Strategic Human Resource Management at Tesco Plc

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Gloucestershire business school|
Strategic Human Resource Management at Tesco Plc|
An analysis of Tesco’s strategic HR and employee relationship management| |
Abdul Latif Sultan (s1010402)|
4/1/2011|
Standard APA referencing style used
Reference list presented at the end of the paper
Word Count: 3009

This paper has been submitted at the University of Gloucestershire in partial fulfillment of the Masters in Business Administration course module ‘Strategic Human Resource Management,’ under the able guidance of Dr. Xiaoni Ren and Jocelyne Fleming. Today’s competitive environment demands companies to pay serious attention to its human resource management because of the important role it plays in realizing a company’s mission, objectives and strategy. It is a vital element in driving a company towards success. The paper aims to demonstrate how strategic HRM and managing good employee relationships play an important role in the success of TESCO PLC. The paper also aims to present a view of how competitive advantage is highly dependent on effective Human Resource Strategies.|

Introduction

According to John Bratton ‘Strategic human resource management is the process of linking the human resource function with the strategic objectives of the organization in order to improve performance (Bratton, 2001). Another view of management authority Michael Beer suggests that the HRM policies and practices of the organisation need to fit with its strategy in the competitive environment and the conditions that it faces’ (Beer, 1984). Wheelen and Hunger, 1995 define strategic management as ‘that set of managerial decisions and actions that determines the long-run performance of a corporation.’ The strategic focus to HRM involves linking the managerial decisions with respect to HR policies with the strategic objectives of the organisation. Aktouf, 1996 (as cited in Bratton, 2001) present’s a model which identifies three inter-dependent variables that need to be identified and continuously adjusted; the values of the senior management, the business environment and the resources available to the firm. The focus is to effectively manage and use the human resources, their skills & intellectual knowledge to gain competitive advantage. Barney states that resources that provide competitive advantage must be un-inimitable, rare and non-substitutable (Barney, 1991). Coff argues that human resources are a vital source for gaining competitive advantage and are inimitable (Coff, 1994). (Guest, 1990) & (Gratton, 1997) share a similar view that employees if motivated can lead to higher performance and commitment. Gratton identifies six factors of success: the commitment of top management; the motivation and aspirations of recruits; the core capabilities of the management team; the team’s aspiration; its ability to build and maintain alliances; and the integration of the business into a global network. The whole idea is to present a view that organisational success does not depend on the financial power or the technological capability of the firm but rather the attitudes, commitment, skills, capabilities of its employees and the relationship it shares with them. If Human resources are the actual source of competitive advantage to firms then how have firms achieved this? This paper is inspired by the competitive strategy, managing employee relationships and other human resource practices employed at TESCO PLC that drive them to success. Company Profile

Tesco is Britain’s largest food retail group and operates in a number of countries (Bhatnagar, 2006). Its global presence covers Europe, Asia and the United States (Tesco, 2010). Tesco is also credited for being the world’s largest e-retailer with an annual turnover of £1 billion. Its market share in the U.K. is approximately 28% followed by others such as Asda, Aldi, and Sainsbury at 10%, 9%, and 7% respectively (DataMonitor, 2010). Tesco caters in food but since a few years has...
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