MGMT1101: Research and Analysis of Tesco's Organizational Structure

This report provides a comprehensive analysis of Tesco Plc., focusing on its operations in the retail industry, particularly within the Canadian market. The analysis begins with a SWOT assessment, evaluating Tesco's strengths, such as its diversified customer base and leading market position, and weaknesses, including concentrated operations. It explores opportunities like strategic acquisitions and addresses threats like political and economic uncertainties. The report then examines environmental constraints, including competition, population size, technological advancements, and changing customer behavior. It identifies key stakeholders, including customers, suppliers, shareholders, and employees, and discusses strategies for managing each group. The organizational structure of Tesco, characterized by a mechanistic hierarchical system, is analyzed, along with its implications for business performance. The report also explores employee motivation strategies, recommending the application of Maslow's hierarchy of needs. Finally, the report includes recommendations for improving progress evaluation and overall business strategy. The report is based on the MGMT1101 course and applies concepts from Modules 1-9 of the course.

Running Head: Mgmt1101: Research & Analysis Assignment Part 2
MGMT1101: RESEARCH & ANALYSIS ASSIGNMENT PART 2

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Mgmt1101: Research & Analysis Assignment Part 2
Table of Contents
Introduction........................................................................................................................3
SWOT: Strategy formulation..............................................................................................3
Environmental constraints.................................................................................................5
Stakeholders......................................................................................................................7
Structure and design of the Organization..........................................................................8
Motivating employees......................................................................................................10
Evaluating the progress...................................................................................................11
Recommendation.............................................................................................................13
Conclusion.......................................................................................................................14
Reference list...................................................................................................................15

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Mgmt1101: Research & Analysis Assignment Part 2
Introduction
Tesco Plc. is one of the most popular names in the Retail Industry and this company is
mainly UK based. At present, they are operating their business in various countries
including Malaysia, India, Canada, Thailand, and many others. This organization is
experiencing continuous growth in Canada due to its effective business strategies.
However, this company must maintain this growth in future as well. This paper is
evaluating SWOT for formulating strategies, environmental constraints, stakeholders,
organizational structure, design and process to motivate employees within Tesco.
Controls are being included that can help in measuring the progress and one effective
recommendation is being proposed in this study.
SWOT: Strategy formulation
Among the major strengths that are identified, diversified customer base is significant.
Diversified customer base can help Tesco to gain some benefits in future. Biggest
benefit of this strength is financial security. As opined by Combi & Gambini (2015), loss
of profit in one segment of business can be balanced from another segment if customer
base is diversified. Optimization of company's revenue can be achieved through the
growth of new consumer segments and markets. In addition, diversification of customer
base can help this firm to sell different new products and services to current and
potential customers. Diversification of customers also helps to gain a strong position in
the market. Tesco holds a leading position in the retail market, which can be enhanced
in future due to this strength in business.

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Mgmt1101: Research & Analysis Assignment Part 2
In the weakness of Tesco, concentrated operation has identified that impact in revenue
collection of the company at the time of recession. Area of operation of this company is
limited within some of the countries of North America. This increases the risk of low
revenue collection that can be eliminated by adopting the strategy of business
expansion. Several markets in Asia and Europe are growing in retail sector. Tesco can
expand their business to these regions for maintaining a steady flow of revenue. As
stated by Coskun, Basligil & Baracli (2018), “expansion of the business to new market
can help a firm to gain advantage over the competition”. Expanding business to other
regions increases flow of revenue and decreases risk of loss that can occur due to
failure of business in one region.
Tesco has adopted the strategy of strategic acquisition that has created an opportunity
for them to have improved process in terms of technology. As said by Höhenberger &
Delfmann (2015), strategic acquisition can help a firm to have continuous growth in
business. This strategy can help this firm to save operational cost and on the other hand
technology infrastructure can be improved. Speed of operational procedure can be
increased because this strategy helps in acquiring resources and core competencies
that are currently not held by a company. Hence, strategic acquisition can help Tesco to
gain different new resources like improved technology and core competencies. In the
modern age, customers are key stakeholders who expect fast and advanced service
from a business organization. Hence, needs and expectations of key stakeholders can
be fulfilled through the help of this strategy. Ultimately, all these advantages can impact
in financial growth of Tesco.

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Tesco is exposed to different threats like an uncertain political situation and the global
economy. During a situation of political uncertainty, this firm can adopt a hedging
strategy. In this strategy, Tesco management can reduce the cost for different essential
operations like human resources and production. Moreover, they can drop the sales
amount during any political turmoil that creates instability in oil and gas prices (Jenkins
& Williamson, 2015). For example, they can reduce transportation of products to distant
locations that involve huge cost of logistics. Uncertainty in the global economy can be
fought by saving adequate funds for future investments. This can save the firm from
threats like loss of profit and market.
Environmental constraints
Specific environment of Tesco includes the retail industry. This industry is growing
rapidly as many business owners are entering into the marketplace of Tesco. Retail
industry of Canada is being slower in 2019. Amit & Zott (2015) have mentioned that
entry of foreign retailers has become one of the main causes behind this scenario. In
2018, more than 30 foreign brands have entered in Canada retail industry. Tesco is
facing increasing competition and this issue may prevent their progress in this country.
Analysis of general environment is mentioned below,
Political: Canada is politically stable and it has a good position in terms of business.
This environmental condition is favorable for the business of Tesco.
Economic: A well-developed mixed economy is present in Canada. Both public and
government are selecting an economic option for this country (Gallego‐Alvarez, Ortas,

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Vicente‐Villardón & Álvarez Etxeberria, 2017). Rapid economic growth is ensuring
improvement of living standard in Canada and this aspect is helping Tesco to get high-
income customers.
Social: Highly diverse population is present in Canada and this is helpful in identifying
target customer group. According to Evans et al. (2017), a smaller population of this
country can be a limitation for exploring retail organizations.
Technological: Technological development in Canada is challenging for business
owners as they need to change their operating system accordingly. Public and private
investment in technological development is contributing to the economy of this country
as well.
Environmental: diverse landscape of this country is the main reason behind tourists
gathering. As mentioned by Haslam, Tsitsianis, Andersson & Gleadle (2015), it is an
opportunity for Tesco to target tourists for more profit.
Legal: Government of Canada has developed a legal framework for employees and
employers. Basic rights of employees must be provided to them as per the legal
framework.
Global environment of Tesco includes different environmental conditions of the
countries where they operate their business. Global issues may impact on the business
of this company. For example, Brexit can impact the business performance of Tesco as
they operate their business in global countries. According to Pandey (2016), “legal

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system of different countries is changing and this company must take account of all
changes in legislation.”
Tesco is facing environmental constraints including increasing competition, and limited
customer base in Canada. Many foreign brands are entering into the retail industry of
Canada and this country has a smaller population. These facts are preventing Tesco to
earn maximum profit from their business. Technological advancement has become a
challenge for this company. Changing customer behavior and changes in legal
structures of different countries are also constraints for Tesco.
This organization has hired skilled employees to serve better to customers and this
aspect is helping them to beat competitors (Tescoplc.com, 2019). For gaining extra
financial benefit, this company is targeting tourists of Canada. Legal advisor of this
company keeps a record of changes in legislation of different countries. Satisfying the
changing needs of customers is the biggest challenge for Tesco. Representatives of this
company communicate with customers to understand their needs for mitigating this
challenge.
Diverse landscape of Canada has created opportunity of gaining more profit by Tesco.
Due to this environmental position, a huge number of tourists are visiting Canada and
the business owners of tourism industry are buying products from Tesco to please
customers.

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Stakeholders
Important stakeholders of this company are customers, suppliers, shareholders, and
employees. All of these stakeholders have a great impact on this firm and its activities.
This organization shapes its activities as per the changing customer behavior. This
organization understands the needs of customers. Trained and skilled employees of this
company serve customers and ensure a higher level of customer satisfaction. Graves &
Sarkis (2018) have mentioned that companies design their activities for gaining more
profit to ensure sufficient return for shareholders. Tesco manages its suppliers with
effective communication for getting raw materials within lower rate. Based on the
gathered material, they develop strategies for sales and marketing. As stated by Fiaz,
Su & Saqib (2017), employees are the backbone of a company as their service help
organization to meet expectations of their customers. Employees of Tesco perform their
business activities and put their best effort to maintain customer satisfaction. Due to this
reason, Tesco manages employees effectively by fulfilling their basic needs.
Employees are the most important stakeholders of a company and effective human
resource management is the key to success. As stated by Nguyen, Mia, Winata &
Chong (2017), fulfilling the needs of employees help organizations to retain loyal
employees and serve as per expectation of their customers. Tesco needs to manage
their employees to maintain constant growth in Canada. Without the support and
collaborative effort from employees, this company may fail to meet expectations of their
customers. This may result in disappointment in shareholders as well. Training
employees may help in improving their professional and personal skills. As suggested

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Mgmt1101: Research & Analysis Assignment Part 2
by Rosemann & vom Brocke (2015), skilled employees are able to manage other
stakeholders including customers and suppliers. HR department of this company must
communicate with employees to understand and solve issues that are being faced by
employees at the workplace. In return, they can get support from their employees to
achieve organizational goals. Due to this reason, this firm needs to manage this
stakeholder first.
Structure and design of the Organization
Figure 1: Organizational Chart
(Source: Tescoplc.com, 2019)
Organizational structure of Tesco has been designed by maintaining a hierarchical
system. Regional manager is the highest authority and store manager work under this
RegionalmanagerStoremanagerFoodtradingmanagerManagerforfreshfoodsectionManagerforambientfoodsectionNon-foodtradingmanagerManagerofelectricalsectionManagerofclothingsectionPersonalmanagerPersonalAssistance

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Mgmt1101: Research & Analysis Assignment Part 2
person. Three managers of food trading, non-food trading and personals managers,
work under the store manager. Their subordinates are looking after sub-sections of
Tesco (Tescoplc.com, 2019).
This company is using a mechanistic organizational structure to ensure good business
performance. As mentioned by Pandey (2016), hierarchical structure is considered as a
mechanistic structure as it ensures a highly centralized authority. Organizational
structure of Tesco is helping them to formalize business practices and procedures. All
characteristics of this organizational structure are matching with the features of
mechanistic organizational structure. Hence, it can be clearly stated that Tesco is
maintaining a mechanistic organizational structure. However, this company faces
difficulty to manage change with this structure.
The organizational structure of this company is helping them to address relevant
aspects of business. For example, current organizational structure is helping in work
specialization. Roles and responsibility of different managers are clearly mentioned and
understandable. Business activities are distributed in different departments. In addition,
the management of this company has created subsections in departments. Chain of
command is flowing efficiently. The entire business is being controlled by the regional
manager and he is making the decision on behalf of Tesco (Tescoplc.com, 2019). The
command of the higher authority is being conveyed to the employees by his
subordinates and employees are obeying instructions accordingly. Mechanistic
organizational structure is helping Tesco to formalize their business practices and

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procedures. This company may face difficulties to manage change in the future and
they must communicate with their employees for gaining their support.
Motivating employees
There are different organizational theories among which Maslow hierarchy of needs can
be adopted by the management of Tesco for their employees. As opined by
Gschwantner & Hiebl (2016), Maslow hierarchy of needs is a 5 tier model that specifies
different human needs. Different needs like physiological, safety and esteem needs.
Fulfilling these needs of employees can help to motivate them that can impact on the
productivity of this company.
Action plan
Needs of employees Actions to be taken
Physiological needs ● Provision of bonuses and
rewards on good performance
● Regular increment to employees.
Need of safety Providing insurance and other medical
benefits to employees and their families
Belongingness Framing policies that can help to
improve interpersonal relationships
between management and employees.

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Esteem needs Regular feedback on the basis of
performance and giving recognition to
employees for their performance.
Self actualization needs Improving creativity and personal skills
of employees through arrangement of
training process.
The actions stated above can help management of Tesco to increase engagement of
employees and motivate them to perform better. Some basic needs like food, shelter
can be fulfilled by providing regular increments and bonuses to the employees. As
stated by Guerreiro, Marques & Gaaloul (2016), sharing profits with employees
increases their satisfaction rate. Moreover, other needs like belongingness and esteem
needs can be provided to employees through improvement of company policies. Hence,
this can help to eliminate problems like employee turnover and low productivity.
Evaluating the progress
There are different types of organizational controls that help in monitoring activities. In
this case, concurrent and feedback control process can be selected to monitor different
business activities of Tesco. As opined by Ivanisevic, Katic, Buchmeister & Leber
(2016), concurrent control helps in evaluation of ongoing employee activities. Controls
rely on different standards and rules that guide employee tasks. Moreover, feedback
control can help the management to review different information to determine whether
performance of employees meets various established standards.