Question

A Tesco case study Introduction Tesco is a customer-orientated business. It aims to offer products that provide value for money for its customers and to deliver high-quality service. Tesco wants to attract new customers, but it also wants to keep its existing customers happy. Building customer loyalty is a cost-effective strategy to grow the business. This is because satisfied customers are a good advert for the business. Tesco has more than a 30% market share of the UK grocery market, nearly double that of its nearest rival. In its 2009/2010 financial year, Tesco earned revenues of £38.6 billion in the UK and employed more than 280,000 people. To keep at the top of its game and to maintain its number one spot in the market, the company needs skilled staff at all levels and in all roles. Roles in Tesco Roles in Tesco range from business development, supply chain management and marketing to finance, store operations and personnel management. Each area of expertise requires leadership and management skills. Tesco aims to develop the leadership qualities of its people throughout the organisation, from administrators and customer assistants to the board of directors. It adopts a similar approach to leadership development for staff at all levels. This is in line with Tesco’s employment philosophy: ‘We believe in treating each other with respect, with everyone having an equal opportunity to get on, ensuring Tesco is a great place to work.’ Berian is a bakery manager Berian manages a team of 17 in a Tesco in-store bakery. One of the key challenges of Berian’s job is to ensure his team produces the right products to meet demand at key times. His usual management approach is to allow the team to take responsibility for achieving the desired result. In this way, the team not only buys into the activity, but also develops new skills. For example, when the bakery expanded its product range and Berian needed to ensure that all the products would be on the shelves by 8.00 am, rather than enforce a solution, he turned to the team for ideas. The team solved the problem by agreeing to split break times so that productivity could be maintained. Berian’s approach produced a positive outcome and increased team motivation. Tesco’s leadership framework sets out not just the skills and competencies but also the personal characteristics and behaviours it expects of its leaders. Tesco looks for managers who are positive, confident and genuine, with the capacity to inspire and encourage their teams. A key part of Tesco’s programme for building leaders is encouraging self review and reflection. This allows staff to assess their strengths and find ways of demonstrating the characteristics that are vital to the long-term development of the business. Stephen is a Tesco store manager Stephen is the manager of a medium-sized Tesco store. He has been with the company for over 10 years and his first job was filling shelves in the dairy section. He is currently working towards the Tesco foundation degree. Stephen directly manages a team of around 20 departmental managers, who between them are responsible for almost 300 people. Stephen’s leadership style is usually to allow his managers to make most operational decisions. However, if, for example, an accident occurs in the store, Stephen may take control to ensure a prompt and co-ordinated response. The best managers adopt leadership styles appropriate to the situation. Stephen’s preferred leadership style is to take a democratic approach. He consults widely as he feels that staff respond better to this approach. For example, when planning a major stock reduction programme, he encourages his managers to put forward ideas and develop plans. This increases team motivation and encourages creativity. Some mistakes may be made, but they are used as a learning experience. However, as a store manager, Stephen deals with many different situations. Some may be business critical and it is important that he responds to these in the most appropriate way. In such situations, Stephen may need to adapt his leadership approach and exert more authority. Martin is Tesco's Programme Manager for Education and Skills Martin is Tesco’s Programme Manager for Education and Skills in the UK. He has a range of responsibilities associated with people, processes and standards. Martin may use a democratic approach when setting training budgets. Managers can suggest ideas to make cost savings and they can jointly discuss their proposals with Martin. By empowering his managers, he gets them to take ownership of the final agreed budget. Laissez-faire is at the other end of the spectrum from autocratic. A laissez-faire manager takes a ‘hands-off’ approach and trusts teams to take appropriate decisions or actions with broad agreed boundaries. For example, Martin might leave an experienced departmental manager to develop a budget. This could be because he trusts that the manager has a good knowledge of the needs of the department and of the business. Factors influencing leadership style People at each level of responsibility in Tesco, from administrators and customer assistants to directors, face different types of decisions. Each comes with its own responsibilities and timescales. These will influence the most appropriate leadership style for a particular piece of work or for a given project or audience. Tesco managers have responsibilities for ‘front of house’ (customer-facing) staff as well as ‘behind the scenes’ employees, such as office staff. Before making a decision, the manager will consider the task in hand, the people involved and those who will be affected (such as customers). Various internal and external factors may also affect the choice of leadership style used. Internal factors include the levels of skill that employees have. Large teams may have members with varying levels of skill. This may require the manager to adopt a more directive style, providing clear communication so that everyone knows what to do to achieve goals and tasks. On the other hand, team leaders may take a more consultative approach with other managers of equal standing in order to get their co-operation for a project. External factors may arise when dealing with customers. For example, Berian may need to use a persuasive style to convince a customer to accept a replacement product for an item that is temporarily out of stock. Critical success factors (CSFs) In order to build a sustainable and robust business, Tesco has set out critical success factors (CSFs). These are linked at all levels to its business goals. Some CSFs apply to all employees. These are: • customer focus – to ensure delivery of ‘every little helps’ • personal integrity – to build trust and respect • drive –to achieve results, even when the going gets tough • team working – to ensure positive relationships in and across teams • developing self/others – to motivate and inspire others. Others are specific to the level of responsibility the person or role has and covers: • analysing and decision making • managing performance • managing change • gaining commitment. • By meeting the requirements of these CSFs, Tesco managers can build their leadership skills & contribute to the growth of the business. • Tesco leaders need to be inspirational, creative and innovative, ready to embrace change and with a long-term vision for achievement. Effective leaders manage by example and in doing so, develop their teams. Tesco encourages all its managers to lead by example. It requires leaders who can motivate, problem solve and build great teams. • Tesco employs people in a wide range of roles and provides a career structure which allows employees to progress through the organisation. Tesco’s process of 360-degree feedback allows its employees to reflect on their own progress and improve. Even if someone starts as working in store filling shelves – as did Stephen – they can progress through the organisation into positions of authority and responsibility. Answer all the below questions: 1. With reference to the Tesco case study, compare the leadership style adopted by Berian, Stephen and Martin. 2. In Tesco, what are the qualities that are required for the individuals to assume leadership roles? 3. In reference to the case of Tesco, evaluate the kind of leadership roles displayed by Berian, Stephen and Martin and the changes they need to make in their respective leadership style as required for the situation. 4. In this Tesco case study, explain what is the leadership and managerial competences that Berian, Stephen and Martin need to develop respectively. 5. What should be the development plans that Managers and individuals in Tesco should take

to develop themselves as leaders for achieving the critical success factors set by Tesco. Given the nature of tasks, roles and responsibilities in Tesco for each individual, what are the leadership and managerial skills that should be exhibited by the concerned managers given the Internal and External environment changes.

Answer 1

The leadership styles that are used in a company are as follows:
Democratic leadership: Democratic leadership is the leadership in which the leader makes the decision based on the team member’s input. In this leadership style, all the employees have an equal right to say on the project decision. This leadership style is the most effective approach as is allows the lower-level employees to take part in the decision of a particular project. This leadership style helps in increasing the employee’s confidence and ensures productivity.
Laissez-Faire leadership: Laissez-Faire is a French term that means ‘let them do’. This states that in this leadership style the leaders put full trust on their team members and help them in focusing on the overall working for running the company.
2. In the company, leadership qualities are the most important part of the improvement of the workplace. The most important quality which must have to be in an individual is to treat everyone with respect and give them equal opportunities for developing ourselves and avoid discrimination at the workplace.

Key leadership roles for each individual are given below:
Berian leadership roles

· To take care of the production that can meet the demand of the customers.

Berian allows its team to take responsibilities related to the current project and make them achieve the desired goal.
Always produce positive outcomes and keep the employees motivated for better productivity.
Stephen leadership role

To make sure the shelves in the dairy section are filled with the required stock.
Allow the managers to make operational decisions related to the working project.
Martin leadership role

To ensure that all the managers are together to discuss their proposals with each other.
To make the team members responsible to take appropriate decisions for the business.
Leadership styles are changed according to the situations for better results. All the leaders follow the same strategy that the leadership styles can be changed during different situations. The response of the team members decides what type of leadership style should be adopted.

4. There are some competencies which an individual think that the leaders should develop.

Creativity and innovation: The basic quality of a leader is to creative and innovative. Creativity and innovation always open the paths of success. This quality always makes employees encouraged in an organization.
Self-leadership: Self-leadership is the task for an individual to analyze own skills and make sure to do better accordingly. This quality makes an individual more effective and efficient.
Customer focus: Leaders always focus on their team quality instead of customer focus. Leaders must have to personally focus on the customers for effective work and make the organization more profitable.
5. All the employees of an organization to take focus on customers to give them all the help which they need. Building trust and give them respect is the basic need to make a company successful in the market. Working with harmony to complete the tough task will also increase the possibilities of a company’s success.