UNIT 37 P2, M1, D1
P2: EXPLAIN THE IMPLICATIONS FOR THE BUSINESS AND STAKEHOLDERS OF TESCO’S OPERATING
ETHICALLY.
M1: ASSES HOW A SELECTED BUSINESS COULD IMPROVE THE ETHICS OF THEIR OPERATIONS
D1: EVALUATE THE IMPACT ON A SELECTED BUSIENSS’S ETHICAL BEHAVIOUR ON STAKEHOLDERS AND
THE BUSINESS.
INTRODUCTION:
In this report I will be explaining the implications for Tesco's and the stakeholders of Tesco’s operating
ethically. I will assess how Tesco could improve on the ethics of their operation and lastly, I will evaluate
the impact on Tesco’s ethical behaviour on the stakeholders and the business.
STAKEHOLDERS IN TESCO:
Owners
An owner is someone who has the legal/rightful title of something. Owners can be sole-traders, partners
or shareholders. Tesco is a public limited company and has three major shareholders; BlackRock Inc.- who
holds 6.64%, Norges Bank- holds 3.9995% and Schroders plc- holds 4.99%. These owners are interested
in the profit that the company makes and is paid by the form of dividend. All owners of Tesco would want
the share price to increase and if they were to do this the company would become more profitable.
Owners would also want to aim for good corporate governance. However, if Tesco were unprofitable, all
the owners would not receive a good or appropriate dividend or return, which can result in them selling
their shares. This will mean the price share would fall on the stock exchange that will impact Tesco and
finding it more difficult to raise new capital to continue the growth of their business.
Employees
Employees are the people that work for the business for wages or a salary. Employees are important
stakeholders; they work for hours to ensure that the business is kept operating on daily. At Tesco they are
different roles for different people, with certain skills, training and knowledge. For example, line
managers, managers, team leaders etc. the employees are part-time or full-time workers, contract hours
or zero-hour contracts. Tesco’s recruit employees with no skills or skill, however they do train their
workers before starting. Having employees at Tesco helps with the success of the business. The employee
would want to earn money in order to work for the company, they would want to be paid fairly, to have a
contract they agree with and are in a good working environment. If the employees do not get what they
want, they leave the company and join another business that is a competitor to the business. If they do,
they may be getting better wages and give bad reviews towards Tesco which will result in people not
applying for a certain role at Tesco.
Customers
Customers are those who purchase the goods from the business. Tesco believes that customers are also
the most important stakeholder. The Tesco PLC states: ‘Tesco exists to serve customers – listening to them
and acting on what is most important to deliver the best possible shopping trip.’ The customers want the
product and service to function their needs in order to solve their problem. They would want the products
at a low price and a good value. The quality of the product is also important as well as: good service, good
customer service, fair treatment and easy access to stores- in store and online. The customers can be
children, teen adults—so they can have low or high incomes, so making the products at an affordable
price is very important for the company to gain success. If this does not happen and doesn’t meet the
customer’s needs, the customers can stop coming to the stores and buying their products. It can also be as
they do not agree with Tesco's policies in testing on animals etc.
Suppliers
The suppliers are those who supply the company with the resources, materials, products and services to
keep the business flowing on a daily basis. The suppliers would want to be paid on time, fairly and
appropriately. They would also want to adhere to their own rules. If this does not happen and are not
treated the way they want, they can stop supplying Tesco with their needs which can result in the
business to stop its operations and would be able to carry on. Therefore, they would need to find new
suppliers which can take up a lot of time and money.
