Report on the Business of Marks and Spencer

Report on the Business of Marks and Spencer

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Report on the Business of Marks and Spencer

· Classification of the business to its ownership

· The benefits and constraints of ownership

· The objectives of the business and how well they meet them

· The structure of the business

· The functional areas and how well the business meet objectives

· Management style and culture

· How quality assurance and control system contribute to added value

· Alternative methods of quality assurance and control

· Communication channels within the business





This is a report on Marks and Spencer a well known retail company. The
business that I have chosen to do is well know in the UK retail. This
business is Marks and Spencer. Marks and Spencer has also recently
been in the news for falling profit and sales in 1999/2000. So Marks
and Spencer is business which is on it way to recover. Famous for
setting the highest of standards in the retail industry, pioneering
its own chargecard and generating such snob value on its products, yet
controlling prices to bring their products within most people's reach.
Marks and Spencer has extended its brand overseas where it continues
to achieve substantial growth. This is likely to be its main source of
growth in the near and long term future as the company develops its
franchise business.

There are a total of 628 locations worldwide. The company also makes
great weight of how it is run - first class customer service,
operating efficiency (through economies of scale), long-term
partnership with suppliers, financial services, staff remuneration 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
The Board and management team is committed to restoring profitable
growth. This will be achieved by total focus on the recovery of the UK

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Retail business.

To eliminate distractions and gain maximum impact from the
improvements, Marks & Spencer intends to close its subsidiaries in
Continental Europe; to divest its two US businesses, Brooks Brothers
and Kings Super Markets; to franchise its subsidiary business in Hong
Kong; and to close the direct catalogue business. In addition Marks &
Spencer will release value from almost half its property portfolio.

In order to improve the capital structure of the Company Marks &
Spencer intends to return £2 billion to shareholders by the end of
March 2002.

2.0 Terms of Reference


Anyone thinking of starting their own business or joining an existing
business needs to have at their fingertips knowledge about what makes
a business work successfully. This report explores the business of
Marks and Spencer in order to determine in analysing the company I
will focus on the following areas types of the business, business
objectives, structures and cultures.



1 I have phoned the head office of Marks and Spencer to request their
Annual Report, since they don’t send it out they only send out there
Annual Review.

2 I will use the Annual Report on Mark and Spencer web site.

3 I have also been reading the Financial Times to see if there is any
useful information, I can use for the business I is investigating.

4 I have also used the Internet to find more information on the

5 I will be visiting Mark and Spencer to interview staff and talk to
the manager

6 I am also using the Business AVCE textbook for information.



4.1 Classification of Ownership

4.2 Marks and Spencer can be classified as a public limited company;
it can be also called an incorporated business. Marks and Spencer is a
business that provides good and services e.g. clothes, finance. It
therefore comes under the tertiary sector. Marks and Spencer is a
profit making company, which belongs to the private sector. The
private sector includes all those business that are set up by
individuals or groups, of individuals. Most with the aim of making a

5.0 Benefits of Ownership

5.2 The benefits of Marks and Spencer’s being a public limited
company is that all members have limited liability, this means that
the firm continues to trade if one of the owners dies and more power
is enjoyed due to its large size. The benefits as follows:

· 5.3 Huge amount of money can be raised from the sale of the shares
to the public. So this means any one is able to buy shares from them.

· 5.4 Production cost may be lower as firms may gain economies of
scale; this means that when they buy large amounts at a reduction in
cost per unit, bulk buying reduces the cost. The company can also add
value towards the goods to make a profit and to pay staff and any
other cost.

· 5.5 As a result of their size, public limited company can often
dominate the market. This shows that being a plc is a strong position
on the market.

· 5.6 It becomes easier to raise finances, as institutions are more
willing to lend to a public limited company because they are reliable.
For example institutions are not likely to lend big amounts of money
to partnership or a sole trader because it would be a high risk.

6.0 Constraints of Ownership


· The constraints of marks and Spencers being a plc ownership are as

· 6.2 Since anyone can buy their shares it is possible for an outside
interest to take control of the company. In order to do this the
person will have to buy a huge amount of shares.

· 6.3 All of Marks and Spencers accounts can be inspected by members
of the public. Competitors may be able to use some of this
information to their advantage. They have to publish more information
than private limited companies.

· 6.4 As a result of Marks and Spencer’s size, they are not able to
deal with their customers at a personal level.

· 6.5 They way they operate are controlled by various company acts
which aim to protect shareholders. The reason this is because most
people that invest in a company like to see an increase in the
dividend yield.

· 6.6 If marks and Spencer’s do not make enough profits, then fewer
people will invest in the company. If this happens the company would
then find it hard to raise capital for the public.


Objectives of Business

7.1 The main objectives of marks and Spencer’s are as follows:

- Profit maximisation

- Increase sales

- Market leadership

- Offering high quality service

- Growth

- Reward shareholders

Profit Maximisation is often the main aim of the private sector
business. This can be achieved where the difference between the total
revenue earned by the business from selling its products and the total
cost of the products is the greatest. So you could say that Marks and
Spencer’s are aiming for as much profit as possible. In the UK retail
the turnover and operating profit before exceptional items were £6.3
million, in 2000/2001 compared to last year 1999/2000 is £6, 4
million, so at the moment Marks and Spencer UK retail business is not
so successful at profit maximisation.


Mark and Spencer International retail and franchise businesses have
operated 125 franchise stores in 26 countries. The turnover in Europe
was increased this year 2000 /2001compared to last year 1999/2000. The
turn over in North America (exc. Canada) has also increased compared
to last year. In the Far East sales had also increased by
approximately 4% to 110.1 million compared from last 105.9 million. So
marks and spencer business internationally is very successful compared
to its UK retail business. The way the business can maximise profits
is buy satisfying customers by making more products or services
available like selling financial services life assurance, personal
insurance and ms insurance this are a few services Mark and Spencer
offer customers.


8.0 Increasing sales

8.1 The objective of increasing sales is very important for Mark and
Spencer. In order to increase sales they must meet and satisfy
customer’s wants and needs. Marks and Spencer also have to attract new
customers, they must target the younger market, and this could help to
boost their sales. The chairman and Chief Executive Luc Vandevelde
also want to attract new customers, so that the UK sales increase. I
think that Marks and Spencer are on their way towards being successful
in meeting their objective for increasing sales; I still think that
they are more successful in the international retail. The reason why I
think that Marks and Spencer are on their way towards being successful
is that on the 6th of November they had their Interim results. Marks &
Spencer has reported a 20% increase in profits for the six months to
the end of September. The retail giant made £220m, a figure at the top
end of analysts' expectations. The profit boost reflects the trading
statement released by M&S last month, which showed an overall rise in
sales of 2.8%. Although the figures do not cover October, chairman and
chief executive Luc Vandevelde said customers seemed to be responding
positively to the changes made by his management team.

9.0 Market Leadership

Marks and Spencer also have the objective of gaining market
leadership, the chairman

And chief executive Luc Vandevelde said that he’s company will aim for
this in every category in which he trades, but they must meet more
demand from the customers, in order to be competitive. Marks and
Spencer has not achieved its objective to be successful in market
leadership, I think it will take some time for marks and Spencer to
recover back to be market leadership; they are improving the way they

Here is bar chart showing the category of market leadership by Marks
and Spencer



Marks and Spencer also have an objective for providing high quality
service. They are also well known for their quality. Marks and
Spencer claim that no one cares more about quality it is said in their
annual review report. I think they meet their objective for providing
high quality service, e.g. in their Milton Keynes Store. Most of
their customers that visited Marks and Spencer were happy with the
service on my survey, but I noticed from my own personal experience
some stores were more inviting than others by the display put on at
the entrance of the store and were more efficient and helpful. Marks
and Spencer are meeting their objectives for high quality service in
Milton Keynes and the West End branch in London.

10 Growth

10.1 Growth is an important objective of marks and Spencer. Many
businesses pursue growth as their main objective. Business people
argue that the firm must grow in order to survive; failure to grow
might result in a loss of competitiveness. In the U.K. retail Marks
and Spencer have 303 stores at the end of March 2001. This also
includes three outlet stores, which opened during the year. Marks and
Spencer also has their franchise business, which operates 125 stores
in 26 countries. If Marks and Spencer are able to grow, they could
dominate the market, in the future it may be able to enjoy some
monopoly power and raise its price. If they do well they could be
able to exploit economies of scale, if they grow large enough. I
think that Marks and Spencer are successful in growth, and also think
that they are meeting their objective. The number of people they
employ can be used to measure the growth of Marks and Spencer also at
the end of March 2001 it had a selling space of 12.4M sq. ft.

11 Rewarding Shareholder


In order to reward shareholder, marks and Spencer have to increase
profit, if there is a failure to make profit, then it leads to loss of
confidence in the business, this is particularly among the
shareholders that is why, it is important for them to keep the
shareholders happy. The chairman and executive Luc Vandevelde say
"while providing a more appropriate capital structure by returning £2
billion to our shareholder." If Marks and Spencer can return £2
billion to their shareholders, then I would say that they are
successful in meeting their objective. The way Mark and Spencer
shareholder receive their shares, is by being given yield this is the
rate of return to the shareholder paid in the form of dividends, so
the higher the yield, the more money the shareholder earns. According
to the business magazine the economist in November edition. Mark and
Spencer is still one of the richest companies in the UK. The company
highest share price in October was 314p the lowest was 186p.Marks and
Spencer also shutdown it’s underperforming Direct clothing catalogue
business. Recently the first part of a sale and leaseback of 78
properties was announced, raising £348 of the £ 2 billion earmarked
for the return to the shareholders. Shares and 21 B shares.

Shareholders can have their B shares redeemed for 70 pence each in
cash on 25 March 2002.Alternatively they can retain their B shares on
which they will be entitled to a dividend of 75% of 6 months LIBOR
until such shares are redeemed.

The next opportunity for shareholders to have their B shares redeemed
for 70 pence each in cash is September 2002 and then every six months

M&S said the return is conditional upon the approval of shareholders
and the High Court.

Commenting on the announcement chairman and chief executive Luc
Vandevelde said the return of capital "will enable us to improve the
potential for a faster rate of earnings growth and create a more
efficient balance sheet structure."Our objective was to treat all
shareholders in the same way. The proposals achieve this and give them
a choice as to when to receive cash."M&S said shareholders would be
sent a circular by Feb 4 setting out in full the proposals. The return
is dependent on shareholder approval at a Court Meeting and an
Extraordinary General Meeting, both of which will be held on Feb 28.

M&S originally announced its intention to return the £2 billion to
shareholders by the end of March 2002 on March 29 2001

12 Structure of Business

12.1 In the organisation structure a business must take account of the
two factors the management hierarchy and the span of control.

The organisational structure of Marks and Spencer is very important.
If they have a clear and effective structure this will enable them to
meet their objectives for example increasing sales, if they have a
poor structure this will lead to failure to meet their objectives.
The organisational structure for Marks and Spencer is tall; this
business has 303 branches in the U.K. The company also has 125
franchise stores in 26 countries. Marks and Spencer also has a tall
hierarchy, the hierarchy of this business is the levels of management,
and this can be done from the lowest to highest rank. It shows chain
of command within the organisation the way authority is organised.
The information and orders passes down to all levels then are passed

Here is a tall structure below:



There have been a few changes, in staff and the way the company
operates since May 2000. Marks and Spencer has had four new directors
have joined, they are as follows: Kevin Lomax and Tony Ball, joined as
non-executive directors and David Norgrove and Roger Holmes as
executive directors, they have also had seven directors leaving the
board, so Marks and Spencer have changed their team to restructure to
the U.K. retail, so that they can increase their sales. In this
business sometimes having a tall hierarchy can tend to be a
constraint, because the fewer levels tend to improve decision making
and communication. Marks and Spencer are a multinational company,
which also used to own Brooks Brothers and Kings Super Markets.


The culture of Marks and Spencer plays a big part in the company; this
is very much concerned about the way in which people in the
organisation interact with each other. If people did not interact
well with each other, this could be bad for decision making; this
could also lead to poor decision being made. Marks and Spencer have a
positive culture.

13 Functional Areas

13.1 The main functions of Marks and Spencer are as follows: -

- Marketing and Sales

- Human Resources

- Finance

- Design and Production

- Administration

- Research & Development


Marketing is about meeting the requirement of customers successfully
so that marks and Spencer can meet a range of objectives, for example
increase sales. Consumers are of vital importance. If Marks and
Spencer want to increase their sales they must make sure that they are
satisfying their customers. Market research is vital because this
could be very important in a market with changing trends, such as
fashion and clothing. The way Marks and Spencer finds out about market
research is by asking people if they like a product and by doing
surveys and questionnaires. One of the marketing objectives is to
target a new market; this could also be the younger market or the
older market of people. If Marks and Spencer have good marketing it
helps managers to improve the performance of their part of the
business and to meet most of the basic objectives in profit and sales.


Promotion is technique design to increase sales, such as money off
coupons, free samples and competition. Advertisement can also be used
via the media, which are intended to inform or influence and use the
power of persuasion to the people who receive them. This could
increase the amount of people who shop at Marks and Spencer; this
could also helps to meet the objective of increasing sales. Selling is
also one part of the marketing process. Before selling their products,
this business carries out a range of activities, which take into
account consumer preferences. These include market research the
testing of products on consumers and the design of products.


Public relation (PR) is one of the organisation’s ways to attempt to
communicate with groups that form its public; this could include the
government, shareholders, employees and customers. The main aim to
communicate is to increase sales by improving the image of the firm
and its products. Public relation can be used to turn around the way
people think by making a positive image of Mark and Spencer. Public
relation is a long term, so it might take some time for the
organisation change the way people think of this company, this is also
external force so there would be no control over the way people
think. Marks and Spencer have used public relation by donating to
charities and helping children by introducing to the concept of good
citizenship and also by helping out many projects which help young and
elderly people with special needs. I have also researched and found
out that Mark and Spencer has been advertising a lot toward the
Christmas period, in newspapers such as the Daily Mail and the Evening
Standard. They have also advertised on national TV as well, I have
noticed this in the start of November 2001.Marks and Spencer have also
used public relation on their TV advertisement by using famous
celebrities such as Zoë Ball the TV presenter and the famous
footballer George Best. This Christmas Marks and Spencer have also
offered free delivery on all internet orders to increase their sales
this Christmas will be very important for them to get back more
customers to shop at Marks and Spencer. David Beckham is close to
joining forces with Marks & Spencer to launch a new and exciting range
of casual clothing for boys. The fashion range, featuring
co-ordinating tops, bottoms and accessories, will launch exclusively
in Marks & Spencer stores in the autumn.

David will work closely with the talented Zip Project* in-house design
team to create an exciting collection of separates for boys aged
between 6 - 14 and will lend his name and image to the range. This is
the first time Marks & Spencer has teamed up with a high profile
sportsman in this way.

David Beckham is enthusiastic about the prospect of working alongside
Marks & Spencer. He said,

"For some time now I have been enjoying the creative side of my
commercial work and when Marks & Spencer offered me the opportunity to
actively assist in the design of clothing for youngsters, I was
delighted. I want to help create the kind of clothes which I would
have wanted to wear when I was younger."

Michele Jobling, Managing Director of the Marks & Spencer Zip Project,

"David Beckham is the perfect icon for this boyswear range. Not only
is he the number one sporting hero for all boys from the age they
begin to kick a football, but he is also a great style icon and role
model - we are thrilled to have him on board. We are confident that
boys will want to wear our new collection because of its great style
and look, and parents will love it for its quality and value."

The ten million customers who shop in Marks & Spencer stores each week
will be able to buy the new collection from September.


The human resources function involves the management of people. The
personal department looks after the welfare of worker of the
workforce, and is responsible for such things as recruitment,
selection, training, health and safety, equal opportunities, payment
systems and work disputes. The welfare of worker of the workforce,
this is concerned with looking after staff at work and there needs.
This also helps the staff to work well. When staff work well, this
increases productivity.

In these business human resources is vital, if the business is to be
successful. The equal opportunity is about giving every person the
same right, no matter who you are. In order for Marks and Spencer to
meet its objectives for increasing sales, it must meet the
organisations aim successfully; this can be identified easily by means
of using people in the most effective way according to their skills.
Training and developing staff is also important to Marks and Spencer,
so that staff can offer a high quality service to customers, it is
essential ensure that staff are fully effective in their jobs and able
to achieve their highest potential. Marks and Spencer aim to provide
continuous self-development on all staff. When staff do work well this
help the business to work well and meet it objective by selling
products and services.


The finance function is about keeping a record of all financial event
that have taken place in the business and when they happen and to
provide financial summaries of what has happened, this could be e.g.
balance sheets, accounts are also used to keep track of the money,
paid into Marks and Spencer and records must be kept of all debtors
and creditors transactions. The payment of wages and bonus pay and
pensions are also carried out from the finance function. The finance
function is also used to reward shareholders that invest in the Mark
and Spencer. The finance function should be combined effectively in
order for this company run well. The finance function help the company
out when it wants to expand buys building new stores in different


Design and production is important function because it order to meet
objectives for increasing sales, the design must satisfy the customers
of Mark and Spencer. The production is responsible for making sure raw
materials are processed into the finished good effectively. The new
designs can be used to attract new customers to Marks and Spencer. In
January 2001 Roger Holmes, Managing Director of UK Retail, joined the
company, he appointed new design talent to deliver the clothing and
traditional customers demand, as well as appeal to younger customers.
Now designers use days computer aided design, this is an interactive
computer system, which is capable of generating, storing and using
geometric and computer Graphics. A wide range of designs can also be
shown on the computer screen. CAD systems handle repetitive work,
allowing the designer more time to concentrate on creating the
designs. The designers must make sure to consider the colour, size
appearance, shape, smell and taste of the products. Many of Marks and
Spencer consumers would not wish to be seen wearing poorly designed
clothes that are why good designs should be produced to help the
company sell more products and increase profits. If more people find
that Marks and Spencer are now producing good design that satisfy
them, then more people would tend to shop their this could also help
to increase market share by selling more clothes and products. A
product needs to be designed to satisfy the needs of the customer;
thus quality design requires close collaboration between the provider
and the end user, the customer. Only when we are confident that a
design meets the needs of the customer as closely as is possible,
bearing in mind the idea of 'acceptable cost' from our definition of
quality, do we have a quality design.


Administration function takes care of the paper work of the company it
also deals with communication, enquiries, messages and producing
documents for Marks and Spencer is mostly done in the head office. In
the UK Marks and Spencer head office is based in Backer Street in
London. Administrator are very important to this business, they deal
with problems of customers or enquiries. The Administrators also
service the work of the organisation. Administration is essential,
with administration the business would not be able to run smoothly or
function and there would be many problems if there were no one able to
deal with the company paper work. The central offices and head offices
are responsible for controlling key aspects of Marks and Spencer
paperwork. This department might handle the filing of materials, the
company’s mail, word processing and date handling facilities. The
modern office focuses on the management of work through information
technology and communication systems. The administration function
sends important information to customers like their orders and their
investment in shares that the person has invested; they also keep
their customer update on what going on and what’s new to offer them.

14 Management styles and culture


The management style is the pattern of behaviour that he or she shows
in carry out a management role over a period of time the most common
management styles, are as follows:

- Autocratic

- Consultative

- Democratic




Autocratic management style is one where the manager is used to giving
instructions like telling people what to do rather than asking them
for their options. The manager is the only person contributing to the
decision- making process. This style of management is more typical of
UK management between 1970s and 1980s, although you are sure to find
it today. A number of managers who started up with this approach find
it difficult or impossible to change their ways. They are used to
holding on power and do not understand how the process of
‘empowerment’ might work. The result of this style is that members of
the group often dissatisfied with the leader. This results in little
cohesion, the need for high levels of supervision, and poor levels of
motivation amongst employees.



Consultative managers are ones who seek to consult other people before
making a decision. Alternatively, they will seek to consult people
before implementing a decision. This type of manager wants to draw on
more sources of opinion him or herself. The consultative manager will
have listening skills and also the ability to create the right sorts
of channels to consult other people. In an organisation with a culture
of consultation, there will be a series of mechanisms (e.g.
newsletters, team briefing, suggestions boxes, etc.) that make it
possible to get the feel of the concerns of other people involved in
the decision- making, as well as to draw on their expertise.



This is a third type of management style is the democratic one, which
involves empowerment. This gives individuals and team responsibility
to make decisions, usually within the framework. The team is then held
responsible for the decisions that it chooses to make. The manager
with this style will feel comfortable allow others to make decisions.
The democratic manager will also have to have a good overall
understanding of decisions being made, and will want regular feed back
on results. However, they will be confidants that empower individuals
and teams will use the responsibility given to them wisely.


The management style of Marks and Spencer is consultative so this
would mean, that leader consults with other before decision is made.
There will be a group influence in the final decision; even through it
is made by the leader. For example the marketing department, about
weather to launch a new range of products may consider first than
rushing straight into launching the products. The decisions are all
taken in to account.

The business of Marks and Spencer sometimes might use a mixture of
Management Styles for example Marks and Spencer is consultative, the
business might also be using democratic management style.
Laissez-faire- This is where people are allowed to do what they feel
correct, this is usually associated with medium status (e.g. Managing
director - Marketing Director) probably because they are experts in
their field so they know what their doing.

Marks and Spencer have a variety of management styles they often give
a choice to the management but it depends upon where they are on the
hierarchical scale. Those higher on the scale are autocratic and tell
staff what to do, from the production line to the logistical
designers. Those managers without managers below them are the ones
which have to use an autocratic style because those below them have no
knowledge on the field, while those around the middle are permitted to
adopt a laissez-faire attitude to management, they are high enough in
the company and have enough knowledge to use the style properly and to
its maximum potential but the shareholders always have a eye on what
there doing with any big decisions having a democratic vote on the




This is the set of beliefs and attitudes of both employees and
management that helps to influence decision making and behaviour with
in the organisation. The simple way of explaining culture is the way
the things are done in a business.


The type of culture of Marks and Spencer is a customer driven
culture. Customer driven culture is where every where in the business
makes a real effort to improve customer service, market research,
employing right people, and training. The business is trying to up
date the technology e- commerce. It also has a positive culture where
staff and workers communicate well. They also regard change as
opportunity than not a treat. I also found they are dynamic, this
where a business is always looking to change the way they work. Always
looking for new ideas. The way I have noticed this is by changing the
displays to make it appeal more to customers.

16 how quality assurance and control systems contribute to added


Marks and Spencer are well known for high quality goods. They aim to
satisfy the broad majority of people with appealing superior quality
products at attractive prices. They have been creating exclusive
products for this broad audience, such as a leather coat for women,
which they introduced last year. The coat was fashionable high-quality
coat retailing at £199. By Christmas they where selling nearly 4000 a
week yet every customer they asked felt her leather cost was very
special. And this was Marks and Spencer aim – aspiration to quality at
great value.


Quality of Conformance

The closeness with which the manufactured product or provided service
meets the specifications of the design. Overall quality is dependent
on both quality of design and quality of conformance. If Marks and
Spencer have a quality design which we do not conform to, this will
not satisfy the customers needs, alternately if they conform closely
to a poor design again overall quality will be poor.


Quality Assurance (QA)

This is used during and after the event, so that it can stop faults
from happening into in the first place. Quality assurance is concerned
to make sure products are produced to best standards. The aim to
produce with zero defects. Quality assurance is the responsibility of
the workforce, working in cells or teams rather then an inspector.
(Although inspections will take place) quality standards should be
maintained by following step set out in a QA system.

Quality Assurance is concerned with the procedural aspects of assuring
quality. As such it requires that quality systems are designed and
implemented to effectively control quality of production continuously,
and that the company is seen to be operating such control by its

In order to operate such systems it is usual for a company to create a
Quality Assurance department / function within its organisation. At
the head of which a Q.A. manager ensures via a staff of inspectors
that procedures / systems to assure quality are maintained and adhered
to within the company through all stages of operation - from design,
development, production, sub-contracting, through to delivery. Such
systems often involve sample inspection of raw materials,
work-in-progress and finished goods to ensure conformance to
specifications. As such they also generate documentation, which must
also be maintained, including in most organisations the Quality
Manual, which details all the companies’ quality systems.

The prime standard for such quality systems in the UK, was formally BS
5750, and is now ISO 9000. A company which wishes to receive ISO
certification must convince external inspectors that it has in place
procedures which continuously assure the quality of its products from
design through to delivery and subsequent service. The ISO certificate
is therefore a valuable standard to achieve; particularly for
suppliers to other business who demand such ISO certification from
their suppliers.


Quality Control

This is concerned with detecting and cutting out compoments or
products that fall below standard. This take places after the products
are produced. Quality control is curried out by quality control in
spectres. Inspections and testing are the common methods of carry out
quality control. Control system in the business is how does the
business achieve and ensure quality.

Quality assurance and quality control in very important for Marks and
Spencer, in order for Marks and Spencer to sell quality products the
business must meet the quality requirement and customers. One of the
main prime concerns of Marks and Spencer is to convert inputs
materials into output (finished goods and services) to satisfy the
needs of customers. Quality assurance and quality control helps to
Adding value is then added to products and services during they are
being produced, adding value to a product simply means making it more
desirable to the final customer, this is so customers are willing to
buy more products at higher prices. So value added is the difference
between the cost of producing a product or service and the selling
price. Some business employ inspectors to make sure the products are
being produced to quality standards; this could often put pressure on
staff and could be bad for the staff morals. Marks and Spencer also
train staff so that they can work well to produce goods and also check
that it meets quality standards.


100% Own Brand: The Company will return to selling only own brand
products and brands exclusive to Marks & Spencer so it can guarantee
customers the quality, value and service they have come to expect.
Central to the recovery plan is the delivery of significant
improvements in product appeal; availability and value thereby
rebuilding the relationships with core Marks & Spencer customers.

17.0 Alternative methods of quality assurance and control


Total Quality Management

One of the alternative methods of quality assurance Mark and Spencer
use is total quality management this goes beyond quality assurance.
TQM is best described as an ethos / philosophy adopted by companies
that place the pursuance of quality at the heart of the organisation
and everything it does. To emphasise what a shift change this
represented from the traditional approach of quality assurance. This
is concerned with creating quality culture so every worker seeks to
delight customers. T.Q.M requires that every employee is devoted to
doing the best job they can, raising the probability of the customer
getting what they want. In order to communicate this spirit of
quality, they promote the idea of Internal Customers that an employee
should see the colleagues he works with or for as customers to whom
they should provide the highest quality service. In order to motivate
staff to provide such quality, employees are shown in training the
importance of their own job in relation to the end product / service,
encouraging them to see themselves as a key link in the 'quality
chain'. In addition, staffs are hired with the appropriate level of
education, experience and more importantly aptitude. During Induction
they learn about the company as a whole and the importance of their
role in the organisation. Short training courses are also given to
introduce the ideas of TQM. To encourage every employee to contribute
to Total Quality they may have also operate 'Quality Circles'.


Quality Circles

Quality circles are relatively small groups of staff who meet at
regular intervals to discuss the work they do and develop ideas to
improve the quality of their work. Management is more often not
represented in such meeting instead control / responsibility for the
meeting is handed over to the workers present. As a result of such
meetings a quality circle will either have the authority to implement
changes to production, or will present their recommendations to

Total difference



Total difference

It should be noted that what one company considers TQM may differ
greatly from the next. What is true in all cases is that the pursuit
of Total Quality is as someone once said 'like walking up the down
escalator', in that companies must constantly seek to move forward in
relation to ensuring quality, even if they are to remain at their
current level of achievement.


ISO 9000

ISO 9000 is another quality system method witch is important to Marks
and Spencer. This service is a reliable supplier of goods and services
to use. Marks and Spencer are well known for providing high quality
good and services for many years, they have also extended their own
quality control procedures into their suppliers’ organisation to
ensure reliability. A reputation for quality is important, but it can
be established only over time. This presents problems for organisation
tendering for orders from new customers. The international standard
ISO 9000 certificate indicates to potential customers that the quality
procedures of the certificate holders are reliable and, by
implication, they are capable of delivering consistently the promised
quality product and service. This shows that Marks and Spencer buys
good and services that meet the quality standards.


Improve the Supply Chain: The Company continues to see substantial
benefits from the reconfiguration of the supply base, being shown in a
Clothing primary margin that is rising strongly. The priorities now
are to eliminate duplication and increase transparency. By
re-establishing closer working relationships with its supply partners,
historically a unique strength, Marks & Spencer will achieve further
improvements in quality, value, product appeal, and availability.


Evaluation of the alternative approach to quality control

Quality control can often be useful for Marks and Spencer, it can be
used to see if the products meet the quality standards, in Mark and
Spencer quality is very important to the business. Inspectors that do
testing the common methods and carrying out quality control carry out
quality control. Quality control this is taken place after the
products have been produced. After the quality control has taken place
the total quality management will take place so the products can be at
it highest quality before the customer received the products. I think
it’s good that Marks and Spencer have quality control because it show
how willing company want their customers to be satisfied with their
goods they receive. The only effete that quality control has is that
the inspectors don’t really do that much most of the time they just
check the people are working and producing the quality goods, plus the
inspector can effete the finance department because the inspector are
just reducing the amount of money of the business by just checking
people are working to quality standards. In the long run it helps the

18 Communication channels



In Marks and Spencer communication is about sending and receiving
information. Employees, managers and departments communicate with each
other every day in the business. In the company, the personal manager
might send a memo to all departments informing them about training
courses that are available.


Good communication is vital for the efficient running of a business.
Company delivery goods may have problems if it fails to given the
exact time of department to its despatch department. Similarly,
problem will also arise if instructions are not clear and goods are
delivered to the wrong address. Effective communication will only
happen if information is sent, received and then understood.


Communication channels

Communication can be along different routes or channels in the
organisation. Sometimes this can be between a manager and subordinate
(vertical) or between two departments (horizontal). As well as this
formal type of communication, information is often passed informally
between department and employees. Information can be communicated in a
variety of ways or through different communication media. These vary
from written methods, such as annual reports, to oral methods such as
discussion, to the use of information and communication (ICT)
technology such as fax machine, e mail or the internet. In Mark and
Spencer they also internal and external communication. There is
vertical and lateral communication this is where information can be
communicated downwards, upward and laterally. Downward communication
has, in the past been used to tell employees about decisions they have
already made, this may be important as it:

· Allows decisions by manager to be carried out by employees,

· Ensures that action is constant and co –ordinate,

· Reduces cost because fewer mistakes should be made,

· Should lead to grater effectiveness and profitability as a result of
the above. There is evidence; however, that the flow of information
upward can help in decision-making.

· It helps managers to keep more in touch with employees attitudes and

· It can alert to manager to potential problems.

· It can provide managers with information that they for discussion
making and gives feedback on the effects of previous discussions.

· It helps employees to feel that they are participating and can
encourage motivation.

· It provides feedback on the effectiveness of downwards communication
an how it can be improved.


Lateral communication takes place when people act the same level
within organisation pass information. An example might be member of
the finance department telling the marketing department about funds
available for a sale promotion. One problem that firms sometimes fase
is that department may become hostile towards each other if they don’t
understand the problems that each fase. The marketing department may
also want funds, but might adversely affect the firm’s cash flow. The
basic communication process involves the transmitter (the sender)
encoding a message (i.e. putting the message and the information into
a form that can be easily understood).

The transmitter then chooses the communication channel that he wishes
to use in order to send it to the receiver (the target for the

On receipt of the message, the receiver will decode it (i.e. interpret
what the message is conveying) and act upon it as necessary.

There are a number of communication channels that the transmitter of
the message can use to send the message to the receiver. The choice of
communication channel will usually depend on the type of stakeholder
that the message is being sent to (i.e. whether the receiver is an
employee, a customer, or a supplier).


Formal/informal communication

Within Marks and Spencer there are both formal and informal channels
of communication. Formal communication are recognised and approved by
employers and employee representatives. An example of formal
communication would be a personal department giving notice to an
employee about redundancy. Informal communication channel can both
help and hinder formal communication. Information that is communicated
through the grapevine may become distorted. This might, in extreme
conditions, because industrial relation disputes. However, the
grapevine can be acknowledged by management and actively approved of.
Rumours, such as of a launch of a new product by a competitor, can be
useful to a business.

Research has shown that effective communication requires both formal
and informal channels.


Internal and external communication

Internal communication is what take place inside the business of Marks
and Spencer, while external communication takes place out side the
business of Mark and Spencer and the out side world. Internal and
external communication has both been transformed by rapid development
in information and communication technology. Mark and Spencer have:

· A linked internal communication system an internal network.

· Links with customers a system for e-commerce (B2C) business to

· Links with other business e-business (B2B) business to business

Together, these links create what is called the networked economy,
which vastly increases the potential of business to connect with
employees, customers, other business, shareholders, etc.


Internal communication

This take place within the business of Mark and Spencer, the three
main ways of communication is verbal, written and electronic.


Verbal information is communicated in face to face interaction,
through telephone messages or recorded messages using answering
machine and voice mail. Although verbal information can be obtained
quickly, it often needs backing up in a written form. For example,
when you communicate an important message to a work colleague he or
she also might say could you email me about it or please can I have it
in writing.


Written information will cover a range of paper documents that are
exchanged within Marks and Spencer (including memos, letters brochures
and annual reports, etc.) written information takes time to process
and often requires extensive filing and distribution systems. Most of
written information will take place in the administration department.


Electronic information is rapidly replacing other forms of
communication. For example a stock list can be transferred
electrically from the supermarket to its head office. Nearly all
networks have an email facility, and this is used to send documents in
electronic from around a company.


External communications

Mark and Spencer need to communicate with a range of stakeholder,
including shareholder, customers, government officials, suppliers and
the community. A range of different external communications media can
be employed to communicate with these groups.


Communication with groups outside the business of Mark and Spencer.
These communications perfume a number of functions:

· 19.5 A public relations function to present a good image of the
company reports and advertising materials.

· 19.6 An information function to provide various grouping with
essential information about the company (e.g. tax records to the
inland revenue, hours of opening for customers, detail of supply
arrangements to suppliers, etc)

· 19.7 A transparency function today, its is often important that
outsiders can see what is happening inside the business so they know
the company is carrying out its business in a true and fair way (e.g.
by providing environmental reports and audits, ethical reports etc.).


There are many types of External communication that marks and Spencer


The Telephone

This is one of the most frequently used form on external verbal
communication is the telephone. It’s great because it’s quick and
allows people who would find it difficult to meet and converse. The
telephone may be used for inquires or contacting someone. There may
also be a telephone answering machine that will save messages. Mobile
phone my also be used mad for communication on the move by Marks and


Business letters


The business letter is used to inform someone such as making
arrangements. A well-written business letter conveys its message while
maintaining goodwill. If a letter is sent promptly, is well set out it
will get message across. In Marks and Spencer letter head its creates
a good impression, particularly by going for an eye-catching heading
and layout. The administrative staff on A4 paper will often do the
business letter. The business letter will often have a heading or
letterhead and a reference and date, it will also include, the
subject, also it will start with Dear Mr/Mrs and would usually end
with Yours sincerely



This is another form of external verbal communication is an interview
with someone from outside the business of Mark and Spencer who may be
interested in the business e.g. press, radio, or television. Part of
the public relation strategy is that in such circumstance is to build
up a positive perception and image of the business. Interview may also
be taken place to recruit new staff for the business.


Electronic Mail

This is also alternative to writing letters and contacting people such
as email. Email can be sent through an Internet service provider such
as e.g. AOL the sender forwards documents to the receiver’s email
address. When the receiver logs on to the computer system can then
receive the message or file. The advantage of email is that:

· 20.4 That it is faster than ordinary mail for Mark and Spencer to

· 20.5 You don’t have to print the message or put it in an envelope
and post it.

· 20.6 It maybe a better way of communicating if the receiver is on
the Internet.


Web site

Mark & Spencer have their own web site, which is Perhaps this is the most dramatic
increase of electronic media for external communication. This may be
used for purposes of public relation activates. It also allows people
contacting them and also allows people to shop online.

21 The impact of ICT on internal and external communication

There has been development in technology have greatly the way Marks
and Spencer business communicate with each other. It is now possible
to deliver instantly messages, over great distances and to a number of
people at the same time via variety of electronic media.


Lap top computers

The development of portable computers mean that Marks and Spencer
business people can work, in different locations to their office. They
allow people to continue working during train journeys, for example,
and to e-mail text and image to other via satellite link. They prevent
working time from being wasted. They also have the advantage of
immediate sending and receiving of information at a variety of
locations. Some lap top computers have to be plugged into a telephone
terminal to receive e-mail, which can be a problem.


Impact of ICT upon internal communication

There is a big impact of ICT in internal communication; it has
transformed the way Marks and Spencer works by bringing new technology
to the business. In the administration department in head office
computers are used to produce reports, letters, memos and databases.
Networking is also used linking together more computers to allow
facilities and information to be shared. This has the effect of
decentralising information and communication so those managers have
more information upon which to base their decisions. A computer
network may be specifically developed for almost any type of
application. A local area network (LAN) may be used to connect
computers within a single room, without the use of telecommunication
links. LANs may be used to link to a file server, who is a permanent
date store that provides files and software for other PCs and also act
as a storage base.

ICT can be used in Marks and Spencer Business by teams of people from
different functions, working together to achieve the aim of the
process. In a transformed business, people involved in particular
processes are given more freedom to make decisions and have more
information at their finger-tips by virtue of information and
communication technology. Instead of having to get permission from
their line manager, they are allowed to make more important decisions.
Senior managers then become more concerned with external matters than
running the internal system. ICT has a very important role to play.


Groups working together in a team will need to share information, and
computer terminals of different specialists are linked, so that
information is available to all. The benefits are a cost of reduction
as a result of simplifying the workflow. The other benefit is the
improved responsiveness to customer needs. Front-line staff is given
powers to act rather than passing problems up to a line managers.
Improved job satisfaction can result.


It’s likely that ICT will have the same sort of impact in transforming
production systems on a worldwide scale. As the Internet expansion
increases, so too will the knowledge revolution – leading to knock –
on effects that have the potential to transform the business in new
and unforeseen ways.


Information and communication processing systems and their application
influence the way in which the business operates and compete at all
levels of decision making. Given the vital role it’s essential
constantly to appraise the effectiveness of the systems to ensure they
provide the maximisation possible benefits for the business.


Marks and Spencer Creates Contracts Management System with Microsoft
Windows NT


Marks and Spencer is a leading high street retailer with three hundred
stores in the U.K. and more than three hundred stores worldwide. Marks
& Spencer makes use of many third party suppliers to provide it with
products. This involves managing a wide range of contracts with
detailed specifications, many of which relate to seasonal goods that
need to be prepared for up to a year in advance.

The challenge was to replace a manual contract management system with
an application sitting on classic three-tier architecture, matching
Marks & Spencer's strict business criteria. In a rapidly changing
retail environment Bob Harris, Corporate Technical Architect, had to
ensure that any system development was flexible enough to accommodate
future developments



Significant business benefits can be expected from the completed CMS
project, such as streamlined communications with suppliers and a more
efficient process for contracting products in time to match seasonal
market trends.

Total cost of ownership is always an important aspect of IT
development. Features of the system such as interoperability of
existing systems and hardware, user familiarity with Microsoft
interfaces and the inherent scalability and flexibility of a DNA
system all drive down costs.



The success of the CMS project on the Microsoft platform has
vindicated the bold steps Marks and Spencer has taken as an early
adopter of Microsoft technology. The company has matched a forward
thinking IT strategy with a pragmatic approach to systems usage and
development. One example of this approach is the continued use of the
Oracle database, where a compelling business case has to be developed
before platform migration occurs. The use of Microsoft DNA technology
will allow these systems to evolve over time, without the need to
replace everything in one go. Indeed Harris has a vision of
heterogeneous technologies integrating to form, what he terms, and a
flat application space; where developers develop applications or
business logic on the most appropriate platform and integrate them
into this continuous space. Marks and Spencer will work towards an
e-commerce capability. E-commerce will be focused initially on the
business-to-business space, which is where CMS fits in.


Impact of ICT upon external communication

There has been a bigger impact in external communication such as
E-commerce. There is also E-business that allows Marks and Spencer
contacts other business such as their suppliers. Email also used as
external communication and telephones.


EDI or electronic data interchange - A system used to automatically
send orders and invoices between computers. For example, stock at a
supermarket may be ordered automatically when stock levels become low.
This allows users to exchange business documents and information such
as orders and invoices directly through the telephone network and
other, more sophisticated electronic communication systems.


How Organisational structure, culture and management style interrelate
in Marks and Spencer


Marks and Spencer have a tall structure with many staff working
together also communication and responsibility goes down the line of
management, to help make sure the company runs smoothly. The company
also has a customer driven culture with is very positive to try to
meet customers needs. Management style is very useful because manager
is able to make important discussion and are able to consult people
before implementing a decision or sometimes they may also use a
mixture of management style like they may be democratic, this is when
individual teams work together for discussions being made by them.
The structure, culture and management style are all used to improve
and help the way the company works towards meeting its objectives such
as increasing sales. Staff might also feel they can work together to
achieve their targets to improve sales and help the company recovery
back, may be the company could increase their market share at the
moment Tesco are doing very well they are at the for market share.


Evaluation of impact of ICT on the performance of Marks and Spencer

Marks and Spencer have used ICT in many ways in the business such as
internal like for administration used for written work and annul
reports, also external like email and the company web site. ICT is
also used to design products and also can be used for market research
and it also used to design the logo of Marks and Spencer, which is
used on their bags and products and services. ICT has had a big
impact on the company, shareholder are able to get information on the
shares from Internet and from the company. The business ICT
performance has been doing well also the business has been showing
signs of improvement also sales has increased and also the market
share for food and clothing has showed signs of improvements. The
business is on its way for recovery.

E-commerce is a big advantage for Marks and Spencer that allows people
on line to shop on line and buy product and services. On the 6 of
November Marks & Spencer has reported a 20% increase in profits for
the six months to the end of September. The company said the initial
response to its Per Una range of womenswear had been "very positive",
although it is too early to see this in the recent figures. Mr
Vandevelde told financial website Cantos that M&S had not seen the dip
in consumer confidence reported by some UK retailers. Marks & Spencer
has continued its recent revival of fortunes and announced better than
expected sales figures for the crucial Christmas period. Sales in
clothing, footwear and gifts jumped by 10.4% - nearly double what
analysts were forecasting - while food sales rose by 5.4% it looks
like Marks and Spencer are doing well. I will be showing how Marks and
Spencer have been performing by showing they results of their sales
and market share


The use of computer in the business

Today the use of computer based training and education covers a very
spectrum of uses. This essay will explore the use of computer-based
education and training in the area of staff training. The advantages
and disadvantages of this computer-based training will be discussed
and the facilities available will also be explained

Many companies now use computers in staff training and education.
Computers are used as both a resource to present information and as a
tool to develop practical expertise in staff.

Computers can be used as a resource to present information because of
presentation programs such as Microsoft PowerPoint. This presentation
package can be used for basic training such as an employee induction;
the presentation could give information about the company and what the
employees will be doing.

Computers can also be used as tools because they can help develop
employees practical skills e.g. an employee who would be working with
the companies database would probably be trained on a “dummy database”
this would allow the employee to build up practical skills.

Among the many benefits of computer-based training the major benefit
to an employer is the reduced cost. As they do not have to send people
away on courses which means they don’t have to pay for travel or
accommodation. So the investment in a suitable training scheme often
pays for itself, as the computers are already available. The only
drawback is that the computer based training courses can be impersonal
and the employee may have been computer literate to do the course.

One of the other advantages is that staff can train when they like at
there own desks on the computer. The downside to this is that a
computer, which cannot explain to the employee what they did wrong
when they make a mistake, although some training packages may be able
to do this to an extent, is teaching them.

Computers can also be used as simulators this could be simulating an
aircraft to train pilots or simulating a database to help train staff
that will be using it. In either scenario real life situations are
simulated and the trainee can learn without the danger of performing
live experiments. In the case of a pilot they can be trained to deal
with dangerous situations such as hazardous weather conditions with no
real danger involved. However simulations can still not replace real

The previous text shows that the major advantages of computer-based
training for employers are a reduction in cost and an increase in
efficiency. This is because they do not have to send staff away on
training courses because they can use the hardware the company already
has to train them. The major benefit to the people being trained is
the convenience; as they do not have to travel away and can learn in
there own time. They can also get immediate feedback on how well they
are doing.


Impact on People

While recognising the imperative to streamline Group operations, the
Board understands and regrets the painful effect this will have on the
people involved. In keeping with the Company's principles, it is
committed to consult fully wherever restructuring takes place, with
redeployment as the preferred option where possible.

The total number of roles directly affected by the changes announced
today is estimated to be as follows:

Business Area

Potential Reduction in Roles

Continental Europe




Head Office




*Includes 200 related to International and Direct and 150 likely to
result from other reviews currently underway.


UK: Sales (Inc VAT)

Sales performance for 9-weeks and 51-weeks to 24th March is given

Like-for-like sales are shown in brackets and have been estimated by
comparing total sales, with new and developed stores excluded.

9-weeks to 24th March 2001
% on Last Year

51-weeks to 24th March 2001
% on Last Year

Clothing, Footwear and Gifts



Home Furnishings


















*The effect of Mothers Day this year (against no Mothers Day in the
comparable period last year) has been to add 1.2% to the aggregate
sales percentage change for the 9 week period.

International: Sales (in local currencies), including franchises

International sales performance for 9-weeks and 51-weeks to 24th March
is given below.

9-weeks to 24th March 2001
% on Last Year

51-weeks to 24th March 2001
% on Last Year

Europe (exc. UK)



The Americas:
Brooks Brothers Inc
Kings Super Markets



Far East





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