to this growth is Tesco’s use of its own label brands including the up-market ‘Finest’ and low-price ‘Value’ labels. Tesco has also expanded into international territories; not just the emerging markets in South East Asia and Europe but also the United States where it has to hold its own against market leader Wal-Mart. Tesco opened its first ‘Fresh & Easy’ store in the United States in 2007 with a strategy set to ensure that ‘Fresh & Easy’ is well placed to capitalise on US customer's search for quality and value, especially as consumer spending decreases.
Like some of its peers, Tesco also aims to improve service and provide better value rather than concentrate on pricing alone. These principles are carried across the business into non-food, services and its international operations. To enable this, the company pays considerable focus on harnessing the creativity of its workforce and encourages staff to come forward with ideas. The company’s prowess in process management applies just as much to its idea management as it does to logistics and store layout. (1)
Vision
Our vision is for Tesco to be most highly valued by the customers we serve, the communities in which we operate, our loyal and committed staff and our shareholders; to be a growth company; a modern and innovative company and winning locally, applying our skills globally. (2)
CASE STUDY
Tesco is a customer-orientated business. It aims to offer products that provide value for money for its customers and to deliver high quality service. Tesco has more than a 30% market share of the UK grocery market; nearly double that of its nearest rival. In its 2009/2010 financial year, Tesco earned revenues of £38.6 billion in the UK and employed more than 280,000 people. To keep at the top of its game and to maintain its number one spot in the market, the company needs skilled staff at all levels and in all roles. Roles in Tesco range from business development, supply chain and marketing to finance, store operations and personnel management. Each area of expertise requires leadership and management skills. Tesco aims to develop the leadership qualities of its people throughout the organisation, from administrators and customer assistants to the board of directors. It adopts a similar approach to leadership development for staff at all levels. This is in line with Tesco’s employment philosophy: ‘We believe in treating each other with respect, with everyone having an equal opportunity to get on, ensuring Tesco is a great place to work.’ This case study will show how Tesco’s leadership framework is fundamental to developing the qualities of leadership needed at every level in the business.
The business writers Tannenbaum and Schmidt categorised different leadership styles. They suggested that leadership styles could be explained on a scale ranging from ‘autocratic’ through ‘democratic’ to ‘laissez-faire’. The autocratic or authoritarian style is characterised by an ‘I tell’ philosophy. Autocratic leaders tell their staff what to do. This can give a business clear direction but it may also lead managers to undervalue or ignore input from their teams. However, an autocratic approach is appropriate in some situations. It is valuable when the business faces a crisis or when an urgent problem arises that requires an immediate response.
Stephen is the manager of a medium-sized Tesco store. He has been with the company for over 10 years and his first job was filling shelves in the dairy section. He is currently working towards the Tesco foundation degree. Stephen directly manages a team of around 20 departmental managers, who between them are responsible for almost 300 people. Stephen’s leadership style is usually to allow his managers to make most operational decisions. However, if, for example, an accident occurs in the store, Stephen may take control to ensure a prompt and co-ordinated response.
The best managers adopt leadership styles appropriate to the