Leadership & Management Skills in UK Retail: Tesco Case Study

This report examines the nature and importance of leadership and management within the UK's retail sector, focusing on key performance indicators and major players like Tesco. It provides a detailed analysis and comparison of leadership and management styles, emphasizing their distinct approaches and the significance of organizational leadership traits. The report also discusses the use of performance management systems in the UK retail sector, particularly within Tesco, highlighting how these systems drive performance and ensure alignment with the company's vision and goals. It further explores the strategic application of change management and the importance of ethical and sustainable leadership in maintaining a competitive edge in the industry.

Developing
Leadership and
Management Skills

EXECUTIVE SUMMARY
The main purpose of this report was to highlight the nature and importance of
leadership and management in the overall current landscape on business in the organizational
context of companies operating in UK’s retail sector along with the key performance
indicators being used by the industry and the companies currently dominating it in terms of
customer base and market size. The report included a detailed analysis of both leadership and
management along with their comparisons as two different approaches used by companies
along with a discussion on organisational leadership definition and traits and the use of
performance management systems in UK’s retail sector.

Contents
EXECUTIVE SUMMARY.............................................................................................................
INTRODUCTION...........................................................................................................................
MAIN BODY...................................................................................................................................
Analysis and comparison of leadership and management.....................................................4
Key Performance Metrics of UK's retail industry..................................................................6
Organizational leadership and management performance.....................................................7
Conclusion.......................................................................................................................................
REFERENCES..............................................................................................................................

INTRODUCTION
When it comes to properly running a business in the modern day and age where there
are many opportunities due to the rampant growth of globalization which has facilitated
immense movement of goods and services to and from borders, there are also many
disruptions and threats coming from both inside and outside the business. These risks need
diligent address and solutions to mitigate long term damage to the growth and profitability of
the company and opportunities must be duly identified and taken advantage of using key
concepts of business administration being management and leadership (Brunet-Thornton and
Martinez, 2018). Both these approaches of controlling and designing the operational and
productivity flow of a business are very important and must be used together to ensure that
the business stays afloat for a consistent period of time. Despite both these pillars of business
management being used on each and every business enterprise in the world, there are obvious
differences in both the approaches and there are separate theories and models of both these
practices which define the way a business works.
The UK retail industry is one of the most major market segments operating in the
country right now and is a major part of UK's GDP as the contributions made by this sector
has seen great growth over the recent years and the current industry is dominated by four
particularly large companies known as the 'Big 4' comprising of Tesco, Sainsbury's, ALDI
and Morrison's. Tesco is the current retail and grocery market leader of the country and has
shown immense growth since the time it was established by Jack Cohen in 1919 and while it
is headquartered in Welwyn Garden City, England, it has numerous stores all over the globe.
This report will highlight the various theories and concepts of leadership and management in
the organisational context of Tesco.
MAIN BODY
Analysis and comparison of leadership and management
Conducting business activities in the modern day requires a lot of investment in the
form of capital along with human resources and until and unless there is a detailed system in
place with allocates and helps in utilization of these resources and investments for the
achievement of the set goals and objectives for the business which is exactly what
management is (Abdallah and Al-Ghwayeen, 2019). Management is a broad process which
involves many complicated processes such as planning, organizing resources, leading the

workforce of the business and monitoring all the resources which are flowing in an
organization. The concepts and approaches of management can be much better understood
with its scope in the company which is described below.
 Continuous process – The core aim of management is to make sure that the business
is in a profitable state and the number of operations that it performs daily are all
streamlined in the best possible manner. The major fact about the nature of
management of a process is that it takes place at each and every level of the
organization all the way from top level executive decision making to the bottom level
production workers.
 Complex activity – Management can also be classified as an activity which is
concerned with the growth and professional developmental of the workforce
employed by business which is very important as the success of the firm depends
upon the talent and skills that it's senior level executives and workers possess
(Andersen, 2018). Management activities are concerned with the growth and
wellbeing of stakeholders.
 Full-fledged profession – Due to the advent of modern business practices and the
amount of technical and soft skills needed to succeed in a corporate environment,
management has been recognized worldwide as a profession which has been
identified with the huge amount of business schools popping globally awarding
various degrees such as the MBA (Masters of Business Administration).
Leadership is another very important aspect of business administration as in order to properly
achieve all the objectives and the goals that the firm sets for its future growth and operational
work flow must be properly managed and the workforce which runs the business must be
regulated and kept aligned with the long term business vision for the best possible result
(Aggarwal, 2018). Leadership in narrower terms means the current capability of companies
and their top management personnel to take swift decisions, inculcate change when needed
and to outperform competition whenever needed. Just like management, the scope of
leadership is quite immense and has been described below for better analysis.
 Dynamic and continuous process – As a process, leadership is concerned with the
ability to positively influence other people in order to make sure that they are
working towards fulfilling their objectives.

 Dependent on personal relations – The flow of leadership in an organization flows
downwards from superior to subordinate and the relationship between these two
defines the overall culture and environment of the company.
 Stakeholder interest – The process of leadership depends immensely on the benefit
and safeguarding of the interests of the shareholders which are mainly the
organization which is responsible for setting leadership standards, the leaders and
their followers. Alignment of the vision and goals of all three entities forms the crux
of business leadership.
Both these concepts are interrelated and are equally important in the overall functioning of
the company in the disruptive business environment as it is important for managers and
executives to be ethical and sustainable leaders along with the need for leaders to possess
proper man and business management skills. The major comparison with both these
approaches is the orientation and nature of the decisions that are made using their models as
theories as the process of management is task oriented while leadership is people oriented.
Management is concerned with establishing and designing the operational framework within
which the majority of the business activities are conducted while leadership is more
concerned with analysing and keeping the workforce in check and making sure their
performance is well within the set operational standards by management. The perennial
outcomes of management and leadership are also different as the former is ultimately
concerned with leading and looking after the employees in a company while the latter's
ultimate focus is to manage the overall work load that the business receives in the fastest and
most efficient way possible.
When it comes to the organizational context of Tesco, both these concepts are clear
cut and used judiciously in many operations since the retail industry is entirely driven on
customer interaction and the reception to the quality of service experience given to shoppers.
The need of management is needed to manage the many stores of Tesco and build a solid
system of quality control to serve customers properly while leadership is used much
differently as it is employed as a measure to make sure the workers are motivated, productive
and act in the interest of Tesco.

Key Performance Metrics of UK's retail industry
The modern business environment requires that there must be proper and streamlined
operations taking place at all times and each and every goal and objective must be given
specific attention to ensure its achievement within set time limits and this is where the
concept of Key Performance Indicators (KPI) comes in (MCKINNON, 2018). KPI's refer to
the quantifiable and measurable indicators of business performance which are tied to a
particular objective and its achievement. There are many facilitations and important functions
of business which are enabled by KPI's which are explained below.
 Making sure the teams and individuals involved in complex tasks in the company are
provided achievable targets to work towards which ensures quality performance
 With the help of KPI’s, a business can accurately analyse it’s productivity and gain
useful information regarding errors and shortcomings
 Facilitate scientific decision making backed up by dependable business performance
metrics
When it comes to the retail industry of UK, it has suffered a great deal due to Brexit and the
COVID-19 pandemic which is only increased the importance of KPI’s which are described
below as crucial indicators of retail sales and business performance.
 Gross interest on the investments made
 Customer retention across stores and supermarkets
 Per square foot sales of organizations
 Cost of inventory turnover
Tesco being the leader of this industry has pioneered the use of KPI’s to drive and measure
its performance to such an extent that it only uses 6 major KPI’s across all of its stores and
supermarket divisions which boils down to the fact that management should aim to simplify
the processes which automatically leads to less errors and easy recording of performance. The
KPI’s that Tesco focuses on include retail sales, profit values, cash flow related to operations,
customer retention, client recommendation along with relationship building with shoppers
which are all necessary parameters to succeed in UK’s retail industry.
Organizational leadership and management performance
Organizational leadership strictly caters to a business setting goals and objectives which are
ambitious yet achievable and motivate their workforce to attain the set milestones by being

driven and focused during their daily tasks (Taylor, Santiago and Hynes, 2019). The key
difference between normal leadership and leaders which are organizational is that they are
wholly people oriented and lead the business in bold new directions while never staying away
from the original vision and ethical nature of the company they work with. Strategic
application of change management across all levels of the organization to mitigate risks of
dispute and employee quarrels, appreciating and compensating them and driving them
towards business expansions is crucial for retail companies like Tesco to continue dominating
their market segment.
Organizational leadership is closely tied to the vision and missions of the firm as they
provide direction to the operations and activities and help the company and its customers to
know the current and future positioning that the enterprise is going for. In context of Tesco,
its main vision is to keep serving its customers, local community and the entire planet better
each day by being ethical, sustainable and quality suppliers of retail goods and groceries
(Core Purpose and Values, 2022). The leadership of Tesco is built to sustain and serve this
purpose as the company has bend educated for a long time to locally source most of the raw
materials an ingredients that goes into making many of the product lines that it serves its
customers daily and the leaders at Tesco have been rapidly pushing the company’s services
towards being environmentally friendly and green and this is evident by the corporate
statement that’s attests that Tesco is aiming for cutting carbon emissions down to zero across
all its location by 2050.
As far as styles of leadership are concerned at Tesco, the company has overhauled its
top management, board members many times over the past years and have filled their vacant
organizational spots with exciting young talent with multiyear retail working experience
(Bahadori, and et.al., 2021). The leaders at Tesco are fully aware of the fact that retail is a
customer oriented business and all the personnel and store managers all over UK must treat
the public nicely who grace their stores with their presence which is why transformational
style of leadership is used to make sure all employees are happy, satisfied and involved in the
business. There is also heavy focus on coaching and training in Tesco by organizational
leaders to make sure people handling their stores have necessary soft and technical skills to
satisfy customer needs.
Performance management is an important aspect of conducting business especially in
the retail industry as the sector directly deals with the general public on a day to day basis
which makes the errors in business activities sting much harder than usual. Through
performance management practices and systems, businesses like Tesco ensure that their

several stores, departments, supermarkets and employees are all performing to the best of
their abilities and the daily targets and standards are getting achieved and exceeded on a
regular basis. The performance management system at play in Tesco is analysed in detail
below using the Performance Management Cycle model which helps detail stages and
elements that firms use to ensure business goes on smoothly and without critical mistakes
(Performance Management Cycle, 2022).
 Planning – Before putting systems into place which help drive organizational and
individual performance, the first stage in this aspect of management involves the
detailed formulation of plans and strategies for the business along with the future
pathway for the firm’s activities. Individual job roles are defined and altered in Tesco
according to their set objectives as now the employees are being taught about green
measures and sustainability.
 Monitoring – This is a key activity following planning as the goals and vision that
has been set must be monitored to make sure every entity involved in the business is
on the same page. Monitoring performance only once as year is not enough for a
market leader like Tesco which is why monthly evaluations take place with bonuses
involved for employees.
 Reviewing – This stage of the performance management cycle takes place usually at
the end of the year and involves grading the performance of business and workers and
as long as proper planning and monitoring took place, firms have a good idea about
how well each employee performed (Ashdown, 2018). Tesco holds quarterly, half
yearly along with annual reviews where effort is rewarded and relationship is built
with store managers and workers.
 Rewarding – This is the last and most important stage of the entire cycle of
performance management as this is where great and consistent output is appreciated
and must be duly compensated for. Tesco provides various post review benefits such
as store promotions, bonuses along with discount membership cards at various
lifestyle facilities in UK.
Conclusion
The above concluded report went into detail regarding the various approaches of
business administration that drives and manipulates firms across the globe in terms of the

activities they undertake, operations they perform and the way they handle the personnel
employed inside their working premises. The two most major concepts of business
administration were identified as Management and Leadership and both concepts were
described in detail including their nature and definitions. Management was defined as a
process which enables the firm to utilize their resources in the best way possible and
effectively manage the way they do business. On the other hand, Leadership was mentioned
as the current competency of firms to outperform their rivals and make quick changes in
operations whenever needed while leading the workforce employed in the business. The
obvious differences between the two concepts was also discussed by a comparison between
their orientation and intended purpose as management is much more concerned with
developing frameworks for operations and designing quality control standards while
leadership is primarily the process of influencing the resources of the business primarily
manpower in the most positive way possible to ensure achievement of set goals. There was
also a brief discussion on the key performance indicators which were measurable units of
performance related to a critical area of a business which cannot afford any major errors in
relation to the UK’s retail industry. The report was concluded with a brief outlook on
organizational leadership practices in the retail sector along with the analysis on the
management performance in the industry using models such as the performance management
cycle.

REFERENCES
Books and Journals
Brunet-Thornton, R. and Martinez, F. eds., 2018. Analyzing the impacts of industry 4.0 in
modern business environments. IGI global.
Abdallah, A.B. and Al-Ghwayeen, W.S., 2019. Green supply chain management and business
performance: The mediating roles of environmental and operational performances. Business
Process Management Journal.
Andersen, J.A., 2018. Servant leadership and transformational leadership: From comparisons
to farewells. Leadership & Organization Development Journal.
Aggarwal, A., 2018. E-leadership-a new and modern style of leadership. International Journal
of Advances in Agriculture Sciences.
MCKINNON, A., 2018. Improving environmental performance retail logistics. Logistics and
Retail Management: Emerging Issues and New Challenges in the Retail Supply Chain, p.279.
Taylor, A., Santiago, F. and Hynes, R., 2019. Relationships among leadership, organizational
culture, and support for innovation. In Effective and creative leadership in diverse workforces
(pp. 11-42). Palgrave Macmillan, Cham.
Bahadori, and et.al., 2021. The influence of ethical leadership on the organizational
commitment in fire organizations. International Journal of Ethics and Systems.
Ashdown, L., 2018. Performance Management: A practical introduction (Vol. 16). Kogan
Page Publishers.
Online Referencing
Core Purpose and Values, 2022 [online] available through
https://www.tescoplc.com/about/how-we-do-business/core-purpose-and-values/

Performance Management Cycle, 2022 [online] available through
https://www.valamis.com/hub/performance-management-cycle