Organizational Development and Challenges at Tesco: A Report

This report provides an in-depth analysis of Tesco's organizational development, encompassing its structure, culture, and the challenges it faces in the global market. The report begins with an executive summary and introduction, setting the stage for an examination of Tesco's characteristics, goals, and objectives, considering its ethos and motives. It reviews literature on organizational change, cultural change, and new leadership, followed by a detailed methodology section outlining the research approach and design. The findings cover socio-cultural factors, PESTLE analysis, organizational structure, and culture, as well as change management and resistance to change. The report also explores the influences of organizational culture and adaptation to change, concluding with a discussion, references, and appendices that support the analysis. The report emphasizes the importance of sustainable organizational development and the impact of Tesco on other organizations, providing a comprehensive overview of Tesco's business practices and its evolution within a globalized context.

University
Organizational development
By
Date
Name
Lecturer’s name
Page 1 of 26

ORGANIZATIONAL DEVELOPMENT
Executive summary
This report focuses on the different characteristics and forms of business organizations followed
by the organizational structure, culture and formation of Tesco. It also highlights the different
characteristics, activities, key influential goals and purposes of Tesco by considering its ethos
and motives. The organizational structure, culture are critically analyzed along with the
challenges that the company face in the globalized market. Sustainable organizational
development is the main requirement of the company and that is being stated in this report. The
company’s influence on the other organizational bodies are also highlighted with referred
examples and current market situations.

ORGANIZATIONAL DEVELOPMENT
Contents
Introduction......................................................................................................................................2
Literature review..............................................................................................................................4
Organizational change..................................................................................................................4
Cultural change............................................................................................................................5
New leadership.............................................................................................................................5
Methodology....................................................................................................................................6
Research findings.............................................................................................................................9
Socio-cultural factors...................................................................................................................9
P.E.S.T.L.E..................................................................................................................................9
Organizational structure.............................................................................................................11
Organization culture......................................................................................................................14
Organizational change...................................................................................................................15
Resistance to change......................................................................................................................16
Influences of organisational culture...............................................................................................16
Adapting to organisational change................................................................................................17
Discussion and conclusion.............................................................................................................18
References......................................................................................................................................19
Appendices....................................................................................................................................21
Appendix 1- Karl Weick’s.........................................................................................................21

ORGANIZATIONAL DEVELOPMENT
Appendix 2- Deal & Kennedy...................................................................................................21
Appendix 3- Cameron & Quinn.................................................................................................22
Appendix 4- Kurt Lewin’s.........................................................................................................23

ORGANIZATIONAL DEVELOPMENT
Introduction
The following report focuses on the formation of business organisations in different sectors
along with the organisational development of a specified organisation. Here, the learner has
taken up Tesco to analyse the main characteristics, goals and objectives of the company. The key
environmental influences of the organisation are taken into consideration in accordance with its
ethos and purpose. The organisational development and the changes that occur are devoted to the
research and development theories and all forms of organisations. The organisational structure
and culture designs are explained, and the challenges are highlighted that they face in the
globalised market. Sustainable organisational development and organisational culture on the
multinational organisation are stated in the diversified environment.
Tesco is a multinational grocery business of British origin found in 1919. It expanded its market
globally and diversified itself in many sectors. The main objectives of the company are to expand
and earn higher profit margin. Tesco is one of the biggest supermarket chains in the UK as well
as across the globe. According to DICKINSON (2012), the objectives are set to meet them in
ethical considerations and improvise the business management. Tesco holds some basic
objectives that they are working on to meet them and achieve success. The basic examples of the
organizational development and planning can be set by evaluating its organizational behavior.
The company sets a perfect array of rules and ethics that help the employees to work in a
peaceful manner and get then maximum job satisfaction.
 Tesco aims at developing a peaceful working environment for their staffs that would
encourage and motivate them to serve more for the company. Motivating the staffs
becomes an asset because the human resource is the human capital the company is
investing in the business.

ORGANIZATIONAL DEVELOPMENT
 Tesco targets to expand their sales of organic products and manufacturing.
 Tesco has 6.5% share of the market in the non-food sector and thus, they aim to be
equally demanded as the food sectors.
Tesco usually carries some basic objectives that include serving the customers with best products
that are manufactured with the help of hygienic and improved technology. According to Durand
and Vergne (2012), being competitive in the market and the whole global platform is another
requirement of the company.
Literature review
Organizational change
The challenges faced by Tesco in the global market field demands a high reformation in the
marketing management body and the technological departments. The use of technology is
essential to carry on the competition and fast working strategies than other companies. Thus, the
human resource department must hire eligible and efficient management level executive who can
formulate new ideas and bring in innovation to develop the marketing condition of the company.
The products need severe attention keeping in mind the need of hygiene factors and financial
factors of the company.
There are two kinds of basic organisation that are profit making and non-profit making. The
profit making organisations are mainly the ones organising the business with some primary
goals. For-profit organisations or corporation solely aims to operate the business and earn
revenue stressing on their objectives and favours, unlike that of public. These organisations are
under private sector, and they generate their shares extending them to the general public. The
public who purchase their shares becomes the shareholders and owns shared ownership.

ORGANIZATIONAL DEVELOPMENT
According to Balasubramanian et al., (2014), this kind of organisations has to pay taxes and
register themselves with state authorities to operate their smooth flow of business.
New ideas and strategy development are needed to build up the advantage of overseas again.
Vaněk, Mikoláš and Žváková (2012) stated that the organisational structure of Tesco follows
features like geographical based, empowering high employability, decentralised structure and
decision making, flexible and friendly working environment with values and ethics ().
Cultural change
There are the lots of companies with whom we can compare TESCO's cultural structure and
other organisational structure but among those Sainsbury can be compared with the TESCO
because the organisational and the cultural structure of both company is similar to each other.
Here Sainsbury is an example from here we can understand corporate strategy and corporate
cultures intimate power relationship. The performance of the economic firm is managed by the
corporate culture because the corporate culture plays a vital role in the decision making of the
corporate sector. From these, it can be understandable that corporate culture can give a lot of
advantage to the company by motivating the employers and the managers. This helps the
manager to involve their employers in some activities by which they can enjoy their work.
Corporate culture signifies that the business mentality and a good working environment can give
the employers and both the managers to maintain their good work which will help the company
to run the business in the market. Corporate culture helps the company to create the new strategy
and the ideas which will attract the both the employers. New strategies like marketing strategies
are the best example because in marketing strategy many companies show the new type of
strategy which is different from other companies. But at the same time this also a disadvantage
for the company because the corporate culture becomes a burden for the organisation because the

ORGANIZATIONAL DEVELOPMENT
organisation culture gives more and vast responsibility to the employers. This led the
disadvantage of the organisational culture.
New leadership
When a company is not doing well under the leader or the leader is retired then the company start
to choose or appoint a new leader for the team. When a new leader comes, the leader has to face
new challenges and has to face new opportunities. It is not easy for a new leader to start the work
smoothly, but then also the leader has to start his work smoothly to show the way to the
employers or the team. The new leader has to transform the old concept and start to build it a
new way. The new leader should have new visionary for the company. The leader should inspire
the employers by an example.
Methodology
In accordance with the need of the research, the appropriate and legal techniques are to be used.
Therefore, the methodology is the key aspect for judging the motive and philosophy with which
the researcher is trying to set the researcher and find out definite conclusions.
Research philosophy
The investigation techniques are the primary stage before initiating the research. The research
philosophy elaborates the nature of data and information that are to be used in the research.
There are three types of research philosophy that are known as positivism, interpretivism and
realism.
Research approach
Following the need of the research philosophy, the approach is also to be taken care of as this is
the base of research functioning while in the mindset of data collection. The nature of the data

ORGANIZATIONAL DEVELOPMENT
collection is a minute material that needs proper attention seeking for thru best results out of the
whole procedure. There are two types of approach as in inductive and deductive. Inductive deals
with the quality of the information whereas the deductive approach represents the quantification
of the data. Deductive approach is mostly acceptable as it helps to grab most important and
useful functions of the company than that of the inductive approach.
Research design
The framework of the research formation and evaluation is known as the research design that
will facilitate the researcher to measure the accuracy of the data and information that are
accumulated. The research design is categories in three types like exploratory, explanatory and
descriptive. Just like the deductive approach, the descriptive research design will elaborate the
significance of the research materials and information taken into consideration.
Research onion
There are different stages to the whole system of researching and research onion is considered to
be the layered structural formation of the research procedures that highlight the individual
importance of each stage.
Data collection method
Qualitative data collection: The secondary data that are used in the research are data from
articles, journals, magazines, the internet, newspaper, blogs, etc. The accountability of the data
collected is measured by the terms of its quality that would help the researcher to conclude on
some subjective and highly qualified recommendations and results.

ORGANIZATIONAL DEVELOPMENT
Quantitative data collection: The quantity of the data and researches according to the research
techniques and methods are considered in the quantity that is mainly analysed in the primary data
collection and statistics features.
Sampling
After deciding the selection of philosophy, approach, design and data collection method under
this department the researcher will decide whether the research will be executed inside or outside
of the organisation by selecting any one of probability or non-probability methods. Elaborating
the same probability method will direct the researcher to conduct the research outside the
organisation and non-probability will direct to conduct within the organisation. As marketing is
done for outsiders, the researcher will go with probability method.
Ethical consideration
The ethical issues and considerations relate to the values of the research rules as well as the data
that the researcher is going to use. The authentication of the data and information matters a lot
for the evaluation of correct informative and standard result. The standardisation of the
regulatory measures and significant attention seeking according to the different stages have to
execute with appropriate communication strategies, and confidentiality is also the most important
factor that should be taken into consideration while remembering the ethical issues of the rules
and objectives of the research. The researcher should pay significant attention to every
department related with research to perform it in a legal manner. Moreover, good communication
and maintaining confidentiality are required skills to execute the research in an ethical manner.
Data analysis

ORGANIZATIONAL DEVELOPMENT
The data analysis procedure is the most important element that decides the ways and approach
through which the researcher will adapt to seek the appropriate results out of the collected
materials. The software techniques, procedures, graphs, surveys, secondary data collection
methods and primary data collection methods are to be analysed.
Research limitations
As we find not every task is easy to perform, and it depends on the individual how they carry out
their tasks, they also face some hindrances, and that's where the limitations of performing
research are to be taken into consideration. Talking about issues related to research the first and
foremost is time management. As there are so many activities, need to be performed by the
proper research allocation of time is required to each and every topic included in research
schedule. Moreover additional funds are also required while executing a research of big size
organisation.
Research findings
Socio-cultural factors
The surveys for the UK shows that people there prefer bulk and one-stop shopping centres.
Social trends seek company's attention, and thus, they formulate their strategies of marketing in
that manner to adjust and meet the demands. The constant health awareness is popular amongst
the customers, and they are highly concerned with their health issue. Therefore, according to
Fiedler and Welpe (2010), Tesco has improvised organic food qualities and offer customers with
hygienic items.

ORGANIZATIONAL DEVELOPMENT
P.E.S.T.L.E
The environmental factors that influence Tesco can be analysed with the PESTLE analysis.
PESTLE is short for political, economic, social, technological, legal and environmental factors.
Political factors: The retailing base of Tesco is worldwide, and thus, these factors influence the
company's performance greatly that includes the tax rates and the act of legislations. Donais
(2011) said that the ongoing financial issues of the whole world encourage the government of
countries to foster employment needs and employability in the companies. Tesco created great
employment opportunities in the diversified working environment.
Economic factors: The economic status and related financial issues are factors that influence the
internal environment of the company. The leverage costs, profits, and losses, debts, and liabilities
are the parameters based on which the financial accessibility of the company is analysed
(Donais, 2011). The company is holding 30% of the UK market share and is still dependent on
them to generate best revenue output.
Social factors: The surveys for the UK shows that people there prefer bulk and one-stop
shopping centres. Social trends seek company's attention, and thus, they formulate their
strategies of marketing in that manner to adjust and meet the demands. The constant health
awareness is popular amongst the customers, and they are highly concerned with their health
issue. Therefore, Fiedler and Welpe (2010) said that Tesco has improvised organic food qualities
and offer customers with hygienic items.
Technological factors: The technological advancements have created high opportunities for the
company. The development of digital marketing by the company has enabled customers to shop
online, and Tesco has facilitated them with home delivery services. The self-service points have

ORGANIZATIONAL DEVELOPMENT
enabled the company to reduce the labour cost that in return is more convenient. Tesco aimed at
investing in the projects on energy efficiency to attain the long-term objectives of the company.
Legislative or legal factors: The governmental policies and legislative measures influence the
performance of Tesco. The code of practices incorporated by the food retailing Commission
(FRC) restricts many practices like the sudden change of product prices without notice
(Heinemann, 2002). Tesco provides their customer price reduction on fuel purchase analysing
the amount that they have spent on grocery.
Environmental factors: The environmental issue is of high concern for any industry. Just to
meet the issues, Tesco has already aimed to reduce the use of carbon footprint by 50%.
According to Isac and Tomescu (2013), lessening of the waste products generated by the
manufacturing units has also been a positive step for the company that creates pollution
awareness amongst the customers.
Organizational structure
Tesco faces some challenges while being in the global market. The challenges influence the
company to regulate and regenerate their organisational in accordance to compete for the market
that gives a tough competition to the rest of the competitors. According to the surveys on Tesco
market shares, the following challenges have been detected:
Tesco is weak at targeting their potential customers- Sainsbury and Waitrose offer more
discounts to the customer and thus, Tesco fails to analyse whom to target, the customers or the
competitors.

ORGANIZATIONAL DEVELOPMENT
The overseas advantage is lost- Tesco has always been dependent on the market of UK, and
gradually it has failed to maintain the international and overseas reputation. Financial and legal
issues are the factors that affect this situation.
The UK market has become a sluggish Retail- The retail market of the company is mainly
grocery, and it has faced a tough situation in the home market itself. Economic recovery is yet to
be felt by the consumers. The sales rate has lowered to a great extent.
The clarity of the products is not consistent- Tesco is not able to cope up and confuse in brand
management and the real potential of the company. Though the company focuses on
technological and hygiene development, it is witnessed that it fails to maintain its quality and
generousness of the products.
Tesco lacks in clear management strategy- The management body fails to operate the
management strategies in the recent market field. The overlapping challenges have let the
management system to fail in the clear execution of the strategies. This leads to the high demand
for management changes and alterations.
The not-for-profit organisations aim at service the society without expecting a profit in return for
their service. Candler and Dumont (2010) said that the main characteristics of this kind of
organisations include a strong board of trustees and efficient management of cash flow. As these
organisations do not raise profit from the service takers, to run the business, investments are
required apart from the business trustees and thus, they aim at maximisation of fund raising
efforts. According to Barnes (2011), the performance of the organizations sets the management
strategies that they will apply.

ORGANIZATIONAL DEVELOPMENT
The hierarchy of the organisational structure begins at the headquarters with CEO and following
down to the general executive managers, supervisory managers and then the regional managers
(SUGARMAN, 2007). The organisational structure of Tesco begins from the regional manager
under whom comes store manager. The store manager operates three sections and dignitaries as
in the food trading manager, non-food trading manager, and personnel manager. The food
training manager trains and operates the fresh food section manager and ambient food section
manager. Taormina (2008) said that the non-food trading manager deals with the electrical
section manager and the clothing section manager. The personnel manager deals with personnel
assistance. The senior functional managers are the ones to deal and operate with the functional
organisational structure. They deal in with the production management and department.
However, according to Vaněk, Mikoláš and Žváková (2012), the whole responsibility of
allocating resources is given to senior management groups. Coordination is a must factor that is
demanded best functional outputs. The divisional organisational structure is the primary bodies
that deals with the functioning of different departments of the company, like human resource,
production, sales, finance, and marketing resources.

ORGANIZATIONAL DEVELOPMENT
Organization culture
Tesco, as it is known to be a leading supermarket brand and the culture that they hold, is
demanded by every other company. Today's world is in a changing process and thus, adapting

ORGANIZATIONAL DEVELOPMENT
the changes must be the most adaptable attitude. Accepting changes and adapting the habit of
adaptation is necessary to mix with situations and find out relevant ways of solutions. The
diversified market and the changing environment have a great influence on every working
company.
Diversified markets are the reasons and results of continuous change and different culture of the
places throughout the world. When the global market undergoes high diversification, scopes of
risk increases for the companies to sustain in the field. This is due to the fact that the situations
demand change. Change in the functioning strategy, change in the marketing strategy and
development of innovation. Every market deals with a bunch of competitive bodies that strives to
beat each other at being successful. This fast racing needs high influential plans and strategic
thinking to cope up with the situations.
Entrepreneurship is the urge of an individual or group who take up risks and develops a business
body to organise and operate their functions and meet the business objectives. The continuous
evolving global market base is the platform where entrepreneurship is exercised. The one who
possesses the quality of being entrepreneurs are great motivators, creative, versatile, tolerant, and
flexible and they have a good knowledge of the business.
Organizational change
NGO, short for non-governmental organisations are mainly the non-profit making private
volunteering organisations. According to Candler and Dumont (2010), they are the service-
oriented bases who work either for the benefit of the business members or other agencies ().
These organisations focus on independent and democratic working pattern and management
system. These organisations are not influenced by government's financial support (Barnes, 2011).
The governmental business sector is set for organisations that run under governmental power.

ORGANIZATIONAL DEVELOPMENT
The characteristics of this kind of organisations are that they are separate legal entities those who
own the power to make contracts with delegated financial authority and operational functioning
strategy to run the business. These types of organisations are primarily sales based
infrastructures. The revenues that are met outside the government sources are collected by them.
They focus on meeting the liabilities too (Balasubramanian et al., 2014). Business sectors can be
extended in the global context, be it small scale or large scale business. It is usually found on the
internet that the small scale business is operating their business sitting at one corner of the world.
For extending business in the whole world, the entrepreneurs and the business management
system must have good overseas experience and depth of self-awareness. Global strategic
thoughts are also necessary and patience to carry on the examples (DICKINSON, 2012).
Resistance to change
The business goals of companies change with the change in the market demand. Tesco, being
mainly a retailer of supermarkets, have the potential to maintain their servicing strategy and that
too on time. This attribute of the company has influenced the competence level in the global
market where the other companies try to think something better than Tesco.
However, in the recent changes, it is seen that Tesco is not able to cope up with the
diversification of the global market and situations are demanding for the change in the company's
cultural structure. It is witnessed by the falling rates of the market shares and profit rate of Tesco
that something is turning the wrong side.
Employees and managers have been creating the impulsive image of the company that by default
demands change in its organisational culture and that is needed to be changed for improving the
lost reputation.

ORGANIZATIONAL DEVELOPMENT
Influences of organisational culture
Diversity refers to integrated working style that works with the different genre of people with
their different perspectives and thought processes. The organisational culture of Tesco beholds
the objectives of the company that says they focus on friendly and open space for the employees
to work and evaluate their styles. There are certain aspects of culturing the culture of the firm.
Tesco follows friendly culture and empowers the employees in the high position so that they
could develop flexibility in the workplace. Decentralised decision-making strategy is one more
aspect of the company's workforce environment that influences the working willingness and
interest of the workers. They have got a welcoming attitude that also gives the employees a
supportive aspect. The performance and attitude of the employees towards the company and to
each other are judged with the culture of this organisation. The arrangements of the company are
controlled by the management that also keeps holding on the measurements of competence level
of the staffs and the managers. The internal affairs of the company, like meetings and
arrangements, shows the strength of their internal atmosphere and the ways they seek to sort out
issues. There are certain aspects of organisational culture like historical, behavioural, normative,
functional, structural, mental and symbolic.
Adapting to organisational change
Tesco is seen to witness a lot of challenges in the global market and in the home market too. The
pressure from the markets and the competitors is very natural and are increasing day by day.
Thus, to tackle this kind of pressure great efficiency and innovation is required. Lozano (2011)
said that the clients are demanding and giving more importance on the security and
environmental aspects.

ORGANIZATIONAL DEVELOPMENT
According to the challenges faced by the company, they need to set strictures realising the
demands of the processes of organisational structure. Along with the top management, Tesco
initiates to develop sustainable organisational development that needs great cooperation and
support of the employees. The constructive discussions are required to formulate new ideas and
effective leadership implications. According to Marjani and Ardahaey, (2012), the conflicts are
not necessarily needed to be resolved but develop sustainable strategies, procedures, behaviours,
structures and competencies. The indicators of the change are taken into consideration to
formulate the sustainable organisation development. The change demanding situations are the
corporate environment, corporate strategies, corporate culture and management with the
employees. All these bodies directly indicate the change in the indicators of the problems and
challenges. Then it is necessary to measure the changes and their intensity based on which the
results and process analysis to resolve the matters would be originated. According to Meutia
(2013), the parties' inclusion might hamper the process, but the willingness of making a change
is generated when the team and management of the company realise that there needs a change. It
is important to set such kind of strategies that would encourage and motivate the employees and
other staff for keeping the target in achieving the newly formed objectives. It is important to
analyses the changes made and reasons behind them so that they can clearly sort out the solutions
and meet the objectives and bring back the position.
Discussion and conclusion
The organisational structure is a boon to many of the functional activities and formation of the
company that helps them to sustain in the globalised form of market. Tesco is one such company
that has created an example of influencing the other related markets and organisations in it. This
report especially focuses on the characteristics, vulture and structure of the company that have

ORGANIZATIONAL DEVELOPMENT
helped the market as well as the organisation in developing the marketing strategies.
Management strategies are the source of examples that would surely be beneficial for the other
related companies to measure their competitive advantage and enjoy better facilities and sources
to develop their organisations.

ORGANIZATIONAL DEVELOPMENT
References
Balasubramanian, R., Gunavathi, K., Jegan, R. and Roobanguru, D. (2014). A Study on the
Generalization of Equations of State for Liquids and Gases. Open Journal of Modern Physics,
2014(2), pp.34-40.
Barnes, R. (2011). The great Tesco beauty gamble (the Tesco supermarket chains marketing’
strategy for breaking into the UK beauty services market). Strategic Direction, 27(7).
Candler, G. and Dumont, G. (2010). A non-profit accountability framework. Canadian Public
Administration, 53(2), pp.259-279.
DICKINSON, F. (2012). Fighting Culture with Culture. Diplomatic History, 36(4), pp.773-775.
Donais, T. (2011). Peacebuilding and Profit-Making. International Studies Review, 13(2),
pp.325-327.
Durand, R. and Vergne, J. (2012). No territory, no profit: The pirate organization and capitalism
in the making. M@n@gement, 15(3), p.265.
Fiedler, M. and Welpe, I. (2010). How do organizations remember? The influence of
organizational structure on organizational memory. Organization Studies, 31(4), pp.381-407.
Heinemann, A. (2002). Business Co-operation on Electronic Marketplaces: Competition Law
Concerns. European Business Organization Law Review, 3(01), p.27.
Isac, N. and Tomescu, C. (2013). The Impact of Sustainable Development on Organizational
Culture at S.C. Automobile Dacia S.A. Management of Sustainable Development, 5(1).

ORGANIZATIONAL DEVELOPMENT
Lozano, R. (2011). Creativity and Organizational Learning as Means to Foster
Sustainability. Sustainable Development, 22(3), pp.205-216.
Marjani, A. and Ardahaey, F. (2012). The Relationship between Organizational Structure and
Organizational Justice. Asian Social Science, 8(4).
Meutia, M. (2013). Entrepreneurial Social Competence and Entrepreneurial Orientation to Build
SME’s Business Network and Business Performance. International Journal of Social Science
and Humanity, pp.381-385.
Sharma, E. (2010). Global Adjustment Perspectives of Indian Professionals. Global Business
Review, 12(1), pp.87-97.
SUGARMAN, B. (2007). A Hybrid Theory of Organizational Transformation. Research in
Organizational Change and Development, 16, pp.43-80.
Taormina, R. (2008). Interrelating leadership behaviors, organizational socialization, and
organizational culture. Leadership & Organization Development Journal, 29(1), pp.85-102.
Vaněk, M., Mikoláš, M. and Žváková, K. (2012). Evaluation Methods of Swot Analysis /
Metody Vyhodnocení Swot Analýzy. GeoScience Engineering, 58(2).

ORGANIZATIONAL DEVELOPMENT
Appendices
Appendix 1- Karl Weick’s
Appendix 2- Deal & Kennedy

ORGANIZATIONAL DEVELOPMENT
Appendix 3- Cameron & Quinn

ORGANIZATIONAL DEVELOPMENT
Appendix 4- Kurt Lewin’s