Assess whether the transformational leadership shown by David Potts is the main cause of Morrisons' improved performance - Edexcel - A-Level Business - Question 1 - 2017 - Paper 2

To evaluate the impact of David Potts' transformational leadership on Morrisons' improved performance, we first need to understand what transformational leadership entails. This leadership style is characterized by inspiring and motivating employees to exceed their own self-interests for the good of the organization.

Contribution of David Potts’ Leadership Under Potts’ leadership, several initiatives have been implemented that likely contributed to the improved performance of Morrisons. His strategic vision has led to the:

1. Restructuring of Management: By replacing several directors, Potts has instilled a new direction for the company that may have energized the workforce and encouraged innovation.

2. Focus on Pricing Strategies: The introduction of the 'I’m cheaper' campaign directly responds to consumer behavior shifting towards discount supermarkets. By cutting prices, Potts made Morrisons competitive, attracting customers who were previously lean towards value-oriented retailers like Aldi and Lidl.

3. Adapting to Consumer Changes: Potts acknowledged changes in consumer behavior, such as the increase in single-person households. This insight allows the supermarket to target specific needs, enhancing the overall shopping experience.

Holistic Business Factors While Potts’ leadership has undoubtedly played a significant role, it is essential to consider other factors:

• Consumer Preferences: As highlighted, consumer choice is not solely driven by price. Factors like product quality, customer service, and convenience also affect shopping decisions.
• Market Dynamics: Broader changes in the economy, including lower interest rates and rising consumer confidence, have also contributed to the supermarket's improved performance.

Conclusion In conclusion, while the transformational leadership demonstrated by David Potts has been a critical factor in Morrisons' better performance, it should not be viewed in isolation. The combination of effective management, strategic pricing, and an accommodating response to changing consumer patterns collectively contributes to the turnaround of Morrisons.