Tesco
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  • 1. Company: TESCOCompany Type: Public Limited CompanyIndustry: RetailingFounded: 1919 (East London)Founder: Jack CohenHeadquarters: United Kingdom, EnglandNo of locations : 6351 storesKey People: Sir Richard Broadbent (chairman), Phillip Clarke (ceo)Revenue: £64.539 billion (2012)Net Income: £2.806 billion (2012)Total Assets: £50.781 billion (2012)Total Equity: £17.775 billion (2012)Employees: 519,671 (2012)Subsidiaries: Tesco Stores Ltd, Tesco Bank, Tesco MobileWebsite : www.tesco.com
  • 2. History:Tesco, the largest retailer in UK as well as the third biggest in the world in termsof revenue, was founded in 1919 by Jack Cohen. In 1924 the brand Tesco was firststarted its journey and in 1932 it became a private limited company. Now Tescois operating in 14 countries all over the world. There are 6351 Tesco stores andalmost 519,671 people working in the company across the world. It had a marketcapitalization of approximately £24.4 billion as of 15 January 2012, the 15th-largest of any company with a primary listing on the London Stock ExchangeBusiness Strategy:Tesco’s business strategies are mainly focusing on huge domestic market offinancial services, telecoms and non-food. One of the main objectives of Tesco’sbusiness strategy is to create sustainable long term growth and according to thecompany this could be achieved by expanding into global market.The company initially focused on Asia and central Europe. Most recently it hasmade its entry into the US market. In 1997 Tesco first decided to diversify andaccording to the company itself this was the basis of its recent success. As a resultof this strategy several new businesses have been created by Tesco for the last 12years andmost of these businesses are profitable and competitive.Tesco has developed its strategies which are primarily focusing on five importantfactors, 1) its core UK business, 2) community, 3) non-food, 4) retailing servicesand 5) international market.There are four different types of Tesco stores in the country. These are 1)
  • 3. express, 2) metro, 3) superstore and 4) extra. In UK there are almost 960 expressstores, 170 metro stores, 450 superstores and over 175 extra stores. Apart fromthese four there are ‘Home plus’ where non-food products, including clothing,areavailable.According to Tesco, fulfilling corporate responsibility and creating values forcommunity are crucial for achieving growth.Tesco’s various retailing services include: -‘Tesco personal finance’ (TPF),‘Tesco.com’ and ‘Tesco telecoms’. In UK, TPF is the most successful supermarketbank. Initially TPF was a joint venture between Tesco and RBS, but in 2008Tesco decided to buy the fifty percent share of RBS in TPF. All the financialproducts of TPF are available online. Developing ‘Tesco.com’ was a strategy ofkeeping pace with the modern trend. Almost one million people are today using‘Tesco.com’ for online shopping. Currently it is country’s one of the leadingtelecomserviceprovidersHumanResourceManagement of Tesco:The HR department carries out recruitment which involves steps that arefollowed:  For instance, there is a call for application after which a criteria is utilized to shortlist those to be interviewed.  After the interview, there is a negotiation of salary to be given and finally job allocation for the qualified.  After recruitment, the candidates are taken through a series of training especially by use of available resources so as to end up coming up with quality employees.The company uses two kinds of training:  One is process training in which the employee is made aware of his or her duties as well as the all process of the work.  The second category is the on the job training. In this category an employee is given after the first criteria of process training. The new employee is then inducted into the job by the most experienced in the job.Tesco understands the relationship between good quality products as well asaffordable prices; it therefore trains its employees perfectly.The components of Tesco’s training procedure involve:  Core skill program: This is a basic training meant to equip the employees on knowledge of handling customers.  Winning in Europe: This is training in Tesco Company that aims at reaching-out to other countries outside the United Kingdom.  Excel program: This category of training addresses all the kinds of training given from basic to the managerial training program.The training given at Tesco is accompanied with pay especially to those who perform well and this leads to effective performance at the end of the training.
  • 4. For good employee relations the company also encourages its workers to worknear their homes thus cut down on time wastage due to transit. The company alsogives their employees freedom of transfer thus encouraging employee retentionthan frequent recruits of new employee’s.There is use of shift to promote unity inthe company as well as exchange of ideas. As a result of a multicultural society,the HR department also works towards creation of a healthy work environment.Tesco works towards this by ensuring that every employee knows his or herrights in the organization. To promote healthy environment both for thecustomers as well as the employees, Tesco prohibits alcohol and other products inthe same category.It also trains its employees on disaster management so as to improve safety in thepremises. Such disaster management includes control of fire outbreak or in case ofburglary.Tesco has committed itself to use commitment based model which does not forceemployees to meet frameworks. In this model still, psychological approach toemployees is emphasized. Employee opinions are taken into consideration and arenormally used even during problem solving process. This model taken by Tescoputs the employee on the fore front so as to ensure that they are satisfied and canbe motivated to work. Thecomplaints that are normally raised by the employeesare taken into consideration as well as their suggestions thus promotion ofhealthy working environment.Payment procedure is the task of the HR department in Tesco Company. It paysits employees as per the ‘National Minimum Wage Act’ requirement. It alsomotivates its employees through pay increment after a thorough proceduralevaluation has been done in the work place. Promotion is also another aspect ofmotivation in the company.Contribution of various Components of HR towards:  Business strategy:Tesco has adopted a comprehensive business strategy which entails attainingconsistent growth and increasing the scale of operation in the internationalmarket. The business strategy also involves attaining a competitive edge in termsof its human resource. This strategy has enabled the firm to strengthen its corebusiness in its UK domestic market.  Mission statement:The management of Tesco is committed to ensuring that it develops sustainablecustomer loyalty. To attain this, the management of the firm ensures that alloperations of the firm are focused on satisfying the customer. This enables thefirm to deliver value to its customers by understanding them in a better manner.The management is also committed to integrating the concept of innovation andensuring that it has a wide range of human resources, and creating a goodworking environment for its employees.
  • 5.  Tesco overall human resource strategy:The management of Tesco has formulated a comprehensive human resourcestrategy. The firm’s overall human resource strategy entails integrating employeetraining as part of the organization culture. The objective is to attain acompetitive edge in its operation. The firm’s human resource strategy revolvesaround challenging rules that are not in the firm’s human resource policy – worksimplification, performance management and ensuring that all the firm’semployees in all its head offices have the necessary core skills. In addition, thehuman resource training also considers employees at the lower level.Vertical Integration:Ways in which the firm’s human resource practices enable Tesco to attain verticalintegration:  Resourcing:Tesco undertakes comprehensive recruitment in the process of increasing the sizeof its human resource. Both ‘internal’ and ‘external’ sources of human resource areconsidered during recruitment to ensure that the firm becomes competitive inrelation to human capital. The firm’s ‘external’sources in human resource are the external market by posting the vacancy on the internet, offline mediums, radio and television. Comprehensive recruitment and selection enables the firm to deliver services effective to the customers and also to undertake product and service innovation. ‘Internal’ recruitment is aimed at ensuring that the employees are motivated to move up in their career. Internal recruitment is based on the performance of the employees. This ensures the employees become more focused at delivering quality service to the customers. Internal resourcing enables Tesco to incorporate the concept of reward management in its operation. To ensure that internal recruitment is effective, the management has formulated a Talent Plan. The talent plan lists the firm’s employees who are seeking to move for a promotion.  According to Recruitment and selection strategy at Tesco:If the talent plan does not have the necessary candidate, the vacancy is postedinternally for a period of two weeks in the firm’s intranet. Internal recruitmentenables the firm’s employees to be loyal to the organization since there are highchances of career development.  Human resource development:The management of Tesco has formulated an effective employee trainingprogram for all its employees. According to Recruitment and selection strategy atTesco, the training program has resulted in effective human resourcedevelopment and a good working environment. This is due to the fact thatemployees decide their training needs which enable them to be in control of theirindividual career paths. Employee training enables the firm to attain its businessstrategy.
  • 6.  Employee relations, rewards and performance:To ensure that the employees are satisfied and productive within theorganization, the management of Tesco has developed a good relationship withthem both in the domestic and foreign market.According to Tesco, this is achieved by developing an employee relations team.The team is charged with the responsibility of developing policies that enableeffective management of the firm’s employees. In addition, Tesco rewards itsemployees based on the value that they create to the organization.Horizontal Integration:Ways in which the firm’s human resource practices enable Tesco to attainhorizontal integration:As be mentioned before, there are three part of the HR strategy. The biggest part of HR strategy in Tesco is Training and Developing. The second one is communication and consolation. The third one is reward and benefit.HR strategy is an important issue of HRM in a large organization. Especially asthe international organization, Tesco is a good example. There are about 470,000employees around the world. In addition, although there are different strategies,they work for the overall HR goal. In Tesco, the overall goal is for developing theculture of organization. The HR managers need to use the different HR strategiesto support the same goals.  Training and developing:Training:Tesco pay more attention on training and developing program. This program isfor everyone who works in Tesco. There will be a huge number of new employeesfor Tesco every year, some of them have no the working experience. Tesco willtrain them before they start their work. In those training, they can get some skillswhich they need for the future work, and they will understand the culture ofTesco. After the training, they will feel their value been improved, that result inthey will more committed work for Tesco. This is positive for Tesco to keep theuseful employees, and that may help Tesco saving some money from recruitment,though recruitment cannot be ignore.Developing:Except the training which be held by the organization, the employees can developthem skills which they prefer to improve. This will increase the employees’interesting on work, therefore, that can develop their as much as they prefer,result in, the individual development will impact for the organizationdevelopment which can improve the organization’s level.However, there are some negative impacts for Tesco: Firstly, although the training is for everyone, they cannot take the training in the same time. Therefore, there are some employees unsatisfied when they will take the training. There will be some negative competitive. Secondly, some employees will leave Tesco when they get the skills which they need. Actually, this is not good for Tesco. They pay the employees’
  • 7. development program, which is in order to improve their level. If some of them leave Tesco that will be double worth for Tesco. They need to employ more employees, may pay for the interview fee, and they have to do the training again. That will increase the cost.  Communication and Consolation:This part is also important for HR goal. That can reduce the unsatisfied of theemployees. Sometimes, communication is a part of the training and individualdeveloping. Because after the training, the manager need to get some feedbacksfor them to improve their next training. And when they arrange the training,there will make some conflict or unsatisfied. Therefore, the manager has tounderstand what the conflict is made by, and how to deal with them.In other way, it is an independent part of HR strategy. That because it is notevery conflict which is broke out by arrangement of training. Therefore, themanager has to understand every way of the employees’ needs.Reward and Benefit:This is a basic and direct strategy of HRM. That can let the employees workhard, that because sometime this is link to their salary and their own portfolio.The discount for the employees is very kindly for them. In addition, training andindividual developing can be seen a kind of the reward.In other hand, some employees want to get more bonus, but the level of themcannot get more, they will unhappy, they may do not hard work as before. Inaddition, the discount is not for the employee, but also for his/her family andfriends. That would be the potential threaten for Tesco.Conclusion:Although those strategies are different, and those are influence the differenttarget. All of them are work for HRM. There will be a link between thosemethods. The manager will mix them to manage the HR in Tesco as much valueas they can. There are some different between each one. They have the differentvalue for the employees. The manager will due to the different responsibility tooperate the HR strategy.Bibliography:  www.ukessays.com  www.slideshare.com  www.wikipedia.com