Minding the Store

On January $1,$ Ruth Cummings was formally named branch manager for the Saks Fifth Avenue store in a suburb of Denver. Her boss, Shanaya Batra, gave her this assignment on her first day: "Ruth, I$\text{'}$m putting you in charge of this store. Your job will be to run it so that it becomes one of the best stores in the system. I have a lot of confidence in you, so don't let me down."

One of the first things Ruth did was to hire an administrative assistant to handle inventories. Because this was such an important part of the job, she agreed to pay her assistant slightly more than the top retail clerks were making. She felt that having an administrative assistant would free her to handle marketing, sales, and personnel matters$$areas she felt were crucial if the store was to be a success.

Within the week, however, she received a call from Batra: "Say, Ruth, I heard that you hired an administrative assistant to handle inventories. Don't you think that is a bit risky? Besides, I think paying an assistant more than your top salesclerk is damaging to morale in the store. I wish you had cleared this with me before you made the move. It sets a bad precedent for the other stores, and it makes me look like I don't know what is going on in the branches."

Three weeks later, Ruth appeared on a local noontime talk show to discuss new trends in fashion. She had worked hard to make contact with the hosts of the show, and she felt that public exposure like this would increase the visibility of her store. Although the TV spot lasted only $10$ minutes, she was pleased with her performance and with the chance to get public exposure.

Later that night at home, she received another phone call from Batra: "Don't you know the policy of Saks? Any TV appearances made on behalf of the store are to be cleared through the main office. Normally, we like to have representatives from the main store appear on these kinds of shows because they can do a better job of plugging our merchandise. It's too bad that you didn't notify someone of your intentions. This could be very embarrassing for me$."$

Just before Easter, Ruth was approached in the store by one of the salesclerks. A customer had asked to charge approximately $$3,000$ worth of china as a gift for his wife. He had been a customer of the store for several years and Ruth had seen him on several occasions, but store rules indicated that no charge could be made for more than $$1,000$ for any reason. She told the customer that she was not authorized to okay a charge of that amount, but that if he would visit the main store in Denver, maybe arrangements could be made.

Later in the day, an irate Batra called again: "What in the world are you thinking about, Ruth? Today we had a customer come into the main store and say that you wouldn't make a sale to him because the charge was too much. Do you know how long he has been a customer of ours? Do you know how much he spends in the store every year? I certainly hope we have not lost him as a customer because of your blunder. This makes me very upset. You've just got to learn to use your head."

Ruth thought about the conversation for several days and finally decided that she needed to see Shanaya Batra. She called her secretary to schedule an appointment for the following day.

If you were an outside consultant attending the meeting, what advice would you give Shanaya? What advice would you give Ruth?