The Process of Organizing a Retail Firm

thus ○ Helps in understanding what the job is ○ Who should report to whom ○ To identify and seek help from advisory personnel in decision making .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.

Organisation chart  A graphic presentation that all employees can understand it  Helps in lot of daily jobs of employees  Each retail classification has certain traditional organizational structures  Each company tailors a chart that best suits its specific needs structural changes are made to suit their needs  .

○ lines of authority. and ○ overall size of the company . ○ the decision-making.Organization Chart Components  an organization chart depicts the various company divisions or functions ○ the relationships of these positions to each other.

or those involved in advertising and promotion. the sales associates who sell the products. Line Positions  Those who hold decision making positions are company producers  Whether they are the merchandisers who have the responsibility for the buying function. .1. they are the holders of line positions. they are involved in “producing” revenue for the company.    Collectively.

Line relationship In smaller companies there may not be other persons and the decision makers operate the business .

. technically classified as staff positions  Staff members play an important role in retail operations.2. Staff Positions  Large-scale operations need for advisory or support positions.  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 determine guidelines and philosophies concerning product assortments for the entire company Advises and makes suggestions to the GMM on areas such as fashion trends. silhouettes. and color forecasts but does not have any decisionmaking powers. Large retailers that use a combination of line positions with staff positions are called line and staff organizations . fabric preferences.

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. ○ Catalog ○ Web site only retailers  multichannel operations ○ brick-and-mortar retailers with catalog ○ Internet divisions .  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.

with the manager performing some specific tasks Each of the people in the company is either a decision maker or revenue producer .On-Site Classifications a. SINGLE-UNIT SPECIALTY STORES owner is in charge of the overall functioning of the operation.

 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 to attend to the selling of the merchandise. .

Small Department Stores  Consists of two divisions CEO is the Chief Financial Officer (CFO) accounting and credit Chief Operating Officer (COO) store protection. traffic and facilities management .

Small departmental store organisation This organizational structure allows for a certain degree of specialization in the company but guarantees coordinated store effort. .

Store management –carrying out the practices that were established by the company’s upper-level executives 5. publicity and store manger division Some titles have changed. Merchandising. Promotion 3.publicity is now called as promotion and some are added 1.    Large departmental stores Leading stores still use some of the Mazur Plan functions Controller. merchandise. Human resources . Store operation 6.lifeblood of retail operation with upper and middle management 2. Control 4.

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 divisions to more profitably operate .

their unique merchandise requirements can be decentralized . Large Chain Organizations  have anywhere from 100 to more than 1000 units.JC Penny ○ if a limited number of units in the chain have markets that are atypical from the rest of the company’s stores. Baby Gap. and Old Navy ○ discount or off-price operations such as Wal-Mart ○ There is often some form of decentralization such as regional warehousing for shipments in limited time ○ Merchandising decisions are decentralized and left in the hands of the store managers and their in-store team. which operates many different retail concepts such as Gap Kids. Banana Republic. ○ Gap.


transportation. warehousing. and customer service .Off –site classification  Catalogs catalog retailer organization charts feature only those divisions and functions such as merchandising. product development. advertising.

e . ○ Their organization charts. deal primarily with product acquisition. Internet Web Site Organizations ○ Web sites with fashion orientations limit themselves to the Internet to reach potential customers. warehousing. visual presentation. like their cataloger counterparts. and customer services. transportation.

 Home Shopping Organizations The main distribution channel for the home shopping shows is on cable television .

Multichannel Operations  Retailers. Most have redirected their tables of organizationto reflect all of the selling channels available to them. concluded that limiting themselves to in store operations will prevent them from reaching wider trading areas. large and small. have become proponents of multichannel retailing. Brick-and mortar companies.   .

store. catalogs. and on-line outlets are presented in three separate divisions. In-store operations. can be adopted to any chain store  . This is a dept.

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 profit themselves  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 .