New Perspectives on 20th Century European Retailing

Peter Scott, Patrick Fridenson, Peter Scott, Patrick Fridenson

• Publisher: Routledge
• Year: 2021
• ISBN:
  9781000344653
• Edition: 1
• Topic: Business
• Subtopic: Retail Industry
• Index: Business

Despite the publication of several studies examining European retailing in relation to the USA, there is still a dearth of recent research, in English, that explores the development of retailing in specific European countries (with the obvious exception of Britain), over the twentieth century. Even for the UK, more research is needed to challenge claims such as the alleged "backwardness" of British retailing relative to North America, or the presence of formidable "environmental" barriers to the "industrialisation" of retailing in Britain.

New Perspectives on 20th Century European Retailing showcases new research on various aspects of twentieth century European retailing, that challenges the traditional view that Europe was a "follower" of America in retail innovation. It brings together work by several - mainly early career - scholars, who are doing innovative, archival-based, research on various aspects of European retail history. Following a general review of European retailing by the editors (discussing key debates and new approaches) seven thematic chapters present work that either sheds new light on old debates and/or explores hitherto neglected topics. Collectively, they show that whereas retailers are often regarded as 'intermediaries', in fact they are actors in their own right and they challenge the traditional view that Europe was a "follower" of America in retail innovation.

The chapters in this book were originally published as a special issue of the Business History journal.

Managing business performance: The contrasting cases of two multiple retailers 1920 to 1939

Andrew Hull

ABSTRACT
Business performance measurement and management (PMM) systems are often viewed as relatively recent phenomena, responding to the failure of historical practices which prioritised financial measures. But despite the considerable focus on these systems over the last 25 years, they have not lived up to their early promise. This article looks backwards to understand how practitioners managed their performance in the past. It focuses on two British multiple retailers between 1920 and 1939 and highlights not only the formal processes they adopted but also the role of the informal processes which shaped how they achieved their objectives.

Introduction

In 1992, Robert Kaplan and David Norton published ‘The Balanced Scorecard – Measures that Drive Performance.’ The article called for a complete rethink on how companies measure their performance and captured the interest of both academics and practitioners alike.¹ It was not the first to challenge how firms measure their performance but its popularity triggered what was subsequently described as a ‘revolution’ which continues to this day.² However, while the subject may have had its roots in measurement, it has evolved and broadened over the last 25 years. Lebas argued that performance measurement is inseparable from performance management as one creates the context for the other.³ Kaplan and Norton’s own contributions have shifted from an emphasis on measurement systems to management systems where measurement is just one part of a wider system.⁴ Similarly, Bititci et al. placed performance measurement within a wider performance management system. In their widely cited definition, they describe a process by which the company manages its performance in line with its corporate and functional strategies and objectives. And, the performance measurement system, which forms part of it, provides the feedback to make appropriate management decisions.⁵ It is this wider context that is the subject of this article and will be referred to as performance measurement and management (PMM).⁶

Despite the considerable focus on PMM systems over the last 25 years, it is not clear that they have been a success in practice. Firms have struggled to implement systems and research has failed to provide consistent evidence that these systems actually improve performance.⁷ H.T. Johnson, whose work with Kaplan on ‘Relevance Lost’ did so much to trigger the performance measurement revolution, has gone even further. Provocatively, he concludes that not only are measures and targets not needed to manage performance but that the on-going focus on them can harm the long-term performance of the organisation.⁸ Some of the most published researchers in the field now question our current understanding of PMM. They argue that the discipline is at a ‘cross-roads’, that ‘our understanding of this field is far from complete’ and requires ‘a complete re-think’.⁹

In considering the issues, the literature too often overlooks the experience of firms in the past. Consideration of how to manage performance and how to use the statistics increasingly available to them has long been a concern for organisations, particularly as they developed from small-scale to large-scale and from single-unit to multi-unit businesses. The conventional narrative describes the focus of pre 1960s performance measurement and management on the supply side; costs needed to be minimised, work was primarily manual and management systems were based on prescriptive procedures and controls.¹⁰ However, this understates the importance of the service sector and particularly the large-scale retail sector which emerged at the end of the nineteenth century. Their management practices focused on the demand side: on the customer and the ‘knowledgeable’ employee who had to understand not only their customers but also the products they had (or had to acquire) to meet their changing needs. In multiple retails, managing the performance of the business was further complicated by distance. Head Offices were not only distant from their customers but also their employees who were responsible for managing the relationship with the customer.

This article will compare the experiences of two British multiple retailers between 1920 and 1939 to understand how they used measures and managed their performance during a period that was volatile economically but managerially innovative. Boots Pure Drug Company (Boots) and WH Smith and Sons (WHS) were already well-established firms by 1920. WHS, founded in 1792, was a traditionally managed firm with structures which had evolved slowly over the previous century. In 1920, it was still owned by the Smith family and managed by a small group of Partners comprising family members or close family friends. In contrast, Boots was bought by the United Drug Company of the United States in 1920 and immediately introduced the innovative structures of its parent company’s retail business (Liggett’s). In comparing the PMM structures of the two firms, the aim is not to identify the differences but rather the similarities and, in understanding these, to provide insights which may help answer questions being raised about modern PMM systems.

Approach

To compare the two firms, data collection, analysis and presentation has been informed by Ferreira and Otley’s ‘extended framework for analysis of performance management systems’.¹¹ The framework was developed as a research tool for describing the structure and operations of these systems in a holistic manner and was based on an earlier model developed by Otley.¹² It was a response to criticism that much of the existing research into PMM’s had been based on simplified and partial settings.¹³

The framework has been modified to avoid obviously anachronistic terminology and some of the separate elements in Ferreira and Otley’s framework have been merged to simplify presentation. The framework is based on a series of questions grouped under the principal components of a PMM system (see Table 1).

Table 1. Framework.

	Questions
Performance objectives	What were the key factors believed to be central to the organisation’s overall future success and how were they brought to the attention of managers and employees?
Organisational structure	What was the organisation structure and what impact did it have on the design and use of performance management structures and systems? How did it influence and how was it influenced by the performance management processes?
Performance management processes:
• Planning and targeting performance	What strategies and plans did the organisation adopt and what were the processes and activities that it decided were required for it to ensure success? How did it go about setting appropriate performance targets for its key performance measures?
• Evaluating performance	What processes (formal and informal) did the business use to evaluate individual, group, and organisational performance? Were performance evaluations primarily objective, subjective or mixed?
• Motivating (including rewarding) performance	How did the firm motivate employees to deliver the performance of the business? What was the mix of financial and non-financial rewards?
Measuring performance	What were the key performance measures? How frequently did they change? How were they specified and communicated and what role do they play in performance evaluation? Were there significant omissions?
Linking the system	How wer...