Unit 1 Business Environment Assignment Solution – Tesco Plc

Unit 1 Business Environment Assignment Solution – Tesco Plc


Diploma in Business

Unit Number and Title

Unit 1 Business Environment – Tesco Plc

QFC Level

Level 4


The organisation that is selected for this report is Tesco. It is a global supermarket chain having its presence over 13 countries with 4, 70, 000 workforce. The headquarter is located at England in UK. It is a public organisation which used to sell their shares in the London stock exchange and currently the value of the share is 166.40p.The unit 1 business environment assignment solution – Tesco Plc explains about various roles and responsibilities of Tesco Plc regarding satisfying the needs and requirements of different stakeholders (Palmer & Hartley, 2008). The assignment also shed light over the role of national environment and the impact of the fiscal policy. In UK Tesco is having the highest market share nearly around 28% as per Kantar market research. The convenience as well as standard quality is the key potential of Tesco towards the customers. It is the human resource department who plays a major role for utilising the resources effectively in order to attain the goals of the business. The employees are the crucial part in their business and for that the management provides support to their employees by inviting them to the decision making process. For example, the employees of the closed stores in UK are transferred to other stores, providing 12 weeks off schemes, apprenticeships schemes declares the organisation to consider the human relation approach.                     

Task 1

Critically analyse the internal and external environment for your chosen organisation, making reference to appropriate literature sources.

The organisation that is selected for the case study is Tesco which is an UK based retail supermarket chain. The mission of Tesco is to serve the customers effectively in the terms of quality and easy living by their products and enhanced services. Thus the slogan for Tesco is “Serving Britain’s shoppers a little better everyday”. The business environment is the external and the internal factors which influence the decision making process of the business. Thus it is necessary to identify the factors in order to assess the  business enterprise.  External environment can be identified by conducting the PEST analysis in the following way:

  1. Political factors (P): Political factors involve the legislation, political environment of the nation, stability of the administration etc. Recently UK has separated from European Union by forming the state Brexit which will influence the decision making process of Tesco. At European Union, a common platform is there that is CARTEL where the organisations operating in EU offers same price and other practices to reduce the discriminatory offerings in the market. But with this separation new rules and regulations will influence the operation and policies of Tesco. Apart from that Health and Safety Act 1974 brings certain procedures which are necessary to be implemented in the workplace for ensuring the safety to the employees and customers (Boyle, 2015). Equality Act 2010 brings certain prohibitions in the areas associated with discrimination towards the employees.
  2. Economical factors (E): The demand, profit level, cost associated with the operation, standard of living, inflation level, Government initiatives are mainly fall under the economical factors. The rate of inflation has gone down from 0.5% to 0.2% which increases the purchase motivation of the customers and that is favourable for Tesco. With the globalisation, the integration of the economies of the countries brings positive impact in the organisation (Craig and Campbell, 2012). The supply of the New Zealand lamb to the operation of Tesco in UK is due to the lower price and high level of availability which reduces the cost associated with the operation at Tesco. Apart from that increase in the rate of the VAT up to 20% maximises the operating cost for the organisations operating in UK. Unemployment rate of the country has also decreased which is around 5% (Bailey and Budd, 2015). Employment opportunities of Tesco are also positive where the figure has increased from 315, 829 to 335, 061 within the year 2016.
  3. Social factors (S): The trend is showing that the customers are preferring the bulk shopping and convenience shopping due to the shortage of the time (Guay, 2015). In order to meet the demands, Tesco provides packaged food items, online stores to the customers. Packaging and labelling the foods are visible. The students or the unemployed youths are showing interest by the schemes like apprenticeships and flexible working provided by Tesco as well as permissible by Government or the educational institutions.
  4. Technological factors (T): The advancements in the technology update the work process of Tesco. The management installed updated technology in the organisation to measure the employee’s performances by collecting the online feedbacks. Maintaining and updating the stocks are done electronically which help the inventory management to make a fair deal with the companies. Self-service systems are there in some store which reduces the labour cost of Tesco.

From the PESTLE analysis  it is observed that there are different factors which influence the management of Tesco. Under the political factors, the legislations like Health and Safety Act  indicates the secured environment in the workplace and for that the management have to conduct the risk assessment practices which include certain cost and time. But at the end of the day the motivation of the employees will increase which will boost the productivity level. Secondly the Equality Act 2010 prohibits the discrimination on the areas like selection, training, promotion etc. it is very much possible that there is a negative relationship among some employees which will violate the legislations and for that the organisation like Tesco have to pay the penalties as per the judgement of the employment tribunal. Improvement in the economical situation of the country will definitely bring some positive inputs in the organisation but on the other hand globalisation may increase the level of competition which is creating huge pressures for the employees in order to achieve the target. Social factors are mainly the trends and developments observed in the society. On this perspective the scenarios of flexible working practices hampers the group formation process which is reducing the bond between the employees. Technology brings smoothness on the process but the network issues, absence of face to face communication can reduce the level of efficiency among the employees at Tesco. Sometimes correct analysis is missing due to the online system of gathering the responses. Internal environment can be identified and analysed from the Porter’s five forces in the following way:

  1. Threat of New entrants: New entrants are always the threat to the company as they approach the market in a way to attract the people effectively towards them in the terms of price, offers, service etc. (Freeman, 2010).  In this respect the employees can also shift to the new companies for developing their future scopes. Thus retaining them efficiently by the management is needed.
  2. Bargaining power of buyer: The customers will only accept the product when the value will match their expectations. From this point, the resources of Tesco like human resource need to be well trained and competent to attract the customers for a long term span.
  3. Threats of the substitute: If the substitute product is less price and give same utility then it is the common tendency of the customers to move (Freeman, 2010). In this respect the stores like Aldi, Lidl are creating the difference which attracts the customers towards them.
  4. Bargaining power of supplier: The suppliers used to bargain with the organisation in the terms of dealing price. It is the procurement department of Tesco who must handle and manage the suppliers or the farmers in order to reduce the bargaining power.
  5. Rivals: Lastly it is the competitors like Morrison, Sainsbury who are near to the market share of Tesco and for that Tesco needs to create a unique value by utilising the resources effectively.  

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Task 2

Using appropriate concepts and models of strategic Human Resource Management critically evaluate a variety of human resource policies and procedures

Tesco is the retail supermarket chain where the human resource plays a significant role in the terms of strategy implementation. Approaching the customers efficiently, responding the customers in an appropriate way, timely delivery of the services, attaining the customer’s queries, maintaining the inventory as well as sales, preparing the budget, leading and motivating the team are fall under the responsibilities of the employees or the human resources in the organisation. All these responsibility needs to be done correctly in order to maximise the level of productivity. The management of the organisation devise a strategy in order to utilise and retain the best resources for creating and delivering a unique value to the customers and also to achieve the competitive advantage. The human resource policies and the procedures of Tesco considers the employees in a central part of the decision making process in order to implement the strategy successfully.

  1. The management of Tesco is committed and determined to pass all the necessary information about the change that can affect their way of working in order to remove the misunderstandings and doubts. The communication process is transparent and clear which involves the feedbacks from both the end (Tesco, 2014).
  2. The training and development session organised by Tesco for increasing the level of competency is also included in the new code of conduct started from the year 2015.
  3. The top management has devised a procedures related to the  health and safety  by establishing a standard. Smoking in the premises or drinking alcohol is strictly restricted. Risk assessment is done periodically by the management in order to detect the risk and to overcome the measures like fire safety, manual handling techniques etc. All the accidents are reported to the concerned authority as per the RIDDOR.
  4. Equal opportunities are given to all the employees irrespective of the caste, colour, gender, race and religion. Fair treatment to all the employees in the organisation is given importance for reducing the negative working environment. Fair judgements are given in the areas like appraisal, compensation and promotion by forming a committee. Harassments, violence are strictly prohibited in the workplace by the top management. If any employee or any member of management body found to be guilty under the Disciplinary board then punishments are like termination, suspension is also there (Tesco, 2014).
  5. Flexible working hours or apprenticeships programmes are there in order to provide convenience to all the employees working with Tesco.
  6. 12 weeks off leave schemes for the employees who are serving more than 1 year at Tesco.
  7. Internal recruitment as well as external recruitment is observed in Tesco. Talent plan is there which fill the vacant place with the suitable employee. For external recruitment policies, the management of Tesco give the advertisement at their websites in the careers section. The applicants needs to fill the application and send their CV to the web portal and accordingly the recruitment board screen the applications based on the parameters they have designed on the basis of the related post.

These are the basic HR policies and the procedures followed by the management of Tesco for developing the human resources effectively in order to meet the demand of the market. The models which can improve the efficiency level of the employees as well as bring effectiveness are Dave Ulrich model and Human Resource Planning model. Firstly is the Dave Ulrich model which integrates the employees or the people, process, strategies and operational focus for increasing the efficiency of the organisation. The model gives four aspects which is necessary for the HRM department of Tesco to adopt it in the strategic planning process. The positive side of this model is the integration of all the areas which are necessary to frame the HR policies and procedures supportive for the employees as well as for the organisation’s success.


The four dimensions are as follows:

  1. Human resource department must act as a Strategic partnerin order to align the human resource activities with the business objectives. For example, establishment of the benchmark for the employees which will automatically influence the organisation for achieving the targets (Harzing and Pinnington, 2010).
  2. Human resource department should be a Change agent who will identify the important modifications that are needed to be implemented in the organisational process and for that clear communication to the employees are needed.
  3. Being an Administrative expert, the human resource department should adopt a cost leadership mechanism by following the succession plan or referrals for reducing the operational cost of Tesco. Along with that perfection in maintaining the administrative work is needed to support the important stakeholders as well as the top management for assessing the current situation of the organisation (Harzing and Pinnington, 2010).
  4. As an Employee champion, human resource policies and the procedures must encourage the employees towards the productive performance and also to maintain goodwill of the organisation. This will reduce the absenteeism, labour turnover, confusions and conflicts of an organisation.

Another model that is  Human Resource planning model can be used as a strategic human resource tool for increasing the level of operational efficiency in the organisation like Tesco. Human resource planning is an integrated approach to identify the skills gaps by aligning the organisational goal and current status of the organisation in order to implement the sound techniques (Boselie, 2010). Forecasting the demand of the human resources by matching the supply is the important feature of this model. Apart from that controlling and measuring the level of efficiency can also be done which are the positive side of this model.

Human Resource planning model                  

At very first stage, the management needs to identify the current state that is the level of competencies in the terms of target achievement. The target achievement should be measured with the business objectives of Tesco for analysing the gaps. The gaps will address the requirements that are needed to achieve the targets. Then at the second stage demand forecasting is needed to be conducted with the help of the techniques like Delphi method, trend analysis etc. Delphi method is the opinions drawn from the relevant groups who can give an idea about the demand of the human resources (Boselie, 2010). The considerations will be the financial resources, technology etc. After that determination of the supply is needed to be done by assessing the unemployment percentage, Government initiatives like the trainings, education. Succession planning or the replacement charts are the techniques that are followed to assess the supply. After balancing the demand and supply, shortages or surplus figures will be arrived that will involved the measures like recruitment or terminations, layoffs etc.

The positive side of the existing HR policies and practices is based on the human relation approach where the employees are given focus in the terms of welfare and benefits for increasing their productivity. The integrated approach to increase the productivity of Tesco is not observed from the existing HR policies and procedures. The policies should align the organisational goal with efficiency level of the human resources which was missing from the overall policies of Tesco. Addressing the skill gaps and devising a strategy is also not mention in the existing HR policies and procedures.Thus from the two models of the Strategic HRM as discussed align the business objective with the current state of the organisation for establishing a plan which will smoothen the operational process as well as bring efficiency in the organisation like Tesco. Thus it is recommended to follow certain models related to the strategic human resource management which can integrate all the functions by aligning the business objectives for enhancing the organisation to achieve the competitive advantage as well as efficiency in the workplace.

Task 3

Make recommendations relating to the attraction and retention of talent to support the future performance of your chosen organisation.

Talent management is the process which anticipates the requirement of the human resources and accordingly a structured plan is being designed to fulfil the requirements. It is a systematic process that saves time as well as cost for the organisation. Tesco is the market leader in the super market chain of UK having around 28.1% of the market share (Kantar World Panel, 2016). In this perspective it is the duty of the management to retain the first position by attracting and retaining the best talent or resources of the organisation. The concept of attracting the people has been changed as per the market research reports. It is not only the role profiling and organisational fit rather it is the expectation of the employees form the employers which is needed to be identified in perspective of talent attraction. The new strategies for attracting the talent can be done in a following way:

  1. “Supply chain” mentality should be followed by the management of Tesco in order to enhance the accuracy and phase out the irrelevant surplus in hiring the people by giving quick reaction exactly to the need (Farndale, Scullion and Sparrow, 2010).
  2. Market research is needed to be done to understand and identify the roles that the potential candidates are hunting for.
  3. Offering the job to the candidates should be transparent where the terms and conditions must be mentioned clearly otherwise in future there is a chance for misunderstandings.
  4. “Employee value proposition” should be focus where the organisation must give opportunities to grow as well as flexibility in working (Mello, 2014).
  5. Potential networks must be created using the platform social media by engaging the talents using the techniques like writing blogs or scenarios of the business.

It is also necessary to retain the talents in the organisation which can reduce the cost of hiring and also enhance the level of familiarity. The new strategies can be:

  1. Employee engagement is the foremost approach that can be applied by allowing them to participate in the decision making process by asking them to share their opinions and feedbacks.
  2. A clear mission, vision, and growth steps should be demonstrate among all the employees in order to enhance their motivation level as well as they will get a meaning to stay in the company.
  3. A culture of innovation should be encouraged among the best talents in order to encourage them to give creative ideas (Farndale, Scullion and Sparrow, 2010).
  4. Mutually beneficial contracts should be given importance where both the organisation and employees will be at win-win situation. For example offering the promotion or increase in the pay structure should be interlinked with the market condition and the inflation level of the economy (Mello, 2014).

Apart from that there are different barriers which are needed to be focused while implementing successful talent management in the organisation. The challenges are as follows:

  1. Cultural differences can be the challenge due to the increased level of diversity in the workforce. It is due to the ageing population which brings deficiency in the labour supply and that influence the organisation to utilise the available talent (Mellahi and Collings, 2010). The management of Tesco needs to focus on the different groups other than the dominant group for achieving the business objectives.
  2. External demands like the legislation of the Government can be a challenging factor for implement the talent management plan. Globalisation has reduced the distance between the countries by integrating the economy as well as culture apart from the Government norms which are different from one country to another. As Tesco is a global organisation having its presence in 13 countries thus legislations are also different which have to be considered before implementing the talent management plan in the organisation.
  3. The organisational practices are different in one country with another due to the perspective of the international trade. Thus a global template for  Tesco Plc  is needed to be developed for supporting the standard talent management plan in the organisation.

Thus it is needed for the organisation Tesco to attract and recruit the best talents in order to develop a unique value proposition for the customers as well as employees to increase the profitability and productivity respectively.


  • Tesco needs to consider the internal and external environment while designing the Human resource strategies.
  • All the policies and the procedures related to the Human resource management needs to be integrated and align with the business objective of Tesco in order to meet the shortages or surplus of the workforce.
  • Attracting the talents require a wide research about the factors which influence the candidates about their expectations. Retaining the talents by aligning their needs with the economic situation can motivate them to stay in Tesco.  

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From the report it has been clear that Human resource management plays a vital role in the areas like decision making process, engaging the resources, attracting and retaining the talents, addressing the shortages and excess of the workforce in the organisation, measuring the efficiency level by addressing the skill gaps etc. Thus it is necessary for the management to devise a strategy which must involve the human resource management for increasing the efficiency as well as productivity.


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