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Principles of Retail Organization

This document discusses the key functions and organizational structure of retail businesses. It outlines the main areas of operations which include merchandising, store operations, marketing, sales promotion, finance, real estate/store planning, and human resources. It then describes the organizational structure ("organo") which aims to facilitate smooth communication and delegate authority and responsibilities. The principles of delegation of authority, functional specialization, and others are discussed. Maintaining proper delegation processes around responsibility, authority, and accountability is also highlighted. Factors to consider for suitable business ownership forms are outlined. Finally, it briefly discusses vertical integration strategies some retailers and manufacturers undertake.

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anithaprasad
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4 views10 pages

Principles of Retail Organization

This document discusses the key functions and organizational structure of retail businesses. It outlines the main areas of operations which include merchandising, store operations, marketing, sales promotion, finance, real estate/store planning, and human resources. It then describes the organizational structure ("organo") which aims to facilitate smooth communication and delegate authority and responsibilities. The principles of delegation of authority, functional specialization, and others are discussed. Maintaining proper delegation processes around responsibility, authority, and accountability is also highlighted. Factors to consider for suitable business ownership forms are outlined. Finally, it briefly discusses vertical integration strategies some retailers and manufacturers undertake.

Uploaded by

anithaprasad
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Business is an activity of creating, producing and marketing products or services for a profit

Merchandising Store Operations Marketing Sales Promotion Finance Real Estate or Store Planning Human Resources

Merchandising
responsibility for planning, buying

Store Operations
planning, managing and maintaining the retail building, protecting the store and merchandise providing customer services co-ordinating the movement of goods and people

Marketing
directs the focus and image of the store

right merchandise at the right time and to make a profit

Sales Promotion
informs customers about goods and services

Finance
controls expenditures and keeps records of money

spent and receivedReal Estate or Store Planning

Real Estate or Store Planning


Oversees store location, property investment,

building and construction and fixtures.

Human Resources
Staffs the store with people who are qualified and

trained

Retail organisation is also known as organo,


which is designed for the smooth flow of communication

so as to create a hierarchical structure to delegate authority and responsibilities

to strategically match the mission, vision and values of the organisation,

to increase productivity
stake holder

enhance customer value so as to fulfil the interest of the

Every manufacturer and every retailer has to take care of

Man, Merchandise, and Money

Principles give an overall perspective of why the organisation was formed and how it plans to sustain itself and grow Principles are incorporated into policy as guidelines in decision making
Delegation of Authority Functional Specialisation

Product Specialisation
Client Specialisation Life style Grouping Geographic Specialisation

Branch Store
Span of Control Unity of Command Line Staff Conflict

organisation should be concerned about its employees Job orientation, rotation, promotion, job enrichment, improve

work morale

Employee turnover, lateness and absenteeism should be monitored


The line of authority should be traceable A subordinate should only report to one supervisor Responsibility should be associated with adequate authority While a supervisor can delegate authority, he/she retains responsibility for the acts of subordinates
There is a limit to the number of employees a manager can directly supervise (span of control)

The firm should strive to limit the number of organisation levels. An organization has an informal structure aside from the formal organisation chart

Three elements are derived from proper delegation process Responsibility


Once the work is defined and assigned to an

individual, an immediate result is the establishment of a unit of responsibility

Authority
right to take all actions necessary to discharge a unit

of responsibility

Accountability
report formally to his superior on the discharge of his

responsibility.

Suitable form of ownership is generally made after careful consideration of the following factors
Nature of business-Service, trade, manufacturing Scale of operations-Volume of business (Large, Medium, Small) and

size of the market area( Local, National, International) served

Degree of direct control desired by owners Amount of capital required initially and for expansion

Degree of risk and liability and the willingness of the owner to assume

personal liability for debts of business

Division of profits among the owners Continuity of the business Relative freedom from government regulations Flexibility of operations Managerial requirements Tax burden

Vertical Integration firm performs more than one set of activities Ex: retailer invests in wholesaling or manufacturing Backward Integration retailer performs some distribution and manufacturing activities Ex: JCPenney sells Arizona jeans (Private Label) Forward Integration manufacturers undertake retailing activities Ex: Ralph Lauren operates its own stores

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