How the business measures success
Measuring the success of the Tesco it is just seeing how well they are doing in the task that they set their objectives. Tesco takes into account things such as market share. By this it is to do with the profits, as more profit means more people buying, so this will mean that Tesco is getting more of the people in the market. Every year Tesco produces a consolidated profit and loss account, for the year ending 3rd March 2001 they made a profit of 27.4 million. Compared with the previous year they made a profit. In 2000 they made a profit of 33.1 million. (2)
Benchmarking
The Tesco uses benchmarking so that it sets the competitive performance standards against which process can be measured. These standards are based on the achievements of the most efficient producers. Tesco ensures that production manager’s focus upon the competitive environment, instead of looking purely at this year’s achievement compared with previous years. Benchmarking is seen as a vital element in achieving a world-class manufacturing.
Financial Report
The Tesco measure their success the most by collecting financial reports as this shows how much of a profit or a loss that Tesco is making. In the reports it shows what’s coming into the business, e.g. revenue, sponsors and others types of input. It also shows what’s going out of the Tesco, e.g. raw materials, rent, wages and anything costing the Tesco money.
Customers
Tesco measure their customer satisfaction, to see if their customer service is a success. They do this by collecting statistics.
There are two types of measurements is the business’s success through the customers. Below are the two signs in measuring success through customers along with examples for each.
Positive signs
These are factors, which show an increase in the number of customers who approach them with an enquiry. Also increases in the number of customers who buy their products. As well as increases in the number of customers who come back and buy their products and reductions in the number of complaints and returned sales.
Negative signs
Are things such as increases in the number of complaints. As well as increases in the number of returned sales as faulty and reductions in the number of customers. 1)
Organisation Structures
Tesco is a very large firm with several positions of responsibility. Being such a large organization provides a lot of power as well as responsibility which is why I believe the company has chosen the ‘Hierarchical Structure’ for its level of responsibility.
This structure is in the shape of a pyramid. It begins at the top with the chairman where the ultimate power lies and broadens out towards the base with the lowest amount of responsibility being given to the workers.
Within the organization there are different functions areas each, which control different section of the business. It is up to the managers of each department to ensure that each member of staff within their department carries out the correct tasks to ensure that the business is run successfully.
Advantages of hierarchical structures: There is a Clear management structure. The lines of responsibility and control are clear and the Functions are clear and distinct
Disadvantages of hierarchical structures: There are many layers of communication. There are many layers of authority and decision-making and also the Cross-departmental communication within the firm can be difficult.
Each department is a functional area as proceeds as follows:
Marketing department:
The marketing function in Tesco is responsible for the following:
Marketing research for needs of the firm. Customer care and service to all consumers. sales promotion and advertising. Preparing sales budgets and forecasts, as well as providing support services to sales staff. This department is also responsible for sales administration and the responsibility of identifying and implementing the marketing mix.
The marketing department of Tesco is essential to the firm as it deals with the marketing research for new or existing products, the advertising and promotions of a service or product to the business. This department also deals with the public relations, which is vital if a business wants to maintain good relations with other organizations and the general public, in order to give the firm a high profile image.
Human Resources department
This can be considered as the most valuable resource in the business. This is due to the fact that if the business had no workers it would not be able to operate.
As Tesco is a large organization it contains a large human resources department and can afford to employ more specialists.
The main purpose of the human resources function is to recruit, however all departments in the organization rely on the human resource department to carry out the following functions:
Recruitment, training, development, redundancy, pay and dismissal of workers.
This means finding the right people, training and developing them so they achieve their maximum potential and creating systems that achieve high levels of morale and motivation.
The purpose of personnel administration is to provide and develop systems to carry out these functions and to maintain accurate personnel records as required by law. This is why this can be seen as a vital part of the business.
Finance department
The finance function is responsible for the financial side of the business. The main activities of this department are as follows, to record all business transactions. To measure the financial performance of the business, control the finances and cash flow so the business can stay solvent, and the finance department is also responsible for creating financial decisions, which are taken from comparing predicted performance with actual performance.
The finance department is important to the business as it provides the organisation with a number of aspects, which help towards the success. Providing financial information to management, e.g. cash and profit forecasts. Providing costings for departments, products or processes. Providing budgets, paying suppliers and staff. Preparing annual accounts and through providing statutory information. This is what makes the finance department as important as any other department in helping a business to achieve its objectives.
Administration Department
Every business needs to be organised in order to achieve its objectives.
The purpose of administration function is to create an ordered routine, which enables the business to function smoothly. It co-ordinates or brings together the various parts of the business so that they all work towards the same goals.
Research and Development
The purpose of Research and Development is to enable an organisation to compete successfully and achieve a competitive edge over its rivals by becoming more efficient and/profitable and giving customers added value.
The activities of which the R&D department achieve are as follows,
Developing new products, materials and processes. Creating new services for consumers, changing/improving the existing products. This function is also responsible for finding new uses for products, testing products for strength, quality and safety. As well as collecting, analysing and cataloguing data from worldwide research, which could be of help to the business.
Management styles and culture
There are many different management styles, which exist with businesses, below is a description of the ones which are consider to be the main styles of management.
Autocratic style: these managers take all decisions with very little or no consultation; they expect their orders to be carried out without any disagreement or questions.
Democratic style: these managers take great care to involve all members of the team in discussion. It is a ‘we need to find out what everyone thinks’
Approach. Although the style can work well with a small, highly motivated team, it can fail when the group cannot make a decision and needs real guidance and direction.
Consultative Style: similar to the democratic approach but instead of allowing the group to make the decision, managers do so themselves. This approach can create a high level of motivation with good quality output and results
Laissez-faire style: these managers intervene as little as possible and allow the group to take control. The group becomes leaderless task/activity managers-these concentrate on the job to be done, for example, certain football managers ‘take every game as it comes’.
Tesco use a mixture of leadership between autocratic and consultative. The managers do make the effort to inform staff of most changes which are being made within the organisation. However the main decisions are always finalised by management even if staff oppose against the decision being made. Management may still choose to carry out there decision at times.
Culture
Any organisation will usually have a set of beliefs and behaviour patterns of different groups and individuals who make up an organisation, these beliefs and behaviour patterns are known as the culture of an organisation. It refers to ‘the way we do things around here’ from business type view. There are several factors that will affect an organisations culture, these factors are the atmosphere, individual freedom, kinds of personality, sets of values, norms and beliefs.
Culture is affected by the past and present events, skills and experience of the workforce, aims and objective and the type of work done within the organisation. There are various sources of culture within a business, the culture which are the company routines and the way decisions are made within the organisation, rules and procedures which refers to the companies organisational structure whether tall or flat etc, layers of hierarchy which indicates the layers of power and the functional areas which relates to each functional areas within the company e.g. finance, marketing, production, etc. The Power structure refers to interrelations between individual and groups, what goes on and who reports to whom. Symbols are linked to promotion, pay rises, and training while rituals and myths are the stories told about history of the business and the everyday life that takes place within the organisation.
There are also several types of culture within an organisation, these cultures can also be separated into categories:
Power culture: this type of culture is common in small organisations, where a small group or powerful individual will establish the culture the organisation will use. This type of culture can be found within large organisations too. As the organisation expands it will become more difficult to operate successfully with a power culture, as this culture disregards the use of procedures and value ‘rules’.
Role culture: this type of culture can be found within small organisations, which are governed by rules and procedures rather than values set by an individual, basically the organisation operates upon agreed procedures and strict hierarchy within the business. Employees who work for an organisation whom have decided to employ this culture are made to believe that individualism should be discouraged. Government departments and merchant may use this type of culture.
Role cultures are more likely to do well in a stable and predictable environment.
Task culture: this culture is used when an organisation’s values are linked to a job or project. In this culture teamwork, adaptability and communication are strongly needed for the team to get the project completed. This culture is usually employed when organisations need to focus on projects set.
Worker’s, who are highly skilled, have flexibility and creativity is usually needed for these projects.
Change culture: A change culture may be needed in certain organisations; these cultures are usually found within flexible, responsive organisations such advertising agencies etc. By using this type of culture an organisation that operates in a highly competitive and rapidly changing market can benefit heavily, as the market is always changing allowing the company to keep ahead of competition but, it can prove difficult to develop this culture as employees may not respond to changes made within the company well if changes occur regularly.
Tesco uses role culture within its business. This is based upon the fact that power authority and respect is obtained via the position of each individual within the company’s hierarchy. The company is also known to use power culture
Communication
Within Tesco communication methods are divided into two basic categories:
Written and Oral
Written methods include:
Fax, the businesses uses this to send important messages to other firms, as it is used to communicate both internally and externally.
Bulletin/company Reports, these are written statements of profitability or loss.
Notices, these are used to display data on notice board about the firm’s activity, jobs being advertised internally and safety
Letters, used occasionally for notices of appointment, promotion or dismissal
Memorandums, these are a form of letter used to transfer messages between sectionsof the organization, which are at different sites.
Agenda, this is a list of schedule items to be discussed at a meeting.
Internal Communications in the Tesco.
Tesco transmit instructions or requests up and down in the lines of command, say from managing director to accounts manager to ledger clerk. Tesco also brief staff of new developments or processes. To request information needed to help make decisions, analyse situations or provide feedback on past-instigated actions. The firm uses this to motivate staff or reassure them when required. When making proposals or suggestions and to transmit ideas up, down and across the organisational structure.
External Communications in the Tesco.
Tesco uses external communication to provide information to customers about new products or services that are being launched. And to handle incoming enquiring about their products and services. They provide information-required say by stature to the Inland Revenue. To promote corporate and brand images. To maintain productive contracts with the companies network of associates, local public sector and customers.
Formal Communications in the Tesco.
The managing Director communicates with the managers on a daily basis. They have formal team meetings to discuss the company’s policy. Then the managers have to delegate authority to run their own departments. So they use their supervisors to communicate with the staff on how they want things done.
Informal Communications in the Tesco.
These are channels in the company, that are gossip and rumours get around, e.g. one manager hears a story that another manager is slacking from a operative, the manager may get mad and then feels de-motivated to work, and the operative heard it from someone else. So it could be lies.
Upward Communications in the Tesco.
This is communication starting from the bottom the operatives going thought all the levels of command to the CEO.
Downward Communications in the Tesco.
This is communication starting from the top of the firm with the CEO going through all the levels of command to the bottom with the operatives.
Open Communications in the Tesco.
This is where there is no restriction that sees or receives the information. So everyone who works in the Tesco can see the information, this would probably be something to be put up on the staff notice board.
Restricted Communications in the Tesco.
A restricted channel of communication is when it refers to a specific person. This ensures that information is kept secure and confidential. This would be something like a pay rise.
Compare the different types of communication
What ICT is used in the Tesco.
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The use of the Internet is more efficient as, E. mailing helps to send out information regarding customer queries on the Marks and Spencers. Using the Email is a quick way to communicate with customer or suppliers and using Email you can send a message or information under a minute.
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Recording Information: using a computer and recording invoices or personal information can do this. Also staff information can be recorded E.g. Pay roll information and staff contracts.
Storage: This is a good way of ICT as, the Tesco will know what stock they have recorded and the quantity of the stock. They record there stock on a database so that is easy to look after.
Impact of ICT on internal communication
Better management information systems possibly leading to more effective control and decision-making. reater use of electronic media. Quicker dissemination of information, e.g. e-mail. There is less reliance on face-to-face meetings. It will also have a good Effect on management as well as staff, as some may find they are no longer needed as a result.
Impact of ICT on external communication
There are also external communications, which take place with the business so with the fast growing development of ICT this will have a major impact on the business’s communication externally.
The level of customer satisfaction may increase, as businesses will be able to provide customers with more. The computers will however generate bills, invoices and order forms. The relationship between the client and supplier may change. The businesses speed to respond to enquiries can increase and this will allow quicker access to centrally held information through the databases.
Explain how the Production process and quality Assurance/control system used by the firm helps add value to its product or service
Raw Materials being collected are buying the stock from across the country that have good sources, such as agricultural goods, which would then be manufactured, packaged and transformed into a finished product. The raw products are turned into soluble goods. This is the manufacturing part. Outbound logistics this involves the storing the products waiting to be exported. Marketing & Sales send them out to other the retailer (Tesco) and it is then down to the supermarkets to sell on the products to produce revenue.
Produce a flow chart to illustrate this.
Identify and describe the Quality assurance and control systems used by the business.
Quality is the sum of those features and benefits that enable a product or service to meet and satisfy customer requirements. There are two types of quality, which are quality control and quality assurance.
Quality Control (QC)
Quality control in the Marks and Spencers defines the maintenance of specified standards by inspecting, sampling or testing quality at various points in the manufacture of a product or delivery of a service, this is usually applied during or after production. This is a major part of the environmentally free business by making quality checks that everything is all above that.
Quality assurance (QA)
Quality is built in from the design stage, through the choice of suppliers at all points of the production process, to the finished product. If Marks and Spencers does not make quality, a central theme of their mission, purpose and culture will find it increasingly difficult to succeed, particularly if their consumers become more sophisticated and less loyal to one supplier.
Quality assurance systems
Total Quality Management is an organisational culture, which is totally committed to the continuous improvement of quality at all levels within every function and department
Adding Value
Adding value means every stage in the production stage it increases the price and the desire to the product. So when the product is finally made it will make the price twice the amount as it started the production stage 1. For example the production systems used to make special Christmas items or packaging;
Conclusion
C.1. Make judgements about how successfully the Business is meeting its objective.
The objectives of the business.
Tesco’s approach to ethical business operates on three levels:-
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Compliance: opening up to defined standards of human rights, social welfare and worker safety, environmental protection and, where relevant, wider ethical issues like consumer protection.
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Disclosure: only through public disclosure can a real process of dialogue and discussion with stakeholders be achieved and the right direction charted for the future.
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Campaigning: to play an active part in campaigning for positive change in the way the business operates, with the ultimate aim of making a positive social and environmental impact on the world at large.
Tesco believes that the business has responsibility to the communities in which it operates. To this end, they support and encourage employees throughout the world to volunteer their time in local action. Their community action covers a wide range of activities from conservation work to providing competitions, special give aways and customer quality.
The three ethical objectives are always achieved because from the first day of opening they are the issues that the CEO believed in. They have the highest market share in their market. Last year they were crowned the top supermarket retailer in the UK which shows how successful they have been. By this it would be understandable to assume that all if not most of the business’s objectives have been met so far. This year the company is once again currently the market leader which shows that they are still achieving their objectives
(SOURCE TESCO GLOBAL INVESTER BOOKLET)
For the next two objectives, these are measurable by the annual performance accounts, which have profit and loss accounts.
Surviving as a Business
To achieve this objective they must increase their profit margin and increase if not expand their reputation. To have a higher profit it would allow more money for Tesco to spend on advertising, this will make the public aware of the business. With the advertising it will build up the companies reputation further. Also to improve quality assurance further in the eyes of the consumer will be a dominant fact in the survival of the business.
Brand leadership
This is like a high market share, being the best in the business. In order to do this they need to do more advertising because the minds of people nowadays are very easily changed and as the UK groceries market is very tight, market share can be lost in an instance. This is linked to increasing profits. Because if the profits rise this would mean more people are buying from the Body Shop.
The body Shop brand though a forced product strategy and increased investment in stores, to achieve this operational efficiencies in the supply chain by reducing product and inventory costs and to reinforce the stakeholder culture.
With these two objectives you can see how successful they are going by the companies report printed every year. I gathered the report and looked at the profit and less accounts and I have seen they are going very well in the 7 weeks into the year of 2002, because last two years their profits have been going down
2002 2003
Retained (loss) Profit 1.2m 1.4m
As you can see in 2002 there was a good profit figure of 1.2 million and in 2003 they made a profit of 1.4 million. This is not a major major increase in profit, which means that the company needs to work extra hard to expand. I think all 5 of the objectives are going well compared with previous years.
A1. Explain how the organisational structure, culture and management styles interrelate in the business.
The Organisation structure, Culture and Management styles all relate to one anther.
To become a successful business you need make all the internal factors involving the
Business right. Tesco has been around for over 25 years and is named top supermarket retailer in the UK and one of the best in the world in.
Tesco’s organisational structure is a hierarchical structure . And you can clearly see the levels of authority, and you would need to show the authority with the management styles of Democratic and Consultative because these two styles let there staff have more say in decisions, and they might get too demanding so. The hierarchical structure goes well with the management style because it lets the staff have a say, but they know their position. The Culture has a big affect on the organisational structure and the management style, because the culture has principles to help gain the objectives, with all these together it will form a complete organisation, they will gel together to make the objectives achievable.
A2. Evaluate the impact of the organisation how the organisational structure, culture and management style on the performance of the business.
You have to build an organisational structure to make and design a successful business. The organisational structure is to make the company a team, because the Body Shop is mainly a product retailer you need to work as a team and work effectively. As I said in C.2 there was a few changes in upper management. This is because they wasn’t going in the right direction and as the source of Tesco global investor booklet, it said the change as done well because it made a 3% increase in sales, from previous years it was decreasing. The hierarchical structure will show the employees their responsibility and the tasks to do. So the tasks are broken down thought the levels of communication. By this all the employees know how and when they contribute to achieving Tesco’s objectives, and this will lead to the success of the company.
The culture has a big influence on the performance of the business because the culture has principles to aim for and to address them to the objectives. By putting these cultures in to Tesco it will help the employees with increased motivation, and this will help the employees work more efficiently. And when the employees have motivation, it is easier to ensure the objectives of Tesco is being met.
The management styles that Tesco have adopted helps the employees feel useful by contribution to Tesco. Having a voice in Tesco will make the employees feel more motivated, when I went Tesco the tour guider said they do discussions like team meetings. He also said Tesco gives every employee £1000 to going a skill, this could be educational, communication or to do a once in a life time experience like sky diving. This clearly shows Tesco looks after it employees, so they can get the best out of their employees to do the work if the employees are happy to work they work better more productive.
As a whole the organisational structure and culture are likely to help in the completion of the objectives that are set.
A3. Evaluate an alternative approach to quality control or quality assurance.
This is how well the product is being manufactured, this could be types of ingredients used, the hygiene around the process of manufacturing or the time of the product. Tesco has brought in a external company to complete the manufacturing process. They have done this in order to maintain the highest standards of products. Tesco has three different working shifts to make sure that the products are being watched over during the manufacturing stage 24 hours a day. They are always cleaning up the floor and the equipment that has been used. They have people writing reports on the quality of the process and making sure it is always up to standard. They also have Health and Safety people checking the quality. The information from the checks is used to improve performance or to see if it meeting its targets. This will help to meet the needs of the customers by giving them satisfaction.
The quality assurance where all the employees in Tesco have the responsibility of all the stages of the production process. This means the employees check the production process and the quality is at a high standard. This means the shift workers will have to make regular checks for the ingredients to be made into health care products. This helps improve the quality of the production at each stage. This means the finished product will reach the customers at the highest quality. When the quality is always high the customers will keep buying from Tesco it will make the market share get higher because they wont lose any customers but gain thought the quality of the products.
The quality controlled systems is not just used in the production, its also in the finance department, because they need to make sure that all the money transactions are correct if there not the accounts will go wrong and the overall figures will be inaccurate. Also the marketing department has to make sure that research is accurate because if it is they might not be giving what the customers want.
- 5 year summary (requested from firm directly)
