Marks and Spencer success

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Abstract This research will explore on the success of Marks and Spencer from its outstanding business operational strategies. It will take a look on the human resource aspect of the organization, theories on leadership and employee motivation will further be discussed in order to achieve a strong comprehension on the nature of individual and group motivation and the policies affecting motivation and conflict within the organization.This research will basically identify the human resources problems arising from organization change and the effectiveness of the policies designed to deal with these problems and to have an analysis of the methods of managing diversity and the organizational issues arising from it.

                IntroductionThe success of any business organization is strong company leadership, concrete and motivated human resource team which strives to achieve a unified goal of the organization, that ranges from financial boost, social responsibilities and well-constructed professionals, good working relationship of the people making up the organization, ranging from the CEO, to the entire administration level, to the staffs and the factory workers. A business success does not only depend on strong marketing skills, strategic branding and selling, effective market positioning, but success also relies on the people behind the work, without them nothing fruitful will be achieved, therefore it is of great importance to put adequate attention and concern to human resource, prioritizing them will lead to effective collaboration and teamwork which will in turn yield the fulfillment of all the organization’s perceived outcomes.The subject of this research is one of United Kingdom’s leading retailers of clothing, foods, homeware and financial services, Marks and Spencer. This renowned retail store serves 10 million customers a week in more that 300 United Kingdom’s store.

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The company also has trades in 30 countries worldwide and has a group turnover in excess of £8 billion.Marks and Spencer (M&S) seems to accomplish an exceptional resiliency in its brand name in spite of offering a wide variety of product lines under its one brand name. Everything is sold in M&S stores, from food, house wares, women’s fashion, and a whole lot of stuff. Contrasting many retailers selling products under the manufacturer’s brand, M&S sells these products under one single brand M&S, very unusual, but consumers don’t seem to mind at all (online Brandchannel.

com). Company HistoryFounded in 1894 in a business partnership between Michael Marks and Tom Spencer, M&S has since grown to a 515-store located throughout the United Kingdom and 200-store worldwide operating in 30 countries. The initial stages of Marks & Spencer started with a philanthropic act of Isaac Dewhirst, an established local businessman, who has lent Michael Marks 5 pounds and his first opportunity to buy and sell goods in London during the 1880s. Michael Marks soon went into partnership with Tom Spencer, chief clerk at Mr.

Dewhirst’s store, and built a chain of market stalls, more popularly known as ‘penny bazaars’. Little did Mr. Dewhirst know that his philanthropic act would soon become one of biggest retailing empire in United Kingdom (Seth and Randall 2001, p. 118; online Marks and Spencer)trMarks and Spencer’s phenomenal growth came from the leadership of Michael Mark’s son, Simon.

As Michael Marks and Tom Spencer have built a chain of market stalls, Simon Marks developed the Marks and Spencer store brand, produced an innovative corporate culture, and set the trading principles that are still used up to today. Simon led the company to go public in 1926. Shortly thereafter under the leadership of Simon Marks, St. Michael, one of the famous brands of M&S, was registered in 1928.

In 1956, all merchandise sold in M&S stores were under the St. Michael label. This started a five decade long of trend of extending M&S brand in various product categories (Seth and Randall 2001, p. 118; online Marks and Spencer).

While Marks & Spencer has enjoyed its brand uncontested and respected for decades, market share, net profit, and share price of M&S has fallen. However, since 2000, M&S has been on the recovery improving its profitability and margins. For 2006, the company registered an increased of 4.1% in retail sales, 35.

1% increase in pre-tax profits, and 63.5% increase in earnings per share. Its food and clothing department continue to be the large contributors of M&S sales accounting for 46.6% and 42.

2% of total revenues. Food recorded a strong growth in 2006, while clothing sales remains flat. Home products and international sales account for 4.5% and 6.

7% for total revenues with home products seeing a 0.8% increase (Marks and Spencer 2006).Performance overall has improved progressively throughout the years with operating margin increasing to more than 10% in 2006. Continued tight control of costs, tight management of stock commitments and better procurement process has been the main factors for the improving margins.

In addition, customer visits has increased by nearly 350,000 a week to over 15 million in 2006 as compared to 14.7 million in 2005. Christmas season also helped in increasing consumer purchases with a total of 10 million consumers purchasing every week. Marks & Spencer management expects to see this positive trend to continue as M&S offers better products, stores, and customer service to the consumers (Rose 2006).

M&S attained a lot in the last three years. They are now on the course of that progress through a persistent focus on the core business, whereas also laying the foundations for future growth. The goal is to develop into a more customer-focused, faster moving and flexible business, showcasing a wide range of choices of quality goods and services. Everything that M&S undertakes has one key goal: constructing a sustainable business for the long term, creating shareholder value through unswerving, profitable growth while ensuring that customers can always trust M&S to do the right thing.

M&S will make this happen by having the steadfast ongoing focus on Product, Service and Environment: providing great products, in great looking stores with great customer service.Moreover, M&S have begun to practice new directions to growth in the course of the acquisition of new space; new food formats; new product areas such as home technology; new website and international expansion. And M&S persist on to control their impact on society and the environment with great care, through their ‘eco plan’, Plan A. They believe this will all make M&S a better business.

M&S have a long way to go before they are truly a world-class retailer again, but they are now on the right track.The Man Behind the Revitalized Marks and SpencerBehind the revived success of Marks and Spencer is the man named Stuart Rose, the chief executive officer. Mr. Rose’s, retail career started a 17-year stint in M&S, he is renowned for with engineering a dramatic and radical change at Arcadia, the owner of the Top Shop and Dorothy Perkins clothing chains when he joined them n 1989.

Marks and Spencer faced a renewed slide in sales from an earlier downturn during 2000 and 2001. The board hoped that Mr. Rose can put together an equally effective comeback strategy in his new role. His primary task was to revitalize M&S’ core clothing division, which suffered a surprise 2.

5% dip in sales during the first three months of the year.Mr. Rose faced the uphill struggle at M;S, which revealed a fall in sale despite a slim rise in annual profits. Many analysts did not believe in him, among them said that later on Stuart Rose will end up selling shared of M;S.

But with his plans of getting M;S’s business “moving forward” again and claiming that he will regain the former glory of the business, he surely did uphold and revitalized what has been gone in M&S.In January 2007, Stuart Rose was chosen as the Business Leader of the Year by the World Leadership Forum. The board believes that he is a clear winner among the nearly thousand business leaders of medium to large British businesses. Stuart Rose is plainly admired as Britain’s most admired businessman, having dramatically improved M;S’s fortune while operating in a much notoriously competitive and fickle market.

Stuart Rose’s is known for his creative leadership and has been distinguished by a number of key features: He was absolutely deliberate in managing key stakeholder groups in taking time in creating confidence in his ability to lead out of its difficulties. This was particularly significant in dealing with the takeover bid and building reassurance for investors that an independent M;S under his leadership will yield better and ideal returns.He stimulated confidence that he could create value. In declining the offer from Philip Green of £4 per share, he convinced shareholders that the M;S share price would rise far beyond that point.

Currently, it is trading in excess of £8.He was clear and decisive towards leadership team he needed. This included making some tough decisions about the structure of that team, making it fairly smaller and more clearly accountable, but at the same time giving high regard to signals about leadership culture.The luxurious headquarters at Barker Street, along with its hierarchical culture were flounced away.

At the same time as slimming down the top team, he simplified the management structure in order to arrive in decision making faster, more accountable and transparent. Rose himself was regularly seen on the shop floor close to employees and customers and he expected his team to do likewiseHe at once engaged with employees at all levels. A major side effect of the loss of confidence in M;S was the low employee morale. A direct effect of this on the way in which they interacted with customers stories of poor service from apathetic employees flourished.

Rose gives initial purpose on re-building employee pride and commitment. But at the same time he was also ruthless in removing some long term employee perks which had grown to become rights. He established more professional, performance based contracts for staff which were designed to reinforce, strengthen and reward behaviours which support and shore up organizational performance. (www.;SWOT AnalysisAs analyzed the competing forces that could affect the overall success of Marks ; Spencer in the retail industry, we also recognize the need to be able to identify the strength and weakness of M;S as well as external opportunities, and threats. The table below is SWOT analysis of M;S strategic capabilities.The value of the SWOT analysis is its ease of use, its simplicity, and its flexibility.

In addition, SWOT analysis allows the synthesis and integration of various types of information which are generally known but still provides the possibility to organize and synthesize recent information as well (Thompson and Strickland 2003, p. 117).The insight to be gained in performing the SWOT analysis is the understanding of the core competency of the company that would give it a distinctive competitive advantage over its rival. More importantly, it provides the groundwork on (1) how the company’s strategy can be matched to both its resource capabilities and its market opportunities, and (2) how urgent it is for the company to correct which particular resource deficiency and guard against to particular threats.

It also raises questions about what future resource strengths and capabilities the company will need to respond to emerging industry trends and competitive conditions (Thompson and Strickland 2003, p. 118-119)SWOT on Marks and Spencer;Strengths-          Strong brand recall and market position in the     United Kingdom retail industry-          Improving financial performance and balance sheet-          Increasing foot traffic and large store network in the   United  Kingdom;Weaknesses-          Geographic concentration on the UK market-          Low return on assets and equity-          Limited online transactions;Opportunities-          Follow through with International Expansion-          Improving online retailing experience-          Greater collaboration with global suppliers and improving supplier relationships;Threats-          Intense competition locally and globally-          Increasing labor wages in United Kingdom-          Weaker consumer spending-          New regulation in European UnionSource: Datamonitor (2006). Marks and Spencer Group plc: Company Profile.;Core competence is defined as “the capability of a company to perform a certain task relative to other competitors.

”(Thompson and Strickland 2003, p. 127; Kotler and Amstrong, 2003) It gives the company a competitive capability and thus qualifies as a genuine company strength and resource. Marks ; Spencer key asset has been its brand. Its ability to sell a wide range of product category under one brand name suggests the UK market’s strong identification and affiliation with the Marks ; Spencer brand.

Its retail chain network across UK and the internationally is also one of the key strengths of the company. Its core competency has always been its strong customer intimacy and its retailing know-how (Rose 2006). This, coupled with its strong brand name and market position, gives M;S its competitive advantage in the UK Retail industry.Market opportunity is a big factor in shaping a company’s strategy.

Strategically, the market opportunities most relevant to a company are those that offer important avenues for profitable growth, those where a company has the most potential for competitive advantage, and those that match up well with the company’s financial and organizational resource capabilities. Furthermore, it is important to note not all opportunities are worth pursuing. It is often advised to pass on a particular market opportunity unless it has or can build the resource capabilities to capture it (Thompson and Strickland 2003).Strong growth opportunities exist in expanding Marks ; Spencer stores in the international market.

With robust growth in the Asian markets and growing middle class in these countries, opportunities to take part and cater to the needs of these market as well. However, expansion program should be gradual (Dickinson 2006b). While its focus on UK retail market has been the key in regaining market share and improving overall profitability of the company, the geographic concentration of revenues coming from the UK market makes the company vulnerable to the market conditions and relatively uncompetitive in comparison to global competitors such as Wal-mart (Datamonitor 2006).Its refurbishment program is also an opportunity to re-launch the Marks ; Spencer brand with a fresh new look that addresses the new market conditions.

The increase investments in improving the format and layout in stores are expected to generate more foot traffic. With competitive pricing across a wide product range, M;S can hope not only increase visits from shoppers but greater number of purchases and increased product turnover. Moreover, with the international expansion of Marks ; Spencer stores, the new format will revive interest. More importantly, the key is to consistently offer the consistent level of customer service and product offering.

However, considering the different markets catered for its international stores, M;S should partner with local operators to understand the trends and the local buyers needs and wants (Marks and Spencer 2006).Lastly, with the intense competition in the local UK market, increasing labor wages, and weaker consumer spending, M;S should find alternative measures in improving its value chain especially in its procurement process (Datamonitor 2006). With inventory costs accounting for a large portion of its expense, the retailer’s ability to control stocking levels, increase product turnover, and reduce procurement costs will be ultimately set the tone in achieving the desired profitability.Strategies on Motivating Employees and Utilizing Leadership SkillsRegardless of the size of the company, having a motivated team of, hard-working employees is fundamentally crucial and very significant to the business successes.

As people lose their motivation, on the other hand, their job performance suffers; they become rather less productive, less creative and innovative, and less of a valuable asset to the company. It all boils down to reality that the business pays the price when motivation issues arise among employees.In order to bring back the lost motivation, whether former hardworking employee has in years declined his performance or may it be a long term problem of an employee to improve. The following discussions will be on how to get employees stimulated, productive and motivated in their respective areas.

Build a foundation. It is very significant to build a solid groundwork for the employees in order for them feel invested and empowered in the company. Make them aware about the history of the business and the vision and goals for the future. Know their expectations and career goals, as well as helping them feel part that they are important parts of the team.

Make each employee feel welcome, in order for them to feel the sense of belongingness and importance.Create a positive environment. Cultivate an office atmosphere that enables all employees to feel worthwhile and important. Avoid having favorites because these can light fire to issues.

Create an open relationship among with the employees; communication is crucial and indeed vital to maintain harmony and productivity in the workplace.Put people on the right path. Majority of the employees are looking or anticipating for advancement opportunities within their own company. Work them to develop a career growth plan that gives high regard both their current skills and future goals.

If employees become aware and excited about what’s on their career path, they will become more engaged, steadfast and dedicated in their present work.Educate the masses. Assist employees in the improvement of their professional skills by providing on-the-job training or in-house career development and trainings. Make them attend workshops and seminars related to the industry or their field of work.

Persuade them to be present at education classes paid for by the company. In these ways, employees will feel that the business is investing in them, and this will render into an improved job performance.Don’t forget the fun. Every once in a while have put work aside and do something fun and nice for the people who work for the business.

Treat and reward them. This will make them feel that their hard work is very much recognized and appreciated, therefore they will continue to do well in their work and do even better.Acknowledge contributions. Take time to praise the contributions of each employee.

Provide incentives. Give people inducements to motivate them to perform well, either with something small like a gift certificate or something more substantial such as a performance-based bonus or salary increase.Honor promises. Whenever promises are made to employees, make sure to keep them.

Failure to follow through on promises will result in a loss of trust, not only that person’s trust, but the trust of every employee who knows about that certain promise.Provide career coaching. Facilitate help to employees reach the next level competently by giving on-site coaching. Bring in professionals to facilitate one-on-one counseling, which aid people to learn how to surmount personal or professional hindrances on their career paths.

Match tasks to talents.  Improve employee motivation by improving the confidence of the employee. Disperse individuals with tasks they will enjoy or will be promising to do well. A successful employee will have the confidence to handle projects with heightened enthusiasm and perseverance.

According to the Annual Review 2007 of Marks and Spencer, they have sustained their commitment to employee participation all the way through the business. Employees are kept well educated and well-versed of the performance, objectives and goals of the group through personal briefings, regular meetings, electronic communications and Chief Executive Broadcasts at focus in the year to all head office employees and store management. These are enhanced by their employee publications which include, ‘Your M&S’ magazine, and DVD presentations. Approximately more than 3,500 employees elected onto Business Involvement Groups across every store and head office location correspond to their colleagues in two-way communication and consultation with the company.

They have persisted to play a vital role in a wide range of business changes including proposals in January 2007 to put their final salary retirement fund scheme on a more secure foothold for the future. The twelfth meeting of the European Council was held last July. This council provided an additional forum for informing, consulting and involving employee representatives from the countries in the European Community. Directors and senior management, on a regular basis visits stores and discuss, with employees, matters of current interest and various concerns and issues to the business.

Share schemes are a long-established and stable part of Marks and Spencer total reward package, encouraging and supporting employee share ownership. Particularly, over 21,000 employees presently partake in the Company’s All Employee Sharesave Scheme. They preserve contact with retired staff by communications from the company and the pension Trust. Member-nominated Trustees have been elected to the Pension Trust Board, including employees and pensioners.

They continue to produce a regular pension update newsletter for members of their final salary pension scheme and our M;S Retirement Plan. The group is also dedicated to an active Equal Opportunities Policy from recruitment and selection, through intense and extensive training and development, appraisal and promotion to retirement. It is their policy to uphold an environment free from discrimination, prejudice, harassment and victimization, wherein each and everyone will be granted equal treatment regardless of gender, color, ethnic or national origin, disability, age, marital status, sexual orientation or religion. All decisions concerning to employment practices will be objective and straight to the point, free from bias and partialities and solely based upon work criteria and individual value.

The group is receptive to the needs of its employees, customers and the community in general and Marks and Spencer is an organization that strives to use everyone’s talents and abilities to the full.One of Marks and Spencer policies is that people with disabilities should have full and just deliberation for all vacancies. During the year, they continued to use the Government’s ‘two ticks’ disability symbol to express their commitment and dedication to interviewing those people with disabilities who complete the minimum criteria, and striving to retain employees in the workforce if by any unfortunate case became disabled during employment. They will vigorously retrain and adjust their environment where probable to allow them to make the most of their potentials.

They continue to work with external organizations to offer workplace opportunities through their innovative ‘Marks ; Start’ scheme and by working closely with jobcentre plus.Strategic IssuesThere are managers insistently and unwaveringly adhere to the misguided and erroneous belief that they can control and have absolute power over employees with rewards and coercion or intimidation. But nowadays there are few threats which are enough to provoke some people to change what they do and much less on what they think. And even reward systems are considered suspect as effective motivators.

Motivated employees are successful in their work. As a result, all managers and supervisors, at some point, seek out to motivate workers. A common mistake is the failure to understand that people build up values and motivation from within themselves before anywhere else which are not from external forces. There is a prevalent misconception and false impression that one person can provide a compelling and persuasive stimulus which causes another person to do something.

That society believes this is demonstrated by the actions of their institutions. Authorities suppose that rigid penalties will, solve the problem and that more effective punishments will take control over student behavior. And for the world of employment, in which most people allot a high percentage of their time, has exceeded other institutions in establishing this fallacious and deceptive theory and that is that people can be effectively controlled from above. The mere fact is that employees can be assisted to become more productive, to show initiative, and to do quality work.

Using force will only just result to temporary compliance. If a business is willing to make a commitment and an assurance to change, the business can learn how to teach employees in an effective approach. Business can learn effective ways to talk with employees who are indifferent, opposing, or who suffer from other negative traits or attitudes. Included in this issue are managers who can’t communicate what they don’t know.

Nor will they motivate effectively if they themselves suffer from overwork, stress and insecurity. The subordinates, in addition, thought very little and poor of the quality of their managers in general and they complained specifically about lack of information and proper training.ChallengesEmployee motivation in the work environment is a mixture of workplace culture, organizational strategy and management style. The right blend of balance is very important.

 All employees have common basic necessities that must be concentrated on by the plant or corporate culture. These include: physical, safety, social, esteem and self-actualization of the employees. Bored and jaded employees have a considerably negative impact on the level of motivating other employees.A de-motivated workforce will in due course result in high absenteeism or non-attendance and employee turnover rates usually are adjunct to by poor customer service.

Motivation is not for hire, neither can be bought. Moreover, it needs to be created, encouraged and steadfastly supported by the organization.The real and actual challenge is to maintain this employee motivation in the long-term condition. Inside the workplace, workforce motivation connotes to getting employees to put forth a high degree of effort.

The key is to get them to do a good job over and over again. In line with this, motivation is something that must come from within an employee. Nevertheless, management can help build an environment that promotes employee motivation.  Motivation can be understood by using the following sequence of events: needs, drives or motives, and goal obtainment.

In this sequence, the needs result to motives, which lead to the goal attainment.Needs are considered caused by deficiencies, which can be either physical or emotional. For example, a physical need exists when a person is hungry. It can be related to an emotional need exists when a person has no one to turn to.

Motives produce action. Achieving the goal gratifies the need and diminishes the motive and when the goal is reached, the balance is therefore re-established.ConclusionsDistinguishing success is crucial, and equally essential is inspiring employees to strive and work hard toward achievements. The staff will be inspired and encouraged by knowing their contributions are recognized and valued and that management is certain in their talents and skills.

The reward practice can be ideal, announcement and award has become a fun and highly anticipated event, knowing the ongoing importance of individual contribution to the company’s success.Encourage creativity and inventiveness by providing freedom, time and other handy resources to employees. Know what they need in order maximize their innovative thinking and productivity, and provide it with enthusiasm and encouragement. To stimulate employees’ creativity and confidence further, sustain constant education through classes, seminars, subscriptions and memberships.

Make information easily reached through a work library. Ask employees to open up new ideas, request proposals for new projects, and share employees’ suggestions through carious forms of publications, or during meetings and recognition events. Most significantly, implement action on those ideas that have potential benefit for the company, and acknowledged employees who made any resulting attainments possible.Despite the fact that persuading creativity and rewarding success may come somehow easily, it may be harder to stay positive when mistakes are made.

On the other hand, this is where positive reinforcement sets in and is even more critical. Employees will be much less likely to give out ideas if they are intimidated or demoralized by management’s reactions to probable mistakes. Keeping in mind and expressing to employees that mistakes are learning opportunities, which could lead to fresh and innovative ideas that have a major, cost-effective impact on the company. If an idea doesn’t work out, be aware of the initiative and effort.

Employees will feel extra inspired and satisfied, knowing that management truly pays attention to their ideas and supports their efforts. According to Rechner at Tejas Securities Group, “management’s openness to staff members’ input, feedback, ideas and suggestions is the cornerstone of good communications and strong employee relationships. Everybody wins when they are all part of a supportive team.” All of these steps add to a sense of entrepreneurship and empowerment, which are indispensable to strengthening teamwork and dedication.

Empowerment should be commenced on three levels: encouraging employees to become more active in their work; relating staff members to improve processes and procedures; and enabling them to make more, bigger and bolder decisions during the course of the business.Further to motivation and job satisfaction, employees profit with strengthened confidence to accept and practice new responsibilities. And once a few employees succeed, their enthusiasm and motivation would become infectious and transmittable throughout their teams or departments. The result will be, those groups would become more enthusiastic, proactive and hence, successful, which further heightens their team spirit.

In due course, the company has much to gain by empowering and motivating staff members. By making the most of employees’ talents and motivation, managers could invest more time in strategic planning and further motivating employees. And in the case Marks and Spencer, they have obviously given high regard to the welfare of their employees, thus enabling them to have a sturdy business structure behind their business operations, and they are the encouraged and motivated employees who are persistently determined and totally dedicated to strive and work harder in order to achieve the company’s unifying goals. It can therefore be concluded, that above all else, proper leadership and effective motivation to employees are the foundation of a strong organization which is financially stable and promisingly successful.

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