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Management at Tesco

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Management at Tesco

Introduction

1920s
Tesco was founded in 1924, when T.E. Stockwell, a partner in a firm of
tea suppliers, and Sir Jack Cohen came together. Legend has it that
Sir Jack Cohen used his gratuity from his Army service in the First
World War to start selling groceries in London's East End markets in
1919. The brand name of Tesco came from the initials of T.E. Stockwell
and first two letters of Cohen. The first Tesco store was opened in
1929 in Burnt Oak, Edgware.

1930s
Self-service supermarkets first opened in the USA in the 1930s, during
the depression. They soon realized that by selling a wider variety and
larger volume of stock, and employing fewer staff, they could offer
lower prices to the public. The Tesco business prospered and grew in
the years between the war.

1940s
In 1947 Tesco Stores (Holdings) Ltd was floated on the Stock Exchange,
with a share price of £ 25. The price at the beginning of February
2002 was around £ 2.42. Self-service stores came to Britain after the
Second World War, and Jack Cohen opened the first Tesco self-service
store in St Albans in 1948.

1950s
In 1956 the first Tesco self-service supermarket was opened in a
converted cinema in Maldon.

1960s
By the early 1960s, Tesco had become a familiar name. As well as
groceries, the stores sold fresh food, clothing and household goods.
The Tesco store, which opened in Leicester in 1961, had 16,500 square
feet of selling space and went into the Guinness Book of Records as
the largest store in Europe. During this period, Tesco introduced
trading stamps so that it could bring lower prices to its customers.

Tesco introduced the concept of the superstore in 1967 when it opened
a 90,000 square feet store in Westbury, Wiltshire. The 'superstore'
was a new concept in retailing and the term was first used when Tesco
opened its store in Crawley, West Sussex, in 1968.

1970s
By 1970, Tesco was a household name, its reputation built on providing
basic groceries at very competitive prices. But as people become
better off, they looked for more expensive luxury items. In the late
1970s the company decided to make its stores more attractive to a
wider range of customers. Tesco introduced more superstores, which
sold a broader range of goods, and had wider aisles and better
lighting. In one year, in the late 1970s, the Tesco market share
increased from 7% to 12% and, in 1979, its annual turnover reached £ 1
billion for the first time.

1980s
During the 1980s, Tesco continued to build new superstores, opening
its 100th in 1985. In 1987 it announced a £ 500 million programme to
build another 29 stores. By 1991, the popularity of Tesco petrol
filling stations at its superstores had made the company Britain's
biggest independent petrol retailer.

In 1985 Tesco introduced its Healthy Eating initiative. Its own-brand
products carried nutritional advice and many were branded with the
Healthy Eating symbol. The company was the first major retailer to
emphasize the nutritional value of its own brands to customers.

1990s
In the 1990s, the company built on its success by developing new store
concepts and new customer-focused initiatives. Tesco broke new ground
in food retailing by introducing, in 1995, the first customer loyalty
card. Club card now offers Airmiles and Clubcard points can be
collected in 5,000 different venues in the UK. Other customer services
followed, including grocery home shopping (now Tesco.com), Tesco
Direct for catalogue shoppers and the Tesco Baby club for new parents,
as well as the launch of Tesco Personal Finance a joint venture with
the Royal Bank of Scotland. Tesco has also expanded into Retailing
Services, forming a joint venture with the Royal Bank of Scotland to
offer a broad range of financial services, closely followed by the
launch of the Tesco Visa card, Insurance and other financial services.
Tesco Personal Finance now offers a range of 15 different products and
services; as well cheque deposits at the checkouts, and instant travel
insurance. In August 2003, Personal Finance had more than 4 million
customer accounts, and delivered a profit of £ 56m in the first half.

2000s
Tesco now has 2,291 stores around the world and about 300,000
employees. The organization has grown from a purely UK operation,
developing international markets in Ireland, Central Europe and Asia.
Today, there are four strands to Tesco's strategy: core UK business,
non-food, retailing services (personal finance and online grocery
sales) and international.

Tesco is one of the best-known names in the high street. It is a large
public limited company (plc) with approximately 165 000 shareholders.
By 1995, Tesco had become the largest food retailer in the UK,
overtaking Sainsbury's. The company operates over 800 stores
throughout Europe. After serving in the First World War, Jack Cohen
used his savings and started selling groceries in London East End
markets. Tesco was founded in 1924. The name was based on the initials
of T E Stockwell, a partner in a firm of tea suppliers, and the first
two letters of Cohen. In 1929, the first store was opened in Edgware,
North London. The business prospered and, in 1947, Tesco Stores
(Holdings) Ltd was floated on the Stock Exchange. In 1956, the first
self-service supermarket was opened. Apart from opening new stores,
Tesco has expanded by taking over other businesses. For example, in
1992, it bought 57 William Low stores in Scotland and, in 1997; it
purchased 109 stores in Northern Ireland and the Republic of Ireland
from ABF pie.

Tesco is an ambitious company with plans to open more new stores in
the United Kingdom (UK). However, in recent years, a major part of the
firm's strategy has been to open stores in other European countries.

Organisational structure of tesco

The functional areas of my business are

* The finance function
* The administration function
* The human resources function
* The marketing function
* The research and development function.

The administration of each function is based around the offices. In
every organisation some sort of administration office supports them
all. For example in a small organisation the administration office may
be in one room with a small number of employees. However in a large
organisation there may be one department dedicated to the
administration of the organisation of the organisation. Generally when
we look at large organisation we can see that there are more
specialised office workers. If we look at these six functions, I can
see that tesco the company I am writing my assignments on would have
all of them expect the research and development simply because the
marketing department does everything. Also all these department are an
essential part of tesco’s success as they are the basis at which all
of the planning and ideas comes from. From the information above I am
going to point out what the different functions do in an organisation.

FINANCE FUNCTION

The main activities of the finance department is:

· To record all business transactions This means that they record in
their logbooks all the expenses that have been paid and all the
incomings. Measure the financial performance of the business This
means that businesses look at how well or badly the business is doing
financially.

· Control the finances and cash flow so the business stays solvent.
This means that they make sure that there is enough money in the
business to pay off debts. Also make sure that there is enough money
so stay afloat.

· Take timely financial decisions by comparing the predicted
performance with actual performance. This means that if the company
wants to invest more money in the business, then it would be up to the
finance department to make the decision on whether there are enough
funds to do so. They would do this by looking and comparing the
financial situation in previous years with the financial situation of
the present year. By this they can see whether the expense will leave
them with enough at the end.

The finance department in an organisation is there to make sure that
the company stay's afloat. They do this by checking the financial
status of the company; when I say checking the financial status I mean
that they record all the money coming into the business and all the
money that is going out. Upon looking at this information they are
able to monitor and act accordingly. The finance department is
probably the most important department in the organisation, simply
because everything costs money and it is the job of the finance
department to ensure that the necessary funds are available when they
are needed. This is really important when the organisation has to pay
their running costs such as loans. This is because if they don't pay
their debts then they risk losing their investment. The finance
department also has a system, which is called the Management
Accounting Information system. This system is used for planning,
decision-making and control. This system involves looking at the
future financial events, and with this system they will be able to
answer future question such as when will the money be available to
renew the roof at the Sandfield site? The Management Accounting
function also prepares budgets and monitors financial progress. If we
look at the information above and then look at Tesco I can say that
Tesco's finance department have a similar sort of system, which looks
at the future financial events. They way in which the finance
department look at the future is to look at the financial status in
past years, and by that they are able to see how much they will have
in the future and they are able to look a ways in which to improve the
amount of money they will have in the future.

THE HUMAN RESOURCES FUNCTION

The human resources in an organisation is the second most important
department, simply because this is where all the new employees are
chosen from. The main purpose of the Human Resource department is to
recruit, select, train and develop staff. This means that they have to
find the right people at the right place at the right time. Once the
new employees have been found it is the Human Resources responsibility
to train and develop them to make sure that they reach their full
ability. This recruitment process starts right with the application
form, with this they have to judge whether the employee is going to
make a good new recruit. If we have an example I would say that with
Tesco's human resources department, they make sure that they read what
the applicants have written in the application form. The application
form is very important to Tesco and that is why they ask a lot of
questions about personal qualities and communication skills, because
they want the right employee who will do a good job. The Human
Resources department also has a legal obligation, and that is to keep
all records that they have in their possession confidential. This
means that they have an obligation to abide by the data protection
act. Also the records that are kept by the Human Resources department
must have information on the needs and activities of the business. So
as you can see that the Human Resources department, have got a lot of
responsibility in terms of getting the best new employees, and making
them reach their full potential and also by abiding by the laws that
there are on keeping records in their possession.

MARKETING FUNCTION

The Marketing department would be responsible for: Marketing Research
This means when an organisation collects data by doing a
questionnaire, and also they do presentations to tell everyone what
new ideas they have come up with to make money. Customer care and
services This means that the marketing department deals with any
customer complaints and problems that they have. Sales promotion and
advertising This means that they are responsible for making sure that
all the sale promotions are out so that customers can see them, and
also they are responsible for making sure that advertisements are done
for the organisation and their products or services. These are the
main responsibilities that the Marketing department has. In order to
fulfill them, the marketing department would need to work closely with
the finance, purchasing, production and transport departments. This is
because if there is a breakdown anywhere in the line, whereby the
marketing department has less materials than they need then the other
departments are there to correct the breakdown. Nearly all the
information that the marketing department uses is all the computer
databases; this information would be for example price lists, customer
details and retail outlets. They would put the information on computer
so that it is easy access for them when they need it, and also they
are able to change and correct any wrong information without the
database getting messy. However the information that is on the
computers still paperwork, simply because for example if there is
sales document about buying products on computer, then the company
will have to send some sort of paperwork to the suppliers about the
transaction and that would be done by hand. The marketing department
is a very important to Tesco simply because each of the promotional
advertisements come from that department, so without them none of the
customers would know what promotions are on.

ADMINISTRATION FUNCTION

Every business would need to have an administration system, in order
to be organised. If the organisation is organised then they are able
to achieve their objectives that they have set themselves. The purpose
of the administration system in the organisation is to create an
ordered way of working which enables the business to function
smoothly. The administration system does the job of bringing together
the various parts of the business so that they can all work towards
achieving the same goals. The ideal administration system would be to
have good communication between the management and workers, and a
system, which enables the objectives to be met. For example once an
order has been placed, the order has to be delivered within 48 hours
of the receipt.

The other thing that would make an ideal administrative system is that
all the methods and procedures should be written down. This is because
everyone are able to see the way in which things should be done in
order to achieve their objectives. It should be written down simply
because the administration system incur problems because staff are
always being changed so they wouldn't be aware of the methods and
procedures. The third aspect that would make an ideal administration
system would be to have proper procedures for controlling and
monitoring work. This means that there would have to be a high level
of supervision and well - motivated staff. This aspect would be
important when the business is changing, simple because it would be
important to keep workers under constant review.

The forth aspect would be to make sure that the administration
department would be properly resourced to make sure that they reach
the objectives. This is important because if the administration
department isn't given proper resources then they won't be able to
reach their deadlines, so it important that the administration
department has the right amount of staff, materials and equipment to
do their jobs properly. The fifth and final aspect that would create
an ideal administration system would be to provide the proper controls
and methods of supporting the people within the organisation. This is
because another name for the administration department is the support
staff; this is because the majority responsibility of administration
is to support the staff within the company. So as you can see that the
administration system is a very important department as well as they
are the backbone of the organisation, and without them the business
wouldn't be organised enough reach their objectives. If we look at
Tesco again we can say that the administration department is also a
very valid member of the team because they make sure that all the
paperwork is in order and that whatever the other departments need
they get. I think that without this department none of the other
departments would be able to function properly and efficiently like
they are now.

RESEARCH & DEVELOPMENT

The main purpose of the research & development department is make sure
that an organisation can compete successfully and achieve a
permanently sustainable competitive edge over their competitors by
becoming more efficient and giving customers added value. Research &
development are there to change an organisation from an old type of
company to a modern and well-sophisticated company. The jobs of the
research & development department can range from little simple design
changes to large high-risk projects worth millions of pounds. Although
most of the research for a company takes place in a large research
organisation, some organisation would have a department devoted to
research & development. With research & development investments, they
all involve high risks as there are no guarantees of commercial
success and also most research & development expenditures end in
failure which costs the company lots of money.

Management styles and leadership used in tesco

Tesco’s tend to use autocratic because the company needs too or the e
tasks wont be carried out within the business, also decisions need to
be made quickly or they wont be done for example a task that is set
for a shelf filler to put the milk out but hasn’t been told to put the
milk out because the management are still deciding who’s going to put
what out, so the milk would be still sat in the storage room and the
customers cant buy it. So if the management didn’t use autocratic then
Tesco’s wouldn’t be run sufficiently. Tesco also uses management by
objectives. They use this because they state to each employee in their
appraisals what there objectives are for a certain period. Also each
manager is set objectives by there line manager for there team for
example the sales teams objective that has been set is to increase the
amount of customers using Tesco by 25%. The way in which Tesco is
structured and managed.

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