Strategic Thinking and Value Management in Business Context Report

This report delves into the critical concepts of strategic thinking and value management, emphasizing their significance for business sustainability and success. It explores how strategic thinking aids in formulating effective strategies for long-term growth, while value management focuses on creating and maintaining stakeholder goodwill. The report uses Marks & Spencer as a case study, examining its challenges, particularly those related to corporate social responsibility (CSR), such as environmental concerns raised by Chinese NGOs regarding textile suppliers. It reviews relevant literature, discusses CSR models, and provides recommendations for addressing these issues. The analysis highlights the importance of integrating CSR practices into business operations to enhance the company's image and create value for stakeholders, including customers, employees, and the community. The report underscores the need for strategic thinking to manage supply chains, adapt to market changes, and foster ethical business practices, ultimately aiming to improve Marks & Spencer's performance and market share. The report is available on Desklib, a platform offering AI-based study tools for students.

Strategic Thinking and Value
Management

ABSTRACT
This report emphasizes on Strategic Thinking and Value Management which are the vital
aspects for company. Strategic thinking is very important for management of firm as this assists
them in formulating appropriate strategies that helps firm in gaining long term sustainability.
Value creation is very important for an organisation as it helps them in maintaining their
goodwill. By more engaging in corporate social responsibility activities and integrating its
practices in business operations, firm enables to maintain its good image in society. Application
of various CSR models in business activities assists manager of company in emphasizing on
welfare of society instead of earning profits. The main objective of this project is to gain
knowledge regarding strategic thinking and value management. It is very essential for firm to
create some value for its stakeholders, customers, community, suppliers and environment. This
will ensure its sustainability in market for long term.

Table of Contents
ABSTRACT.....................................................................................................................................1
INTRODUCTION...........................................................................................................................1
TASK ..............................................................................................................................................1
Company Overview................................................................................................................1
Research phenomenon............................................................................................................2
Main problem.........................................................................................................................3
Literature Review...................................................................................................................4
CSR Models............................................................................................................................7
Recommendation..................................................................................................................15
Limitations............................................................................................................................16
CONCLUSION..............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
Strategic Thinking is defined as the process that demonstrates the manner in which an
individual think, view, assess and create future for themselves. It is a highly effective and
valuable approach or tool that can be applied to arrive at final decision related to personal and
professional life (Hitt, Ireland, & Hoskisson, 2005). Value Management refers to the mixture of
planning methods and tool to find out optimal balance of benefits of project in relation to its risk
and cost. It is the procedure of planning evaluating and developing a plan to make appropriate
decisions regarding optimum balance of costs, risks and benefits. Strategic thinking and value
management, both are crucial aspects for a business firm as these assists it in getting clear
understanding regarding different principle, concepts and theories at forefront of value
management and strategy. Consideration of these aspects helps company to stay innovative and
competitive in all aspects of business operations. In the present assignment, chosen organisation
is Marks & Spencer Group plc which is a multinational retailer of United Kingdom that deals in
clothing, food and home products. This assignment covers history and scope of strategic
management theory and analysis of value creation to develop an independent approach for its
application to issue (Bolden, 2016). A business canvas model is developed and different
approaches and theories of strategic thinking and value management is evaluated in this project.
Apart from this, the concept of value creation and its significance to business firm is discussed in
this report.
TASK
Company Overview
Marks & Spencer Group plc is one of the well-known British multinational retailer which
is headquartered in City of Westminster, London, United Kingdom. The company is known for
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selling of clothes, luxury food as well as home products. Michael Marks and Thomas Spencer
are the founders of firm and it was established in year 1884. Branded goods such as Kellogg's
Corn Flakes is also sell by company. Currently, M&S has approximately 979 stores all across the
United Kingdom which includes around 700 stores that sells only food products (Marks &
Spencer's Outlets, 2018). Operating income of the company is around £690.6 million and its net
income is approximately £115.7 million in year 2017. Approx. 85,000 number of employees are
employed by Marks & Spencer that helps in offering its products worldwide.
Research phenomenon
While operating their business activities there are number of problems faced by Mark &
Spencer that have a direct impact over the performance as well as growth of company. These
issues further affect the value creation process of company. Following are the major issues faced
by Mark & Spencer:11 Decline of sales:- Major issue faced by Mark & Spencer is that it find difficulty in
maintain its market share related to women's clothing. As middle aged and even elder
women are now expecting to dress up more fashionable as compare to earlier. M&S is
struggle toward keeping pace with these desires (It's back to being simply the best. 2018).
This leads to decrease in the market share of company to 9.9% down from 11%, due to its
failure in value creation among its target market. As company fail to align with the
fashion need of women's which affected the sales of company. M&S tries to maintain its
market share by cutting off its price over product or services and adjust the cost
according to their competitors. But this leads in heavy loss to company (Homburg, Stierl
and Bornemann, 2013).11 Over commitment of supply chain:- Another major problem faced by Mark & Spence
which affect its value within target market is over commitment done by mediators of
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supply chain. Vendors of Mark & Spencer take order from the retailers but due its slow
supply chain and lack of resources availability they are not able to provide the quantity to
store which they promise to delivery. This affects the image of company as they don't
have required stock to present in front of competitors which leads failure to value
creation. The main reason behind this issue is lack of strategic thinking, as strategic
planning may help M&S in identifying the methods through which they can manage the
demand of customers with supply of merchandise.11 CSR issues:- It is one of the major issue which affected the goodwill as well as revenue
of Mark & Spencer to large extent. NGO's of China criticised various suppliers of
international clothing brand. By pointing out material used to manufacture the cloth is
harmful to environment and create pollution. M&S is one among them which is claimed
that textile suppliers make material; for company that creates environmental violation.
This has affected the image of company within the society and its stakeholder, as
customers losing their confidence in them (Jasper and Crossan, 2012).
Main problem
Major issues faced by Mark & Spencer is social criticism due to issue raised by China's
NGOs' over textile suppliers. They state that textile producers are manufacturing the fabrics
which have a direct impact over environment and create pollution. Institute of Public and
Environmental Affairs(IPEA), published a report which state that number of textile manufacturer
that supply fabric for production of clothes to various brands such as Mark & Spencer, Polo,
Tommy Hilfiger have found to be carrying out polluting practices that affects environment.
Supplier are claimed that they violate waste water discharge standards while other have issues
related to air emission. These activities create pollution that is continuously damaging the
environment, lakes, rivers and also affect the livelihood of local communities. As Mark &
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Spencer is taking their material from these suppliers which affected the goodwill of the company
and ruining its image in society (Kapferer, 2012).
It is the issue faced by company which is related to Corporate Social Responsibility. It
refers to a business approach which contribute toward sustainable development by providing
social, economical and environmental benefit to all the stakeholders. CSR is broad concept that
addresses many topics that includes corporate government, human rights, environmental effect,
working condition, health & safety and contribution to economical development. So in order to
overcome this issue, Mark & Spencer is required to involve more in CSR practices. They must
contribute more fund toward the benefit of society and perform other activities for the welfare of
the society. Further company can also use such machineries which produce less emission while
producing fabric this help in rebuilding their image within the society. Mark & Spencer can also
opt for fabric which are environment friendly and are easier to recycle. This help in improving
the image of company within the society and also support in gaining higher revenue by attracting
large number of customers toward their product or services (Kerr and et., al.,2013).
Literature Review
Literature Review is defined as a search and assessment of available literature on a
particular topic. It is a kind of scholarly paper and review article that involves current
knowledge and substantive findings and methodological and theoretical contributions to a
specific topic. As per the view point of Chelsea, 2018, Corporate Social Responsibility is the
firm's obligation to consider its stakeholders interest including employees, customers,
community as well as also consider environmental and social consequences of its business
activities. By introducing CSR into core processes of business and stakeholders management,
company can attain the ultimate objective of creating corporate and social value (Gans and
Ryall, 2017). Corporate social responsibility is highly interrelated with strategic thinking and
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value management. Strategic CSR administers firm with solution for balancing creation of
economic value with societal value, determining and responding to opportunities and threats
facing by stakeholders, in developing sustainable practices for business, managing stakeholder
relationship, deciding capacity for organisation for philanthropic activities.
Strategic Thinking refers to an ability to create effective plans align with objectives of
firm within a specific economic situation. It helps managers of business in reviewing policy
issues or problem, perform planning for long term, set goals, determine priorities, opportunities
and potential risks. When executed in strategic management process of firm, strategic thinking
includes generation and implementation of unique business opportunities and insights supposed
to create competitive benefit for firm. In planning process of Marks & Spencer, strategic thinking
applies innovation, operational and strategic planning to develop appropriate strategies for
business that have higher chance for success (Goldman, Scott and Follman, 2015). The main
basis for formulating future strategies is past learning and experiences of company. The primary
purpose of firm's strategic thinking is to develop a strategy that is integrative, coherent and
unifying framework for decisions regarding resource utilization and business activities. The key
outcome of strategic thinking that is getting by manager of Marks & Spencer Group plc is an
effective strategy. This process initiates with innovation that assists firm to move outside from its
comfort zone into possibilities of surpassing organisational and customers expectations and
requirements. Integrating business operations with CSR activities creates value for its
stakeholders including customers and society. Strategic Management offers various contents and
tools to improve productivity and increase performance (Rothaermel, 2015).
Corporate social responsibility refers to the self-regulating business model or tool that
assists firm to be socially accountable to public, stakeholders and itself. The policies of CSR
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functions as inbuilt, self-regulating framework whereby business ensures and monitor its active
compliance with international norms, ethical standards and spirit of law. It is the process that
aims to embrace accountability for firm's actions and promote positive influence by its activities
on communities, environment, employees, customers and stakeholders. CSR is a business
approach which contributes to sustainable development through delivering environmental, social
and economic benefits for stakeholders . (Haines, 2016). For Marks & Spencer group plc,
corporate social responsibility is the integration of values and operations of business, whereby
stake holders (employees, investors, community, customers, environment) interest are reflected
in actions and policies of company.
CSR activities helps firm in creating strategic value when it seeks mutual benefit with
society. It generates strategic value when firm is encouraged by pressure or constraints like
fiscal, social, legal and from competitors. If Marks & Spencer Group plc integrate its business
operations with corporate social responsibility, it will be able to create more value for society as
well as its other stakeholders. It is required by management of firm to think strategically and
encourage strategic thinking within organisation so that they tend to be able to make appropriate
strategies that will be in the sake of society. This will create value for its employees,
communities, stakeholders and society. It ensures ethical working within firm which helps in
improving image of Marks & Spencer Group plc in market and within society.
As per the view point of Daniel, 2012, Value management is the mixture of planning
methods and tools to establish optimum balance between costs, risks and benefits. Corporate
social responsibility is the key to value creation (Hénard, Diamond and Roseveare, 2012). To
execute actions that are responsible and value sources are beneficial for firm. It helps
organisation in developing reputation as an ethical and responsible business which provides
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competitive advantage to company. Firms often favour those suppliers who have CSR policies,
since it reflects on how customers see them. This will provide cost saving advantage to company
by making optimum utilization of resources and reducing emissions and waste. This will protect
environment from getting polluted as well as assists firm in saving. This is the way through
which corporate social responsible activities creates value for firm as well as society. Being a
sustainable, responsible business may make it easy for company to recruit new workforce and
retain existing one. This will help in motivating employees for longer term, therefore, reduce
cost and disruption of retraining and recruitment. Social responsibility has now become
indispensable. Strategic decisions of firm involve economic as well as social consequences
which are closely connected. The presence of interdependence between society and company
activities have direct influence on communities in which they work. It leads to either positive or
negative consequence. So, it is required by Marks & Spencer to take into consideration societal
decisions and expectations, as there may be some captivating alternatives when services or
goodwill to society are considered. Corporate responsibility is a kind of management that depict
by transparency and ethical relationship of firm with stakeholders (Hill, Jones and Schilling,
2014).
CSR Models
The pyramid of CSR:
It is a leading model of CSR which was popular to embrace the complete spectrum of
society expectations of firm's responsibilities and states them in form of categories. This model is
based on totality of CSR that comprises four different aspects. It is arranged as per the
decreasing priorities order from which economic responsibilities are the most crucial one.
Corporate social responsibility is constituting of four types of social responsibilities, i.e.,
economic, legal, ethical and philanthropic. This framework categorises distinct responsibilities
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hierarchically according to their significance in decreasing order. The most important is
economic responsibility on the basis of which all other responsibilities are predicted, as without
it, others become controversial considerations (Klein, Barney and Foss, 2012). Firms are
expected to perform their operations within the legal framework , therefore the next level of
framework is depicted as legal responsibility. The another responsibility is ethical which is
defined as those practices or activities which are prohibited or expected by members of society
even though people are not codified into legislations. Lastly, at the pyramid's top, is the
responsibility of philanthropy, which is arbitrary in nature. Basically, the pyramid intent to
define a required and adequate set of obligations that needs to be fulfil by a socially responsible
businesses, simultaneously also requires to take into consideration their declining importance
(McWilliams, Siegel and Wright, 2006).
Application:
This is the model which has to be considered by managers of Marks and Spencer in order
to maintain good image in industry. As per this model managers of Marks and Spencer has to use
different approaches in order to deal with economic, legal and ethical aspects of society.
Economic aspect of this pyramid, it is prime r4epionsibility of managers not to take actions
which are economically beneficial for society. There is difference in laws of every country, so in
order to maintain brand image in society, it is essential to analysis laws and then formal
regulations has to be taken. Nature of society must be analysing by managers so they can
perform business operations in more ethical and appropriate manner.
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(Source: The pyramid of CSR,2018)
Advantages: This model provides us a benchmark in order to measure business
performance and profitability. In this economic activities are must do duties which positively
effect on creditors, consumers and shareholders.
Disadvantage: In this rules and regulations of the government is impact on the business
operations and activities. In this model, decision are take on top to middle level management that
negatively impact on business growth and development (Orlitzky,Siegel and Waldman, 2011).
Intersecting circle model of CSR:
This model is given by Schwartz and Carroll to explain the fact that none of the aspect is
more important than CSR. Intersecting circle model categorized the hierarchical prioritization of
CSR and integrate its three aspects they are legal, economic and moral. This model state that a
business is created to earn profit but is actually a social creation and requires the support from
society for its survival. This support can only be achieve through responsibilities and obligations
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Illustration 1: The pyramid of CSR