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There are two kinds of basic organization that is profit making and non-profit making. The profit making organizations are mainly the ones organizing the business with some primary goals. For-profit organizations or corporation solely aims to operate the business and earn revenue stressing on their objectives and favors, unlike that of public. These organizations are under private sector, and they generate their shares extending them to the general public. The public who purchase their shares becomes the shareholders and owns shared ownership. This kind of organizations has to pay taxes and register themselves with state authorities to operate their smooth flow of business (Balasubramanian et al., 2014).
The not-for-profit organizations aim at service the society without expecting a profit in return for their service. The main characteristics of this kind of organizations include a strong board of trustees and efficient management of cash flow (Candler and Dumont, 2010). As these organizations do not raise profit from the service takers, to run the business, investments are required apart from the business trustees and thus, they aim at maximization of fund raising efforts. The performance of the organizations sets the management strategies that they will apply (Barnes, 2011).
Entrepreneurship is the urge of an individual or group who take up risks and develops a business body to organize and operate their functions and meet the business objectives. The continuous evolving global market base is the platform where entrepreneurship is exercised. The one who possesses the quality of being entrepreneurs are great motivators, creative, versatile, tolerant, and flexible and they have a good knowledge of the business.
NGO, short for non-governmental organizations are mainly the non-profit making private volunteering organizations. They are the service-oriented bases who work either for the benefit of the business members or other agencies (Candler and Dumont, 2010). These organizations focus on independent and democratic working pattern and management system. These organizations are not influenced by government's financial support (Barnes, 2011).
The governmental business sector is set for organizations that run under governmental power. The characteristics of this kind of organizations are that they are separate legal entities those who own the power to make contracts with delegated financial authority and operational functioning strategy to run the business. These types of organizations are primarily sales based infrastructures. The revenues that are met outside the government sources are collected by them. They focus on meeting the liabilities too (Balasubramanian et al., 2014).
Business sectors can be extended in the global context, be it small scale or large scale business. It is usually found on the internet that the small scale business is operating their business sitting at one corner of the world. For extending business in the whole world, the entrepreneurs and the business management system must have good overseas experience and depth of self-awareness. Global strategic thoughts are also necessary and patience to carry on the examples (DICKINSON, 2012).
Tesco is a multinational grocery business of British origin found in 1919. It expanded its market globally and diversified itself in many sectors. The main objectives of the company are to expand and earn higher profit margin. Tesco is one of the biggest supermarket chains in the UK as well as across the globe. The objectives are set to meet them in ethical considerations and improvise the business management. Tesco holds some basic objectives that they are working on to meet them and achieve success (DICKINSON, 2012).
Tesco usually carries some basic objectives that include serving the customers with best products that are manufactured with the help of hygienic and improved technology. Being competitive in the market and the whole global platform is another requirement of the company (Durand and Vergne, 2012).
The environmental factors that influence Tesco can be analysed with the PESTLE analysis. PESTLE is short for political, economic, social, technological, legal and environmental factors.
Political factors: The retailing base of Tesco is worldwide, and thus, these factors influence the company's performance greatly that includes the tax rates and the act of legislations. The ongoing financial issues of the whole world encourage the government of countries to foster employment needs and employability in the companies (Donais, 2011). Tesco created great employment opportunities in the diversified working environment.
Economic factors: The economic status and related financial issues are factors that influence the internal environment of the company. The leverage costs, profits, and losses, debts, and liabilities are the parameters based on which the financial accessibility of the company is analysed (Donais, 2011). The company is holding 30% of the UK market share and is still dependent on them to generate best revenue output.
Social factors: The surveys for the UK shows that people there prefer bulk and one-stop shopping centers. Social trends seek company's attention, and thus, they formulate their strategies of marketing in that manner to adjust and meet the demands. The constant health awareness is popular amongst the customers, and they are highly concerned with their health issue. Therefore, Tesco has improvised organic food qualities and offer customers with hygienic items (Fiedler and Welpe, 2010).
Technological factors: The technological advancements have created high opportunities for the company. The development of digital marketing by the company have enabled customers to shop online, and Tesco has facilitated them with home delivery services. The self-service points have enabled the company to reduce the labor cost that in return is more convenient. Tesco aimed at investing in the projects on energy efficiency to attain the long-term objectives of the company.
Legislative or legal factors: The governmental policies and legislative measures influence the performance of Tesco. The code of practices incorporated by the food retailing Commission (FRC) restricts many practices like the sudden change of product prices without notice (Heinemann, 2002). Tesco provides their customer price reduction on fuel purchase analyzing the amount that they have spent on grocery.
Environmental factors: The environmental issue is of high concern for any industry. Just to meet the issues, Tesco has already aimed to reduce the use of carbon footprint by 50%. Lessening of the waste products generated by the manufacturing units has also been a positive step for the company that creates pollution awareness amongst the customers (Isac and Tomescu, 2013).
Tesco faces some challenges while being in the global market. The challenges influence the company to regulate and regenerate their organizational in accordance to compete for the market that gives a tough competition to the rest of the competitors (Sharma, 2010). According to the surveys on Tesco market shares, the following challenges have been detected:
Tesco is weak at targeting their potential customers- Sainsbury and Waitrose offer more discounts to the customer and thus, Tesco fails to analyze whom to target, the customers or the competitors.
The overseas advantage is lost- Tesco has always been dependent on the market of UK, and gradually it has failed to maintain the international and overseas reputation. Financial and legal issues are the factors that affect this situation (Sharma, 2010).
The UK market has become a sluggish Retail- The retail market of the company is mainly grocery, and it has faced a tough situation in the home market itself. Economic recovery is yet to be felt by the consumers. The sales rate has lowered to a great extent.
The clarity of the products is not consistent- Tesco is not able to cope up and confuse in brand management and the real potential of the company. Though the company focuses on technological and hygiene development, it is witnessed that it fails to maintain its quality and generousness of the products.
Tesco lacks in clear management strategy- The management body fails to operate the management strategies in the recent market field. The overlapping challenges have let the management system to fail in the clear execution of the strategies. This leads to the high demand for management changes and alterations.
The hierarchy of the organizational structure begins at the headquarters with CEO and following down to the general executive managers, supervisory managers and then the regional managers (SUGARMAN, 2007). The organizational structure of Tesco begins from the regional manager under whom comes store manager. The store manager operates three sections and dignitaries as in the food trading manager, non-food trading manager, and personnel manager. The food training manager trains and operates the fresh food section manager and ambient food section manager. The non-food trading manager deals with the electrical section manager and the clothing section manager (Taormina, 2008). The personnel manager deals with personnel assistance. The senior functional managers are the ones to deal and operate with the functional organizational structure. They deal in with the production management and department. However, the whole responsibility of allocating resources is given to senior management groups. Coordination is a must factor that is demanded best functional outputs (VanÄ›k, Mikoláš and Å½váková, 2012). The divisional organizational structure is the primary bodies that deals with the functioning of different departments of the company, like human resource, production, sales, finance, and marketing resources.
The challenges faced by Tesco in the global market field demands a high reformation in the marketing management body and the technological departments. The use of technology is essential to carry on the competition and fast working strategies than other companies. Thus, the human resource department must hire eligible and efficient management level executive who can formulate new ideas and bring in innovation to develop the marketing condition of the company. The products need severe attention keeping in mind the need of hygiene factors and financial factors of the company. New ideas and strategy development are needed to build up the advantage of overseas again. The organizational structure of Tesco follows features like geographical based, empowering high employability, decentralized structure and decision making, flexible and friendly working environment with values and ethics (VanÄ›k, Mikoláš and Å½váková, 2012).
Tesco is seen to witness a lot of challenges in the global market and in the home market too. The pressure from the markets and the competitors is very natural and are increasing day by day. Thus, to tackle this kind of pressure great efficiency and innovation is required. The clients are demanding and giving more importance on the security and environmental aspects (Lozano, 2011).
According to the challenges faced by the company, they need to set strictures realizing the demands of the processes of organizational structure. Along with the top management, Tesco initiates to develop sustainable organizational development that needs great cooperation and support of the employees. The constructive discussions are required to formulate new ideas and effective leadership implications. The conflicts are not necessarily needed to be resolved but develop sustainable strategies, procedures, behaviours, structures and competencies (Marjani and Ardahaey, 2012). The indicators of the change are taken into consideration to formulate the sustainable organization development. The change demanding situations are the corporate environment, corporate strategies, corporate culture and management with the employees. All these bodies directly indicate change in the indicators of the problems and challenges. Then it is necessary to measure the changes and their intensity based on which the results and process analysis to resolve the matters would be originated. The parties’ inclusion might hamper the process, but the willingness of making a change is generated when the team and management of the company realize that there needs a change (Meutia, 2013). It is important to set such kind of strategies that would encourage and motivate the employees and other staff for keeping the target in achieving the newly formed objectives. It is important to analyze the changes made and reasons behind them so that they can clearly sort out the solutions and meet the objectives and bring back the position.
Diversity refers to integrated working style that works with different genre of people with their different perspectives and thought processes. The organizational culture of Tesco beholds the objectives of the company that says they focus on friendly and open space for the employees to work and evaluate their styles. There are certain aspects of culturing the culture of the firm.
Tesco follows friendly culture and empowers the employees in high position so that they could develop flexibility in the workplace. Decentralized decision making strategy is one more aspect for the company's workforce environment that influences the working willingness and interest of the workers. They have got a welcoming attitude that also gives the employees a supportive aspect. The performance and attitude of the employees towards the company and to each other are judged with the culture of this organization. The arrangements of the company are controlled by the management that also keeps hold on the measurements of competence level of the staffs and the managers. The internal affairs of the company, like meetings and arrangements shows the strength of their internal atmosphere and the ways they seek to sort out issues. There are certain aspects of organizational culture like historical, behaviourial, normative, functional, structural, mental and symbolic.
Tesco as it is known to be a leading supermarket brand and the culture that they holds is generally demanded by every other companies. Today's world is in a changing process and thus, adapting the changes must be the most adaptable attitude. Accepting changes and adapting the habit of adaptation is necessary to mix with situations and find out relevant ways of solutions. The diversified market and the changing environment have a great influence on every working companies.
Diversified market are the reasons and results of continuous change and different culture of the places throughout the world. When the global market undergoes high diversification, scopes of risk increases for the companies to sustain in the field. This is due to the fact that the situations demand change. Change in the functioning strategy, change in the marketing strategy and development of innovation. Every market deals with a bunch of competitive bodies that strives to beat each other at being successful. This fast racing needs high influencial plans and strategic thinking to cope up with the situations. The business goals of companies change with the change in the market demand. Tesco, being mainly a retailer of supermarkets, have the potential to maintain their servicing strategy and that too on time. This attribute of the company have influenced the competence level in the global market where the other companies try to think something better than Tesco. However, in the recent changes, it is seen that Tesco is not being able to cope up with the diversification of the global market and situations are demanding for the change in the company's cultural structure. It is witnessed by the falling rates of the market shares and profit rate of Tesco that something is turning the wrong side. Employees and managers have been creating impulsive image of the company that by default demands change in it's organizational culture.
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Durand, R. and Vergne, J. (2012). No territory, no profit: The pirate organization and capitalism in the making. M@n@gement, 15(3), p.265.
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