Question

CD Mart was a growing retail chain in India, operating multiple stores across five cities. It decided to expand its operations further. As the business grew, it became difficult for the senior manager to devote time on important policy decisions. Since that was critical, the Chief Executive Officer, Meera, adopted the policy of selective dispersal of authority in store operations as she believed that the employees were competent, capable and resourceful and could assume responsibility for effective implementation of their decisions. This reduced the need for direct supervision exercised by a superior, giving the top management more time to focus on important policy decisions. This also allowed subordinates to handle assignments independently. The management was thus able to develop a reservoir of qualified manpower, who would be considered to fill up more challenging positions.

(a) Identify and state the concept of management which was adopted by Meera, the Chief Executive Officer of CD Mart, in the above case.

(b) Also explain two points of importance of the concept identified in (a) above.

Hint:

The phrase selective dispersal of authority at the store level points to decentralisation. Two importance points are relief to top management and developing managerial talent.

Answer 1

Step 1: Part (a): Find the clue in the case:
The case says the CEO adopted the policy of selective dispersal of authority in store operations. This means authority is spread to lower levels at selected places.
The case adds that subordinates handle assignments on their own and that top management gets time for policy decisions.

Step 2: Part (a): Name the concept:
The concept is Decentralisation.
Decentralisation means delegating authority throughout all the levels of the organisation, so that decision making power is shared with lower levels and lies nearest to the point of action.

Step 3: Part (b): Importance, point 1:
Relief to top management: when decisions on routine matters are taken at store level, senior managers do not have to supervise every step.
In the case, this reduced direct supervision and gave top management more time for important policy decisions.

Step 4: Part (b): Importance, point 2:
Develops managerial talent for the future: lower managers get a chance to take decisions and prove their ability.
In the case, the company was able to build a reservoir of qualified manpower who can be promoted to more challenging positions.

Step 5: Other points you could use:
Decentralisation also develops initiative among subordinates and brings quick decisions, since the decision is made near the place of action.

Final Answer:
(a) Decentralisation. (b) Two points of importance: it gives top management time for policy decisions, and it develops a reservoir of managerial talent for the future.