Investigation of Tesco's Ethical Behavior in Business Operations

This report conducts a thorough investigation into the ethical behavior of Tesco, a major retail company. The study utilizes secondary data from various sources like journals, magazines, and articles to assess Tesco's practices. The research focuses on how ethical violations impact organizational reputation and performance, emphasizing the importance of transparent values and practices. The report examines the ethical practices within Tesco, analyzing productivity, compliance, values, and management support. It also reviews literature on the importance of ethical behavior in business, its impact on stakeholders, and challenges faced by organizations. The analysis includes specific examples of ethical concerns and alleged shortcomings within Tesco, such as supplier relations, employee treatment, and unfair trading practices. The report recommends that Tesco establish clear ethical guidelines and practices to improve its standing with stakeholders, including customers and employees. This report is a valuable resource for students studying business ethics and corporate social responsibility, available on Desklib, a platform offering AI-powered study tools and past assignments.

Business Project

ABSTRACT
The purpose of this study is to conduct an investigation of the ethical behaviour which is being
carried out on day-to-day basis in Tesco. This study have been conducted with the help of
secondary data obtained from journals, magazines and articles which have been published on the
distinct internet platforms. The major findings of this research is that any violation in terms of
ethical practice or code of conduct tend to reflect upon organisational reputation and
performance. Therefore a business undertaking such grounds of operation tend to achieve a
distinct position in the market. It is recommended to this organisation that, it is essential to form
a transparent and clear values and practices which are practised both by the management and
personnel.

Table of Contents
1.TITLE:..........................................................................................................................................1
2.INTRODUCTION........................................................................................................................1
2.1 Introduction...........................................................................................................................1
2.2 Background of this research..................................................................................................1
2.3 Aims......................................................................................................................................2
2.4 Objectives..............................................................................................................................2
2.3 Business Problem..................................................................................................................2
3. Literature Review.........................................................................................................................3
3.1 Importance of reflecting ethical behaviour in business organisations..................................3
3.2 Impact of undertaking ethical practices on stakeholders of business..................................4
3.3 Conduct a investigation on the ethical practices carried out by Tesco.................................4
3.4 Reflect upon challenges faced by business and their overcoming........................................5
4. Analysis of Case..........................................................................................................................6
4.1 Productivity...........................................................................................................................6
4.2 Compliance...........................................................................................................................8
4.3 Values and Principles............................................................................................................9
4.4 Management Support..........................................................................................................11
Reliability and validity..............................................................................................................12
6. RECOMMENDATION.............................................................................................................14
7.REFERENCES...........................................................................................................................16

1.TITLE:
“An investigation to establish to what extent is Tesco reflecting ethical behaviour regarding their
daily practices operations in relation with its direct stakeholders: customers and employees.”
2.INTRODUCTION
2.1 Introduction
Ethics in business defines moral and social values which are undertaken by an
organisation while carrying out operations. It defines principles which are identified by business
in determining what is good and bad for the organisation (Blanchard and Peale, 2011). They help
in separating good from bad and states code of conduct which is to preferred by business while
operating in the current market. According to Andrew Crane, Ethics are defined to be situations,
decisions and activities which attempts to address issues of being right and wrong. The major
reason for which they are treated to be important as they are known to be foundation on which
business evolution and development is carried out. The summation of such factors tend to alter
experience of an individual in an organisation therefore, organisation must take assistance from
the right code of conduct so that declining profitability of the organisation can be dealt with in an
ideal manner. There is a increased demand moral and ethical behaviour among organisations as
they tend to facilitate an improved level of communication and partnerships among individuals.
Organisation such as Tesco are bound to portray ethical behaviour as they possess large
of consumers and employees and their impact upon community is significant as well. A poor
choice of the ethical element can carry out a significant impact upon the productivity as well as
favour-ability of the organisation in the current market. The major elements which are
undertaken in this approach are corporate social responsibility and corporate compliance. This
business report attempts to identify whether Tesco, a leading retailer in the market of United
Kingdom is reflecting ethical behaviour through its practices and operations which are carried
out on daily basis.
2.2 Background of this research
Tesco is one of the dominant retailer which is carrying its operation in the United
Kingdom market. This organisation is known to deliver value offerings to consumers at
unbeatable prices. The company attempts to follow customer centric approach by working
closely with the suppliers of this organisation. The operations of this organisation are carried out
through it vast distribution network (6911 stores) all over the world. The dominance which has
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been often perceived as monopoly in the market and this organisation is known to deliver
unethical behaviour numerous times. The allegation upon this organisation stands on grounds of
corporate policy, ecotown, financial affairs, data leak scandal, health and safety issues. This
study attempts to conduct a detailed investigation on the ethical behaviour which is undertaken
by this organisation and identify extent to which unethical elements are persistent in its practices.
2.3 Aims
Aims of this project defines purpose of undertaking this business project. The aims of this
research study is, “An investigation to establish to what extent is Tesco reflecting ethical
behaviour regarding their daily practices operations in relation with its direct stakeholders:
customers and employees.”
2.4 Objectives
Objectives state the approach which will be taken into consideration to complete this
project. The objectives defines the framework which will be undertaken for conducting a
successful investigation of the research topic. The major objectives which are formed to
undertake this study are as follows:
 To determine Importance of reflecting ethical behaviour in business practices
 To analyse Impact of undertaking ethical practices on stakeholders of business
 To conduct an Investigation of ethical practices undertaken by Tesco in its business
practices
 To Reflect upon the challenges faced by business and their overcoming
2.3 Business Problem
Tesco is an leading organisation possessing market share of whopping 28% in retail
segment in the United Kingdom. The company have encountered with some of the major
shortcomings when it comes to their business practices. The stakeholder of this organisation have
defined this organisation to be 'worst' when it comes to conforming with codes of conduct of
business established by the government (Tesco suppliers say retailer worst at following grocery
code of practice, 2015). It has been identified through a supermarket regulator conducted a
survey through questionnaire in which approximately 100 supplier to this organisation were
enquired relating to conforming to code of conduct of this organisation. Out of all retailer who
are carrying their operation in the economy of the United Kingdom, Tesco is believed to be
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never comply with code of conduct of business practices which is identified on the aspect on
supplier exclusively.
However, this is just one aspect there are numerous other parties involved as well such as
customers, employees and communities which surrounds this organisation. This institution is no
stranger to unfair trading practices in its operations. This organisation have been allegedly
known to sell personal details in exchange of money. This feature defines that management of
this organisation more concerned about generating cash rather than following moral and ethical
norms in carrying out business. The treatment which is offered to consumers and employees
have been under scrutiny as well. The organisation provides livelihood to approximately 47,000
employees and have known to exercise dominance quite well. Therefore, it is very essential to
conduct a detailed investigation so that it could be determined to extent this organisation have
been portraying ethical behaviour to its stakeholders. This research attempt will identify
approaches through which these recurring problems with the company will be dealt with forming
suitable principles and codes of conduct which are appreciated by stakeholders.
3. Literature Review
This segment of the case attempts to conduct a critical review of the pre-defined
objectives and business issues which are pertaining in the organisation. The tools which which
are undertaken in this approach to successfully contribute are magazines, journals and articles
which are relevant to the case subject. It is a crucial aspect as it helps in perceiving this current
situation from the eyes of impressive laureate.
3.1 Importance of reflecting ethical behaviour in business organisations
It is essential for a business to form and practices right principles and code of conduct so
that business practices are carried out in the right manner. These are referred to judgement about
what is right and wrong in terms of behaviour and decisions. The decisions when undertaken in
an organisation tend to be influenced by numerous factors involving ethics and may persuade a
business to reject opportunity which might lead to businesses (Huhtala and et. al., 2011). An
organisation which is portraying ethical behaviour along with corporate social responsibility tend
to be extremely beneficial for business. The first major influence is that an organisation will be
able to attract best of available talent in the market which ultimately possess a direct impact upon
profitability and productivity of an organisation (Resnik, 2015). This approach which is
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undertaken by organisation to follow ethical norms and guidelines helps them in forming right
relation with the investors and encourage higher investment. Pearson, (2016) states that The
reputation of an organisation will experience an upliftment when practising such approaches and
tend to achieve higher goodwill. Therefore it can be said that business ethics are helpful for
organisation in enhancing their sales revenue and reputation.
3.2 Impact of undertaking ethical practices on stakeholders of business
It can be said that there is a direct impact on stakeholders of business when ethical practices are
carried out by organisations. According to Bello, (2012) Stakeholders are refers to individual
who have direct interest in operations of the company and get influenced by decisions formed on
a large scale. The crucial components for stakeholders in respect to organisations are employees,
management, suppliers, shareholder and society. The organisation is making efforts to
contribute positively to the environment so that needs of customers could be fulfilled. This
organisation is taking assistance from agency and shareholder theory so that every element of
stakeholder could be satisfied with company's approach (Epstein and Buhovac, 2014). The major
impact is that internal stakeholders are that employees could be retained with the organisation for
longer period.
The ethical practices in terms of employees involves free and fair treatment, job security
and rewards and recognitions which persuades them to perform better (Weiss, 2014). The
management following code of conduct should formulate decisions which leads to growth of the
organisation. When it comes to external stakeholders which involves community and
environment in which operations of business are carried out. According to Godos-Díez,
Fernández-Gago and Martínez-Campillo, (2011), An institution when undertaking corporate
social responsibility helps in building an environment which is less harmful for people living
around and simultaneously improves quality of lead by people. The ethical practices considering
stakeholder assures that there is an right balance between profitability and environment of an
organisation.
3.3 Conduct a investigation on the ethical practices carried out by Tesco
The ethical practices which are carried out by Tesco have been questioned time and
again. The organisation have been involved in judicial proceeding due to numerous alleged
causes. The ruthless business practices which are carried out by this organisation is known to one
of the emerging cause for its declining productivity and market reputation (Wright, 2011). The
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prior failure on the ethical grounds is that this retailer known to adopt unfair practices when it
comes to procuring inputs from numerous sources. The relations which are shared with suppliers
and farmers are very poor and this organisation is known to exercise use of authority on
numerous grounds. According to Brown and Treviño, (2014), There are allegation that this
organisation have dismissed employees on unfair grounds and are known to imitate marketing
practices of Walmart which is under judicial proceeding as well.
In contrast to above claims, the company have its own customised code of conduct which
is helpful in protecting people and communities that work for the business. The company have
made numerous efforts to follow code of conduct so that right environment for employees is
created and cater it role in the society in the significant manner. This code of conduct of
organisation is known to undertake various legislation and policies which are formed for the
purpose of protection of stakeholders of business (Dutta and Banerjee, 2011). In case of any
query, employees are motivated to call line managers and helpline numbers and issues will be
resolved in quick manner.
The values of this business lies to treat the customers in the manner they want to be
treated and making little efforts which lead to make big difference in the life of people (Wang ,
2014). The code of conduct and value were non-existent in the working environment of the
organisation which lead to in-numerous accidents in respect to this institution. In the wake of so
many judicial proceeding this organisation have carried out numerous efforts so that such
incidents could be prevented from happening in the near future. This organisation have relied
upon its ethical practices upon communication and leadership so that queries and issues relevant
to stakeholder could be resolved before they cause any potential harm to the organisation
(Hassan, S. and et. al., 2013).
3.4 Reflect upon challenges faced by business and their overcoming
Aforementioned are major incidents which are encountered by this business organisation.
Therefore it is extremely important for organisation to reform its code of conduct and CSR
activities so that existing position in the market could be retained for longer duration (Saunders,
Kitzinger and Kitzinger, 2015). In the wake of accidents, this organisation is known to form a
team of 70 ethical advisor which are formed solely for the purpose of monitor the functions and
practices which are carried out in the organisation. This organisation has been part of the Ethical
Trading practices since 20 years but now have emphasizing on acting more responsibly and
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adopt a forward thinking approach. The major CSR practices which are undertaken by this
institution are reviewed on the annual basis so that measures which leads to improved of the
society are identified and implied. The 'steering wheel model' which is undertaken by the
organisation is known to respond to the altering expectation of concerned parties (Wang and
Hsieh, 2013).
4. Analysis of Case
Until, now it has been determined the manner in which an organisation has been
struggling with the ethical practices and complying with code of conduct which has been formed.
It is extremely important for organisation to focus on the CSR and ethical practices so that
productivity and reputation of the business could be enhanced (Benn and Dunphy, 2013). The
reason for the same is that along with focusing on aspects of wealth maximisation it has become
equally important for organisation to focus upon fulfilment of needs and expectations of various
stakeholders so that sustainability of business operations could be enhanced in the market (Crane
and Matten, 2016). The analysis of the various elements of the ethical practices are taken into
consideration so that their impact upon business could be identified. A brief analysis of four
element of ethical practices in business are as follows:
4.1 Productivity
The term can be referred as economic measure of a machine, person, system, factory etc.
in regard of converting inputs into effective outcome. Productivity measure can be evaluated
collectively through reviewing current trends in growth of labour technological development and
wage level. Through the assistance of appropriate technologies, productivity can be emphasised
within less time. A successful and effective business like Tesco understand the value of
workplace productivity for business and growth. Business productivity of company need to
analyse their available company resources which can help in producing profitable services and
products as determined or desired through clients or consumer. This not only enable more
creative and health workforce but also assist in employing best outcomes and proactive
employee behaviour in company. Tesco has managed a proper authentic environment in order to
manage the productivity among workers of enterprise. Company has come up with new digital
tracking gadget known as Arm Mounted Terminals in regard of levels of productivity measured
continuously on their working environment. Motorola manufactured device instruct staff
members of warehouse and other people to load others.
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The illustration presents the previous records of Tesco productivity which is constantly
on rise after the fluctuation of 2011. It states that in 2003, where business productivity of
company and their procedure was lower than than level of performance in 2015. On the other
hand, from 2011 and 2012, it was constant. Tesco has been leading the retailing market from
decades through the assistance of their service quality and productivity of their company. After
focusing over worker need and satisfaction, Tesco has observed drastic change in the
performance level and work productivity. Company has been focusing over the ethics and code-
of-conduct that has stimulated the company's growth and productivity which is constant as per
the illustration. Meanwhile, there are various attainable activities that can help in meeting
determined standards of organisation. This has stressed over the benefits of consumer along with
interaction and consumer services of organisation. Though, the level of productivity might fall or
decrease within company which is denied by Tesco stating the fact that company has been
providing their worker more comfort and convenience within their working environment. Hence,
in context of better productivity and work performance of company, ethics play major role in
stimulation and betterment of working activities and operations within environment.
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Illustration 1: Business Productivity of Tesco
Source 1: Business Productivity of Tesco, 2018

4.2 Compliance
This is an element in which a business is persuaded to obey all the rules and regulations
which are formed by the government. The states of compliance is achieved when an organisation
is able to meet is legal obligations and which mostly undertake health and safety of others
(Lawrence and Weber, 2014). Tesco have been undergoing judicial proceeding as they have
failed to comply with the legislation which has been formed by the government. With this rise of
operations there is an increased complexity in the compliance issues related to an organisation. It
tend to increase responsibilities which are to carried out by an organisation.
Tesco have been known to breach policies of conduct numerous times and suffered in
terms of operation and disruptions. It has been identified that this mega retailer have been known
to breach groceries code of conduct in the market. The investigation identified that company
have been deliberately making efforts through delayed payments to supplier which brought then
under scrutiny of government (Tesco breached Code, 2016). The government has enforced this
organisation to provide invoices which are more clear and transparent to suppliers. But lately
number of supplier have reported that there is an improvement in the state of relations between
organisation and supplier due to incorporation of latest practices their compliances.
(Source: Tesco- supplier relationship, 2016)
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Illustration 2: Tesco- supplier relationship

It can be easily identified from the above graph is that this organisation is paying its
supplier more than the market average rate which is mainly carried out so that better relations
could be formed with suppliers. After per litre of milk, Tesco is paying at-least 7 pence more
than the market average rate. This initiative by the organisation helps in facilitating better
relations with the supplier protecting business from the scrutiny of the government. The most
important consequence which can be ascertained through complying with the governmental rules
and regulations is that there will be substantial reduction in the fines, penalties and disruptions.
The reduction in the legal problems helps in a business in maintaining stability in their
operations and attaining established productivity. The business organisation needs to hire a
compliance expert which helps a business in conforming with legal obligation set up by business
(Pearson, 2016). The compliance also carries an indirect impact with employee retention and
public relations. There are numerous laws which are formed in respect to employees in an
organisation. It further assist in providing a safe environment which is preferable by them. The
positive changes in the relation with numerous parties could be availed through compliance tend
to reflect on the performance of an organisation.
4.3 Values and Principles
Business values and principles often are expressed typically in terms of organisation's
performance functioning along with their regular interaction with customers, suppliers and
consumer. An initiative aim or objectives of the code of practice and ethics is to determined and
explains the products and service which organisation will manufacture and provide along with
the basis of their fairness and honesty. Principles of company whereas utilised to support the
business values through involving philosophies of operations that worker should follow. There
are various measures or major components which is supported and developed by principles such
as continuous development, business profitability and consumer satisfaction (Blanchard and
Peale, 2011). Another majorly defined value is in entire communication and other regarding
circumstances. Through meaningful and coherent establishment of company vision and mission
statement, enterprise can manage their decision-making as well as strategic planning. Tesco has
determined their values keeping consumer satisfaction as their priority and undertaking the code
of ethics under the pledge. Consumer desire for great service values and products that can assist
in delivering best outcome and great service to consumer. They ascertain whether their consumer
are given major attention by company according which principles of enterprise has been
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