Context of Business: PESTLE Analysis, Leadership Style, CSR and Effects of Covid-19 and Brexit on Tesco

This report provides insights on the PESTLE Analysis, suitable leadership style, corporate social responsibilities and effects of Covid-19 and Brexit on Tesco.

Context Of Business

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. PESTLE Analysis of Tesco.....................................................................................................3
2. Suitable leadership style for the business to achieve their objectives.....................................5
3. Corporate Social Responsibilities............................................................................................6
4. Effects of Covid-19 pandemic and Brexit on Tesco................................................................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Context of business is considered as an important aspect of the business which is
explained as an understanding of different perspectives which are related with decision making
process of the businesses. It is also used by the IT department to identify various implications
which are helpful in the execution of strategic initiatives for better results by the organizations.
The current report is based on Tesco which is one of the most popular supermarket chains
in the UK retail industry. This company has gained a significant market share in the industry
with the help of their quality of products and affordable price range. This report will explain the
external environmental factors of Tesco with the help of PESTEL Analysis, a suitable leadership
style for achieving business objectives, corporate social responsibilities in the process and the
effects of Brexit and Covid-19 pandemic on Tesco.
MAIN BODY
1. PESTLE Analysis of Tesco
Political factor
Tesco is multinational food retail organization that operates its business operations
worldwide. Political factor highly influences over performance of Tesco which usually involves
act of legislation, taxation rates and stability of region in which they function. The financial
instability forms government to encourage most of the retailers to develop job opportunities for
domestic population (Belás, Kmecová and Čepel, 2020). Tesco plays influential role in terms of
forming up employment opportunities in order to enhance demand for their goods and
diversifying the workforce.
Economic factor
It is the major concern of organization as it is likely to leverage demand, cost, price and
profit. It is foremost for the organization to be aware about changes in policies, taxation and
other crucial factors that might affect the finance accessibility. Internationalization and
diversification are two supreme key strategies pursued by firm in the years which drive towards
major reason to success. Moreover, decline in disposable phase and household income, corporate
has shifted their core focus to promote their brand either luxurious items.
Social factor

The frequent change in variety of social changes reflects that customers in UK have
changed their perspectives to bulk shopping and individual stop shopping. Similarly, Tesco has
introduced various non- food products offered for sale. Such quality products demanded through
customers get immense predisposed by their attitude and belief that aligns with social
conditioning. Nowadays, customers are becoming health conscious as their approach for food is
dealing with sudden changes. In that manner Tesco is adaptive towards such alterations by
obliging demand for organic products.
Technological factor
Technology is the key concern for very organization which assist organization to bring
out the changes and enhance the productivity of business practices. While advancement in
technology has brought several opportunities for organization (Braslauskas, 2020). Formulation
and introduction of online shopping catering facilities for home delivery as well. Another one is
self- checkout points served suitable convenience as well as ease for customers which positively
impact to have decreased labour cost.
Legal factor
Governmental norms directly impact over performance of Tesco as it is mandatory to
obey laws of both international and local markets to continue flexible operations. Food retail
commission has positioned some specific guidelines which must be followed by all members of
retail segment. Previously, some allegations imposed on the organization because of gender and
age bias which conquered in working culture. All kind of legal aspects must be followed in order
to manage their reputation as once company loose their creditability it would be quite expensive
to get back the position.
Environment factor
The higher amount of pressure on organization to address environmental jeopardize and
adopt methods of operation to benefit the society. Tesco has stated clear vision to reduce its
carbon emissions by 50 percent by 2025 (Cordova and Celone, 2019). Also, they are looking
further to minimize waste product into their physical stores through snowballing social
conscience in customers.

2. Suitable leadership style for the business to achieve their objectives
Leadership is considered as a process of motivating people to work together in a group
and accomplish better results with the help of better coordination and communication. This is
beneficial for enhancing the overall management of a business and establishing better platforms
for the team members to grow and generate better productivity in the industry. There are several
leadership styles which are described in order to provide a specific structure for the management
of different tasks and duties by the employees of a business. These styles are developed by
analysing the different situations which are usually faced by organizations. They are as follows:
Autocratic Leadership
Under this type of leadership, employees are not included in the decision making process
of the businesses and all the major decisions of the business are taken by the leaders (Dörndorfer,
Hopfensperger and Seel, 2019). The autocratic leadership style is rigid in structure and leads
towards poor morale among the employees. The job satisfaction among the employees is also
less due to such neglect of their inputs from the business environment.
Democratic Leadership
This leadership styles is opposite to the autocratic leadership and believes in including
the suggestions of team members in the decision making process. It provides a positive business
environment for the employees where they can enhance their skills and generate better quality of
output. Appropriate support and guidance is provided by the leader in the democratic leadership
style for boosting the morale of the leaders and increasing their interest in the business processes.
Transactional Leadership
Under the transactional leadership, emphasis is given on the work of employees by
identifying specific targets for them to increase their effectiveness and efficiency in achieving
them. The roles and responsibilities for employees are justified which provides better assistance
top the employees to achieve the results appropriately and maximize the quality of output which
is achieved by them in the business environment.
Transformational Leadership
The transformational leadership style focuses on the consistent improvement of the
productivity of the organization with the help of innovative strategies and approaches. The
leaders motivate their employees to come of their comfort zone and try new things for achieving
better results in the industry. High growth can be achieved by organizations with the help of this

leadership style as the employees have the liberty to take risks and achieve results which are
beyond their expectations.
Tesco is a large organization which operates in a highly competitive retail industry in the
UK and at a global level as well. It is necessary for the company to make frequent changes and
provide something attractive to the customers to generate better competitive advantage in the
industry. The transformational leadership style is considered as suitable for the business to
enhance the overall satisfaction levels of the employees in the industry (Ivashchenko and Isaeva,
2021). It is suitable for the business as the cost of employee turnover is low for the business as
the employees take interest in the business processes and core decisions of the companies. With
the help of this type of leadership, the businesses are able to grow and achieve better profitability
as their expenses to procure new talent is less in comparison with the other businesses. The
transformational leadership style is beneficial for promoting the ideas of staff members and
providing them with appropriate support for achieving extraordinary results. Motivating the staff
members is beneficial is helpful for increasing the interest of the staff towards the business
objectives. This is further beneficial for the company to generate better quality of output and
enhancing the overall experience of their team members to enhance their personal and
professional development.
The challenges and gaps in the development of the business are easily identified with the
help of this transformation leadership style which is effective for the business to enhance their
overall opportunities which are necessary for the company to grow. Effective mitigation
strategies can be developed by Tesco by following the principles of this leadership style which
has a positive impact on the motivation levels of the employees in the industry. The focus of the
leader is to encourage the employees top learn new skills which is effective for them to generate
better results in the industry (Yaremko and et.al., 2021). These practices are dedicated towards
increasing the operational capabilities of the company which is crucial for them to achieve
sustainability in the competitive business environment of the global retail industry. This s helpful
for the business to establish a positive communication between their team members and increase
their coordination which is helpful for them to grow and achieve better success in the industry.
3. Corporate Social Responsibilities
Corporate Social Responsibilities is referred as a business model which is helpful for the
businesses to fulfil their duties towards their stakeholders and the environment. This is beneficial

for the businesses to control the risk of various challenges and risks upon their business in the
industry. The major factors which have a negative impact on the society and the external and
internal environment of the business are identified with the help of CSR. Effective strategies are
prepared by the management to make effective changes in their decision making process and
gain better advantage in the industry with the help of these aspects which are developed for the
benefit of the organization (Jurik and et.al., 2019). A positive brand image of Tesco can be
developed and promoted among the customers which may have a significant influence on the
overall popularity of the company in the global business environment. These activities are
referred as important for the companies to grow and generate better quality of output which is
essential for the businesses to enhance their performance in the competitive business
environment. The CSR can be broken into different types which have a unique role in the
development of the business in the industry.
Environmental responsibility
This is one of the most important part of the CSR of a company which helps the business
to reduce the wastage, pollution and emission of harmful substances in the environment. This is
beneficial to reduce the carbon footprint which is released by the business is degrading the
quality of environment. CSR is further helpful for recycling important goods and raw materials
which reduces the wastage significantly.
Ethical responsibility
The fair and ethical behaviour of a business towards their employees is necessary for
them to develop better relationships with their team members. Practising ethical responsibility is
helpful for Tesco to reduce biases from their organizational structure and provide equal
opportunities to their employees for their better growth in the industry. The ethical responsibility
plays a vital role in building a positive image of the business among their key stakeholders which
is essential for their sustainability in the industry.
Philanthropic responsibility
The responsibility of a business to provide better services to the society is necessary for
them to grow and generate higher quality of output which is necessary for them to grow and
generate better quality of output (Komljenovic and et.al., 2019). The contributions made by
Tesco in the overall development and enhancement of the society is helpful for the company to

clear their image among the population. Events and programs introduced by the business are
further helpful for the businesses to grow and achieve better productivity in the industry.
Financial responsibility
Financial responsibility of the company is to conduct appropriate research and
development for their products and services before providing them to the direct customers.
Recruitment of the employees can be made by the company from diverse labour markets which
will be beneficial for providing better services for the company to grow and achieve success in
the business environment. The financial reporting needs to be transparent for reducing the risk of
theft or breach of the critical information of the business which is necessary for the company to
grow.
CSR is helpful for the business to get better brand recognition in the market which is
considered as integral part of the overall growth and sustainability of the business in the industry.
The relationship with the investors of the business can be strengthened with the help of these
aspects as they tend to improve their trust towards the decision-making of the business. The
employees are satisfied when these factors are given due consideration by the business that has a
significant influence on the overall management process of the company. It provides better room
for mitigation of risks as effective strategies are prepared and implied that has a positive
influence on the overall success of the company in the industry.
CSR requires a significant amount of investment by the businesses which may have a
negative influence on their overall profitability in the industry. Tesco may find it difficult to
implement certain changes in their business environment due to scarcity of certain factors and
capital (Nascimento and et.al., 2018). The accountability of the actions have a disadvantage for
the business as it my generate immense pressure for the employees to perform to the expectation
of the key stakeholders of the business. This may lead towards issues and challenges for the
business to grow and manage their sustainability in the competitive industry.
4. Effects of Covid-19 pandemic and Brexit on Tesco
The Covid-19 pandemic and Brexit were two major issues which were faced by the
businesses of UK in the year 2020/2021. These phenomenons created dificulties for Tesco to
manage their daily business operations which was inappropriate in the success of the businesses
in the industry. The businesses in the retail industry and severtal other sectors in UK had to make

significant changes in their decision-making process which is necessary for the organization to
grow. The major effects of on Tesco of these both factors are as follows:
Increase in trade restrictions
The Covid-19 pandemic and Brexit had a negative influence on the supply chain
management of the business in the local and global business environment. The difficulties for
Tesco increased due to these factors having a negative impact on the relationship of the business
with their key stakeholders in the industry. These aspects had a negative impact on the success of
the business to procure goods and services from their suppliers and sale it to their target market.
Less access to talent
The restrictions of Brexit has increased the problems for Tesco to recruit talented
candidates from certain nations which are restricted for association with the UK. These activities
created a negative impact on the overall productivity of the company in the competitive business
environment. The business had less access of skilled workforce due to the pandemic as the
candidates were not able to travel from their respective nations for getting employment
opportunities in the UK.
Issues in management of operations
The Covid-19 pandemic had a severe impact on the operational capabilities of Tesco in
the year 2020/2021 due to the lock-down which was imposed by the UK government. This lock-
down was one of the primary reasons due to which the stores were remained shut and the
organizations was unable to manage their performance in the industry (Rissanen and et.al.,
2020). There were changes in the decision-making process of the company as per the new
regulations of Brexit which created delays in the business process of Tesco. These aspects have a
significant influence on the overall performance of the business in the competitive business
environment due to the different factors.
Less profitability and sales
Tesco have faced issues in managing their profitability due to less sales in the year
2020/2021. The company was unable to increase their sales and enhance their profits in the
business environment which had a negative influence on the overall performance of the company
in the business environment. The shut downs of stores due to pandemic situation may have a
negative influence on the overall performance of the company in the industry. These aspects had
a major influence on the global image as well as the management of capital by the business.

How does Tesco addressed this situation
This situation was addressed by the business by identifying the key aspects that had a
negative influence on the overall performance of the business in the industry. Effective strategies
were prepared by the business for mitigating these risks and increasing the productivity of the
company in the business environment. It has been beneficial for the company to take effective
measures and control the different aspects which created issues for the business to grow (Song
and et.al., 2019). There were several changes in the decision-making process of the company
which led towards effective results for the company. Consultation was taken by the business by
highly qualified professionals which were helpful in increasing the opportunities which were
available by the business to tackle the pressure of the Covid-19 pandemic and Brexit. There were
several changes which were helpful for the business to find better results in the industry leading
towards appropriate changes in the results of the company in the business environment.
Tesco gave sheer emphasis on their online delivery services which were beneficial for
increasing the sales of the company in difficult times. The online platforms and promotion on
digital applications were effective for the company to grow and achieve better results in the
business environment (Torres and Sidorova, 2019). With the help of these changes the company
was able to operate in the retail industry successfully and manage their financial condition in
difficult times. These aspects were necessary for the company to grow and create better quality
of output in the competitive business environment.
CONCLUSION
From the above report, it has been analysed that the business has been able to identify the
different external factors which have a potential impact on the performance of the business in the
industry. The PESTEL Analysis has been effective in order to analyse their factors effectively
and find suitable results fir the business to mitigate the risks. The transformational leadership
style has been found to be the most suitable for the business to adapt as it provides better
opportunities for the companies to grow. CSR is a helpful factor which is necessary for the
company to develop a healthy image of the company among the customers. With the help of
effective strategies, the business has been able to reduce the negative impact of Brexit and
Covid-19 on the organizational performance.

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