Theories of Management in Tesco
Management is the administrative process which entails strategic planning, devising aims, administering resources, arranging financial aspects and human assets needed to attain goals and evaluating outcomes (Thompson & McHugh, 2009). According to Hitt et al, 2009, management is the process of performing job using financial, human and other resources. Tesco has been practicing some management theories in the running of the organization, some of them are explained in this essay. Transformational Leadership Theory is well-known and it acknowledges leadership theories. This theory was proposed in response to the work of two teams. One team was involved of Hitt, Ireland, & Hoskisson in 2009 and the second team comprised of Thompson in 1989. These analysts have a focused concern regarding leaders’ involvement in key transformations and operating from the top of the association. All the teams used comparatively small, non-systematic and non-representative examples for their study. Supportive facts have been gathered that Transformational Leadership can make supporters go beyond expected performance.
Tesco is assumed to be the most flourishing retail organization in UK. The achievement of Tesco was evidently impacted by the hiring of Terry Leahy as Tesco’s Chief Executive Officer. Leahy is recognized as a creative organizer, who potentially led the company to come across a wide range of organizational transformations that were aimed to transform the company to be more customer-oriented as well as building the company’s labour force. Terry Leahy has been proven to be an admirable leader. Leahy was noted to have said, “The victory of an organizer depends upon preserving a happy atmosphere for the labour force” (Grout & Fisher 2011, p.149). He also says that, there are four elements that a manager must offer to his employees and followers to persuade and encourage them. According to Bratton et al, 2010 these include an exciting job, a chance to get on in life, a reputable surrounding and finally an effective reporting authority, as a help not a problem creator.
Rosen characteristic pattern
According to Rosen leader’s style actually means a characteristically patterned exhibition by a manager on the procedure of decision-making and authority practices. There are two main types of leaders in focus. These are the autocratic and participative leaderships styles (Thomas & Adair, 2004). An autocratic style of leadership means that, the team or organization is led by an authoritarian type of leader. On the other hand, the participative leader has the same authority as the autocratic one, but participative leader has a choice to impose his authority in a different way during the decision-making and duties assignment procedure of the group activities.
The hiring of Terry Leahy as the Chief Executive Officer by Tesco turned out be a new and a fresh start for the company. Leahy considered participative style of leadership, where the workers have their power of speech in the policy-making process. He also gave emphasis on the significance of hiring many other managers to handle institutional process. The institutional formations hence enabled smooth execution of duties and responsibilities of every individual which are evidently mentioned. Leahy delegated managerial duties to the newly hired managers for the company. This was meant to ensure that, the operations of more than three hundred thousand individuals could run effectively. The managing style formulated by Terry Leahy and by the leaders altered the composition of the company. An organic system has been adapted for the organization. An organic system can be referred as a sensible use of official policies and rules, decentralized and mutual policy making, generally mentioned job duties, and an elastic authority organization with lesser hierarchical levels. This system is more suitable for those institutions where innovation is a much needed factor. The stress of innovation proposes a system that can act in response to the structural fluctuations quickly, so it is essentially freely defined as elastic. The institute tries not to be formalized nor are duties very closely structured (Thomas & Adair, 2004). On the other hand, there are organic systems ‘which are formulated mainly in terms of proficiency’, and management accrues to the most informed and competent person. There becomes more committed environment in the organization, with the conclusion that formal and informal structures become impossible to differentiate. A structure of values and beliefs that turns out to be an efficient alternative for formal hierarchy (Mullins, 2011), the Company has tried to adopt a simpler and flatter managerial system.
Pugh, 2007argued that leadership is the procedure to inspire individuals to do their best and accomplish a desired goal. It can also be referred to as the capability to convince others gladly to act in a different way. Bratton, et al., 2010 supported the same idea raised by Armstrong about management as action of directing individuals’ moves to accomplish group targets and idea in an approach that effects motivation, inspiration, influence and mobilization. In addition, Bratton, et al., 2010 have expressed the paths of leadership in this regards: Leadership is encouraging people to get duties performed to above their level standards and quality, with a willingness to act. The duty of a leader is to catch followers; the aim of a leader has to be constructive, which leads to necessary change. Leahy’s leadership style is credited for the institutional success of Tesco. This is essentially because Leahy foresees Tesco’s changes as the only factor that could guarantee a difference in performance due to his leadership (Handel, 2003). Hence, for Leahy, changing Tesco is more of leadership than supervision. Leahy realized that the individuals, which included the consumers and workforce at Tesco to be vital in the overall operations of Tesco. He also alleged that, there must be a line drawn between managing and leading an organization.
Leahy’s aim of transforming the organisational background at Tesco is in accordance to Buchanan & Huczynski, 2010, argument that, ‘supervision is about performing duties properly, whereas leadership should mean effectively lead all the activities’. According to Buchanan & Huczynski, 2010, managing class is transactional, whereas leading class is transformational, predominantly when it is effectual. Terry Leahy’s leading capabilities explains that the purpose and values are confined to varying factors. Leahy difference in leadership is explained by vital values and beliefs correlated with customer pleasure and corporation. Leahy finds consumer as an expansion of the commercial representation of Tesco, which was emphasized in various aspects such as effective communication to customers as they should not be, disregarded at any cost this would enable an increase in consumer welfare interest. In addition, compromise with the people for better solutions, effectual conflict resolution between staff and consumers should be enhanced elasticity and cooperation in dealing with issues and problems should be implemented and finally achievement of synergy by involving everyone in the management of the organization.
Motivational theories at Tesco
In 2012, The Times 100 developed a case study evaluating the motivational methods used by Tesco to encourage its employees. It is the firm belief of Tesco’s management that, encouragement of employee’s leads to improved work quality. The employees tend to commit fewer errors, avoid conflict at work premises as well as express more loyalty to the company. However, non-encouraged employees exhibit almost opposite results to that of encouraged ones. In order to culture and develop encouraged employees, Tesco implemented Maslow’s theory of hierarchy of needs to guarantee that, most employees requirements gets satisfied at work place. (Smith, Farmer, & Yellowley, 2012). The company ‘in turn’ embarked on providing a feasible workplace, monthly pay, and other varying needs for employees in order to gratify their physiological requirements. The Maslow theory has two main advantages; one is that it encompasses all requirements needed by an individual for encouragement. Secondly, there is no a definite order of satisfying needs meaning that people can gratify higher requirements before lower requirements based on the differences of individuals along with their culture.
However, (Mullins, 2011) thinks that there are some issues with the implementation of Maslow’s theory in a workplace. Such issues include it is very problematic to gratify all higher level requirements of individuals at work while some of these requirements can be only gratified through other aspects of life. However, different individuals express different value of the same requirement. The encouragement levels are not identical too for employees in the same hierarchical level. In 1959, Motivation-hygiene theory or Two Factor Theory which was developed by a psychologist Frederick Herzberg came into use. However, Herzberg developed a twist in the tale if gratifying needs by adding a second dimension to Maslow’s theory by proposing that, there are different sets of factors causing workers to be displeased in the workplace even if all of their other requirements are met in accordance with Maslow’s theory of hierarchical requirements. According to Frederick Herzberg these factors included; company policy, working surroundings, security, and salary for the workers. In addition, he also highlighted company policy and supervision problems to bring along different levels of motivation among the employees. While presenting his discoveries, Herzberg divided his motivation factors into two sub categories. One is the hygiene factor. Lack of hygiene can cause discouragement or displeasure among the workers. However, it does not often develop gratification in the presence of them.
Tesco Company employed elements of Herzberg’s theory to encourage its employees. The company focused on the factors which caused displeasure among the workers along with the ones causing gratification. For example, employees are encouraged and authorized by a timely and suitable communications from the management. This is through including personnel in the making of decision and by allocating responsibilities if possible (Hitt et al, 2009). Most of the job irritations stem from Hygiene factors. For instance, irritation due to bureaucracy, poor management, internal politics or sense being exploited are some irritations that may be experienced. Recently, Tesco has gained acknowledgement by achieving the National Business Awards such as the respected Employer of the Year award where judges declared Tesco as the winner because its solutions appear to be more complete. Tesco acknowledges that, encouraged staffs are always committed to their work and in turn making a positive force on the performance of the business. The company invests a huge amount every year in training courses based on a number of factors known as Herzberg motivators. For example, the company trains the workers in new and more open communication channels between managers and staff. In addition, the directors and senior managers spend some time on the shop floor welcoming the ideas from customers and staff as well as planning a place to focus on individual talent and to speed-up shop floor workers on the promotional scale. Moreover, the staff is trained on a better acknowledgement of individual employees’ personal conditions.
These plans have assisted Tesco in achieving record growth and sales profits and show how motivation theory can be used in practice (Hitt, Ireland & Hoskisson, 2009). Throughout the years, there are critiques which have arisen, for instance the employees sample was not actual representative of all workers; however, more studies have attempted to assist these discoveries. Moreover, some critics have expressed that it is natural for people to take credit for gratification while putting the blame on external factors in case of displeasure. Herzberg and his discoveries are quite significant in progress connected with the domain of job design and processes of management to offer job gratification and encouragement (Salaman, 2001).
Tesco has been practicing some of the management theories successfully. In order to gratify the safety requirements of its employees, the company provides secure employment contracts together with safety and health measures in the workplace. The possibility to make employees union within the workplace offers them sense of belonging. This enables them to build teamwork and team activities that have been made available at Tesco so as to gratify the love requirements. The company’s worth depends on self-respect and respect of employees coupled with gratefulness on hard work and with the help of all round clock feedback the company ensures the satisfaction of esteem requirements. In order to gratify the self-actualization requirements, Tesco provides progression programs such as PDP and acknowledgment of skills and talent. (Mullins, 2011).
After matching Maslow’s theory with Herzberg’s two-factor motivation theory, it is evident that Herzberg showed that managers have to make the employees feel engrossed in the workplace by developing ‘suitable working’ conditions. The theory expresses that various factors including work nature, responsibilities, personal development and progress and acknowledgments are the true encouragement factors for employees. (Mullins, 2010: 266).
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