Contemporary Global Issues in Business and Tourism - A Case Study of Tesco

This essay discusses the global issues faced by Tesco, a British retailer of multinational groceries and general merchandise, before contributing to new international operations. The issues include COVID-19, cultural barriers, managing global workforce, and legal compliances.

GLOBAL ISSUES IN BUSINESS
AND TOURISM

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CONCLUSION................................................................................................................................1
REFERENCES................................................................................................................................2

INTRODUCTION
The term Global issue is an important issue that should be considered nowadays. As the
environmental concern is increasing day by day, People are participating actively to fight against
these global issues (Yeh,2021). Some of the major global issues are, water contamination and
shortage, child labour and violence. Global issues are also effecting the business and tourism
sector, as they are somewhere linked to them in many ways, terrorism also lays an Impact on
these sectors too, some social and cultural differences and barriers also effects these industries.
This essay will include four fundamental global issues that should be considered by the Tesco
which is the third largest retailing company of UK.
MAIN BODY
Tesco PLC is a British retailer of multinational groceries and general merchandise, which
currently has its headquarters located in Welwyn garden city, London. The company follows a
hierarchical structure of organisation because of its wide range of operations and functions
running globally. Tesco believes in delivering the best of its quality and class through its
products to the targeted customers. The company also offers the online shopping of groceries,
brick and mortar supermarkets, food chains etc. Tesco has a well known reputation in the eyes of
its customers as they work on their policies and stays dynamic according to the shifts in
consumer's tastes and preferences(halid, Okafor and Burzynska, 2021). The organisation also
focuses on building the healthy relationships with their employees and customers. This essay will
have a detailed description of four fundamental and global issues that is considered by Tesco
plc, before contributing into the new international operations. Covid 19 is the first and the major
issue that has caused a huge impact on the business environment. The world has to faced a lot of
difficulties and sufferance due to the pandemic. With the increasing issue of pandemic, various
restrictions and legal regulations were imposed which has effected every single factor of the
economy, as various trade restrictions and medical concerns were increased. Tesco has a large
and reputed presence in the western Europe and Britain as well, one of the noticeable positive
impact of the pandemic on Tesco that it has expanded its online grocery shopping business to a
great level which has benefited the company in many ways, as due to the pandemic every one
was more reliable on the use of technologies and online shopping was considered much safer and
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easier, due to the outside restrictions and the breakdowns caused by the COVID 19. so the
company has experienced a gradual increase of 9.2% in their sale of year 2020 in comparison to
that of 2019. Tesco has also mobilised its network logistics in united kingdom by increasing the
delivery slots. With the positive impact mentioned above, the company has also suffered from
the negative ones too, as the profits of the company were declined by 892 million pounds,
because of the global pandemic compared with the previous year before the pandemic occurred
which acted as the major recession period for the company. It has also hired around fifty
thousand workers due to the spread of operations and tasks post COVID 19 (Kwok and Koh,
2019). Tesco has always believed in offering the excellent potential efforts in terms of rendering
the goods and services demanded by the customers. The company has also simplified its
hierarchical structure to an extent by reducing the number of employees working over there.
With the leap of time after the situation is improved, Tesco has also showed a sudden growth in
the market, as they improved their pricing policies and focused more on differentiation strategies
so as to stay a stand out and a unique competition in comparison to its competitors. It also offers
great schemes and discounting facilities so as to keep the customers engaged with their
organisation, along with that it has also opted new and up graded technologies within the
organisation so as to make efficient and effective use out of them within the organisation. Tesco
has been 'Recast' in the eyes of the general public by adapting new challenges and changes after
the COVID 19 global pandemic. Moving further, the cultural barriers is also considered s an
issue from the perspective of business when entering into the international industries.
The term cultural barriers are defined as the the barriers, which is caused and arise by the
misunderstandings, misinterpretation caused by the different culture and their backgrounds. The
communication is termed as an important cultural barrier which can effect the people in many
ways, as the languages, symbols and the way of expressions differs from person to person. The
Cultures also gives rise to prejudices, opinions, protests and manners. it has announced by the
Tesco that it has closed its American stores due to the growing cultural differences, it was also
said that Tesco and the Americans didn't understood each other, The company had initiated a go
for the US market by opening a chain of supermarkets, namely fresh and easy which did not
appeared to be successful when compared to the chain of united kingdom, as the customer's
preferences and behavioural pattern was very different, also their expectations were quite varied
from that of UK based customers, as a result, it closed the chain of fresh and easy supermarket
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chain from California Nevada and Arizona respectively. Tesco can overcome its cultural barriers
by interacting more with its customers, they can encourage this step by using the social media
platform which also help them in getting the feedbacks of the customers regrading their products
and services rendered at a particular region or an area, some social media campaign and fun zone
interrogative session can also be conducted so can different customers from various region and
culture can participate actively during all these activities and can socialize with each others and
with the employees too.
The third factor, which should be considered by the company is the managing of global
workforce (Monte,2021).
As Globalisation of the workforce is an important part of an organisation. The company
should analyse the various new organisational changes it can adapt which can increase the scope
of the workforce management. In this factor, the managerial focus is on how to manage the
overall workforce of the company by which the productivity and the efficiency of the workers
can be increased and they can become more flexible in adapting the new changes before entering
into new market and opting new policies. Some challenges faced during the maintenance of
global workforce are, Talent gaps and conflicts of interests. As the talent gap is one of the
biggest challenges of the HR department. In this term, the management team has full focus on
attracting and hiring a potential candidate for the vacant position available in the organisation,
which is well skilled and performs in the best of his\her potential. The HR team encourages the
search of an unique talent within the organisation and also fills the gap between the talent and the
talent system. The second point is related with conflicts of interests, as when the organisation is
having a global presence , than the integration of markets also become a challenge. The local and
the global market differs from each other in various conditions, as the local market has a focus
on the small sector targeted customers and when talking about globally, the focus divides on
different sections like resources, technologies and also on attracting the customers from different
regions and cultures globally, so as to increase its range and productivity.
According to Tesco, it has implemented a global workforce management platform by
adding the Red prairie's management application system on its retail stores which are across
around 13 countries as Tesco is facing many problems in managing its global workforce because
it is expanding into many countries and it is also adapting new technologies and operational
systems to reduces the customer traffic with employee scheduling. The company has chosen the
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red prairie's application because it provided the best system of scheduling that help the
organisation in different formats. It has also helped them in assisting the shopper by encouraging
their efforts to improve the customer's experience. This workforce management system includes
the time and attendance, forecasting of business operations, planning for the performance of
future tasks through the different activities based on the computer based training. The last global
issue that effects the business operations and management is related with the legal compliances
which is faced by the companies in order to leap into the international sectors of business. As the
complexity and the uncertainty of laws and regulations lays down a great impact on the
company(Bryson COVID-19). In order to stay in the long run the company should understand
the legal formalities and rules which can acts as a challenge in performing business activities and
also they should develop the various approaches for engaging with the regulations. The company
also faces the difficulties in implementing a governance structure to ensure the senior
management is moving along with opting the regulatory compliance. The companies should
consider the different factors in mind such as ownership, shareholders agreement, partnership
agreements and intellectual property(Syedand Tariq).
The legal challenges with respect to Tesco can be explained as it has faced a problem in
accounting errors and audits and also the UK regulations are somewhat strict and restricted.
Besides the national governance codes and other committees, which regulates and encourages the
corporate agenda, the multinational companies like Tesco should be aware of the similar norms
at the international levels. As this will overlap the further provokes in the complex corporate
structure. The whistleblower is anyone who is considered to be aware about the insights of the
illegal business activities occurring within the organisation. They can be employees, suppliers,
clients or any other member working within the organisation. The whistleblower at the middle
of the accounting scandal has committed that he personally commissioned the analysis in detail
of the alleged profit manipulations. The serious fraud offices has also permitted to investigate
about the accounting practises organised and running on in the organisation in 2014. Tesco
stressed upon the whistleblower mechanism, criticism surrounds the efficiency of the company.
Later on the problem has been resolved by the firm and also the enforcement gaps has been
reduced(Bonetti,Perryand Quinn, 2018). It has also improved the annual reports of accounting
results and audits, so as to move along with the contemporary laws and legal norms prevailing in
the society. Thus no company can be exempted from the challenges of legal and regulatory
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overlap, they have to pay attention to the most fundamental errors and other factors related to
legal compliances so as to improve the allocation of corporate resources by maintaining a good
position in the located surroundings to accomplish the targeted goals by being well reputed
too( MuhamadSalleh,and Kasim,2018).
CONCLUSION
The essay contributes towards the global issues that are faced by the business and the tourism
sector, in order to enter in the new operations and the industry of international sector of business.
Further more, the various global issues are stated which challenges the Tesco company which is
one of the most popular and well established retailer of general merchandising, groceries and
households in United kingdom. As the company follows the tall structure of management, and
also it has its operations running in different countries, it has to face many challenges within the
layers of management in the organisation and external factors and issues like, cultural barriers
such communication, language and expressions, managing of the workforce globally as the
company is operated in 13 different places which makes it a bit difficult to promote the
efficiency in the tasks and operations performed and the last one is concerned with the legal
compliances , which effects the company's productivity and the functional abilities in many
ways, so in order to ensure a good position in the eyes of general public the company must
follow the rules and regulations imposed by the government.
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REFERENCES
Books and Journals
Bonetti, F., Perry, P. and Quinn, L., 2018, April. The digital revolution in fashion retailing:
examining managerial processes and challenges in the adoption of consumer-facing in-
store technology. In 20th Annual Conference for the International Foundation of
Fashion Technology Institutes (pp. 205-213).
Bryson, J.R., COVID-19 and the immediate and longer-term impacts on the retail and hospitality
industries.
Khalid, U., Okafor, L.E. and Burzynska, K., 2021. Does the size of the tourism sector influence
the economic policy response to the COVID-19 pandemic?. Current Issues in Tourism,
24(19), pp.2801-2820.
Kwok, A.O. and Koh, S.G., 2019. Is blockchain technology a watershed for tourism
development?. Current Issues in Tourism, 22(20), pp.2447-2452.
Monte, A., 2021. A study of value chain reconfiguration processes under Covid-19 pressures: the
case of Tesco PLC in the United Kingdom.
Syed, J. and Tariq, M., Oxford Research Encyclopedia of Business and Management.
Yeh, S.S., 2021. Tourism recovery strategy against COVID-19 pandemic. Tourism Recreation
Research, 46(2), pp.188-194.
Muhamad, H., Salleh, A. and Kasim, N.A.A., 2018. Manner Ethics Addressed in Existing
Accounting Curriculum. International Journal of Academic Research in Business and
Social Sciences, 8(12).
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