John Lewis

Nowadays, the capacity of stuff has become an important aspect to improve the competitiveness of enterprises. Researchers have found that physical capital produce 30% of the national economic growth, however, 70% of it caused by intellectual capital is human capital. So, the human capital is really important (Stickrath & Sheppard, 2004). Managers pay more and more attention to the motivation of personnel as well. There are many ways for leaders to incentive their employee, while which is the best leadership style is still under discussion (Mahoney & England, 2007). This essay will analyze the reasons of the success of John Lewis enterprise in perspective of the leadership application, and finding the core of his whole employee stock ownership of success. Firstly, it will discuss the leadership style of John Lewis, and then combining with the theory of encouragement to find the inner reason of John Lewis’ success. Finally, it will talk about John Lewis’ leadership style has been putted up.

John Lewis is the biggest department store in England (Hoffert et al, 2002). From 1864, it opened the first shop date in London's Oxford Street; the John Luis's department store has 150 years of history (Campbell, 2003). Now, it has a good performance with enviable high market share. It has branch stores both in Oxford Street business district and shopping mall. Not only the outstanding achievement of John Lewis attracts people's attention, its unique John Lewis model deserving discussion. John Lewis was originally held by the Lewis family, but in 1929, the primary family person planed that he would removed out of the board, but also put the right of controlling the whole company to their employees. Thus, everyone in John Lewis has his own share. Besides this, he also set up a perfect system, that is, even the new employees can get stock of the company quickly, it really realizes the whole employees have stock ownership.

McGregor’s Theory X and Y studies management and leadership styles. Theory X managers believe that employees do not actually like their job and need to be controlled. However, by contrast, theory Y managers believe that employees like their job so that managers are likely to give them more opportunities to participate in making decisions, which seems to be democratic leadership. (Marcouse, Surridge and Gillespie, 2011)

Leadership is the person who occupies certain leader position, owns certain leader function and power, assumes certain leader responsibility and implements certain leader function. It is known that the leadership can be divided into different styles, such as Authoritarian, Democratic, Participative and Laissez faire leadership style. According to Benjamin & Flynn (2006), authoritarian leadership refers to the decision-making basic focus on a type of leadership the Supreme leader while the democratic leadership is that except a few major problems are decided by the leader, the other business issues are solved by the general leadership types. Participative leadership is a special form of Democratic leadership, its main characteristic is that most decisions are reached in and subordinate based on consensus, the interpersonal relationship is in the first place. Laissez faire leadership refers to the basic grant decision-making power of subordinates, it is a type of leadership leaders that responsible for the guidance, coordination and incentive staff mainly (Chaudhry & Javed, 2012). And the leadership style should be accompanied withe the need of the company. As for John Lewis, it gives a great power to the employees that are a kind of democratic leadership.

Maslow (1943) puts up that the need of human can be form to five level, that is Physiological needs, Safety needs, Love and belonging, Esteem, Self-actualisation five class, followed by a lower level to a higher level arrangement. John Lewis model is the example of Maslow's hierarchy of needs theory the third level ---Love and belonging needs (Anderson, 2014). Gambrel & Cianci (2003) found that everybody wants to achieve mutual care and attention (Zalenski & Raspa, 2006). Emotional need is more detail than physiological need. While the emotional need is varied with a person’s physiological characteristics, such as his experience, education, religion and so on.

In the development of John Lewis, the leaders of John Lewis always take employees as the fortune of its success, according to empowering and letting employees as the owners of the company, they regard that employees not only can be responsible for their own work, but also can play their full enthusiasm and creativity, which are critical for John Lewis’s competitive advantage and success. John Lewis makes their share to every employee, in order to let the staff have the sense of belonging. The company wants to make their partners enjoy the special place of work. Owing to Autocratic leaders generally adopt one-way and top-down communication, assign tasks by orders without emphasizing workers’ feedback. As they put that the heart feeling of partners is their highest pursuit. And when the enterprise makes profits, then their individual performance will also increasing (Mohammad & Hossein, 2006). From the leadership team management style, this is a kind of management mode is decentralisation. It indicates that such leadership devolutes the power to the staff and let them self-management (Gambrel & Cianci, 2003). So, in the past several years, like other enterprises, John Lewis struggled for the financial crisis, but the atmosphere customers felt is not the same to other place. British Financial Times columnist Michael Skapinker described John Luis subordinates, that the stores’ climate is different with any other company. The staffs are more attentive and professional. They are the owners of the company, or it can be say that, the company is their home, everyone expects to have a beautiful and hamoneous house, and this point is reflected through their behavior. This is similar to the experiment done by doctor Bharat, after analysing collected financial data that more than 250 companies and conducted a survey of more than 60 senior management personnel, he found employee-owned businesses (EOBs) have a stronger profitability, greater flexibility, and higher employee loyalty (Lok & Crawford, 2004).

At the same time, John Lewis is a partnership company, and the staff is its partner. Partners are not uncommon in the UK, but the scale is so large, each employee is a partner of the enterprise (Popper & Mayseless, 2003). In order to let the staff involved in management decisions, John Lewis has set up employee forum in each branch, can be used to publish on the shop and business view. John Lewis model shows a good example of delegate powers to lower levels management. It can be found that employee ownership has advantage of responsible management system (Müller & Turner, 2007). On the one hand, when employees’ risk is closely related to return, it helps the staff to build a more equitable responsibility with a reasonable distribution process. It also enhances the attention and in corporate culture, and make them have confidence in both company and themselves. Compared to employees who have no enterprise ownership or right to participate in the decision-making process of the enterprise, employee owned businesses are the most outstanding advantage is that the economic downturn elasticity, or the ability to withstand the poor economic situation, it is a way to maintain sales growth and job creation.

On the other hand, employees stock ownership, meaning that all staff is the big boss. Some employees may even have more stock than their boss, at this time, some wonderful chemical will changes in the company, brewing out (Müller & Turner, 2007). That is the biggest disadvantage of employee stock ownership---management has all gone. Because everyone is the shareholder, sounding great, but the rank of some people is not high, the stock is more than the boss, causing some management problems (Zalenski & Raspa, 2006). In addition, a company needs is a strong and effective leadership center, to host some special decision, if a company is managed by a large group of common staff, certain contradictions must happen everywhere. Just make the John Lewis department store as an example, although the big shareholders in 1929 handed over the shares, the whole company management right delivered until twenty years later (Mohammad & Hossein, 2006). It took twenty years of observation time, to ensure that these employees can manage themselves.

To sum up, today, John Lewis can maintain a relatively healthy income, a basic fair reward system, a fairly good employee welfare and community development policies; all have significant relationship with the staff structure of the shareholders. However, even though John Lewis provides a successful example of democratic management and fair distribution in the enterprise interior, it just an abnormal phenomenon in the UK business enterprise, even all around the world. The implementation of this leadership style, not only needs the foresight and courage of the manager, but also need to have a certain historical conditions. For many business enterprises, to change the organisational structure similar to the John Lewis model, the step is still too far away.

Reference List
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