Strategic Change
Strat. Change, 8, 325±334 (1999)
Graham Beaver
Professor of Business Development, Department
of Strategic Management and Marketing,
Nottingham Business School, The Nottingham
Trent University, NG1 4BU
Introduction
Marks & Spencer, for years held up to
be the very model of good corporate
governance and strategic consistency is
in trouble and recovery will not come
easily.
There was blood on the boardroom carpet at
Marks & Spencer (M&S) following the undigni-
®ed, unprofessional and unnecessary manage-
ment succession that is so uncharacteristic of
this great British retailer. At the end of last year
Sir Richard Greenbury announced that he was
vacating his Chief Executive Of®cer (CEO)
position, pressured by controversy over his
stewardship. The succession was a full-scale
public melodrama in several acts that served to
devalue the company, damage its reputation
and undermine its premier position as the high
street's most respected organization. Apart
from begging the question of whether this
Copyright # 1999 John Wiley & Sons, Ltd.
Competitive
advantage and
corporate
governanceÐ
shop soiled and
needing attention!
The case of Marks
& Spencer plc
testosterone-driven behaviour is the best way
to change the senior management structure in
a blue-chip company, the debacle raises doubts
about the key issue: whether M&S, the very
model of British retailing, famed for its inno-
vative ¯air, can regain its edge against tough
competition. The opening paragraph taken
from The Sunday Times Business Focus page
(1999b) summarizes the unhappy situation in a
nutshell.
A Turkish Bank seized job lots of Marks and
Spencer clothes last week because one of
the retailer's franchise partners had run into
trouble. `At least somebody wants their
goods!' quipped one analyst.
It is not a joke that would have been
made two years ago when M&S was pushing
into mainland Europe and was acquiring
19 Littlewoods stores to further its dominance
of mainstream retailing. M&S is still the biggest
Strategic Change, Sept±Oct 1999
326 Graham Beaver

to turn the organization around. One leading

M&S is still the biggest player retailer is on record as saying that:
on the UK high street
A lot of people failed to see how bad things
have got at M&S. Even if he implements the
right policies starting from now, it could
player on the UK high street and its presence
take Salsbury at least three years to turn
can make or break a shopping centre.
things around.
However, after its worst fall in trading and a
bitter boardroom battle, St Michael's image is
In the longer term, Salsbury will consider
looking shop-soiled and needing attention.
strategic issues such as the overseas portfolio
Peter Salsbury, the chief executive who
and the organizational structures necessary to
emerged last year from the undigni®ed battle
move forward, but for the moment his priority
to succeed Greenbury, has made his ®rst radi-
is to restore the British chain to corporate
cal move to stop the rot. Three board directors
health. His success in that will be the measure
were axed as 31 of the company's top 125
by which he is judged.
executive positions were dropped. Written off
by some before he even got the job, SalsburyÐ
who was Greenbury's favoured candidateÐ
appears to be thinking the unthinkable and
The erosion in competitive
could bring in outside brands to retail in M&S
advantage
shops.
M&S started out in 1884 as a market stall in
The St Michael brand name still accounts for
Leeds, the `penny bazaar'Ðno need to ask the
an impressive shopping volume, with nearly
price. One hundred years on and it has
40% of women's underwear and one in four
become part of the British way of life with
men's suits sold in the UK. However,
some of the most famous doing their shopping
in February 1999 the company con®rmed
there. `I am an enormous fan of M&S; their
fears that pro®ts will almost halve this year.
clothes are superb. They have sent me up
The sales ®gures were also dreadful. Despite
some suits so that Denis can look at them.'
increasing its ¯oor space by 9%, sales in the 15
Margaret Thatcher.
weeks to 9 February were 6.4% below the same
It is a matter of record that for some
period in the previous year.
shopping at M&S is a real tradition as typi®ed
Since its shares peaked in October 1997, the
by the following comments taken from shop-
company has underperformed the FTSE 100
pers at the ¯agship Oxford Street store. `It's
index by 52%. It would seem that M&S has got
where my mother used to buy all my under-
just about everything wrong. The management
wearÐto me it is a total institution.' `I don't live
of the trading campaign in the run-up to Christ-
in this country any more, so that when I come
to Britain, I look forward to going to M&S.'
The company has moved into the nation's
M&S has got just about living rooms, kitchens and personal ®nances.
everything wrong The St Michael brand, which for so long could
do no wrong, is now showing weaknesses in
both perception and position. First, women's
wearÐwhich is such an integral part of the
mas was dire. The company bought too much M&S product portfolioÐhas not been selling
stock, priced it too high and then had to slash well. That was con®rmed recently with the
prices to shift it. By the end of the season its publication of the half-year sales and pro®ts
products were looking tired and uninspiring ®gures. Second, the company was accused of
and shoppers stayed away in droves. Industry deserting Britain when it announced that it
commentators have stated that it will take years would be sourcing more of its clothes abroad.

Copyright # 1999 John Wiley & Sons, Ltd. Strategic Change, Sept±Oct 1999
The case of Marks & Spencer plc
Third, came the boardroom row over who
should run the business, which contributed
substantially to damage the already tarnished
reputation and undermine its market standing.
Many critics and retail specialists attribute
blame to the company's past success for many
of today's problems. It has been widely
Many critics blame the
company's past success for
many of today's problems
reported in the business press, that it has
made the organization inward-looking and
arrogant and as a result has become out of
touch with many of its customers and what
they really want. Furthermore it has failed to
accurately monitor and respond to what its
competitors are doing. The strength of sterling
and the slow-down in retail spending have not
helped, plus the bullish expansion abroad has
eaten into pro®ts. However, there are other
reasons why the brand has lost its edge as
evidenced by the following customer com-
ments recorded just before the run-up to the
Christmas 1998 shopping campaign. `Overall,
quite good value, but very boring this year.'
`The colours are a bit dowdy and everything is a
bit crowded together.' `I think that it is still
great you know: some of the fashions aren't
terri®cally good though.'
This is clearly endorsed by a later comment
from The Financial Times (1999) that states:
An hour walking round Marks and Spencer's
London show-case spring/summer collec-
tion leaves you unclear who was meant to
be there.
A 100% man-made camou¯age-patterned
shirt: a long sleeveless dress, the colour
of which descends from cream to brown,
patterns with brown leavesÐyesterday's
offerings show what happens when a
company tries too hard to be trendy . . .
After a cliff drop in sales, Marks and Spencer
Copyright # 1999 John Wiley & Sons, Ltd.
327
badly needs customers to return. The range
is not unwearable, . . . But navigating an
M&S store would test a Magellan . . . The
collection seems desperate, disorganised
and derivative.
One of the most aggressive competitors to
M&S is `George', the fashion label at ASDA. The
label has been designed and managed by
George Davies, the founder of the Next fashion
chain. When interviewed on the BBC2` `Money
Programme' (29 November 1998), he stated
that one of the problems that M&S have failed
to appreciate is the contemporary sophisti-
cation of the high street customer, and their
non-negotiable demands for immediate satis-
faction.
The customer looks in the (fashion) maga-
zine and will not wait. What they see
in January, they want to buy in February,
so for a retailer your intelligence has got
to be good to know what the magazines
are going to promote and you have got to
have a structure with your supply partners
that can cope with ridiculously quick turn-
arounds.
Another area where M&S are losing market
share is food. It would be fair to report that
the store revolutionized the ready prepared
meals market making dinner parties an easy
thing to organize but their competitors were
not slow to appreciate the substantial pro®ts
to be made and have moved aggressively to
capture sales.
The following comment from Richard
Hyman, the Chairman of `Verdict Research'
clari®es the current market position:
Competitors have learned from Marks in
product development. In food, for example,
the gap has been narrowedÐit has not
been shut. M&S still has a very signi®cant
competitive edge, but I think that organisa-
tions like Tesco and the others, are pro-
ducing the kind of value-added foods now
that were just not available ten years ago
and that one could only ®nd in Marks and
Strategic Change, Sept±Oct 1999
328
Spencer. I think that that has had something
of an impact.
Many of the newest M&S shops, especially
the out-of-town regional centres, incorporate
the very best in retail design but this is not the
case with much of the retail infrastructure
which many critics have stated look dull along-
side some of the more ambitious competition.
Across the road from the M&S ¯agship London
store is Selfridges, which has recently under-
gone a £90m modernization programme. The
following comment from Peter Williams, the
Finance Director summarizes the expectations
and needs that the contemporary shopper both
requires and demands (BBC2 `Money Pro-
gramme', 29 November 1998)
They are expecting something differentÐ
they are expecting theatre; they are expect-
ing to be entertained; they are expecting to
®nd somewhere where they can eat; and
they are expecting to ®nd products display-
ed to them in an exciting and attractive way,
displayed to them as they would expect to
see them in their own home. And also they
are expecting to ®nd a lifestyle which they
can relate to them which we believe will
encourage them to purchase.
For all the issues and problems confronting
M&S that need to be addressed, the evidence
from markets both domestic and international
suggests that enduring competitive advantages
in retailing are based on brands and systems,
and it is strengths in these areas that have
differentiated and supported the superior
performers from the rest.
There are examples where transitory com-
petitive advantages have been developed in
modern retailing usually based on clever or
innovative positioning. A good example would
be that of George Davies, mentioned earlier,
who developed Next. He identi®ed a market
for stylish clothing for a slightly older age group
of women than fashion retailers were catering
for. However, two things went wrong with
Next, which led to a substantial decline in their
fortunes and a boardroom coup, similar to the
Copyright # 1999 John Wiley & Sons, Ltd.
Graham Beaver
Greenbury affair, which resulted in Davies'
departure to the retail wilderness.
The ®rst was that the niche identi®ed was
rapidly invaded by aggressive competition,
many of them with stronger retailing skills.
Secondly, the company convinced itself that
its success was the result not of a transitory
dominance of a neglected market segment,
but of a universal management genius
applicable to a wide range of retail activities.
It then went on a spree of acquisition and
diversi®cation and came close to ®nancial
oblivion as a result. Ratners made the same
mistakes some ten years later (see for example
Hussey, 1998).
It seems clear from the substantial retail
sector case evidence that positioning is not a
source of sustainable competitive advantage
for any organization because it is easily copied,
and therefore undermined. The history of
Tesco illustrates the weaknesses of competitive
differentiation based on positioning advan-
tages as it departed from the original `pile
them high and sell them cheap' market philo-
sophy in order to create the necessary systems
and brand image to rival and then convincingly
overtake Sainsbury.
In the last Management Today research, in
association with Nottingham Business School
(December 1998), Tesco was again con®rmed
as Britain's most admired company, a title that
Tesco was again con®rmed
as Britain's most
admired company
it has won for the second time. The point that
needs to be emphasized here is that when
Tesco set out to create a brand, it took almost
20 years to accomplish its market strength and
superiority. Sustainable competitive advan-
tages invariably take longer to create, and last
longer too. Market positioning is a competitive
advantage only when it is matched and sup-
ported by that based on organizational systems
and strong brand awareness.
Strategic Change, Sept±Oct 1999
The case of Marks & Spencer plc
This is the paradox of M&S, who for so long
have enjoyed success based on the consistent
attention to these crucial areas. In his seminal
book Foundations of Corporate Success, John
Kay (1993) wrote:
Corporate success is based on the distinc-
tive capabilities of the ®rmÐthose things,
often the product of its particular history,
which competitors cannot reproduce even
after others realise the bene®ts these capa-
bilities bring to the company that enjoys
them. Corporations add value when they
successfully match these distinctive capa-
bilities to the external environment they
face. A ®rm adds value through the distinc-
tive character of the relationships it estab-
lishes with its stakeholdersÐits employees,
customers, shareholders and suppliers.
To its customers, M&S has a reputation for
quality, dependability, and no-nonsense shop-
ping. Its staff have been encouraged to view the
company with loyalty and pride but with a
strong element of personal empowerment. In
short, there is a strong M&S organizational para-
digm (see for example Johnson and Scholes,
1998). In his regular Financial Times column
(20 January 1999) John Kay wrote:
With competitive advantages such as these
there is always a balance to be struck
between exploiting them in the short run
and developing them for the long term. You
can always increase pro®ts faster than
underlying sales, for a bitÐby taking full
advantage of your strong customer franchise
in your prices; by putting pressure on your
suppliers and diversifying your supply re-
lationships; by reducing staff numbers and
employment security; by eroding the things
that make you different from your compe-
titors, the things which were the source of
your higher pro®ts in the ®rst place.
Perhaps that is what Marks and Spencer
did, as it became leaner, meaner, and more
aggressive in the 1990s. Perhaps today it
is starting to pay the priceÐand that
perhaps de®nes the dilemma: does it meet
Copyright # 1999 John Wiley & Sons, Ltd.
329
City expectations for earnings today and
tomorrow by pushing these processes
further and becoming more like its compe-
titors? And accept that in the long run, that
will also lead to the same returns as its
competitors earn?
There are other writers and industry analysts
that fear that the problems for M&S go beyond
the choices outlined by Kay, and certainly go
well beyond the dif®culties facing the high
street. The company has been developing itself
as a department store for some time and
moving into ranges, such as furniture, which
some commentators argue it lacks the exper-
tise to handle. One story widely reported tells
the tale of an M&S branch manager who called
his opposite number at John Lewis, asking
what to do with a table that had been scratched
during home delivery. `Send your French
polisher round,' said the man at John Lewis.
The problem was that M&S did not have one
because it had not thought through the ®ner
details of selling furniture.
The issue of corporate governance
The board governance fad is being kept
alive by a bunch of consultants and acad-
emics . . . There is no evidence that board
governance matters to shareholders. When
I see the evidence, I'll take this more
seriously.
This is a verbatim comment from the CEO of an
American `Fortune 500' company (McKinsey,
1996), and the worrying evidence is that he is
not alone in his scepticism (see for example
Hussey, 1998; K. Glaister, `Recent trends in
strategic management research', Financial
Times Corporate Strategy Workshop, Leeds
University Business School, 20 January 1999).
Though there are many corporate leaders in
Britain and America that ®rmly believe in the
importance of good board governance and
have taken very positive steps to improve their
organization's governance processes, many
others still remain doubtful about the bene®ts
and necessity of taking action. Other com-
Strategic Change, Sept±Oct 1999
330
ments from two other CEOs support this posi-
tion. `So many other things matter moreÐ
competitors, ®nancials, marketingÐboard
governance is not on my screen.' `Fund man-
agers are very short-term oriented; not much
use in talking about boards with themÐit's too
long-term an issue.'
The reality is that corporate governance is
not an academic fad, or the latest management
Corporate governance
is not an academic fad
consultancy technique conceived to win more
business for the profession. Corporate govern-
ance matters and moreover, there is compel-
ling evidence to suggest that it is not neutral;
i.e. good governance practice really does make
a difference, and one that many investors are
willing to pay for. In a McKinsey survey (1996),
investors were asked to compare two well per-
forming companies (such as those with con-
sistent pro®ts and rated number one or two in
terms of market share) and state whether they
would pay more for the shares of one of these
companies if it were well governed. Two thirds
of the investors said that they would. As one
respondent quoted in the survey states: `Com-
panies with good board governance practices
have a shareholder-value focus.'
Among those willing to pay more for good
governance, the average premium speci®ed
was 16%. There were a minority of those inves-
tors who said that they would pay more but felt
that the actual premium was hard to quantify.
However, based on the entire survey group,
including those who said that they would not
pay more, the average premium was 11%. An
11% increase in the share price would equate
to an increase in earnings before interest and
tax (EBIT) of 11% in perpetuity. To put that
®gure into perspective, consider the scope and
intensity of effort that would be required to
earn a similar increase through measures such
as cultural change, cost cutting, ef®ciency
measures or higher productivity!
Copyright # 1999 John Wiley & Sons, Ltd.
Graham Beaver
When investors were questioned why
they should pay a premium for good govern-
ance, three main issues surfaced. First, that a
well managed company with positive govern-
ance practices will perform better over time,
leading to a higher share price. Second, good
governance was seen as a means of reducing
risk, as it was believed that it decreases the
likelihood of bad things happening to a
company. Also, when bad things do happen,
they expect well-governed organizations to
bounce back more quickly taking the appro-
priate corrective action. Finally, others regard
the recent attention to governance issues as
something of a fad, but they are prepared to
pay a premium because the shares of a well-
governed company may be worth more
simply because governance is such a major
concern.
Of all the problems facing M&S, the one that
has been the most damaging has been the
conduct and behaviour of its board and the
in®ghting over who runs the company.
Sir Richard Greenbury, for ten years the M&S
CEO was put under substantial investor press-
ure to split his roles as both chairman and chief
executive and make plain the management
succession plans. As stated earlier, Peter
Salsbury, Greenbury's preferred choice was
selected as the new CEO in preference to Keith
Oates, the incumbent deputy chairman after a
®ght between the two favourites, with Green-
bury remaining as chairman.
The investor pressure for management
changes came at a time when many believed
that a split had developed on the M&S board.
Oates, who was once seen as Greenbury's heir
apparent, was plainly at loggerheads with seve-
ral senior colleagues and made his dissatisfac-
tion known about the current management
complexion. He is thought to have made plain
his ambitions to two of the non-executive
directors in the wake of a 23% pro®ts tumble
which precipitated a dramatic fall in the share
price. At the time of Oates's attempt to secure
support, Greenbury was relaxing at the Chola
Sheraton in Chennai, India. The news reached
the rumbustious Greenbury who promptly
¯ew home fuelling the speculation that board-
room acrimony was the principal item on the
Strategic Change, Sept±Oct 1999
The case of Marks & Spencer plc
agenda. At the time, one major investor went
on record as saying:
It is time for the non-executive directors to
make Greenbury reveal a succession plan
and time to see a split in the rolesÐor for
the company to let us know that he is going
to retire in a year's time . . . Corporate
governance issues need to be addressed. We
would like to feel there is a succession play.
We would like to know what is going on. I
expect the board to manage that. Do I have
con®dence that the Mark's board will get a
grip of this? I don't know.
The tradition at M&S has been for the
chairman to appoint his successor and the
company is big on tradition. One friend of the
Sieff familyÐdescendants of Simon Marks,
M&S's founder, said: `The family are hopping
mad about this whole situation. They want
Rick (Greenbury) to sort it out now. This is not
how things are done at M&S.'
There is no doubt that Oates had his
supporters both in and out of Michael House
in Baker Street, the company headquarters
(dubbed The Kremlin inside the retail indus-
try). One supported stated: `He is the only
serious contender who has ever really had the
guts to stand up to Rick. He has ability and
experience and should get the job on merit.'
However, as events now demonstrate, that
was not the consensus view. One respected
city analyst stated that there was something
`Clinton-esque' about the denial by Oates of
having any part in the press coverage of the
succession wrangle. He added:
If he is not involved, then his friends are.
This sort of speculation is extremely dama-
ging for a company and Oates of all people
knows that.
It is like some Jacobean tragedy with Rick
attempting to push out Oates and put
Salsbury on the throne, and Oates, the old
pretender, attempting to mount a putsch. In
the end, I think that they will all fall on their
swords and there won't be a dry eye in the
house. But in the meantime, this charade is
Copyright # 1999 John Wiley & Sons, Ltd.
331
detracting them from the fact that M&S is in
troubleÐand that is a proper tragedy.
The above represents only a fraction of the
dramatic, colourful and acrimonious comment
that was extensively reported throughout all
aspects of the British and European media. One
of the most bitter and publicly fought board-
room battles is ®nally at an end, but at what
cost to an organization regarded as THE model
retailer not just in Britain but internationally?
The M&S brand is clearly regarded by analysts,
investors and fund managers as THE barometer
of the retail sector, and while competitors may
privately enjoy the company's discomfort, they
are also shocked to see the market leader falter
and lose its way. Richard Hyman, the Chairman
Competitors are shocked to
see the market leader falter
of Verdict Research summarized the position
endorsed by many: `It is incredible to think that
the board of M&S could behave in such a
manner. I think that all this business has been
very damaging to the reputation of the com-
pany.'
Carol Kennedy in a special theme edition of
Long Range Planning (1998) observed that
many corporate change and succession pro-
grammes fail because top management ignores
the inconvenient truth that change is usually
seen as threatening to the individuals con-
cerned. Saving the company, or correcting its
problems may not be a powerful enough
incentive when set against disruptions to
personal routines and agendas. Clearly this
is myopic, immature and unacceptable
behaviour and must be neither tolerated nor
condoned. The considered judgement of many
analysts and industry watchers is that the board
of M&S were fortunate to escape with the
damage caused (which was not inconsider-
able)Ðthings could have been much worse.
(See for example The Sunday Times report,
1999a, `Revolting investors' in which the
boards of underperforming companies are
Strategic Change, Sept±Oct 1999
332
dealt with by Prudential, Phillips & Drew and
Hermes Fund Managements. This new breed of
shareholder activist has been the scourge of
value-destroying companies and has been
dubbed `The Awkward Squad'.)
Commenting on its report `What price repu-
tation?' published in November 1997, the
journal Management Today reported:
The days when companies could do as they
pleased, ¯y in the face of public opinion,
turn a deaf ear to the cries of staff, routinely
give `no comment' to the press and speak to
the City only via their pro®t margins are
long gone . . . in the 1990s corporate reputa-
tion has become more important and more
vulnerable than ever before.
Being a good corporate citizen with a policy
embracing good governance practices is ra-
pidly becoming a matter of survival rather than
choice, or at the least, an opportunity to steal
competitive advantage over less sensitive com-
petitors. M&S is not alone in experiencing self-
in¯icted damage to its image and reputation.
There is a long list of prominent organizations
that have ignored stakeholder concerns or
badly managed communications across stake-
holder groups including British Airways,
Disney, Shell and Midland Bank (see for
example Beaver and Jennings, 1996). All these
companies will doubtless, over time, recover
any cash losses involved. But they may never
fully regain aspects of their general repu-
tationÐand this could prove the greater loss.
These organizations join a growing list of
companies now facing the reality that each of
their audiences will get to know what is being
said or done and will no longer simply tolerate
poor governance, indifferent performance,
insensitive management or inconsistent
behaviour patterns. Kay (1993) wrote:
One of the distinctive capabilities of com-
petitive advantage that companies possess
is reputation. It is the most important
commercial mechanism for conveying infor-
mation to consumers and other interest
groups . . . Reputations are dif®cult and
costly to establish.
Copyright # 1999 John Wiley & Sons, Ltd.
Graham Beaver
Here perhaps is the nub of the matter: the need
to haveÐand deserveÐa corporate reputation
that can act as a buffer when things go wrong.
It is the spectre of a damaged reputationÐof
having to make costly reversals in policies or
practices as a result of stakeholder pressure, or
worse as a consequence of a self-in¯icted
wound (of the type under discussion here) that
overhangs the urgency with which integrated
stakeholder management and pro-active gov-
ernance procedures now need to be treated.
Epilogue
At the time of writing (March 1999), Peter
Salsbury announced that he will be meeting
shareholders who will doubtless want to
know what his strategy and approach will be
for steering the retail giant away from the
rocks. He has begun by courting the city, an
area where Greenbury with his more comba-
tive style had dif®culties. Greenbury was an-
gered by what he perceived as the city's short
termism and its inability to understand his
business. Nor was he afraid to make his
feelings known. Angry letters, dubbed `Rick-
ograms', were despatched in response to the
mildest criticism. Salsbury's more open and
conciliatory attitude will be a welcome change
at this dif®cult time. He has been at pains to
inform the city what is going on at the
company and that he is undertaking a strategic
and operational review of the organization
`from root to branch'. In a statement to share-
holders, Salsbury said.
We have put the senior management team
in place. They have the responsibility of
sorting out what they need, including help
from outside. We have been top-heavy in
the boardroom and we have more hierarchy
than we need. The team is a third smaller
now than it was and we have set about
reforming the board. I did not do this
review (the management cutting referred
to at the beginning of the article) thinking
that I would have to go back and do it again.
Strategic Change, Sept±Oct 1999
The case of Marks & Spencer plc
Staff at the Baker Street headquarters fear
that Salsbury has only just started wielding the
axe and feelings are running high. One senior
of®cial stated to The Sunday Times (1999b)
that.
Anywhere between 200 and 600 people
could be made redundant in the next three
to six months depending on which rumour
you believe. But what we want to know is
whether the people accountable for M&S's
downfall are going to be at the top of the
redundancy list. Greenbury, Salsbury and
the main board must all be held accounta-
ble. Many staff cannot understand why
Greenbury continues to be employed, espe-
cially when he appears to be in denial of his
total responsibility for the debacle. Don't
forget that Greenbury will collect at least
£400,000 for doing a three day week and
going part time!
Salsbury is seen as the knight in shining
armour but he has only worked at Marks
and Spencer and if he continues to be
surrounded by M&S clones, his task may be
too great. Do remember that Salsbury was
the man in charge of clothing when that
department went off the cliff.
Further changes in the management struc-
ture are expected however, with the likely and
unprecedented decision to appoint a chairman
from outside the company. This option is being
examined by the company's non-executive
directors. This may not look as rule-breaking
or surprising as it ®rst appears, for there is a
concern that the `old-guard' has simply re-
placed the `old-guard' when many people had
hoped that new blood and fresh ideas would be
brought in. This concern may be somewhat
premature, as Salsbury has made his `mark'
early after being written off as Greenbury's
clone. In the ®nal analysis, the M&S affair is still
a debacle and the chapter has to be closed
before recovery plans can be implemented.
The following ®nal observations, ®rst from
George Davies of ASDA, and then from Richard
Hyman of Verdict Research are hard not to
agree with.
Copyright # 1999 John Wiley & Sons, Ltd.
333
At the end of the day, they hit a rocky patch
and the right people have got to come
through. Yes they have a challenge on their
hands, but I am sure that ultimately, they
will rise to itÐand after all what would the
traditional high street be without M&S?
You really do have to take a view
that spans more than a few months, and
probably, more than a few years. M&S is
going to come back and it will come back
very strongly. I do not think that there is any
doubt about that at all. I think that this has
been such a big shock.
Even though M&S has lost market share and
seen the erosion to its competitive advantage
and market position, there is little danger that it
will disappear from the high street. The
damage to its reputation though is much
more serious. The new management team
would do well to appreciate and value the
necessity of effective stakeholder management
and good governance practices as key impera-
tives for the future.
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