In a move that will catch some Wall Street investment firms off guard, Sears, Roebuck & Co., the world's largest retail firm, has selected senior executive vice president Edward R. Telling as chairman of the board.

But the decision by Sears board of directors comes as no surprise to many insiders at Sears Tower in Chicago, who have watched Telling direct a reorganization of the retailer in recent months - a series of changes that put Sears back on a growth track it jumped in the early 1970s.

The 58-year-old Telling will replace outoging chairman Arthur M. Wood, who earlier announced his retirement effective Jan. 31. He will be 65 on Jan. 26.

In selecting Telling for chairman at a meeting in Chicago yesterday, however, the Sears board bypassed the current president and heir-apparent, A. Dean Swift, who recently turned 59.

While Sears has advanced executives in the past over individuals normally in line for promotion, most retail industry analysts had expected the top job to go to the well-regarded Swift.

Although the company's formal announcement gave no reasons for the choice of Telling, industry sources said it reflected the emphasis he has placed on central management of the sprawling retail firm since moving to the headquarters in Chicago two years ago.

In the wake of a serious slump in Sears sales growth, the nation's leading retailer hired McKinsey & Co. to recommend organizational changes - which subsequently took place, the first in a generation.

As one step in the reorganization, Sears began stripping away some of the marketing and pricing authority which previously existed at regional offices across the country.

Management over these operations was consolidated in Chicago under a new, four-man "office of chairman," in February 1976. The new office was, in the view of some industry experts, a method of testing out potential successors to Wood.

Joining Wood in the new office were Swift, as president; James W. Button, senior architect of Sears merchandising in the early 1970s, which began to emphasize higher-priced goods; and Telling, who had been in charge of the company's Eastern region.

Telling was brought to headquarters because of his work in building up the Sears image in the East, where it previously had not been the recognizable giant it is elsewhere in the nation. He became what one source described as "the key go-between" in relations with individual stores and Sears tower, the 110-story headquarters building.

"If there is one person who deserves credit" for the recent recovery of Sears, it is Telling, said retail analyst Jeffrey Feiner at the New York investment firm of Drexel Burnham.

Sears had "missed its market to a certain extent" by seeking more affluent customers in the early 1970s, Feiner said. But under Telling, the analyst added, "he's done the job" of making the firm more competitive with such aggressive firms as K mart Corp., and a newly rejuvinated Montgomery Ward & Co. in recent years.

One example of Telling's direction has been a drive to install budget stores at Sears units at a time when other retailers (such as Woodward & Lathrop in Washington) are phasing them out.

In metropolitan Washington, for example, Sears has been adding new women's apparel budget shops at its largest stores. Telling has hopes of adding 400 such budget shops by year's end.

Sears is the largest general merchandist retailer in this part of the country, with an estimated $350 million of sales at a dozen stores in Baltimore, Washington, Annapolis and suburbs.

Nationwide, Sears last year had sales of $15 billion, on which it earned a record $695 million. The company has 416,000 employees and also owns Allstate Insurance Co.

Wood, who will remain a director of Sears after his retirement, said yesterday that the management shift "will not affect the thrust, the direction of our company." He called the new officers a "strong team."

Seeking to downplay talk of tension among competitors to be his successsor, Wood said he is "thoroughly in accord with the decision . . . We don't have turmoil around here . . . These men (Telling and Swift) are both so well liked it will be a relief to the company to know who is on first base in 1978."

When he retires as chairman, Wood will become chairman of the trustees of the Sears savings and profit sharing fund, the largest in private industry with nearly $3 billion of assets (including about 20 per cent of 220 million shares of Sears common outstanding).

In other management changes of Sears:

Charles C. Wurmstedt, 54, succeeds Telling as senior executive vice president for field operations; he has been in charge of Midwest operations.

John G. Lowe, 57, now in charge of the Far West, succeeds Wurmstedt, and Henry D. Sunderland succeeds Lowe.

Telling, who will also be chief executive, becomes the 10th chairman in the company's 91-year history. He joined the company in 1946 as a trainee in his native Danville, Ill. He took over Sears stores in the New York area in 1965 and was elected vice president for the Eastern region and a director in 1969.

Swift, whom he beat out for the top post, remains chief administrative officer. He joined the firm in 1940 as a salesman in Highland Park, Ill., and became president on Feb. 1, 1973.