A detailed account of TESCO and its leadership analysis
Tesco is a British multinational company. It sells groceries and general merchandise to customers. Its headquarters are located in Welwyn Garden City, Hertfordshire, England. It is known to serve millions of customers every week throughout the globe. There is nothing which the customers can’t find in Tesco stores. It is one stop solution for most things the customers intend to buy such as groceries, books, furniture, toys etc. Not only this, Tesco also has its fuel stations, telecom and internet services. Further, it has nearly 7000 stores worldwide and employs 4,50,000 people.
This article curated by our expert academic writers presents an extensive account of TESCO, a renowned British business organization founded in 1919. The article spans the history of TESCO, the leadership style of its top management, and its incumbent organizational structure. A meticulous analysis of the aforementioned verticals of business operations and strategies have been carried out in this post that also takes into account an evaluation of the upcoming leadership changes set to take place in the organization.
Tesco began its journey in 1919. It was founded by Jack Cohen. Initially, Tesco wasn’t the great supermarket as it is now. Instead, it was just a group of market stalls in Hackney, London. In fact, even the name Tesco got christened after Jack Cohen purchased a shipment of tea from T.E Stockwell in 1924. It was formed by combining the first three initials of ‘T.E.S Stockwell’ i.e. ‘TES’ and the first two alphabets of Jack Cohen’s surname i.e. ‘Co’. This way, the company formed its name ‘Tesco’.
Later, in 1929 the first Tesco store was opened in Burnt Oak, North London. It sold dry goods along and Tesco Tea. Then, in 1934 Tesco started to expand. Jack bought some land and built a new warehouse and headquarters at Angel Road, Edmonton, North London. After this, Tesco continued to expand rapidly and soon its stores flooded different areas in London and its neighboring countries. Further, it was in 1958 that the first Tesco supermarket was opened in Maldon, Essex. This was followed by the expansion of Tesco supermarkets in different parts of London and other countries.
Tesco supermarket sells groceries and general merchandise to its customers. It is dedicated to serve the customers with the best products. So, in 2012, it introduced a new product range named – Everyday Value, with a mission to provide high quality and healthier products to the consumers. Even today, Tesco continues to change the customer’s lives for better with its high quality products.
All these things together have made Tesco world’ leading supermarket.
Over the years, Tesco has established itself in different fields other than just selling groceries and general merchandise to its customers. It is through these different subsidiaries that Tesco has further provided employability to thousands of people. Given below is a list of different Tesco Subsidiaries:
Booker Group is a food wholesale corporation. It was found in 1835 by George and Richard Booker. This company sells a wide variety of food products to its customers from frozen food to tobacco. It is estimated to serve nearly 1.3 million customers including restaurants. Tesco acquired it on 5 March, 2018. It did so to access the huge chain of shops and restaurants, the Booker Group served. Further, the acquisition turned fruitful as it resulted in a significant increase in Tesco’s revenue generation. This happened because the takeover made Tesco a leading supplier to 117,000 corner shops, farm shops and 4,40,000 restaurants and pubs. This way, the takeover of Booker Group has proven to be highly beneficial to Tesco.
Tesco Bank came to life in 1997. Initially, it was known as Tesco Personal finance. It was not solely owned by Tesco as the Royal Bank of Scotland also had its shares in it. But, after nearly 10 years of its inception, in the year 2008, Tesco bought the shares of Royal Bank of Scotland. Thus, Tesco Personal Bank was re-christened as Tesco bank. From then on, the Tesco Bank is an entirely Tesco owned subsidiary.
It operates with a vision to help shoppers to manage their money a little better every day. For this, the bank puts dedicated efforts to understand the customers’ needs and then serve them exactly what they need. Further, it takes pride in serving more than 5 million customers with its excellent banking and insurance products.
Tesco Mobile came to life in May 2003 through Tesco’s joint venture with O2. It is a mobile virtual network operator. It is with the inception of this subsidiary that Tesco began its journey in the Telecommunications sector.
Tesco Mobile operates in the United Kingdom, Slovenia, Czech Republic and Ireland. Although Tesco mobile uses the network O2 to operate everywhere else, in Ireland it uses the network operator Three Ireland. Further, Tesco mobile has gained a huge success and serves more than 5 million customers. The company accredits its success to its ever evolving technology and handset ranges.
Tesco Tech Support
In the year 2007, Tesco acquired ‘The PC Guys’, and launched its tech support services by the next year. This subsidiary of Tesco, offers technical support services to customers who either have or are aspiring to buy electronic devices such as laptops and cameras. Further, the Tesco Tech support website offers all kinds of technical support to customers. It does so by offering its customers the access to tools like ‘how to videos’ and Tesco tech support magazine.
TESCO Leadership and Organisational structure
Tesco Board of Directors consists of 10 members. It follows a hierarchical structure, which truly matches the demand of the huge size of the company. In this structure, multiple management systems operate to ensure that everything gets done with perfection. In the case of Tesco, there are 4 levels of management operating within a store.
At the top level of the hierarchical structure, a Regional Manager operates and takes care of the rest of the management systems down the line. He is in charge of ensuring the smooth functioning and operation of the entire hierarchical structure. Next, at the second level, a store manager operates and ensures that everything in store from the goods to the functioning of the employees is up to the mark. Further, at the third level, there are three different managers for different sections of the store namely- Food Trading manager, Non-food trading manager and Personnel Manager. The Food Trading Manager deals with the things happening in the food section of the store. The Non-food trading manager manages the non-food section such as clothes, electronics and other things. The Personnel manager shoulders the responsibility of managing and engaging the employees working at different sections and levels of the store.
Then, at the fourth level, there are two subordinate managers to the food trading manager namely
Key differences between both are
Fresh Food Section Manager
Ambient Food Section Manager
Further, the Non-food trading manager also has two subordinate managers namely:
Electrical Section Manager
Clothing Section Manager
Lastly, the Personnel manager has also one subordinate namely
This is the complete picture of Tesco’s leadership and organizational structure.
TESCO Management team and TESCO Board of directors
Tesco has a diverse board, wherein eminent leaders work together to run the leading groceries and general merchandise company. It comprises 14 members in total. All these influential people together direct the company on the path of success. They share their perspectives, insights and viewpoints with each other before arriving at a mutual decision. Here is a brief introduction to the Tesco management team and board of directors:
John Allan- Non-executive chairmanAppointed- March 2015 Tenure- 5 years
John Allan is known for his extensive leadership experience, skills and knowledge. He has gained his distinguished experience from working across different sectors such as finance and retail. He possesses deep secrets of governance by employing which he leads the board effectively. Before, joining Tesco in March 2015, John Allan had worked for different organizations at different positions. He was the CEO of Excel PLC before Deutsche post acquired it in 2005. Then, he joined the board of Deutsche board as the CFO, in 2007. Further, he also served as the non-executive director of Worldpay group PLC, National Grid plc, the UK Home office supervisory board, 3i plc, PHS group plc, Connell plc, Royal mail plc, Wolseley plc and Hamleys plc and Chairman of London first.
Currently, he has the membership of three committees in Tesco, namely- Corporate Responsibility Committee, Nominations and Governance committee and Remuneration Committee.
Dave Lewis- Group Chief ExecutiveAppointed- September, 2014 Tenure- 5.5 years
Dave Lewis is an extraordinary leader who is an expert in the fields of brand marketing, general management and customer management. Before joining Tesco in 2014, he worked with Unilever. There he rose from the position of graduate trainee to president of personal care within an enthralling span of 27 years. He continues to beacon the company to success with his expertise in change management, business strategy and customer development. Not only this, Dave Lewis is also known for his energetic demeanor, enthusiasm and commitment to serve customers with the best.
Alan Stewart- Chief Financial OfficerAppointed- September, 2014 Tenure- 5.5 years
Alan Stewart is the Chief Financial Officer of Tesco. He beacons the Tesco board with his extensive experience in corporate finance and accounting. He is also a non-executive director of Tesco bank. Before joining Tesco, Alan Stewart worked for Thomas Cook Holding where he was the UK CEO and CFO. Also, he was the group finance director of WH Smith PLC and CFO for Awas and Marks & Spencer plc. He possesses detailed understanding of financial operations and risk management. Thus, he helps the Tesco board take important financial decisions with minimum risk.
Deanna Oppenheimer- Senior Independent DirectorAppointed- March 2012 Tenure- 8 years
Dianna Oppenheimer brings her significant marketing, brand management, consumer knowledge and expertise to the Tesco board. Her immense caliber helps in shouldering her responsibilities as Senior Independent Director with perfection. Before joining Tesco in 2012, she worked with eminent organizations and handled some major responsibilities there. For example, she was the Chief Executive of UK Retail and Business Banking and Vice chair of Global Retail Banking. Further, she was appointed as chair of Hargreaves Lansdown plc in 2018. Along with this, she is also the founder of advisory firm, CameoWorks LLC. Currently, she is the member of three committees at Tesco, namely- Corporate Responsibility Committee, Nominations and Governance committee and Remuneration Committee.
Independent Non-Executive Directors
Tesco has 9 Independent Non- Executive Directors. All of them together offer creative contribution to the Tesco board. Along with this, they also offer their insights and pose constructive challenge to the executive directors. This implies that whenever they feel that something is not right, they offer their critical reviews in a constructive manner and highlight potential issues and threats associated with a strategy or plan. The following are the names of the 9 Independent Non-Executive Directors of Tesco- Mark Armour, Melissa Bethell, Stewart Gilliland, Steve Golsby, Byron Grote, Mikael Olsson, Simon Patterson, Alison Platt and Lindsay Pownall.
Robert Welch- Group Company SecretaryAppointed- August 2016
Robert Welch has major expertise in offering the responsibilities of a Group Company Secretary. This is because before joining Tesco, he has served in other organizations at the same designation such as First Group Plc and Kasakhmys Plc. He is an active member of ICSA’s Company Secretaries’ forum and Association of General Counsel and Company Secretaries of FTSE 1000 companies.
Board Committees of TESCO
The different board committees at Tesco are
The Audit Committee
The audit committee has five members- Byron Grote, Mark Armour, Melissa Bethell, Stewart Gilliland and Simon Patterson. They together offer individual assessments and supervise financial reporting of different processes and audit procedures.
Corporate Social Responsibility
The CSR Committee has five members- Lindsey Pownall, John Allan, Steve Golsby, Mikael Olsson, and Deanna Oppenheimer. This committee ensures that the company and its board members have the required focus on its corporate social responsibility while making profits.
Nominations and Governance Committee
The Nominations and Governance Committee consists of five members- John Allan, Stewart Gilliland, Byron Grote, Deanna Oppenheimer and Alison Platt. It reviews the composition of the board, and then works on the appointment of new members to the board, monitors and plans the execution of the process.
The Remuneration Committee consists of six members- Steve Golsby, John Allan, Byron Grote, Mikael Olsson, Deanna Oppenheimer, and Alison Platt. This committee ensures that the remuneration policies support the strategies and promote the goals of sustainability.
The Executive Committee
The Executive Committee actively works on helping the Chief Executive implement the various policies, strategies and plans formulated in a proper manner. Given below are the names of Executive Directors and senior executives of the Executive Committee.
TESCO Organisation chart
Dave Lewis- TESCO CEO
Dave Lewis was born on 12 March,1965 in Yorkshire, England. He has taken educational degrees from Hills Road Sixth Form College, Trent Polytechnic and Harvard Business School. He is an extremely focused and determined person. It was in 1987 that he graduated from Trent Polytechnic and began working at British- Dutch multinational consumer goods company- Unilever. He worked there for 27 years of his career progressing from a graduate trainee to the President of Personal Care at Unilever. He achieved all this with his dedicated efforts and leadership skills. It was further due to his excellent leadership and management style that Unilever climbed much greater heights of success. Then, in September, 2014 Dave Lewis bid adieu to Unilever and joined Tesco as its CEO.
Dave Lewis is the CEO of Tesco. He joined Tesco and acquired this position in September 2014. It is with his extraordinary leadership that Tesco is soaring high in success. He is a calm and patient human being. He believes in digging deeper into the roots of a problem before posing any solution. So, the first thing he did after joining Tesco, was to invite colleagues to write to him about the things they thought their new CEO should think about and work upon. It was through this thoughtful step that he understood the problems which hindered the company’s growth. Then, he utilized his extensive international consumer experience, expertise in change management, business strategy, brand management and customer development to eliminate the problems and made Tesco rise to success.
He is an actual leader, who believes in moving ahead together as a team. So, he listens to his colleagues compassionately and has an empathetic demeanor. Not only this, Dave Lewis also strengthened the company’s relationships with its suppliers with his compassionate and empathetic personality. He inspired Tesco and its suppliers to work together as one company and do their best to become the most efficient supply chain.
Further, Dave Lewis receives a lot of praise for his decision making ability. All through his years at Tesco, he has taken a number of decisions which have benefited the company. For example, one of his decisions which focused on packing Spanish grown vegetables right there on the site rather than in the UK, increased the shelf life of vegetables by 1 day. This increase in self-life of vegetables is extremely for Tesco.
All these qualities and progresses Tesco has made together give a clear picture of Dave’s excellent leadership.
Dave Lewis leadership style
Dave Lewis has a unique leadership style. He is a visionary and an extremely determined person. It is only because of his determination that Tesco fought the hard times and rose back to success. In the year 2016, Tesco’s revenue fell down to the lowest. This struck the company really hard and it seemed nearly impossible to cover the huge loss. But, Dave Lewis was determined to face the challenge and overcome it anyhow. He set tough, clear targets for his company and left no stone unturned to help his team accomplish them. As a result of the tireless efforts made by Dave and his team, soon Tesco’s sales rose up by 9%. This is a clear example of what an excellent leader Dave is
He is not the one, who just provides his team with a list of targets to accomplish. Instead, he is the one who sets the targets and then beacons his team through every step of the way to accomplish the goals. Further, Dave Lewis is like a wave of energy. He conducts every task in such an energetic manner that all his colleagues also start bubbling with immense energy. As a result, his team works with high productivity and great engagement.
Thus, Dave Lewis is a great asset that all members of Tesco cherish to have. He works dedicatedly to enhance the profit of the company and also treats his colleagues with respect, compassion and empathy. To sum up, he is a kind of leader every organization aspires to have.
Tesco upcoming CEO leadership analysis
Ken Murphy Leadership analysis and how company will move or change under his leadership
Ken Murphy will succeed Dave Lewis as the CEO of Tesco around October, 2020. He is an Irish businessman. He earned his educational degrees from University College Cork and Harvard Business School. He is a man of immense caliber and is known as a seasoned and growth oriented business leader. Earlier, he worked at Boots, the leading health and beauty retailer and pharmacy chain in the United Kingdom and other countries of the world. There he worked as the Chief Operating officer and then progressed to Executive Vice President, Chief Commercial Officer and President Global Brands after Walgreens took over Boots in 2014. According to John Allan, the Chairman of Tesco, “Ken’s values align with the values of Tesco. He has strong strategic and operating skills, which make him the right person to become the new CEO of Tesco.
Further, as Ken Murphy takes over Dave Lewis, he’ll have to work on driving Tesco’s sales growth. This is because Tesco is currently financially secure and stable after overcoming the losses encountered by Tesco accounting scandal 2014. Thus, Ken Murphy will now have to take the secure and stabilized company to newer heights of sales growth.
According to the current CEO of Tesco, ‘Dave Lewis’, “for this Ken needs a strategic perspective, Proper understanding of the brand, its customers and extraordinary interpersonal skills to engage 4,50,000 people working at Tesco, which he already has in him.”So, Ken Murphy has to stand by the expectations of everyone counting on him with his caliber.
The company is thus looking forward to welcoming the new leader and working with him. The new changes that he will bring will surely uplift the profits of the company. Also, a new leader is always believed to bring new energy and freshness to the existing system.
What leadership style does Tesco use?
TESCO works on a democratic style of leadership. It is the company, which welcomes the voice of every employee of the organization and includes their views in the process of decision making. It is with the help of motivated employees, the customers further remain happy with TESCOâ€™s services.
What are the five types of leadership?
There are different types of leadership styles, which are practised by the companies of the world. Five of the most common leadership styles include participative, autocratic, Laissez-Faire, transformational and servant.