Impact of Environmental Factors on M&S: PESTLE Analysis, Leadership Styles, CSR and Brexit & Covid-19 Effects

This report discusses the impact of environmental factors on M&S through PESTLE analysis, recommends suitable leadership styles, critically analyzes CSR initiatives, and discusses the effects of Brexit and Covid-19 on the organization. It includes a detailed analysis of M&S's waste management, sustainable raw materials, recruitment and retention, charity and community funding donations, clothing and equipment, climate change, and employee health and safety.

CONTEXT OF BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
1. PESTLE Analysis of Mark and Spenser..................................................................................3
2. Presenting different leadership styles and recommending suitable leadership styles to M&S4
3. Critical analysis of Corporate Social Responsibilities of Mark and Spenser organization.....6
4. Effect of Brexit and Covid – 19 on M&S and how it has addressed the situation..................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12
Books and Journals....................................................................................................................12

INTRODUCTION
The present report is based on M&S which is known as a multinational retailer of UK
headquartered in London, England, UK. It is specialized in selling home products, clothing
products, beauty and food products. Like several other businesses operating in UK, M&S is one
of those businesses who gets severely affected because of the implementation of Brexit and the
unplanned emergence of Covid – 19. In this report, the discussion will be done with regards to
the impact of environmental factors on M&S with the help of PESTLE model. Also, the most
suitable leadership style would be recommended to M&S through which it could achieve its
business objectives. Furthermore, the CSR initiative that M&S have implemented within its
processes would be identified and critically analyzed. At last, the effect of Brexit and Covid – 19
on the operations of M&S will be discussed along with highlighting how M&S has addressed
these situations.
MAIN BODY
1. PESTLE Analysis of Mark and Spenser
In order to analyse the impact of external environment factor over the retail sector as well
as the chosen M&S organization, the Pestle model is used. The Pestle analysis of M&S
organization is as follows:
Political: This is the first factor which define the impact of political stability of the country
over the performance of retail industry (Monte, 2021). The political instability of UK and Brexit
has put negative impact over the retail sector and M&S company. The retailers unable to move
its products freely all over the EU market and they required to pay tariff which has increased
their cost of sales.
Economical: The economic condition of country in term of inflation, interest and
employment rate is also a factor affecting retail industry. During and after Covid-19, consumers
has change its pattern of spending to necessity products from luxury products. This factor creates
threat for the retailers that provide goods at high price. However, this is an opportunity for M&S
retailer because the company provide high value goods at reasonable price which customer can
easily afford.

Socio-culture: The change in the taste and preference of consumer is the factor that affect
the overall business operations. After the launching of credit cards in the market, the sales of the
retail sector have increased by more than 10% (Pham and Nguyen, 2021). M&S has taken
advantage of this trend and allow its customer to new clothing products on credit card payment
facility to gain high market share.
Technological: The introduction of online shopping, self-checkout etc. in the technological
world has changed the overall market condition of UK retailers. This is one of the crucial
technological factor that affect the overall performance of retailer and work as both opportunity
and threat for company based on their capabilities. For example, M&S retailer has grasp this
opportunity to take competitive advantage and for this M&S has started online sales as well
along with offline sales from stores.
Legal: The legal factor which are affecting UK retailer such as M&S are the legislation,
rule and regulation of country. It means the legislation changes over the period of time and with
change in regulations in every country it became difficult for the retailer to comply with each
country changing legislation and rules without any mistake and difficulty. Thus, it can be said
that the changing legal and regulation of country create threat for M&S as the retailer have
operation in more than 100 countries (Baliyan, 2021).
Environmental: This is the last factor of Pestle analysis which also put impact on the
performance of retail sector. The M&S retailer of UK basically uses fair trade practice which is
one of the most sustainable business practices not even used by larger competitors of company.
Not only that, the retailer in order to maintain its image of luxury brand in the UK as well as
international level, they use recyclable packaging. This is also beneficial for reducing carbon
emission. However, becoming more sustainable by M&S is not unique thing because UK
retailers are pledge to do the same.
2. Presenting different leadership styles and recommending suitable leadership styles to M&S
There are basically four main types of leadership styles which is available to the
management of Mark and Spenser which they can adopt in order to achieve its business
objectives. The critical evaluation of four types of leadership styles are as follows:

Autocratic Leadership Style: This is a type of leadership style under which the team
leaders do not seek any one views point in their decision making process. This is a type of
leadership style in which team leaders gave direction to the team members and do not involve
them in the decision making process (Specchia and et.al., 2021). The benefit of this leadership
style to M&S company that they able to complete their target on time but on the other hand, low
job satisfaction and poor morale of employees is disadvantage of autocratic leadership style.
Bureaucratic Leadership Style: This is also one of the most significant and best leadership
style which management of M&S company can implement. Under this style, the team leaders
usually seek inputs from others in their decision-making process. This type of leadership is
basically adopted by large organizations where ideas of other also gathered but to some extent
only in order to maintain the strictness in the environment. It means the team leaders listen new
ideas of their team member but also reject in case if such ideas are not beneficial for company.
The benefit of this style to M&S is that it enhances the morale & productivity of employee but
on the other hand, this is quite time consuming leadership style which leads to heavy loss to
company in case of poor ideas.
Democratic Leadership Style: This is a type of leadership style which is also known
participative leadership style. Under this style, the team leaders of company basically place high
value on their knowledge, skills and diversity. The team leaders under this leadership style
continuously ask their team member, direct reporters as well as the peers to share their ideas and
thoughts over the success of the organization (Alblooshi, Shamsuzzaman and Haridy, 2020). It
develops confidence in the team leaders as well as team members of the organization and
empower lower level employees to exercise authority. However, in the stressful situation, the
adoption and use of democratic leadership style became time consuming for company.
Laissez-Faire Leadership Style: The laissez-faire is s French term which means “let them
do” in English. This is also one of the key leadership style available to M&S company under
which the leaders have to trust their employees and offer minimal interference in their work. The
adoption of this leadership style helps the management of company to empower its group of
employees at the workplace but is least intrusive leadership style. Sometime employees need
leaders from whom they can cross check their work. The wrong work would lead to heavy loss to
the company.

Recommended a suitable leadership style:
On the basis of analysis of different leadership styles, it is recommended to management
and leaders of Mark and Spenser that they have to adopt democratic leadership style for the
purpose achieving business objectives. It is because this is perfectly suitable to keep the
employee motivated and encouraged after the global pandemic situation. As per the opinion of
author democratic leadership styles encourage participation among the employee with further
leads to development of diversified workforce at M&S. Also, this style helps the leaders of M&S
to keep employee involve and engaged in each decision making process during the Covid-19
period (ZHANG, 2018). In this way, the company able to invite higher level of commitment of
the employees within the work process. In simple term, the democratic leadership basically
foster positive as well as healthy cultures at M&S organization.
For example, Apple is a world top information technology company uses the democratic
leadership style within their organization in order to create positive culture within the business.
With the help of this leadership style, Apple company able to build strong relation with the
employees and among the employees. Apple company basically hire candidates from more than
one country that why creating a positive culture for diverse team is important for the leaders and
management of company. That’s why it is recommended to M&S company to adopt and
implement democratic leadership style in order to achieve its business objective of international
expansion (Jones and Comfort, 2018).
3. Critical analysis of Corporate Social Responsibilities of Mark and Spenser organization
Mark and Spenser is a leading and most valuable British multinational organization of UK
that have always taken responsibilities towards the sustainable development, customer,
employees, partners, supplier as well as local communities seriously. In order to achieve business
objectives in the term of quality, service, innovation and trust M&S company always doing
business in responsible manner by taking part in the sustainable development program such as
Five Year Eco Plan, Plan A. The various steps taken by M&S for following CSR are as follows:
Waste Management: It is identified from the research that; M&S company take part in
the Five Year Eco Plan. Being a part of this Plan A, M&S company is highly committed to stop

sending its UK and Irish stores waste to the landfill. Rather they use the food waste to produce
green energy via anaerobic digestion or compost. With the help of this program, M&S company
has properly managed the waste in order to save the environment. Also, M&S company reduces
non glass packaging by 25% and carrier bags by 33% in order to save trees and plastics.
Sustainable Raw material: As a part of Plan A, five year eco plan, M&S company ensure
that all the key raw material used in the production of good such as cloth, food, beauty should
come from sustainable sources (Jones and Comfort, 2019). For example, M&S company sell fish
which come from independently certified sustainable sources, use of wood material which is
easily recyclable. These are some of the sustainable action taken by M&S company with the aim
of protecting the environment, society and governance.
Recruitment and Retention: This is also one of the corporate social responsibility action
of M&S organization under which employ around 71000 people in the UK and 75000 all over
the world. The employee turnover rate of M&S organization is lower as compared to its
competitors Sainsbury, Aldi etc. It is also analysed from the research that, around 40% of people
doing job in M&S from past 5 years’ while 22% are working from more than ten years. This
indicate that the contribution of M&S company towards the lower unemployment rate of UK is
good which further leads to economic growth.
Charity and community funding donations: This is also one of the sustainable action
taken by M&S company under which the company basically donate fund to the local charitable
communities directly through its local stores. This is done by the company for the welfare of the
society the impact of which they able to manage its position in the market or in the eye of UK
local community (Parung, 2019). Donating percentage of company earnings for the community
welfare is required by every retailer of UK in order to sustain in the market.
Clothing and Equipment: This is basically a charitable program of M&S organization
under which the company donates its returned cloths, unused equipment as well as the part of
business surplus to the charity Newlife. Newlife is a charitable organization that funds medical
research, nurse support, awareness campaign and significant equipment for the disable people.
By taking part in this program, M&S organization able to contribute in the welfare of the disable
people. For example, M&S organization directly funds 400 pieces of equipment for disabled
children each year with the aim of supporting such children.

Climate change: Being a part of Plan A five year eco plan, M&S organization have aim
to make operation in the UK as well as Republic Ireland with the purpose of helping both
customers as well as suppliers to reduce carbon emission. M&S company with the help of green
electricity reduces 25% of energy and power use every year. The company also develop the low
carbon products & services to help customer reduce energy consumptions and bills. This helps
the company to enhance its brand image in the eye of customer as well as whole society.
Employee health, safety and wellbeing: Health and safety of employees is also one of the
sustainable measure have to be taken by each organization in order to enhance its productivity
and company performance. For example, in the year 2008, M&S company has launched a pilot
wellbeing program in their different stores with the aim of provide the wide range of mental as
well as physical health initiatives. This is one of the major initiative with the help of which the
organization able to keep their employee happy and satisfied with the workplace. The company
also completed 13000 breast screening for their employees as well as pensioners (Das and
Cirella, 2020).
4. Effect of Brexit and Covid – 19 on M&S and how it has addressed the situation
Effect of Brexit on M&S
Businesses in UK like M&S get greatly affected both positively and negatively as a result of
implementation of Brexit which involves the following:
 Labor shortages was the biggest impact of Brexit which was resulted due to restricted
immigration policy adopted by UK. The free movement of people between UK and
nations of the European Union comes to halt. Accordingly, several position remain
vacant which could not be filled through the skills and abilities available among UK
citizens which leads to shortage of labor for M&S (Keogh-Brown and et.al., 2020).
 The value of pound gets declined which led to rise in the price paid for importing
products or raw materials from EU nations for M&S. Accordingly, the profit margins of
the company gets affected much. However, the declining value of pound acts in positive
way as well. This is because after Brexit, M&S have started trading with non – EU
markets as well by expanding its operation to non – EU nations. This resulted in making

M&S product cheaper and more appealing in several markets where M&S have expanded
such as Brazil and China.
 With the implementation of Brexit, the businesses like M&S were having no clues about
future relationship with regards to trading with both EU nations and non – EU nations
because earlier they were following the trade negotiation specified by European Union,
but for now those terms are not applicable on getting separated from EU. Accordingly,
the free trade terms enjoyed by UK as a member state of EU is not available for
businesses operating in UK and accordingly, it was a major cause of concern for them
which led to deterioration of their performance in a great way.
 Also, with the reduction in restrictive measures imposed EU allows M&S to freely
conduct business with other markets of the world allowing for sourcing specific products
not available within UK.
Effect of Covid – 19 on M&S
 Covid – 19 has resulted in business closure due to the implementation of lockdown by
UK government. Accordingly, M&S is forced to cut down more than 7000 jobs which led
to losing talent staff in the hands of competitors. The clothing & home trading store of
the company gets severely affected because of the pandemic and resulting lockdown and
this segment has around 78000 workforces and accordingly, there was no option but to
slash down its workforce (Beech and Anseel, 2020).
 M&S has reported 90% plunge in its full year profit with the beaten up of its clothing
sales as a result of emergence of Covid – 19. It just happens because of multiple
lockdowns which have shut down the non – food space of almost all the retailers like
M&S.
 Also, M&S has reported that the cost running their business has increased much after the
spread of coronavirus because of compulsory imposition of several measures and their
fulfilment such as social distancing, masks, hand washing, etc. in an attempt to control
the effect of pandemic. On an average, per unit costs were found to be 7% higher in 2020
and there is much higher expectation with regards to the rise in costs.
 Covid – 19 has severely disrupted the supply chain network of the company. With the
imposition of lockdown, transformation, transportation and distribution of products &

services become much difficult and as a result several issue arise which involves rising
commodity price, port congestion, shifting in customer behavior and logistic disruptions.
Addressing the situation
 To attract customers during the time of pandemic, M&S has implemented several
preventive measures across all its stores which includes, social distancing, provision of
face masks for customers entering their stores and also have established sanitizer stands
outside all their stores. This was done to minimize the risk of transmission of
coronavirus.
 M&S has instigated specific team for responding to Covid – 19 for giving special focus
on central issues such as business continuity with suppliers, handling grievances of
colleagues and balance sheet resilience (De Lyon and Dhingra, 2021).
 M&S started following standard Grievance procedure for facilitating the reporting by
individuals, employees and wider communities forming part of the company’s supply
chain of any wrongdoing without getting feared of retribution.
 With the country’s restrictive policy with regards to immigration, M&S undertake to
retain talented employees who are considered to be the immigrants from EU nations. This
allows the company to avoid the issue of vacant position resulting from Brexit.
 M&S has protected its brand by exploiting the opportunity of sourcing products &
services from non – EU nations. This has resulted in better reputation of the business in
terms of offering unique & high quality products & services.
CONCLUSION
From the above report it has been concluded that the M&S gets negatively affected due to
the political instability resulting from Brexit and usual social environment with the advent of
pandemic. Also, several technological advancements have been adopted by M&S to tackle the
issue of Covid – 19 in an attempt to operate business through online platforms. Also, the best
leadership style identified with respect to the circumstances of M&S is the democratic leadership
style through which it can achieve is business objectives efficiently. At last, it has been identified
that Brexit and Covid – 19 have affected M&S in positive & negative manner due to which its
sales performance gets deteriorated and also the company lost many of its talented staff.

REFERENCES
Books and Journals
Alblooshi, M., Shamsuzzaman, M. and Haridy, S., 2020. The relationship between leadership
styles and organisational innovation: A systematic literature review and narrative
synthesis. European Journal of Innovation Management.
Baliyan, R., 2021. A Shift in Paradigm for Apparel Industry Post Covid 19. Turkish Journal of
Computer and Mathematics Education (TURCOMAT). 12(13). pp.5203-5211.
Beech, N. and Anseel, F., 2020. COVID‐19 and its impact on management research and
education: Threats, opportunities and a manifesto. British Journal of Management, 31(3),
p.447.
Das, D. and Cirella, G. T., 2020. Corporate social responsibility practices in the United
Kingdom. Journal of Applied Management and Investments. 9(2). pp.51-54.
De Lyon, J. and Dhingra, S., 2021. The impacts of Covid-19 and Brexit on the UK economy:
early evidence in 2021. London: Centre for Economic Performance, London School of
Economics and Political Science.
Jones, P. and Comfort, D., 2018. Storytelling and corporate social responsibility reporting: A
case study of leading UK retailers. European Journal of Sustainable Development
Research. 2(4). pp.1-11.
Jones, P. and Comfort, D., 2019. Storytelling and corporate social responsibility reporting: A
case study commentary on UK. food retailers. Journal of Public Affairs. 19(4). p.e1834.
Keogh-Brown, M. R., and et.al., 2020. The impact of Covid-19, associated behaviours and
policies on the UK economy: A computable general equilibrium model. SSM-population
health, 12, p.100651.
Monte, A., 2021. A study of value chain reconfiguration processes under Covid-19 pressures: the
case of Tesco PLC in the United Kingdom.
Parung, C. A. P., 2019. The Impact of Corporate Social Responsibility on Consumer Purchase
Behaviour in High-Street UK Retailers.

Pham, T. A. and Nguyen, D. A. C., 2021. Entering the Finnish market 2021: case company:
Uniqlo.
Specchia, M. L. and et.al., 2021. Leadership styles and nurses’ job satisfaction. Results of a
systematic review. International journal of environmental research and public
health. 18(4). p.1552.
ZHANG, C., 2018. Relationship between leadership styles and job satisfaction in luxury retail
project.