Case study of Marks and Spencer

Daniel Huo

15419679

04/28/2016
 Content
1. Introduction
2. Part 1-Strengths and Weaknesses of Marks and Spencer
3. Part 2-How following factors affected the performance of Marks and
Spencer
 Leadership
 Corporate culture
 Corporate Governance
4. Reference
 1. Introduction
In the report two sections will be covered as the result of analysing the case study of Marks and
Spencer. Firstly, the strengths and weaknesses of Mark and Spencer, and the second part would be
discussion of the influence of leadership, corporate culture and governance in Marks and Spencer.
 2. Part 1-Strengths and Weaknesses of Marks and Spencer
The case study of Marks and Spencer introduced the company’s performance and history, also
showed the company’s strength and weakness comparing both internally and externally. 5 strengths
and weaknesses was comparably notable than the others, in the following they will be listed and
explained respectively.

Strengths
Execution

Due to the concentrated power of management level in Marks and Spencer, as introduced in the
case study that the position of chair and CEO was usually owned by one man, brings the company a
up to bottom management method, orders are given from the top of management level and
executed by the employees, decisions are made quickly and could be executed efficiently. It
increased the efficiency of executing new strategies.

Quality of products

Marks and Spencer have managed to keep its relationship with UK-based suppliers and meticulously
ensured that goods were exactly to specification, it created a good brand image to its customers.
And provides attraction to its customers.

Clear segmentation in marketing aspect

Clear segmentation of Marks and Spencer market provides core concept on its operation strategy
therefore the resources could be efficiently invested on a clear direction, locked down its primary
customer base in a stable level ensured the probability.

Reputation

Reputation of Marks and Spencer is well known by customers, it provides the company’s product
more penetration to the market. With a great reputation of not just its products to attract customers
but also of the company itself to attract talent and motivate employees.

Better treatment to employees

Better treatment to its employees motivates them to work with passion, created better working
environment and prevented the loss of talent in order to stabilize the operating of the company.

Weaknesses
Concentrated power

Concentrated power could also be huge risk for a corporation, as less as the opinions are being
provided when drawing strategy for the corporation, the less aspects could be considered. Therefore
the possibility of making a poor decision which will affect the corporation’s sustainability and
profitability will increase. Also potentially, damage the internal environment of the corporation by
providing a negative working ambience.

Lack of communications from employees to management level

If the feedback from employees were not being provided to the management level, firstly
corporation’s internal environment could be affected and therefore the efficiency of its employees
will also be affected. Secondly feedback from employees is a resource to evaluate the corporation’s
operating status, if the corporation’s performance is reported with deviation, the strategy made for
the future could lead the corporation to a worse position.

Lack of flexibility in operating methods & managing methods

Marks and Spencer was not capable of reacting to the dynamic change of the business environment
fast enough. This caused its competitive advantage to be less affective. Flexibility could provide
corporation to be more sustainable in the business environment, Marks and Spencer waited so long
to even provide their customer loyalty card scheme when it was sweeping the whole market. Also
Per Una and the food industry was largely criticized and affecting the company’s performance but
still run for a long time until being decided to be capped and redirected.

In managing aspects, communication between employees and top management was not concerned
by M&S, orders and decisions were always given and made by the board level. And constant change
of the executor from the top level would cause employee’s trust and respect to the management to
decrease, especially with corporations like M&S which has such unique corporation culture that all
employees look up to.
 3. Part 2-How following factors affected the performance of
Marks and Spencer
 Leadership
 Corporate culture
 Corporate Governance

Leadership in M&S
All different leading/managing style could be summarised into 3 kinds, Autocratic, Consultative and
Democratic (Unknown, rip.edu).

In autocratic leading style, the leader/manager is the party that make real contribution to the
decision-making process, in other words, the opinions from anyone apart from the top level of
management group is ignored, this managing style was most commonly used in the late 90’s.

Consultative leadership style is slightly complicated than Autocratic, before the decision is made
managers tend to seek consult to other people and take more ideas into consideration. However it is
still the leader himself or herself the one making the decision.

Last but not least, Democratic management style, where the responsibility of making a decision is
taken buy a team or more. The contribution of decision-making process is no longer provided by
more than the leader. As the consultant and opinions provided by people within the framework is
taken consideration they also make the decisions.

In the early stages of M&S it started off with the concept of family business, the power back then
was mostly in hand of the founder family and the leading method was following traditional family
values(J Phyl, case study). It was strongly inward looking originally. However in the late 90’s they had
to have a change of leadership due to the company’s underperformance issue. Under Vandevelde’s
leadership M&S came up with a recovery strategy which brings the company closer to its original
operating concept that providing quality value and service to its customer. The strategy saved M&S’s
reputation and returned it to its core strength. Vandevelde’s leading methods could be considered
close to consultative leadership, because even though it was still the leader making the decision but
opinions of the staff in the company was taken in consideration in order to follow the company’s
reputation and tradition. In other words, there was a group within the corporation’s framework
affecting the final decision.

However, it is reasonable to argue that consultative managing method was not the only method
M&S approached. For example, at top level of management when planning operating strategy
consultative seems suitable for the cause, yet, democratic managing method and autocratic could be
applied in other aspects in the corporation. Corporations huge as M&S must have different
approach to manage staff under varies hierarchical scale. For example, at the production line,
autocratic management could enhance the efficiency of production given staff operation machinery
have insufficient knowledge on the field. For those around the middle level the use of managing
methods tend to be more flexible, because they are in a position high enough in the firm and the
knowledge they have provides them the ability to use the autocratic approach properly. However,
the shareholders are fully aware of the situation in the firm and able to have a democratic vote on
bigger issues such as the candidate for the next CEO.
Corporate culture and Governance in M&S
Organizational culture can be explained as beliefs and attitudes between management and
execution level in order to have impact on the decision making process and affect the internal
environment within the firm. In the book <<Organizational Behaviour>> corporate culture was
defined as “an organization's culture focuses on the values, beliefs and meanings used by its
members to grasp how its uniqueness originates, evolves and operates”(H,
Buchanan,Origanizational Behaviour). In different corporations difficulties and situations are
handled differently and the cooperate culture tend to be the key factors that composed the
difference. Relatively the corporate governance also varies along with different corporate culture.
For example, in the early stages of M&S, the concept of a family business that most member with
the board are all family member, the order is proceeded from top to bottom, so is the
communication methods within the firm. As the result, corporate governance in the early days for
M&S was based on fast turnover. The value of the culture stood for the way things are being
handled in M&S and formed the original managing methods. Within this kind of corporate culture,
employees were not motivated to rise to the top of the firm simply because they were not in the
family. However the paternalistic culture did bring an efficient execution process to the firm and
simplified the administrative process. In later 90’s huge organisational growth increased the
difficulties for corporates to remain on the family level. M&S as one of the typical firms started with
the concept of family met their setbacks the inward looking culture and the need of leadership was
to take the blame of the underperformance. However, there are bright sides of the essential culture
of M&S, because after all it had a well-planned market strategy and clear segmentation on its
customer group. It’s considered as the reason why after Stuart Rose’s strategy change for M&S,
revert to old values and a simpler culture brought M&S back to the game. M&S’s corporate culture
has now evolved into customer driven culture, based on its original insurance of quality and value
for the customers, customer driven culture made effort to improve customer relationship and
market research on the external aspect, in the internal aspect, enhanced the training for staff and
methods of governing the firm.

In conclusion, the customer driven culture on M&S kept its reputation and provides power and
efforts for the firm to evolve as the market does. The managing style and internal governance was
suitable and efficient for the firm to run smoothly because not only the consultative approach brings
the manager more options and opinions it also enhanced the internal communication aspect. The
other 2 managing styles were also executed at the right level of the firm and improved the efficiency
and dynamic of M&S.
4. Reference
Buchanan/Huczynski, 2013, Organizational Behaviour, 8 th Edition, Pearson

Exploring Strategy: Text and Cases by Johnson, Whittington and Scholes, 9 th edition, pages 650-657

Rensselaer Polytechnic Institute, 24 May 2012, Management Styles, {online}:

https://en.wikipedia.org/wiki/Management_styles#cite_note-1