Tesco's overstated first-half profits' discovery by almost £250m is, according to Dave Lewis, this is a very serious issue. In an era where the economy is fast shrinking due to globalization of industries--and at the same time corporation entities have been feeling the crunch of intense competition and a need to survive--merger between companies have become a rule to sustain growth and at the same time to keep companies neck on the surface in the sea of fierce competition. In this context, talks of acquisition left Tesco's employees in uncertainty. Unlike before when employees could work with composure and security over their stay in the company they belong in, everything now was shaken in the core of its foundation due to talks of mergers. Just a rumor of an acquisition could send employees shaking and queasy over their tenure and security in the company they work in.
Management is a key issue in the development of organizations. It is generally accepted that good management is essential to the functioning of an organization. In managing people the manager must first satisfy the needs of the employees. Apparently, employees lacked motivation in times of Tesco's trouble. Six days prior the discovery of the scandal, the watchdog accounting released the updated version of the corporate governance code of UK, this code is used to prevent of sort of upsets in the 1990s. It is noted that the accountants have inherent estimates of risk of manipulation in the company's commercial income, which have a big impact on profits. Apparently they were encouraged by Tesco's audit committee to stack up the numbers.
London-listed firms should either abide with its demands or discuss why they have not been complying. But following with the leadership mantra it extends on the possibility to neither inhibit nor reveal the cover up of the £250m black hole.