Financial management in a retail setting
A Marks and Spencer case study

Page 1: Introduction

Marks & Spencer is Europe’s most profitable retailer with a global brand and global recognition. Its achievement largely depends on the effective use of people. An organisation may have the latest technology and the best physical resources, but it will never thrive if it does not value its people. Its most valuable asset will always be its people and the work they do. For Marks &...
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Page 2: Role of the manager

Management can be defined as ‘getting things done with or through other people’. It involves deciding on objectives and making decisions to ensure that objectives are met. It involves planning, organising and coordinating activities. It involves controlling - making sure that things are going to plan and working with people. It is necessary, through effective communication, to make...
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Page 3: Managing finance

In order to operate, a business needs resources. Whether these resources are physical resources, such as property, equipment and materials, or less tangible human resources, money is required to pay for their use. As a result, the management of finance is inseparable from the management of the business as a whole. Controlling costs is a key element in the process of financial management. It...
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Page 4: Financial planning

Everyone budgets to a greater or lesser extent. A budget is a financial plan developed for the future. Budgeting is an important control mechanism for every organisation and helps to predict what the organisation thinks will happen over the next accounting period. Studying budgeting results is a way of monitoring and controlling performance. Comparing expected results to actual results and then...
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Page 5: Monitoring and controlling performance

While the Commercial Manager is generating enough sales to meet the forecast, and the Personnel Manager is controlling the agreed staffing budget, the Financial Manager will monitor all other costs. Costs are broadly broken down into direct costs and indirect costs. Direct costs are those clearly identified with the sales volume. They include carrier bags, food waste and staffing costs. Indirect...
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Page 6: Conclusion

The Financial Manager has a vital role which impacts directly on the activities of the Commercial and Personnel team. It is a very varied role, involved in every area of operation. Financial Managers are sometimes called the ‘conscience of the store’. Their work involves helping to develop better practices and improving the ways in which Marks & Spencer’s stores serve their...
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