Page 22 - DMGT553_RETAIL_STORE_MANAGEMENT

Unit 1: Introduction: An Overview of Retail Operations

Notes

Case Study Decentralization within a Book Retailer

Introduction
The largest specialist book retailer in the UK and Ireland is Waterstone’s. It has more than
200 branches and employs approximately 4,200 people. Organisations are as individual as
nations and societies. Their widely different cultures are reflected in their values, ideals
and beliefs. Within Waterstone’s, the belief is that each branch is part of the local community.
In this context, the buying decisions of each branch should, therefore, directly reflect and
respond to local customer demand, which gives each individual branch a sense of identity
and local relevance.
Waterstone’s is a familiar sight in high streets as well as in airports and on university and
college campuses. All branches are tailored to meet the needs of customers in the catchment
area and local market. Recent developments include an Internet bookstore, where books
can be ordered electronically, and another superstore in Piccadilly that is 56,000 sq. ft. in
size.
Vision

Sharing a vision enables everyone within an organisation to think ahead and be part of
the plan for the future of that business. The shared purpose within Waterstone’s is simple,
“To be the world’s best loved and most profitable Booksellers”. This provides direction
for the organisation to form the basis of a strong and vibrant company culture, which
positions the customer as key in terms of business priorities.

The complete commitment and support of everyone within the company is required to
deliver the kind of service this vision demands. Waterstone’s believes people are its most
valuable asset. People need to know where the organisation is going and what it is aiming
to achieve.
Decentralisation

Decentralisation is the movement of power and decision-making from the centre outwards
to other parts of the organisation. The belief behind decentralisation is that most decisions
cannot be taken at the centre but instead must be taken on the spot by people who know
the circumstances and customers. Decentralisation provides a radical challenge to the
traditional methods of control and influence exerted within an organisation.
Within Waterstone’s, decentralisation means that wherever possible, individual branches
have the freedom to make their own decisions about how best to serve their customers
and manage their part of the business. This case study looks at why Waterstone’s chose to
decentralise and examines the impact that this has had upon the business. It examines:
1. why decentralisation is a key response to the book industry supply chain.

2. the impact of decentralisation on how Waterstone’s is structured as well as on how
it operates.
3. how decentralisation helps to equip Waterstone’s booksellers with the skills and
knowledge that the business needs to fulfil its business priorities.
Organizational Structure
A typical retail company will have a hierarchical structure like the one shown. Dependent
upon management policies, senior buyers will control the quantity and type of products
Contd...

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