In this report I will be providing the UK’s largest supermarket, Tesco with advice on their performance. I have chosen to use two types of analytical models to review the company; I will be looking at the organisational structure of Tesco, as well as analysing their business and competitive strategy. 1.1 Company overview
Tesco is the leading food retailer in Britain, they have also focused on building non-food sales which are available in store and online. Tesco is one of the world’s largest retailers with approximately 4,331 stores in 14 countries which include Asia, Europe and the United States. (Tesco, 2011). See appendix 1 for a map of the countries Tesco operate in. In the UK alone there are 2,715 stores with just fewer than 300,000 employees. Because Tesco is a global organisation and analysing the company as a whole would be too much information to report, i will focus my analysis on the Tesco stores based in the United Kingdom, looking closely at the company’s business and competitive strategy and also their organisational structure. 2.0 Organisational structure
According to Balogun & Hope Hailey (2004) “Organisations are composed of a number of interconnected and interdependent parts or subsystems, and are most efficient when the major components are in alignment with each other.” (Balogun and Hailey, 2004, p.42) For an organisation to succeed it should have a structure that is based on different levels of authority and responsibility. It defines a framework of the company and by doing so each member of staff knows their job role within the firm, what is required of them and who to report to. The company’s organisational chart should be accessible to all employees for them to see. By having a good organisational structure, allows the management team to carry out good leadership and effectively communicate with their staff. Management should be committed to motivating and encouraging the staff and especially promote teamwork within the company. Senior managers are accountable for overall direction of the company, where as middle managers have a team of people who they manage and are responsible for that department and then report to their senior manager. An organisational chart represents the structure of an organisation and shows the relationship between staff and departments. They make information more accessible for employees and make them more productive, helping them understand the company strategy and structure. Grant (2010) argues, “Hierarchical structures are essential for efficiency and flexibility in firms. The critical issue is not whether or not to organise by hierarchy – there is little alternative – but how the hierarchy should be structured and how the various parts should be linked.” (Grant, 2010, p.183). Grant also goes on to discuss that hierarchies are known for their ability to resolve problems of cooperation in the organisation by the imposition of top-down control. According to Christy (2011) the objectives of an organisational structure can be summarised as to provide for: * The economic and efficient performance of the organisation and the level of resource utilisation; * Monitoring the activities of the organisation;
* Accountability for areas of work undertaken by groups and individual members of the organisation; * Co ordination of different parts of the organisation and different areas of work; * Flexibility in order to respond to future demands and developments, and to adopt to changing environmental influences; and * The social satisfaction of members working in the organisation; (Christy, 2011, p.347)
2.2 Business and competitive strategy analysis
It is sensible for a company or organisation to have a competitive strategy but the market is forever changing. As Bennett (1999) points out “It is not possible to know today what tomorrow’s competitive strategy should contain.” (Bennett, 1999, p.70) So to have a successful and effective...
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