Evaluation of John Lewis Partnership as a Conscious Capitalism - Literature review Example

Evaluation of John Lewis Partnership as a Conscious Capitalism Introduction In the United Kingdom and beyond, effective business strategies have proved to be one of the prime factors that determine success or failure. Business enterprises that are structurally strong and maintain high standards sustain their dominance for long. Effective organisational management team who diligently work for a common purpose is a spice to the good structures that a business have; they regulate the operations and steward the firm towards the destinations of success. In many instances, various businesses have teamed up (partnered) by pulling up resources and skills as the work together in reaching the same goals (Hopkins, 2007: 170). Such amalgamations have not only benefited the firms economically but also increased their market share and command. The level of competition in such industries goes down as the merged business gain competitive advantage over their independent competitors in the same market. As a matter of fact, most businesses have chosen a market strategy that portrays them as enterprises that care and are concerned about the welfare of the society. Such organisations operate to demonstrate that they are conscious about what their activities impact on the society and they do all they can to ensure the community are not harmed in any way. This strategy is known as conscious capitalism. This paper aims at critically evaluating John Lewis Partnership, the partnership principles as well as determines why it qualifies to be designated as a conscious capitalism. Conscious Capitalism The motivation to provide beneficial outcomes in the society in which a business is set and operates ultimately brings a sense of social responsibility. Businesses carry out their activities in cultural settings within the society and it is therefore appropriate if they align themselves with the cultural and legal frameworks under which the business operates. Conscious capitalism is an extensive system of capitalism in which private enterprises operate in a cognisant manner with regard to the welfare of the society members. It is about taking ensuring social responsibility by adopting harm-preventive measures as well as practices that have positive and healthy impacts in the environment. The companies therefore feel obliged to safeguard the moral and ethical codes of conducts in a bid to promote social welfare. This moral obligation is what conscious capitalism is embedded on. Although Friedman would look at business to be inclined to making maximum profits alone, conscious capitalism goes ahead to base its operations in keeping values. This implies that the need to be mindful of the society’s values informs the actions and decisions the businesses make as they attempt to generate high revenues in their trading activities. Firms (such as John Lewis Partnership) that subscribe to conscious capitalism are therefore guided by codes and principles that inform their operations to achieve these double-objectives. Background to John Lewis Partnership John Lewis Partnership is a legally registered partnership business enterprise located in Britain with over 60,000 partners including employees. It was formed in 1864 launching its first shop in Oxford, London the same year. Several years later (exactly four decades), Waitrose store was also launched; a massive expansion that significantly enhanced John Lewis Partnership’s operations. It has travelled the long business way of expansion and today, John Lewis is a popular name in the streets. It is known for the great command it has on the United Kingdom’s economy having joined up twenty seventy department stores and over one hundred and sixty six Waitrose stores. Its operations mode of a retail shop makes it have direct contact with its customers making its popularity escalate even higher. The strong establishment and long period of historical existence has made it win trust and loyalty among its stakeholders making it thrive in allegiance and reliability grounds. One thing that makes John Lewis Partnership to stand out in Great Britain is the large number of partners who co- possess the business. Over sixty thousand members are partners in this enterprise and most of them are workers and staff of the same company. This is remarkable observation that amazed so many. The fact that they all have voices in the running of the business has equally contributed to its fame and growth in the market. Founded by Spedan Lewis with a vision of incorporating workers into the management of the firm they work for, guided by a range of principles and values, the organisation has continually been on course in ensuring that these are adhered to. These principles are what have kept the good flow of operation and seen the remarkably expansions it has had over the years. John Lewis Partnership Principles John Lewis Partnership has a clear guideline that seeks to recruit and integrate men and women with skills, expertise and determination to unite and function together as they adhere to the organisation’s principles and values. It is clear at John Lewis Partnership that success and goal achievement can only be realised if the guiding principles are followed and respected. It is for this reason that the principles are given much weight. These principles include: Purpose, Power, Profit and members’. Purpose Principle Drawing from its founder’s intended purpose, John Lewis Partnership functions to offer its employees (who are partners) a worthy job that is not only satisfying but also generate income for them. It purposefully operates to put smiles on the faces of its employees by offering an employment that s employee-based unlike other businesses that rests power on the management. By virtue of having control over the business, the employees feel a great sense of ownership. They personalise everything going round in the business and this brings a great psychological satisfaction. The prime purpose to improve the general welfare of its employees is one of the key reasons why John Lewis has successfully navigated through the tough business seasons. Every worker is glued to the purpose of the business of which the all understand. This has created a good relationship and facilitated peaceful coexistence amongst the employees as well as the overall stakeholder family. It is a ‘let’s-join-hands-and-make-profit’ operational mechanism that is inclusively sensitive to members’ needs. Power Principle This is a rationale through which power is shared in the partnership. With the understanding that clearly stipulating hierarchy of power minimises conflicts and eventual failure, John Lewis Partnership has a clearly defined roles in the governing duties. The partnership power is vested consensually on three bodies that oversee the smooth running of the organisation and these include: ‘Partnership Council, Partnership Board and Chairman’. The three are the bodies mandated with the governing of the organisation as the top most authorities that can make last decisions and effect critical policies. Each of the bodies has clearly designated roles and functions in ensuring the organisation is mainstreamed into the right channels of success. This power principles enables the organisation have the right leadership than can coordinate the activities and bring together diverse workers to actively direct their operations toward the common organisational goal realisation. Profit Principle The ultimate goal of any business is making profits that can benefit the organisation in facilitating growth as well as improving financial status of its workers, management and other stakeholders. Profit is what entrepreneurship is started for. The struggle that businesses go through in subduing the forces of losses and failure to realise profits are immense. John Lewis Partnership is not exceptional in this struggle. It exists to make profits, actually large profits that can sustain its development projects as well as financially meet other economical obligations it has to its members. It is this principle that motivates and commits workers to high performance in order to generate revenues. Employees are tasked with producing the best results that can help generate big profits so that the prime purpose of the organisation can work in accordance with the purpose principle to deliver the ‘promise’ for worthwhile employment. Members Principle Embedded on fairness and equality, John Lewis Partnership has a principle that guides and defines how membership for the partnership is acquired. As previously highlighted, membership is virtually acquired through the will to work together with other members as long as one can pass the integrity test. Expertise in what the business is engaged in as well as determination and diligence are some of the virtues that earn individuals a spot into the partnership. Respect for fellow partners and courteous relationship is greatly emphasised so that an enabling environment that favours work can be created. The principle demands members to be sensitive to each other’s needs and relate to one another in a way that promotes understanding and cohesion. Fairness and equality is an element in this principle which demands that each and everyone be treated equally and their honest contributions be recognised and appreciated. A lot of focus is given to members and their relationship since this organisation is partner satisfaction-oriented which forms its primary purpose of existence. The principle regulating and overseeing members’ action and welfare is undoubtedly very core to the operations of this business union. Principles of Conscious Capitalism In as much as it may seem that businesses exists to make profits, there is just so much it is expect to do or deliver. As aforementioned, conscious businesses or rather organisations that operate under conscious capitalism seek more than just profit from its operations. These organisations want to leave the society better than they found it and it is for this reason that they go beyond their ways to ensure that benefit rather than harm becomes their ultimate gift to the society. Achieving this however is not a walk in the park. Without clearly outlined principles and codes that guide the company’s operations and general conduct, this goal might never be reached (Lee and Kotler, 2013: 189). The four principles of conscious capitalism include: Higher purpose Generally, human life calls for purpose. People live (ought to live) for a purpose. Spontaneity breeds uncertainty in results. No one can easily predict what they aim to score if they did not purposefully establish their mission. The same way in conscious businesses, they operate on basis of purpose. A look into the formation of conscious businesses reveals they are similarly established for some clear purpose. It is this purpose that drives the organisation and sustains it in the industry. Although purpose may include making profit, it goes ahead to serving purpose than are post-organisational such as proving social services to community. Stakeholder Orientation Conscious businesses are bound to ensure the welfare of their stakeholders is safeguarded. The stake orientation principle bulks them with the task of engaging their stakeholders in every stride they make. Through moral values and healthy norms, businesses are able to safeguard the interests of its stake holders. Customers are important stake holders in the business fraternity and endeavours to protect them are supported by this principle. For instance, businesses that genuinely operate under conscious capitalism will do all they can to avoid their (customers’) and any form of abuse that is morally or legally unacceptable. Workers, partners, suppliers and the society at large that contribute to the growth of the business in one way or the other will be safeguarded by this principle and a healthy relationship amongst the contributors will be achieved (Kofman,2006: 155). Conscious Leadership From east to west, across the highlands and beyond the horizons, any social organisations can only stand for long if there is an effective leadership structure. Conscious capitalists understand that leadership that is consciously driven is required to erect, sustain and grow a business that aims at surpassing the trivial purposes of profit making to attending to the needs of the larger community (Davila and Crowther, 2007: 100). It is the effective leadership that blend the organisational goals with stakeholder’s personal objectives such that ultimately both are achieved. For instance, a good leadership team would decide on the best way to when the business is in a dilemma between making a profit and working within the ethical pavements. Healthy leadership translates to healthy business operations. Conscious Culture A good business environment is indubitably significant in facilitating high performance. An environment that is positive and enabling is key to the success of a business (Mallin, 2009:99). It creates a free-flowing professional relationship that ensures business purpose is stuck. A social environment is a product of culture. Conscious capitalism puts emphasis in the need to create a culture that is implanted into the positive socio-cultural provision of a given community. This way, the adherence to values, norms and traditions of the stakeholders shall have been achieved. The other preceding principles can only be obeyed if a good atmosphere that is regulated by reasonable ethical standards is created. Organisational culture for conscious businesses is not just like any other, it is mindfully informed (Crowther and Aras 2008: 189). Justification of John Lewis Partnership as a Conscious Capitalism The question of if John Lewis Partnership is a conscious capitalism is easy, indeed it is. There are several reasons that induce that conclusion. As matter of fact, conscious businesses are not so easy to find because most businesses operate under Friedman’s principle of responsibility towards making profits; nothing less, nothing more (Horrigan, 2010: 111). Businesses are therefore formed and operated with an insensitive blind mind of making profits. They therefore ignore any social responsibilities that would abort their mission of making huge profits. In the process, a lot of harm and damages are caused, occurrences that would have been avoided if only the primary purpose was set right and a good strategy adopted (Segerlund, 2010: 122). John Lewis Partnership is justifiably a conscious business because of the principle guideline that directs if functionality as partnership enterprise. A counter-comparison between its set of principles and those of a standard conscious capitalism asserts this claim. In both cases, the principle of purpose come first and is greatly emphasised. John Lewis Partnership is formed and guided by the prime purpose of serving its stake holders. It is through this purpose that it generates profit. The great mindfulness it has on the welfare of its stakeholders defines its purpose (Crane and Matten, 2010:134). The organisation’s history proves that it was formed and has run for all that time with a specific purpose that is oriented towards meeting the needs of its stakeholder. The purpose to serve the society by breaking the employee-employer aspect and bring the employee-partner relationship has continually served the purpose its founder had for it (Canon, 2012:100). The architects of conscious capitalism similarly campaigned for, in their purpose principle, a business that had purposes exceeding mere profit making. This way the alignment of John Lewis principle on purpose with that of conscious capitalism demonstrates how much it qualify to be deemed as that( May, Cheney, and Roper,2007: 115). Consequently, leadership is a key principle that describes a conscious business. A company that has not demonstrated effective leadership can hardly qualify to be a conscious leadership (Carroll, 1999: 270). Similarly, a counter analysis of the two (conscious capitalism and John Lewis Partnership) unfolds how much they entangle. John Lewis Partnership is a combination of many stores and are under a single identity. With over 60,000 partners, if there was any inadequacy in leadership system of the organisation then it would have fallen long ago. Rolling over such a wide milestone might never be possible with poor leadership especially if the organisation involves several partners like in the case of John Lewis Partnership (Mackey and Sisodia, 2013: 201). The management structure that consists of chairman, council and board regulates and coordinates the activities of the business to ensure that if smoothly run. Decisions are also made and any problem that arises is informatively solved. Conscious capitalism expects its members to have good leadership structures as seen in John Lewis Partnership to grant them a verifiable identity. Conscious capitalism as indicated demands members to have a conscious culture, a social culture that has values and norms that promote coexistence amongst the stakeholders (Crane, 2008:118). Looking at Lewis Partnership, this has not been left out. The organisation though its principle guideline that directs conduct and behaviour amongst members of the partnership pact. The culture of respect amongst members, fairness, equality and courtesy provides for an environment where stake holders can operate in without any frictions (Hunnicutt, 2009). This is in accordance with the requirements of conscious capitalism in which the business is supposed to subscribe to the social standards that promote growth, peace and development. Members as well as any other stakeholders can healthily and positively relate with each other as they work towards a common purpose. The significant regard given to stakeholders further promote this culture by ensuring that practices directed towards them are filtered and properly thought about that they cannot unnecessary harm (Laszlo, C. and Zhexembayeva, 2011: 167). As seen, the large volume partners that form John Lewis Partnership are basically employees of the organisation. This implies that practices and decisions that are meant to influence the employees would directly be influencing the partners. They will therefore have to be scrutinized and this applies to all stakeholders (De Chiara. and Russo Spena, 2011:71) Conclusion and Recommendations Although capitalism has faced myriad criticism, its outstretched form known as conscious capitalism is more practical and benefitting. Some companies have lined up and embraced in the UK and across world having seen how much valuable it is to perform beyond duties of profit making. Among these companies include John Lewis Partnership; an organisation that has legally existed for quite long. It ranks high not only on the scale of high partnered enterprise but also on consistency ranking. Guided by its four operational principles of purpose, power, profit and members, the smooth management of the organisation is attributably generated from these. It has justifiably proven that their guidelines are in line with the expectations anyone would have from a business operating under a conscious capitalistic framework. The four principles of conscious capitalism suitably entangle with the operational procedures of John Lewis Partnership leading to a no-doubt conclusion that the organisation is an example of a conscious capitalism. However, it is recommended that to illuminate more practically manifestos of conscious capitalism, John Lewis Partnership should engage more in social community services that widely and directly benefit the society (Sun, Stewart, and Pollard, 2010: 144). References Cannon, T. (2012) Corporate responsibility, New York, NY, Pearson. Carroll, A. (1999) Corporate Social Responsibility: Evolution of a Definitional Construct. Business & Society, vol. 38, no. 3, pp. 268-295. Crane, A. & Matten, D. (2010) Business ethics, Oxford, Oxford University Press. Crane, A. (2008) The Oxford handbook of corporate social responsibility, Oxford, Oxford University Press. Crowther, D., & Aras, G. 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