Case study on Debenhams Plc and Leadership

Debenhams Plc is a department store group with 120 stores in the United Kingdom and the Republic of Ireland and another 21 overseas franchise stores. Besides women's, men's, and children's, cosmetics; and house wares, they offer services like personal shopping assistance, wedding services and in-store restaurants and cafés to attract its 15.8 million customers. The company now employs 23,300 people in its domestic market (UK) and the Republic of Ireland where its principle operations are based and generated £2,086.8 million sales (annual review 2005) in the past year. Due to new store openings, the company is rapidly growing in sales, gross profit margin and market share throughout the share of UK department stores (15.7%). Debenhams three major routes to the market (trading formats) are the UK department stores, the international stores and the internet which all contributed to the strong sales growth of the company. (www.debenhams.com)

The company’s roots go back to the partnership of Clark and Debenham in 1813 and grew throughout the 19th century with the opening of numerous retail outlets as well as clothing manufacturing operations to its incorporation in 1905 and the opening of its first department store. The company was traded as an independent company with 65 department stores on the London Stock Exchange until it was acquired by the Burton Group in 1985. The company became independent again in 1998 as Debenhams Plc and introduced, during a repositioning of the business, an exclusive range of own-brand merchandise which accounts for over half of its sales, international brands and concessions across key product areas. In December 2003, Debenhams was acquired by CVC Capital Partners, Texas Pacific Group, Merrill Lynch Global Private Equity and the Management team. (www.debenhams.com)

Debenhams refers to itself as ‘Britain’s most favourite department store’ as it differentiates itself from other retailers through its wide and unique range of own-bought l brands, which are to some extend exclusively available at Debenhams, and over 500 international brands in total. (www.debenhams.com)

In order to expand, the organisation transferred their department store concept abroad through franchise. They work with local franchise partners, primarily in Scandinavia, Hungary, Malaysia and the Middle East, and adapt stores to consumer preferences and requirements. Therefore, the company is aware of cultural diversity and tries to satisfy regional needs and demands. (Jones, 2003)

The company’s future objectives are driven by a clear strategy to increase profitability and grow market share. Through the further development and enhancement of the website, new customers should be attracted. Additionally, Debenhams plans on entering new markets like China and Thailand. (Company visit, 2005)

Leadership is described by Debenhams as “creating a stimulating and inspiring environment which enables everyone to deliver outstanding performance” (Employees Guideline, 2005). Even though leadership is, according to Pettinger (2002), the core of managerial and supervisory operations, the term ‘leadership’ is difficult to define as there exists no ‘best way’ of being an efficient, effective or good leader.

However, leadership can be described in several ways. Peters and Austin (1989) focus on the person itself and define a leader as an “enthusiast, nurturer of champions, hero finder, wanderer, dramatist, coach, facilitator and builder”, whereas Roddick (1992) and Drucker (2001) refer to leadership as a vision which aspires, energises and lifts other “peoples’ vision to a higher sight”. Pettinger (2002) emphasises that leaders should be able to “take the right decisions in given situations”. This can only be achieved when being able to communicate effectively in both directions in order to gain “an overall or strategic view” with a wider perspective.

Decision making….

Cole (1990) and Northouse (2001, both cited by Morden, 2004) outline that leadership itself must be seen as a ‘dynamic’ process whereby one individual coordinates and influences others in order to achieve a common organisational goal or task. At the same time, Morden (2004) points out that it is not only the process but the interaction between the leader and his or her followers that should be dynamic.

But why is leadership so important? Debenhams (2005) argues that only leaders who communicate efficiently, motivate their teams and have a strong vision will be able to achieve successful business results. It can affect the company’s objectives negatively if teams lack of confidence in their leaders as they might not be able to achieve them. Thus, it leadership becomes of vital importance at all levels, from the shop floor to the main board. According to Crow and Hartman (1995), leadership is also very important in “attempting to reduce employee dissatisfaction”.

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