Business at work

they only used formal channels of communications and chains of command. It

may be necessary to short cut the formal system if a matter is very argent

or a clash of a personalities is creating communications problems. Some

informal channels may be tolerated if groups of workers have formed good

working and personal relationship outside of the formal channels. Informal

channels may even be the most effective way of communicating some kinds of

information.

All organisations have a grapevine, which communicates information

informally through personal contact between employees both vertically and

horizontally throughout the organisation. The grapevine can be a quick way

of communicating information to the workforce as a whole as it tends to

operate by word of mouth. It can be used to pass on important information

before an official announcement and, depending upon the feedback generated,

the company may modify its intentions before the formal announcement.

The problem with using the grapevine is that information can get distorted

or exaggerated as it is passed on. Proposal to cut a workforce, through 10%

natural wastage and 5% redundancies, may soon get changed to 15% compulsory

redundancies as it spreads through the grapevine. This may be useful as the

actual announcement may prove to be much more acceptable than the distorted

version on the grapevine.

External communications

Efficient internal communications are important, but an organisation’s

external communications are vital. Its business prospects will be seriously

threatened if it neglects its external communications. An organisation

needs to communicate externally with:

. customers and clients

. suppliers of materials, parts, machinery, other physical inputs and

business services

. local, national and European authorities that deal with matters such

as taxation, planning permission, environmental protection,

competition law, investment grants, trading standards, and health and

safety

. pressure groups concerned with issues such as consumer protection,

animal welfare, environmental matters and the welfare of law paid

workers

. the media and the general public on matters that can either damage or

enhance the company’s public image.

Organisation must ensure that the quality of their external communications

is as high as possible and select the most effective media for

communicating information. It is obviously important that organisations

maintain effective communications with their customers, and most businesses

invest heavily in market research promotion to attract and keep customers.

Many companies now recognise the importance of providing a communication

channel which allows customers easy access to the company. Some companies

advertise a customer care telephone number or an E-mail address on their

packaging or promotional literature. The customer care section will be

stuffed by people trained in the kinds of communications skills needed to

deal with customers making complains. Larger companies may employ

specialists press officers and public relations officers to handle dealings

with the media, pressure groups and the general public.

Organisations relying on other companies for materials and components can

find themselves in financial difficulties of their external communications

lets them down and orders are not placed at the right time. This may led to

shortages of parts and materials, and production may be held up. Relations

with suppliers may also be affected by poor verbal communications skills

which can cause confusion of the exact nature and delivery of an order. It

is for this reason that any changes to an order made verbally should be

supported by some form of written or electronic confirmation.

Opened and restricted channel of communications

In most organisations, some internal channels and communication media are

open to all employees; stuff at all levels can access the information.

Organisations want to provide some information to all their employees. This

would include, for example, information on health and safety regulations,

environmental management policies, incentive chemist and any response to

resent adverse publicity. This downward information flow from the top of

the hierarchy would be open to all.

The content of much downward and upward information flow sis fairly

routine, and organisation are not too concerned about people beyond the

sender and recipient being aware of what is being communicated. However,

access to some information and channels of communications may be

restricted. Some information is sensitive – and if it becomes known to

people other than the intended recipients, it could create either internal

or external problems.

Information and communication technology

Both internal and external channels of communication are increasingly

supported by information technology, with computers generating and managing

information flows. A computer-based information management system provides

the mean to communicate, collect, store, summarise, analyse and present

information in a way that best suits the controlling and decision making

needs of different managers. Inform received by one department or section

can be further processed before it passed onto other departments through

the organisations computer network.

Computer systems can help organisations:

. react changes in the business environment

. process complex information

. provides administrative support

. increase job certification

. collect information at source

. communicate via the internet.

The Data Protection Act 1984

The Data Protection Act was introduced to ensure that organisations

structured and managed the data held on their computers in a responsible

way. These are its main provisions.

. Organisations must register the kind of information it keeps on

individuals with The Data Protection Agency (DPA).

. Data must be obtained and processed fairly. People should know if the

information they give to organisations will be kept on computer and why

it is needed.

. Organisations can only collect the kind if information that they have

registered with the DPA, and the data must not be used outside of the

purpose for which it has been registered.

. The information held on individuals must be accurate and, where

necessary, up to date and it must not be kept longer than necessary.

. Organisations must take precautions against unauthorised access to the

information they hold on individuals.

. Individuals are allowed access to the personal data held by

organisations and, where necessary they can correct mistakes.

In March 2000 the Data Protection Art was extended to cover records kept on

a paper as well as information stored on computers and to provide

additional protection for the individual. The protection includes new

rights to know who holds information on you. It provides a statutory right

to know the identity of the person in a business responsible for data

protection issues, right to have a photocopy of personal information held

by organisations and greater rights to object to anyone holding personal

data.

There are also new rules to prevent organisations sending data to a country

outside the European Union in an attempt to avoid complying with

legislation on data protection. There are new provisions which can lead to

individuals being held personally responsible for not abiding by the rules.

Communication within Tesco plc.

An illustration of communication within Tesco plc.

Figure 2.0: Example of vertical and lateral communication within Tesco.

I have analysed the communication within Tesco plc. and now I can say that

Tesco uses relevant and accurate information to plan and manage efficient

development, marketing, distribution and cost control. Information,

vertical and lateral, communicated within Tesco very efficiently at the all

levels. Every single person who works in Tesco is sure about from whom he

should receive information and instructions.

But apart of internal communications Tesco has very good external

communications as well. The company communicates with customers and

suppliers very well. The quality of Tesco’s external information is very

high. Tesco has many communication channels which allow customers easy

access to the company, for example, Tesco advertises a customer care free

telephone number and e-mail address on its packaging literature.

E6

Production.

Production involves activities, which combine inputs in order to bring

about the physical changes that eventually produce the desired output – the

product. The product may be goods for consumers and households or parts and

machinery for other producers and manufacturers. Production can create a

physical change through:

. Processing

. Manufacturing

. Assembly

. Craft-based processes.

Value added

A common feature of all forms of production is that they are the means by

which organisations add value to their operations. Put simply, all

organisations add value to the externally sourced materials and other

inputs that contribute to their output. Value added is the difference

between the value of an organisation’s output, as measured by sales

revenue, and the costs of its inputs bought in from outside which

contribute to output.

The relative importance of the input costs incurred by a producer depend

upon the nature of the business. Most businesses generally consume a

combination of:

. Raw materials

. Parts and components

. Energy

. Business services.

Quality

Quality has always been an important competitive factor in some markets,

but during the 1980s an increasing number of UK producers began to devote

more attention to quality improvement. The rise in the spending power of

the average household meant that consumers’ choice of goods and services

was no longer so dependent on price. At the same time, consumers were being

offered a wider choice obliged producers to improve and complete on

quality. Because firms producing consumer goods and services sought to

raise quality, their suppliers – companies producing materials, parts,

machinery and business services – were also forced to improve quality.

A growing number of organizations now operate in markets where product

differentiation is rapidly decreasing. For example, advances in technology

mean that there is now very little difference between personal computers

offered by the different manufacturers in particular price range. A PC

producer must therefore strive to gain a competitive advantage by

establishing a reputation as a company with high quality and good customer

care. Consider training shoes as another example. Manufactures of trainers

periodically introduce new features into their shoes in an effort to create

a greater degree of product differentiation, but they all remain

essentially the same design and product. If the identifying logos are

removed, the average buyer might find it difficult to distinguish between

brands.

Producers of both consumer goods and consumer durables must therefore place

more emphasis on quality when marketing their products.

The increasing importance of quality can also be seen in the market for

consumer services. The main features of services provided by airlines,

banks and fast food chains are often virtually identical, and product

differentiation can only really be achieved by improvements in quality.

Another factor in changing business attitudes to quality was the success of

Japanese manufacturing companies. It was perceived that quality played an

important role in helping Japanese companies succeed in European and US

markets. By the end of the Second World War very little manufacturing

capacity remained in Japan, and in the immediate post-war period Japanese

products generally had a reputation as being cheap but inferior quality

versions of products manufactured by US and European producers. However by

the early 1980s Japanese companies had become closely associated with high-

quality products for which they were able to charge premium prices. In the

early 1980s, Japan had 18 per cent of the world trade in the manufactured

goods, substantially more than the UK’s 5 per cent share.

Quality control

Quality control involves an organisation using some kin of inspection

system for identifying materials, parts, components and finished products

which do not meet the company’s specifications. Inspection or testing may

be carried out at various stages of production to ensure that faulty items

do not remain in the production chain.

The operative or inspection department may check every item or just a

sample of production. Processing industries, such as the brewing and

chemical industries, also test regular samples of their products. Quality

inspection is supported by highly sophisticated monitoring, measuring and

testing equipment. This allows organisations to make adjustments to machine

settings and control devices to improve quality.

There are some drawbacks to a quality inspection system. Using an

inspection system to control quality encourages employees to take it for

granted that some output is bound to be defective. Less attention is paid

to preventing errors and defects in the first place as they will be picked

up later by the inspection system.

A quality control system must ensure that there is regular contact between

those departments that have a particular interest in quality matters. The

marketing department, for example, may identify issues raised by customers,

while the design research and development departments should work with

production on developing the product so that current defects are eliminated

when work is being processed.

Quality assurance schemes

A quality assurance scheme is the means by which an organisation implements

its commitment to quality. It helps firms to do the job properly the first

time, because the scheme is designed to prevent failures rather than

detecting errors once they have occurred. In this way a quality assurance

scheme (QAS) differs radically from quality control systems which involve

inspection procedures at various stages of production. The design of a QAS

recognises that defects do not just happen; they are caused by people.

Assuring quality

Once an organisation has identified the reasons why people are responsible

for defects and errors, it can develop a system which eliminates the causes

of defects. In this way, quality is assured. There is no single format for

a QAS, and an organisation chooses a system which is most appropriate to

its particular product or service. What it must do is to insure that every

stage of production (or in the provision of a service) that materials,

equipment, methods and procedures are used in exactly the same way, every

single time.

All employees should be aware of what is expected of them, and should know

how their own particular performance has to meet certain clearly identified

requirements.

Product Evaluation and Quality Assurance within Tesco plc.

What product evaluation and quality assurance in Tesco plc.

Tesco products are continually monitored and tested for their quality and

customer acceptability; this is product evaluation. Tesco staff and

management procedures are also monitored to ensure that they maintain the

highest standards; this is quality assurance.

Why does Tesco carry out product evaluation?

Product evaluation is carried out for a variety of reasons. These include:

testing new products under development

testing existing products when a change of supplier is being considered

testing Tesco products against those of competitors

to update information on the packaging

to monitor quality and safety standards.

Changing of packaging information

Even when a product remains the same, packaging information may have to be

altered because of a change in legal requirements, changes in nutritional

concepts, or advances in food preservation and cooking. For example, a

product might have its packaging altered to indicate that it could be

suitable for microwave cooking. It will therefore be necessary to test the

product in company’s laboratory. Here Tesco inserts fibre optic probes into

the product. This allows us to monitor the temperature of the product

whilst it is cooking, in order to ensure that it reaches a high enough

temperature for it to be consumed with safety.

Tests on existing products

Quality control tests are conducted regularly on all existing own-brand

products at Head Office, in Consumer Advice Centres, and in specialist

laboratories. These include tests on food safety.

Consumer Advice Centre

The purpose of five Consumer Advice Centres in Sandhurst, Shoreham,

Southport, Cheshunt and Perth is to carry out practical research with

customers into new and existing products. Each centre is staffed by two

consumer service officers who are qualified home economists. Their most

important role is to conduct consumer acceptability tests and sensory

analysis. Over a four-day period, six to eight products will be tested.

Their role also includes being available to the customer for any queries

concerning diet, health and nutrition, PR work at a local and national

level, quality control, and giving talks and demonstrations to local

community groups.

Organising a taste panel

Market researchers will recruit customers who are shopping in the store.

These customers take part in the test only if they fulfil the recruitment

criteria that have been established for the product being tested. For

example,Tesco might ensure that all participants are heavy users of the

product, or a product aimed at children will be tested on children only.

As far as possible, consumers test Tesco products against a benchmark. This

other product is normally the market leader; testing against it allows us

to ensure that product matches or exceeds this quality standard. Products

are tested "blind" and identified by codes so that consumers do not know

which one is the Tesco product and which one is the benchmark.

The questionnaire is designed so that consumers give scores for various

questions, such as their opinion as to the appearance of the product; they

are also asked to tell us what they liked and disliked about the product.

Sensory analysis

Sensory analysis is a more technical evaluation of a product which is

carried out by consumer service officers who have been specially trained to

analyse the product using uniform objectives and technical descriptions.

They will evaluate the product and forward a description of it to Head

Office for use in the final report.

What is done with the data?

Data from sensory analysis, questionnaires and customer comments are

collated and subjected to statistical analysis at Head Office which will

lead to a product either passing or failing the tests. If it is failed, the

product is reformulated according to the comments made by customers in

response to the questionnaire. Products are then re-tested and will be

launched only when they achieve a pass result.

Implementing of quality assurance

Quality assurance is implemented at all levels in Tesco. Everyone is

"focused" on giving the customer the best possible shopping experience in

terms of service, quality, availability, price, car parking facilities and

store design. This "focus" is set in Annual Trading Plan and is implemented

through various departmental objectives and through specific training

programmes. Tesco invests large amounts of money in training, so that Tesco

can achieve specific objectives, for example First Class Service

initiative.

Usually each initiative has a sponsor, normally a Main Board member. It is

the directors and managers who brief the teams, and then it is up to

individuals to "buy in" to an idea. Tesco has found that this process works

well as it is not prescriptive and it allows people to implement new ideas

in their own way.

Setting standards for quality

A common tool for creating "benchmarking" standards is called SWOT

analysis. This stands for "strengths, weaknesses, opportunities and

threats" and it provides a useful way of evaluating quality standards.

Standards cannot exist in isolation, and SWOT allows comparison with

competitors to be taken into account. Tesco therefore uses SWOT a good deal

for specific products, for example in evaluating a new range of

merchandising or evaluating a new process provided by a supplier.

Tesco Packaging design.

Tesco has many "Own Brand" products, and in order to promote its own brand

correctly Tesco has its own Packaging Design Department. Products sell for

a variety of reasons; in the first instance, the visual appeal of a product

is important to attract customers to the product initially, as it is only

after the first purchase that the customer is attracted because of the

quality of the product and its value for money.

How does Tesco add value to its product?

Usually value for product depends on one very important key – quality of

the product, better quality – more tests are done – bigger value, but Tesco

tries to keep prices lower than all other national supermarkets. Tesco adds

value to its products by means of buying it from contractor for lower

price, testing it, and selling it for higher price.

C1

Success of the business in meeting its objectives.

Tesco is one of Britain's leading food retailers and has 586 stores

throughout Great Britain. In Europe Tesco has 41 stores in Hungary, 32 in

Poland, 13 in the Czech Republic and Slovakia, 33 in Northern Ireland, 76

in the Republic of Ireland and 1 in France, to prove that business meets

its objectives successfully I’ll present some diagrams and company’s

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