As the text outlines, there are four levels of management in a retail firm (typically a large retain chain operation):

1. Strategic, which guides the entire operation.
2. Administrative, which handles logistics, manages employees, and attends to marketing and financial activities.
3. Merchandise management, which entails the buying functions, as well as inventory management and pricing policies.
4. Store management, which attends to the day-to-day operations at the store level.

Of course, in a mom-and-pop retail enterprise, these four functions are usually wrapped up into one job and handled by the proprietor(s)!

Organization Design Considerations

A number of issues surface at this point, including:

• Specialization--focusing employees on a narrow range of activities. For examples, buyers often have a very narrow range of product categories for which they are responsible.
• Responsibility and authority--in all too many cases, employees have responsibility but lack authority to make important decisions without first receiving permission from a superior. Effective management grants authorities as needed to employees.
• Reporting relationships, which deals with how many employees report directly to a specific manager. The goal is to not have too many or too few reporting relationships, although the optimal number is anyone's guess.
• Matching organization structure to retail strategy. Lean, low-margin retailers often have management decisions made at centralized locations, while those with higher margins (and less price-sensitive customers) tend to have more decisionmaking authority at the store level.

As mentioned above, though, many of these issues are moot if we are discussing a mom-and-pop retailer. Whereas a large retail chain (regional or national) will likely have separate retail divisions, merchandise divisions, teams of buyers, etc., the small retailer will count itself lucky if the store manager, buyer, and salesperson are all not the same person!

Improving the Process

Large retail corporations often require Buyer Trainees to function first as retail clerks. This gives the would-be buyers a much deeper appreciation for the operations. Stores like Wal-Mart practice unannounced in-store visits to monitor activities (much like Sam Walton once did himself to ensure that customer service and everything else were in tip-top shape). In some firms, buyers work with store managers within a region. This is critical for recognizing that regional differences do exist across the country, and that what may sell well in one region may not work at all in others. Finally, some chains allow for feedback and involvement from store manageers in the buying process. In other words, there is recognition that the local manager may indeed have keen insight into what really needs to happen at his/her store, rather than the folks back at HQ.

Motivating Employees

Given that employees at the store level are often unmotivated and unloyal, it can be difficult to keep things under control. Below are several key areas of concern:

1. Balancing policies and supervision with employee freedom. It is common to try to reduce everything to a policy manual that governs all possible situations. Of course, it is inevitable that a situation will arise that is not covered in the manual. Furthermore, this inflexibility can serve to further unmotivate employees.
2. Incentives, such as commissions and bonuses. If a retailer pays a straight wage scale, bonuses can help motivate employees to reach above and beyond what might be considered "normal." In some firms, all sales staff are on straight commission, which can be a huge motivator. But incentives like commissions and bonuses can cause employees to overlook some aspects of their jobs. If a vendor is offering a "spiff" this week for selling its product, the employee may push that particular item at the expense of all others. Management must be careful to not bait employees into striing to get maximum bonuses and commissions, at the expense of ignoring other important aspects of their jobs. Remember, an employee's agenda will often be different from that of the firm.
3. Organizational culture, which is the internal "culture" of the firm. At REI, the culture is very laid back, with employees being stakeholders in the organization as well as workers. Employees dress casually, and are often hard-core users of the products they sell. This creates a hands-on culture for both employees and customers, who feel free to try out a product on-premise (where possible, of course!). Personally, I would rather trust a grizzled veteran hiker selling me a GPS unit than some squeaky-clean kid in a polo shirt who never ventured farther than the mall his entire life!

Building Commitment

Of course, compensation and incentives are important considerations in building morale and commitment, but there are other factors that can be used to help retain employees and keep them focused on the goals of the company:

1. Selective Hiring. Of course, this is easier said than done, especially when the labor market is tight. In many cases, retailers have to hire people who have a pulse and little more. When the labor market is tighter, firms can be a little more selective in hiring practices so that they hire people well-qualified for the task.
2. Training. It goes without saying that employees should be trained, but in many cases they are not. Training includes exposure to company policy and procedures, as well as any equipment that will be operated. Finally, traiing may include exposure to the products being sold, especially if there is any technial nature to those products.
3. Empowerment, which means giving employees some authority to make decisions on the fly as needed. In other words, the firm is saying that it trusts employees to make sound decisions on certain issues that may arise. This can also serve the purpose of maintaining customer satisfaction, as well as freeing managers to do their jobs without being hounded for low-lvel decisions.
4. Another method of building commitment is to try to reduce the status differences between management and employees. As long as there are either real or perceived large differences between management and the employees down on the floor, commitment will be low.
5. Promoting from within is a great way to help retain employees, because they know that they have an opportunity for upward advancement.
6. Finally, flextime and job-sharing are important options (and "benefits") to offer employees. Given the complexities of 21st-century living, employees often need a little give-and-take with their jobs. Offering a little flexibility can go a long way in retaining employees.