Marks and Spencer: Structure and Culture

attach and Spencer Structure and Culture1. INTRODUCTIONMarks Spencer is British institution. Opened in 1884, the accompany emerged as a major retailer of clothes, food, household items and pecuniary services. By 1997, Marks Spencer was an international company with sales of over 8 billion and very highschool net profit margins.However, the group experienced a shocking reversal in fortune at the turn of the 21st Century when its main node base, women aged between 35 and 55 began to cylinder block shopping at their stores.This posed a very serious threat to the companys survival and Marks Spencer eyeshot hard and long about how to rectify the situation. It did so by introducing bold crude moves changing its in corporald culture and by strengthening quick systems and processes. By doing so, the company was able to regain its loyal customers and formulate erst again. Yet, the last few years have been challenging as the company was badly impact by the global economic crisi s.This report outlines the changing structure and culture at Marks Spencers. It provides a comparison of the contri only whenions of the key business amours to the organisational change over. It also identifies the key stakeholders of the organization and the key issues of managing them. Finally, a bone analysis is done for Marks Spencer along with an assessment of its long term future prospects.2. CHANGING corporeal CULTURE AND organisational STRUCTUREAll organizations have their own cultures, which consist of the set and beliefs sh ard by its members which determine to a considerable degree how managers respond to problems and opportunities. But corporate culture can construct static and excessively bureaucratic over time, even among successful organizations (Huff et al, 2009).An organizational culture is powerful because it automatically shapes the way members see their world. Any culture is deeply rooted in beliefs and values that members have internalized. When beliefs and values argon held without challenge for a long period of time, they are even less likely to be questioned (Robbins and Judge, 2007). The norms rarely change to accommodate those who deviate from them. Inertia sets in and employees occasion stuck in a rut. Employees become kind to change and are unwilling to do things differently because they involve inconvenience and uncertainty. This could ultimately overthrow the company.Like most(prenominal) successful organizations, Marks Spencer was a victim of its own success. Its corporate culture because inflexible, plastered and resistant to change because it was felt that since the company was successful, there was no need to change. Deeply entrenched was a sense of employee entitlement regarding remuneration and working hours. However, when it became clear that the old culture was unable to cope with changing demands of the marketplace, the go past precaution decided on a major revamp.As a result, employees became less resist ant to change and began to embrace impertinent ways of doing things. Employees were willing to work for longer hours if it meant better pay and they were less resistant to the fact that they might lose their businesss if the company performed poorly. They were also sent for learning and education programs to equip them with new skills sets so that they were better able to cope with changes in the working environment. All these efforts contributed to the change in corporate culture which is now more dynamic and flexible.A number of major changes were also nonplus to the organizational structure. The formal chain of command was flattened to a certain extent and in doing so the company became more agile and responsive to changes in customer demand and taste. The regional management structure was alter to delegate more responsibility to individual store managers to give them more autonomy.3. CONTRIBUTIONS OF KEY BUSINESS FUNCTIONS TO ORGANIZATIONAL CHANGES3.1 FinanceThe finance func tion plays a critical business office at Marks Spencer in discriminating costs and eliminating unnecessary expenditure. The entire value chain was examined to determine where and how costs could be trimmed. As a result, the company was able to reduce costs, provide better prices to the customers and improve its overall profitability. Ultimately, it is the shareholders who stand to gain the most from the initiatives made in terms of maximization of shareholder wealth.3.2 MarketingTo attract new customers and retain existing customers at Marks Spencer, the marketing function critically examined the cause of declining sales. The main cause negative customer perception of its main customer base women aged between 35 and 55 that the clothes interchange at Marks Spencer were unfashionable and even dowdy. Therefore, the marketing function decided to split up the long-cherished St Michaels blot into a number of categories to cater for different customer needs.Consequently, the compa ny launched three new product categories for women (www.marksandspencer.com, 2011). The first, the everlasting(a) and Classic ranges were for basic purposes, for example jeans, sweaters and plain shirts. The second range, Autograph is for the more fashionable woman of a larger demographic group. The final range, per una, is targeted at the younger woman of ages 25 to 35 and is of average localise size.By segmenting its products for different markets, the company was able to regain most of the sales it lost. Different marketing campaigns are held for each range and this makes the companys products appear more attractive to customers.3.3 OperationsA number of critical changes were made to the companys operations. For one, the supply chain was made leaner and in doing so, the company made substantial savings. Fewer suppliers were utilise and this facilitated transparency and response time. The lead time was reduced and the company placed a greater accent mark on timeliness and qual ity. These contribute to leaner operations which lead to higher profits.3.4 Human ResourceThis function is critical to the successful implementation of a strategy. The HRM function at Marks Spencer played an important role in changing employee mindset and modifying the corporate culture to be more attuned to the changes that need to occur (Hitt et al, 2004). As a result, employees were more receptive to change and aware of the sacrifices they need to make.4. KEY STAKEHOLDERSThe key stakeholders of Marks Spencer are shareholders, management, employees and customers. The following diagram shows their relative importance and powerPower of StakeholdersMeet Their Needs Key fraudB, C ADLeast Important Show ConsiderationInterestKeyA ShareholdersB attentionC CustomersD Employees5. MANAGING KEY STAKEHOLDERSShareholders would like to maximize their wealth. Share maximization is through with(predicate) share price appreciation and dividends (Aaker, 1996). Therefore, satisfying this gr oup would require increasing profits and the company profile.Management is implicated about maintaining control over operations. Their goals are both(prenominal)times similar to that of shareholders but in some cases they differ (Daniels et al, 2007). Hence, there is the agency problem.The employees at Marks Spencer are most concerned about job security and work conditions. Ideally, they would like jobs that pay well and have good hours. However, this may be at variance(p) with the goal of wealth maximization of shareholders as employee benefits will erode profits. Similarly, if employees are unionized, they may cause problems to management and reduce its influence. Hence, management must strike a balance between making employees and shareholders happy.Customers are concerned about satisfying their needs and wants. Managing them effectively would require Marks Spencer to improve its product offering to make satisfied customers who make repeat purchases.6. SWOT ANALYSIS6.1 (S)t rengthsExcellent control system for suppliers, inventory and layout of stores. really high quality productsEfficient and modern production techniquesGood understanding of its core customer base.6.2 (W)eaknessesgeneric clothing that is often perceived as unfashionableAn image of being boring6.3 (O)pportunitiesGlobal refinementUtilizing more overseas suppliers to achieve cost advantageMaximize use of existing technology to receive competitive advantage6.4 (T)hreatsCompetition with premium quality clothing manufacturersCompetition with discount storesEconomic downswing7. FUTURE PROSPECTSMarks Spencer is facing a very difficult time. After its successful business turnaround, it is once again facing problems due to the recession. Indeed the next few years may be a very difficult time for the company. Not only is it facing competition from high end retailers but discount stores as well. Meanwhile, the middle class is shrinking and if the company does not take bold steps, it may collaps e. To succeed, the company must grow its market share by penetrating new markets or new product lines.8. CONCLUSIONMarks Spencer is a company with a long history of success. To overcome its true difficulties, it must draw on its strengths, overcome its weaknesses and revamp its strategy to stay relevant and competitive.