Comprehensive Analysis of Tesco's Business Operations and Strategies

This report provides a comprehensive analysis of Tesco's business operations, examining its structure within the public and private sectors. It delves into the importance of accounting for business success, the functions of the HR department, and key aspects of employment legislation. The report further explores team development stages, motivational theories, and different leadership styles. Additionally, it assesses the impact and benefits of customer service on business success, highlighting the significance of customer profiling. The analysis includes interpretations of profit and loss accounts, as well as roles and responsibilities within a business context. The report uses Tesco as a case study, covering both internal and external factors affecting the company's performance and overall strategies.

How Businesses Operate

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Types of organisations found in the public and private sectors.......................................1
1.2 Different structures within the businesses........................................................................1
1.3 Impact of local, national and global economic environment...........................................2
TASK 2............................................................................................................................................2
2.1 Importance of accounting for business success................................................................2
2.2 Functions carried out by the HR department....................................................................3
2.3 Key features of employment legislation...........................................................................3
TASK 3............................................................................................................................................4
3.1 Interpret the information on the profit and loss account..................................................4
TASK 4............................................................................................................................................5
4.1 Determining roles and responsibilities.............................................................................5
4.2 Stages of team development.............................................................................................5
4.2.2 Motivational theories.....................................................................................................5
4.2.3 Different types of leadership style.................................................................................6
TASK 5............................................................................................................................................7
5.1 Impact of customer service on business success..............................................................7
5.2 Benefits of customer profiling to a business....................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
A business operates in different sector with various services and structure in order to
provide quality services to customers. Tesco, a British multinational company is taken for
consideration. It is one of the biggest retailing chain in world and headquarters in London,
United kingdom. The report will cover types of organisations found in the public and private
sectors along with different structures within the businesses and impact of local, national and
global economic environment. In addition, importance of accounting for business success,
functions carried out by the HR department and key features of employment legislation will be
discussed. Finally, the report will demonstrate stages of team development, motivational theories
and impact as well as benefits of customer service on business success.
TASK 1
1.1 Types of organisations found in the public and private sectors
Private and public businesses are common and can be easily found in any country. There
are a lot of businesses operating in UK in both public and private sector.
Private business: The business is owned and managed by an individual or private group that
there is no involvement of state. The main purpose of such businesses is to make profits generate
revenues.
For an example: Iceland business, United Kingdom.
Public business: Public businesses are managed and controlled by local government to provide
services to people living in that particular nation.
For an example: Pentland group, United Kingdom.
1.2 Different structures within the businesses
Business structure is a crucial part of any organisation that it helps to improve and
develop performance of employees if managed and controlled well. The structure of every
business is different from each other as per the requirement and development in market share
effectively.
Functional business structure: The structure if very common and used by many
businesses. It is a structure used by human resource management and accounting in order to
separate each area of work in order to manage work of others effectively. For an example,
managers report to their top level management operating in various functional areas.
1

Product business structure: The structure is based on everting and specific in relation to
a particular product or service. For an example, Executive an over kraft service or product is
responsible for each product which is under the label.
1.3 Impact of local, national and global economic environment
Internal or external environment directly affects the working of organisation and its
management responsibilities to scan their environment and modify their strategies and policies
accordingly. Different environment and their impacts is given below,
Local environment: Local environment has a direct impact on business and its overall
development. Competition, global warming local government, political and small businesses
focused on sustainability encourage environmentally friendly practices within a region.
National environment: National environmental factors such as periods of growth,
unemployment, discretionary spendings and taxes has an impact on business operational
activities. Businesses are interlinked which creates a powerful force in terms of market without
borders.
Global environment: There are some global economic factors such as interest rates,
demand and supply, inflation rates and recessions which has a great impact on business
productivity and profitability.
TASK 2
2.1 Importance of accounting for business success
Accounting system is crucial for businesses that all the financial statements produced by
accounting system are used by various stakeholders in order to take economic decisions.
Importance of accounting is given below,
 It helps Tesco to plan their strategies and policies according to the profit of organization
as funds is essential while implementing strategies.
 Accounting assist company to make their future budget according to the availability of
funds in an organisation.
 Effective management and reporting of accounting practices helps to manage investors
and to increase economic growth effectively.
2

2.2 Functions carried out by the HR department
Different functions are managed and controlled by human resource department such as
hiring and firing workers, training and development programs, interpreting employment
legislations and management of employee relationship.
Recruitment and selection: It is a process where, HR department recruit and select new
employees within firm in order to manage the work accordingly. Main aim of this is to find the
required skills and capabilities which could help company to improve their performance as
compare to their competitors. This will help to enhance workforce strength which produce more
profitability and productivity.
Training and development: In order to enhance skills and knowledge of existing as well
as new workers within firm, training and development programs are organised by HR department
in a specific time period. Training helps company to inculcate required competencies which is
useful while performing at the workplace.
Compensation: Employees are performing hard so to satisfy their needs and wants from
the monetary value which they get in exchange of work performed by them. Proper
compensation assist employees to increase their morale and motivation which directly affects
their performance in positive way.
2.3 Key features of employment legislation
There are some key employment legislations and laws are followed by businesses in order to run
operations smoothly and effectively. Some examples of employment laws includes,
 Age discrimination: Company and their management should not discriminate any
employees in terms of age. Salary provide to them should be according to their
performance instead on age and experience.
 Equality in payment: There are many cases in which men are getting more payment as
compare to women. That's why government comes up with this act which states that
payment or monetary value given to the employees is according to their experience,
position, working performance etc rather than on the basis of gender.
 Health and safety act: Employee gets motivation from different thing which also
includes healthy and safety environment at the workplace. If environment is equipped
with all the equipments which is required to accomplish an assigned task then it will
improve their performance which leads to increase in productivity while working.
3

TASK 3
3.1 Interpret the information on the profit and loss account
It can be said that a profit and loss account helps to determine profits and losses of
business for current and past year which helps to make strategies in order to increase profits and
decrease losses effectively.
Interpretation: From the above financial statement of Tesco Plc, it can be concluded that the net
income is increasing from the year 2007 to 2010 which shows that the business is able to reduce
its expenses effectively. In addition to this, net operating assets, financial liabilities and
shareholder equity is also rising which is a good sign for company development and growth. The
financial position of firm is growing that strategies managed by management should be carried
out in the future as well.
4
Illustration 1: Tesco Financial Statement

TASK 4
4.1 Determining roles and responsibilities
Every individual has its own roles and responsibilities while working in a team. In today's
business effective work should be carried out by groups and team in order to show a high
capability of solving issues and own problems effectively. Leader has an important role to
encourage his workers towards their individual work that helps to increase profitability and
production for company. In addition to this, Belbin team roles and motivational techniques will
help to determine roles and responsibilities efficiently.
4.2 Stages of team development
The process of working together as a team is known as team development. Bruce
Tuckman has defined five stages of team development model which helps to understand roles
and responsibilities effectively.
Forming: Team members are polite and positive in this stage that some of them are
anxious and some are excited towards work.
Storming: In this stage, people start to push against boundaries. There are many teams
fails in this stage because of various working styles, conflicts and frustration.
Norming: It is a stage, where people appreciate each other's work to solve their
differences and to increase strength. A socialisation helps to develop a strong commitment
towards goals and objectives.
Performing: The hard work leads in this stage without any frictions that helps to achieve
goals and objectives. Joining and leaving of employees has no disturbance on existing workers'
performance.
Adjourning: This is a stage, where many teams reach eventually. Team members with
close relationships may find difficulties in this stage.
4.2.2 Motivational theories
Managers and leaders are bale to use motivational techniques in order to increase
performance, skills and knowledge of their employees that helps to enhance production and
profitability.
Hertzberg’s Two-Factor Theory
The theory was developed by Frederick Herzberg in 1950 in which there are two factors
founded by him which influence satisfaction and motivation of workers.
5

Motivator factors: There are some factors which leads towards increasing motivation and
satisfaction of employees such as career progression, work enjoyment etc.
Hygiene factors: These are some factors which may affect motivation of workers such as
benefits, policies, salary and relationship with managers.
Maslow’s Hierarchy of Needs
Abraham Maslow developed this theory in 1943 which is known as 'A theory of human
motivation. The hierarchy is made up of five levels:
Physiological: The needs of a human should be in order such as food, shelter and water to
survive.
Safety: Health, financial and personal safety is important.
Love: The need of family, relationship and friendship.
Esteem: The need of be respected by others and to feel confident.
Self-actualisation: Desire to achieve goals and objectives.
Hawthorne Effect
Henry A. Landsberger described Hawthorne effect first in 1950 by noticing tendency of
people to work harder and better when noticed and observed by a researcher effectively.
4.2.3 Different types of leadership style
There are various types of leadership styles in order to lead employees working under and
within the firm effectively. This will help to lead in different situations in order to manage the
work and profitability. Some of them are described below:
Democratic leadership: Subordinates are involved in this leadership to make decisions.
The main feature of this leadership style is that communication is active upward and downward.
Autocratic leadership: All the responsibilities and authorities are hold by leaders to make
their own decisions without any consultancy. There is a lack of flexibility that a few situations
supports this leadership style.
Strategic leadership: Strategic leaders make strategies and plans in order to improve
performance of employees that helps to deliver strategic thinking. It helps company to make their
employees and company adaptable to different situations.
6

TASK 5
5.1 Impact of customer service on business success
A business become successful by providing good customer services to all the consumers
in the market. Customers who receives quality services helps to improve and develop business
bottom line by behaviour of repeating purchasing effectively. The bad customer service will
decrease profitability as well as brand image. It is analysed that a happy customer tells at least
three of his or her best friends, family members and others about his or her experience with
brand after using the product and service effectively. The business should take some initial steps
in order to provide excellent customer services to make sure the positive reputation of brand in
their minds.
7
Illustration 2: Impact of Customer Service
Source: Deborah Edwards, 2015

The impact of customer service is crucial for any business in order manage their growth,
development, profitability and production. The firm should response complaints in a professional
manner to treat consumer with respect. There are so many customers available online on social
media platform so the firm is able to turn a bad experience into a good and effective one.
How customer service can affect business
 It is analysed that there are 80% people likes to work with businesses who provides good
services.
 Enhancing consumer retention by 5% can increase profitability up to 125% effectively.
 Loyal consumers are worth ten times as their first purchase on average.
8
Illustration 3: How Customer Service Can Affect Business
Source: Deborah Edwards, 2015

 Business who prioritise customer service can make 60% higher profits than its
competitor.
5.2 Benefits of customer profiling to a business
There are several benefits of consumer profiling to a business which helps to increase
profitability and production. This will also help to achieve desired goals and objectives
effectively. Here are some benefits described below:
Better communication: Customer profiling can develop better communication for
business because they provide valuable suggestions and feedbacks. This will help to make
changes in products and services according to their needs effectively.
Greater opportunities: Opportunities in terms of valuable suggestions can help to make
extra efforts from business towards customers. It will help to make process much easier for
company as they know more about customers.
Reduces competition: A business is able to determine key elements in order to maintain a
strong relationship with customers. This will help to compete others in the market effectively.
Increases profits: It becomes a lot less expensive in time and money spent developing
the relationships. This will help to make future plans to have a higher returns on best efforts.
9

CONCLUSION
It can be concluded from the above report that private and public businesses are common
and can be easily found in any country. The main purpose of such businesses is to make profits
and to provide services to people. The structure of every business is different from each other as
per the requirement. In addition, accounting system is crucial for businesses that accounting
practices helps to manage investors and to increase economic growth. There are some key
employment legislations and laws should be followed by businesses in order to run operations
smoothly. Managers and leaders are bale to use motivational techniques in order to increase
performance, skills and knowledge of their employees and a business become successful by
providing good customer services to all the consumers in the market.
10
Illustration 4: Benefits Of Customer Profiling
Source: Susan Oakes, 2016