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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Tesco, which is a multinational grocery and common merchandise retailer in United Kingdom. It is the third-largest retailer in the world. It has stores in seven countries across Asia and Europe and is the grocery market leader in the UK, Ireland, Hungary and Thailand. Tesco was founded in 1919, the founder, Jack Cohen, which has a group of market stalls. He is the son of Jewish migrants from Poland, he began to sell war-surplus groceries from a stall at Well Street Market, Hackney, in the East End of London on that year. Tesco also come out with their own brand which name ‘Tesco',and was first appeared in 1924. The name TESCO was derived from the combination of a tea supplier's name T.E.Stockwell and Jack Cohen the founder of Tesco. Jack Cohen start his experiment with his first permanent indoor market stall at Tooting in November 1930. The first Tesco store was opened at 54 Watling Street, Burnt Oak, Edgeware, Middlesex on September 1931. They also open the first self-service store in St Albans in 1956. Afterwards, in 1961, Tesco Leicester appeared in the Guinness Book of Records as the largest store in Europe.

Tesco started to introduce a loyalty card, branded 'Clubcard' in 1995, and later an Internet shopping service. Overseas operations were introduced the same year. Afterwards, Tesco declare the purchase of the retail arm of Associated British Foods, which consisted of the Quinnsworth, Stewarts and Crazy Prices chains in the Ireland and Northern Ireland, and associated businesses, for £640 million. The European Commission approve the deal on 6 May 1997. In addition, Tesco also also have 4 types of supermarket which is Tesco Express, Tesco Extra, Tesco Superstores and Tesco Metro.

Why is it important for a business to be organised

We are going to investigating the organisational structure while narrate the organisation structure that business have. Every company should have their business organised, it makes it easier to operate the business. It is also a must to use an organisation structure. In view of the fact that, it helps to give understandable explanation of the jobs roles and the employee's responsibility that they are allocate to different field. If a business is not organised, it wouldn't  be as efficient as the ones that has the organisation structure, employees will be clueless about their responsibilities.

Organisational structure are what business need to use to ensure they are able to meet their purpose efficiently and successfully. It should be designed to make sure that the task of each employees are equally distributed and fair amount of wages based on their job positions. They also need to establish the lines of control and communication. It is important to develop a organisation structures that a company his organised and unnecessary conflict between employees can be avoided and employees will not able to unambiguously make decision as they wished. Thus, a happy environment for working can be achieved.

Organisational Structure

Tesco is a British grocery operating in several country. It is an established merchandise retailer company.  Tesco headquartered in Welwyn Garden City, Hertfordshire, England, United Kingdom. Tesco follows functional structure.

By using this structure, positions and responsibility will split up into many segments to make sure the work will be complete in a more efficiently and smoother way. The ones on the peak of the pyramid have the highest role and power.It is split up into smaller units with every division being arranged manage under a departmental line manager. It is also accountable for the head of department and then upwards.

The line of control

The line of control show that the employee in Tesco need to report to the senior within the sector that they're working. Tesco's four layers of management inside a store can create irritating bureaucracy with a bad effect on cooperation among managers and slowing down on the flow of information across the management layers. The senior level management needs to consider bringing down layers of management must be finished as soon as possible to generate more pliability and fast flow of information among staff.

Strength of Tesco using Functional Structure

    Nowadays every business or organisation is established in a different way, relying on its needs and goals. A diffusion of different structures are utilised nowadays. One of the oldest and most traditional structures is a functional organised structure. Beneath this system, people with comparable jobs and abilities are grouped collectively into productive units with a hierarchical reporting system. This offers a variety of benefits. One of the benefit of a functional organisation structure is the positive atmosphere, where it offers for skill development. Due to the fact a functional organised structure group of people performing comparable responsibilities that require certain skills, greater experienced or gifted organisation members serve as examples and mentors to individuals with less experience. This leads to continuous growth and improvement inside the organisation from easy day to day interaction, as an alternative of having to depend on specialised seminars or workshops to enhance the best of work popping out of a department.

Secondly a useful structure for agencies establishes a very concrete chain of command. As an instance, a photo department and graphic design branch may additionally fall under the purview of a visual arts department beneath the purview of a marketing department within a larger corporation. A clear chain of command is vital as it creates standard working techniques, hooked up consequences and greater responsibility. In turn, productivity takes place on a greater proficient basis. Thirdly functional organised structures in corporations can accelerate the decision-making process. Generally, group decision-making can sluggish down development on projects due to the numerous perspectives concerned. At the same time as people will nevertheless have differing perspectives under functional systems, comparable expert and educational backgrounds offer more common ground than not, theoretically making the decision-making process much simpler to navigate.

Furthermore, the streamlined hierarchy facilitates greater authoritative decision-making, which calls for far much less deliberation most of the time. The other benefit of functional organised structure is that, functional structures offer a completely specific profession ladder for individuals. As such, individuals reaching a supervisory position are much more likely to have had experience within the tasks they may be evaluating their personnel on. This offers them higher insight and credibility when they make their reviews, and may permit them to provide greater constructive feedback due to the fact they have got a firsthand knowledge of the jobs the individuals being evaluated are performing.

Lastly, the advantage of functional organised structure is specialised results. This is because absolutely everyone in a functional structure is operating in an area of expertise with peers of comparable knowledge, their contributions to the overall goals of a company or employer may be more specialised. Unlike teams where members serve in drastically different capacities, like a graphic designer and copywriter working collectively, group members in a functional organised structure have expertise in comparable regions, and may push each other to greater heights and as in the long run an excellent end result will be proven. It is because the saying goes, steel sharpens metallic, and coworkers in a functional organised structure can sharpen each other's skills.

Weakness of Tesco using Functional Structure

Functional structure is a process to show the relationship with the company. All of the

companies are define its as organisational structure. Most of the organisation choose their

organisational structure based on many factors like: size, geographical spread, industry

sector, legal structure, financial statement and others. Tesco organisational structure can

reflect them as a larger size of business. Tesco Company has two different structure which is

Tesco governance structure and structure at store level. A functional structure have their

advantages will have flaws too. In this situation, what was the disadvantages of Tesco

Company using functional structure?

First of all, the communication of Tesco could lead to lack of focus. This is due to

Tesco Company have separate two department to solve problem which is governance

department, involving different type of committee and another department is store

department, involving food or non-food managing. That's mean when they need to discuss

some problem, they have a hard communication between two departments which can cause a

big problem when they have not running a good communication. Besides that, co- ordination

may take too long. Each structure consist few level or relation. From The higher level to the

lower level, it has some managing in the middle level. For an example, the store manager of

Tesco get a mission from the top level and the store manager have to pass to the food

manager or non-food manager and the last step will pass to the employee, then only the

employee can start the job. So, all this various process will make the co-ordination take a lot

of time. Furthermore, there is a gap between the top and bottom people. A gap can be

consider as misunderstanding between the top and bottom people. Because the people in the

organisational structure are group according to their specific skill, roles or task, and their

entire team only can operate well. But, when the company are arrange the people to the

wrong place or group, which will make a gap between the people.

Functional structure of Tesco Company can directly affect the environment of the

organisation. Therefore, how its affect Tesco Company and what Tesco will loss? First of all,

customer will loss of trust to Tesco. This is due to co-ordination of Tesco Company are too

long. The customer will not get a good response from Tesco, so the customer will not trust

and dislike Tesco. Therefore, the loyal customer will disappear and choose other

supermarket. Besides that, Tesco will lose their market value in Malaysia. Because of Tesco

Company lose market value in Malaysia, and they will decide to take out Tesco from

Malaysia. Therefore, Malaysian will loss a supermarket that can purchase daily goods. Next,

economic of Malaysia also will decrease. When the traveller is a loyal customer of Tesco, and they know Tesco is taken out from Malaysia. The traveller will decide whether travel to

Malaysia or not.


Without doing any research on this point it is obvious that Tesco is one of the largest retailers in the world. The success of Tesco didn't come by chance but it's the result of hard-work, effective leadership and even effective management. Dave Lewis, aka Tesco CEO have always kept a clear vision in central to Tesco's success. All aspects of the business is constantly being monitored by professionals so that they don't fall off track to achieving their new goal being changed yearly. Every decision taken considered these areas to ensure customers, communities, suppliers and staff are treated fairly and with respect. Tesco's main goal is always to keep their customers satisfied with their shopping experience and loyal to the brand. In order to keep the customers satisfied, they recognised that there are many groups of healthy eaters. Tesco got their customers to respond to their survey which is to offer a variety of types of health consumers from enthusiasts, to fashion conscious models, not forgetting pregnant women, and even individuals with food allergies. Wines and beers have alcohol units on them to help consumers have a moderate intake. Tesco have identified major changes in lifestyles in the UK buying public and come up with a range of tailored 'Healthy Eating' products specially designed to meet individual requirements. As Tesco has been so successful throughout the years, they continue to keep their customers as their first priority. Tesco is looking to expand their business and offer more services to other countries and even open more supermarket around the world.

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