Organizational Behaviour and Leadership

This document discusses the issues of organizational behaviour and leadership in Tesco. It explores the diversity issues, leadership problems, and provides possible solutions. The document also includes a literature review on workplace diversity and ethical leadership.

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TESCO
Organizational Behaviour and Leadership
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ORGANIZATIONAL BEHAVIOUR AND LEADERSHIP 1
Introduction
Tesco is known as the largest global chain of retail stores all over the world and is also
considered as the largest chain store in United Kingdom. Tesco mainly operates its business from
companies headquarter which is situated in London. On the global retail business platform, this
company was able to successfully acquire fourth position in 2008. After this, Tesco was
successfully able to achieve fifth rank in Metro AG circulation and it was truly a big moment for
retail companies to achieve such a position in this business since 2003 (Gurdain, 2010). This
corporate has expanded its business operation in other sectors such as food and drink on the
global platform. This organization has understood the need for diversity in the business and
therefore has introduced a new segment in their business operations such as clothing's, electronic
items, DVD selling and renting and financial services. This corporate has not limited their
business to only these segments, they have also entered into digital market in which they are
offering services like internet services, software service which are connected with medical as
well as dental care along with telecommunication setup (EEPH, 2019). This business expansion
strategy has helped their organization to become one of the largest retail stores on the internal
business market. Tesco employees are very dedicated to meet the current and future expectations
of potential customers with the help of their high-quality services.
Leadership issues in Tesco
One of the biggest leadership issues which happened in Tesco was related to diversity
issue. In fact, the matter was so high that it was taken to the court by the employee who blamed
that they were facing discrimination on the base of age and gender and their pay rate was cut as
per the supermarket night and weekend shifts. Leadership of Tesco was not able to offer a
discrimination-free working environment for a group of people which has joined Tesco and it has
been seen that around 38,000 employees were being affected. Tesco company leadership has
agreed to bring change in their policy regarding pay rate rise of £7.62 on an hourly base which is
considered as one of the highest payers in this retail industry (The Guardian, 2018). But still,
employees who used to receive double salary on Sundays or bank holidays are seeing it unfair.
Employees who have joined the company before 1999 and are in their 40 years age are seeing it
as a reduction to their benefits. According to Paula lee, the leadership of Tesco has truly
committed discrimination related to long term employee and in fact has created a new platform
of wage cut in this retail business sector. Employees have also blamed that company is using this
amount on their other business areas in order to gain profit (Everett, 2012). These employees are
continuously blaming that company leadership is taking advantage of their loyalty and when
leadership believes that they are going to leave the job they try to make things worst in the form
of a wage cut. Even though company's leadership has agreed to resolve this issue by offering a
rise in the wage rate but at the same time, they are playing tricks by not disclosing the exact
amount of employee which has been affected by their wage cut policy.

ORGANIZATIONAL BEHAVIOUR AND LEADERSHIP 2
Another biggest leadership issue which happened in the business operation of Tesco
Company was mistreatment of supplier and profit miss-declaration in 2015. According to
Christine Tacon, it has been found that Tesco leadership has truly overlooked the laws which are
associated with the governance of grocery market. It was blamed that Tesco leadership has
played tricks in paying the amount to their suppliers. In fact, they have made supplier wait for
two years to clear the amount of million pounds in order to use this amount in their other
business activities which will help them in generating more revenue. It simply indicates that
Tesco leadership has clearly misconducted the financial flow in order to gain personal growth
(The Guardian, 2016). In addition to this, Christine Tacon also said that internal mails of the
company were clearly indicating that payment must be cleared before a particular date so that
they can make use of this money in target promotion. The leadership of Tesco has created a very
complex situation between supplier and financial teams because they were not able to manage all
these superseding pressure related to business. This kind of attitude was soon seen in almost
every section of the Tesco business. In addition to this, it has been seen that Tesco leadership
was not allowing repaying the debt which they have taken from the market up to two years in
order to maintain the cash flow in their business. It was also known as accounting scandals
which have overstated profit which has put this company under the investigation of fraud office
(Ruddick & Roland, 2015). Tesco leadership has not maintained this act up to one or two
suppliers; in fact, this strategy was widely spread to every section of distribution system. One of
the suppliers was badly affected because company did not pay their million-pound bill till two
years which has created a complex situation for their business strategy. In addition to this, they
have not paid the entire amount in one term and have intentionally used slow repay strategy to
maintain the balance of cash for their personal gain. It is not that all the delays were intentional;
there were delays due to weak management and ineffective business communication within the
Tesco organization (Butler, 2016). More ever there were dedicated frauds in the operating
procedure of the invoice in order to overshadow the financial flow within the business. There this
act has created a non-trust environment within the suppliers of Tesco which has created a
negative image of the Tesco in the retail market on the global level.
Literature review
According to Jonsen, Maznevskian & Schneider, 2010, diversity in the workplace have
been considered as one of the complex and provocative phenomena. Both narrow and broider are
connected with this workplace diversity. Narrow aspect is always linked with restrictions which
are connected with particular cultural patterns just like race as well as gender. Few believe that
workplace diversity which is based on civilization, race, and gender will not be able to link with
administrative processes, capabilities as well as reasoning orientations. One of the major issues
in this practice is discrimination and prohibiting of traditional group in the organization. It is the
diversity concept in the organization which offers protection to all individuals from getting
discriminated on the base of race, culture, and background. The concept behind this is every
person is different and therefore it seems that diversity only remains up to their mind only.

ORGANIZATIONAL BEHAVIOUR AND LEADERSHIP 3
According to this Kreitz, 2008, workplace diversity advocates three different theoretical
patterns in order to understand the possible influence of workplace diversity. First one is social
categorization in which individuals are characterized on the base of their silent qualities such as
gender, age and then a stereotype is being formed. Second one is similarity qualities which are
linked with both silent as well as non-silent qualities values, believes, group formation and
interpersonal links. Third one is a decision-making framework which is linked with the impact of
dispersed interlinks. It has been seen that in a few situations these theories are forming
contradictor believes related to impact of diversity on group procedures and their performances
(Avery, 2011). In addition to this, it has been found that social and similarity diversity theory may
impact negatively and may reduce communication within the group, reduce satisfaction and
upsurge turnover rate.
According to this Ozbilgin & Tatli, 2011, workplace diversity is impacted by several
factors which give rise to discrimination as well as conflicts within the organization. It has been
found that individual identity in a group creates disruption within the group dynamics and must
be avoided. In addition, they believe that group which is categorized as out group is to be evoked
with hate, suspicion, and rivalry within the group dynamics. Diversity in the workplace is always
connected with the competitive benefit for the organization in terms of decision making,
developing a high level of creative and innovative environment within the organization. These
successes can be linked with the organization in terms of opportunity and market extension
(Guillaume et al., 2017). In addition to this, it has been found that cultural diversity pattern is more
effective in terms of job performance by offering them a clear direction which connects their
objective with the organization vision.
According to Schaubroeck, Hannah & Avolio, 2012, ethical leadership is considered as one
of the most important elements which decide the organization success in terms of development
and growth. It has been seen that ethical leadership is also connected with the leadership of good
attributes and following strong values. But they believe that following rule and regulation does
not mean that leadership is completely ethical. In fact, they must adopt the framework of
disclosing issues on the ethical platform of the organization instead of hiding them. Ethical
leadership primary objective is to serve their followers by eliminating the chances of conflicts
within the followers. In addition to this, they also believe that transformation leadership is one of
the best representations of ethical leadership which helps in maintaining right procedures in the
organization (Mayer, Kuenzi & Greenbaum, 2010). It is the ethical leaders which maintain the trust
environment within all stakeholders which are associated with the organization business it may
be suppliers, employees, customer, small vendors and so on. Ethical leadership always encourage
their followers to maintain a positive work environment in the organization by ensuring that no
unethical practices are going on within the organization.
As per Rubin, Dierdorff & Brown, 2010, ethical leadership is considered as normatively
applicable conduct with the help of personal movements and interactive association in the form
of two-way communication, strengthening and decision making. In addition to this, ethical

ORGANIZATIONAL BEHAVIOUR AND LEADERSHIP 4
leadership is also connected with the trust relations between follower and leader. It actually
offers a role model which can be followed in the organization in order to eliminate the chances
of unethical practices going on in the organization.
Possible solutions
One of the best options for Tesco is to introduce an ethical leadership training program
under which leader of the organization will be offered training related to ethical practices. This
ethical leadership program will help in changing the present behaviour of the organization.
Under this ethical leadership program, leaders will be encouraged to select the path of trust in
order to progress instead of finding shorts which can lead to unethical practices (Walumbwa &
Schaubroeck, 2009). In addition to this, leaders will be made to go through three days' workshop
in which they will be offered both practical experiences as well as theoretical experience in terms
of true ethical stores related to corporate world. Theoretical experience will help in positioning
ethical business roots in the minds of the leaders while practical experience will help in
introducing ethical behaviour in them which directly link it with organizational behaviour.
Practical experience will help them in understandingthe thin line difference between ethical and
unethical business practices (Avey, Palanski & Walumbwa, 2011). In some cases, it has been
seen that what is ethical for one person is unethical for another person due to their position and
responsibility. This training program will help in introducing ethical practice.
Another best option for Tesco is to communicate their payment policy to all its suppliers.
In this situation, it is better for the Tesco leadership to develop a joint group which will consist
of a supplier, local media, employee and shareholders. Management of Tesco will focus on
communicating their payment policy in front of all partners of the group (Miceli, Near &
Dworkin, 2009). Under this policy leadership of Tesco will disclose their payment pattern with
all the group members. This will help the organization to remain fair with the supplier in
payment pattern and will not lead any chances of miss-conduction related to payment.
Involvement of local media will help in generating trust environment in the group because every
meeting will be broadcast in the public which will eliminate chances of any payment frauds. This
policy will help the organization in regaining the trust of the Tesco leadership which is one of the
key elements in the progress of the organization in terms of growth and development (Angeline,
2011). Suppliers are always considered as the backbone of the business operation and they
support is of great importance for the Tesco leadership in the present situation.
One of the best options for Tesco is to introduce a group of people who will audit the
unethical practices going on in the organization related to diversity. In addition to this, they will
also educate the people related to the importance of diversity in the workplace and its importance
in business operation (Brown & Mitchell, 2010). This will help in motivating the management to
promote diversity in the workplace by supporting each other as a family. The management of the
organization must use two sources of auditing one must be internal and other will be external.
Internal auditors will be able to explore the situation much better than external auditor which will

ORGANIZATIONAL BEHAVIOUR AND LEADERSHIP 5
help in offering quick solution related to the unequal treatment of the employees but one of the
biggest issues with internal auditing is that there are ample chances that these internal auditors
may get influenced by leadership power of Tesco. This can lead chances of manipulation in the
auditing process and the issue will remain hidden. In this situation, external auditor group may
not be much aware of the current process of the organization but they are expert in their field and
understand how to handle the current situation (Thiel et al., 2012). One of the biggest benefits of
using this group is that it will eliminate the chances of any pressure and manipulation from the
leadership of Tesco Company. This will help in maintaining a fair situation in the improvement
process and will display the issue in the original form. This will aid in better improvement of the
organization.
Another best option for Tesco is to introduce a new platform on which the individuals
which are associated with the organization can present their issues in front of the entire
stakeholder so that clarity related to issue can be shared with the stakeholder so that proper
action can be taken on timely base (Lewis & Malecha, 2011). This will help the leadership of
Tesco to bring necessary chance in the organization in order to improve their present situation.
Recommendation
In this situation, the best option for Tesco organization is to make use of ethical
leadership training program in their organization. This will help the organization in improving
their current business behaviour which has created a negative image of the organization in the
present market. This training will help the Tesco organization in developing ethical attributes in
their leadership which is essential for the organization to introduce an ethical work environment
in the workplace. In addition to this, leadership will be motivated to go through both practical as
well as theoretical aspects of the ethical practices (Lane et al., 2012). This will help in
developing a positive work environment in the organization which is essential for improving the
present situation of the organization. Issues and scandal which has occurred in Tesco
organization are linked with the leadership issue and this training will help in reducing or
eliminating such acts in the organization for the future. This will help the origination to maintain
their position and dignity in the business market. In addition to this, management of the
organization must introduce a payment policy which they will share with their entire
stakeholders. They will also involve media as a key local partner in order to build trust among all
key partners of the organization. Media will cover will broadcast every meeting happened on this
payment policy which will create pressure on the management not to entertain any kind of
misconduct with payment which is associated with the suppliers. In addition to this, it will help
in creating great relation between supplier and organization which is essential for successful
running of business operation. Supplier will be ensuring that the organization will not delay their
due payment in terms of generating their personal profit (Thornton et al., 2013). Another option
which company is having is to improve their present situation related to organizational behaviour
is to introduce audit policy which will take care of issues related to diversity. Two types of
auditing will be there one will be internal and other will be external. Internal audit will help in

ORGANIZATIONAL BEHAVIOUR AND LEADERSHIP 6
bringing quick change in the business operation while external audit will help in eliminating the
chances of pressure and power control from management of Tesco.
Conclusion
Due to heavy competition in the retail industry, it is not easy for companies to remain
sustainable for a longer time. Tesco Company was surrounded by many scandal and lawsuits
which have created a negative image of the company in the business market. In this situation, if
Tesco organization wants to remain sustainable they have to introduce new policy in their
organization in order to promote ethical business practices in the organization. In addition to this,
it is very important for the organization to gain the trust of the supplier because they form an
important part of the business operations. In addition to this must offer an open platform to the
employee so that they can discuss their issues freely on this platform.

ORGANIZATIONAL BEHAVIOUR AND LEADERSHIP 7
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