Working in Organisations - Case of Tesco - Essay Example

Working in Orgnistions - Orgnistionl nlysis Report bstrct The report below provides n insight into the supermrket compny, Tesco, with emphsis on its orgniztionl structure nd design, externl environment nlysis, compny's nlysis of resources, competence nd culture. The report consists of four section tht subsequently cover ll of those res nd end up with resonble conclusion. The first prt reflects nlysis of Tesco's orgniztionl principles. nlysis is mde bsing on hrne model nd reflects compny's flition, collective resources, substitutbility nd recorded control. Second prt identifies the significnt reltionships between politicl, economic, socil nd technologicl (PEST) environments of Tesco. The next prt of report describes orgniztionl structure of orgniztion bsing on the interview conducted. mong numerous dimensions of retil orgniztionl structure it reflects complexity, formliztion, nd centrliztion. The finl, fourth prt of report is concluding prt where I describe orgniztionl design of Tesco. Bsing on the interviews tht I conducted previously nd literture tht I hve reserched, I evlute orgniztion nd suggest its design. Section 1: Introduction nd bckground to the report Mny retil shopping centers hve tried nd filed to perform excellently outside their home mrkets. Likewise, some retilers hve led stry trying to develop Internet shopping. s result, TESCO, the United Kingdom's biggest grocer, hs drwn significint ttention becuse of its mbitious overses strtegy nd its successful on-line home delivery service. nother successful key fctor tht inputs to TESCO sustinble development nd growth is the mrketing communiction pln tht provides the detiled overview of the Compny's fiscl policies s for meeting the clients' needs nd providing competitive prices within wisely locted grocers ll over the world. TESCO understnds tht successful mrketing strtegy should be bsed on customers' need, tht is why the Mission Sttement declred for the Compny sounds s it follows: "One of our vlues is to understnd customers better thn nyone. We go to gret lengths to sk customers wht they think, listen to their views, nd then ct on them. We look both t wht customers sy nd wht they do. This feedbck guides the decisions we tle" (www.TESCO.com) Tesco is the lrgest food retiler in UK, operting round 2,318 stores worldwide. Tesco opertes round 1,878 stores throughout the UK, nd lso opertes stores in the rest of Europe nd si. Tesco.com is wholly-owned subsidiry offering complete online service, including tescodirect.com nd tesco.net. The compny lso offers rnge of both online nd offline personl finnce services. Tesco is hedqurtered in Hertfordshire, UK. For the yer ended October 2005 Tesco PLC chieved revenues tht totlled 33,557 million, n increse of 18.7% ginst the previous yer's revenues tht were 28,280 million. s well s convenience produce, mny stores hve gs sttions. Section 2: Methodology Informtion for this explortory study ws gthered by conducting semistructured interviews with route slespersons hving knowledge of wholesle theft methodology. These individuls were selected on the bsis of their willingness to shre pertinent informtion with the uthors with whom they or their contcts hd estblished trusting, personl contcts. It is virtully impossible to get rndomly-selected strngers to discuss such sensitive informtion. fter the purpose nd scope of this study were fully explined to ll respondents, ech ws ssured of nonymity, nd no ttempt ws mde to gther informtion from the respondents other thn theft methodology. Section 3: Data Data for this study are mainly based on the face-to-face interview coducted recently with Tesco employees. The interviews were open-ended to ensure proper understnding of the often complicted theft methods. There were eight interviewees. Ech hd t lest two yers experience s route slesperson, nd ech greed to prticipte nonymously without compenstion. Each interviewees was given to complete the questionnaire (Appendix B), that covered various questions on organizational structure and design. Questions were intended to provide broad information on the issue. For this reason, they had a form of open questions were participants were assumed to provide personal attitudes toward each of nine questions. Section 4: nlysis . Orgnising principles of Tesco ffilition Tesco hs number of ffilites ll over the world. Besides it hs recently lunched scheme by which third prty website providers could become Tesco ffilites, plcing links from their website trnsferring consumers to Tesco's own website. Tesco would then py commission to the ffilite in respect of sles so generted. Elogicom becme one such ffilite. However, insted of throwing link from its own website to tht of Tesco, it registered number of its own websites which included the word word 'tesco' in the URL. Consumers rriving t those unuthorised websites were tken directly to Tesco site; ny sles mde through ccessing those sites would ern Elogicom commission. Collective resources This principles of orgniztion is not supported by Tesco s it does not imply using collective resources to rech the gols of its business. It mintins opertionl ctivity by using the chnnels tht it hs promoted by itself nd resources within the frmes of the orgniztion. Sustinbility Tesco sustins its position on the mrket when nticipting number of interntionl nd locl strtegies tht keep stkeholders ttention nd promote their investment. Besides, the compny constntly expnds its opertions. Tesco is lso ctive in the clothing, finncil services nd electricl products mrkets. The group's incresing focus on non-food products is illustrted by the expnsion of its Tesco Extr formt. In finncil services, the group mde its first fory with Clubcrd Plus in 1997, joint venture with Bnk of Scotlnd, which pys interest on blnces nd offers n overdrft fcility t superior rtes to stndrd bnks. (Dennis, Merrilees, 2005) This ws followed up in 2000 by the introduction, lso in conjunction with Bnk of Scotlnd, of credit crd nd trvel nd motor insurnce. More recently, in 2005, Tesco lunches included home nd mobile telephone services nd brodbnd Internet ccess. Recorded Control From the Key Risk Register, Tesco ssesses the impct nd probbility of ech risk nd the effectiveness of the mitigting controls. Methods for monitoring ech specific risk re then greed. ccountbilities for mnging these opertionl risks re clerly ssigned to line mngement. Risk ssessments re crried out routinely by mngement throughout the UK nd interntionl businesses. Procedures exist to ensure tht significnt risks nd control filures re esclted to senior mngement nd the Bord on timely bsis. Tesco hs five-yer rolling business pln tht focuses on delivering theGroup's strtegy. Ech business unit nd support function derives its objectives from the pln nd these re cscded to form individul objectives. The pln covers ll the key trding nd finncil performnce mesures nd trgets to deliver the finncil returns on the cpitl employed in the business. (tesco.com) On n nnul bsis these plns re combined with detiled budgets nd lso our blnced scorecrd (which we cll our Steering Wheel) which unites the Group's resources round our customers, people, opertions nd finnce. This enbles the business to be operted nd monitored on blnced bsis with due regrd for ll stkeholders. In Tesco's fst moving business trding is trcked on dily nd weekly bsis, finncil performnce is reviewed weekly nd monthly nd the Steering Wheel is reviewed qurterly. In ddition, ll mjor inititives require business cses to be prepred, normlly covering minimum period of five yers. Post-investment pprisls re lso crried out. We hve structured progrmme for internl communiction of policies nd procedures nd performnce. This provides employees with cler definition of the Group's purpose nd gols, ccountbilities nd the scope of permitted ctivities of compnies, executive functions nd individul stff. This ensures decision-mking tkes plce t the correct level nd tht ll our people understnd wht is expected of them nd how we hve performed. B. PEST nlysis Politicl Fctors s long s Tesco opertes in globl environment with stores round the globe1, its performnce is gretly influenced by the politicl nd legisltive fctors of these countries. Through employment legisltions, the government encourges retilers to provide mix of job opportunities from flexible, lower-pid nd loclly-bsed jobs to highly-skilled, higher-pid nd centrlly-locted jobs (Blchin, 1994) s well s to meet the demnd of students, working prents nd senior citizens who need to be employed too. Tesco understnds tht retiling hs gret impct on jobs nd people fctor. Being strong competitor such lrge retil shop s Tesco oftentimes destroys the jobs vilble in trditionl stores s becuse of inbility to compete they simply go out of business. Tesco tries to propose s mny jobs s possible in order to cover the shortge cused by the closeness of those shops. In ddition it employs lrge numbers of student, disbled nd elderly workers, often pying them lower rtes. In n industry with typiclly high stff turnover, these workers offer higher level of loylty nd therefore represent desirble cndidtes. Economicl Fctors long with politicl fctors Tesco is concerned bout economicl issues tht cn gretly influence demnd, costs, prices nd profits of compny. One of the most powerful fctors on the economy is high unemployment levels, which diminishes the positive demnd for mny goods, dversely ffecting the demnd required to produce such goods. These economic fctors re mostly out of compny's control while their effects on the performnce nd the mrketing mix cn be significnt. lthough interntionl business is still growing, (Appendix A) nd is expected to contribute greter mounts to Tesco's profits over the next few yers, the compny is still very much dependent on the UK mrket. Hence, Tesco would be bdly ffected by ny setbck in the UK food mrket nd re out in the open to mrket concentrtion risks. Socil/Culturl Fctors s long currently British customers hve moved towrds 'one-stop' nd 'bulk' shopping, Tesco hve incresed the mount of non-food items vilble for sle. The type of goods nd services demnded by consumers is function of their socil conditioning nd their consequent ttitudes nd beliefs. Consumers re becoming more nd more wre of helth issues, nd ttitudes towrds food re constntly chnging. One exmple of Tesco dpting its product mix is to ccommodte n incresed demnd for orgnic products. The compny ws lso the first to llow customers to py in cheques nd csh t the checkout. Technologicl Fctors This fctor is mjor vrible which hs influenced the development of mny of the Tesco products. The new technologies benefit both customers nd the compny: customer stisfction rises becuse goods re redily vilble, services cn become more personlised nd shopping more convenient. Tesco stores utilise the following technologies: wireless devices, intelligent scle, electronic shelf lbelling, self check-out mchine, rdio Frequency Identifiction (RFID). The doption of Electronic Point of Sle (EPoS), Electronic Funds Trnsfer Systems (EFTPoS) nd electronic scnners hve gretly improved the efficiency of distribution nd stocking ctivities, with needs being communicted lmost in rel time to the supplier (Finch, 2004). C. Orgniztionl Structure The structure of retil firm refers to the wy in which its humn resources re orgnized nd entils the hierrchy, deprtmenttion, spn of control, nd integrtion mong the vrious units. The structure nd design of n orgniztion re the result of its externl environment, its size, its technology, its gols, nd its ledership. dditionlly, culture nd strtegy ply crucil role. Retil orgniztionl structure hs numerous dimensions: formliztion, speciliztion, stndrdiztion, hierrchy of uthority, complexity, centrliztion, professionlism, nd personnel rtios. mong them, complexity, formliztion, nd centrliztion re focl to our discussion of retil orgniztion (see Figure 1). Figure 1. Dimensions for structure CENTRLIZTION STRUCTURE FORMLIZTION COMPLEXITY ) Complexity Complexity refers to the number nd vriety of hierrchicl lyers, job titles, nd divisions nd deprtments within n orgniztion. The more lyers nd divisions, the higher the complexity of n orgniztion. (Bddeleys, Jmes, 1990) It is needed to sy tht the level of complexity vries within the retil orgniztion. Within Tnglewood, the legl deprtment hs mny lyers of lwyers nd stff members servicing the legl needs of different regions of the country, wheres mnufcturing my hve only one loction with two hierrchicl levels. b) Formliztion The compny tht is being discussed hs decentrlized retil dministrtion. It is counted to be the cornerstone of orgniztionl policy tht is crucil when it comes to compny's retil success nd some difficulties to overcome every now nd then. The ltter my relte to the locl overpricing of goods, poor service, out-of-stock conditions, nd excessive nd unblnced inventories. t the mentime, compny officers ssume tht the dvntges of decentrliztion previl over its disdvntges. c) Centrliztion Centrliztion refers to the distribution of power nd decision mking within n orgniztion. The less the number of groups nd levels involved in decision mking, the more centrlized firm. In centrlized orgniztions, lrge mjority of ll decisions re mde by top mngers. In decentrlized orgniztions, on the other hnd, decisions re delegted or pushed down to lower levels. Orgniztion Structure of Tesco extends its customer centric philosophy to its orgniztion structure. The wy the compny is orgnized reflects its client thought cycle s they progress through their BPO inititive. Compny's reltionship mngers re consultnts nd industry people with strong consulttive skills to help clients evlute the off-shoring inititive. Product mngement drws from senior industry resources to drw up rod mp for n optiml long term off-shoring strtegy. Trnsition mngers combine strong consulting, opertions nd technology skills to ensure the smooth migrtion of processes. Operting tems re led by mngers with significnt experience in mnging opertions in our clients industry, supported by well educted, motivted nd innovtive process executives. The Chief Risk Officer ensures complince with pproprite control nd regultory environment to help mitigte customer risk. The orgniztion is supported by qulity consultnts, finnce nd dministrtion professionls, technology resources nd people mngement to ensure uniform, effective nd productive delivery. Uniform, except for those plesnt surprises. D. Orgniztionl Design In Tesco tsks re given nd controlled by the mnger while other employees such s stff officers, the office mnger, the personnel nd sfety mnger, nd the production mnger report directly to the mnger nd supervisors report directly to the production mnger. In Tesco, like in ny other orgniztion tht ttempts to build cohesive orgniztionl structure nd pproved orgniztionl culture, the ttention to the level of qulity of service delivered is pid. It is believed, tht the highest qulified nd best people in n orgniztion hving the "wrong" orgniztionl design will in the long run only provide mediocre services. (Dennis, Merrilees, 2005) "The concept of being distinguished" is prt of Tesco's culture. It is common people's psychology to buy the things with fmous brnds. In such wy they tend to prove tht they re different with others, the reson why you cn find mny imittions in the night mrket. Tesco might focus on the brnding imge nd price strtegy; it might ttrct more customers to purchse the products. (non, 2004) Orgniztionl structure of Tesco is quite complicted s the objectives nd strtegies for the big compny should be shped by principle "from bottom to the top", mening tht ll personnel should be engged in the performnce of orgniztionl mission. Generlly, orgniztionl structure institutionlizes: * how people will interct with ech other, * how communictions will flow, * how rewrds re distributed, * how power reltionships re defined, nd * wht is importnt to the orgniztion. In other words, orgniztionl structure provides the bsic templte for the continunce of n orgniztion's culture; i.e., norms, vlues, philosophies, nd informl ctivities. Orgniztionl culture provides both the orgniztion nd its members insight into "how things re done round here". (Desjrdins, 2005) Section 4: Conclusion Through profound analasys the above report identified TESCO's organizational structure and design and current position on grocery mrket. Results of reserch show that TESCO is on the stage of rebuilding its brnd imges while keeping the leadership position on the mrket. The report reflects promotion strategies for compny products which basically oriented on the locl nd foreign mrkets expansion by means of incresing the costs of dvertisement and endorsement. Overall, the report has given an example of successful functioning of Reatil Company that skillfully implemented marketing communication strategy of branding and effective service delivery and as a result has received recognition and leadership position. Tesco fostered powerful identities by mking their retiling concept into virus nd spending it out into the culture vi vriety of chnnels: culturl sponsorship, politicl controversy, consumer experience nd brnd extensions. pendix A Tesco: Shre of ll Europen food retilers' sles, 1999-2003 Source: Mintel Report 2003 Appendix B Questionnaire Q1: Please, outline briefly the nature of your work at Tesco, specify the name of company division. Q2: Within organizational design of your organization, are you managed by the supervisor or you produce reports directly to the production manager Q3: How would you describe organizational structure of your organization Q4: Do you consider your company to be centralized or decentralized Please, justify your answer. Q5: In what ways does the current structure of your organization fail to provide adequate links or communication between employees and customers How might the situation be improved Q 6: What would you describe as the most striking characteristic of Tesco organizational culture Is there something about the culture of Tesco that you would like to see the company address Q 7: What alternative structure or organizational model might enable your company to provide better service and make more efficient use of staff Q8: How would you describe sustainable development of your company Q9: What is the single greatest impediment to getting your job done Bibliography: 1. Bddeleys, Jmes, K. (1990). Firm resources nd sustined competitive dvntge. Journl of Mngement, 17(1), 99-120. 2. Blchin . (1994) Prt-time workers in the multiple retil sector: smll chnge from employment protection legisltion, Employee Reltions, Vol. 16 Issue 7, pp.43-57; 3. De Toni . nd Tonchi S. (2003) Strtegic plnning nd firms' competencies: Trditionl pproches nd new perspectives, Interntionl Journl of Opertions & Production Mngement, Vol. 23 Issue 9, pp.947-976; 4. Dennis C., Merrilees B. (2005) Sle the 7 Cs: teching/trining id for the (e-)retil mix, Interntionl Journl of Retil & Distribution Mngement, Vol. 33 Issue 3, pp.179-193; 5. Desjrdins D. (2005) Tesco strtegies turn up competitive het in UK, DSN Retiling Tody, 2/28/2005, Vol. 44 Issue 4, pp.4-6; 6. Dtmonitor Report (2003) SWOT nlysis Tesco PLC, July; 7. Dtmonitor Report (2004) Compny Profile: Tesco PLC nlysis, November; 8. Finch P. (2004) Supply chin risk mngement, Supply Chin Mngement: n Interntionl Journl, Vol. 9 Issue 2, pp.183-196; 9. non (2004) Cse study IV: Tesco implements the business engine network to gin full control of its IT project portfolio, Journl of Dtbse Mrketing & Customer Strtegy Mngement, Vol. 12 Issue 1, pp.66-73; Read More