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KCB ID: 12128, 12637, 12638, 12797, 10915, 11873, 12774 TESCO ENTERING THE INDIAN MARKET 1.0 INTRODUCTION: Tesco is Europe's second largest supermarket after the French firm Carrefour, and according to Mintel market research in 2004, Tesco is closing the gap. It is the fourth largest supermarket in the world. Tesco operates 2,318 stores in 12 countries around the world and employs 326,000 people, 237,000 of them in Britain where it is the largest private employer. It operates 1,878 stores in the UK, 261 stores in Europe and 179 stores across Asia and plans to open 184 stores worldwide over the next year. 1.1 SIGNIFICANCE OF THIS PROJECT: After grabbing a major share of UK retail market, moving into the international market will be a good marketing strategy as it gives the organization a scope to expand its business horizon, as it had already entered into 12 different nation markets, it will be a great move for Tesco to enter Indian market, where the economy is booming and the opportunities to take a good percentage of retail market is possible. In 21st century, human resource had become the back bone for the companies, they play a vital role in uplifting the organization and at the end of 2003 Tesco had been voted on the top as “the Ability to Attract, Develop & Maintain Top Talent” 2.0 RECRUITMENT: According to Edwin B. Flippo, “recruitment is the process of searching the candidates for employment and stimulating them to apply 1
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TESCO ENTERING THE INDIAN MARKET

1.0 INTRODUCTION:

Tesco is Europe's second largest supermarket after the French firm Carrefour, and

according to Mintel market research in 2004, Tesco is closing the gap. It is the fourth largest

supermarket in the world. Tesco operates 2,318 stores in 12 countries around the world and

employs 326,000 people, 237,000 of them in Britain where it is the largest private employer. It

operates 1,878 stores in the UK, 261 stores in Europe and 179 stores across Asia and plans to

open 184 stores worldwide over the next year.

1.1 SIGNIFICANCE OF THIS PROJECT:

After grabbing a major share of UK retail market, moving into the international market

will be a good marketing strategy as it gives the organization a scope to expand its business

horizon, as it had already entered into 12 different nation markets, it will be a great move for

Tesco to enter Indian market, where the economy is booming and the opportunities to take a

good percentage of retail market is possible.

In 21st century, human resource had become the back bone for the companies, they

play a vital role in uplifting the organization and at the end of 2003 Tesco had been voted on the

top as “the Ability to Attract, Develop & Maintain Top Talent”

2.0 RECRUITMENT:

According to Edwin B. Flippo, “recruitment is the process of searching the candidates for

employment and stimulating them to apply for jobs in the organization”. Recruitment is the

activity that links the employers and the job seekers.

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2.1 ORGANISATIONAL HIRERACHY OF TESCO :

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2.2 JOB ANALYSIS:

2.3 JOB ANALYSIS FOR THE POSTIONS IN TESCO:

In the head office the job would be more on decision making.

In the branch offices and stores the job would be falling into the middle level of

management

The duty managers and team leaders role are intermediary in nature

Though customer assistant is in the bottom line they are the crucial resource for Tesco.

2.4 THE JOB AND CANDIDATE DESCRIPTION:

This process involves the person specification and the job specification. The person

specification can be done using Rodger’s ‘7 point plan’ (Alec Rodger, 1985)

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What is job analysis?

It is the process of analyzing the job. This process is done before advertising the vacancy. The job analysis consists of two parts. They are:

Candidate definition Job definition

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2.5 PERSON SPECIFICATION OF TESCO:

2.6 JOB DESCRIBTION:

Job description is where the personnel applying for the job are given a clear picture of

what is expected of them, to successfully complete the job.

The top management’s main job will be to assess various pros and cons and take crucial

decisions for Tesco. Since the Tesco’s are just now entering the Indian markets, the top

management is expected to take some crucial decisions of how to capture top position

and venture in to other Indian cities.

The area managers job would be to see to if the stores in his area are managed, and are

reaching the customers in an efficient way as well as suggesting various changes or new

ideas to the top management to improve the organization.

Store managers job is to run the store smoothly and in an efficient way and the same as

area managers but in a lower level. He should manage to achieve the target set up for

his store.

Duty managers, team leaders are in charge of day to day happenings and managing the

customer assistants in regard to running a smooth store.

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Customer assistant job would be to reach the customers on personal level and to assist

them when required.

Once the recruitment process is completed, the selection processes comes into play. Selection

is the process of choosing the ideal candidate.

There are many tools used for selection, they are:

Usually in Tesco, aptitude tests are conducted followed by interviews to select the

suitable candidate. But for higher levels of the hierarchy it is the experience that counts the most

and the eligible candidate is interviewed, given a group test and performance test so that right

person is selected for the right job.

A proper recruitment process removes the pressure on the selection process as

requirements of the candidate are clearly mentioned. This will cut down the number of

applications. The recruitment and selection process should be a rational and logical process but

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Selection tools

1. Interviews2. Aptitude tests3. Performance test4. Group test5. Work sample

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it is always not so, because power and influence can impact the process (Robert G, Gatewood,

2007).

2.7 TRAINING AND DEVELOPMENT:

In this 21st century, needs and requirements of the organizations change every day, it is

just not enough to recruit the right candidate for the job, but it is important for the organizations

to train these employees by imparting specific skills so that their potential is used to the

optimum level in benefit of the organization. Development refers to learning opportunities which

helps the employees to grow. Training and development complement each other. HRD’s are

now paying a major role in helping the employees as well as the organization to grow

considerably by training the employees not only technically but also personally. Shown below is

the classic training cycle which is followed in most of the organizations (Thomas G. Cummings,

2008)

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Classic training cycle

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As mentioned before training and development goes hand in hand , and in this ever

Changing and ever growing business world the organisations including tesco had understood

the importance of development of the organisation is through development within the

organisation itself. That’s the reason tesco along with its various tools of training like,

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REASONS BEHIND EMPLOYEE RELUCTANCE TOWARDS TRAINING:

• Employees may be reluctant to changes

• They lack motivation

• They are not comfortable to adapting changes or new technology

• They may have psychological obstacles like ego problems to sit for training

• They may not be interested if training becomes monotonous and is not leading to personality

development

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This training is done at the beginning and employees are refreshed every six

months.Tesco is also laying a platform for the development within the organisations by having

programmes like graduate programmes where the employees can apply for a new job in the

higher position if they gradute and qualify for the job.

3.0 TEAM WORK:

For TESCO entering into the Indian market is a way huge task which can be completed

only by working in groups or teams. Teamwork is defined as the compilation of individual action

to achieve a common goal or purpose, which lowers the individual needs to the group needs. In

essence, every individual in a group keeps aside his/her personal needs and employs to

achieve the objectives of the larger group. Teamwork is essentially needed to complete a multi-

dimensional task. A team approach always motivates the individuals with interpersonal skills, to

coordinate his/her efforts. The success of a team is the impact of integration and involvement

contributed by each person in a team.

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The above figure portrays the various levels of teamwork involved in achieving different

level of goals (Gibson, Terry L. 1980). In order to achieve a larger goal, a high level of

interpersonal skills, integration, and involvement is required. Team members at all levels should

be motivated against the team goals through proper planning, training and providing appropriate

feedback.

Globally TESCO is the third largest super market and it would need an effective team to

promote its product in India. The development of an effective team is the most important and

complicated task in the process of a corporate expansion. The following diagram shows that

how a manager can build an effective team through setting goals, planning the tasks, allotting

the resources, and assessing the performance against the goals.

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Setting a goal which is achievable, clear and proper allocation of resources is the initial

task which requires a high level of interpersonal skills and also sufficient time (Pearce, Sue and

Cameron, Shelia, 1994). A comprehensive planning is needed for the accomplishment of the

goal and there should be an appropriate communication and consultation between the team

members at every level. The managers at each stage should monitor the changes which might

affect the accomplishment of the team goals. The changes that might affect the team objectives

could be at a team, individual, environmental, organizational, legislative, departmental, or

economic level.

3.1 CLASSIFICATION OF GROUPS:

Researchers have found the existence of two kinds of group namely Formal group and

Informal group in every organization (Artemis. C, and Prashant .B, 2001). The groups which are

set up by the organization’s management to execute the organizational goals are called Formal

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Set organizational

objectives

Obtain commitment of

team and individuals

Training and development

activities

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groups. Those groups which are developed by the employees in accordance with their self

needs are called as Informal groups.

The goal of TESCO is to enter into the Indian market, to achieve this objective it should

set up a number of formal groups.

3.2 INTRA GROUP CHARACTERISTICS:

The different kinds of groups that can be employed in TESCO has briefly discussed in

the above section. In addition, a group also has certain characteristics called intra group

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characteristics. It is mandatory for a manager to aware of such group characteristics before

setting up a team/group. The intra group characteristics are Group norms, Cohesion, Group

development, Group think, Risky shift, and Social loafing.

GROUP NORMS:

The set of regulations which appropriately governs the behavior, attitudes, and opinions

of a group is called as Group norms (Hahn, Martin 2007).

They exercise substantial influence over group members

They keep up group identity; regulate social communication and drives estimated

behavior.

The group norms can include dress code, output limits, and social interactions.

Task norms cover the quality standards, work performance, and may deviate from the

organizational expectation.

Maintenance norms support group identity and cohesion

Relationship norms support the attitudes and behavior to outsiders.

The process of obtaining the norms is called as socialization.

GROUP COHESION:

Group cohesion is a factor which determines the togetherness of group it is also known

as team spirit or ‘esprit de corps’ (Artemis. C, and Prashant .B, 2001). Strong group cohesion

will improve the group strength and stability. Weak group cohesion can split the group

togetherness.

The level of group cohesion is given by the size of the group. Generally a small group will have more cohesiveness.

Cohesion can be acquired through gender, faith, skills and experience.

Group cohesion is an advantage in case of complementary goals to the organization.

Group cohesion can produce a positive impact by providing social satisfaction and mutual support.

Cohesive groups may not be opened new members.

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GROUP DEVELOPMENT:

Bruce W Tuckman (1965) identified 5 stages involved in the process of group

development. They are Forming, Storming, Norming, Performing, and Adjourning.

GROUPTHINK:

Irving Janis (1980) proposed a theory on group decision making called groupthink. The

key point of groupthink is that the group members lose their critical evaluative capabilities due to

the tendency of highly cohesive groups. The aim of this theory is to create awareness about the

effects of groupthink on group decision making.

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RISKY SHIFT:

Risky shit is a phenomenon which weakens the ability of group decision making. Risky

shift makes the group radical and increases the willingness to take risk (Johnson, Phillip M.

2001). The groups tend to take more risk than individuals alone. Due to,

Existence of persuasive and powerful risk takers in a group

Due to high degree of ambiguity group member responsibility is diffused

Exhibiting a Macho culture

Some group can be over cautious

De-individuation which makes the group to lose its identity.

SOCIAL LOAFING:

Social loafing is the tendency of group members to underperform particularly where

individual contribution is difficult to identify (Piezon. Sherry L, 2005). It occurs when an individual

does not contribute an equal amount of work and yet shares the groups benefit.

Social loafing can be prevented by,

Developing rules of conduct

Establishing self accountability

Creating groups of appropriate size

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Encouraging group loyalty

Implementing peer evaluation

Evaluating the progress

4.0 LEADERSHIP:

In the past leadership was more associated to the “power of controlling others”. But,

nowadays the concept of leadership has changed a lot. Today we all belong to a knowledge

based society, hence the power to create or innovate a new product or a new process and to

promote it is seen as a basis of leadership.

4.1 IMPORTANCE OF LEADERSHIP:

There are certain teams that have tasted success without a leader or manager, but

many do not. According to Richardo Semler there are certain factors that are more important for

a team than a leader. These factors are equal distribution of profit, democracy, information etc

( Richardo Semler, 1989).There are also groups in which the members act as their own bosses.

These members are called as super leaders, as they lead themselves and such teams are

called as ‘self managing teams’ (Charles C. Manz, 1990).But according to many researchers,

there can be no teams that can be successful without a leader. The leader of a team can in the

form of a coordinator, coach or a facilitator.

4.2 WHO LEADS THE TEAM IN TESCO?

In Tesco the hierarchy of employees can be represented as:

Regional manager

Area manager

TeaTs

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Customer assistant

Team leader

Duty manager

Store manager

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4.3 LEADERSHIP THEORIES

1. TRAIT APPROACHES:

For many years the traits theory dominated other theories. According to Sir. Francis

Galton leadership qualities are inherited characters. Intelligence, self confidence, alertness and

physical characters such as height, body built up, age, complexion etc were believed to be the

traits of a leader.

2. BEHAVIOURAL APPROACHES:

During 20th century it was also found in many studies that, a person who can lead a

situation, can be efficient in leading all the other difficult situations (Stogdill R M., 1948)

RENSIS LIKERT THEORY:

Dr. Rensis Likert studied the human behaviour within an organisation. He researched

different categories of people in different organisation. In doing this study on leadership he

came up with two styles of leadership.

Leadership

Job centered leadership Employee centered leadership

Job centered leadership:

This leader has more power and his main task is to monitor whether his subordinates

are performing properly and are able to complete the task. He also has to supervise if the work

is being done according to the specified procedure. In order to influence the behaviour of his

follower, he uses rewards and power accordingly.

Employee centered leadership:

This leader plays a supportive role. He is more concerned about the employee

development and group development. He believes that this kind of behaviour will help to

increase the performance of the worker and also the organisation.

Rensis Likert also identified four styles of management that will influence the behaviour of the

worker:

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BLAKE AND MOUTON’S GRID MODEL:

The leadership grid model is considered to be the most practical and suitable model for

the organisations 21st century. The main objective of this model is the concern for people

(motivation, trust, safe work environment and fair payment) and concern for work Such as

organisational goals (Peter G. Guy, 2009)

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Management styles:

THEORY X AND THEORY Y:

Douglas McGregor proposed two models called the theory X and Y. These models were

proposed after studying the other behavioral theories in his book ‘The human side of enterprise’

in 1960.

THEORY X:

This theory states that people in general do not like work on their own. They are very

lazy and a close observer to monitor them while working. This theory can be compared to a

watch dog guiding a herd of sheep. Here leader has more power and uses fear and threats to

motivate workers.

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THEORY Y:

This theory states that, people have self interest in doing work and know their

responsibility. And a manager uses encouragement, motivation, help and opportunities for his

subordinates. These qualities help in personal development and the capacity, creativity and

imagination of the workers can be fully utilised (Ann Marriner, 2004)

In a study conducted by Wegner in 1980 on 227 first line foremen, he found that theory x

type leadership was followed on uneducated foremen while theory y on educated field

independent foremen (Lifang Zhang et al., 2006)

SITUATIONAL LEADERSHIP THEORY (SLT):

SLT was developed by Hersey and Blanchard in 1969. This theory tells that different

leaders arise in different situations.

SLT composed of

Task behaviour Relation behaviour

Directive dimension Socio-emotional dimension

Combination of these two behaviours in right proportion

Solving problem

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SITUATIONAL LEADERSHIP MODEL(LL):

This is the graph showing different levels of the two dimensions that can used appropriately.

CONTINGENCY THEORY:

This model was developed by Fiedler. According to him situation is an important factor in

determining the best style of leadership. He believes that the efficiency of the leader depends

upon the ability of him to modify to modify the situation to solve the problems or achieve the

goals (Andrew J. Dublin, 2009)

Leadership

Relationship oriented Task oriented

The least preferred co-worker scale is used to determine the leadership style. The factors that

determine the environmental suitability are:

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Various situational characteristics:

Highly Highly

favourable unfavourable

Moderately

Favourable

4.4 APPLICATION OF LEADERSHIP THEORIES TO OUR PROJECT:

Making a decision about which leadership approach will be more suitable to a very vast

organisation as Tesco is really a difficult process. Moreover leadership till now is an indefinable

term although much research has been done in this area. Each and everyone will have a

different opinion of what leadership is and each organisation will require a leader according their

needs. One best method to determine suitable leadership is to compare and contrast the

various theories according to our needs.

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4.5 QUALITIES OF A TESCO MANAGER:

STORE OR DUTY MANAGER:

Since he is dealing with less or moderately educated customer assistants he should

more descriptive in nature and should define all the procedures and process clearly to

his followers.

He should be able keenly observe the performance of his subordinates because the

customer assistants are those who directly deal with the customers and for a retail giant

like Tesco Customers should be given super importance.

He should be able to appreciate for good work and also correct the mistakes done by his

subordinates in a suitable manner so that it won’t occur again.

AREA AND REGIONAL MANAGER:

They are higher officials who indirectly monitor the activity of the lower level employees

through the store manager. Store manager is answerable for the good or bad

performance of his team.

Since they are dealing with well educated and experienced people like the duty and

store manager they should be more communicative, trust generating, self confident and

analytic.

They should more task oriented as well as relationship oriented.

These are some of the broad requirements how a leader should be in Tesco, let us compare our

requirements with the theories:

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4.6 MOTIVATION:

Like leadership, motivation is also a vast area, in which, many research has been done

and many theories and models proposed. What is motivation basically? Motivation in work place

is the act of activating someone to achieve the goals.

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Motivation Theories

Content theory Process theories Reinforcement theory

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How the motivation should be in Tesco?

Motivation can be in the form of praise.

Economic rewards.

High level of concession on Tesco products.

Benefits.

Paid holidays.

Employee of the month award.

Local travel expenses for a week.

4.7 CONTENT THEORY OF MOTIVATION:

HUMAN RELATIONS THEORY:

Human relations theory was proposed by Elton Mayo based on the Hawthorne

experiment. This experiment was conducted on both small firms and large firms. The production

rate increased in the small firms no matter what the 'rest time’ was, it was increasing when the

rest time was increased or decreased or even eliminated. Small firms also recorded less

number of people who went on a sick leave than in larger ones. Hence Mayo came to a

conclusion that more than money the human relations are the most important factor (John r.

Walker et al, 2009)

MASLOW’S HIERARCHY OF NEEDS:

Abraham Maslow proposed that the unsatisfied needs motivate the people. According to

Maslow the ‘desire to satisfy the unsatisfied needs’ is motivation. The human needs can be

represented as

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Maslow also tells that when one level of needs is satisfied, then they no longer act as a

motivator, and the next level of needs become the motivating factor. Hence Maslow’s theory

tells that needs are unending and act as a good motivation factor. When one need is satisfied

the next need comes into play.

ALDERFER’S ERG THEORY:

The Maslow’s need theory was not able to convince everybody and faced many

criticisms, as a result Clayton Alderfer (1972) proposed an alternative needs hierarchy called

the ERG theory. The whole theory can be represented as,

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Needs

Satisfaction

Needs

Satisfaction

Existence needs

Relatedness needs

Growth needs

Progression

Regression

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Existence needs- are the basic physiological needs such as food, shelter etc.

Relatedness needs- are the social factor of belonging to a group e.g.: friends and teammates.

Growth needs are- those factors which make them feel proud.

HERZBERG’S THEORY:

Herzberg’s motivation-hygiene theory is called ‘The two factor theory’. This theory deals

with certain factors which produce job satisfaction/dissatisfaction, and other factors which

motivate the people (Herzberg, F, 1996)

This theory can be summarized briefly as follows:

PROCESS THEORY:

This is quite different from content theory, as it deals with the behavior of the workers.

These theories help in predicting the behavior of the workers, so that workers may be

influenced.

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The two factors are

Hygiene factors Motivators

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VROOM’S EXPECTANCY THEORY:

This theory is the most widely used theory. According to this theory the level or the

extent of motivation F(M) depends upon,

Where, E is expectancy is the individual’s perception that his effort will affect his performance of

the work.

I is instrumentality, which is the relationship between task completion and reward and V is

valence, which is the value attached to the reward (Nancy Borkowski, 2008)

THE WORK OF PORTER AND LAWLER:

Porter and Lawler’s theory on motivation suggests that motivation not only depends

upon, the perceived effort, performance, reward and the value of the reward but also on the

traits (abilities) of the person and how he perceives his role in completing the job successfully.

4.8 RULES AND REGULATIONS OF REWARDS IN TESCO:

The reward structure should be equitable and perceived to be fair. Different staffs get motivated by different types of reward, hence the need of the staff

should be known to the leader. The value of the reward should match their performance and also their levels of

expectation.

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F(M)=E * I * V

Reward 2nd level of outcome

Performance 1st level of outcome Effort

Expectancy Instrumentality

Valence(Motivation)

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4.9 Suitability:

5.0 CULTURAL ISSUES:

India is definitely a very good choice made by this giant UK retailer because, these two

countries are psychologically compatible with each other. This is because India was a former

UK colony.

5.1 HOW TO MEASURE THE CULTURAL RELATEDNESS?

Hofstede’s 5d is the best method to do this. This model is based on IBM study (Richard Black,

2003)

The five dimensions model

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Some of the other models,

India-UK Hofstede chart:

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PDI- Power distribution index IDV- Individualism MAS-Masculinity UAI- Uncertainty avoidance index LTO- Long term orientation

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Cultural issues - organizational perspective:

Cultural issues: Employee perspective

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6.0 CONCLUSION:

Proper management of people within an organisation has lead to the success of many

organisations. And all the organizations should give primary importance to this area. Many

researchers have done great work on how to deal with people, proper application of the

appropriate theory and innovative thinking will yield good results. Recruitment and selection is a

boundary defining activity which determines ‘what kind of people should join the Tesco’. This

process should be rational as this is going to decide our employees, who will form teams to

promote the Tesco. Coming to the teams, it should be more balanced in nature so that it does

not become dysfunctional. The leader should be more responsible and promote the active

participation of members so that there is no social loafing. India is a country with great cultural

diversity. Hence the stores with in India cannot follow the same strategies as it may be

controversial to some communities. Therefore the stores, their product, management type will

not be the same throughout the country. The Tesco’s success depends upon how it adapts to

the culture and understands the local people. Tesco considers human resource as a unique

resource and gives more importance to individual objectives. In Japan, the hard and soft

approaches are applied differentially which will be suitable to India too.

Finally, Tesco can definitely taste the fruit of success if it overcomes the barriers within

the organisation and in the external environment.

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