Case study of TESCO

TESCO CASE STUDY


Executive Summary

This report is a detailed study of the case of the multinational company Tesco. The introduction will clarify the concept of leadership styles and its necessity. The latter part of the introduction will be a brief introduction to Tesco and what is given in the case. This will be followed by a detailed analysis of the case in which the segments of the case and the concepts will be analyzed rigorously. The following section will be of recommendations in which necessary changes to the case will be provided. The last section will be the conclusion to the essay depicting what the case was about and how it was studied. This will be followed by references used in the report.

Introduction

When any businessman or a manager is asked the question “what do efficient leaders do?”; the answer might be that a leader is the one who builds a good work culture or the one who forms strategies and motivates but when there is a question of what leaders should do or what they are supposed to do, there is a unified answer of “achieving results”. To achieve results, there is no specific guideline for every situation, company or work environment which is why every leader has to invent or frame their own leadership style according to the surrounding work environment. (Bosiok & Sad, 2013) A leadership style can be defined as:
“A leadership style is a combination of traits, skills and behaviors that leaders use while they interact with subordinates” (Lussier & Achua, 2009)
Essentially, a leadership style is a method in which leaders influence the actions and decisions of his subordinates. Three primary styles of leadership were carried forward by which are democratic, liberal and autocratic but now there are several types of predefined leadership styles for business dependent on the how the leaders gets the work done or his attitude towards his subordinates. (Yang, 2008) Every leader works in alignment to at least one of these leadership styles and gets results. The various predefined leadership styles have proved to be quite effective in the past years but corporate world is in an ever-changing and evolving stage which the advent of globalization and information technology.
To obtain superior performance from employees and get the most from the resources, knowledgeable leaders nowadays are adapting to more than one leadership styles to get results. In this case, leaders must be aware of the situation and are supposed to think of an appropriate leadership style for the situation and that skill can be developed through innovation, creativity and experience. (Casse & Claudel, 2011) The application of an appropriate leadership styles can effectively motivate employees and the situations can be handled smoothly which clearly boosts the company performance. As Tesco has to deal with customers directly, if employees are allowed a certain amount of freedom then it would lead to creative measures for serving the customers and improving the product maintenance which would increase customer satisfaction.
Tesco
This case is based on the functioning and implementation of leadership styles in Tesco which is a multinational grocery retailer based in London. It was founded by Jack Cohen in 1919 in East End. Since its foundation, it has branched out into 12 countries and also diversified its business products. It has become the second largest retailer in the world on the basis of revenue. Tesco expanded internationally after its rapid growth in England. Presently, Tesco has over 3,000 outlets worldwide with many types of supermarket operations. After building their first supermarket in 1958, Tesco initiated its overseas expansion in the year 1996 with mixed results. With the launch of the club-card facility which was first of its kind, Tesco peaked in sales and dominated the world markets by 2010. (Tesco, 2014)
The case describes how different leadership styles with examples of how they were implemented by different people in different situations. As it is a customer oriented business, the leadership styles and examples relate to appropriate situations. Different range of functions in department lead to a difference in the managerial roles played by people. The leadership styles that are displayed in this case are categorized on the basis of the amount of freedom given to the subordinates by the leader and the major categories are autocratic, democratic and laissez-faire. The issues that arose at multiple occasions in different department were tackled by the respective leaders in an appropriate fashion by effectively using different leadership styles to alleviate the situation and to get results. Tesco also implemented the system of 360-degree feedback so that employees can track their progress and improve accordingly. For the development of leadership skills of managers, Tesco introduced several critical success factors which were to be focused upon to progress.
Berian had to tackle the situation of sustaining productivity in the organization and was successful by keeping a democratic approach. Stephen is an ambitious leader who has progressed from a basic level in the hierarchy and handles the problem of the accident effectively by changing his leadership style according to necessity. Martin the program manager has a very liberal democratic approach and succeeds in the respective task. The actions applied by Tesco were fairly successful but there is further need for guidelines for leading efficiently.
The different concepts and their implementation in the organization fail to draw a line between leadership and management. Also, the leadership styles used in the respective situations are not limited to the specific type of situation but there is a myriad of options where the same leadership styles can be used in different situations.
Analysis

The first thing which comes into focus while approaching the case is the emphasis on Tesco’s leadership framework. This framework is purposefully kept flexible and broad so that employees in any level possess the potential to reach a senior level of hierarchy. This framework is focused to instill leadership qualities in employees of every level. The framework is an effective method to ensure the employees stay motivated as employees of every level can be ambitious about his/her long term goals in the company and this framework can improve Tesco’s employee retention rate. This leadership framework encourages treating colleagues in every level with respect which can make every branch of Tesco a desirable workplace.
There is a distinction depicted between management and leadership based on the roles that are played by a manager and a leader. The distinction given here is ambiguous and has the tendency to confuse a reader regarding the meaning of managing and leading. Leading other people is a part of managerial actions but there is also a fine distinction other than what is given over here. The role of a manger is limited to the administration of tasks while the role of a leader surpasses rules and delves into innovation for problem solving. The role of a manager is identical to many managers but the role which is a leader plays and the actions performed by the leader are distinct to the leader. The focus of the managerial role is on people while the role of a leader is people oriented and has direct connection to building trust and motivation among the employees. (Murray, 2009)
The example of Berian handling the problem with the productivity issue was relevant to problems that could occur in Tesco. Berian kept a democratic approach in leading his subordinates. This approach is further linked with creativity and innovation explaining indirectly how a democratic approach can lead to innovation which is an effective action by Berian.
What follows this is a chart explaining the different leadership styles through a scale which took the area of freedom given to subordinates and use of authority of a manager as an example. Tesco’s scale of determining the leadership styles is solely based on the actions of the manager which is entirely wrong and again creates a problem in the reader’s mind about distinguishing between what a leader and a manager is. Explaining a leadership style system through the activities is not a clear approach and even if Tesco has been able achieve results with the leadership styles, there is bound to be a clash or confusion in determining a leadership style as there are other leadership styles which might be appropriate for a leader’s action strategy.
In my experience, it is better to have a psychological approach to the explanation of leadership styles regarding the demeanor of a leader and not about the specific roles. If an individual grasps the crux of the leadership styles based on the psychological aspects, the he can lead using multiple leadership styles and can also form a hybrid leadership style.
There is also a deep emphasis on how leadership approaches can be switched according to particular roles by the example of how managers can reach a decision by adopting an “I Sell” or an “I Consult” approach. This does not give a clear distinction about the behavior of the leader but just suggests how a manager should act in a particular situation. Regarding the suggestion of maintaining a democratic approach even in critical situations and ignoring the shortcomings as a learning experience, it is more serious than it sounds like and critical problems can arise if “a major stock reduction program” isn’t handled under the personal supervision of the manager. The case puts forward another example of forming a budget by assigning it to a subordinate based on trust and experience but a hands-off approach is just an invitation for risk and the duties of a leader indicate that a leader should guide his subordinates whenever he can so if Martin has time to overlook the formation of the budget then he shouldn’t go for a Laissez Faire leadership style.
The following section explains leadership styles in action by dealing with a situation after taking 3 factors into account: The task, the team and tradition. This section puts the theory of selecting an appropriate leadership style into action. This detailed approach keeps the task to be done into consideration and also certain non-task-related objectives like cost savings and motivation in perspective during the choice of a leadership styles according to a situation.
The later part of the case describes the factors influencing leadership styles. The division of the factors is done on the basis of the level of influence of the factor. While the level of skill is an internal influential factor, the external factors are explained in much more detail through collation of Tesco’s critical success factors. The critical success factors are aligned with the goals of the business. These factors are specific and can be used by leaders to motivate and generate focus among employees regarding their tasks. There are also certain success factors devoted to the senior management which are related to decision making, change management and performance management.
The conclusion lists out the efforts made promote effective leadership which include the formation of the vision and the 360 degree feedback initiative which is an effective process for progress.
Recommendations

After the introduction of Tesco, there is a section about management and leadership which attempts to distinguish between both the concepts through the roles of both the entities which fails to illuminate the difference and makes it even more complex. The correct approach to be taken while explaining the concepts of a roles of manager in comparison to the roles of a leader, a psychological approach with a business undertone would be required. It can be observed in the work of (Goleman, 2000) where the leadership styles are distinguished based on Goleman’s earlier work on emotional intelligence. This division also clarifies the leadership style further on the basis of the leader’s modus operandi, emotional intelligence competency, and in which situation the leadership style would be the most appropriate. The case describes how democratic leadership style induces motivation through an example of Berian. But the manner of description suggests that it is beneficial every time but in reality it is merely a singular occurrence and cannot be taken as a determinant for all occurrences.
There is also a conflict in the portion where it is mentioned that Tesco’s program for motivating leaders involves mainly self-review and reflection while at the end of the case Tesco mentions 360 degree feedback which involves feedback from seniors, subordinates, colleagues and even suppliers at times. It is not a self-review but a feedback system essentially which suggests that the system is not clear. Although, self-review would still be a better option.
The classification of leadership styles on the basis of 3 common partitions of autocratic democratic and Laissez Faire can often be seen but basing it entirely on the use of authority and freedom provided to subordinates is inadequate to explain the gist of leadership styles in an actual business scenario. The description of the model itself suggests that certain styles are only effective under certain circumstances. The ideal approach to embrace would be to adopt hybrid leadership styles in order to tackle a range of situations without additional guidance. (Casse & Claudel, 2011) It should be clear to the subordinates that during certain situations feedbacks and opinions cannot be taken and that the leader is making a wise choice. This phenomenon is a result of building trust.
The leadership styles of Stephen is shown has overly democratic and it is defended by saying that any accident that occurs will be handled by Stephen but considering the possibility of the situation where there is a heated argument with or between customers or a similar situation and there is no time or scope for Stephen’s involvement then it could be a problem that the responsibilities are on the managers. There is a statement that the best managers are the ones who adopt leadership styles according to the given situation and this is backed by giving Stephen’s example of democratic leadership styles. The Martin’s example of democratic approach is the most suitable as the final decision lies in the hands of the leader. The hands-off approach shouldn’t be adopted unless extremely necessary.
Conclusion
Tesco as a retail company has many number of employees under its service which would be suggestive of the fact that there are many department in the organizational structure and also many departmental managers and leaders. This requires Tesco to implement efficient leadership styles among the managers to ensure optimum performance and sustained growth and development among the employees. Not only did Tesco achieve a global status but also managed to add to the leadership styles through their own customized scale. The case suggested several steps that were taken by Tesco to promote an effective leadership environment.
This Case delves into the field of leadership and attempts to draw a line between managing and leading. The concept of leadership styles is covered in depth and there are many instances where they are explained through examples. Leadership styles in action describes how to determine a leadership style based on factors of task, team and tradition and also the factors affecting leadership styles are given. After analysis of the case it was found that many elements were helpful while some did not do justice to the core concepts. Recommendations were given accordingly specifying what changes were essential to the case and concepts.
Bibliography
Bosiok, D., & Sad, N. (2013). Leadership styles and creativity. Online Journal of Applied Knowledge Management, 64-77.
Casse, P., & Claudel, P. (2011). Leadership styles: A Powerful Model. The Training Journal, 46-51.
Goleman, D. (2000). Leadership that gets Results. Harvard Business Review, 78-90.
Lussier, R., & Achua, C. (2009). Leadership: Theory, application and skill development. Mason: South-Western Publications.
Murray, A. (2009). What is the Difference Between Management and Leadership? Retrieved from The Wall Street Journal: http://guides.wsj.com/management/developing-a-leadership-style/what-is-the-difference-between-management-and-leadership/
Tesco. (2014). About Us. Retrieved from www.tescoplc.com: http://www.tescoplc.com/index.asp?pageid=6
Yang, C.-W. (2008). The Relationships Among Leadership Styles, Entrepreneurial Orientation, and Business Performance. Managing Global Transitions, 257-275.

Skills

Posted on

March 8, 2018

Submit a Comment

Your email address will not be published.