The impact of COVID-19 on business management practices (case study: Tesco)

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Introduction
The aim of this assignment is to critically discuss the effects of Covid-19 on the management and, leadership practices in Tesco. According to Rosnizam et al., (2020), Tesco is a British multinational grocery and general merchandise retailer founded by Jack Cohen in 1919. It started as a small market stall in the East End of London, and it has grown to become the third-largest retailer in the world measured by gross revenues. According to Ng et al., (2019), today, Tesco operates in 11 countries, with over 6,000 stores and more than 450,000 employees worldwide. Tesco is primarily a retail business that sells a wide range of products, including groceries, clothing, electronics, and home appliances (Calvo, 2022). The company operates in various sectors, including food retail, clothing, and financial services. The company’s headquarters is located in Welwyn Garden City, Hertfordshire, in the UK. According to Karet al., (2021), Tesco’s organisational structure is designed around its various business units, including Tesco Superstores, Tesco Extra, Tesco Metro, and Tesco Express. The company has a hierarchical structure, with senior executives overseeing various departments and business units. 

The COVID-19 pandemic had a significant impact on business management practices across industries, and Tesco, one of the largest retail chains in the UK, provides a compelling case study to explore these changes. Here’s an overview of the key impacts and how Tesco adapted its management practices in response to the pandemic:

1. **Supply Chain Management**

– **Impact**: Tesco faced disruptions in its global supply chain due to factory closures, transportation restrictions, and surging demand for certain products (like toilet paper, hand sanitizers, and groceries).
– **Response**: Tesco adapted by increasing collaboration with suppliers and diversifying its supply base. They also worked to manage stock levels efficiently, limiting bulk purchases and implementing rationing on high-demand items.

2. **Workforce Management**

– **Impact**: Tesco had to quickly adjust to government restrictions, leading to staff shortages due to illness or isolation and increased demand for online services.
– **Response**: To address these issues, Tesco introduced flexible working hours, hired temporary workers, and provided financial support to vulnerable employees. They also implemented safety measures such as personal protective equipment (PPE), social distancing, and regular sanitization within stores.

3. **Digital Transformation & E-commerce**

– **Impact**: With physical stores facing capacity limits and lockdowns, online shopping saw a sharp increase.
– **Response**: Tesco accelerated its digital transformation by scaling up its online delivery service and click-and-collect options. They expanded delivery slots, increased the number of staff for picking and packing online orders, and invested in technology to manage the surge in online demand.

4. **Customer Experience & Service**

– **Impact**: Customers’ expectations shifted during the pandemic, with more emphasis on safety, convenience, and contactless shopping experiences.
– **Response**: Tesco introduced various measures to improve the customer experience, such as offering priority delivery slots for vulnerable customers, implementing contactless payment methods, and setting up dedicated shopping hours for healthcare workers and the elderly. They also launched new mobile apps and streamlined the website for better service.

5. **Leadership and Crisis Management**

– **Impact**: The pandemic tested leadership and crisis management across the company. Decision-making had to become faster and more flexible to adapt to the rapidly changing situation.
– **Response**: Tesco adopted more agile leadership practices, with a focus on clear communication, transparency, and swift decision-making. Senior management held regular updates and communicated with employees and stakeholders to ensure everyone was informed about the company’s plans and safety measures.

6. **Corporate Social Responsibility (CSR)**

– **Impact**: The pandemic raised the importance of CSR, as businesses were expected to support both their communities and employees during the crisis.
– **Response**: Tesco increased its involvement in community support, donating millions of meals to food banks and charities. They also introduced initiatives to support local communities and NHS workers. Tesco’s CSR efforts during the pandemic strengthened its brand image and customer loyalty.

7. **Financial Management**

– **Impact**: The uncertainty caused by the pandemic affected revenue streams, particularly in non-food segments, while operational costs increased due to health and safety measures.
– **Response**: Tesco implemented cost-cutting measures, focused on core business activities, and prioritized cash flow management. They temporarily halted dividend payments to maintain liquidity and reviewed their investment plans to align with the new business environment.

Conclusion

The COVID-19 pandemic forced Tesco to adapt its management practices significantly, focusing on agility, digital innovation, employee welfare, and supply chain resilience. These changes helped the company not only navigate the immediate challenges of the pandemic but also position itself for future growth in a post-pandemic world.

If you’d like, I can dive deeper into any specific aspect of Tesco’s response or provide more data-driven insights for your case study.