Analysis of TESCO's Organizational Behaviour and Strategies Report

This report provides a comprehensive analysis of TESCO's organizational behavior, focusing on its strategies and internal factors to improve efficiency. The report begins with an introduction to organizational behavior and its importance, followed by an examination of TESCO using the 7S framework ...Read More

Participation Review-
Organizational
Behaviour

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
7S framework .............................................................................................................................1
PESTLE analysis.........................................................................................................................2
SWOT analysis............................................................................................................................3
Balanced scorecard......................................................................................................................4

INTRODUCTION
Organizational behaviour is concerned with predicting and influencing the human
behaviour In the organization. It is a branch of social science applied in management activities.
It is essential for every company to practice organizational behaviour in order to study the
complex nature of individuals. Tesco is a British multinational company that deals in retail
merchandise and groceries (Kukreja and Gupta, 2016). The following assignment will focus on
ways to improve the effectiveness in the organization, individual skills and overall behaviour by
performing PESTLE, SWOT analysis and 7S framework.
MAIN BODY
7S framework
The 7S framework model was developed by McKinsey and it focuses on seven internal
factors that can help an organization to achieve its goals effectively and efficiently.
(Channon and Caldart, 2015)
 Strategy: In today's dynamic environment, it has become compulsory to have a business
strategy otherwise the company will lag behind. In order to gain competitive advantage,
TESCO has developed strategy called corporate steering wheel. This strategy aims that
all the employees in the company must have a single objective which is to achieve the
target with maximum productivity.
 Structure: Every company follows an organizational structure depending on their
requirements. TESCO company follows a combination of divisional and matrix
organizational structure where they segregate their employees on the basis of
geographical locations, products and service groups. Earlier they used hierarchical
organizational structure but it did not turned out to be as effective as divisional structure.
 Systems: System is the process used by a company to successfully achieve their goals and
objectives. TESCO group has adopted simple process so that it can be understood by top
level management as well as lower level workforce as well. This can increase the
coordination in the organization [McKinsey 7S Framework, 2018].
 Style: The British multinational company has started following democratic leadership
style as it has turned out to be the most effective for them. In this leadership style, the
company gives utmost importance to its employees by hearing their voices. The top level
management gives importance to employee's suggestions and value their feedback which
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brings a feeling of togetherness in the organization. This also incubates the feeling of
team work and trust within the workforce which helps in the growth of the company.
Previously, they followed Laissez Faire leadership but it turned out that it had negative
impact on the working of the organization.
 Staff: As of 2019, TESCO group employs more than 400,000 people world wide.
Recently the company has started providing various benefits to their employees like
holiday pay, retirement plans, maternity pay and much more. This not increases the
motivation of staff members but also reduces their turnover rate which is beneficial for
the organization in the long run. Earlier, TESCO'S policies were very rigid when it came
to providing benefits to its employees but recently they realized the importance of
incentives and benefits. Moreover, the employees feel more responsible and accountable
towards the company which increases their productivity (Alam and Raut-Roy, 2019).
 Skills: Individual skills are very important for the success of any company. TESCO'S
human resource department provide proper training to its employees which increases
their skills and help in their overall development. Also, these employees are assigned
tasks according to their area of specialization which helps them in improving their
efficiency.
 Shared values: Shared values are the core values that describe the vision of the company.
Every organization, big or small follows some value which help them in achieving their
objectives. TESCO company follows the core value of improving the living standard of
people and maximum customer satisfaction.
PESTLE analysis
 Political factors: The company is affected by various political factors like tax rates,
subsidies, recession, import-export duty etc. Also, TESCO group operates globally which
makes it even difficult as they have to deal differently with every country's political
factors. The announcement of BREXIT reduced the share prices of TESCO company and
has lead to inflation. The group even dropped the idea for opening new stores in the
Europe (Perera, 2017).
 Economic factors: The economic factors have always been a matter of concern for the
company. Earlier, TESCO'S major market share came from the United Kingdom itself
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(30%) but with the increasing diversification, the organization has now become highly
dependent on Europe for its major share of profits.
 Social factors: The social factors have a huge impact on the company's working. Few
years back, the grocery store's major share came from the meat and eggs section but with
the introduction of vegan food products and the changing beliefs/attitude of the people,
the sales of animal food products have decreased. Also, the newer generation has
become much more health conscious and that has also hampered the sales of the
company.
 Technological factors: Technological factors have contributed towards the growth of the
company by giving them cost benefits. The organization recently introduced the facility
of online shopping and home delivery which has had a positive impact on them. Also, to
reduce the labor cost and for the ease of consumers, the grocery store established self
service checkout points.
 Legal factors: It is imperative for any business to abide by all the legal rules and
regulations. TESCO has adopted all the mandatory licenses related to food, quality and
selling of goods and services. The company has also introduced harassment and equal
pay policy in order to retain its human resource and to make sure that fair activities are
followed by them.
 Environmental factors: TESCO company has decided to reduce its carbon footprints by
the end of 2020. The organization has also started to take its CSR activities more
seriously.
SWOT analysis
Strengths
 TESCO group is the biggest grocery retailer with the largest market share in the entire
United Kingdom.
 Use of advanced technology that minimizes the overall cost and maximises the net profit
of the company.
 Motivated and skilled employees that continuously contribute towards the growth of the
company.
Weaknesses
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 The company's financial profits are reducing incessantly because of the huge debt and
liability burden the group have upon themselves.
 The company has been a part of various controversies which have hampered their brand
image (Grant, 2016).
 The performance of TESCO outside the European markets has not been that great which
has affected their growth prospects.
Opportunities
 TESCO has the great opportunity to diversify its operations by entering into new markets
through merger or joint venture.
 The company can improve its organizational culture and working environment which will
improve their overall efficiency and effectiveness.
(Phadermrod, Crowder and Wills, 2019).
Threats
 Entry of new online competitors can hamper their market share and overall profits.
 BREXIT can be a potential threat as it will affect the market share and profits of the
company.
Balanced scorecard
Balanced scorecard is a strategic management tool that helps a company to identify and
improve their internal functions and their external results (Lueg and Vu, 2015).
TESCO group uses balanced scorecard to achieve the overall competitive advantage. The
company focuses on the overall training given to the employees, the speed with which the
products are manufactured and sold, level of customer satisfaction and the feedback given by
them and the accuracy with which the financial statements are prepared. Taking adequate care of
these factors can help them to achieve competitive advantage.
CONCLUSION
From the above report it has been concluded that a company has to study the
organisational behaviour in order to increase their overall efficiency and effectiveness.
Also,proper training and development must be given to the employees in order to improve their
skills. The 7S framework, PESTLE, SWOT and balanced scorecard strategies have turned out to
be very useful in identifying the true position of TESCO company.
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REFERENCES
Books and Journals
Alam, S. and Raut-Roy, U., 2019. Evaluating the Effectiveness of Reward Strategy at Tesco:
Evidence from Selected Stores in UK. Indian Journal of Industrial Relations.55(1).
Channon, D.F. and Caldart, A.A., 2015. McKinsey 7S model. Wiley encyclopedia of
management, pp.1
Grant, W., 2016. The challenges facing UK farmers from Brexit. EuroChoices.15(2). pp.11-16.
Kukreja, G. and Gupta, S., 2016. Tesco Accounting Misstatements: Myopic Ideologies
Overshadowing Larger Organisational Interests. SDMIMD Journal of
Management.7(1). pp.9-18.
Lueg, R. and Vu, L., 2015. Success factors in Balanced Scorecard implementations–A literature
review. management revue, pp.306-327.
Osland, J., Devine, K. and Turner, M., 2015. Organizational behavior. Wiley Encyclopedia of
Management, pp.1-5.
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Phadermrod, B., Crowder, R.M. and Wills, G.B., 2019. Importance-performance analysis based
SWOT analysis. International Journal of Information Management.44. pp.194-203.
Ravanfar, M.M., 2015. Analyzing Organizational Structure based on 7s model of
McKinsey. Global Journal of Management And Business Research.
Zhao, J. and Dou, X., 2019. A Study of British Organic Food Market.
Online
McKinsey 7S Framework. 2018.[Online]. Available
Through.<https://expertprogrammanagement.com/2018/11/mckinsey-7s-framework/>.
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