Organizational Analysis of Mothercare Plc: Leadership and Management

This report provides a detailed analysis of Mothercare Plc's management practices, organizational structure, and leadership styles. It examines the company's management principles, including the application of Theory X and Theory Y, and the role of the CEO in strategic decision-making. The report explores the steps taken to restructure the organization, the impact on employees, and the development of a strong organizational culture. It also analyzes the leadership style of the CEO, considering situational leadership, path-goal theory, and transformational leadership, along with the effects of power, influence, and conflict within the organization. Additionally, it discusses the various types of motivation used at Mothercare and concludes with recommendations based on the findings. The report uses corporate examples and relevant literature to support its analysis and provides a comprehensive overview of Mothercare's organizational effectiveness.

Module Title: Organizational Theory and Practice
Module Code:
Student ID:
Word Count: 3000

Contents
Introduction..............................................................................................................................................3
The management style and principle and functions of the management of Mothercare Plc...................4
The steps are taken with regard to organizational structure to achieve high performance and the
organization culture at Mothercare and its impact on the employees.....................................................4
The leadership style of the CEO of Mothercare to enhance the organizational effectiveness................5
The effects of power, influence and conflict at Mothercare....................................................................6
The various types of motivation used at Mothercare...............................................................................7
Corporate Examples and Literature.........................................................................................................8
Recommendations....................................................................................................................................9
References..............................................................................................................................................10
Figure 1: Maslow's Hierarchy of Needs
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Introduction
Mothercare Plc is a British retail chain operating across the United Kingdom and 60 other countries. It
was founded in 1961 to sell products to the mothers, expectant mothers and children up to age eight. It
is a public limited company listed in the London Stock Exchange. The retail industry is one of the
fastest-growing industries around the world since its beginning. Without retailing business, it will be
difficult for us to collect the required products that are essential for our daily lives. The retail
operation makes it easier for ourselves to have all the requirements under one roof. Mothercare is one
of them which is specialized in a separate sector.
This report shows the analysis of the management of Mothercare and some recommendations are
given at the end of the report. A good number of theories is applied across the report to analyze the
organization effectively. A retail business organization must have an expert management team to run
smoothly. Mothercare’s director's board has made great changes in its organization structure like the
old CEO is replaced by the previous CFO. It has a strong workforce to serve their customers properly.
They are trained well and can give unbiased recommendations to the customers. Its management team
follows all the principles described by Henri Fayol. Effective leadership is the reason behind its
success story.
Mothercare maintains a management style where all the employees have a comfortable working
environment. They are appreciated and respected for the core service. The organizational restructure
puts a great impact on the employees and it has reduced its cost tremendously. Leaders of Mothercare
are experienced in this field and they try to be surrounded by talented subordinates and make a
harmony in their contribution. As the shape of this industry is changing, Mothercare should take
immediate steps to adapt to changing trends. It should focus on expanding its market around the world
through large retails store with huge product assortments. A job at Mothercare is like gold for the
candidate and it is one of the best employers across the UK.
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The management style and principle and functions of the management
of Mothercare Plc
The board of directors has appointed the former CFO Glyn Hughes as interim CEO recently. The new
CEO is determined to achieve the goal of its further expansion in international markets through
franchise arrangements (Abdulla, 2020). There are two types of management styles according to the
theory of Douglas McGregor: Theory X and Theory Y. Theory X refers to the authoritarian style,
whereas Theory Y defines the participative style (Williams, 2013). The CEO practices both of the
styles in the daily activities of management. The board of Mothercare is well designed under the
Public Limited Company Law of the UK. The critical and major decisions are made through the
executive meeting by analyzing all the suggestions and other minors and immediate decisions are
made by managers in charge (Corporate governance, 2020). Employees are given chances to put their
thoughts during the decision making process.
There are 4 core principles in management according to the Scientific Management Theory of F.W.
Taylor (Dyck and Neubert, 2009). The CEO of Mothercare uses all the principles in managing the
workforce. Works are divided into almost all departments. The Human Resource department hires the
right employees and put them where they are skilled and feel comfortable to do their job. Managers
monitor the performance of employees and give them instructions (Corporate governance, 2020). The
CEO ensures the teamwork in each department with equal rights to do their job which results in
maximum efficiency.
Management is a set of principles that includes functions of planning, organizing, staffing, directing,
and controlling which is an integral part of a business to attain the desired objectives (Campling,
2008). Mothercare’s CEO Glyn incorporates all the functions that lie in the definition. The CEO has
the responsibility to design the planning on how they will accomplish their tasks. The entire plan to
obtain the ultimate goals is developed by the CEO by analyzing all the possible ways with top-level
managers (Functions of Management | Management Study HQ, 2020). Then middle and lower-level
managers apply all the plans and take necessary steps in emergency cases.
The CEO organizes all the resources and makes harmony among all departments to push the
organization towards efficient management (Final Results, 2020). The HR department under the direct
supervision of the CEO hires the required workforce and makes effective arrangements to pull out
their best efforts. The CEO directs all the heads of all departments and controls if there occurs any
discrepancy between the original and expected result (LEADERSHIP MANAGEMENT, 2017).
The steps are taken with regard to organizational structure to achieve
high performance and the organization culture at Mothercare and its
impact on the employees
Major restructure steps have been taken at Mothercare recently which lead to the effective and
efficient management of its business. A significant change has been made in its management like
decreasing employees, voluntary reduction in pension benefits by key executives etc (Folly, Folly and
profile, 2020). Moreover, key changes in its board to make it more appropriate according to its size
and thus it reduces board cost. Almost 79 retail stores across the UK have been closed and there was a
change in capital raise to refinance for the group (Final Results, 2020). An accelerated restructure of
the organization cuts its cost £25 million per year. Through the restructuring program, the Mothercare
board has created three divisions: Mothercare Global Brand, Mothercare UK
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franchise and Mothercare Business Services (Abdulla, 2020). All of these divisions have separated
leadership team and plan to achieve their objectives. This new organization structure results in the
achievement of high performance. It is working to recover the supply base and customer loyalty that
has been lost for its organizational restructuring (Final Results, 2020).
A strong organizational culture tends to produce a better result than those with a weak culture (Bajaj,
Tuli and Srivastava, 2010). Mothercare Plc has developed a strong culture that makes an outstanding
environment for mother and children. Its staffs are passionate and committed to serving their in-store
customers with unbiased suggestions. It does not create any disparity between male and female
employees. Female employees are increasing since 1990 in all departments (career-advice/company-
spotlight, 2020). Moreover, staffs are treated well and they enjoy their jobs in a healthy workplace.
These result in the best outcome of their efforts and they are motivated.
Mothercare is related well to both aspects of Organizational Iceberg Theory of French & Bells.
According to this theory, there are formal and informal aspects of an organization. Formal aspect is
visible from all sides whereas the informal aspect is less visible and it is hidden (Crowther, 2012).
The formal dress code for staffs at Mothercare is navy blue trousers, navy blue blouse for females and
a light blue shirt and navy blue tie for males. This formal aspect is visible and noticeable by the
customers (Folly, Folly and profile, 2020). Staffs are skilled and trained to handle all the queries by
the customers and help them in purchasing decision. The goal of staffs is to aid customers first and
customers cannot see the closed-door matters (Levy, Weitz and Grewal, 2014). There may be
different groups among the staffs but they are skilled to maintain a comfortable and cheerful store
environment for the customers.
The leadership style of the CEO of Mothercare to enhance the
organizational effectiveness
A perfect leadership style is a must for the effective performance of an organization. Leaders are like
rudders of business operation. Experienced and skilled persons can be leaders in any situation. But a
leader takes the lead as responsibility, not as the boss of his subordinates (LEADERSHIP
MANAGEMENT, 2017). The CEO Glyn is skilled and experienced enough to hold his position. He
has been appointed to run the transformation plan to become an international franchise operation. He
has all the characteristics required to be successful in this field and he has earned job-related
knowledge for many years in the retail chain (Abdulla, 2020).
According to the Situational Leadership Theory, leaders must have the ability to change leadership
style by the changing situation (Benfari, 2013). The CEO of Mothercare takes timely steps to manage
retail stores effectively. House’s Path-Goal Theory focuses on the path planned by the to achieve the
goal of the organization. A leader may be directive, supportive, achievement-oriented or participative
(Bajaj, Tuli and Srivastava, 2010). The CEO of Mothercare holds all the styles. He supports his
subordinates to overcome the obstacles and directs them on how to go through the barriers. He is
determined to reach the peak of success and for this, he works with employees as a team member and
makes a pleasant working environment (Abdulla, 2020).
Glyn has all the traits like a charismatic leader such as idealized goal, high self-monitoring, perceived
as a change-maker, self-confident etc. All these tend to produce a positive result and run the business
effectively and efficiently (Folly, Folly and profile, 2020). Fielder's Contingency Theory defines the
effective leader as the one who adapts to the situation and interacts with subordinates to control the
situation (Lumby and Coleman, 2010). Glyn respects all the staffs in the organization and controls the
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tasks of all departments. Every retail store has a separate team to accomplish the desired sales and
there are managers to handle the teams.
Leadership style is impacted through the changing trends and leaders are tactical to handle all the
changing situations. Transformational leaders always motivate employees and appreciate the
extraordinary performance of the employees (Gunter, 2005). The CEO maintains emotions and
relationships effectively and he emphasizes interaction among the staffs and managers through proper
communication and participation. To operate the business effectively, managers are trained to
empower the employees that motivates them to use their best efforts. All the managers lead the
followers to form the front line and they are trusted by their subordinates (Folly, Folly and profile,
2020). These leadership styles in Mothercare pave the way to its effective organization management.
The effects of power, influence and conflict at Mothercare
Perfect leaders never misuse their powers on the subordinates rather they perform their jobs as
responsibility. All the managers of Mothercare are allowed to exercise their power over their team
members but they are monitored properly how they treat their subordinates (LEADERSHIP
MANAGEMENT, 2017). According to Peter Drucker's 'Good Old-Fashioned Leadership Theory',
good leaders accept power as their responsibility not as rank and they always try to be connected with
talented followers (Campling, 2008). At Mothercare, all the department heads make their plans
through the discussion with their department executives and staffs and implement them properly. The
problem arises where only a single leadership style is followed. For example, an autocratic leadership
style creates negative results more than the positive one (Levy, Weitz and Grewal, 2014). Employees
are demotivated under the autocratic leader and thus this hampers the entire business operation.
The CEO of Mothercare makes a cluster of all leadership style and takes steps according to the
condition of the problems (Corporate governance, 2020). During the decision-making process,
decisions taken may be biased if the final decision-makers seek their interests. Women employees
may be treated badly by their male supervisors. But The CEO Glyn has ensured a good workplace
environment where all employees are treated equally. All the decisions made are monitored properly
by the heads. When the board of directors decided to close most of its stores that threatened 2,500
employees' careers (Abdulla, 2020). Employees are compelled to the decision and this makes other
employees think about their career. All the executives are experienced and skilled in this field and
they are aware of how to use their position and there is little chance for biased decisions.
Conflict Theory of Karl Marx claims that there may be possible conflictions because of competition
among the employees. They may try to earn more than their employees and this creates a grouping
problem (Williams, 2013). Mothercare’s staffs in retail stores are seen to form different groups for
their interests. Thus an uncomfortable working environment for the new employees may be created
which demotivates them (Dyck and Neubert, 2009). Moreover, employees are intimately based on
their choices like religions, cultures, social class etc. Once females were treated equally at
Mothercare. All these conflicts are properly controlled by the executives and board members through
effective use of their powers and they ensure a cheerful environment for the employees and customers
at large. Power is an effective tool that promotes and integrates all the departments to make
harmonious relationships, solve conflicts and enhance performance (LEADERSHIP
MANAGEMENT, 2017).
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Figure 1: Maslow's Hierarchy of Needs
The various types of motivation used at Mothercare
Motivation is the fundamental factor for the effective management of the workforce. Business leaders
motivate their employees through the arrangements desired by them and they also motivate the
customers to retain their trust and loyalty (Bajaj, Tuli and Srivastava, 2010). Maslow's Hierarchy of
Needs is a motivational theory that includes five stages of needs: physiological, safety, love and
belonging, esteem, and self-actualization which are depicted in a pyramid (Williams, 2013). In
psychology, it is presumed that individuals are motivated if they are satisfied with their fundamental
needs.
Motivational factors vary across social class and psychology of the individuals. The first four stages
down the pyramid are defined as deficiency needs whereas the upper level is considered a growth
need. Mothercare is the best choice for the new candidate in retail job field (career-advice/company-
spotlight, 2020). They are the best employer in the UK since their commencement. Employees are
interested to get a job at Mothercare and thus can earn for their own-self and family. It has a good
environment with the highest security, especially for the women employees (Corporate governance,
2020). Employees are respected for their services and board of directors considers that it is their
employees who are the reason for their success.
Mothercare is a retail chain of products targeting the mothers, to be mothers and children across the
UK and 60 other countries. Customers visit their stores not only for the fundamentals products and
clothes rather they come to have the extraordinary services from their well-behaved employees
(Abdulla, 2020). It makes the necessary arrangements for their employees like handsome
remuneration, training, motivational sessions, career progression etc. That is why it is the best
employer in the retail field. Salesmen get maximum salaries and they are respected properly. Though
there is a significant change in Mothercare business operation employees' behaviour and manner is
still same as before (Final Results, 2020). They know every product and they can suggest the
customers what can be the best choice.
Mothercare has ensured ethical trade and an ethical working group under the Ethical Trade Initiative.
The middle and upper-level job holders get the highest salary at Mothercare and their contribution is
praiseworthy to its transformation goal (career-advice/company-spotlight, 2020). Employees are
considered as the core to achieve its objectives. All the heads monitor to find the talented and
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hardworking employees and give them opportunities to make proper use of their abilities (Folly, Folly
and profile, 2020). They invest more to make employees specialized for effective customer service.
Corporate Examples and Literature
Retailing is one of the most important sectors of the economy and it has a great impact on the smooth
flow of business. Retailers work as an intermediary between the manufacturers and consumers (Levy,
Weitz and Grewal, 2014). Customers can collect their desired products easily from retail outlets in
front of their homes. With technological advancement, it is easier for consumers to get the products
online. Retail business also includes services such as restaurants, hotels, parks etc (Bajaj, Tuli and
Srivastava, 2010). It is classified from different perspectives. There are department stores,
superstores, supermarkets, speciality stores, convenient stores etc. A large skilled and experienced
workforce is necessary to operate the retail stores fluently and serve the customers properly (Benfari,
2013).
Retailing can be done from small stores to a large one. Wal-Mart, Target, Best Buy, Marks and
Spencer are some of the larger corporate giants in the retail industry. It is difficult to operate such
huge businesses properly (Levy, Weitz and Grewal, 2014). But the management teams of these types
of retail giants handle their business perfectly. They face many difficulties to cope up with changing
trends. With the help of advancement in internet technology, Amazon, Alibaba, eBay, Netflix are
dominating the retail industry (The Retail Industry and Its Impact on the Economy, 2020). The online
retail business holds 15% of total sales in this industry. Brick and mortar stores still have its
significance as customers prioritize to shop from retail stores.
Managing a retail business operation in this modern world is not easier like before. Customers are
concerned enough and they can collect information from their colleagues and neighbours about the
products (Walters, 2012). Large retail stores have skilled staffs to deal with any types of customers
and they ensure large product assortments. Customers can have personalized services in these large
stores (Bajaj, Tuli and Srivastava, 2010). Mothercare operates its retail business offering products to
mothers and children with a well-trained workforce. Moreover, it serves its customers through online.
Thus it can retain their customers in both ways.
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Recommendations
Customers always want a place where they can find all the desired products to save their time and
money. That is the reason for the dominance of large retail stores in this industry. Mothercare should
make available large product assortments in all of its stores. So, they have to invest a huge amount of
money to cover a large area for its stores. Moreover, they should ensure appropriate supplies of
products that are demanded largely. In this age of technology, Mothercare should install all the
necessary technological tools in all of its stores. It was a wise decision to close 79 stores across the Uk
rather they should focus on grabbing new markets.
It is not far that one day most of the retail sales will occur online. Thus the dominating online retailers
like Amazon, Alibaba will hold the large market share. So, it is the best time to restructure
Mothercare’s online store in a way that will meet the expectation of customers. Consumers should be
able to purchase any kinds of products from their respective places through Mothercare’s web site.
They should redesign their app effectively so that customers can have personalized service. If it is
possible to expand their markets internationally through own self, then they should go for it. Because
this will ensure a huge return from a large market share.
Ensuring appropriate digital tools is not the end. Staffs should be trained effectively to use the tools.
Moreover, they should be able to handle cunning customers. To expand their markets, more
employees will be needed. So, a strong and expert workforce should be available. Their home delivers
services should be accelerated with an effective strategy to retain their customers. They may deal with
the hospitals to deliver their products with a discount as most of their products are for new mothers
and babies. This will help to grab a large market. If possible, they may build their warehouse for each
city to ensure an effective and efficient supply chain by collecting directly from the manufacturers.
Effective integrated promotion is a must to deliver the message that Mothercare is emerging with a
new flow.
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