Summative Assessment for Understanding Organisations and the Role

of Human Resources
Chosen company – Tesco:

Contents page

Task 1:

 1. Introduction………………………………………………………………………………………………….2
 1.1 Overview…………………………………………………………………………………………………….2
 1.2 Products and services of Tesco……………………………………………………………………2
 1.3 Customers and define their needs………………………………………………………………2
 1.3.1 Tesco Customers………………………………………………………………2
 1.3.2 Customer Needs……………………………………………………………….2
 1.4 Purpose, goals, targets and financial structure……………………………………………2
 1.4.1 Financial Structure and decision maker(s)…………………………3
 1,4,2 Previous Financial Performance…………………………………….....3
 1.4.3 Future Financial Goals……………………………………………………….3
 1.5 PESTLE Analysis……………………………………………………………………………………….….4

Task 2:

 2.1 Organisational structure and four functions……………………………………………….5

 2.2 Functions working together……………………………………………………………………….6
 2.3 Organisational Culture……………………………………………………………………………….6

Task 3:

 3.1 HR activities supporting the Organisation………………………………………………….8

 3.2 HR Professionals supporting Managers and Employees …………………………….8

References: ………………………………………………………………………………………………………………10

Bibliography: ……………………………………………………………………………………………………………11
Task 1:

1. Introduction
1.1 Overview

Tesco was started in 1919 from a stall in East London and is now a global company operating in
13 countries. There are now over 450,000 employees working for the company worldwide.
1.2 Products and Services of Tesco

Tesco’s core business is groceries, but in 1960 they began selling non foods, anything from wine
to furniture. Since 1995 Tesco has provided services such as Online Banking, club cards, mobile
phones and online grocery shopping which can be accessed via any mobile device
1.3 Customers and their needs

1.3.1 Customers

77% of millennials use Tesco with 73% of women using the store against 63% of men (You Gov,
2018).

Tesco have found a market for single person foods with 7.7m single person households
countrywide (The Guardian, 2018).

1.3.2 Customer Needs

Tesco customers need convenience, and an excellent customer service. They expect well
qualified, well trained staff who are visible and they want competitive prices and easy to navigate
well signed stores.
1.4 Purpose, goals, targets and financial structure
1.4.1 Previous Financial Performance

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Tesco’s profit from sales increased by 3% from 2017-2018, but the group as a whole made an
operating profit of over 69% from £507bn to £857bn in the same period, mostly achieved due to
cost cutting efforts over the period.
1.4.2 Financial Structure
Tesco’s finances are overseen by the Finance Director who reports directly to the Board. All key
financial decisions are made by the board of Directors (the Executive team) with delegated
authority to other directors and managers within the business. Each team's role covers all
aspects of financial analysis - such as investment appraisals, cost benefit analysis, developing
targets and monitoring performance.
1.4.3 Future goals (tesco, 2018)

1. Tesco are investing between £20m and £25m opening between 10 and 15 discount
stores by mid-2019 to compete with Aldi and Lidl. “Jack’s” will sell 2,600 products
against the 35,000 held by Tesco. 1,800 of these will be branded as Jack’s. (BBC News)
2. Reduce operating costs through adopting a cost-conscious culture. 15,000 jobs will be
lost over 700 stores as Tesco reshape their stores in an attempt to save £1.5bn by 2020.
(Daily Express)
3. Increase skill levels so they have access to a larger number of roles and can develop long
term careers. 77% of employees have agreed that they have been given the opportunity
to learn and develop (Tesco Plc, 2018).

1.5 PESTLE Analysis

Factor Reason for Impact Importance

Legal National minimum wage High

Technological Advancement and medium

innovation

Social More health conscious Low

Economic Weakness of £ Medium

Legal

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Tesco, like all other companies in the UK, have to pay at least minimum wage to each of their
employees above the age of 18. In 2017 Tesco implemented a plan to pay their employees more
than minimum wage. It was agreed to increase pay for hourly-paid store employees by 10.5% as
part of a new pay deal, with the hourly rate set to reach £8.42 an hour by November 2018.

Technological (ecommerce, 2016)

Advancements in technology have brought various opportunities for Tesco. They have
implemented their own in-house mobile payment app called PayQwid in over 524 stores in the
UK allowing customers to spend up to £400 and accrue loyalty points automatically

Social
Tesco have looked at the social impact on their customers and responded by relaunching their
“own brand” foods. Over 1,300 products have been re marketed as good, better and best to
allow customers the quality they need at a price they can afford.
Economical
The weak pound will affect costs, demand, profits and prices. Changes in taxation for example
could affect the accessibility of finance. Although the business is growing internationally, the
company is still dependent on the UK market where it has a share of around 30%.

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Task 2:

2.1 Organisational structure and four functions

Financial structure is defined in the business dictionary as a framework of various types of
financing employed by a firm to acquire and support resources necessary for its operations

The Tesco board is a traditional layered hierarchy and consists of the chairman, his group chief
executive, and a number of non-executive directors. Below them are directors and managers of
the various sections that sit on their own committees and report back to the board.

A detailed organisational chart of a large corporation structured on the traditional model would
show many layers of managers; decision making flows vertically up and down the layers, but
mostly downward (business, 2019)

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Finance

The Finance department deals with accounting, organising, auditing and managing the
companies finances.

Distribution

Tesco Distribution centres are responsible for ensuring that the products get to stores
at the right time and in good condition.
Marketing
The role of Marketing is to understand the customer better than anyone else and to
influence business decisions to meet customer’s needs
Commercial
The Commercial department ensures that Tesco have the best range of goods at the
best prices and encompasses buying, merchandising, stock management, and
product development
2.2 Functions working together

Finance are responsible to the board to ensure each section has, and adheres to, an annual
budget. Finance and marketing work together to develop a cost efficient, customer friendly
advertising campaign to attract customers. The commercial department will work with
marketing to get the best prices and quality on those products to sell in their store while staying
within the budget for purchasing those goods. Once this has all come together the distribution
department will work to ensure that products are delivered to the stores around the country at
cost price while making sure the quality and amounts of products are as advertised.

2.3 Organisational Culture

Culture is described quite nicely by Edgar Schein as “A pattern of shared basic assumptions
learned by a group as it solved its problems of external adaptation and internal integration, a
product of joint learning”. (Schein, 2013)
Tesco was built with a simple mission – to be the champion for customers.
1. Tesco believe that looking after their employees means developing a culture of trust
and respect which begins in the boardroom but is cascaded through all levels and is
essential to the success of Tesco. It is important therefore that employees feel
recognised and rewarded for the work they do and where they have the opportunity to
develop in their careers and are supported in by the company at all levels as they move
through their careers in the business. Tesco believe that when an employee feels fully
engaged at their work then they are more likely to give the best service and information
to their customers.

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2. Tesco believe that listening to its customers and addressing their issues is fundamental
to the way they operate. In 2018 it changed the name of its own “everyday value”
products to “Hearty food Co.” following a survey that showed Tesco customers did not
feel valued when they bought an “everyday value” product. People want to feel like
they’ve got a bargain or at least a good deal. In order to provide consistent quality,
specifications and pricing the customer needs to know its suggestions are being
implemented

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Task 3:

3.1 HR activities supporting the Organisation

HR managers have a responsibility to help facilitate the smooth operation of the organisation.
They must maintain accurate and inclusive data on individual employees. This data includes
everything from employee performance reports, their terms and conditions of employment,
training and attendance records and their personal details. Precise record-keeping is necessary
to ensure that the organization complies with legal regulations such as National Minimum
Wage regulations.
HR can help an organisation with an HR analytic Strategy which is the use of descriptive, visual
and statistical methods to interpret data and HR processes. Collecting data on the people that
work for the organisation will help the business to deliver initiatives it feels will help it achieve
its goals. For example, if the business knows how employee engagement can be improved,
where leadership is lacking and where the gaps in employee knowledge is, it delivers
quantifiable and achievable methods for progression and goal fulfilment.
Organisations need to have a planned pathway for each of their employees. As part of this
scheme, the HR department will help to create the induction and training and development
plan which can be agreed and implemented across the company. These programs will be used
to ensure the company is giving the employee the opportunity to operate at their full potential
whilst feeling that the management are investing in them thereby lifting morale. This will
benefit the company as employees tend to stay when they are fulfilled in their roles.

3.2 HR Professionals supporting Managers and Employees

Line managers have a very important role in the day-to-day management of people and
operations, but also in helping implement HR policies and in supporting the day to day activities
of the teams they work in. (Hayden, 2018)

Hr will work alongside the line managers to ensure that they are aware of, and implement
uniformly, the company’s terms and conditions. Some areas where HR can help include
understanding of policies, disciplinary and absence and sickness. These areas are often
contentious and need to be dealt with fairly and equally. Looking at and following the ACAS
code of practise will help with this.

HR professionals have employee experience as part of their specialist knowledge (according to

the CIPD profession map). This can include counselling services for staff that are struggling with
mental health problems. It also refers to things like looking at implementing flexible working to
allow for a better work - life balance which can be helpful to new parents or employees new to
the area.

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HR will work closely with line managers to implement employee training programs and to
ensure that employees fell they are benefitting from them. The training of employees is
paramount to their advancement in any business and HR will work with employees on a one to
one basis if needs be to ensure they understand, and benefit from, the training they are
undergoing and that it is correct for their projected pathway in the company.

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References
business, R. f., 2019. Organizational structure. [Online]
Available at: https://www.referenceforbusiness.com/management/Ob-Or/Organizational-
Structure.html
[Accessed 2 february 2019].

Contributor, P., 2014. pestleanalysis.com/pestle-analysis-tesco/. [Online]

Available at: https://pestleanalysis.com/pestle-analysis-tesco/

ecommerce, 2016. The workroom. [Online]

Available at: https://ecommerceworkroom.co.uk/technology-in-tesco-how-tesco-are-improving-online-
and-offline-shopping/
[Accessed 28th January 2019].

Essay, U., 2017. The strategic and cultural change at Tesco. [Online]
Available at: UKEssays. November 2018. The strategic and cultural change at Tesco. [online]. Available
from: https://www.ukessays.com/essays/business/study-to-analyze-the-improving-work-standards-at-
tesco-business-essay.php?
[Accessed 28th January 2019].

Global, C., 2017. Finance support areas. [Online]

Available at: http://www.cimaglobal.com/Documents/ImportedDocuments/Finance_Support_areas_-
_Tesco.pdf
[Accessed 28th January 2019].

Hayden, S. G. a. D., 2018. The role of line managers in HR and L&D, London: Chartered Institute of
Personnel and Development .

Moose, S., 2017. Topics, Sample Papers & Articles Online for Free. (2017). Customer service Tesco’s
customer expectations.. Customer service Tesco’s customer expectations., 1(1), p. 28.

News, B., 2017. BBC News Business. [Online]

Available at: https://www.bbc.co.uk/news/business-40386827
[Accessed 28th january 2019].

Schein, E., 2013. Organizational Culture and Leadership. [Online]

Available at: https://thehypertextual.com/2013/01/17/edgar-schein-organizational-culture-and-
leadership/
[Accessed 4 February 2019].

Tesco PLC, 2019. www.tescoplc.com/about-us/history/. [Online]

Available at: https://www.tescoplc.com/about-us/history/

Tesco, 2018. http://businesscasestudies.co.uk/tesco/the-healthy-eating-brand/meeting-customer-

needs.html, p. 1.

Tesco, 2018. http://businesscasestudies.co.uk/tesco/the-healthy-eating-brand/meeting-customer-

needs.html. tesco healthy eating, 1(1), p. 1.

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tesco, 2018. https://www.tescoplc.com/media/474793/tesco_ar_2018.pdf. [Online]
Available at: https://www.tescoplc.com/media/474793/tesco_ar_2018.pdf
[Accessed 22nd January 2019].

tesco, 2018. Tesco 2018 Strategic report. [Online]

Available at: https://www.tescoplc.com/media/474794/tesco_2018_strategic_report.pdf
[Accessed 2 February 2019].

Bibliography

CIPD Fact Sheet – History of HR

CIPD Report – HR Outlook 2016
CIPD Fact Sheet – HRBP
Jack Welch video – The Role of HR
CIPD Fact Sheet – Role of Line Managers in HR & LD
CIPD Fact Sheet – PESTLE analysis
Martin, M. and Whiting F., 2013. Human Resource Practices, 6th Ed.
Leatherbarrow, C., Fletcher, J. and Currie, D., 2010. Introduction to Human Resource
Management, 2nd Ed.
Tesco PLC.com

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