One Owner, Eight Outlets, No Authority
Nabami Sweets runs a central kitchen in Barasat and three retail outlets, selling about ₹4.2 crore a year. The owner, Mrs. Dutta, plans to open five more outlets in eighteen months and has written a 14-page 'Vision 2027' document with sales targets and a promise to 'serve five lakh customers'. No outlet manager has seen the document. There are no unit budgets, no monthly targets, and no written contingency for a competitor opening nearby - one did, in January. Mrs. Dutta personally approves every purchase above ₹2,000, signs every supplier payment, and interviews every hire, including cleaners. The purchase assistant and the outlet managers both place orders with the same three suppliers, and duplicate payments have occurred twice. Outlet managers cannot settle a customer refund above ₹500. Two capable managers resigned last quarter, one saying she had 'the title but not the authority'. A consultant's survey found Mrs. Dutta works 74 hours a week.
1. Identify the deficiencies in Nabami Sweets' planning and explain how each deficiency is likely to damage the eight-outlet expansion.
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1. The plan is not communicated. A document no outlet manager has seen is a private intention, not a plan. People cannot align daily decisions with targets they do not know, so the commitment that is a major merit of planning never forms. 2. The plan is not derived into sub-plans and budgets. No unit budgets and no monthly targets mean 'Vision 2027' has no operating translation - no purchase plan for the kitchen, no staffing plan for five new outlets, no cash plan. Expansion multiplies fixed cost; capacity and cash are exactly what must be planned first. 3. There is no contingency planning. A competitor opened in January and there was no prepared response. Planning must build in alternative courses because the environment is uncertain, and a bigger fixed-cost base makes a price war more damaging, not less. 4. The goals are unmeasurable. 'Serve five lakh customers' cannot be controlled. Planning and controlling are twins: a standard that cannot be measured cannot generate a variance, and a variance that cannot be measured cannot generate corrective action - so the 74-hour week will be spent firefighting. 5. Planning is done by one person. Plans made without those who execute them are usually unrealistic and inflexible; the two resignations suggest the execution side has already disengaged.
2. Mrs. Dutta says: 'I have delegated - the purchase assistant is responsible for buying.' Examine this claim using delegation, authority and span of control, and specify what she should delegate and what she should retain.
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Delegation has three elements - authority, responsibility and accountability - and authority must be equal to responsibility. The purchase assistant has been handed the duty to buy, but Mrs. Dutta still signs every payment and clears every order above ₹2,000. That is responsibility without authority: the assistant cannot commit the firm, so the task returns to her desk, and the duplication with outlet managers (and the two duplicate payments) continues because no one owns the supplier relationship. Accountability, by contrast, can never be delegated - she remains answerable for the money.
Delegate: purchasing within an approved budget and approved vendor list up to, say, ₹50,000 per order; outlet hiring and shift scheduling; customer refunds up to ₹5,000; local promotion spending against a monthly target.
Retain: expansion strategy and timing, capital expenditure, bank limits and borrowing, key supplier contracts above a threshold, and final appointment of outlet managers.
Structural fix: group work into four functions - kitchen, retail operations, purchase, finance - each with one head. Her span of control currently covers every employee, which is why she works 74 hours and why accountability is diffuse.