Risk Management and Innovation Report: Tesco's Business Strategy

This report provides a comprehensive analysis of risk management and innovation strategies, focusing on the case of Tesco, a major player in the retail industry. It begins by exploring various risk assessment techniques, including qualitative and quantitative methods, and discusses their relative roles in organizational strategy. The report then delves into the organizational culture implications of effective risk management, examining how company culture influences quality, efficiency and productivity. It highlights good practices within firms like Tesco and suggests ways to improve them. Furthermore, the report investigates different innovation models and their application within an organization. It identifies the components of an innovative organization and analyzes factors affecting innovation at Tesco, offering suggestions for improvement. The report also touches upon the importance of professional skills in this context. Overall, the report provides a detailed overview of how companies can effectively manage risks and foster innovation for higher performance, using Tesco as a practical example.

RISK MANAGEMENT AND
INNOVATION

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
Question 1........................................................................................................................................3
Risk assessment techniques-........................................................................................................3
Relative roles of quantitative and qualitative risk assessment-...................................................4
Question Two...................................................................................................................................5
a) Organisational culture implications of embedding the effective management of risks...........5
b) Good Practices in firm and ways to improve it.......................................................................7
Question 3........................................................................................................................................8
Innovation Models.......................................................................................................................8
Question 4......................................................................................................................................11
a) Component of innovative organisation..................................................................................11
b) Components that effect on innovation in Tesco....................................................................12
c) Suggestion improvements that impact on innovative activity...............................................13
QUESTION 5................................................................................................................................13
Professional skills......................................................................................................................13
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

INTRODUCTION
Risk management can identify the risks, help in planning and reducing them so that there
is going to be higher functioning of the organization which is going to be present. Innovation
includes a lot of risks which is why the company will have to have good risk management in the
organization in order to operate effectively. Tesco is working in the retailing industry from 1919,
having its headquarters in England, United Kingdom. There are 450,000 employees working and
6,800 stores worldwide of the organization. The report is going to consist of theories, critical
evaluation and techniques which the company must use in order to manage risks and innovation
can take place effectively in the company for higher performance.
Question 1
Risk assessment techniques-
Organizational risks are the chances for uncertainties in organizational strategies these
are the segments in which outcome of certain activity can not be specifically be specified by
which company have equal chances for getting success and equal chances for failure. Due to
which companies tend to develop their organizational strategy in such a way that it is completely
based on the practical knowledge and company's goal achieving capabilities by which risks can
be minimized (Kaur, Rishi and Siddiqui, 2020). However this is not often as easy as it is said
because there are certain times when it is very difficult for organization to get desirable
probabilities and for which company has to analyse its performance through the following risk
assessment methods.
1. Qualitative Risk Assessment-
In this type of risk assessment the decisions are made on the basis of individual's
experiences and expertises due to which chances for failures are reduced because the decisions
are made on the physical ground and also to minimize risks suggestions from other experts are
also taken. Tesco should closely evaluate the qualitative assessment of risk because through
systematic examination it can minimize the risk of innovation through proper implementations of
precautions. This will enable organization to efficiently develop organizational strategies in such
a way that employees are also able to implement these changes and also at the same time
company is able to provide new products or services in minimum risk.
2. Quantitative Risk Assessment-

In this type of risk assessment the organizational risks are analysed through the means of
numerical values this type of risk assessment will provide Tesco high level of predictability on
the bases of smart guesses like probabilities (Yazdi, 2020). This risk assessment is developed on
the basis of previous analysis of company's working capabilities and because of which it is
highly achievable and since complex mathematical calculations are involved in it because of
which it is high accurate. The main difference between quantitative and qualitative risk is that
qualitative risk is mostly based on physical outcomes which are used by individuals as an
experiences and then strategies are developed whereas quantitative is core mathematical based.
3. Site-Specific Risk Assessment-
This type of risk assessment is based on a specific geographic location in other words
each different task is having its own unique and individual risk associated with it and because of
which Tesco must implement a combination of qualitative and quantitative risk assessment
(Verma and Chaudhari, 2016). By this company will, can efficiently analyse the type of risk and
then can implement quantitative if needed, by this proper evaluation company will save problem
solving time and also at the same time it will reduce organizational efforts in classifying the
intensity of risks.
Relative roles of quantitative and qualitative risk assessment-
Risks are the by-product of any activity and thus organizational working has to developed
in such a way that output is achieved at minimum organizational expenditures and because of
which company will be able to achieve its targets. Thus company has to evaluate the type of job
required and then has to identify the type of risk associated with it, for achieving this company
can use different approaches like qualitative and quantitative risk analysis. Following is the
relative role of risk assessment methods.
Qualitative risk assessment-
This type of risk assessment is method is quicker and practically implementable because
it is done on the basis of expertises and experience which the decision maker is having in terms
of achieving its target (Birgen and et.al, 2020). This assessment is more efficient at the initial
stage and gets better with the level of experience which the decision maker is achieving with
time, this happens because at the initial stage the decisions are made on the basis of theoretical
approaches and with time, employee is able to identify the working process. However the

effectiveness of this type of risk assessment is limited to the knowledge collection of decision
maker because of which unclear core concepts will lead to failures.
Quantitative risk assessment-
This type of risk assessment is achieved after the theoretical implementation of
qualitative risk assessment because this is a numeric approach of analysing risk assessment,
which is more accurate and reduces the chances for failures. This happens because through
theoretical evaluation all the expected factors can be analysed and then working strategies are
made in such a way that high output is achieved at minimum expenditures. However this may be
more accurate but on the other hand this is a time-consuming process as compared to qualitative
risk assessment because that approach is based on the bases of personal experiences due to which
decision maker is well aware of the final outcome of the product (Hordyk and Carruthers, 2018).
But in this case final outcome is analysed only through the means of complex mathematical
calculations at the initial stage and then they are implemented for the final stage.
From the above analysis it can be evaluated that since Tesco is a multinational
organization which is having employees of all different types and skills because of which it must
rely on qualitative assessment because its employees are well-trained in terms of achieving of
their objectives. Due to which there are high chances that employees will utilize their experience
and expertises in such a way that through their actions they are able to achieve their objectives
and also at the same time they may try to implement creative approaches for minimizing the
risks. But organization must also try to integrate the advantages of quantitative assessment only
in special cases when there are more than one factors are included because by which Tesco can
make sure that risks are minimized. Through this proper integration of all small consecutive
steps company can minimize the risks which will provide high working capabilities to the
company and also at the same time goal achieving capabilities of organizational are also
increased.
Question Two
a) Organisational culture implications of embedding the effective management of risks
Company cultures highly impact on increase quality, efficiency and productivity of work
and it also reduces chances of various kind of risk that evolve because of changing business
styles and strategy. It becomes important for the firm work according to globalization so that
maximum profit can be generated by attracting large number of customers in different part of
globe (da Silva Etges and Cortimiglia, 2019). There are various types of risk that comes in path
of achieving goals such as changes in technology, poor communication because workers belong

to different background etc. Organisation culture plays significant role in covering problems.
Tesco Plc. is one leading firm in United Kingdom and also expanded business in different part of
world. Diversified workforce in organisation improves innovation as well as creativity skills.
Firm highly focused on developing a culture that can highly profit while expanding business in
different part of globe. It follow strategy of recruiting people from different background with
versatile experience and use their skills and talent in effective way so that maximum output can
be taken which will contribute in growth of firm.
Recruiting diverse workforce
Employees from different culture have different ideology and hence recruiting will be
beneficial as all will contribute in developing a product that can satisfy diverse customer group
in globalize market and hence increase revenue of firm. Human Resources management team of
Tesco shortlisted people that comes from different culture, background etc. and analyse their
working experience and way which it can support firm. This help in giving employment to
talented and skilled workforce which will help in taking company to globalize business. It
support in gaining competitive advantage as changing business need people from different
background.
Training and development
Organisation provide various kind of training and development programs to recruited
firm and prepare them for any upcoming changes in business structure. Human resource
management take suggestion, opinion, etc. from workers so that a proper plan for learning
system can be done (da Silva Etges and Cortimiglia, 2019). Employees’ engagement in making
training and development programs decrease burden on firm and on the other hand workforce
will get right skills on time which increase efficiency, quality and productivity. Tesco faces risk
related to changing work style in UK and sometimes government also set new policies but
providing quality training and development learning can supporting in overcoming from it.
Management of firm with skilled and trained workforce can generate higher output with quality
and also increase customer satisfaction level.
Leadership
Leaders not only frame policy and procedure for future endeavours but it also contributes
in building employees relations. Organisation senior highest risk in leadership for example if
negative politics started by leaders or unrecognized talented workforce then they will migrated to
another company and hence firm will not able generated quality with quantity product. Skilled
workforce decrease workload and use their experience in improving work style for example
people from different background have different knowledge and hence using talent in work can
highly be beneficial for organisation to increasing competitive advantage in changing business.
Biasness and giving opportunity to flattering people by senior effect on other workers in firm
which will not feel part of association and hence firm will not able to maintain their loyalty.
Strategy and plan can be leaked by isolated people to competitor which become biggest
challenge for firm. It becomes important for leaders to gain loyalty of workers and hear them
with neutral behaviour so that they become part of firm and decrease chances of isolation and
discrimination. Tesco recruit diverse workforce and for this, its leaders use transformation
leadership. Employees are given autonomy at workplace which improves innovation and

creativity skills and hence firm will provide a product that can support changing taste and trend
of customers.. Leaders also take suggestion and opinion of workforce in decision making so that
quality ideas can be evolved and also improve their thinking and problem solving skills which is
necessary for changing business (Syrova, 2020. Employees highly supported by management
whenever they will face problem.
Organisation tries to management risks that are generated from leadership style. Tesco try
to gain confidence of workers so that any upcoming challenge can easily be tackle. Management
highly focused on personal growth of employees which increase loyalty of workers as well as
decrease retention. Innovation and creativity skills highly support in providing product that
increase customer satisfaction level in changing taste and trend.
b) Good Practices in firm and ways to improve it
Tesco's sociability and solidarity positively impact on organisation culture. There are
various practices which organisation implement at workplace which improves cultural diversity
and hence create friendly relation among workers such as hosting cultural events, recognising
workers experience from past background etc. It helps in gaining loyalty of workers and increase
efficiency, quality, and productivity of work. Human Resource Management of firm highly
focused on building employee relation so that every worker feels part of association and support
in achieving higher goals (Kwak, Seo, and Mason, 2018). HR team analyse performance of
workers and send report to senior management which gives reward, award, incentives, promotion
and increment to workers. Increasing job opportunities in country affecting on managing talented
and skilled workforce and it become necessary for organisation to emphasize on personal growth
and try to get loyalty of workers. Tesco use transformational leadership which improve problem
solving as well as decision making skill of workers which are necessary changing business it also
so help in gaining competitive advantage. However, firm has to make quick changes according to
demand of market and it can only possible by trained and skilled workforce. Employees of firm
remain highly motivated and devoted to work and readily accept and upcoming challenged.
Flexibility in working style and giving autonomy by leaders profited firm in expanding business
globally and attracting large number of consumers. However, organisation can also improve in
work by adopting necessary changes in technology and training and development programs
which will impact on its growth.
Communication Programs
Communication plays significant role in diversifying culture. Accent, ton of speech,
gesture must be effective so that people can easily understand information and accordingly reply.
Most of time changing businesses do not focus on it which effect on quality of work because of
improper direction and misunderstanding of information. Tesco Human resource management
team must hire people which have knowledge of English language. After recruitment they have
to focus on training related to communication effectively so that will be able to work in corporate
culture and contribute in growth of firm. Trying to analyse their week point for example India
accent might not be understand by French speaker and hence filling gap by training can improve
communication. They have to take feedback, suggestion and opinion from workers and help
them in improve communicating skills such as email writing, way of representing etc. which help
them in adjusting in firm.

Technological changes
It become important firm to advancing technology in globalize business environment so
that work performance can be improved. Tesco of financial strong retail firm and make quick
changes in system so that efficiency, productivity as well as quality of work can be enhanced.
Organization must prove effective training and development programs to workers so that they
can easily work on modern technology for example touch screen system are continuously
increasing and it becomes important firm to train workers for it (Korableva, Gorelov and Shulha,
2017). There is higher risk firm from cyber threat; supply chain management etc. from other firm
and reduction in it can only be possible by effective training and development programs.
Feedback and opinion must be taken from workers before launching any programs which help in
easily building it and can be understand by all.
Question 3
Innovation Models
Innovations plays important role in changing business and Tesco use various types of
strategy to improve it for example workforce in firm give higher autonomy so that it impact on
problems solving as well as creativity skills. However, innovation cab be positive or negative
both as sometimes it become difficult to predict future outcomes from innovation. It becomes
important for firm to assess it and manage carefully so that its alignment will coincide with
sustainable development. There are number of methods that Tesco use in monitoring and
controlling innovation such as knowledge management, collaboration & networking, creativity
techniques, process improvement as well as project management technique and business
creation. It allow new ideas and skills which are necessary for changing business but this tools
allow closely manage it so that productive result with quality can be come out.
Knowledge Management
It is become important for the firm to utilize knowledge in way such that it has long
lasting impact on goals of organisation. Tesco collection information from workers, analyse it
and then make changes in work accordingly. Checking and evolution of talent in giving changes
of innovative ideas that are highly productive and decrease useless information. Tesco conduct
Knowledge audit so that proper strategy can be setup after assessment of it. It uses software in
managing data so that online record can be recheck and evaluate and can work for future
planning. After identification of information, it is shared and handled carefully by firm and hence
able to proper innovation implementation.
Collaboration and Networking
In this ideas of innovation always evolve by sharing and understanding perspective of all
in firm and hence collaboration is necessary for it. In the initial stage firm build a team with clear
goals and objective. Workers in group come have different knowledge and supervise by leaders
in Tesco. After that firm focus on team work and also allow self organizing teams so that similar
mind can work closely (Pysmak, 2017). Agile again support in innovation by building effective
tam. Tesco’s Management try to reduce difference and provide all resource that can help in
innovation so that fruitful result can benefit firm.

Creativity Technique
Creativity of employees can enhance product quality and hence increase customer
satisfaction level. In first phase Tesco focuses on brain storming of working so that effective
ideas can be dig out from minds. Organisation use feedback, suggestion and opinion from
workforce and analyse their ideas so that effective strategy can be setup accordingly. Mind
mapping also done by management in improving thinking and creativity skills and firm use
various kinds of tools for it such as Google design thinking. TRIZ 40 also use by firm in improve
creative thinking of workers and also help in properly managing it.
Process improvement techniques
Organisation use various kind of tool for innovative ideas management in process
management technique (Nechaev, Bovkun and Zakharov, 2017). Tesco use benchmarking, Key
Performance indicator, kaizen etc. and it improve quality, efficiency and productive of work with
evolution of right ideas at workplace. It analyse performance of business and also emphasizes on
changes which are required in process. Firm allow combination of management and employees
in innovation of new work structure which can highly beneficial for firm and improve
productivity.
Project management techniques
Project management need innovative ideas as well skills and Tesco managers use various
types of method effective manage work. Project portfolio management is use by firm in
forecasting and analysing business so that amount as well as right technique can be implemented.
Business creation
Business creation refers to a system process that changes innovative ideas into business.
In the first stage Tesco create road map for planning and success of business and it become
important for success of company (Nechaev, Bovkun and Zakharov, 2017). Stimulation of it
again reduces risk in changing market. Planning of business done in such as way that effective
strategy can implemented successfully by innovation ideas and hence firm able to achieve higher
goals.
Tidd and Bessant describe straightforward or simple model of innovation. It helps in
effective implementation of strategy that framed by creative ideas of organisation. It help in
managing risk and increasing competitive advantage in changing business which are necessary
for firm’s growth. For example: Organisation focusing on organic business after COVID and
hence using this model successful idea can be implement at work place

Searching
COVID has highly affected retail business in United Kingdom but after analysing present
market scenario and consulting with stakeholder try to plan for organic business. There are
number of opportunities in it for example: after corona virus customers motivated and attracted
towards healthy food and hence firm able to health lifestyle. Tesco take it as advantage and use
effective supply chain management to react to customers. Idea of firm is to provide organic
product on similar cost in beginning to consumers after they addict will increase price and hence
able to target them easily. However, there are number of firm and British customer taste & trend
continuously changes and firm has to remain alert for it.
Select
Organization checks old record of customers which purchase similar type of product from
its store. After analyzing of information contact them and told them that organic product can be
available on online delivery with similar price as that of chemical one. Explains them benefit of
it and way in which it impact on their health. It helps in targeting right customers initially.
Implementation
Training and development programs are given to customer and will set effect supply
chain management strategy so that fresh organic product can reach to customer and increase
customer satisfaction level (Schulte and Hallstedt, 2018)
.
Capture
Once the product will be in hand and taste will be develop then after 6months firm will
increase cost that can still not much high and buyer’s can easily purchase it. Then quarterly
prices of product will be increasing such manner that right and profitable price easily be targeted
by firm.

Question 4
a) Component of innovative organisation
Innovative organisation has various types of component which impact of its success such
as leadership, structure of it, individuals participators, Team working, creative climate etc. as
described by Tidd and Bessant. It increase efficiency, quality and productivity of work and hence
impact on growth of firm.
Shared vision, leadership and the will to innovate
It become important that vision of firm innovation must be understands and share among
all participant so that it cannot create (Rosas and et.al., 2017). Before framing it take suggestion
and opinion from key stakeholder so that a proper vision can guide all for long term goals. Top
management committeemen plays significant role in setting aims and objective and they involves
employees in achieving it. Leadership must be effective and can idealised workers so that in
difficult time, they can stand for firm and hence decrease migration of talent as well as skills.
Leaders should give free hand to employees so that innovation and creativity skills can be
improved. Workforce assessment done in end but if they are diverting from vision must help
them so that target can be achieved (Parast, Sabahi and Kamalahmadi, 2019). Involve them in
decision making so that a proper strategy can be set and accepted by all and it improve loyalty of
workers which is necessary for changes. Taking feedback, suggestion and opinion again help in
improving work structure and become path for innovative as well as creative ideas. Employees
must be train in effective way so that they can prepare for any upcoming challenges and can
handle difficult situation easily. Transformative and democratic leadership style are often use by
senior authority in order to implement or evolving new innovative ideas in firms. It decrease
unnecessary burden of them and firm can easily prepare for changing taste and trend of
customers.
Team working
Effective plays important role in evolving or implementation of innovative as well as
creative ideas in firm. Selected people must have required talent and can work ain group as well
as maintain decorum. It becomes difficult for firm to maintain team as people have large
difference and different ideology. However, effective team can be build by analysing problems
and resolve it quickly. There are number of ways that organisation can use in resolving issue
such as involve people in meeting and listen their problems and give judgment that can be
accepted by all (Heller, 2017). Changing business need diversified workforce but because of
poor communication it become difficult for taking help of all in achieving goals. Training and
development problems related to communication can benefit organisation in understanding ideas
and information. It also improves efficiency of work as most of people miscommunication
because of wrong way of representation. Tuckman team developing theory can become highly
profitable of firm as in stages problems can be resolved and effective team can be build which
help in targeting goal and increasing competitive advantage in changing business. Diverse work
can also be close to each other if effective strategies adopted such as culture events, involving
different background in different team etc. and hence all will come with new and unique ideas
which are necessary for changing business environment.
External focus

It becomes important form firm to increase customer satisfaction level by providing
product on time and increase profit share in changing business. There are number of time when
firm feel embarrassed because of mismanagement internally for example: product is not reached
to customer timely of miscommunication but if firm makes sales and marketing team
effectiveness then this problems can easily be resolved (Keiningham and et.al., 2020). Effective
supply chain management by innovative ideas can help in targeting buyers and supplying goods
& services on time. Organisation must involve workers in improving product and services such
as taking feedback, suggestion as well as opinion in improving quality and launching new
product can help in delivering right product timely and increase revenue of firm. It also help in
innovative ideas and for this firm take help of marketing team to analyse taste and trend of
customer so that Research and development department can do required changes in work.
Building customer relationship is an important part of firm and it can only be possible by
analysing their need and connect with them on different platform such as Instagram, Facebook
etc.
b) Components that effect on innovation in Tesco
Tesco use various types of strategy in welcoming new ideas as well as implementation of
it in organisation. After COVID, organisation is highly focusing on building team that can
support effective supply chain management in changing business and increase market share.
Organisation emphasizing on developing customer oriented product by evaluating their need.
Leaders of the firm very cooperative and interactive which creates friendly environment place.
Leadership and vision
Organisation set vision of attracting customer by providing organic product and increase
profit share after pandemic (Petricevic and Teece, 2019). Tesco is focusing in developing taste of
customer for its health food. Firm is trying to build effective supply chain management so that
product can reach to customer timely and hence enhance customer experience. Transformation
leadership style is use by organisation in monitoring and controlling workforce. Leaders give
free hand in working process of employees which positively impact on innovation and creativity
skills. They also involve in decision making and innovation ideas involvement in firm and hence
able to gain their loyalty which enhance quality and productivity of work. Innovation ideas are
develop in firm for example organic product as similar cost for sometimes comes from
stakeholders and employees support in it as they know it will be future of business.
Team involvement
Human resource management select employees from different background with ideology
so that diverse workforce can be created for globalization. Managements and leaders analyse
their skills and according teams set (Afrifa and et.al., 2020). This helps in gaining competitive
advantage in changing business and also improves productivity with quality. Training and
development programs of Tesco build in such as way that people can understand each other and
generated new innovative ideas from their experience. Mutual respect among workers also
increases by cultural events and programs so that they can work as team at project. In organic
product business employees of firm work as team which help in attracting customers and
reaching theme timely with effective supply chain management.
External focus