Tesco's Strategic Expansion & Global Operations: A Detailed Report

This report provides an analysis of Tesco's organizational structure, governance, and culture using McKinsey's 7S model, evaluating the influence of globalization on its global operations. It explores how Tesco has adapted to operate in the global market, including the impact of culture based on Hofstede's dimensions. The report also discusses the ethical and sustainable factors considered by the organization in a global context, highlighting their importance in decision-making. Furthermore, it assesses the range of strategic expansion routes available to Tesco, concluding with key insights into the company's approach to globalization and strategic development. Desklib offers this solved assignment along with a wealth of study resources for students.

Organisation structure
and Workforce
motivation

INTRODUCTION
Globalisation is the term used to define the interdependence of different countries of the
world for different products, services, technologies, investments, informations and cultures. It is
growing vastly and continuously in all over the world, majorly after the cold war in early 1990s.
This increase in global interactions has caused a growth in international trades. It has provided
the customers with more and better choices, which thus decreases the power of suppliers. It also
promotes new and effective ideas. This demand of certain products and ideas may differ in
different countries or cultures depending on the level of satisfaction it provides to the
corresponding population. There are wide ranging effects of globalisation which are complex
and even politically interfered(den Hertog, 2019). The chosen company for this report is Tesco.
The report will consists of the explanation of organisational structures, cultures and governance
through applying McKinsey's 7S model in reference to Tesco. Then there is the evaluation of
how the respective factors given, has influence over global operations and the measures and
strategies Tesco uses for operating in a global market. Moving further, it includes the effect of
culture on Tesco by applying Hofstede's dimensions. Then the brief meaning of ethical and
sustainable factors with its importance in decision making of an organisation are included. At
last, it includes the range of strategic expansion routes that are available for the company.
MAIN BODY
Explanation of structure, governance and culture within Tesco by applying Mckinsey's 7s
model
Structure – It is a system that tells about how the rules, roles and responsibilities are directed
and framed to achieve goals of a company.
Governance – This is a board of director's, manager's or owner's force of influence that tells
about certain processes and practices used in a company.
Culture – These are the ways of behaving that consist of the beliefs and values established by
the owners that forms the perception of its employees and related community.
The Mckinsey's 7s model is a strategic management tool which analysis the organisational
design of a company with the goal to promote its organisational effectiveness. It is consisted of 7
internal factors of an organisation which have a large impact on determining its

successfulness(Parekh and Wilcox, 2018). They are comprised of hard and soft considered
elements. In reference of Tesco, the influence of globalisation is explained through this model in
the following ways :
 Strategy – It is a set of business plans of a company that are framed to achieve
competitive advantage and growth. Tesco uses cost leadership business strategy type
which focuses on minimizing the cost that can lead to higher margins or low pricing to
attract more customers(Pollock and Mott, 2018). It can achieve this type of strategy
through its high bargaining power from the suppliers due to the immense amount of
buying of raw materials.
 Structure – These are the ways and form of providing the information and
communication with its lower level management. Tesco follows hierarchical type of
structure. Through this, the information travels from its many layers of management
which are structurally guided to provide the information to the next level accordingly.
 System – This forms the business infrastructures that set up the chain of decision making
and workflows. Due to its retail supermarket type of industry, Tesco relies on a wide
range of systems to uphold its operations on daily basis.
 Skills – These are the capabilities such as creativity and productivity of its employees
that affect the working of its company. Tesco provides training programs to its employees
on a regular basis which helps in enhancing the level of their skills.
 Style – These are the approaches that a management takes to enhance the performance,
productivity and working environment of its company. Tesco uses democratic leadership
style to manage its employees.
 Shared values – These are the behaviour and respect towards certain values that are
accepted in the workplace. Tesco considers the use of fair norms and standards and revise
them actively.
 Staff – This refer to all the human resource / personal of a company and factors related to
it such as their motivation, quantity and skills. Teso hires fresh graduates which help it in
considering the growing needs of the nation and it also provides training programs to
their workforce(Yilanci and Gorus, 2020).

An evaluation on how the above factors have been influenced by global operations and how
tesco has adapted for operating in global market :
Globalisation has brought a lot of both, opportunities and challenges. It provides a
company a chance to increase its appearance and deal in the global market which result in
targetting bigger amount of consumers. It gives challenges to a firm because of the need for lot
of researches to study the demand of the new market. It also increases competition for a domestic
level business entity due to the disturbance and presence of the multi national companies dealing
in global market(Pata, 2021). The effect of global operations on the structure of a company is
vast. Tesco has to change its planning strategies according to the demands of the new markets.
The type of transferring information between different levels and discrimination among different
authorities is also moulded according to the corresponding population. The culture will diversify,
the company needs to hire more native employees of the market to read the demands. This will
change its organisational culture and the ideal values in its different markets.
Applying Hofstede's Dimensions of culture to demonstrate how Tesco has been influenced:
Hofstede's cultural dimensions theory, developed by Greert Hofstede is framework used
for communicating inter culturally. Culture distinguish a group or category of people from other.
This tool helps in identifying those different types of cultural dominances and how they make an
impact on an organisation. It is consisted of 6 dimensions. Following is the hofstede's cultural
dimensions theory of Tesco :
 Power Distance – It is referred as the inequality and unequal distribution of power
among people of a society. It tells about the extent to which people are willing to accept
the inequality. Tesco has a loose hierarchical system. These is less difference between
the standards of different authorities. Information and ideas are are shared regularly.
 Individualism vs collectivism – Individualism refers that an individual is self centred
and focus on looking after themselves, their family or some close ones. Collectivism
tells that the concern of an individual is more towards considering them as a part of a
group and prefer doing tasks collectively. The force of individualism is more in Tesco.
Employees are expected to be self reliant and initiative(Prados de la Escosura, 2021).
This also leads them to focus more on personal goals rather than organisational goals.

 Masculinity vs Femininity – This factor explains about the dividation of power on the
basis of gender. The dominance of male and female in a society have different
embraced values. Tesco exhibits masculinity values more in its organisation. Employee
are competitive, aggressive and celebrates monetary rewards more than non monetary
ones(Watt, 2019).
 Uncertainty avoidance – This force tells about the extend of behaviour in which people
try to avoid hard situations, unclear, complex and out of ordinary activities. The culture
of Tesco does not support this force and new ideas / opinions are welcomed. This proves
to be an improving element for the organisation and individual / employee both.
 Long term orientation vs short term orientation – These elements tell about the
duration for which an individual or community are likely to work and their focus
towards different types of rewards such as the organisation using long term orientation
do not expect immediate wins and focus on long term success, whether as short term
orientated firms celebrate quick wins(Sadeh and Feldman, 2020). Tesco consider short
term orientation to be able to evolve in the dynamic environment.
 Indulgence vs Restraints – In these dimensions, indulgence allows its believers to
enjoy their leisure time with full gratification and enjoy their desires. Restraints
dimension do not allows its practiser's to enjoy and indulge in instant satisfactory
activities and has strict norms. Culture at Tesco believes in indulgent force. Employees
demand flexible working hours to enjoy their life at fullest and do not interfere in each
other's personal life.
An evaluation of ethical and sustainable factors that an organisation has to consider in a
global market and how this impacts on decision making in a global context :
Ethical behaviour is the moral way of acting and using of values to maintain and improve the
working conditions of an organisation with reference to the business world. Sustainability is the
use of process that consider and promotes its four pillars that are build to implement the fair
practice which do not harm the resources for future use. These include the principles that shape
the conduct and behaviour of employees. Some ethical and sustainable factors that should be
considered when working on global market are :
 Buying and promoting suppliers from foreign countries that use environmental friendly
practices in manufacturing and fabricating.

 Considering social issues, taking related initiatives and demotivating the bad social
activities that are being practised in business world such as children slavery, misusing of
human rights and providing good working conditions to workforce(Castles and Davidson,
2020).
 Bringing new types of products and services that the changing or developing culture will
prefer from the developed cultures or countries.
An assessment and critical evaluation of the range of strategic expansion routes available :
Strategic expansion routes are the factors formed to find the areas that are needed to expand and
can help the company in achieve faster growth, higher profits, targetting higher market,
diversifying in different segments and over-ally promote the growth process of a company.
Different expansion routes that Tesco can consider are :
 Corporation – The industry has a big amount of competition which separates and break
the groups and chain of customers which leads to diversifying of customers to different
retailer. The company can use this use expansion route to target and cover more amount
of customers and decreasing competition. This route can be used in different ways –
merging from different firm, taking over / buying any other firm and through forming
strategic alliance with other competitors.
 Diversification – This is a route filled with full of opportunities to target wholly a
different segment of customers or their present customers by filling their different form
of need or want. The building of present section of commodity and introducing a new
product or services that is demanded by the market. Tesco can research and identify the
needed type of product/ service in its various areas of presence and start building its
presence in that corresponding sector such as footwear and furniture(Kramsch, 2019).
CONCLUSION
In the above report it has been concluded that, globalisation is a vast term that have its
impact on different elements and some people and even countries are depended on it through
buying and selling products across national boundaries. It is not only consisted of products and
services but information, technology, investment and cultures too. Then there are organisational

structures, governance and culture which have a huge impact in building of the organisation's
working environment. The Mckinsey's 7s is a strategic tool which is consisted of staff, style,
skills, system, share values, strategy and structure. These structure, governance and culture are
impacted when working globally. Tesco has used many efficient ways to adapt in its different
markets. Hofstede's cultural dimension theory is consisted of 6 elements which help to cope with
the cultural changes. Then there are ethical and sustainable factors covered which should be
considered when working on a global market. At last it covers some strategic expansion routes.

REFERENCES:
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