Organizational Analysis of Tesco Public Limited Company Report

This report provides an in-depth organizational analysis of Tesco, a British multinational retailer. It examines Tesco from four key perspectives: bureaucratic, contingency, political, and cultural. The report delves into Tesco's hierarchical organizational structure, assessing its formalization, horizontal and vertical differentiation, and strategies for managing structural tensions between differentiation and integration. Furthermore, it analyzes Tesco's technologies using Charles Perrow's theory, evaluates key factors in Tesco's environment using PESTLE analysis, and assesses the degree of fit between its structure and environment. The discussion also covers the cultural and political dimensions of the company, along with the challenges and benefits faced by Tesco. Finally, the report concludes with suggestions for addressing these issues, providing a comprehensive understanding of Tesco's organizational dynamics.

Running Head: ORGANIZATIONAL ANALYSIS
Organizational Analysis
Name of the Student
Name of the University
Author Note

1ORGANIZATIONAL ANALYSIS
Executive summary
The purpose of this report is to understand the four perspectives of the chosen organization that
is Tesco. The four perspectives to be discussed in this report include the beurocratic perspective,
contingency perspective, political perspective and cultural perspective. With the help of the
abovementioned perspectives, organizational analysis of the Tesco Public Limited Company will
be conducted. Apart from analyzing the organizational structure of the company, the benefits and
challenges faced by the company will be analyzed in detail and effective suggestions to cope up
with these issues will be discussed in this report.

2ORGANIZATIONAL ANALYSIS
Table of Contents
Introduction......................................................................................................................................3
Discussion:.......................................................................................................................................4
Bureaucratic Perspective.............................................................................................................4
Contingency Perspective.............................................................................................................8
Cultural Perspective...................................................................................................................12
Political Perspective...................................................................................................................14
Conclusion.....................................................................................................................................16
Reference list:................................................................................................................................18

3ORGANIZATIONAL ANALYSIS
Introduction
Tesco Public limited company is a British multinational general merchandise and grocery
retailer. The company has its head quarter at Hertfordshire, England located in United Kingdom.
If measured with respect to profit, Tesco is considered to the third largest retailer and if the
overall revenue of the company is considered, it is the ninth largest retailer across the world. The
organization has it store across 12 crucial countries located in Asia and Europe and UK. Tesco
was founded by Jack Cohen in 1919 and from being a UK grocer initially, with the advancement
of time the company diversified its area that includes retailing cloths, books, electronics, petrol,
software, toys and furniture (Kotab and Helsen 2014). During the 90s the company repositioned
itself from a down market, high volume retailer to an organization that offers consumers the
finest range of goods. The chief aim of the mentioned organization is to stay the leading retailer
by gaining competitive. In order to make this goal successful, the primary objective of Tesco is
to provide finest quality products as well as services to the consumers at a very reasonable price
much lower than their potential competitors. According to the board of directors of the
mentioned company, Tesco was built with the mission of serving the consumers by assuring
them ‘a better quality of life’ and ‘easier way of living’ (Dalkir 2013). The company understands
that the consumers across the world want high quality products at low cost which can be bought
easily and that’s why the management of Tesco Plc. has taken the oath of pushing their service
towards betterment little by little, each and every day for the satisfaction of the consumers.
According to statistical data, Tesco serves nearly 66 consumers in every second only in the UK,
and the goal of the company is to ensure that each and every consumer experience a highly
enhanced service (Burrell and Morgan 2017). In this report, organizational analysis of the above-
mentioned company has been performed with the help of four perspectives that include

4ORGANIZATIONAL ANALYSIS
Bureaucratic perspective, Contingency perspective, cultural perspective and finally political
perspective. This analysis is done to understand the techniques, internal environment and
teamwork performed by the organization.
Discussion:
Bureaucratic Perspective
1. Description o the formal organizational structure of Tesco
The organizational structure of the company is hierarchical due to the vast size of its business. In
large stores, there are four layers of management. However, this organizational structure of
Tesco is flexible and varies with respect to the geographical location and size of the store. The
flowchart given below describes the organizational structure of the given company:
Figure 1: Organizational Chart of Tesco

5ORGANIZATIONAL ANALYSIS
Source (Miozzo, Yamin and Ghauri 2012)
The board of directors of the company is comprised of 10 members. However, in the year
2015, the company evidenced several changes that include the appointment of John Allan as the
new director of the board, the appointment of Dave Lewis as the new CEO and Alan Steward as
the Chief Financial officer of the company (Brannen, Moore and Mughan 2013). Apart from
that, that year the company had also evidenced the retirement of four non-executive directors and
the appointment of 3 directors in their place. The governance structure of Tesco is comprised of
five committees that include Audit Committee, Corporate responsibility committee,
Remuneration committee, Nomination committee and disclosure committee (refer to Appendix).
2. Assessment of formalization of Tesco
Being a vast and well-reputed organization, Tesco is highly formalized and follow a fixed
set of intra-organizational rules and structure. The organizational civilization and construction of
Tesco are characterized by friendly civilizations, high employee authorization, decentralized
construction, flexible work environment, shared beliefs and values and decentralized determining
to devise. For instance, one formal rule of Tesco includes weekly face to face communication
between the employees (Hatch 2018). This, in turn, enables the employees to remain well
informed about the crucial happenings in the company along with providing help to serve the
consumers in a more satisfactory way.
3. Level of horizontal and vertical differentiation
Product differentiation can be defined as crucial marketing processes since it builds the
competitive advantages of the company. Horizontal differentiation refers to product distinction
based on the quality of the product. The horizontal product differentiation of the company is low

6ORGANIZATIONAL ANALYSIS
and the level of vertical differentiation of Tesco is high. In contrast to that, in case of vertical
differentiation, distinctions between products are objectively measurable. The own-level product
of Tesco which includes 50 percent of its overall sales has three levels, namely, value, normal
and finest (Shafritz, Ott and Jang 2015). Considering the fact that several stores of Tesco had gas
stations attached to it, Tesco has also become one of the largest petrol gas retailers.
Tesco follows decentralized decision-making structure that includes involvement of
lower-level employees while a crucial decision is taken by the company. For example, the store
managers of each of the stores of Tesco located in different parts of the world has the capability
to take certain decision associated with the respective stores. Each store manager is only
answerable to the regional manager of the company. Considering the fact that decision making
can be termed as a form of empowerment, this empowerment enhances the responsibility of the
employees of the organization. This, in turn, enhances the productivity and the loyalty of the
employees. The enhanced motivation of the employees enables Tesco to maintain its high
revenue and reputation in the global market.
4. How Tesco manage the structural tension between differentiation and integration
Differentiation is mostly seen in a large organization where individual departments,
branch offices or section adopt their own corporate culture which is different from the culture of
the parent organization (Kim et al., 2014). For instance, The Sales department of Tesco has a
different approach to corporate culture compared to that of the finance department of the same
organization. Integration, on the other hand, can be defined as the ability of an organization to
coordinate their operation. Since the vertical differentiation of Tesco is low, the company can be
regarded as highly integrated and has a strong connection between its product lines and

7ORGANIZATIONAL ANALYSIS
departments. In order to manage the structural tension between integration an differentiation,
Tesco follows the below mentioned strategies:
 Time constraints and prioritization
Each department of Tesco sorts its priorities in order to manage the tension of diffraction
and integration. For instance, while the sales department of Tesco focuses on enhancing the
revenue of the company, the accounting department of the organization focuses on reducing
the overall costs of the company. Thus, the chief purpose of the company that is to enhance
the yearly profit is served. When it comes to managing the time constraint of the
organization, the product development staffs of Tesco work in terms of years and months,
while the consumer support staffs work on the basis of days and hours (Kotabe and Helsen
2014).
 Merging with Bookers
In order to deal with differentiation in the external environment of the company, Tesco has
takeover Booker in order to increase its market. Merging with Booker will enable the company
to grab the out-of-home food market that includes Cash and carry a network of Bookers along
with click and collect home or business delivery capacity of Tesco (Scott and Davis 2015).
5. Code of ethics of Tesco
Like any other well-reputed multinational company, Tesco also posses a written code of business
conduct and ethics. The cultural value tree of Tesco provides an ideal guide to demonstrate the
commitment of the company to ethical business conduct. The board of directors of the company
has adopted the written code of ethics and business conduct as a guideline which will help the

8ORGANIZATIONAL ANALYSIS
company to promote ethical and honest conducts, accurate, fair , timely, understandable and full
disclosure along with providing effective guidance to the officer, directors and employees that
will help them to deal with ethical issues. According to Tesco, the mentioned code of ethics
though is not for covering every ethical situation or issue of the employees, officers or directors
but should be used as an additional guidance while dealing with the issue (Tescocorp.com 2018).
Contingency Perspective
1. Description and assessment of technologies used by Tesco with respect to Charles
Perrow’s theory
According to the American sociologist, Charles Perrow, technologies used by the
organization can be classified into 4 chief categories that include Routine, Craft, Engineering and
Non-routine technology. Being a retail organization, the technologies used by Tesco falls under
craft and engineering technologies (Scott and Davis 2015). Engineering technologies though has
a lot of exceptions can be managed in systematic and rational manner. The technologies used by
Tesco in order to construct retail stores across the world falls under this technology.
Technologies used by the mentioned company in order to restore its furniture’s and other
products fall under craft technology. The RFID project of Tesco falls under the engineering
technology. In order to make the task of the employees who are in charge of the stock counting
department, the organization has introduced a barcode which is RFID enabled to their new F&F
clothing range. With the help of this technology, the products get automatically counted and
removed while entering and leaving the stores. Not only that, this technology also enables the
suppliers to backtrack the information (Mollah 2014). Thus, the RDIF technology not only
enhances the overall experience of the shoppers but also provides the suppliers with accurate
replenishment of the stock.

9ORGANIZATIONAL ANALYSIS
Apart from that, the company has recently co-joined If This Then Than (IFTTT), in order
to provide its consumers with the ultimate shopping experience. This application enables the
consumers of Tesco, to connect other actives app with each other and use them all at a time.
2. Assessment of key factors in Tesco’s Environment by identifying elements of change
as well as elements of stability
The chief purpose of Tesco is to satisfy its consumers and its stakeholders along with
other individuals involved with the organization. Tesco's environment can be classified into the
external and internal environment. In order to identify the element of change as well as the
stability of the organization, PESTLE Analysis of Tesco can be considered as an effective tool.
A crucial element of change evidenced by the company is to separate the confectionery from the
retail stores in order to help the consumers to make a healthier choice. Although the company
had taken out confectionary stores from checkouts and large stores two decades ago, now this
change will be implemented in Tesco Express convenience stores and Tesco Metro stores too.
Some of the elements of stability of the company are diverse and wide consumer base across the
world, a wide range of patents and patent license agreements and a strong product portfolio
(Oied.ncsu.edu. 2017). On the other hand, some of the major elements of changes that act as a
threat to the mentioned company are seasonal variations, potential risks associated with the gas
and oil industry and uncertainty in the global economic condition.
3. The degree of fit between organization's structure and organization’s environment
The organizational structure of Tesco is found to be highly beneficial for the company.
Considering the fact that the global unemployment rate has increased over the last one decade,

10ORGANIZATIONAL ANALYSIS
the organizational structure of Techno provides huge opportune to recruit huge labor force at an
optimum cost. The job opportunities at Tesco are much higher than that of any of its competitors.
This proves to be beneficial for both the company and the global economy since in one hand, the
recruitment of labors at a cheap rate helps the company to enhance its overall revenue, it also
reduces the global unemployment issue to a little extent (Tescocorp.com 2018). Secondly, since
the company provides employees with the freedom to make decisions for the company, the
loyalty and productivity of the employees got enhanced. This acts as a beneficial factor for the
company since it helps the company to obtain a competitive advantage in the global environment
by satisfying the consumers. Thirdly, the organizational culture of the company encourages
beliefs and values associated with ethics and interaction between the employees and the
managers in the workplace. friendly relation and flexible organizational structure motivate the
employees of the organization. This, in turn, enhances employee retention and the brand equity
of Tesco (Clark 2012).
4. The structural problem of Tesco
Being a globally known retail company, the organizational structure of Tesco is strong
and effective. As a result, very few amounts of issues are faced by the company due to its
organizational structure. Considering the fact that the organizational structure of Tesco is
hierarchical, some of the advantages experienced by the company include a clear chain of
command, clear path of advancement and specialization. A clear chain makes it easier to
communicate during the time of crisis and generates clearly defined set of responsibilities (Scott
and Davis 2015). The hierarchical structure of Tesco offers a clear path of career advancement
for the employees either by replacing a superior or in another branch of the company in a better
designation. Being the third largest multinational retail sector of the world, Tesco needs to

11ORGANIZATIONAL ANALYSIS
manage a good number tasks ranging from marketing to Human resource and accounting. The
hierarchical structure of Tesco enables the company to divide the areas of concern into various
specialized departments. One of the chief ways by which the company has eliminated
organizational issues is scrutinizing the disadvantages of its structure and working separately on
them. Two of the major disadvantages of the Hierarchical organizational structure are
communication barriers between the employees and the managers and disunity in the
organization. In order to deal with communication gap between the employees and the managers,
the company has implemented internal intranet technologies that have to ease the organizational
communication to a great level. Besides that, by enabling the employees to take part in decision-
making session, Tesco has provided its employee with the empowerment that also enhances the
loyalty of the employees (Solomon, Russell-Bennett and Previte 2012). In order to prevent
disunity among the employees and the managers, Tesco has implemented an effective
organizational strategy that includes setting a common objective for all of its retail stores.
Besides that, the HR management of Tesco organizes yearly activities and encourages teamwork.
5. How Tesco deals with Ethical issues
Considering the fact that Tesco is the founder member of Ethical Trading Initiative (ETI),
the ETI base code is used by the company which includes freely chosen employment, right to
bargain collectively and freedom of association (Volberda et al. 2012). Apart from that, the
company pays special attention so that the working conditions of all the employees are hygienic
and safe, child labor is not encouraged within the office premier, the working hours are not
adversely affected the work-life balance of the employees, no discrimination is practiced, living
wages are paid, no inhumane or harsh treatment is experienced by any of the employees and
regulator employment is provided to reserved candidates. Any violation of the above mention