Marks & Spencer

Marks & Spencer

Marks & Spencer was founded on 1884 as a market stall by Marks. It became Marks &

Spencer in 1894 as a partnership with Spencer. From that humble beginning Marks & Spencer

became leader in the industry. And for more than half a centuryM & Spencer was the epitome

of enlightened capitalism. It dominated the British high streets and provided shoppers with

quality and value clothing unrivalled by competitors. It was one of Britain’s largest high profile

retailers selling variety of goods and services such as clothes, food, furniture and loan services.

But its glory has started to crumble when it profits began to fall since 1998. M & S has

been facing their worst times ever. Their problems began at the start of financial year April 1999.

They suffered almost from financial ruins. Since the event of its failure, M & S has been taking

more than several attempts to recover their losses.

Extensive studies and researches have been conducted to find out the root causes so as

to come up with appropriate strategies for development. Most of the studies started with the

company’s profile. Below is an analysis of the company’s profile and the validity of one

strategic management models to Marks & Spencer’ experiences.

Marks & Spencer’s organization culture is characterized as a reflection of “taken for

granted fashion” that is an attitude shared by members of the organization. The beliefs and basic

assumptions operate unconsciously among the members and also exist at the organizational

level. The assumptions and taken for granted fashion have taken its roots from the basis of the

organization’s success.

During the 80's Marks & Spencer experienced a massive growth of interest in culture and

symbolism in organizations. The culture and symbolism that pertain to meaning and imagery are

used to emphasize the �softer’ character of the organization. M & S pattern of action within the

organization is treated in view of meanings and symbol rather than as a �hard’ structure of the

business system. They depended too much in the image of M & S that they have overlooked the

other side of the coin.

`The explanation of why people act as they do may lie not in a combination of

"objective" and "subjective" factors, but in a network of meanings which constitute a

"world taken for granted" (Schutz, (1964)1. the participants. Indeed, "objective" factors,

such as technology and market structure, are literally meaningful only in terms of the

sense that is attached to them by those who are concerned and the end to which they are

related... Organisations do not react to their environment, their members do. People act in

terms of their own and not the observer's definition of the situation' (Silverman's, 1970)2

A key for sustainability of all organization is to change and evolve continuously to match

with its environment out side its window in which it operates.

Until the late 1990s M&S have been very successful. It worked to achieve this

esteem by applying a structured formula to all its operations and maintained it by

establishing a set of fundamental principles, which were held as core to the organization

and used in all of its business activities since its birth. Their paradigm help them in the

past but the same paradigm didn’t worked in the present and they went through a

strategic drift.

Mark & Spencer’s corporate culture from its foundation to its fall in the late

1990s is described as follows:

M&S always depended on the British suppliers overlooking the impact of this

system to its financial costs. They had a traditional way of having specialist buyers

through an operation being performed from the central buying office from where it was

distributed to stores overlooking its effect on time factor.

M & S stores used to have identical layout, design, and training among others. Store

managers are not in the liberty to deviate from the specifications. Moreover, there existed severe

restrictions on the ways by which store managers relate with the local customers.

And lastly, Marks & Spencer was not interested to cater to current fashion and trends.

The firms failure in terms of its culture is best expressed by Richard Greenbury, M & S

chief executive from 1991, “ I think that the simple answer is that we followed absolutely and

totally the principles of the business with which I was embued…. I was the business with the aid

of my colleagues based upon the very long-standing, and proven ways of running it”. (Johnson &

Scholes, 2001).3

Marks & Spencer as a whole had adhered to these commitments since the time when