Looking at the Organisational Structure and Culture of Cadburys and Tesco
This report will look at the organisational structure and culture that
Cadburys and Tesco have adopted over their companies history. The
report will show how Cadburys and Tesco started and how they have
changed or improved the overall structure and culture of their
2.0 Background information
2.1.1 How did Tesco get started?
Tesco was formed by Sir Jack Cohen where he set up a grocery stool in
the West end of London. The stool was set up by Jack using the
gratuity he received from the army for his services in world war one.
The Tesco name was first used on packets of tea. The name Tesco was
put together by using T.E.S from T.E.Stockwell who was a partner in
the tea suppliers. C and O were taken from Jacks surname Cohen, thus
the name Tesco was born.
The first store opened in 1929 in a place called Burnt Oak, Edgware.
The first stores to open were all small stores which had large
quantities of products as Sir Jacks vision was to buy big and sell
cheap. At this time all the stores were a place where the shopping was
done for the customer, where as in America the shopping experience was
one of self service for the customer. Sir Jack was not into the idea
of making customer's shop for themselves, but with Sainsbury's now
offering the customer's self service Jack had little option. The first
Tesco store to be changed into a self service was in St Albans1948.
2.1.2 Where are Tesco now?
Today Tesco are now the biggest supermarket chain in Brittan and have
also expanded into other foreign markets in the E.U. Also Tesco,
having almost saturated the market with superstores, have now gone
back to there routes by buying the small corner shop chain 'One stop'
and turning them into little Tesco expresses. The reason for this is
to get the Tesco name into small Towns and Village's where 'One stop'
was and will stop Tesco customers from picking up their essentials
from a competitor.
2.1.3 Tesco's current organisational structure
To day Tesco have two organisational structures. One for the company
as a whole, which includes the board of directors and the other one is
the structure used within each of their stores.
(The store structure can be found under appendix 1.0)
The store structure that Tesco uses is very easy to understand with
each level of control shown clearly. By having a simple store
structure it allows employees to see easily who is in charge of each
department or who their department manager is.
2.2.1 How did Cadburys get started?
Cadbury limited was set up by one man in 1824 called John Cadbury from
Birmingham. In 1824 Cadbury was set up to be a grocery shop. This
changed in 1831 when John Cadbury went into manufacturing drinking
chocolate and cocoa. In 1847 a large factory was rented in Bridge
Street Birmingham. Around the same time John Cadbury was joined by his
brother Benjamin and the name of the business became Cadbury Brothers
The turning point of the business was in 1866 when the brothers
introduced the process of pressing the cocoa butter out of the cocoa
beans. The benefits for the Cadbury brothers was that they could use
the butter to make different types of eating chocolate the first of
which was the Cadburys dairy milk.
After this time the brothers moved to the now famous Bournville site
where Cadbury world is situated today. The Cadbury brothers changed
the employer to employee relations for the better by having the
Bournville site as a 'factory in a garden'. Also the brothers
introduced better employee welfare with joint consultation and other
innovations in this area.
2.2.2 Where are Cadburys today?
Today Cadburys are the UK's market leader and are one of the largest
chocolate producers in the world and have opened new business
opportunities by producing chocolate within other countries like
Ireland, India and Pakistan. Cadburys is the confectionery division of
Cadbury Schweppes Plc, which has other big named brands within the
soft drinks market such as Dr Pepper.
Compared to when Cadburys began, the business is now known for the
chocolate bars that it produces and is, now and then, a favourite
amongst children and adults.
2.2.3 Cadburys current organisational structure
Like Tesco, Cadbury Schweppes also have two different structures. The
structure that they use for their board of directors has been
re-designed to "clarify accountability and enable swifter
diction-making." (Quote taken from www.cadburyschweppes.com)
Looking at the improved organisation structure it is clear to see who
is in charge of which departments within the business.
(The company structure can be found under appendix 2.0)
3.0 Tesco's and Cadburys Company Structure
3.1 Tesco company structure
Tesco is a company that has also delayered the amount of employees
used through out the company. Reasons for Tesco delayering are:
Â· The company have found more efficient ways of completing a task or
Â· The advancement in technology has allowed the company to take some
of the more demanding tasks away from employees to minimise human
error E.G stock ordering, delivery schedules, etcâ€¦
Â· The company giving general staff more responsibility within stores
and allowing them to use their own initiative when helping or serving
The managers within each store have now been given a much broader span
of control with their workforce. This means that each manager will
have more employees to communicate with, but each employee has been
trained to a set standard, which allows the manager to trust them to
get on with the job with little guidance from him or her.
Looking at the Tesco Company the report can see that all of the key
decisions for each region of the country are made by the board of
directors based in Cheshunt, which makes the company centralised in
its diction making.
As the company is run centrally it allows Tesco to minimise the cost
of having big finance, general office departments in each of its
stores as well as minimise the amount of work each store has and
allows them to concentrate on selling the businesses products to the
3.2 Cadburys company structure
Looking at Cadburys it is clear to see that the company, over time,
has delayered the amount of:
Â· Workforce it employees and replaced them with more efficient
Â· Outsourcing areas of the company like maintenance and market
With the introduction of delayering Cadburys have seen advantages such
Â· It is able to guarantee its products will be of satisfactory
Â· Employees are now multi skilled, thus able to work in more than one
area of the business.
Â· The company has increased its production and profitability or the
These advantages can pose some problems as each manager will have more
employees to look after as well as have a much broader span of
control, which can cause confusion between the managers and the
The Cadbury factories all work independently and the company as a hole
is decentralised as each factory uses the resources (E.g. milk) of the
country they are in. The same cannot be said when looking at the board
of directors for the Cadbury Schweppes Company, which portrays the
company as being more of centralised enterprise as all the major
decisions regarding a factory are made at board level.
4.0 The HR department within Tesco and Cadburys.
4.1 Tesco's HR department
Within Tesco the HR departments are within all of their stores as well
as in the regional and head offices. By having a HR department in each
store it allows the HR team to see how the store is doing as well as
see clearly where the company needs new staff. Also the HR department
helps the company by:
Â· Devising techniques to measure and reduce labour turnover.
Â· Planning ahead to make sure that every department has enough staff.
Â· HR planners operate a flexible workforce, which has numerical,
financial and functional flexibility.
Â· Train new employees to be able to work within their designated
department correctly and safely.
The main problems of a HR department to deal with are the chances of:
Â· Having a skills shortage within new staff.
Â· Having to entice new employees to join as the competition for new
staff becomes stronger.
Â· The sudden increase in labour turnover.
By achieving their main objectives and attempting to avoid the main
problem areas the HR department can help the store to meet customer
demands as well as achieve the stores aims regarding staff
In an attempt to minimise the level of staff turnover the HR
department offer each member of staff the opportunity to increase
their flexibility within the business by way of training. Another way
in which Tesco's HR department try to keep staff within the company is
by way of reward/incentive. These incentives are things like:
Â· Staff discount after a years service to the company.
Â· Increase of pay after 6 months on the job.
Â· Paid holiday after 6 months.
Tesco also have a reward system, which recognises when an employee has
performed excellent customer service towards a customer and the store
then rewards the member of staff with a token of their appreciation
(e.g. Â£10 gift voucher).
4.2 Cadburys HR department
Each of Cadburys factories have a HR department, which deal with the
factories demand for:
Â· New staff with a good skill level or possible past factory
Â· Train new/current staff to be able to use new equipment correctly
Â· Help current employees with any problems they may have in their work
As with any HR department the main problem areas that the HR
department in Cadburys faces are:
Â· Skill gaps in new potential employees
Â· Competition from other factories meaning less new staff available.
Â· High staff turnover affecting production.
To try and combat this problem Cadburys offers its staff an incentive
and rewards program. This program consists of:
Â· Increase in pay
Â· The chance of internal promotion
Â· Paid holiday
Â· Discounted company shires
Also the company offers the chance for employees to go on days out to
places like Alton Towersor to London with their colleagues and family.
5.0 The culture of Tesco and Cadburys
5.1 Tesco's culture
When Tesco started out the business had a culture of being a company
of cheep affordable products. The reason for this was due to Sir Jack
Cohen (the founder of Tesco) as he would always buy products in bulk
as well as tins that Sainsbury's had discarded because it was his
vision to be able to 'pile it high and sell it cheep'.
In Tesco today the company is still recognised by the motto of 'pile
it high and sell it cheep', but the company has introduced quality
into its products by offering three different key areas of products.
The first area consists of very high quality products such as organic
and these products are usually the most expensive. The middle group of
products are usually a collection of Tesco and company branded
products and covers a wide price bracket. The third group of products
are Tesco's value range, which consists of the cheapest products such
as toilet rolls, bin liners and ready meals. These types of products
are all about value for money and are not priced by the level of
As well as offer their customers more choice, in the way of groceries,
Tesco now offer their customers the opportunity to purchase clothes,
electrical goods, DVD's CD's, etcâ€¦
By offering their customers these other products Tesco are changing
their culture into becoming a 'one stop shop', which offers customers
the chance to purchase almost anything they need at the same time.
A danger for Tesco is the threat of ASDA overtaking them in
affordability along with viability and becoming the new store that
'piles it high and sells it cheap'.
5.2 Cadburys culture
The culture of Cadburys started out being paternalistic as the company
was devoted to making its employees feel welcome and valued within the
company. Cadburys relied on its staff very heavily as without a vast
employee base the company would not be the big corporation it is
To entice employees to the company Cadburys built their famous
Bournville site along with accommodation so the workforce would be
close to their place of business. Along with this the factory was
built in the middle of a garden so when employees had finished work or
were on a break they had somewhere to relax as well as socialise with
other colleges on a Sunday as the factory was closed.
Today Cadburys have become a company who have a culture, which is
interested in keeping its stakeholders happy. Along with this and the
advancement in technology Cadburys have now lost its extensive
employee range and replaced it with machines and now only employ
enough staff to keep the machines going. By being stakeholder driven
the company has now become controlled by shareholders who are mainly
interested in the company making a profit.
6.0 How advancing technology has affected Tesco and Cadburys.
Tesco has seen technology help their business by allowing them to take
some jobs away from employees, which could have big affects on the
company's profit, product availability and product waste if not done
The key areas that Tesco have handed over to technology to complete
Â· The control of stock that each store holds as this will help the
company to minimise the chance of running out on key products and
Â· The tills have been changed over the years and are now linked with
the main computer. This allows the correct price to be charged to the
customer as well as tell the main computer how much of each product
has been sold and how much to order next time.
Along with technology the range of products has also advanced
considerably. These changes are things like:
* Ready meals, which would normally take time and effort to put
* Different tastes from other countries like Chinese or Indian.
* The appeal of celebrity chefs with their endorsement of a line of
products (e.g. Jamie Oliver for Sainsbury's).
The advancements in grocery market and their products have, in recent
times, hit a peak. This has meant that Tesco and other grocers have
now increased their product range to include new items such as music,
films, cloths and some electrical appliances. This has allowed Tesco
to keep the company at the top of its market place as well as start to
rival some of the cloth retailers.
Over time Cadburys have owned different brands which have produced
different products, but today only produce chocolate and associated
Product changes for Cadburys have not been as advanced as Tesco as
Cadburys dairy milk chocolate has been around for over 100 years with
little or no changes. Cadburys have released new products such as
Boost as well as dairy milk chocolate with caramel.
The reason that Cadburys have not released many new products in resent
years is that the market place is one of little change where as with
Tesco the market place is very volatile with the never ending price
wars and innovations.
7.0 Where should Tesco and Cadburys go now?
Looking at Tesco it seams that they have hit a peak in what they can
do as they have achieved the view of becoming a 'one stop shop'. The
down side to some of the electrical goods that Tesco offer is that
they are not of a brand that some customers would usually associate
with quality or reliability like Sony, JVC, Phillips and LG.
When it comes to clothes customers like to be able to brows other
shops before they make their final purchase. This can be a problem for
Tesco as most of the stores that stock clothes are out side the
shopping centres of the cities or towns where they are situated. To
combat this Tesco could open specific stores that only sell clothes or
electrical goods and these stores could be situated within the
shopping centres along with all of the big clothing shops such as Top
Man/Shop, BHS, Debenhams and Marks and Spencers. The advantage for
Tesco could be to compete directly against the main clothing companies
and consumers would start to benefit with a new type of price war.
One down side for Cadburys is that it is hard for a consumer to define
which product is produced by which company and with such a large
choice in the market place it is hard for a consumer to stay loyal to
one brand. To combat this Cadburys have started to have their company
name on the front of the product. E.g. Cadburys dairy milk with
With consumers becoming even more concerned with healthy eating
Cadburys would be wise to look into producing a low fat or fat free
chocolate range. The advantages of this, as well as the British
market, could open a potential US market where people are becoming
more aware of healthy eating such as the Atkins diet.