Tesco Group’s Culture and Innovation

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Introduction

The following essay deals with organisational culture and innovation. Organisational culture wields a lot of influence on the organisation and the individuals. The culture may act as a gateway of innovation or a hindrance to innovation. The review evaluates the influences of organisation on the behaviours related to innovation and change in the Tesco Group of companies that is one of the largest grocery stores in United Kingdom with branches all over Europe.

Theoretical perspectives

Organisational culture refers to the actions, behaviours and symbols that characterize an organisation. It is the traditions and precedents of how the organisation operates and functions in terms of how it interacts with the clients, the public and with other organisations. It is also the actions and precedents set by the organisations and handed over to the new members of the organisation (Burns, 1961). The organisational culture is an integral part of the organisation and it influences the manner in which the company operates (Hofstede, 2001).

It determines the kind of the results of the organisation. With the dynamism of the twenty first century, many organisations are finding themselves incorporating changes in their organisation and maintaining the status quo. The following are theoretical perspectives, which explore the role of culture in organisations, and how the cultural patterns differ as per the organisation and how to bring change in the organisation (Schein, 1992).

There are two major theoretical perspectives shaping the organisation culture. The first perspective views culture as an external entity of the organisation such that it is prone to manipulation by the organisation leaders and influences of time as well as technology. This aspect sees the organisation symbols, artefacts and rituals as aspects that may bring change as their meaning and interpretations depend on the individuals in the organisation (Burns, 1961). The second perspective views the organisational culture as part of the organisation and a major aspect of the organisation which is critical and enhances performance of the organisation in matters of time and opportunity. The artefacts, colours and logos of the organisation have a lot to do with the organisation and they determine what the stakeholders of the organisation perceive it to be (Burns, 1961).

Cultures impact on innovation

The organisations culture is very influential on the innovativeness of the organisation as the cultural aspects may hinder or promote the innovativeness and creativity of the employees. The culture contributes to the organisation innovativeness in the following aspects (Morgan, 2006). The first impact of culture is on the goals emphasis. The organisations individualised or collective achievement of goals determines whether the employee participation on innovative projects will be personal or collective (Mullins, 2010). When the results expected are clearly outlined, the employees dedicate their energies towards the achievement of the goals unlike in settings where there is no clarity of the set goals and energies are focused in determining the goals to be achieved rather than how to achieve those goals (Cameron & Quinn, 2006).

Organisations with cultures, which emphasise on the set objectives, communicate clearly and they have proper lines of communication unlike those that are not emphatic on the goals set. The organisations with clear objectives are likely to experience innovative aspects of their employees compared to organisations that are not goal specific (Alvesson & Sveningsson, 2008).

The other way in which the organisational culture affects the innovations experienced in the organisation is whether the organisation rewards system is based on the innovative results (Dorfman, & Gupta, 2004). If the rewards received have basis on the creativity of the employees in their operations, innovative breakthroughs will be a norm unlike in organisations where the rewards do not have a basis of innovative results. This provides the employees with an intrinsic motivation to be innovative (Holbeche, 2006).

How can the leadership of an organisation influence organisation’s culture and innovation

The organisation’s leadership is critical in enhancing and determining whether the organisation will embrace innovation as part of its culture or not. Innovation is usually risky and time consuming and many organisations leadership do not influence the kind of culture needed by the employees (Alvesson & Sveningsson, 2008). For the organisations leadership to embrace innovation, it is imperative for it to ensure that it has well formulated ways of motivating employees. The major role of leadership is to motivate innovativeness by expressing the support to the employees verbally. This unequivocal support allows innovation, which is necessary for the organisation to achieve the goal (Alvesson & Sveningsson, 2008).

The leadership can influence the organisation’s innovation processes positively through provision of the necessary resources vital in the innovation process. The resources needed may be in the form of funds to buy equipment. The process of innovation is risky and losses may be incurred if the management is not experienced. Organisations that do not encourage mistakes and losses incurred through the innovation process will not experience any breakthrough in innovation (Alvesson & Sveningsson, 2008).

The leadership of the organisation also influences the organisation’s innovation through the communication mechanisms adopted by the organisation. (Dorfman & Gupta, 2004). The communication from the leadership of the organisation must have clarity on the organisations expectations on the employee. Leaders who fail to communicate effectively do not encourage innovation in the organisation (Holbeche, 2006). For the organisation to encourage innovation, it is necessary for the leadership to institute innovation based evaluation and reward mechanisms (Amabile & Collins, 1999). The reward system serves as a motivator for the employees to embrace innovation (Dorfman, & Gupta, 2004).

When the organisation leadership uses the transformational style of leadership where the leaders act as guide rather than the controllers, more innovativeness may be experienced than in organisations that embrace the transactional or authoritative form of leadership where only one individual has lots of power (Amabile & Collins, 1999). This ensures that leaders and employees receive feedback on their performance and explore together new ways of improving performance thereby coming up with new processes of making work easier (Brooks, 2009).

The Tesco’s cultural influence on behaviours related to innovation and change

Tesco group of companies is a grocery ownership company that has retail stores in Britain, other parts of Europe, Thailand and the United States of America. The company has a culture, which enabled it to succeed as a chain store supermarket. The following is an analysis of the organisational culture of Tesco.

The first aspect of Tesco to explore regards its organisational structure. Tesco has two organisational structures. Below board of directors are the subsidiary executives in charge of the operations of Tesco in different countries. In addition, below them are the branch managers of various Tesco branches in each country. The other organisational structure is having the branch management where the branches operate independently; they have their own departments and way of operations, which is very important. The independence of the branch has enabled the branch manager to formulate policies that are innovative and geared towards achievement of results (Brooks, 2009).

The other cultural aspect of the organisation relate to the products sold by the organisation. Tesco has a philosophy of selling cheap, as this was the intention of the organisation’s founder. This especially applies to the grocery and food items where it sells at lower prices compared to the competitors. This philosophy has however received numerous challenges because at times selling at low prices calls for compromise in quality. The company has decided to strike a balance between selling low and selling quality products (Troompenaars &Williams, 2003).

The organisation culture of the company especially about the rewards schemes of the organisation are not intended to encourage innovation. They create employee loyalty and reduce labour force turn over. It is important that the organisation look for ways of rewarding the employees because of not only performance but also based on creative performance.

The organisation must formulate task support mechanisms where the employees receive direct support in their innovative activities. The support activities include allocating funds for research on the market trends of the customers and formulating products or marketing programs according to the customer behaviours (Troompenaars &Williams, 2003).

There has to be direct and clear flow of information in the company to ensure that the information received from the seniors is full of clarity in terms of the goals and the expectations that the company has on the employees. In the situation where goals are ambiguous, a lot of time is wasted on determining the gaols to pursue (Amabile & Collins, 1999).

In the information age, integrating information technology as part of the organisation culture is imperative. Tesco’s online market is growing everyday and there is need to harness the ability of the company to handle the increasing number of the online buyers. The company must formulate creative ways of managing traffic on the websites as well as capturing data of the buyers analysing the trend.

Strategies that leaders of Tesco may implement to create appropriate culture

The following are strategies that Leaders of Tesco may use to create an organisational culture that promotes innovation. The first one is that the organisation may incorporate innovation as part of its culture in ensuring there are resources allocated towards innovation in the organisation budget (Hofstede & Minkov, 2010). The allocation of resources allows funding of innovative activities and ensuring that they have the first priority. Innovation is an important part of the organisation and this ensures that the organisation succeeds in its activities. The resources also incorporate allocating time for the pursuit of innovative activities (Burns, 1961).

The other recommendation that the leaders of Tesco need to implement in the organisation to promote innovation is creating innovation myth and stories. The stories are narrations of heroes and individuals who have contributed to the success of the organisation through their innovative engagements (Amabile, 1998). This intrinsically motivates the employees to apply creativity in the daily operations, as they perceive that it is part of the organisation’s culture (Hofstede & Minkov, 2010). The stories act as a guide and testimonials that the organisation promotes innovation (Lewis, 2006).

The innovation processes usually consume time and are risky which makes many organisations not to have innovation processes as part of their culture. For Tesco to incorporate innovativeness in its culture, it is imperative for the leadership to consider having an innovation or research academy. This is where new ideas are evaluated and implemented on a low risk environment to test the effectiveness. The academy may conduct research on the behaviour of employees and customers and look for ways of implementing the strategies (Brooks, 2009).

The organisation must allow or create mechanisms of collective evaluation of performance. The collective evaluation process brings an opportunity for identifying causes of failure and situations where performance may be improved through application of new ideas. The feedback obtained from the evaluation assists the leaders to evaluate their effectiveness as well as look for ways of having the corporate culture that promotes innovation (Troompenaars, 2010).

Conclusion

The future of organisation depends on the ability to innovate. Companies must work to enhance their scope of innovation for them to be at par with the competitors otherwise, they will fail. The Organisation should be innovative as part of the organisational culture. The symbols and the brand of the company must convey an aspect of innovation so that customers can be attracted and retained.

References

Alvesson, M. & Sveningsson, S. (2008). Changing organizational culture. London: Rutledge.

Amabile, T. (1998). How to kill creativity. Harvard Business Review, 76, 77-89.

Amabile, T. & Collins, M. (1999). Motivation and creativity. Handbook of creativity. Cambridge: Cambridge University Press.

Brooks, I. (2009). Organisational behaviour. Harlow: Prentice Hall.

Burns, T. (1961). The management of innovation. London: Tavistock.

Cameron, K & Quinn, R. (2006). Diagnosing and changing organisational culture. New Jersey: Jossey Bass.

Dorfman, P. & Gupta, V. (2004). Culture, leadership, and organisations: The Globe study of 62 societies. London: Sage.

Hofstede, G. (2001). Culture’s consequences. California: Thousand Oaks.

Hofstede, G. & Minkov, M. (2010). Cultures and organisations. New York: McGraw Hill.

Holbeche, L. (2006). Understanding change: Theory, implementation and success. London: Heinemann.

Lewis, R. (2006). When cultures collide. London: Sage.

Morgan, G (2006). Images of oorganisation. London: Sage.

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Trompenaars, F. (2010). Servant-leadership across cultures: Harnessing the strength of the world’s most powerful management philosophy. New York: McGraw-Hill.

Trompenaars, F. and Williams, P. (2003). Business across cultures. Capstone: Chichester.

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