Contemporary Strategic Issues

This essay discusses the contemporary strategic issues faced by business organizations, using TESCO as a case study. It explores the challenges of globalization, intense competition, and the impact of recession on strategic administration. The essay also examines the ethical considerations and the importance of business theory, leadership, and management in addressing these issues.

Contemporary
Strategic
Issues

A strategic management of business is referred to be a foremost agenda of almost all
business organisations to deal within the pertaining challenges of today's globalised world. It is
where an active globalisation This in turn urges the organisations to accommodate themselves
within a dynamic operational structure that consequently benefit them to a great extent without
making a negative impact on their undertaken business practices (Grant, 2016). The present
essay has discoursed upon such challenging facet of today's business organisations that are
usually addressed as contemporary issues that duly influences their strategic administration of
work in a pessimistic manner. It is based upon a factual interpretation of a public sector
organisation named TESCO that is a famous retail based enterprise, headquartered in UK.
They have together dispersed their proposed goods and services all over the world and
have attained a global recognition. Such international orientation of business is however referred
to be a slight challenging consideration for the concerned officials of TESCO that has in turn
created several contemporary issues for an effective handling of their functional practices
(Rosenberg Hansen and Ferlie, 2016). It is also due to another most influential factor of
ferocious competition among the retail based organisations operating in UK. This has duly
necessitated the establishments like TESCO to opt for a strategic administration of their
resources. It indicates both personnel and manpower resources of TESCO along with their other
affiliated sources for a timely accomplishment of their targeted goals.
TESCO is however referred to be a leading player in the overall economic system of UK
with a leading contribution of their business in enhancing the profitability status of both their
domestic and international marketplaces. It is mainly due to a pivotal aim of their business where
they are chiefly intended to maintain a well-defined position in their market by duly fulfilling the
realistic needs and demands of their consumers. It however requires a prime identification of the
customer’s preferences that are presently prevailing in the market set in conformity to its
prevailing trends (Morris and et.al., 2015). Although, TESCO is largely impacted from an
existent occurrence of recession in the country that is in turn affecting their adopted practices by
together creating a pressurized state of work for them to contend in the market that comprises
with enormous number of rivals. It is where recession has clearly depicted a declined level of
profits for them where the customers are together apparent to make fewer spending of monetary
funds that in turn depicts a lessened state of sales by TESCO (Pugh and Duffy, 2013). This in
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turn postulates them to position themselves at a contending edge to successfully handle their
business operations by combating such challenging state.
It in turn enlightens the ideology of socialism for heading towards a prosperous business
with an affiliated concept of collective bargaining where the most contending constituent for
TESCO is their associated shareholders. It is where the solicitous bodies of the cited entity must
try to increase their profits at the rime of recession by completing the legal obligations towards
their shareholders (Weiss, 2014). This in turn propose them to align with a classical formulation
of Milton Friedman where increasing profits is referred to be a major consideration of almost all
sort of companies. It together corresponds to the leading business objective of the quoted firm
where they are operating with a rigorous intention of augmenting their marginal rates of profit to
meet the expectations of their shareholders.
However, to do so, TESCO is hereby referring to cut down the price of their offered
commodities to compete with some of their renowned rivals namely Sainsbury, Morrison's and
ASDA, etc. This is mainly due to a better composition of these contending bodies to combat the
state of recession with some improved policies to fetch a liable interest of the buyers in the
market as compared to TESCO (Weele and Raaij, 2014). It is thus to escalate the profit levels,
the concerned venture is more apparent to purchase inexpensive raw material from the suppliers
that is in turn reflecting several ethical concerns such as cheap labour policies, etc. this in turn
signifies an unethical practice where cheap labour are those who are creating goods by working
for long hours under fewer earnings.
It has therefore represented one of the most challenging phase for TESCO to undertake
certain ethical practices to serve their consumers by together considering about their other
stakeholders such as the employees and shareholders or investors, etc. (Vom Brocke and et. al.,
2014). Caux principle is thereby referred to be one such intellectual way to promptly handle all
their affiliated stakeholders with a balanced outlook to operate with them. For which, certain
ethical practices are required to be adopted by TESCO that in turn fulfils their such business
considerations where they are hereby required to do justice with that to such broad community of
young labours.
In the present scenario, major emphasis of firms is on running business operations in an
ethical manner as to stay in the market for longer span of time, it has become highly necessary.
The success of modern business is apparent however, as per today’s era of business, it is
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significant to perform operations in such a way that society’s interest can be effectually fulfilled.
Now-a-days, it is vital to concern about the society before launching any product or service in
the market and according to their actual needs and expectations, all efforts should be made.
Tesco is following business ethics to a high extent as well as fulfilling the corporate social
responsibilities so as to keep all stakeholders satisfied and loyal towards the firm (Svanberg,
2013). Being in the retail sector, to survive with sustainability for longer span of time, it is
important for Tesco to comply with business ethics and perform CSR activities effectually in the
market.
In terms of business theory adopted by Tesco, company wants a highly motivated
workforce who can lead the firm to attain higher growth and success in the market. Tesco at
present is the market leader in retail sector of UK with earning profits around £3.4 billion which
is making it the largest British retailer across the world. Currently, the firm is having the
workforce of 468,000 employees working in the organisation from worldwide. Business theory
of Tesco is to grow by making the workforce highly motivated, flexible and well-trained. For
having a skilled and knowledgeable workforce, Tesco organises various training and
development sessions so that the desired outcomes can be gained out of them (Jervis and Art,
2015). Apart from that, at the time of recruitment and selection, company gives due
consideration on selecting right person at the right position so as to run operations in a systematic
and effectual manner. Main aim of business theory of Tesco is to satisfy the customers in such a
way that they would stay with business in the long run and provide their loyalty and trust to
company.
On the other hand, ethical theory says about the way in which Tesco is carrying out all its
operations in the market and keeping stakeholders satisfied in the long run. Main consideration
of firm with respect to run business ethically is to provide products and services with high
quality and at reasonable cost. Company is charging a fair price from customers for the purpose
of retaining them for longer span of time. Also, firm is communicating only fair and transparent
information regarding business and not making any effort for misleading the customers. Apart
from that, it is offering high value to the target people in return of what they are spending while
purchasing the products of Tesco (Pugh and Duffy, 2013). In addition to this, organisation is
offering superior quality products to the end users and not cheating on the basis of worth
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provided with respect to the goods and services of company. In this way, Tesco is following its
ethical theory and keeping the stakeholders highly satisfied.
Moreover, as per social theory followed by the firm, it can be said that company is
performing various corporate social responsibilities with an aim to keep the society satisfied with
business performed by Tesco. It helps in making the firm able to make a strong and effective
position in the market that is providing a competitive edge over others in the retail sector of UK
(Varadarajan, 2010). Apart from that, CSR activities performed by Tesco are for all its
stakeholders whether they are employees or customers as they want to satisfy them all. Company
understands the fact that to be in the competition with gaining sustainability, Tesco requires to
perform CSR activities in a effectual manner that would make the stakeholders feel satisfied and
remain in the competition in the long run (Baylis, Wirtz and Gray, 2016). This is the reason; for
this firm, welfare of society is one of the major objectives.
In Tesco, leadership plays a significant role to make it successful as being the large
organisation, it is important for the firm to have effective leaders so that operation and other
functions can be effectually managed. Along with that, it is also significant to have proper
business management so as to make the firm successful by attaining all targets on time and in an
efficient manner. However, as per the views of Hodgkinson and Healey, (2011) leadership can
only be called as effective when the leaders and managers are honest as well as have the skill of
integrity. According to him, leaders can be great only when they are able to build the
organisational culture in which there is honesty as well as integrity. They must be able to make
employees understand the value of same and perform all activities with the help of these only.
The authors believe that without having honesty and integrity as fundamental cornerstones of an
organization, to become successful in the long run can only be possible when these qualities will
be there in the leader.
On the contrary, according to Sparrow, Scullion and Tarique, (2014) courage and
communication skills to be in the leaders in Tesco are more important being in the retail sector.
As in the retail industry, people require to communicate with the customers face to face, it is
significant for employees to have strong and effective communication skills. In addition to this,
if anything goes wrong then the leader must be able to rectify the same with courage. Also, the
most important skill which is required in the leader of Tesco is team building and company
assigns many projects that have to be completed by a team within stipulated time period. So, it
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can be said that without having team working skills, employees cannot perform their work in the
teams for which leaders need to be a team leader. On the other hand, it can be critically analysed
in accordance with Ferlie and Ongaro, (2015) that along with leadership, business management
is equally important for Tesco as if managers and leaders would not be able to effectually
manage the business, attaining results in the desired way and within specific duration of time
would not be possible. For leading a business, first it has to be effectually managed as without
proper management, achieving the results is not possible for Tesco (6 Fundamentals of Business
Management, 2016). It is highly important to delegate the work among employees in a
systematic and equal manner so that everyone would be having the work as per his/her area of
interest and the capability to perform.
Therefore, it can be concluded that Tesco is facing some contemporary issues like
handling the workforce as company is operating in different nations and thus, there is diversity
among employees. So, for the same, company needs to keep the workforce highly motivated
through effective leadership and management. Apart from that, to stay in the competition and
gain a competitive edge over others, it is following the business, ethical and social theory in such
a way that firm is attaining all its set goals and objectives on time. This is the reason; company is
having a large customer base with high goodwill in the market (Miara and et.al., 2013). Tesco is
keeping all its stakeholders highly satisfied by which it is gaining higher profits as well as the
market share in the retail sector of UK. Thus, company is maintaining a strong and leading
position in the market with gaining sustainability.
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