RetailMax 1

Running head: RETAILMAX

Retail Max Inc. Case Study

Lance Calkins

Grand Canyon University

Power, Politics, and Influence

LDR 610

April 17, 2011

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Retail Max Inc. Case Study

Introduction

RetailMax, Inc., provides merchandise optimization software to major retailers. It

experienced a downturn in business two years ago and laid off non essential employees.

One current employee, Cam Archer, was offered an opportunity to transition to the sales

team. Although Archer was not interested in sales, she did like the company’s

entrepreneurial culture and believed in the company’s ability to help struggling

companies forecast demand, manage inventory, and save money (McGinn, 2006).

To rebuild the company, Todd Elman was hired as CEO. Under his direction, the

company excelled and grew to more than 100 employees while raising $38 million from

top-tier venture capitalists (McGinn, 2008). Archer found herself ready to move up in the

organization and was tired of the constant traveling in sales. Archer was offered two jobs

within RetailMax. The Vice President of Product Management and Marketing, Regan

Kessel, offered Archer the position of Director of Product Management (DPM).

Simultaneously, the Vice President of Sales, Vince Mangini, offered Archer a job in the

Professional Services Department (PSD). The DPM was just what Archer desired, less

travel and an opportunity to move up within the organization. The PSD department

offered greater pay with bonuses paid for good performance. Archer has a very

challenging decision to make when considering which job to accept. Archer must report

her decision to Kessel with less than a day to consider all her options (McGinn, 2006).

Greatest Potential Power and Individual Power Bases

Although both Archer and Kessel have great potential power, Archer has the

greatest potential power. Archer is subordinate to Kessel and also has much less
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experience. Kessel is an experienced software executive with more than 20 years of

experience in the industry. Kessel founded his own retail supply chain software company

that sold to IBM in 1996 (McGinn, 2006). Archer has proven herself in the sales division

of RetailMax but has yet to prove herself in the marketing division of the company. If

Archer should accept the newly created position of Director of Product Marketing, she

would be the first individual to fill this position.

Kessel’s power bases would focus mainly on legitimate and expert power. He

uses his expert power, which is shown by his successful software executive career

experience. Legitimate power is also used by Kessel as he is the Vice President of

Product Management and Marketing (PMM). Archer uses her social and referent power

in the organization. Archer is a great communicator, enjoys working directly with

customers, has good working relationships and influence with her co-workers and

company leaders, and has a very good understanding of the social networks within

RetailMax.

Stereotypical Gender Roles and Social Factors Affecting Individual Power

Stereotypical gender roles did not influence Kessel or Archer to proceed in any

certain manner. Kessel and Archer’s correspondence was professional and did not

involve discrimination of gender. Kessel very much wanted Archer to transfer into his

division. Archer had a close professional relationship with the CEO Todd Elman and had

no issues working with Kessel or Mangini.

Archer had a very good reputation with the CEO Todd Elman and her supervisor

in the sales department. Archer had a great relationship with the company’s founder who

moved on to become the Chairman Emeritus. It was also during this period that one of
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Archer’s colleagues was promoted from within the sales group to become the first Vice

President of Sales. CEO Elman was interested in keeping Archer with the company when

Archer requested a transfer out of sales. Both the VP of Sales and the CEO supported her

request to transfer into the Marketing Division (McGinn, 2006). Archer had not built a

relationship with the new Vice President of Product Management and Marketing (PMM)

and asked Elman to recommend and assist her with transferring to PMM. Elman, Kessel

and Archer met, and as a result, a new position, Director of Marketing, was created. As

an MBA graduate from a leading business school, Archer is considered by both

employees and customers as smart, diligent, and valuable. In the sales department, Archer

had performed very well, carrying an annual quota of $1 million. Archer’s co-workers

spoke very highly of her and voiced confidence in her ability to make the most of her

new position (McGinn, 2006).

Archer’s Interest in the Position

Kessel and Mangini most likely focused on recruiting Archer based on pay.

Kessel was at a disadvantage as he was limited to the amount he could pay Archer while

Mangini could offer Archer a greater salary than Kessel. Archer did consider salary as a

part of her decision but also wanted to cut down on travel and have the opportunity to

develop skills that will position her for rapid professional growth within the company.

Accepting the Director of Marketing would allow Archer to accomplish her corporate

goals although her salary would be reduced. Accepting the Director of Marketing would

strengthen her power within the organization by increasing her depth within the

organization as well as increasing her level of influence and respect.

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Hiring and Compensation of Archer by Kessel

Kessel should hire Archer based on her dedication to the company and her proven

track performance. Archer has the qualifications to step into this newly created position

with her sales experience and working relationships with customers. Hiring Archer would

increase his power within the organization. Archer could bring Kessel’s division to new

heights the company has never seen before. There are possible positive effects by hiring

from outside the organization include salary saving and increased job satisfaction by

other employees who may be upset due to salary inequity.

Archer’s Compensation

Fortunately, the company has provided Kessel with flexibility in the salary he can

offer Archer. With an additional $200,000 to allocate, he should offer Archer a base

salary of $140,000 (which is higher than what Archer believes will be her base salary,

thus compensating for the lack of bonus structure), hire an administrative support person

for $40,000, and increase the salary of each product manager within the department by

$4,000 annually. Additionally, Kessel should consider placing the recently created two-

person marketing team under Archer’s direct supervision. This will satisfy Archer’s goals

of strengthening her position of management in the company while simultaneously

insuring a cohesive, consistent marketing strategy. Moreover, it will insure compensation

equity within the department as Archer will have management responsibilities in addition

to the requirements of the position.

With the increase to her base salary, additional management responsibilities, and

less travel, Archer should accept the position of Director of Product Marketing. This
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position will allow her to utilize her solid sales and customer service experience within

the company while more fully developing the skills she learned while completing her

MBA. It should also better position her for future upward movement within the company.

Social Power

Although both utilized effective social power, Archer used her social power most

effectively. Archer showed that her interest lies within the best interest of the company.

She puts the organization first before her own monetary interest. When Archer accepted

the emergency challenge in turning around Toys N’ Stuff, she transferred from a

salesperson that earned valuable monetary rewards into an assignment that denied her

commissions. Archer knowingly accepted the challenge that did not allow her to make

commission on $700.000. Her social power had a great influence on the company.
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References

McGinn, K., Witter, D. (2006). Retailmax: role for cam archer. Harvard Business

Publishing

McGinn, K., Witter, D. (2006). Retailmax: role for regan kessel. Harvard Business

Publishing

McShane, S. L., & Von Glinow, M. A. (2008). Organizational behavior (5th ed.). New

York: McGraw-Hill

Northhouse, P. G. (2010). Leadership theory and practice (fifth ed.). California: SAGE

Publications, Inc.