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Retail Business Environment

Notes The Organizational Culture of M&S
Understanding the Cultural Context
The culture of the M&S plays in important role if the company’s performance wants to be
understood. Only when the culture of an organization is analyzed, it is actually possible to
understand its strategy, as Watson (2002) points out.
When speaking of organizational culture we speak of a general set of meanings that is shared by all
members and that defines the way people have to think and behave. The roots of these shared
beliefs trace back to the founders of M&S and are personified in the case study in the behaviour
of the senior management such as Greenbury and Salesbury. So, in order to understand M&S
culture, it is essential to understand the impact senior management had made on the rest of the
company. This interrelation can be seen below:

Illustration 5: Impact of Senior Management on Organizational Culture

When analyzing the case, the following list of main beliefs and values can be found that has to
be adopted by all members of M&S:

 Quality has to be offered at reasonable prices
 Relationships with suppliers on a personal basis are essential
 Control of the organisation should be exercised top-down

 Employees are promoted internally
 The company grows from within and can build upon its long lasting reputation
Problems of M&S’ Organizational Culture
Structure, culture and strategy are interrelated. Accordingly, these three main aspects need to be
discussed in more detail:
Problems with Strategy

First of all, it was believed by the former top management that quality had to be high while
prices needed to be affordable. This belief was essential for strategy making because it implied
which actions had to be taken to achieve these aims. Such a strategy is however problematic to
implement because as Porter (1985) notes, it leads to a situation of “stuck in the middle” which
means that companies should either be low cost or product led. Achieving both is to some extent
contradictory in his view and can therefore help to explain the inability of M&S to achieve
sustained competitive advantage.

Problems with Culture and Structure

Secondly, an important belief was that control should be in the hands of top management which
had been exercised by the successors of the founder. The case shows that Greenbury always tried
to run the business on his behalf and rejected delegating responsibilities. This approach can be
named “top down” which means that information flow from top management to the shop floor.
This has several disadvantages: it fosters autocracy and managerialism, it does not take advantage
of the sales staffs’ experiences who know best what customers demand, it leads to bureaucratic
structures which hamper flexibility and quick decision making, it discourages lower managers
to make critical suggestions because of Greenbury’s habit to think that his decisions are hardly
fallible.

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