Business at work

management positions.

26. The involvement of specialists from different areas reduces the risk

of resources

being wasted on projects with no future - in non-matrix structures an idea

originating

in, say, the marketing department may be pursued for a long time before it

comes to the attention of production which might find that it is

simply not practical.

Disadvantages:

. The existence of a matrix structure and project teams can lead to

confusion as individuals are involved in a large number of different

relationships creating a complex pattern of authority and

responsibility.

. A line manager may resent a subordinate receiving instructions from

managers based on other departments, especially if they are at a lower

level of management.

. This also raises questions as to who has priority over the

subordinate’s time and what information arising out of the work of the

project team should also be reported through the line authority. This

can be a potential source of conflict and relations may also be

strained if the subordinate suffers from divided loyalty.

Centralised structure

Organisations are centralised when the majority of decisions are taken by a

few people at the top of the organisation and little decision making is

delegated to those further down the organisational structure.

Even if many important decisions are delegated to subordinates, some

aspects of the business are always likely to remain totally under central

control. In general, senior managers or a centralised department takes

responsibilities for: major financial issues, wages and salaries, manpower

planning and personnel records, purchasing.

Advantages:

27. Senior management have more control of the business, eg budgets.

28. Procedures, such as ordering and purchasing, can be standardised

throughout the organisation, leading to economies of scale and lower

costs.

29. Senior managers should be more experienced and skilful in making

decisions. In theory, centralised decisions by senior people should be

of better quality than decentralised decisions made by others less

experienced.

30. In times of crisis, a business may need strong leadership by a central

group of senior managers.

31. Communication may improve if there are fewer decision makers.

Decentralised structure

Complete decentralisation would mean subordinates would have all the

authority to take decisions. It is unlikely that any business operates in

either of these ways. Even if authority is delegated to a subordinate, it

is usual for the manager to retain responsibility.

Some delegation is necessary in all firms because of the limits to the

amount of work senior managers can carry out. Tasks that might be delegated

include staff selection, quality control, customer relations and purchasing

and stock control. A greater degree of decentralisation - over and above

the minimum which is essential - has a number of advantages.

Advantages:

32. It empowers and motivates workers.

33. It reduces the stress and burdens of senior management. It also frees

time for managers to concentrate on more important tasks.

34. It provides subordinates with greater job satisfaction by giving them

more say in decision-making, which affects their work.

35. Subordinates may have a better knowledge of ‘local’ conditions

affecting their area of work. This should allow them to make more

informed, well-judged choices.

36. Delegation should allow greater flexibility and a quicker response to

changes. If problems do not have to be referred to senior managers,

decision-making will be quicker. Since decisions are quicker, they are

easier to change in the light of unforeseen circumstances which may

arise.

37. By allowing delegated authority, management at middle and junior

levels are groomed to take-over higher positions. They are given the

experience of decision making when carrying out delegated tasks.

Delegation is therefore important for management development.

Delayered structure

Delayering involves a business reducing its staff. The cuts are directed at

particular levels of a business, such as managerial posts. Delayering

involves removing some of these layers. This gives a flatter structure.

Delayering is likely to play a major role in a policy of decentralisation

as the removal of management layers allows authority for decision making to

be shifted to a lower level in the organisation.

Advantages:

. The savings made from laying off expensive managers. It may also lead

to better communication and a better motivated staff if they are

empowered and allowed to make their own decisions.

. However, remaining managers may become demoralised after delayering.

Also staff may become overburdened as they have to do more work. Fewer

layers may also mean less chance of promotion.

Management style

Management style refers to the approach that an organisation takes in

setting objectives for its employees and the way it manages relations

between superiors and subordinates.

Management or leadership styles can be categorised as:

Autocratic: A manager that adopts an autocratic management style takes

entire responsibility for decisions and, having set objectives and

allocated tasks to employees, expects them to be carried out exactly as

specified. Employees are told exactly what, how and when work must be

started and finished. It is the kind of management style often associated

with a corporate culture centred almost exclusively around production.

Power is focused at the top, and the centralised decision making is geared

to getting the goods out of the factory and to customers. Little regard is

paid to any non-monetary needs of employees; they are not consulted or

involved in decision making.

Democratic: A democratic management style seeks to involve employees in the

decision-making process, either by consulting them directly or through

their representatives. This approach reflects a corporate culture which is

more human resource centred and recognises the organisational benefits from

meeting its employees’ non-monetary needs - such as a need for job

satisfaction and a sense of belonging. A consultative approach is

particularly important if an organisation is planning to change product

design or working conditions, methods and practices.

Laissez-faire style: This style gives people complete freedom to organise

and carry out their work. It is a very person centred approach. A laissez-

faire approach may still impose some constraints, such as completion dates

for certain key tasks or the earliest and latest arrival times for a

flexible hours working day. There is no formal structure for decision

making as decisions are taken by a variety of processes depending upon the

nature of the problem, the opportunity to be explored and the individuals

involved.

Consultative style: Leaders consult with others before decision are made.

There will be a group influence in the final decision, even though it is

made by the leader.

As diagram above shows, Tesco has many levels of staff: directors on the

top, and step by step to employees on the bottom, therefore I can think

that Tesco is a hieratical organisation, where each individual knows who he

must report to. Communication in a complex organisation such as Tesco will

be dependent on the organisational structure, but this will be discussed

later in my section on “Communication”.

I can see that Tesco has a centralised and decentralised form of

organisation because people on the top, who control the company, take the

majority of decisions and also the company’s Head office is centralised at

Cheshunt in Hertfordshire.

Tesco is very big organisation and has very many stores in different places

– this fact shows that Tesco is a decentralised organisation, with much

decision-making delegated on a regional and individual store level.

From the information I have managed to access I believe/consider that Tesco

has a very good democratic and consultative management style. It is a very

successful firm, as seen earlier, it is now the U.K. market leader with

positive leadership from above and a notable corporate culture.

The directors present their annual report to shareholders on the affairs of

the Group together with the audited consolidated financial statements of

the Group for the 52 weeks.

The principal activity of the Group is the operation of food stores and

associated activities in the UK, Republic of Ireland, France, Czech

Republic, Slovakia, Hungary, Poland and Thailand. A review of the business

is contained in the Annual Review which is published separately and,

together with this document, comprises the full Tesco PLC Annual report

Accounts.

Culture

Culture in organisations is often described as the set of values, beliefs

and attitudes of both employees and management that helps to influence

decision-making and ultimately behaviour within them. Each organisation has

a unique culture. This is what makes studying business behaviour so

fascinating. The business culture helps to determine how things get done in

firms and defines, quite simply, how the company works. The fact that

organisations are themselves organic, composed of workers constantly

interacting with each other and their environment, suggests that the

culture in firms is not static and constant – the way firms operate can

change, either intentionally through management action or more likely

through natural evolution.

Corporate culture

Corporate culture is a set of values and beliefs that are shared by people

and groups in an organisation. A simple way of explaining corporate culture

might be to say that it is the ‘way that things are done in a business’.

The corporate culture of a business can influence decision-making. It also

encourages low level managers to behave like entrepreneurs. Business

leaders are able to create a corporate culture to achieve a corporate

objectives and strategy of the company. It is important that the corporate

culture of a business is understood by all the people that work in the

organisation. It is usually transmitted to new members and reinforced

informally, by stores, symbols and socialisation, and more formally through

training.

Advantages of a strong corporate culture.

. It provides a sense of identity for employees. They feel part of the

business. This may allow workers to be flexible when the company

needs to change or is having difficulties.

. Workers identify with other employees. This may help with aspects of

the business such as team work.

. It increases the commitment of employees to the company. This may

prevent problems such as high labour turnover or industrial relations

problems .

. It motivates workers in their jobs. This may lead to increased

productivity.

. It allows employees to understand what is going on around them. This

can prevent misunderstanding in operations or instructions passed to

them.

. It helps to reinforce the values of the organisation and senior

management.

. It acts as a control device for management. This can help when

setting company strategy.

Figure 1.8: Types of business culture.

Culture, presented within Tesco plc.

Tesco has achieved its position as Britain’s leading food retailer by

offering excellent value and service to its customers. Underlying its

business success is a commitment to upholding certain values, working

principles and culture within the organisation, and to seek continuous

improvement in its ethical performance. As a measure of its achievement to

date, in 1997 the company came top in the Christian Aid league table for

ethical commitment.

Customers.

Tesco must serve its customers by providing the goods they want and the

service they expect. By meeting customer needs better than its competitors

do, Tesco earns profits and creates value for its shareholders.

Customer service is at the heart of Tesco business culture. The base line

is quality and value, but customers also look for a shopping environment

which is attractive, well planned, and enjoyable. They also expect staff to

be helpful, responsive to their needs, and sympathetic to their problems.

Tesco is constantly seeking new ways of meeting customer needs. These

include introducing Customer Assistants dedicated to helping customers at

every point during their shopping, establishing a Customer Service Centre

to deal with customer enquiries, providing facilities for customers with

disabilities, and organising customer question times when Tesco can hear

customers views.

Staff.

Tesco employs 154,000 people in the UK and 27,000 in Ireland and Europe. It

is constantly told by customers that its staff are the company’s best

asset. This means that the company must motivate and train its employees to

give the best possible customer service, and provide opportunities for all

members of staff to develop their talents to the full.

The company believes that the welfare and safety of its employees is of

paramount importance, and applies high ethical standards to protect

workers’ rights and reward employees fairly for their work. Full and part-

time staff have had their benefits harmonised, including salaries, purchase

discounts, pensions and profit-sharing. The company has a national

agreement with USDAW, the shop workers’ trade union.

The approach of Tesco to worker welfare goes beyond its own employees. The

company insists that its suppliers meet certain employment standards in

matters such as fair pay or minimum working ages. Tesco believes it can

play a positive role in influencing working practices around the world.

Like other large companies, however, Tesco recognises that its wider

reputation depends on other things, such as its staff relations, its

attitude to the environment, its support to the community, and its

relationships with its suppliers. Also, as a leading food retailer, the

company must ensure that it provides products, which are safe to eat or

use, as well as giving customers advice on matters such as healthy diets.

Health and safety

Tesco customers rightly expect that their purchases will be safe to eat or

use. The company applies the highest standards in meeting these

expectations and makes special provision for those with special dietary

needs. Following government recommendations on the nation’s diet, Tesco was

the first retailer to promote healthy eating.

Environmental policies

Tesco is committed to protecting the environment and to using its

commercial strength to put its principles into practice. In many cases, the

company’s standards far exceed legal requirements. Its environmental

policies cover matters such as recycling of packaging, working with

suppliers to minimise the use of pesticides, energy conservation, and the

siting and design of its stores. Tesco also works closely with

environmental organisations in areas relevant to its business.

Animal welfare

The company aims to set the highest standards of animal welfare in the

industry, and has introduced a code of practice on the treatment of animals

to which all its suppliers must adhere. The company is also funding

research to improve understanding of animal welfare, and will continue to

promote and implement high standards in order to improve animal husbandry

still further.

Relationships with suppliers

Tesco has relationships with thousands of suppliers in the UK and overseas,

and works closely with these suppliers in order to ensure that products are

of the highest quality and delivered in the best possible condition. By

working in close partnership with its suppliers, Tesco is helping them to

meet its own high standards, not just in efficiency and product quality,

but also in environmental protection, animal welfare and employment

practices.

The community

Tesco is very much part of local communities throughout the UK and is

committed to playing a positive role by working with community

organisations. The company’s community contribution covers support for

education, groups dedicated to helping people with disabilities, and a wide

variety of other organisations. The company has introduced schemes which

enable its own staff and customers to help raise money for good causes.

Each large supermarket retailer in Britain has its own corporate identity

and culture. Often these are very similar, yet each organisation seeks to

present its own individual image. Of the types of cultures that I have

discussed above, I think that Tesco displays many of these differing forms,

especially customer driven or customer orientated, task culture,

competitive culture, innovative culture and positive culture. It is often

said that in business “the customer is King” and this is very true of

Tesco, which operates in a very competitive market. It must be very heavily

customer orientated as satisfied customers will usually regularly return,

but dissatisfied customers may not …. and go elsewhere! It is also very

innovative, always encouraging new ideas and products, e.g. the possible

introduction of car sales. Tesco used to be a food retailer, but now it

also sells clothing, electrical goods, books and stationary, computers,

mobile phones, etc. It has a very positive culture as it is always

searching for new opportunities for its staff and also its retail products.

Its success is now a good indicator of how this blend of business cultures

has led to market growth and market leadership.

E5

Communications

The efficient communication of information is particularly important for

organisation that operates in competitive markets. Relevant and accurate

information is needed to plan and manage efficient production, marketing,

distribution and cost control. Information – whatever it is nature and

purpose – must be communicated as efficiently as possible.

All people in an organisation are part of an information flow – they are

involved to varying degrees in providing and receiving information.

However, there are three main levels at which information is required:

. operational level

. middle management

. senior management.

Operational level

At the operational level – on the factory floor, in the office or at

premises where consumer services are provided – there are charge hands and

supervisors who must ensure that work is planned and carried out as

efficiently as possible. In a factory, for example, a supervisor giving the

task of overseeing the production of a particular item needs to know:

. the quantity to be handle

. the completion date

. the availability of plans and machine capacity

. the operations to be performed

. the kinds of labour needed and its availability

. the materials and components required to produce the order.

The kind of information assists the supervisor in planning and controlling

he work and it is essential for decision making at an operational level.

Activities at the operational of an organisation produce data that will be

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