BMAN24442 Strategic Management Assignment Sample
Here’s the best sample of BMAN24442 Strategic Management Assignment, written by the expert.
Introduction:
As per Ma, Ding & Hong (2010), Strategic management acts as milestone for companies. It helps companies in measuring its performance i.e. where they are and where they want to go. All employees of the company work as a team for the success of strategic plans.
The effective strategic management involves consideration of all stakeholders of the organization like shareholders, creditors, customers, employees etc which is vital for organizations.
STEP 1
Strategic planning
Strategic planning is crucial for companies for remaining competitive as well as sustaining and growing business and revenue. Strategic planning provides the aim to the organization as to what targets to be achieved in next five, ten or fifteen years. Apart from that, the planning also includes finalization of activities for achieving those set targets (Plimmer, 2010).
The process of finalizing strategic plans involves different stages like identification of prevailing issues in the organization, consideration of vision and mission of the organization, SWOT analysis of the organization, setting of goals, prioritization of activities as well as plans for monitoring as well as controlling (Analoui and Karami, 2009).
Strategic planning Principles
Finalization of vision statement:-
Vision statement of the organization offers clear picture about the future of company. A well-defined vision statement explains what organization wants to achieve in next ten or more years. It reflects how organization could achieve success. The vision statement provides the reason behind existence of organization (Dess and Lumpkin, 2009). All strategies of the organization must be directed towards achievement of vision of the organization.
Finalization of mission statement:-
Normally, mission statement of an organization is described within twenty words and explains the big aim of the organization. Company’s mission statement explains its various associations and what company represents.
Setting of Goals: –
Each activity of organization aims for fulfilling goals. Goals are based on mission statement of the organization. Goals clarify the requirement of the organization and its target for next 5 years. In the view of Drummond, Ensor and Ashford (2012), goals are usually set for 5 years. Every goal of company is of strategic importance and must be achieved in right order and right time. The human resource of the organization works in synchronization for attaining the set goal.
Set Objective: –
Basically, objectives could be seen as sub set of goals which are for short term and make it easy for the organization to attain its goal together. According to Hollensen (2011), objectives of organization must be SMART i.e. Specific, Measurable, Achievable, Realistic and Timely.
Strategic challenges or problems that Tesco has faced
In UK, Tesco is one of the biggest retail chains. Tesco holds 2nd position after Wal-Mart in eth world. Tesco was founded in 1919, at Hackney, London by its founder Mr. Jack Cohen. Currently the employee base of Tesco is higher than 500000 workers and organization is having operation in twelve countries. The product portfolio of company is highly diversified ranging from groceries to clothing, to electronics etc. (TescoPlc, 2017).
Though, Tesco is having large market share in the market of UK, still organization is facing tough challenges in sustaining its market position due to increase in competition. Tesco is faced with issues related to slowdown in its growth rate that is reducing year by year. Other concerning issues before the management of Tesco during recent times are mentioned below-
- Diversification of business at large level has made management difficult
- Raw material prices are increasing leading to increase in the price of products offered by the company.
- Already heavy investment made in club card
- In-effective financial planning (Tesco, 2017)
- Different ethical issues
In addition to above listed issues, there are certain small intensity issues which could turned into major issues if not handled timely and appropriate. One of such issues is rise in the level of wastage which is raising concern of carbon emission. In future, if the problem is not resolved quickly then it might result in financial burden on company in the form of penalty under Environment Act. Moreover, surviving in competitive market is becoming touch for company as some of its stores in European markets have become sick units.
Diversification in the field of telecom business and financial services has become a major concern for business of Tesco during recent past. Tesco has made an investment of around £30 million in its financial segment such as services of banking and insurance. However, according to company officials, diversification into financial services would be rewarding in future.
The financial services offered by Tesco Plc. are wide like retail banking, personal finance, home loans, vehicle loans, credit cards etc. which has the potential for increasing the market share of company in this sector too. Moreover, Tesco bank is totally managed by Tesco Plc. which enjoys the brand value attached with the group. According to Wallop (2018), the recent financial problem of the company was owing to the global economic slowdown and not because of performance of the company.
Although, in the view of Ander and Kapoor (2010), huge investment in relation to development of financial products such as insurance and mutual funds has proven to be poor decision of the company.
The above graph clarifies that there is difference between the expected growth by the company and its actual performance, reflecting that company is finding it hard to compete in the market in its banking services which might be due to more specialization of other banks in comparison to Tesco Bank.
Also, the number of financial products of Tesco Bank is less in comparison to other banks. In addition to that, organization failed in maintaining the banking sector standards leading to failure in meeting requirements of customers (Wrenn, 2018).
Another decision of company to go international has created challenges for company to survive in international competitive markets (Bingham and Eisenhardt, 2011). Also, introduction of schemes like selling specified products and receiving their payment in EMIs, although, has resulted in rise in sales figure of company during Mar, 2012 to Dec 2013, however, the decision has affected the profitability of the company in later years as many of the customers made default in making payment of their EMIs and Tesco has ended up with heavy stock of used geysers and used TVs which also affected its market position (Tesco, 2015).
STEP 2
Distributive Leadership
In the opinion of Collis (2010), distributed leadership could be regarded as an advance version of leadership in which there is change in focus from behaviors and attributes of leaders (such as traditional traits, transformational theories and situational theories and styles of leadership) to an advanced and more practical perspective, under which leadership is seen as a process performed collectively resulting from the involvement of various actors (Cool and Schendel, 2010).
This perspective of leadership is explained as ‘ Distributed leadership do not denote action of a person for others or grouping of actions by which people makes contribution towards the organization or group, in fact, it denotes activities performed by the group under a relationship , in place of actions of individuals (Hall, 2011)
Requirement of Distributive leadership in Tesco
Since Tesco has entered into high level of diversification of business, distributed among different geographical locations, the role of leaders within the organization has become more critical. The management of the organization is required to effectively manage diverse and distributed workforce.
For that, employees required to be properly trained and empowered for gaining required skills for performing routine operations and moving ahead as per strategic plans of the company (Wrenn, 2018). The process of decision making also required to be decentralized in Tesco for quick and effective decision making and managing such large organization in effective manner. It is important for big organizations like Tesco to trust and motivate its employees.
The management must make employees responsible for taking actions for fulfilling requirements of customers. For achieving this, it is crucial for management of the organization to concentrate on local talents for resolving local issues faced by global retail giant.
Instead of providing instructions to managers working in different locations, the management is required to empower them to make their own decisions and take risk for adjusting the working environment as per the requirement of local culture.
At present, Tesco is following transformational style of leadership. In this style of leadership, leaders promote innovative thinking through providing encouragement to his/ her team and helping them to undertake calculated risks.
Through organizing workshops as well as concentrating on focused group, managers assist their teams in resolving complex situations (Wallop, 2018). Such organization believes that through promoting intellectual creativity as well as curiosity, company could nurture personal expression and assist team in resolving issues in innovative ways.
However, in the absence of well-defined procedures for accepting and acknowledging failures, the transformational leadership style might assist in working on new ideas but with no or little merit. Therefore distributive leadership is effective in solving issues if leadership power is distributed in the organization to different people at right positions, at right time and at right place for managing the operations of business (Wrenn, 2018).
In the model of distributed leadership, the accountability as well as responsibilities of leaderships is shared among employees having relevant expertise and skills, rather than a single leader enjoying all powers (Goksoy and Ozsoy, 2010). For instance, in schools the model of distributed leadership concentrates on development of different leaders with the aim of enhancing quality of learning and teaching and getting better results.
Under distributed leadership , the process of decision making is also decentralized among people working in collaborations and willfully share their roles and responsibilities with others having knowledge as well as skills which could complement own skills. The focus of distributed leadership is on participation, empowerment and cooperation whereas in traditional approach of leadership focus is on control and command.
As explained by Drummond, Ensor and Ashford (2012), distributed leadership is not a leadership style like transformational leadership but in fact it is a method. It requires efforts from different stakeholders and low in dividing relationship between followers and leaders. It is a part of daily interactions and routine activities among employees throughout the company, irrespective of their position in the organization.
Advantages of applying DL in the organization
The advantage of distributed leadership is rise in initiatives, spontaneity and creativity and thus empowering participation to influence the outcome. Although, under this the accountability relies with the leader and a shield is provided to participants from the risks. In the opinion of Wrenn (2018), the collective nature of distributed leadership increases the importance of clear vision.
Distributed leadership is more responsive to the requirements of markets/customers-
- Improved quality of decision making, i.e., leads to stronger sense of ownership
- Enhances the quality involved in the process of decision making by creating sense of ownership.
- Enhances financial transparency within the organization
- Encourages entrepreneurship, leading to generation of new ideas and initiatives.
- Promotes motivation and enthusiasm among employees.
- Helps is managing complex demand in the market as participants become stakeholders.
- Offers opportunity to analyze the work and role of leaders for more improvement.
- Encourage knowledge sharing.
Conclusion
Tesco is facing problems because of diversification of business and prices of raw material with respect to its strategic planning. It should be focused on strategic planning. Through applying DL in the organization Tesco can avoid issues which have been raised because of diversification and globalization of its operation. Distributed and skilled workforce would accomplish objectives of the organization in effective manner.
References:
Tesco, 2017 http://ir.tescocorp.com/phoenix.zhtml?c=118467&p=irol-irhome
TescoPLC, annual report, 2015 http://ir.tescocorp.com/phoenix.zhtml?c=118467&p=irol-irhome
Analoui, F. and Karami, A. (2009) Strategic management in small and medium enterprises – Page 74, London: Thomson learning
Ander, R. and Kapoor, R. (2010) “Value Creation in Innovation Ecosystems: How the structure of technological interdependence affects firm performance in new technology generation,” Strategic management Journal, 31, pp. 306-333
Bingham, C. B. and Eisenhardt, K. M. (2011) Rational heuristics: the ‘simple rules’ that strategists learn from process experience, Strategic Management Journal, 32, pp. 1437–1464.
Collis, D. J. (2010) “A resource-based analysis of global competition: The case of the bearings industry.” Strategic Management Journal, 12, 49-68.
Cool, K. and Schendel, D. (2010) ‘Performance differences among strategic group members’, Strategic Management Journal, 9(3) , pp. 207-223.
Dess, G. and Lumpkin, G. (2009) Strategic Management: Creating Competitive Advantages. 6th London: McGraw-Hill Education.
Drummond, G., Ensor, J. and Ashford, R. (2012) Strategic Marketing: Planning and Control, 4th London: Palgrave Macmillan
Goksoy, A. and Ozsoy, B. (2010) Business Process Reengineering: Strategic Tool for Managing Organizational Change an Application in a Multinational Company, International Journal of Business and Management, 22: 256-264.
Hall, R. (2011) “The strategic analysis of intangible resources” Strategic Management Journal, 13, 135-144
Hollensen, S. (2011) Global Marketing: A Decision-Oriented Approach, 6th London: FT Prentice Hall.
Ma, Y., Ding, J., & Hong, W. (2010). Delivering Customer Value Based on Service Process: The Example of Tesco.com. International Business Research, 3(2), 131-135.
Plimmer, G. (2010). Scoring points: How Tesco continues to win customer loyalty. Journal of Revenue and Pricing Management: Special Issue: AGIFORS 2009 Conference, 9(4), 377-378.
Wallop, H. (2012). com to split customers according to wealth and age. [online] Telegraph.co.uk. Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9356088/Tesco.com-to-split-customers-according-to-wealth-and-age.html [Accessed 25 April 2018].
Wrenn, E. (2012). Is Tesco Online safe? Supermarket giant comes under scrutiny after Twitter users spot ‘security holes’ on website. Daily Mail. [online] Available at: http://www.dailymail.co.uk/sciencetech/article-2182071/Is-Tesco-Online-safe-Supermarket-giant-comes-scrutiny-Twitter-users-spot-security-holes-website.html [Accessed 27 April 2018].
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