Organizational Behavior Analysis: A Case Study of Tesco's Failure

This report provides an analysis of Tesco's organizational failure, focusing on the mistreatment of workers and its impact on the company's reputation and financial performance. It identifies key organizational behavior factors contributing to the failure, including ineffective management, procrastination, lack of emotional intelligence, and conflicting objectives. A SWOT analysis is conducted to assess Tesco's strengths, weaknesses, opportunities, and threats. The report further evaluates the company's post-failure actions, such as engaging with the USDAW union and shifting focus to qualitative outputs. The effectiveness of these responses is discussed, highlighting the importance of regaining brand reputation and expanding business scope. The report concludes by emphasizing the need for organizations to prioritize ethical practices and stakeholder satisfaction to avoid similar failures. Desklib provides access to similar case studies and solved assignments for students.

RUNNING HEAD: Organizational Behavior
Organizational Behavior

Organizational Behavior 1
Contents
Introduction.................................................................................................................................................1
Organizational Failure.................................................................................................................................1
Organizational Behavior factors contributing in failure...............................................................................2
SWOT...........................................................................................................................................................3
Post failure actions of the organization.......................................................................................................5
Effectiveness of response............................................................................................................................6
Recommendations.......................................................................................................................................6
Conclusion...................................................................................................................................................7
References...................................................................................................................................................8

Organizational Behavior 2
Introduction
The aim of this report is to provide a brief introduction about the real organizational failure case
and the way in which the company overcome the issue. It is difficult for the organizations to
maintain their consistent image in the environment through their activities, resulting to which the
companies fail in initiating such activities (Hennesssy 2013). The below mentioned report
explains details about the real world business failure, the reason of such failure and its impact on
the stakeholders. Further, it also explains the factors affecting the failure in the company. The
latter part of the report evaluates the post event activities initiated by the organization and
effectiveness of the decisions implemented by the company.
The given paper explains the organizational failure of the company Tesco under which they
badly treated the workers of the company that subsequently reduced their interest in the
organization and made the company pay heavy penalties as well. More details about the report
are discussed below:
Organizational Failure
Allegations were imposed on the company Tesco for badly treating their workers in the market.
The company’s name is defamed in the market because of their malpractices against the worker
of the company. In the year 2013, the company made a pre-tax profit that is of £3.5bn. Some of
the people also pointed out the issue that in the recent years, the supermarket Tesco has started
receiving subsidies from the developmental agencies, central government, European money,
local government and many more authorities. Apart from that, the tax credits have also helped
the company to earn subsidies wage bill as well. The company initially in 2013 announced that
they are aiming to build a large distribution plant in Dagenham. The employees working in US
with the company asked to shift to another plant as they were shutting down the current plant.
They sent all the employees at the Harlow hub of the company. The USDAW was told the same
thing about the shifting of their job in the company Tesco. Further, the company then decided to
pull out themselves from US and change various aspects as well. The Harlow depot of the
company Tesco was working efficiently, still the company aimed to shut it down by making
around 800 people unemployed (BBC 2013).

Organizational Behavior 3
With the effect of shutting down of this process, the company served jobs to these people at other
places thinking it as their utmost responsibility. Resulting to which, they transferred all these 800
workers to Dagenham. This gesture of the company was appreciated but half-heartedly as the
agency workers were shut down directly by the company. Apart from the regular employees, the
company used to provide employment to many other people like catering workers, agency
workers, support workers etc. but soon after the closing of the depot the jobs were shut out for
them and the terms and conditions were ripped off. Also, due to shifting their jobs the employees
started having issues in sustaining their livelihood in diverse environment with little pay (Sparks
2014).
The company also badly treated to their disabled employees as well. An employee of Tesco was
having degenerative back condition was allegedly threatened by the management of the company
for losing his job if he continues to perform some activity. Another disabled employee whose
retirement was approaching was asked to work some more days as he was being shifted to
another unit. That disabled person contributed 24 years of this life to the company and in
response to which, the organization treated him badly without satisfying his needs (Reason
2016). The company also eliminated the work of agency staff from the company; the
management did not made these workers shift in the new process of the organization due to
which they lost their jobs unexpectedly. The company did an unethical deed with the employees
of the organization who demanded for their rights from the management. In response to such
activities, the company harmed the interest of the stakeholders, specifically the employees of the
company by taking their jobs and not providing fair working conditions to survive or other
alternative jobs to some worker. The company did a wrong deed with the agency workers,
disabled staff and many other employees (Quirke 2017).
Organizational Behavior factors contributing in failure
The organizational behavior factors that contributed to the failure of the organization are
discussed below:
 Ineffectiveness of management: It is one of the biggest reason due to which the decision
of the company became ineffective. The organization faced difficulty in analyzing all the
available circumstances and then initiating a specific decision that should satisfy all the

Organizational Behavior 4
stakeholders of the company. In order to succeed in the mission and earn optimum
revenue from the market, the company initiated some actions that highly dissatisfied the
employees in the company Tesco.
 Procrastination: The management of the company initiating the procrastinating
activities called off every important action that is to be taken in the company. The top
level management of the company lacked efficiency to take corrective decisions on time,
whenever they faced difficulty in initiating something; they started shutting it down
(Halfon 2013).
 Lack of emotional intelligence: A good managerial team is one that satisfies the interest
of all the stakeholders of the company present in the environment. The management of
the company lacked the aspect of emotional intelligence due to which they were unable to
satisfy the needs and requirements of the customers present in the environment. The top
level management did not understood the importance of the employees of the company
due to which they faced difficulty in keeping the employees satisfied with the activities of
the organization (Deeds, and Pattillo 2015).
 Conflicting objectives: It is the responsibility of the manager to align the interest of the
stakeholders with the activities of the company. The management of the company defined
some goals and objectives for the organization, lesser fact that was known was that the
employee were playing major role in initiating their activities of the company (Finn
2018). But the company did not perform any function to satisfy the interest of the
stakeholders in the company due to which there was conflicting interest between both the
parties that failed the organizational functions (Kennedy 2013).
SWOT
The SWOT analysis is an internal as well as external analysis of the company. Further, the
SWOT analysis of Tesco is discussed below:
Strength
 The biggest strength of the company is its high brand image in the target market.
Identified and diverse brand image of the company helps them in managing functions and

Organizational Behavior 5
increasing its market share in the target market. This aspect also helps the company in
influencing the stakeholders of the organization.
 Wide and diversified customer base also helps the organization in initiating its activities
actively in the target market. The company serves different types of products to different
types of customers present in the market. Also, the organization is settled approx. 6,553
stores in the market that helps them to highly satisfy the demand of the customers
through their services (Bozic, Siebert, and Martin 2018).
Weakness
 Concentrated operations are one of the biggest weaknesses that are faced by the company
in the external environment. Major activities of the company are organized and initiated
in the market of North America. Resulting to which the company faces difficulty in the
convincing other customers through their product and services.
 The company is also known for sharing many controversies with them. One such
controversy is mentioned above resulting to which the name of the organization is
defamed in the market. The company’s legal charges are increased also due to the
increase in the controversies and penalties as well (Coe, Lee, and Wood 2017).
Opportunities
 The organization has a widespread target market, due to which they again the advantage
to invest in the research and development technologies and increased the success ratio of
the company. The company being placed in the market as technology based company
needs to constantly innovate their activities so as to sustain their image in the target
market.
 The company also earns the opportunity to strategically acquire the different aspect to
earn reputable profits for themselves. The organization has also made substantial
investments in different aspects so as to gain profits and technology to become
competitive as well (Son, et. al., 2018).
Threats

Organizational Behavior 6
 The company faces difficult in aligning the interest of stakeholders with the interest of
many other people present in the organization. The problem of conflicting interest makes
it difficult for the organization to adjust their profits in the external market. Resulting to
which, dissatisfied stakeholders acts as a biggest threat for the company in the external
environment.
 Further, seasonal variation is another threat for the company in the target market. The
industry in which Tesco is placed keeps on changing its face resulting to which the
company needs to make changes in itself in order to become competitive. So, the
seasonal variation makes it difficult for the company to manage their growth (McKinley,
Latham, and Braun 2014).
Post failure actions of the organization
The company highly dissatisfied the interest of the stakeholder (employees) in the company due
to which they faced failure in initiating organizational activities as well. For all the deeds that are
done wrong by the company, they aimed to positively mitigate it in the following ways:
 At the initial level, the organization aimed to combine the managerial activities of the
company with that of the motive of the employees present in the environment. The
company aimed to increase the satisfaction level of the stakeholder from the other future
activities that they initiate in the environment. The company later agreed to the mistake
that they committed in the environment. The managerial bodies of Tesco openly issued
the notice about the mistakes that they committed with the employees of the company.
They also stated that they are aiming to provide thee satisfaction level to the stakeholders
of the company (Hornstein 2015).
 Post occurrence of that event, the company reached into an agreement with the USDAW
union of employees that fought for their interest with the stakeholders with the company
in the environment. In response to which, voting was initiated in the company for
implementing certain decision in the environment. Thus, with this event it should be
noted that the company started following the democratic style to initiate an accurate
decision making process in the company that subsequently increased the satisfaction level
of stakeholders and initiated ethical activities as well.

Organizational Behavior 7
 As the USDAW union fought for the rights of the employees of the company and the
responsibilities of the organization towards the employees, the company started shifting
their interest from number to qualitative outputs that means satisfaction level of the
stakeholders of the company. Resulting to which the case resolved and the requirement of
the employees adequately fulfilled (Chakrabarti 2015).
Effectiveness of response
Apart from initiating adequate measures to resolve the case of organizational failure, the
company implemented various other measures to integrate effectiveness in the company. Talking
about the effectiveness of the activities implemented by the organization, it should be noted that
the company adequately initiated activities that can help them to sustain their image in the target
market (Ugboro 2016). It is important for every organization present in the current business
environment to initiate their action in such a way that it creates identified brand reputation in the
market. Even if the image of the company is damaged, they should aim to regain it by
multiplying positive activities in the market. Further, focusing on the strengths of the company
there are now expanding their scope of business worldwide due to which the stakeholders gain a
better opportunity to attain the services of the company and gain satisfaction as well
(Amankwah-Amoah, Boso, and Antwi-Agyei 2016).
The actions of Tesco effectively helped the employees to manage their conditions and overcome
with the problems that they earlier had with the company. The management of Tesco adequately
satisfied the stakeholders and specially the employees of the company by implementing good
corporate social responsibilities towards them. Thus, it should be noted that due to the effective
and efficient mitigations taken by the management, the company has regained such position in
the market (Benos, et. al., 2016).
Recommendations
Looking at the unethical organization failure of Tesco, the below mentioned recommendations
should be provided to the company to maintain their image:

Organizational Behavior 8
 The management of the organization should create and implemented strict rules and
guidelines for them to support and help the employees in attaining satisfaction in the
target market. The company should evaluate the diverse conditions present in different
countries and remunerate the employees accordingly. In a country is if their high cost of
living then they should pay to the employee accordingly. The company should create
contract with the agency workers and the support workers as well. All the terms and
conditions should be cleared on prior basis so as to eliminate misconceptions
(Heracleous, and Werres 2016).
 The company should state all the requirements of the job prior employing a person in the
company. They should state the pay scale, growth, working hours and conditions to the
employees before employing them in the company. There should be implementation of
open door policy in the company. The management should encourage the employees to
come and take part in the decision making process of the company. This policy should
help the employees to directly communicate with the top level management of the depot
if they are facing any issue at workplace or wants to give suggestion. In this way the
employee will not go out to resolve their issue instead they will communicate to their
supervisor regarding the problem that they are facing in the company (Connelly, et. al.,
2016).
 Lastly, the organization should adequately follow the code of conduct formed by the
management to eliminate various issues connected with the company. The code of
conduct formed should be feasible and accessible by the company and its stakeholders.
Conclusion
Thus, in the limelight of above mentioned events, it should be noted that the above mentioned
report explains the organizational failure issue with the company Tesco and the post event
changes made in the organizational behavior. The report explained information about the
company and its failure to meet the expectation of the employees. It explained reason of
occurrence of the event, mitigations and recommendations as well. Thus, it should be noted that
in order to keep the stakeholders satisfied with the activities of the company, the management
should always aim to align their interest with the interest of the company. In this way they can

Organizational Behavior 9
easily succeed in the target market. The report adequately fulfills the requirements of the
assessment.
References
Amankwah-Amoah, J., Boso, N. and Antwi-Agyei, I., 2016. The effects of business failure
experience on successive entrepreneurial engagements: An evolutionary phase model. Group &
Organization Management, p.1059601116643447.
BBC., 2013. Tesco Harlow depot deliveries to be halted from Monday [online]. Available from <
http://www.bbc.com/news/uk-england-essex-23288145> Accessed on 25 May 2018.
Benos, T., Kalogeras, N., Verhees, F.J., Sergaki, P. and Pennings, J.M., 2016. Cooperatives’
organizational restructuring, strategic attributes, and performance: the case of agribusiness
cooperatives in Greece. Agribusiness, 32(1), pp.127-150.
Bozic, B., Siebert, S. and Martin, G., 2018. A strategic action fields perspective on
organizational trust repair. European Management Journal.
Chakrabarti, A., 2015. Organizational adaptation in an economic shock: The role of growth
reconfiguration. Strategic Management Journal, 36(11), pp.1717-1738.
Coe, N.M., Lee, Y.S. and Wood, S., 2017. Conceptualising contemporary retail divestment:
Tesco's departure from South Korea. Environment and Planning A, 49(12), pp.2739-2761.
Connelly, B.L., Ketchen, D.J., Gangloff, K.A. and Shook, C.L., 2016. Investor perceptions of
CEO successor selection in the wake of integrity and competence failures: A policy capturing
study. Strategic Management Journal, 37(10), pp.2135-2151.
Deeds, V. and Pattillo, M., 2015. Organizational “failure” and institutional pluralism: A case
study of an urban school closure. Urban Education, 50(4), pp.474-504.

Organizational Behavior 10
Finn, C., 2018. Tesco worker with injured back fails in unfair dismissal case [online]. Available
from < http://www.thejournal.ie/tesco-worker-back-injury-2171906-Jun2015/> Accessed on 25
May 2018.
Halfon, R., 2013. Tesco's treatment of its workers shows why we must stop subsidising it
[online]. Available from < https://www.newstatesman.com/politics/2013/05/tescos-treatment-its-
workers-shows-why-we-must-stop-subsidising-it> Accessed on 25 May 2018.
Hennesssy, P., 2013. Labour accuses Tesco and Next of hiring foreign staff on the cheap
[online]. Available from <
https://www.telegraph.co.uk/finance/newsbysector/epic/tsco/10235442/Labour-accuses-Tesco-
and-Next-of-hiring-foreign-staff-on-the-cheap.html> Accessed on 25 May 2018.
Heracleous, L. and Werres, K., 2016. On the road to disaster: Strategic misalignments and
corporate failure. Long Range Planning, 49(4), pp.491-506.
Hornstein, H.A., 2015. The integration of project management and organizational change
management is now a necessity. International Journal of Project Management, 33(2), pp.291-
298.
Kennedy, S., 2013. Worker blows the whistle on Tesco’s recruitment tactics [online]. Available
from < https://www.channel4.com/news/by/siobhan-kennedy/blogs/worker-blows-whistle-
tescos-recruitment-tactics> Accessed on 25 May 2018.
McKinley, W., Latham, S. and Braun, M., 2014. Organizational decline and innovation:
Turnarounds and downward spirals. Academy of management review, 39(1), pp.88-110.
Quirke, B., 2017. Making the connections: using internal communication to turn strategy into
action. Routledge.
Reason, J., 2016. Managing the risks of organizational accidents. Routledge.
Son, J., Baek, J., Park, H. and Kim, C., 2018. The localized merchandising for international
retailers: A study of Tesco’s failure in Japan. The Ritsumeikan Business Review, 56(5), pp.1-20.

Organizational Behavior 11
Sparks, L., 2014. 07 tesco’s supply chain management. Logistics and retail management:
Emerging issues and new challenges in the retail supply chain, p.149.
Ugboro, I.O., 2016. Influence of managerial trust on survivors' perceptions of job insecurity and
organizational commitment in a post restructuring and downsizing environment. Journal of
Behavioral and Applied Management, 4(3).