Driving Digital Transformation in a Physical World

Posted: January 5th, 2023

Driving Digital Transformation in a Physical World

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Driving Digital Transformation in a Physical World

1. Evaluate the leadership style of CEO Alain Bejjani by analyzing the given case and substantiate your answer based on the theories and concepts discussed in class.

Alain Bejjani is a visionary leader that formulates and articulates to overall vision of the firm. He has a very clear idea of what form Majid Al Futtaim should have in the long term, and therefore acts as the strategic captain of the conglomerate. Upon taking up as the chief executive officer of Majid Al Futtaim, Bejjani embarked making a 25-year strategic plan for the conglomerate to guide the activities of the firm for the next quarter of a century. The outcome of this planning process was vision of the company, “great moment for everyone, every day”, which defines the vision held by Alain Bejjani. Moreover, Bejjani’s vision is to incorporate a new digital layer into the physical infrastructure of the firm, which would facilitate the transformation from a traditional brick-and-mortar business to a modern technology firm in conformity to the contemporary business trend. Likewise, Bejjani is spearheading a cultural transformation at the firm in which he wished to inculcate a “Majid Al Futtaim way” that would make the firm a unique and attractive workplace for talented employees. Mascareño, Rietzschel, and Wisse (2020) describe a visionary leader as one that paints a vivid picture of the future and persuades others to contribute to the realization of the vision intentionally. Bejjani seems to have painted such a picture and persuaded other leaders and employees at Majid Al Futtaim to participate actively and creative towards that achievement of that dream.

Alain Bejjani is also a participative and collaborative leader. He participated actively in the planning process. He also plans collaboratively with his leadership team. These two approaches indicate that Bejjani is team players. From the perspectives of Blake and Mouton, Bejjani can be said to have a high regard for productivity and people. While he seeks to have his employees attain the organizational goals efficiently to meet the prescribed performance indicators, he is also interested in helping his workforce professionally through continuous training. The positive effects of participative leadership have been elaborated by Odoardi et al. (2019, p. 105), who noted that participative leaders convey meanings and values of innovation that influence the “cognitions, attitudes, and behaviors” of employees at the workplace.  Bejjani uses his participative leadership style to provide employees with freedom to invest in their create energies and participate in the corporate decision-making process as a team. In this regard, Bejjani’s leadership style is high in directive and support behavior. In the same vein, Bejjani demonstrates a shared leadership approach in which he facilitates the emergence of multiple leaders in his organization. For instance, he set up the Majid Al Futtaim Leadership Institute in which leaders are developed from the talented workforce the company attracts. Moreover, he use a collaborative planning and decision-making approach during the formulation of the new company’s vision in which he involved the other leaders in the firm in the strategy formulation process. Khaled El Chidiac, the acting CEO of Majid Al Futtaim Ventures, Joe Abi Akl, the chief corporate development officers and El Khatic, the chief marketing officer are notable leaders that Bejjani involves in the corporate decision-making process. Shared leadership has been explained by Zhu et al. (2018) who noted that it changes the perspective of leadership from being that of an individual possession to a collective property best applied in team settings. As such, in shared leadership, roles, responsibilities and influences are distributed among the members of a work team rather than being resident on any one individual. Liggett (2020) argued that leadership produced the best organizational outcomes when it was shared and when everyone was exerting his or her efforts in a common direction and towards a shared common goal. Bejjani appears intent on creating a conducive corporate culture to facilitate the transformation of Majid Al Futtaim into a modern global firm.

Alain Bejjani exhibits mentorship and coaching in his leadership style. He promoted professional development among his employees by setting up training centers and programs, such as the School of Analytics and Technology and the School of Great Moments. Moreover, Bejjani is focused on advancing the vision set by Mr. Majid, who is the founder of Majid Al Futtaim and the Mall of The Emirates, while shepherding a digital transformation that would enable the firm to have an impact on the Emirati and regional society by changing the lives of its employees and clients. Bejjani’s leadership behaviors are consistent with transactional leadership in which the leader inspires others to attain higher levels of performance through intellectual stimulation, idealized influence, individualized consideration, and inspirational motivation (Sims et al., 2020, p. 4). As a transformational leader, Bejjani has presented his idealized firm to the workforce at the company and inspired creativity and innovation to his employees to facilitate their participation in the attainment of his vision.

 Bejjani is a democratic leader. This is because he allows employees to create new approaches to their tasks and present their ideas to the firm without any discouragement or discrimination. That way, he has managed to develop an innovative and creative firm that seeks to improve continuously its business model and operational processes. Fiaz, M., Su, Q., & Saqib, A. (2017) argues that democratic leadership focuses more on human capital and is characterized by the encouragement of participation among all members of the workforce, helpfulness and friendliness, which are qualities that are evident in Bejjani’s leadership style.  

2. Critically analyze the challenges CEO Alian Bejjani is facing, which can impact the growth and sustainability of Majid Al Futtaim.

Majid Al Futtaim is a large corporation operating the Mall of the Emirates that houses diverse retail and lifestyle establishments. It relies on the diversity of its offerings and modern lifestyle demands of its customers as the main source of revenue. However customers have to visit the mall physically to bring in the revenues to Majid Al Futtaim. In this regard the inability or disincentive to visit the mall of the emirates is the single biggest threat to the survival of Majid Al Futtaim.

Alain Bejjani faces several challenges that threaten the growth and sustainability of Majid Al Futtaim. The first and most significant challenge is the fierce competition from foreign technology-based companies, such as AirBNB, Amazon, Netflix, and UberEats (Hubbard & Siegel, 2020). These firms are offering services to clients at the comfort of their preferred location, albeit home or workplace. Therefore, clients have alternatives of accessing their favorite food, movie, music, and groceries without having to venture into the mall or any other physical store. The most significant competitor to Majid Al Futtaim is Dubai Mall, which is a government-supported mall that has replicated the design and offering at Majid Al Futtaim, only at a larger scale.

The second threat is from the possible resumption of the strict lockdown measures to curb the spread of Covid-19. Although the pandemic has eased out lately and the United Arab Emirates government and others in the world have been gradually easing out on their containment measures, the emergence of more virulent mutants of the virus pose the danger of presenting new pandemic waves in the country and across the world. Already the 9pm-to-7am and later, the 10pm-to-6am curfew that had been imposed in the entire United Arab Emirates had slowed down business and injured the revenues of Majid Al Futtaim; but their lifting in the middle of 2020 had held much promise for Bejjani (Elbahrawy, F. (2020). However, if such movement measures were to be reinstituted, they would challenge the recovery path of the company and disorganize business strategy.   

The third threat the overreliance on global firms to occupy the mall of the emirates. The earnings of Majid Al Futtaim are predominantly in the form of the rent paid by the tenants, who run their retail, entertainment, and lifestyle businesses. If such firms were to exit the country for whatever reason, including venturing into new markets, bankruptcy, and harsh business environment, the mall of the emirates would have no tenants and therefore earn no rent revenue.  

The fourth threat is the changing lifestyles and preferences of the Emiratis and global customers. The active shoppers of the world are increasingly seeking amazing shopping experiences regardless of their location. These shoppers can travel across the world to gain an overwhelming and memorable shopping experience. Majid Al Futtaim should be able to discern and keep up with the changing tastes and demands of customers to remain relevant and inviting, lacking which would cause clients to seek alternatives away from the mall of the emirates.  

3. Propose a comprehensive recommendation (minimum 7) that the CEO Allain Bejjani needs to consider in leading MAF to be a competitive organization.

Although Majid Al Futtaim has enjoyed business success over time, it needs to remain competitive and weather the onslaught from local and international competitors and business models that are gradually decimating the brick-and-mortar model. Therefore, several recommendations are presented that can make the firm to remain competitive in the long term.

Firstly, it is recommended that Bejjani considers the enhancement of the technological transformation of the firm by facilitating the adoption of modern technologies to improve the shopping experiences of customers. The company needs to infuse modern technologies, such as artificial intelligence and data analytics to improve the efficiency of operational processes and enhance customer experienced and satisfaction. This recommendation is consistent with the arguments presented by Hwangbo, Kim, and Cha (2017), who note that in recent times, firms were paying attention to smart technologies that helped retail outlets to improve the quality of their services to clients. These technologies included augmented reality, interactive interfaces, indoor positioning, vision and sensors, and were being used to improve the shopping experiences of customers in offline outlets. In this regard, Bejjani   should consider implementing smart technologies without diverting from the physical presence and infrastructure of his business units. 

Second, in relation to the first recommendation, it is recommended that Bejjani considers the integration of Majid Al Futtaim’s physical and virtual experiences for its customers. Shoppers are increasingly demanding more freedom in their shopping experiences where they demand that they can switch seamlessly from the physical shopping mode to the virtual one. Hwangbo, Kim, and Cha (2017) argues that start technologies would help Bejjani and his leadership team to learn the behaviors of customers and use that knowledge to create virtual experiences of customers in the physical premises of his business units.

Third, it is recommended that Bejjani considers having a succession plan at the firm that would help prepare young and diligent employees to take over from him once he exits the helm of Majid Al Futtaim. This would ensure business continuity by minimizing or even eliminating distractions that may occur during a leadership transition. Hosseini, Barzoki, and Isfahani (2018) insisted that talent management incorporated succession management and had a positive effect on the improvement of the competitive state of a company. They presented several succession planning models that Bejjani could consider, including succession planning without job title model, seven-pointed star model, leadership pipeline model, and acceleration pools model.  

Fourth, it is recommended that Bejjani considers increasing the human resource diversity at the firm to help attend to diverse clientele better. In this regard, the firm would recruit employees from diverse nationalities backgrounds and gender that reflects the global market. Lee and Kim (2020) revealed that workforces with diverse age and education backgrounds had a positive effect if firm performance. Tung (2016) notes that labor migration and globalization had generated interest in international human resource management and inspired the attention towards diverse workforce to service diverse customers. A diverse workforce was a very valuable organizational resource that required prudent knowledge management approaches that would ensure that the unique knowledge held by each employee circulates in a firm, thus turning it to a global learning organization (Tung, 2016).

Fifth, Bejjani should consider expanding the firm’s operations into more cities in the United Arab Emirates, such as Abu Dhabi, and into other foreign countries across the world. Already, the Mall of the Emirates is popular among the international revelers that visit the UAE, and these clients would be excited to have similar shopping, hospitality and leisure experiences in their home countries. Buzavaite and Korsakiene (2019) reiterated that internationalization was a desirable progression of corporate growth and required a firm to have management teams that had international experience.  

Sixth, Bejjani should consider training more Emiratis to prepare them to fill positions occupied by expatriates once they exit the company. The Emirati and Arab revelers are increasingly visiting malls in the region and across the world as they embrace the shopping and lifestyle culture that has permeated the world. These customers would like to be served by familiar people that understand their language and culture, who would be emirate employees in this case. This way, Majid Al Futtaim would have a stock of employees that can be deployed to regional branches within the Gulf and MENA region. It would also help the expatriates become more experienced in the Emirati culture by working alongside more Emiratis. That way, the expatriates would be better equipped to service Emiratis and other Arab and Muslim customers. This would conform to the national strategic plan and economic vision of the United Arab Emirates under Vision 2030, which seeks to encourage the development of a skilled Emirati workforce to facilitate the economic development of the country (Kaabi & Sandhu, 2018). In this regard, Bejjani would be contributing to the national vision by recruiting and training more Emiratis to reduce the overreliance on expatriate labor.      

Seventh, Bejjani should consider aligning the diverse business units at Majid Al Futtaim to enable it to leverage the synergies they present. This way the firm would have a cohesive business approach that would help the form capitalize on the unique capabilities of each unit for the overall success of the firm. This might require that Bejjani divests from some business units while investing in other new ones to enhance strategy and business alignment. Ultimately, such reorganization would help Majid Al Futtaim to grow faster than its peers in the business environment. Amiri, King, and DeMarie (2019) noted that corporate restructuring was critical for firms that were intent on surviving technological change and competition in the business environment. They noted that divestitures were part of the restructuring process and involved the detachment of operations or assets using slit-offs, equity carve-outs, sell-offs, management buy-outs, and spin-offs (Amiri, King, & DeMarie, 2019). Besides, new acquisitions should be aligned to the overall strategy of the firm based on institutional and agency theoretical perspectives (Amiri, King, & DeMarie, 2019). In this regard, Bejjani and his leadership team should develop a divestiture and acquisition strategy that would help align the business activities of Majid Al Futtaim.

References

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Buzavaite, M., & Korsakiene, R. (2019). Human capital and the internationalisation of SMEs: A systemic literature review. Entrepreneurial Business and Economics Review, 7(3), 125-142. doi: 10.15678/EBER.2019.070307.

Elbahrawy, F. (2020). UAE ends overnight coronavirus curfew, allows vaccine tests. Bloomberg. Retrieved from https://www.bloomberg.com/news/articles/2020-06-25/uae-ends-overnight-coronavirus-curfew-allows-vaccine-tests.

Fiaz, M., Su, Q., & Saqib, A. (2017). Leadership styles and employees’ motivation: Perspective from an emerging economy. The Journal of Developing Areas, 51(4), 143-156. doi:10.1353/jda.2017.0093.

Hosseini, S. H., Barzoki, A. S., & Isfahani, A. N. (2018). Analysis of the effects of succession planning implementation on organisational performance. International Journal of Productivity and Quality Management, 25(2), 198-211. doi:10.1504/ijpqm.2018.10016021.

 Hubbard, N. & Siegel, R. (2020). Majid Al Futtaim in 2019: driving digital transformation in a physical world. Graduate school of Stanford Business, Harvard business Publishing. 

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