Organisational behaviour is a study that investigates the impact that individuals and structures have on human behaviour within an organisation. The purpose of this knowledge is to improve an organisation’s effectiveness. In this report you will find how various aspects of this study have shaped the organisation Burberry and the factors which have affected the individual behaviour. Burberry is an iconic yet global clothing brand that dates back to 156 years, where the company was founded by Thomas Burberry. The brand has been most famously recognised for its trench coats till today and sells its products to the end consumer through both retail (including digital) and wholesale channels including sales to department stores, multi-brand specialty accounts, Travel Retail and franchisees who operate 65 Burberry stores, mainly in emerging markets. (www.burberryplc.com)
1.1 Compare & Contrast organisational structures & culture at Burberry An organisational structure defines how jobs and tasks are formally divided and coordinated. Every organisation has a culture, which significantly affects various aspects of individual behaviour. Understanding the culture is important because it allows an organisation to establish its structure. According to Schein’s theory of organisational behaviour the founders of an organisation establish a culture which is then promoted by its successors. An organisational culture defines the norms and values, and the types of behaviour that is encourage or discouraged. (Mullins 2005). Further looking into types of culture Schein argues that there are three levels of corporate culture. Artefacts are the surface level of culture that can be easily seen through technology, clothing, ceremonies etc.
The next level is determined by beliefs goals, norms and values established by founding leaders (Schein 2004). Burberry’s culture revolves around protecting its core values which is to protect, explore and inspire through the original ideas with which Burberry was founded with. Angela Ahrendts mentions in the Harvard business review (Jan-Feb 2013) “In a way, we’re right back to our roots. I always remind employees that we didn’t found the company; Thomas Burberry did—at the age of 21. He was young. He was innovative. We say that his spirit lives on and that it’s this generation’s job to keep his legacy going”. Burberry’s culture is one that promotes its employees to innovative yet protecting Burberrys’ heritage while promoting its brand and inspiring those around them.
Prior to Burberry’s current achievements, the organisation was very much divisional. This type of organisational structure groups together those individuals who are responsible for a particular product type or service according to workflow. A divisional structure of a business tends to increase flexibility, and it can also be broken down further into product, market and geographic structures. In this type of structure we find that every department has its own ideas and objectives, but meeting divisional goals as set out by organisational policies and plans.
Looking at Burberry’s structure, they had various teams working on different products. “We had 23 licensees around the world, each doing something different. We were selling products such as dog cover-ups and leashes”. The organisations culture was focused around marketing its brand through licencing. We find that the divisional structure at Burberry was product orientated as compared to how the organisation is structured today. (Harvard Business Review, 2013)
Today Burberry has the elements of a divisional structure, however it has been centralised around Burberry’s core values. In a centralised structure, the top layer of management has most of the decision making power and has strong control over departments and divisions. In a decentralised structure, the decision making power is distributed throughout the departments and divisions, and they may be different levels of independence. The corporate culture has also changed whereby individuals are led by creative thinking within the organisation and to explore new ideas around Burberry’s heritage ideas and to take inspiration from them.
1.2 How does the relationship between Organisational structure and culture affect business performance in Burberry? There is a very strong relationship between Burberry’s structure and its culture. The organisation was focused on promoting the brand through licencing and this lead to a culture which was not inspired by Burberry’s heritage. This affected Burberry’s performance in the global market because despite having various products on the market promoting its brand, it was far behind its competitors. Companies such as Louis Vuitton Moët Hennessy (LVMH) had almost 12 times the revenue compared to that of Burberry’s (Harvard Business Review 2013). Its divisional structure had caused the division of ideas, and thus affecting Burberry’s culture. It had factories producing one type of product, whilst it was developing completely different products in another.
Burberry had lost its uniqueness. As mentioned by Angela Ahrendts, “Surveying the industry, we realized that Burberry was the only iconic luxury company that wasn’t capitalizing on its historical core. We weren’t proud of it. We weren’t innovating around it”. When Angela Ahrendts became the CEO of Burberry she introduced new ideas based on Burberry’s heritage and protecting its core values. The centralisation of its structure led to a consistent strategy across the whole organisation.
A senior design director appointed to ensure that every product was being developed would have to be approved by one individual. As Angela Ahrendts mentions “I told the team, anything that the consumer sees—anywhere in the world—will go through his office. No exceptions.” (Harvard Business Review, 2013). This change in its structure ultimately changed Burberry’s culture, allowing the organisation to come away licencing and focus on developing products that truly represented Burberrys 156 years of history. The introduction of protecting its core values became the new platform to Burberry’s development in the global luxury market.
Centralisation meant that, with Burberry’s new found culture, it would help to provide a consistent strategy across the whole organisation enhancing operational efficiency as well as improving the quality of products and to promote the uniqueness of the Burberry brand. This new culture gave birth to the development online marketing strategies, such as online streaming of live fashion shows, and the use of social networking sites such a twitter, Facebook and YouTube. This would allow Burberry to promote its core products through which it seeks to achieve maximum revenue and create brand awareness through digital media.
1.3 Factors that influence Individual behaviour at Burberry
There are various factors that affect working environments and how individual respond to them. Analysing these factors is very important as they affect motivation, perception and overall performance in achieving targets and goals.
Burberry is an organisation that works with its employee to ensure that they have a pleasant experience whilst working within their organisation. The Burberry organisation seeks to promote the same for their employees like customers have when shopping at a Burberry store. One of the foremost factors that influence behaviour is through leadership style. Individuals at Burberry inspire one another to create a collaborative and energetic workplace and are given the freedom to express themselves. Every employee is given the same respect and everyone’s opinions are taken into account. As quoted by a former employee working in the loss prevention department, Chicago US “I loved being employed as a Loss Prevention agent for Burberry, Working there was like working with family”. (www.indeed.com) – Burberry Reviews).
Burberry employs individuals that have strong creative spirit, and offer packages for them such as healthcare, pension and discounts and allows opportunities for professional development and internal promotions (www.burberryplc). Having a diverse global workforce Burberry recognises individual talent and has created an innovative and exciting place to work for individuals of all backgrounds, age, ethnic origin, marital status, disability or sexual orientation. Opportunities are offered at all levels of the organisation from creative function to retail sales. These factors can influence individual behaviour by making employee feel that they have equal opportunities within the working environment.
Burberry also provides opportunities for career advancement based on performance, without compromising on the factors highlighted above. Creating a workplace that is energetic and collaborative can motivate and affect performance of employees, which is why this aspect of study is essential for every business. If businesses fail to analyse these factors then it could lead to under performance of staff, which ultimately affects business performance. (www.burberryplc.com)
About Burberry/Our strategies (accessed on Jan 2013) – www.burberryplc.com About Burberry/Brand and Business (last accessed on Jan 2014) -www.burberryplc.com The Burberry Brand by Nicole Schloss. (March 2010) available at: http://fashionandpower.blogspot.co.uk/2010/03/burberry-brand.html (last accessed on 07/01/2014) Burberry’s Corporate structure (figure 1.1) (2014) available at http://lorrainecastellon.blogspot.co.uk/p/burberry.html (last accessed on Jan 2014) Edgar Schein: Organizational Culture and Leadership (Jan 17th 2013) available at: http://thehypertextual.com/2013/01/17/edgar-schein-organizational-culture-and-leadership Harvard Business Review (Jan-Feb 2013) On Burberry’s CEO on
turning an Aging British icon into a Global Luxury Brand. (www.indeed.com) – Burberry Reviews – last accessed on Jan 2014 Mullins, Laurie J. (2005). Management and Organisational Behaviour – seventh Edition (Financial Times/ Prentice Hall)