Marks and Spencer Company: Organizational Management

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Table of Contents

Strengths and Weaknesses of Marks and Spencer (M&S)
M&S’s Relative Underperformance over the Last 20 Years
Reference List

Strengths and Weaknesses of Marks and Spencer (M&S)

The first strength of M&S is that it has managed to place itself in a strategic position as far as competitiveness is concerned. It has achieved that through differentiation and positioning of its products, goods, services, and operations. The second strength is that it has penetrated several markets across the globe. In the United Kingdom, M&S has a total of 622 stores and 270 others in 34 countries. The organisation’s mission is “to make aspirational quality accessible to all” while its objective is to transform itself into a leading player in the retail industry (M&S: the official board 2010).

The third strength is that it sells goods and services of high quality at affordable prices. Over the last 12 months, M&S has taken measures aimed at boosting its position at the global level. At the local level, it has taken various measures aimed at boosting growth in the UK. It has also taken initiatives to strengthen its foundation and improve customer satisfaction. In addition, it has done serious campaigns to expand its international market. The organisation’s positioning initiatives are likely to remain the same over the next 12 months. The reason is that it aims at delivering quality and affordable products and services to all its customers over the next three years.

The fourth strength is that many customers perceive M&S’s products as having ‘value for money’ (About.com: top 5 reasons customers don’t buy from you 2015). The reason is that the products are not only of good quality, but they are also provided in different varieties.

The fifth strength of M&S is that it has a powerful brand, which enables many customers to remain loyal to its products and services. The brand has remained popular for many years. In fact, some children have been born and grown up knowing that M&S is the only organisation which provides authentic products at affordable prices.

However, the organisation has some weaknesses, which if properly addressed, can enhance its competitiveness in the retail industry. The first weakness is that it has not invested appropriately in differentiation and positioning. I would advise the organisation to invest more resources in differentiation and positioning so as to improve its future strategic position. Instead of differentiating a single product at a time, it should differentiate several products at the same time. Doing so would enable it to have a pool of loyal and dedicated customers for its goods and services.

The second weakness is that it has a poor market entry strategy. The reason is that its current strategy for entering new markets focuses on opening new stores in different countries. Even though it is a good strategy, it has not helped the organisation a lot. The reason is that opening new stores is more expensive than working with agents. The organisation should, therefore, consider entering into a partnership with organisations which are not in the retail industry and start selling its products through those organisations. This strategy would enable the organisation to save the costs associated with setting up new stores in other countries.

The third weakness is that it faces stiff competition from other companies such as NEXT PLC, GAP, and H&M. The main strength of these companies is that they focus on trendy fashion. For instance, GAP’s main target customers across the globe are those aged 15-35 years. The reason is that the customers in this age bracket are usually attracted to fashion trends.

The fourth weakness is the inability to adequately deal with the misuse of the M&S brand by fraudsters. In many cases, fraudsters have used the M&S brand to sell poor quality products to unsuspecting customers. As a result, the organisation has lost a lot of revenues. The fifth weakness is that the organisation lacks an effective strategy for reaching all the market segments in the United Kingdom (UK) and other countries. It has mostly focused on the clothing division and specifically on women’s wear. As a result, it has lost a competitive advantage in the other divisions such as food and general merchandise.

M&S’s Relative Underperformance over the Last 20 Years

Leadership

In the organisational context, leading has to do with the leaders consolidating the efforts and resources of the organisations and focusing on the future by setting up a vision which they intend to achieve in a given period using the consolidated efforts and resources. Leading entails building and sustaining teamwork, strategic thinking, managing conflicts, coaching, inspiring a shared vision, problem-solving, performance management, decision-making, delegation, systems thinking, leading change, dealing with ambiguities, developing trust, employee development, customer service, innovation, emotional intelligence, and servant leadership (Daft 2008).

The leadership history of M&S has been characterised by autocracy. The reason is that almost all the Chief Executive Officers (CEOs) have exercised the top-down approach of leadership, which has contributed to its underperformance. The autocratic type of leadership is characterised by the concentration of power in a single individual. In the organisational context, autocratic leaders are the sole decision-makers, and they perceive the other employees as not capable of making any decision.

This type of leadership is associated with a mechanistic organisational structure which has the board of directors at the top, the middle management, the senior supervisors, and the workers in that order. This structure is characterised by a hierarchical authority, written rules and regulations that specify the exact nature of relationships among employees and how tasks are carried out. The mechanistic organisational structure is also characterised by a failure to share power with others. Such structures are common in organisations which are led by autocratic leaders who are the only decision-makers. The organic organisational structure, on the other hand, provides a support system that enables various organisational departments to work independently with little supervision and control (Boddy & Paton 2013).

Over the last 20 years, almost all the leaders that M&S has had have not been consulting other stakeholders when making crucial decisions. Before he left office in 2010, Sir Stuart was criticised by the shareholders for holding the positions of CEO and chairman at the same time. Sir Stuart’s leadership style also made some customers, especially in the clothing division, to become disloyal to M&S. The reason is that Stuart did not consult other stakeholders, especially the employees in the clothing division, which led to poor competitiveness of M&S.

Corporate culture

Corporate culture, also known as organisational culture refers to shared beliefs, values, norms, and practices which characterise an organisation. Norms are informal rules which govern the conduct of employees and constitute what is permitted and prohibited in different organisations. Some organisations are managed using Taylor’s scientific management approach, which views workers as machines not as social beings (Johnson, Scholes & Whittington 2011). This management approach is associated with a weak organisational culture which inhibits teamwork, thus making organisations to miss the value associated with teamwork. In organisations with a weak culture, there is poor harmonisation of organisational processes and functions such as planning, employee development, manufacturing, processing, marketing, branding, labelling, public relations, and packaging.

This poor harmonisation compromises efficiency and effectiveness of the organisations, thereby reducing productivity (Mathew 2007). In such organisations, it is hard for the employees to be creative because they are not provided with the necessary incentives to stimulate their creativity. The employees usually feel demoralised because they do not get the intrinsic value of work. Instead, they simply work for the sake of working since they are not loyal to the organisations. In the case study, Davis describes M&S’s culture as “constipated”, meaning that the organisation has a weak culture, which can be attributed to the autocratic type of leadership which has been exercised by the leaders of the organisation over the last 20 years.

Corporate governance

Corporate governance is defined as the manner in which corporates are regulated, either by governments or other institutions. Since corporates play an important role in the economy of a country, there is need for them to be regulated so that their operations lead to the maximum realisation of returns, which in turn boosts the economy of the country. Different countries have different corporate governance frameworks, which are depended on the countries’ economic, legal, and cultural backgrounds.

For instance, the UK’s system of corporate governance is based on principles, not on rules and regulations. The framework operates under the principles of the combined code of conduct. The code outlines what constitutes good corporate governance in terms of organisational structure, organisations’ boards, and the composition of various committees at various levels of organisations. It also allows organisations to decide which model of corporate governance is best depending on their prevailing internal circumstances. However, the code requires organisations to explain to their shareholders about the organisations’ internal governance and how it affects the profit margins of the organisations. This approach is market-oriented, and it gives the shareholders of an organisation a big say on administrative matters of the organisation.

In the case study, M&S has had two CEOs who have held the positions of CEO and chairman at the same time. They include Sir Richard Greenbury and Sir Stuart. Even though the UK corporate framework does not prohibit such an arrangement, it requires that the shareholders be explained why a CEO could also act as the chairman at the same time. As a result, the rights of M&S’s shareholders to get information about the organisation have been grossly violated over the last 20 years. This violation has scared away some potential shareholders, thus interfering with the ability of the organisation to grow as it would have wished. There is, therefore, the need of the incoming CEO, Mr Bolland, to refrain from acting as the CEO and the chairman at the same time. If he refrains, he would not only redeem the image of M&S but also increase its bottom line due to improved shareholders’ confidence.

Reference List

About.com: top 5 reasons customers don’t buy from you 2015. Web.

Boddy, D & Paton, S 2013, Management: An introduction, Pearson, Harlow. Web.

Daft, R.L 2008, The leadership experience, Thomson/South-Western, Mason, OH. Web.

Johnson, G, Scholes, K & Whittington, R 2011, Exploring strategy: [text and cases], Prentice Hall, Harlow. Web.

M&S: M&S: the official board 2010. Web.

Mathew, J 2007, ‘The relationship of organisational culture with productivity and quality’, Employee Relations, vol. 29, no.6, pp. 677-678. Web.

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