Strategic Leadership Analysis: Tesco's Challenges and Frameworks

This report provides an analysis of the leadership challenges faced by Tesco following a significant change in its leadership structure. It begins with a brief overview of Tesco and the replacement of Terry Leahy by Phillip Clarke, highlighting the strategic issues that emerged as a result, including the lack of clear goals, employee resistance to change, and concerns about maintaining the company's reputation. The report then explores the application of relevant leadership theories and frameworks, specifically transformational leadership theory and contingency/situational theory, to address these issues. It references various academic sources and industry reports to support its arguments. The report concludes by emphasizing the importance of addressing these challenges to ensure Tesco's continued success and stability in the market.

LEADERSHIP

TESCO 1
Introduction
In this part of the report, a brief background of Tesco will be given. In 2011, the
organisational structure of Tesco had undergone a major change when Terry Leahy who held
the position of chief leader for over 15 years at Tesco, was replaced by Phillip Clarke.
Followed by the brief introduction about Tesco, the strategic issues that are being currently
faced by the company due to the said change will be mentioned.
Strategic issues:
 No clear set of goals and objectives at Tesco: The first issue that could be included
in the report is the lack of adequate management strategy at Tesco. Since the time
when Terry the ex-finance director of Tesco left his position, the company has been
facing various problems in meeting its goals and targets. The current leaders at Tesco
have failed to define company’s goals in the clear and concise manner. Moreover, the
strategies and policies required to achieve the desired goals and objectives are not
clearly defined which often creates confusion among the employees of the company.
 Employee’s resistance to change: The employees at Tesco have low tolerance to any
organisational change that occurred and hence they resisted to such change. Thus, it is
highly required for Tesco’s new director i.e. Phillip Clarke to provide a reasonable
assurance of well-being and job security to the employees of the companyto retain
their motivation and interest in the company.
 Maintaining the reputation in the market: Tesco had to undergo various changes
such as changes in organisational culture, model of leadership, level of productivity.
The employees, customers and other stakeholders of the company have lost the
confidence on the company as a result of leadership change.

TESCO 2
Theories and frameworks
In order to deal with the strategic issues that have occurred at Tesco due to some
organisational changes following theories and frameworks could be used.
 Transformational leadership theory: This theory suggests that a leader must work
with his team to figure out the required change and to create a clear vision to guide his
subordinates about the change and executing such change in the organisation.
 Contingency or situational theory: This theory of leadership entails to match
appropriate leaders to the suitable situations and events (Antonakis & House, 2014).

TESCO 3
References
In order to make further research for the purpose of completion of the detailed assignment
following list of references can be used:
Antonakis, J. and House, R.J., 2014. Instrumental leadership: Measurement and extension of
transformational–transactional leadership theory. The Leadership Quarterly, 25(4), pp.746-
771.
Butler, S. &Farrel, S., 2014. Tesco must change culture and reinvent brand, new boss tells
employees. Available at: https://www.theguardian.com/business/2014/sep/26/tesco-must-
change-culture-reinvent-brand Accessed on: 24.11.2018
Financial Times, 2015. Tesco puts a brave new face on old problems. Available at: Accessed
on: https://www.ft.com/content/9fe25e7c-5d5e-11e5-a28b-50226830d644 24.11.2018
Haddock-Millar, J. and Rigby, C., 2015. Business Strategy and the Environment: Tesco
PLC’s Declining Financial Performance and Underlying Issues. Available at:
http://eprints.mdx.ac.uk/18143/1/RBFS-V6N3-2015-9_PublishedVersion.pdf Accessed on:
24.11.2018
Management Today, 2014. 6 challenges new Tesco chief Dave Lewis will have to tackle.
Available at: https://www.managementtoday.co.uk/6-challenges-new-tesco-chief-dave-lewis-
will-tackle/article/1304346 Accessed on: 24.11.2018
Nwagbara, U., 2010. Managing Organizational Change: Leadership, Tesco and Leahy's
Resignation. E-Journal of Organizational Learning and Leadership, 9(1), pp.56-79.

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Personal Today, 2010.Tesco HR team to face change management challenges after Leahy
retirement. Available at: https://www.personneltoday.com/hr/tesco-hr-team-to-face-change-
management-challenges-after-leahy-retirement/ Accessed on: 24.11.2018
Renko, M., El Tarabishy, A., Carsrud, A.L. and Brännback, M., 2015.Understanding and
measuring entrepreneurial leadership style.Journal of Small Business Management, 53(1),
pp.54-74.
Tesco PLC. 2018. About us. [online] Available from: https://www.tescoplc.com/about-us/
[Accessed 16/11/18].
Wehrmeyer, W. 2017.Strategic issues.In Greener Marketing (pp. 95-110).Routledge.