In contrast, a democratic style of leadership encourages participation
in the decision-making process. It tries to persuade others by
encouragement and is characterized by frequent consultation and
freedom to express opinions. Team building and power sharing is common
in this type of approach. The work force tends to be more committed as
they are part of the decision-making process. Strategic decision
making can take longer due to the consultation process but decision
making at the customer level is much quicker.
Though there are limitations for both styles, it is suggested that
effective decision making is best served by a democratic style.
Nevertheless, it should be noted that there is no such a thing as
'perfect theories'. To make good decisions requires different decision
making styles in different situations.
Marks and Spencer's is a large British company that has had a
consistent record of success and profitability until around 1997.
Since 1997 is sales have plummeted which lead to a large decrease in
profit. Marks and Spencer's was the store that everyone turned to for
basics, from underwear to ready meals. They did this without
advertising or accepting credit cards as they had their own loyalty
cards which customers could purchase. It was thought that they could
never fall from the top spot. They are now trying to find out what has
gone wrong and how they could solve their problem.
Marks and Spencer's has suffered from stiff competition by US
retailers, such as Gap, muscling in on the UK market. This has reduced
the demand for Marks and Spencer's products. The competition has
gained the demand that Marks and Spencer's has lost. The clothes that
the company sells have been condemned by fashion critics as downy and
uninspired. This has made the company feel as if they have lost the
confidence of their customers, which has lead to their decline as a
company. This is one of the reasons why Marks and Spencer's has lost
its demand to its competition.
Task 3
Marks and Spencer before the loose in profits had been expanding in
the UK by increasing the amount of stores they had and ploughing back
money into the business by using Market Research to help guide them.
This was a bad move as they were losing profits they were also using
money to expand in the UK which made them loose even more profit. This
huge loss in profit forced Marks and Spencer's to cut down on an
investment and its also lead to a cut down it vacancies at their
store.
Marks and Spencer's was also slow to join the internet shopping
revolution, which made its competitors gain some competitive
advantage. They were also reluctant in accepting credit cards which
made its profits suffer even more. Marks and Spencer's may have been
reluctant to change as its corporate culture, which would not allow it
to change with fashion. Businesses are always under constant pressure
to change, both internally (management and shareholders) and
externally (in the market place). Marks and Spencer's was slow to
change internally and externally. They did not keep up with fashion
and trends which lost them much of their market share. An example of
this would be the introduction of the grey clothes which they had all
over the shop floor and as a result, not many people were interested
as this was not the trend at that time. Marks and Spencer never took
their iniative to listen to their customers and that was part of their
downfall as a company. Marks and Spencer's has always been associated
with quality, which adds value to all their products and services.
This should give them a competitive advantage, but they lost it as
their products weren’t thought of as fashionable products any more.
Competitive advantage is the idea there are many other businesses in
the same market as you, and to gain more customers you need to do
something that is different and better than your rivals i.e. offer
them a choice to make on your quality products and keep up with the
trend of that time. Competitive advantage can be gained by cost
leadership, which is where you cut all your costs down so that you can
pass on your saving to your customers at a cheaper price. This should
increase the demand for your product as the demand curve. Marks and
Spencer's does not gain competitive advantage in this way as they
charge quite high prices. Another way that businesses gain competitive
advantage is by innovation. Marks and Spencer's uses their
relationship that they have with their suppliers to gain competitive
advantage.
They are known for having good customer relations as they have a good
refund policy. As a lot of jobs have had to be cut, Marks and
Spencer's employees do not feel secure in their jobs, and so they may
not be motivated to work as hard. As Maslow's hierarchy shows,
employees need security needs to get to the next step in the
hierarchy. These security needs can be gained by long-term contracts,
or even by being told that their jobs are safe and a small pay rise
could be given. The company have said that they are loyal to Britain
as they have always used British suppliers, but to reduce costs they
have ended their contracts with suppliers to move to overseas
suppliers who are much cheaper. This does not give Marks and Spencer's
a good reputation and may have lost them some customers and
shareholders. This could lead to a decrease in shares as shareholders
would have sold their shares as they were not getting much back
Task 3
from their investment. Marks and Spencer's is a market orientated
business, but it has not kept up with fashion and so they need to do
some market research to see what customers want. To change to what
customers want Marks and Spencer's have tried to aim its clothing at
younger more demanding women shoppers by trying to keep up with
fashion trends. They have changed their suppliers in favour of more
modern labels, including some designer labels. They have been selling
a cheaper ranger of goods to gain competitive advantage by cost
leadership. This may not be good for their image as the cheaper prices
may make customers think that the quality of the goods have decreased.
To change the company effectively a new chief executive, Peter
Salsbury was needed. He helped to bring the company into the 21st
century by helping to launch the internet website, introducing credit
cards and employing new management to find out the current trends, and
bringing them to the stores. The internet website is a good idea as it
reduces the overhead costs of stores.
Human Resources are concerned with the employees who work for Marks
and Spencer. Marks and Spencer regard their staff as the most
important resource that they possess; other resources include
equipment, money in the bank, buildings, land and materials. The Human
Resource department’s main jobs are to attract and retain goods, high-
quality staff, to ensure that the organisation operates within the law
in relation to employment and health and safety and to ensure that the
organisation avoids unlawful or unfair discrimination. However, if the
employees of Marks and Spencer are not motivated and only do the
minimum work that is required, then all the money or equipment in the
world won't make Marks and Spencer a successful business. On the other
hand, if the employees of Marks and Spencer are keen to do their best
and well trained and committed to the aims of the business, then Marks
and Spencer will be a successful business. This is why the employees
or human resources are so important to Marks and Spencer. Austen
refuted
The company has been doing well in its food and financial services
part of the business, but it has been doing poorly in its clothing
range. To try and do better in its clothing range Marks and Spencer's
have teamed up with David Beckham to launch a new range of casual
clothing for boys. Marks and Spencer's hope that this will attract the
market for young boys aged within 6 and 14 years. The company are
trying to change their image to young and fashionable.
The main reason for Marks and Spencer's losing so much profit was
length of time that they took to realise that they were not keeping up
with fashion and trends. The failure of M&S's suppliers to develop
possible new products has been viewed as a failure in their
relationship with their customers. This is what made it very easy for
competitor to steal their market share, but they are taking effective
steps to regaining its customer’s confidence and profits.
Task 4
M&S had been successful in terms of profit and market share until the
late 1990s, but in 1998 its profit dropped 23% which caused its shares
to fall drastically. Famous for setting the highest of standards in
the retail industry, pioneering its own charge card and generating
such great value on its products, yet controlling prices to bring
their products within most people's reach.
The company makes great weight of how it is run i.e. first class
customer service, operating efficiency (through economies of scale),
long-term partnership with suppliers, financial services, staff
rewards and overall packages the best in the high street. Following a
wide-ranging and detailed strategic review of its business, the Board
of Marks & Spencer has announced significant changes to the Group
strategy and structure.
The purpose of this assignment is to analyze and evaluate the
strategic decisions made by Marks and Spencer (M&S) in different
periods in the last ten years or so. The analysis focused on the
relationships between decision making and organizational structure,
culture and management styles. Some other factors on decision making,
such as the individual factors and stakeholders expectations were also
discussed and related to the case respectively.
A look at one of the key decision makers and their decisions will help
understand the situation.
Peter Salsbury (CEO, 1998 - 2000)
Peter Salsbury was appointed CEO in a chaos which made Gureenbury step
down from the CEO position. The appointment was poorly received by
shareholders, so it caused another fall in its share price. Salsbury
had only worked in womens wear, one of the worst performing units in
M&S. To overcome the difficulties M&S was facing, Salsbury made some
strategic decisions including:
- Implementing a reorganization strategy, splitting the company into
three: UK retail business, overseas business and financial
services
- Establishing an organization- wide marketing departmet to break
down the traditional buying and selling model
- Adopting a customer-focused approach
- Implementing a large scale promotional campaign to restore M&S's
image
- Starting to change the bureaucratic culture to create a better
decision- making environment
- Stripping away the layers of hierarchy
- Sourcing overseas suppliers while severing the links with domestic
suppliers
- Establishing a property division to pass down the power to the
managers and make them more responsible
- Closing six European stores and all the Canadian ones, and
reducing the size of the head office to slow the profit decline
- Attempts to reposition M&S
- Further restructure in order to counteract the acquisition
These bullet points had been researched from the internet using google
as I simply typed Peter Salsbury and clicked on most on the links that
came up to find out more information about this particular manager.
Though so many ambitious plans were made and measures were taken, M&S
was not revitalized and profit and shareholder funds continued to go
down. It was hard for some actions to take effect with a short period
of time. There were some limitations for Salsbury to develop and
implement decisions since he had been promoted internally within the
organization and had limited management experience apart from that
gained in M&S. Some advantages and disadvantages of the main decisions
made by the various managers can be seen below:
Advantages
- Adverts
- Cut cost of staff hours but affected the services
- Refund system
- Lycra
- First company to gain more than 1billion as a profit margin in the
market they operated in
- Marks and Spencer’s card
Disadvantages
- No communication between managers and directors
- Removal of children’s clothing
- Lack of sufficient sales assistant
- Customer service was suffering
- The introduction of the grey
- Poor job satisfaction
- Lack of credit cards
Analysis
Numerous decisions are made at different levels in an organization.
Different people have their own roles in every level of decision
making. Top management should lay their emphasis on the strategic
decision making. If they focus too much on the daily operation and
decisions, on one hand the company will be run without a clear
direction, on the other hand the middle level managers and employees
will be confused. That is one of the key reasons why Greenbury failed
to lead M&S. The decisions he had made in the context of the
organizational structure and culture proved ineffective or even wrong.
His management style and personal perception is definitely an
important attribute to his failure.
The traditional way of management in M&S had seemed to work
successfully, but in today's rapidly changing environment, its
ignorance of changes invited risks. The disadvantages of its highly
centralized hierarchy and autocratic management Style emerged and
hindered effective decision making and thus affected its management;
while its competitors reacted quickly to the changes and improved
their performance to become competitive. The centralized structure
didn't allow the store managers and employees to participate in the
decision-making process. There was only one-way flow of communication.
Employees' opinions on a strategy or plan and customers' feedback were
barely received to the top management. Although Greenbury visited
stores frequently to supervise the operations, he could only get false
message due to the fear of him among the staff. This unhealthy
situation stimulated to poor decisions that were made based on the
poor perception of the internal and external environment; false
feedback or no feedback convinced the decision maker, in this case
Greenbury, believe that the decision was sound and right and then
another decision was made based on such assumptions.
The centralized structure, autocratic management style together with
the inward-looking culture isolated M&S from the outside world. The
company overly concentrated on its operations without examining the
external stakeholders' attitudes, expectations and actions. When niche
competitors offered fashionable products at similar price and discount
stores competed with low priced essential clothing, M&S still
positioned its so-called 'classic, wearable fashions' at a
uncompetitive price without changing. This put M&S in a very
unfavourable situation, which is in the middle of the market with
competitors at both ends with cutting edges. M&S still stuck to their
UK suppliers while its competitors turned to Asian manufacturers to
cut cost. Customers started complaining about products and services.
M&S did not do much in response to the complaints, which made the
customers even more disappointed and unsatisfied. On the contrary,
they even blamed the customers for some of their loss. Internally
there was a lack of motivation. The employees, as a group of
stakeholders, had no power in decision making and did not feel being
trusted so they did not share a sense of responsibility and ownership.
From all above it is not difficult to tell that decisions made in such
context would not be sound. Facing fierce local competition, Greenbury
decided an aggressive expansion programme which required substantial
investment. The poor investment decision on Littlewoods purchase
pushed the company into a crisis. If the Littlewoods stores did not
contribute much to the group's revenue, then M&S would suffer a severe
loss in profit since he would have to invest a lot without any
increase in sales. Unfortunately Greenbury made the decision to buy
those stores.
Salsbury had a much better understanding of the situation M&S was
facing. From what he decided and acted, he realized where the main
problems were. He broke the vicious cycle of decision making by trying
to change the organizational structure to a flatter decentralized one,
giving more responsibilities to the managers to create a better
decision-making environment and adopting a customer-focused approach.
Seemingly, during the short period of his
Management, nothing was improved and in some extent it was getting
worse. However, Salsbury laid a positive foundation for Vandevelde's
strategies, who took over after Salsbury. He started a democratic
management style. Attributed to the limitations to his personal traits
and abilities, his mission of leading the company couldn't go further.
Vandevelde opened new horizons for M&S. He was bold enough to get rid
of or downgrade some traditionally valued aspects in the company, such
as shift suppliers from traditional UK suppliers to Asian manufactures
and downgrade the St Michael brand which had been another supplier. He
reinforced the leadership Salsbury had started and undertaken further
steps in organization changes. The reverse of the 'inward-looking'
culture involved the employees in the management. Their participation
is vital in evaluating and developing the relationships with
customers. Participatory leadership has the benefit of improving the
quality of decisions by incorporating employee values, information,
and alternatives into the decision. It also increases the potential
for decisions to be implemented as employees help make, and "own," the
decision. Vandevelde was sensitive to the changes of the environment
and the power some external stakeholders had. This was reflected by
what he did in response to the competition and the interviews
conducted with the public media. The knowledge and experience he
acquired internationally enabled him to have an accurate perception of
the opportunities, threats and risks M&S was facing.
He had a clear idea on what the strengths and weaknesses M&S had so
that he could make rational decisions and develop strategies to help
the company rejuvenate the status they had lost. Among his decisions
he identified priorities and focused on direction for the company.
That is vital for a company like M&S, who had suffered unclear
strategic decisions for many years. So far no big achievement has been
seen but all the actions he took at M&S are similar to a surgery, in
the sense that the patient (M&S) is not relived from pain but that's
the start of his or her recovery. It will take time to see the good
signs before the patient (M&S) gets better.
Conclusions
In the last few years, M&S has experienced the serious declination
from a successful market leader to a company that’s seen struggling.
The flaws of its traditional 'formula for success' laid some potential
problems for the company development yet it was some key strategic
decisions that resulted in the failure.
Decision making is a central part in management. Decision making
process can be affected by both internal and external constraints such
as inadequate or incorrect information about the problem, failure to
identify the problem, resistance of employees to change, poor quality
management, lack of resources both financial and physical, poor
communication systems, lack of team work, the organizational; the time
available to react, speed of competitor reaction, changes in consumer
preferences, changes in technology, availability and cost of
information.
Strategic decisions, as long term decisions, require a highly detailed
analysis because of their high cost, significance to for a company's
long-term development as well as an absence of information and
uncertainty. Decisions like market expansion and purchase of
Littlewoods stores were strategic decisions. The task of the top
management is to concentrate on the strategic decisions. In cases
where too much attention from top management is put on the daily
operations and routine decisions, problems may occur. Too much
emphasis is put on the short-term decisions, so less time and efforts
are assigned to the long-term decision making. At the same time, top
management's interference in low-level decision making will cause a
lack of motivation among employees.
Decision makers' personality, experience, perception and attitudes
towards risks can influence the decision-making process. Their
behaviour determines their management styles. Management styles can
define what a company will do during a decision-making process and
decisions they eventually choose. The top-down management style was
being changed to a more participatory style at M&S so managers and
employees could get a word in the decision making process.
Organizational structure determines how fast and effective a decision
is made and feedback is received. Tall hierarchical structure slows
down the decision-making process while a flatter structure allows
quick and effective communication, which helps make better decisions.
A centralized structure can help make fast decisions from the top,
however, that do not means they are good decisions. The strong power
discourages low level managers' and employees' participation. In a
decentralized structure the improved communication keeps the top
management informed of the environmental changes, which enables the
company to make quick decisions in response to the changes made.
Organizational culture is the atmosphere where decisions are made. It
can either promote or hinder the decision-making process. A healthy
culture is vital to a company's development.
Task 5
Richard Greenbury (CEO& Chairman, 1991-1998) inherited the management
style of the previous chief executives, which is a 'top-down'
management style. They paid great attention to details. They
controlled almost every aspect of the business including the supplier
control, merchandise and store layout. The centralized authority was
highly emphasized.
Greenbury was a person with overconfidence in himself and his
decisions. He enforced an autocratic approach which enhanced the
'inward-looking' culture. He excluded opinions from employers and
managers which prevented him from getting informed of the real
feedback of his decisions and changes in the operation and market. For
instance, the customer satisfaction survey showing the declining
satisfaction was kept away from him.
The decisions made by Greenbury are as follows:
- Cut the number of full-time sales assistants in stores in order to
reduce the cost.
- Started the expansion programme in Europe and America in the early
1990s
- Halted the expansion programme in October 1998
- Aggressive capital investment
- Purchase of 19 Littlewoods department stores in1998
- Increased profits
- Double refurbishment both in M&S and Littlewoods
- Bought excessive stock for the Christmas season in 1998
- Some of these key bullet points where researched from the video
watched as well as from the internet as I looked to further the
information I already gained from the video watched.
- 1998 was a turn for M&S as the decisions made by Greenbury were
disastrous to the development of the company. The profitability
dropped dramatically. The positive image faded away. The important
functions in connection with the manager’s role can be seen below:
- Finance
- Human Resources
- Production
- Marketing
- Administration
Finance: Marks and Spencer have a Finance department their reason for
having one is to control the financial side of Marks and Spencer. The
Finance Director deals with all the banking work of Marks and Spencer.
The main work of the Finance department is to sort and keep the
accounts and the staff wages up to date. The due of targets of the
Finance department are to make sure that their staffs are paid on time
and with the correct wages and make sure all the banking information
are correct.
The Finance has to keep on track of all the money going out and coming
into Marks and Spencer. Finance department is very important to all
the staffs that work in Marks and Spencer, because the payment of
wages and salaries is part of its function. In Marks and Spencer they
have a chief financial manager who has the responsibly for ensuring
all the accounts are properly prepared.
The Finance function of Marks and Spencer keep all the financial
records required by the business and detailing all the receipts and
payment that have been made by Marks and Spencer. They prepare the
financial records of the customers who have the store cards; monthly
statements have to be sent out to each one and they also have a
currency exchange in some store and they prepare the final accounts
from these records that are required by law; the annual accounts have
to be seen by all the shareholders and they also provide the
continuous, up- to- date financial information for managers on
performance. Marks and Spencer have to pay the amounts of their owing
to their supplies.
In Marks and Spencer the finance function are grouped into three main
areas.
In Marks and Spencer the Finance department have to deal with the
currency exchange, refund policy, and the lack of credit cards being
taken in the stores. In the future the finance department in Marks and
Spencer will probably introduce new cards to each store as they might
start accepting credit card which they currently didn’t accept.
Human Resources
Human Resources are concerned with the employees who work for Marks
and Spencer. Marks and Spencer regard their staff as the most
important resource that they possess; other resources include
equipment, money in the bank, buildings, land and materials. Moneys in
the form of stocks and investments, which are available to be used in
the department of the company, are called capital PTO.
The Human Resource department their main jobs are to attract and
retain goods, high- quality staff, to ensure that the organisation
operates within the law in relation to employment and health and
safety and to ensure that the organisation avoids unlawful or unfair
discrimination.
However, if the employees of Marks and Spencer are not motivated and
only do the minimum work that is required, then all the money or
equipment in the world won't make Marks and Spencer a successful
business. On the other hand, if the employees of Marks and Spencer are
keen to do their best and well trained and committed to the aims of
the business, then Marks and Spencer will be a successful business.
This is why the employees or human resources are so important to Marks
and Spencer.
The ways Marks and Spencer can give their staff opportunities to train
are to give them a work experience first and than show them the basic
work.
Production
The production director of a company is responsible for making sure
raw materials are processed into finished goods effectively. He or she
must make sure work is carried out to an appropriate standard and must
supervise procedures for enabling work to be carried out smoothly. In
Service industries, the production function involves organising
resources efficiently to offer the final consumer the best value and
quality.
Marketing
Marketing is looking at the business through the customers' eyes. The
basic purpose of Marks and Spencer marketing is concerned with
identifying in what their customers require and providing it, so that
customers continue to shop at Marks and Spencer. They can do this by
introducing the new products such as new fashion clothes and they can
introduce new service such as you buy two things you can get another
thing free.
Marketing in Marks and Spencer is considered much more than just a
separate function. Marks and Spencer staff are very keen to be
involved and to find out other things they require. They are keen to
make their customers happy and even try to duopoly additional services
that the customers may be aware of e.g. new credit card.
Marketing in Marks and Spencer include the market research, promotion
and sales. Market research tries to find out what their customers
opinion and needs are from the data collected, they try to propose
change to existing products or service. They do their best to match
their customer's requirements.
The marketing department are linked with many departments for example
the finance department provide the money the purchase stocks and
services.
Administration
All large organisations depend on an administrative spine. Dealing
with enquires, communicating messages and producing documents for the
workforce are all examples of administrative tasks. Administrators are
very important because they service the work of the organisation i.e.
Marks and Spencer. Problems arise when the administrators clog up the
arteries of an organisation with administrative work that moves the
organisation away from its central objectives. The term used is called
“red tape”.
Many large firms have a central office that is responsible for
controlling key aspects of the firms’ paperwork and this might be the
system in which Marks and Spencer use.
Task 6
For this task I will find out about the different communications
within Marks and Spencer. I will find the internal and external
methods of communications for Marks and Spencer's.
Communication is basically the interaction between people, which focus
on the transfer of information.
The internal methods of communication which marks and Spencer's come
across within the firm, staff and employees are: E-mail, Memos, Face
to Face, Notices, Sharing data base and Team briefing.
The external sources of communication which Marks and Spencer's comes
across within the firm through mainly stakeholders, customers,
suppliers etc are: E-mail, Business to customers, Mail, Letters,
Advertising, Meetings, Fax, Arranging conferences, the Internet and
the Websites of all leading brokers.
An identification of the communication channels that exist within
Marks and Spencer include the following:
- Internal
- Formal/informal
- Upward/downward
- Open/restricted
- Internal
Internal communication:
Businesses need to communicate with a range of different individuals
and organisations including their customers, their competitors, and
their suppliers as well as their own employees. Good communication
within a business is essential if that business is to operate
effectively. Internal communication is communication that takes place
within a business. There are a variety of communicating information
inside an organisation; these are written, oral, visual, electronic
and non verbal communication. Written communication is widely used to
communicate both internally and externally.
A Written communication: Written communication includes: letter,
memos, reports, agendas, notices etc…
- Letters are used internally on formal occasions, e.g. being sent to
warn an employee whose behaviour could lead to dismissal, and to
inform new staff of their contracts. Letters are more associated with
external communication, but are still an important form of internal
communication. The letter is a form of written communication which is
rarely used within companies except in special circumstances.
- Memos: Almost all of the written communication within businesses is
in the form of memorandums, memos for short. A memo is the most widely
used internal written form and it’s less formal. A memo is an informal
type of letter which, is because it is only sent to people in the same
company, does not need to be fully addressed. Memos are not usually
signed and they are relatively informal but this does not mean that
they do not matter. Memos are part of the official communications of
the business and must be treated seriously-in court actions, the memos
between members of staff in a business can be used as evidence.
- Notices and company are used in business to provide various written
details, for example of company health and safety rules, or of its
sports and social club activities. They are used to publicise jobs
internally.
- Internal
Written communication: Written communication includes: letter, memos,
reports, agendas, notices etc…
- Agendas: meetings are a form of oral communication but they need to
have some written element so that people can know what the meeting is
supposed to cover and after it has happened, what the meeting decided.
Before every meeting, therefore the secretary of the committee will
send out an agenda(a list of headings under which points will be
discussed)
- Reports are used where a much longer piece of work has to be
communicated within the company or by outsiders who are working for
the business on a temporary basis. A report is generally a detailed
written statement on a particular subject. It can be compiled by an
individual or by a group, and usually contain specific elements,
although the shape and order of these elements can differ between
companies. They tend to be formal documents on aspects such as the
progress of a new product, or the expected effects of computerising an
existing procedure.
Oral communication:
Oral communications are those that are spoken: on the telephone, in
meetings, during interviews and assessments, in committee.
- The Telephone is the most important form of electronic
communication. They provide direct person to person oral
communication. The major limitation is that the person you need to
speak to must be available on the other end. Many firms have internal
telephone systems which allow the employees to have conferences with
other staff on the phone. Up to five or six members of staff can speak
together and have a ‘meeting’ on the phone, without leaving their own
individual offices.
- Meetings are an important form of internal communication. Some are
held by telephone or by video link but most be held on a face to face
basis in a single room.
- Interviews and assessments: Staff can usually communicate with their
bosses in an informal oral way at any time, but firms need formal ways
of communicating as well. If a member of staff is seriously concerned
about something, they can request a formal interview with their
superior to try to resolve the matter. Many companies these days also
use formal staff assessment interview to make sure that staff are
happy with their work. The boss then set objectives for the next year
which are to be met and this will help investigate ways of helping the
members of staff further their careers.
- Work committees: some companies have works committees which are
attended by representatives of both management and employees. The
objective of these committees is to provide an opportunity for any
ideas or problems which might be identified by either management or
staff to be discussed.
Visual and electronic communication:
Companies use many visual forms of communications internally,
including television, posters for safety information or to inform
employees about special offers. An increasing number of companies have
a communications network. Micro-computers which staff has on their
desks are linked together so that letters, reports, memos, and other
messages can be sent electronically between them without the need for
expensive typing or distribution of paper.
Internal-Non-verbal communication:
Non-verbal communication is also important in both formal and informal
social situations. It includes the use of facial expression, tone of
voice, gestures, body contact, physical appearance etc… The
communicator must ensure that any non-verbal signals support the oral
message, rather than contradict it. Non-verbal communication can help
managers to understand more about how their staffs are feeling.
Formal/informal
Formal communication in an organisation is communication that takes
place through the recognised channels (e.g. official meetings, memos,
newsletters etc…). Informal communications are ones that take place
that are not part of the ‘official’ recognised networks of
organisation. This does not mean informal communications are
necessarily negative or anti-organisational. Much of the good work in
an organisation is carried out by members taking an initiative into
their work and coming up with ideas that directly benefit the company.
Informal communication can also serve as motivating their staff
members because they are based on individual initiative (one on one
conversations not planned).
Upward/downward
Much of the communication in old-fashioned, traditional industries was
carried out in a downward direction. Managers created the systems, the
rules and the work programmes and communicated these down the line to
junior employees. There are clear advantages of such an approach:
1. Senior managers are able to set targets and objectives, and then
give the instructions to make sure they are carried out.
2. Because there is a clear line of command, instructions can be clear
and consistent.
3. Costs can be cut by operating with an efficient system in which
fewer errors are made.
However, in recent years, there has been more of an emphasis on
upward communication. This is felt to be important because:
- Good ideas can bubble up from below from people who deal with ‘nuts
and bolts’ decisions on a day to day basis.
- Many people at the bottom of an organisation are very talented and
have good ideas that are worth listening to.
- Managers can be made aware of likely problems before they occur.
- It provides feedback on the decisions made by senior managers.
- People lower down organisations are more likely to know what is
practical in a working setting than those higher.
- Being asked to be involved in the communication process motivates
those lower down in the organisation.
- Open/restricted
When trying to communicate with someone or a group it is important to
identify the purpose of the message as well as the people whom the
message is targeted at. If the message is targeted at everyone within
the organisation or group outside and does not contain confidential
materials, then the message is open for anyone to see or hear e.g.
notice board for students, memos to all staff, magazines by the
company or school etc… An example of an open communication in the real
world would be if there was a student committee or group that was open
to all students so they could share ideas based on that group or
committee. On the other hand if it does contain confidential
materials, it will be targeted at specific groups or people of that
company. This is known as a restricted way of communication. An
example would be in a school or college a staff briefing or meeting
would be done behind closed doors so that none of the students would
be able to no what’s going on within their school.
Which one has little impact and which has the most?
I believe that external communication is better than internal
communication because it’s a better way of advertising a product to
the outside world and this way the company is able to grow with this
type of communication. More and more people would be able to contact
the company rather hardly anyone knowing about the company or product
trying to be sold or advertised, which internal communication does
because it keeps the communication within the organisation rather than
letting people outside the organisation know about it. External
communications are used to communicate with a range of stakeholders,
including shareholders, customers, government officials, suppliers and
the community.
Research has shown that it’s important that companies have both formal
and informal communication. For example, management may break
information to employees through team briefing, but the full
understanding of what management has had to say may come about only
through informal discussions between team members. Unofficial
discussions and conversations have an impact within the organisation,
and most managers recognise the importance of informal communication.
However there is a danger of misinformation being spread along. This
is particularly the case when changes are being planned within an
organisation. Individuals involved in the informal communications
networks may deliberately distort messages or through lack of
understanding of what is going on, may give out confusing messages.
Overall I think that the formal communication is better than the
informal communication because it has been planned rather than an
unofficial meeting.
Which one has little impact and which has the most?
Upward communication is by far a better way of communicating rather
than downward communication. This is gives the workers an
opportunity to be able to share their ideas with their manager in the
company. This would make the worker feel happy and apart of the team,
which is sure to make the company look good as their workers would be
happy to work for them. Downward communication isn’t a good way of
communicating with your workers because they would feel as if they
were slaves and would not be able to tell you their ideas even though
they might be good. This would lead to them being unhappy working for
you and this wouldn’t make the company look good to the people outside
the company.
Open communication is better than restricted because this way all the
employees will be up to date on what’s going on with the company and
wouldn’t feel left out just because they’re in a different department,
age or gender. People would be able to communicate openly by giving
the employees memos, writing things on the notice board etc… It should
only be kept restricted if the information giving out has to be
confidential if not I think open communication is the best route to
informing their workers.
Motivation
When we examine motivation in a business context, we study why people
behave the way they do at work. When an employee is given a task to do
and it is not carried out satisfactorily, this failure may well be due
to a lack of motivation, rather than a lack of ability.
These are the main factors which influence the motivation of
employees:
· Pay level
· Working hours
· Working environment
· Existence of fringe benefits
· Recognition of the importance of the work by others
· Nature of the tasks undertaken at work
· Degree of job security
· Promotion prospects
· Management styles
· Organisational culture
BTEC National Certificate In Business
Business and management
Task 6
Motivation
Employees who are poorly motivated often score badly on at least one
of these factors; an undemanding job, unpleasant working conditions
and low pay, which are all common causes of poor motivation. A lack of
motivation- either limited to one area or department, or spread
throughout the firm could really affect the company. This results in
higher labour turnover, increased incidents of absenteeism or
sickness, poor time keeping, and more disputes between both formal and
informal groups within the firm. Motivation problems are not easily
overcome. Organisations therefore try to avoid them arising in the
first place.
Approaches to overcome poor motivation include:
· Changing leadership styles-for example, moving towards a more
democratic style
· Establishing team work to develop a team spirit and a sense of
common purpose
· Improving the quantity and quality of communication, e.g. by
reviewing the effectiveness of notice boards, or through introducing a
company newsletter
· Reviewing levels and methods of payment, possibly offering incentive
payments or additional fringe benefits, and comparing financial
rewards with those of similar organisations
· Introducing greater employee involvement, e.g. through setting up a
suggestion scheme, quality circles, and other formal and informal
groups
· allowing job rotation and developing job enrichment
· setting up training and staff development schemes
The results of the personnel audit provide additional information for
the firm’s management to evaluate its policies. Motivation theory is
concerned with the goals which people set, and the methods they use to
achieve these goals.
BTEC National Certificate In Business
Business and management
Task 7
As part of my personal development plan I would like to improve my
various skills in communication. Communication is the exchange of
information between people within and outside organisations. These
types of skills in communication can be seen below:
Ø Being on the telephone
Ø Offering your views in meetings
Ø Presentations
Ø Reports
Ø Letters
Ø Fax
Ø Problem solving
Ø E-mail
With improvements in these areas I believe this would both impress my
colleagues and manager as well as help guide the company to being
successful. This would reduce the time taken to carry out activities,
increase the speed with which output is generated, undertake a larger
volume of work and it would make it easier for the other workers to
understanding the user or their colleague.
As a sender of information you need to put it into a form that a
receiver can understand. This might involve oral, visual, verbal or
written messages to transmit the ideas or information. As the sender I
would use the particular medium I’m used to into sending or
transmitting the information instead of picking a medium which I’m not
to used t and that’s why I feel to develop my skills further for all
these types of communication. This is due to the fact that though the
message flows to the receiver there is no guarantee the receiver will
either receive the full message or understand it. This is because of
the lack of skill from the sender has in the type of medium they
picked to sending the message (oral, visual, verbal, written etc…)
At the moment I believe I’ve got pretty good communicational skills
which could be better in some minor areas such as in meetings as I
feel I’ve got a lot more ideas and want to speak out but find it
difficult getting through to my colleagues. If I had more training
with an individual on written English I think this could help improve
the layout of my letters written in e-mails and reports or memos. I
believe I’ve got good problem solving skills and I’m aware of what to
do in such situations as I’m a fast learner. I also get on well with
the people around me as this helps both as a student and in my later
life when older. Without these skills mentioned I would find it harder
getting through life i.e. when working for a company or making new
friends etc…
BTEC National Certificate In Business
Business and management
Task 8
How can GOOD communication affect business objectives?
An organisation needs to create the communication channels that most
effectively enable it to achieve its business objectives. Clearly in
some instances downward communication may be most effective,
particularly where clear instructions need to be carried out. However
it is also important to have upwards communication as it is also
helpful. It has been recognised that that people at the base of the
company enable good ideas. They are the sort of people who would be
trusted by the company to come up with ideas. Good communication can
affect a business as well as their objectives if things get really bad
between the workers and managers, such as them not being able to
communicate or getting on with each other. Communication is a major
part of a persons reference as this will be what the company will be
looking at when they hire them as well as their experience in that
area. Without having good communication in a business it would make
things difficult for both the staff and manager as this would make
him/her look bad hiring someone with poor communication skills. This
might lead to people being fired as a result. For a company or
organisation to be able to be successful they most make sure they are
able to complete each objective set each year/month depending on what
company they are and this can be helped by good communication. These
are the benefits of good communication below:
· It provides a cheap and quick method to communicate and can transfer
complex and highly technical information effectively. It is of
particular value to companies which operate internally.
· It avoids the need for endless pieces of paper as businesses strive
towards paperless administrative systems.
· It allows automatic generation of communications, e.g. re-ordering
of stocks and invoicing of customers.
BTEC National Certificate In Business
Business and management
Task 8
How can BAD communication affect business objectives?
Bad communication can cause so many problems for a company or
organisation if they don’t have good communication skills between the
staff members and manager. It could lead to ruining their plans and
having to start from the beginning depending on how big the company is
already and could lead to them recruiting new faces for the company
that have good personalities and are easy to get on with. Little
mistakes like bad communication could also cause the manager his/her
job if the matter is that serious.
Business may encounter a number of factors preventing successful
communication.
* Transmitter of information may use terms or jargon which are
unfamiliar to the recipients, leading to misunderstanding.
* Too much information might be transmitted, causing overload on the
part of the recipient.
* A sender of information might choose the wrong medium for
communication, e.g. using the telephone to transmit detailed and
complex information.
* Sometimes group norms can inhibit communication- some
organisations with cultures which keep managers and shop floor
workers separate may incur disadvantages in term of efficiency.
* Differences in cultures, time zones and languages can all
contribute to ineffective communication.
* The provision of incomplete information (perhaps due to time or
cost constraints) can inhibit successful communication.
* High technology communication systems can generate enormous
amounts of communication that may not improve the efficiency of
the organisation.
* Although many firms use the internet, as yet no one has made large
profits from operating on the Worldwide Web.
* New technology can be expensive to install and may require
substantial training of employees, incurring further costs.
Conclusion
With the improvements of new technology this can help organisations
such as Marks and Spencer improve their communicational skills within
the business as well as externally to their customers. This will make
them communicate a lot quicker which can be seen as a positive.
Fortunately M&S had found out where the prominent problems were. The
strategies were redefined and changed in the organizational structure,
culture and management style had been going on. What M&S needs to
focus on is the tactics and plans serving the purposes of the
strategies. Details are needed to be refined, such as a cleared
positioning and layout of stores. The changes in management style and
organizational structure are on the right track. In order to enhance
it successfully to meet the objective, consistency is important,
though initially it would be found hard for the employees to accept
the changes. Many employees were used to the 'top- down' decision
-making style. Leadership is a social agreement. The creation and
changes of leadership will take years after people's experience.
Therefore the top management has to be patient with the change and try
to avoid inconsistency in change. When executives call for
BTEC National Certificate In Business
Business and management
Task 8
Conclusion
Employee participation but then don't design or manage an effective
process of involvement, employees are quick to label such activity as
placation or even manipulation. Accordingly employees will lose
confidence in the management and become passive to decision made from
the top and give no support. To accelerate the process of changes
within the company, it is recommended that training should be given to
all parties within the organization to help them understand their
roles.
Since strategic decisions required more expertise and group efforts,
more competent executives and managers are expected to join the
management team. M&S should pay some attention to its promotion
systems and recruitment policy and take some measures if necessary.
More assistants in shops are needed as it is hard to find an assistant
when you need one. This may anger customers and this is bad PR. Hiring
assistants may increase costs slightly but helpful assistants will
improve customer relations and the customers won't have to look round
the shop just to get some help. Assistants will also give a more
friendly and helpful feel to the stores. Efficiency could improve if
motivation amongst employees was better. Currently employees do not
feel secure in their jobs, as there have been many job losses at M&S
recently. Employees need to be told that their jobs are safe - a small
pay rise could be given. Once Marks and Spencers starts implementing
well researched recovery programmes the business will once again have
its past success and profitability. This was all helped by Green Bury
as he helped increase profits, cut cost as well as being the first
company in the market they operate in to reaching 1billion as a profit
margin.
Greenbury inherited the management style of the previous chief
executives, which is a 'top-down' management style. They paid great
attention to details. They controlled almost every aspect of the
business including the supplier control, merchandise and store layout.
The centralized authority was highly emphasized.
Greenbury was a person with overconfidence in himself and his
decisions. He enforced an autocratic approach which enhanced the
'inward-looking' culture. He excluded his subordinates' opinions,
which prevented him from getting informed of the real feedback of his
decisions and changes in the operation and market. For instance, the
customer satisfaction survey showing the declining satisfaction was
kept away from him. 1998 was a turn for M&S as the decisions made by
Greenbury were disastrous to the development of the company. The
profitability dropped dramatically. The positive image faded away.
However, before any focus shift takes place, it will be wise and
valuable to conduct a customer survey to listen to what their
customers' thinking. They had been incredible customers because to
them M&S is more a lifestyle than a retailer. Due to the feeling,
genuine and valuable opinions and advice can be guaranteed from the
customer, which M&S should value.
