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Ethical behaviour of UK supermarket Tesco.

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Foundation Degree in Accounting and Finance Subject: Organisational Behaviour Assignment Title: Ethical behaviour of UK supermarket Assignment Submission: w/c 29/03/2004 Course Tutor: C.E. Stafford Name: Daisy So Course Code: FDA Contents Introduction 3 Stakeholders of Tesco 3 Internal stakeholders 3 External stakeholders 3 Connected stakeholders 4 Consideration of Power 4 Tesco's Mission Statement 4 Tesco's actions towards the society 5 Deontology Approach 5 Utilitarianism Approach 6 Teleology Approach 6 Egoism Approach 6 Improvement in ethical behaviour of Tesco 7 Conclusion 7 Bibliography 8 Reference 9 Ethical behaviour of Tesco plc Introduction I carried out a research on UK supermarkets' social responsibilities and business ethics, I decided I will use Tesco plc for this assignment. The reason being Tesco has a wide range of policies regarding their supplier, customers, shareholders and the community. "At Tesco, we aim to make a positive contribution to society. Our CSR programme builds on this commitment and is backed by our 'Every Little Helps' approach." John Gardiner, chairman, Tesco Tesco adopted both the agency theory and the stakeholder theory and it has the intelligent self-interest (Mullins 2002). Tesco uses a combination approach of deontology, utilitarianism, teleology and egoism (Boddy 2002) to the ethical of the society. An ethical assessment will consider the position of the staff, the nature and interrelationship of activities, product and service ranges, mixes and balances, relationships with the community and the environment. ...read more.


Tesco's Mission Statement "Creating value for customers, to earn their lifetime loyalty" We can see from the above statement that Tesco concentrates on the long-term relationship with its customers. Tesco focused on providing exceptional value and choice for customers to ensure that they continue to grow market share. Tesco had expended significantly in the past 10 years, it started in non-food retailing in 1997 and now Tesco is creating value on a wide range of products from grocery to financial services such as personal loan, home and motor insurance and credit card services. From these evidences we can see Tesco is working very hard to follow its mission statement to achieve its goal. Tesco's actions towards the society Tesco combined the agency theory and the stakeholder theory (Mullins 2002) when they make any ethical decisions. Milton Friedman's view (Mullins 2002:148) suggested the agency theory is that "...the social responsibility of business is to make as much money as possible for the shareholders, within the rules of the game." Mullins (2002:149) defined the stakeholder theory is that "...a business is for its stakeholders and its actions should be designed to balance stakeholder interest." Tesco uses the agency theory to decide its main objective, it is to provide excellent goods and services to earn their customers' loyalty. This will ensure their existence on the market and to maximise the shareholders' investment. ...read more.


Tesco uses this approach to take above actions to contribute towards the local community. Boddy (2002) suggested that if people follow this principle it will result in general good. Because of the contribution Tesco made (Computers for Schools vouchers and charity's activities), customers are more happy to shop in Tesco because they are able to maximise their personal self-interest towards the society. Improvement in ethical behaviour of Tesco Tesco has a wide range of ethical policies to cover different areas, they include the following: * Human right * Local community sponsorship * Charity * Ethical trading * Fairtrade * Animal Testing * Environment These are only a small selection of Tesco's policies which I can find on its website, there are many more policies to cover different area of the ethical aspect. Since we are in a dynamic business world and there is no set policy can cover all changes, Tesco should expand its policies and to improve and maintain its reputation. Conclusion Survival or long-term performance is the main ethical duty of the organisation, its staff, customers, community and other stakeholders. For this to happen, a long-term view must be taken. Organisation must distinguish between right and wrong. It is necessary for the organisation to recognise the nature and legitimacy of the interests of the different stakeholder groups and interested parties, and to take steps to see that these are widely understood and satisfied as far as possible. ...read more.

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