Case Study: Tesco Plc

Case Study: Tesco Plc



Case Study: Tesco Plc

Tesco is determined to maintain its share of the UK food market during the recession. What are the main ethical issues which Tesco faces as it develops its policies. Explain the differences between a utilitarian approach and a stakeholder approach to business. Which do you think Tesco has adopted?

Tesco is UK leading food retailer and it has gained this position in the market through providing customers good value and services. Even though they are successful, they still are committed to their principles and values. This is shown by the fact that since 1997 the company has been at the top of the "christian Aid league table for ethical commendments." For Tesco to keep this top spot as the leading succesful retailer, it has to take in to consideration the concerns of each sector of the community; such as its customers , staff , shareholders, supplies and the local people who live close by. (Gough, 2008)

Tesco is the largest corporation and private employer in the UK. Tesco is consistently listed among UK's most admired companies by Fortune magazine. At the same time, it is frequently the target of criticism for its employment practices. While Tesco publicly prides itself on having strict ethics policies, the company has been fighting for years to get its ethical approach perfect. The company's ethical issues come with such frequency that the company's investors are frustrated at the stagnant returns of Tesco stock.

One of Tesco's biggest ethical issues is how it treats it employees and according to news reports over the last couple of years, the criticism seems to be justified. The following is a sampling of the personnel issues that Tesco faces.

Unfortunately, the situation did not end there, as it should have, as per Tesco policy. Lowry, finding herself in the uncomfortable position of still working in the same department as Williams, requested a transfer. Lowry, who wanted to continue to work at Tesco, has been informed that she must find another job within 90 days or human resources will determine the next steps. Lowry's story presents an interesting dilemma for Tesco, one that is not easy to explain. (Blattberg, 2004)

In the midst of all the allegations, Tesco is trying to change its stripes, or at least some of them. Last year, the company decided to hire a global ethics office, which was created in 2004. This decision is more than a defensive tactic -- it's an attempt get out in front of critics and project a reputable image at home and abroad.

Tesco claims that it is making significant changes to address many ethical charges that have been imposed at them. However, the company's chief executive has been accused of ethical violations by a former marketing executive. Julie Roehm, former marketing communications chief who has filled a breech of contract suit after being fired in December, says that Chief Executive H. Lee Scott violated ethics policies by accepting discounts on yachts, diamonds, and personal ...