Organisational Change at Marks & Spencer: A Case Study

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ORGANISATIONAL CHANGE: MARKS & SPENCER
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ORGANISATIONAL CHANGE: MARKS &
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Table of Contents
Introduction......................................................................................................................................3
LO1. Comparison between the ways in which change impacts on an organisation’s strategy and
operations (P1, M1).........................................................................................................................3
LO2. Evaluation of the influences that drivers of change have on organisational behaviour (P2,
P3, M2)............................................................................................................................................7
LO3 Determine How Barriers to Change Influence Leadership Decision-Making (P4, M3).........9
Background of Marks & Spencer................................................................................................9
Application of Force Field Analysis..........................................................................................10
Different Barriers to Change.....................................................................................................12
Accomplishment of Change......................................................................................................13
LO4 Apply a Range Of Leadership Approaches to a Change Initiative (P5, M4)........................13
Leadership Approaches.............................................................................................................13
Advantages and Disadvantages.................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16
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Introduction
In the modern world of business, the concept of organisational change is integral, critical, and
quintessential for benefiting the organisation in multiple ways. Change is an essential aspect for
an organisation as it not only brings variation within the internal systems and processes of the
organisation, but it also helps to rectify the identified issues and flaws that could affect the
business operations of the company. Due to the current state of globalisation and high
competitiveness in the market, organisations are bringing in change within their internal systems
and processes (Burnes, Hughes, and By, 2018). However, as there are benefits to change, there
are also side effects as well as barriers to change in an organisational context. In the following
study, organisational change would be critically analysed and evaluated within the context of
Marks & Spencer. The study would critically analyse the impacts of change as well as the
barriers of change within the context of Marks & Spencer.
LO1. Comparison between the ways in which change impacts on an organisation’s strategy
and operations (P1, M1)
Drivers and impacts of change and its effects on organisational strategy
The current market environment is undergoing changes every day. An organisation must be
prepared to tackle the frequent market changes. As opined by Böttcher and Müller, (2015), the
inability of an organisation to not adapting with the market change will lead to huge loss and
eventually the organisation will get perished.
Change driver is the internal or external factors that leads to change in an organisation. The
internal factors are the ones that is in control of the organisation (Doppelt, 2017). The principles
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set by an organisation might cause to design a change in the organisation. The capabilities of an
organisation is another factor for change to take place. The strength in one department will lead
to focus on the changes in that department more. Organisational idea of measuring the outcomes
can also lead to an internal change. A change in leadership also causes change in business
strategies, which is a vital part of internal change. These are some examples of internal change
drivers.
External change drivers are the drivers that forces the organisation to change its strategies in
order to sustain in the market (Doppelt, 2017). Such changes are not under the control of the
company. Drivers like change in technology, competition, customer needs and wants, demand
and supply and customer preferences are some examples of external change drivers.
Figure 1. Drivers of change
(Source: Parseihian, et al., 2017)
Organisational case study
The following case study is about Marks & Spencer where they undergo a massive scrutiny and
change. Marks & Spencer are one of the leading retail stores of UK that underwent a turnaround
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plan due to the change in the market’s taste and preferences. Marks & Spencer’s clothing line
has been regarded as outdated and old by the customers as the clothing lines had no new designs
and changes according to the market. This resulted in a huge loss for the company in their
clothing section. The new renovation in the food branding and clothing line brought little to no
positive impact to the company. The clothing line and food section was still continuing to fall.
Due to this reason Marks & Spencer scrutinised and changed their trading structure, supply chain
and marketing strategies. The condition brought about 3.1% decline in the group sales (Morgan,
2015). The new changes has been appealing to the younger customers who criticised their ageing
clothing line and expensive food hall. Marks & Spencer closed 24 stores as a plan to axe 100
branches in total (Eccles, Krzus and Ribot, 2015). The supply chain, being one of the leading
reason for their decline, has been scrutinised and the company made efforts to improve the
products by buying many clothing lines. The challenges faced by the company resulted in huge
decline in the market share which resulted in flat profit for the company.
Figure 2. Annual loss in the revenue of Marks & Spencer
(Source: Morgan, 2015)
SWOT analysis of case study to understand drivers of change
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Strength
Marks & Spencer are one of the leading brands in UK. Their massive popularity has been able to
bring in some amount of profit even during their transition period. The popularity of the brand
and loyalty of some of their customers are a massive strength to the company (Roth, 2017). The
professionals working for Marks & Spencer are also one of the reason why the company still
gained some flat profit during their transition period.
Weakness
Marks & Spencer still has some chains of clothing line which was regarded as outdated. The
company did not sell them off as it might bring a huge loss to the market due to which those
clothing lines still prevail in the market in order to gain some profit (Eisenberg, 2019). The brand
image has also been hampered due to the organisational change which also is one of the
weaknesses of Marks & Spencer.
Opportunities
The introduction of some fresh chain of clothing line has been facing some positive replies from
the market. This is has regained some of the old customers. This can be an opportunity for the
company as bringing in more such fresh fashion can build their brand image (Roth, 2017). The
change in their supply chain has also brought some efficiency in the company which can also be
an opportunity if utilised effectively.
Threats
The strategic change of the company has seen it close a number stores in order to curtail some
cost. This has resulted in huge loss of potential and designated employees. The food fall has also
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not been cost effective to much extent. These can be huge threats for the company and they
might lose a competitive edge (Eisenberg, 2019).
Evaluation on the effects and impacts of change on the organisational strategy
The transition period of Marks & Spencer has brought about a lot of changes in their business
processes and strategies. Their plan to change and scrutinise the business structure and strategies
has many effects and impacts in the business process.
One of the results of the change in business strategy of the company is changing the outdated and
incompetent supply chain. The change in supply chain has brought about a huge change in the
company’s structure and process which has been quite expensive. To curtail the expenses Marks
& Spencer has shut down around 24 outlets and is planning to a total of 100 outlets (Eccles,
Krzus and Ribot, 2015). This has resulted in huge loss of manpower and finance. Marks &
Spencer had to lose a lot of competent employees that could have been and asset for the
company. The trading structure has also been changed due to their plan. The change in trading
structure has impacted their business structure and strategies. The marketing plan has also been
changed which resulted in a change of marketing strategies of the company (Helfat. and Martin,
2015).
LO2. Evaluation of the influences that drivers of change have on organisational behaviour
(P2, P3, M2)
Evaluation of effect of change on leadership, individuals and team behaviour
The change in the structural and strategic plan of Marks & Spencer had influenced the human
resource of the company to a great extent.
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The leadership had faced a change during the company’s transition period. The leaders were
continuously figuring out new strategies that would help the company. The crisis situation
changed the leadership style of the leaders and managers in the company. The leaders had to be
more attentive towards the new ideas coming from different sources (Friedrich, Griffith and
Mumford, 2016). The leaders had to work overtime due to the condition of the company. The
leaders had to stand up and lead the team during the difficult period of the company
The individual employees had a tougher situation in the company. They had to work very hard
and efficiently due to the increasing number of employees losing their job. The employees also
had to work with efficiency and constantly bring in new ideas of development. The mass
unemployment led to a state of intense competition in the company. The employees had to prove
their worth in order to remain in the company (Li, Mitchell and Boyle, 2016).
The leaders, managers and employees had to work as a team for the company. Team work was
essential at that moment. The teams had to work with more efficiency and effectiveness in order
to stabilise the company. All the departments of the company had some distinct responsibilities
which had to be met with full efficiency.
Evaluation of the strategies adapted by the organisation in order to minimise impact of
change
Marks & Spencer had adopted to a number of strategies in order to enhance their declining
revenue. The company had done an excellent work in analysing the business of the company.
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This helped the company to draw a conclusion about the methods and strategies that the
company must adapt in order to sustain in the market.
The resulting strategies were communicated to the stakeholders that helped them to get a clarity
of their future plans. This enhanced the trusts of the stakeholders of the company which helped
the company to gather additional finance. The company also closed a number of outlets in UK
that helped them to save some cost. The marketing team changed the promotional strategies and
promoted the brand in such a way that it attracted the customers. The advertisement of Marks &
Spencer bringing in new product line has played a huge role in creating anxiousness in the
market. The company negotiated with many small and medium sized companies for merger and
acquisition in order to utilise the technologies and innovation of those companies (Beaunoyer, et
al., 2017). The company also carried out many discount and reward programmes in the outlets
that attracted a lot of customers. The clothing line had a discount of up to 80% and there were
gifts rewarded to customers who shopped for more than 10,000 GBP (Parseihian, et al., 2016).
This not only attracted customers but also helped to balance the brand image of the company to
some extent.
LO3 Determine How Barriers to Change Influence Leadership Decision-Making (P4, M3)
Background of Marks & Spencer
Marks & Spencer is a UK based British global retailer that specialises in luxury food products as
well as household and fashion apparels. The company was founded by Michael Marks and
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Thomas Spencer in 1884 and was focused on selling retail products. Marks & Spencer is one of
the largest retail companies in the world with a global presence as well as having over 979 stores
across UK. The company has generated over £10.698 billion in revenues and having employee
strength of over 80,787 all as of 2018 (Bernon, 2018).
Application of Force Field Analysis
The concept of Force Field Analysis was created by Kurt Lewin and the tool is used in order to
critically analyse all the different aspects of any situation especially in the case of a proposed
change and evaluate the forces for change as well as the forces that oppose the change (Xu,
2018). For Marks & Spencer, the change that was brought forth was for the issue of poor
structure of the system regarding their trade, supply chain, and marketing, which has caused
problems in the business of the company affecting their revenue generation and profitability.
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Figure 3: Force Field Analysis
(Source: Xu, 2018)
As such, the force field analysis of the change is:
Proposal for Change
The proposal for this change regarding their poor trade, supply chain, and marketing aspects is to
completely renovate the structure of the internal system (Pedersen, Gwozdz, and Hvass, 2018).
Factors Supporting Change
The factors supporting change are:
 The poor stock and inventory supplies which is unable to cater to the needs of the
customers
 Need to increase both the revenue generation of the company as well as its profitability
(Martínez-Costa, Jiménez-Jiménez, and Dine Rabeh, 2018).
 Changes in the taste and preferences of the customers as well as the creation of new
customer centric products and goods
 Low maintenance costs of the internal systems as well as an enhanced productivity and
speed
 Availability of new disruptive and digital technologies for effective promotion,
marketing, trade, and supply chain (Martínez-Costa, Jiménez-Jiménez, and Dine Rabeh,
2018).
Factors Opposing Change
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 Huge cost for bringing the entire change of the internal structure in terms of marketing,
trade, and supply chain
 Resistance from staff on being fearful of the adoption of the new technologies and
machinery as well as equipments (Griffioen, Doppenberg, and Oostdam, 2018)
 Impact on the environment as well as disruption brought forth by the change
From the above analysis, it has been found that while the factors opposing change is reasonable,
however, the factors supporting change is overwhelmingly high and as such, the proposed
change has been accepted easily (Griffioen, Doppenberg, and Oostdam, 2018).
Different Barriers to Change
There are four major Barriers to change within the organisational context of Marks & Spencer,
which has also influenced their decision-making and leadership. These are:
 Uncertainty: Uncertainty arises when an organisation is able to bring change which has
no clear or expected outcomes or unfamiliar compatibility with the internal system as
well as with the employees. Uncertainty was a factor in bringing change within Marks &
Spencer, which caused issues within their system, and as such, this helped to bring
change within their decision-making and leadership where the employees were trained to
comply with the changes and proper planning was done (Gandenberger, Köhler, and
Doll, 2018).
 Ineffective Leadership: Without a suitable leader, change cannot be brought forth as
well as implemented within the internal system of the organisation. Ineffective leadership
was a barrier in bringing change within Marks & Spencer, as no suitable leader was
present in order to implement the changes. As such, Marks & Spencer had to change their
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