A Tesco case study Introduction Tesco is a customer-orientatedbusiness. It aims to offer products that provide value for moneyfor its customers and to deliver high-quality service. Tesco wantsto attract new customers, but it also wants to keep its existingcustomers happy. Building customer loyalty is a cost-effectivestrategy to grow the business. This is because satisfied customersare a good advert for the business. Tesco has more than a 30%market share of the UK grocery market, nearly double that of itsnearest rival. In its 2009/2010 financial year, Tesco earnedrevenues of £38.6 billion in the UK and employed more than 280,000people. To keep at the top of its game and to maintain its numberone spot in the market, the company needs skilled staff at alllevels and in all roles. Roles in Tesco Roles in Tesco range frombusiness development, supply chain management and marketing tofinance, store operations and personnel management. Each area ofexpertise requires leadership and management skills. Tesco aims todevelop the leadership qualities of its people throughout theorganisation, from administrators and customer assistants to theboard of directors. It adopts a similar approach to leadershipdevelopment for staff at all levels. This is in line with Tesco’semployment philosophy: ‘We believe in treating each other withrespect, with everyone having an equal opportunity to get on,ensuring Tesco is a great place to work.’ Berian is a bakerymanager Berian manages a team of 17 in a Tesco in-store bakery. Oneof the key challenges of Berian’s job is to ensure his teamproduces the right products to meet demand at key times. His usualmanagement approach is to allow the team to take responsibility forachieving the desired result. In this way, the team not only buysinto the activity, but also develops new skills. For example, whenthe bakery expanded its product range and Berian needed to ensurethat all the products would be on the shelves by 8.00 am, ratherthan enforce a solution, he turned to the team for ideas. The teamsolved the problem by agreeing to split break times so thatproductivity could be maintained. Berian’s approach produced apositive outcome and increased team motivation. Tesco’s leadershipframework sets out not just the skills and competencies but alsothe personal characteristics and behaviours it expects of itsleaders. Tesco looks for managers who are positive, confident andgenuine, with the capacity to inspire and encourage their teams. Akey part of Tesco’s programme for building leaders is encouragingself review and reflection. This allows staff to assess theirstrengths and find ways of demonstrating the characteristics thatare vital to the long-term development of the business. Stephen isa Tesco store manager Stephen is the manager of a medium-sizedTesco store. He has been with the company for over 10 years and hisfirst job was filling shelves in the dairy section. He is currentlyworking towards the Tesco foundation degree. Stephen directlymanages a team of around 20 departmental managers, who between themare responsible for almost 300 people. Stephen’s leadership styleis usually to allow his managers to make most operationaldecisions. However, if, for example, an accident occurs in thestore, Stephen may take control to ensure a prompt and co-ordinatedresponse. The best managers adopt leadership styles appropriate tothe situation. Stephen’s preferred leadership style is to take ademocratic approach. He consults widely as he feels that staffrespond better to this approach. For example, when planning a majorstock reduction programme, he encourages his managers to putforward ideas and develop plans. This increases team motivation andencourages creativity. Some mistakes may be made, but they are usedas a learning experience. However, as a store manager, Stephendeals with many different situations. Some may be business criticaland it is important that he responds to these in the mostappropriate way. In such situations, Stephen may need to adapt hisleadership approach and exert more authority. Martin is Tesco'sProgramme Manager for Education and Skills Martin is Tesco’sProgramme Manager for Education and Skills in the UK. He has arange of responsibilities associated with people, processes andstandards. Martin may use a democratic approach when settingtraining budgets. Managers can suggest ideas to make cost savingsand they can jointly discuss their proposals with Martin. Byempowering his managers, he gets them to take ownership of thefinal agreed budget. Laissez-faire is at the other end of thespectrum from autocratic. A laissez-faire manager takes a‘hands-off’ approach and trusts teams to take appropriate decisionsor actions with broad agreed boundaries. For example, Martin mightleave an experienced departmental manager to develop a budget. Thiscould be because he trusts that the manager has a good knowledge ofthe needs of the department and of the business. Factorsinfluencing leadership style People at each level of responsibilityin Tesco, from administrators and customer assistants to directors,face different types of decisions. Each comes with its ownresponsibilities and timescales. These will influence the mostappropriate leadership style for a particular piece of work or fora given project or audience. Tesco managers have responsibilitiesfor ‘front of house’ (customer-facing) staff as well as ‘behind thescenes’ employees, such as office staff. Before making a decision,the manager will consider the task in hand, the people involved andthose who will be affected (such as customers). Various internaland external factors may also affect the choice of leadership styleused. Internal factors include the levels of skill that employeeshave. 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 toachieve goals and tasks. On the other hand, team leaders may take amore consultative approach with other managers of equal standing inorder to get their co-operation for a project. External factors mayarise when dealing with customers. For example, Berian may need touse a persuasive style to convince a customer to accept areplacement product for an item that is temporarily out of stock.Critical success factors (CSFs) In order to build a sustainable androbust business, Tesco has set out critical success factors (CSFs).These are linked at all levels to its business goals. Some CSFsapply to all employees. These are: • customer focus – to ensuredelivery of ‘every little helps’ • personal integrity – to buildtrust and respect • drive –to achieve results, even when the goinggets tough • team working – to ensure positive relationships in andacross teams • developing self/others – to motivate and inspireothers. Others are specific to the level of responsibility theperson or role has and covers: • analysing and decision making •managing performance • managing change • gaining commitment. • Bymeeting the requirements of these CSFs, Tesco managers can buildtheir leadership skills & contribute to the growth of thebusiness. • Tesco leaders need to be inspirational, creative andinnovative, ready to embrace change and with a long-term vision forachievement. Effective leaders manage by example and in doing so,develop their teams. Tesco encourages all its managers to lead byexample. It requires leaders who can motivate, problem solve andbuild great teams. • Tesco employs people in a wide range of rolesand provides a career structure which allows employees to progressthrough the organisation. Tesco’s process of 360-degree feedbackallows its employees to reflect on their own progress and improve.Even if someone starts as working in store filling shelves – as didStephen – they can progress through the organisation into positionsof authority and responsibility. Answer all the belowquestions:

1-Given the nature of tasks, roles and responsibilities in Tescofor each individual, what are the leadership and managerial skillsthat should be exhibited by the concerned managers given theInternal and External environment changes.