Page 34 - DMGT554_RETAIL_BUYING

Unit 2: Buying for Traditional Retail Organizations

2.2 Chain Organizations Notes

This major retail classification includes different groups of stores. They include the specialty
stores, discount operations, supermarkets, drugstores, variety stores, and those that specialize
exclusively in their own product lines—the private-label merchants. What they all have in
common is best understood through the broad definition of a chain: a group of stores of essentially
the same type, centrally owned, and with some degree of centralization.

Did u know? Chains include retailers that have as few as two units and those that number
as many as two thousand or more.

Figure 2.2: Chain Organization

Chief Executive Officer

Merchandising Publicity Store Human Control
Management Resources

Real Estate and Warehousing Supplies and
Construction Equipment

Source: http://wps.pearsoncustom.com/wps/media/objects/5808/5947551/MCH150_Ch02.pdf

2.2.1 Divisions of the Organization

The organizational structure of most chain organizations parallels that of the department store.
They usually have many of the same divisions such as merchandising, publicity, store
management, human resources, and control, each of which is responsible for the same duties
and responsibilities in both types of organizations. Therefore, there is no need to reexamine
these divisions. In the chains, however, there are often divisions other than those that have been
discussed in the department store organization. Those divisions make these types of companies
function better.
The nature of the chain organization is centralization. That is, unlike the department store,
which generally operates from the flagship store, the chain operates from a central location or
corporate headquarters where decision making for all of the units takes place. Known as company
headquarters, it houses those who are responsible for all of the policies that govern the business.
Included are the different levels of executives responsible for merchandising, advertising,
accounting, warehousing, traffic and transportation, human resources, equipment and supplies,
research, and sales.
The chart above displays a typical table of organization for a chain that features eight divisions.

Real Estate and Construction

Many of today’s chains are in a constant state of expansion. Some have as many as two thousand
units and are constantly looking to open more to meet the needs of consumers all across the
nation and, in some cases, abroad.

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