Marks & Spencers (M & S)

Impact of Culture on Organisational Strategy:

M & S would have its organisational culture as its basic assumptions & beliefs which
operates unconsciously and define a basic taken for granted attitude within the
organisation and its environment, resulting in strategy being rooted into it, the impact of
culture on the strategy would be national cultural context, stakeholders would be affected
as a vast cultural dimension exist , different attitudes to work, response to authority,
equality vary from one location to another, M & S would have had a problem coping with
these very different standards and expectations in which they operate.

How would you understand an Organisational Culture & its Impact on Strategic
Development?

As stated above the taken for granted (Organisational culture) would have its strategy
rooted in the “collective experience” thus reflecting in the organisational routine,
meaning culture is about collective behaviour in the organisation (taken for granted
assumption), and strategy of an organisation tends to be moulded by its culture.

Hitch In The Formula

Cultural Impact on Strategy: Could be listed as a presumable reason for M & S

withdrawal from international market. M & S carried away by its paradigm, failed to
realise and take advantage of the growing homogeneity of consumer taste to create global
customers; there could also had been advantage taken from central sourcing efficiencies,
trying to get lowest cost suppliers to achieve cost advantage, cost differentials on labour
or other aspect of the business to match competitors cost.

Recommendations:

• A good understanding of the environment, capabilities and expectations would

give create the awareness that a country where M & S were based with high levels
of imports & exports would increase interaction on a more global scale, thus
global competition.
• Proper analysis into M & S customers’ i.e the characteristics of people which
would include race, age, sex.
• Purchase/use situation – Purpose of use, Brand loyalty (St. Michael’s) choice
criteria (market segmentation) may have averted the £250 million loss in stock in
1999 January which created a strategic gap for competitors to capitalise on, with
constant loss over the years and a loss of 13% in operations profit from turnover
the previous year, expansion would not have been a priority.
• Unaware of the expectations of the stakeholders (Internally & externally) the
appointment of Salasbury in November 1998 was seen as negative.
 • M & S were caught in the middle, as the top end GAP, NEXT were not just on a
broad differentiation, but more interested in providing a higher service/product
which would justify the price premium, targeted at a market segment, on the other
hand MATALAN, ASDA tried to achieve its own target market by competing on
lower price to maintain similarity in products.
• More often than not, when a organisational culture begins to affect the strategies
of any organisation, the strategies intended at the corporate level is usually not
realised, rather out of routines & rituals becomes an emergent strategy or becomes
a failed strategy.
• A series of events cumulated in M & S’s misfortunes, all pointing to the direction
of organisational culture creating a situation of M & S strategies failing to address
their strategic position as such performance deteriorates, any wonder why in the
heat of the crisis an expansion and unnecessary acquisition of little woods stores,
that was a clear strategic drift which became a recipe for disaster.

The Cultural Web of M & S

Control: Top down control, Simon marks control was obvious with suppliers, goods
specification to build trust/reliance on suppliers and ensure high consistent quality.

Paradigm: “We are the best” (taken for granted) selling standards, to customer needs at
reasonable prices.

Power: Top heavy male dominated, believed in the control of suppliers, merchandise and
layout of store being beliefs of a tried & trusted (proven) way of running it.

Structure: Top down decisions, strategy formulated at the top, everyone else works
towards that intended strategy irrespective of opinions.

Rituals & Routines: Family members assuming leadership or promotion from within,
inward looking.

Staff: Staff compensation better in the industry, Uniforms provided.

Stories: (well sorry ai’nt done dat yet, any body with any ideas…?)