Organization Structure &

HRM In Retail

By: Prof. Kamiya Khanna

 Topics
• HRM in Retail i.e. Issues & Concerns
• Creating organizational Structures for a retail firm
• Retail organization structures in
• Single
• Departmental
• Independent Stores

• Retail organization Design Issues

 HRM in Retail
“In today’s Era it is difficult to gain an edge through
unique product offerings, since today’s customers
has easy access to a wide selection of goods.”

Retailers are striving to create a superior store

experience for consumers – To increase sales &
Customer Loyalty

Two Major Retail Variable Assets are:

 Inventory
 Labour
 Labour
• Retailer’s single largest controllable
expense

• Workforce is Retailer’s Face to the

customers

• Through Employees Brand’s Deliver:

• Customer Service & Experience
• Revenue
• Brand Differentiation
 Organization Structures
• Defines the Hierarchy Levels, the reporting
relationships and the decision makers
• Is the starting point for managing a
business
• Helps understanding various task to be
performed and helps in understanding the
roles to be played by people within the
organization.
The Process of Organizing a Retail
Firm
 Identification of Tasks in Retail
Organization

Management

Store Buying & Finance & Legal &

HRM Marketing etc
Operations Merchandising Accounts Administration
 Planning and Assessing a Retail
Organization: Factors to Consider
Planning and Assessing a Retail
Organization: Factors to Consider
Planning and Assessing a Retail
Organization: Factors to Consider
Organization Structure In Retail
• Factors Influencing the creation of Organizational
Structures:

– Scope & Scale of Operation, Viz. Local,

Regional, National or International

– Types of Products Sold

– Types of Departmentalization: Functional,

Product Wise or Geographic
 Organization Structure for
Small/Single/Independent Retailers
Owner/Manager

Responsibilities
Buying, Promotion, Sales, HR, Operational
Control & General Management

Back Office Staff

External Advisors Responsibilities Sales Staff
Accounting & Record keeping, Responsibilities
Lawyers, CA, Data Entry, Inventory Control, Customer Service, Selling,
Bankers, etc Purchase Orders, Time Keeping Stock Control, Display &
& Payroll, Facilities Management Housekeeping
Organization Structures Used by Small
Independents
 Mazur Plan
• In 1927, Paul Mazur recommended a functional
organizational Structure.
• As per Mazur organizational Structure should be built
around 4 functions:
– Control
– Publicity
– Operations
– Merchandising

Various Additions to it as per today’s World are:

- Supply Chain Management
- Logistics
- HRM
 Organization Structure for
Departmental stores- Mazur plan
Organizational Format Used by Chain
Stores
 HRM In Retail
• Hiring persons with Right Attitude is
important in all organizations
The HR Function in Retail Involves:
1. Identifying Various roles in organizations
2. Recruiting people with the right attitude to fit
the jobs.
3. Training
4. Motivating Employees
5. Evaluating employee performance
 Identifying Various roles in
organizations
• Helps in determining the No. of people
involved for various jobs, the skill sets and
educational background needed, location
• Key Tasks in retail organization Involve
 Buying and Merchandising
 Store Management & Operations
 Technology Support
 Training
• Need of Training arises at following
Times:
– Induction
– Sales Staff in direct contact with customers
– Communication Knowledge
– Product Knowledge
– Company Policies on Return
– Knowledge of the workplace
– Market Awareness
– Personal Grooming
– Skill enhancements
 Motivating Employees
• Key Factors that help in Motivating People
are:
– The Organizational Culture
– The Rewards & Recognition
– The Monetary Benefits
– Prospects of Growth and Job Enrichment
Role of HRM in Retail

Role of HRM in
Retail
 Retail Organization Design
Issues

1. The Degree to which decision making

is centralized or decentralized.
2. Approaches used to co-ordinate
merchandise and Store Management.
 Centralization Versus
Decentralization
Centralization is when authority for retailing
decisions is delegated to corporate
managers rather than to geographically
dispersed regional, district, and Store
Managers.

Decentralization is when authority for retail

decisions is assigned to lower levels in the
organization.
 Advantages of Centralization
1. Reduction in Costs
- Overheads Fall as fewer managers are required to make
the Merchandise , HR, Marketing and Financial Decisions.
- The no. of buyers reduce, Reduction of personnel in
administrative functions such as marketing and Human
Resource.

2. Coordinating buying achieves lower prices

from suppliers.
- As large Quantities can be ordered together

• Provides an opportunity to have best people

make decisions for the entire corporation.
 Advantages of Centralization
4. Centralization increases efficiency
- Standard operating policies are used for
store and personnel management; these policies
limit the decisions made by store managers.

For e.g.: Corporate merchandisers do considerable

research to determine the best method of presenting
merchandise.
 Disadvantages of Centralization
1. Makes it more difficult for a retailer to adapt
to local market conditions.
2. Cannot Tailor merchandise to local needs
3. Cannot respond to local competition and
labor markets.
4. Pricing is centrally established, individual
stores may not be able to respond quickly to
competition in their markets.
5. Centralized personnel policies can make it
hard for local managers to pay competitive
wages in their area to hire appropriate
salespeople.