CASE STUDY

RETAILER MERCHANTS LIMITED

Introduction

In the past two years, Retailer Merchants Limited has grown into one of South

Africas largest food retailers. They operate $231$ corporate and $106$ franchise

outlets across South Africa. They have been listed on the JSE Limited since

March $2015.$

Now that Retailer is one of South Africas major role players in the food retail

industry, they have a new strategic expansion plan: to maintain their position as

the leading food retailer in South Africa and expand into the continent. Their new

vision is to become the leading food retailer on the continent by $2030.$

With the new vision in sight, Retailers board of directors is considering four key

internal decisions in order to adapt the organisations structure and design to fit

the new expansion plan. The four key decisions concern Retailer and its

organisational structure, people and culture.

Retailer and its organisational structure

The board of directors consists of the Deputy Managing Director and the Chief

Executive Officer. Six general managers $($Finance$,$ Information Technology,

Purchasing, Human Resources, Marketing and Statutory and Legal services$)$

report to them. For the time being this structure will not to change. However, the

management board has raised concerns about the current organisational

structure design, and if it will still be suitable once the organisation expands into

Zimbabwe, Namibia and Zambia, especially considering that:

$1.$ They aim to list themselves on the Namibian and Zambian Stock

Exchanges.

$2.$ They will need district offices in Zimbabwe, Namibian and Zambia.

$3.$ There are legal and cultural implications for expanding into Zimbabwe,

Namibia and Zambia.

Within the organisation, a high priority is placed on specialisation. Specific tasks

are identified and assigned to individuals or teams who have been trained, or are

qualified, to do these tasks. In$-$house training of employees is also structured

around the above $($departmental$)$ classifications.

Another a high priority is placed on standards and procedures within each

department. For example, staff and management are expected to maintain the

highest level of integrity and honesty in dealing with customers, suppliers,

service providers and colleagues. These principles are set out in the

organisations rules and in a document entitled A Guide to the Code of Conduct

for Retailer Merchants Employees. Copies of the document are made available to

the workforce.

Standards and procedures, together with integrated tasks and activities of

employees, also ensure that the organisation reaches its goals. Most coordination

activities are formal and the board delegates the day$-$to$-$day management of the

business to the chief executive, assisted by senior management $($the six general

managers$).$

Senior management is invited to attend board meetings; it facilitates the

effective control of all of the groups operational activities, acting as a medium of

communication and coordination between the various business units and

subsidiaries. The board is also responsible for ensuring that a comprehensive

system of internal control policies and procedures is operative and for compliance

with sound corporate governance principles.

The board, working through the audit committee, supervises the financial

reporting process. It is also responsible for ensuring that adequate ongoing

procedures and processes exist to identify, evaluate, manage and monitor key

business risks. This is done by way of an enterprise$-$wide risk management plan

$($EWRM$),$ which has been implemented in all business units. The EWRM is

reviewed on a regular basis. No material loss, exposure or misstatement arising

from a material breakdown in the functioning of systems has been reported to

the directors in $2017.$

Retailer and its people

Retailers success over the years, and the increase in operating profit, can

primarily be attributed to what really is the heart and soul of the organisation

its workforce. Each employee makes an invaluable contribution to the groups

continued growth and success. More than $18500$ permanent employees and

some $6800$ temporary and casual workers are currently employed. The groups

objectives are to appoint the right person to the most suitable position and to

use the employees skills to maximum effect. They maintain a productive

workforce by training and developing staff to meet the requirements of their

business through an efficient human resources function, and by ensuring

compliance with all labour$-$related legislation.

Retailer and its organisational culture

Through a culture of team achievement, the group has exceeded productivity

targets and shown inflation$-$beating real growth of over $9\%$ in sales per

employee. Staff turnover remains at low levels and almost $63\%$ of employees

have service records of more than $10$ years. This depth of experience in the

group is an important contributor to productivity and indicates a high degree of

job satisfaction with a diverse range of career advancement opportunities from

within. Staff turnover for $2017$ stands at around $10\mathrm{.}5\%,$ which is considerably

lower than the average of $14\mathrm{.}8\%.$

For Retailer, providing a stimulating and promising career to its employees is of

pivotal importance and numerous training and development programmes are in

place, giving employees the opportunity to grow and develop. One of the most

effective ways to train employees is working in teams. Senior managers are

continuously encouraged to form task teams once issues arise within their

respective departments.

Transformation in the workplace remains a priority and the group has a

comprehensive employment equity plan to achieve the necessary goals. The

majority of potential managers are sourced from within the group and internal

promotions have served as a strong motivation to staff to work their way up

through the ranks.

The positive and constructive human resources environment in Retailer is

testament to the groups advanced people management systems. It continues to

be at the forefront of the retail industry through constant renewal and

adjustment to nurture a dynamic workforce.

Going forward

Retailer is excited about the future of its business, and well positioned to further

increase the groups presence in South Africa and other African countries.

Adapted from: Hellriegel, D$.,$ Slocum, J$.,$ Jackson, S$.$E$.,$ Louw, L$.,$ Staude, G$.,$

Amos, T$.,$ Klopper, H$.$B$.,$ Louw, M$.,$ Oosthuizen, T$.,$ Perks, S$.$ & Zindiye, S$.2017.$

Management: $5$th edition. Cape Town: Oxford University Press Southern Africa.

The case study states: Within the organisation, a high priority is placed on

specialisation. Specific tasks are identified and assigned to individuals or teams

who have been trained, or are qualified, to do these tasks. Furthermore,

Retailer employs more than $18500$ permanent employees and some $6800$

temporary and casual workers are currently employed.

According to Botha, Vrba and Smit $(2020),$ several factors influence the

development and effectiveness of groups and teams in organisations.

With reference to the variables associated with effective group$/$team functioning,

explain how these group$/$team structures function within an organisation. Give

relevant examples from the case study to support your explanation.