Business Management Practices of Arcadia Group Ltd.: A Report

Desklib provides past papers and solved assignments. This report analyzes Arcadia Group's business strategies and leadership.

Context of business
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Executive summary
Business management is a process of motivating the workers in the workplace to give their best
performance at work. For any business, that aims to sustain in the market, there must be a
synergy between the vision and the business practices. This study is based on the various
management practices of any business organization including Arcadia Group Ltd., UK. The
report mentions the all types of leadership styles for any business organization and identifies the
style followed by Arcadia. Some recommendations have been suggested in this report that can
be utilized by the organization for further improvements in the future.
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Table of Contents
Introduction......................................................................................................................................4
A brief history and summary of the business you have selected and the rationale for your choice.
.........................................................................................................................................................4
Discuss their vision, leadership style and management practices and the various strategies
making use of various theories you have studied as evidence.........................................................5
Analyse how the above have been achieved or implemented by your selected company with
specific examples.............................................................................................................................8
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...........................................................................................................................................9
Conclusion.....................................................................................................................................11
References......................................................................................................................................12
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Introduction
The process, through which any business organization motivates its workers to produce greater
outcomes by spending less effort, is called business management. A clear business strategy is
needed for the success of any business organization. The coordination between the goal of the
organization and its mission, vision and values must be maintained well. These may be
considered as the foundation of strategic business planning and decision making. For creating
strong communication with the people, a meaningful mission and vision must be developed by
any organization. Through proper utilization of the various business strategies, any business can
reach its goal of making money in a very cost effective manner. Apart from that, every business
should analyze its strengths and weaknesses, which is considered as one of the best business
practices. In this report, the way in which the organization Arcadia Group Ltd. implements
leadership style, various business strategies and business practices while focusing on the vision
of the organization is discussed and some recommendation regarding the leadership style,
business practices and strategies are given so that the organization can improve its business.
A brief history and summary of the business you have selected and the rationale for your
choice.
Arcadia Group Ltd. is a UK based organization operating in the retail sector. The headquarter of
the organization is located in London, United Kingdom. The organization originated as Cross-
tailoring Company, which was a clothing manufacturer company for menswear, in 1903 by
Montague Burton who was an eighteen years old Lithuanian immigrant. In 1946 the organization
started selling women’s wear. The organization became a part of Taveta investments in the year
2002 and was renamed as Arcadia Group Ltd. After that the organization has started growing its
business digitally and has succeeded in growing its business in many countries. Arcadia group
Ltd. Has 1170 stores in 36 different countries.
The organization uses its online website to sell its products in 107 countries. The organization
has employed about 22000 employees all over the world. The organization now deals in mens’
and womens’ clothing, accessories and shoes. A number of British clothing brands like Topman,
Burton, Topshop, Miss Selfridge, Dorothy Perkins and Wallis are owned by Arcadia. The annual
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revenue of the organization in 2017 is £1.91b and the gross profit was £155.7m
(Arcadiagroup.co.uk., 2019). The gross profit margin of the company was recorded to be 8.2% in
2017 and the net income of the company in the year was £144.8M. The main competitors of the
organization are Inditex, H&M, Next and Debenhams. This organization has been chosen for this
report because all the information regarding requires for the completion of this report were
available and all the contexts including leadership style, business strategies and management
practices can be well-understood and addressed.
Fig.1- Arcadia Group Revenue
Source- Arcadiagroup.co.uk. (2019)
Discuss their vision, leadership style and management practices and the various strategies
making use of various theories you have studied as evidence.
Vision: The vision of the organization Arcadia Group Ltd. is the production of fashionable
goods in ethical manner demonstrating the responsibility towards the environment and the
people.
Leadership style: Leadership style is the pattern of management role is a business organization
at any particular time (Uhl-Bien and Arena, 2017). There are many types of leadership style that
are discussed below:
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Autocratic Leadership style: This can be defined by a leadership style where the instructions are
given by the managers or leaders to the people regarding their work and only the manager or
leader is involved in the decision making process. The level of satisfaction and motivation of the
employees is lower in many organizations that follow an Autocratic leadership style (Iqbal et al.,
2015).
Consultative Leadership style: This can be defined by a leadership style where the managers or
leaders usually uses to communicate with the employees before decision making and provide
them helps in this process (Hassan et al., 2016). The listening ability of such kind of leaders is
better. In this kind of organization a culture of consultation is present among the leaders and the
employees. Various mechanism including briefing, newsletters and suggestions is followed for
including the people in the decision making process.
Democratic Leadership style: This can be defined by a leadership style where the decision
making responsibility is given to the employees, individually by the managers or leaders
(Alonderiene, and Majauskaite, 2016). This kind of leadership style includes empowerment. The
individual employees or the teams or groups become accountable for the taken decisions and a
feeling of comfort is gained by the leaders by allowing other to make decision. The leaders track
the status of the decision making processes regularly from the teams or the individuals.
Leadership style followed by Arcadia Group Ltd.: The leadership style followed by Arcadia
Group Ltd. is a Situational Leadership. According to Hersey-Blanchard Model the organization
is determined that a single leadership style cannot be a good option for the business (Meier,
2016). So, the leaders use to adjust the leadership styles depending on the situation. Sometimes,
the managers and leaders at Arcadia consult with the other employees before taking any vital
decision. Although the manager takes the final decision, this is depended on multiple influences.
Arcadia sometimes follows a demographic leadership style along with its consultative leadership
style. According to Lewin's leadership styles, the demographic leadership style is the most
effective leadership style for such organization (Billig, 2015). Demographic leadership style is
also followed by this organization.
Management practices
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Systems Theory: By following systems theory, an organization is thought to be an individual
having different subsystems and the success depends on the cooperation between different
subsystems through communication (Shin and Konrad, 2017). The open organization receives its
essential inputs from the environment such as labour, raw materials and several others but a
closed system have little interaction with its environment. Arcadia Group Ltd. follows the
Systems theory and operates as a system. The different departments of the organization such as
finance, Human resource management, digital team, supplier management, customer care team,
legal team, R&D team serves as the subsystems and there is a well maintained communication
between these departments so that information can flow in every required direction and the
business runs smoothly in most cost effective way. The organization also performs as an open
system because it receives its essential inputs like raw materials, workers and technology from
its external environment.
The Human Relations Theory: This theory of management explains that employees must be
given special treatment and attention so that they can sense that their work has importance and
they are more stimulated to give high quality performance increasing the productivity of the
organization. Arcadia ensures that all its employees are getting enough attention and they are
motivated towards their work. Thus following this theory, the organization has been able to work
with 22000 employees and succeeded in gaining reputation worldwide.
Business strategies:
Porter's Generic Strategies: Porter's generic strategies help in describing how a business
organization achieves competitive advantage within the market scope chosen by it. According to
this theory there are four strategies namely, cost leadership strategy, differentiation strategy, cost
focus strategy and differentiation focus strategy (Chungyalpa and Bora, 2015). Depending on the
target scope and the competitive advantage the organizations can choose any one strategy from
the 4 strategies.
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Fig.3- Porter's Generic Strategies
Source- Chungyalpa and Bora, (2015)
In cost leadership, an organization have becomes the low cost producer in the broad market and
in a differentiation strategy it becomes unique in case of its products in order to get value from
the buyers. In cost focus strategy, an organization is determined in getting cost advantage in the
narrow targeted market whereas in differentiation focus strategy it seeks differentiation in a
narrow target scope (Laari et al., 2017). This model helped Arcadia group in generating
strategies in different situation. Also the organization follows Porter's Five Forces model for
generating strategies. Porter’s five forces model is a tool that is used to analyze the five forces of
the industry so that the intensity of competition and the profitability of any organization can be
determined. The five forces are threat of new entrants, threat of substitutes, bargaining power of
buyers, bargaining power of suppliers and Rivalry among existing competitors (Rothaermel,
2015).
Analyse how the above have been achieved or implemented by your selected company with
specific examples.
Arcadia Group Ltd. Follows a Situational Leadership style. The managers and leaders change the
leadership style from time to time depending on the environmental factors that affects the
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organization. When necessary the leaders take the vital decision by themselves and sometimes
they consult with the other staffs of the organization following a consultative leadership model.
It also follows the demographic leadership style when the employees are more trusted.
The different departments of the organization act in a synergy so that the goal of the organization
is achieved in most cost effective way. The different departments function in the different
aspects of the business. The finance team of Arcadia helps it to run the business smoothly.
Human resource management ensures that best talent is present in the organization. The tech
team of the organization helps it to grow internationally. The supply chain teams are responsible
to deliver 130 million products from 50 different countries every year. The organization has huge
number of suppliers and the relationship with the suppliers is well managed by the supplier
management team. The legal team helps Arcadia by providing a range of commercial legal
advice. Thus, a well maintained balance between the departments or subsystems leads to the
success of the organization.
Arcadia also maintains a good relation with all its employees and the customers. A good relation
with the employees has helped the organization to grow internationally. Arcadia Group has
founded fashion footprint in 2006, which is a programme for monitoring and managing the
impact of society and environment on its brands and business. As the target scope of Arcadia
group is broad, the most effective strategy that is followed by this organization is a
differentiation strategy. Also the organization uses the Porter's Five Forces model so that the
competitiveness of the environment of the business can be well understood, for generating
profitable strategies. To understand the effect of the environmental factors, the organization
depends on PESTLE analysis and TOWS analysis. With these the organization has become
aware about the macro and micro environmental factors that may improve or hamper the
business growth.
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
Arcadia has become one of the successful clothing stores worldwide by utilization of the useful
management practices and leadership styles. Different business strategies have helped the
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organization to expand its market share not only in UK but also in a number of countries.
Enhancement of the reputation by maintaining a good relation with its customers can be most
recommended strategy for the organization because the customers are considered as the most
essential stakeholder for any organization. Also the organizations have to open more stores in
different countries and offering a free home delivery to some regions may help the organization
in gaining more customers. Also the customer care unit of the company has to be more sincere
toward their work and solve the queries of the customers promptly.
The management practices and leadership styles must be changed depending on the country
where the organization is operating. Sometimes the managers or the leaders have to be strict by
following the autocratic style of leadership depending on the behavior and quality of the team
members. Transformational leadership is a leadership style where the leaders or managers
allocate smaller tasks and keep their focus mainly on the most important goals of the
organization (Ghasabeh et al., 2015). This kind of leadership style can be followed by Arcadia in
order to achieve success by reaching the goals easily. The present management practices
followed by Arcadia, are undoubtedly good but not enough. To succeed it must achieve a good
amount of manpower. The level of dedication among the employees can be increased by
employee engagement programme. The employees must be provided with some benefits like
bonus, incentives and perks so they are always motivated to their work. Training and
development programme of the employees can be improved as well.
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Conclusion
The report clearly highlights the various management practices to be implemented for success of
any business organization including Arcadia Group Ltd., UK. This study outlines the numerous
business strategies that are implemented by this company. The different types of leadership
styles are clearly discussed and the leadership style that the company Arcadia Group Ltd. follows
is also mentioned in this report. Though the company has faced many troubles and with the help
of the discussed leadership styles and changing them at particular times, the organization has
been able to cope up with the situations and become able to survive. This report also makes some
clear recommendation that this organization can follow for gaining success.
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References
Alonderiene, R. and Majauskaite, M., 2016. Leadership style and job satisfaction in higher
education institutions. International Journal of Educational Management, 30(1), pp.140-164.
Arcadiagroup.co.uk. (2019). Arcadia . [online] Available at: https://www.arcadiagroup.co.uk/
[Accessed 8 Apr. 2019].
Billig, M., 2015. K urt L ewin's Leadership Studies and His Legacy to Social Psychology: Is
There Nothing as Practical as a Good Theory?. Journal for the Theory of Social Behaviour,
45(4), pp.440-460.
Chungyalpa, W. and Bora, B., 2015. Towards Conceptualizing Business Strategies. International
Journal of Multidisciplinary Approach & Studies, 2(1).
Ghasabeh, M.S., Soosay, C. and Reaiche, C., 2015. The emerging role of transformational
leadership. The Journal of Developing Areas, 49(6), pp.459-467.
Hassan, H., Asad, S. and Hoshino, Y., 2016. Determinants of leadership style in big five
personality dimensions. universal journal of management, 4(4), pp.161-179.
Iqbal, N., Anwar, S. and Haider, N., 2015. Effect of leadership style on employee performance.
Arabian Journal of Business and Management Review, 5(5), pp.1-6.
Laari, S., Töyli, J. and Ojala, L., 2017. Supply chain perspective on competitive strategies and
green supply chain management strategies. Journal of cleaner production, 141, pp.1303-1315.
Meier, D., 2016. Situational Leadership Theory as a Foundation for a Blended Learning
Framework. Journal of Education and Practice, 7(10), pp.25-30.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Shin, D. and Konrad, A.M., 2017. Causality between high-performance work systems and
organizational performance. Journal of Management, 43(4), pp.973-997.
Uhl-Bien, M. and Arena, M., 2017. Complexity leadership: Enabling people and organizations
for adaptability. Organizational Dynamics.
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