Debenhams Case Study: Analyzing Macro Environment, Leadership, and Motivation

This case study examines the impact of macro environmental factors on Debenhams' current situation, analyzing the company's leadership style and its relevance to the challenges faced. It explores the effectiveness of motivation theories like Theory X and Theory Y in motivating employees during a period of decline. The study concludes with recommendations for improved leadership styles, management practices, and strategies to address the company's challenges.

Debenhams – Case Study
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Executive Summary
The task presented below has discussed the major factor of macro environment that has
affected the business of Debenhams negatively. The assumption has been made on the
leadership style of the company that has led to its failure in driving changes. The motivational
theory has been suggested to motivate workers in the present situation. Some
recommendations have been presented on the leadership style and management practice of
the organisation. Strategies have been proposed that the corporation can incorporate to
counteract challenges of present situation of the development of the business.
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Table of Contents
Introduction................................................................................................................................4
Main Body..................................................................................................................................5
Conclusion................................................................................................................................10
Reference List..........................................................................................................................11
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Introduction
The context of business encompasses knowledge about the factors that affect the operations
of an organisation, its decision as well as growth. Debenhams falls in the fashion retail sector
that has legal structure of a private limited company. William Clark has established this
corporation in 1778 (Simmons, 2013). It has been invested by William Debenham in 1813.
This organisation is headquartered in Brock Street, United Kingdom. The annual revenue of
this firm has been 2,277 million Euros as in 2018 while the number of workers working in
this company has been 27,893 in 2016 (ir.debenhams.com, 2018). This company has been
listed on the London Stock Exchange in 1928 for the first time. The present report will
discuss the strategies that should be incorporated into the firm to deal with the current
situation. Reflection will be provided on personal experience while completing the presented
task.
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Main Body
1. Discuss the impact macro environment had on the current situation faced
Some factors of microenvironment have influenced the operations and growth of Debenhams
negatively, which are enlisted as follows:
Social factor
Modifications in the fashion of the United Kingdom influence the business growth of
Debenhams. The company could not meet the challenges of changes in trends of fashion that
had affected its sales rate. Due to constant changes in the fashion industry of United
Kingdom, the organisation had to suffer loss, as it could not meet the requirements and
preferences of the customers of the native region. It has continued to provide consumers with
traditional designs apparels that have affected their decision of making purchases from the
company negatively. This has decreased the sales rate of the company gradually that has led
to reduction in their business shares.
Economic factor
The economic factors such as economic growth rate of UK has been decreased from 1.8% in
2017 to 1.4% in 2018 that has increased the cost of the business as it has expanded without
considering the budget (statista.com, 2019). The business decision of providing customers
with products at discount price frequently has limited increment of the business profit
(Westbrook, 2019). The rise in cost with its expansion at prime locations of the country has
resulted in increase in the rents that have leveraged the organisation’s debts as well. The
company had to manage the cost of meeting the staff requirements in the different stores
where Debenhams had made expansion that has further amplified the cost. It had not been
able to respond to the financial crisis at proper time that has resulted in closure of many
stores. This has been due to lack in prediction of the cost as the company has failed in making
a proper budget plan and align the price of the products that would have to manage the
expenditure of the business.
2. Research on the Debenhams leadership style and its relevance to their current
situation
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The leadership style followed in Debenhams his autocratic that has limited the growth of the
company (Simpson, 2018). However, as per the case study, the lack of control and innovation
has restricted the growth of the organisation as well as of workers’ capabilities. The
movement for change is dependent on the management team therefore; there has not been
change in the operations or innovation for business improvement. The business leader has
ineffectively managed the members that the latter did not find that it is their responsibility to
respond to the challenges and predict the fluctuations in the trends of fashion. This has
resulted in its failure to maintain its image and traditional brands as it has stayed far from
business innovation as per the trend.
Due to the company’s failure in responding to the changes has decreased the value by 95%
(Chapman, 2018). As per the report of Marston (2019), it has failed in demonstrating its
uniqueness in producing differentiated products from that of competitors and leveraged the
sales. This has been due to improper management or leadership style in leading the business.
It has lacked in innovation therefore could not appeal to the young consumers as it produced
the traditional apparels that were not preferred by buyers anymore in the present era. Even
due to lack of financial consideration, the business has failed, as it could not adjust the cost
with the price of goods. This has resulted in the increment in cost and reduction in profit
generated from trading the products. Therefore, Simon Herrick had to depart from the
company for his lack of proper leadership quality in predicting the cost and profit of the
business (Titcomb, 2014).
3. Discuss any one motivation theory that you would suggest that would help motivate
their employees in this situation. Justify your choice of motivation theory.
Douglas McGregor has created theories of motivation such as Theory X, and Theory Y. In
the context of Debenhams, alignment of Theory X would be witnessed for motivating the
workforce in the situation where there are low sales and increase debts of the business. As per
this theory, there is need for supervision to workers so that they would perform their tasks
with sincerity (Lawter et al., 2015). According to this theory of motivation, rewards as well
as punishment are necessary for the workers to keep them motivated in making them do their
tasks responsibly. Theory X assumes that the workers are irresponsible and they need
enforcement from external to divert their mind as well as activities in performing the work
with diligence (Hattangadi, 2015). In order to motivate workers, the leader should incorporate
this theory to set the goal and make labours focus on objectives for business’ development.
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This will motivate the employees with the participation of the manager in management of
their work. During low sale performance of the organisation, manager should enhance the
participation of workers in performing on a better way for future success of the company.
The management should enhance interest of the labour force by providing them with
intangible as well as tangible benefits. The leader should encourage workers and assist them
in management of tasks. This theory would be beneficial for Debenhams, as workers will be
motivated by the idea of rewards that will enhance their participation in doing tasks and
inspire them to reach the business’ goals without lack of encouragement. The systematic
workflow by incorporation of this theory would make workers accountable for their roles and
make them perform the delegated duties effectively. Theory Y will benefit the company, as
the manager operations will be done within a time that will motivate the workers with
enhancement in their performance. As per this theory, the members’ creativity level will be
enhanced by discussion with management team. Thus, there will be increment in the number
of outputs as well as enhancement in quality of the service and goods (Lawter et al., 2015).
In the circumstances where the employees are disheartened due to loss in business, this
theory would make them determined in performing the tasks in proper way. They would
focus on creating changes in business situation by proper guidance of the leader. In the
present situation of Debenhams, Theory X will control the activities of workers as well as
motivate them through reward system. Theory Y on the other hand will develop their
creativity and motivate them in using their ideas in business’ operations.
These theories have been selected in order to recommend Debenhams for motivating the
workers because these theories of McGregor include both hard and soft approach in treating
workers. Therefore, it should lead the human resource efficiently by motivating them as well
as providing them with ideas for business growth.
4. What could be your recommendations as an improvement (the proposed leadership
styles, management practices and the various strategies that can be undertaken by this
firm based on research done) to your company
It can be recommended from the case study of Debenhams that it needs improvement in its
management system as the company’s decision are solely made by the team of managers and
leaders without taking opinions of the employees. Therefore, the management should
incorporate team members of the firm in decision-making so that the individual’s views
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would be presented and it will be able to solve the issues presented above by considering
their opinions. The pricing strategy should be modified as products traded in this
organisation are provided to the consumers at the price range that is excessively low, which
should be more for the premium quality garments. The organisation should incorporate the
transformational leadership style in directing the human resources. As per this style, the
leader of the firm should motivate, inspire, and encourage them to create modifications
through innovation in the process of operations (Nguyen et al., 2017). This will let the firm
grow and enhance the capabilities of members as well.
This leadership style would benefit individuals, as their skills will be developed that would
contribute to success of the business (Choi et al., 2017). The practice of management should
be altered in making decision for the expansion of the business. The organisation has
numerous locations in the country that had made it difficult for the leader to plan the budget
of operations of the stores. The management team should delegate duties appropriately to the
workers based on their ability that will assist in influencing the quality of products. It should
encourage innovation to put into practice the ideas of the employees for enhancement of the
goods. It can be recommended that proper budget plan and prediction of the cost of business
would be beneficial for Debenhams. This will save the company from financial crisis that has
already occurred because of expansion in the Birmingham store as per the data provided in
the case study. Its approach in providing products in frequent discount and offers has
decreased the profitability.
Therefore, the management should not present products to consumers at frequent discounts
and consider the actual cost before price determination of goods. It can provide discounts
during festivals to increase the sales rate. However, it should make the time limit for discount
offers so that maximum profit will be generated within a period and customers’ decision of
making purchases will be affected positively. Locations of the stores should be selected that
would be frequented by customers. The team members should involve in market research to
identify the current trends and manufacture the goods as per the demand of consumers. This
will aid the organisation in making profit through sales of the demanded products to buyers
(Lumpkin and Crawford, 2015). The organisation will be able to attract customers through
modern promotional techniques such as through video campaigns, enhancing online website
by adding chatbot facility, and others to appeal the brand to the consumers.
5. A reflection report in your experience in writing this report
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Introduction
The present report will provide reflection on the experience in writing the report present
above. Personal experience will be provided concerning the outcomes of writing the report on
business.
Reflection
The report has assisted me in understanding the basic factors that can lead to failure of the
business. I can reflect that during writing this report, I had come to understand ways through
which the faults or mistakes concerning the decision of the business can be overcome. I have
developed knowledge of the importance of following the trends in the fashion industry for
success of business. My understanding concerning the significance of proper financial plan in
organisations before making expansion has been enhanced. I have been able to develop my
academic skill in academic writing by writing this report. My critical thinking and analytical
skills have been improved by thinking in a critical way the affects of the macro environment
on Debenhams.
I have been able to analyse the leadership style incorporated by the chosen firm in this report
that has affected the business negatively. My writing skill has been developed with the use of
vocabulary in answers to the questions provided in the report. I have been able to develop my
research skills in finding out the data related to case study. My oral communication skill has
also been improved by reading different articles and journals related to the topic. In future, I
will try to enhance the quality of tasks by investing more time in researching so that I would
be able to get relevant answers. This will let me enhance my report’s quality and develop my
skill in academic writing (Goodson, 2016).
Conclusion
The report has reflected the personal experience associated with writing the report on
Debenhams. The learning experience has been described and action plan has been made for
improvement in report writing in future.
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Conclusion
It can be deduced from the report provided above that social and economic factors have
affected the business of Debenhams negatively. It has been supposed that the democratic
style has been used in the firm that has resulted in its downfall. Theory X has been suggested
for motivating workers to improve activities’ quality. Recommendations have been presented
on the strategies that will let the company overcome the present situation that has been
provided in the case study report. Reflection has been provided on the experience of the
learner in writing the present report.
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Reference List
Chapman, B., 2018. What went wrong for Debenhams and how can it turn things around?.
[online] Available at: https://www.independent.co.uk/news/business/analysis-and-features/
debenhams-what-went-wrong-sales-down-share-price-department-store-chain-a8531726.html
[Accessed 9 Sep. 2019].
Choi, S.B., Kim, K. and Kang, S.W., 2017. Effects of transformational and shared leadership
styles on employees' perception of team effectiveness. Social Behavior and Personality: an
international journal, 45(3), pp.377-386.
Goodson, P., 2016. Becoming an academic writer: 50 exercises for paced, productive, and
powerful writing. Sage Publications.
Hattangadi, V., 2015. Theory x & theory y. International Journal of Recent Research
Aspects, 2(4), pp.20-21.
Ir.debenhams.com. 2018. [online] Available at:
https://ir.debenhams.com/static-files/8f1ff5d2-d1cf-4f04-9afe-3549c844716f [Accessed 9
Sep. 2019].
Lawter, L., Kopelman, R.E. and Prottas, D.J., 2015. McGregor's theory X/Y and job
performance: A multilevel, multi-source analysis. Journal of Managerial Issues, pp.84-101.
Lawter, L., Kopelman, R.E. and Prottas, D.J., 2015. McGregor's theory X/Y and job
performance: A multilevel, multi-source analysis. Journal of Managerial Issues, pp.84-101.
Lumpkin, J.R. and Crawford, J.C., 2015. Consumer perceptions of developing countries.
In Proceedings of the 1985 Academy of Marketing Science (AMS) Annual Conference (pp.
95-99). Springer, Cham.
Nguyen, T.T., Mia, L., Winata, L. and Chong, V.K., 2017. Effect of transformational-
leadership style and management control system on managerial performance. Journal of
Business Research, 70, pp.202-213.
Simmons, E. 2013. Timeline- A history of Debenhams. [online] Drapers. Available at:
https://www.drapersonline.com/news/comment/timeline-a-history-of-debenhams/
5047100.article [Accessed 9 Sep. 2019].
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Simpson, E. 2018. Debenhams attempts to 'bring joy back'. [online] Available at:
https://www.bbc.com/news/business-45634363 [Accessed 9 Sep. 2019].
Statista. 2019. UK: GDP growth 2000-2018 | Statista. [online] Available at:
https://www.statista.com/statistics/281734/gdp-growth-in-the-united-kingdom-uk/ [Accessed
13 Sep. 2019].
Titcomb, J. 2014. Debenhams finance boss quits days after major profit warning. [online]
Telegraph.co.uk. Available at:
https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10546564/Debenhams-
finance-boss-quits-days-after-major-profit-warning.html [Accessed 9 Sep. 2019].
Westbrook, I. 2019. Debenhams deal 'is national scandal'. [online] Available at:
https://www.bbc.com/news/business-47864580 [Accessed 9 Sep. 2019].
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