Effect Of Globalization On Uk Economy Commerce Essay


Before discussing this issue we should know about the globalization. Defines globalization refers to any force that create unexpected, uniforms, sometimes disruptive heretofore impermeable boundaries which the relevant conditions previously varied.

As we know that UK is highly open economy. Openness of the global economy can increase the size of trade market available to domestic manufacturers and encourage the transfer of technology. The process of globalization highly impact British economy. Here we see few examples of impact of globalization on UK economy.

The British has been a favoured place for foreign direct investment. There are many factors that can explain this statement like improvement in supply performance of the economy, good system of tax and improved record in industrial dealings.

Globalization increases the importance for British of continuing to increase a competitive advantage in industries with huge growth like living standards of people for long term. The one of the main impact of globalization creates that is the British government changing the corporate taxes and improvement in labour markets and the system of welfare. Some of the British economists believe that globalization reduces the capacity of government to charge the taxes for businesses. Globalization increased the pressure in British organizations in tradable goods industries. (Frankel, 2011)

Economic and social impact of Tesco:

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Tesco is one of the largest retailers in the UK and world's 3rd largest grocessary retailer working in 12 countries having 440,000 employees is serving millions of customers. In UK there are 2115 stores and 280,373 employees they have 37.6 billion pound of sales with 6% annual growth in sales. These figures show that Tesco is playing very important role in the economy of UK. They paid up to 2 billion pound in tax to the government including corporate, sales, property and income tax. Tesco is also contributing in society as well they are contributing in saving environment they opened the first environmental store in Manchester which have 70% smaller carbon footprint. They are helping to minimize the climate change. By keeping in mind the customer's health and choice they have removed over 2,500 tonnes of fat and 3000 tonnes of salt from their products in UK.

They raised up to 6.2 billion pounds in charity to help the communities in UK in 208 they raised up to 40 million pound for cancer research in UK.

Q. 1.2: Activities of Tesco influenced by IMF, World Bank, WTO:

World Trade Organization:

WTO is the forum for International Corporation for the trade related policies. It creates the code of conduct for member countries. We can say that it is a plate form for the countries come together to exchange the market access commitment on mutual basis. (Mattoo, Hoekman, & English, 2002).

Basically the main goal of WTO is to help importers, exporters and manufacturers who provides the foods and services to operate effectively. As we know that Tesco is an international organization so they are able to import the goods from different countries like brazil, south Africa, Ghana, Nigeria and other Asian countries.

World Bank:

World Bank is an international financial organization which helps to established to control the distribution of economic aid among members countries and to make loans to them in times of financial aids. Basically it helps to poor developing countries to increase their growth and development. (Marshall, 2008)

Tesco can be influenced by the World Bank in a sense that one of the main focus of World Bank is to promote international trade and foreign investment between member countries. So we can say that Tesco can be influenced by World Bank because of its friendly international policies so they are expanding their business in different countries in Asia region. It will help those countries like it will generate employment and grow their economy and it Tesco will become more strong global brand.

International monetary Fund (IMF):

It is an international organization and there are 146 members of IMF. The main functions of IMF are to give fund to member countries to finance solution to temporary balance of payments problems and to help the growth and international trade and to provide international monetary support between member countries. The IMF also creates additional reserves for member nations called special drawing rights (Mody, 2006).

Q. 1.3: Activities of Tesco Regulated by European Union Directives:

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European Union directive is a legislative which is accepted in European Union parliament and European Union is mainly focused on establishing accepted law of its members. There are a lot of directives which need to be followed by the organization like Tesco. Following are the some directives:

Employee directives:

Employee directives include the discrimination, cultural biasness, religion, cast, colour and etc. under the directive 2000/43/EC on anti-discrimination law Tesco is following this in all 11 countries where it is operating.

Health and waste Directives:

Under directive 2002/96/EC and 2002/95/EC the manufacturer has to dispose all the waste of goods or electrical waste safely or refurbish or recycle it. Tesco is properly wasting its goods or electrical waste after collecting from customers as well without harming environment. They also test its all product before selling them to customers.

Q.2.1: The Contribution of Board of Directors in Tesco:

The board of Directors and their roles and functions are following:

List of BODs:

There are 16 boards of directors listed below:

David Reid:

He is non executive chairman of Tesco in 2-04-2004 and his responsible for internal development of Tesco Plc. He was deputy chairman of Tesco. he is also a member of nomination committee.

Phillip Clark.

Phillip Clark was appointed to the board in 1998 and now in March 2011 he became CEO of Tesco Plc before it he was international operations and IT director.

Richard Brasher.

Richard Brasher was appointed to the board in 2004 and he is commercial and trading Director.

Andrew Higginson.

Andrew Higginson was appointed to board in 1997 and he is chief executive of retailing services.

Tim Mason.

Tim Mason was appointed to the board in 1995 and he Is marketing and E-commerce Director

Laurie McIlwee:

He was appointed to the board in 2009. He is distribution director before that he was UK finance director.

Lucy Neville-Rolfe:

She was appointed to the board in 2006. She is now Deputy Chair of British group,

David Potts.:

He was appointed to the board 1998 he is responsible for all UK retail operations. After 2003 his responsibilities were increased as he also responsible for supply chain in UK and Ireland.

Gerath Bullock:

He is appointed as a non-executive director in 2010. He is also member of audit committee, and member of nomination committee.

Stuart Chambers:

He is appointed as a non-executive director in 2010. He is member of audit committee and member of remuneration committee.

Karen Cook:

She s appointed as a non-executive director in 2004. She is member of nomination and remuneration committee.

Ken Hanna:

He is appointed as a non-executive Director in 2009. He is also a member of audit committee, nomination committee and remuneration committee.

Graham Pimlott:

Is Non-Executive Director. 

The full panel of BODs meets every month and they manages overall control of the group issues and schedule the matters reserved for its decisions including approving financial statements, main acquisitions, expenditures, disposals, policies regarding risk and its management. According to the Company Act 1985 the directors are responsible to prepare the financial statements of the Tesco which shows the current status of the Tesco.

Preparing the financial statement by directors the company having suitable policies, they make sure that all the accounting standards are which are applicable have been followed or not.

2.2 Analyse how the regulatory requirements such as companies Act shape the decisions and activities of the board of directors of your chosen company

the company which is working in United Kingdom have to follow the rules and laws of decided by UK government and the company's act that is passed n the UK parliament that is specially for the companies working in UK. The updated and new company's act was passed in 2006. There are many new regulations were passed there are lot of regulations for the companies among these regulations following are some of the main duties of directors of Tesco which are following:

Avoid conflicts

Use independent decisions

Don't exceed power and authority

Promote success for the company

Don't involve in third party's interest

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Above are the some important duties of the directors have to follow to operate Tesco in UK.

Being member of board of director all of them have to obey and fulfil the requirements of the above rules and responsibilities to run Tesco operations smoothly. The directors must avoid conflicts for the interest of the Tesco. They should work for the company's interest not for their personal interest. They should have to act within the power and authority given by the company and they should express their feelings and opinions for the growth and of the company and to run Tesco with in profit. These directors should not involve in the illegal actions for their interests and should not accept any benefits from the third party or party from outside of the Tesco and don't leak Tesco's secrets just for their benefits and interests they have to be loyal. All the directors should not involve in any actions that is. It is unlawful and a criminal offence and directors should discourage the involvement of third party on any stage.

3.1 Discuss various efforts made by public organisations to create environmental awareness in your chosen company. Also include in your discussion the economy of such efforts.

As a multinational organization it is very important for role for Tesco to help in minimize the climate change. To achieve this objective Tesco is committed to a zero carbon company. Tesco reduces 2% carbon in UK by till 2010. Tesco reducing its 100% waste it is there is a waste target for every Tesco store in UK and they review this target after every week. Where possible Tesco make sure that if there is any chance to reuse that waste recycles that waste they don't miss it.

For example to reduce the percentage of all products like meat sold in every store is used to generate the energy to produce electricity. Now 5000 tonnes of waste meat is used to generate 2500 megawatt-hour electricity. Tesco also trying to maximize the ways to recycle the waste.

Tesco always support communities because Tesco believe in society people in society work together and help each other. Tesco made a charity trust in 1987 to support all charities. In the end of 2010 Tesco charity trust made 1,899,377 pound for charities and local communities. Tesco charity trust helps to support the needs of employees, customer and communities.

In 2009 Tesco made a partnership with British Red Cross to support the communities that are affected at local national and world wide level in disasters. For example Tesco collected 3 million pounds after disaster of tsunami to help those affected communities they provided them 340,000 blankets, 137,500 kitchen sets, and 190,000 tarpaulins and 111 emergency health kits.

3.2 Analyse and evaluate some of the initiatives undertaken by your chosen company to minimize the impact of its main activities on the environment.

Tesco is very committed to increase its understanding of what can be the impact of its activities on the environment. Its first priority is to take initiatives to minimize the impacts of its activities. There are particular rules and policies for improvement of environment to keep it clean and safe.


It is core value for Tesco to act responsibly for all communities. Tesco is minimizing the waste in a way to reduce it that they produce. Every Tesco has a target which is reviewed after every week. By this year Tesco achieve its major objective since 2009 Tesco achieve 100% from its waste going to landfill. Tesco also make sure that if possible then waste can be used to make energy by recycling waste for example 5000 tonnes of waste meat can e used to create 2500 megawatt electricity. Tesco also start using carrier bag into refuse bags.


Tesco now provide recycling services to its customers in all over UK and other countries where it is operating in year 2009 Tesco start 2 new recycling departments in Malaysia. Till now this department collected round about 250 tonnes of materials. In year 2011 Tesco starts TOMRA recycling machines for its customers about size of a cash machine which help its customers to recycle more at Tesco Express and Metro stores. Now Tesco have more than 100 machines are operating outside of stores.


Tesco's water footprint was 23 billion litres. Only 1% of water footprint is related with products that Tesco sells, with some 850 billion litres from our upstream supply chain, and 1,000 billion litres used by customers consuming our products. Tesco are now using these figures to develop a water strategy, which Tesco intend to have in place for next year's Corporate Responsibility Report.

3.3 Assess how far the measures taken by your chosen company for safety and security of its employees and customers meet their expectations.

Regulations for health and safety vary from country to country, choice from almost imaginary to more rigid than those in US. The importance placed on health, safety and security relates to some extent to the level of regulation and other factor in each country (Jackson & Mathis, 2007).

Tesco strictly following all health and safety measures for its employees and customers. In year 2002 Tesco introduced a group wide human rights policy, deals with conditions for employment includes salaries, working hours, health and safety, and security.

Tesco is very committed to protect the health and safety of its employees and customers. There objective is to reduce and remove unnecessary accidents and ill health related with its work and place and to reduce the rate of accidents which are reported by customers and its employees as the development of business.

Different personalities certainly plays a role in health and safety there are number of well known and recognized facts of the part of that management can play to make sure that employee go home in the same healthy condition in which condition they arrived at work place (Ridley, 2008)

Tesco have a full risk management process to identify and reduce the work related health and safety risks across the business. Tesco is continuously monitor and performance and getting feedback from its workers. Every store measures the performance of health and safety and its reports three times in every year through discussion with staff. Health and safety campaign are launched in every three for three times with discussions with its staff to focus on the improvement in health and safety in stores. Tesco successfully reduces all reportable accidents of customers and employees in its stores for last five years. It also introducing better measures for reviewing risks and minimizes the number of accidents.