Objectives
Every company that exists needs to survive and in order to survive they need to make a profit. To achieve this, the company need to set its self objectives (short-term goals) to achieve an over aim (long-term goals). In a Public Limited Company the Board of directors decides upon the aims and objectives of the company. The shareholders then agree on them, however, sometimes the stockholder’s objectives can conflict. Below is examples of the objectives business set themselves:
- To make profit
- To grow the profit of the organisation and get the best possible return on the money invested in the organisation
- To grow, expand and increase the size of the business
- To provide quality goods and services
- To provide highly competitive goods and services
- To be the market leader and beat all competitors
Tesco’s main statement
‘Value for Your Money’
Tesco aims to offer unbeatable value, through outstanding prices, choice and service. They continue to benefit customers by cutting prices and helping them spend less every day.
Tesco Objectives
- Understand customers better than anyone
- Be energetic, innovative and be first for customers
- Use our strengths to deliver unbeatable value to our customers
- Look after our people so they can look after our customers
- Treat people how we like to be treated
- All retailers, there’s one team...the Tesco team
- Trust and respect each other
- Strive to do our very best
- Give support to each other and praise more than criticise
- Ask more than tell and share knowledge so that it can be used
- Enjoy work, celebrate success and learn from experience
Importance of Objective
Tesco has set itself to enable them to plan for now and the future and to help them to set targets to be achieved. It is important for Tesco and any other business to have objectives, because objectives help to meet deadlines in order to make and improve the business, with objectives the business is unable to improve and compete against other business. It is also very important for Tesco to achieve its objective in order to be a business in a competitive market and the only why this can be achieved is by meeting the deadlines. Not only does the objective make the business successful, but it also encourages costumers to be part of the business that meet its objective and is improving to be a better business.
Tesco’s Financial Information
# Excluding net loss on disposal of fixed assets, integration costs and goodwill amortisation.
‡ 2004, 2003, 2002 and 2001 statistics have been calculated based on the adoption of FRS 19, 'Deferred Tax'.
* Sales and turnover have been restated as a result of the implementation of FRS 5, Application Note G, 'Revenue Recognition'.
† 53 week year.
Conclusion
Tesco has been successful at achieving its objectives, because it is shown in the graphs above; profit and sale have increased over the five years.
Tesco have been successful because…..
Organisation and Organisation Structure
Organisation:
Organisation is a plan of the activities and tasks which are to be performed within a company.
Organisation structure:
The structure of an organisation is the way organisation has divided and arranged the task that it wants employees to perform.
Different kinds of organisation structures:
Businesses use different kinds of organisation structures. The organisation structure used by a business depends on the objectives, size, products or serviced, market and the culture of the business. There are three common types of structures used by business.
- Tall Structure
- Flat Structure
- Matrix Structure
- Centralized Structure
- Decentralized Structure
- Geographical Structure
Organisation Chart:
The organisation structure of a business is usually shown on an organisation chart.
An organisation chart is a map of the organisation that shows where tasks are performed and who performs them.
The disadvantages and advantages of a Flat Structure
Advantages
- More efficient decision making
- Faster and easier to serve customers
- Swift responses to market demand
- Profits do not have to be divided amongst several partners
Disadvantages
This organisation structure of Tesco has affected its performance and helps it to meet its objectives because there are few levels to get a message to the top (manager) where as if it were a hierarchy structure it would take forever. This structure also helps with the objectives because it is easy to communicate and make decision easily; also it gives benefit to customers because they are being served faster which means more customers more profits.
Functional Areas
As you can see on the pervious page the Tesco has arrange the task performed by employees into groups of related tasks and activities called ‘functions’. Groups of related tasks and activities as called ‘functional areas’ or ‘departments’.
The functional areas or departments that exist in a business are:
- Finance
- Human Resource
- Production
- Marketing
- Administration
- Research and Development
The ones I found on Tesco’s organisation structure are:
- Finance
- Human Resource
- Marketing
There are others, but these ones are the main functional areas that most businesses use.
Roles and Responsibilities
Finance
The finance department of a business is responsible for financial record keeping. This involves keeping records- either in manual form or on computer file- of money received and paid out. Linked with this function is credit control, the monitoring of how well the customers pay up.
The finance department normally also overlooks the payment of wages and the handling of cash by the cashiers.
Human Resource
It is responsible for hiring employees, for staff training and development, and for dealing with matters relating to industrial relations. It also looks after the welfare of the workplace. In service industries in particular the personnel functions is responsible with senior management for the customer care programmed which will be critical in winning new business and satisfying existing customers.
Marketing
Marketing is involved with satisfying customers’ needs at the right price. It means researching what the customers want, and investigating how the business can satisfy that need. Selling, on the other hand, involves persuading the customer to buy the products the business has already produced. Normally the marketing and selling function are closely linked.
The effect on the Objectives
The roles and responsibilities have helped the business to achieves its objectives because everyone in the business has a target to meet, to make the over all objectives and everyone has to works as a team. If the departments don’t work as a team then the targets won’t be met and there won’t be an overall successful in the business objectives.
Management/ Leadership style
Management/leadership style refers to the behaviour, attitude and approaches of managers, towards their employees.
There are different types of management/leadership styles and they are:
- Autocratic
- Democratic
- Paternalistic
- Laissez-faire (this is not very common)
- Proactive
- Reactive
I believe that my organisation, Tesco management is Democratic, because he is not very rude, he doesn’t treat his employees like children and he is not over powering. A Democratic management style means that they make the decision, but can ‘consult’ in the process.
The effect on the Objectives
The performance and efficiency of Tesco, (management style) has helped the organisation to achieve it’s objectives by…..
Oraganisational Culture
Organizational culture is the self-image of an organisation. This means that the culture of an organisation is unique. And that it helps to explain the way work is performed: what is acceptable and unacceptable: what behaviour and actions are rewarded and encouraged and what behaviour are discouraged and punished. In general organizational culture is the entire tradition, value, policies, beliefs, and attitudes that lie behind everything an organisation does and thought.
The four types of organizational culture are:
- Power Culture
- Role Culture
- Task Culture
- Person Culture
I believe that Tesco organization culture is a Task Culture.
Task Culture
It brings together the right resources and people. And it relies on the power of the task and the group for effectiveness. There is hierarchy and power and influence in widely spread and based more on expertise, rather than on position or personal power.
Benefits
- Building a team
- Share values and aspiration
- Feel valued by organisation
- Empowerment
- Input
The effect on the Objectives
This organization culture as helped Tesco to achieve its objectives, because in task culture everyone is given as task which they have to achieve for themselves as will as objectives, the task culture has helped to achieve Tesco objectives, because everyone is taking part in order to make Tesco more successful in meeting their objectives.
The relationship between organizational structure, culture and management style
Flat structure
Democratic
Task culture
Communication
Internal communication
This is where communication is held within the business (Tesco)
- Memos
- e-mails
- telephones
- meetings ect
Tesco’s main pattern of flow of information is...
Tesco uses ICT for internal communicate with … and Tesco also uses ICT to communicate with people and record data, for example in the Finance Department; it records all the data of the transaction the business does. The HR department uses ICT to record personal information of all the employees and marketing uses ICT to produces questionnaire and information about the product on sale
Tesco uses ICT to communicate with people and record data, for example in the Finance Department; it records all the data of the transaction the business does. The HR department uses ICT to record personal information of all the employees and marketing uses ICT to produces questionnaire and information about the product on sale
Tesco has over 200 internal systems, link to hundreds of suppliers, communication across 200 sites, and more than 5000 office-based IT users to support.
External communication
This is where communication is held outside Tesco
- e-mail
- telephone
- internet
- letters
- fax
Tesco uses external communication to communicate with shareholders, customers, supplier’s, for example Tesco’s customers can make orders of their wants and needs buy shopping online and having the goods sent home. Another example could be when Tesco want to make an order for stock that has run out, Tesco could phone the suppliers or fax them as this would be more efficient then a letter.
Tesco has three webs and they are…..
The information displayed on the website is… this enables the customers. Students and shareholders…
Tesco has been extremely quick to embrace IT, For example, Tesco passion for new technology has been a key to becoming the world’ biggest e-grocer in a remarkably short period of time.
Tesco.com is the world’s biggest on-line grocery retail and is internationally respected. I fact, in February 2001, Tesco was voted ‘e-trail of the year’ by retail week.
Tesco home shopper was, the UK’s first-ever home grocery shopping services. Critically, it allowed customers to search for products and fill a basket without the expense of an Internet connection, an offline concept that was an innovation and has been copied ever since. Tesco has been known to serve a sum of 15,000 customers via the web.
Value Added and Quality Control and Assurance
How does the production process work?
There are four main areas to the factory:
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Intake and Storage - receives the raw materials - meat, vegetables and so on.
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Low Risk Preparation and Storage - the raw materials are processed and then stored. For example, potatoes may be peeled - some will be used for making into mash, others sliced for use in other meals; meat may be minced or stored in chunks. Access from the low risk area to the next, high-risk area is impossible without going through the hygiene routine. This is to prevent staff in one area from moving through to another and risking possible contamination or compromising hygiene.
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High Care and Assembly - the cooking and manufacturing process proper - in this section the meals are all prepared and packaged.
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Packaging and Distribution - the outer sleeves are placed on the products. They are boxed, palletised and placed into lorries for delivery.
Intake and Storage:
Large quantities of raw materials arrive at the factory every day, for example, potato deliveries can come in 2-3 times a day and amount to 140 tons a week. On arrival they are checked and tagged. The purpose of the tagging is to ensure that every ingredient can be traced - where it came from, what happened to it in the factory and which product it went into. This enables the business to be able to maintain its quality control and identify problems and to withdraw products if problems do occur at a later stage. For example, if a customer complains about a particular product, its origin and the ingredients that went to make it are all fully traceable at every stage in the process.
If raw materials do not meet the correct standards they are withdrawn or 'quarantined'. Around 2% of the intake may be unsuitable for one reason or another - marks on the potatoes, for example - and is classed as wastage. Kettleby Foods have 3 main suppliers of potatoes ranging from Lincolnshire to Ireland and the main supplier of meat comes from Yorkshire.
Low Risk Preparation and Storage
The production-planning department decide on the quantity of ingredients needed for the range of products it has to produce to satisfy the orders being placed by Tesco. A batch of ingredients will then be prepared, for example, 3 batches of meat will be earmarked for cooking for Cottage Pies. Potatoes may be cooked in 250kg, 500kg or 1 ton batches. It takes around 20 minutes to cook ½ ton of potatoes. This process allows the raw materials to be consolidated into pre-defined amounts.
Image: Potatoes, washed and cleaned, being loaded into the cooker.
Having been prepared, the raw materials are then batched up and stored in the high care storage area before being used in the preparation of the meals themselves.
Image: Ingredients stored in batches ready to move to the cooking process area.
High Care and Assembly
The raw materials are stored in the high care storage after cooking and are subject to regular checks to ensure that quality is maintained. Batches of cooked minced meat, for example, have a shelf life of 48 hours in the cold store, whereas other raw materials such as sauces may have a shelf life of up to 7 days depending on their type and method of packaging. Meat based products are stored in large metal vats, whereas some sauces are packed in sealed pasteurised plastic bags - the bags, however, are specially designed to ensure that they cannot split or burst. Around 450 raw ingredients make up the inputs to get to the pre-packaging stage before they get blended into the final product. Platform chefs are involved in the cooking of the food and many are experienced in the catering trade. Most have an HND.
Image: The cook pans where the various foods are cooked. Computer systems monitor the time, temperature and status of the products. The chefs working here are all experinced in the catering trade.
An important feature of the planning and production process is the lead-time; this is the time taken from order to final manufacture and the product being ready to deliver. For Cottage Pies, the lead-time is around 5 hours. Three hours of that time is taken up by the cooked meat having to be cooled. Such processes have to be carefully monitored to ensure that proper hygiene procedures are adhered to - this again helps to ensure that the final product is safe to eat.
Tesco will generally place an order at 6am. They expect the order to be fulfilled and in their depots by the next day. There are 10 depots around the country and deliveries are being made to them 2-3 times a day.
The ingredients must then be put together to make the actual final product. This process is done partly through automation and partly through manual labour. The machinery needed to do this is expensive. One piece cost £600,000 alone! Some machines have programmable systems to be able to vary what it does. For example, the way mashed potato is laid onto cottage pie or a chicken and broccoli pie may be different in terms of the 'patterning' it makes. Tesco, who in turn may be interpreting the results of its own market research, may demand the patterning. To re-programme the software to change the patterning costs Kettleby Foods several thousand pounds each time!
The manual work can be quite tedious. Tasks include selecting portions of meat such as chicken from a bin and loading it into the individual trays. The portions are each weighed and an indicator console tells the worker whether the weight is correct for the product concerned. Too low and the company could risk breaking the law, too high and again they might be not meeting legislation but also the cost would rise!
Image: Staff weigh out the required amount of meat to put into the Lancashire Hot Pot. The meat is put into the trays along with the other ingredients before being passed down the production line for the next stage.
The trays with the meat then have the relevant sauce, vegetables and potato, etc added to them - mostly by machine. They are then wrapped in the film. It is important, however, at this stage that checks are made to ensure that the whole process has been done properly. Substandard products are removed from the production line and checks are made to ensure that no foreign bodies have got into the product. The trays pass through a metal detector, for example! All products are checked for their weight and if they are within the allowed tolerances they pass through to the packaging and distribution area - if not they are rejected. Kettleby Foods use statistical process control (SPC) to check for rejects. SPC is a statistical device to monitor the variations in product quality and process in relation to its targets.
Image: Chicken and Broccoli Pies pass through the watchful eyes of a quality checker before having the potato topping added by machine. The staff member can add additional pieces of broccoli by hand if they spot that more is needed.
Packaging and Distribution
In the packaging and distribution area, the product has the sleeve put over it. It is then boxed up and placed onto pallets. The pallets are then moved to the lorries to go to the distribution depot. Once there, the products will be 'picked' for distribution to the 10 Tesco depots and from there to the stores themselves.
At the distribution stage, the central depot will have the information about which stores will require what quantities and therefore which depots will need what. The palletised meals are sent to the main depot, which selects or 'picks' what each regional Tesco depot requires and then distributes those items. Once at the regional depots, the meals are transported to the stores themselves.
Image: The final product goes through a metal detector and weighing machine before passing through to the distribution area. Here they have the sleeves put onto them, are boxed up and placed onto pallets to be distributed to the main depot for 'picking'.
