Organizational Sustainability Research Report

ORGANISATIONAL SUSTAINABILILTY RESEARCH REPORT
Organizational Sustainability Research Report

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Abstract
This research report examines that how well the management of Tesco is meeting challenges to
its sustainability at the current time. It reflects the issues faced by Tesco and present practices in
human resources available which affect it in achieving long term sustainability. Nowadays, Tesco
has been facing challenge to its global sustainability due to economic crisis and discounted
retailers entrants in its rival market. It has been going through technological issues due to its
poor online shopping facility. Lastly, its HR management is currently weak since its employees
are less satisfied with their job roles and switch to other companies even after getting training
from here. Tesco is chosen for the assessment of organizational sustainability because it has been
facing sustainability challenged at present and facing flat sales and profits levels.
Some of the sources located during the preliminary research includes the following:
Mess, H. (2004). HRM best practice. Otago management Graduate review. 2. 25-37.
Retrieved from http://www.business.otago.ac.nz/Mgmt/research/omgr/2004/04mess.pdf
Tiwari, P. (2012). Human resource management practices: A comprehensive review.
Business survey report. 669-705. Retrieved from
http://www.iobm.edu.pk/PBR/PBR_1201/120103_HRM%20Practices%20Tiwari%2037.pdf
Marchington, M. & Grugulis, I. (2011). Best practice human resource management:
perfect opportunity or dangerous illusion. The international journal of human resource
management. 11. 1104-1124. Print.
Johnson, E. K. (2000). The practice of human resource management in New Zealand:
strategic and best practice. Asia pacific journal of human resources. 38. 69-83. Print.
Organizational Sustainability Research Report

Introduction
This report includes the analysis of Tesco in order to determine how well the
management is meeting challenges to sustainability of Tesco at the current time. This includes
both research about the Tesco itself and relevant peer reviewed journal articles and books which
reflected on the issues faced by Tesco and best practices in human resources available to help it
in achieving long term sustainability. It then summarizes the research findings and observations,
as well as recommendations.
Organizational Sustainability at chosen organization Tesco

Tesco is the UKs most profitable and biggest grocery retailer which produces large
number of supply-chain items including books, apparel, electronics, furniture, fuels such as
petrol etc. According to Profile: Tesco (Anon., 2013), it also provides various forms of internet,
telecom and financial services to its customers. Its core objective is to provide quality products
and best customer care services to its consumers. Tesco is number 3 on worlds ranking of largest
retailers, earning a 30% market share in the UK grocery market (Tesco, n.d.).
Analysis Of The Current State Of Sustainability Of Tesco

Following is the detailed description of the current state of sustainability of the
organization including such factors as its current state of economic performance and expectations
for the future, the companys technological resources, and how well it is meeting global
challenges.
Current state of economic performance. At present, Tesco is being faced with flat
economic performance. This is due to three reasons. Firstly, the food retail market has been
introduced with various discounters, namely, Aldi and Lidl. Eventually, its customers are cutting
back on it and switching to food stores like Aldi and Lidl, and also Sainsbury (Davey, 2013).
Secondly, the stimulating retail environment of Europe has made drastic effects on Tescos
productivity and economic performance. According to statistical information, by the end of 2013,
the companys like-for-like sales and profits declined by 5% and 70%, respectively. Thirdly, the
companys online shopping facility also lags behind than that of Sainsbury. It is reported that
Tesco online sales are 13%, while that of Sainsbury are comparatively higher i.e. 15% (Rankin,
2013).
Future expectations regarding economic performance. It is expected that Tesco must

focus on adopting guerrilla strategies which uplift its profit and economic performance level and
draw back its consumers who have preferred discounted retail stores over it. Future expectation
regarding improvement of its economic performance includes practices such as:
Improvement in practices at existing retail stores.
Investment in opening new stairs in potential areas where ample growth is forecasted.
Invest more in online and digital area to upgrade the online shopping procedure and provide easy
shopping to its consumers.
Technological resources of Tesco. Its technological resources include its intellectual

property, accrued experience, license of Patent Copyrights, stock control and supply chain
system, online checkout system, Advanced in-store queuing system and a Self-Scan Checkout
system which is highly admired by all of its customers (Where do you fit in? Information
Technology, 2009).
How well Tesco is meeting its global challenges. Globally, Tesco has been facing flat
profits and low productivity and sales levels due to varying global challenged being faced in
various countries. For example, forced production at China and Hungary has declined its sales.
So, it has recently decided to minimize its operations in European sector and China. Moreover,
economic crisis in Slovakia and trading restrictions at South Korea has also badly affected its
sales. However, in order to improve its operations in China and Korea, Tesco has employed a
collaboration tool Cisco TelePresence which has assisted the company in reviewing and
improving its operating models to be practiced at these two countries. Similarly, in order to
upgrade its online shopping facility for its customers in UK, Tesco has invested 1b. Likewise, it
is meeting global trading hours restriction challenge by using Cisco TelePresence program
which has reduced its travel expenses by 20% (Tesco uses Collaboration tools to support rapid
international growth, 2009).
Analysis Of Sustainability With Emphasis On Management Of Human Resources In Tesco

This section will throw light on Tescos current human resources practices and analyze
what the company is doing wrong or could be doing to better support sustainability with
emphasis on management of human resources in it.
Current HR practices employed at Tesco. Human Resource practices are well managed
at Tesco based on their golden rule Every Little Helps more and more (Human resource
practices at Tesco, n.d.).
Human resource management. Firstly, each of its employee is detailed his/her role and
provided means to broaden their expertise and experience. Every worker is welcomed toward
innovation by presenting their thoughts and opinions in all internal and external matters (Human
resource practices at Tesco, n.d.).
Recruitment and selection. Secondly, the Recruitment and Selection method at Tesco is
led through a series of 5 steps of Human resource planning process. In first step, the Human
resource management system is designed such that is fair toward every employee regardless of
their culture, race, nationality gender etc. In second step, an environmental analysis is done to
cope with global sustainability challenges. Next, human resources demands is forecasted and
later its supply is forecasted accordingly. Lastly, the plan is approved by both management and
employees for its practical application. As a result of this planning, the applicants and existing
employees knows well their respective job roles, assigned responsibilities and targeted job
performances (Human resource practices at Tesco, n.d.).
Monitoring and Rewarding practices. Necessary monitoring of employees is carried out
in order to decide their pays, remuneration policies, rewards and compare the wages with those
offered by other market rivals. General monitoring and job evaluation techniques employed at
Tesco are Points Rating and Factor Comparison. Both these methods assess the performances
and every skill of each employee.
Similarly, Tesco employs Job Classification method for rewarding its employees.
According to this, each employee is given a specific grade for his/her respective skill, experience
and job roles. The common rewards awarded to Tescos employees are namely Share schemes,
Staff privilege card, pension and awarding of free holidays (Human resource practices at Tesco,
n.d.).
Employee termination. Moreover, Tesco also employs Employee exit methods. It
interviews its employees before they leave in order to assess their work load and reason for
leaving. If the employee is precious to the company, he/she is offered better compensation, else
he/she is offered pension, if eligible, along with reference letter to be used in the next job
(Human resource practices at Tesco, n.d.).
Developmental transitions in HR management at Tesco. Recently, Tesco has been

making transitions to develop its Human Resources management practices. For example, it has
established a Talent Plan in order to evaluate its employees for their promotions. It has
developed comprehensive recruitment plan in which job vacancies are posted through all online
and offline mediums, such as internet, television ads, brochures etc. Moreover, it trains each of
its employee so that they get adapt to the organisational culture.
Human Resource challenged faced by Tesco. There are various challenges faced by HR
management of Tesco. For example, training programs are offered in such a way that all
employees cannot get the training program simultaneously. This results into less morale among
the employees. Moreover, mostly employees when get their skills upgraded by training, they
simply switch to other firms along with their enhanced expertise. This affects the labour of
Tesco. Eventually, the company has to post more jobs, hire more, train more, and thus invest
more once again which ultimately affects its sustainability (HRM human resource management
in TESCO organisation, n.d.).
Moreover, the reward and bonuses are provided as set by the company, not as desired by
the employees. In addition to that, several discounts are offered to employees family, but not to
him/her. Ultimately, the employees are less satisfied with their job.
Comparison Of Tesco HR Practices With Those Of HR Theories

Human Resources Theories. The sustainability of each organization is dependent upon
how far its employees are concerned for its success. To achieve this, the employees must be
motivated enough to carry out the objectives of the organization. Below is a detailed analysis of
different human resources theories and how they inform and enhance the employee motivation:
Maslows hierarchy of need theory. This theory is concerned upon fulfilling the personal,
social, physiological, safety and security needs of the employees. The practice of this theory can
motivate employee by offering them personal development plans and conducting career
discussions frequently. When an employee is offered self-respect and his/her achievements are
celebrated, it eventually fulfils the security and social needs of them by maintaining good pay
packages and other facilities.
Herzbergs theory. This theory demands organizations to consider job satisfying features
of its employees. When the employees are awarded promotions and incentives upon their quality
work, a sense of responsibility rises among them and they motivate toward better performance.
Moreover, when employees are provided various opportunities to advance their skills and attain
higher education, they stick to organization for long, remain its loyal worker, and make it
successful through his/her excellent performance.
Theory by McCrae and Costa. This theory presents a direct relation between personality
of the employees and the environment of their work place. When this theory is practiced within
an organization, due to its decentralized structure, employees control is appreciated and
welcomed in decision making. This more communication results in motivation, enhanced
emotional expressiveness, job satisfaction and wide range of interests in the work itself.
Comparison of HR practices of Tesco considering the HR theories. It can been seen

that theory of McCrae and Costa is practiced in Tesco since it welcomes its employees in
decision making. Moreover, Herzberg theory is also applicable there because employees are
awarded promotions, incentives and training opportunities in Tesco. However, Maslows
hierarchy of need theory is semi-practiced here i.e. the reward and bonuses are provided as set by
the company, not as desired by the employees. In addition to that, several discounts are offered to
employees family, but not to him/her. Ultimately, the employees are less satisfied with their job.
This fails to fulfil the self-actualization needs as mentioned in the Maslows hierarchy of need
theory.
Conclusion
It can be seen that economic, global and technological sustainability is highly vital for the
Organisational sustainability. When real economic growth is made, more revenues are earned for
investing in new resources. More profit results into more demand and thus elevated economic
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performance. It was seen that consumer spending at Tesco got squeezed due to its poor
sustainability and human resource management practices. It needs to devise new strategies to
revive its large stores, upgrade small stores and invest more and more in online medium.
Recommendations
In order to gain sustainability on global arena, Tesco needs to adopt following practices
and changes in its Human resources and global operational practices:
It must invest more its employees motivation in order to improve its retail stores operations in
US and Japan.
It must set its Human resources policies by evaluating employees on the basis of business
performances only.
It must train its employees together, without any biasing attitude.
It must train employees in case they sign a short contract of not leaving company right after
getting training. This will allow Tesco to get positive output from up-to-dated skills learned by its
employees. Moreover, since they will be forced to not resign for specific set period, it will make
them satisfied with their job i.e. they can carry out goals of the company and switch to other
company as desired by them after end of that contract period.
Remuneration and promotional incentives must be upgraded based on earned annual profits of
the company. This will provide a sense of secured job to the workforce.
Managers must be more active in their managerial duties. Each stores manager must evaluates
its employees skills on monthly or weekly basis and reward the good ones, and train the poor
ones for upgrading their performances.
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Tesco must devise means to speed up its consumers spending. It must also offer sales and
discounted promotions once in every season and on special occasions. Buy 1 get 1 free offer
must be practiced in stores where sales are declining.
Tesco must improve its global operations by considering governmental policies of each country
and conducting marketing analysis in order to study the impact of cultural changes on its global
sustainability.
It must adopt up-to-dated technologies for speeding up its production and other operational
activities.
It must invest most on online shopping. It has been presently that mostly companies are earning
maximum through online businesses. This provides ease of shopping to the online buyers. Most
of the customers use smartphones for making online purchases. Thus, Tesco must design more
user-friendly and quick online platform to beta its online rival Amazon.com.
Nowadays, businesses are being affected by the oscillating exchange rates. Thus, Tesco must
establish its retail stores in those countries where commodity prices are low, Vat is not high and
rental rates are minimal.
In order to attain sustainability, Tesco must seek for environmental friendly practices for
attracting green consumers.
Currently, the competition in retail market has strengthened. International rivals, super-markets
and online players are coming forward to get attention of consumers of Tesco. Thus, it must
provide timely services, discounted food and other items, and environmental free products to its
customers.
It must fulfil the expectations of all of its stakeholders i.e. employees, stockholders, the
community, the environment. It must provide fair promotional schemes to its employees to earn
their loyalty. It must be dedicated toward community and environment by working hard to
achieve its goal of becoming zero-carbon business by 2050 (Tesco sustainability case study,
2013).
It must devise a Contingency plan in case its profits declines or employees resign in crucial
stages.
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References
Davey, J. (2013). Tesco struggles for growth as Sainsbury strides on. Reuters. Retrieved
from http://uk.reuters.com/article/2013/09/29/uk-tesco-sainsbury-idUKBRE98S04920130929
HRM human resource management in TESCO organisation. (n.d.). Ukessays.com.

Retrieved from http://www.ukessays.com/essays/retail/hrm-tesco-organisation.php
Human resource practices at Tesco. (n.d.). Ukessays.com. Retrieved from

http://www.ukessays.com/essays/general-studies/human-resource-practices-at-tesco.php
Profile: Tesco the UKs largest retailer, 2013. Retailweek. Retrieved from
http://www.retail-week.com/home/profile-tesco-the-uks-largest-retailer/5046179.article
Rankin, J. (2013). Tesco shares tumble then recover as profits slump nearly a quarter. The
guardian. Retrieved from http://www.theguardian.com/business/2013/oct/02/tesco-sharesprofits-slump-sainsburys
Tesco- Developing appropriate leadership styles, n.d. the times 100 busniess case studies
Retrieved from http://www.thetimes100.co.uk/downloads/tesco/tesco_16_full.pdf
Tesco sustainability case study. (2013). Cloudapps. Retrieved from

http://www.cloudapps.com/tesco-sustainability-case-study/
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Tesco uses Collaboration tools to support rapid international growth. (2009). Success
story. Retrieved from http://www.cisco.com/web/telepresence/collateral/Tesco-Success-Story.pdf
Where do you fit in? Information Technology (2009). Tesco careers. Retrieved from
http://www.tesco-careers.com/home/you/it

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ORGANISATIONAL SUSTAINABILILTY RESEARCH REPORT