CASE APPLICATION v ‘The John Lewis Partnership (JLP) is different; any number of news items or academic journal articles will confirm this. JLP operates 48 John Lewis stores across the United Kingdom, 34 of which are department stores selling everything from lingerie to elec- trical goods The partnership also includes 351 Waitrose supermarkets (a company [purchased by JLP in 1937). However it isnt the numberof stores, nor the retail offer- ing that make this organization different, i isthe 88,900 permanent staff who are the partners of JLP. With profits flowing to the partners and not the external sharehold- ers, JLP is very dflerent to most capitalist enterprises. in 1864, John Spedan Lewis started trading on Oxford Street in London; however, it was not until 1929 that the John Lewis Partnership was established. John believed ‘that business success should be balanced with the happiness of employees and that by ‘making them partners he was allowing employees to share the responsibility of owner~ ship as well as the rewards in the form ofa share ofthe profits These rewards have not ‘been insubstantial, averaging 17 percent of average pay, since 1970, when cash bonuses started being paid, ‘The role of the partners is not limited to simply receiving a share of the part- ‘nership profits. The Partnership Council, a democratically elected body, looks after ‘the partners’ interests. The Couneil has a say in how profits are spent, can influence ‘matters such as pay and pensions, and directly elects five members of the Partner- ship Board. There are mechanisms in place to ensure that this structure allows all partners across the business to have a voice. Ata local level, elected partners work alongside managers to influence the running of the individual store. JLP also dis- tributes a weekly in-house newspaper called the Gazette, which actively encourages partners to ask questions, with each question receiving a personal response from ‘management, ‘So what is it ike to work at JLP? In 2010, an article for The Guardian newspaper interviewed a number of JLP employees, both present and past. There was real sense ‘of connection and belonging. even amongst those who had retired. When asked why people stayed with the company twice as long as the industry average, one partner ‘imply replied that if people weren't happy, they had the responsibility and support to ddo something about it. Other partners referred to a willingness to make extra effort, specifically noting that motivation felt different. Perhaps the greatest praise for this system came from a partner who confirmed she would only begrudgingly move to another company if it offered her twice the salary!While employee ownership is rare, JLP is not alone. They are members of the Employee Ownership Association (EOA), which represents U.K. organizations that are currently employee-owned or currently moving to this new form of ownership. According to EOA figures, the number of employee owned businesses in the United Kingdom is increasing by 10 percent per annum. In 2009, an independent report by the Demos think tank estimated that the employee-owned sector was worth £25 billion to the U.K. economy and further development should be supported. In 2012, this grow ing belief in employee-ownership was further supported when the U.K. Deputy Prime Minister called for more companies to follow the JLP model, arguing that firms where staff had more of a stake were more innovative and had higher levels of productivity. It is unlikely that the JLP model will totally replace the typical capitalist enterprise any time soon. However, the continued success of JLP and the general feeling that a business should be measured against more than share price could see employee-owned organizations becoming far more common in the future." 11. Isthere a link between the approach at the John Lewis partnership and the earlier theories of motivation? 2. Considering the Goal-setting theory, how do you think this partnership structure will affect the setting and achievement of challenging individual goals? 3. "Money is not a motivator.” Discuss this statement in light of the JLP case. 4, Do you think that this partnership approach will solve any of the problems associated with the Equity theory? Why or why not? 5. What could be the potential drawbacks of this type of organizational ownership?