at Cheshunt. Hertfordshire, and the many stores operated by Tesco around
the country. For example, there are two Tesco superstores in Leicester, at
Hamilton and Beaumont Leys, both of which have a Human Resources officer in
charge of personnel administration.
The Commercial Department, directed by John Gildersleeve, responsible for
all commercial operations and technical services.
The Distribution Department, directed by Philip Clarke, responsible for
Supply Chain and all distribution operations. Distribution Director
responsible for products delivery, logistics and transport. Its purpose is
to ensure that Tesco stores have the right products delivered against
agreed delivery schedules and in good condition, enabling the stores to
provide a consistently high level of customer service. Tesco products are
sent to stores from distribution centres around the country. Tesco runs 13
centres and a further six centres are run for Tesco by contractors. A
typical centre covers 300,000 square feet and handles some 50 million units
a year. The centres work around the clock, seven days a week, providing
2,500 deliveries daily, amounting to 19 million cases per week. Tesco
employs 6,800 people in distribution (excluding the staff at the contractor-
run centres), and has about 1,000 tractor units and 2,000 trailers in its
national vehicle fleet.
The Operations department, directed by David Potts, responsible for
operations of Tesco stores in Northen Ireland & the Republic of Ireland. In
May 1997, Tesco completed an agreement with Associated British Foods to
purchase all their supermarkets in the north and south of Ireland. The
purchase price was Ј641 million, giving Tesco a further 110 food stores and
a leading position as a food retailer on both sides of the Irish border.
I have considered each of the major functions of Tesco separately. However,
it is the effective interaction of business functions that is essential to
the success of an organisation in attaining its objectives.
As an example, Tesco has recently introduced a customer-oriented website on
the Internet. Company has developed within this service facility a direct
order system via E-mail – called “Tesco Direct”. Customers can order
their produce/product for home delivery.
There are now many thousands of such deliveries but these all depend upon
the successful interaction of the major business functions outlined
earlier.
In other word, -
. Marketing - responding to the initial enquiry, receiving and
processing an order, distributing the product to customer.
. Administration – adding the customers details to the IT system,
passing on details to other departments within the business.
. Finance – investigating the financial status of the customer, offering
credit terms if appropriate, invoicing for payment.
. Distribution – receiving details of order and meeting the customer’s
demands, liasing with marketing over delivery dates, rescheduling
other production as required.
. Human resources – at a store or warehouse level – ensuring sufficient
employees are available to meet the delivery requirements of the
order, arranging overtime payments if necessary.
Hence these functions help meet the objectives successfully. All Tesco’s
organisation structure works as links of a chain, if one link falls down,
all the organisation will experience difficulty. For example, most
important department of Tesco, I consider, is Distribution department. If
this department fails, products will not be delivered to the store, so
customers will go to another store. Tesco’s success is built on the good
work of each department.
E4
Organisational structure
In many small firms, the owner may have a very hands-on approach and may be
responsible for getting customers, hiring any extra labour and acquiring
other inputs and taking all financial decisions. As organisations grow,
however, their structure takes on a greater significance and those at the
top have to pay more attention to its formal structure and presentation.
The various business functions will show an increasing degree of
specialisation as an organisation expands and people will be employed to
manage and take decisions in specialist areas.
In general, an organisational structure sets out:
1. Major roles and job titles, showing who is in control of the business
as a whole and who manages its major business functions within
departments.
2. The level of seniority of people holding different positions and their
respective positions in the organisation’s overall hierarchy.
3. The working relationships between individuals, identifying
relationships in terms of superiors and their subordinates and
indicating who has authority to take certain kinds of decisions and
who are responsible for carrying out the work arising from those
decisions.
4. The extent to which decision making is concentrated in the hands of
people at or near the top of the organisation or handed down to those
at lower levels of management.
5. The broad channels through which information is communicated
throughout the organisation, indicating the route by which
instructions flow down the hierarchy and how information flows back up
the hierarchy.
Organisational charts
Organisational charts are representations of the job titles and the formal
patterns of authority and responsibility in an organisation.
Business may produce organisational charts for several reasons. First, it
is important that a company reviews its organisational structure on a
regular basis to take account of any changes in the business environment.
A formal organisational chart helps the company to identify where changes
need to be made and to decide the relationship between any new sections or
departments and the rest of the organisation. Business also produce
organisational charts because they allow a company to review its structure
and to identify areas where cost saving changes and improvements can be
made. Organisational charts are useful when changes take place in the
company. It can be updated to take account of any informal developments in
its structure that have been good for the company. A revised organisational
chart is particularly useful for informing people about the new structure
of the company after mergers or take-overs.
The organisational chart can also be used during an induction period to
give new employees a useful overview of the company and their own position
within the structure in terms of their authority and the managers to whom
they are responsible. Although an organisational chart has several uses, it
should not be taken as giving an exact description of how the organisation
actually operates. It does not give the exact nature of job
responsibilities or indicate what levels of cooperation may be necessary
between departments.
Function 1.7: Line authority in a production department.
Chain of command - is the line of command flowing down from the top to the
bottom of an organisation. It passes down the management hierarchy, from
director and senior management levels to those in middle and junior
management positions and eventually to employees in supervisory jobs who,
for example may have authority over assembly line workers or staff
providing services to the organisation’s customers. Organisations with a
long chain of command - with a hierarchy made up of many levels of
management - are said to have tall organisational structures.
Span of control - refers to the number of subordinates a manager is
responsible for and has authority over. Organisations with a long chain of
command will tend to have narrow spans of control. Organisations with a
short chain of command tend to have wider spans of control. This produces a
flat organisational structure because it has a hierarchy with fewer levels
of management.
Flat organisational structures: are generally desirable, there is a limit
to the number of subordinates who can be placed under one superior. Even
very experienced managers who have the qualities and personalities that
promote loyalty and hard work can only be responsible for so many
employees.
Tall organisational structure : some organisations have many levels and
grades of staff with a tree-like management structure and strong patterns
of vertical communication. This means that there are many different grades
of staff between people lower down the organisation and the person at the
top. Tall organisations suffer from problems with bureaucracy, as
information needs to be directed through the correct channels before
appropriate action is taken.
The main features of such a structure are as follows:
6. At each level there are several staff responsible to a person at the
next level up. The process is repeated until the top of the
organisation is reached.
7. In a limited company the person at the top is the Managing Director
who is ultimately responsible for the whole organisation.
8. As the levels within the organisation are ascended, the number of
people at each level decreases and this gives the organisation a
pyramidal structure.
In an organisation with flat structure there are fewer levels or grades of
staff and much more emphasis on communication across the organisation. This
is more likely to be the structure of a small business where everyone knows
each other and works together more as a team.
In some situations, however, a relatively wide span of control may be
acceptable if:
9. The potential disadvantages of a wide span are outweighed by the costs
of employing the extra managers needed to produce narrower spans of
control.
10. Junior employees are engaged mainly in routine work and as a result
the manager is required to make relatively few decisions.
11. Managers are willing to reduce the pressure on their own time by
delegating more decision making and they can identify staff who are
likely to respond well to the extra responsibility.
12. An effective range of financial and non-financial motivational factors
produces a committed group of people who need very little supervision.
13. The group within the span are highly skilled or talented and are given
a great deal of scope to be creative and imaginative in their work.
Line structure
In a line structure, a company is usually organised into functional
departments, each headed by a senior manager, below whom there is a chain
of command. This indicates that there is a line of authority and
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