The document discusses leadership theories and change management strategies adopted by the A.S. Watson Group as it transformed from a small medical shop to a global retailer. It analyzes how the group used functional leadership theory and transactional theory to guide employees. It also examines how prospect theory and expected utility theory helped the group achieve goals by motivating risk-taking. Key change management activities included expanding branches, implementing effective supply chain management, and providing employee training, which helped smooth transitions and attract customers. Overall, the document evaluates how the group's leadership approaches and strategic decisions enabled it to successfully adapt and flourish in an increasingly competitive global market.

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Leadership and change management

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Table of contents
Introduction:.................................................................................................................................. 3
Body: .............................................................................................................................................. 3
Conclusion: .................................................................................................................................. 13
References:................................................................................................................................... 14

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Introduction:
In this case, study based assignments, leadership and change management activities, branding
strategies are discussed in relation to the A.S.Watson Company. Change management technique
is very important to smooth the business after making an entire transformation of the business
paradigm. Here the assignment deals with numerous theories, like Prospect theory,
Transformation theories, and many others to spread their importance to make betterment in the
change management situation. It will help the readers to identify the key forces and factors
should be managed in an organization during its change management with prudent leadership.
Body:
Identify and discuss two theories of leadership style and behavior adopted by the top
management team in A.S. Watson group.
The A.S.Watson group top management team had taken some excellent steps during their branch
expansion. Actually, they have propounded the employee training systems along with post-
training examination and other processes (Doppelt, 2017, p.450). This training before
employment is great leadership style which the top management group of A.S.Watson group has
adopted. According to the entire case study, it is observed that starting from small medicine
shops towards the multi-production house was a big journey where the leadership style pattern
they adopted and their change management behavior had provided a great mileage to the
company. A.S.Watson group has adopted the change management and leadership theories of
Functional Leadership Theory and Transactional theory. Both of the theories are discussed in the
next parts.
Functional leadership theory:

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According to this theory, leadership is very crucial and leader’s motivation, personal characters
play a vital role in the team management procedure. This theory maintenance needs the leaders’
tremendous motivation and supervision as a leader can take care all of its employees. Group
effective management along with maintenance of cohesion among the team members can
enhance the procedure in an effective manner. Due to this significance, when the team leader is
driven in the way of functional leadership it creates a great way to make an optimum effective
group due to its superb range of productivity. In Functional theory are five basic genres which
enhance the leadership degree along with their importance (Cummings and Worley, 2014,p.705).
Figure: Functional theory
Sources: (Hayes, J., 2014, p.1250)
There is monitoring of leader to the entire working environment, arranging the subordinate's
functional areas, making an effective technical and non-technical training to the employees,
motivating the team members to reach their goals, along with making a feelings of integrity
amongst all the employees of the team as each can help others and overall can achieve the target
as an entire team. In A.S.Watson group there is the leadership style, where subordinates or
employees have to follow the leader’s attitude. In this aspect, this leader’s attitude or training can

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make an effective way which is divided into two subcategories – consideration structure and
initiation structure (Heding et al., 2015,p.509).
According to the consideration structure, emotional attachment or the caring mentality for the
team members is very effective where the employee can feel that their leader is always with them
to help and motivate them. On the other hand, initiation structure includes the specific attitude of
the leader rather than a helping attitude. In this way, the leader only allocates the task, fix a
standard for each team members, motivate and train them to reach the target and finally measure
the activity of each team members in respect with the standardized unit of work. In this initiation
structure, the accomplishment of the target to achieve the goal is the final target.
Transactional theory:
The transactional theory is based on the proper arrangement of activities and distributes every
activity among the employees according to their level of performance (Saebi et al., 2017, p.570).
In this effective performance procedure, another attraction is the reward or appraisal giving the
system to the team. In this aspect, it can resemble the A.S.Watson group’s top managerial
activities where the activities and performance of each team members help them to get rewards,
appraisals, training, and motivations. In this aspect, A.S.Watson groups had motivated their
employees to gravitate their customers to sells multiple kinds of products of their production
houses. In this procedure, the motivation of leaders is very important. In this procedure of
training, there is another vital role of leaders to train their team members to exaggerate their
motivation to achieve the target. Above all, target achievement means enhancements of sales and
marketing is highly needed to increase the productivity of the manufacturing houses. In this
transformational leadership procedure, there are four things for leaders, which is influencing the

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employees with his behavior, motivating the team members in an inspirational ways , stimulate
employee's mind in an intellectual manners, and consider each team members in an
individualized manner to make a willful relationship with the employees as they follow their
leader cordially, from the heart, not for only some money.
Evaluation of two theories which are adopted by the top management team in A.S.Watson
group in attaining their accomplishments based on their managerial techniques
In A.S.Watson group there is the main motto of the top managerial group was to attain their
accomplishments where two basic management theories are utilized to get the maximum output.
The theories are prospect theory and the expected utility theory. In this discussion, these theories
will be discussed in the précised format (Altamony et al., 2016, p.700).
Prospect theory:
To attain the accomplishment the first and foremost thing will be making the measurement of
possibilities of winning a goal after fixing a proper standard chance in a game, where every
activity has appeared as a gamble. In this system, risk assessment power, as well as the decision-
making activities of the employees in the team, is very important. Otherwise, the activities can't
be possible to achieve utilizing this theory. In this theory, leaders or top managerial seniors has
the duty to mention both of the outcomes of winning and losing the challenges. In this aspect, the
basic things will be the decision making after knowing every beat of the result. As a leader, in
this system should motivate their team members to know the average probabilistic ideas in
relation to the expected outcome and the over expectation about the average rate of profitability.
In this theory, the probable value of winning is very high from the average expectation.

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According to the A.S.Watson group, it is observed that the motivation, inspiration, training for
the employees can stimulate their employees to win every challenge with other parameters of the
risk assessment power and troubleshooting power. As this company has expanded their
businesses from the single branch and single product to multi-branched and multi-product based
ones then they had a long journey to assemble their teams of employees with highest
motivational power also who knows to take risk in a gamble, play in an equivalent manner and
win the optimum outputs (Osiyevskyy and Dewald, 2015, p.1100).
Figure: Prospect theory
Source: (.Stark, J., 2015, p.25)
Expected utility theory:
According to this theory, the employees are given two subsets of results where one option to take
the risk and other option takes as to give away the opportunity for further progress. In this way,
one set of employees becomes pressurized and may give up their hopes whereas proper

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leadership can motivate another subset of employees to take the option as a challenge and take
the steps towards their progression for a higher designation in a very small sort of times. To
properly measure the outcome after following this acts in the A.S.Watson group as a blessing to
achieve their present shape as a business tycoon. Here the control of the mind of the employees
as the decision makers acts as the influencing factor for the results. In this aspect, there is a great
chance of winning too. From the discussion of this theory, it can be decided that this expected
utility theory rotates around to basic things where one is the expected achievement rate of the
employee and another is the preference of the employees about taking the risk.
In this aspect, it is clear that according to the activities of the A.S.Watson group there is a great
importance of the leaders to motivate their employees. This stimulation and motivation can drive
the employees to get the highest output beyond their limitations. As the leader can stimulate an
employee then the employee can get the power to take a risk and achieve the motto. Above all,
there is a subset of possibilities which is dependent upon several factors as discussed where the
possible outcomes are very high and profitable too.
In this aspect, the comparison and the discussion from both of these theories it can be concluded
that prospect theory and expected utility theory are totally based on the decision making power
and the risk-taking power of the employees. In this aspect, it is clear that the prospect theory and
expected utility theory were maintained in a high stimulus in the A.S.Watson group to attain the
accomplishments in a high degree. So, there is another importance of these theories that above
all leadership of the top managerial leveled seniors is a factor to get the optimum output.
Identification and discussion of two activities conducted in order to smooth the change

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According to the case study, there is two majestic way of performance for the A.S.Watson group
which are discussed in the next paragraph.
Firstly, the A.S.Watson group the managerial group has taken the risk of expanding their
businesses from a single store to the multiple branches over the globe. During these expansions,
these have taken the decisions to comply with global change management system. So, they had
made the system of effective logistics management system, their distribution management
system along with the proper procurement maintenance system. In these management systems,
the leadership of the A.S.Watson group was very authentic as there was a great stimulus for the
employees. In this aspect, they have done a lot for their customers also as there is a great system
of employee training to attract the customers in a long chain (Helfat and Martin, 2015, p.1300).
Another important and effective idea of A.S.Watson group was effective supply chain
management. In this way, they have made the agricultural firms and raw materials. As a result,
they have started to make their own multiple products utilizing their own materials. In these
aspects, they can win over the high bargaining power of the farmers and power suppliers in the
market. In this case study, the top managerial group has taken the decisions of the branch
expansion and manufacturing multiple products.As the company has expanded their options
means the products like daily cares, natural beauty products, herbal products, beauty cover,
health products, luxury perfumes along with some customer attractive things such as tea, costly
refined wines, drinks, beverages and fruit juices, it has expanded there chances for winning the
market also. As discussed earlier, about the expected utility ratio so there is a high expectancy
rate where is a huge amount of chances also.

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Starting from the small medicine shop the A.S.Watson group has opened multiple doors of their
products. From this entire case study, several things and decisions are made from these two
points. During their expansion of branches, managerial teams have selected the places which are
Asia, Europe where place value was increased for several times. Above all, branch expansions
are completely depends upon the place value as the products are usable or not for the people of a
particular place. Thereafter, to smooth the change the management group has taken the decision
to provide a great feeling towards their customers to attract them and make a long-term
relationship only with their cordial behavior rather than the monitory relationship. It was their
aim to make the open store of A.S.Watson groups in the way where people can enjoy a good feel
for their shopping and they can take the products with reliability. Anther activities of the
A.S.Watson group to smoothen the change management procedure are to make the arrangement
of the training for their employees. As reported in the case study, in the A.S.Watson group there
is a great system of the employee training. In these training, all the employees were trained with
several management techniques. These include the retail section handling, maintenance of the
customer relationship, making a reliable weather in the workplace to gain the reliance on
customers and others. Along with all of thee trainings, these company has made a great system in
this training syllabus which was customer attraction rues. This study has enabled a lot of
employees to attract several customers with extraordinary promotions of their products, market
valuations along with their user-friendly facilities.
These were two basic activities which are now focused on the effective steps for change
management situations in the A.S.Watson companies.

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Analysis and evaluation of the implications of two activities conducted that helped
A.S.Watson group to be flourished as a global retailer.
A.S.Watson group was founded in 1828, as a small medical shop, dispensary in the Guangdong
provinces. After its acquisition by the business tycoon Hutchinson Whampoa, just after its
shipping to the Hongkong, the company had started to be flourished along with the tremendous
acquisition of business properties of several provinces during 1980 (Cameron and Green, 2015,
p.1150). In this time, the business tycoon, the owner had taken the decision to make the
acquisition over several properties spread in the Asian and European continent was just a test for
the company. In the meantime, the business owner has taken the decision to change the mode of
business which was a complete transformation of the businesses from the dispenser based system
to the aggregated multiple product production houses. Then the A.S.Watson group had started to
continue this business with their registered names of A.S.Watson group. Thus changing the
situation was profitable for the company whereas it was not an easy journey. To cope up with the
changing situation, the company has to take numerous decisions where effective distribution
system management, procurement system organizations along with prudent logistic maintenance
was a big deal (Booth, 2015, p.56). In these situations, another importance activity was that the
managerial group has taken the ways of supply chain management which have helped them to
cut their procurement cost drastically. To cut off the procurement cost the management group
has made their agro firm where they had helped the farmers and raw materials, suppliers. These
activity has helped the firm to reduce the bargaining power of the suppliers. The bargaining
power of suppliers is a great force according to Porter's five forces analysis to smoothen the
external environment of the organization also. Training system for the employees was another
great step for the employees of the A.S.Watson managerial group. After recruitment, the

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employees were trained there which had helped the organization to complete the promotions of
their multiple products. These training has helped the organization to attract millions of
customers across 10,000 branches in 10 to 12 countries in the entire globe.
To smoothen the change management and making the small multi-product stores into a
multinational brand another effective step of A.S.Watson group was the establishment of the
Personal care store. During this expansion of the multiproduct houses, there were several
aggressive competitors too, which are Wall mart, Tesco, Carrefour and many others. But these
branded stores acted as the One step solutions for the customers due to their limitation of
products. In this branded stores customers got only some limited products whereas the personal
care stores of the A.S.Watson group was nurtured with multiple products. These products were
food products, health and clinical products, drinks, beverages and fruit juices along with beauty
products. Due to the assimilation of so many products under a roof, people were automatically
attracted to these stores to complete their entire marketing in a particular shop. It was a time and
cost effective kinds of shopping also. As a result of so many products, the strategy has helped
the A.S.Watson group as a branded store. In this aspect, the organization was very much prudent
in their lead management so in Asia, it had complied 15 % of their entire profit also. After 1980,
most of the middle-class stores had started to follow the branding strategy of A.S.Watson group
also (Bryson, 2018, p.520).
It was the basic implementation of the decisions and strategies as taken by the A.S.Watson group
and proper materialization of all the strategies, training, leadership and managerial instruction
had helped the organizations to be established as the global retail shop. In this course, another
important thing was to keep pace with the aggressive competitors as the Tesla, Wallmart, and
others. Proper branding strategy, leadership, following proper theories and behavioral patterns

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along with promotion with the help of trained employees had helped the A.S.Watson
Organization to achieve the competitive advantages over their competitors also. In this
discussion, the activities of the top managers of the A.S.Watson group was discussed which has a
great importance to reach the goal of success. Nowadays, this Watson group is one of the
eminent retail sectors where change management system and the leadership pattern had a crucial
role.
Conclusion:
It can be concluded from the entire discussion over the importance of leadership and change
management in the journey of A.S.Watson group from a small dispensary to a multinational
retail brand, that to manage profitability and maintain the stability of an organization, leadership
is a crucial factor. In this aspect, several issues were also detected according to the case study.
The issue was the maintenance of integrity or to maintain the business stability among 10,000
branches in 10 to 12 countries across the globe. In this aspect, the basic distribution system,
supply chain management system were the driving forces to maintain the stability above all. Top
managerial decisions were also appreciable as till date these decisions are followed by several
small and medium shaped enterprises. In this aspect, several business management theories are
discussed here where proper following had given the best result. For detailed promotion, along
with employee promotion procedure, Watson group has to maintain their community through
numerous social media platforms also. As in this globalized world, competition is very tough. To
keep pace with the changing world Watson group has to gain popularity with increasing their
touches with customers and it will definitely help them to be the best retail brand in the world.

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