• Using information found in at least two interviews with John Lewis Chairman Sir Charlie Mayfield, describe the leadership characteristics of Sir Charlie using one of the models below (remember to support your answer with evidence):
• Servant
• Transformational
• Charismatic
• Authentic
• Authoritarian
• Democratic
• Laissez-faire
• Describe the trading performance measures (KPIs) that John Lewis use to measure their annual performance, and suggest two improvements that could be made.
• Using the Pyramid of Corporate Social Responsibility describe and evaluate John Lewis’s approach to Corporate Social responsibility
• John Lewis says ‘Our Partnership model gives us our distinctive culture.
This, combined with the efforts of our Partners, gives us our competitive advantage.’
Explain how the John Lewis employee partnership model couldgive John Lewis competitive advantage.
In this report, the case of a leading department store chain, John Lewis is discussed. According to the opinion of its managing director Andy Street, that the company’s sales performance saw increase to a greater extend especially in the Christmas season. The success of the business can be due to the many contributing factors. One of which is the democratic leadership style followed by John Lewis, in which the employee partnership model is followed. Another aspect of success is the effective Corporate Social Responsibility showed by the company towards the society. Evaluation of its trade performance with the support of KPIs is also a major factor for John Lewis to enable more expansion in the international market.
John Lewis is one of the leading department stores in UK. The store saw a drastic improvement in its business performance in the recent period, especially the Christmas sales contributed to an increase up to 734m in five weeks. According to the managing director., Andy Street, company is planning to expand to more branches in the international market and estimates to open 65 stored by 2023. The success of the store is mainly due to the employee partnership model, the pyramid corporate social responsibility model followed by John Lewis and the suitable KPI used by the company to measure to measure its trade performance. All these aspects are discussed in this report.
John Lewis is one of the successful department store chains in UK and the company tries o double its size including the launch of a French website and the overseas operations. The secret behind John Lewis’s success is the impact of its effectual partnership model as well as the leadership style that the company implements. The employees are performing in a most efficient manner in this department store which results in the increases in its sales by 6.9pc to £734m in the five weeks in December month, during the festive season of Christmas. The partnership model of this department store is that it is owned and run by the staffs.
The success of an employee owned business is that it follows a democratic leadership style (Gosenpud, & Vanevenhoven, 2011). In John Lewis, employees are given more role in the decision making process as seen as one of the traits of the democratic leadership. There involves more participation by the employees in John Lewis and there is one of the reason that the employees in John Lewis finds more motivated towards their work and this leads to the higher productivity on the work performance of the staffs. This can be taken as one of the reason for the success of this departmental store. The contribution to the business scenarios will be increased when a democratic leadership is followed. Group of employees are encouraged to share their opinions and ideas to the company in such leadership styles. Moreover, it is also evident that John Lewis gives more attention in maintaining employee relationship. For instance, the company plans to keep a celebratory event for staff as a part of its celebrations for its 150th anniversary. This shows that in following a democratic leadership, the company also encourages the creativity of employees, which ultimately results in higher business success, which John Lewis has attained over years.
It is noted that the trading performance of John Lewis has been improving from that of the previous years. The company sees a steady uplift in its trading and then plateaus. Though the peak in the trading performance has been late, it contributed to a higher performance level to the department store. The growth in its trading performance has made John Lewis to start several new projects. In fact, the company plans to start new stores outside UK within the next decade. The growth plan involves the strategy of doubling the size of the company.
These growth plans in the trading performance has been strategized using trading performance indicators, which the Key Performance measures. Using the KPI, the department store will be able to know the level of success of its business operations and also whether there is any improvements needed in any of the business areas. Primarily, KPI helps in utilizing the market opportunities as well as in mitigating the risks. The business objectives can be bettered only knowing the current business information. It is this Key performance measures that supports John Lewis to know whether the expansion and growth plan is viable and double the size and expanding to international operations can bring in the desired results.
The KPI’s gives the estimation about the level of growth possibility. By applying KPIs, the CEO of John Lewis, Mr. Street, comes to an estimation that by 2023, John Lewis is likely to have 65 stores opened across the globe when compared to the 40 stores that it currently have along with an increase in the annual revenue from around £4bn at present to £7bn. Thus performance measures are of two types. One is measuring the ratios of return to risk. The return from an investment and its risk is measured in this performance measure. The second type is the -adjusted return of an asset, where the predetermined standard or estimation is compares with the actual return on investment (Nickels, McHugh, & McHugh, 2011).
Pyramid of Corporate Social Responsibility is founded by Carroll (1991). According to Carroll, there are four layers of Corporate Social Responsibilities which is depicted in a pyramid model. There are four types of responsibilities as per this model. They are the economical, legal , ethical and philanthropic responsibilities, which form the four layers of this pyramid model.
The economic responsibilitiesof a company is to enhance its sales and reduce the costs incurred. This also involves the effective strategic formulation. Looking at the instance of the department store, John Lewis, the company fulfills its economic responsibilities from an increased sales volume during the Christmas season in which John Lewis outperformed in the market and generated sales over £35m. The legal responsibilities of the company are also one of the company’s contribution towards the society in which the company is expected to adhere the laws and regulations of the country. Even in the mode of expansion to other countries as planned by John Lewis to expand its stores outside UK, the company will have to ensure that it strictly obey the laws and regulations of other countries as a part of its CSR policy (Hengliang, & Weiwei 2012).
Ethical responsibility is not a mandatory aspect for a company, but it is needed and expected by the society. The company has to follow the ethical means of conducting its business so that the trust on customers and brand image of the company can be improved. The philanthrophic responsibilities include comes in the top most position in the pyramid. According to Carroll, this responsibility of the company is to improve the quality of life of the people in the society, by providing programs and encouraging the people to volunteer. In this case, as a part of the celebrations of the 150th anniversary, John Lewis conduct a celebratory event for staff and a one-off event for customers. Also, the company enables a best pension program all over UK, in which the Final salary, non-contributory, accrual rates best in the market. Also, Mr.Street argues that the corporate governance of the company is different from other corporate as the company’s operations are transparent and communicated to the people. There is nothing to hide from the people, which show John Lewis having a good corporate social responsibility towards its society (Carroll, & Buchholtz, 2014).
One of the main critical success factors of John Lewis is that the company follows the employee partnership model. The outperformance of the company in the Christmas days, increase in the sales volume by 6.9pc to £734m, the growth plans of the company including the launch of a French website, expanding its operations outside UK etc all are the impacts of the effective employee partnership model. When employees are given the decision making power, they feel more motivated and committed towards the company (Welford, 2013). Thereby, the increased morale of the employees paved way to the higher performance level. As a result of this, the sales volume of the department store has increased. This enables the success of the business in an overall basis (Schaffer, Agusti, & Dhooge, 2014).
Conclusion
To sum up, it is understood that the success fo every business is based on the vital aspects like its leadership style, employee relations, the corporate social responsibility shown by the company towards the society as well as the use of proper Key performance Indicators to measure its trade performance. With the effective use of all these elements, the company can achieve higher sales volume, profit margin, expansion possibilities will be achieved and good employee and customer relationship (Apte, Dietrich, & Fleming, 2012). As seen in the case of John Lewis, the renowned department store chain was able to outperform in the market with the combination of implementing all these vital ingredients within the company.
References
Hengliang, W., & Weiwei, Z. (2012). A Customer Churn Analysis Model in E-business Environment. International Journal, 6(9), 296-302.
Obradović, S., Fedajev, A., & Nikolić, ÄÂ. (2012). Analysis of business environment using the multi-criteria approach: Case of Balkan’s transition economies. Serbian Journal of Management, 7(1), 37-52.
Gosenpud, J., & Vanevenhoven, J. (2011). Using tools from strategic management to help micro-entrepreneurs in developing countries adapt to a dynamic and changing business environment. Journal of Applied Business Research (JABR), 27(5), 1-14.
Nickels, W. G., McHugh, J., & McHugh, S. (2011). Understanding Business 9th ed. Irwin, McGraw-Hill New York.
Carroll, A., & Buchholtz, A. (2014). Business and society: Ethics, sustainability, and stakeholder management. Cengage Learning.
Schaffer, R., Agusti, F., & Dhooge, L. (2014). International business law and its environment. Cengage Learning.
Apte, C., Dietrich, B., & Fleming, M. (2012). Business leadership through analytics. IBM Journal of Research and Development, 56(6), 7-1.
Welford, R. (Ed.). (2013). Hijacking environmentalism: Corporate responses to sustainable development. Routledge.
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