Leadership Practices at Tesco: A Case Study

This report summarizes the leadership practices identified in Tesco, including leadership styles, challenges, and development activities that minimized problems or issues within the organization. It concludes with providing proper recommendations to enhance leadership practices and increase overall efficiency and effectiveness of the company.

Leadership Theory

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
General Overview of Tesco's activities.......................................................................................1
Overview of leadership practices, styles, challenges and development activities within the
organization..................................................................................................................................2
Strengths and weaknesses of leadership styles and impact on organizational performance.......5
Recommendations for improving leadership practices................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Leadership is a key element in effective management where all forms of leadership are
important for organizations, ranging from senior management to first-line management.
Regardless of whether you have a small or large organization, effective leadership is very
important. When leaders are effective, employees are dedicated, motivated and strongly
represented. This report includes the overview of leadership practices within the Tesco which
identifies the various challenges and issues affecting the performance of the organization. It also
analyses the strength and weaknesses of leadership styles used in organization and also shows
recommendations on how to maximize organizational effectiveness.
MAIN BODY
General Overview of Tesco's activities
Tesco is a large retail store in the tertiary sector that specializes in food and beverage
production. They buy all of their products directly from the manufacturer, with the exception of
the bread they make themselves. Following are some main features and business activities of
Tesco and their specialty products are food and beverages. Tesco sells a variety of foods at very
competitive prices such as organic, low-fat, and foreign foods. Tesco responded very quickly to
changing the taste of food and now sells many Indian food products i.e. Curry, which today is
one of the most popular dishes in the UK. Their main activity is selling products to the public,
such as supermarkets (Andersen, 2015). They have a grocery store, bakery, butcher and are also
sold every day as frozen food, drinks, cans, toys and other household appliances and their
customers are only communities that live on location and need to make weekly or daily
purchases. Tesco also offers other services that are not part of its core business and this includes
sales of electronic goods, books, pharmacies and furniture, gardening tools, broadband access,
ringtones and games, telephone contracts, and photo centres. They also carry out all types of
insurance such as home and life insurance.
Tesco is a customer-oriented company and the aim is to offer products that offer added
value and high quality services to their customers. Tesco wants to win new customers, but also
satisfies their current customers. Customer loyalty is a cost-effective strategy for business
development because satisfied customers are good advertising for business. Tesco has a market
share of more than 30% in the UK food market, which is almost twice that of its closest
competitor. In fiscal 2009/2010, Tesco produced £38.6 billion in the UK and employed more
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than 280,000 people. It is very much important for Tesco to have very skilled and qualified
workforce in all role so that it could be maintaining its market position. There are variety of
range of responsibilities which are like that of marketing, branch operation, supply chain
management, human resource management and business development. Every department of
Tesco would be requiring to have proper management and leadership skills. There is specified
goal for improvement of leadership skills for their employees within company which could
include that from customer assistants, administrator and board of directors. While in case of
developing the workforce of Tesco there will same at all levels of company.
Overview of leadership practices, styles, challenges and development activities within the
organization
Leadership practices
Leadership is related to the influence, motivation and inspiration of people. It's about
training and developing people, respecting them, but challenging them. Managers strive to build
strong teams with people who are committed to the overall goals of the organization. Tesco's
leadership framework not only defines skills and competencies, but also personal characteristics
and behaviour that await executives (Anderson and Sun, 2017). Tesco is looking for managers
who are positive, confident and real, and who can inspire and nurture their team.
Leadership style
Leadership styles can vary depending on the task. For some managers, teams can be
responsible for many tasks. The team leader sets goals, but team members can decide how to
achieve these goals. It has several advantages such as it helps in motivating individuals in the
team and is based on the experience of team members. The leadership style can be explained on
a scale from autocratic to democratic.
 Autocratic leadership - This type of leader will only be giving only clear instruction to
their subordinates and employee so that they could do their work according to set
guidelines. While on other hand in this situation workers would be losing their talent or
new ideas as their contribution will be ignored. Autocratic type of leadership is very
much appropriated at time when there is very urgent piece of work or when company is
undergoing its crisis period. It could be noted that Stephen is known to as the middle
manager for Tesco who is working from past 10 years and is working in Tesco
Foundation education. He is also leading a team of about head of 20 departments of
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company who are comprising of 300 members. His leadership approach is always
allowing his managers to take their own decision which is related with operations. He is
that much capable of taking all control of his responsibilities and roles so that Stephen
could take coordinate response.
 Democratic leadership – it is considered as one of the best approach in leadership that
the company will involve to take the decision by taking the help of other members in the
team. It includes to manage the work and the program is being arranged by the managers
of Tesco so the employees ca also take the part in the context of decision making and at
the same they are free to give their opinion. In Tesco program manager is responsible and
accountable for the skill and trainings of the employees. In Tesco manager use the
democratic approach to give the trainings and development through the timeline and
budgets. They were always trying to make the business cost effective and at the same
discuss their suggestion and empower the team that are ultimate responsible for the
budget of final project.
 Laissez-faire leadership - Laissez-faire is at the other end of the autocratic spectrum.
Immoral managers take a practical approach and believe that the team makes decisions or
actions that are in accordance with widely negotiated boundaries. For example, Martin
can leave an experienced department head to make a budget. This may be due to the fact
that managers know the needs of the department and company well.
 Transformational leadership - One of the most popular leadership theories is the theory
of transformational leadership. Tesco's success was announced with the appointment of
Terry Leahy as Chief Executive Officer (Leadership Style at Tesco, 2011). Leahy is
considered a visionary and leads the company to a series of organizational changes aimed
at making the company more customer-focused and developing the company's workforce.
Terry Leahy is respected as an excellent leader and it was reported that Leahy believed
that the success of a leader depends on maintaining a satisfied workforce.
Leadership challenges
Tesco's main strategic problem is that it is not clear who will be there as supermarkets are
among more luxurious offers from Sainsbury and Waitrose and discounts on Aldi and Lidl.
These concessionaires have been putting pressure on large supermarkets in the UK in recent
years, and critics say Tesco has failed to lower prices early enough to compete with German
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brands. Tesco has long been known for its wise business approach and supermarkets focus on
high growth, fast expansion, and cheap offers.
 Lack of communication - The ability to communicate clearly with the surrounding
people is one of the most important qualities of the leader. But it's not as easy as it
sounds. Most executives feel a mismatch between them and their team.
 Conflicts - The biggest challenge for the leaders is that most of them cannot only resolve
conflicts but even exacerbate conflicts and make the situation less profitable.
Leadership development activities
 Training at work - Companies must realize that the most important place where leaders
need to learn is work and leadership. In order for companies to help executives learn
within organizations, educational institutions need to be established within the
organization. Companies need to hire trainers to train and develop leaders in various
countries and places where Tesco operates. Organizations need to establish a corporate
education department, located in the HR department (Ford and Harding, 2018). Business
Leadership Development (BLD) must be established in business education. The group
will focus on executive development and the development of general leadership and will
also be responsible for all leadership-specific training. The development of corporate
governance must be used to create systematic opportunities to improve the capabilities of
Tesco business leaders. The focus of the BLD process must be on creating opportunities
for the development of important transition moments in people's careers.
 Leader sponsors - Another strategy for developing effective leadership is sponsoring.
Through sponsors, senior managers at Tesco will promote and actively participate in
leadership development. One example of the lead sponsor's activities is the inclusion of
leaders in conferences to manage and facilitate dialogue sessions under the Leadership
Development Program (Ruben and Gigliotti, 2017). Senior executives can also facilitate
discussions in the panel. Through sponsorship, successful Tesco executives can share the
characteristics, abilities and characteristics of effective leaders and share them with future
leaders.
 Development and review of leadership - To identify, evaluate, and develop future
leaders, Tesco needs to provide a list of competencies needed to become an effective
leader. This competency can be used as a criterion for developing leadership qualities.
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This criterion also helps in providing content for the executive and executive assessment
process through activities such as self-assessment, multi-point feedback, and assessment
simulations. They will help identify and qualify external resources for leadership
development.
Strengths and weaknesses of leadership styles and impact on organizational performance
Autocratic leadership Strength - A kind-hearted autocrat, who is very dependent on positive influences, uses
gifts and incentives to harmonize his subordinates with organizational goals.
 Weaknesses - Rigorous autocracy, mainly relying on negative influences, uses the power
of fear and punishment to bring subordinates to organizational goals.
Democratic leadership Strength - Democratic leadership is one of the most effective leadership styles because it
allows lower level officials to exercise authority, which they must use wisely in the future
positions they can take.
 Weaknesses - Because participation takes time, this style can make things slower than the
autocratic approach, but often the end result is better (Grandy and Sliwa, 2017). This may
be most appropriate when teamwork is very important and quality is more important than
market speed or productivity.
The appointment of Terry Leahy as CEO of Tesco marks a new era for the company.
Leahy adjusts the style of participation, gives voice to employees in the decision-making
process. The Chief Executive also stressed the importance of appointing many leaders in the
organizational process. As a result, the organizational structure becomes smoother, with clear
roles and responsibilities. Leahy delegates leadership roles to organizational employees to ensure
that the company works effectively with more than 300,000 employees (Swanwick and
McKimm, 2017). The leadership style shown by Terry Lee and imitated by company executives
changed the company's structure. The company has adapted organic organizations. An organic
system is characterized by low use of formal and regulatory rules, distributed and shared
decisions, work responsibilities are broadly defined and flexible structures with little to moderate
hierarchy of authority. Organic structures are more suitable for organizations that need to be
innovative. The pressure to innovate implies a structure that can respond quickly to
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environmental changes so that it is certainly not clear and flexible and organization tend not to be
formalized as their roles are not too structured.
Recommendations for improving leadership practices
Tesco's leadership program must do the promotion of self-examination and reflection and
in this way, employees can assess their strengths and find ways to show characteristics that are
important for long-term business development.
 Determine and communicate vision - Tesco must have a vision which is brilliant and
ambitious leadership strategy that describes the future of their business.
 Employee recognition - Employees want to feel valued. They want to feel valued. It
conveys a sense of commitment and dedication (Tourish, 2019). When individuals and
teams work out expectations to achieve extraordinary results which are a source of joy
and appreciation for ongoing commitment to the organization's vision, mission and goals.
 Delegate and strengthening - Perhaps the best strategy for engaging team is to allow it
to delegate more responsibility and it's nice to be held accountable.
 Establish relationships - These leaders not only recognize team members who have
great potential, but also voluntarily and selflessly adjust their training to what is really
needed by special demonstrators and encourage employees to look for new opportunities.
 Coaching - Group sessions and team meetings are great for collaborative style
conversations. However, over the years, Tesco found that one-time collaboration with
team members is very important.
CONCLUSION
From the above report it had been summarized that leadership practices identified in the
Tesco affected the performance which includes leadership styles, challenges and development of
activities which minimized the problems or issues occurring in the organization. At last, it
concluded with providing proper recommendations to enhance the leadership practices and
increasing overall efficiency and effectiveness of the organization.
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REFERENCES
Books and Journals
Andersen, J. A. (2015). Barking up the wrong tree. On the fallacies of the transformational
leadership theory. Leadership & organization development journal. 36(6). 765-777.
Anderson, M. H., & Sun, P. Y. (2017). Reviewing leadership styles: Overlaps and the need for a
new ‘full‐range’theory. International Journal of Management Reviews. 19(1). 76-96.
Ford, J., & Harding, N. (2018). Followers in leadership theory: Fiction, fantasy and
illusion. Leadership. 14(1). 3-24.
Grandy, G., & Sliwa, M. (2017). Contemplative leadership: The possibilities for the ethics of
leadership theory and practice. Journal of Business Ethics. 143(3). 423-440.
Roussel, L., Thomas, P. L., & Ratcliffe, C. (2015). Leadership theory and application for nurse
leaders. Management and Leadership for Nurse Administrators. 25-46.
Ruben, B. D., & Gigliotti, R. A. (2017). Communication: Sine qua non of organizational
leadership theory and practice. International Journal of Business Communication. 54(1).
12-30.
Swanwick, T., & McKimm, J. (2017). ABC of clinical leadership. John Wiley & Sons.
Thompson, G., & Glasø, L. (2015). Situational leadership theory: a test from three
perspectives. Leadership & Organization Development Journal. 36(5). 527-544.
Tourish, D. (2019). Is complexity leadership theory complex enough? A critical appraisal, some
modifications and suggestions for further research. Organization Studies. 40(2). 219-238.
Online
Leadership Style at Tesco. 2011. [Online]. Available through :
<http://www.managementparadise.com/forums/foundation-human-skills-f-h-s/221128-
leadership-style-tesco.html>.
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