Resource Management. Tesco PLC - Essay Example

?Resource Management Table of Contents Table of Contents 2 Introduction 3 A Brief Overview of the Organisation 4 Sourcing Process of the Organisation5 Budgeting Process of the Organisation 7 Financial Reporting Requirements for the Organisation 9 Conclusion 11 References 12 Introduction The area of resource management mainly deals with handling various day-to-day activities or affairs of businesses of any particular organisation. These affairs or activities might comprise repayment of debts to the shareholders, along with gathering of debts from the marketers, delivering quality products or services to the customers and most vitally managing inventories in an effective manner. In general, the aspect of resource management is fundamentally described as a procedure of utilising the available valuable resources of any organisation in the best probable way. These resources may comprise products, equipments, labour resources such as employees, financial resources, human skills, inventory, information technology along with production resources among others (SBA, n.d.). After acquiring a brief idea about the conception of resource management, it can be apparently viewed that financial reporting and budgetary procedures constitute a fundamental part within the context of resource management by a considerable level. In this similar concern, most of the business organisations belonging to this modern day context tend to significantly focus upon developing their respective financial reporting as well as budgetary procedures with the intention of carefully planning along with reviewing their finances effectively. The modern organisations have been viewed to recognise, measure, analyse and report their various finance related information for ensuring a smooth operations the businesses through rendering developed financial along with budgetary procedures (Miller, 2012). With this concern, this report intends to provide a brief understanding about the sourcing, budgeting procedures and financial reporting requirements of an organisation named Tesco PLC. This particular report would focus on procedures rather than detailed accounts or quantification of the data available relating to the aforesaid organisation. Thus, it can be affirmed that the budgetary procedures and the issues concerning financial reporting of Tesco would be the central theme of this report. A Brief Overview of the Organisation Tesco PLC, a United Kingdom based multinational business corporation is regarded as one of the foremost leaders in establishing retail chain stores throughout the globe. The organisation was established in the year 1919 and has earned significant business reputation in this globalisation and technology driven era. The organisation can be viewed to possess numerous retail chain stores in different parts of the globe with a handful of competent employees performing various operational functions in an effective manner. The visions of Tesco can be apparently observed to be generating greater value to the customers, offering quality products to the customers, complying with the requirements of its shareholders along with customers and attaining superior competitive position over its key business market contenders. It has been apparently observed that the organisation tends to adopt as well as execute certain important strategies for the purpose of accomplishing its predetermined business targets. In this regard, Tesco emphasises applying modernised along with innovative ideas for developing each of its operational aspects, executing pioneering technological advancements along with effectively exploiting accessible valuable resources. Apart from these visions, the mission of the organisation is to become the global leader in the respective industry by serving a large number of customers around the globe where it operates. It facilitates the company to acquire a greater competitive position over other major business market contenders (Tesco, 2013). Sourcing Process of the Organisation In order to identify and analyse the sourcing procedure of Tesco, it can be viewed that the organisation performs international sourcing for the purpose of attaining its desired business targets. In this regard, the organisation is involved in sourcing numerous clothing, general merchandise and food items on a worldwide basis along with purchasing several products directly especially from the producers as well as the manufacturers with the intention of delivering quality products to its customers. Through the operations of Tesco’s Group Sourcing which has been headquartered in the region of Hong Kong, the organisation strongly believes that it can ensure the production of better as well as superior quality of products, lessen its operational along with other transactional costs, accomplish superior competitive position, apply best practices, execute knowledge sharing based aptitudes and develop products among others. It can be viewed in this similar concern that the organisation directly sourced in excess of ?4 billion worth of general merchandise and food products at retail value in the year 2011. Thus, it can be affirmed that the procedure of Group Sourcing plays a decisive role in supporting Tesco to acquire its expected business targets by a certain degree. One of the vital sourcing partners of Tesco named Tesco International Sourcing Limited which looks after the purchasing department also assists the organisation in successfully conducting sourcing of products or brands in various parts of the globe where it operates. It is worth mentioning that the pan-European sourcing of Tesco has eventually resulted in driving strong sales along with enhancing overall profitability as well as productivity and profit margins by a considerable level. The sourcing procedure of Tesco is focused on engaging its suppliers through making active participation in one of its programmes named Trading Fairly Programme, wherein the organisation can address as well as mitigate any sort of local along with national challenges (Tesco PLC, 2011). In terms of sourcing, it can be viewed that the organisation has successfully exported substantial quantity of products or brands in international business markets by incorporating certain market-leading clothing brands. In this regard, F&F can be taken into concern through which the organisation has been able to spread its broad assortment of brands or products especially in overseas business markets. F&F is regarded as one of the market-leading brands of clothing which is particularly operational in the regions of Hungary, Slovakia and Czech Republic as well. Another sourcing procedure of Tesco can be viewed as working in collaborations or partnerships with various suppliers attached with the organisation in order to make sure that its diverse product offerings are sourced responsibly in different regions throughout the globe. With regard to analysing the sourcing procedure of Tesco, it has been observed that the organisation possesses efficient local technical teams that work mutually with its commercial teams. This enables to make sure that the standards and the quality of Tesco’s products are met in every business field of the organisation. Apart from effectively sourcing its broad array of products in overseas business markets, Tesco also strategically manages to acquire attractive funding sources for smooth conduct of its business. In this regard, Tesco Bank plays an imperative part in enabling the funding of the organisation to be preserved within the regulatory requirements by a greater extent. Specially mentioning, certain dynamic facets of Tesco Bank such as possessing effectual governance arrangement and preserving a prudent as well as a robust liquidity risk-management approach for managing, monitoring and measuring liquidity eventually strengthen the funding capacity of the organisation at large. The other quality characteristics and approaches of Tesco Bank like interest rate risk management, liquidity management, credit risk and foreign currency risk management also empower the funding and sourcing capability of the organisation by a significant level (Tesco PLC, 2011). Thus, the aforesaid vital aspects reveal the sourcing procedure of Tesco. Budgeting Process of the Organisation Prior to analysing the budgeting procedure of Tesco, it is quite indispensable to comprehend or gain a valuable insight about the notion of budget or budgeting. In general, budget or budgeting is principally regarded as the procedure of generating an effective plan to expend money of any organisation. Moreover, it is often viewed to be an estimation of revenues, costs as well as resources over a particular period which reflects a reading of upcoming economic goals and conditions. The facets of budgeting include planning for executing effective activities with the intent of attaining quantified objectives, evaluating the standards for measuring overall performances and coping up with any sort of adverse situations. In precise, it can be affirmed that a budget specifically enables to plan any kind of upcoming spending as well as saving and planned income along with expenses. Various business organisations endeavour to conduct budgets in order to repay debts and also to ensure that they possess sufficient figure of money in fulfilling future needs (Herkimer, 1988). In relation to determining the budgeting procedure of Tesco, it can be observed that the aspect of capital planning forms a major element in the budgeting process of the organisation. In this similar concern, the notion of capital planning associated with the field of budgeting mainly represents the determination of especially long-term investments that are valuable to be pursued for a particular business organisation. It is worth mentioning that the idea of capital planning supports an organisation in terms of offering a qualitative along with a quantitative decision-making procedure in order to emphasise proposed investment initiatives based upon their comparative significance towards accomplishing organisational targets (Steiss, 2005). The aspect of capital planning as one of the effective methods of budgeting provides active support to Tesco through forecasting that adequate capital resources are accessible towards supporting the deliverance or the accomplishment of business along with strategic objectives by a certain degree. Furthermore, Tesco’s budgeting method of capital planning also assists the organisation in mitigating counterparty credit risks by a significant level. These sorts of risks generally appear while conducting the transactions that are associated with financial derivative instruments, long-settlement transactions and securities financing transactions among others. The budgeting method of capital planning incorporated by Tesco is quite competent and most vitally is able to use several appropriate tactics. Thus, it has become much more responsive towards mitigating any sort of external pressures. It can be affirmed from a broader outlook that there lay certain important reasons for which Tesco adopts along with executes the budgeting method of capital planning. In this regard, these aspects comprise systematic documentation of various financial reporting, exploiting the accessible resources effectively, preserving an ongoing planning cycle and developing the present infrastructure relating to financial standards. The organisation i.e. Tesco strongly believes that it can accomplish its expected business targets by adopting along with executing the budgeting method of capital planning. In this context, the business targets might encompass raising market share, enhancing profitability along with overall productivity and accomplishing superior competitive position over its primary business market rivals. It is worth mentioning that by minimising counterparty credit risks through utilising capital planning budgeting method, the company has been able to reap several significant benefits. These benefits include making smoother transactions relating to cash flows, effectively performing various contracts such as interest-rate contracts, contracts related to equities along with foreign currency rates and most vitally complying with various requirements linked with financial reporting. It can be affirmed that in order to develop the budgeting method of capital panning, Tesco needs to take into concern certain imperative activities. These activities comprise establishing a procedure for making effective capital planning, forming a Capital Planning Advisory Group containing various experts, developing a consistent policy for funding maintenance needs along with capital renewal and developing materials to revolutionise the budgeting method of capital planning (Tesco PLC, 2013). Financial Reporting Requirements for the Organisation The organisations belonging to this modern day context are often viewed to remain much keen towards defining how different financial transactions ought to be reported and what information must be revealed in the financial statements. With regard to determining the financial reporting requirements of Tesco, it can be observed that the Directors of the organisation felt the necessity to prepare financial statements for every financial year which would provide an accurate along with a fair outlook of the state of affairs of the organisation at the concluding part of every fiscal year. With this concern, in order to prepare accurate financial statements, the Directors of the organisation require to comply with certain fundamental requirements that are linked with financial reporting. In this regard, the Directors of the organisation are required to select, adopt as well as incessantly apply appropriate accounting related policies and make prudent along with rational estimations and judgements. Most importantly, it requires preparing the respective financial statements on a continual basis. In addition, the other major financial reporting requirements for Tesco would be the preparation as well as the generation of frequent financial reports along with facilitating the shareholders to reveal major shareholdings in the financial statements, distribution of regulated information and the stipulation of central mechanisms for sharing valuable regulated information. It can be stated that the aforesaid requirements must be met for the purpose of addressing and mitigating financial reporting linked issues and also complexities associated with budgetary procedures. In this regard, one of the financial reporting linked issues can be misinterpretation of data by the shareholders. On the other hand, inappropriate allocation of funds can be regarded as one of the critical issues related to budgetary procedures of any organisation. Thus, by complying with the above discussed requirements, there would lay a probable chance especially for Tesco to cope up with the above mentioned issues or problems by a certain degree (Tesco PLC, 2012). Conclusion From the above analysis, it can be affirmed that Tesco possesses certain dynamic sourcing and budgeting procedures which facilitate the organisation to attain its expected business targets by a considerable level. In this technology and globalisation driven era, it is quite indispensable for an organisations such as Tesco to possess and develop an effective budgetary procedure along with sourcing approaches for the purpose of repaying their respective debts and consequently enhancing liquidity position by a greater extent. Apart from considering sourcing and budgeting procedure, Tesco would also have to comply with the requirements associated with financial reporting. In this regard, the requirements might encompass generation of frequent financial reports along with facilitating the shareholders to reveal major shareholding within the financial statements. Thus, it can be strongly believed that the compliance of these requirements would certainly support Tesco to prepare a true along with a fair view of the basic organisational affairs of the organisation at the conclusion of every fiscal year. References Herkimer, A. G., 1988. Understanding Health Care Budgeting. Jones & Bartlett Learning. Miller, G., 2012. Government Budgeting and Financial Management in Practice: Logics to Make Sense of Ambiguity. CRC Press. SBA, No Date. Resource Management. Content. [Online] Available at: http://www.sba.gov/content/resource-management [Accessed September 05, 2013]. Steiss, A. W., 2005. Strategic Facilities Planning: Capital Budgeting and Debt Administration. Lexington Books. Tesco, 2013. Vision and Strategy. About Us. [Online] Available at: http://www.tescoplc.com/index.asp?pageid=12 [Accessed September 05, 2013]. Tesco PLC, 2011. Business Review. Media. [Online] Available at: http://www.tescoplc.com/media/417/tesco_annual_report_2011_final.pdf [Accessed September 05, 2013]. Tesco PLC, 2013. Tesco Personal Finance Plc. Files. [Online] Available at: http://www.tescoplc.com/files/pdf/results/2013/tpf/pillar_3_market_disclosure_201305.pdf [Accessed September 05, 2013]. Tesco PLC, 2012. Financial Statements. Reports. [Online] Available at: http://www.tescoplc.com/files/reports/ar2012/files/pdf/tesco_annual_report_2012_financials.pdf [Accessed September 05, 2013]. Read More