1.

Assess the benefits to Sterling Stores of using centralised

decision making (10 marks) 
Centralised decision making is when decisions are made in a Head
Office with senior managers (top of the hierarchy), where
subordinates would have no authority to make decisions. One
benefit to centralised decision making is that it becomes easier to co-
ordinate and control the business by senior managers. As they are
more skilled and experienced in making decisions for the business.
As Sterling stores CEO Richard Green, decided to discontinue the
children’s clothing line so medium sized stores can maximise food
sales. Therefore, this can have a positive effect on stores as their
total costs will be reduced as well as maximising food sales too.
Overall, this decision would increase profits as costs have been cut
down in medium sized stores so they can maximise food sales
instead.
However, one disadvantage to Sterling stores using centralised
decision making would be that the senior management wouldn’t be
completely aware to customer feedback. This is because
subordinates have better knowledge of customers around their field
of work. The superiors of sterling stores were not informed about
customers disliking them discontinuing the children’s clothing line,
and the board were not aware, therefore the unhappy customers
caused the market share to decrease by 3% in 6 months.
Furthermore, if subordinates were given more management
opportunities, they can make well informed decisions relating to the
customers wants and needs. As they have a continuous interaction
with the customers day to day, allowing them to have better
knowledge to make well-judged choices.
In conclusion, I think that Sterling stores should use a decentralized
structure to continue making their decisions. Although CEO Richard
Green did decide to increase profits, customers weren’t satisfied in
the long-term, resulting to a total loss 6 months later. Therefore, he
would have been informed if subordinates have the power to make
decisions based on consumer trends to prevent a reduction in
market share occurring again. As they are constantly aware of the
customers preferences and can receive feedback much quicker
compared to the board of directors.

Evaluate whether the success of Simply You is due to the autonomy

being given to employees by Rachel Smith? Justify your view. (20
marks) 
Autonomy is the process of giving employees the freedom to work in
a way that suits them. This could be deciding their place of work or
the order of task completion etc. One reason to why Simply You is
successful is that the autonomy method allows employees to work
using their own schedules and this enables them to achieve success.
As this business model makes the workers feel as though they are
self-employed and has been in place throughout the business.
Relating to Maslow’s hierarchy of needs, this form of employee
empowerment allows the works to meet their self-actualisation
needs to make them realise their full potential within the business. If
the targets are achieved to a good standard, Rachels management
style respects the employees lifestyle and their own methods of
achieving the target. This could be a reason to the success of the
business as the employees are not burdened with a supervisor
constantly watching over them.
However, a possible reason as to why the success didn’t come from
the autonomy is because their main competitor closed several
stores. This success could have been caused since Simply You’s main
rival “Mademoiselle” announced to close 26 of their 112 beauty
salons, due to customer numbers decreasing. Therefore, Simply You
benefited from their retrenchment and offered tailor made packages
across the country. This is a USP service as the high street clinics
don’t offer this. Simply you could have achieved success using this
opportunity without the need of the autonomy for their employees.
Another reason which could be a possibility for the success of Simply
You would be that each employee is specialised to their geographical
area in which they are working in. As Rachel has given each worker
their own geographical area, this therefore allows them to become
marketing experts and therefore increase sales by meeting the needs
of the target market within their own area. Simply you also has a
policy that other employees cannot operate in the same area unless
the employee cannot meet the demand for that specific time period.
This allows each employee to maximise their sales as they are not
being clashed with other employees jobs. Another benefit to this
would be that another employee would take over if the original
employee cannot make it, this flexible working condition gives the
worker a choice and this improves worker morale and satisfaction,
which results in the employees being more likely to achieve targets
set by Rachel resulting to a success in the business.
On the other hand, another reason the success of Simply you was
not caused by the autonomy method is that the business model
ensures that each geographical area is only operated by one worker.
As a result, Simply You can cover all areas and ensure that no market
is left without an employee. This spread of employees throughout
the country raises an awareness of the brand. As it is a form of free
market if which improves the profile of the business and is more cost
efficient as each market isn’t filled with several workers who are idle
with no work to complete. Thus increasing profitability and reducing
costs for Simply You is another reason to their success.
In conclusion, the autonomy used for the employees has been the
main reason for their success as it is a low cost method to motivate
staff to contribute to the business even further. However, another
reason that contributes to their success is the spread of employess
which ensured their growth of Simply You nationwide.