Write a detailed report of 1500 word count starting from Introduction to Conclusion with references(Harvard style) and appendices when necessary.

COURSEWORK CASE STUDY

CHANGE & LEADERSHIP

MMN223634

TRIMESTER A, 2022/2023

Set up by Gail Munro, Pledge for Cotton (PfC) opened its first high street store on London's Oxford Street in 1987.Within 5 years PfC had expanded rapidly with stores in every major city in the UK and latterly penetrated the European market with stores in key cities such as Paris, Barcelona, Madrid, Budapest, Lisbon and Athens. The key recipe for its success was its affordable fashionable product lines and a dedication to Corporate Social Responsibility (CSR).

Background

Gail from a working class background grew up in the west end of London brought up by her mother who worked as a fulltime live in maid for a high society socialite, Lady Cotton. Lady Cotton was a kind young widow who enjoyed hosting lavish dinner parties for her wealthy and fashionable friends. Having no children of her own she became very fond of Gail and in many respects treated Gail as her own daughter. In the Cotton household Gail developed her passion for fashion watching closely the stream of guests who were entertained by Lady Cotton. When she left school she studied fashion design at university with the cost of her education being funded by Lady Cotton. Gail excelled on her programme of study and was offered an internship with a leading British fashion designer. This opportunity opened the path to securing work at several other fashion companies across Europe; where in Milan she fell in love and married up-and-coming Italian businessman Benito Mancini. Within a couple of years they welcomed the arrival of their twins Maria and Franco.

In 1984, Lady Cotton passed away leaving her entire estate to Gail, which left Gail feeling burdened by responsibility. After careful consideration, Gail decided that she would invest the money in a fashion business that has been her life's passion but one that would also make a difference where possible for those less fortunate. She felt that she owed this to Lady Cotton whose generosity had made such a difference in her own life. Gail and Benito drawing on their expertise carefully planned this new venture which took them to several countries to investigate the raw materials on offer and manufacturing and retail facilities.

Eventually after almost three years of planning the new PfC was born. In memory of Lady Cotton, the new company name not only incorporated the name 'Cotton' but also encapsulated its pledge to the wellbeing of the less privileged. Accordingly, the priority was for PfC clothes to be of a quality and price affordable by most and not just the wealthy.Cotton was naturally incorporated in all clothes designed, manufactured and sold by the company. Drawing on her passion and expertise in fashion, Gail personally designed the new lines for the London store to ensure that they were fashionable emulating the designs of famous fashion houses but of cause much more affordable.

To keep costs down and yet protect quality Gail knew that she had to outsource clothing manufacture to a country with low labour cost.However she was keen to carefully select the clothing manufacturer, cotton fabric producers and cotton suppliers, considering the horror stories of cotton famers and poor work conditions of clothing manufacturers. It was vital to her that PfC's commitment to CSR was protected throughout the supply chain.

On their travels to secure an appropriate manufacturer, Gail and Benito had encountered several companies that were engaged in poor practices that contravened international legislation including the abuse of child labour. In Bangladesh they found a family manufacturing company that proved to be a breadth of fresh air. The company treated its employers with care and consideration paying them sustainable wages with good working hours and conditions. Gail and Benito sensed a true 'family-like' atmosphere with employees engaged with both their work and the company. Gail and Benito were impressed and formed a partnership with the company. They also invested money in enhancing the manufacturing process with new technology for increased efficiency to enable the company to meet the demands of PfC. As a gesture of goodwill Gail and Benito agreed to accept the manufacturing company's current suppliers of cotton fabrics and their network of cotton farmers from India having being assured of their reputation.

PfC

PfC garments proved an instant success in London; it was the first fashion store in the UK to offer fashionable designed clothes at affordable prices. The Oxford Street store drew the attention of consumers from all walks of life. Its association with Lady Cotton meant that even the socialites of London were seen shopping at PfC and wearing PfC's products. To further stimulate the cross class appeal of the clothes Gail worked hard on promotion using fashionable celebrities. Pictures of celebrities in PfC clothes combined with other reputable brands in magazines and news papers fuelled interest and demand.

Within the first ten years, PfC had expanded into all major cities in the UK and subsequently into Europe. As the company grew, a formal organisational structure was required to manage the business along with the recruitment of both generalist and specialist staff and managers. Gail assumed the position of CEO and brought her twins into the business as IT Director (Franco) and HR Director (Maria). Together they formed PfC's Board of Directors.They also employed a team of designers who worked closely under Gail's direct supervision in designing the new clothing lines. A team of managers and staff were also appointed for the key functions including IT, Marketing, HR, Operations and Finance. The head office of PfC was located in London to enable Gail's frequent visits to all PfC stores in the UK and Europe.

Gail retained sole control over the manufacturing of the products in Bangladesh. As the business grew and became more successful she made further investments in the partner company in Bangladesh to ensure it was able to meet the required capacity for production. She also enhanced the terms of employment of the employees by increasing the wages of employees well beyond that of other manufacturers in Bangladesh.Gail visited Bangladesh frequently to oversee the production and over time developed close personal relationships with the owners and their employees. In 1990, she built and staffed a free crche and kindergarten on the factory premises, for the young children of the factory employees so that parents did not have to worry about the well being of their children whilst at work. These facilities were appropriately equipped with free food and drinks provided to children whilst in care. In 1995 she set up an after school club a for employees' children. These acts of philanthropy had a monumental impact on the future of the employees' children in a country plagued by poverty where many children are denied an education and are forced into work from as young as 5 years of age (UNICEF, 2010). Supporting the less privileged remained a central foundation of the growing business.

Overtime she also developed relationships with the company's cotton fabric producers and their cotton suppliers. She actively encouraged and supported cotton farmers to move from conventionally grown cotton to organic cotton production; despite being a little more expensive organic cotton was in keeping with PfC's philosophy and commitment to wellbeing of the less privileged. Conventionally grown cotton is the most pesticides and insecticides intensive crop in the world (Natracare, 2013). Cotton farmers typically use some of the most dangerous pesticides which even when carefully administered according to label instructions harmpeople,wildlife and theenvironment. In many countries, cotton is still hand picked; therefore anyone working in the cotton fields is exposed to extreme levels of toxic chemicals. The chemicals can also affect others in the community once they have seeped into the water supply. The health risks of pesticide exposure include birth defects, reproductive disorders, long-term memory loss, paralysis, weaker immune systems and even death. "In India, home to over one third of the world's cotton farmers, cotton accounts for 54% of all pesticides used annually, despite occupying just 5% of land under crops" (Environmental Justice Foundation ). In contrast, organic cotton is free from the use of toxic pesticides; composted manures and cover crops replace synthetic fertilizers, innovative weeding strategies are used instead of herbicides, and beneficial insects and trap crops control insect pests. "Organic farming, helps prevent topsoil erosion, improves soil fertility, protects groundwater, and conserves energy as well as protecting the health of children and women, who often are the key workers on cotton farms" (Natracare 2013). Following the move to organic cotton, PfC associated cotton farmers also became early supporters of the Fair Trade Cotton movement in India aimed at a transparent textile production chain which complies with international regulations and social standards.Fairtrade "is based on a partnership between producers and consumers" and "offers producers a better deal and improved terms of trade. This allows them the opportunity to improve their lives and plan for their future" (Fairtrade International, 2011).

Although Benito was not formally involved in the business, he played an active role in helping Gail with PfC's strategy development including its expansion strategy.Gail was a visionary inspiring leader.She believed in developing close relationships not just with organisations within PfC's supply chain but also with staff in all 30 stores. PfC's employees respected, trusted and believed in her. She prioritised employee wellbeing and developed a trust based culture, and was ahead of her time introducing flexible working for all employees. PfC also invested heavily in staff training and development with employee reward initiatives such as Best Employee of the Month; part-time store staff were included in all initiatives. She strongly believed that in the highly competitive retail industry, an engaged work force and sensitivity to CSR were important sources of advantage that distinguished PfC from its competitors.

In dedication to its commitment to the welfare of the less privileged, PfC worked closely with the local communities in the cities where its stores were located. Every Christmas, Gail allocated funds from the company sales revenue[1] to Store Managers to help bring some Christmas cheer to less fortunate members of the community; last year PfC stores focused on children's home. It also has internship partnerships with several local London universities for students in fashion design whereby students from low income families undertake paid internships working with Gail and her team of designers. PfC also works closely with third sector organisations donating unsold sales items to those in need of clothes.

Her dedication to employee wellbeing and CSR has over the years raised the profile of PfC distinguishing it from its competitors through strong brand identity and loyalty. In 2003, Channel 4 screened a documentary of the history of PfC hailing it a 21^st Century Business Role Model given its unique capability for growth and profitability whilst remaining socially responsible in all communities it engaged in.

Despite her caring paternalistic leadership style Gail led the company with a firm grip making all key decisions, with input from Benito. Although Franco and Maria were on the Board of Directors and were experienced with managing the business, they were rarely involved in the strategic leadership and decision making of the company. PfC remained very much a Benito and Gail venture, which infuriated the twins and brought them even closer. However, when Gail invited Maria on a trip to Paris in 2000 to finalise the arrangements for PfC's first Parisian store it caused a serious rift between the twins. Since then the twins had begun to compete with each other to gain Gail's attention in vying for the future role of CEO; the closeness that they had previously shared has been replaced by ambition and unhealthy competition.

Gail continued to make frequent visits to key fashions shows in London, Europe and the USA. These shows were a key source of inspiration for the new lines that she designed for PfC. In 2007, rushing back to the Head Office from a New York fashion show for the 20^th anniversary celebration of PfC's first Oxford Street store she walked into a major argument between the twins in the board room. This day was to mark the end of Gail's PfC.

She discovered that the twins were impatient to take over the reins of the company; the argument concerned who would make the better CEO. Distraught by what she had witnessed Gail wanted nothing more to do with the business that she had so caringly built; a profitable and responsible company that made a difference to so many. At the end of 2007, she retired from PfC and moved back to Milan with Benito. The business was handed over to the twins who became joint CEOs with equal interest.

PfC: Post Gail

The delight of finally being able to take control of PfC very soon turned into anguish for the twins.Despite extensive experience of the business, neither Maria nor Franco had any real experience of strategic leadership of the company. Further they struggled to cope with sheer scale of the responsibilities that they had to deal with. It was only after Gail's retirement that they had begun to appreciate the extent of the role that she had played.

Despite their previous discord they realised that they had to put their differences aside and learn to work together. The twins divided the roles previously played by Gail with the exception of strategy development which they retained jointly. However both twins were overwhelmed with the sheer challenge of their role as joint CEOs that they tended to seek comfort in the management of the company, which was familiar.

The design team was the first to feel the frustration of the leadership gap. Although Maria was tasked with leadership of design, she rarely made herself available to the design team. The team was desperate to start on the next new line knowing that in a couple of months new designs would be required by the manufacturer in Bangladesh. Having relied on Gail for the inspirational ideas she brought from her travels they were at a complete loss. In the end the team asked for a meeting with Maria, where they proposed that the senior team members would take turns in attending Fashion Shows to inform PfC's designs. They were shocked when Maria proposed that she would attend the shows herself and outraged when she claimed that such perks were only for the CEOs and not mere employees. Disenchantment with the new regime begun to set in and motivation hit rock bottom when Maria returned from her first show claiming that it was so boring that she decided to go shopping instead. All she provided were a few pictures taken of shop window displays from New York. With very little to go on they struggled to design the next season's line. Not surprisingly, over the years PfC begun losing its reputation for fashionable well designed clothes; market share and profits have dropped noticeably since 2007. The design challenge was further exacerbated as PfC lost its more experienced designers.

Store managers and employees too started to feel alienated from PfC's Head Office. They had been accustomed to Gail's constant updates, frequent visits, her genuine care for the wellbeing of staff and her keen interest in the stores, its window displays and merchandise display bringing new ideas from her travels to multiple cities. In contrast, Maria rarely visited the stores and when she did it was clear it was obligatory; she showed little interest in the initiatives of store managers and staff concerns. When issues and problems were raised Maria became defensive and autocratic. For example, at the Paris Store in the presence of employees, Maria when challenged by the Store Manager for the lack of appeal of PfC's recent lines responded by informing the manager that she could look for a new job if she was unhappy at PfC. The lack of communication, involvement and support from the CEOs combined with reduced sales and limited investment in store enhancements prompted a significant proportion of store managers and employees to leave PfC in search of alternative employment.

Within a couple of years PfC had lost its lustre, with unappealing designs and dreary stores.For the first time in its history in 2010 PfC recorded a loss which continued for subsequent quarters. With mounting financial challenges all previous investments in local communities were slowly terminated including the paid internship. Franco, who had taken on the responsibility for PfC's supply chain also contacted its clothing manufacturer in Bangladesh to report that it would no longer be supporting its crche, kindergarten and after school club facilities. He also informed the manufacturer that PfC would be reconsidering the financial agreement negotiated by Gail and if the company did not comply with the new arrangements PfC would be looking to secure an alternative manufacturer. The tone of this formal correspondence from Franco deeply upset and infuriated the owners of the Bangladesh based company, which had been in partnership with PfC since 1987. Regardless, having already established itself as a trust worthy and CSR sensitive manufacturer in the industry, and having fended off requests from one of PfC's Spanish based competitors it was confident that it could easily find an alternative customer.

In 2009, Just -Style reported that value clothing retailers are most likely to ride the storm of the recession as this segment is set to be the rare growing segment in a generally declining clothing retail sector.The twins decided that to survive in the current difficult economic climate compounded by the financial challenges and talent drain experienced at PfC, the only viable solution was to target the low cost market. To rebrand as a low cost clothing retailer, PfC would have to either reshape or completely redesign its supply chain. Firstly, organic cotton from Fair Trade cotton farmers would not suit the low cost target market given the higher prices. Secondly, retaining the current manufacturer would also prove too expensive given the higher wages. As such they opted for a new manufacturer which would meet the needs of the low cost focus.

PfC Today

In 2011 PfC rebranded itself as a low cost clothing retailer having sourced a new manufacturer in Bangladesh able to produce its clothing at low cost. Unfortunately, by the time PfC entered the low cost market the market dynamics had changed; in the current economic crisis it is low cost retailers that are suffering the worst (Feltsted, 2011). Competition in the low cost segment is intense with key players such as Primark, C&A, H&M, Tesco, Kiabi, Takko and Matalan. Further mid-range segment players such as Zara andCortefiel have engaged in strong discounting strategies to fuel competition, whilst Mango has established a new low cost line called 'think-up'(Just -Style, 2009).Further, established players such as Primark have absorbed rising costs in a bid keep prices down and retain market share. As such Kunde (2013) proposes that in the future, higher-end segments are more likely to see growth given demographic shifts in Western Europe; the more mature population with a higher disposable income is likely to desire higher priced better quality garments. Some retailers such as H&M are already moving into this segment (Kunde, 2013).

Overall the rebranding strategy had proved unsuccessful. PfC continued to make losses and even its Head Office employees had become disillusioned with the lack of a meaningful vision and effective strategies. The only thing that has kept employees at PfC was the difficulty of securing a new job in a crisis crippled economy.

On 6^th September 2013 the world heard the news of the collapse of the Merchant Tower at which PfC's new manufacturing company was located. Killing more than 2,000 people it was labelled the world's worst industrial disaster sparking global outrage. The involvement of PfC, which had been hailed the 21^st Century Business Role Model, caused disbelief.

Finally the twins appreciated the inspirational wisdom of their mother and acknowledged responsibility for the failure of what was once a highly successful, ethical and socially responsible organisation. At cross roads, they are of the opinion that an external consultant, able to bring a fresh perspective in designing creative strategic and fundamental change drawing on developments in theory and practice is vital for the future survival of PfC.

Purpose of this Assessment

Your team has been commissioned by the CEO to do a group diagnosis and identify key issues impacting on the Case Study organization. Main recommendations in design for change and analysis of implications for the case organisation is required.

The analysis which is required to be presented must highlight the key issues impacting on the

Case Study organisation with an analysis of their implications for the company and its place in society. The report should conclude with a brief indication of recommended action.

The formal academic/management nature of this report requires a formal, mature and analytical writing style. Appropriate linkage between sections should be evidenced. The diagnosis report must be structured as follows:

Preliminaries*

A Title Page

Detailing the title of the report, the name of the author and programme of study, word count and the submission date.

Executive Summary

Key elements of the report including report aim, case context and key issues, implications, and indication of the way forward comprehensively and well summarised on a single page.

MAIN REPORT

Introduction

The aim, outline of case context and structure of the report are succinctly set out.

Case Diagnosis & Analysis

Clear and succinct critical review of the case organisation

of Combined Implications reflecting acute perception of key issues and effective analysis of the potential current and future implications incorporating scrutiny of the wider global environment, with attention to CSR, Business Ethics and appropriate citation of sources. The discussion should be well scoped, logically structured, evidence-based, appropriately detailed and demonstrate wider reading. Where relevant, arguments made should be linked to appropriate theory. (Whilst it is valuable to use a range of diagnostic tools to assist with the analysis of the status quo, this section should focus on the results and analysis of implications.

The tools used with relevant detail should be presented in Appendices)

Conclusion

This section draws the report together by presenting a brief clear succinct summary of the key issues and an indication of required action (e.g., Change, the type of change and focus of change).

References* CTR Harvard: referencing sample for website, article and book

Appendices* Well-presented collection of any relevant supplementary material. Appendices should be numerically and sequentially labelled (E.G. Appendix 1: PEST Analysis, Appendix 2: SWOT Analysis: The Detailed Picture) and referenced appropriately in the report.