Critical Context of Management: Toys R Us UK Administration Report

This report provides a comprehensive analysis of the management challenges faced by Toys R Us, focusing on the context of its administration in the UK. The report delves into the impact of globalization, examining how increased competition and changing consumer preferences, influenced by global market dynamics, contributed to the company's decline. It also explores the role of technology and networks, discussing how the failure to adapt to digital marketing and e-commerce trends negatively affected sales. Furthermore, the report investigates the significance of conflicts and cooperation within the organization, suggesting that internal issues and an ineffective corporate culture may have hindered the company's ability to respond effectively to external pressures. Through this analysis, the report aims to provide insights into the critical factors that can determine the success or failure of management strategies in a rapidly evolving business environment, using Toys R Us as a case study to illustrate these concepts.

Management in a critical
context

Table of Contents
INTRODUCTION......................................................................................................................1
GLOBALISATION....................................................................................................................1
TECHNOLOGY AND NETWORKS........................................................................................3
CONFLICTS AND CO-OPERATIONS....................................................................................4
SYSTHESIS / DISCUSSION....................................................................................................6
CONCLUSION..........................................................................................................................8
REFERENCES...........................................................................................................................9

INTRODUCTION
Management is an art of getting things done from others, said by a renowned
philosopher and researcher. In era of globalisation, technological advancements can be seen
at peak. Every day innovation of new technology takes place replacing or obliterating the
previous one (Kaminow, Li and Willner, 2010). In accordance with this context, the
following report will present the aspects of management of organisation in critical context by
comprehending the condition of “Toys R Us”. The organisation has been gone into
administration that impacts 3000 jobs in UK. In this context, the impact of globalisation,
technology and network, conflicts and cooperation will be ascertain in the assignment.
Eventually synthesis of the study and discussion will be made on the issue in order to
generate better understanding of the report.
GLOBALISATION
According to (Hirst, Thompson and Bromley, 2015) globalisation defines as the
integration of economies, industries, markets, cultures and policy making all around the
world. Globalisation is the process through which the local, national and international market,
societies, and cultures interact with each other through global network of trade,
communication, immigration and transportation. In today’s world majority of countries have
allowed free flow of goods and services from one country to another. This enhances the
capacity of doing business and increases the productivity and profitability of the corporations.
Toys R Us is an American toy and juvenile products retailer founded in 1948. Headquarter of
the company is located at Wayne, New Jersey in the New York metropolitans area. The
company has 866 stores operating in United States and more than 750 stores in over 37
countries.
The organisation is known for providing high quality, durable and efficient toys for
children and juveniles. In United Kingdom, Toys R Us is one of the largest retailer and the
first store opened in year 1985. In February 2018, the news circulated by BBC about the store
has gone into administration leaving a £15m VAT bill. The management has been ready to
shut down over 100 stores in the country which impacts on more than 3000 jobs in UK (Toys
R Us UK goes into administration, 2018). The major reason identified was the store was
unable to find the customers who purchase their products. Globalisation can be considered as
the core cause of the current condition of the store. As import and export practices within the
country have been increases, new competitors begin to enter and capture the market. The top
1

competitor of the organisation is ASDA Group Limited, Argos Limited, Hamleys of London
Limited (Bolton, Shankar and Montoya, 2010). Globalisation has impacted in the trade of
Toys R Us in United Kingdom due to increase in number of substitutes and quality products
from different countries. Furthermore, new and high tech products have been spread in the
market that attracts kids more than old traditional toys. This increases the level of
competition and buyers got diverted from purchasing products from Toys R Us. In the more
recent past, globalisation was often primarily focused on the economic side of the world, such
as trade, foreign direct investment and international capital flows, more recently the term has
been expanded to include a broader range of areas and activities such as culture, media,
technology, socio-cultural, political, and even biological factors, e.g. climate change (Michie,
2011).
Globalisation affects the growth and development of the business and since the
evolution of ease of access of products and services, organisations are establishing their
business and spreading it all over the world with the desire to achieve maximum profits and
sales. This negatively impacts on the sales of existing business by increasing the level of
competition and other issues. In order to sustain in the competitive environment, it is the duty
and responsibility of the management to formulate effective and efficient strategies that helps
in preventing pressurised situations and helps the organisation to stroll towards growth and
development (Findlay et al., 2012). Unfortunately, Toys, R Us unable to formulate these
strategies and thus, over 100 stores are now being shutting down in United Kingdom
affecting over 3000 jobs. This is the massive layoff that impacts on the national economy of
United Kingdom.
“It is clear that only the strongest retail offers will survive what is one of the toughest
trading environments the retail sector has seen for some time.” Back in December, the
company clashed with the Pension Protection Fund who demanded £9 million in order to
support the chain's restructuring plan. It was also reported that Toys 'R' Us had plans to
revolutionise its business to fit the "evolving needs" of today's UK retail market (Specter,
2018). Thus, it implies that globalisation affects the business operations of the organisation. It
either boosts up the business or drags the organisation down. In order to sustain in the
competitive environment, it is the duty and responsibility of the management to formulate
effective and efficient strategies that helps in preventing pressurised situations and helps the
organisation to stroll towards growth and development (Diehl and Frederking, 2015).
2

TECHNOLOGY AND NETWORKS
Technology in simple terms means non materialistic thing that helps in reducing the
efforts, time and cost of an individual as well as organisation. (Leonardi, Huysman and
Steinfield, 2013) enunciated that in the present era, the technologies are evolving rapidly and
high tech instruments are now available in the market that aid in reducing the efforts, time
and cost incurred in the organisation. Technologies have influenced each and every
organisation doing trading activities all over the world. In order to sustain in the competitive
environment and enhancing the quality of products and services, it is very important for the
management of the organisation to install high and advance technologies in their premises
(Valente, 2012).
Technologies and networks plays prominent role in the growth and development of
the business. Toys R Us specialises in delivering high quality toys and other products for kids
and juveniles. Despite of having good reputation, effective quality of products and prolonged
experience, the management suffered heavy loss in the market economy of United Kingdom.
In February 2018, the organisation faced enormous loss and fell into administration. Over
100 stores are about to shut down in United Kingdom which affects over 3000 jobs (Turak,
2018). Organisation was unable to find any buyers for their products and thus leads towards
downfall. Technologies and network aid in increasing the sales and profits of the organisation
if used appropriately and precisely.
In order to find the buyers and interact with them precisely, the management of Toys
R Us needs to use the appropriate technologies. Digital and social media marketing helps
numerous organisations in increasing their customer base and reducing the additional cost.
Using appropriate technologies and networks might help out the management of Toys R Us
adequately. There are different types of technologies available in the market which can be
appropriately used by the organisations in order to prevent uncertainties and risks (Bento and
Bento, 2011). Furthermore, by providing adequate training to the employees, the
management can raise their skills, competencies and knowledge. In order to sustain in the
competitive environment, the management needs to install precise technologies that act as a
safeguard to the company and provides adequate benefits that helps in reducing
organisational time, efforts and cost. Adequate use of technologies and network also aid in
generating competitive advantages in the business.
3

In this context (Steyn et al., 2010) enunciated that networking technology allows for
the exchange of data between large and small information systems used primarily by
businesses and educational institutions. Network technicians, also known as network
engineers or specialists, are responsible for the configuration, installation and troubleshooting
of the technology used to transmit digital information, including audio, visual and data files.
Through networking, end-users are able to transmit files, messages and other data through e-
mail or various other channels, sharing information through Internet or Intranet connections,
based on the needs of an organization (Brooks and Waters, 2010).
Technologies have influenced each and every organisation doing trading activities all
over the world. In order to sustain in the competitive environment and enhancing the quality
of products and services, it is very important for the management of the organisation to install
high and advance technologies in their premises. From customer relationship management
systems to partner based relationship management systems, technologies played vital and
important role. With appropriate use of technologies, the organisation can lead towards
growth and development. Thus, it implies that the mangers of Toys R Us in United Kingdom
need to use the precise technologies that help them to find the appropriate buyers for their
products (Bento and Bento, 2011).
If the management have installed the precise technologies and provide effective
training to the employees, than the outcome might be different and company would not have
gone into administration. (Kaminow, Li and Willner, 2010) argued that investing in high tech
adds costs to the organisation and sometime management finds it difficult to make investment
in technologies. Furthermore, installing technologies is not everything, the management
needs to provide effective training to employees as well as themselves in order to use them
appropriately. Thus, it increases time and costs to the organisation which management avoids
to bear.
CONFLICTS AND CO-OPERATIONS
Conflicts and disputes can be seen in every organisation, whether it is large, small or
medium scale. Conflicts are essential as it provides an opportunity to improve the particular
aspects of the organisation. Conflicts can be devastating too, if management ignore the needs
and expectations of employees. Toys R Us, is one of the largest toy retailer incorporating its
business activities in United Kingdom and all over the world (Greenberg, 2011). Due to
certain issues and unable to find the buyers, the organisation fell into administration leaving
4

15 million pound of unpaid VAT. The situation is terrible in United Kingdom as management
makes decision to shut down over 100 stores incorporating in the nation. Over 3000 jobs are
at stake due to massive shut down of stores in the country (Javed, 2018).
It drastically influences the national economy of the country and unemployment rate
too. The main reason articulated by the officials was that the organisation was not able to find
the buyers for their products. Conflicts might be another reason that affects the company’s
productivity and profitability. In order to sustain in the competitive environment, it is very
essential for the management to focus on their internal corporate culture (Mullins, 2007).
Corporate culture is of two types which are positive corporate culture and negative corporate
culture. Positive corporate culture means there is effective environment within the
organisation, employees and managers coordinate and communicate with each other so that
an environment of trust and support can be generated. Negative corporate culture denotes the
frequent disagreement between workers, employees or managers. Organisation observes
frequent conflicts which impacts on the absenteeism and high employee turnover.
The corporate culture of Toys R Us was not effective in UK which leads to the
dissolution of over 100 stores in the country. In order to increase the productivity and
profitability of the company, it is very important and essential for the management and
employees to corporate with each other. Organisations that have effective corporate culture
and team bonding were able to sustain in tough to tough economic conditions and recessions
(Brown and Harvey, 2011). Conflicts and cooperation are two distinct elements that either
drive the organisation towards growth and development or drags them down below the point
of breakeven that they wouldn’t even able to stand in the market economy of the nation. It is
important for the management to consider the importance of human resource and make
effective policies and practices that helps in increasing the motivation and satisfaction of
employees.
Different and various theories have been proposed by philosophers, researchers and
scholars. Maslow’s Need Hierarchy Theory is one of the most renowned and efficient theory
of motivation. Maslow classified the need of employees into five categories which must be
fulfilled by the organisation in order to achieve higher motivation. Another theory has been
proposed by Herzberg. The two factor of motivation theory developed by Herzberg connotes
that there are two factors (hygiene and motivation factors) that affects the motivational level
of employees (Nye and Welch, 2014). Further, theories like team management and leadership
5

theories can be linked with the situation of Toys R Us. It was the duty and responsibility of
management of Toys R Us to implement certain strategies and follow certain practices that
increases the employee motivation and reduces the disputes and conflicts within the
corporation. As management of Toys R Us wont able to maintain the corporate culture of the
organisation, it has faced many issues and employees were not able to work precisely and
appropriately (Rahim, 2010). Thus, Toys R Us fails to secure the needs and expectations of
employee in United Kingdom, which leads the organisation to sudden downfall and thus
ultimately over 100 stores are about to close in the country (Toys R Us UK goes into
administration. 2018). This implies that cooperation is very essential and crucial factor that
impacts on the corporate culture of the company. If management fails to understand the needs
and expectations of employees, than they have to face devastating results.
SYSTHESIS / DISCUSSION
Management is an art of getting things done from others, said by a renowned
philosopher and researcher (Hirst, Thompson and Bromley, 2015). In era of globalisation,
technological advancements can be seen at peak. Every day innovation of new technology
takes place replacing or obliterating the previous one. In accordance with this context, in
above essay I have discussed the aspects of management of organisation in critical context by
comprehending the condition of “Toys R Us”. The organisation has been gone into
administration that impacts 3000 jobs in UK. Toys R Us is an American toy and juvenile
products retailer founded in 1948. Headquarter of the company is located at Wayne, New
Jersey in the New York metropolitans area. The company has 866 stores operating in United
States and more than 750 stores in over 37 countries. The organisation is known for providing
high quality, durable and efficient toys for children and juveniles.
In United Kingdom, Toys R Us is one of the largest retailer and the first store opened
in year 1985. In February 2018, the news circulated by BBC about the store has gone into
administration leaving a £15m VAT bill. The management has been ready to shut down over
100 stores in the country which impacts on more than 3000 jobs in UK (Davies, 2018).
Globalisation can be considered as the core cause of the current condition of the store. As
import and export practices within the country have been increases, new competitors begin to
enter and capture the market. The top competitor of the organisation is ASDA Group
Limited, Argos Limited, Hamleys of London Limited. Globalisation has impacted in the trade
of Toys R Us in United Kingdom due to increase in number of substitutes and quality
6

products from different countries. Furthermore, new and high tech products have been spread
in the market that attracts kids more than old traditional toys.
I have discussed on the aspects of globalisation in which it was identified that
globalisation greatly impacts on the growth and development of the organisation. I have made
another analysis on technologies and networks. Technologies and network aid in increasing
the sales and profits of the organisation if used appropriately and precisely. In order to find
the buyers and interact with them precisely, the management of Toys R Us needs to use the
appropriate technologies. Digital and social media marketing helps numerous organisations in
increasing their customer base and reducing the additional cost (Robertson, 2010). Using
appropriate technologies and networks might help out the management of Toys R Us
adequately. There are different types of technologies available in the market which can be
appropriately used by the organisations in order to prevent uncertainties and risks.
Technologies have influenced each and every organisation doing trading activities all over
the world. In order to sustain in the competitive environment and enhancing the quality of
products and services, it is very important for the management of the organisation to install
high and advance technologies in their premises. From customer relationship management
systems to partner based relationship management systems, technologies played vital and
important role.
Conflicts and cooperation are critical factors that aid in determining the success of the
organisation. Conflicts and disputes can be seen in every organisation, whether it is large,
small or medium scale. Conflicts are essential as it provides an opportunity to improve the
particular aspects of the organisation (Rahim, 2010). Conflicts can be devastating too, if
management ignore the needs and expectations of employees. Toys R Us, is one of the largest
toy retailer incorporating its business activities in United Kingdom and all over the world.
Due to certain issues and unable to find the buyers, the organisation fell into administration
leaving 15 million pound of unpaid VAT. The situation is terrible in United Kingdom as
management makes decision to shut down over 100 stores incorporating in the nation. Over
3000 jobs are at stake due to massive shut down of stores in the country.
It drastically influences the national economy of the country and unemployment rate
too. Thus, Toys R Us fails to secure the needs and expectations of employee in United
Kingdom, which leads the organisation to sudden downfall and thus ultimately over 100
stores are about to close in the country. This implies that cooperation is very essential and
7

crucial factor that impacts on the corporate culture of the company. If management fails to
understand the needs and expectations of employees, than they have to face devastating
results.
CONCLUSION
From the above essay, it can be understood that managing an organisation is a
complex and critical tasks. Any mistake can turns out to be devastating for organisational
growth and development. In accordance with this context, in the above essay, the aspects of
managing an organisation in critical context have been addressed by analysing the recent case
of Toys R Us. The organisation has gone into administration due to unable to find buyers.
The critical aspects which are globalisation, technologies and networks and conflicts and
cooperation has been assessed in this essay. Eventually, synthesis and discussion of the
situation has been made in this essay.
8

REFERENCES
Books and Journals
Bento, A. and Bento, R., 2011. Cloud computing: A new phase in information technology
management. Journal of Information Technology Management, 22(1), pp.39–46.
Bolton, R.N., Shankar, V. and Montoya, D.Y., 2010. Recent trends and emerging practices in
retailer pricing. In: Retailing in the 21st Century. Springer, pp.301–318.
Brooks, R. and Waters, J., 2010. Social networks and educational mobility: the experiences
of UK students. Globalisation, Societies and Education, 8(1), pp.143–157.
Brown, D.R. and Harvey, D.F., 2011. An experiential approach to organization development.
Diehl, P.F. and Frederking, B., 2015. The politics of global governance: international
organizations in an interdependent world. Lynne Rienner Publishers.
Findlay, A.M., King, R., Smith, F.M., Geddes, A. and Skeldon, R., 2012. World class? An
investigation of globalisation, difference and international student mobility.
Transactions of the Institute of British Geographers, 37(1), pp.118–131.
Greenberg, J., 2011. Behavior in organizations. Pearson.
Hirst, P., Thompson, G. and Bromley, S., 2015. Globalization in question. John Wiley &
Sons.
Kaminow, I., Li, T. and Willner, A.E., 2010. Optical fiber telecommunications VB: systems
and networks. Elsevier.
Leonardi, P.M., Huysman, M. and Steinfield, C., 2013. Enterprise social media: Definition,
history, and prospects for the study of social technologies in organizations. Journal of
Computer-Mediated Communication, 19(1), pp.1–19.
Michie, J., 2011. The handbook of globalisation. Edward Elgar Publishing.
Mullins, L.J., 2007. Management and Organizational Behavior . Harlow: FT. Prentice Hall.
Nye, J.S. and Welch, D.A., 2014. Understanding global conflict & cooperation: intro to
theory & history. Pearson Education.
Rahim, M.A., 2010. Managing conflict in organizations. Transaction Publishers.
Robertson, S.L., 2010. Corporatisation, competitiveness, commercialisation: new logics in
the globalising of UK higher education. Globalisation, Societies and Education, 8(2),
pp.191–203.
Steyn, P., Pitt, L., Strasheim, A., Boshoff, C. and Abratt, R., 2010. A cross-cultural study of
the perceived benefits of a retailer loyalty scheme in Asia. Journal of Retailing and
Consumer Services, 17(5), pp.355–373.
9

Valente, T.W., 2012. Network interventions. Science, 337(6090), pp.49–53.
Online
Davies, R., 2018. Toys R Us and Maplin fall into administration putting 5,500 UK jobs at
risk. [Online] the Guardian. Available at:
<http://www.theguardian.com/business/2018/feb/28/toys-r-us-falls-into-administration-
putting-3200-uk-jobs-at-risk> [Accessed 2 Mar. 2018].
Javed, A., 2018. Toys R Us and Maplin collapse into administration, putting 5,500 jobs at
risk. The Telegraph. [online] 28 Feb. Available at:
<https://www.telegraph.co.uk/business/2018/02/28/toys-r-us-collapses-putting-3200-
jobs-risk/> [Accessed 2 Mar. 2018].
Specter, F., 2018. Toys ‘R’ Us closing down? FULL list of potential closures - is YOUR local
store at risk? [online] Express.co.uk. Available at:
<https://www.express.co.uk/pictures/pics/10035/High-streets-retailers-shops-close-
closures-pictures> [Accessed 2 Mar. 2018].
Toys R Us UK goes into administration. 2018. [Online] 28 Feb. Available at:
<http://www.bbc.com/news/business-43225248> [Accessed 2 Mar. 2018].
Turak, N., 2018. Toys R Us goes into administration in the UK following US closures.
[online] Available at: <https://www.cnbc.com/2018/02/28/toys-r-us-goes-into-
administration-in-the-uk-following-us-closures.html> [Accessed 2 Mar. 2018].
10