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Retail inventory shrinkage, sensing weak security breach signals, and organizational structure
dc.contributor.authorSu, Hung-Chung
dc.contributor.authorRungtusanatham, M. Johnny
dc.contributor.authorLinderman, Kevin
dc.date.accessioned2023-04-04T17:43:59Z
dc.date.available2024-03-04 13:43:58en
dc.date.available2023-04-04T17:43:59Z
dc.date.issued2023-02
dc.identifier.citationSu, Hung-Chung ; Rungtusanatham, M. Johnny; Linderman, Kevin (2023). "Retail inventory shrinkage, sensing weak security breach signals, and organizational structure." Decision Sciences 54(1): 8-28.
dc.identifier.issn0011-7315
dc.identifier.issn1540-5915
dc.identifier.urihttps://hdl.handle.net/2027.42/176106
dc.description.abstractRetail inventory shrinkage, resulting primarily from employee theft and shoplifting, costs retailers nearly $70 billion annually. With brick-and-mortar retailers today confronting increased competition and low future growth expectations, reducing inventory shrinkage is becoming even more critical to becoming profitable. This paper analyzes a unique dataset that combines both primary survey and objective archival data from a Fortune 500 retailer to test a theoretical model associating retail inventory shrinkage, the capacity of a retail store to sense weak security breach signals, centralization of decision making, and formalization of security breach management. The analysis builds on insights from high reliability organization theory and the literature on organizational structure. Results reveal that as a retail store increases its capacity to sense weak security breach signals, it observes decreases in store-level inventory shrinkage, with this negative association amplified (dampened) when the retail store has formalized procedures and protocols for managing security breaches (has centralized decision making within the retail store). Moreover, while the establishment of formalized procedures and protocols for managing security breaches bolsters the capacity of a retail store to sense weak security breach signals, centralizing decision making has the opposite effect. Our findings contribute to the retail operations literature by introducing a new store-level organizational capability to guard against theft-based retail inventory shrinkage and by offering novel insights into how and why organizational structure at the level of a retail store deters or facilitates the capacity to sense weak security breach signals. From a practical perspective, these findings advise retailers to develop the capability to become aware of and to mitigate security breaches. Further, to support this capacity, retailers are urged to decentralize decision making to retail store personnel and to invest in formalizing procedures and protocols for managing security breaches in order to deter retail thefts that shrink retail store inventory.
dc.publisherPrinceton University Press
dc.publisherWiley Periodicals, Inc.
dc.subject.othercentralization
dc.subject.othersensing weak signals
dc.subject.otherhigh reliability organization theory
dc.subject.otherretail thefts
dc.subject.otherretail inventory shrinkage
dc.subject.otherformalization
dc.titleRetail inventory shrinkage, sensing weak security breach signals, and organizational structure
dc.typeArticle
dc.rights.robotsIndexNoFollow
dc.subject.hlbsecondlevelComputer Science
dc.subject.hlbsecondlevelMathematics
dc.subject.hlbtoplevelScience
dc.description.peerreviewedPeer Reviewed
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/176106/1/deci12524.pdf
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/176106/2/deci12524_am.pdf
dc.identifier.doi10.1111/deci.12524
dc.identifier.sourceDecision Sciences
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dc.owningcollnameInterdisciplinary and Peer-Reviewed


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