Meyersohn, Nathaniel
CNN.com
Posted 11/24/2023
Key words and Definitions
Controlling – a management function that involves checking for errors and taking corrective action.
Shrinkage – refers to merchandise lost to shoplifting, waste, employee theft, damages, and other means.
Shoplifting – retail theft, or the unauthorized removal of products from a store without paying for the products.
Summary: Key Points of the Article
Retailers nationwide stress that shoplifting is at "crisis-level proportions." Some retailers have resorted to closing outlets where shoplifting is so bad the outlets cannot make a profit. Electronic retailer Best Buy has a different solution: Hire more staff. Best Buy is also moving back to full-service cashiers and security staff at the entrances.
Shrink, or merchandise loss due to various reasons, is up by 19% in 2022 and cost the industry $112 billion in losses. This amount is almost double the pre-pandemic shrink losses. While big screen TVs are difficult to shoplift small electronics are one of the highest loss categories.
Many retailers have reduced staffing levels in the past several years but one of Best Buy's competitive advantages is service. This requires more staff and also helps reduce shoplifting. A Best Buy spokesperson said you will be greeted by a friendly staff member when you enter the store. Fortunately, the friendly service also functions as a strong deterrent to would-be shoplifters.
News Topic
#18 Controlling
Exercise 1 Multiple Choice Questions
- Ensuring that an event occurs as it was planned to occur is known as _________.
a. control
b. efficiency
c. effectiveness
d. none of these
Answer: Ensuring that an event occurs as it was planned to occur is known as control. Efficiency occurs when a firm produces a given level of output with the fewest resources. Effectiveness deals with completing a task and getting the desired result. - Which of these factors with regard to information is important to managers?
a. information quantity
b. information timeliness
c. information appropriateness
d. all of these
Answer: All of these factors are important to decision makers. Information quality can also be added to this list. Managers need relevant information delivered in a timely manner to be able to make good decisions. - Best Buy loses at least 25% of its merchandise to shrinkage.
True
False
Answer: The article did not reveal Best Buy's percentage loss but it is less than the overall retail sector since they use more staff.
Exercise 2 Critical Thinking Questions
- How is information related to control?
Answer: Managers need timely, relevant, and accurate information to be able to take corrective action. This necessity makes it extremely important to have good data collection systems in place. The amount of the shoplifting losses may cause other retailers to evaluate the cost effectiveness of hiring more staff. - How do staff serve as a deterrent to shoplifters?
Answer: Shoplifters prefer stores with limited supervision (e.g., staff) since it makes it easier to slip something into their pocket or clothing without being seen. Simply having more eyes on the retail floor keeps many shoplifters from stealing merchandise. There are other stores with a lower likelihood of getting caught. Shoplifters also engage in a cost-benefit analysis. - Why is it important for a retailer to limit shoplifting?
Answer: Shoplifting losses can be so high that some retailers are forced to close the outlet. Shrinkage losses, although not all attributed to shoplifting, cost retailers $112 billion in 2022.
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