Business at work
p> . It increases the commitment of employees to the company. This may prevent problems such as high labour turnover or industrial relations problems .
. It motivates workers in their jobs. This may lead to increased productivity.
. It allows employees to understand what is going on around them. This can prevent misunderstanding in operations or instructions passed to them.
. It helps to reinforce the values of the organisation and senior management.
. It acts as a control device for management. This can help when setting company strategy.
Figure 1.8: Types of business culture.
Culture, presented within Tesco plc.
Tesco has achieved its position as Britain’s leading food retailer by
offering excellent value and service to its customers. Underlying its
business success is a commitment to upholding certain values, working
principles and culture within the organisation, and to seek continuous
improvement in its ethical performance. As a measure of its achievement to
date, in 1997 the company came top in the Christian Aid league table for
ethical commitment.
Customers.
Tesco must serve its customers by providing the goods they want and the
service they expect. By meeting customer needs better than its competitors
do, Tesco earns profits and creates value for its shareholders.
Customer service is at the heart of Tesco business culture. The base line
is quality and value, but customers also look for a shopping environment
which is attractive, well planned, and enjoyable. They also expect staff to
be helpful, responsive to their needs, and sympathetic to their problems.
Tesco is constantly seeking new ways of meeting customer needs. These
include introducing Customer Assistants dedicated to helping customers at
every point during their shopping, establishing a Customer Service Centre
to deal with customer enquiries, providing facilities for customers with
disabilities, and organising customer question times when Tesco can hear
customers views.
Staff.
Tesco employs 154,000 people in the UK and 27,000 in Ireland and Europe. It
is constantly told by customers that its staff are the company’s best
asset. This means that the company must motivate and train its employees to
give the best possible customer service, and provide opportunities for all
members of staff to develop their talents to the full.
The company believes that the welfare and safety of its employees is of
paramount importance, and applies high ethical standards to protect
workers’ rights and reward employees fairly for their work. Full and part-
time staff have had their benefits harmonised, including salaries, purchase
discounts, pensions and profit-sharing. The company has a national
agreement with USDAW, the shop workers’ trade union.
The approach of Tesco to worker welfare goes beyond its own employees. The
company insists that its suppliers meet certain employment standards in
matters such as fair pay or minimum working ages. Tesco believes it can
play a positive role in influencing working practices around the world.
Like other large companies, however, Tesco recognises that its wider
reputation depends on other things, such as its staff relations, its
attitude to the environment, its support to the community, and its
relationships with its suppliers. Also, as a leading food retailer, the
company must ensure that it provides products, which are safe to eat or
use, as well as giving customers advice on matters such as healthy diets.
Health and safety
Tesco customers rightly expect that their purchases will be safe to eat or
use. The company applies the highest standards in meeting these
expectations and makes special provision for those with special dietary
needs. Following government recommendations on the nation’s diet, Tesco was
the first retailer to promote healthy eating.
Environmental policies
Tesco is committed to protecting the environment and to using its
commercial strength to put its principles into practice. In many cases, the
company’s standards far exceed legal requirements. Its environmental
policies cover matters such as recycling of packaging, working with
suppliers to minimise the use of pesticides, energy conservation, and the
siting and design of its stores. Tesco also works closely with
environmental organisations in areas relevant to its business.
Animal welfare
The company aims to set the highest standards of animal welfare in the
industry, and has introduced a code of practice on the treatment of animals
to which all its suppliers must adhere. The company is also funding
research to improve understanding of animal welfare, and will continue to
promote and implement high standards in order to improve animal husbandry
still further.
Relationships with suppliers
Tesco has relationships with thousands of suppliers in the UK and overseas,
and works closely with these suppliers in order to ensure that products are
of the highest quality and delivered in the best possible condition. By
working in close partnership with its suppliers, Tesco is helping them to
meet its own high standards, not just in efficiency and product quality,
but also in environmental protection, animal welfare and employment
practices.
The community
Tesco is very much part of local communities throughout the UK and is
committed to playing a positive role by working with community
organisations. The company’s community contribution covers support for
education, groups dedicated to helping people with disabilities, and a wide
variety of other organisations. The company has introduced schemes which
enable its own staff and customers to help raise money for good causes.
Each large supermarket retailer in Britain has its own corporate identity
and culture. Often these are very similar, yet each organisation seeks to
present its own individual image. Of the types of cultures that I have
discussed above, I think that Tesco displays many of these differing forms,
especially customer driven or customer orientated, task culture,
competitive culture, innovative culture and positive culture. It is often
said that in business “the customer is King” and this is very true of
Tesco, which operates in a very competitive market. It must be very heavily
customer orientated as satisfied customers will usually regularly return,
but dissatisfied customers may not …. and go elsewhere! It is also very
innovative, always encouraging new ideas and products, e.g. the possible
introduction of car sales. Tesco used to be a food retailer, but now it
also sells clothing, electrical goods, books and stationary, computers,
mobile phones, etc. It has a very positive culture as it is always
searching for new opportunities for its staff and also its retail products.
Its success is now a good indicator of how this blend of business cultures
has led to market growth and market leadership.
E5
Communications
The efficient communication of information is particularly important for
organisation that operates in competitive markets. Relevant and accurate
information is needed to plan and manage efficient production, marketing,
distribution and cost control. Information – whatever it is nature and
purpose – must be communicated as efficiently as possible.
All people in an organisation are part of an information flow – they are
involved to varying degrees in providing and receiving information.
However, there are three main levels at which information is required:
. operational level
. middle management
. senior management.
Operational level
At the operational level – on the factory floor, in the office or at
premises where consumer services are provided – there are charge hands and
supervisors who must ensure that work is planned and carried out as
efficiently as possible. In a factory, for example, a supervisor giving the
task of overseeing the production of a particular item needs to know:
. the quantity to be handle
. the completion date
. the availability of plans and machine capacity
. the operations to be performed
. the kinds of labour needed and its availability
. the materials and components required to produce the order.
The kind of information assists the supervisor in planning and controlling
he work and it is essential for decision making at an operational level.
Activities at the operational of an organisation produce data that will be
processed to provide much of the information required by middle management.
Middle management
Middle management needs to know how efficiently work at operational level
is been carried out and the extend to which any resources under their
control are being used to achieve the organisation’s objectives. Much of
this information relates to the productivity of labour, the utilisation of
machine capacity and the rate at which materials and other inputs are being
consumed.
Middle management also needs a great deal of financial information about
the costs of the resources consumed in relation to output. This financial
data can be used to determine and monitor total costs, revenues, profits
and the achievement of business objectives for example, it will be possible
to identify any fall-off in productivity or rise in labour costs which
might contribute to arise in unit labour costs or to detect the excessive
use of materials which might suggest an increased in wastage.
Senior management
So far, I have mainly considered the need for information that is processed
and generated from sources within the organisation. At senior level,
however, information from internal sources often has to be supported by
information derive from external sources to help managers ensure that the
resources and their control are used as efficiently as possible in
achieving business objectives. Decision making at senior management level
has a major influence on the success or failure of the organisation. Any
decisions concerned with controlling the organisation, assessing its
performance, planning its future and initiating action must be supported by
all relevant information.
Decision making at senior level in areas such as business strategy and
planning requires information about broad trends rather than detailed
information needed to make many routine decisions on day-to-day matters at
lower levels of the organisation. Senior management need information about:
. developments in initial costs and sale trends
. overall profitability, and the respective contribution of each part of the business
. capital requirements, and availability of internal funds and the cost and sources of external capital
. manpower and skills requirements
. forecast of demand of the organisation’s markets
. the impact on business of any changes in the economic, political, social and legal environment.
Superior
Prep Line manager Prep
group group
Staff Subordinates
Staff
relationships relationships
Figure 1.9: Communication network
Communication channels and methods
The communication channel refers to the means by which information is
communicated. The actual choice of communication channel depends upon a
combination of:
. the need for an immediate feedback or response
. costs
. speed and urgency
. the number and location of the people who need the information
. the degree of confidentiality and security required
. the desired degree of formality
. convenience
. the complexity and amount of detail to be conveyed
. the type of information to be communicated
. the need to keep a record of the communication.
Business information can be communicated in many ways. Methods include:
. written reports
. instruction manuals
. letters, circulars and memoranda
. material posted on notice board
. in-house magazines and newspapers
. sheets of figures
. information on standard forms
. graphs, charts, drawings and photographed
. video, television and other audio-visual techniques
. meetings and interviews
. public address announcements
. electronic mail
. network messaging
. fax
. telephone and voice mail
. pager device
. video conferencing
Whatever communication method is used, the information sent should be
relevant and avoid superfluous comments and unnecessary detail. The
information communicated to a supervisor on a factory may have to include
an exact description of the operations to be carried out. In contrast, much
broader information is supplied to middle and senior management. Senior
managers may only require general indicators and a broad description of the
developments that need to be considered when assessing the organisation’s
performance, setting objectives and deciding upon strategies.
Exception reporting
To ensure tht the information provided to management is relevant, clear and
concise and makes effective use of managers’ time, some organisations
stipulate that managers are only provided with dada relating to exceptional
developments. Middle management, for example, may only receive information
connected with performance measurements that deviate by more than an agreed
percentage from their targets. The information dealing with exceptional
performance should also be supported by brief statements of the internal
and/or external factors that may have contributed to any exceptional
performance. Exception reporting makes more effective use of the time and
skills that middle management devotes to decision making and to initiating
and controlling actions.
Downward information flows
A downward information flow describes the provision of information by a
superior to an immediate subordinate. It is, therefore, concerned with
internal communications as part of a formal communications channels. A
downward information flow can cover:
. issuing instructions on the tasks that have to be carried out by a subordinate and setting objectives, such as the target data for completing the work
. requesting information concerning the area of work for which subordinates are responsible
. communicating the organisation’s procedures, working methods and practices and the rules and regulations
. given feedback on subordinate’s performance in relation to his or her objectives and targets
. motivating people and encouraging attitudes that raise productivity and improve quality.
Some information will not come from an employee’s immediate superior but
from other parts of the organisations. For example, when employees first
start work they receive general information about the structure and goals
of the organisation from the personnel department. However, for information
that relates to work undertaken by the subordinate, the communication
channel should be from superior to immediate subordinate.
Upward information flows
An upward information flow along a vertical information channel is from a
subordinate to a superior. This might be feedback from a downward flow or
the communication may originate directly from subordinates. An upward
information flow can cover:
. responding to a superior’s request for information on some aspect of work for which the subordinate is responsible
. informing managers about the subordinate’s own performance, problems or their personal ambitions in relation, for example, to promotion or opportunities for developing new skills.
. passing on information about other employees in the subordinate’s section and relations with sections with which there is a direct link
. submitting ideas on improving working methods and solving work problems.
In the interests of effective working relations. Most organisations expect
subordinates to report formally through their immediate supervisor or
manager. However, they are likely to communicate in formally with managers
higher up the hierarchy and in some situations, such as grievance
procedure, may go directly to a more senior manager than their immediate
superior.
Horizontal information flow
In addition to upward and downward flows, there are also horizontal
information flows between people of the same status. Because many
operations within an organisation must work very closely together, there
must be formal arrangements for the exchange of information between
sections and departments. The production department, for example, must have
close contact with the purchasing department when it is considering changes
to materials and components or introducing advanced machinery and
equipment. Production staff also has to exchange information with employees
in requirement, training, marketing and transport.
The quality of information.
The essential characteristics of an efficient information system are that
the right people receive the right information at the right time. The
information communicated should be:
. internally relevant to the needs of the recipient
. accurate and concise
. comprehensive, avoiding a time-consuming request for extra information
. clear – it must be presented and communicated without ambiguity or possible misunderstanding.
The person receiving the information must have confidence in the ability of
the sender and, therefore have the confidence to take decisions based on
the contents of the communication. The person sending the information must
be confident that the receiver has the ability to understand, use and take
effective decisions based upon the information supplied.
This information system, the communication media and the kind of
information provided should be review on a regular basis. The information
system should be adjusted to take into account any developments within the
organisation such as changes in its organisational structure or management
style. This review should also take into account external factors such as
advances in information technology.
Informal communications
Vertical and horizontal information flows should be clearly defined. If
individual are not sure about from whom the y should receive information
and instructors, this can lead to the growth of information flows which are
not part of the formal system. If there are two information flows running
at the same time, there can be confusion and a fall in productivity. These
informal systems can generate alternative sources of information and create
a situation where the different levels of management receive inconsistent,
inaccurate or even conflicting information.
Many businesses, however, accept that some tasks would not get completed if
they only used formal channels of communications and chains of command. It
may be necessary to short cut the formal system if a matter is very argent
or a clash of a personalities is creating communications problems. Some
informal channels may be tolerated if groups of workers have formed good
working and personal relationship outside of the formal channels. Informal
channels may even be the most effective way of communicating some kinds of
information.
All organisations have a grapevine, which communicates information
informally through personal contact between employees both vertically and
horizontally throughout the organisation. The grapevine can be a quick way
of communicating information to the workforce as a whole as it tends to
operate by word of mouth. It can be used to pass on important information
before an official announcement and, depending upon the feedback generated,
the company may modify its intentions before the formal announcement.
The problem with using the grapevine is that information can get distorted
or exaggerated as it is passed on. Proposal to cut a workforce, through 10%
natural wastage and 5% redundancies, may soon get changed to 15% compulsory
redundancies as it spreads through the grapevine. This may be useful as the
actual announcement may prove to be much more acceptable than the distorted
version on the grapevine.
External communications
Efficient internal communications are important, but an organisation’s
external communications are vital. Its business prospects will be seriously
threatened if it neglects its external communications. An organisation
needs to communicate externally with:
. customers and clients
. suppliers of materials, parts, machinery, other physical inputs and business services
. local, national and European authorities that deal with matters such as taxation, planning permission, environmental protection, competition law, investment grants, trading standards, and health and safety
. pressure groups concerned with issues such as consumer protection, animal welfare, environmental matters and the welfare of law paid workers
. the media and the general public on matters that can either damage or enhance the company’s public image.
Organisation must ensure that the quality of their external communications
is as high as possible and select the most effective media for
communicating information. It is obviously important that organisations
maintain effective communications with their customers, and most businesses
invest heavily in market research promotion to attract and keep customers.
Many companies now recognise the importance of providing a communication
channel which allows customers easy access to the company. Some companies
advertise a customer care telephone number or an E-mail address on their
packaging or promotional literature. The customer care section will be
stuffed by people trained in the kinds of communications skills needed to
deal with customers making complains. Larger companies may employ
specialists press officers and public relations officers to handle dealings
with the media, pressure groups and the general public.
Organisations relying on other companies for materials and components can
find themselves in financial difficulties of their external communications
lets them down and orders are not placed at the right time. This may led to
shortages of parts and materials, and production may be held up. Relations
with suppliers may also be affected by poor verbal communications skills
which can cause confusion of the exact nature and delivery of an order. It
is for this reason that any changes to an order made verbally should be
supported by some form of written or electronic confirmation.
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