Business Analysis of Marks & Spencer: PESTEL, Democratic Leadership, CSR, Brexit & Covid-19 Effects

This report analyzes the business concepts of UK based retail organization Marks & Spencer, including PESTEL analysis, democratic leadership style recommendation, corporate social responsibilities, and the effects of Brexit and Covid-19 pandemic on the company.

CONTEXT OF BUSINESS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK – 1.........................................................................................................................................4
PESTEL Analysis of Marks & Spencer.......................................................................................4
TASK – 2.........................................................................................................................................6
Recommending Democratic Leadership Style.............................................................................6
TASK — 3.......................................................................................................................................9
Corporate Social Responsibilities (CSR) of Marks & Spencer...................................................9
TASK – 4........................................................................................................................................11
Effects of Brexit and Covid-19 Pandemic on Marks & Spencer...............................................11
How the company addressed these issues..................................................................................12
CONCLUSION..............................................................................................................................13

INTRODUCTION
Businesses all over the world employ number of strategies to gain competitive advantage
over their competitors. Changes in the business environment and ability of the leadership
influences the businesses’ strategy and response (Torres and Sidorova, 2019). Corporate Social
Responsibilities (CSR) is an influential management concept that several business organizations
make use of to incorporate social and environmental factors in their strategic plans.
The following report will analyze these business concepts in the context of UK based
retail organization 'Marks & Spencer' starting with the company's PESTEL analysis and a
relevant recommendation of a suitable leadership style that will facilitate the achievements of
business objectives. Further the report will evaluate socio-environmental responsibilities along
with the repercussions of Brexit and Covid-19 pandemic on Marks & Spencer and how it
addressed the same.
TASK – 1
PESTEL Analysis of Marks & Spencer
PESTEL is an acronym that stands for the Political, Economic, Sociological,
Technological, Environmental, and Legal factors that externally affect an organization. Marks &
Spencer (M&S) is a celebrated name across the United Kingdom which deals with a wide range
of retail goods such as food provisions, clothing and apparel, home products, etc.
POLITICAL
Headquartered in UK with more than 1500 retail outlets, Marks & Spencer is well-
adjusted within the political structure of government regulations. This refers to its large scale
availability of free trade policies through EC trade agreements. But the pertinent threat of Brexit
may lead to the fallout of the retail organization resulting in higher costs of production for the
UK retailers. This will negatively impact its international outlets indicating massive store
shutdowns with increased prices of all its products. Even if M&S retains its hold in its native
land, still the European suppliers will face critical losses.

ECONOMIC
A wide product range of food, clothing, and home-use products dominate Marks &
Spencer's supplies. In spite of its premium market position, the company is encountering
economic threats in the form of numerous discount and budget stores which are on the rise. This
has disrupted its target audience market as the brand refused to incorporate a forgiving 20%
discount of Christmas offer in the past. Due to this, the retail enterprise started importing goods
from foreign suppliers. Other economic aspects such as recession, high inflation rates, increase in
taxes, and a rising budget store market serve as major fiscal and monetary concerns for the
organization.
SOCIO-CULTURAL
There are a multitude of factors that affect the purchasing behaviour of consumers such as
social, psychological, and cultural trends. These are dynamic in nature and are overshadowing
Marks & Spencer's demographic appeals. Although the retail company is a household name
among the young and old alike but the shifting trends in market are hampering the popularity of
the organization. For instance, the company witnessed a good amount of control in the clothing
sector in the wake of Gen X fashion trends. This led the brand to devise a strategic move of
stepping up its food department sales by investing in the ready-to-go meals division providing it
a ranking among the top 10 quick-meal distributors.
TECHNOLOGICAL
The factor of technological innovation has helped in the sales growth of the consumer
goods of Marks & Spencer. Self help systems like self-checkout has become an industry wise
usage mechanism. The UK based retail giant has incorporated the same along with focusing on
the creation of new technological operating models such as the 'Technology Transformation
Programme so as to enable a good supplier base (Casañ and et.al., 2021).
The company has also made good use of e-commerce marketing through various online
portals which have made easier for the customers to shop conveniently from the website. The
retail organization has methodically replaced the traditional shopping approach of end users by
establishing web powered store outlets easing the process of consumer friendly delivery. It has
also strengthened its customer service portal in order to provide prompt and decent client

support.
ENVIRONMENTAL
The environmental elements keeping in line with the company's production process are
highly favourable to its business. Marks & Spencer has started its own green policy strategy
(Plan A) to reduce the carbon footprint on the planet by eliminating the environmental risk of
harmful production methods. The enterprise has also invested in fair trade relations such as
buying directly from small retailers as this is a much more organic way of dealing in products
like organic food produce, healthy production of cloth fabric (Better Cotton Initiative policy),
etc. The company has also made use of various energy reduction practices (Çitilci and Akbalık,
2020). These environmental initiatives have proved beneficial to the organization and have
secured the public's praise.
LEGAL
There are a lot of legislative factors which are negatively affecting the M&S retail brand.
The retail brand has been involved in some serious legal issues in the past pertaining to health
and safety regulations of its working staff. It refers to the company's Broad Street store
renovation wherein the cancer causing element 'Asbestos' was getting leaked during the
construction process. This led to two lawsuit file charges regarding the Health at Work Act
(1974) ending up in a dual fine of 500,000 pounds. Such legal mishaps proved harmful to the
enterprise. Apart from this, the recent threat of Brexit looms large above the UK trade market
following which certain helpful trade policies will reach their cessation.
TASK – 2
Recommending Democratic Leadership Style
Leadership is defined as the ability of an individual to influence or guide members of an
organization for achieving a goal. There are a lot of leadership styles that can be implemented by
business organizations such as Marks & Spencer in order to get the best out of their workforce
personnel (Alblooshi and et.al., 2020). Some of these styles are outlined below.

Autocratic Leadership Style
In this type of authoritarian and coercive leadership style an individual is having control
over all the decisions and have little input from group members. Autocratic leaders makes
choices which is based on their ideas and judgments and rarely accept the advice from other
people. Sometimes this form of leadership becomes suffocating for employees (Al Khajeh,
2018).
Laissez-Faire/Delegative Style
The term 'Laissez-faire' is derived from the French which means 'let them do'. The
definition is self explanatory wherein a leader trustfully leaves the tasks in the hands of his/her
employees without any objective iterference. This form of leadership style is mostly applied in
fresh start-ups and small entrepreneurial businesses. Also known as delagative leadership it
involves the absence of overhead supervisor.
Democratic Leadership Style
Democratic leadership style is the process in which every single individual is responsible
or have equal participation in the decision making process. The word democracy means
“anything which can be run by the help of people” and this word works well in running any
organization as well. This style also helps in connecting people to their work and encourages
more substantial commitment levels. This also provide a robust connectivity between the team
members of the organization and emphasizes value and morality.
There are many characteristic advantages of using this specific leadership style in Marks
& Spencer organization as it efficiently helps in solving the complex issues within the business
environment. The retail organization follows a consultative form of leadership where the leaders
constantly seek consultations from their subordinates before taking any major decisive actions.
This provides a good scope for the company to adopt a more clear, open, and collaborative mode
of DEMOCRATIC LEADERSHIP that the company can benefit from.
Democratic Leadership Style
Through this kind of participative leadership M&S can achieve its desired goals in a
much more liberal manner. Unlike its autocratic variant the democratic leadership style helps in
enhancing the virtues of honesty amongst the employees with an all-over improvement of team
knowledge. The organizational structure of Marks & Spencer pays more attention to the buying

needs of customers which sets the pace of employee responsibilities.
Moreover it has been observed that post COVID- 19 pandemic situations, the issue of
work from home rose in very rapid manner following which leaders and managers had to direct
the team over the virtual modes slowing down the process of effective team management. With
the application of the democratic leadership style the leaders can easily motivate their team in a
liberal manner. It will also increase the participation of each team member of the organization
which can help in solving complex issues in a short span of time (Dapper, 2019).
This is also known as participative leadership style and it is all about distributing the
powers and gaining the output. Marks & Spencer organization can adopt and follow this
democratic leadership style in the form of:
Employee engagement surveys
This will also help the individuals in having a good leadership quality and improves the
culture of employee engagement, commitment and also job satisfaction. Leadership styles like
this also helps in building a deeper relationship between the team members and the employees.
360 feedback
It is a key element for keeping the employees engaged and motivated at the workplace.
The 360 degree feedback is growing in popularity and it gives a view of employee performance
and has many benefits like strengthening, accountability and collaboration among the team
members. Marks & Spencer has a well built company structure with multiple staff teams working
cohesively which means that communication and responsive feedback can directly reach the
management ensuring smooth functioning of the company.
Other forums
There are certain ways that can help develop the democratic leadership style in the this
retail organization. The leaders can generate creativity by having open and extensive discussions
with brainstorming with its workforce. It has been observed that today’s employee wants to work
with those team leaders who have the ability to handle the pressure, have a quality of stress
management, who are problem solving, who have good decision-making, adaptability and have
empathy towards others.
Benefits of using this style

A leader knows how to motivate the employees by giving them innovative ideas and also
helps them in understanding the system. Democratic leadership in this context puts emphasis on
providing guidance to help minimize potential threats that can affect employees' productivity.
It further creates free and open connection between the employees and the manager and
help the team develop more strength thereby increasing the efficiency and productivity of the
entire organization.
By having this democratic leadership incorporated in Marks & Spencer's organization all
the team members can actively progress and can speak their minds in the decision-making
process.
TASK — 3
Corporate Social Responsibilities (CSR) of Marks & Spencer
Corporate citizenship better known as Corporate Social Responsibilities (CSR) can be
defined as the necessary sustainable operations and policy programmes that any dedicated and
reasonable organization undertakes in order to place a positive impact on the world besides
aligned with its business guidelines.
The UK based retail company Marks & Spencer puts major emphasis on CSR as an
integral component of their business organization. It is of the opinion that consumers tend to
choose those businesses for their shopping purposes which pursue a more ethical approach
towards the society and surrounding environment (Nyame-Asiamah and Ghulam, 2019). In this
case, the corporate social responsibilities followed by Marks & Spencer include sustainable
social and environmental approaches which are discussed below.
Charity, Clothing, Community
Marks & Spencer has modestly included several society centric welfare activities such as
donating the remaining stock from its stores to charitable funds and centers. These donations
include a range of clothing, food, monetary, and community equipments that helps facilitate
medical research centers and health awareness campaigns for promoting a sheltered social
platform (Barnett and et.al., 2020).

Food and Fundraising
The retail company has also launched an open community based food network by the
name of 'Fare Share' through which it carries out the surplus food distribution processes to those
in need. Several M&S local stores in the UK manage this activity by redistributing the expired
food to dependent people. Fundraising is another subsidiary actiity where money is collected for
corporate partnerships.
Eco-Plan for Climate Change
The organization completely redefined its corporate social responsibilities with the help
of its 'Plan A' operation which is five year 'eco plan' aimed at reducing the toxic emissions in
relation with the manufacturing and supplying activities. M&S leaders have struck amiable and
useful connections with major federations and Climate Groups to reduce energy use by 30%
along with resorting to other eco-friendly products and service operations (Karwowski and
Raulinajtys‐Grzybek, 2021).
Sustainable Waste Management
Marks & Spencer has methodically adhered to a more sustainable way of waste reduction
as per its Plan A module such as choosing green energy production through compost material
over landfills. It is also committed towards using fresh and organic raw material and ingredients
for foods along with utilizing polyester packaging and recycled plastic by eliminating carrier
bags by 35%.
Health, Recruitment & Training
The company has undertaken several heallth and wellness measures for maintaining its
employees' mental and physical health through medical screenings as per NHS guidelines. It has
a 71,000 workforce strength around UK indicating its contribution towards employment
provision to various people (Das and Cirella, 2020). With a strong employee base the company's
HR and management has several marketing teams at work for the training and development of
unprivileged population.
Ethical Trade Relations & Diversity
The store team operations of the organization all over UK exhibit a well regulated
compliance with the legislative schemes and procedures. The retail company has a keen

inclination towards maintaining a strong ethical etiquette in its varied trade relations which is
spread all over the world. It secularly embraces all countries, religions and trade cultures which
helps elevate its brand reputation among corporate circles.
TASK – 4
Effects of Brexit and Covid-19 Pandemic on Marks & Spencer
Britain's formal departure from the European Union in January 2020 has majorly
impacted Marks & Spencer as follows.
Tariff Barriers – The first and foremost effect can be seen on the decreased rate of UK exports
of its widespread stores. The department of import and export usually work on the standard
quotas imposed on provisional goods known as trade tariffs which eases the smooth functioning
of international trade relations (Byrne and Rice, 2018).
Sale Losses – The European Union confederation regulated duty free access to its member
nations but with Brexit fallout UK companies like Marks & Spencer witnessed a substantial
amount of damage in the form of the decreased sales of its general merchandise pertaining to its
clothing and apparel products.
Stores Fallout – Post Brexit all the relaxations in trade barriers of EU referendum became
obsolete for the retail organization (Khabaz, 2018). More specifically the retail company had to
forcibly shut down 11 of its French stores centrally in Paris which evetually put an end to its
supply base of chilled and organic food.
Covid-19 had major impacts on the company such as -
Employee Lay-offs – Covid-19 caused a lot of unprecedented damage in M&S organization. One
of the major affected section was the long term employee base that became victims of the
eviction policy. The pandemic crisis made the UK retailer slash down approximately 7,000 jobs.
The company's demographic consisted of working age population whose employment status was
drastically affected during the pandemic (Jones and Comfort, 2020).

Suppliers and Customers – Marks & Spencer had to shut down more than 11 of its stores in the
Covid affected areas thus reducing the clothing and food sales substantially. This resulted in a
heavy crash of its customer base and loss of revenue. The 'lost year' phase of the coronavirus
pandemic included frequent lockdowns and curfews which obstructed the transportaion and
communication among its suppliers which mostly consisted of native British farmers.
How the company addressed these issues
Marks & Spencer's response towards Covid-19 wave has been discussed as follows.
Ethical Environmental Standards
The retail business competently responded to the detrimental effects of the Covid wave
by applying good amount of focus on the ethical standards of their dealings with the supplier
base. This was done with a keen consideration of environmental clauses at such a health
conscious time. The company consistently adopted its global sourcing principles set by its senior
leaders. These included healthy terms of employment, decent workplace conditions, and zero use
of any kind of slave or forced labour (Denysov, and et.al., 2021).
Supporting Supply Workers
The M&S organization suffered most of it supplier countries and to salvage this condition
started buying their raw food produce directly from British farmers. Taking this into account the
company as a gesture of its good faith in its suppliers approached various government
deparrtments combined with the farming unions to gain their support. This worked out in favour
of the retailer and major industrial bodies sent their help in the form of campaigning and
fundings.
The retail company has made some changes in its business dealings post Brexit. These
are:
New Trade Deals
Marks & Spencer has reviewed its business in the franchise stores which marks the
inclusion and application of entirely new trade tariffs (import export quotas). One of the
company's spokespersons told the media that the retail brand has made certain decisions for
conducting its European business operations in the Czech Republic (Faria, 2020).

Opening New Stores
As per the report of The Daily Mail, M&S is said to have closed down many of its
apparel stores in France and has also exited from the Russian market altogether due to the losses
it incurred post-Brexit. This is a very strategic step taken by the company to reduce its clothing
space in EU companies and place it at other profitable locations. It is the organization's latest
effort at its store turnaround by shifting 50% of its clothing lines and household products at other
locations.
CONCLUSION
The above report has summarized the understanding of the dynamic nature of business
organizations in the context of the UK based Marks & Spencer retail brand. It has considered the
future of the chosen organization within the global business environment with the company's
PESTEL analysis. The report has also included a recommendation of suitable leadership style
that Marks & Spencer can benefit from. The study has further identified the need for
sustainability in business concerns in relation to the above discussed Corporate Social
Responsibilities (CSR) regarding social, environmental and ethical issues. It has elaboratively
discussed the nefarious effects and impacts of Brexit and Covid-19 on the organization followed
by the measures that were taken to address and combat the issues.

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