Leadership and Motivation of Marks and Spencer Company - Case Study Example

Leadership and Motivation & Organisational Behaviour – the case of Marks and Spencer Introduction – Company overview In modern market, the development of a firm’s organizational activities can be achieved only through an appropriate customized leadership style that will be aligned with the organizational strategies. After its implementation in practice, the specific leadership style could lead to the differentiation of existing organizational structure influencing the performance of employees and the performance of the firm either in the short or the long term. In accordance with Parnell (2003, 16) ‘in many respects, the evidence for the existence of a strategy can permeate an organization; sharing strategic information with lower-level managers and employees may enhance both job comprehension and organizational commitment’. In other words, the introduction of a specific leadership in a particular organization could not guarantee the positive performance of the specific organization; various obstacles could intervene in the successful completion of the relevant strategy while its effects on the firm’s organizational structure could be influenced by a series of factors like the position of the firm in the international (or the local market), the culture of the organization and the leadership practices applied on the organizational activities. In fact, in the study of Rand (1999) it is noticed that ‘businesses fail because management does not have effective control of the business as management is too far removed from revenue-producing processes; visibility is nonexistent or, at best, extremely limited’ (Rand, 1999, 97). In other words, a firm’s operation could be strongly affected by the fact that the decisions of its leader are not the appropriate (taking into account the current market conditions and the position of the firm within its industry). Further more, in order to avoid the risks related with the lack of appropriate control over the organizational activities, a leader should proceed on the close examination of the following business activities/ sectors: ‘inputs (materials, energy, information, management, technology, facilities and labor), transformation (or conversion process) and disposition (marketing and sales)’ (Gomez et al., 2002, Ch.15). The extended reference to the decisions of leaders in modern firms is made because of the importance of these decisions for the performance of all organizations operating internationally. Current paper focuses on the leadership practices used across all organizational departments of a particular British firm, Marks and Spencer. The effects of these practices on the performance of employees and the organizational behaviour are examined at the level that they can offer a credible image of the development of the firm worldwide - as it can be proved by the examination of the figures published in the corporate website. Marks and Spencer was established approximately in 1884. The firm was limited primarily in the Leeds Market. However, in 1894 the partnership of the firm’s owner – M. Marks – with T. Spencer led to the beginning of the firm’s radical development across UK – as well as in the international market. It should be noticed that in accordance with the corporate website currently the firm owns more than 600 stores in Britain and approximately 240 stores around the world – with an active presence in about 34 countries. The priority of the firm’s managers has been ‘to make aspirational quality accessible to all; our Values: Quality, value, service, innovation and trust’ [corporate website, 1]. The above comment is included in the firm’s mission statement and it’s indicative of the leadership strategies on which the realization of the various business projects is based. The performance of the firm – because of its significance – has been studied extensively in the literature and the empirical research. In this context, it is noticed that ‘the variety store retailer Marks & Spencer started its process of internationalization 25 years ago, now representing a valuable case study in market entry and international positioning’ (McGoldrick, 1998, 189). The above researcher refers specifically to the development of Marks and Spencer in the international market and the potential consequences of this expansion on the firm’s various sectors. The study of the firm’s financial performance (which is based on the data published in the corporate website) can lead to the assumption that during 2007 the firm managed to reach a high level of growth. Indicatively, we could refer to the fact that ‘international revenues were up 16.8% with strong performances in both owned and franchised stores, up 14.0% and 21.5% respectively; this was driven by strong like-for-like performance and 23 new store openings’ [1]. The performance of the firm as described above can lead to the assumption that leadership decisions in the specific firm are carefully chosen in accordance with the firm’s needs and potentials but also in accordance with the market trends and the conditions of the international market – that always influence the local market. 2. Methodology 2.1 Management and Leadership in Marks and Spencer – general aspects In order to understand the leadership decisions in Marks and Spencer it would be necessary to refer primarily – even if at a general context – to the role of leadership in the development of activities of modern organizations. A significant requirement for the success of any business activity is the continuous and close control of all organizational activities but also the choice of the appropriate management plans. Operations management has a decisive role in the success of any organization around the world. In order for operations management to be effective it is necessary that it is based on appropriate leadership decisions that will refer to the following issues/ priorities: ‘making and keeping relationships, implementing new technology in the supply channel, the use of forecasting to increase supply chain effectiveness, outsourcing to increase efficiency, and cost management as a strategic weapon’ (Cook et al., 2001, 14). The examination of the leadership and management styles used in Marks and Spencer can lead to the assumption that all organizational activities are given equal priority when developing a specific management plan in the above firm; the firm’s leaders pay a particular attention to the HRM policies applied on all organizational departments; in this context, employee motivation is proved to be a significant criterion for the development of all leadership practices in Marks and Spencer. Employee is a valuable asset in the above firm; for this reason the benefits offered to the firm’s employees could affect the organizational structure – through the differentiation in the distribution of employees’ benefits if compared with the other firms that also operate in the particular industry. It should be noticed that in the past decade the firm faced severe limitation of its financial performance mostly because of the strong turbulences occurred in the British (but also in the international market); however, the firm’s leaders managed to lead the firm in its recovery (through the application of an innovative marketing plan); the last 2 years the firm has achieved a significant growth which is expected to be further increased in the years that will follow especially through the adoption of the following priorities (as set by the firm’s leaders): ‘building a sustainable business for the long term, generating shareholder value through consistent, profitable growth; continuing to focus on Product, Service and Environment: offering great products, in great looking stores with great customer service’ [corporate website, 1]. A significant attention is also paid at the increase of the employees’ motivation. Regarding the specific issue, the following comment has been made by the firm’s leaders: ‘we want our people to enjoy their work and feel they have all the skills they need to do their job to the best of their ability’ [corporate website, 1]. The achievement of the above target is made feasible through the introduction of various rewarding schemes - meeting the needs of each particular employee – as well as through the use of a series of plans that aim to support the personal and the professional development of the firm’s employees. It should be noticed that the provision of benefits to the firm’s employees is decided on certain criteria: the position of employees in the organization, their skills and competencies, the firm’s needs but also the firm’s potential to respond to the funds required for the provision of such a support. An indicative example of the above policy is the fact that different type of support is offered to the firm’s managers in accordance with their position in the organization: ‘section managers also receive specific training on stock management, driving sales and motivating their teams, while store managers are regularly assessed to address any senior level development needs they may have’ [corporate website, 1]. Apart from the regulation of various issues related with the firm’s HR management, the leaders of Marks and Spencer also focus on the appropriate restructuring of organizational structure – whenever is required – in order to make sure that all organizational departments will be offered equal support. 2.2 Effects of leadership style on the organizational behaviour within the firm The effectiveness of leadership decisions in Marks and Spencer can be assumed if examining the firm’s performance through the years – as explained above. The various criteria that could influence the choices of leaders in the specific firm could be based on the relevant literature. We could indicatively refer to the views of Bass and Calder as they are incorporated in the study of Pavitt et al. (1990). In this context, it is noticed that ‘the dominant theme in leadership research has been an attempt to determine the characteristics and behaviors most closely associated with effective leadership (Bass, 1981); a second theme is the concern with group members’ beliefs about and perceptions of leadership’ (Bass, 1981 and Calder, 1977, in Pavitt et al., 1990, 374). In many studies, the effects of leadership decisions on the behaviour of employees within a specific organization have been explained using the traits theory which is based on the following concept: ‘leadership has been defined in terms of individual personality traits, leader behaviors, responses to leader behaviors, interpersonal exchange relationships, interaction patterns, role relationships, follower perceptions, task goals, organizational culture, and nature of work processes’ (Rost, 1991, Yukl, 1989 in Mello, 2003, 345). The application of the above views is particularly important in order to understand the response of the firm’s leaders to the challenges set by the local as well as by the international market and the strong competition developed in the particular industry. Leaders’ decision could directly affect all organizational activities. However, it would be necessary that specific principles are followed/ applied when developing the relevant plan of action. In any case, the increase of employees’ performance (which is usually achieved through the increase of employees’ motivation) is among the most important priorities of all leaders worldwide (see also the study of House et al., 2008). On the other hand, it has been proved that the influence of leaders on employees can be differentiated in accordance with the employees’ personal values, their educational and professional background but also their views on critical issues of daily life (like career, family and so on). Moreover, the position of employees in the organizational hierarchy has been also proved to have an important role in the influence of leaders on a firm’s employees. In this context, it is supported that ‘people high in organizational identification are motivated to evaluate their social world through their work environment and as a consequence will expand effort to evaluate their manager from the traits they perceive within him/ her rather than relying upon their prototypes’ (Martin et al., 2001, 259). However, the influence of leaders’ decisions on the firm’s employees cannot guarantee that the employees’ performance in a particular organization will be high. Rather, the performance of employees in all modern organizations should be regularly reviewed making sure that certain requirements are met and that the targets set by the firm’s managers will be feasible to be achieved. In accordance with Gelade et al. (2003, 383) ‘in most cases, the performance of an organization is determined by the productivity and efficiency of such higher-level organizational entities as departments, retail outlets, plants, or teams’. In other words, employees’ performance can be an indicator for the need of reviewing the organizational structure but it is possible that other organizational entities influence the development of a relevant scheme. In the case of Marks and Spencer, the leaders’ decisions on the restructuring of the firm’s marketing strategies led to the recovery of the firm’s performance after the severe crisis of the last decade. More specifically, the application of a marketing plan which was heavily based on the participation of a well-known model of the past, Twiggy, led to the rapid recovery of the firm’s performance and the achievement of a high financial growth which continues up today. In the specific case, the decisions of the firm’s leaders led to the restructuring of the firm’s behaviour – referring especially to the marketing practices used up to then by Marks and Spencer. In this context, the effects of the leadership decisions on the organizational behaviour have been positive – referring also to the employee motivation practices used throughout the organization as they will be presented more analytically in the next section. 2.3 Organizational development methods and motivation in Marks and Spencer The organizational development methods in Marks and Spencer focus on the increase of employee motivation in all organizational development. In order to understand the relevant practices it should be necessary to refer primarily to the general aspects of employee motivation – as they can be observed in all modern organizations. It should be noticed that various aspects of employee motivation have been developed by managers around the world. In this context, it is noticed that ‘achievement motivation is defined as a non-conscious concern for achieving excellence in accomplishments through one’s individual efforts’ (House et al., 1997, 413). The above study refers to a particular type of employee motivation, the achievement motivation; however different criteria have been used through the years in order to identify the most appropriate employee motivation practices in modern organizations. We could refer to the study of Korman et al. (1999) who came to the conclusion that ‘rather than relying on traditional past-experience models, a more effective approach would be to apply the best principles of future-oriented competency development with the best principles of behavioural identification to develop a behaviour matching profile which however requires a comprehensive analysis of both situations and individuals’ (Korman et al., 1999, 221). The above view can be regarded as a suggestion regarding the necessary parts of effective employee motivation strategies in modern organizations. However, there is no reference to the firm’s potential in order to incorporate the specific strategy. It should be noticed that the theories developed in the specific field – employee motivation and organizational performance – have been differentiated in accordance with the industrial sector in which a firm operates, its characteristics (size, culture, mission and so on) as well as the skills of the leader involved. Referring specifically to the motivation and its presence in the literature it is noticed that ‘the search for a generalized theory of motivation at work appears to be a vain quest; the motivational theories are all partially true, and explain the behaviour of certain people at certain times’ (Bhatta, 2002, 39). In other words, instead of trying to identify the most appropriate motivational theory – applicable on a particular firm - a firm’s leader should try to identify primarily the characteristics and the needs of his firm and then try – at a next level – to develop an appropriate plan for the increase of employee motivation. In any case, it has been proved that the increase of employee motivation can lead to the rapid increase of their performance no matter the industrial sector in which a firm operates. Regarding this issue, it is noticed by Kim (2005) that ‘job satisfaction is positively correlated with motivation, job involvement, organizational citizenship behaviour, organizational commitment, life satisfaction, mental health, and job performance, and negatively related to absenteeism, turnover, and perceived stress’ (Kim, 2005, 669). In other words, if a leader manages to increase the job satisfaction of employees in the organization, then it is very likely that the overall performance of employees in the specific organization will be increased reducing the stress caused to the employees because of their duties/ responsibilities in the particular organization. Towards the same direction, it is noticed that ‘an organization could increase productivity simply by increasing the happiness and satisfaction of its employees, and both organizations and employees would benefit’ (Landy, 1989, R. Wright, 2000 in Barrick et al., 2003, 30). It should be noticed that increasing employee motivation – and as a result their performance – can be a challenging task especially when long held practices within the organization are going to be deleted – or be changed in order to meet the requirements of the employee motivation plans. In the case of Marks and Spencer, the development of the firm’s financial performance has been achieved through the implementation of a series of effective employee motivation plans. Heavy attention is paid at the increase of the firm’s performance without particularly bothered for the financial cost of the relevant project; it should be noticed however that the review of corporate activities – in all organizational department – supported the increase of the firm’s performance and the limitation of the cost related with the professional (also the personal) development of employees. The above targets are achieved through an appropriately customized rewarding plan which has been customized to the needs of employees but also their position in the firm. This plan is based on specific principles like the continuous control over the application of the above mentioned plan by both the parties in a particular contractual agreement. The above mentioned benefits plan also includes a series of other rights – as it will be further developed in a relevant study. The case of pension plans offered to employees of Marks and Spencer is an indicative case in which the applicability of a specific law on a case only partially justified (as in the television). On the other hand, employees in Marks and Spencer are free to choose among all benefits offered by the company to them because of their performance or their personal/ professional development through the specific case. It should be noticed that the right of employees to ask for benefits is depended on the firm’s size and the level of capital the transfer of which is attempted. 3. Analysis of findings Employee motivation has been found to be closely related with organizational performance – applied also on the case of Marks and Spencer. It should be noticed that in most cases, the effectiveness of employee motivation plans cannot be precisely measured. For this reason, the performance of these plans cannot be considered as guaranteed. Because it is necessary to perform the specific examination, certain criteria would be used in order to ensure the objectiveness of the justification in the relevant procedure. Regarding this issue, it is noticed that ‘employee performance appraisal is an effective way to determine the performance of the employees in an organization’ (Shrestha et al., 2007, 1621). In other words, the implementation of especially customized plans of action could be delayed and for this reason alternative sources will be employed. Marks and Spencer is a firm that operates in the specific area - there has been no precaution for the protection of employees/ women in all organizational departments. Of course, many employee benefits are included in the HR plans applied on the various organizational sectors. The following three committees can be regarded as having leadership rights in Marks and Spencer: ‘the Audit Committee, the Remuneration Committee and the Nomination Committee’ [corporate website, 1]. There is a strong need for the implementation of additional employee motivation plans that will be based on innovation. In this context, it is noticed that ‘creativity is becoming a topic of ever-increasing interest to organizational managers; thus, there is a need for a greater understanding of the dynamics between the personal and contextual factors responsible for creative performance in work settings’ (Tierney et al., 1999, 591). Of course, current efforts of leaders in the above firm in order to increase the employee performance can be characterized as rather satisfactory; however, it would be necessary for existing employee motivation practices to be updated in order to meet the challenges of modern market. All the issues developed above regarding the main characteristics of successful leadership and especially the characteristics of successful employee motivation plans could be also applied in the case of Marks and Spencer. The firm’s managers should take into consideration current theoretical framework regarding the development of effective leadership decisions (the Porter’s five forces model on the industry competition as well as his value chain model, see Appendix) are indicative examples of the theoretical tools available to leaders of modern organizations in order to develop effective strategic plans – related with all organizational activities. 4. Conclusions The development of appropriate employee motivation plans is necessary in order to ensure the high rate of employee performance in modern organizations. In accordance with Robertson et al. (1995, 547) ‘because private sector organizations are driven primarily by market or consumer preferences, organizational effectiveness is more readily measured in terms of efficiency and profitability’. In other words, the strategic plans chosen by a firm’s leaders are depended on the need of the firm for increased performance especially towards its competitors. In this case, firms that belong both in the private and the public sector have to develop appropriate HR plans making sure that employees are offered the necessary incentives in order to increase their performance; the improvement of the employees performance is expected to lead in the improvement of the organizational performance both in the short and the long term. On the other hand, in order to decide on the employee motivation plan that is appropriate for a specific firm operating in the modern market it is necessary that all organizational sectors are carefully reviewed making sure that the plan chosen will be in accordance with the firm’s financial strength; the firm’s leader will have the responsibility to choose the employee motivation plan that is most feasible in terms of current organizational conditions but also in terms of current market trends; the plans applied by competitors regarding the specific organizational sector are also taken into consideration. In accordance with Neely (2002, 295) ‘the key benefit in the process of deciding what to measure appears to lie in the fact that the process forces management teams to be explicit about their priorities; without precise definitions and targets it is impossible to establish appropriate measures for customer satisfaction’. In other words, all managerial plans have to be adequately justified in terms of the targets set but also in terms of the means used for their realization; the availability of resources for the realization of these plans should be also taken into consideration when having to develop a particular organization plan. On the other hand, when the restructuring of existing organizational structure is decided appropriate measures should be taken in advance in order to ensure that there are there is a balance between the specific decision and the targeted result (referring mostly in the resources used and the expected payback). 5. Recommendations In Marks and Spencer the effectiveness of leadership is guaranteed through the cooperation of three different committees (as described above). The literature related with the desired attitudes of modern leaders could be applied on this case but slightly differentiated – as leadership in the specific organizational is a commonly developed activity and it is not related with the decisions of a particular person. The comments that have been made in the literature regarding the characteristics of a successful leader could be taken into consideration in the case of the specific organization. In this context, it is noticed that ‘leaders may persuade with logic, but they motivate through emotion; leaders must come to grips with the challenges of emotion, a key driver of productivity, quality and other factors that lead to business success’ (Ashforth, 1995, 97). In the case of Marks and Spencer the persons that participate in the three committees that control the organization – playing the role of the firm’s leader should have the above attitudes despite the fact that the importance of these attitudes for the evaluation of the effectiveness of these person’s decisions would be reduced - compared to firms in which leadership belongs only to one person. When organizational restructuring is decided it is necessary that the relevant plans are adequate justified – balance between measures taken and resources employed as explained above. Leader has the responsibility to decide on the strategy that would be most appropriate for the increase of employee performance taking into account the current organizational conditions. In order to achieve the above target leader should have the necessary skills/ abilities to evaluate the needs of the firm but also the resources available for the realization of any strategic plan. In accordance with Korman et al. (1999, 221) ‘of critical importance is the nature of fit; organizations need more versatile managers and are finding fewer candidates available with the skills they need’. On the other hand, because the cost of relevant effort can be significant it is necessary that every strategic plan is carefully reviewed as of its expected outcome but also as of its expected cost. In the case of Marks and Spencer the effectiveness of current employee motivation strategies can be assumed taking into account the performance of the firm the last years; the firm’s leadership decisions can be characterized as quite satisfactory and no particular suggestion for their improvement could be made at the moment. Bibliography Ashforth B. E. (1995). Emotion in the workplace: A reappraisal. Human Relations 48(2): 97 Bhatta, P. (2002) Positive Action: Cultural Insights into Motivation. Global Business Review, 3(1): 39-52 Barrick, M., Ryan, A. (2003). Personality and Work: Reconsidering the Role of Personality in Organizations. Jossey-Bass. San Francisco Cook, J. S., Debree, K., Feroleto, A. (2001). From Raw Materials to Customers: Supply Chain Management in the Service Industry. SAM Advanced Management Journal, 66(4): 14-23 Gelade, G.A., Ivery, M. (2003). The Impact of Human Resource Management and Work Climate on Organizational Performance. Personnel Psychology, 56(2): 383-398 Gomez-Mejia, L., Balkin, D. (2002). Management, 1e. The McGraw-Hill Companies House, R., Aditya, R. (1997) The Social Scientific Study of Leadership: Quo Vadis? Journal of Management, 23(3): 409-473 House, R., Mitchell, T. (2008) Path-Goal Theory of Leadership, [online], http://www.shvoong.com/social-sciences/business-management/1757956-article-path-goal-theory-leadership/ Korman, A., Kraut, A., London, M. (1999). Evolving Practices in Human Resource Management: Responses to a Changing World of Work. San Francisco: Jossey-Bass Martin, R., Epitropaki, O. (2001) Role of Organizational Identification on Implicit Leadership Theories (ILTs), Transformational Leadership and Work Attitudes. Group Processes & Intergroup Relations, 4(3): 247-262 Mello, J. (2003) Profiles in Leadership: Enhancing Learning through Model and Theory Building. Journal of Management Education, 27: 344-361 Pavitt, C., Sackaroff, P. (1990) Implicit Theories of Leadership and Judgments of Leadership among Group Members. Small Group Research, 21: 374-392 Porter, M. (1998) On Competition. Harvard Business School Press Rand, T. (1999). Why Businesses Fail: an Organizational Perspective. Emergence, 1(4): 97 Robertson, P. J., Seneviratne, S. J. (1995). Outcomes of Planned Organizational Change in the Public Sector: A Meta-Analytic Comparison to the Private Sector. Public Administration Review, 55(6): 547-558 Tierney, P., Farmer, S., Graen, G. (1999) AN EXAMINATION OF LEADERSHIP AND EMPLOYEE CREATIVITY: THE RELEVANCE OF TRAITS AND RELATIONSHIPS Personnel Psychology 52 (3): 591–620 Walker, J.W. (1998). Are We Using the Right Human Resource Measures? Human Resource Planning, 21(2): 7-10 Marks and Spencer, http://www.marksandspencer.com/gp/node/n/43454031/026-5884441-1538006?ie=UTF8&mnSBrand=core [1] Appendix Figure 1 – Five forces in Industry Competition (Porter, 1998, 22) Figure 2 – Value chain in modern organizations – Michael Porter (1985) (source: www.valuebasemanagement.net) Read More