A Comprehensive Analysis of Tesco's Corporate Strategy and Governance

This report provides a comprehensive analysis of Tesco's corporate strategy and governance. It begins with an introduction to corporate governance and its significance, followed by a background study on Tesco. The report identifies problems faced by Tesco, such as issues related to accounting practices and employee concerns, and analyzes them using both primary and secondary data. A literature review supports the analysis, exploring various aspects of corporate strategy and governance. The report then critically reviews the research findings and offers recommendations and an action plan to address the identified issues. The aim is to improve Tesco's corporate culture and drive the company towards success by enhancing its corporate strategies and governance practices. The report also highlights the importance of ethical conduct, the role of the board of directors, and the significance of effective strategies in the face of globalization and competition. The project utilizes a Gantt chart to outline the activities and timescales involved in the research process.

CORPORATE STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
Background Study.......................................................................................................................1
Problem faced by Tesco..............................................................................................................3
Activities and timescales.............................................................................................................3
Literature Review.............................................................................................................................4
Discussion of the secondary and primary research undertaken.......................................................4
Primary Data...............................................................................................................................4
Secondary Data...........................................................................................................................9
Critical review of the results of the research.................................................................................10
Recommendation and Action Plan.................................................................................................13
Recommendation.......................................................................................................................13
Action Plan................................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Corporate governance in strategic management refers to the set of internal rules and
policies that determine how a company is directed (Tricker and Tricker, 2015). In accordance
with this context, this project will cover the aspects of corporate strategies and governance of
Tesco. Tesco is Britain multinational grocery and general supermarket and merchandise retailer
with headquarters in Welwyn Garden City, Hertfordshire. With the help of literature review, the
project will critically analyse the aspects of corporate strategies and governance. Further, critical
review of primary and secondary data collected will be analysed in this research project.
Recommendations and suggestions will be provided to the management of Tesco, so that they
can improve their corporate strategies and governance.
Background Study
Corporate strategies encompasses a firm's corporate actions with the aim to achieve
company objectives and goals. The strategies are formulated by the top management of the
organisations for the growth and development of business operations. These strategies assist the
management of the organisations to tackle the future uncertainties and prevent risks (Mathur and
et.al., 2013). Further, these strategies are formulated with the aim to increase the market share
and growth. Corporate strategy and governance are the rules and regulations which are
formulated by the Board of Directors of companies. These policies, rules and code of conduct are
to followed by each and every person employed in the particular organisation. Corporate
governance is the system of rules, practices and processes by which a company is directed and
controlled.
Corporate governance essentially involves balancing the interests of a company's many
stakeholders, such as shareholders, management, customers, suppliers, financiers, government
and the community. Corporate governance and strategies are the framework on the basis of
which organisation conduct their business activities effectively and efficiently. Since corporate
governance also provides the framework for attaining a company's objectives, it encompasses
practically every sphere of management, from action plans and internal controls to performance
measurement and corporate disclosure (Filatotchev and Nakajima, 2014). In the era of
globalisation and competitions, organisations aim to sustain in the competitive world by
increasing their production capacities. Thus, corporates management needs to formulate effective
strategies and policies so that employees and employers work collectively in order to accomplish
1

desired goals and objectives of the organisation. Corporate governance has become a buzz word
in the business management field. Owners of businesses of all sizes are employing the concepts
of corporate governance to develop a strategic plan for operations.
This includes systems and procedures designed to structure authority, balance
responsibility and provide accountability to stakeholders at all levels. In essence, corporate
governance is about balancing profitability with sustainability. Tesco Corporation is an
international company with a strong reputation for providing quality products and services. The
code of conduct formulate in the organisation so that positive corporate culture can be made and
organisation can move on the path of success (Armstrong and et.al., 2015). Ethical conduct is
referred as the conduct which is morally correct and honourable. The aim of the organisation is
to increase their productivity and profitability by conducting their business activities ethically
and legally. Further, the board of directors of the organisation aim to create premises a better
place for both employees and employers. This will aid in eradication of conflicts and disputes
and organisation can move on the path of growth and development. The board of directors is the
primary direct stakeholder influencing corporate governance (Adamides, 2015).
Directors are elected by shareholders or appointed by other board members, and they
represent shareholders of the company. The board is tasked with making important decisions,
such as corporate officer appointments, executive compensation and dividend policy. In some
instances, board obligations stretch beyond financial optimization, when shareholder resolutions
call for certain social or environmental concerns to be prioritised (Honoré, Munari and de La
Potterie, 2015). Corporate strategies and corporate governance plays important role in the growth
and development of the organisation. In this aspect, it is the responsibility of the top management
and appropriate authority to formulate and implement effective and efficient strategies so that the
corporate culture of the organisation can be improved and company can drive on the path of
success.
Research Aim: To analyse the corporate strategy and governance of Tesco.
Objectives:
 To understand the significance of corporate strategy and governance for Tesco.
 To examine the code of conduct and code of ethics followed in Tesco.
 To investigate the problems and issues faced by the organisation in terms of corporate
strategy and governance.
2

 To recommend appropriate solutions to eliminate the problems.
Problem faced by Tesco
Tesco is one of the largest grocery and supermarket incorporating its business activities
across United Kingdom. The corporate governance and strategies of the organisation are
formulated by Board of Directors and chairperson of the company (ArAs, 2016). According to
the analysis of Financial Times Stock Exchange 100 index, Tesco held the last position in terms
of its corporate governance policies and strategies. The supermarket chain was brought down by
the lowest scores for accounting and audit practices that were largely a hangover from an
accounting scandal and a series of profit warnings in the past two years. Tesco present system of
corporate governance is not efficient and faced many criticisms in the market economy of United
Kingdom. The issues including misleading pricing tactics, not treating and considering
employees needs and concerns, not following the code of ethics and conducts, etc. Thus, it lead
to increase in conflicts and disputes in the organisation. Employees frequently got exasperated
and infuriated with the wrong treatment of their superiors and managers. This impacts on the
overall growth and development of the organisation. In this context, this report will analysed the
corporate governance and strategy of the organisation. The loopholes will be discovered by
analysing and interpreting the reviews of employees. Recommendations and suggestions will be
provided to the management of Tesco, so that the issues in corporate governance can be solved
and organisation can move the path of growth and development.
Activities and timescales
In the following project series of activities will be performed so that the goals and
objectives of the project can be accomplished. The series of activities can be explained with the
help of Gantt chart. The Gantt chart will help in describing the activities effectively and
efficiently and which is provided below:
Activity 1th
Week
2nd Week 3rd
We
ek
4th
Week
5th
Week
6th
Wee
k
8th
Wee
k
9th
Week
Research Aim
Reviewing
3

Literarture
Finish Proposal
Design question
and pilot research
Carry out &
Record Research
Data Analysis and
Making Graphs
Literature Review
According to Lamberti and Noci (2012), Company needs to follow different types of
corporate strategies which helps to get higher performance and productivity in the world. To get
desired target in the world the must need to follow approaches of marketing. Corporate strategy
has vital role in the firm. It has positive and negative impact on the firm because sometimes it
gives advantages to an entity and sometimes that are not effective to get higher performance in a
world. Technologies are changing every day and the manger if the firm has a responsibility to
analysis the market condition and based on that they should take effective decisions. Corporate
strategy helps to give more profit to the company. Firm should use government policies which
helps to maintain employee relation and also helps to expand their business in the world. There
are different types of policies for the employee such as employment laws that helps to give
protection and security to an employee. Corporate strategy and governance helps to get higher
performance and productivity the world. Government policies are very helpful for an entity it
gives more profit to expand their business in a world.
However, in contrast to this, as per the views of Tricker and Tricker (2015) There are
different types of strategies to increase a firm performance and productivity in the world when
the company use the corporate approach the can face many problems in a firm such as related to
the employees, related to the policies. To solve the issues they need to follow appropriate plans
and stages. Management is responsible to follow appropriate and effective strategies and polices
that helps to give higher profit to a firm in the world. They also need to give effective
environment to the employees so that they can easily communicate with each other for the
4

problem. Corporate strategy gives more advantages to a company to get higher profit and desired
goal in the world. Sometimes conflicts can occur during the implementation of approach so the
manager needs to give effective policies and environment to an employee to work together.
Because this directly affect the firm performance in the world.
According to Mathur and et.al. (2013), Strategies of corporate must be understandable by
the employees then only they can innovate a product and get higher performance in the world.
Sometimes during the implementation of corporate strategy in the firm, employees and
management faces some barriers that directly affect the firm overall performance in the world.
By using the corporate strategy in an entity they can get desired target and objective of a
company in the world. There are different types of government policies that helps to give more
efficiency to a firm and also helps to expand their business in the world. Government policies
must be effective and efficiency for the employee than only they can get desired goal in a world.
Government also gives appropriate policies to the employee and the companies that helps to get
higher performance in an industry.
However, in contrast to this, as per the views of Kim (2015), Company manager ha s
responsibility give essential resources to the employee to produce innovative products. There are
different types of cooperate strategies that helps to get desire target and higher performance in
the world. By using advanced approaches of corporate firm can easily get higher productivity in
an industry. Manager needs to give appropriate, effective training and development to the
employee to use strategies for the change. Corporate strategies helps to expand their business in
the world and helps to get higher performance in a world. Manager needs to find out the
direction of a corporation in which different business operations work together to get specific
objective. According the target, manager needs to give training and development to the
employees. There are different types of government policies that helps to give protection and
also help to get higher performance in a world. By using the governance company can easily
maintain employee relation in an entity and it has positive impact on the firm overall
performance. Governance has positive impact on the firm because it provides the way to increase
their performance and they can easily expand their business in the world. By using corporate
approaches in an entity, it gives more advantages and enhancement to the firm. Company must
need to follow the government policies that gives the way to increase performance and they can
also expand their enterprise in the world. Corporate strategy and governance has vital roles in the
5

company and it gives more advantages to an entity to maintain the brand recognition and to get
higher performance.
According to Steyn (2012), code of conduct and code of ethics are most essential for the
company. Manger needs to follow this documents that gives higher efficiency to the firm. Code
of conduct is the document which is issued by the board of director. It includes essential norms,
rues, regulations and responsibilities. Every firm use the document to maintain employee relation
and also increase the efficiency of work. It also includes the different types of rules ns regulation
for the employees and they need to follow in a company. This document guides and instruct an
employee in the firm to work together. By working together an entity can easily get higher
performance and productivity in the world. Code of ethics is the document that is created by the
top level management which includes the set of principles and designed to instruct a member of
the company to find out business integrity. There are different types of policies that helps to take
appropriate decisions based on the current situation. Both factors are helps to take effective
decisions and also helps to maintain employee relation in the company. Those documents helps
to give a way to behavior and work in an entity. Code of ethics gives the way and guide to the
management to solve specific problem and take effective decision.
However, in contrast to this, as per the views of Pantano (2014), Code of conduct and
code of ethics must be effective and well managed because based on that only employees will
behave in the firm. There are different types of instructions and guidelines that helps to take
appropriate decisions based on the situations. Theses documents helps to get higher performance
in the world and also maintain relationship between the employees. Code of conduct contains
the rules and regulations that employee needs to follow in the company. This document is issued
by the board of director and it contains the norms and policies. Code of ethics has different types
of policies and instructions that helps to take effective decision for the specific situation.
Sometimes various conflicts can occur so that a manager can easily find out the solution to solve
them. Employees faces different types of problems that has negative impact on the company
performance. Top level management gives an appropriate information and policies which helps
to get desired target and higher performance in the world. In companies there are various set of
rules and regulations which helps to maintain employee relation and gives the way to work
together ion s firm. It helps to expand their business in the world. Management has a
responsibility to provide appropriate and effective polices to the employee so that the can easily
6

work together to get desired target. Some times in an entity they face different types of problems
in the market so they can easily take decision that gives more advantages to the company. Top
level management has a responsibility to create those policies, rules and regulations that must be
beneficial for them. By setting effective plans and policies for the employees they will give more
effort to get desire target of a firm in the world. Rules and regulations must be effective and
efficient so that it give more profit to maintain employee relation and also helps to get higher
performance in a world. From code of ethics company can easily get the way to solve any types
of problem that occur in an entity. It provides the way to increase overall firm performance and
productivity in the world. Code of ethics gives the way to solve the particular problem and also
help to take effective decision. It helps to get higher performance and productivity in the world.
According to Park (2014), sometimes companies face different types of issues related to
the corporate strategy and governance. Organizations follows various approaches that helps to
get higher performance and productivity in the world. Employees facing barriers during the
implementation of the strategy. Manager needs to give appropriate environment to the employee
so that the can easily innovate their products and also maintain employee relation in an entity.
There are different types of issues such as employee relation, lack of knowledge, employment
laws etc. These all are the barriers that employee can face during the implement the corporate
strategy. To manage the works and relation the manager needs to give appropriate and open
environment to the employee so that the can easily communicate with each other to get desired
target in an entity. One of the big problem is that the employees have lack of knowledge to
implement the strategy to increase overall performance in the world.
However, in contrast to this, as per the views of Adamides (2015), employees have the
issues during the implementation of the corporate strategy in the firm. Manager has a
responsibility to give appropriate and open environment to the employees so that they can easily
communicate with each other and also give ideas to get desire objective of an entity in the world.
Major issue is occurred in the firms the employee relation. To maintain employee relation in an
entity a manager needs to give appropriate environment so that they can easily give their own
ideas and suggestions for the specific problem. By involving an employee in the decision-making
procedure so that they feel motivated and then they will give more contribution to get desired
target in the world. To solve the conflict in an entity, firm need to follow appropriate process that
gives the way to solve them. There are different types of plans and policies that helps to maintain
7

relationship between the employees in the company. There are various government policies that
helps to solve the conflict and also helps to expand their business in the world. To solve an issue
related to the corporate strategy manger needs to take appropriate decision based on the current
situation. Companies follows different types of policies and plans which helps to get higher
performance and productivity in the world. To solve any conflict in the company the need to take
appropriate decision and stages of solutions. There are different types of problems that can be
easily solved by the company.
According to Filatotchev and Nakajima (2014), These all are the problems that can occur
in the company, it directly affects the firm performance and productivity in the world.
Government policy must be good and efficiency for the employee that helps to maintain
employee relation and give higher protection to the employee. Sometimes company are not
following those plans and policies which give more benefit to the employee so that it can create
conflict for an employee in the company. Employment laws gives more advantages to the
employee and it gives higher security sand protection to an employee.
However, in contrast to this, as per the views of Armstrong and et.al. (2015), There are
various approaches and strategies that helps to solve appropriate conflict in a firm. One of the
major conflict can occur when entity use the corporate strategy in the company is the employee
relation. To maintain employee relations in the company manager has a responsibility to provide
open environment and also give appropriate policies to them. It helps to get desired target and
also helps to get higher performance in the world. Company use those plans and policies for an
employee that are beneficial for them such as employment laws, policies etc. corporate strategy
helps to increase the firm performance and also helps to expand their business in the world.
Discussion of the secondary and primary research undertaken
Primary Data
The primary data of the research has been collected via questionnaire form. The questionnaire
has been provided to all the employees working in all the departments of Tesco out of which 30
responses has been taken as sample. The interpretation of primary data is in thematic form and is
provided below:
Theme 1: Corporate governance and corporate strategies are important for the organisation.
8

Is corporate governance and corporate strategies are important for the
organisation?
Frequency
Yes 21
No 3
Don't Know 6
Interpretation: In the questionnaire survey conducted in the premises of Tesco, the question has
been asked to all the employees regarding the importance of corporate governance and corporate
strategies to the organisation. In the sample of 30 employees, 21 agreed that corporate
governance and corporate strategies are important for the organisation. 3 employee did not
agreed with the statement and voted no whereas 6 employees doesn't know whether corporate
governance and corporate strategies are important for the organisation or not. This implies that
corporate governance and strategies are very important and essential for the organisations.
Theme 2: Management of Tesco does not follow the code of conduct in the premises.
Is Tesco management completely follows the code of conduct in the premises? Frequency
Yes 12
No 15
Don't Know 3
9
Yes No Don't Know
0
5
10
15
20
25 21
3
6

Interpretation: In the questionnaire survey conducted in the premises of Tesco, the question has
been asked to all the employees in order to acquire information about the following of code of
conducts and ethics in the premises. From the sample of 30 employees, 12 employees accepts
that code of conduct has been followed in the premises of Tesco. 15 employees did not agree
with the statement and their response was no. Further, 3 employees have no idea whether, code
of conduct has been following in the organisation or not. This implies that the code of conduct
and corporate governance has not been following in the organisation.
Theme 3: Issues faced with the company's policies and procedures in respect to
implementation of strategies.
Do you face issues with the company's policies and procedures in respect to
implementation of strategies?
Frequency
Yes 18
No 10
Don't Know 2
10
Yes No Don't Know
0
2
4
6
8
10
12
14
16 12
15
3