Background of the Problem
Discuss about the Journal of Innovation and Entrepreneurship.
The case study shall be analysing the leadership strategies in relation to the design leadership adopted by the UK based retail giant John Lewis Partnership. The case study analysis shall also be laying emphasis on the policies implemented by the company for persisting in the market. Moreover, the background of the problem related to leadership strategies and the reflection of the issue on the retail economy shall be presented. The issues faced by the customers and employees of the retail company have been highlighted in the case study. Moreover, the sudden slash of employees in order to meet the loss margin also gives rise to design leadership of the company, as is also a part of the discussion in the study. Further, a detailed description shall also be presented on the on the effects of the issue of leadership due to the presence of the social media websites. The models and theories related to the case study of John Lewis Partnership and the current research scopes and gaps in the scenario shall be portrayed in the case study analysis. Further, a brief recommendation on alternate pathways shall also be portrayed in it.
In order to maintain a consistency in the market, a company has to follow several norms and policies of leadership. Without a proper leadership structure, a company can never sustain or might even not create happy employees. As per Bolman and Deal (2017), John Lewis is a UK based Retail Company and is also one of the pioneers in the retail industry of Britain. Since the company’s leading design management lacked a proper structure, the company started facing a lot of hardships for existence in the British market. The physical stores of the company started seeing a massive fall in their sales after since the rise of online marketing and shopping. Similar to other retailers, the company also started facing troubles in attending more footfalls. As per Goleman (2017), the profits of the company too collapsed during the starting of the financial year. The profit margin of the company fell up to 31.2 percent during the starting of the year. This issue was created due to the sudden change of the Managing Director of the firm and the focus of the new Managing Director on the online platform. As opined by Ward (2016), the company had gained its 30 percent of the total profit from online sales but presently it aims at creating 50 percent sales through the online platform. This, in turn, shall again decrease the profit margin of the company as it generates huge margin in the physical departmental stores due to the fixed price policy. As per Antonakis and Day (2017), the design leadership again remains improper because the company did not do a proper research prior to the decision.
Leadership Strategies of John Lewis Partnership
Though the company aims at fulfilling its 50 percent sales through the online platform, it lacks in the operation of the web platform. The customers of the company regarding a breach of the website management and monetary transaction were raising many complaints. As per Renz and Herman (2016), a customer reported that he found 465.37 GBP missing in his John Lewis Partnership MasterCard and the bank statement reflected ‘adjusted’ and it was done by the company itself. After several repeated queries, the customer service department of the company replied that the amount was transferred into a Barclay’s account of the customer, which the customer did not even possess. As opined by Johnston and Marshall (2016), it was again said by the company that the amount had been transferred to the account of a different person by mistake. The company also said that it would take almost four working days for the amount to reflected back into his account. However, even after the said tenure by the company, the amount did not reflect back into his account. The company lacked in design leadership in this field, due to improper communication with the customers. Fairhurst and Connaughton (2014) state that the company apologized for its mistake and even promised to pay 100 GBP as compensation to all the customers who faced inconvenience. This event has laid a deep impact on the leading design of the company. The boost of the online platform that was planned by the company saw a downpour even before the proper implementation. Tourish (2014) state that the leadership design that had to implement innovation rather decreased the goodwill of the company. (Refer to Appendix A)
As per D’Innocenzo et al., (2016), the company had cut the annual bonus of 85,000 staffs, which amounted to a total of 74m GBP. The company claims that the workers of the company are the partners of the company and so it is known by the name of the company itself. As per Collinson (2014), to equal the decrease in the profit line of 77 %, the company planned to cut the annual bonus of the workers and make the margin equivalent. Moreover, the annual bonus was cut off for further five more years resulting in dissatisfaction among one-third of the employees. The company adopted this policy in order to avoid paying stress in the customer’s pocket. As per Raelin (2016), due to the tough competition in the UK market and the sudden fall of Pound in the global market, the cost price of several raw materials saw a massive hike. In order to equalize the difference in the profit margin, the company adopted such measure. Herein, the leadership design is affected due to the unplanned cutting of the worker’s salary and continuing it for several more years. As per Gudauskas et al., (2015), the employees are the backbone of a company, so for the well running and sustaining of a company the first and foremost duty of the company should be to satiate the employees.
Effects of Social Media on the Issue of Leadership
The company is also losing its crown in the retail sector in the UK due to massive job cuts and payment below the minimum wage policy. The company has been convicted of slashing 387 employees to prevent itself from the uncertain business condition that is about to arrive according to the company. As per D’Innocenzo et al., (2016), the company was even accused of paying less than the minimum wage policy set by the Employment act 2002 and Trade Union and Labour Relations act 1992. This step also lays a deep impact on the leadership design of the company. For the smooth running of the company, a set of management policies need to be maintained and implemented. Hoch et al. (2016) state lack of the design management lays effect on the design leadership. In the case of the company, they did not implement any innovation or modern procedure that may suggest proper design leadership. Moreover, the events discussed lays emphasis on the design leadership of the company, as the company did not implement any such measures to bring in innovation or modernisation. Further, the sustaining of the leadership through tenure of the period is also lacking in the reflected case of John Lewis Partnership Company. The company failed in implementing strategic and corporate intent for the future of the company.
H0: Effective design leadership has a positive relationship with management of customer base through assessment of customer needs.
HA: Effective design leadership does not have a positive relationship with management of customer through assessment of customer needs.
HA: Innovative leadership design does not have a positive relationship with enhanced employee retention through employee motivation.
H0: Strategic leadership design has a positive relationship with effective technological development within an organisation.
HA: Strategic leadership design does not have a positive relationship with effective technological development within an organisation.
H0: Contemporary leadership design has a positive relationship with strategic management of business operations.
HA: Contemporary leadership design does not have a positive relationship with strategic management of business operations.
The present study involves the active influence of demographic and financial data. Thus, the researcher has given a preference over quantitative information. The aforementioned quantitative data is accumulated from a number of government surveys, newspapers and financial data repositories. However, qualitative data is not entirely discarded for the present study. Semi-structured interview details, case studies, articles from newspapers have helped to form an insight on the scenario relating to design leadership problems. Researcher has preferred the use of a mixed data method, owing to the wider base of concepts that could be covered by the obtained observation (Barrientos and Reily, 2016). The help of keywords in search engines searches the articles over the World Wide Web. Prominent tools for data collection are the public accessible libraries and online databases. The company website of John Lewis Partnership also offered knowledge about the current trends in the company and its troubleshooting procedures. The researcher has avoided the use of primary data in the present study. This is due to the time and budget bound nature of the research.
Current Research Scopes and Gaps
It has been analysed from the leadership issue of the company that these issues lay a deep impact on the sustainability of the company. As per Meuser et al., (2016), the primary issue that has been highlighted in the case study analysis is the breach of the privacy of the customer and the monetary fraud due to some technical issue. The company did not respond well to the complaint of the customer and even did not refund the amount within the promised time span. The leadership theory of contingency had not been followed here to cope up with the situation and respect the qualities of the company’s followers. According to Sotiriadou et al., (2014), the company does not maintain the behavioural theory of learning through observation and maintaining leadership. Such behaviours shall further tend to de-motivate the customers of the company in doing business with them and thus shall result in a fall in the leadership design of the company.
During another case, it cut off the annual bonus of its employees, which was around 74m GBP. the company did not focus on the management of the employees rather it stressed on not paying pressure to the customers. As per Santos et al., (2015), the company thus violated the participative theory, according to which leadership design should implement taking inputs and suggestions of others, in this case, the employees whom the company terms as partners of the company. According to the participative theory, the company did not encourage employee participation in discussions. As per McDonald and Thompson (2016), the design leadership of the company thus does not follow the theories of leadership. In the same instance, the design leadership of the company did not even follow the management theory of leadership. This theory focuses on the supervision and the group performance of the employees.
The company saw a deep loss of the goodwill of the company due to the technical glitches its customer faced. The customers of the company had faced a monetary issue while maintaining a MasterCard of the company. The issue was caused due to the improper maintenance of the company’s website and due to the negligence of the top-level managers. It did not follow the relationship theory of leadership in this case, as it did not fulfil the needs and requirements of the persons associated with the company. As per Leftheriotis and Giannakos (2014), this theory also demands an ethical and moral value in terms of design leadership. The management theory demands proper supervision of the organisation and thus implements the design leadership, but it was not so in this case.
Recommendations
The company’s decision in moving to the online platform for the boost in sales also saw a lack in the design leadership. According to Brooks (2015), the company had started investing a lot of amount on the backend of the online platform. As per Collinson (2014), the company caters to around 30 percent of its customers in its online platform; its aim to cater 50 % of its customer through the online platform is an issue of consideration. El Ouirdi et al. (2015) comment every item being sold online decreases the profit amount of the item due to the huge back-end processes involved. The contingency theory of leadership was not followed in order to maintain an effective and right balance among the needs and requirements of the company and its associates. Moreover, the company failed in following the situational theory of leadership, and according to the theory implementing the democratic style while following the design, leadership would be more effective.
As seen in the observation from the secondary sources, John Lewis Partnership (JLP) has represented reliability and quality since a long time. However, recent breaches in its organisational processes have created an adverse impact on their customer populace. As opined by McDonald and Thompson (2016), lack of a strong central leadership can be responsible for the upsurge in the design leadership issues faced by the retail giant. The revamp of the company website has resulted in multiple technical breakdowns that left direct debits by the stakeholders unpaid. The governing body of JLP have announced the increment of relational customer service taskforce to enhance service quality (Raelin, 2016). The following sections comprehensively discuss the issues that have been recognised in the present study.
As mentioned above, design leadership troubles are not essentially confined in a single sector of an organisation. In case of John Lewis Partnership, the adversities of leadership issues have spread to a number of departments. Brooks (2015) notes the steady fall in the annual sales of the company as e-commerce is draining the rush of clients from high street business. Human resources drive JLP and marketing strategies to attract shoppers through their doors, just like conventional chains of department stores.
As seen above, the efficiency, quality and productivity undergo rapid fluctuations when turnover rates are high. The Waitrose branch has also suffered, owing to the disparities in design leadership. As per the survey of D’Innocenzo et al. (2016), 71% employees in JLP state, that they are satisfied with the conditions provided in their present jobs. Johnston and Marshall (2016) note this percentage has relatively reduced from 81% and 87% in the last 2 years. Hence, it can be stated that the workplace environment of JLP has been slowly declining in the span of the last few years. In case of most companies, the records can still amount to influence the stakeholders. However, in case of JLP, the results have proved to mark an era of declination in employee satisfaction. This has been further confirmed by the report of Leftheriotis and Giannakos (2014), who state that the turnover rates of employees have faced a record growth in the last 5 years.
Sustainability of Leadership
Leadership strategies affect the annual sales of a company, owing to the increasing disparities in organisational processes. This is also displayed in the present case scenario, where the overall business of JLP has suffered a setback due to the faults in conventional leadership techniques. Per capita gain in department stores of JLP as well as in its online cartels is facing stagnation in the present state. As opined by Sotiriadou et al. (2014), the operating profit decreased by 10.8% in the last working annum. Similarly, Waitrose supermarket branch faces a struggle to hike their net operating profits up from the meagre 23.4% that the business has achieved last year.
John Lewis Partnership evenly distributes the partnership bonus among its staff (John Lewis Partnership, 2018). However, it is noted that the aforementioned bonus incentive has been lowered from 15% to 11% of staff wages this year (Butler, 2018). JLP has further issues a notice that the profits of the present financial year may be reduced, due to the additional costs of pension and tough international trading. Meuser et al. (2016) predict that profitability is expected to reduce in the range of £270 to £320 million, which is even lower than last year’s net profitability of £342.7 million.
John Lewis Partnership depends on online transactions for generating a major portion of its revenue. Gudauskas et al. (2015) predict the influence of technological issues can act as a major setback to the online sales. The crash of the official website of JLP has caused a 46% loss in the transactional records (Skapinker and Felsted, 2015). This has presented the trade and commerce of JLP with fresh sets of hindrances. This is because the items sold on the e-commerce platforms substantially generate lesser amount of profits. Fairhurst and Connaughton (2014) state the efforts included in fulfilling online orders are more than that of offline deliverables. JLP simultaneously associates large amount of fixed costs that are linked to the maintenance of infrastructures. Thus, JLP is suffering from the lack of balancing strategy in its business transactions.
The above figure demonstrates the conceptual overview of the effect that affected JLP due to the crash suffered by its website. This further symbolises the significant lack of strong organisational design leadership in JLP. As opined by, Hoch et al. (2016) the latest technological advent in the company has incurred a large amount of losses. Large enterprises are in continuous need of hard and soft skills to steer the environment of the business. According to the concept of design leadership, technological aspects should be treated as a complementary to organisational practices in the present scenario. The field of design management can be used in the case of JLP to resolve the prevalent design leadership issues. Rigorous use of a solitary design leadership approach often adversely hinders the flexibility of a company to change with prevalent trends of the market and customer needs.
Hypotheses
However, the experience of the customers fails to show any promising development. In case of organisational leadership, Kogut and Fleck (2017) comment visionary attributes like integrity and communication are critical in large, multipurpose conglomerates. The executives of JLP are lacking in the context of strong team building and design leadership abilities. Hence, they are facing high employee turnover rates that would have been otherwise mitigated by design leadership strategies. As opined by Santos et al. (2015), clients do not feel that their needs are being adequately addressed through the organisational procedures and deliverables. Business representatives of JLP are concerned their personal opinions of customer needs than the actual trend in client requirements. As opined by Renz and Herman (2016), this is making the customer more inclined toward the competitor companies of JLP.
The unmet needs and repetitive production of unsatisfactory products fail to retain the loyal customers. Thus, JLP has to invest a major portion of their budget to attract customers, which further gives rise to multiple problems in cash flow. There is also a lack of organisational training noticed in the staffs, which are responsible for handling client feedback (Parwez, 2017). The employees, owing to their decreased job satisfaction are often impolite in their conduct. Leaders of JLP must acknowledge the concerns of their clients to recognise appropriate rectification methods through social media.
Large organisations are often hindered by extensive leadership conundrums owing to a number of perspectives. In this scenario, the perspectives amount to the issues relating to design leadership and management of John Lewis Partnership. The recommendations suggested by the researcher aim to contribute to emergent leadership skills in multi-sector conglomerates like JLP.
- Adherence to company’s code of conduct to promote customer satisfaction: Effective leaders are responsible for withholding the organisational policies for their employees. Christina et al. (2015) state staff should possess the concept that organisational rules are also applicable to people included in the authority. Social media can help raise the awareness in customer about the brand progress and help to retain their loyalty. (Refer to Appendix B)
- Calculated risk and innovation to increase profitability: Calculated risks are essential to promote an innovation in the company Social media provide an opportunity for the management and marketing of these ideas. Flexible design leadership leave ample amount of room for employees to take calculated risks to promote the progress of a company (Dong et al. 2015). Thus, the directors of JLP must encourage the staff to work on their innovative ideas and take systematic risks. This can give rise to a number of new projects and revenue earners for the company.
- Conflict management to ensure staff satisfaction: Conflict in large enterprises is a common part of the organisational process. Employees are actively indulged in the formulation and maintenance of ideas. Hence, it is possible that conflicts will arise due to contrasting viewpoints (Shukla and Srivastava, 2016). JLP must ensure organisational leaders are capable to implement proper conflict management techniques in their task force. Social media can also be used to promote the satisfaction of employees in JLP.
- Active communication to avoid technological crisis: Communication is critical to achieving organisational and interpersonal goals for both the company and the staffs. As commented by Cox (2016), communication is driven by the action of two or more two-way process. Effective communication is essential to establish strategies, resolve conflicts and address client needs in the e-commerce platforms. JLP should employ experienced technical operators
Conclusion
Thus, it can be stated from studying the above information, successful design leadership is a cognitive approach attained by a variety of organisational attributes. Corporate leaders must be capable enough to recruit, build and retain a competent task force in the organisation to achieve the objectives within the deadline. In order to mitigate the issues of design leadership, JLP should employ a stronger and more capable executive board of directors. In addition to this, new approaches driven by the post-modern theories of bureaucratic leadership and interpersonal communications should be intervened. A limitation of the present study is its time and budget bound nature. Owing to these limitations, the researcher could not employ primary data collection methods to aid the study. However, lack of primary data has been neutralised by critical reflection on the literature and extensive sources of secondary information. Overall, it is recommended that JLP needs to keep its organisational processes at par with the latest technological trends to establish significant business acumen in the market. Hence, problems in corporate design leadership can hinder productivity, reduce creativity and stagnate the growth of JLP.
Reference List
Antonakis, J. and Day, D.V. eds., (2017). The nature of leadership. New York: Sage publications.
Bolman, L.G. and Deal, T.E., (2017). Reframing organizations: Artistry, choice, and leadership. New Jersey: John Wiley & Sons.
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Journals
Brooks, S., (2015). Does personal social media usage affect efficiency and well-being?. Computers in Human Behavior, 46, pp.26-37.
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Fairhurst, G.T. and Connaughton, S.L., (2014). Leadership: A communicative perspective. Leadership, 10(1), pp.7-35.
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Hoch, J.E., Bommer, W.H., Dulebohn, J.H. and Wu, D., (2016). Do ethical, authentic, and servant leadership explain variance above and beyond transformational leadership? A meta-analysis. Journal of Management, p.0149206316665461.
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Raelin, J.A., (2016). Imagine there are no leaders: Reframing leadership as collaborative agency. Leadership, 12(2), pp.131-158.
Santos, J.P., Caetano, A. and Tavares, S.M., (2015). Is training leaders in functional leadership a useful tool for improving the performance of leadership functions and team effectiveness?. The Leadership Quarterly, 26(3), pp.470-484.
Sotiriadou, P., Brouwers, J. and Le, T.A., (2014). Choosing a qualitative data analysis tool: A comparison of NVivo and Leximancer. Annals of Leisure Research, 17(2), pp.218-234.
Tourish, D., (2014). Leadership, more or less? A processual, communication perspective on the role of agency in leadership theory. Leadership, 10(1), pp.79-98.
Online Articles
Barrientos, E. and Reilly, A.H., (2016). Unpacking’Give Back Box:’: A Social Enterprise at the Intersection of Leadership, Innovation, and Sustainability. Journal of technology management & innovation, 11(1), pp.48-54. Available at: https://scielo.conicyt.cl/scielo.php?pid=S0718-27242016000100007&script=sci_arttext [Accessed on: 9/3/2018]
Christina, S., Waterson, P., Dainty, A. and Daniels, K., (2015). A socio-technical approach to improving retail energy efficiency behaviours. Applied Ergonomics, 47, pp.324-335. Available at: https://www.sciencedirect.com/science/article/pii/S0003687014001422 [Accessed on: 9/3/2018]
Cox, J.A., (2016). Leadership and Management Roles: Challenges and Success Strategies. AORN journal, 104(2), pp.154-160. [Online] Available at: https://onlinelibrary.wiley.com/doi/10.1016/j.aorn.2016.06.008/full [Accessed on: 9/3/2018]
Dong, Y., Liao, H., Chuang, A., Zhou, J. and Campbell, E.M., (2015). Fostering employee service creativity: Joint effects of customer empowering behaviors and supervisory empowering leadership. Journal of Applied Psychology, 100(5), p.1364. [Online] Available at: https://experts.umn.edu/en/publications/fostering-employee-service-creativity-joint-effects-of-customer-e-2 [Accessed on: 9/3/2018]
Kogut, C.S. and Fleck, D., (2017). Professional versus family management in fashion retail companies: exploring value-investors’ perceptions. Cadernos EBAPE. 15(3), pp.559-573.Available at: https://www.scielo.br/scielo.php?pid=S1679-3951 (2017)Inability in staff retention000300559&script=sci_arttext [Accessed on: 9/3/2018]
Parwez, S., (2017). Community-based entrepreneurship: evidences from a retail case study. Journal of Innovation and Entrepreneurship, 6(1), p.14. Available at: https://link.springer.com/article/10.1186/s13731-017-0074-z [Accessed on: 9/3/2018]
Shukla, A. and Srivastava, R., (2016). Examining the effect of emotional intelligence on socio-demographic variable and job stress among retail employees. Cogent Business & Management, 3(1), p.1201905. Available at: https://www.tandfonline.com/doi/full/10.1080/23311975.2016.1201905 [Accessed on: 9/3/2018]
Butler, S. (2018) John Lewis cuts staff bonus as profit falls 77%, The Guardian,p. 4. Avai lable at: https://www.theguardian.com/business/2018/mar/08/john-lewis-cuts-staff-bonuses-as-profits-dive-77-percent-weaker-pound-waitrose [Accessed on: 9/3/2018]
Skapinker, M. and Felsted, A. (2015) John Lewis: trouble in store, Financial Times, p. 11. Available at: https://www.ft.com/content/92c95704-6c6d-11e5-8171-ba1968cf791a [Accessed on: 9/3/2018]
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