Organization and Transaction Costs
Throughout my high school and college career, I have found myself part of many different organizations that operate quite differently from each other. The main two that come to mind are the retail store I worked at in high school and the campus bar that I work at currently.
The retail store that I worked at was different from the traditional retail store due to the manner in which they went about purchasing inventory. I worked for TJ Maxx, which prides itself in providing brand name fashion for a fraction of the price. I was only a cashier/sales associate, however, I still got a very good look at the organization of the store due to my extended time of employment. There were three managers: the store manager, the hiring manager, and the floor manager. Underneath them were the co-ordinators which served as a middle link in rank between the starting associate and the manager. The scheduling was all handled by management and you would have up to three weeks of scheduling at a time. Inventory ordering was handled by corporate TJ Maxx and was distributed to stores based on sales in their respective region. The biggest transaction cost for an organization is the quality of the product they receive. Since TJ Maxx is a third party buyer, they have no choice on the specifics of the product being bought and sent. The advantage that they gain from this is wholesale prices on well known brands, which they can then push to the consumer. While often times the product comes with very minor flaws or is out of season, other times a product is received that is heavily damaged or not appealing to the public. With the latter items, the store must price them out of the inventory or reduce the price until it becomes appealing to the consumer. The only major change that came upon the store was a remodeling of the floors and fixtures, which did have some effects on the store and its associate. To compensate for the remodeling costs, payroll was cut back and some employees quit due to lack of hours.
At my current job, the organization and management of the bar is vastly different than that of a retail store. We have six managers, eight head bars, and ten head doors that make up the management detail of the bar. These management positions are held by either seniors or juniors of the university, and they all directly answer to the owner of the bar who is an older gentleman from the champaign area. All of the ordering of liquor and physical changes made to the bar are done by the owner, while the students are in charge of the day to day operation of the business. In addition to management, there is a staff of about 50 bartenders and 55 doormen. Scheduling is done by the managers and comes out on a week to week basis. Recently we went through the process of replacing our old registers with point of sale systems that record inventory and sales electronically. This was a big adjustment for the staff due to the complexity of the system and the inadequate training provided. In terms of transaction costs, the biggest mishap with the newer system is the reliance on wifi to open and close sales, whereas the old registers did not report electronically and could continue to make sales without connection to the internet.
The retail store that I worked at was different from the traditional retail store due to the manner in which they went about purchasing inventory. I worked for TJ Maxx, which prides itself in providing brand name fashion for a fraction of the price. I was only a cashier/sales associate, however, I still got a very good look at the organization of the store due to my extended time of employment. There were three managers: the store manager, the hiring manager, and the floor manager. Underneath them were the co-ordinators which served as a middle link in rank between the starting associate and the manager. The scheduling was all handled by management and you would have up to three weeks of scheduling at a time. Inventory ordering was handled by corporate TJ Maxx and was distributed to stores based on sales in their respective region. The biggest transaction cost for an organization is the quality of the product they receive. Since TJ Maxx is a third party buyer, they have no choice on the specifics of the product being bought and sent. The advantage that they gain from this is wholesale prices on well known brands, which they can then push to the consumer. While often times the product comes with very minor flaws or is out of season, other times a product is received that is heavily damaged or not appealing to the public. With the latter items, the store must price them out of the inventory or reduce the price until it becomes appealing to the consumer. The only major change that came upon the store was a remodeling of the floors and fixtures, which did have some effects on the store and its associate. To compensate for the remodeling costs, payroll was cut back and some employees quit due to lack of hours.
At my current job, the organization and management of the bar is vastly different than that of a retail store. We have six managers, eight head bars, and ten head doors that make up the management detail of the bar. These management positions are held by either seniors or juniors of the university, and they all directly answer to the owner of the bar who is an older gentleman from the champaign area. All of the ordering of liquor and physical changes made to the bar are done by the owner, while the students are in charge of the day to day operation of the business. In addition to management, there is a staff of about 50 bartenders and 55 doormen. Scheduling is done by the managers and comes out on a week to week basis. Recently we went through the process of replacing our old registers with point of sale systems that record inventory and sales electronically. This was a big adjustment for the staff due to the complexity of the system and the inadequate training provided. In terms of transaction costs, the biggest mishap with the newer system is the reliance on wifi to open and close sales, whereas the old registers did not report electronically and could continue to make sales without connection to the internet.
In future posts, I hope you stick with one example only and then go into greater depth with that. You'll get more out of the exercise that way.
ReplyDeleteI don't do much non grocery shopping these days but once in a while I will buy an item via Amazon. So I wonder for a clothing store like TJ Maxx from the customer side, what does the in store experience do that cant' be done online? Is each branch of TJ Maxx essentially the same or does each have some items that are only found there? Perhaps there are still other questions to consider from purely the customer viewpoint.
If you did that then you might ask whether the structure that you reported addresses the customer issues or not. Also, you labelled positions but otherwise didn't explain things. Is there really enough work to have three different managers at a location? What distinguishes a floor manager from a store manager? Is one of them the boss of the other?
The same sort of questions could be applied to the bar. It is not enough to ask about the structure of management. Does the structure function reasonably well? Can you explain why? That's what is needed here.