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HRM in Marks & Spencer

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Introduction
In the face of increasing competitive environment organizations have to focus on the value of
investments in human resources as a major source of competitive advantage. Although business
strategy as a means of competition is common conversation in the executive suite, taking a
strategic approach can be especially beneficial for staff functions within companies, as they often
are required to justify their need for resources and their contribution to the company.

The following report presents the analysis of human resource management (HRM) issues
provided in the case study on Marks and Spencer's (M&S) organizational change. Discusses
strategic HRM issues facing the company in deciding to create business units and adopt
structural change, and the extent to which M&S needs to overhaul HRM and its core business.
The author also emphasizes the importance of HRM styles and approaches for the company's
medium term business practices, being integrated into an overall organizational strategy.

2.0 Strategic HRM Issues for M&S's Organizational Change


The received wisdom in the literature on organisational change is that employee involvement is
crucial to successful change, especially in situations that require attitudinal and cultural change.
Therefore, any rapid organisational transformations can only be successful if they focus on
structural as reverse to cultural change. The case with M&S is a scenario of rapid organisational
transformation, which was based on a vision imposed on the company in a mainly directive
fashion, down from the top, by its management and CEO, but which could potentially lead to a
widespread change of attitudes and behaviours in the company. This change in the middle of the
trading period was a risky action and would bring a big confusion for the staff, putting a high
pressure on their performance. It was an emergent change where staff had to develop and adjust
to new ways of a flatter organisational structure and new ways of operations under new business
units.

In the case of M&S, it can be seen that the company deliberately set out to change the basis on
which it competed by reinventing itself as a service-based organisation. One of the standard
perceptions for successful organizations is that they should know their own strengths and
weaknesses, their customers' needs and the nature of the environment in which they operate.
Hence, by introducing new business units M&S aimed to create them fully profit-accountable,
putting more emphasis on the individual performance of the departments. This would enable
M&S to effectively control their operations and show where the improvements need to be
implemented. Hence, by this new approach to business practices, the company had to closely
consider strategic issues of HRM.

One of the reasons behind the proposed change is to modify the attitudes and behaviours of the
staff. People are being required to reconsider their attitudes towards how work is performed and
their attitudes to their counterparts externally. Whatever form it takes, if it is to be successful,
there are three people-related activities that need to be undertaken: creating willingness to
change; involving people, and sustaining the momentum (Doorewaard and Benschop, 2003;
Burnes, 2004). M&S in seeking to create willingness and a readiness for change need to be
aware that stressing the positive aspects of the proposed change may have much a negative
impact on the company's performance. Therefore, M&S have to make people fully aware of the
pressure for such change during the trading period, giving them an on-going feedback on the
performance and areas of activity within the organisation, and understanding staff's fears and
concerns. A constant communication and involvement will have to be present, providing
resources and explanations for change. Aligned line managers will have to give all support
needed to the change agents, develop new competence and skills and reinforce desired
behaviours, such as increased pay or bonus.

The new changes to business units and flatter company structure are likely to increase employee
empowerment and responsibility, increasing more of the direct contacts with customers and
building new knowledge. Post-Modern theories suggest better flexible strategies,
accommodating change in the structure of power relationships, where they specialise in their
field of tasks (Johnson and Scholes, 2002; Francis, 2003), To become more flexible M&S
decided to apply a more horizontal management organization style. Through a clear leadership
role of appointed heads of business units, centralisation will also be high only to a certain degree,
not to prevent adaptability and flexibility of staff. Coordination will need to be in a form of a
clear structured hierarchy and division of labour. To encourage job enrichment and staff
satisfaction, M&S may establish one or more specific coordinating roles. Liaisons, individual or
departmental, committees, task forces, project groups, and the like are all examples of possible
structural coordinating devices.

Many modern theorists believe that in order to succeed business culture needs to be change-
oriented and, hence, M&S need to adapt to differentiating changing environments and internal
workforce diversity.

3.0 HRM Approaches for M&S's Medium Term Performance


The interpretation of HRM is based on incorporating either a "soft", developmental humanist
approach or a "hard", situational contingent approach (Liao, 2005). Schneider (1994) has
suggested that in the "soft" approach, effective HRM is seen necessarily to involve a focus upon
fostering employee motivation, commitment and development. It is an approach that
acknowledges the importance of HRM to the aims of the business, whilst reflecting attempts by
management to create a work environment that emphasises employee development, through
practices such as training, participation and communication, and the importance of having
innovative, flexible, committed employees who are valued resources.

"Hard" HRM is, as Liao (2005) has noted, closely aligned with what is often termed strategic
HRM. In these instances, HRM is closely linked with business strategy. Accordingly, it views
employees as resource to be used dispassionately and in a formally rational manner. As such,
HRM effectiveness can be more contingent upon cost minimisation measures rather than upon
significant investment in human resources. A "hard", contingency-based approach to HRM is
often seen as an essential part of a cost-minimisation strategy. However, in the case of M&S it is
suggested that for a successful implementation of changes, there is a more need of " soft "
approach for the medium term success, as everyone within the company needs to cooperate and
understand the importance of the changes.
For M&S the commitment of senior management and the assigned heads of the business units to
HRM are crucial to company's effective operation. It would be essential to possess the
knowledge and skills necessary to implement a credible HRM programme within the
organisation. For a medium term success, M&S needs to consider the following HRM
approaches:

 A clear understanding and commitment of the management to the desirable change need
to prevent any conflicts and operational barriers;
 Good dynamic and effective leadership will have to take place and be supported by the
managers of M&S;
 It is also importance to consider teamwork in decision process. The employees have to be
integrated into the change process management;
 To become more service-focused company, M&S will have to look at a culture of
communication, so that people can use the advantage of a good working team for the
progress and the company's success. Mayo's motivation theory also suggests that
effective communication is an essential part of organisational changes and an effective
foundation of modern organisations. Hence, M&S has to put greater emphasis on
improvement of interpersonal communication skills of all organisational members;
 As McGregor's theory proves, employees are likely to be motivated by the goals of
achievement and " self-esteem ". By rewarding staff and by leading people, M&S would
build a good management for a medium-term success;
 Staff involvement and participation are likely to contribute to a sense of responsibility
and ownership and, hence, organisational commitment and loyalty. The norms and beliefs
that enhance an organisation's ability to receive, interpret, and translate signals from the
environment into internal organisational and behavioural change will promote its
survival, growth and development;
 It may be important to clarify the strategy throughout the hierarchy to every employee
(Huang, 2001). An effective two-way flow of information and communication has to take
place, so that everyone will be aware about the goals and visions of the company's
growth. Face-to-face, one-to-one communication through to routine bulletins on notice
boards and circulars sent around the organization might take place for effective
communication of the message. Staff meetings have to take place to inform everyone
about the changes and prevent misunderstanding and dissatisfaction. In order to get a
feedback on the changes, two-way communication approach has to be encouraged;
 A good strategy for dealing with conflicts and contingency system is also essential form
for the operational process. 

4.0 HRM and Core Business of M&S


One of the challenges for managers having to introduce change in the company is to determine
the strategy that will produce the best results. In a situation of excellence, a company has to be
able not only to adapt in an outstanding way to its market conditions, but also to develop internal
practices that clearly set it aside from the competition.

Change can be costly, not only in financial terms, but in terms of management time. The
question should arise whether M&S has enough capabilities and is ready to manage change and,
more importantly, readiness to achieve the scope of change.
It is not enough to adjust the performance management processes to support changing business
strategies. Managers of M&S need to be able and willing to envisage a future where the
strategies and performance of the company are transformed by stretching the staff's capabilities
of the organisation better than their competitors. The primary goal of M&S management has to
be in overhauling an integrated relationship between HRM and the core business to successfully
implement the changes.

Strategic capability is essentially concerned with how the resources (including people) are
deployed, managed, controlled and, in the case of people, motivated to create competences in
those activities and business processes needed to run the business (Huang, 2001).
Bergenhenegouwen (1996) states that the concept of core competences goes beyond this in a
search for those few activities that underpin competitive advantage. Nevertheless, the starting
point of successful strategies for M&S is acquiring, retaining and developing human resources.
Much of the “hard” side of HRM is concerned with ensuring that this baseline is maintained in
the company. Such HRM activities as audits to assess HR requirements to support core business
strategies, goal-setting and performance assessment of individuals and teams, the use of rewards,
recruitment as a key to improve strategic capability, and training would assist M&S management
in delivering about the proposed change in the most effective way for business outcomes.

M&S has been always renown for the strength of linking business and human resource strategies.
This tends to bring clarity from the business planning process. However, operating in a highly
competitive environment, with a constant pressure from stakeholders and external forces impacts
the decisions of the management Board, as it was in this case.

In general, a strategic approach to HRM involves the designs and implementations of a set of
internally consistent policies and practices that ensure a firm's human capital to contribute to the
achievement of its business objectives. Fundamental to the strategic HRM perspectives, there is
an assumption that firm performance is influenced by the set of HRM practices a firm has in
place. M&S line managers can enhance productivity by building a sound HRM system having a
set of specific HRM practices in different ways. This necessitates the development of an
approach to investigate the correlation between a firm's productivity and strategic HRM factors.
Based on that understanding, managers can adopt appropriate strategies to improve company's
HRM so as to increase the business units' total productivity. According to strategic HRM, the HR
strategy should be developed alongside the general strategy of the organization, to acquire
cultural fit within and with the outside environment.

5.0 Conclusion
Every organisation wants to be successful and depends upon its employees to make that happen.
Success should be viewed over the long term. A healthy organisation can go the distance and the
best metric of success should be the health of the employees.

The most important issue of M&S is to build upon the company's already existing strengths and
try to overcome the threats of the change. One of the major benefits claimed for organizational
learning is that it enables organizations to manage change in a timely and effective manner. The
organizational learning and individual development movement was largely a response to the
need for organizations to seek to sustain competitiveness and survival in a discontinuous
environment. Management practice today is still largely driven by a closed systems view that
relies on planning, on a consensual, top-down implementation of change interventions. M&S's
change requires time and energy for learning new approaches, but it is necessary to develop new
skills and capacities. M&S has a long history of change management and HRM excellence, but
even for them, resolving their present tensions and changes represent a considerable challenge.

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