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Summary B.P3: Explore the organisation structures, aims and objectives of two contrasting businesses.
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B.P3: Explore the organisation structures, aims and objectives of two contrastingbusinesses.
In this report, I will be investigating how two contrasting businesses, Tesco a public limited
company and save the children a non-profit organisation differ in structure, aims and
objectives.
All organisations need an organisational structure to operate at maximum efficiency; a
structure enables a business to communicate effectively across multiple different functional
areas, i.e. marketing, finance, human resources etc. providing a steady workflow.
Organisational structures have two main features of in which the structure operates;
- A chain of command: The route information and instructions flow from executives to
managers to employees; it clarifies who is answerable to whom in the business.
- Span of control: The amount of subordinates a manager has responsibility for in the
chain command.
A chain of command, which supports in providing guidance to employees through levels of
authority within a business. A chain of command provides operational efficiency because all
employees understand who reports to who.
The span of control measures the number of subordinates report directly to a manager,
subordinates on the lines of communication are there to report to staff members higher on the
hierarchy and are accountable to their line manager for their actions. The instructions are
entrusted to delegates who then inform and provide task for subordinates to complete.
Tesco:
Organisational and management structure: Hierarchical and centralised structure.
Tesco is a public limited company with over 4,000 stores, an average revenue of £56 billion
and over 300,000 employees worldwide, so to effectively handle all its operations Tesco uses
hierarchical structure (commonly referred to as “tall structure”).
A hierarchal structure is used by large businesses and has over three levels with an
authoritarian management style. Tesco possibly has over five levels due to number of
functional areas and employee within the business. The Tesco head office’s structure will
differ from the branches structure, a branch will not have a marketing department in its store
compared to the head office, but the marketing team may distribute information about new
seasonal posters down a chain of command to the managers, who then inform the store
colleagues (subordinates).
The main advantages of hierarchal structure for Tesco is it has a clear line of communication,
it ensures that communication is passed down clearly and effectively despite the size of the
business, enabling Tesco to maximise profit with experiences seniors providing effective
business decisions. Furthermore, it increases productivity for employees because a hierarchal
structure enables for promotions and it provides clear directive as to who employees should
respond to in the business.
However, this structure has drawbacks due to bureaucracies. The taller the structure, the
slower the communications and decisions-making due to instructions, requests and
information having to be sent up a long chain of command and back down for final decision.
, For Tesco’s this may cause loss of profit because a task that requires quick action may take
days to be completed.
Moreover, to ensure that all Tesco stores handle a negative situation swiftly it uses a
decentralised form of management, meaning the head office allows decisions to be finalised
by managers and subordinates down the chain of command in a branch. Finally leading to an
increase in profit for the specific branch and increasing employee motivation because they
feel engaged within the businesses operations.
Below is an illustration of Tesco’s organisations structure:
CEO
Director of Head of
Director of Director of Director of Reasearch and
Human Customer
Finance Marketing Operations development
Resource services
Accounts Interviewing Digital Marketing Engineering Planning
manager HR Assistance Quality team Production tam
department marketing Team assisstant department department
Purchasing Training
manager department
Functional areas:
Functional areas are the departments within a business Tesco has multiple functional areas
who are all interdependent, and each area has to communicate with another to ensure all
business operations are running efficiently.
Responsibility of functional areas:
Marketing: The department in Tesco is responsible for designing and promoting posters of
Tesco products across multiple stores in the UK. The marketing area is crucial because Tesco
operates within a highly competitive market meaning it has to ensure that it effectively
captures consumer attention through clever marketing. The marketing department
communicates with finance regularly because it has to discuss budgets and return on
spending.
Finance: The department is crucial for Tesco’s success as it manages the business revenues
(over billions of pounds annually) and redistribute it to departments to set budgets on salaries,
marketing campaigns etc. The finance area devises financial forecasts to present in exchange
for on loans and investments from internal and external stakeholders, i.e. shareholders
(internal) and government (for tax purposes).
Human resources: Tesco’s human resources department is central to its success due to the
number of stores that needs staff across the UK. The human resources team responsibilities
include hiring, training and maintaining the safety of all Tesco employees. Furthermore, the
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