Leadership vs Management: Operational Analysis of Tesco PLC

This report differentiates between the roles of a leader and the functions of a manager, applying these concepts to a case study of Tesco PLC. It explores how leadership and management contribute to Tesco's operational management, including the implementation of strategies and policies, and decision-making processes. The report also highlights the importance of leadership styles, such as situational leadership and management by objectives, in addressing challenges and achieving business goals within Tesco's global operations. The document is contributed by a student and is available on Desklib, a platform providing study tools for students.

Management and Operation
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Table of Contents
Task 1.........................................................................................................................................3
LO 1: Differentiating between role of leader and function of manager.....................................3
LO 2: Applying the role of leader and functions of a manager in a given scenario..................5
Task 2.........................................................................................................................................7
LO 3: Demonstrating the role of leaders and functions of managers in the operational
management of the company.....................................................................................................7
LO 4: Explaining the relation between leadership and function of management in a business
..................................................................................................................................................10
Reference List..........................................................................................................................12
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Task 1
LO 1: Differentiating between role of leader and function of manager
As per Adam Jr and Swamidass, (2015) leadership is a term that only suggests the level of
motivation and skills used by the individual to take the company forward and achieve the
desired goals and objectives. Leadership is a dynamic duty that is not the capability of any
person to implement readily. Managers come close to being a leader but their roles and
functions suggest the dissimilarity between the two.
Leaders Managers
According to Angell and Klassen (2014), a
leader is what a leader does. They innovate
various operational strategies and
procedures that pave the way for the
business to achieve its objective.
Arndt (2014) suggested that managers have
the duty and responsibility of managing
their team and boosting teamwork. Unlike
leaders they do not engage in new strategy
development but focus on the performance
of the team and their approach towards
company goals.
Another characteristic that separates leaders
from managers is the development of trust
and confidence that they can instil among
workers in the organisation. By verbally
motivating the workers and through policy
making they can boost workers to strive
towards achieving the objectives,
The manager’s role is to effectively conduct
the various administrative functions and
monitor all the daily operational activities to
understand daily progress made by the
various departments.
The vital role that a leader needs to fulfil is
the strategic vision of wanting to achieve
specific long-term goals of the company.
Keeping this in mind, various goals,
strategy and policy making is carried on.
Unlike leaders, the responsibility is limited
only for the achievement of short-term
objectives of the company. They monitor
daily progress and their decision making is
limited to this extent.
According to Coughlan and Coghlan
(2014), leaders are supposed to take vital
and risky decisions for the benefit of the
company.
The role and function of a manager is to
carefully assess employee performance and
generate necessary performance reviews
that can help in showing the employee
progress and performance evaluation can be
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initiated.
Proactive nature is a characteristic that
every leader possesses and this translates
automatically in their policy making
strategies.
The decision making function of managers
is restricted to managing operational
activities and improving existing policies.
This allows them to change daily routines
and way of work.
The leaders must continually drive towards
the creation of new business ideas and
strategies so that the company functions are
not hindered by the constant change in
business environment.
As per Croxton et al. (2014), managers are
responsible for the operational activities that
are critical for the running of the
organisation.
Table 1: Differences between leaders and managers
The above table suggests how dissimilar the functions and roles of a manager and leader are.
This difference is critical as it allows to understand the role which both a leader and a
manager play in making the organisation run smoothly and on track to achieve the objectives.
The distinctive approaches of both helps in understanding that they are critical in their
respective functions and are irreplaceable from their functionality. A key point is the fact that
leaders cannot be made. The qualities required for leadership can be learnt to some extent,
but some features remain inherent in the leaders and that makes them stand out from the
managers. The importance of both cannot be underestimated since both are good at what they
do. The prime importance of both their roles and functions is the fact that they help the
company in staying organised through well planned strategies.
As per Goodhue et al. (2014), the true test of both managers and leaders lies in the various
traits and qualities that each possesses and implements for collectively working towards
making the company successful. Managers sometimes may have to bear the burden of ill
planned objectives by leaders and it may also happen that well chalked out plans are not
monitored and administered properly by mangers. Both this situation leads to the bad
performance of the company. Hence, in a way it can be stated that leaders need managers to
carry out their duties and managers need the guidance of leaders to implement strategies. This
is a sign of a closely knit group who undoubtedly work as a unit to achieve the set objectives
both in the short-term and in the long-run.
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LO 2: Applying the role of leader and functions of a manager in a given scenario
According to Kleindorfer et al. (2015), a leader is strategically opulent and manages to chalk
out intricate strategies that not only help in boosting the policies, but in a way it assists the
achievement of company targets. The leader is exclusively responsible for the manner in
which they communicate and take decisions. If the business perspective of Tesco is taken into
perspective, the role of leaders and manager functions can be brought out clearly. The
leadership style that the company follows has direct consequences on the operations at
managerial levels. Tesco very wisely utilises the management by objectives theory and
situational leadership style to produce strategies and plans that assist the business in
achieving its desired goals.
Lambert and Cooper (2015) argued that using a particular theory model assists in leadership
as it provides theoretical and empirical knowledge about the rate of success that can be
achieved by its implementation. In the case of Tesco, the various issues surmounting the
company has been dealt with the utmost ingenuity. The concern for the company lay deep
down in the fact that even after the company began sales service well in 2016, their actual
sales figures still saw a decrease even after providing exciting offers to lure the public. There
was a massive fall in sales by 1.5% and group sales fell by 0.5% (website). The performance
of Tesco gradually improved by the introduction of seasonal offers. These offers bore good
results as according to retail owners, customers responded well to the products as they were
offered at 5% cheaper rates than the previous year. This clearly suggests the situational
leadership that they incorporated to achieve the desired results from their consumers.
The company had faced a massive loss worth £6.38 billion in 2015, so the steady business
albeit not highly profitable in the preceding year is a point that leadership skills definitely
helped in stabilising business opportunities for the company. Management of the company
also played a major hand in the utilisation of offers to make attractive discounts possible and
it had an impact on the overall sales initially. The distinction can be clearly understood as
leadership in the company allowed changes in plans and policies and the management
allowed implementation of the policies and procedures.
The major focus of management by objectives lies in the fact that it focuses highly on
leadership and communication in the business and managing control of the decision making.
It readily helps in managing the duties and roles of managers and doesn’t need the
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management of the workforce. Mentzer et al. (2013) stated that the process of managing by
objectives helps in making the managers more responsible towards their capabilities and
encourage them to utilise effective steps to take company forward. In the case of Tesco, they
used a combined effort on both leadership skills and management skills of personnel to tackle
the falling business scenario and make the company stable again with discounting strategies
and offers to its valued customers.
Tesco has already established business across the globe, and it is crucial that their business
management system used methods that could tackle various issues that can damage the
company image. Nguyen et al. (2015) argued that managing a large organisation with huge
global market requires effective leadership styles and processes as cultures, values and
operational activities may vary from place to place. The behavioural theory could not help the
issue of Tesco as it is solely focused on improving marketing aspects of the company. The
behaviour of customers could not be mapped. The management by objectives process
allowed Tesco to entertain a simplified management process. Having business widely spread
across the country, it requires management at every location. This is where the transformative
leadership implemented by them bears its results. The power and responsibility given to the
local managers and other departmental heads allows them to exercise control over necessary
strategies and plans keeping in mind external and internal factors of the location they are in.
The general managers of each geographic location maintain democratic approach in order to
lead their staff since careful attention is required in considering the macro factors of a
business environment. Giving top priority to the general managers allows the company to
handle its global operations with ease. The constant managerial and staff performance
reviews allows the company to assess whether the desired targets have been met or will
require further efforts to be successfully done. According to Oliva and Kallenberg (2013),
managerial functions dictate the level of results from employees and makes it evident
whether the approaches taken by them have been capable enough to garner desired results.
The emphasis that Tesco gives on making managers of various departments in several global
areas responsible for operational activities makes the roles and functions of managers even
more relevant.
The implications of decision making always falls upon the manner in which leadership and
management are carried on in the business. In the case of Tesco, the consistent focus on
recording and evaluating employee information is critical for the manner in which decision
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making is conducted in the company. It only goes to suggest that leadership functions and
manager functions are very much important in order to devise decision making steps that can
help the business in the creation of strategies that are best suited for achieving business goals.
Task 2
LO 3: Demonstrating the role of leaders and functions of managers in the operational
management of the company
Considering the fact that leaders are the initiators of every strategic change that is needed to
be done, it is evident that company benefits lie specifically in the functionality of the leaders.
Operations management is a vital aspect that decides the manner in which the business will
perform for achieving the set targets. Piercy and Rich (2014) argued that the
accomplishments of operations management is the vital task that managers of all
organisations, be it small, medium or large must conduct to ensure business functionality.
The qualities and traits of managers who are responsible for operations handling must be in
lieu with the organisational values and cultures. This will help them to be clear about the
matters that need attention so that strategic measures can be adopted.
According to Smith and Fingar (2013), leaders pose a tremendous responsibility in making
operations management possible with their impeccable knowledge and idea about the market.
The case of operational leaders suggest to the point that their important knowledge about the
supply chain management and distribution networks can be vital information that can be
passed to operational managers for effective business undertakings. Since improving
productivity is the major factor in the business, operational leaders supply vital information
and perspective that is beneficial for business interests. Operational managers can readily
benefit if information regarding the various warehouses, logistics and production department
are provided specifically. Quick decisions can be made and the best supply chain option can
be initiated for enhancing business. Considering the fact that Tesco is a huge Food and
Beverage Company, the need for operations management rises significantly.
The biggest requirement for companies that indulge in food and beverages is of achieving
total quality management (TQM). The functionality in Tesco’s business ventures lies
specifically in satisfying the needs of customers. The need for the business to maintain
quality in its products and ensure that the distribution system is capable to handle demands is
the top priority that they focus in. Operational activities in the company can decide the
success of the company in achieving the quality parameters and tis will only be possible by
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intercommunication. Stevenson and Sum (2013) argued that communication and feedback are
important traits of both managers and leaders as it helps them to communicate and gather
necessary feedback that is essential for business operations. Managers who are responsible
for the operations management in an organisation focus mostly on the production and
development aspects of the business. They are responsible for supervising, recording and
assessing the progress of the functions on a regular basis. Stuart et al. (2015) suggested that
business needs to focus on maintaining a tight production schedule so that effective
distribution can commence.
On the contrary, leaders who handle operation management must conduct their operational
activities in such a manner that that their actions do not collide with the interests of the
company. Ward et al. (2013) suggested that leaders have the prime responsibility to deal with
factors related to the supply chain network. They are responsible for tracking logistics and
maintaining inventory stock as well. These factors bring their responsibility to hand over the
gathered information to the operations manager so that they get an idea of the overall demand
of the products. Inventory management is vital for the maintenance of stock since it allows
the company to understand and control supply in the market. Tesco faces massive
competition from Pepsi and its sub brands, this makes it vital that Tesco understands market
demand so that they can easily supply the products to locations that show a brighter prospect
for profits.
According to Zeng et al. (2013), TQM is a serious factor that helps in controlling the
customer loyalty factor and allows managers to effectively motivate the employees for
creating the best value for money product so that brand retention can be achieved.
Considering the widespread loyalty that Tesco enjoys, it is important that quality is never
compromised and the operations managers must be dynamic enough to handle the daily
operations across the globe in tandem. It is also vital that sharing of business dealings must
be transmitted to all the regions that Tesco conducts business in as it can give the feedback of
global performance of the business. This information is vital for the company to identify
strengths and weaknesses in their business activities.
The essence of operations management can be embodied by various methods namely, Six
Sigma, Lean production and queuing theory. In the context of Tesco, it can be stated that the
use of lean production has definitely improved the performance of the business in recent
years. The demand-driven nature of the supply chain of the company has focused highly on
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increasing scale of operations in a bid to cut costs that would be required in inventory
management. Arndt (2014) opined that lean strategy essentially helps in cost cutting on other
factors and helps the company raise its scale of operations. If reports are to be considered, it
is evident that by adopting an eco-friendly model and sourcing around 30% of its raw
materials from sugarcane-based commodities the company has helped in cost cutting. It also
provides them a good value on their corporate social responsibility (CSR). By focusing on the
main element of their product which is water, the company has focused on areas that can
reduce the level of water inefficiency (Cmuscm.blogspot.in, 2017).
A SWOT analysis of Tesco is viable in understanding the pros and cons of the company
along with an idea of the various possibilities that the business environment provides.
Strengths:
 The vast global presence that Tesco
enjoys gives them instant brand
recognition and helps them to launch
new products without the effort to
use promotional mix.
 Being one of the most renowned and
profitable businesses, it has a good
track record of business transactions
even under massive competition.
 Customer loyalty has been a huge
part of the success of Tesco. This
can be attributed to their amazing
marketing strategies and discount
factors.
 According to Coughlan and Coghlan
(2014), the huge demand for its
products ensure that the company
has a large distribution network. The
nature of the distribution network
assists the company to function well
in distributing and maintaining its
Weakness
 Tough competition with rivals such
as ASDA, Sainsbury and Morrisons
gives it the much needed
competition in terms of business
though its products and aggressive
marketing.
 The lack of product diversifications
curbs the level of impact that the
company could do with other
products in its roster.
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supply chain.
Opportunity:
 Business expansions in developing
nations and climatic condition that
are favourable for such products
allow the business to increase their
chances of profitability.
 The need to improve supply chain
management and making it more
streamlined will allow better
distribution network.
 Focusing on high discount factors
and making seasonal offers on a
regular basis can help the company
immensely.
Threats:
 The economic hassles that the
European Union is facing, combined
that with the BREXIT issue makes
business difficult in such a scenario.
 Constant evolution of marketing and
promotional strategies of rivals
ASDA and Sainsbury makes it
important that the company doesn’t
lose focus.
Table 2: SWOT analysis of Tesco
LO 4: Explaining the relation between leadership and function of management in a
business
As per Oliva and Kallenberg, (2013), the leadership and management are interrelated terms
that suggest the need for each other. The lack of leadership cannot initiate proper
management and without management leadership has no value at all. Tesco being a large
brand with high level of brand recognition and loyalty is considered to enact its part of CSR
towards the community. However, the fact that leadership and management must be kept in
mind not to hurt any sentiments within the organisation and outside the organisation. The
business must conduct itself responsibly by keeping company values and ethics intact. The
CSR of Tesco has been prominent in providing certain part of it revenue stream towards
charitable options. Management must decide what should be the level of charitable donations
that is feasible for the company.
Business sustainability is the major objective that every organisations look forward to
achieving one day. Tesco being an already established company should focus on newer
market so that global sustainability in business can be achieved. Better business is linked with
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better relations with stakeholders and shareholders. This is based on how the leaders have
established business policies and the man management of the various departmental managers
in the organisation. The building of relations with suppliers and logistics is possible by better
management in understanding needs of company and improving level of communication with
suppliers and distribution network. This can assist in quicker supply in order to meet
demands and fulfilling business targets will be possible. As per the comparisons between
leadership and management, the need for situational and contingency leadership can arise in
any business house. The contingency leadership arose during Tesco’s fall in sales that saw
the company lose massive finances in a single year. It however was rectified by redesigning
policies that was handled well by the management staff.
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