Marks and Spencer: Structure and Culture

attach and Spencer Structure and Culture1. INTRODUCTIONMarks Spencer is British institution. candid in 1884, the company emerged as a major retailer of clothes, food, household items and financial services. By 1997, Marks Spencer was an international company with sales of over 8 billion and very high net profit margins.However, the group experienced a shocking reversal in fortune at the turn of the twenty-first Century when its main customer base, women aged amid 35 and 55 began to stop shopping at their stores.This posed a very serious holy terror to the companys survival and Marks Spencer thought hard and spacious active how to rectify the situation. It did so by introducing bold new moves changing its corporate culture and by strengthening existing systems and processes. By doing so, the company was able to regain its loyal customers and grow once again. Yet, the last few years have been challenging as the company was badly affected by the global economic crisis.This re port outlines the changing structure and culture at Marks Spencers. It provides a comparison of the contributions of the constitute business functions to the organisational change. It also identifies the key stakeholders of the organization and the key issues of managing them. Finally, a SWOT analysis is done for Marks Spencer along with an assessment of its long call future prospects.2. CHANGING CORPORATE CULTURE AND ORGANIZATIONAL STRUCTUREAll organizations have their own cultures, which consist of the values and beliefs shared by its members which determine to a considerable degree how managers respond to problems and opportunities. But corporate culture can frame 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 are held without argufy 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 become stuck in a rut. Employees become resistant to change and are unwilling to do things diametrically because they involve inconvenience and uncertainty. This could ultimately destroy the company.Like close successful organizations, Marks Spencer was a victim of its own success. Its corporate culture because inflexible, rigid and resistant to change because it was felt that since the company was successful, there was no affect 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 top management headstrong on a major revamp.As a result, employees became less resistant to change and began to embrace new ways of doing things. Employees were willing to work for longer hours if it meant burst pay and they were less resistant to the fact that they might lose their jobs 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 fall in able to cope with changes in the working environment. All these efforts contributed to the change in corporate culture which is now more than dynamic and flexible.A do of major changes were also made 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 simplified to delegate more responsibility to individual store managers to give them more autonomy.3. CONTRIBUTIONS OF key out BUSINESS FUNCTIONS TO ORGANIZATIONAL CHANGES3.1 FinanceThe finance function plays a critical role at Marks Spencer in cutting costs and eliminating extra 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 to the highest degree from the initiatives made in terms of maximization of shareholder wealthiness.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 sold at Marks Spencer were unfashionable and even dowdy. Therefore, the marketing function decided to split up the long-cherished St Michaels brand into a number of categories to cater for different customer needs.Consequently, the company launched three new product categories for women (www.marksandspencer.com, 2011). The first, the Perfect 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 dress 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 practices 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 used and this facilitated transparency and repartee time. The lead time was reduced and the company placed a greater emphasis on timeliness and quality. These contribute to leaner operations which lead to hi gher(prenominal) 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 PlayerB, C ADLeast Important Show ConsiderationInterestKeyA ShareholdersB ManagementC CustomersD Employees5. MANAGING KEY STAKEHOLDERSShareholders would like to increase their wealth. Share maximization is through share price appreciation and dividends (Aaker, 1996). Therefore, satisfying this group would require increasing profits and the company profile.Ma nagement is concerned about maintaining control over operations. Their goals are sometimes 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 incompatible 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 mustiness 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)trengthsExcellent control system for suppliers, inventory and layout of store s.Very high quality productsEfficient and modern production techniquesGood judgment of its core customer base.6.2 (W)eaknessesGeneric clothing that is often perceived as unfashionableAn image of being boring6.3 (O)pportunitiesGlobal expansionUtilizing more overseas suppliers to achieve cost advantageMaximize use of existing technology to obtain competitive advantage6.4 (T)hreats disceptation with premium quality clothing manufacturersCompetition with discount storesEconomic downturn7. FUTURE PROSPECTSMarks Spencer is face 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 arguing 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 collapse. To succeed, the company must grow its market share by penetrating new markets or new p roduct lines.8. CONCLUSIONMarks Spencer is a company with a long history of success. To overcome its current difficulties, it must draw on its strengths, overcome its weaknesses and revamp its strategy to stay relevant and competitive.