Chapter 11

Organizational Structures

Organizational Structures

Refers to the way a retail organization is designed, including the division of tasks, line of authority, span of control, and coordination methods.

Division of Tasks

Retailers play a specific role within the distribution channel, working alongside wholesalers and manufacturers to deliver products to consumers.

Line of Authority

A clear hierarchy defines who reports to whom within the organization

Span of Control

The number of employees a manager directly supervises should be limited to ensure effective oversight.

Empowerment and Delegation

Employees are more motivated and productive when given ownership and decision-making authority within defined parameters.

Coordination and Communication

Effective communication channels are crucial for smooth operation across all departments.

Informal Relationships

Recognize the value of positive working relationships that go beyond formal reporting structures

Small Independents

Often have a flat structure with a single owner or manager overseeing all aspects of the business.

Department Stores

Traditionally organized with merchandise departments overseen by dedicated buyers and managers.

Chain Stores

May utilize an "equal-store" format where all stores have a similar structure and merchandise selection.

Large Retail Chains

May have complex structures with regional divisions, product category specialists, and centralized support functions.

Human Resource Management Cycle

Involves recruiting, selecting, training, compensating, supervising, and motivating employees in the retail sector.

Employee Turnover Costs

Hidden expenses associated with replacing employees, such as recruitment, training, productivity loss, customer loyalty, and supplier relationships.

Diversity and Inclusion in Retail

Focuses on promoting equal opportunities for women and minorities through training, advancement, recruitment, and zero-tolerance discrimination policies.

Women in Retail

The industry has a high percentage of female employees. Important considerations include:

• Training and advancement opportunities.

• Flexible work arrangements (flex time, job sharing).

• Access to childcare options.

Minorities in Retail

Fostering a diverse workforce requires:

• Clear commitment to diversity from leadership.

• Active recruitment programs to attract qualified minority candidates.

• Training and development opportunities for all employees.

• A zero-tolerance policy for discrimination

Diversity as a Business Strategy

Utilizing a diverse workforce to gain a competitive edge by reflecting customer demographics, fostering innovation, and enhancing creativity.

Labor Law Compliance

Ensuring adherence to labor laws covering minimum wage, discrimination, workplace safety, ADA compliance, and ethical sourcing practices.

Job Descriptions and Training

Clearly defining job roles, responsibilities, and skills required, along with investing in training programs for employee development.

Employee Compensation

Includes salary, commissions, bonuses, benefits, and other incentives to attract and retain talent in the retail industry.

Commissions based on sales performance

Incentivize employees to exceed sales targets and contribute to the store's profitability.

Profit-sharing bonuses

Reward employees for their collective contribution to the company's success. This can foster a sense of ownership and engagement.

Benefits packages (health insurance, paid time off)

Offer competitive benefits packages to attract and retain top talent. Health insurance helps employees feel secure and reduces absenteeism due to illness. Paid time off allows employees to recharge and maintain a healthy work-life balance, potentially leading to increased productivity and morale.

Employee Motivation Factors

Influences on employee behavior like achievement, job satisfaction, work environment, relationships, leadership confidence, and understanding of company goals.

Close supervision

Assumes employees are naturally lazy and require close supervision.

Self-motivation

Assumes employees can be self-motivated and take ownership of their work.

Self-management

Management applies self-management approach