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 assistant 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 looking 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 recommendations must be justified to the regional 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 extent 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 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 merchandise well enough to be helpful to customers. 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 company stores in the Northeast region, with potential for considerable improvement. On several occasions Bill noticed a line of customers waiting to be served in the ski department, 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 hundreds of dollars on ski equipment.” Bill observed 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, racing, 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 fortune and risk permanent injury to hurtle down a mountain in blizzard conditions, and then stand in long lines and ride up a freezing chairlift just to do it all over again! •
1. How much of each type of power does Bill have at this time? He has two types of power:
Reward power is the perception by the target person that an agent controls important resources and rewards desired by the target person. One form of reward power over subordinates is the authority to give pay increases, bonuses, or other economic incentives to deserving subordinates. Bill also has reward power. Although 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 (i.e. Bill’s opinion is important). Coercive power.
A leader’s coercive power over subordinates is based on authority over punishments, which varies greatly across different types of organizations. Coercion is not likely to result in commitment, but when used skillfully in an appropriate situation, there is a reasonably good chance that it will result in compliance. As the boss of a retail sporting goods store, of course, Bill has coercive power. He has absolute freedom to issue orders to his subordinates and they are required to comply with it. He found that leaders with greater reward power perceived subordinates as objects of manipulation, devalued the worth of subordinates, attributed subordinate efforts to the leader’s power, maintained more social distance from subordinates, and used rewards more often to influence subordinates. In general, a leader should have only a moderate amount of position power, although the optimal amount will vary somewhat depending on the situation.
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. Rational persuasion involves the use of explanations, logical arguments, and factual evidence to show that a request or proposal is feasible and relevant for attaining task objectives. A weak form of rational persuasion may include only a brief explanation of the reason for a request, or an undocumented assertion that a proposed change is desirable and feasible. Stronger forms of rational persuasion include a detailed explanation of the reasons why a request or proposed change is important, and presentation of concrete evidence that the proposal is feasible. Rational persuasion is most appropriate when the target person shares the same task objectives as the manager but does not recognize the proposal is the best way to attain the objectives.
3. What should Bill do to improve store performance?
