Analyzing Tesco's Technological Innovation and Corporate Governance

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BUSINESS ENVIRONMENT

Table of Contents
INTRODUCTION............................................................................................................................. 3
TASK 1............................................................................................................................................ 4
TYPES OF INNOVATION AND TECHNOLOGY AND THEIR IMPACT ON ECONOMIC PROGRESS OF
UK.................................................................................................................................................. 4
INNOVATION AND TECHNOLOGY..............................................................................................4
CONTRIBUTION OF INNOVATION & TECHNOLOGY IN THE ECONOMIC GROWTH OF UK..........4
ORGANISATIONS USING NEW TECHNOLOGIES IN THEIR BUSINES OPERATIONS.......................5
IMPACTS OF TECHNOLOGY AND INNOVATION ON SALES AND PROFIT OF TESCO........................7
NEW TECHNOLOGIES USED BY TESCO.......................................................................................7
COMPARING SALES AND PROFIT OF TESCO BEFORE & AFTER INTRODUCING NEW
TECHNOLOGIES..........................................................................................................................9
TASK 2.......................................................................................................................................... 11
DEMONSTRATING UNDERSTANDING OF CORPORATE GOVERNANCE.........................................11
CORPORATE GOVERNANCE..................................................................................................... 11
HISTORY OF CORPORATE GOVERNANCE IN UK WITH EXAMPLES............................................11
RESPONSIBILITIES OF THE BOARD OF DIRECTORS...................................................................12
EXPLANATION OF ARCHIE CARROLL’S PYRAMID OF CSR.............................................................14

CORPORATE SOCIAL RESPONSIBILITY...................................................................................... 14
FOUR AREAS OF CSR................................................................................................................ 14
CONCLUSION............................................................................................................................... 16
REFERENCES.................................................................................................................................17

INTRODUCTION
The report will make a deep discussion on various aspects of the Business Environment. It
includes the proper understanding of several innovation and technological techniques and
analyse their impact on the economic growth of the country. In the first part, the report will
provide relevant practical examples by explaining the huge impacts of technology and
innovation in concern with business organizations. In the later part, the discussion will move
further on the operations of the company including its sales and profit while describing new
technologies adopted by the company. Further, the report will provide deep understanding of
corporate governance in UK. Also, the discussion will analyse the corporate social responsibility
of the company by applying Archie Carroll’s Pyramid to illustrate it more effectively.
All of the above points will be covered in concern with a popular retailing company TESCO. The
company is a multinational groceries and a merchandise retailer which has headquarter in
England, UK. The company was founded in 1919 and has completed its 100 years in the retailing
industry with a great success and still committed to provide value added services in the coming
years (Erasmus et al., 2016).

TASK 1
TYPES OF INNOVATION AND TECHNOLOGY AND THEIR IMPACT ON
ECONOMIC PROGRESS OF UK
INNOVATION AND TECHNOLOGY
Innovation defines as creating, developing and implementing a new idea, thought or
imagination to create value. In the Business context, Innovation implies the translation of an
idea into a product or service for which customers willing to pay. Innovation always results in
satisfying the customer needs and expectations (Prajogo, 2016).
Technology defines the techniques, methods or skills which are the components of the
scientific knowledge used specially for the practical purposes. In the business context,
technology refers to the collection of processes which is used in producing goods or services for
the business (Luftman et al., 2017).
CONTRIBUTION OF INNOVATION & TECHNOLOGY IN THE ECONOMIC GROWTH
OF UK
A study analyzed that Innovation is an important key in growing the economy of UK. As the
industry is growing rapidly, it is necessary to bring innovation by using latest technologies in
order to face the current challenges of the industry. The Industrial Strategy Challenge Fund is a
strategy followed by government to increase investment on research and development so as to
influence the economic growth (Prajogo, 2016). It is being delivered and developed by Innovate
UK which is formed in April, 2018. UK Research and Innovation is a company operated with the
purpose of maintaining UK’s leading position in innovation by creating best environment to
flourish (Erasmus et al., 2016).
This was a huge step taken by the government of UK to determine the challenges facing the
industries in 21st century and finds how the challenges can be converted into the opportunities

to grow the economy of UK. ISFC fund has ensured that the innovation and technologies
excellence must exist in the country though it isn’t just theoretical but have the real-world
impact too (Erasmus et al., 2016). The technology that was discovered in the country includes
2D-Tech, a University of Manchester spin-out, the commercial ventures includes ultra-light,
graphene, atomic thin carbon based material etc. (Mian et al., 2016)
According to a great author, Rt Hon. David Willetts, the emerging technologies and the
advancement plays a key role in growing the economy for providing the standard living to the
people in their future (McCombie and Thirlwall, 2016). He says that these emerging
technologies are playing a critical role in making a great contribution to the economic growth of
UK while boosting its role as the international leader in innovation, creativity and the
technology (Luftman et al., 2017).
ORGANISATIONS USING NEW TECHNOLOGIES IN THEIR BUSINES OPERATIONS
The business organizations are using new and latest technologies in order to serve better
services to its customers while improving its operations to generate high profit margin and
bring efficiency in the business operations (Prajogo, 2016). The general operational processes in
any business include communication, financing, project management, customer service,
automation, conferencing etc. (Erasmus et al., 2016)
Financing and ICT issues in key business functions
The communication issues are becoming very common in any business. It also contains the
environmental issues related to the ICT. Also, the role of financial department in the business
has set out by using the functionality of the telecommunication network operators (Brijs, 2016).
The financial techniques at any business help in managing businesses and project effectively
within the ICT industry (Jorgenson and Vu, 2016).

The most popular and effective technology of information and communications will examine
the generic principles of finance and cover the business functions of financial accounting,
corporate finance, management accounting, financial decision making and the investment
appraisals (McCombie and Thirlwall, 2016).
The ICT is providing helpful facilities to the businesses in order to make effective
communication with several customers and helps in using the resources with more reliability at
a faster rate than normal. This can be done by making use of technologies such as internet, fax
machines, phones, email etc. (Jorgenson and Vu, 2016)

IMPACTS OF TECHNOLOGY AND INNOVATION ON SALES AND PROFIT OF
TESCO
NEW TECHNOLOGIES USED BY TESCO
Tesco is proposing retail technologies in different ways such as introducing barcode scanners,
new style checkouts in its stores located at different locations. Tesco had a bad experience in
last 12 months due to its own technological brand tablet had to face a huge loss on the UK high
street and therefore decided to discontinue the brand (Visnjic et al., 2016). As a result,
technology department of Tesco have been facing redundancies and therefore Tesco decided
to pick out some areas where the tech team will utilize the skills to improve the operations and
better serve the customers (Luftman et al., 2017)
Automating online shopping
This technique is used by Tesco to make better connection with the people by their buying
actions. The technique helps a person in making actual purchases. In includes services such as
Voice assistant Google Home and IFTTT (if this then that) allows customers to automate their
online shopping. It also provides the washing capsules and various connected device at home
(Brijs, 2016).

Mobile Payments
With launching Pay+, Tesco got and advantage of directly linking to the Club card loyalty
Programme. Customers can use number of payment cards on this app and get fast and simple
checkout experience (Visnjic et al., 2016).
Cashless stores
Tesco decided to close its direct business and to open a cashless store by bringing the products
on its core ecommerce site. It includes a trial of “Scan and Go” proposition. Bringing out this
model at stores brings clear efficiency and cost benefits to the Tesco (Luftman et al., 2017).
Other than this, Spoon Guru, automated responses on the Facebook and the upside of robust
Wi-Fi are some other effective technologies that have been introduced by Tesco to improve its
operations and become prevalent in the supermarkets (Folarin and Hassan, 2015).

COMPARING SALES AND PROFIT OF TESCO BEFORE & AFTER INTRODUCING
NEW TECHNOLOGIES
When Tesco comes to using and introducing the new technologies in the store environment,
the business has been transforming its activities. Tesco has invested in large amount for using
the technologies; also it has more plans for the year ahead. In the past years, when Tesco has
not introduced technologies in its business operations, the environment was totally different.
The company has only focused on improving the efficiency and the core operations under
Lewis’s watch (Folarin and Hassan, 2015).
Today the profit accounted with the operations of Tesco is £1.6bn, which is the profit after
introducing the technology of scan-as you-shop. The technology is used for the customers as
self-service checkout that allows the people to scan commodities as they shop (Souto, 2015).
Tesco is involved in introducing the new technologies from the past few years.

The sales have been increased by 0.3% without considering the competitive market conditions.
The focus of Tesco on improving the operations by introducing technology shows the positive
result with 1.2% growth. As a result, the group sales accounted as £51.0bn and the profit
deliver through it accounted as £1,644m which is continuously growing after technology
introduction (Folarin and Hassan, 2015).
The above finding made it clear that there is continuously growth in the sales and profit of
Tesco after it has being involved in using the technologies. Tesco believes in delivering the
services to the customers in the best way by making effective use of the technologies. From
reformulation, development to the new systems and technologies, Tesco is encouraging its
culture of innovation in order to make the business stable at the cutting edge of demands and
new trends (Souto, 2015). Tesco Bank & Tesco Mobile stands to be effective in bringing new
services and facilities to the consumers to earn their loyalty.

TASK 2
DEMONSTRATING UNDERSTANDING OF CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
The laws, rules and processes through which the businesses are regulated, collected and
operated refer to Corporate Governance. It includes the internal and the external factors that
are influencing the interest of the company people including the stakeholders, shareholders,
suppliers, customers, government management and regulators (Tehrani, 2016).
HISTORY OF CORPORATE GOVERNANCE IN UK WITH EXAMPLES
The concept of corporate governance has entered for centuries but didn’t come into the trend
until 1970s. The term before only exist in the United States and the balance of decision making
and power between executive, shareholders and board of directors evolving for centuries. After
the World War II, the country experienced strong growth of economy which had a huge impact
on corporate governance history. Corporates were growing rapidly (Tehrani, 2016). The things
start changing after SEC that is security and exchange commission brought corporate
governance to forefront. It was therefore first appeared in 1976 in Federal Register.
As of now, The Corporate Governance Code of UK sets out high standards of effective practice
for the companies on the board composition and remuneration, development, accountability,
shareholder relations and audit. The code has its main focus on the stakeholder’s engagement.
The code was published in July, 2018. Also, it has the major focus on relationships between
shareholders, companies and the stakeholders (Tehrani, 2016).
Governance principles and structures determine the responsibilities and the rights among
various participants in the corporation such as the managers, board of directors, shareholders,
regulators, auditors, creditors and other stakeholders. The code of corporate governance is
necessary in order to remove the conflicts between the interests of stakeholders, primarily