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Principles Of Management

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Principles Of Management

Postby Kentrell » Sat Nov 26, 2016 12:43 am

MBA assignment, need answers pls...

2. Why do most of the large department stores and supermarket chains organize

their stores on a territorial basis and then organize the internal store units by

products? Give examples from your own experience.

3. “You cannot motivate managers. They are self-propelled. You just get out of their

way if you really want performance”. Comment.

4. Why do most of the controls of overall performance tend to be financial? Should

they be? What else would you suggest?
Posts: 31
Joined: Thu Apr 17, 2014 11:44 pm

Principles Of Management

Postby Orson » Sat Nov 26, 2016 11:47 pm

:   MBA assignment, need answers pls...

2. Why do most of the large department stores and supermarket chains organize

their stores on a territorial basis and then organize the internal store units by

products? Give examples from your own experience.

Retail Location Strategies & Decisions

Why Location is Important? There are three most important aspects in Retailing – location, location & location. Locating the retail store in the right place was considered to be adequate for success. It is a important part of the retail strategy as it conveys a fair amount of image. It influences the merchandise mix & interior layout of the store. It is difficult to change the location once the store comes into existence. Change of location may result in loss of customer & employees. Types of Retail Location The choice of the location of the store depends on the target audience & kind of merchandise to be sold. Types: Freestanding/Isolated store Store located along major traffic artery No competitive retailers around Rents are usually low Advertising cost are high Customers may not prefer to travel long distance to visit only one store Part of a business district A business district(primary, secondary or neighborhood) is a place of commerce in the city Rent is high; parking is cumbersome It has good accessibility in terms of transport Customers are more . Types: Part of a shopping centre Shopping centre - A group of retail & other commercial establishments that is planned, developed, owned & managed as single property Parking is available Basic configuration – mall or strip centre with walkway Ideally enclosed & climate control Steps involved in choosing a retaillocation 1. Identify the market in which to locate the store 2. Evaluate the demand & supply within that market i.e., determine the market potential 1. Demographic features of the population 2. The characteristics of the households in the area 3. Competition & compatibility 4. Laws & regulations 5. Trade area analysis 3. Identify the most attractive sites 1. Traffic 2. Accessibility of the market 3. The no. & types of stores in the area 4. Amenities available 5. To buy or to lease 6. The product mix offered 4. Select the best site available Retail Merchandising

What is Merchandising? Merchandising is planning, buying & selling of merchandise(product). The American Marketing Association defined merchandising as ?the planning involved in marketing the right merchandise at the right place at the right time in the right quantity at the right price?. Merchandising can be termed as the analysis, planning, acquisition, handling & control of the merchandise investments of a retail operation.Factors affecting the merchandising function Size of organization Merchandising Organization to be carried structure Merchandising function Types of stores Merchandise Planning Merchandise planning can be defined as the planning & control of the merchandise inventory of the retail firm, in a manner which balances between the expectations of the target customers & the strategy of the firm.Implication of Merchandise Planning Finance Payments to suppliers Profitability measurements Developing advertisements New product introductions Details of Purchase Order Warehouse & Logistics Details of allocations Marketing Merchandise Planning Store Operations Space planning Communication about new products & their features Merchandise Planning ProcessStage I: Developing the Sales Forecast 1. Reviewing past sales 2. Analyzing the changes in the economic conditions 3. Analyzing the changes in the sales potential 4. Analyzing the changes in the marketing strategies & the competition 5. Create the sales forecastStage II: Determining the Merchandise Requirements Planning in merchandising is at two levels: 1. The creation of the Merchandise Budget(5 parts) 2. The Assortment Plan Merchandise Budget Stock Planned Planned Gross Sales Plan support plan reduction Purchase Margin

Merchandise Planning ProcessStage II: Determining the Merchandise Requirements Planning in merchandising is at two levels: 1. The creation of the Merchandise Budget(5 parts) 2. The Assortment Plan The Merchandise Hierarchy Merchandise Merchandise Merchandise Style Price SKU(Stock Company Department Classification Category Sub Category point Keeping Unit) ISB&M Retail Management

Merchandise Planning ProcessSome key merchandising termsStaple/basic merchandising – products always in demand(basic necessities)Fashion merchandising – products has high demand for a relatively short period of timeSeasonal merchandising – seasonal productsFad merchandising – enjoy popularity for a limited period of time; generated high sales for a short timeStyle – unique shape or form of any product(taste in music)Assortment – variety of merchandise mix The width/breadth of assortment – refers to the number of brands The depth of assortment – variety in one goods/services categoryPoints to be kept in mind while creating a plan - The merchandise budget should be prepared in advance of selling season. The language of the budget should be easy to understand. Merchandise budget must be planned for a short period – 6 months is the normal norm. Budget should be flexible. Key Components of MerchandisePlanningPlanned sales – Planned sales are projected sales for a period that is planned. Example: Last year’s sale for the same period = 35,000 Month %age increase Planned sales(Rs) Feb 12% 35,000 X 12% + 35,000 = 39,200 April 25% 43,750 June 21% 42,350Planned purchase – Planned purchases represent the merchandise that is to be purchased during any given period. Planned Purchase = Planned Sales + Planned Reductions + Planned EOM – Planned BOM Key Components of MerchandisePlanningPlanned reduction – Markdowns(deductions in prices), employee discounts & inventory shrinkage due to theft or pilferage come under planned reduction.Planned markup – After calculating the level of inventory that needs to be purchased, the retailer needs to determine the initial markup for the products. Markup in Rs. = Selling Price – Cost Price Markup % = Markup in Rs. Retail PriceGross Margin – Gross margin is the difference between the selling price & the cost of the product, less reductions from markdowns, shrinkage & employee discounts. Profit = Gross margin – operating expensesB.O.M(Beginning-of-month) & E.O.M(End-of-month) planned inventory levels –Four Methods of Inventory Planning:a. Stock-to-Sales Method S/S Ratio = Stock in hand E.O.M(at retail value) = Value of inventory Sales for the same month Actual sales Planned BOM Inventory = Stock-sales ratio x Planned sales Key Components of MerchandisePlanning The Basic Stock Method – In this method, the buyer believes that he needs to carry a certain amount of inventory in the store at all times. Basic Stock = Average stock for the season – Average monthly sales for the season Average monthly sales for the season = Total planned sales for the season No. of months in the season Average stock for the season = Total planned sales for the season Estimated inventory turnover rate for the season Beginning of the month(BOM) stock = Planned monthly sales + Basic Stock The Percentage Variation Method – This method of inventory calculation is used in case the stock turnover typically exceeds six times a year. BOM Stock = Avg. stock for season * 1/2 * [1 +(Planned sales for the month / Avg. monthly sales)] The Week’s Supply Method – Retailers who need to maintain a control over the inventories on a weekly basis, may use this method. BOM Stock = Average weekly sales x No. of weeks to be stocked Merchandise Planning ProcessStage III: Merchandise Control – The Open to Buy The concept of Open to buy has two folds: 1. depending on sales of the month & the reduction, the merchandise buying can be adjusted. 2. the planned relation between the stock & sales can be maintained. Open to buy ensures that the buyer – Limits overbuying & under buying Prevents loss of sales due to unavailability of the required stock Maintain purchases within the budgeted limits Reduce markdowns i.e., reduction in price which may arise due to excess buying Open-to-Buy = Planned EOM Stock – Projected EOM Stock Projected EOM Stock = Actual BOM Stock + Actual Additions to stock + Actual on order – Planned monthly sale – Planned reductions for the month Merchandise Planning ProcessStage IV: Assortment Planning Assortment Planning involves determining the quantities of each product that will be purchased to fit into the overall merchandise plan. Details of color, size, brand, materials etc. have to be specified. To create a balanced assortment merchandise for the customer. Department Menswear Product Line Shirts Trousers Accessories Louis Breadth Zodiac Van Heusen Philippe Arrow Depth Styles Color …… Merchandise Planning ProcessStage IV: Assortment PlanningThe Range Plan:The aim of the range plan is to create a balanced range for each category of products thatthe retailer choose to offer.Range planning should take care of - The no. of items/options available to the customer should be sufficient at all times & should be such that it helps the customer make a choice. The overbuying & under buying is limited. Sufficient quantities of the product are available, so that all the stores can be serviced & the product is available at all the stores across various locations. The lower limit of the range width is often called aesthetic minimum Merchandise Planning ProcessStage IV: Assortment PlanningThe Model Stock Plan:After determining the money available for buying, a decision needs to be taken on what tobuy? & in what quantity?Steps - 1. Identify the attributes that the customer would consider while buying the product. 2. Identify the number of levels under each attribute. 3. Allocate the total units to the respective item category. The process of merchandise planning may be top down or bottom up. Top down planning occurs when the corporate objectives dictate the company’s financial objectives in terms of sales, profit & working capital. In Bottom up planning, individual department managers work on the estimated sales projections The Model Stock Plan Men’s shirt 100%(1000) Casual Dress Formal Sport 40%(400) 10%(100) 20%(200) 30%(300) Small Medium Large Extra large 25%(100) 40%(160) 25%(100) 10%(100) Full Sleeve Half Sleeve 30%(48) 70%(112) Button Other Down 60%(67) 40%(45) White Blue Cream Grey 40%(18) 30%(14) 20%(9) 10%(4) Cotton Cotton Blend 25%(4) 75%(14)

Branding & Private Labels

Branding BrandThe American Marketing Association defined a brand as “a name, term, design,symbol or a combination of them, intended to identify the goods or services ofone seller or group of sellers & to differentiate them from those of thecompetitors”. Branding existed from the time man felt the need to differentiate his products from that being offered by others. Branding gradually became a guarantee of the source of the product & ultimately its use as a form of legal protection against copying grew. With the development of shops, shopkeepers hung pictures above their shops indicating the types of goods they sold. With industrial revolution mass production came into existence but the distance between the manufacturers & customers increased. This eventually led to the evolution of the role of the brands as tools by which consumers identified the products. Building a Retail BrandKey questions for retail brands – Can the brand be identified with the lifestyles of its target customers? Is there a perceptible difference between the brand & the products offering by the retailer & other retailers? Can a story be woven around the brand? A retail brand is a combination of the company‘s heritage, the merchandise mix, the store environment, the service strategy, the advertising & promotion. Successful retail branding starts with a clear definition of what retailers stand for – an identification of what the customers associate it with, leading customers to think: “This brand is a reflection of me.. This brand is meaningful to me..” The retailer needs to determine the specific value proposition for the end customers. Playing on emotional benefits can also be a branding exercise of the retailer. Retail branding does not sell a specific product. It is about customer service. Important categories under which the retail stores can be broadly classified are as follows:

Retail stores can be broadly classified into two categories, i.e. store based retailers and non-store based retailers.

The classification is t explained as follows:

Retail Stores

Image Courtesy : upload.wikimedia.org/wikipedia/Pushkar.jpg

A. Store based retailer:

Store based retailer is again classified,

I. On the basis of ownership:

1. Independent retailer:

An independent retailer is one who owns and operates only one retail outlet. Such stores can be seen under proprietorship. The individual retailer can easily enter into a retail market. The owner is assisted by local staff or his family members. These kinds of shops are passed from one generation to other generation.

The independent retailer maintains a good relationship with the customers. Small scale retail business: Single owners can easily start and manage small business units profitably with the help of one or two assistants. It can be a grocery store, stationery shop, or a cloth store, etc.

2. A chain retailer:

When two or more retail outlets are under a common ownership it is called a retail chain. For example: One of a number of retail stores under the same ownership and dealing in the same merchandise. It is called chain retailing.

Chain Stores are groups of retail stores engaged in the same general field of business that operate under the same ownership or management, chain stores are retail outlets owned by one firm and spread nationwide. For example, Van Heusen, Food world, Shopper’s stop etc.

3. Franchise:

A franchise is a contractual agreement between franchisor and a franchisee in which the franchisor allows the franchisee to conduct a business under an established name as per the business format. In return the franchisee has to pay a fee to the franchiser. For example: Pizza hut, McDonalds, etc.

4. Leased Department:

These are also known as Shop in Shops. When a section or a department in a retail store is rented to the outside party it is called leased department. The licensor permits the licensee to use the property and in turn the licensee pays a fee to the licensor for using his property.

5. Consumer Co-operatives:

A consumer co-operative is a retail organisation owned by its member customers. The objective is to provide commodities at a reasonable price. For example: Sahakari Bhandar, Apna Bazaar etc.

II. On the Basis of Merchandise offered

1. Departmental Stores:

A departmental store is a large scale retail institution that offers several products from a pin to plane such as clothing, grocery etc. Retail establishment that sells a wide variety of goods.

Departmental stores are the largest form of organized retailing today, located mainly in metro cities, in proximity to urban outskirts. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under a common roof. Examples include Shoppers Stop, Piramyd, Pantaloon.

2. Convenience stores:

These are relatively small stores located near the residential area. They offer limited line of convenient products such A ` store is a small store or shop that sells items such as candy, ice-cream, soft drinks, lottery tickets, cigarettes and other tobacco products, newspapers and magazines, along with a selection of processed food and perhaps some groceries, etc.

Such stores enable the customers to make quick purchase and offer them few services. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day; Prices are slightly higher due to the convenience premium.

3. Super Market:

These are retail organisations that provide low cost high volume self-service operation to meet consumer requirements. Most of the super market charge lower price. Example: Subhiksha.

They are the large self-service outlets, catering to varied shopper needs. These are located in or near residential high streets. A supermarket, also called a grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into department.

It is larger in size and has a wider selection than a traditional grocery store and it is smaller than a hypermarket or superstore. Supermarkets usually offer products at low prices by reducing their economic margins.


3. Hyper Market:

A hypermarket is a superstore which combines a supermarket and a department store. Hyper markets are huge retail stores that offer various products such as clothes, jeweler, stationery, electronic goods at cheaper price. Example: Big Bazaar, Star Bazaar, Giant Stores etc. They focus on high volume.

4. Specialty stores:

A specialty store is a store, usually retail, that offers specific and specialized types of items. They offer a narrow product line that concentrates on specialised products such as jeweler, fabrics, furniture etc. Customer service and satisfaction are given due importance.

For example, a store that exclusively sells cell phones or video games would be considered specialized. A specialty store specializes in one area. #####################

3. “You cannot motivate managers. They are self-propelled. You just get out of their

way if you really want performance”. Comment.

misunderstood and is a source of much frustration for managers. In the simplest terms, motivation is a need that makes people engage in behavior to satisfy that need. For example, if you are thirsty, you will be motivated to get something to drink. That is the only thing that can motivate you to get a drink. While this example is simple, most motivation problems are not because the majority of our needs are unknown to ourselves and others. Additionally, people have multiple and often conflicting motivators.

Another major aspect of motivation is the difference between intrinsic and extrinsic motivation. Intrinsic motivators drive people to do things because they like to do a particular task; no external incentive is necessary. For example, someone who is intrinsically motivated to meet challenging objectives would likely do well in a sales position with challenging sales goals. Extrinsic motivation, on the other hand, drives people to do things to get an external reward. For example, someone does a job, even though they do not like it, so that they can earn money.

Motivators at Work

Managers and others often think of motivation in general terms, e. g. “they are a very motivated group.” Such usage leaves the effective manager wondering, “what are they motivated to do?” One must think about what people are motivated to do and whether it is consistent with what one wants them to do. For example, a manager may conclude that one employee is motivated to socialize and the other to innovate. Both are motivated, but the behavioral implications of these two motivators are quite different. The manager of the innovator will likely have an easy time getting creative ideas and products from that employee. It might be harder to get innovation from the one who is motivated to socialize. In fact, this example illustrates the value of selecting employees who are motivated to do the job; they are easier to manage. They will do their work well and with less managerial effort and are also more likely to improve the processes involved with their work. Therefore, having a fuller understanding of motivation is of value to managers who want employees who are motivated to do what management wants done.

You Can’t Motivate People

Most managers think that they can motivate their people to work. The truth is that you cannot motivate anyone to do anything, although you can make them do things. There is a big difference! With self-motivators, their intrinsic motivators make them perform. When you make people do something, you have to watch, monitor, and push them to do what you want. Think of a drill sergeant getting recruits to perform. While a work situation is not that extreme, pushing is similar because it involves a lot of management effort. Pushing is no way to work with people in a creative environment where you want people to take ownership of their work. Leaders do not want to engage in a struggle to get people to perform. They want to support people who like to do what their job requires.

Matching Employees to Jobs

The best that you can do is match people to the right job. It sounds easy, but as with most management issues, it is easier to say than do. It requires that you first really know your people, which most leaders do not. For a sales position, you would want someone who likes people. The best person for an analyst job is probably a numbers oriented introvert. This all sound logical, but it is not common sense because it is not done as commonly as one might think. The main reason is that leaders usually don’t really know who they are selecting and what motivates them. Additionally, they often are mistaken regarding what is requiredto do a job. Given these two conditions, there is often a mismatch between the person and the job.

The trick to matching employees is to know what motivates employees. Really understand people before you hire them and/or place them in a job. Know what the job requires in terms of behavior and personality. Once you know both, you can effectively match people to jobs they will find motivating.

Matching Motivation Tips

•   Select personnel who are already motivated to do at least part of the job, if not the whole job.

•   Understand what is required in a job and what kind of people are motivated to do it

•   Really know the individuals who you hire or place in a job

•   Learn what intrinsically motivates your followers to perform exceptionally.

•   Use psychometric measures, team selection,

•   Find out what employees value(e.g., time off, money, status, etc.).

•   Expectations formed over life can have a significant effect on what motivates people, so learn what they expect from work. Use this information to help you hire personnel who have expectations that you can satisfy.

Therefore, rather than hiring people and then trying to motivate them, which is ineffective, hire individuals who will be motivated by the job itself. Doing so will allow you to focus on leading them rather than pushing them to do their work. When you focus on leading, you will be able to move the organization toward fulfilling its vision and securing competitive advantage.

Creating Motivating Jobs

Dr. Frederick Herzberg postulated that motivation comes from the job, not from money or other commonly used incentives such as fringe benefits. For example, a fighter pilot is primarily motivated by the challenge associated with flying and completing missions. Money is an ineffective tool to motivate such individuals which is evidenced by their relatively low pay, yet high motivation to do a dangerous job. Herzberg believed that the key to creating motivational jobs was job enrichment. This is the process of giving workers, at the individual or group level, more responsibility for planning, coordination and performance of their own tasks. In doing so, management gives up some of its control and power to the personnel performing the job. Herzberg believed that this made jobs more motivating.

Based on Herzberg’s theory, Hackman & Oldham proposed the Job Characteristics Model which is a practical model that is useful in designing jobs that are motivational.

The basic idea is to select core job characteristics that are motivational, which leads to critical psychological states and outcomes such as work motivation, satisfaction and work effectiveness. According to the model, the following characteristics are key to accomplishing this goal. Skill variety is the use of many different skills. Management can either use more of the worker’s existing skills or invest in training to develop more skills for use on the job. Task identity is the degree to which personnel can complete a whole job or a major portion it. When task identity is high, employees can see the impact of their work. Task significance is the importance of job to the organization. Management can increase task significance by combining jobs and making job’s impact clearer to staff. These three factors, when present in a job, lead to a sense of meaningfulness, which contributes to the outcomes mentioned earlier.

Autonomy has a direct effect on sense of responsibility. When an employee is given more freedom, stronger sense of ownership is likely and therefore accountability and responsibility will follow. When one is solely responsible for a task, everyone knows who to seek when performance is excellent or poor. Therefore, autonomy also contributes to the outcomes mentioned earlier.

Feedback from the job leads to knowledge of results. Although this sounds like “common sense,” it is not common practice. Workers commonly complain that they do not know how well they are performing. Reliance on the typical yearly review certainly plays a part in this lack of feedback and therefore a lack of knowledge about results. When an individual has quick and ample feedback about their performance on a task, they will likely experience the outcomes mentioned earlier. Such feedback can come from supervisors, the task itself, customers, coworkers, etc.

When leaders build all these core job characteristics into a job, the individual will be intrinsically motivated by the job. However, they are not motivating the employee. Leaders are just creating a job certain employees will find motivating. The job does the motivating … automatically. There is one major limitation to this model; it is not applicable to all people, only those who have a high need for personal growth. Such individuals like to learn and experience new things. Since not all people have a high need for personal growth, this model should be applied with care.

Tips for Creating Motivating Jobs

•   Think creatively when designing jobs and selecting job elements. Merely adding more tasks to a job has little motivational value.

•   Job design is likely to be successful with professional or committed personnel.

•   Use pay for performance or social motivators(ex. humor) with employees who have low growth needs.

At this time of year a lot of people are considering big changes in their lives, especially when it comes down to their career. They’ve spent the first month of 2016 deliberating their options and have decided, action should be taken.

Despite being the shortest month of the year, February always seems as though it lasts forever – particularly if you’re feeling demotivated and frustrated at work.

There’s nothing worse than feeling discouraged and unsatisfied. Sitting at your desk all day feeling undervalued and practicing the act of procrastination on another level makes your day drag beyond belief.

As a business owner, I’m always on the lookout for changing characteristics or dynamics within my team.  

Losing a member of staff is always bad news for business because it instantly effects productivity and morale within the office. It’s more than likely colleagues have built great relationships with one another and, of course, it’s always sad to see them go.

After 30 years in business, I’ve noticed there are a few tell-tale signs which I often use as ‘satisfaction indicators’. Here they are;


Every business owner should be keeping track of their productivity, that’s a fact. More importantly, business owners should be keeping track of their employee’s productivity – you can do this by asking for weekly reports and having weekly updates with your team to discuss projects, strengths and struggles.

When someone is looking for a new job they intrinsically tend to switch off from their current role, that’s just natural.

So if you notice a certain employee’s productivity has started to dip dramatically, then something’s not right.


When someone’s not happy in their job, you can usually see it written all over their face and body language.

This is one of the easier signs to spot – have they been more negative than usual? Are they complaining more regularly about their workload? Are they reluctant to take on any other projects? Have you noticed a lack of input, creatively?

I always find that people who leave spend their last couple of months doing ‘just enough’ to get by, often without repercussions because the boss is too busy running other facets of the business.

This hesitation to commit is a serious issue so if you see this evolving, it should be addressed as soon as possible.

They’re no longer social

Company culture is critical for a happy, satisfied workplace. If you notice an employee is avoiding social interactions and no longer wants to get involved with the community, fun aspects of the business then this could be another strong signal they’re thinking of leaving.

When someone is deliberating their future prospects, they are often on edge and reluctant to share these feelings with colleagues. Spending time with them outside of work could be too risky as they may slip up and admit something their avoiding.

Watch out for these warning signs and there will be less of a shock factor when it comes to having ‘the conversation’.

The important thing is to always ensure your staff are happy, feel motivated and valued in their role. If you don’t do this, your talent retention strategy needs a serious rethink!


4. Why do most of the controls of overall performance tend to be financial? Should

they be? What else would you suggest?


''most control of overall performance tend to be financial''






-market  share  [ expressed in   % percentage ]

-market  potential [ units  or  tonnage  or  litres ]

-product   sales  [ units ]

etc etc.


-sales  in  dollars

-gross  profit  in  dollars

-net profit in dollars.


ARE  DONE  BY  ''NON-FINANCIAL'' INFORMATION. ####3####################  
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