Organizational Structure of Retail Firm Dr. Anitha prasad

7/27/2019 Organizational Structure of Retail Firm Dr. Anitha prasad

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The Process of Organizing a Retail Firm

http://www.prenhall.com/bermanevans/chapter11

http://www.prenhall.com/bermanevans/chapter11



Organisational structure helps in maximizing

efficiency and profitability of a firm

Major or minor business requires this

structure

By doing so Line of authority is delineated

Duties and responsibilities are identified, thus

○ Helps in understanding what the job is

○ Who should report to whom

○ To identify and seek help from advisory personnel in

decision making



Organisation chart

A graphic presentation that all employees canunderstand it Helps in lot of daily jobs of employees

Each retail classification has certain traditionalorganizational structures

Each company tailors a chart that best suitsits specific needs

structural changes are made to suit their needs



Organization Chart Components

an organization chart depicts the

various company divisions or

functions

○ the relationships of these positions to eachother,

○ the decision-making,

○ lines of authority, and

○ overall size of the company



1. Line Positions

Those who hold decision making positions are

company producers

Whether they are the merchandisers who have the

responsibility for the buying function,

the sales associates who sell the products, or those involved in advertising and promotion,

they are involved in “producing” revenue for the

company.

Collectively, they are the holders of line

positions.



Line relationship

In smaller companies there may not be other persons and the decision makers operate the

business



2. Staff Positions

Large-scale operations need for advisory or supportpositions, technically classified as staff positions

Staff members play an important role in retail

operations.

Their salaries are often higher than those of many in

line positions

They are not lower-level employees even though they

do not make the actual decisions.



GMM heads the

merchandising division

and has the ultimate

power to determineguidelines and

philosophies

concerning product

assortments for the

entire company

Advises and makes

suggestions to the

GMM on areas such as

fashion trends,silhouettes, fabric

preferences, and color

forecasts but does not

have any decision-

making

powers.

Large retailers that use a combination of line positions with staff

positions are called line and staff organizations



Fashion Retailing Organization Charts

Fashion retailers are divided into three

main types

○on-site classifications

○off-site operations

○multichannel operations



on-site classifications, smallest operation,

the single-unit small specialty store

the specialty store operation with several units

the small department store

large department stores

department store groups

large chain operations

off-site operations,○ Catalog

○ Web site only retailers

multichannel operations ○ brick-and-mortar retailers with catalog

○ Internet divisions



On-Site Classifications

a. SINGLE-UNIT SPECIALTY STORES

Each of the

people in the

company is

either a decision

maker or

revenue

producer

owner is in

charge of the

overall

functioning of

the operation,

with the manager

performing somespecific tasks



Small Multiunit Specialty Chains

○ Many small operations achieve success with their first

stores and expand their operations with other unit○ Organisation tables should show these increased

number of employees

CEOoperates from

this location and

leaves the stores toattend to the selling

of the merchandise.



Small Department Stores

Consists of two divisions

CEO is the Chief

Financial Officer

(CFO)

accounting andcredit

Chief Operating Officer

(COO)

store protection, trafficand facilities

management



This organizational structure allows for a certain degree of

specialization in the company but guarantees coordinated storeeffort.

Small departmental store organisation



Large departmental stores Leading stores still use some of the Mazur Plan functions

Controller, merchandise, publicity and store manger division Some titles have changed- publicity is now called as

promotion and some are added

1. Merchandising- lifeblood of retail operation with

upper and middle management

2. Promotion

3. Control

4. Store management –carrying out the practices that

were established by the company’s upper -level executives

5. Store operation

6. Human resources



Large departmental stores



Department Store Groups

○ many department stores that were once independently

operated are now divisions of major retailing giants.

○ As these organizations grow, there is a constant need to

redefine their operations and adjust their structures to reflect

the changes

○ some of these major department store groups sell off divisionsto more profitably operate



Large Chain Organizations

have anywhere from 100 to more than 1000 units.

○ Gap, which operates many different retail concepts suchas Gap Kids, Baby Gap, Banana Republic, and Old Navy

○ discount or off-price operations such as Wal-Mart

○ There is often some form of decentralization such asregional warehousing for shipments in limited time

○ Merchandising decisions are decentralized and left in the

hands of the store managers and their in-store team- JCPenny

○ if a limited number of units in the chain have markets thatare atypical from the rest of the company’s stores, their unique merchandise requirements can be decentralized





Off –site classification

Catalogs

catalog retailer organization charts feature only those

divisions and functions such as merchandising,

product development, advertising, warehousing,

transportation, and customer service





Home Shopping Organizations

The main distribution channel for the home

shopping shows is on cable television



Multichannel Operations

Retailers, large and small, have become proponents of

multichannel retailing.

Brick-and mortar companies, concluded that limiting

themselves to in store operations will prevent them from

reaching wider trading areas.

Most have redirected their tables of organizationto reflectall of the selling channels available to them.



In-store operations, catalogs, and on-line outlets

are presented in three separate divisions.

This is a dept. store, can be adopted to any chain

store



Trends In Organizational Structures

The latest trends of retailing has forced the merchants to reorganize

their tables to serve the needs of customers and thereby profitthemselves

Restructuring to Accommodate Multichannel Expansion

Consolidation of Divisions

○ acquisition of department stores by major retail groups and so

consolidation of staff

Decentralization

○ Merchandise distribution, has now been decentralized to

include regional operations

Documents

Organizational Structure of Retail Firm Dr. Anitha prasad