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Tesco is a world famous public limited company which was established in 1919 in East London by Jack Cohen. Currently Tesco has expanded its operations in 14 countries (China, Czech Republic,Â Hungary, India, Japan, Malaysia, Poland, Republic of Ireland, Slovakia, South Korea, Thailand, Turkey, UK, USA) with a work force of 472,000 and 5,008 store world wide.
The mission of Tesco defines the main purpose of the organization. As per Tesco the mission of Tesco is to create value for customers to earn their lifetime loyalty.
The values of Tesco mainly focus on the employees and the customers. They have identified that the success of the organization depends on the people who shops and people who works at Tesco. This is how Tesco defines its values.
No one tries harder for customers:
Be the first to meet their needs.
Act responsibly for our communities.
Treat people as we like to be treated:
Work as a team.
Trust and respect each other.
Listen, Support and say thank you.
Share knowledge and experience.
....so we can enjoy our work.
Tesco has also specified how they are going to achieve the goals they value. This method is called every little helps.
EVERY LITTLE HELPS
Other characteristics underlying Tesco success is its four parts
To be as strong in non-food as in food
To maintain a strong core UK business
To develop retailing service
To become a successful international retailer
Customers have heavily influenced Tesco's mission and values. Tesco has gathered vital through feedbacks and customers surveys, implemented adequate strategies to fully satisfy its
Evaluate the extent to which Tesco's meet the objectives of 3 groups of
Stakeholders are the parties which are affected by the business. Regardless of the results, they can also make an impact on the organization. So it is necessary to identify and satisfy the needs of the stakeholders.
In an organization employees plays a major role. One could consider that they are the most important stakeholder of the business which is correct up to some extent. It is said that a happy employee is more loyal and contributes more to the productivity of an organization. So it essential that they feel rewarded for the work the do. From employees point of view they expect a good basic salary and a fair overtime pay. The policy for the basic salary in Tesco is that an employee should receive 30% more than the poverty line index. In countries like Malaysia there is no pre specified legal minimum wage, but the same policy is followed in Malaysia to make sure all employees get paid fairly. Also Tesco gives its employees the opportunity to experience their brand. For example Tesco Mobile provides discounts to their employees and Tesco bank offers special on Home Insurance, Life Insurance and Travel Money. Training is an area Tesco heavily invests. Tesco is planning to invest £30m on the new Tesco Academy hub for Asia which will be built in South Korea in 2011. Also the employees are trained annually. For an instance the first 17 students of the Tesco Foundation Degree which is awarded by Manchester Metropolitan University were graduated in July 2010. Also since 2004 all the employees who joined the training programs have been awarded the Apprenticeship in retail skills. The examples mentioned above shows that Tesco focuses more on employee career development and ensures the employees gets a fair salary.
In a business customer is also considered as an important stakeholder. What customers expect from the business differs completely from employee expectations. Customers expect high quality product for a cheaper price. Credit period and Service are the other key areas the customers look in. In-order to serve these needs Tesco has taken many initiatives. Firstly Tesco gives its customers the opportunity to purchase all the goods from one place. This helps the customer to save time and all the other additional expenses such as fuel expenses. The bulk purchasing helps Tesco to save large amount money. This benefit is passed to the customer by Tesco. That is one of the reasons why Tesco products are cheaper than other products. The Tesco shuttle buss service helps the customers to cut off travel expenses and the Tesco membership cardholders are given additional benefits such as gift vouchers.
Shareholders are the group which has invested money on the business. They are the owners of Tesco. Like every owner they expect Tesco to do well if not they will not make any profit. Tesco share prices are high. This is good news to the shareholders. Business expansion is another key area shareholders look-in to. Currently Tesco has expanded its operation in 14 countries. This make the company stable in the competitive international market. Also as return of the investment the shareholders are paid a portion of the organization profit. Because of the high profits Tesco make annually dividends too increase and dividends are paid twice a year. According to an article which was posted on www.stockopedia.co.uk (Tuesday 20th April 2010) Tesco gave a 9.1% dividend rise.
1.3 Explain the responsibility of this organization & the strategies employed to meet given objectives.
Tesco is an organization that has a clear picture about its responsibilities and the ways how to meet them.
It is the responsibility of Tesco to look after its employee's necessities. Tesco has provided the facilities such as Training canters and degree programs to make sure Tesco helps its employees to build their career. The regular surveys helps to find the employee satisfaction and necessary corrective actions are taken over come the problems which were discovered in the surveys. These surveys also helps to gather employee views, ideas and suggestions. According to http://www.tescojobs.org.uk the promotion positions are filled internally rather than externally. This way the employees are rewarded for their hard work. An organization has the responsibility to improves workers living conditions. By setting up the minimum salary level for an employee 30% more than the poverty line index, Discounts on Tesco brand products helps Tesco employees to bring up their living conditions. An organization should treat all its employees equally. All the employees of Tesco are provided a confidential email address and a common 24 hour telephone line to inform the management about the issue they have. All the issues are investigated and are brought to the attention of the CEO.
An organization should always give its customers the best products for a cheaper price. This is one of the reasons why Tesco is popular world wide. Because of the bulk purchasing method helps Tesco to get discounts. Then the benefits of these discounts are passed to the customer. This helps Tesco to give its customers the best for a cheaper price. A Tesco membership card also helps the customers to get more discounts. Regardless of the amount of the transaction the customer make an organization is responsible for treating all its customers equally. The "Every Little Helps" strategy of Tesco keeps an extra step to help its customers. Tesco keeps this strategy on play by listening, understanding the customer and being the first to meet their needs. The additional services such as the shuttle bus service not only helps the customer to cut off the travel expenses it also helps save time.
Tesco always try to take the necessary steps to protect the environment. Environmental friendly bags and environmental disposable methods are few of the strategies they use to be more ECO friendly. Tesco "go green" policy also helps the organization to be Eco friendly at the same time send a message to the community to not to pollute the environment. Following are the targets Tesco has set to become more user friendly.
Becoming a zero-carbon organization by 2050
Reducing the emissions of the products we sell by 30% by 2020
Helping customers to reduce their carbon footprint by 50% by 2020
New stores built between 2007 and 2020 to emit half the CO2 of a 2006 new store
reduce emissions per case delivered by 50% by 2012
Many CSR activities are organized annually. In 2006 Tesco contributed 1.87% of its profit to the charities/local community organizations. "Computers for schools scheme" was initiated in 1992 by offering computers in return for schools and hospitals getting vouchers from people who shopped at Tesco. In 2004 it was calculated that Tesco has given away equipment worth of £92 million. Since 2005"Tesco Cup" football tournament is organized annually by Tesco to recognize the talented footballers. These activities prove that Tesco has recognized its corporate responsibilities and they are taking the necessary steps to make sure they meet them.
2.1. Write a report how different economic systems attempt to allocate and make effective use of resources of manufacturing industry.
An economic system is an organized process, which is followed by a government to reserve its resources for the production of goods and services in the community.
There are 3 basic questions an economy should answer regardless of the type of economic system which is used or the status of the country.
What are we going to produce?
How are we going to produce?
Who's going to consume it?
Are the 3 basic questions.
To answer these questions 3 main economic systems are used in the modern days. Every system has its ups and downs. So it is difficult to say which the best method that should be used.
Command or Planned Economy
In a planned economy as the name implies the three fundamental questions are answered through central planning and the national state is the force which is directly involved in central planning. Former Soviet Union is a perfect example for a country which used the planned economic system.
In a planed economy the resources are allocated in an interesting manner. Firstly the government has to do a research and need to identify what goods and services were needed by the people. This is a very complex process which needs a huge number of human resources allocated. After finding out the information the manufacturers will be informed about what they need to produce and in what quantity. The raw material and the other resources will be provided by the state. The manufacturers are given a target and achieve it. Once the products are produced in return the manufacturers are given a wage and the products will be sold to the public.
North Korea, Cuba are some of the other few countries that follows this method.
The market economy rarely exists. The base of the Market economy is demand and supply and there is no state involvement in this process. The manufacturers can produce their goods freely and the profit depends on the resource allocation, cost of production and Price of the product.
The manufacturers are compelled to look for high quality low price raw materials to increase the profit margin. Also they need to manage their resources in a cost effective manner. For instance the machinery needs to produce more in less time and the additional labour resource needs be removed. The resource allocation mainly depends on the individual manufacturers.
Mixed economy is a combination of the above two. Where some resources are allocated by the state and the other are reserved through the price of the market. Most of the countries in the world follow this method. How ever depending on the country the government involvement varies. Some countries give more freedom to the manufacturing firms to allocate and use resources and some don't. United Kingdom is a good example for a country which has a mixed economy. The private sector gets its resources/services/raw material from the market for the market price but the government provides resources/services/raw material to the public sector.