Week 03 application assignment – case study #3 leadership

Bill Thompson is the new manager of a retail

sporting goods store in Vermont that is part

of a national chain. Bill, who is 25 years old,

has been working for the company for four

years.Before his promotion he was the assis-

tant manager for two years at a company

store in Delaware. Last week he was briefly

introduced to the employees by his boss, the

regional manager.

The profit performance of this store is

below average for its location and Bill is look-

ing forward to the challenge of improving

profits. When he was an assistant manager,

he was given mostly minor administrative

duties and paperwork, so this assignment will be his first opportunity to show he can

be an effective manager.The base salaries of

the 20 employees who work in Bill’s store

are set by the company, but appraisal ratings

by the store manager influence the size of

an employee’s annual merit raise.These rec-

ommendations must be justified to the re-

gional manager, especially if they are not

consistent with individual and department

sales.Bill can suspend or fire employees with

the approval of his boss, but in practice it is

difficult to do so unless the recommendation

is supported by a strong case.

The store layout and most prices are set

by the headquarters office. However, store

Bill Thompson is the new manager of a retail

sporting goods store in Vermont that is part

of a national chain. Bill, who is 25 years old,

has been working for the company for four

years.Before his promotion he was the assis-

tant manager for two years at a company

store in Delaware. Last week he was briefly

introduced to the employees by his boss, the

regional manager.

The profit performance of this store is

below average for its location and Bill is look-

ing forward to the challenge of improving

profits. When he was an assistant manager,

he was given mostly minor administrative

duties and paperwork, so this assignment will be his first opportunity to show he can

be an effective manager.The base salaries of

the 20 employees who work in Bill’s store

are set by the company, but appraisal ratings

by the store manager influence the size of

an employee’s annual merit raise.These rec-

ommendations must be justified to the re-

gional manager, especially if they are not

consistent with individual and department

sales.Bill can suspend or fire employees with

the approval of his boss, but in practice it is

difficult to do so unless the recommendation

is supported by a strong case.

The store layout and most prices are set

by the headquarters office. However, store performance can be affected to a limited ex-

tent by the store manager.One way is to keep

the cost of employees low by making sure

they are working efficiently and not taking

excessive sick days.Another way is to ensure

that employees are providing a high level of

customer service so that customers will return

to make other purchases rather than going to

a different store next time. Customer service

depends on knowing the products well,being

polite, providing prompt service, and making

sure that inventories of popular goods are

maintained so that customers can find what

they want. Pay is low for this type of retail

selling job,turnover is high,and it takes a few

months for a new employee to learn the mer-

chandise well enough to be helpful to cus-

tomers. Thus, it is also desirable to keep

competent employees satisfied enough to

stay with the company.

Although it is only his first week on

the job, Bill believes that he has already

discovered some of the problems at this

store.Among the various departments in the

store, the ski department has the highest

potential profits during the winter, because skiing and snowboarding are popular winter

sports in Vermont. At the current time the

department’s sales are about average for com-

pany stores in the Northeast region, with

potential for considerable improvement. On

several occasions Bill noticed a line of cus-

tomers waiting to be served in the ski de-

partment, and he overheard some of them

grumbling about how long it takes to get

served. One customer said he was leaving to

go to another store that didn’t make him “wait

all day to have the privilege of spending hun-

dreds of dollars on ski equipment.” Bill ob-

served that Sally Jorgenson, the department

manager, spends a lot of time socializing with

her salespeople and with customers,including

friends who drop in to visit and talk about ski

conditions, resorts, fashions, equipment, rac-

ing, and so forth. Bill, who doesn’t ski, cannot

understand what they find so interesting to

talk about. He wonders why anybody in their

right mind would want to spend a small for-

tune and risk permanent injury to hurtle down

a mountain in blizzard conditions, and then

stand in long lines and ride up a freezing chair-

lift just to do it all over again! ■

SOURCE: Copyright © 1987 By Gary Yukl.

QUESTIONS

1. How much of each type of power does Bill have at this time?

2. What influence tactics could be used in this situation to influence Sally? Explain what

you would actually say to Sally in the process of using each tactic.

3. What should Bill do to improve store performance?