Business at work

is quality and value, but customers also look for a shopping environment

which is attractive, well planned, and enjoyable. They also expect staff to

be helpful, responsive to their needs, and sympathetic to their problems.

Tesco is constantly seeking new ways of meeting customer needs. These

include introducing Customer Assistants dedicated to helping customers at

every point during their shopping, establishing a Customer Service Centre

to deal with customer enquiries, providing facilities for customers with

disabilities, and organising customer question times when Tesco can hear

customers views.

Staff.

Tesco employs 154,000 people in the UK and 27,000 in Ireland and Europe. It

is constantly told by customers that its staff are the company’s best

asset. This means that the company must motivate and train its employees to

give the best possible customer service, and provide opportunities for all

members of staff to develop their talents to the full.

The company believes that the welfare and safety of its employees is of

paramount importance, and applies high ethical standards to protect

workers’ rights and reward employees fairly for their work. Full and part-

time staff have had their benefits harmonised, including salaries, purchase

discounts, pensions and profit-sharing. The company has a national

agreement with USDAW, the shop workers’ trade union.

The approach of Tesco to worker welfare goes beyond its own employees. The

company insists that its suppliers meet certain employment standards in

matters such as fair pay or minimum working ages. Tesco believes it can

play a positive role in influencing working practices around the world.

Like other large companies, however, Tesco recognises that its wider

reputation depends on other things, such as its staff relations, its

attitude to the environment, its support to the community, and its

relationships with its suppliers. Also, as a leading food retailer, the

company must ensure that it provides products, which are safe to eat or

use, as well as giving customers advice on matters such as healthy diets.

Health and safety

Tesco customers rightly expect that their purchases will be safe to eat or

use. The company applies the highest standards in meeting these

expectations and makes special provision for those with special dietary

needs. Following government recommendations on the nation’s diet, Tesco was

the first retailer to promote healthy eating.

Environmental policies

Tesco is committed to protecting the environment and to using its

commercial strength to put its principles into practice. In many cases, the

company’s standards far exceed legal requirements. Its environmental

policies cover matters such as recycling of packaging, working with

suppliers to minimise the use of pesticides, energy conservation, and the

siting and design of its stores. Tesco also works closely with

environmental organisations in areas relevant to its business.

Animal welfare

The company aims to set the highest standards of animal welfare in the

industry, and has introduced a code of practice on the treatment of animals

to which all its suppliers must adhere. The company is also funding

research to improve understanding of animal welfare, and will continue to

promote and implement high standards in order to improve animal husbandry

still further.

Relationships with suppliers

Tesco has relationships with thousands of suppliers in the UK and overseas,

and works closely with these suppliers in order to ensure that products are

of the highest quality and delivered in the best possible condition. By

working in close partnership with its suppliers, Tesco is helping them to

meet its own high standards, not just in efficiency and product quality,

but also in environmental protection, animal welfare and employment

practices.

The community

Tesco is very much part of local communities throughout the UK and is

committed to playing a positive role by working with community

organisations. The company’s community contribution covers support for

education, groups dedicated to helping people with disabilities, and a wide

variety of other organisations. The company has introduced schemes which

enable its own staff and customers to help raise money for good causes.

Each large supermarket retailer in Britain has its own corporate identity

and culture. Often these are very similar, yet each organisation seeks to

present its own individual image. Of the types of cultures that I have

discussed above, I think that Tesco displays many of these differing forms,

especially customer driven or customer orientated, task culture,

competitive culture, innovative culture and positive culture. It is often

said that in business “the customer is King” and this is very true of

Tesco, which operates in a very competitive market. It must be very heavily

customer orientated as satisfied customers will usually regularly return,

but dissatisfied customers may not …. and go elsewhere! It is also very

innovative, always encouraging new ideas and products, e.g. the possible

introduction of car sales. Tesco used to be a food retailer, but now it

also sells clothing, electrical goods, books and stationary, computers,

mobile phones, etc. It has a very positive culture as it is always

searching for new opportunities for its staff and also its retail products.

Its success is now a good indicator of how this blend of business cultures

has led to market growth and market leadership.

E5

Communications

The efficient communication of information is particularly important for

organisation that operates in competitive markets. Relevant and accurate

information is needed to plan and manage efficient production, marketing,

distribution and cost control. Information – whatever it is nature and

purpose – must be communicated as efficiently as possible.

All people in an organisation are part of an information flow – they are

involved to varying degrees in providing and receiving information.

However, there are three main levels at which information is required:

. operational level

. middle management

. senior management.

Operational level

At the operational level – on the factory floor, in the office or at

premises where consumer services are provided – there are charge hands and

supervisors who must ensure that work is planned and carried out as

efficiently as possible. In a factory, for example, a supervisor giving the

task of overseeing the production of a particular item needs to know:

. the quantity to be handle

. the completion date

. the availability of plans and machine capacity

. the operations to be performed

. the kinds of labour needed and its availability

. the materials and components required to produce the order.

The kind of information assists the supervisor in planning and controlling

he work and it is essential for decision making at an operational level.

Activities at the operational of an organisation produce data that will be

processed to provide much of the information required by middle management.

Middle management

Middle management needs to know how efficiently work at operational level

is been carried out and the extend to which any resources under their

control are being used to achieve the organisation’s objectives. Much of

this information relates to the productivity of labour, the utilisation of

machine capacity and the rate at which materials and other inputs are being

consumed.

Middle management also needs a great deal of financial information about

the costs of the resources consumed in relation to output. This financial

data can be used to determine and monitor total costs, revenues, profits

and the achievement of business objectives for example, it will be possible

to identify any fall-off in productivity or rise in labour costs which

might contribute to arise in unit labour costs or to detect the excessive

use of materials which might suggest an increased in wastage.

Senior management

So far, I have mainly considered the need for information that is processed

and generated from sources within the organisation. At senior level,

however, information from internal sources often has to be supported by

information derive from external sources to help managers ensure that the

resources and their control are used as efficiently as possible in

achieving business objectives. Decision making at senior management level

has a major influence on the success or failure of the organisation. Any

decisions concerned with controlling the organisation, assessing its

performance, planning its future and initiating action must be supported by

all relevant information.

Decision making at senior level in areas such as business strategy and

planning requires information about broad trends rather than detailed

information needed to make many routine decisions on day-to-day matters at

lower levels of the organisation. Senior management need information about:

. developments in initial costs and sale trends

. overall profitability, and the respective contribution of each part of

the business

. capital requirements, and availability of internal funds and the cost

and sources of external capital

. manpower and skills requirements

. forecast of demand of the organisation’s markets

. the impact on business of any changes in the economic, political,

social and legal environment.

Superior

Prep Line manager Prep

group

group

Staff Subordinates

Staff

relationships

relationships

Figure 1.9: Communication network

Communication channels and methods

The communication channel refers to the means by which information is

communicated. The actual choice of communication channel depends upon a

combination of:

. the need for an immediate feedback or response

. costs

. speed and urgency

. the number and location of the people who need the information

. the degree of confidentiality and security required

. the desired degree of formality

. convenience

. the complexity and amount of detail to be conveyed

. the type of information to be communicated

. the need to keep a record of the communication.

Business information can be communicated in many ways. Methods include:

. written reports

. instruction manuals

. letters, circulars and memoranda

. material posted on notice board

. in-house magazines and newspapers

. sheets of figures

. information on standard forms

. graphs, charts, drawings and photographed

. video, television and other audio-visual techniques

. meetings and interviews

. public address announcements

. electronic mail

. network messaging

. fax

. telephone and voice mail

. pager device

. video conferencing

Whatever communication method is used, the information sent should be

relevant and avoid superfluous comments and unnecessary detail. The

information communicated to a supervisor on a factory may have to include

an exact description of the operations to be carried out. In contrast, much

broader information is supplied to middle and senior management. Senior

managers may only require general indicators and a broad description of the

developments that need to be considered when assessing the organisation’s

performance, setting objectives and deciding upon strategies.

Exception reporting

To ensure tht the information provided to management is relevant, clear and

concise and makes effective use of managers’ time, some organisations

stipulate that managers are only provided with dada relating to exceptional

developments. Middle management, for example, may only receive information

connected with performance measurements that deviate by more than an agreed

percentage from their targets. The information dealing with exceptional

performance should also be supported by brief statements of the internal

and/or external factors that may have contributed to any exceptional

performance. Exception reporting makes more effective use of the time and

skills that middle management devotes to decision making and to initiating

and controlling actions.

Downward information flows

A downward information flow describes the provision of information by a

superior to an immediate subordinate. It is, therefore, concerned with

internal communications as part of a formal communications channels. A

downward information flow can cover:

. issuing instructions on the tasks that have to be carried out by a

subordinate and setting objectives, such as the target data for

completing the work

. requesting information concerning the area of work for which

subordinates are responsible

. communicating the organisation’s procedures, working methods and

practices and the rules and regulations

. given feedback on subordinate’s performance in relation to his or her

objectives and targets

. motivating people and encouraging attitudes that raise productivity

and improve quality.

Some information will not come from an employee’s immediate superior but

from other parts of the organisations. For example, when employees first

start work they receive general information about the structure and goals

of the organisation from the personnel department. However, for information

that relates to work undertaken by the subordinate, the communication

channel should be from superior to immediate subordinate.

Upward information flows

An upward information flow along a vertical information channel is from a

subordinate to a superior. This might be feedback from a downward flow or

the communication may originate directly from subordinates. An upward

information flow can cover:

. responding to a superior’s request for information on some aspect of

work for which the subordinate is responsible

. informing managers about the subordinate’s own performance, problems

or their personal ambitions in relation, for example, to promotion or

opportunities for developing new skills.

. passing on information about other employees in the subordinate’s

section and relations with sections with which there is a direct link

. submitting ideas on improving working methods and solving work

problems.

In the interests of effective working relations. Most organisations expect

subordinates to report formally through their immediate supervisor or

manager. However, they are likely to communicate in formally with managers

higher up the hierarchy and in some situations, such as grievance

procedure, may go directly to a more senior manager than their immediate

superior.

Horizontal information flow

In addition to upward and downward flows, there are also horizontal

information flows between people of the same status. Because many

operations within an organisation must work very closely together, there

must be formal arrangements for the exchange of information between

sections and departments. The production department, for example, must have

close contact with the purchasing department when it is considering changes

to materials and components or introducing advanced machinery and

equipment. Production staff also has to exchange information with employees

in requirement, training, marketing and transport.

The quality of information.

The essential characteristics of an efficient information system are that

the right people receive the right information at the right time. The

information communicated should be:

. internally relevant to the needs of the recipient

. accurate and concise

. comprehensive, avoiding a time-consuming request for extra

information

. clear – it must be presented and communicated without ambiguity or

possible misunderstanding.

The person receiving the information must have confidence in the ability of

the sender and, therefore have the confidence to take decisions based on

the contents of the communication. The person sending the information must

be confident that the receiver has the ability to understand, use and take

effective decisions based upon the information supplied.

This information system, the communication media and the kind of

information provided should be review on a regular basis. The information

system should be adjusted to take into account any developments within the

organisation such as changes in its organisational structure or management

style. This review should also take into account external factors such as

advances in information technology.

Informal communications

Vertical and horizontal information flows should be clearly defined. If

individual are not sure about from whom the y should receive information

and instructors, this can lead to the growth of information flows which are

not part of the formal system. If there are two information flows running

at the same time, there can be confusion and a fall in productivity. These

informal systems can generate alternative sources of information and create

a situation where the different levels of management receive inconsistent,

inaccurate or even conflicting information.

Many businesses, however, accept that some tasks would not get completed if

they only used formal channels of communications and chains of command. It

may be necessary to short cut the formal system if a matter is very argent

or a clash of a personalities is creating communications problems. Some

informal channels may be tolerated if groups of workers have formed good

working and personal relationship outside of the formal channels. Informal

channels may even be the most effective way of communicating some kinds of

information.

All organisations have a grapevine, which communicates information

informally through personal contact between employees both vertically and

horizontally throughout the organisation. The grapevine can be a quick way

of communicating information to the workforce as a whole as it tends to

operate by word of mouth. It can be used to pass on important information

before an official announcement and, depending upon the feedback generated,

the company may modify its intentions before the formal announcement.

The problem with using the grapevine is that information can get distorted

or exaggerated as it is passed on. Proposal to cut a workforce, through 10%

natural wastage and 5% redundancies, may soon get changed to 15% compulsory

redundancies as it spreads through the grapevine. This may be useful as the

actual announcement may prove to be much more acceptable than the distorted

version on the grapevine.

External communications

Efficient internal communications are important, but an organisation’s

external communications are vital. Its business prospects will be seriously

threatened if it neglects its external communications. An organisation

needs to communicate externally with:

. customers and clients

. suppliers of materials, parts, machinery, other physical inputs and

business services

. local, national and European authorities that deal with matters such

as taxation, planning permission, environmental protection,

competition law, investment grants, trading standards, and health and

safety

. pressure groups concerned with issues such as consumer protection,

animal welfare, environmental matters and the welfare of law paid

workers

. the media and the general public on matters that can either damage or

enhance the company’s public image.

Organisation must ensure that the quality of their external communications

is as high as possible and select the most effective media for

communicating information. It is obviously important that organisations

maintain effective communications with their customers, and most businesses

invest heavily in market research promotion to attract and keep customers.

Many companies now recognise the importance of providing a communication

channel which allows customers easy access to the company. Some companies

advertise a customer care telephone number or an E-mail address on their

packaging or promotional literature. The customer care section will be

stuffed by people trained in the kinds of communications skills needed to

deal with customers making complains. Larger companies may employ

specialists press officers and public relations officers to handle dealings

with the media, pressure groups and the general public.

Organisations relying on other companies for materials and components can

find themselves in financial difficulties of their external communications

lets them down and orders are not placed at the right time. This may led to

shortages of parts and materials, and production may be held up. Relations

with suppliers may also be affected by poor verbal communications skills

which can cause confusion of the exact nature and delivery of an order. It

is for this reason that any changes to an order made verbally should be

supported by some form of written or electronic confirmation.

Opened and restricted channel of communications

In most organisations, some internal channels and communication media are

open to all employees; stuff at all levels can access the information.

Organisations want to provide some information to all their employees. This

would include, for example, information on health and safety regulations,

environmental management policies, incentive chemist and any response to

resent adverse publicity. This downward information flow from the top of

the hierarchy would be open to all.

The content of much downward and upward information flow sis fairly

routine, and organisation are not too concerned about people beyond the

sender and recipient being aware of what is being communicated. However,

access to some information and channels of communications may be

restricted. Some information is sensitive – and if it becomes known to

people other than the intended recipients, it could create either internal

or external problems.

Information and communication technology

Both internal and external channels of communication are increasingly

supported by information technology, with computers generating and managing

information flows. A computer-based information management system provides

the mean to communicate, collect, store, summarise, analyse and present

information in a way that best suits the controlling and decision making

needs of different managers. Inform received by one department or section

can be further processed before it passed onto other departments through

the organisations computer network.

Computer systems can help organisations:

. react changes in the business environment

. process complex information

. provides administrative support

. increase job certification

. collect information at source

. communicate via the internet.

The Data Protection Act 1984

The Data Protection Act was introduced to ensure that organisations

structured and managed the data held on their computers in a responsible

way. These are its main provisions.

. Organisations must register the kind of information it keeps on

individuals with The Data Protection Agency (DPA).

. Data must be obtained and processed fairly. People should know if the

information they give to organisations will be kept on computer and why

it is needed.

. Organisations can only collect the kind if information that they have

registered with the DPA, and the data must not be used outside of the

purpose for which it has been registered.

. The information held on individuals must be accurate and, where

necessary, up to date and it must not be kept longer than necessary.

. Organisations must take precautions against unauthorised access to the

information they hold on individuals.

. Individuals are allowed access to the personal data held by

organisations and, where necessary they can correct mistakes.

In March 2000 the Data Protection Art was extended to cover records kept on

a paper as well as information stored on computers and to provide

additional protection for the individual. The protection includes new

rights to know who holds information on you. It provides a statutory right

to know the identity of the person in a business responsible for data

protection issues, right to have a photocopy of personal information held

by organisations and greater rights to object to anyone holding personal

data.

There are also new rules to prevent organisations sending data to a country

outside the European Union in an attempt to avoid complying with

legislation on data protection. There are new provisions which can lead to

individuals being held personally responsible for not abiding by the rules.

Communication within Tesco plc.

An illustration of communication within Tesco plc.

Figure 2.0: Example of vertical and lateral communication within Tesco.

I have analysed the communication within Tesco plc. and now I can say that

Tesco uses relevant and accurate information to plan and manage efficient

development, marketing, distribution and cost control. Information,

vertical and lateral, communicated within Tesco very efficiently at the all

levels. Every single person who works in Tesco is sure about from whom he

should receive information and instructions.

But apart of internal communications Tesco has very good external

communications as well. The company communicates with customers and

suppliers very well. The quality of Tesco’s external information is very

high. Tesco has many communication channels which allow customers easy

access to the company, for example, Tesco advertises a customer care free

telephone number and e-mail address on its packaging literature.

E6

Production.

Production involves activities, which combine inputs in order to bring

about the physical changes that eventually produce the desired output – the

product. The product may be goods for consumers and households or parts and

machinery for other producers and manufacturers. Production can create a

physical change through:

. Processing

. Manufacturing

. Assembly

. Craft-based processes.

Value added

A common feature of all forms of production is that they are the means by

which organisations add value to their operations. Put simply, all

organisations add value to the externally sourced materials and other

inputs that contribute to their output. Value added is the difference

between the value of an organisation’s output, as measured by sales

revenue, and the costs of its inputs bought in from outside which

contribute to output.

The relative importance of the input costs incurred by a producer depend

upon the nature of the business. Most businesses generally consume a

combination of:

. Raw materials

. Parts and components

. Energy

. Business services.

Quality

Quality has always been an important competitive factor in some markets,

but during the 1980s an increasing number of UK producers began to devote

more attention to quality improvement. The rise in the spending power of

the average household meant that consumers’ choice of goods and services

was no longer so dependent on price. At the same time, consumers were being

offered a wider choice obliged producers to improve and complete on

quality. Because firms producing consumer goods and services sought to

raise quality, their suppliers – companies producing materials, parts,

machinery and business services – were also forced to improve quality.

A growing number of organizations now operate in markets where product

differentiation is rapidly decreasing. For example, advances in technology

mean that there is now very little difference between personal computers

offered by the different manufacturers in particular price range. A PC

producer must therefore strive to gain a competitive advantage by

establishing a reputation as a company with high quality and good customer

care. Consider training shoes as another example. Manufactures of trainers

periodically introduce new features into their shoes in an effort to create

a greater degree of product differentiation, but they all remain

essentially the same design and product. If the identifying logos are

removed, the average buyer might find it difficult to distinguish between

brands.

Producers of both consumer goods and consumer durables must therefore place

more emphasis on quality when marketing their products.

The increasing importance of quality can also be seen in the market for

consumer services. The main features of services provided by airlines,

banks and fast food chains are often virtually identical, and product

differentiation can only really be achieved by improvements in quality.

Another factor in changing business attitudes to quality was the success of

Japanese manufacturing companies. It was perceived that quality played an

important role in helping Japanese companies succeed in European and US

markets. By the end of the Second World War very little manufacturing

capacity remained in Japan, and in the immediate post-war period Japanese

products generally had a reputation as being cheap but inferior quality

versions of products manufactured by US and European producers. However by

the early 1980s Japanese companies had become closely associated with high-

quality products for which they were able to charge premium prices. In the

early 1980s, Japan had 18 per cent of the world trade in the manufactured

goods, substantially more than the UK’s 5 per cent share.

Quality control

Quality control involves an organisation using some kin of inspection

system for identifying materials, parts, components and finished products

which do not meet the company’s specifications. Inspection or testing may

be carried out at various stages of production to ensure that faulty items

do not remain in the production chain.

The operative or inspection department may check every item or just a

sample of production. Processing industries, such as the brewing and

chemical industries, also test regular samples of their products. Quality

inspection is supported by highly sophisticated monitoring, measuring and

testing equipment. This allows organisations to make adjustments to machine

settings and control devices to improve quality.

There are some drawbacks to a quality inspection system. Using an

inspection system to control quality encourages employees to take it for

granted that some output is bound to be defective. Less attention is paid

to preventing errors and defects in the first place as they will be picked

up later by the inspection system.

A quality control system must ensure that there is regular contact between

those departments that have a particular interest in quality matters. The

marketing department, for example, may identify issues raised by customers,

while the design research and development departments should work with

production on developing the product so that current defects are eliminated

when work is being processed.

Quality assurance schemes

A quality assurance scheme is the means by which an organisation implements

its commitment to quality. It helps firms to do the job properly the first

time, because the scheme is designed to prevent failures rather than

detecting errors once they have occurred. In this way a quality assurance

scheme (QAS) differs radically from quality control systems which involve

inspection procedures at various stages of production. The design of a QAS

recognises that defects do not just happen; they are caused by people.

Assuring quality

Once an organisation has identified the reasons why people are responsible

for defects and errors, it can develop a system which eliminates the causes

of defects. In this way, quality is assured. There is no single format for

a QAS, and an organisation chooses a system which is most appropriate to

its particular product or service. What it must do is to insure that every

stage of production (or in the provision of a service) that materials,

equipment, methods and procedures are used in exactly the same way, every

single time.

All employees should be aware of what is expected of them, and should know

how their own particular performance has to meet certain clearly identified

requirements.

Product Evaluation and Quality Assurance within Tesco plc.

What product evaluation and quality assurance in Tesco plc.

Tesco products are continually monitored and tested for their quality and

customer acceptability; this is product evaluation. Tesco staff and

management procedures are also monitored to ensure that they maintain the

highest standards; this is quality assurance.

Why does Tesco carry out product evaluation?

Product evaluation is carried out for a variety of reasons. These include:

testing new products under development

testing existing products when a change of supplier is being considered

testing Tesco products against those of competitors

to update information on the packaging

to monitor quality and safety standards.

Changing of packaging information

Even when a product remains the same, packaging information may have to be

altered because of a change in legal requirements, changes in nutritional

concepts, or advances in food preservation and cooking. For example, a

product might have its packaging altered to indicate that it could be

suitable for microwave cooking. It will therefore be necessary to test the

product in company’s laboratory. Here Tesco inserts fibre optic probes into

the product. This allows us to monitor the temperature of the product

whilst it is cooking, in order to ensure that it reaches a high enough

temperature for it to be consumed with safety.

Tests on existing products

Quality control tests are conducted regularly on all existing own-brand

products at Head Office, in Consumer Advice Centres, and in specialist

laboratories. These include tests on food safety.

Consumer Advice Centre

The purpose of five Consumer Advice Centres in Sandhurst, Shoreham,

Southport, Cheshunt and Perth is to carry out practical research with

customers into new and existing products. Each centre is staffed by two

consumer service officers who are qualified home economists. Their most

important role is to conduct consumer acceptability tests and sensory

analysis. Over a four-day period, six to eight products will be tested.

Their role also includes being available to the customer for any queries

concerning diet, health and nutrition, PR work at a local and national

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