Management and Operations

MANAGEMENT AND
OPERATIONS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO 1.................................................................................................................................................3
Comparison of characteristics and roles of managers and leaders..............................................3
Analysis of leadership and management on the basis of theories...............................................4
LO 2.................................................................................................................................................5
Function of leaders and managers in different situational context..............................................5
Models of approach and theories for leadership and management..............................................6
LO 3.................................................................................................................................................7
Operations management and role of leaders and managers.........................................................7
Significance of operations management in achieving business objectives.................................9
LO 4...............................................................................................................................................10
Factors affecting decision-making and operational management.............................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Operations management refers to the administration of organisational practices concerned
with organising, planning, designing and supervising through leaders and managers. It aims at
converting materials and labour into goods and services in order to maximise the efficiency of an
organisation in attempt to balance costs and attain high operating profits. This report aims to
assess the management and leadership practices of Tesco PLC; a British multinational
supermarket chain and one of the largest retailers for grocery and merchandise headquartered in
Hertfordshire, England. The report will provide a critical analysis of models and theories of
leadership qualities and management skills. Insights on operational management within Tesco
plc, its significance in attaining business objectives, role of leaders and managers in operational
management and description of their relationship in contemporary business environment.
LO 1
Comparison of characteristics and roles of managers and leaders
Managers are the key employees of the organisation who manage and design the
operations of the company in the direction of pre-determined objectives. They oversee the
department or group of workers and develop relevant policies and strategies to improve
productivity. Managers are assigned on various levels and departments in Tesco. Their
fundamental job is to plan, organise, supervise and develop the employees along with
coordinating various activities within the company. They are assertive, knowledgeable, reliable,
confident and have the ability to handle pressure, recognise good work, get the work done, and
build a mutual trust with employees (Hales, 2019).
Leaders are the key people of the company who inspire the rest of the employees and are
primarily responsible for setting business objectives or designing the targets, policies, goals and
leading the way for productivity. They motivate people to achieve organisational objectives
through effective communication and leadership skills like empathy, humility, positivity,
delegation, resilience and being visionary (Afrianty, 2020).
Management and leadership are complementary to each other and linked in context of
qualities and characteristics. Leaders motivate and inspire whereas managers plan, organise and
coordinate. The skills of a manager or leader are not exclusive in nature. A leader who can only
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possesses leadership skills may be ineffective when it comes to scheduling employee vacation
time, checking time cards, finishing employee reviews, and other things that workers require
managers to do on periodical basis. Similarly, a manager who spends all the time reading reports
or only completing paperwork may lack a developing relationship with their employees. The
similar qualities of leaders and managers are leading, perseverance, empathy, supervising,
decision-making, problem solving etc.
Differences between Leaders and managers:
Leaders Managers
They chart a course to provide direction They do the planning and budgeting
They provide the guidance and counsel They undertake organising and staffing
People tend to follow their example and
consider them a role model
Managers follow the orders of the superiors
and implement it in the company
Motivation and inspiration of employees Solving problems and controlling activities
Creates environment for change and
development
Maintain control and order
Build trust and relationships They aim at protecting the status quo
Strategic orientation Technical orientation
Analysis of leadership and management on the basis of theories
According to contemporary management theory, there is no best method to organise or
lead a company and make decisions (Kulkarni, 2017). It focusses on optimal course of action
which is contingent for external and internal situations. For Tesco, the role of leaders is to
analyse the scenario of the company along with production, retail, demand and supply and set
visionary goals that are best suited and attainable as per the existing market situation. The
managers, on the other hand, have to focus on delivery of operations, effective implementation
of the strategies for maximising profit and control and supervise the supermarket chains
effectively. As per classical management theory, the workers of Tesco have economic and
physical needs and doesn’t count job satisfaction or social needs (Nicotera, 2019). It advocates
focus on labour, centralised leadership, maximisation of profit and decision-making. According
to this theory, the leaders of Tesco are responsible for taking centralised decisions and take care
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of the needs of the employees along with inspiration and motivation by making them a part of
the decision-making process of the company. The managers have to supervise the employees and
get the work done effectively to ensure productivity along with solving their problems and
addressing to their needs. The behavioural theory of leadership concentrates on the study of
particular attributes of a leader as the behaviour of a leader is the predictor of influences the
employees and determines the success (Ketprapakorn and Kantabutra, 2019). The leader in
Tesco has to model the internal behaviour policies as it will be followed by the rest of the
employees. The organisational environment and behaviour of the leader will impact the
operations directly. From the management perspective, managers have to be responsible for the
implementation of code of conduct such as health and safety, punctuality, diversity etc. The aim
of both leader and managers is to minimise the risks and control the situation.
LO 2
Function of leaders and managers in different situational context
Both leaders and managers are aimed towards achieving organisational success, customer
satisfaction and attaining organisational goals and objectives. Fundamental functions of leaders
and managers are designing or planning, controlling, organising, coordinating, staffing,
measuring etc (Bush, Bell and Middlewood, 2019). But the role and function can differ
according to different situation in Tesco.
Situation 1: The top management at Tesco decides to improve brand loyalty.
The role of a leader in this case would be to develop strategic policies and action plan
taking into account both micro and macro business environment. As customer satisfaction
primarily determines brand loyalty, the leader has to make certain of the quality of products and
services by coordinating all activities and operations like sourcing, logistics, supply chain,
distribution, finance, marketing; and guide and inspire employees along with seeking other
functional areas. On the other hand, a store manager’s function is to plan, organise store
activities, direct employees, train/coach them, control sales assistants to ensure customer’s ease.
The manager will act as a controller and guide for all store related activities.
Situation 2: Tesco aims at cost reduction for improving profitability.
The role of a leader in this case is to evaluate and analyse the activities of Tesco to fix
high cost operations for reduction of cost. The leader will partner up with low cost suppliers,
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lower the production or distribution cost and lay a vision for the company to effectively meet
objectives. The store manager will reduce sales and service cost along with the remuneration and
salaries of the employees in a way that employees don’t become dissatisfied. The manager will
evaluate performances and identify lowest productive workers and eliminate them from the job
or provide training etc.
Models of approach and theories for leadership and management
The contingency theory states that that effectiveness of leadership depends upon various
situational factors such as the nature of the work, personality of leader or composition of the
group and that no particular leadership style is the best. In Tesco Express stores, few leaders and
managers follow authoritative leadership style as the employees work productively. The stores
specialise in food items of high margin segment and employees work best under established
guidelines and orders that lead to attainment of objectives timely. The Tesco Superstores which
are large organisations, follow a democratic style leadership as there is high number of customer
interaction and employees want flexibility in dealing with them (Otley, 2016).
Situational theory of leadership is practiced by those leaders who adopt various styles
of leadership according to different situations and development level of employees or team
members. The four styles of leadership are telling, participating, selling and delegating. Telling
is used for directing the employees about their tasks and how to do it. Selling is adopted by
leaders and is a back-and-forth between workers and leader where leaders sell their ideas to get
employees buy into the process. Participating approach is used when leader wants active
involvement of team members in decisions and coming up with ideas. Delegating is practiced in
situations of hands-off approach of leadership where group members makes most decisions and
are responsible for their actions (Thompson and Glasø, 2018).
The fundamental principle of system leadership theory consists of formal and informal
company structure, policies, procedures for leadership functions. The main mechanism is to
conduct, execute and communicate decisions. It uses set of capacities and skills that individuals
and company can use to catalyse, support and enable processes at system-level change. It
encompasses collaborative leadership, building coalition and insights into systems for mobilising
action and innovation across decentralised network. Tesco uses this approach for the selection
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and training of employees, mainly sales assistants and credit managers. In context of Tesco’s
operations, system leadership has proven to be quite effective (Arena and Uhl-Bien, 2016).
Task Leadership theory refers to assignment of responsibilities to team members for
enhancing efficiency. It is a behavioural approach where leader concentrates on the tasks that
have to be performed according to certain standards. The leader has to ensure that each member
understands their job role and lets leader develop a timeline (Henkel, Marion Jr and Bourdeau,
2019). Clarity in assignment of tasks and required deadlines have to be established. In the sales
department of Tesco stores, leaders follow a task based as well as a relationship-based approach
for maximum productivity of workers. Relationship oriented leadership focusses on
motivation, satisfaction and wellbeing of team workers. The Tesco stores focus on interaction
facilitation, positive relationships, casual interactions, communication which lead to individual
impact and has a positive effect on self-efficacy of employees.
Tesco is inculcating new leadership styles like transformational leadership to focus on
how leaders can create positive and valuable change for the team members with the aim to
develop them into leaders (Galli, 2019). The succession planning methods of Tesco is extensive
when it comes to fostering talented employees and making them the leaders and team handlers of
tomorrow.
LO 3
Operations management and role of leaders and managers
Operations management is the administration of organisational practices concerned with
organising, planning, designing and supervising through leaders and managers. The objective is
converting materials and labour into goods and services in order to maximise the efficiency of an
organisation in attempt to balance costs and attain high operating profits. The retail operations at
Tesco include activities of store management like employee management, store layout, supply-
chain, cash operations, inventory management, promotions and pricing policies and tactics,
master data management etc.
Different operations management approaches:
 Six Sigma (6σ): This theory was established by Bill smith in 1986 and was adopted to
improve the quality of process output by minimising the impact variability of business
process and production along with reducing the causes of defects. Leaders create visionary
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targets and objectives and initiate the approach in the organisation. Managers implement
those targets and motivate people to use six-sigma in every step of the retailing process.
Tesco adopts this method in its stores through leadership and management for specific
value targets like reduction in costs, increasing customer satisfaction and reducing
pollution.
 Lean production: This approach to management concentrates on cutting out waste while
ensuring maintenance of quality and is applied in aspects like production and distribution.
This helps in minimising activities that don’t add any value to the process like stock
holding, repairing faulty things etc. Leaders inspire the employees to reduce the wastage in
the organisation and laed the way by setting examples to the relevance of quality. Managers
control and measure if the approach is being followed properly by the employees. Tesco
uses this technique in few stores like Tesco Express to reduce the waiting time through
efficient equipment (Antony, Snee and Hoerl, 2017).
 Principles of Total Quality Management (TQM): This is a scientific approach
revolutionised in 1950s in Japan as it relied on facts rather than opinions and long-term
success through customer satisfaction. In this approach, all members of Tesco participate in
enhancing products, processes, services, and organisational culture. The principles that are
followed are: leadership, customer focus, process approach, factual approach to decision
making, system approach to management, involvement of people, continuous improvement
and mutually beneficial relationships with suppliers. The leaders of Tesco use the
philosophy of quality management and goes to the extra length for quality of customer
satisfaction and inspire the workers to follow the approach. The managers undertake the
technical aspects of the work and inculcate it in every departments, making sure the
workers are following it. The company provides a wide range of high-quality products and
services within its supermarket chains and ensure they are free of waste, defects and
accidents. The strategies used by the leadership and management involves efficient human
resources where staff attends a periodical meeting to meet the primary agenda of TQM and
discuss techniques to integrate or adjust business functions to attain quality. Tesco also has
a quality management team for weekly review of quality maintenance (Pambreni and
et.al.,2019).
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 Just-in-Time Inventory: This management strategy aligns orders of raw material from
suppliers directly with schedule of production. This is an inventory system strategy which
increases the efficiency of management and reduce the wastage by receipt of goods as
needed in process. The managers have to forecast demand accurately and produces hold
adequate stock to have enough goods to meet the maximum level of demand. The retail
industry especially benefits from this if the leadership and management implement this
technique in the company (Lai and Cheng, 2016).
 Kaizen: This is a Japanese term meaning ‘change for the better” and the approach focusses
on continuous improvement in operations and involvement of all employees. Kaizen views
improvement as a methodical and gradual process and has various ideas like creating team
atmosphere, enhancing everyday procedures, making small yet regular changes, inculcating
employee engagement, making workplace safer and less tiresome etc (Erez, 2016).
Leaders set the vision to make the organisation a kaizen-based workplace while the
managers ascertain the daily routine of employees by initiating tasks and programs and
implementing policies for adoption of the technique.
Significance of operations management in achieving business objectives
Operations management plays a primary role in companies as they make professional
managers capable of attaining the strategic goals and objectives of the organisation within a
defined period. Operations management controls the entire system of the company. The
fundamental functions of operations management are to address the areas of Control and
Distribution Systems, Process design, Capacity management, Transformation of raw material
into finished goods/services, Scheduling and Logistics/inventory management. It handles
problems of design, maintenance, operation, improvement in the systems of the company used
for the production, distribution and retailing in the company. There are clear responsibilities
regarding this in management and leadership functions of the company in various departments
like marketing and finance and is essential in managing the regular activities. Though operations
management, the company makes better use of their resources such as human resources or inputs
are utilised optimally (Reid and Sanders, 2019).
Operations management helps the company in attaining high revenue for profit
maximisation and high net operating profits along with maximization of shareholders. Cost of
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production can be reduced for this and also to ensure physical and intangible resources are not
overutilized or wasted. Another significant aspect of operations management is the focus on
quality management. There are various techniques like TQM, just-in-time, Kaizen, Lean
production which help organisations in improving the quality of the products and services,
reducing bottlenecks, detecting defects, minimizing faults, errors and risks, waste reduction,
pollution free operations, timely operations, innovation approaches for customer satisfaction etc.
This also includes adoption of benchmarking, reengineering, outsourcing, and implementation of
technology has led quality management to advanced levels (Salam, Panahifar and Byrne, 2016).
Few approaches to Tesco’s organizational coordination and control include product
distribution, product development, product evaluation, promotions, advertisement, sales and after
sales service. The supply chain management in Tesco enhances its purchase process, adopts
RMA processing system for effective customer relationship management, reduces process
bottlenecks, starvation and blocking. Financial evaluation metrics contains order management
cost, customer service cost, customer orders, reserving inventory, credit check, consolidating
orders, processing inquiries and quotes, finished goods warehouse cost of storage, receiving,
picking, and shipment of finished good products. In Tesco, benchmarking is considered a good
internal auditing process where the company identifies its weaknesses, finds gaps in its
performance and ability to attain targets. The company then converts its weaknesses into
strengths by improving the issues over a period of time and aim at increasing its market share
and customers. Management and coordination go hand-in-hand and operations management
helps in aligning all departmental activities for effective control and adopting a systematic
approach to attain business objectives (Choi, Cheng and Zhao, 2016).
LO 4
Factors affecting decision-making and operational management
The contemporary business environment of Tesco consists of internal and external factors
like resources, market trends, political climate, finance and technology. These factors impact the
decision-making process and operations management done by leaders and managers within the
organisation and impact the achievement of organisational goals. Financial status of Tesco
influences major decisions like marketing budget, remuneration to employees and final cost of
products and services which leaders and managers of the company have to strategize. Resources
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of the company such as human resources, physical resources, intangible resources influence the
operations and processes. Market trends also impact the way company decides its product
placement, advertisements and addressing the needs of the customers. Stakeholders consist of
employees, investors, suppliers, customers and aligned government institutions who invest in the
company only when their desired interest is taken care of, therefore the management has to take
decision in their retail operations where the interests of the affected party is taken care of. Legal
and political changes can directly affect the decisions and conduct of Tesco. Brexit has
impacted the operations of the company as there are high import restrictions from other countries
of the EU and supply chain has been distorted. The legalities such as food standards, consumer
protection laws, employee legislations impact the remuneration strategies, policies and code of
conduct of the company. Technological advancements help the company in easing its operations
within departments and across stores where the leaders and managers can plan and forecast the
needs and requirements. The adoption of RFID technology for specialist smart tags for
merchandise in multiple stores and going omnichannel were decisions taken by the leaders and
top management in Tesco to cope up with the changes in technology (Zinovieva and et.al.,
2016).
Business environment factors affecting wider community
Culture: Preservation of the local culture of a place which to stop disruption by the passage of
time, and helps the organisations to promote themselves as socially responsible institutions
working for the betterment of culture and community. The company operates in a way that is
satisfying the needs of the community and culture like refraining from offensive marketing
tactics in order to maintain the culture (Rao and Tilt, 2016).
Values: The values of a society are preserved so that the company can aim at promoting their
products and services for customer satisfaction even if the values and beliefs of customers are
different. It creates a sense of responsibility in the organisational environment and market.
Ethics: The ethical standards have to be maintained by the company at par with general business
ethics to promote transparency and ensuring customers use and choose the right products. The
leadership and management have to take care that their decisions adhere to the ethics and have to
aim at remaining loyal, responsible and concerned about the welfare of the stakeholders. It also
helps to build brand loyalty and goodwill (Ferrell and et.al., 2019).
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Sustainability: The leadership and management decisions in the operations of Tesco have to be in
line with the sustainability of operations. The company has to ensure optimal utilisation of
resources and they have to work towards reducing pollution by adopting eco-friendly methods,
practice appropriate waste disposal, and reduce their environment impact and carbon footprint.
CONCLUSION
From the above report it was concluded that both leadership and management of Tesco
has contributed to the success of the organisation. Managers are the key employees of the
organisation mange the company in the direction of pre-determined objectives. Leaders inspire
the employees and are responsible for setting business objectives, policies, goals and leading the
way for productivity. Leadership and management are complementary and must go hand-in-
hand. Various models of approach and theories for leadership and management like situational
leadership, contingency theory, systems leaders, task and relationship-oriented leadership were
assessed. Different approaches to operations management in context of Tesco were analysed
such as TQM, just-in-time, Lean production, Kaizen. The factors affecting the decision-making
in contemporary business environment of Tesco were identified and its affect on wider
community like culture, ethics and sustainability was evaluated.
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Online
Introduction to operations management, Carter Mcnamara, 2020, Available through:
<https://managementhelp.org/operationsmanagement/>
Leaders and managers at Tesco, hr elements, 2015 Available through:
<http://www.hrelements.com/wp-content/uploads/2015/09/761-tesco-developing-
appropriate-leadership-styles.pdf>
Tesco official site, 2020 Available through:
<http://www.hrelements.com/wp-content/uploads/2015/09/761-tesco-developing-
appropriate-leadership-styles.pdf>
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