Course Code : BRL– 003
Course Title : Retail Management Perspectives & Communication
Assignment Code : BRL–003/TMA/2014-15
Coverage : All Blocks
Maximum Marks: 100
Attempt all the questions
(A) Short Type Questions
1. Explain Henry Fayol’s principles of modern management theory.
Solution:
Today’s managers have access to an amazing array of resources which they can use to improve their skills. But what about those managers who were leading the way forward 100 years ago?
Managers in the early 1900s had very few external resources to draw upon to guide and develop their management practice. But thanks to early theorists like Henri Fayol (1841-1925), managers began to get the tools they needed to lead and manage more effectively. Fayol, and others like him, are responsible for building the foundations of modern management theory.
Fayol’s 14 Principles of Management
Fayol’s principles are listed below:
Division of Work – When employees are specialized, output can increase because they become increasingly skilled and efficient.
Authority – Managers must have the authority to give orders, but they must also keep in mind that with authority comes responsibility.
Discipline – Discipline must be upheld in organizations, but methods for doing so can vary.
Unity of Command – Employees should have only one direct supervisor.
Unity of Direction – Teams with the same objective should be working under the direction of one manager, using one plan. This will ensure that action is properly coordinated.
Subordination of Individual Interests to the General Interest – The interests of one employee should not be allowed to become more important than those of the group. This includes managers.
Remuneration – Employee satisfaction depends on fair remuneration for everyone. This includes financial and non-financial compensation.
Centralization – This principle refers to how close employees are to the decision-making process. It is important to aim for an appropriate balance.
Scalar Chain – Employees should be aware of where they stand in the organization’s hierarchy, or chain of command.
Order – The workplace facilities must be clean, tidy and safe for employees. Everything should have its place.
Equity – Managers should be fair to staff at all times, both maintaining discipline as necessary and acting with kindness where appropriate.
Stability of Tenure of Personnel – Managers should strive to minimize employee turnover. Personnel planning should be a priority.
Initiative – Employees should be given the necessary level of freedom to create and carry out plans.
Esprit de Corps – Organizations should strive to promote team spirit and unity.
2. Describe the steps in planning process that are applicable to all types of organization.
Solution:
Business plan is a written document prepared by entrepreneur that describes all the relevant external and internal elements involved in starting new venture. It is an integration of functional plans such as marketing, finance, manufacturing and human resource plan.
A business plan is a blue print of step by step process that would be followed to convert business idea into successful business venture.
Following Steps are involved in the Process of Planning:
Idea generation
Environmental scanning
Feasibility analysis
Project report preparation
Evaluation, control and review
* Idea generation: is the first step in the business planning process. This step differentiates entrepreneur from usual business. An entrepreneur may come up with new business idea or may bring in value addition to existing product in the market. Sources of new idea for entrepreneurs are :
Consumers/ customers
Existing companies
Research and development
Employees
Dealers, retailers
* Environmental scanning: once the entrepreneur is through the idea generation stage, next entrepreneur is required to conduct environmental scanning which includes analyzing external and internal environment that affects business idea.
1. External environment comprises of:
Socio cultural appraisal: it gives brief overview about the culture and tradition existing in society. It is comprised of values and beliefs of people which determine the acceptance of product by customer in the market.
Technological appraisal: it assess various technological options available to convert an idea to product. It also provides an brief overview about technological updation.
Economic appraisal: it assess the status of the society in terms of economic development, per capita income, national income, consumption pattern in the business.
Demographic appraisal: it assess the population pattern of given geographic area. which includes sex, age profile, distribution etc.
Government appraisal: it assess the various legislation, policies, incentives formulated for particular industry. Flexibility of these rues determine ease for entrepreneur in terms of opening venture in particular area.
2. Internal environment:
Raw material: it refers to in terms of availability of raw material required for the process of production. If the material availability is at distance place and is very expensive then entrepreneur should give second thought to the same.
Production/ operation: it assess the availability of various machineries, equipments, tools and techniques that would be required for production.
Finance: it studies total requirement of finance in terms of start up expenses, fixed expenses, running expenses etc.
Market: refers to study on potential customer and target customers in market.
Human resource: refers to demand and supply of required human resource in market and estimation of expenses to be incurred on human resource.
* Feasibility analysis: refers to conducting detailed analysis in relation to every aspect relevant to business and determining credibility of business.
Market analysis : is conducted to estimate the demand and market share for proposed product and service in future. Demand and market analysis is based on factors like consumption pattern, availability of substitute goods and services etc.
Technical and operational analysis : is to assess operational ability of proposed business enterprise. Technical or operational analysis collects data on following parameters :
Material availability
Material requirement planning
Plant location
Plant capacity
Machinery and equipment.
Marketing plan: lays down the strategies of marketing which can lead to success of business plan. Strategies are in terms of marketing mix which includes ( product, price, place, promotion ) which determines the potential demand of customers for product in the market.
Production plan / operational plan: production plan is drafted for manufacturing sector where as operation plan is designed for business into service sector. It comprises of strategies on parameters such as location layout, cost, availability of material, human resource etc.
Organizational plan: defines type of ownership pattern in company, sole trading concern, family business, private or public limited company etc.
Financial plan: financial plan indicates the requirement of proposed business enterprise. Which includes fund flow, cash flow statement, breakeven point, projected ratio, projected balance sheet.
* Project report preparation: project report is a written document that describes step by step strategies involved in starting and running business.
* Evaluation, control and review: as company operates in dynamic environment company has to monitor and review strategies and policies to stay in line with competition existing in market.
3. Differentiate between centralized and decentralized structure of retail organization.
Solution:
The difference between a centralized and a decentralized system of organization is that in a centralized structure all the decision making and authority are focused on the top tier of management. These few people are the ones that dictate company policy and make all the crucial decisions.
A decentralized system, on the other hand, delegates authority throughout the organization and to all levels of management. Very often the methods used will depend on a variety of influences such as the size of the company and if it is scattered in a variety of places rather than all under one roof. In a huge organization with many diversification, like General Motors, for example, there is more likely to be evidence of a decentralized system because it would be impossible and impractical for only a handful of people to ensure that every aspect of the operation was covered.
Advantages of centralization include an organization’s ability to be able to keep a tight grip on all aspects of the business. In a smaller business where centralization is possible, there is less chance that employees will be unaware of what is expected and what the common goals are because there is such a tight grip on all aspects of the organization from management.
An advantage of decentralization is that there tends to be faster decision making and an ability to adapt to the demographic area of production. It also means that lower level managers have the opportunity to gain valuable experience and develop more fully because there is more room to grow
4. Discuss and comment upon the four basic phases in decision making process in an organization.
Solution:
Four Basic Phase or steps in decision making process:-
Problem Recognition
Most decision making starts with some sort of problem. The consumer develops a need or a want that they want to be satisfied. The consumer feel like something is missing and needs to address it to get back to feeling normal. If you can determine when your target demographic develops these needs or wants, it would be an ideal time to advertise to them. For example, they ran out of toothpaste and now they need to go to the store and get more.
Search Process
Most of us are not experts on everything around us. In the searching phase we research for products or services that can satisfy our needs or wants. Search Engines have become our primary research tool for answers. It is an instant and easy way to find out what you are looking for.
Also don’t forget about actual human beings. Our friends and families all have had many different experiences and can offer us recommendations. In most cases recommendations from actual people instead of a search engines are preferred. You have more of a trust factor with people close to you then a computer program.
You also may have had past experiences that assist you in solving your problem. You may have had a life experience in the past that helps you make the correct purchase decision. You could also just know what decision to make just by picking up things over the years and knowing how to solve them.
In this stage you are also beginning your risk management. You might make a pro’s vs. con’s diagram to help make your decision. People often don’t want to regret making a decision so extra time being put into managing risk may be worth it. People also remember bad experiences over good ones, take that into account.
Evaluating Alternatives
Once the consumer has determined what will satisfy their want or need they will begin to begin to seek out the best deal. This may be based on price, quality, or other factors that are important for them. Customers read many reviews and compare prices, ultimately choosing the one that satisfies most of their parameters.
Selection Stage
After tallying up all the criteria for the decision the customers now decide on what they will purchase and where. They have already taking risk into account and are definite on what they want to purchase. They may have had prior experience with this exact decision or maybe they succumbed to advertising about this product or service and want to give it a try.
5. Explain the crucial issues of team building and team management.
Solution:
Following are 8 crucial issues or problems:
Absence of team identity. Members may not feel mutually accountable to one another for the team’s objectives. There may be a lack of commitment and effort, conflict between team goals and members’ personal goals, or poor collaboration.
Difficulty making decisions. Team members may be rigidly adhering to their positions during decision making or making repeated arguments rather than introducing new information.
Poor communication. Team members may interrupt or talk over one another. There may be consistent silence from some members during meetings, allusions to problems but failure to formally address them, or false consensus (everyone nods in agreement without truly agreeing).
Inability to resolve conflicts. Conflicts can not be resolved when there are heightened tensions and team members make personal attacks or aggressive gestures.
Lack of participation. Team members fail to complete assignments. There may be poor attendance at team meetings or low energy during meetings.
Lack of creativity. The team is unable to generate fresh ideas and perspectives and doesn’t turn unexpected events into opportunities.
Group think. The team is unwilling or unable to consider alternative ideas or approaches. There is a lack of critical thinking and debate over ideas. This often happens when the team overemphasizes team agreement and unity.
Ineffective leadership. Leaders can fail teams by not defining a compelling vision for the team, not delegating, or not representing multiple constituencies.
6. Give the proforma of Profit & Loss A/c and a Balance Sheet with the help of imaginary figures.
Solution:- See the Book for the answer of this Question.
7. Discuss the importance of Appearance and Artifacts in non verbal communication.
Solution:
Non-verbal communication consists of the feeling or emotion we convey behind the words we speak verbally.
“Transmission of messages by a medium other than speech or writing” (Non-verbal communication, 2011).
“Non-verbal communication includes pitch, speed, tone and volume of voice; gestures and facial expressions; body posture, stance, and proximity to the listener; eye movements and contact; and dress and appearance” (Non-verbal communication, 2011).
Problems occur when our verbal messages do not match the non-verbal messages that our bodies are sending out. This can result in counter-productivity within the business world while also destroying one’s credibility (Raudsepp, 1993).
The importance of recognizing and interpreting body language in a global economy can mean the difference between success and failure, literally by the sleight slip of a hand.
Although most non-verbal communication occurs naturally, its origins are based in one’s cultural upbringing (Hargrave, 2008).
If individuals are not knowledgeable of such differences when interacting with various cultures, he or she runs the risk of insult as well as possible business repercussions.
(B) Essay Type Questions
8. Describe in detail various issues in designing of retail organization structure. Also discuss different aspects of an ideal retail organization structure.
Solution:
There are two main issues while designing a retail organization structure-
1) The degree of centralization.
2) Coordinating merchandise and store management.
1) The degree of centralization
Centralization is the process by which the activities of an organization, particularly those regarding decision-making, become concentrated within a particular location and/or group.
On the other hand, Decentralization is the distribution of power in the lower level of management.
Benefits of Centralization:
1) Reduction in cost – overhead costs are reduced because lesser managers are required to make decisions.
2) Improves efficiency – With the help of standard policies and guidelines.
3) Allows experts to take decision – The best people makes decision.
Limitations:
The major limitation is that the person sitting in the corporate office does not know about the conditions in the local market and hence he can not take any relevant steps to fight the local competitors.
2) Coordinating Merchandise and store management
An independent retailer does not faces any problem in coordinating the store and the merchandise as he is in a direct touch with the customers, so he can look after the customer demands and fulfill it very easily.
On the other hand, a large retail firm having a lot of retail chains faces this problem as both the store and the merchandise department are dependent on each other for fulfilling the customer demands and requirement.
Approaches to coordinate:
1) Increasing the contact with the customer.
2) Regular visits to the store.
3) Involving the manager in coordinating the buying and selling process.
9. “By understanding the controlling function and its characteristics, a retailer can adopt suitable control mechanism to achieve the set objectives” comment upon the statement and describe various stages in control process.
Solution:- See the book for the answer of this question;