Sustainability and Transformational Leadership in H&M

This report analyses the leadership and sustainability practices of H&M, identifying the impact of change on the organization and ways in which the challenge was managed. It also critically analyses how H&M evolved as a result of change and presents recommendations for the future.

Sustainability and
Transformational Leadership

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Analysing the leadership and sustainability practices in quoted firm..........................................3
Identifying the impact of change that affected the organization..................................................4
Identifying ways in challenge was managed by H&M................................................................5
Critically analysing how H&M evolved as result of change.......................................................8
Presenting certain recommendation that could benefit the firm..................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Sustainability is ability to meet the current needs without compromising on the needs for
future generation. Similarly, transformational leadership is method that causes changes in social
and individual systems. The present report is based on H&M that is the most recognized retail
brand worldwide. Further, the report will analyse the leadership and sustainability practices that
is the organization is following. Moreover, significant impact of changed policy adopted by the
firm will also be discussed in detail. Further, the ways in which the changed policy affected the
firm operations will also be analysed. Also, certain methods through which the challenge will be
overcome will also be explained in detail. Furthermore, how the organization changed as whole
due to his change will also be analysed. Lastly, certain recommendations that will benefit the
quoted firm in the future will also be analysed in detail.
MAIN BODY.
Analysing the leadership and sustainability practices in quoted firm.
Sustainable practices include valuing the employees of the organization, following
social responsibility so that long term business goals could be achieved with improved
performance. It is very important to develop sustainable practice in the firm so that competitive
advantage could be gained but this could be done only through following effective leadership
practices by the managers.
In context of H&M group they have assures that all the practices and products sold are
sustainable and does not harm the environment in any manner. Moreover, they ensure that
minimum environmental damage is caused and resources are not waste in any of the production
process (Muralidharan and Pathak , 2018). Also, it can be seen that they are opting for more
digital workplace so that they are able to work more efficiently through cutting down the extra
costs. For example : Less use of plastic bags and paper work will serve as way through which the
environment is protected. Moreover, the quoted firm encouraged the sustainability practices
within the daily routine activities through continuous employee engagement and awareness
during its certain conference meeting and events. This has further helped the firm in
continuously monitoring the work practices, resource consumption and carbon footprint levels at
the workplace.

Further the quoted firm has developed the sustainable business program that allows very
employee active participation in creating the awareness among the new employees and
customers in well specified manner. Following these practices also make the firm as socially
responsible in at different levels in the market.
It is also seen that firm has adopted the best leadership practices through optimizing
supply chain and relying more on the renewable energy sources so that work practice can be
done in smart manner (Kotamena , Senjaya and Prasetya, 2020). Further, in certain reports it was
also stated that the H&M has launched social media campaign with hashtag
#WorldRecycleWeek so that to create the awareness among the customers about recycling the
unwanted clothing by offering 30% off coupon in their respective stores.
Also, it is seen that most of the times the quoted firm inspires customers to become better
customers through influencing them to purchase only those products that cause less damage to
the environment (Manzoor and et.al., 2019). Further, it is done through encouraging the use of
more environment friendly product packaging while delivering the goods to the consumers that
are ordered via online medium. Further, the H&M brand has also asked it employees to avoid
any unsustainable behaviour while working at the workplace so that small good changes in the
firm can bring about large impact on creating a better working environment.
Identifying the impact of change that affected the organization.
In context of one challenge that is faced by the quoted firm is that effectively adopting to
the changes prevailing currently in the country. Most of the H&M stores are facing challenging
from other stores that are offering products at relatively lower prices (Ravitch and Carl, 2019).
Also, another challenge company had faced in recent times was that digital marketing techniques
were very weak and hence firm was heavily relayed upon the store outlets for sales of its
products than online digital media platform to successfully sells its products to large number of
markets.
Moreover, this factor was proved to be major threat to the firm in times of Covid 19
when all the stores were shut down and there was complete lock down and hence the sales
reduced to large level as customers were unable to buy certain products who prefer to shop at
stores (Lai and et.al., 2020). Further, it was seen that the company came to use the online
medium much later in 2010 when all other retail outlets were already successful in selling
products through this medium. Also, even after using the e-commerce platform H&M was

unsuccessful in availing various opportunities that this platform provides to all its users in the
particular manner (Peng and et.al., 2021). Some major problems include that website was
improperly designed, poor navigation on the page, very slow delivery and delay in responding to
the customer queries on time in compare to other brands that were already established.
Moreover, it can be seen that certain drivers of changes such as lack of appropriate use
of technology that was major reason in lower sales at that particular point of time (Shafi, M. and
et.al., 2020) Another was social changes such as pandemic and changes in opinions of the people
in buying certain other brands that offer products at lower prices along with various taxes and
regulation imposed by the government that does not allow free delivery of goods in certain
regions of the country has also impacted the firm growth and are considered as major causes of
challenge that firm had faced in the pasts.
This type of challenge have negatively impacted the sales of the firm as it was not able to
cover large market areas due to this. Also, it was unable to serve the needs of the group that are
mostly demanded products at relatively fewer prices than in time of pandemic when earning
were very less and minimum (Azim and et.al., 2019). Moreover, the outcome of the company
was that it was unable to gain effective competitive advantage than the rest other brands. Thus,
certain drivers of change have negatively impacted the firm as it was unable to utilize the
resources in the efficient manner . Furthermore, employees of the quoted firm were also affected
due to such challenge as they were unable to work in less stressful environment. Also, making
certain changes and modifications at that period was difficult for firm in as there were also
various tax risks associated with it. Also, due to decreased sales the firm was unable to expand
its selling of the products into various regions.
Identifying ways in challenge was managed by H&M.
The above stated challenge was overcome by the firm through using effective digital
investment strategy that was done by creating growing demand of the products on online
platform. This further help H&M to conquer large markets very there is high level of competition
(Ma and Jiang , 2018). Also, various business strategies were been developed that focused on
opening new stores and avoiding shop closures so that old customers could have the best
shopping experience from various H&M stores. Further, various collaborations options had been
identified by the firm so that there is more digital assistance could be got for smooth operations.

Moreover, in certain aspects the measures of overcoming such problem can be explained in
detail which are as follows:
Sustainability:
It has focused on reducing the green house emissions by end of 2030. Also, the company
while increasing the sales digitally also aims to sell only those goods that can be 100% recycled
or are fully sustainable products. Moreover, it has also stock “conscious” sustainable fashion
collection from its various stores (Le and Lei, 2018). The firm has also taken various opinions
and collected opinions form the genera public that better services could be provided in the easiest
manner. Further, it has also observed the competitors move regarding the sustainable practices
that they are currently following so that certain changes can also be made according to it. Also,
the prices related to such products are also kept according to the market moves.
Leadership:
The major digital challenge was overcome by the firm through assuring that employees at
the workplace practice teamwork and co-operation for achieving the collective goals. It set clear
guidelines for employees so that business operations can be conducted honestly, responsibly and
ethically (Gui , Luo , Zhang and Deng , 2020). However, such type of transactional leadership
might sometimes create problems for employees due to strict norms and policies. H&M is
committed in developing better labour and employment laws so that equal and fair wages can be
provided to all individuals. Also, the H&M is focused on granting enough rights so that they can
easily express their thoughts regarding any further changes they wish that need to be developed
in the organization. Also, the leadership style after this challenge is that the management is
focused on recruiting and attracting employees through indicating messages like opportunity to
work abroad, higher learning skills and much more. Thus, this helped in attracting, more number
of employees to work in the organization so that the organization would be able to grow on large
level.
Transformational aspects:
H&M with the significant use of technology it adopted central inventory management
software so that all the data relating to the sales and logistics in its warehouse can be easily
collected by the firm (Faupel and Süß , 2019). Also, this system has allowed the firm in making
the process of ordering and restocking in much easier manner than the rest others. Thus, it can
respond to changes in the market in much faster and flexible manner than old traditional paper

work methods that was complex and time-consuming. Moreover, it also maintains close
relationship with the suppliers so that knowledge regarding the working of supply chain could be
fully utilized.
The stated challenge was also overcome by the firm through creating value driven
products so that they could be sold in better ways than the competitors. Also, they have improved
the websites, started giving various offers and coupons in the festive seasons and respond to
customer queries through hiring an effective team of professionals (Asbari, 2020). Also, through
the digital platform the company deals in more in fast fashion that allows all class of people to
have the latest trends in reasonable and affordable prices. Further, it has adopted the fast product
cycle that give limited opportunity to its customers to avail the products at special prices that has
helped in generating large amount of customer traffic digitally.
Further, through operating the digital platform the firm has make certain changes such as
it has added a new feature of payment through PayPal, more of loyalty programs to attract large
number of customers (Sheehan , Garavan and Morley , 2020). Earlier e-commerce platform was
not having navigational options for different product categories. For example: Earlier while
searching on the home page “men” there were no other options such as jeans, shirts etc. which
has now been improved.
Also, it was seen in earlier times that SEO strategy was non existing that made some serious
errors that impacted the performance of the firm search engines. However, in the current times it
has improved to large scale and hence it is seen that now people can easily locate the brand and
any of its information regarding the products through use of various keywords so that more
brand awareness can be created .
Moreover, it was seen that managers of the H&M were concerned in improving the client
relationships through addressing each and every need on almost all the platforms where
customers can be reached easily. Also, management is focused on motivating the employees so
that they re able to successfully implement certain changes that are prior importance to the
quoted firm. Moreover, the best motivation is provided through increased salaries and incentives
that allow them to contribute together more towards the organizational success. Also, regular
meetings were undertaken by the management to ensure that work is carried out in smooth
manner and if any corrective actions or improvements need to be implemented on the e-
commerce platform than the management can easily look into.

Critically analysing how H&M evolved as result of change.
With using of e-commerce platform the firm has done major transformations such as
now they are focusing on the lifestyle behaviours rather than the short term trends that occurs in
the markets. Also, the firm is allowing more companies to become the part of the H&M supply
chain that allows other firms to benefit from the local presence, knowledge and expertise through
H&M platform. Moreover, it has come up the option of click and collect and in store mode
through which the customers in selected outlets can use the H&M digital app to discover what is
available in the nearby stores. Furthermore, to increase the sales in all regions it has also
introduced various new ideas such as developed modern stores with new interior and exterior
concepts along with improved customer services.
Moreover, quoted firm has conducted extensive market research in recent times that helps
to identify the ways through which it can look into new digital aspects like to assure more safety
and security in online payment to their fast growing customers. Also, the firm is investing is
artificial intelligence and customer loyalty so that right stores would be able to target right
customers that would further help in generating huge revenues.
Also, the firm has introduced mobile app that allow the customers to scan and find any
products at the store (For H&M, the future of fashion is both circular and digital, 2021) .
Further, H&M catalogue could be easily searched by its users using certain images. The firm is
also focused on analysing the data through big data processing algorithms so that information
regarding the returns and receipts etc. can be easily collected in advance for easy understanding
of the consumer behaviour and fashion sense. Further, to make sure that e-commerce platform is
operated perfectly it has implemented an employee communication platform that allow the team
members of H&M to chat with while working from one system only. Thus, an effective use of
digital platform has allowed the firm to stay ahead in competition both through offline and online
medium.
Further, it is seen that it is most popular brand among the youth in various parts of the
world. Moreover, people love the latest fashion that the website offers and now they are eager to
shop with brand on regular basis. Also, various offers and discounts are also given during the
festive season so that large number of customers get attracted to the websites. The digital
platform also has allowed the firm to have an efficient customer query section through which
various queries of the customers are addressed in the most effective manner. Quick replies from

the H&M customer department officials in current times tends to develop higher customer
satisfaction and brand image in the fast changing markets. Also, with the extended revenues
quoted firm have also been able to invest in the marketing activities so that more people are
aware of the brand and its products. Moreover, the firm has completely changes it business
models and is investing in the training programmes so that work can be carried out more
effectively. Through these training the employees H&M can resolved any issue that company is
facing in very less time even while working independently.
Presenting certain recommendation that could benefit the firm.
Through the H&M has done successfully in the business there are certain suggestions that
can be provided to the firm for further future improvement.
New technology: It is to be recommanded to the quoted firm that it should more concentrate on
investing in more technologies so that sustainable use of resources can be done. For example the
company can use more of renewable energy sources such as solar panels so that energy can be
consumed in environment friendly manner. It will also save the extra costs that is involved in the
firm. New technologies would allow in easy working and also work could be done in faster
manners (Jackson, 2020). For this to become a success it is (essential) than the quoted firm stop
investing on opening large stores that involve huge costs and consideration of other factors that
is not possible in times when there is less revenue generation in any point of time. Hence, it
should focus on opening small stores and investing more in digital technologies. Moreover, in
store digital transformations should aim at solving the key points of the customer.
Sustainability strategies: Another suggestion to the H&M is that consumers today are more
attracted towards those brands that follows those practices that helps in serving the best to the
environment. It ensures that best practices are adopted within and outside the firm operations' so
that more people are attracted towards the services. Hence, it should aim at making the outlets
greener by planting trees around it and adopting those practice that assures that less plastic is
used. All type of sustainability strategies will not only help the firm in becoming socially
responsible but will also allow employees to think more innovative practices for the development
of the firm. Moreover, the firm could also develop some recycling programmes through any of
the public events or places that will encourage people to adopt more environment friendly
methods for the sustainable environment.

CONCLUSION
From the above report it can be concluded that sustainability ensures that work can be
carried out in way that ensures that minimum wastage of resources is done. Also, there are
various types of leadership and sustainability practices that had been adopted by H&M to remain
competitive in long run. Also, the absence of digital technology platform in past along with
drivers of change that affected the firm operations had explained in detail. Further, the ways
through which this challenge has been managed in context of leadership and sustainability
aspects had also been explored under this report. Moreover, changes in working of quoted firm
through overcoming this challenge had identified. Lastly, certain valid recommendations on
potential practices that would benefit the organization in the future has also been analysed under
this report.

REFERENCES
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Asbari, M., 2020. Is Transformational Leadership Suitable for Future Organizational
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Online
For H&M, the future of fashion is both circular and digital. 2021. [Online]. Available
through:<https://www.mckinsey.com/industries/retail/our-insights/for-h-and-m-the-
future-of-fashion-is-both-circular-and-digital>.