This report has been designed to provide a strategic management and leadership style of TESCO with their global operations within the retailing industry. TESCO is a leading retailer/ Supermarket in UK and nowadays is a globally recognised brand.
With the assumption that various principles of management and managerial functions are learnt, managerial quality and leadership is discussed in this unit. This theme is closely related to the managerial functions of motivating, directing and communicating. The performance, efficiency and effectiveness of any organisation depend significantly on the managerial quality of the organisation. The managerial quality in turn depends substantially on the quality of the leadership in the organisation.
DISCUSS THE DIFFERENCE BETWEEN LEADERSHIP AND STRATEGIC MANAGEMENT AND CRITICALLY ASSESS HOW DIFFERENT LEADERSHIP STYLES CAN BE ADAPTED TO DIFFERENT SITUATIONS WITHIN YOUR ORGANISATION.
Leadership is the process of influencing the behaviour of others to work willingly and enthusiastically for achieving predetermined goals. 'Strategic Management' often refers to a formal position in the organisation, i.e., Manager. The biggest difference between managers and leaders is the way they motivate the people who work or follow them, and this sets the tone for most other aspects of what they do.
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'Leadership' focuses on human interactions and on 'influencing others' whereas 'strategic management' is concerned with procedures, results and the process of getting things done.
To differentiate leadership and strategic management, the researcher has to define them.
Leadership is the process of influencing others to understand and agree about what needs to be done and how to do it (Yukl, 2010:26)
Leadership is very difficult to define, but easy to give examples. It involves a variety of attributes and dimensions. Leadership required courage, vision, decisiveness, determination, understandings, ability to inspire, capacity to act, sense of timing, etc, etc... A leader is often judged by his mettle in a crisis. i.e., Mikhail Gorbacheve's break with communism and the cold war, John F Kenedy during the Cuban missile crisis, Winston Churchill during the London Blitz, etc, etc. in these turning points leadership made a crucial difference in the history. It is the same in case of organisational leadership.
Leadership is extremely complex, indefinable and mysterious trait. Leadership is commonly defined as "the art of influencing others to strive willingly". Leadership encourages and inspire teams and individuals to do their best for the achievement of set goals. Leadership is the art to control people and to do what the leader want them to do with confidence and zeal. Leadership is considered the most effective tool of management. Success of any establishment depends upon the quality of leadership. To lead is to guide, conduct, direct and proceed.
A great leader directs the organisation towards success to get a competitive edge in the market, like Steve Jobs (Apple); or lead them from huge losses to profits, like Louis V. Gerstner (IBM).
Dess, Gregory G., G.T. Lumpkin and Marilyn L. Taylor. (2005) defined strategic management as, "strategic management consists of analysis, decisions and actions an organisation undertakes in order to create and sustain competitive advantage." According to this definition, there are two main elements to discuss.
First, the strategic management of any organisation consists of three main processes; analysis, decisions and actions. It concerned with analysis of external and internal environment of the organisation and its strategic goals (vision, mission and objectives). Next leaders should make strategic decisions. And the last are the actions that must be taken. Decisions are of little use unless they are acted on. Organisations need to take necessary actions to implement their strategies. This is an ongoing process that required a great deal of interaction among these three processes (analysis, decisions and actions).
Secondly, the strategic management essence is about the study of why some organisations outperform others. As a result, leaders needed to determine the competence of their organisation weather it compete and sustain in the long run or not. They have to work out how they compete in order to create competitive advantages in the market?
Ellen-Earle Chaffee (1985) summarized what she thought were the main elements of strategic management.
Always on Time
Marked to Standard
It is fluid and complex.
It involves adapting the firms to their business environment.
It involves both strategy formation and strategy implementation
It affects the entire organization by providing direction.
It is partially planned and partially unplanned.
It involves both conceptual and analytical thought processes.
It is done at several levels: individual business strategies, and overall corporate strategy.
HOW DIFFERENT LEADERSHIP STYLES CAN BE ADAPTED TO DIFFERENT SITUATIONS WITHIN THE ORGANISATION.
Hitt (1988) interestingly distinguishes a leader from a manager in his statement that, 'manager's do things right while leaders do the right things'. He supports the statement by stating that a good manager is the right choice to maintain a department at state A and a leader is required if it has to be successfully moved from state A to state B.
TESCO Metro Store
Mr. John O'brain is the manager in our organisation TESCO Metro store (a medium-sized store). He has been with the company for over 15 years and his job was filling shelves in different sections. Mr. John manages a team of 15 departmental managers who between them are responsible of around 250 people. Mr. John's leadership style normally allows his managers to make several operational decisions. However, if in the store, any incident takes place, Mr. John take control to ensure a prompt and coordinated response.
In our store, there are several approaches that lie between democratic and autocratic. These approaches allow team members' up to certain extent, but, Mr. John reserved the right to make final decisions. Mr. John's 'I sell' philosophy helps to persuade his team to accept his viewpoint. Before taking any decision, Mr. John's 'I consult' approach seeks the viewpoints of his subordinates, which go closer to a democratic style of management.
Mr. John preferred leadership style is to take a democratic approach. This is the quality of best managers that they adopt leadership styles apposite to the situations. Mr. John consults extensively as he considers rest of the staff members responds better to this approach. For instance; if scheduling an old stock reduction programme, he encourages his subordinates to develop plans and put forward their ideas. By doing this, he encourage creativity and motivate his team members. Some mistakes may be made by team members, but they are used as a learning experience.
Mr. John as a store manager deals with different situations and he responds to the situations in a most appropriate way. Some may be significant for business but Mr. John always adopt his leadership skills and exert more authority.
CRITICALLY EVALUATE HOW LEADERSHIP AND MANAGEMENT THEORIES CAN SUPPORT THE STRATEGIC DIRECTION IN YOUR ORGANISATION.
Excellence in organisational performance doesn't come about by accident. It is a conscious choice made by leaders and strategic management. A great leader knows his/her organisational environment and set some plans and vision for the organisation in long run.
To make the concept clear I would like to quote the work of Zalaznik (1977), Burnns (1978), Koter (1990), Benis (1993), and Posner & Kouzes (1995). They described, "Different characters which compare and contrast the leadership with strategic management are leadership management, communication and direction."
A great leader directs the organisation towards success to get a competitive edge in the market. For example, to bring a revolution in the organisation, Steve Jobs 'Apple inc' lead the organisation and create a competitive advantage in the marketplace that are not only unique and valuable but also difficult for competitors to copy or substitute, whereas the strategic management at 'Apple inc' acts and controls the activities to reach the target and mission of the organisation by performing all the developed rules and policies for effective operations.
A company with a good strategy must make clear choices about what it wants to accomplish. Trying to do everything that your rivals do eventually leads to mutually destructive price competition, not long-term advantage. Some examples are Wal-Mart, IKEA, South West Airline have developed unique, internally consistent, and difficult to imitate activity systems that have provided them with sustained competitive advantage.
However in this complex and ever changing world, anticipating the future can be very difficult. Warren Bannis and Burt Nannus (2002) argues that,
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"...problems of organizations are increasingly complex. There are too many ironies, polarities, dichotomies, dualities, ambivalence, paradoxes, confusions, contradictions, contraries, and messes for any organization to understand and deal with."
Several authors presented their models and theories. In the early 19th century, Professor Elton Mayo from Harvard Business School wanted to examine productivity and work conditions and the studies grew out of preliminary experiments at the plant from 1924 to 1927 on the effect of light on productivity. His experiments showed no clear connection between productivity and the amount of illumination but researchers began to wonder what kind of changes would influence output. Specifically Mayo wanted to find out what effect fatigue and monotony had on job productivity and how to control them through such variables such as rest breaks, working hours, temperature and humidity. In the process he stumbled upon a principle of human motivation that would help to revolutionise the theory and practice of management.
Maslow's famous theory "Hierarchy of Needs' is considered one of the best motivational theories for staff members. In this theory, Maslow settled five levels of desires required in an organisation.
Physiological needs; i.e., food, rest, money
Safety and security of life; i.e., freedom,
Love and affection; family, friendship, relationship
Esteem needs; i.e., self respect, appreciation, confidence
Self accusation; i.e., potential vision about self representation.
Maslow's theory "Hierarchy of needs" rely on the working positions and designations of staff members within the organisation. The needs of top management are different than the mid-level staff members and so on mid-level staff members needs are different from lower level members of the staff.
Leadership theories are as important as management theories in the strategic direction of the organisation. Mostly the leadership theories are derived from the features of different human behaviour. i.e., 'Transformational Theory', 'Transactional Theory', 'Contingency Theory', 'Trait Theory' and 'Great Man Theory'.
'Transformational theory' as name states that, leaders are very transformable to their followers. 'Transactional Theory' tell us that employees work for reward (money). 'Contingency Theory' says that a true leader can perform well under pressure and is flexible with the organisational environment. 'Trait Theory' argues about the optimistic and pessimistic perception of a leader. 'Great Man Theory' states that leader has got born qualities and leading power. (Boldan, et al, 2003).
Tesco is a leading retailer/ Supermarket in UK and nowadays is a globally recognised brand. It aims to offer products that provide value for money delivering the high quality services. Similar like other organisations TESCO also wants to build up relationships with new customers but they also don't want their existing customers to go away. To grow the business, building customer's loyalty is a cost effective strategy, but by adopting this strategy, they achieved 30% of UK grocery market which is double that of its nearest rival. TESCO earned £38.6 billion revenue in the UK market. (The Times Magzine, 2012)
To keep at the top of its game and to maintain its number one spot in the market, TESCO needed finest people at top management level. The main areas of expertise like, personnel management, store operations, marketing & advertising, finance and supply chain management, requires leadership and management skills. The organisations' aim is to develop leadership qualities among staff members from administrators to sales assistant. TESCO's adopt similar approach to leadership development for its staff members. This is in line with TESCO's employment philosophy: 'ensuring TESCO is a great place to work, TESCO is an equal opportunity employer, at TESCO we believe in treating each other with respect.' (The Times Magzine, 2012)
These aims of the organisation show that TESCO practice Maslow's 'Hierarchy of Needs' theory to motive staff members in the organisation. 'TESCO is a great place to work' - means it is 'Safe and Secure' to their life with full freedom as well as the staff can fulfil their 'Physiological Needs' (food, rest, money). 'TESCO is an equal opportunity employer' - covers the area of 'Love and Affection' (friendship). 'At TESCO, we believe in treating each other with respect' - covers Esteem Needs (self respect, appreciation, confidence) and Self Accusation (potential vision about self representation).
The researcher explained TESCO's this policy in the table given below.
TESCO is a great place to work
Safety and Security of life
TESCO is an equal opportunity employer
Love and Affection
At TESCO we believe in treating each other with respect
The plus point of Maslow's theory, 'Hierarchy of Needs' is that its results are satisfactory in the organisation as it fulfils everybody's requirements (needs) from upper top management to bottom level sales assistants. Mullin, (2005) argues that it is very difficult for Maslow's Hierarchy of Needs theory to satisfy the strategic management members and top management staff members as their needs are too much and too complicated. Mullin, (2005) also recommended another theory named 'Herzberg - Two Factors Theory', which is far better than Maslow's theory, 'Hierarchy of Needs' as it maximum satisfy the strategic management and top level employees. The regular engagement of this theory with workplace brings improvements in the organisational work conditions, i.e., self satisfaction, negative salary factors makes worker absent in a work.
Summing up, the theories of leadership and management have enormous effect on TESCO's performance. Because of these theories, TESCO became a remarkable chain. Although it is leading in its market and is attempting to conquer the international world, it is the values that they uphold that are second to none. It is the emphasis on "its people" that have allowed them to be so successful; by continuously trying to provide better and faster services of a high quality, and investing time and money in its employees is why they have so many loyal customers.
There are several other theories which are effective and needed to try, for example 'Trait's - Leadership Theory' as now a days, TESCO's are known for innovation, they have now become a one stop store, not only can one acquire the weekly shop but now can obtain insurance, home furnishing, clothing, and electrical goods. It is for reasons such as these that they have always been able to stay one step ahead of their competitors.
EVALUATE THE CURRENT LEADERSHIP REQUIREMENTS IN YOUR ORGANISATION AND DEVELOP A PLAN TO DEAL WITH FUTURE SITUATIONS REQUIRING LEADERSHIP.
TESCO is a customer orientated business. It aims to offer products that provide value for money for its customers and to deliver high quality services. Like other organisations, TESCO also want to attract new customers but don't want to lose existing customers either. Gathering loyal customers is a cost effective strategy for the growth of business. A satisfied customer is a good advert for the business.
Every organisation has different leadership requirements in different situations. According to several authors, the authoritative or autocratic manager is probably the least popular for organisations. This type of managers/ leaders only says something to their subordinates when they commit mistakes. Therefore they often found it much difficult to communicate and can be perceived as domineering or imposing. Rather than relying on subordinates to carry out tasks autonomously, this type of managers wants to control all type of situations and departmental aspects themselves. They tend to prefer direct communication and blunt.
On the other hand, consensus based or developmental managers are often well respected due to their broad-mindedness and tolerance. Their subordinates are very comfortable to approach them in different situations and share their viewpoints about handling the different tasks. This type of managers/ leaders relies typically on staffs' feedback and training in order to achieve set goals and boost the organisation.
Autocratic or developmental leadership style may not be a good option for organisations in different situations, but a blend of the two is a better option for organisations like TESCO.
John Eric Adair (no date) presented a 'leadership theory' for military and other big establishments. His theory was known as 'Action-Centred Leadership'. He mainly discussed the qualities of leadership, and approaches to deal with different situations. 'Action-Centred Leadership' has three different states of affairs like, tasks needs, team maintenance needs and individual needs. (Mullin, 2005)
TESCO is also based on 'Action-Centred Leadership'. TESCO empathises on training, encouraging individuals to work as a unit, upholding restraint, setting standard, communication within different departments like marketing, finance and Human Resource. (The Time Magazine, 2012)
Task functional Leadership at TESCO has potential impact on business and helps make quick decisions. Several leaders prefer to take quick decisions without discussing with sub-ordinates. Some other task base activities of TESCO are managing the workers, defining group tasks, allocation of resources. In this section, current leadership requirement is clear and share responsibilities because leaders have all the powers. (The Time Magazine, 2012)
As argued by Mullians, (2005), TESCO's individual activities are convoluted, individual trainings, reconciliation between individuals and groups, meeting individual needs and personal problem solving.
TESCO becomes difficult to handle, due to its operations and large number of branches. The company requires leadership development so that new leaders can handle the business units in a well and appropriate manner. For that reason, several training programmes like 'Business Development Learning' are held in TESCO. The purpose of these programmes is to develop leaders who can drive their staff according to their way. Furthermore, the senior executives can support their fellow leaders. It helps leaders to see-through all activities, and modernizes the working style at TESCO. The upper level management at TESCO needed to upgrade their assessment processes like, assessment simulation, self assessment and multi scoring feed back. TESCO is also in need of developing 'emotional intelligence' i.e., social skills, empathy, motivation, self regulation, self awareness, etc, etc. (TESCO's Annual Report, 2012)
In our TESCO Metro Store, 'Mr. John' uses a very authoritarian style if anything needed to achieve in a quick time frame or in a specific manner. For example, in order to make cost savings - if budget needed to be quickly reduced, Mr. John tells the supervisors and sub-ordinates that what and when they needed to be done so that they can resubmit their budget in-line with expectations.
One of the best qualities of Mr. John is that he inspire, influence and guide his sub-ordinates. From time to time he tells his staff members about corporate initiatives or new in store innovations. Although, it is a 'tell' situation, Mr. John aims to 'sell' the idea. He makes sure that his sub-ordinates know why this is necessary.
A good leader is always aware with the consequences of using wrong and hazardous style in a specific position. For instance; in a store, if the manager 'M' does not adapt the approach of laissez-faire with a new staff member in bakery section. It means the new staff member is not properly inducted with the operations and is unfamiliar with the hazards. The chances are, the new member might burn the bread or injured himself. So, here leaders should adopt 'Tell' approach.
Leaders have to realize that money and position is not motivational. They have to understand the emotions of their subordinates and they should take appropriate actions where needed. This is just an example to inspire leadership at TESCO to be ready to embrace changes, be innovative, helpful and creative. Effective leaders manage by examples and in doing so, develop their terms. Leaders are the one who can motivate individuals, solve problems and build strong teams. TESCO employs people in a wide range of roles and provides a career structure which allows employees to progress through the organisation. TESCO's process of 360-degree feedback allows its employees to reflect on their own progress and improve. Even if someone starts by working in store filling shelves- as did Mr. John - they can progress through the organisation into positions of authority and responsibility. TESCO encourages all its managers to lead by examples.
EVALUATE THE CURRENT LEADERSHIP REQUIREMENTS IN YOUR ORGANISATION AND DEVELOP A PLAN TO DEAL WITH FUTURE SITUATIONS REQUIRING LEADERSHIP.
Basically the leadership style depends on different situations and organisations. For example, in Military, the autocratic style of leadership is the most appropriate one as in military they needed to take quick actions than any other organisation. Organisatons like TESCO have enouth time to make appropriate decisions. Phillips & Hunt, 1992, Jacobs & McGee, (2001), Zaccaro, (2001) argues on leadership styles that, "leadership skills are basically congruent and parallel to the organisational level as they could be complex and multiple in number category too".
Bennis Hail (no date) argues that leadership skills always depends on the ability of leaders, usually leadership is rooted in command & control with hierarchy actions. TESCO is using these methods to develop leadership skills.
Mentioned below are the important leadership skills required by TESCO.
According to Zacaro, (2001), business skills are vital for leaders as these help them in making decisions interconnected with operations and resource management. Coperman, (1971) says that the organisations efficiency is increased and sub-ordinates get motivated if leaders have business skills.
The leader in this category should be a well observer and an active listener. Zacaro, (2001) says that these are the basic skills which contend with data and information collection, then dispensation of collected data/ information, and at the end circulate it. TESCO is in need to built cognitive skills in its leaders so that they would be able to distribute information from the main office to sub units.
Zacaro, (2001) says that, strategic skills are complex in nature and are required by organisations in their leaders to solve difficult tasks. Kanungo & Conger, (1987) argued that planning skills are the sub skills of strategic skills. System perception or perception of system, both of which together build image of the establishment. (Mumford, et al,2000).
This category builds up social faculties in a leader. Morgason, (2005) says that having interpersonal and social skills helps a leader to coordinate with his work and with his team. Mumford, et al, (2000) further added that this skill builds up coordination with the work, with others and with leader himself too. The persuasion skill is considered the sub skill of interpersonal skills.
To handle the business operations smoothly, these skills are very vital in the leaders. In the development of leadership skills, it is vital to pursue specialists' model and theories. Leaders become developers when they identify problems and then find out the measures to overcome those problems. Fulop, et al (1999) recommended that leaders should be able to give suggestions in accordance with vision, mission and organisations' purpose. Hence, a collective intelligent leader can only overcome problems.
Schmidt and Tannenbaum (no date) categorised the leadership styles and suggested that leadership style could be elucidate on an extent variety from 'democratic' through 'autocratic' to 'laissez-faire'.
The democratic style is branded by philosophy of 'l Share'. Teams and sub-ordinates opinions is considered while making decisions.
Mr. John is also a programme manager for TESCO's Education & Skills. He got a wide range of responsibility associated with standards, process and sub-ordinates. While setting the training budget, Mr. John may use democratic style. Sub-ordinates also invited to put forward their opinion in saving costs. By giving power to his sub-ordinates, he get them to take ownership of final agreed budget.
The autocratic style is branded by philosophy of 'l tell'. So as mentioned by philosophy, leaders supposed to tell their sub-ordinates what to do in different situations. It helps business to go in clear direction but chances are leaders might ignore or underestimate the input from subordinates. This approach is highly appreciated when the organisation is in real crisis and business needed immediate attention.
Summing up, a good leader is always aware with the consequences of using wrong and hazardous style in a specific circumstance. For instance; in a store, if the manager 'M' does not adapt the approach of laissez-faire with a new staff member in bakery section. It means the new staff member is not properly inducted with the operations and is unfamiliar with the hazards. The chances are, the new member might burn the bread or injured himself. So, here leaders should adopt 'Tell' approach.