Impact of Macro Environment on Debenhams: A Case Study

This report analyzes the impact of macro environment on Debenhams, a departmental store in the UK. It discusses the political, economic, social, technological, legal, and environmental factors affecting the company. It also explores the leadership style of Debenhams and suggests a motivation theory to improve employee performance. Additionally, it provides recommendations for improving the company's leadership style, management strategies, and practices.

Context of Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
1 Impact of macro environment on the present situation of the company..................................1
2 Leadership style of Debenhams and its relevance on the present situation.............................3
3 Motivation theory that will help in motivating the employees ...............................................4
4.Recommendation on Improvement of leadership style followed by the company,
management strategies and management practices in the company...........................................5
5 Reflection from the whole project............................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES ...............................................................................................................................8

INTRODUCTION
Business is operating because of the economies and strong customer base which they
have in country. Debenhams is also a departmental store which is oldest and they are continually
operating having a multi channels departmental stores. This company was incorporated in 1905.
They had a series of mergers and acquisitions which was a strategy of company to expand their
operations and increase their profitability(Ryan and Deci, 2017). They are having a presence in
major cities. The company had a series of mergers and acquisitions which they have done in
order to increase their overall sales. This report is based on the case study of company in which
Debenhams had a dropped in their overall sales and this had a very negative effect on company’s
sales. Various leadership styles which can be adopted by the leaders in this company has been
discussed. Further there is a discussion of a motivation theory which they must use to motivate
employees os that their overall level of performance can increase.
TASK
1 Impact of macro environment on the present situation of the company
Macro environment consists of various factors which affects a company. This is a combination
of six major factors are affecting a company. Pestle analysis is used by the company in this
macro environment analysis. Below mentioned is the pestle analysis of Organization:
 Political: Political factors are those which are related to the government intervention of
the company(Mehrara and Rezvanian 2018). All the type of government intervention is
discussed here. Debenhams is operating in UK all the changes taking place in this country is
affecting to a large extent by the changing political environment of this country.
 Economic: Economic factors are related to the economic performance of the country.
Factors which affect the economic growth of the country include inflation rates, interest rates.
Disposable income of people. In context of Debenhams their overall sales will increase if the
personal disposable income of the people of UK will increase s they will have more to spend
with them. The expansion plan of Debenhams also failed as it lead to increase in their overall
cost and they were not able to cope up with those expenses. The decline in the economy of UK
was also a big reason for the failed expansion of this store.
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 Social: This is the dimension which is related to the general environment which is related
to demographic features of a country. This includes customs, norms and values related with the
population of the country(Thory, 2015). There are many factors such as age distribution,
lifestyle attitude of people, distribution of income, growth rate and overall barriers related to
culture in a country. The consumer behavior is very unpredictable and is also continuously
changing, this is a reason why Debenhams saw a decline I their overall sales as they were no
bale to cope up with the fast changing trends of fashion and its competitors were able to do so.
They were not able to successfully unfold the latest trends which were prevailing in their country
and especially for their target market.
 Technological: These factors are related to the various innovations which are being done
because of changing technology. Which affect the operations of industry and all the companies
which are part of this industry. These factors influence the decisions which re to enter a industry
or not to enter, lunch or not a product. It becomes very important for a company like Debenhams
which is belonging to the industry which is a departmental store to understand the rapid changes
in technology as this is helping the company in having a competitive edge in the market(Storey
2016).
 Legal: These factors are related to the legal laws made by the concerned authorities of
every country. Such laws affect the overall functioning of company and they have to be
compulsorily adhered by all the companies part of a country. There are many changes which are
continuously done in such legal regulations of a county which must also be considered by the
companies with time. Such legal laws include employment laws, copyright laws, patent laws,
antitrust laws, protection laws, laws related to employees. And many others. In case of
Debenhams this company has to also take care of various laws which are prevailing in UK.
 Environmental: These factors are related to the surrounding environment and the overall
ecological aspects which affect a company and its overall functioning. There are limitation of
resources which are available with any country. because of this fact it has become very
important for all the companies that they have to consider this environmental aspect very
carefully. Also, with the growing awareness of the impacts of climatic change on the operation
of companies and their offerings is also considered in this environmental aspect. This has lead to
situation that now more companies are getting involved into practices which are related to
corporate social responsibility (CSR). Debenhams is also a departmental store of UK which is
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highly concerned for the environment and this is the reason why this company has CSR policies
in their overall functioning.
Above mentioned are the various macro environmental aspects which is affecting the
overall functioning of Debenhams. These factors are having a major control on the
internal decision making of this departmental store.
2 Leadership style of Debenhams and its relevance on the present situation
Leadership practices are related to how subordinates are being managed in a company by
a leader. There are certain leadership styles which have been developed with time and every
organization adopts a particular style in their overall management of operations and
functions(Muller and Turner, 2017). The style adopted has a great effect on the success or failure
of any organization.
Democratic leadership: This is the style of leadership which is related to consider as one of the
very effective styles of leadership. In this style employees at all different levels are taken into
consideration while the decisions are made by the top management of the company. This is a
method which helps employees in feeling connected to the organization.
Autocratic Leadership: This is also one style of leadership which is just the opposite of
democratic leadership. In this there is no involvement of employees in any decision which is
being made by the company. The concerned authorities make the decisions and employees just
have to adhere to it. The satisfaction of employee is not considered in this style of leadership.
Laissez –Faire Leadership style: this is the style in which top management is gives full
authority to the employees that they are fee to make decisions. There is no involvement
of the organization in the process of decision making(Saleem ,2015). Employees
themselves have to make decisions according to what they mutually agree on a particular
decision.
In context of Debenhams, this company has a culture which is having full involvement of
employees at all different levels. They have a strong belief that they can work together to
achieve the set goals or objectives. They are following the democratic style of leadership in
which they want to give importance to opinion of all the employees. They having a culture in
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which they want to have a strong participation of their staff members. They feel as a company
that this will help in increasing the overall satisfaction level of employees. Employees are
considered as one of the very important stakeholders of the company in Debenhams and this is
the main reason why there is high level of satisfaction of employees.
3 Motivation theory that will help in motivating the employees
There are many motivational theories which can be used by Debenhams. Most suitable theory at
this point when this company is facing a declining sales and slow growth is the Maslow
motivation theory. They also have a belief, norms and values in which they give a lot of
importance their employees. This makes it essential for them to use this theory of
motivation(Anderson. and Sun ,2017). This is a theory of motivation which is used by
companies. This is a five stage model which is used by companies to assess the needs of
employees and fulfill those needs so that employees are motivated to increase their overall
employee performance at the workplace. Increase satisfaction helps in increasing the
productivity of employees. This theory of motivation is discussed below divided into five stages:
 Physiological needs: these are referred to as the basic needs which rae very necessary for
survival of a person. Without such needs basic survival is not possible. These needs include
food, clothing, and water.
 Security and safety needs: These are those needs which are in concern with basic three
types of security which includes financial security, safety against injuries or accidents and also
safety regarding health & wellness of people. When the basic physiological needs are satisfied
then only employees move to this second level of needs hierarchy theory.
 Social needs: These are referred to as the needs which are related to the love, belonging
and acceptance. This is the emotional relationships which is also a requirement of the people in
workplace also. Such type of relationships include friendships, romantic relationships, cordial
relationships with the colleagues. Community groups, social groups, religious groups, family
members and many other such type of relationships(Nicholls, 2017). They all together help in
fulfilling the social requirements of a individual. Such relationships also act as a motivation for
people to increase their work performance.
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 Esteem needs: When the above three levels have been satisfied then only a person moves
to this stage(Antonakis and Day, 2017). This stage of Maslow’s motivation theory is related to
the two basic requirements which are respect and appreciation. At this stage, it becomes
essential for the employees to get accomplished the feelings of prestige and accomplishment.
People need to be valued by others so that they are able to increase the overall contribution level
at the workplace (Lee, Lee and Hwang, 2015)
 Self Actualization needs: this is the peak of Maslow’s motivation theory. In this there is
self actualization which is done by the individual. This need is referred to as the stage of being
self aware and realize what actually a person wants and desires. This is the stage of realizing
self worth and fulfillment of this need is very essential for every person in organizations.
Above discussed is the Maslow theory of motivation which Debenhams can use to adopt
in their company. This will help them in identification of various needs of their employees and
then satisfaction of such needs according to their stages will help in increasing the motivation
level of employees.
4.Recommendation on Improvement of leadership style followed by the company, management
strategies and management practices in the company.
Present situation of the company is that they are facing a crisis and a decline in their overall
sales. The management style is basically the democratic style of leadership they are focusing on
this style as this company treat employees as a valuable member of the company. They always
believe in encouraging their employees is that they are able to participate with full enthusiasm
and motivation. Frequently there have been many changes in company which is affecting its
overall operations in a negative way. Below mentioned are some of the recommendations on the
management practices of company:
 Debenhams should adopt a transformational style of leadership this will help the
company in improving the overall company’s conventions.
 In transformational style of leadership employees are given a individual task and target
goal which they have to fulfill in a limited period of time. This is a very important
requirement of company at this stage where they will need to focus on completion of
their individual objectives. When employees will challenge themselves this will lead to
achievement of targets which in turn will lead to achievement of company’s objectives as
a whole.
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 Management should also make strategies in high a new business strategy should be
formed and then all the operations and functions should be direct in the way to fulfillment
of that particular strategy. Which can be to increase sale by a 10 percentage from the last
quarter.
 Debenhams should try to check on their expansion strategies, such as their Birmingham
store was a complete failure and this lead to increase in cost and zero profits for the
company. The physical expansion plans bought soaring costs which lead to increase in
the leasing liabilities of company(Holten. and Brenner, 2015).
 Adequate research should be done in a particular market before planning to launch a
particular store. This will help in deciding of a target market and then increasing the sales
of company.
5 Reflection from the whole project
According to this report, I have observed that Debenhams is a departmental store having
presence in United Kingdom. They are having presence in the major cities of UK. The major
strategies of this company have been encouraging their employees by ensuring their participation
in all major decisions of their company. This has lead to satisfaction of employees, but there is a
lack of motivation on part of employees. So Maslow’s motivation theory is being used to
motivate employees. Also, I have understood that the transformational style of leadership should
be adopted by the company so that they are able to transform their leadership style and managing
their employees in a more proper and effective manner. I have been able to develop an
understanding that there is lot of investments which has to be done while a particular strategy is
being implemented in the company. This helps in increasing the success possibility of the
strategy. This exactly happened in the case of Debenhams as their physical expansion plans
which has laed to soaring costs. The overall liabilities of the company increased and they were
not able to cope up with such a situation, as a result there was a declining in the profit and
growth graph of company.
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CONCLUSION
The above report it can be concluded that Debenhams is a largest departmental hospital
which is having a presence in United Kingdom. Various motivational theories are there which
can be used by companies to motivate employees in order to increase their level of motivation
and improve performance at workplace. Leadership style is also a tool which can help leaders in
managing their subordinates. Such styles have also helped organizations in managing their
employees. There are many strategies which company adopts without adequate research this
leads to situation of declining profits and sale. This also negatively affects the brand image of
company in the market. Hence, there is requirement that to adopt a particular strategy lot of
research should be done and then only management should come on a particular decisions.
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REFERENCES
Books & Journals:
Anderson, M.H. and Sun, P.Y., 2017. Reviewing leadership styles: Overlaps and the need for a
new ‘full‐range’theory. International Journal of Management Reviews, 19(1), pp.76-96.
Antonakis, J. and Day, D.V. eds., 2017. The nature of leadership. Sage publications.
Holten, A.L. and Brenner, S.O., 2015. Leadership style and the process of organizational
change. Leadership & Organization Development Journal, 36(1), pp.2-16.
Keshavarz, M. and Karami, E., 2016. Farmers' pro-environmental behavior under drought:
Application of protection motivation theory. Journal of Arid Environments, 127,
pp.128-136.
Lee, Y., Lee, J. and Hwang, Y., 2015. Relating motivation to information and communication
technology acceptance: Self-determination theory perspective. Computers in Human
Behavior, 51, pp.418-428.
Mehrara, A. and Rezvanian, S., 2018. Identifying Factors Affecting Professional Motivation of
Iranian Seafarers Onboard Ocean Going Merchant Vessels. Management and Economic
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Muller, R. and Turner, J.R., 2017. Project-oriented leadership. Routledge.
Nicholls, J.G., 2017. Conceptions of ability and achievement motivation: A theory and its
implications for education. In Learning and motivation in the classroom (pp. 211-238).
Routledge.
Ryan, R.M. and Deci, E.L., 2017. Self-determination theory: Basic psychological needs in
motivation, development, and wellness. Guilford Publications.
Saleem, H., 2015. The impact of leadership styles on job satisfaction and mediating role of
perceived organizational politics. Procedia-Social and Behavioral Sciences, 172,
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Storey, J., 2016. Changing theories of leadership and leadership development. In Leadership in
Organizations (pp. 17-41). Routledge.
Thory, K., 2015. Understanding emotional intelligence. Occupational Health and
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