Organising and Supervision in Retail

Made By : Muskaan Mahajan(21) Surbhi Sachdeva (36)

Steps to Operate Retail Business

Setting up organization structure.
Hiring and managing Personnel. Managing operations.

Organization structure
It is the formal system of task and reporting

relationships that controls, coordinates, and motivates employees so that they cooperate to achieve an organization's goals. Encourage employees to work hard and to develop supportive work attitudes Allow people and groups to cooperate and work together effectively A retailer cannot survive unless its organization structure satisfies the need of the target market, regardless of how well employee and management needs are met.
Most of the retailers do similar tasks such as buying,

pricing etc. but there are many ways of organizing a retail firm.

Process of organizing

Outlining the specific task to be performed in retail distribution channel.

Dividing the task among channel members.

Grouping the retailers task into jobs.

Integrating positions through an organization chart.

Classifying the jobs.

Specifying the tasks to be performed

Buying merchandise Setting price Inventory storage Customer research Customer contact Facilitate shopping Customer follow up and handling complaints. Personnel management Billing customers Handling receipts Delivery to customer Handling Returns Sales forecasting and budgeting

Dividing the tasks among channel members

The tasks which are mentioned in the previous

step does not needs to be done by a retailer only. It can be divided among the retailer, manufacturer or wholesaler, specialist etc.

Grouping tasks in jobs

The tasks can be grouped into jobs. For eg.

- Displaying merchandise and customer dealings can be the job of sales personnel. - Entering data and managing cash can be the job of the cashier.

Classifying jobs
Here jobs are classified by categorizing them into

functional, product, geographic or combination.

Developing an organization chart

Format of the retail organization should be

designed in a coordinated and integrated way. With these things in mind , a retailer devises an organization chart which graphically displays the hierarchal relationships.

Organizational design
is the process by which managers select and manage various dimensions and components of organizational structure and culture so that an organization can achieve its goals.

Considerations of Organization design

1)

2)
3) 4)

Focus on Specialization Matching Authority and responsibility Work out the reporting relationships Matching organizational structure to the retail strategy

Focus on Specialization
The tasks should be assigned and allocated to the employees on the basis of the expertise that they possess. This will help in improving the quality of the work as well as increase the job satisfaction amongst the employees.

For eg. An employee who is an expert in promotions and marketing should be assigned with the responsibility of promoting the retail store.

Matching Authority and Responsibility

Providing relevant authority and responsibility to the employees helps the employees in effectively undertaking the responsibilities which are assigned to them and get lead to maximization in sales and revenues.

But many times providing the authority and responsibility may also lead to serious conflicts between the employees. For eg. Conflict between the store manager and the merchandise department regarding the purchase of stock.

Working out the reporting relationship

The organization should ensure that there are correct number of employees under the superior. It should neither be too less nor too more.

Managing organization structure to retail strategy

The structure of the retail organization should match the retail strategy. The structure will change according to the type of retailer and the size of the store. For eg. The structure of a single store retailer will differ from the structure of a chain store retailer.

Retail Organization Structures

Single Store Retailer

A very uncomplicated arrangement.

Usually two or three levels of personnel including

the owner, manager and the employees. No or very less specialization.

Department Stores
1) 2) 3) 4)

It divides the entire organization into four main parts:Merchandising Publicity Store Management Accounting and Control.

Chain Retailers
Many functional divisions

Merchandising, sales promotions, distribution,

real estate, personnel, IT etc. Centralization of authority.

Issues in Designing a Retail Organization

There are two main issues while designing a retail organization structure1) 2)

The degree of centralization. Coordinating merchandise and store management.

The degree of centralization

Centralization is the process by which the activities of an organization, particularly those regarding decision-making, become concentrated within a particular location and/or group. On the other hand, Decentralization is the distribution of power in the lower level of management.

Benefits of Centralization
1)

2)

3)

Reduction in cost Overhead costs are reduced because lesser managers are required to make decisions. Improves efficiency With the help of standard policies and guidelines. Allows experts to take decision The best people makes decision.

Limitations
The major limitation is that the person sitting in the corporate office does not know about the conditions in the local market and hence he can not take any relevant steps to fight the local competitors.

Coordinating Merchandise and store management

An independent retailer does not faces any problem in coordinating the store and the merchandise as he is in a direct touch with the customers, so he can look after the customer demands and fulfill it very easily.

On the other hand, a large retail firm having a lot of retail chains faces this problem as both the store and the merchandise department are dependent on each other for fulfilling the customer demands and requirement.

Approaches to coordinate
1)

2)
3)

Increasing the contact with the customer. Regular visits to the store. Involving the manager in coordinating the buying and selling process.

Supervision is the manner of providing a job environment that encourages the employee accomplishment. The goals are to oversee personnel, achieve good performance, maintain employee morale and motivation, control expenses, and communicate policies.

Proper supervision is needed to sustain a superior performance of the employees. Supervision is provided by personal contact, meetings and reports.

 The key to good supervision is knowing how to

motivate employees.
Motivation is the drive that moves people to act.

Supervisor must discover the key that motivates each employee.

Two schools of thought on amount of supervision that should be exercised

HEAVY HEADED APPROACH LIGHT HEADED APPROACH

How to evaluate
Formal evavluation in which emplooyees receive

a detailed account of their job performance tell exactly what their status is. Factors to evaluate are performance and personal attributes.

Employee evaluation factors

Performance characteristics Job knowledge Quality of work Quantity of work Organizing capabilities Supervision requirements Promptness Peer relationship Personal attributes Enthusiasm Loyalty Dependability Leadership Maturity Stability Creativity

Customer relations
Analytic abilities

Honesty
Initiative

Store personnel Evaluation methods

Degree of objectivity Degree Of Formality Formal Objective Subjective

Performance records MBO

Professional shoppers

Rating scales Checklist

Intuition

Informal

 1)

3 basic styles of supervision Management assumes that the employees must be closely supervised and controlled.

2)

Management believes that the employees can be self managers and assigned authority.

3) Management applies a self management approach and also advocates more employee involvement in decision making.