Burberry Company: Organization Design Analysis

Burberry is a multinational fashion company with its main offices in the United Kingdom. It has been in existence for over 150 years, having been formed in 1856.Burberry’sorganization and operations, for instance, leadership style and employee involvement, are influenced by the prevailing British culture. This paper examines Burberry’s organizational design regarding the following aspects: organizational structure, human resource strategy, employee involvement, and leadership styles. In addition, the paper will analyze how the UK culture shapes the above organizational practices at Burberry.

Culture of the United Kingdom

The culture of the UK is shaped by several factors, including being a wealthy nation, having a strong democracy, and being predominantly Christian country. The British are a reserved people. This situation may be observed in their calm way of speaking. Robb (2014) describes British people as reserved and private, with a keen focus on observing schedules and protocols. Additionally, they emphasize facts. As such, their communication is both detailed and one that lacks exaggeration. Punctuality is greatly observed in the UK, particularly regarding business meetings.

Background of the Organization

Burberry is a UK-based company that was founded in 1856 to produce luxury attire that would carry the British heritage. Its trademark is the Burberry trench coat available in both male and female versions. In the 150 years of its existence, Burberry has grown into a multinational corporation with branches across the world. In addition, the number of products manufactured by the company has increased to include a variety of fabrics and beauty accessories.

The company’s manufacturing plants are located in the UK and a few others across Europe. Further, the company relies on licensed partners to distribute products to its wholesale customers and retail stores all over the world. Given its large size, Burberry commands a network of over 10,000 employees. Presently, Burberry controls 497 stores, either fully owned or as concessions, across 32 nations (Liu, 2014). Additionally, the company operates an online sales platform (burberry.com) where customers can order for products to be delivered to them.

As stated above, the company prides itself in representing the British heritage, history, and culture to the rest of the world. The association with royalty and class is a major selling point for Burberry. The company is also well known for its artisanship, innovation, and quality products. As Biressi and Nunn (2013) explain, social class in the UK is still emphasized and that it can be deciphered from a person’s accent or demeanor. Moreover, Burberry has resorted to promoting its brand through the social media, which is in itself a reflection of the wider acceptance of social network platforms by the UK citizens.

Organizational Design of Burberry

This section presents an analysis of Burberry’s organizational design, including how the UK culture has shaped the company’s organizational structure, practices, job design, and employee management among others. Despite its global outlook, Burberry’s organizational culture is a reflection of the wider UK corporate culture. According to Build our culture (2013), the company’s culture is largely shaped by its historical background and UK heritage.

Further, employees’ welfare is of utmost concern to the company since the management appreciates their central role in promoting a company’s success. The immediate former CEO, Angela Ahrendts, once explained that employees are the most critical assets at Burberry. In line with this assertion, various reward systems have been put in place to recognize and award dedicated employees. This strategy is adopted to support talent and/or inspire innovativeness in the organization. Below is a discussion of the various aspects of Burberry’s organizational design.

Organizational Structure

Various structures are available by which an organization can be designed, namely, functional, product, hybrid, matrix, and team-based frameworks. The type of structure that is suitable for an organization depends on factors such as the size of the organization, efficiency and specialization needs, and the certainty of the environment (Alvesson, 2012; Daft, 2012). The management of Burberry understands that internal organization is important if a fashion company is to succeed. Overall, the chair of the “board” heads the company. The current chair is Sir John Peace. His role as the leader is to direct the panel in making important decisions for the company.

Directly under the chair are the senior independent director, the chief executive officer (CEO), and the various committees. Collectively, the board and the committees drive the company’s agenda such as the appointment of directors, senior employees, and managing risks. On the other hand, the role of the CEO is to supervise the day-to-day business management of the organization. In this capacity, the CEO is responsible for making profits for the company and/or ensuring that managers and other employees perform their duties as designated.

Burberry’s Organizational Structure.
Fig. 1: Burberry’s Organizational Structure.

The chart above illustrates the organizational structure of the company. As stated above, the CEO is in charge of the functional activities of the organizational. He works hand-in-hand with the senior management team. To achieve success, Burberry is divided into four categories, namely, products, production and sourcing, distribution patterns, and marketing communications (Peng & Chen, 2012). The company possesses a distinct logo that is meant to differentiate its products from those of its competitor firms in the market. Similarly, the company engages in thorough advertising of its products to create market awareness and/or maintain its existing clientele.

Burberry’s functional strategies are designed to facilitate the achievement of the company’s long-term goals for the benefit of all major stakeholders. The company, whose core values include defending, discovering, and motivating customers, views effective strategies as the best way to enforce the said principles (Build our culture, 2013). Between 2012 and 2014, the company’s management was dedicated to blurring the line between physical and online shopping.

In other words, the company was promoting its online shopping platform to increase its customer base. In line with this goal, the corporation provided all its sales associates with iPads to promote communication with customers. Customers who made online orders would collect their deliveries at the store nearest to them the following day. This convenience caused the online traffic to increase several folds. As a result, retail revenues made up for 70% of the total company revenues in 2013 (Liu, 2014).

Burberry is committed to embracing a discrete culture that is characterized by an international team approach and a groundbreaking will where employees are nurtured to be loyal and accountable. As such, Burberry’s job design (also known as work/task design) as viewed an important function where the company’s HR has to specify how jobs will be arranged in line with the prevailing culture. Job design is important because it determines whether technological and organizational needs of an organization will be met. At Burberry, work arrangement is carried out in a manner that ensures job satisfaction among employees.

As such, employees are placed in teams in areas where they are most comfortable working (Build our culture, 2015). By outlining the requirements and methods that are necessary for a certain job, Burberry HR hopes to attain the right candidate(s) for each position. Besides, Burberry relies on job design to raise the organization’s productivity levels. It accomplishes this agenda by providing non-monetary benefits to employees to keep them motivated.

Human Resource Strategy

As a company that is focused on delivering high-quality products, Burberry has a robust HR body whose primary function is to manage talent. According to Liu (2014), managing talent at Burberry involves recruiting and training highly motivated employees who can pursue the company’s goals. The Maslow hierarchy of needs suggests that once people satisfy their lower-ranking needs (basic needs, safety, love, and esteem), they advance to pursue self-actualization. This fact is appreciated at Burberry that has a culture whereby employees are given impressive salaries to ensure that not only are their basic needs satisfied but that they also live in comfort.

In turn, this practice helps in delivering desirable results in line with the company’s goals. Further, the corporation engages dedicated associates and interns in its numerous branches around the globe. In2012, LinkedIn ranked the company in the 29th position in terms of the “in-demand” employers in the world. This position is not surprising given that the company has a conducive working environment for its employees, as well as a robust reward system. This setting enables dedicated employees to be easily promoted, hence motivating other employees to work hard. Consequently, innovativeness is high at Burberry because employees are motivated to develop their full potential.

In terms of leadership, the company values the involvement of its employees. As the former CEO, Angela Ahrendts, once stated, the Burberry management advises its leaders to pay attention, think and discover new ideas (Easton, 2012).

The statement underlines the company’s dedication to employee engagement and team building. The leadership of Burberry is transformational and one that is geared toward empowering employees to achieve their highest potential. As such, motivation is an integral element of Burberry’s leadership style. Leaders/managers are dedicated to inspiring employees to explore new opportunities and/or pursue personal identity within the organization. Employee motivation is achieved through various ways, including good pay, providing social security (health insurance, retirement benefits, and paid leave among others), and promoting employees’ self-esteem.

Additionally, the company provides training and networking opportunities for its employees as a way of achieving the wider goal of worker empowerment. As from 2012, the company’s HR has facilitated the development of 250 employees (Burberry, 2011). Exceptional performance is recognized across all departments and branches of the organization. Additionally, leaders at the organization promote activities that build esteem for the employees, a move that encourages employees to work toward self-actualization.

Management Practices

The success of every organization is largely dependent on the dominant leadership style because the management formulates the strategy and/or decides how resources are to be distributed with the view of achieving the organization’s goals. Before Angela Ahrendts took over as CEO in 2006, the company had lost its control of the fashion market, commanding only 2% of the total market share. At the time, it was viewed as an old-fashioned company.

As such, it did not have many youthful customers. Therefore, Ahrendts’ uphill task was to restructure the company’s image to make it more appealing to the younger generation that constituted the largest portion of UK’s population. At the same time, social media was becoming an immensely popular phenomenon among the millennials, a situation that made it easy to reach them. Ahrendts’ efforts resulted in a 200% increase of the company’s stock. In an interview with Fortune Magazine, Ahrendts revealed that such tremendous success of the company was the result of building successful teams made up of many senior managers (Easton, 2012).

Together, the senior managers were able to brainstorm on ways to reinvent the brand. To date, teamwork remains a major force driving Burberry to achieve corporate success, despite acute competition in the fashion industry.

Ahrendts and her team of senior managers exploited the British heritage of the company to achieve success. In the interview with Fortune Magazine, Ahrendts stated, “We’re British. They’re not” (Easton, 2012, para.2), implying that the British heritage is a major driving force for the company’s success. The UK culture can be observed in the nature of leadership that Ahrendts and her successor, Christopher Bailey, demonstrated. Bailey’s leadership style is, in a strict sense, the reflection of Ahrendts’ approach to management (Neate, 2013). As such, not much has changed regarding the management style after Ahrendts left Burberry.

Bailey’s leadership style can be described as being friendly, persuasive, sociable, and enthusiastic. In many ways, this style is a reflection of the British culture of friendliness and humility. Similarly, teamwork and collaboration are both valuable traits in the British culture. The traits have influenced the manner in which Burberry is run. Bailey encourages his juniors to be innovative. He grants them the freedom to implement their creative ideas at the organization. Bailey who is a passionate and young designer prefers to work with young employees who reflect over 70% of the company’s customer base.

In terms of environmental scanning, operating in the competitive fashion industry requires Burberry’s management to remain on the lookout for opportunities and potential threats to the organization. Threats may arise in the form of a new government regulation or the entrance of a formidable competitor into the market. Luxury consumers are always looking for new ways to satisfy their wants and needs, a situation that puts pressure on luxury companies.

Hence, Burberry has a culture of conducting regular scanning that aims at identifying new trends and potential competition. The objective is to remain ahead of the existing customers’ expectations while attracting new ones. Importantly, the fashion industry is unpredictable due to frequent changes both in the ecological and financial environment (Build our culture, 2015). Thus, the company relies on psychographic segmentation to maintain a hold on its target market. In other words, Burberry’s clientele are stylish individuals who appreciate the British heritage. As such, they are likely to purchase Burberry’s product even during hard economic times.

Conclusion

Burberry was founded in 1856 to manufacture and sell luxury fashion items. Burberry’s organizational culture reflects the wider UK civilization, for instance, the emphasis on social class. The company’s leadership is dedicated to spreading the country’s heritage and history through its products such as the famous Burberry trench coat. The company’s leadership succeeded in integrating the British heritage into Burberry’s products.

In addition, teamwork among senior managers has facilitated the company’s success. Additionally, the transactional form of leadership demonstrated by the immediate former CEO, Ahrendts, and the current head, Bailey, respectively, resonates with the friendliness and sociable attitude of the British people. Burberry’s leadership values employee empowerment as a primary tool for promoting the company’s success both in the UK and around the globe. The focus on employee empowerment has enabled the company to turn around its earlier failures by attaining success in its operations.

References

Alvesson, M. (2012). Understanding organizational culture. Thousand Oaks, CA: Sage.

Biressi, A., & Nunn, H. (2013). Class and contemporary British culture. Berlin, Germany: Springer.

Build our culture. (2015). Web.

Daft, R. (2012). Organization theory and design (11th ed.). Mason, OH: South-Western College Publishing.

Easton, N. (2012). Angela Ahrendts: The secrets behind Burberry’s growth. Fortune. Web.

Liu, Z. (2014). Effectiveness of digital marketing for Burberry China. Web.

Neate, P. (2013). Christopher Bailey takes over from Angela Ahrendts as Burberry chief. The Guardian. Web.

Peng, N., & Chen, A. H. (2012). Consumer perspectives of cultural branding: The case of Burberry in Taiwan. Journal of Brand Management, 19(4), 318-330.

Robb, G. (2014). British culture and the First World War. Basingstoke, UK: Palgrave Macmillan.