Managerial Decision Making: Tesco Case Study - Problem Solving Report

This report examines managerial decision-making through a case study of Tesco, focusing on the company's challenges related to sourcing raw materials and its relationship with UK farmers. The report begins by outlining the problem background, identifying internal and external issues such as com...Read More

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Managerial Decision Making

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Contents
Overview..........................................................................................................................................3
Problem background........................................................................................................................3
Problem definition...........................................................................................................................4
Solution generation..........................................................................................................................5
Solution evaluation..........................................................................................................................6
References........................................................................................................................................8

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Overview
The main aim of this assignment is to highlight the problem, which is structure based. This report
will entails some section that is problem background, problem generation and solution
evaluation. These all factors will be defined by making action Plan. For this assignment, Tesco
will be chosen in which the literature review will portray the incident of the issues handled by
the company. The woods model will be considered by this assignment in the section of
methodology in order to highlight the problem solving steps. it would be helpful to analyse the
strengths and weakness of the company to resolve the problem in an effective manner. At last,
the recommendation will be provided for the purpose of eliminating the issues within the
company so that set goals can be achieved by the company within time frame.
Problem background
The company has to face barriers in the form of problems. It has been found that the major
problems can be internal as well as external. Internal problem are those problem that happens
within the company, which involves communication gap, change resistance and
miscommunication between employees. External issues referred those issues that are connected
with supplier, investors, communities and legal norms. The impact of external issues is huge in
the process of decision making of the organisation. Therefore, it is necessary for the management
to understand the whole issues and take appropriate action to resolve the same. The procedure to
resolve the issue needs to be incorporated for the purpose of finding the solution efficiently
(Yildiz&Böhme, 2017).
Tesco is the company that facing the criticism and protest in the market of UK from the
association of farmer for introducing the raw materials such as lambs from New Zealand, fruits
from the Morocco etc. It has been found that National Farmers Union (NFU) has wedged an
objection to the Trading Standards for introducing the low-priced substance from the exterior
exclusive of resource the unrefined materials from the British farmers (Rodionova, 2016). It has
been found that number of brands take advantage of well known company and do business by
taking name of them for their business, which is ethically wrong. It is being done for the purpose

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of meeting the factors of localization and also to convince the customers, which are maintained
by the unions of the farmers. The branding along with the packaging is completed the same as
the British made goods. It has been found that the abroad foods are introduced at cheap rate and
then it is selling out with the name of the well-known brands such asRosedene farm blueberries,
Willow Farms whole chicken,etc (Ghosh, 2016). It has been claimed by Tesco, the cheap
products can hamper the quality of the products that can lead the company into hazardous
situation. It has been found that the price of lambs is quite cheaper in New Zealand in the
comparison of United Kingdom, this decrease the operating cost of the company, along with that,
it affects on the retail marketing as well with the rate of 17% (Bouzon, Govindan& Rodriguez,
2018).
The complaint of the farmers in the UK in the direction of Tesco can have an effect on the
functioning procedure. The management should recognize an explanation to gratify the
stakeholders of their business. It is necessary for the organization to give complete focus on the
stakeholders in order to attain competitive advantages. There are number of approaches to
resolve the issues by many scholars. Woods model is an effective model to resolve the issues in
limited time frame as it comprises six steps in it. These six steps should be focused by the
company to analyse the situation and bring solution. On the basis of the issues handling by Tesco
can be anxious with the problem-solving stages as per the model of Woods in the following term:
The starting stage of the model is that, when the information concerned with the issues will be
recognized. On the basis of the stage, as per Woods, it is the term which is required to be
recognized. The operation process is the major problem of the Tesco Company which is
impacting the relationship of the management with the farmers. The objective of the company is
to keep focus on customer centric approach to make them satisfied from the quality of the
products. Along with that, the main focus of the company is on increasing the profit by taking
consideration of all the stakeholders so that, equality can be maintained. Globalisation is the
major term, which is tightening the gaps of the countries in the relation of trade and affairs. In
order to increase globalisation, governments are captivating positive initiatives so that the
international trade and affairs can be encouraged on huge way. This activity carries scope and
chances to the organizations for expanding their impressions in various nations which impacts

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their basic leadership process. It is the basic rationale in the association to decrease the working
expense for pulling in more incomes. In view of this circumstance, Tesco is bringing in low-cost
crude materials from the nations like New Zealand, Morocco for expanding their incomes and
furthermore the client's value. Nevertheless, tesco is also approaching to source the local raw
materials from the farmers. In view of that guarantee or responsibility, the associations of the
farmers of UK are challenging by conveying petitions or objections to the expert (Govindan,
Rajendran, Sarkis &Murugesan, 2015). Thus, the discussion will support Woods through
addressing the major points from this step which are as follows
Problem definition
The issue should have been characterized dependent on the circumstance that is being
distinguished in the main stage. The major issue shows the problem between the British farmers
association and Tesco. It has been justified that the organisation is bringing in the modest items
in order to satisfy the customers by taking consideration of similar quality of the UK. These
activities are helpful for the clients in the term of spending plan, accessibility and quality. The
issues can be seen that the farmers’ relationship with UK is likewise advocated as their products
are being disregarded by Tesco. The cheap products are brought by the company from different
nations and put the name of them on British brand, hamper the morale of the company (Atsan,
2016). The basic stage is the problem description and obsession of the goal. Exploratory research
can be connected so as to separate the primer thoughts which will help to characterize the issue
(Xiao, Meredith &Gao, 2017). The role of the primary tools is huge in helping the exploratory
research as the gathering of data or perception legitimately from the respondents.
The farmers or the providers of Tesco will be the respondents for that leading the gathering can
be composed to comprehend their perception.
The power of the farmers is required to be recognized by providing analysis of the stakeholder
(Trkman, 2010). It is the analysis which is helpful for the management to resolve the issue of the
stakeholders in the disturbed business which will facilitate to intend approach for pleasing them
so as to amplify the turnover of the business. It includes four proportions that are as follows:
Promoters

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This segment is emphasised upper level of interest along with the power. At this stage, the
member of Tesco is fallen under this category which requires a high level of communication and
management.
Latents
This is the stage that the sight of low level of the interest and upper level of power. In such case,
the customers are the latents who are required to be content with high value developed by the
organization.
Apathetics
At this stage, the extent of interest is high with low power. Apathetics shows the suppliers and
the farmers and it is required by the management to inform them regarding the changes in the
terms of contracts so that operation can run smoothly.
Defenders
It is the section which is not required by Tesco because of the low interest and low power.
Hence, according to woods, the recognition of the objective can be linked with the phase where
the thought regarding the stakeholder in the company can be developed.

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Solution generation
This stage refers the solution, for the recognized issues are required to be developed. As per
Woods Model, this stage is helpful in providing sights to the management for achieving the goals
of the organization. It is necessary for the management to keep the focus on the step by step
process for finding the solution and accomplishing the goal (Ma, Ding & Hong, 2010). The
management should focus on the fishbone diagram to complete the solution. The fishbone
diagram is mentioned below:
Hence, the ideas are required to be developed which can transform the negative influences of the
issues which are recognized in the Fishbone diagram.
There are some solutions for resolving the issues that are mentioned below:
1. Discussing with the farmers to take out their complaint.
2. The validation provided to the Trade standard authority for the ongoing operational plan
of developing overseas raw materials which will support the business along with the
bonding with other countries.
Solution evaluation
This stage is related to the Woods Model through the solution review procedure where the
inspection is required to be completed for the purpose of deciding the level to which the
explanation supports the objective or moreover development required to be done. Evaluation is

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considered as the process where the affirmative along with negative factors are evaluated for the
purpose of developing best solution for the concerned issue. It has been found with the help of
the woods model that issues can be handled in an effective manner when all the parties involved
in the procedure of resolving issue (Guo& Wang, 2019). It is required to check the availability of
the resource before executing the action plan.
The solution which is developed can be focused on the following process:
Solution 1- Negotiation with the farmers for diminishing the complaint
In the context of the positive side, it can be said that the negotiation process will involve the win-
win situation for both the parties and farmers are the major parts of the business who included by
giving the raw materials such as pork, beef and fruit to the company and discussing with them
can carry good bonding for the huge time period.
On the other hand, this solution has a negative side as well because the company Tesco can face
the issues of negotiation as the introduction of out of the country raw resources is pleasing the
clientele efficiently. The productivity can obstruct with this process of negotiation as the
introduced items are much inexpensive which is decreasing the operating cost (Wood, Coe &
Wrigley, 2016).
Solution 2: Ignoring the negotiation and providing justification to the Trade standard
authority
The encouraging side for this solution is that it is based on the globalization that allows the
business to do business on an international level. The justification is valid as the company got a
license to operate the business globally in apprehensive countries.
With respect to the negative side, it shall be noted that hampered relationship can influence the
operation for the long term. Enduring challenge will develop a negative impact on the mind of
the consumer that the items are introduced which are having a lower rate and can influence their
health.
Implementation and action plan
The explanation will be employed in the following way:

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1. The management will call a summit with the Union of the Farmer.
2. Representatives as well as the Union and the organization of Tesco will be there.
3. The opinions will be presented by both parties. For instance, the price will be claimed
with the management in which they are getting is much low than them.
4. After providing their opinions both the parties will arrive at level of compromise where
the providing prices of the farmers will be transformed.
According to Woods, a review is required to be focused that will show a true image regarding the
growth of the functioning planning which is being framed.

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References
Atsan, N. (2016). Decision-making under stress and its implications for managerial decision-
making: a review of literature. International Journal of Business and Social
Research, 6(3), 38-47.
Bouzon, M., Govindan, K., & Rodriguez, C. M. T. (2018).Evaluating barriers for reverse
logistics implementation under a multiple stakeholders’ perspective analysis using grey
decision making approach. Resources, conservation and recycling, 128, 315-335.
Ghosh, S. (2016). Tesco's 'fake farm' brands referred to trading standards. Retrieved from:
https://www.campaignlive.co.uk/article/tescos-fake-farm-brands-referred-trading-
standards/1402536
Govindan, K., Rajendran, S., Sarkis, J., &Murugesan, P. (2015). Multi criteria decision making
approaches for green supplier evaluation and selection: a literature review. Journal of
Cleaner Production, 98, 66-83.
Guo, L., & Wang, Z. (2019).Ratio Analysis of J Sainsbury plc Financial Performance between
2015 and 2018 in Comparison with Tesco and Morrisons. American Journal of Industrial
and Business Management, 9, 325-341.
Ma, Y., Ding, J., & Hong, W. (2010). Delivering customer value based on service process: The
example of Tesco. com. International Business Research, 3(2), 131.
Rodionova, Z., (2016). Tesco and other supermarkets using fake farm brands spark complaint
from NFU. Retrieved from: https://www.independent.co.uk/news/business/news/tesco-
and-other-supermarkets-using-fake-farm-brands-spark-complaint-from-nfu-
a7144551.html
Smithers, R. (2017). Tesco faces legal threat over marketing its food with 'fake farm' names.
Retrieved from: https://www.theguardian.com/environment/2017/dec/13/tesco-faces-
legal-threat-over-marketing-its-food-with-fake-farm-names

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Trkman, P., (2010). The critical success factors of business process management. International
journal of information management, 30(2), pp.125-134.
Wood, S., Coe, N. M., & Wrigley, N. (2016). Multi-scalar localization and capability
transference: exploring embeddedness in the Asian retail expansion of Tesco. Regional
Studies, 50(3), 475-495.
Xiao, M., Meredith, R., &Gao, S. (2017). An Exploratory Study Investigating How and Why
Managers Use Tablets to Support Managerial Decision-Making. Australasian Journal of
Information Systems, 21.
Yildiz, E., &Böhme, R. (2017).Effects of information security risk visualization on managerial
decision making. Proc. of EuroUSEC.