Examine Tescos Organizational Structure
Mariam Peyton is a professional Financial Analyst. She holds a Masters degree in Economics. She specialises in financial analysis and forecasting. Her expertise includes studying the financial performance of companies, markets and entire industries looking for trends, insights and information that can help you glean rich insights for use in academic and market research.
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The aim of this paper is to analyze the organizational structure and functions of Tesco, a supermarket chain that operates in a competitive environment. The paper discusses how Tesco creates value for its stakeholders, such as suppliers, customers, employees, and shareholders. Tesco is a value-added intermediary that connects suppliers from different locations with customers who need their products. The company’s fundamentals are founded on its three-pillar core values namely; serving our customers, communities, and planet which affect its organizational culture. In addition to its core values, its organizational structure also plays an enormous role in the operations of the organization. The company has a hierarchical, product-based, and decentralized structure which has great benefits.
Organizational structure refers to the ways in which an organization operates in order to achieve its set goals and objectives. It refers to the arrangement of roles, responsibilities, and relationships among the members and units of the organization. Organizational structure influences how information flows, how decisions are made, how resources are allocated, and how performance is evaluated. A well-designed organizational structure can enhance efficiency, effectiveness, innovation, and adaptability. This essay looks at its structure and culture and its contribution to Tesco’s dominant performance in its industry.
Tesco Plc. is a multinational food retailer and general merchandiser operating across the UK, Central Europe, and Asian markets such as Ireland, Hungary, Thailand, and Malaysia. It was established in 1919 as a market stall by Sir Jack Cohen, however, the supermarket chain has grown to be a market leader since 1996. Tesco is currently the biggest supermarket in the UK with a persistent market share of 26 percent on the market. The company is classified to be among the top four supermarkets on the market, with it on the list are Asda, Sainsbury's, and Morrisons. As of 2023, the company operates 4,100 stores in the UK and the Republic of Ireland.
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Examine Tesco’s Organizational Structure Case Study
Key Learning Outcomes
By the end of the case, students should be able to:
- Understand and explain the main features of Tesco's organizational structure
- Understand how Tesco's organizational structure affects its performance, efficiency, innovation, flexibility, and responsiveness to the external environment.
- Apply relevant theories and concepts of organizational structure to real-life organizations.
1.0 INTRODUCTION
Tesco PLC is a global leader in the grocery and general merchandise industry. It was established in 1919 by Jack Cohen. The company has grown steadily over the years, expanding its product range, market share, and international presence. Today, Tesco PLC operates 4,859 globally and it generates the highest revenue among its competitors in the industry.
The company has established itself as a dominant force in the UK grocery sector, thanks to its effective organizational structure and culture. It has a clear vision, mission, and values that guide its strategic decisions and operations. It also fosters a culture of innovation, collaboration, and customer focus, which enables it to adapt to changing market conditions and customer needs. The company's organizational structure and culture are key drivers of its competitive advantage and growth. As of 2023, the company has generated a revenue of 60 billion pounds. The company employs 337,000 people worldwide.
ORGANIZATIONAL STRUCTURE OF TESCO
According to Minterzberg (1972), organizational structure is the way that jobs, systems, processes, people, and groups are arranged and coordinated to achieve the goals and objectives of the organization. Organizational structure is a set of methods that assign tasks to specific roles and establish the relationships among them. An organization's structure determines how its members divide and coordinate their work, and how they align their efforts to achieve the organization's goals and objectives. The structure of an organization is very important because it affects the efficiency and effectiveness of its operations, communication, decision-making, and innovation. Mullins, (2016).
Tesco's organizational structure is characterized by three features: hierarchy, product differentiation, and decentralization. These features enable Tesco to achieve high levels of efficiency, innovation, and customer satisfaction. Nwagbara (2010) claims that Tesco's structure is a key factor for its success in the competitive retail market.
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