The role and effect of Tesco
Tesco is one of the largest supermarket chains in the United Kingdom. Sir JACK COVEN is the founder and chairperson of Tesco. When he started to sell groceries in his store his first day’s profit was pound 1 over the sell of pound 4. During the year 1956 in Maldon the first Tesco self-service store was opened. During 1960 Tesco take over a group of 212 stores in northern part of England. In 1968 term super store came in front when Tesco open store on Crawley, West Sussex. During the year 1974 Tesco opened petrol stations at different locations. In 1979 annual turnover of Tesco reached up to 1 Billion Pound. In 1982 computerised check outs has started in Tesco. And in the same year annual turnover of Tesco reached on 2 billion pound. 1990 decade considered as a very important in the Tesco’s history and development. Because in this decade some major events happened which are responsible for considerable growth of Tesco. In 1991 Tesco became largest petrol retailer in the Britain. In 1992 first Tesco metro store open at convent garden. First Tesco express open in 1994. During 1995 Tesco became largest food retailer, Tesco enter into Hungry, and Tesco announced Club Cards. In 1996 Tesco introduced term customer assistant to make shopping more easily. In 1998 Tesco entered into Taiwan and Thailand and thereafter in South Korea in 1999. Tesco became largest organic food retailer in the UK during 2001. During 2001 Tesco entered in Malaysia and Japan in 2003.
The core purpose of Tesco is to create value for customer to earn their lifetime loyalty. Tesco has developed long term strategy based on growth in core UK, to expand by growing internationally, to be strong in food and non food items, and to follow customers into new customer service. Near about 400,000 staff working in 13 countries. Tesco is playing major role in economic development and employment generation.
What is change?
Change is set of an activity which is use to generate valuable output of an organisation. In business it is collection of activities which involves inputs and creates valuable output.
To become stable in today’s worldwide and fast altering business environment every organisation emphasising on every individual employee to take more responsibilities. Structures of most organisations becoming more and more flatter, simple and less hierarchical to adopt the concept of change and team work for constant adoptions. For that organisation focus on employee relationship, constant development in product and services, flexibility for customers and employee, emotional literacy to create moral at working place.
Significance of change in current organisational environment:
Organisation needs stable guideline path to achieve its short term and long term goals. It helps to create group to approach towards goals and targets with great energy (i.e. knowledge and skills).
It helps to create new organisational strategies and visions for further development.
It helps to judge market situation and other competitors.
It helps in planning and improving overall performance.
It acts as a path between new behaviour and organisational success.
Change affects all aspects of organisation from implementation to success of project.
By changing the system and structure it helps in developing and implementing new skills and techniques for corporate success.
Customer oriented change helps in development in products and services. Now a days companies becoming aware about customers response to product with respect to need want and desire. This study will help in development of customer led philosophy rather than product led philosophy.
Total quality management can be improved by making small changes in products and services. Because customers’ wants and needs are continuously changing. It means company must observe these small changes and convert them into products and services.
In case of chemical and petrochemical companies; small changes in production system can help in maintaining environmental balance, and also help in reduction of hazardous emission.
Technological changes such as introduction of Information Technology in organisation helps in reduction of work force and improvement in time management and perfection and continuity in work.
Styles of change management
Education and communication- It helps in overcoming lack of information about working process of an organisation. Each and every employee should know clear cut information about his work and functions hence it helps in change management. But on the other hand it’s little bit time consuming.
Collaboration- It increases ownership and quality of a decision processes.
Direction- proper direction of project leads to clarity and speed of project or process. It helps in timely completion of project and to provide timely delivery to customers.
Edict- It is helpful in crises and confusions.
Factors considered most important for change in organisation
There are so many factors responsible for change in organisation. Some of them are mentioned below.
1. Economic Factor- Capital development has impact on changes in organisation and life style of people. It helps in introduction of new technology in industry. On the other hand changes in wages, interest rates, inflation affects on the organisational change. It observed in car manufacturing companies; most of the companies prefer to install their production units in country like china, Russia, India its due to the currency rate, wages of employee and easily available resources.
2. Competitive advantage- Continuous innovation and involvement of new ideas throughout the project is very important to take competitive advantage of product. To compete with other industry or organisation there must be some changes and new ideas in lifecycle of project to become stable in market.
3. External factors- these factors includes legislative factor, political factors, privatisation etc. in this factor some specifications are not under our own control. Legal and political factor affects on the nature of work in organisation. So due to these factors it needs to make some changes in the organisation. In legal factor; environmental law, labour law, some company rules and regulations comes under this section.
4. Business survival- Time is key factor in success of project. According to the availability of time and facilities it needs to make some changes in functionality of organisation.
5. Technological Factor – Use of improved technology helps in business development. In production industry and service industry use of information technology helps in timely and successful completion of project. Use of IT helps in maintaining personal as well as organisational records and accounts. For example use of IT helps in maintaining supply chain management in retail industry. So it is very necessary to make changes in technology and functionality to take such advantages.
This term is coined by Max Weber. According to him organisation can be managed on impersonal and rational basis this is called as bureaucracy. Such kinds of organisations are easier and effective to manage the change. Because any development carried out in organisation is targeted towards organisational goal rather than personal goal. Such organisations work under set of rules and regulation. Everyone emphasise on rules and regulation rather than personal powers. Employees get gob on the basis of knowledge, skills and level of competence.
Characteristics of bureaucracy
Rules and Regulation
Division of labour
Example of Bureaucratic Management in the retail industry
Rules and regulation- company has set up certain rules and regulation on which basis all operations are carried out. For example company has set up separate rules for shopping, complaints, and data protection.
Impersonality- Company provides variety of jobs in different departments and selection of candidate is based on the level of competence and skills. For example company has wide range of departments like business development manager, project manager, customer technical manager, national account manager etc. all these positions needs some specific skills and knowledge and experiences.
Division of labour- different kind of people works in different sections like food , grocery, bakery, wines, fruits and vegetables, telecommunication, health and beauty, cold drinks, dairy products, insurance, electronics and IT department. Every employee concentrates his department and targets only.
Hierarchical structure- Company has divided stores like Tesco extra, Tesco Metro, and Tesco express. Every store has different functionality and targets. Every store manager control store with his juniors. And send report to his senior team to look after progress and difficulties.
Authority structure- There is authority to appoint extra staff in company’s store.
Rationality- New staff is appointed which has highest ratio of customer to staff.
Organisational work is completed by various employee appointed on different positions.
Division of labour divide labours into various departments and every one concentrate on his work only.
Every employee can be control with the help of rules and regulation.
Employee appointed on the basis of technical qualification and career oriented criteria.
Uniformity of decision and action maintained by set of rules and regulations.
Due to impersonal working pattern routine works are already setup.
There are many levels of management in every section and department.
There is much paper work and record keeping hence cost of expenditure is increases.
One department is more or less depends on another department. If one department is not working properly then works of other department may affect.
5. Employee expects some kind of job security in the time of difficulties. But all these investment do not guarantee about perfection in work from employee.
Organisational Change Development
There many type form of organisational change development
Business process re-engineering
Here I will explain about E-Marketing and Joint ventures with example of company, TESCO.
E-Marketing is the marketing guide where the digital technologies are used to advetise and attract the people, this is followed in the entire world by all levels of company. This medium of advertisement makes easier to bring both the buyer and the seller together. The benefits included in this type of marketing include low cost and the message are given to people in an easy way. The restriction in this is that the information delivering should be in the kind of right message to right person.
It consists of:
Online reputation management
It benefits both the seller as well as the consumer
It is the easiest way to access all levels of market.
It helps to enhance global marketing for small firms as well.
There is a scope for enhancing customer service and customer value.
It helps to offer many products and services in one screen.
It helps to target customer individually.
It helps to reduce cost of formal advertising and marketing
Details of products are mentioned on screen. Hence there is a scope for informed and competitive buying.
All products can not publish on web. Some products need to select and publish them.
There are some problems in web marketing like legal problem, infrastructural problem, and commercial problem.
There may be chances of hacking.
It needs IT education. So it is not that much profitable in country having illiteracy in IT.
Tesco as a case example:
By applying the E-Marketing strategy in first half of the finanicial year 2007 i.e. Year up to September, the company has made £784 million sales and profit rate increased by 62% which is £54.7 million. Tesco receives about 300000 orders per week. Due to E marketing now the online grocery sale has exceeded £1 billion. During the Christmas 1.3million shoppers choose to shop at Tesco which record braking in UK. In 2006 Tesco launched Tesco direct product album and circulated free of cost. Where the information of every product has mentioned clearly with some product codes. Customer need to book it online or order by phone only.
Joint venture consists of collecting two or more businesses together to achieve common goal. There are so many reasons for joint ventures like business expansion, development of new product, development of new market etc. rewards and risks of enterprise are also shared. Joint venture gives more resources, more capacities, increased technical expertise, access to developed market and distribution channel.
There are some disadvantages in joint ventures
Objectives of venture are not 100% clear and committed to everyone involved.
Partners may have different objectives of venture.
Different culture and style result in poor integration and efficiency.
Example of Tesco
Tesco is the second largest retailer in UK collaborated with India’s largest automobile group Tata to expand his business and develop into Wholesale cash and carry market. Tesco announced £60 million to invest in first two years in retail development. Company planning to sell fresh food, grocery, and non food products to small retailers, restaurants, and kirana stores. Tesco’s technical capabilities will support to develop hyper market and star bazaar. This cash and carry business is going develop for wholesaler only but not for the individual customer. Here Tesco has skills and techniques of retail market and Tata has already well settled in India. By using both companies resources wholesale cash and carry business is going to settle. Company is trying to set up training centre at Bangalore for the employees training.
Model of organisational changes
There are some models have been developed for ensuring organisational changes.
These models are as follows.
Business process re-engineering
Delayering and downsizing
Push and pull strategies
Kaizen is term originated in Japan. It consists of two words KAI (continuous) and ZEN (Improvement). This terminology is related with continuous and gradual improvement of operation and productivity. The key element of kaizen are quality, involvement, efforts with all employees, wish to change in organisational operations and communications.
Foundation elements of KAIZEN are
Suggestions for improvement
Elimination of waste and inefficiency, standardisation and hose keeping are also considered very important factors.
Elimination of waste and inefficiencies-
Maintain time management in every kind of work
Use all resource properly i.e. materials
Replace all inefficient factor of production specially machinery
Try to change process of production in order to maintain intensity and quality of production.
Standardisation- In standardisation; every aspect of production need to manage with respect to time, quality and quantity. There are some standards have been set up for maintaining quality standard of products like ISO9000, ISO9001, ISO9002, ISO140000 etc. To get these standards certificates there is a set of procedure in production process. These procedures need to follow to get these certificates
Standardised clean up
Tesco is a retail organisation working in UK, Europe and Asia as well. KAIZEN can be use as a valuable tool for improvement of organisational profile. While working in any organisation team work is very necessary factor which leads to timely and properly completion of work. Maintaining personal discipline means use of uniforms, timely working and respectful and friendly behaviour leads to healthy working climate in store. Timely discussion with the manager and team leaders and customers as well helps in reduction in problems and better performance. Tidiness of products, proper order of products cleanliness etc leads to create better shopping environment in store. Use of energy saving lights, use of well maintained refrigerators reduces energy consumption. These are small ideas can be use to improve performance and store profile.
Business process re-engineering
The concept of Business process re-engineering occurred around 1990. This is very wide approach. This concept deals with delays, storage, wastage, error correction etc. It also deals with the communication process between different departments, functions of process, rules and regulations etc. at last business process re-engineering should result into outcome ‘close to’ customer. In short this is a concept of redesigning.
Four phases of BPR
Understand all processes involved in the operation before starting re engineering. Why, when, what, where, how such questions leads to understand basic operations.
Without considering previous structures and procedures invent completely new process of operations.
Re engineering should be dramatic. There must be dramatic improvement of performance of work.
In this task whole organisation is get divided into different departments and processes are separated into simple tasks.
Task 2.2a & 2.2.b
STAKE HOLDER ANALYSIS
Any person, group, or organisation that has direct or indirect stake in company because it can affect or affected by organisations activity, objectives and policies is called as stakeholder.
Tesco have wide range of stakeholders with variety of interests and expectations. Company trying to take an account of stakeholders participation and views while taking different decisions. Tesco is trying to make little changes in managing customer’s needs, staffs and community expectations, suppliers and investor’s policy, government rules and regulations and NGOs as well.
Company has developed customer question time facility in which company can observe fast changing needs of customers and think to make changes in present facilities to provide better product support. This is a kind of meeting where all staff and managers come together to listen customers view. And discuss on problems.
While making changes in stores and Structures Company take into account what local public is saying. So before taking any action company distribute leaflets in local area and listen the views of the people. So that it can be helpful for company and community as well
To do a proper job it is very necessary to have better knowledge about the working method and principles. For this reason company has set up questionnaire to take survey of staff. Staffs are also participating in annual review programme. So that they can work effectively and they will get better benefits.
Company use the formal process of communication while dealing with suppliers. Company carry out anonym’s survey about what suppliers thinking about companies working policy and to identify areas of improvement.
Company carry out wide range of meetings presentations and responds to wide range of enquiries. Company wants shareholders view and issues about corporate governance strategy. Shareholders communication is carry out by investor’s relation team. Company representatives also meet to socially responsible investment community these meeting provide updates on corporate responsibility strategy and performance. Such kind of processes has developed in company to increase shareholders participation in development and business growth.
SIGNIFICANT CHANGES IN AN ORGANISATION
There are certain processes could be used for involvement of stakeholders in organisational change.
System and subsystem
Input transformation output modelling
multiple cause diagram
Functional and division structures
Input transformation output modelling
This model has developed by John Smyrk. This model is helpful in linking of product to project activities relationship with expected output, and organisational goals. This model consists of three phases; Input, transformation process and output. Operational process consists of transformation of inputs into finished goods and services. Basic production model applies in manufacturing process in both profit and non profit sector.
Some of the inputs are used in manufacturing of goods and services and other in part of process.
Types of inputs
Transformed resources- used to manufacture products. For example material and information.
Transforming resources- used to perform manufacturing process. For example staff, facilities.
Some time transformation process delivers unexpected products as well as goods and services designed to deliver. Important aspect is to minimise environmental impact of waste during all process. Transformation process includes change of physical state of material, position or location of material, change of ownership, and change in physiological state of customer.
In the process of organisational change ‘Tropics Factor’ plays an important role as a reminder. Details of ‘Tropics factors’ are as follows
Resources- Resources are also well defined in every projects which are available for use.
Time scale- Each and very project has definite time scale. Within this period it has to be finished. Some time it takes slightly longer time to complete project and it directed towards the long term effects it may be positive or negative
Objective- should be simple and relevant. And it should be subjective to degree and acceptable to project manager and the organisation.
Perceptions- there must be perception of all stakeholders in sharing of any kind of difficulty Interest in project is widespread then there may be a possibility of lack of definition
Control- Is very important aspect in the project. It should be within group and but some time need to allow to share with other who has beneficial inputs.
Sources- of project must be changed timely its due to internal or external factors.
Implementation of managing change in organisation is considered as a key element for successful management of any kind of organisation. Different kinds of management models and tools have been developed for change management. Business process re-engineering, Out sourcing, Joint ventures, E-Marketing, Mergers and Acquisitions such options have been developed for organisational change. Each option has more or less advantages and disadvantages. Stakeholders analysis, System modelling, System and subsystem, Input transformation output modelling, multiple cause diagram, ‘Tropics factor’ Functional and division structures these are the techniques can be used to increase stakeholders participation is organisational change process. There are some models have been developed to ensure ongoing changes in organisation. Including that I think six sigma concepts which have been developed in Japan can be used as valuable tool for ensuring ongoing change in organisation. Six sigma concepts is generally deals with quality management and the basic benefit is that it reduces error in production and final products so company can save resources need to be used on after sales service.
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