Impact of Lean Thinking on Organizations

This assignment analyzes the impact of Lean thinking on organizational structure and behavior within the discrete manufacturing industry. It examines how Lean principles affect various aspects of an organization, including its design, processes, and employee behavior. The analysis draws upon relevant academic literature and real-world examples to illustrate the practical implications of Lean thinking in this sector.

BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Background of organisation........................................................................................................1
Issues faces by Marks and Spencer ...........................................................................................2
Impact of these forces on the organisation..................................................................................4
Policy action taken for the key stakeholders...............................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Business environment includes all the factors which may have direct or indirect impact
on the working of organisation. These factors can be internal or external. Internal factors include
suppliers, employees, clients, etc. Political, economic, technology, etc. come under external
factors. It is necessary for organisation to pay special attention on these factors so that it might
not have negative impact on the workplace (Hamilton and Webster, 2015).
In the current report, Marks and Spencer is taken into account. The report will give
detailed study on the type purpose of business entity and will discuss nature of environment in
which it works. Impact of different forces will also be mentioned in the report. Importance of
stakeholders and policy regarding them are also there.
Background of organisation
Marks and Spencer is leading retailer company established globally in more than 10
countries all over the world with more than 500 stores. In UK alone company has more than 900
stores.
Marks and Spencer is a private Ltd firm working in the retail industry. It means that
major shares of company are sold or traded to the public. Company specialise in selling
luxurious food product, home product and clothing and provide best services to their customer.
Providing the best customer experience has become part of its brand. Their main aim is to
provide there customer with luxury product in affordable price.
Organisational structure:
Organisational structure is a system which outline the various rules and regulation that
decide how the work, roles and responsibility are delegated and controlled in organisation. It is
also responsible for the way an information is flowed in organisation. For organisation to achieve
there desired goals and objective need to combined the effort of each individual in organisation
for this each individual are divided into group according the requirement and specialisation
(Wetherly and Otter, 2014). Organisational structure is necessary for the smoother working.
There are two type of structure first flat structure and other tall structure. Flat structure does not
have many layer of management and crucial decision are taken by the highest authority of firm.
Tall structure have many levels of hierarchy and power is delegated between this level
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(Menychtas and et. al., 2014). Each level have its own manager and leader who is responsible to
take important decision for its team.
Marks and Spencer has adopted flat structure for their firm this type of structure has the
least level of management between administration department of firm and the front line. This
structure is adopted by company in recent year. By the process of delayering company removes
many of its authority layer. Having so many layer in organisation lead to delay in decision
making process and employees at lower level also doesn't get chance to take part in this process.
This process encourage and motivate employee and also increase their participation in decision
making process (De Vries and Van der Poll, 2016). It also helps in excluding bureaucracy from
firm and promote the growth and development of employees. The skills of employees are
developed through providing them with more responsibility and giving them chance to make
quick decision in the time of needs. It provides workers with more accountability which increase
their trust and loyalty toward the firm. Staff workers also start taking initiatives for the firm and
for its growth.
Illustration 1: Flat structure
(Source: Types of organisational structure, 2015)
Issues faces by Marks and Spencer
Marks and Spencer is one of the leading company in the retail industry. There are many
problems that company faces in their daily working. This problem can be internal or external. It
is necessary for organisation to deal with this problem as it may adversely affect the performance
or the profitability of the firm.
Issues at micro level
Micro level issue are those issue which emerges within the organisation. This issue have
major impact on the working and profitability of organisation. Any internal conflicts have it
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impacts on both organisation and its staff (Ludvigsson and Green, 2014). So, it is essential for
organisation to take crucial measures in order to make sure that this does not have any big impact
on the sales and performance of company. Some issue faced by Marks and Spencer are
mentioned below
Communication:
Communication is an important part of any organisation. For the smoother and efficient
working its essential to have great communication and understanding between team members as
well as other department of organisation (Silventoinen and et. al., 2015). Marks and Spencer is
suffering from miscommunication which lead to many misunderstanding among teams.
Communication is key to success because of this information does not get passed correctly in the
firm. Lack of communication also have adverse effect on the working environment, it creates
tension and lack of trust among staff. It is essential for cited firm to see that this problem get
resolve as fast as possible so that it does not affect the working of firm.
Lack of competition
Keep your friend close but your enemy closer. To sustain in this market, it is crucial to
know what the rival team is up to. Having knowledge about the strategy and products of the
opposite can help organisation to adjust themselves according the change (Iamratanakul, 2015).
In this competitive market where everyone is trying to be at top, it is needed to pay attention to
rivals. This is the place where Marks and Spencer lacks. The cited firm come up with different
strategy through which they can penetrate the market and help them earn profit but in all this
strategy it forgets to keep eye on their rivals which led them to stand much lower at the scale as
rival firm produce same product as you at low price which lead to loss of cited firm so it is
necessary to know about different strategies of rival so that Marks and Spencer can find stability
in market.
Issue at macro level
Issues at macro level include external factor which have major impact on the profitability
and sales of organisation. External factor may include political or economic factor. Many time's
organisation have to change their way of working because of the change in these factors some
issue faced by firm are mentioned below
Low economy
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In current time the economic outlook of firm is quite unstable and uncertain which have
direct impact on the retail stores. Changes in economy of country have its effect on the
purchasing power of people because of uncertain economic condition people spend very little on
the luxurious product that cited firm sell which impact the overall profitability of firm (Van
Wormer and Besthorn, 2017).
Political factors
It is crucial for firm to abide all the rules and regulation implemented by government. In
current time new standard regarding the health and safety were included. Marks and Spencer did
not abide by this rule which lead the firm in political hassle which has negative impact on the
firm
Impact of these forces on the organisation
There are major impact of these forces on the working of the firm. Marks and Spencer are
going through many problems which have its negative impact not only on the organisation but
also on its market. It is essential for firm to resolve this issue
Lack of communication is affecting the working environment of organisation. The
tension in the firm is affecting the relationship of employees within and also their relationship
with firm. It has major impact on the performance of an individual and of organisation at whole.
The trust of workers towards the firm is also shaky (Benn, Abratt and O'Leary, 2016). Lack of
communication leads to many misunderstandings and miscommunication which affect the
performance of firm. It is also affecting its performance and its market. The latest e.g. of this is
the Marks and Spencer are facing many problems at one of their distribution centre. The problem
of free spacing has affected the sales of company (Types of organisational structure, 2015). The
firm was selling only one third of their actual sale. Due to lack of communication between
various system that handle the product and distribution of p-product. It also impacts the customer
satisfaction which might also affect the overall performance of organisation. This not only affect
the sales of company but also hamper the brand image and satisfaction of customers.
Lack of awareness regarding the potential of rival has led to the downfall of Marks
Spencer in progress ladder (Walter, 2015). The cited firm did not pay attention to their rivals
which cause them many losses. It has major impact on sales of food offered by Marks and
Spencer. There was major decline in the sales of food offering by M&S Ltd. And many critics
stated that company do not have scale to compete with other leading competitor in UK. Firm in
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order to increase their sales requires knowing about different products and strategies of their
rivals so that they could compete with them properly.
Economy play important part in the sales of organisation. The change in economy can
have both positive and negative impact on the sales and profitability of firm. If the economy of
country is strong than it will increase the purchasing power of people leading to the profitability
of organisation if it is uncertain or unstable that means there will be loss in the sales. Firm can't
control this changes but can implement new changes that can help them. In current times because
of the changing economy Marks and Spencer had to close number of their stores and also had to
job cut 2% of their staff. To overcome this issue firm can introduce discount in their sales which
will be in benefit of both customer and firm.
Political factor rules, regulation legislation etc. are necessary to abide for smoother and
effective working of firm. Not abiding this rule can lead to many hassles which doesn't throw
positive light on the name of firm (Lawrence and Weber, 2014). Marks and Spencer did not
abide the safety and health rule which lead them to political problem when a door fell on one of
their employee. It is essential to follow this rule so that company can stay away from
unnecessary problems which can affect the brand name of company
Policy actions taken for the key stakeholders
Stakeholders are those people who directly or indirectly affect the working of
organisation or get effect by any changes implement in the firm. Stakeholders are important part
of organisation. Stakeholder includes employers, customer, government, suppliers, directors etc.
 It is required for firm to pay extra attention to their stakeholders for smoother and
efficient working. For this Marks and Spencer has adopted few policies in their firm
 Stakeholders of company include directors which are responsible for the working of firm.
To please them and make sure that they remain loyal to firm company provide them with
their annual report. This provide stakeholder with the information which make them
satisfy (Närman, Johnson and Gingnell, 2016).
 To retain this stakeholder company had another policy in which they provide these
important people with some gift and additional bonus which keep their interest in the firm
and firm is able to retain their loyalty.
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 In the current scenario, firm is also focused towards understanding the stakeholders view
point in respect to policy making. It also assist in ensure that all will get benefited by the
work of firm.
CONCLUSION
From the above report it can be concluded that business environment play major role in
the organisational activity of firm. Different environmental factors can have negative impact on
the working and profitability of firm and it is necessary for business entity to take important
measure in order to handle this issues. Stakeholders are important part of firm and it is crucial for
firm to keep them happy. Happy stakeholders lead to smoother working and overall profitability
of organisation. Organisational structure is also discussed here and benefits of flat structure and
positive change it brought in Marks and Spencer are also mentioned in this.
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REFERENCES
Books and Journals
Benn, S., Abratt, R. and O'Leary, B., 2016. Defining and identifying stakeholders: Views from
management and stakeholders. South African Journal of Business Management. 47(2).
pp.1-11.
De Vries, H. and Van der Poll, H. M., 2016. The influence of Lean thinking on organisational
structure and behaviour in the discrete manufacturing industry. Journal of Contemporary
Management. 13(1). pp.55-89.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press, USA.
Iamratanakul, S., 2015. Modeling the Macro-Environmental Factors of International
Distribution. In Conference Proceedings: Technology Innovation and Industrial
Management.
Lawrence, A. T. and Weber, J., 2014. Business and society: Stakeholders, ethics, public policy.
Tata McGraw-Hill Education.
Ludvigsson, J. F. and Green, P. H., 2014. The missing environmental factor in celiac disease. J
Med. 371. pp.1285-94.
Menychtas, A. and et. al., 2014. 4CaaSt marketplace: An advanced business environment for
trading cloud services. Future Generation Computer Systems, 41, pp.104-120.
Närman, P., Johnson, P. and Gingnell, L., 2016. Using enterprise architecture to analyse how
organisational structure impact motivation and learning. Enterprise Information
Systems. 10(5). pp.523-562.
Silventoinen, K. and et. al., 2015. The CODATwins project: The cohort description of
Collaborative Project of Development of Anthropometrical Measures in Twins to study
macro-environmental variation in genetic and environmental effects on anthropometric
traits. Twin Research and Human Genetics. 18(4). pp.348-360.
Van Wormer, K. and Besthorn, F. H., 2017. Human behavior and the social environment, macro
level: Groups, communities, and organizations. Oxford University Press.
Walter, C., 2015. Journey towards equity: How interactions between stakeholders, policy, and
environment impact implementation during the first year of a dual language program.
Lewis and Clark College.
Wetherly, P. and Otter, D. eds., 2014. The business environment: themes and issues in a
globalizing world. Oxford University Press.
Online
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Types of organisational structure, 2015. [Online]. Available
Through :<https://www.forbes.com/sites/spencer/2015/07/13/the-5-types-of-
organizational-structures-part-3-flat-organizations/#29fff5106caa>. [Accessed on 23rd
October 2017].
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