To what extent has the changes in HRM contributed to the

improvement of improving the competitiveness of Marks &

Spencer after 1997?

1. Introduction

In a recent business environment, competition has been

become a central core issue due to its crucial impacts

on the company development of the company in terms of

market and profits. In this essay,This dissertation

will introduce the proper and effective strategies to

overcome the problems would so that turn the company

would be turned into higher competitive stance.

Additionally, The aim of this article is aims to

analysis analyze the competitive environment come from

both internal and external of Marks and Spencer plc

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(M&S), to evaluate the reasons why it went has gone

wrong ever since 1997, and to identify how the changes

of human resources management could help M&S sharpen

its competitive edgeimprove its competitiveness. This

paper has beenis divided into four parts. The first

part deal withfocuses on the situations facing H&S has

been facing ever since 1997 that it the company is

suffer suffering from a great crisis, . the The current

situation is analyzed in the second part analyzed the

situation by the using the SWOT model to examine the

positions and environment of M&S, . The third part will

emphasizes on discuss discussing the human resources

management policies that M&S used to respond the

weakness discuss discussion during the SWOT

analyzedanalysis. In theThe final part aims to an

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evaluation evaluate of the HRM responds policy if HRM,

and illustrate the good effects and drawbacks the

changes has made.

2. The situation Situation

2.1 Background of M&S

Founded Ever since its establishment in 1884, M&S has

gradually grown transformed from a single market stall

small booth to an internationala worldwide retail

enterprise with, multiple multi-channels retailer. It M&S

focuses on sells selling stylishfashionable, high-quality

end clothing clothes, household suppliesand home

products, as well asand quality fine food,foodstuff

sourced purchased from around about 3000 three thousands

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distributorssupplier globalall around the world.(M&S,

2104)

2.2 A highly Fiercely competitive Competitive clothing

Clothing market Market of M&S

Undoubtedly, Marks & Spencer (M&S) waswas considered as

one of the world’s greatbiggest retail enterprises in the

world retailers, benefited benefiting from a unique

internal recruitment and promotion model (Mellahi,2002).

The human resources policies of M&S attached great

importance to's human resources policies focused on a

sophisticated internal recruiting system; , emphasizing

on employee promotions and employee jobwork security.

However, it became a handicap to deal with the entirely

new circumstances for due to the lack oflacking the

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ability to adapt to dynamic external environment, of in

the late 1990s，. when M&S had to had to competecompete

with other a host of revitalized and newer competitors,

of clothing retailers, both from the local UK core market

and international global retailers marketentering the UK

market, such as Gap, H&M, ZARA, and Mango. People worked

in M&S are usually recruited when they were young, with

no without any work experience outside besides M&S. ' As

a resultConsequently, ‘M&S routines’ has set upwas

established and failed tobut could not indentify

recognize the new realitycurrent market situation and

sought instead to rationalize itfind another way to

modify its routines (ibid). Since Ever since 1998 to

recently, the company has expiring been experiencing some

unprecedented troubles: decline declining sales,

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collapsing profits collapsing and lose losing market

share. For exampleinstance, according to BBC NEWS, 2014,

M&S sees just experiencd a another business fall in

clothing sales division for around 2.1% in the last three

months to the end of December,of the year 2013( BBC NEWS,

2014).The Two reasons are considered to be accountable

for causes of M&S failure might from two perspectives:

internal factors (human resource management and,

centralized management system) and external factors

(changed competitive environment and changed customer

needs) ( Meliahi(Meliahi et al., 2002). Since M&S cannot

control the competitive environment, it could be a wise

way to focus on the changes insideinternal changing

elements to improve boost the its competitive

positionadvantage.

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2.3 The rationaleRationale, : why Why does HRM

cContributed to increase Increasing

competitivenessCompetitiveness?

The interpretation definition of the of HRM role is based

onestablished on incorporating integration of either a

"soft," evolution method of developmental humanist

approach or a "hard," situational contingent approach

method of situation (Liao, 2005).HRM is seen as an

approach to development, commitment and fostering

employee's motivations. It may might also help them to

acknowledges the business aims of the business and accept

the new-ly changed culture quicklyas soon as possible.

Actually, HRM could be become an advantagea strength of

for M&S while facingconfronted with the rapidly changing

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competitive environment by ever since last 1900s. A

dynamic and effective HRM leadership would tends to be

initiated and further developed bytake place and be

supported by the managers management leaders to respond

tos the customers needs. (CIMA,e-magazine,2014). M&S is

currently facing a rapiddrastic

organisationalorganizational transformation, it

requireing a management change from the top to

downbottom, and. It could might potentially lead to

fundamental changes widely of both attitudes and

behavioursbehaviors in the company. Therefore, the

changes in HRM area could improve the competitive

competitiveness of M&S.

3 Analysis of theCurrent situationSituation

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A full-scale of analysis of the company may help to

understandcontribute to have thorough wellcomprehension

about the positions within the industry. The SWOT

framework could effectively guide the analysis from

internal and external aspect so as to assess evaluate the

company performance of the company furthermore to and set

upcome up strategy about for the changes. For example,

the changes strategies in human resource management

should be based on the outcomes of the analysis result

from the framework.

SWOT in year 1997

Strength

Store brand equity

Weakness

Centralized management

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Highly effective and

Cooperate cooperative Social

social Rresponsibility

StrategyStrategies

M&S has secured its leading

role in department stores

through its Leadership

leadership in

clothingclothes has made M&S

market leader in industry.

department stores

system in HRM department

Opportunities

An increasing trend is shown

Threats

More competitive environment

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in business sales of Online

online shopping sales in the

UK, which continues to

flourish in the UK and

wellensures the profit

growth of enable M&S to

increase revenues.

Emerging markets (China)

from both national and

international markets

Young The young generation

tends to have no loyalty to

the store as the elders do.

Strength

M&S has been established for about approximately 130

years and had has been enjoying a public reputation of

the brand in the UK, . it It has gradually been grown to

a national institution and no one has ever said a bad

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word about it in the early 1990s. The company attracts

customers through with its innovations, which has covered

covering both the cloth clothing and underwear sectors

with its unique textile technology ( BBC NEWS, 2006).

Another advantage of M&S is that it is theenjoys the

leadership leading role in the clothing industry of the

in UK, . occupied Occupied 10.9% for the market share,

M&S, stand onis the third largest clothing retailer in

the world (Kantar World panel Index, July 2014).

Additionally, the company’s it also launched Plan A was

launched in January 2007, which is an effective CSR

strategy could to improve business reputation, and. the

The company believes that “sustainability is both a moral

and commercial imperative” (M&S , 2014). ThusTherefore, a

well-known quality reputation and leadership in cloth

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clothing sales could be a strength become a competitive

edge on for the future strategy planning and to

increasing the competitive competitiveness increase of

M&S.

Weakness

People in M&S tend to hold an overwhelming belief based

on the success of the company and, refused to deny admit

there isare something wrongproblems with it,in the

company. and tThey underestimate the effect of the

varietyconstantly changing external environment. (Mellahi

et.al, 2002) This belief could be exacerbated by

centralized management system within HRM. Instead

ofRather than to plan for the future looking outward, and

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focus emphasize on the competitions consumers’ needs and

customerscompetitive situation, M&S attention has

attached great importance tomore o n the internal

relationship factors such as emphasizing focusing on

internal promotion promoting and recruiting recruitment

policypolicies. Therefore As a result, M&S is easily tois

likely to lose acknowledge of consumer requirements.

contact with its customer needs and wants, aDue to

centralization centralized management of HRM, may lead

information might probably become less available valuable

and also more likely to be easilybe ignored by Head

headquarter easily Office. (ibid)

Opportunities

The rapid developing of internet development has brought

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in a new platform for e-business., the The operation of

an online stores may flourish in the UK and well enable

M&S to increase revenues. For exampleinstance, an online

shop website, named Amazon reached an annual revenue of

$147.8 million in 1997, which is was regarded as a great

success of the online shopping market, . Thus, it is

believed that M&S could also further develop its business

in this area.(Amazon,1997)

Besides thatIn addition, the significantthe remarkable

growth increase rate of emerging markets over the

recentin the past few years has successfully gained

attracted the attention of from M&S’s top level

managementmanagerial levels in for exploiting these

potential market exploration. For instanceexample, China

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has become gradually become one of the largest greatest

consumer marketmarkets for clothing clothes and home

textiles with a population of 1.3 billion of population

and rapid economic growthdevelopment. The market size has

achieved huge increased along with the growing GDP and

disposable income, reached reaching 7.48% in 2009

(ITC,2011, 2011).

Threats

The changed competitive environment for clothing market

becomes more and more obvious at the late 1990’s. There

are competitors against M&S from both host and new

entrants overseas. Such asFor instance, in the 1990s, the

company NEXT has achieved successful transformation

transformed themselves in the 1990s into strong price and

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quality and new retailers with competitive pricing and

quality edge across the price/quality spectrum, such as

Gaps or Zara. (Mellahi,2002)

The Clothing clothes industrymarket is has already

maturedeveloped mature, ly but has not reached

saturation, and market not saturated which indicates

indicating that customers consumers are always looking

searching for new and fashionable stylish clothes. With

variety various new choices for the young generations,

M&S is not as attractive as it does to the elders, they

would not place it first when they shop for clothing and

it, which may threat M&S’s market shares. (BBC，2006)

4.Respnde4. Respond to of the HRM weakness Weakness HRM

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Based on the analysis of M&S’sthe strength and weakness

within M&S, it is essential to implement strategies that

are appropriate to deal with the current competitive

situation. To against prevent the adverse effect of the

centralized management system in HRM department, M&S has

applied a more horizontal management organization style.

A horizontal organization A level structure company tends

to havehas a less-defined chain of command system.

Instead of Rather than each personeveryone having has a

clearclear job rolely defined duties, employees staffs

might cooperate in a group unitmay work in teams, with

that every staff needs to make their own contribution to

the group. everyone on the team having input. (Denton,

2011) Compare with the centralized management policy,

horizontal style employees may work cross many different

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functionfunctions and report to s variety of leaders,

rather than a line manager only. M&S also established one

a specific coordinating role, which could ensured the

organizational effectiveness within the organization,

unrestricted communicate communication among employees

and motivate the teamteam motivation. (M&S,2014)

In order to improve the competitiveness among

competitors, M&S has transfer transferred to into a more

service-focused company, in which the culture of

communication culture is vital. Employees could gain

better understand betterunderstanding beyond

organization; and deliver tasks could deliver more

clearly and efficient so as to improve boost employees’

moralethe motivation of employees. According to Mayo’s

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motivation theory also, it was suggests believed that

effective efficient communication and interaction is an

essential play an important role inpart of organization

organizational changes transformation and practical

strengthening the foundation of the modern

organizationcompany. Hence, M&S put greater emphasis on

the improvement of interpersonal communication skills of

all organizational members, . (M&S, 2014)

5. Evaluation on HRM approach Approach made Implemented

by M&S

McGregor’s theory suggests that employees are more likely

to be motivated by goals and achievements --" self-

esteem." By applied adopting the horizontal management

style, M&S would createcreated a good management for a

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medium-term success. It could also contributes

contributed to the achievement of its business objectives

and increase increased the business units of total

productivity. However, horizontal management style may

result in large cost especially whilealong with the

growth of business grows, as because of the

organizational must needs to foster a culture of

teamwork. Employees may be confused about their roles and

responsibilities within the organization, and therefore,

project managers can might be frustrated by their lack of

control.

It may not be enough sufficient to adjust to the

management style so as to support changing environment.

Managers of M&S may also need to be willing dealingdeal

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with a future where the strategies and performance of

organization can be transformed by stretching and be

being aware of staff’s capabilities which are superior to

better than their competitors. The primary goalinitial

objectivity of M&S management has to beis to in

overhaulingmodify its an integrated relationshipinternal

correlation between key business and HRM and the core

business so as to successfully succeed in implement

gaining competitive edge in the constantly changing

environmentchanges.( Mundy,2012)

6. conclusionConclusion

In conclusion, this easy has investigateinvestigated and

analyses analyzed the current situation and threats of

M&S ever since 1997.The courses major causes of for M&S

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to loss lose their competitiveness, which have been well

demonstrated by the SWOT analysis. Moreover,Furthermore,

it is believed that the implemented strategies, are

effective, such as to affected the horizontal management

style, to transfer the organizational culture and to a

appoint a specific coordinating role within the

management team. However, after a critical evaluation of

the response to this the situation, it might useful that

theses would havethere might be positives as well as

negative results of the process of M&S. Therefore, it is

essential to take all theses factors into account so as

to create the most ideal solutions for M&S to

improvementimproving its competitiveness.

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