Internal communications strategy for organizational change at Tesco

Management of Change Campaign: Internal Communications

Company overview

Tesco is a British-based multinational grocery retail chain founded in 1919 by Jack Cohen. Currently the company is the largest of the kind in Britain with group worldwide revenues exceeding £50 bn, running operations in 13 countries and employing more than 440,000 people (Tesco Annual Report, 2008).

Up until the 1990s, the retailer grew organically and by acquiring existing grocery stores, the expansion being limited to the grocery sector. In 1997, Tesco made its first step outside this sector by forging a business alliance with Esso referring to the leasing of several petrol filling stations where the former would operate small supermarkets under the Express format and in return the later would sell their fuel via Tesco stores. In 2001, the retailer made its first international step by expanding to internet grocery retailing in USA. Poland followed shortly, through an acquisition of 13 Hit supermarkets. The last international market entry was in China in 2004. In 2003, the company expanded its operations to the telecom industry to complementing the internet service provider business acquired earlier. In addition to grocery, fuel and telecom, Tesco runs operations in garden centers and personal finance.

The giant retailer manages 3,728 stores worldwide.

Internal communication - theoretical background

In a dynamic, globalized environment, change is an essential key to success. Tesco has often proven its abilities to adapt to a volatile market such as the international arena by permanently changing internally and externally to meet expectations.

Some aspects need to be considered by an organization in times of change among which employee involvement and clear leadership are seen as essential (Lydon, 2006). Changes need to be communicated within the whole organization to achieve the benefits targeted by these processes. Therefore internal communication is key to successful organizational change. In Tesco, internal communication initially reporter to the Human Resources department. As the emphasis on employees delivering on the promise of Tesco brand increased, the internal communication worked increasingly closer to corporate affairs and corporate marketing. Nowadays, it is part of corporate affairs (Quirke, 2000).

Watson et.al. (2005) identifies organizational communication as an important tool for organizations to obtain the commitment of their employees and managers want their employees to identify with the company's goals and values and work hard on its behalf, rather than taking independent action, which is not necessarily in line with those. Internal communication becomes increasingly challenging in multicultural environments. Tesco's internal communication department is responsible of internally communicating its brand to over 440,000 employees in 13 countries on 3 continents. The retailer is also keen on reaching all employees before news about its operations/brand are mentioned in the national media, which has been considered one of the biggest challenges faced by the company (Tesco, 2008). Hofstede (1984) defined culture as "the collective programming of the mind which distinguishes the members of one group of society from those of another." Communication between people coming from different cultures is not as fluid as the one between people of the same culture due to cultural distance, also known as "the extent to which different cultures are similar or different" (Shenkar, 2001). In the business world cross-cultural conflicts are closely followed by communication breakdown (Acosta et.al., 2004). Additionally, failed attempts to communicate with people from different cultures usually turn into conflicts (Kimmel, 2000). Tesco's employees have diverse cultural backgrounds and while the communication of important issues have to keep a global touch, the transmission of these issues should also incorporate local aspects and as "one size does not fit all." In 1999, right after Tesco Plc. merged with Samsung in Korea, the new entity faced difficulties as the Korean employees perceived the new management process to be lacking humanity and too rational (Korea Institute for International Economic Policy, 2005). The Korean culture is more emotional and less rational as the British one. Therefore, to reconcile Tesco's corporate culture, the Shinbaration Task Force was created. This task force is actually a mix of Shinbaram, the emotional reaction that helps individuals to exceed their limits and rationality. The Shinbaration campaign's goal was to stimulate teamwork and foster a working environment in which people can exceed their limits.

Also, communicating on similar levels with the staff's educational one is important as it renders an optimal level of message transmission and assimilation. In the beginning, Tesco's employee communication was informational and consisted in presenting the company's business plan to their people. The presentation was done either through personal letters sent directly to employees, or via two-way sessions with cross functional groups or via desktop presenter material (Quirke, 1998). This initial experience had taught the giant retailer that the communication to the bottom level of the organization meant talking in simple terms as the rate of illiteracy measured for its own employees was around 30-40%. Consequently, the business plan presentations were abandoned in favor of sessions focused on the customers. These sessions consisted in-store presentations made by store managers using graphic desktop presenters and in ad-hoc sessions that would fit the pressures of their day. The communication became more effective due to the simple, plain language and the involvement of the shop manager in this process. Besides the simple language, the company chose to transmit the messages using a low-tech medium and avoided using complex, management speak on purpose in order to reflect ease and simplicity, which are two important characteristics of Tesco brand: "simple, down to earth, honest folk."

Last, but not least, the technological level of communication is essential especially in a company with cross-border activities and considerably large personnel such as Tesco. The retailer is using several communication channels, such as email, mail, presentations and so on to communicate with the staff and it is keen on using each of these channels in an efficient manner. An example in this direction is the use of email within the organization. Having so many employee, in the past the misuse and/or abuse of email was creating big problems for the company generating a high volume of misdirected emails. Thus, a campaign to raise awareness regarding the proper use of email was launched. Humorous booklets were distributed to the personnel with the purpose of explaining simple guidelines of outlook use. Follow-up research indicated improved use of email (RY case studies, Accessed January 2009).

The content

The content needs to be suitable to the staff's education level and take under consideration the various cultural differences between employees located in different regions of the world. Thus, before designing it, the company will generate a series of demographic statistics (e.g. age, gender, nationality, religion, education level) that will help the communication department put together an efficient internal campaign. Research results suggest that segmentation and customization is a good way to deal with information overload generated by new communication channel available every day in addition to the old ones (Internal Comms, 2006). Additionally, due to increasing globalization the need for segmentation is also increasing due to personnel heterogeneity (Davis, 2005).

The content language adopted for white collar workers will be a simple, plain one as the goal is for the message to be understood best and used by the employees in their interaction with the customers. In global communication campaigns, the language will be the same for white and blue collar workers and therefore a simple and plain one for everyone. In specific communications, the language can increase in complexity if the auditorium that needs to receive the message had a higher education level.

The content will take under consideration the cultural differences between the corporate headquarters country (e.g. UK) and the local offices (e.g. Korea) and adapt global campaigns to the local requirements. Additionally, the content will be designed to match company objectives and how these objectives can be understood by personnel. Therefore, a specialized team will be dedicated to understanding the personnel, the company values the personnel needs to be familiar with. Ericsson, the telecom giant is a good example of a company that outsources the internal communication processes to a specialized company as its personnel's increased diversity was too inefficient to be handled internally, communication-wise (Zetterquist, 2006).

The people in charge of transmitting the corporate messages

From Tesco's internal communication experience one can easily notice that white collar workers assimilate corporate messages easier if these are transmitted by their direct managers at the work premises. The same is not necessarily true for high-tech companies that can use the intranet for corporate messages. Thus, for a white collar auditorium the messages will be laid out to the staff by the team managers and for blue collar auditorium those will be spread out via email.

The message transmission will be designed and presented by a local person, preferably, in order to avoid miscommunication generated by cultural differences if the auditorium is from another region than that of the corporate headquarters. The local presenter is likely to bond better with the auditorium and gain its attention.

Last, but not least, the presenter has to easily interact with the auditorium and collect feedback from this one regarding content and transmission quality to help the company measure the efficiency of its internal communication campaign.

Strengths and weaknesses

An internal communication campaign designed by a specialized team and using personnel segmentation has a number advantages meant to increase corporate communication efficiency. Thus, the campaign's content is more likely to be understood by the employees because the team designing it is specialized in communication and had the expertise to deal with personnel diversity and because the content is designed for people within similar or identical demographic segments. The efficiency of a communication campaign should be visible in the relation between company personnel and customers and indirectly in the company's results.

Moreover, a campaign that takes under consideration the differences between employees from various locations are likely to attract the staff's sympathy as it shows that global companies are not as impersonal as they are perceived in the media showing that they care about their people.

The disadvantages of such campaigns are mainly related to the resources needed to be engaged to deploy them. Thus, the integration of local content requires working with local teams, different cultures and languages, more information to collect, analyze and consolidate and therefore more people needed to be engaged in the campaign design. The demographic segmentation is also costly and needs to be updated regularly as companies with multicultural diversity tend to change personnel quite often.

Overall, such a campaign is desirable for a multinational company provided that the entity is permanently striving to improve the cost efficiency of its internal communications. In time, this one can adopt different technologies meant to automize the information collection of various sources worldwide and potentially migrate all activities related to corporate communication to an online environment in which it is no longer necessary for the presenter to have a physical presence in the same place as the auditorium.

Reference List

Acosta, C., Leon, V.J., Conrad, C., Gonzalez-Cervantes, R. And Malave, C.O. 2004. Case Study on Culture and the Implementation of Manufacturing Strategy in Mexico. Journal of Manufacturing Systems, vol. 23(3): pp. 173-181.

Davis, Alison. 2005. Applying Employee Demographics. Strategic Communications Management. August 1st, http://www.allbusiness.com/technology/computer-software-management/943392-1.html

Hofstede, G. 1984. Cultural Dimensions in Management and Planning, Asia Pacific Journal: pp.84-99.

Internal Comms. 2006. The Top Seven Macro-Trends in Internal Communications. April edition, www.internalcommshub.com

Kimmel, P. 2000. Culture and Conflict. In Morton D. And Coleman, P.T. eds., the Handbook of Conflict Resolution: Theory and Practice. San Francisco: Jossey-Bass Publishers: pp. 453-474.

Korea Institute for International Economic Policy. 2005. Case Study of Samsung-Tesco, Korea. Peterson Institute, www.petersoninstitute.org

Lydon, T. 2006. Common Sense in a Changing World. Ispos Mori Relationship Management. www.ipsosmori.co.uk

Quirke, B. 1998. What's your Value Proposition? How to Maximize the Business Payoff for Internal Communication. Strategic Communication Management - reprint from October/November. www.synopsisonline.com

Quirke, B. 2000. Making the Connections - Using Internal Communication to Turn Strategy into Action. 1st Edition, Gower Publishing.

RY case studies, Accessed January 2009. Managing Email Effectively at Tesco. www.ry.com

Shenkar, O. 2001. Cultural Distance Revisited: Towards a More Rigorous Conceptualization and Measurement of Cultural Differences, Journal of International Business Studies, vol. 32(3): pp. 519-535.

Tesco Annual Report. 2008. http://www.tescoreports.com/

Tesco. 2008. Reaching a Large and Diverse Audience at Tesco. Strategic Communication Management, October 1st: http://www.allbusiness.com/labor-employment/human-resources-personnel-management/

Watson, G.E., Watson, G., Gallagher, K. And Armstrong, M. 2005. Managing for Results. 2nd Edition, Chartered Institute of Personnel and Development.

Zettrequist, P. 2006. Transforming Internal Communication at Ericsson. Strategic Communication Management. December edition, http://www.allbusiness.com/technology/computer-software-management/943392-1.html

Management of CHANGE - CAMPAIGN INTERNAL COMMUNICATIONS

Key highlights

UK is the base of the Tesco's operations. The retailer runs here 2,115 stores across the country employing over 280,000 people.

Key highlights

In Asia, the retailer runs 814 stores in 5 countries employing over 77,500 people.

Key highlights

In Europe, the retailer runs 746 stores in 6 countries employing over 83,700 people.

Key highlights

In USA, the retailer runs 53 stores in 3 states employing over 669 people.