Organizational Performance and Retail Challenges: A Structural Equation Approach

Organized retailing is a sunrise industry in India. Many big industrial houses and international players are in the arena. The perfect competition in the market posed many challenges to retailers for better organizational performance. In this study we attempt to identify items for retail challenges (RC) and organizational performance (OP) based on strong literature support in consultation of practitioners and consultants in the field of organized non-livestock retailing (NLR). The retail challenges so selected were classified with factor analysis using principal component analysis with varimax rotation. Here, the retail challenges are classified into four categories as: strategic challenges, environmental challenges, customer challenges, and supply chain (SC) challenges. The six identified items for organizational performance are: market performance, SC competencies, stakeholder satisfaction, innovation and learning, customer satisfaction, and financial performance. A confirmatory model was tested using structural equation modeling to prove hypotheses: strategic challenges, environmental challenges, and customer challenges influence SC challenges and all the challenges affect organizational performance. The data were collected from organized non-livestock retail players operating in north India. All the results are validated using rigorous statistical analysis.