WS 2014 The past and future of global organisations. Mckinsey Quartely , pp.1-4.
Atkinson, P 2013 Managing change and building a positive risk culture. Management Services ,
Fabac, R 2010 Complexity in organisations and enviroment- adaptive changes and adaptive
decision making. Interdisciplinary Description of Complex Systems , pp.1-16.
Iceland supermarket 2016 The Iceland Story.
Mayfield, P 2014 ‘Engaging with stakeholders is critical when leading change’, Industrial and
Commercial Training, vol.46, no. 2, pp. 68–72.