Issues in traditional/conservative organisation – A study of Marks and Spencer
Table of Contents
Background study and issues of Marks and Spencer 3
Solutions to identified problems. 7
Introduction
In the rapidly advancing business world, some organisations have not been able to compete with the current requirements and demands. Most of these organisations are resistant to essential factors like people management and change and the effect of such resistance can be observed on their success and productivity. Many popular organisations have ended their business or are on the brink of collapsing due to a resistive attitude towards change in their culture and operations. For instance, organisations like Toys R Us and Blockbuster closed down to resistance towards change. They failed to address the needs and demands of the current market scenario. Marks and Spencer (M&S) is another organisation that is dropping towards failure in the current scenario. This essay will focus on convincing the senior management of M&S regarding change and its importance with feasible solutions from a team leader’s view. The necessity of change and solutions will follow the identified issues with M&S that is resulting in their failure.
Background study and issues of Marks and Spencer
Marks and Spencer is one of the major international retailers in the region of UK. Their list of products includes food products, home products, and clothes. Thomas Spencer and Michael Marks founded M&S in Leeds around 1884. Currently, they are operating out of 959 stores located across UK where 615 of them focus on dealing with food products only. It is a public limited company and it is traded as a component of FTSE 250 and London Stock Exchange. As for 2019, they have been serving across 1463 locations. Their major brands are Autograph, Per Una, Rosie, Limited, M&S Collection, Blue Harbour, and M&S Energy. M&S Bank is their major subsidiary, which is owned by HSBC bank from 2004. As of 2020, 80,000 employees have been working with the retail organisation (Home, 2020).
Around 1998, M&S emerged as the first retailer of UK to gain pre-tax profits that estimated over £1 billion. However, in the subsequent years, the organisation faced an unforeseen slump that led the stakeholders and the overall organisation to revise their business decisions. Their chief executives have been replaced a couple of times that may have interfered with the stability of the organisation. Marc Bolland took over as chief executive in the year 2010 from Stuart Rose, the executive chairperson of M&S. They continued to operate as non-executive chairperson until Robert Swannell replaced them in early 2011 (insider.co.uk, 2019). Currently, their sales of clothing have reduced drastically whereas their food sales have improved slightly after they expanded their venture with products like Kellog’s Corn Flakes. The major reason for the fall in their clothing sales is associated with their distances with the St. Michael brand name. In order to curb their downfall, they decided to close down over 100 stores by 2022 (Media.thinknum.com, 2020). Several major reasons have led to them to the brink of collapsing and they have failed to exhibit signs of recovery.
Figure 1: Profits decline of Marks and Spencer
(Source: Livecharts.co.uk, 2020)
M&S treat their programmes of change as standalone project and they fail to focus on the sense of urgency as suggested in the Kotter’s eight-step change management model. Their business leaderships are not in synchronisation with their organisational goals and objectives that focus on long lasting changes for productivity and success (Managementtoday.co.uk, 2020). In addition, they fail to prioritise the experience of their employees. Employees are the most essential constraint of an organisation. Their performance is directly proportional to the success gained by an organisation. Their resistance to understand the current demands of the business scenario while trying to retain their traditional measures have added to their decline. Their methods are particularly “old school” that fails to compete with the technologically and radically advanced retail organisations (Ft.com, 2020). They are struggling to exhibit signs of recovery to improve their performance. They fail to understand the needs of their targeted base of consumers due to which large levels of waste have been recorded for their clothing sales. They have not been able to adapt to the highly challenging conditions of the high street. Other reasons of their decline include lack of competitive features, lack of innovation digitally, and brand values (Evening Standard, 2019).
Figure 2: Marks and Spencer fall out of FTSE 100 index
(Source: AJ Bell, 2020)
Figure 3: Share prices decline of Marks and Spencer since last four years
(Source: Ft.com, 2017)
Why is change necessary?
In the rapidly advancing business environment, slow-paced adaptions of organisations are disappointing. The major changes in the business world are associated with population changes, changing technology, changing customer trends, changing economy, and such others (Georgalis et al., 2015). Businesses that fail to understand the severity of these changes have been wiped out of the current competition. Examples of such businesses are Toys R Us, Blockbuster, Woolsworth, and many more. Their strategies and approach to business have not been satisfactory that threw them out of the competition. Change is essential for any organisation since lack of change will compel organisations to lose their edge of competition while failing to cater the changing demands of their targeted base of consumers. Change is necessary due to rapid advancements in technology, constantly evolving needs of consumers, changes in the global economy, varied opportunities for growth, and status quo challenges. Evolving digitally helps organisations meet the competition in the current market structure. Moreover, tending to the growing demands of the consumers is primary for successful organisations. Implementing change within the organisation increases their opportunities of growth, which helps in understanding the difference between their current approach and the approach necessary for performance improvement.
The instabilities in the global economy further lead to changes in the operations and failure to implement such changes leads to operational decline. Changing customer trends provides more opportunities for the organisations; however, some organisations fail to change their attitude towards integrating the changing demands of the consumer base with their fundamental values. Conservative and rigid approaches bar the roads to effective communication and the number of ignorant employees increase. Financial crisis is another major reason of organisational change. Performance gaps are one of the most common reasons of organisational failures and change management can help in bridging the gaps between individual performances and organisational performance (Paliokaitė and Pačėsa, 2015). The reaction of an organisation to external and internal pressure received greatly affects their approach towards organisational change. Understanding the depth of pressure drives towards organisational change and vice versa. M&S have exhibited lack of understanding and responses towards their crisis due to which they have not been able to recover or show sign of recovery in the recent past.
M&S has been involved in many controversies that pose questions against their approach towards diversities. In addition, the leadership approaches adopted by this organisation has not worked in alignment with their organisational goals and objectives. They require major changes in their decision-making strategies as well by establishing measures of effective communication and improving the rate of involvement in the decisions by the employees (Canning and Found, 2015). Other than their decision to shut down more than 100 stores, they require focusing on a modern organisational structure that is team based. Systematic and objective approaches can help M&S reverse their condition according to market standards.
Solutions to identified problems
A leadership program to transform middle management
Employees in the middle management require focusing on the expectations of the senior management while providing aid to their peers and colleagues. Middle level managers are responsible for more than one major project that inhibits their ability to prioritise the organisational goals and objectives. The types of middle managers are diverse that include directors, vice presidents, plant managers, general managers, divisional managers, or regional managers. Developing leadership skills is the major aim of leadership programs. These programs focus on developing mission, vision, values, and styles of leadership. Interpersonal skills and effective communication amongst middle managers, senior management, and other employees are two other highlights of leadership programs. The system navigation requires a six-skill framework. These skills include resiliency, systematic acting and thinking, communication, learning agility, influence, and self-awareness (Center for Creative Leadership., 2020). Systematic acting and thinking focuses on understanding patterns between processes and relationships while dealing with trade-offs and uncertainties. Clarity and self-control are two major factors of this skill that enables middle managers to focus on the organisational objective rather than resolving low impact issues of the employees.
Resiliency in leadership helps in handling setbacks, uncertainty, and stress that is vital for failing organisations like M&S. A development program for leadership can help in building tools for developing resilience throughout the organisation. Communication is one of the core functions for leadership. It enhances the ability to express information and ideas while presenting thoughts with clarity. Effective communication is based on aligning actions and words, listening, and asking questions that enhance the process of decision-making. Influence focuses on gathering cooperation for the changes that require implementation for directing the organisation towards success (Lacerenza et al., 2017). Influence works best with team based organisation structure. Leadership programs help in developing a range of styles of influence, suitable for the organisation. Leadership programs focus on understanding opportunities and gaining skills, knowledge, and technical knowhow. It helps failing organisations like M&S to respond, be resourceful, adapt, and adjust according to the necessities of change. Self-awareness is essential in the process of change and leadership programs for transforming middle management highlights its significance. Self-awareness can help the middle management in understanding their strengths, style, shortcomings, motivation, preferences, and quirks that enhances the decision-making process (Chaimongkonrojna and Steane, 2015). M&S could benefit from such leadership programs to transform middle management that can help them change their traditional approach to operations and administration. These changes can influence their financial stabilities and shares in the concerned market.
Figure 4: Participation of middle management in leadership programmes
(Source: Training Magazine, 2018)
A diversity programme to widen participation in decision making
Diversity programmes can be important for M&S since it can shift the focus from the scandals associated with diversity factors. Shifting focus on the diversity factors highlights the factor of higher level of hiring with considerable investments of capital and money. Diversity programmes help in capitalising on the diversity factor; including diverse employees in the different levels of business decisions that helps in gaining insights on organisational success from different viewpoints. Inclusive decision-making helps in implementing change at a faster pace (Jackson et al., 1995). Evidence has been gathered that exhibit that involvement of diverse teams in the decision-making process produces 60% improved results. Decisions are made faster with minimum number of meetings and inclusive teams present 87% better decisions for the business (Downey et al., 2015). Diversity programmes focus on talent innovation as well from different areas. This can be suitable for M&S since they serve in different locations across the world. Local talent is essential for understanding the needs of the particular place and input from global talents help in aligning them according to the organisational objectives. Other than women and local talent, it is essential to incorporate talent from different areas that will increase participation in the decision-making process for the business.
Age diversity, gender diversity, and domestic cultural diversity are three main dynamics of decision-making teams. Organisations are characterised by substantial diversity in their workforce. Diverse teams within an organisation can increase the rate of profitability and innovation. Moreover, more than 1000 companies around 12 countries have known to benefit from incorporation of diverse teams in their business (Barak, 2016). The abilities of problem solving are enhanced through diversity programmes. Moreover, diverse leadership can help in understanding global perspective of stakeholders. Companies like Ford are known for focusing on involving diverse teams in their decision-making processes that helps in risk assessment and development of solutions for potential risks. M&S cannot afford lack of innovation in their business and lack of diversity may develop barriers in the field of innovation. Team behaviour is widely influenced by the diverse factor. In addition, diverse teams focus on understanding the primary issues around the globe and ensure that the business operations cater to the global issues by considering environment friendly operations.
Figure 4: Gender diversity in Marks and Spencer
(Source: Statista, 2020)
A team based structure managed by SMART objectives
Organisations following team based structures work towards a cumulative goal of the individuals and overall organisation. Team based structures are flexible and less hierarchical that enforces teamwork, decision-making measures, and problem-solving measures. They have managed to change the way industries operate. It is beneficial for global organisations like M&S. The team approach enables to capitalise on the strengths of the employees while reducing their weaknesses. Different teams supervise and carry out different activities aimed at achieving a collective organisational goal. This helps in reducing the pressure on particular individuals or departments and improves overall organisational performance. The four major advantages of team-based structures are less management, improved relationships, increased productivity, and balance (Thompson et al., 2015). This particular solution will be most suitable for M&S and they can utilise the SMART objective approach to identify and provide solutions for their issues. SMART can be considered as criteria for guiding the process of setting objectives for an organisation. The five variables of this approach form the acronym SMART. These variables are specific, measurable, attainable, relevant, and time-based.
For an organisation like M&S, the leadership abilities and skills can be utilised to exercise the different objectives and the different teams formed will be responsible for these objectives. The leadership approach in team based structures focus on motivating the employees towards changes while ensuring they are able to mitigate any resistance faced during the time of change implementation. Effective communication is an essential aspect of team-based structures since without appropriate communication the outcome of the different teams cannot be synchronised according to the organisational goals (Larson et al., 2016). Moreover, failing organisations like M&S need to understand the distribution of their resources amongst the different operations along with structured teams.
Best approach for Marks and Spencer:
The leadership vision for recovering the current state of M&S can be “gaining loyalty of customers and building signs of recovery over the next 5 years”. Situational leaderships can be suitable for understanding the different issues facing the organisation. The leadership approach can be utilised to work on ethical relationships with the stakeholders. The team-based structure using SMART objectives will be most suitable for the current situation of M&S. Leadership programmes and diversity programmes can be added to the objectives adopted through team based organisational structure. The SMART objectives for 1 year have been given in the section below:
| Objectives | Specific | Measurable | Attainable | Relevant | Time-based |
| To conduct better market research and target appropriate amount for manufacturing products | To find the reasons of product wastage and understand consumer demands | To target 3 locations across UK initially to attain objective | Yes, it is achievable | It is relevant since their clothing sale is facing rapid decline | 1 year |
| To explore new approaches to business over traditional approaches | To explore new leadership approaches, effective communication measures, and relevant programmes | To invest in leadership programmes for transforming middle management and diversity programmes for better decision- making process | Yes, it is achievable | It is relevant since there has been no change in their organisational and management structure | 6 months |
| To improve approaches to digital innovation | To improve their online shopping options and increase the use of credit and debit cards | To target 3 locations around UK for achieving specific objective | Yes, it is achievable | It is relevant since digital innovation will help in interacting with the stakeholders better | 1 year |
| To improve their diversity programmes for better decision-making | To hire global talent besides women and local talent | To target 3 or more specific areas for hiring global talent | Yes, it is achievable | It is relevant since M&S needs to improve their decision making process under diversity leadership approaches | 1 year |
| To build teams for each of the major organisational goals of change | To build teams to support the team based organisational structure | To build different teams including project team, training and development team, supervision team, etc. | Yes, it is achievable | It is relevant since M&S will adopt team based structure for the operations | 4 months |
Table 1: SMART objectives for improving the status of Marks and Spencer
(Source: Created by the learner)
Conclusion
The essay has discussed the issues of traditional or conservation organisations and the consequences of the lack of their will to change. The organisation in focus is Marks and Spencer since they are on the brink of collapsing and they have failed to understand and categories their issues. A number of shortcomings have been identified and discussed briefly. Solving one of their major issues can lead them to the path of success. Understanding the needs and demands of the current targeted base of consumers can prevent large-scale product wastage while improving their sales. Moreover, they can accept the factor of change and shift from a traditional organisational structure. Digital innovation can also help them reach out further to their customers. These issues can be best dealt through a team-based structure that is majorly managed by SMART objectives. These achievable objectives can help them prioritise their issues while estimating the accurate time to minimise the impact of their current issues and shortcomings.
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