Tesco and Aldi: Analysis of Business Activities & Org Structures

This essay provides a comparative analysis of Tesco and Aldi, focusing on their business activities and organizational structures. It examines Tesco's service-oriented operations and supply chain management alongside Aldi's distribution channels and key business departments. The discussion covers the shift from centralized to decentralized operational approaches, highlighting the advantages and disadvantages of each. Centralization offers ease of implementation and fast decision-making but can become bureaucratic, while decentralization enables better customer service and staff motivation but may lead to inconsistencies. The essay concludes that Tesco employs a combination of both structures, while Aldi leans towards decentralization, and suggests that a balance of both approaches is ideal for effective decision-making. Desklib offers a wealth of resources, including similar essays and solved assignments, to aid students in their studies.

INVESTIGATING BUSINESS

Answer-1
Business activities of Tesco include operations, outbound logistics, with certain support
activities such as organisation’s infrastructure, human resource management, and
technological development (Glaser, 2017). Tesco`s operation are mostly service oriented,
which has upstroke opportunities, express stores, and maintenance of shelves (Lilliestam, &
Hanger, 2016). Recent supply chain management checks and identifies entire in-store
inventory to pay attention to the designing and implementing efficient supply chain in order
to deliver effective “customer interface.” Some of the important types of organisational
structure are hierarchical structure, flat structure, divisional structure, line organisational form
of structure, and team-based structure (Glaser, 2017).
Aldi`s business activities include arrange the deliveries, store pickups, and international
network of nearly 10000 supermarkets. Aldi operates distribution channel, centres, IT
infrastructure, supply chain infrastructure, and other warehouses (Mello, & Jalles, 2018). The
main departments of Aldi are specific customer segments, value proportions, channels,
customer relationships, key activities, key resources, key partners, revenue streams, and cost
structure.
With the changing role of business environment, employee`s role, and customers, there are
many changes occurred in last few years because of difference in operational practises.
Earlier, the organisation’s operations were based on centralised form of structure (Funcke, &
Bauknecht, 2016).
Answer-2
With the change in the business environment, it is seen that companies have changed their
approach of operations from centralised to decentralised.

Some of the advantages of centralisation are that it is easy to implement most common
practises and policies for business. It prevents other departments of business from becoming
very in dependent. It is easy to monitor and co-ordinate from the central business. It avails
fast decision-making and it is easy to show enhanced leadership. On the other hand, it has
some disadvantages such as it becomes bureaucratic as it has often-extra layering in hierarchy
(Lahr, Zee, Luijckx, Vroomen, & Buskens, 2017). Local managers are mostly to remain close
to the customer needs. At the same time, it lacks authority down the level of hierarchy, which
may reduce motivation among the managers. In the centralised organisational structure,
customer services are missed and speed of local decision-making is slow.
With the rapid changes in the business environment and mandatory compliance to the
legislations, organisations have been adopting training sessions to improve employee`s
performance. In the decentralised organisational structure, employees are hold responsible for
market researches. Employees are allowed to pass their own opinions on the changing
customer’s preferences. However, decentralisation has its own advantages and disadvantages
such as it enables the manager to make a decision to have a closure look for the better
customer services. It would be better to respond to the local situations. Decentralisation can
improve staff motivation with consistent aiming to have a flat hierarchy (Lahr, Zee, Luijckx,
Vroomen, & Buskens, 2017). Decentralisation is a good way to improve training and
development for the junior management. At the same time, if every manager comes to listen
to opinion of the employees then it becomes to accomplish to the one decision and so as the
goal. It is not very necessary that goals will be achieved on the fast pace but it will be
unnecessary stretched. Decision making may not compulsory accomplish strategic thinking.
It is quite difficult to ensure regular and consistent practises and other policies at every
location. It may lead to diseconomies of scale and duplication of functional roles at the same
time. Every manager back out strong leadership when it is needed especially in the crisis. It

becomes very difficult to tough to achieve tight financial control and also cost of
overrunning. Tesco follows partial form of both centralised as well as decentralised
organisational structure in order to ensure that certain power to exercises when it becomes
crucial for consistent customer experience and the relative quality together with an aim to
exploit economies of scale (Hansjörg, & Junghun, 2016).
Answer-3
It is seen that over the changes in the business environment, on the one hand, it is important
to consider and provide rights to the employees to participate in decision-making. Whereas, it
is also crucial important to impose certain power to regulate the effectiveness of the
activities. There should be a fruitful combination of both centralised as well as decentralised
organisational structure (Rached, Bahroun, & Campagne, 2016). Tesco’s current operational
practises are seen as very appropriate due to its effective organisational structure to follow
general trends when managing the business in the recent scenario. Aldi also follows nearly
the same kind of organisational structure as Tesco but it is a little more decentralized when
seeing its decision-making processes and structure (Rached, Bahroun, & Campagne, 2016).
There is a way to improve and enhance the decision-making by Mutual understanding among
the team members a bit earlier so that it can improve the employee’s motivation hierarchical
needs as well as organisational needs.

References
de Mello, L., & Jalles, J. T. (2018). The global crisis and intergovernmental relations:
Revisiting the centralisation-decentralisation debate ten years on. GEN Working
Paper A 2018, 3.
Funcke, S., & Bauknecht, D. (2016). Typology of centralised and decentralised visions for
electricity infrastructure. Utilities Policy, 40, 67-74.
Glaser, F. (2017). Pervasive decentralisation of digital infrastructures: a framework for block
chain enabled system and use case analysis.
Hansjörg, B., & Junghun, K. (Eds.). (2016). Fiscal Federalism 2016 Making
Decentralisation Work: Making Decentralisation Work. OECD Publishing.
Lahr, M. M., van der Zee, D. J., Luijckx, G. J., Vroomen, P. C., & Buskens, E. (2017).
Centralising and optimising decentralised stroke care systems: a simulation study on
short-term costs and effects. BMC medical research methodology, 17(1), 5.
Lilliestam, J., & Hanger, S. (2016). Shades of green: Centralisation, decentralisation and
controversy among European renewable electricity visions. Energy Research &
Social Science, 17, 20-29.
Rached, M., Bahroun, Z., & Campagne, J. P. (2016). Decentralised decision-making with
information sharing vs. centralised decision-making in supply chains. International
Journal of Production Research, 54(24), 7274-7295.