Development of Corporate Culture in Tesco: A Case Study

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DEVELOPMENT OF CORPORATE CULTURE: A CASE STUDY IN TESCO
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Table of Contents
Introduction......................................................................................................................................3
1. Explain two models of organization culture that may support to achieve the chosen
organization’s goals and objectives. (AC1.1)..................................................................................3
2. Difference between organization culture and national culture (AC1.2)......................................7
3. Analyze the corporate cultural profile of the selected organization by considering a minimum
of five major features, as part of the corporate cultural profile (AC1.3).........................................8
4. Analyze the effect of corporate culture of your selected organization, on the accomplishment
of business objectives (AC.1.4).....................................................................................................10
5. Describe the current environment of the selected organizational and the cultural requirements
of the organization. Also, recommend some measures for improvement of the organizational
environment. (AC.2.1 & 2.2).........................................................................................................12
6. Analyze the relation between selected organization’s current values and its organizational
objectives. Also, provide a framework of corporate values, which can satisfy the operational and
strategic requirements of the selected organization. (A.C. 2.3).....................................................16
7. Identification of external and internal stakeholders found within the selected organization
(AC3.1)..........................................................................................................................................19
Conclusion.....................................................................................................................................22
References......................................................................................................................................23

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Introduction
Corporate culture is an important part of today’s organizations. This is used to develop a
legislative position of an organization in the highly competitive market. In this study, a critical
observation is done on Tesco, which is a famous retailing store and overspreading their business
in all over the world. This shows, how organizational cultures are maintained within Tesco,
identifying their cultural and corporate profile within the organization. Moreover, how the
strategies are implemented within the organizations is also identified to develop an idea
regarding their corporate structure and strategies, which is performed among different
stakeholders of that organization.
1. Explain two models of organization culture that may support to achieve the chosen
organization’s goals and objectives. (AC1.1)
In several ways, organization culture supports to company to attain their aim and objectives. The
organization culture directly put impacts in the organizational strategies such as organization
structure, organization values, job satisfaction and motivating the employees or workers. Here,
two models of organization culture support to attain the selected organization’s objectives and
goals i.e., Tesco.
Actually, organization culture is a theoretical concept, as it is difficult to recognize. In the year of
1980, Edgar Schein was developed an organization culture to create culture more understandable
and visible for a company. He also determined what types of steps require to be carried out to get
the objectives and goals of organization. Regarding to Edgar Schein, there are indirect as well as
direct mechanisms in organizations (Carlström and Ekman, 2012). However, the organization
model is directly affected by direct mechanisms. This contains opinions, status, exemplary
behaviour and appointments. While indirect mechanisms do not influence the organization
culture as they are determinative. This comprises of mission and vision statement of an
organization, rituals, corporate identity and design.
Edgar Schein separated organization culture in to three diverse levels:

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Figure 1: Organizational cultural model
(Source: Bhasin, 2012)
Artefacts and symbols - Artefacts highlight the main surface of any organization. They are
generally noticeable element within organization like architecture, processes and logos. As
argued by Bhasin (2012), these elements are not only noticeable by the workers but also
understandable and visible for the external parties.
Espoused values- This mainly comprises of values, rules and standards of any organization. In
this step, organizations express their objectives, strategies and conclude the public statements
what the organization values (Edwards et al. 2013). However, problem may arise while the
opinions of leaders are not similar with basic assumptions of companies.
Basic underlying assumptions- These types of assumptions are intensely entrenched within the
organization culture and are practiced as unconscious behaviour and self-evident for the
employees. Besides, these assumptions are difficult to understand (Heracleous and Wirtz, 2012).
In general, three types of organization model are presented as “Onion model” as it is developed
based on several layers. The outer part is simple to adapt and easy to modify. The deeper, the
layer, it is difficult to adjust it. In Tesco, they do not implement a culture in a particular day and

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in fact, from the past- experiences and practicing every day, they are forming the culture of their
workplace. By utilizing Schein’s level in their organization, their visible section of organization
culture is easily noticed by a visitor. As opined by Agarwal et al. (2012), their management uses
several languages as it provides away of culture through speaking modes, slogans and special
expressions. Tesco’s managements are circulating myths and stories between the employees.
This indicates that how critical situations must be handled, what types of acts or persons are
measured heroic and so on. Technology is an important part of Tesco’s organization culture as it
shapes and reflects on the assumptions through the materials, knowledge and operations.
Artifacts are mainly visible indicator of Tesco’s culture. They are noticeable; they may be
seemed, felt and heard (Biggs et al., 2013). For instance, Tesco’s management easily determines
what kind of dress code and layout is utilized and how the workers address each other.
Therefore, Schein’s model is supported to attain Tesco’s organizations goals and objectives.
Handy’s model is also beneficial for Tesco as this culture model supports to attain their
organization objectives and goals. Handy, a leading authority on the organization culture, distinct
four several types culture: Power, Task, Role and Person.
Figure 2: Four classes of culture

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(Source: Edwards et al. 2013)
Power Culture
In an organization like Tesco with a power culture, power is made by just some people whose
influence spreads all over the organization. In Tesco, there are some regulations and rules as it is
based upon Handy’s power culture. As cited by Edwards et al. (2013), these rules are decided
what is happens in the organization. Workers are judged by what they accomplish rather than
how they perform or how they solve different situations. A power culture is generally a strong
culture; through it may quickly turn toxic for the organization.
Role culture
In Tesco, role cultures are developed based on several rules. They are extremely controlled, with
every employee within organization knowing what their responsibilities and roles are. As cited
by Gupta and Kumar (2013), role culture is determined by a position of an individual within
organizational model. Role cultures are developed on complete organization model that are not
flat with a long chain. In role culture, the process of decision-making may often be painful-slow.
In short, organization with role culture has a tendency to be bureaucratic for the employees.
Task culture
Task culture develops while teams in a company are formed to address particular issues or the
progress projects. In Tesco, task is the essential thing for their employees. Whether task cultures
shows effectual will hugely be determined by team dynamic (Senarathna et al., 2014). With the
proper mixture of personalities, leadership and skills in the teams may be incredibly creative and
productive for Tesco.
Person culture
In a company with person cultures, people very much seem themselves as superior to the
organization. Tesco simply exists for the people to work. A company with person culture is just a
collection of some people who occur to be performing for the similar organization. With the
appointment of Terry Leahy as CEO, Tesco direct towards in series of modification in their
organization culture. However, he implemented a participative leadership style where the

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workers are provided voice in the process of decision-making (Bhasin, 2012). Thus, the
organization model became more flat where the responsibilities and roles of everybody are
clearly stated and the company can easily attain their objectives (Wanjiku, 2014). The company
has implemented a simpler, flatter and organic organization culture.
2. Difference between organization culture and national culture (AC1.2)
The national culture is connects with deeper held values like evil vs. good, dangerous vs. safe
and abnormal vs. normal. The values of national cultures are learned early, held deeply and
modify slowly over the course of generations as witnessed in all ages. As discussed by Carlos
Pinho et al. (2014), organization culture is contained of huge rules and regulations, rooted with
organizational applications that will further use for learning. Change in organization culture is
complex and takes huge time. While two or more organizations are merged together then
personal values of workers impact on the corporate culture.
In recent time, culture is the most common researched matter for the organization. A connected
is drawn among a better culture of organization and dominance within the marketplace. As
discussed by Riivar and Lämsä (2014), culture is formed by unique theory as well as situational
development of a company. It may be distinct as the expectations, values and beliefs more or less
shared by the members of any organization. It influences the activities of an organization as their
management does business and makes well known about the relevant customers, suppliers,
employees and competitors objectives (Wanjiku, 2014). Leaders and upper level executives are
mainly responsible for instilling the norms and values into the employees as they not only know
what are predictable for them, but enthusiastic to worm in a manner as to beneficial the company
(Da Veiga and Martins, 2015). A top-rated leader is capable to make several resources of
meaning and identification by giving an environment, which is rewarding for its workers and
employees.
A national culture is similar to that of a company, is comprised of values, rituals, symbols and
traditions of individuals in a specific area. Food, traditions of family and language are all rooted
within national culture. Culture generally differs within connection among the society and
individual, ways of dealing with the conflict situation and conceptions of gender and class. All
these things are more comparable for the organization culture, just on the grander scale.

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As cited by Tong et al. (2015), culture determines the achievement or failure of a company as it
unswervingly effects its main values and their workers. Changes in culture are more generally
arise while the organizations are faced a major problem like economical crisis, or while they
enlarge themselves across nations. Organizations may bring the changes in culture by uncovering
the main beliefs as well as values of their workers, by communicating and processing the change
process, and by set up novel behavioral norms objectives (Wanjiku, 2014). Change in the
management can become a main problem, if not applied properly it may result within loss of
worker trust in their management. Moreover, successful companies inspire by a well-built
organization culture into their workers.
Tesco is a model of such company that has undergone major tactical changes in their
organization. It is the largest retailers of drinks and food around the world. Such achievement of
Tesco has been probable for their growth strategy, and its main competencies that are basically
value-added services and brand reputation. Additionally, Tesco has shown a huge potential
towards capture the foreign markets with variable surroundings, political and cultural factors. As
noted by Marchington (2015), it is extremely sensitive for the external surroundings, and adjusts
on a need basis. It is also significant towards consider the factors of internal environment that
include towards its competencies. Tesco has also enhanced the supplier relationship programs
that are unique within their structure and very particularly designed keeping within view its
ethnically and culturally different suppliers around the world. Strong communication are build as
well as close connection are continued towards enlarge respect and trust and to create a center of
attention more suppliers through word-of-mouth (Tong et al. 2015). However, workers from the
national cultures would be socialize and get knowledge of organization culture. Application of
organization culture is very dissimilar while it compare to the national culture, company
probably would find it hard to hand out foreign workers in an organization culture.
3. Analyze the corporate cultural profile of the selected organization by considering a
minimum of five major features, as part of the corporate cultural profile (AC1.3)
As the industry enlarges and the company includes employees, their management would have to
less contact with every employees as they establish in different management layers. To make

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sure that the company retains their values, it is essential towards promote the teamwork and that
needs making a corporate culture.
Mission Statement
To examine whether or not Tesco have a corporate culture, or to learn what type of culture the
company recently have, as their employees to pen down the organizations objectives and values.
Their management may be surprised at what they learn. If they do not have a written mission
statement, their workers may build their individual ideas of what the company’s values etc.
However, develop a mission statement, which lays out main values for interacting with the
suppliers, consumers, employees and local community (Marchington, 2015). Post it on their
official website and communicate it towards their workers, soliciting their reply in the time of
developing stage.
Policy Guide
Another important way to analyze the corporate culture is to review the employee’s rules and
procedures. If management does not have formal guidelines, make a handbook for the
employees. This method would support Tesco’s management to take a look at how their
employees recently operates, if this furthers the culture the management desire to make and they
require to make the probable changes in those area (Tong et al. 2015). A policy guide is a useful
application for making or changing the internal culture that Tesco has. It puts several boundaries
for the employees but may motivate them to do their work. List the company’s procedures and
policies according to attendance, safety, personal utilization of organization assets and other
daily matters, which affect the employee’s behaviour.
Code of conduct
The code of conduct is considered as a major part of the guidelines followed by Tesco within
their workplace, in order to reach their target. In the organization, it is used to create a
commitment for achieving the target and this is eventually done by obtaining trust within the
organization. This conduction code is often used for creating a guideline for the employees to
work within the organization in a peaceful and proper way (Marchington, 2015). Tesco uses this

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guideline in such a way, so that it can ensure a coordinated and profuse teamwork among
employees so that a corporate and interacting behaviour is established within their organization.
Thriving workplace
In Tesco, it has been found that a healthy and positive working environment is maintained within
the organization among the employees. It is responsible for maintaining a reputed as well as, to
achieve a standard and profitable position in the market. This is done by providing a positive
working environment to the employees, so that they can have both their physical and mental
comfort within the organization (Marchington, 2015). This is used to maintain a strong and
proper corporate culture within the workplace, which would even satisfy the well- being of the
employees. This can be done to elicit skills and knowledge of employees, which eventually make
them motivated for working for the company.
Teamwork
It has been found within Tesco that the company provides a group of well- skilled employees. As
the company is facing high level of competition in corporate world, they must pay attention
towards gaining advantages to their employees. This eventually makes them engaged within the
work, and this is effectively done by managing a proper teamwork within the organization. This
is done by training the employees so that they can compete with their peers and colleagues, so
that they can opt for a common goal.
4. Analyze the effect of corporate culture of your selected organization, on the
accomplishment of business objectives (AC.1.4)
Organizational or corporate culture is one of the most significant influencing factors for the
business and organizational operations. According to Manzoni (2012), the more developed is the
corporate culture, more efficiently will be the business objective accomplished by the
organization. Tesco has been one of the leading names among the retailers of United Kingdom. It
is among the top three largest and best retailers of the world. Therefore, it becomes very
significant to analyse its corporate culture and assess its impacts on the business and
organizational objectives of the company. There are various other companies indulged in the

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retail sector, but Tesco is far ahead from them. As per the opinion of Brannen et al.(2013),
despite of having same types of business and in many cases same type of organizational
structure, Tesco has managed to be at the leading position just because of its corporate culture.
Corporate culture has many impacts on the business objectives of Tesco.
In the corporate culture of Tesco, the main motive for the organization is to provide best level of
services along with best quality of products at the lowest price. As stated by (Barberá et al.
(2012), this motto of the company was established during its initial stages and is still applied in
the corporate culture of Tesco. The company has managed to impress and attract its customers
through providing products to them in three different categories. These product categories can be
illustrated in better way through following table:
Categories Description
1st product category High quality products
High price of products
2nd product category Tesco’ collection of branded products
Wide range of pricing
3rd product category Good quality products of general use
Regular price
Table 1: Categories of corporate culture
(Source: Author)
The products categories of Tesco are as followed:
 The first category comprise of those products, which are expensive and of high value.
These products are very expensive and are greatly demanded in the market.
 The second category of the middle category of products comprise of those products that
are from the collection of branded goods of the company (Tong et al. 2015). These
products are available at wider range of prices that means some are bit expensive and
some are little cheap.

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 The third and last category of products consist only the cheapest products of general uses.
These products are also of good quality but are retailed at regular prices.
These categorizing techniques used in the corporate culture of Tesco, depicts its organized
working behaviors and its high corporate values.
According to Yang et al. (2011), through this pricing technique, the company offers higher rates
of satisfaction to its diverse segments of customers. In this way, the main objective of Tesco i.e.
customer satisfaction, is fulfilled effectively. The employees in Tesco are frequently involved in
various projects and organizational tasks, which help them to improve their skills and working
styles. This helps in better provision of customer satisfaction through offering high quality
products at cheapest rates.
The corporate culture of Tesco facilitates better satisfaction and development of their employees
and staffs. According to Zulkiffli and Perera (2011), when the employees and staffs are respected
and cared in an organization, then results that are more prosperous and outcomes are achieved
through various organizational and business operations. Due to this factor, the employees of
Tesco are able to give much efficient performance in various organizational processes and in
turn, more productivity and higher profitability rates are achieved by Tesco. This helps in
accomplishing the business objective of Tesco, in an effective way.
As opined by Guiso et al. (2015), the corporate culture of Tesco is healthy and employees and
customers friendly, due to this, more talented and skilled workers and employees willingly join
the workforce of the company. Due to high reputational corporate values, the workforce of Tesco
is filled with talented and skilled workers. Due to this, more innovation and creativity is added in
the various operations of Tesco plc. These skilled employees get to develop more working and
organizational skill which they implement in their working styles. Because of all the factors, the
operations of Tesco are carried out in an effective manner.
The corporate culture of Tesco comprises of high corporate values. It determines the external and
internal identity of Tesco. According to Chan et al. (2012), the strong and effective corporate
culture of Tesco has facilitated retention of best employees in the workforce; this enhances the
operations management in Tesco. It also facilitates better completion of tasks and projects
through effective team works and effort. These bear better results in the business run by Tesco.