Challenge Case Summary

Hy-Vee executives have been faced with the challenge of organizing the activities of their expanding firm. With over 240 locations, the company has delegated authority and autonomy to each store manager, permitting each one to make key decisions that affect their respective store. Store managers must determine which products should be stocked at their store, how much to price those items, and how they should be displayed to attract customers.

In organizing the activities of employees in a growing organization like Hy-Vee, leadership must recognize, for example, that a manager's activities, as well as those of subordinates, are a major factor in the company's success. Because the activity of a store manager can affect all personnel within that store, the activities of the store manager must be well defined.

Overall, for store managers to be responsible, they must perform the activities they are obligated to perform. Store managers, even though they have been delegated some autonomy, must still follow all company policies and procedures. They must also ensure that employees working at their particular store receive necessary training and are compensated appropriately.

Hy-Vee's corporate office must be sure that any individuals within the company who are delegated job activities are given a commensurate amount of authority to give orders and carry out those activities. Managers throughout the company must recognize, however, that authority must be accepted if obedience is to be exacted. To increase the probability of acceptance, care should be taken to ensure that individuals understand internal orders and regard those orders as being consistent with the objectives of the store they work in and the objectives of the company. Employees should also perceive the orders they receive as being compatible with their individual interests and should consider themselves mentally and physically able to follow those orders. Management must be careful to delegate jobs only to those organization members who are mentally and physically able to carry them out.

Assuming that one of Hy-Vee's main objectives is to sell safe and fairly priced groceries, company personnel who are directly responsible for achieving this objective should possess line authority so that they can perform their responsibilities. For example, individuals responsible for procuring national brands must be given the right to do everything necessary to secure the best-selling brands possible.

Functional authority and accountability are two additional factors that Hy-Vee must consider when organizing employee activities. Some employees may have to be delegated functional authority to supplement the line or staff authority they already have. A Hy-Vee human resource manager (staff person), for example, may need to gather information from the company's sales department in order to understand whether the company needs to hire additional people. Functional authority would enable human resource staff to command that this information be channeled to them.

In organizing employee activity, Hy-Vee should also stress the concept of

accountabilitythe idea that fulfilling assigned responsibilities brings rewards and not fulfilling them brings negative consequences.

To delegate activities effectively, Hy-Vee must assign specific duties to individuals, grant the corresponding authority to these individuals, and make sure these individuals are aware that they are obligated to perform these activities.

In encouraging the use of delegation, Hy-Vee must be aware that obstacles to delegation may exist on the part of store managers, their subordinates, or the departments in which they work. Leadership must be sure that managers can meet the delegation challenges of discovering which obstacles exist in their work environments and taking steps to eliminate them. If Hy-Vee store managers are to be successful delegators, they also must be willing to consider the ideas of subordinates, allow them the free rein necessary to perform their assigned tasks, trust them, and help them learn from their mistakes rather than instituting unreasonable penalties.

Centralization implies that few job activities and little authority have been delegated to subordinates; decentralization implies that many job activities and much authority have been delegated. Hy-Vee corporate leadership will have to determine the best degree of delegation for store managers regarding all job activities. For guidelines, Hy-Vee leaders can rely on certain rules of thumb that say greater degrees of delegation will be appropriate for the company (1) as stores become larger, (2) as store locations become more geographically dispersed and diversified, and (3) as the needs for quick decision making and creativity increase.

At the store level, managers should also determine how decentralized the store should be. First, store managers should use specific guidelines to decide whether their situation warrants additional decentralization. In general, additional delegation will probably be warranted within the store as the competence of subordinates increases, as managers' confidence in their subordinates increases, and as more adequate and reliable decision-making information within the company becomes available to subordinates. For delegation to be advantageous for Hy-Vee, store managers must help subordinates learn from their mistakes. Depending on their situations, individual managers may want to consider supplementing decentralization with centralization.

Statement Select:

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"Y" if you would give the advice to Taylor.

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"N" if you would NOT give the advice to Taylor.

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"NI" if you have no idea whether you would give the advice to Taylor.

1)Mr. Taylor, in meeting your responsibility, authority, and delegation challenges at Hy-Vee Supermarkets, you should...

clarify the responsibilities of each store manager.

A.Y

B.N

C.NI

2)Mr. Taylor, in meeting your responsibility, authority, and delegation challenges at Hy-Vee Supermarkets, you should...

make sure that one person in Hy-Vee's corporate office is responsible for performing all the activities that take place at Hy-Vee.

A.Y

B.N

C.NI

3)Mr. Taylor, in meeting your responsibility, authority, and delegation challenges at Hy-Vee Supermarkets, you should...

eliminate responsibility gaps when dividing job activities.

A.Y

B.N

C.NI

4)Mr. Taylor, in meeting your responsibility, authority, and delegation challenges at Hy-Vee Supermarkets, you should...

communicate to employees that responsibility and authority are essentially interchangeable terms and have the same meaning.

A.Y

B.N

C.NI

5)Mr. Taylor, in meeting your responsibility, authority, and delegation challenges at Hy-Vee Supermarkets, you should...

understand that throughout Hy-Vee, authority does not necessarily imply that employees will follow the instructions of managers.

A.Y

B.N

C.NI