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Unit 1: Introduction: An Overview of Retail Operations

As sales increase, specialization in management may occur when the owner manager hires Notes
additional management employees. Figure given above illustrates the common division of
management responsibilities into merchandise and store management. The owner-manager
continues to perform strategic management tasks. The store manager may be responsible for
administrative tasks associated with receiving and shipping merchandising and managing the
employees. The merchandise manager or buyer may handle the advertising and promotion
tasks as well as the merchandise manager or buyer may handle the advertising and promotion
tasks as well as the merchandise tasks. Often the owner-manager contracts with an accounting
firm to perform financial control tasks for a fee.
Organization of a Regional Department Store: In contrast to the management of a single store,
retail chain management is complex. Managers must supervise units that are geographically
distant from each other. In this section, we use Rich and owned by Federated Department Stores
to illustrate the organization of a large, multi-unit retailer. The Rich Stores merged three regional
department store chains. While the store carry the name of the regional chains, there full name
of the division, we traditionally, department stores were family-owned and managed.
Organization of these firms was governed by family circumstances. Executive positions were
designed to accommodate family members involved in the business. Then, in 1927, Paul Mazur
proposed a functional organization plan that has been adopted by most retailers. The organization
structures of retail chains, including Rich management tasks into separate divisions.

Figure 1.2: Organization of a Regional Department Store Rich

Divisional
Merchandise
Managers

Source: Everonn_ Retail Management _Exhibit 6.2: Organization of a Regional Department Store Rich
Figure 1.2 shows Rich Max have similar organization structures. Vice presidents responsible for
administrative tasks, specific merchandise categories, stores, report to the chairperson and
president.

In most retail firms, the two senior executives typically called the CEO and COO, work closely
together in managing the firm. They are frequently referred to as principles or partners. One
member of the partnership is primarily responsible for the operating divisions. In Rich

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