Zara: Culture and Organization Report

RUNNING HEAD: MANAGEMENT 0
ZARA
CULTURE AND
ORGANISATION
REPORT
Student
7/8/2019

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Executive Summary
Organization culture is the norms, value, traditions which thrives the company to plan its
long term goals. It states the relationship of management with its employees who from different
part of the society come together to achieve the objective of the company. Such organizational
culture can be observed in Zara, which is a renowned fashion brand, and are serving the
customers since 1963. The secret of its success is its employees who are putting their efforts to
make the perfect garments for its customers. Zara welcomes the diversity of employees in their
company and works with integrity. However, from the last seven years, the company is facing
criticism in the other countries like US, Brazil, and Sweden as they are abusing and exploiting
the needs of the employee and are encouraging inequality and discrimination on the workplace.
Therefore, the focus of the report on the issues faced by Zara and following its analysis
according to Greet Hofstede cultural dimensional theory with recommendations.

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Contents
About ZARA- A Journey to become a Fashion Statement....................................................................3
Organization culture..........................................................................................................................4
Corporate Culture Issues faced by Zara.................................................................................................6
Hofstede Theory:...................................................................................................................................9
Philosophy of Hofstede Culture Dimension:.......................................................................................11
1. Power Distance Index................................................................................................................12
2. Individualism versus Collectivism (IDV)..................................................................................13
3. Masculinity versus Femininity (MAS)......................................................................................14
4. Uncertainty Avoidance Index (UAI).........................................................................................14
5. Long- Versus Short-Term Orientation.......................................................................................14
6. Indulgence versus Restraint (IVR)............................................................................................15
Analysis of Issues in accordance with Hofstede theory:.................................................................15
Conclusion...........................................................................................................................................17
Bibliography........................................................................................................................................18

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About ZARA- A Journey to become a Fashion Statement
Zara is a globally acclaimed Spanish haute couture company of the Inditex group. It is a
go-to fashion brand, which acts as a trendsetter and operates as the biggest chain of retail and
online marketing in the segments like clothing, accessories, and footwear. Moreover, in
comparison to the other premium fashion brands, it has emerged as one of the few brands that
desire to provide the comfortable yet stylish products to their clients at reasonable prices (Forbes,
2019). The journey of Zara was started in 1963 (Zara, 2019), when Amancio Ortega Gaona
entered into the fashion industry and opened the dressmaking factory, Inditex. The company has
shown exceptional growth during the 1990s and expanded its business in other nations like
America, France and most of the regions of Europe. Today, Zara is recognized as one of the best
fashion brand, which is manufacturing and supplying Apparel, fashion accessories and footwear
in 2259 stores in 96 countries (Zara Success Story, 2019). While serving the wants of the
customers Zara follows the ethical values of beauty, clarity, functionality, and sustainability.
Zara respects the culture and age group of every customer and designs the apparel according to
his or her body fit and preference. Moreover, it follows a dynamic culture while responding to
changing trends, feedback of customers on their collection. This fashion brand is flexible and
effective in acknowledging the response at the right time and every two weeks, it launches a new
collection for its customers so they can get a variety of choices at the affordable prices and the
interest of consumers can be maintained in the company.

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Source : (Zara investment could significantly alter PG’s financial dynamics,
2018)
Organization culture
It means accomplishment, experiences, values, norms, and beliefs that direct the
management and employees to fulfill the expectations of society.
For ZARA customers are heart, therefore, the company expects, and encourages its
employees to perform according to the needs and wants of the customer (What is Organizational
culture?, 2019). In the retail outlets, Zara motivates its sales department and managers to interact
with the customers. They should be ready to solve their problems by focusing on the suggestions
provided by them. The foundation of Zara is based: To give the best fashion style to their clients
and get them faster than any brands.

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Zara focuses to provide prime services to their customers, therefore it conducts training
programs for their employees so they attain the expertise of leadership and communication skills.
Inditex empowers “esprit de corps” in an organization and directs the efforts of a subordinate to
perceive the psychology of the buyers. In the supply management chain, the company commits
to enhance the self- esteem of their production managers by introducing the programs of
effective functioning so that employees can perform the activities in a most eco-friendly and
efficient way (The Secret of Zara’s Success: A Culture of Customer Co-creation, 2018). Zara
commits to provide equal opportunities for growth to their manufacturing unit and contribute
USD 49 million on a yearly basis in the community development programs. It promotes
entrepreneurial culture in the company and recruits personnel with an abundance of talent and
skills. Moreover, the company always looks for the individual which can be the most prominent
asset for the company and act in its interest. Zara knows how to keep its employees satisfied and
follows the motivational techniques like promotion, rewards, and incentives so that employees
can accomplish their psychological needs. Through these great initiatives, labor turnover is only
10%. Zara adopts a flexible working environment and complies with management principles of
“division of work” ( Zara (a), 2019). Managers work with subordinates and delegate the power
of taking authority and responsibility of taking a decision. Furthermore, it boosts the risk-taking
attitude of the employees so that they can perform the assigned task in a precise way. To promote
decision- process in Zara’s management team is following an innovative employment strategy
where there is no chief designer and the designers have the freedom to forecast and prepare the
garments according to the current trends and demands. Zara strengthens the employment team by
giving them the opportunity to handle the internal operations and performance of the company in
the market. To deliver the perfect silhouettes in the industry, Zara has hired a creative