Organizational Structures
After reading this chapter, you should be able to discuss:
■ The differences between line and staff positions as shown on organization charts.
■ How an organization chart is structured showing the lines of authority.
■ The different types of organizational structures presently used by retailers.
■ The beginnings of organization structuring for large department stores and how they have changed to suit today’s companies.
■ Reasons why chain organizations conduct their businesses as centralized op- erations.
■ Why some chains have decentralized some of their functions.
■ Reasons for separating the buying and selling functions.
Once the decision has been made to begin a retail venture, it is necessary to plan its organ- izational structure in a way that maximizes efficiency and profitability. All of the duties and responsibilities of those in the company must be identified, and lines of authority must be carefully delineated so that all members of the organization will understand what their job responsibilities are. By doing so, everyone knows who will report to whom, who the deci- sionmakers are, and which advisory personnel is on hand to assist in the decision-making process. No matter how large or small the operation, whether it is a major department store or single-unit boutique, each company must be structured in such a way that best serves its needs and makes the business a success.
To clarify their organization’s structure so that all employees can understand it, most companies prepare a graphic presentation called an organization chart. The chart clearly spells out the various divisions of the company, the roles they play, lines of responsibility and authority, decision-making positions, advisory roles (if there are any in the organization), and areas of responsibility. Such charts allow employees at any level of the