Mohan Kumar Injeti – s10003822

Dilshan Jayalath – s10002845

Introduction:

Business in other words means a commercial activity or an economic system in which

goods and services are exchanged for one another or money, on the basis of their perceived
worth. Every business requires some form of investment and a sufficient number of
customers to whom its output can be sold at profit on a consistent basis.

To further explain the above said definition of business, the leading supermarket
conglomerate giant TESCO has been taken as an example and in the following lines we will
discuss the various factors of and which affect a business.

Founded in 1919 by Jack Cohen, Tesco has quite an interesting story of upbringing. Jack
Cohen began to sell surplus groceries from a stall at Well street market, Hackney in the east
end of London. In 1924 the name TESCO first appeared. Jack Cohen bought a shipment of
tea from T.E. Stockwell. He wanted an influence of the tea supplier on his company so he
used the first 3 letters of the suppliers name (T E S) and the first two letters of his surname
(C O) thus founding TESCO. Tesco opened its 1st store in Burnt Oak, Edgware, Middlesex in
1929. And since then there was no looking back as it was floated on the London stock
exchange in 1947. It was then named as Tesco stores (holdings) limited.

In 1956 the first self service store opened in St Albans (operated as Tesco metro until
2010) and also the same year the first supermarket in Malden was opened. After its
formation in the 1920’s during the 1950’s and 1960’s Tesco saw a rapid growth and grew
organizationally also through acquisitions until it owned close to 800 stores. This included a
purchase of 70 Williamsons stores(1957), 212 Irwin’s stores(1960), 200 harrow stones
outlets(1959), and the victor value chain(1968) which was sold to be jam in 1986.Though
originally Tesco was specialising in food and drinks, it later diversified into many vast areas
such as clothing, electronics, financial services, telecom, home, health, car, dental and pet
insurance, retailing and renting of DVD’s, CD’s, music downloads, internet services and
software.
Carroll’s model:

According to Carroll “The history of business suggests an early emphasis on the economic
and then legal aspects and a later concern for the ethical and discretionary aspects”.
Economic obligations are therefore seen to be tempered by ethical responsibilities or social
expectations and norms. Discretionary responsibilities go beyond ethical responsibilities and
include philanthropic measures such as corporate sponsored programs for disadvantaged
workers. In 1991, Carroll presented his corporate social responsibility model as a pyramid
and suggested that, although the components are not mutually exclusive, it “Helps the
manager to see that the different types of obligations are in constant tension with one
another”. Social responsibilities of Tesco will be describes as follows in respect with Carroll’s
model.

Corporate social responsibilities (CSR):

Can be described as the “economic, legal, ethical, and discretionary expectations that a
society has of an organisation “.
Economic:

The economic responsibilities refer to the society’s expectation that the organisation will
produce goods and services that are needed and desired by the customers and sell those
goods and services at a reasonable price. Organisations are expected to be efficient,
profitable, and to keep shareholders interests in mind with the basic 4 responsibilities which
are:

1. Profitability

2. Transparency

3. Non discrimination

4. Sustainability.

Tesco has a wide range of products from a different brands and makes, and also its home
brand products which are cheaper than most of the displayed established brands. But still
the profits are staggering and the transparency maintained is excellent. Tesco applies the
same financial criteria to all of its customers, suppliers, and employees. Direct stakeholders
benefit from this because the company makes decisions on the financial merit rather than
the biases and references of the decision makers, and by sustaining on a very large scale
business, Tesco has completely proven that it heeds to all the economic responsibilities and
expectations by the society. Tesco and supermarkets in general, are sometimes criticised as
being too big or too remote. But by growing, learning and applying what they have learned to
running their shops better, they are able to reduce prices, provide thousands of new jobs,
and help their suppliers by providing a growing market.

Legal:

Tesco is bound by all the laws, regulations and standards passed by the UK government. It
adheres to all the legal aspects of running a business. As with any large corporation, Tesco
was involved in litigation usually from claims of personal injury from customers, claims of
dismissal, and other commercial matters. But Tesco has come out clean and shines on its
glory of being a company which stands by rules and legal ethics.
Tesco abides by all the legal responsibilities relating to the expectation the organisation will
comply with the laws set down by the society to govern competition in the market place.
Tesco stands by the thousands of legal responsibilities governing almost every aspect of
their operations, including consumer & product laws, environmental laws, employment laws.

Ethical:

Ethical responsibilities concerns societal expectations that go beyond the law, such as the
expectation that organisations will conduct their affairs in a fair and just way. This means that
the organisations are expected to do more than just comply with the law, but also make
proactive efforts to anticipate and meet the norms of society even if those norms are not
formally enacted in law.

Customer:

At the heart of all they do, is delivering cheaper, better products and providing more choice
for the customer.

Staff:

Tesco is the UK’s biggest private sector employer with over 250,000 people and 116,000
international workers. Tesco creates jobs and generates taxes and indirectly by helping to
attract further inward investments. Tesco does business with nearly 2000 own brand primary
suppliers in over 98 countries, with a complex range of relationships from individual farmers
and growers to processors and manufacturers.

Philanthropic:

Tesco has made a commitment to CSR in the form of contribution of 1.87 % of its pre tax
profits to charities/ local community organisations.

In 1992, Tesco started a “computer for schools “scheme offering computers in return for
schools and hospitals getting vouchers from people who shopped at Tesco. Until 2004, 92
million GBP worth of equipment went to these organisations. Starting during the 2005/2006
football season, the company now sponsors the Tesco cup a football competition for the
young players throughout UK. Over 40,000 boys alone have took part in the 2007/2008
competitions. In 2009 Tesco’s “change for good “for advertising was trade marked by
UNICEF for charity usage. Tesco is committed to reducing the energy consumption and
usage of green house gases. In 1997, Tesco made a voluntary commitment to reduce the
energy consumption per square foot by 35% by 2006. But by 2005 they already achieved
their target, almost an year earlier. Committed to minimising waste production throughout the
operation, Tesco constantly working with suppliers to ensure that they give customers high
quality, competitively priced products that are produced to the high environmental and
welfare standards the society demands. In all Tesco has brilliantly performed all its services
to keep in mind the philanthropic needs of the society.

Stakeholders:

Stake holders are a certain group of people that have an interest in a business. Each group
have their own interests in the business. Tesco has many stakeholders. They are as follows:

* Customers

* Employees

* Government

* Shareholders

* Local Community

Now explaining what interests each group has:

Customers:

Customers are the sole reason businesses operate. Without a customer there wouldn’t be a
market or business.

Employees:

prospective employees are very important for a company. There is no way a company will
run without employees to run it.

Government:

Government can also be included as a stakeholder because the company acquires licenses
and permits to run its business. It also pays taxes to the government which helps the
government run the society in turn.
Shareholders:
shareholders are the actual owners of the company. The management only runs the
company on their behalf.

Local community:

The local communities are benefitted by a company because it provides jobs and also goods
at a very good price. Most of the companies get their raw material supplies from local
farmers and suppliers etc to reduce costs of transportation and storage. So this is in a way
benefit for the local community.

Summary:

In summary, a business operates within an environmental context that is constantly

changing in response to a range of factors, many of which are outside the direct control of an
individual business.

Tesco operates in a fast-changing competitive environment that encourages customers to

get services in response to the changing global trend, where price will be a factor, forming
the economic base of Carroll’s model.

A successful business must also comply with current legislation and is likely to take
advantage of modern technology. Tesco is an example of an organisation using the triple
bottom line concept to ensure it is profitable, legal and respects the environment. Tesco also
practices philanthropy, increasingly expected by society. Supermarket shopping is often
categorized as a self-service retail environment. For supermarket retailers who want to build
relationships with their customers, it’s essential to track their levels of ‘satisfaction’ with the
key elements of the supermarket environment. From the retailer’s perspective the aim is to
minimize the reasons for complaints and dissatisfaction and establishing a track of direct
feedback from customers about their reactions to those key elements.

Personal reflective:

Mohan kumar injeti : s10003822

In my opinion Tesco has started off nominally as a single store and now is one of the largest
supermarket chains in the world. It has reached this stage through continuous perseverance
and customer satisfaction. This achievement can be very well appreciated and also the fact
that should be noticed is there cannot be so much success of a business without customer
satisfaction. So we can gauge the number of people and customers who are happy that it
reached this stage now. It has the best products and at a very cheap price which it has
maintained like any other long known brand. The technology and advanced methods used
by Tesco are just worth wondering. For example their self checkout counters are a very good
and latest way of giving customers a real shopping experience and feel that the customers
are at the top level of a business without which it is impossible to run. And with the various
and vast regions of goods and services all provided under a single shelter it saves the
customer from running around for different things. Finally i conclude by saying that Tesco
has indeed made a mark in the hearts of customers.

Madhubasha dilshan jayalath: S10002845

Tesco Company has the most number important items for everyone. There are home goods,
Electronic items, computers(lap tops), liquer, etc..... . Because as i think they have not the
better advertesmants. The Tesco director board should have to develop their advertising
department as soon as well. And also it has low price of goods after the siensbury. So most
of people want buy the low price goods. So Tesco company should have to reduse their
price of goods.

And also The Tesco Company should spread their shops for every towns.Because
after that they can earn some extra income. So these are the my ideas about the Tesco
Company.

And also i should say about the group assiments, That is very important to all
students like us. Because they can shair their ideas with group members, And we can work
as a team, So these reason the group assiment is very usefull for us....

References:

Polinsky, M.j.(2005) ‘European Journal of Marketing’ ,Marketing stakeholder

analysis,Vol.39,No.9/10,p.1063

Walker,P.(2001) “Consumer Law”.4th ed.London:Cavendish publishing Limited.

Poppers.D,and Rogers.M( 2004 ) Managing Customer Relationships,

John Wiley & Sons,Inc,New Jersey

Baken,J, (2004), The Pursuit of Profit and Power, Constable, NY, 2004

Bowen, HR, (1953), ‘Social Responsibilities to the Businessman', Harper & Row, NY

Bushill-Mathews P, (2003), ‘Commission Report on Corporate Social Responsibility', EU

Publications. The Hague. 28 April 2003.

Corporate social responsibility and environmental statement, (2007),

Herrmann, S, (2006) ‘CSR Model Implementation From School Stakeholder Perspectives'.

Journal of Education for Students Placed at Risk, Vol. 11 Issue 3/4, p279-294

Kurki, Anja; Boyle, Andrea; Aladjem, Daniel K., (2006) ‘Implementation: Measuring and
Explaining the Fidelity of CSR Implementation'. Journal of Education for Students Placed at
Risk, Vol. 11 Issue 3/4, p255-277
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