Introduction

Tesco is a customer-orientated business. It aims to offer products that provide value for money for its customers and to deliver high-quality service. Tesco wants to attract new customers, but it also wants to keep its existing customers happy. Building customer loyalty is a cost-effective strategy to grow the business. This is because satisfied customers are a good advert for the business.

Tesco has more than a 30% market share of the UK grocery market, nearly double that of its nearest rival. In its 2009/2010 financial year, Tesco earned revenues of 38.6 billion in the UK and employed more than 280,000 people. To keep at the top of its game and to maintain its number one spot in the market, the company needs skilled staff at all levels and in all roles.

Roles in Tesco

Roles in Tesco range from business development, supply chain management and marketing to finance, store operations and personnel management. Each area of expertise requires leadership and management skills. Tesco aims to develop the leadership qualities of its people throughout the organization, from administrators and customer assistants to the board of directors. It adopts a similar approach to leadership development for staff at all levels. This is in line with Tesco's employment philosophy: 'We believe in treating each other with respect, with everyone having an equal opportunity to get on, ensuring Tesco is a great place to work.'

Berian is a bakery manager

Berian manages a team of 17 in a Tesco in-store bakery. One of the key challenges of Berian's job is to ensure his team produces the right products to meet demand at key times. His usual management approach is to allow the team to take responsibility for achieving the desired result.

In this way, the team not only buys into the activity, but also develops new skills. For example, when the bakery expanded its product range and Berian needed to ensure that all the products would be on the shelves by 8.00 am, rather than enforce a solution, he turned to the team for ideas. The team solved the problem by agreeing to split break times so that productivity could be maintained.

Berian's approach produced a positive outcome and increased team motivation. Tesco's leadership framework sets out not just the skills and competencies but also the personal characteristics and behaviors it expects of its leaders. Tesco looks for managers who are positive, confident and genuine, with the capacity to inspire and encourage their teams. A key part of Tesco's programmed for building leaders is encouraging self-review and reflection. This allows staff to assess their strengths and find ways of demonstrating the characteristics that are vital to the long-term development of the business.

Stephen is a Tesco store manager

Stephen is the manager of a medium-sized Tesco store. He has been with the company for over 10 years and his first job was filling shelves in the dairy section. He is currently working towards the Tesco foundation degree. Stephen directly manages a team of around 20 departmental managers, who between them are responsible for almost 300 people.

Stephen's leadership style is usually to allow his managers to make most operational decisions. However, if, for example, an accident occurs in the store, Stephen may take control to ensure a prompt and coordinated response.

The best managers adopt leadership styles appropriate to the situation. Stephen's preferred leadership style is to take a democratic approach. He consults widely as he feels that staff respond better to this approach.

For example, when planning a major stock reduction programmed, he encourages his managers to put forward ideas and develop plans. This increases team motivation and encourages creativity. Some mistakes may be made, but they are used as a learning experience. However, as a store manager,

Stephen deals with many different situations. Some may be business critical and it is important that he responds to these in the most appropriate way. In such situations, Stephen may need to adapt his leadership approach and exert more authority.

Martin is Tesco's Programme Manager for Education and Skills

Martin is Tesco's Programme Manager for Education and Skills in the UK. He has a range of responsibilities associated with people, processes and standards. Martin may use a democratic approach when setting training budgets. Managers can suggest ideas to make cost savings and they can jointly discuss their proposals with Martin. By empowering his managers, he gets them to take ownership of the final agreed budget.

Laissez-faire is at the other end of the spectrum from autocratic. A laissez-faire manager takes a 'hands-off' approach and trusts teams to take appropriate decisions or actions with broad agreed boundaries. For example, Martin might leave an experienced departmental manager to develop a budget. This could be because he trusts that the manager has a good knowledge of the needs of the department and of the business.

Factors influencing leadership style

People at each level of responsibility in Tesco, from administrators and customer assistants to directors, face different types of decisions. Each comes with its own responsibilities and timescales. These will influence the most appropriate leadership style for a particular piece of work or for a given project or audience.

Tesco managers have responsibilities for 'front of house' (customer-facing) staff as well as 'behind the scenes' employees, such as office staff. Before making a decision, the manager will consider the task in hand, the people involved and those who will be affected (such as customers). Various internal and external factors may also affect the choice of leadership style used.

Internal factors include the levels of skill that employees have. Large teams may have members with varying levels of skill. This may require the manager to adopt a more directive style, providing clear communication so that everyone knows what to do to achieve goals and tasks. On the other hand, team leaders may take a more consultative approach with other managers of equal standing in order to get their co-operation for a project. External factors may arise when dealing with customers. For example, Berian may need to use a persuasive style to convince a customer to accept a replacement product for an item that is temporarily out of stock.

Critical success factors (CSFs)

In order to build a sustainable and robust business, Tesco has set out critical success factors (CSFs). These are linked at all levels to its business goals. Some CSFs apply to all employees. These are:

customer focus - to ensure delivery of 'every little helps'

personal integrity - to build trust and respect

drive -to achieve results, even when the going gets tough

team working - to ensure positive relationships in and across teams

developing self/others - to motivate and inspire others.Others are specific to the level of responsibility the person or role has and covers:

analysing and decision making

managing performance

managing change

gaining commitment.

By meeting the requirements of these CSFs, Tesco managers can build their leadership skills & contribute to the growth of the business.

Tesco leaders need to be inspirational, creative and innovative, ready to embrace change and with a long-term vision for achievement.

Effective leaders manage by example and in doing so, develop their teams. Tesco encourages all its managers to lead by example. It requires leaders who can motivate, problem solve and build great teams. Tesco employs people in a wide range of roles and provides a career structure which allows employees to progress through the organisation. Tesco's process of 360-degree feedback allows its employees to reflect on their own progress and improve. Even if someone starts as working in store filling shelves - as did Stephen - they can progress through the organisation into positions of authority and responsibility.

1. In reference to the case of Tesco, evaluate the kind of leadership roles displayed by Berian, Stephen and Martin and the changes they need to make in their respective leadership style as required for the situation.

2. In this Tesco case study, explain what is the leadership and managerial competences that Berian, Stephen and Martin need to develop respectively.

3. What should be the development plans that managers and individuals in Tesco should take up to develop themselves as leaders for achieving the critical success factors set by Tesco.

Given the nature of tasks, roles, and responsibilities in Tesco for each individual, what are the leadership and managerial skills that should be exhibited by the concerned managers given the Internal and External environment changes.