MANAGEMENT PRINCIPLES: TESCO
Management Principles: Tesco
The organizational structure depends on a number of factors. These include; the size, the industry or sector the company operates in (private or public), number of employees and the available resources. Tesco is among the best food retailers in Britain with more than 580 stores all over the United Kingdom. It continues to increase its market share every year. There are numerous positions of responsibilities in Tesco due to its large size. In reviewing organizational structures, this paper will look at Tesco as the case study. An organizational structure chosen by a firm majorly indicates the chosen methods that the specific firm applies in delineating communication lines, authority, responsibility and policies (Florescu, Apetroaie, & Ducu, 2012:639). The structure has the power to determine the nature and extent to which dissemination of leadership occurs all through the company. It also determines the methods by which communication and information flows within the firm. Commonly, major organizations adapt either hierarchical or flat structures (Warren et al, 2013:90).
Tesco has adapted a hierarchical organizational structure. In this layout, the firm follows a structure similar to a pyramid. In such a structure, the Chief Executive Officer sits at the head of the pyramid. Everyone else therefore is a subordinate to another within the firm. In this layout, multiple entities make up a base in a descending order. The pyramid has several levels from the CEO to employs sitting at the pyramid’s bottom. Tesco top most management is headed by a chairman. Here, the overall power and authority is exercised and broadened out towards the lower levels (Florescu, Apetroaie, & Ducu, 2012:639). The levels include management, director of programs, research and development, finance management, personnel management, and marketing management.
The image above shows a hierarchical structure shown in organization A and a flat structure in organization B. As seen above, every level in the structure is above another. Every manager has a number of people below them (Florescu, Apetroaie, & Ducu, 2012:639). In this structure, the responsibility and authority levels are well defined. Opportunities for a promotion are high and motivate employees to do better. However, communication is somehow hampered between departments in comparison to flat organizations.
Decisions on different management levels
Decisions made by the top, middle and first line levels of management are communicated from the top. Tesco has a top down structure where decisions are passed from top to bottom. In the mentioned levels, managers must make crucial decisions on behalf of the firm. In the hierarchical system, managers are ranked in order of position of power. Senior management makes decisions that affect the firm in its entirety (Dwivedi et al, 2014:83). They are not involved in the daily running of the firm. Following the top management, middle level management implements the goals set out by the senior management. They include regional managers, general managers, divisional managers and plant managers. In their levels, they set goals that match with the overall goals set by senior management to suit their departments or business units. They also communicate upwards to offer suggestions or feedback. The first level management is also referred to as line management or supervisory management. The job titles in this category include department managers, forepersons, shift supervisors, office managers and store managers (Büschgens et al, 2013:771). Their main decision making involves management of first line workers. These are the workers who practically offer the service or produce the goods sold. Even though they are not involved in setting goals, they are important in their implementation (RAFFAELLI & GLYNN, 2014:550).
Vision, Mission and Corporate Strategy
Strategies are plans that set out how firms deploy their resources in an attempt to attain their set goals. Tesco has recently emerged with a strategy to improve the shopping experience for its clients. The company came up with a 7 part strategy that aimed at getting high esteem from the customers while enjoying and sustaining long term growth. These strategies include growing the UK core, creating highly valued brands, being outstanding in sales, growth in retail services, corporate responsibility, building a strong team and being the best in all they do. The vision of this company is becoming the best strategic partner to the customer. The mission remains to be recognized by the client base as best in food retail. While continuing to invest in the United Kingdom, Tesco has its sole focus on the customer making it a customer based company.
SWOT Analysis
The strengths weaknesses, opportunities and threats are good performance measures in describing the internal environment of any firm. For Tesco, strategic management processes are key to their success. A good process in this regard must be flagged off by a thorough internal assessment. A SWOT analysis allows a firm to be aware of its strengths, work on the weaknesses, and exploit opportunities while eliminating threats (Dwivedi et al, 2014:83). Tesco must be aware of its strengths every day. In the same manner, it is paramount for the company to be aware of the weaknesses that may hamper its strategies. Opportunities in the market allow the firm to come up with means to be competitive and the threats must be eliminated.
Organizational Culture
A culture is atypical approach that a firm employs. The approach here includes the personality, the procedures as well as the shared beliefs that the firm applies in solving issues. There are four main cultures that include; power culture, role culture, person culture and task culture (Büschgens et al, 2013:771). Tesco employs the role business culture. This is the case since every employee has specific job skill training and keenly follows their job description and schemes. In such a culture, an employee has a chance to express themselves. This gives them a chance to be more productive (Dwivedi et al, 2014:83). In a diverse firm, the role culture is effective as everyone presents their uniqueness and contributes to company growth. Therefore, this culture used in Tesco is strength and an opportunity for growth. Diversity here is exploited for improved productivity. In the same culture, extrinsic rewards are used for the employee motivation (Büschgens et al, 2013:771). This helps to increase productivity. So far, the company is performing well under this culture and strategy. In reference to the issue of changing the culture, this paper presents that Tesco is better of remaining with this strategy and culture. This is due to the large size of the company and the large employee base. If the company was to institute changes, then this would not only be costly for the firm but would also take up a lot of time and resources.
Conclusion
Tesco has adapted a hierarchical organizational structure. In this layout, the firm follows a structure similar to a pyramid. Here, the overall power and authority is exercised and broadened out towards the lower levels. Additionally, Tesco has a role culture that is strategic to its aim and vision. This paper presents that Tesco is better of remaining with this strategy and culture.
Reference List
Büschgens, T, Bausch, A, & Balkin, D 2013, 'Organizational Culture and Innovation: A Meta-
Analytic Review Organizational Culture and Innovation: A Meta-Analytic Review', Journal Of Product Innovation Management, 30, 4, pp. 763-781
Dwivedi, S, Kaushik, S, & Luxmi 2014, 'Impact of Organizational Culture on Commitment of
Employees: An Empirical Study of BPO Sector in India', Vikalpa: The Journal For Decision Makers, 39, 3, pp. 77-92
Florescu, V, Apetroaie, M, & Ducu, C 2012, 'ORGANIZATIONAL METHODOLOGY
REENGINEERING BY FLATTENING THE HIERARCHICAL PYRAMID -PATH TO SUSTAINABLE DEVELOPMENT', Global Conference On Business & Finance Proceedings, 7, 2, pp. 638-642
KWON, W, BALOGUN, J, & VAARA, E 2014, 'STRATEGIC CHANGE: A DYNAMIC
PERSPECTIVE ON FRAMING STRATEGIC INITIATIVES', Academy Of Management Annual Meeting Proceedings, pp. 672-677
RAFFAELLI, R, & GLYNN, M 2014, 'TURNKEY OR TAILORED? RELATIONAL
PLURALISM, INSTITUTIONAL COMPLEXITY, AND THE ORGANIZATIONAL ADOPTION OF MORE OR LESS CUSTOMIZED PRACTICES', Academy Of Management Journal, 57, 2, pp. 541-562
Warren, D, Gaspar, J, & Laufer, W 2014, 'Is Formal Ethics Training Merely Cosmetic? A Study
of Ethics Training and Ethical Organizational Culture', Business Ethics Quarterly, 24, 1, pp. 85-117
