Marketing Communications

Chapter 7 : Retail Organization and Management

Designing a Retail Organization Structure

Defining Organizational Objectives
Identifying Organizational Tasks

Principles of Retail Organizational Design

Specialization and departmentalization

Authority and responsibility
Unity of command
Span of control

Forms of Retail Organization

Levels of organization

Retail Organization Structures

Independent store Organizational Structure
Department store Organizational Structure
Chain store Organizational Structure

Legal Forms of Retail Organization

Sole proprietorship
Partnership
Corporation

Chapter Summary

An organization is a formal structure of roles and positions put in place to achieve some specific goals. The structure of a retail organization defines the role of employees and the way in which the organization functions. This chapter discussed the steps involved in designing an appropriate retail organization structure to enhance a store's ability to serve its target markets. To design an effective retail organization structure, managers/ owners must define store objectives, identify the tasks, classify the tasks and jobs, and assign responsibilities and authority to various positions, and define the relation between them.

Organizations can have flat structures or vertical (tall) structures. A flat organization structure has only one or two levels of management, whereas a vertical organization has more than two levels of management.

Independent stores, department stores and chain stores use different organization structures to facilitate their operations. Department stores use the basic Mazur plan with some modifications to design their organization structure. This chapter also described various forms of ownership like sole proprietorship, partnership and corporation.

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