Cultural Environment of Zara

This report analyzes the cultural environment of Zara in China and the challenges faced by the organization. The report uses Hofstede's cultural dimensions framework to analyze the cultural differences between China and Spain. The report also provides recommendations for Zara to overcome the cultural challenges in China.

Running head: CULTURAL ENVIROMENT OF ZARA
CULTURAL ENVIROMENT OF ZARA
Name of the Student
Name of the University
Author Note

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Table of Contents
1. A brief background to the organization and its environment.....................................2
2. An Introduction to the focus of the report..................................................................2
3. A brief argument which explains why you have chosen this framework instead of
others..........................................................................................................................................3
4. An explanation of the theoretical framework you will use to analyse the
organization, including its main concepts..................................................................................5
5. An analysis of practice, issue, event or sub-unit which uses to chosen theoretical
framework and concepts............................................................................................................7
5.0 Power distance.....................................................................................................7
Individualism..............................................................................................................8
Masculinity.................................................................................................................8
Uncertainty avoidance................................................................................................9
Long term orientation.................................................................................................9
Indulgence..................................................................................................................9
Conclusions..................................................................................................................10
Recommendations........................................................................................................11
References....................................................................................................................11

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1. A brief background to the organization and its environment
Zara SA is a Spanish organization that operates in the fast fashion based retail
industry. The organization has its origins in Arteixo in Galicia. Zara was established in the
year 1975 by Rosalia Mera and Armancio Ortega. Zara has been able to become a major
brand that belongs to the Inditex Group which is the biggest apparel based retailer in the
world. The major brands that are owned by the Inditex Group mainly include, Pull & Bear,
Massimo Dutti, Uterque, Oysho, Bershka and Zara Home (Zarahome.com., 2019). Zara has
been managing around 20 clothing based collections in the year 2017. Zara has been able to
expand its international operations by opening its first international store in Portugal in the
1988. The organization has been able to enter the United States in the 1989, following it has
expanded its operations in many different international locations within 2010
(Zarahome.com., 2019).
Fast fashion is a term which is mainly used by the fashion based retailers for the
purpose of expressing designs which are able to move quickly from the catwalk for capturing
the current trends in fashion. Fast fashion can also be associated in an effective manner with
the concept that is related to disposable fashion. The fast fashion based industry has been able
to affect the retail industry in a huge manner (Adekola & Sergi, 2016). The retailers in the
industry thereby aim at keeping up with the fast paced shopping based journey of the
consumers. Zara operates in the fast fashion based industry and is able to deliver the products
based on changing needs and demands of the consumers who are a part of the market (Bakir
et al., 2015).
2. An Introduction to the focus of the report
The major cultural challenge that has been faced by Zara in China is based on the lack
of proper development of physical store based culture. The organization has failed to develop

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the physical stores in the country. Major attention was provided to the online stores and sales
that are made with the help of these stores. The lack of proper store related culture of the
organization has been able to affect the relationship that has been developed with the
customers as well. Zara was not able to connect with the customers in an effective manner,
which led to the lack of profitability of the organization (Bambauer-Sachse & Rabeson,
2015).
The main issue was based on the lack of proper interaction of store employees with
the customers who visit the stores. The organization has not been successful in developing
high levels of popularity among the customers in China. This is also related to the
communication process that has been developed by the organization in the industry. The lack
of proper communication in the organization has been able to affect the long term operations
of Zara in China (Beugelsdijk, Kostova & Roth, 2017). The culture and tradition that is
followed by Zara in other parts of the world have not been followed in China. This has led to
the closure of the flagship store of the organization in the year 2017. Zara has not been
successful in maintaining the operations in the country successfully due to the major
challenge related development of proper organizational culture that has been followed by the
organization (Bambauer-Sachse & Rabeson, 2015).
3. A brief argument which explains why you have chosen this framework instead of
others
The national cultures of different countries are based on various cultural value based
systems. The generation of value systems is based in a conception and the beliefs based on
different necessities and resources. The two major models that are used for the analysis of
differences that exist between the national cultures are Hofstede’s cultural dimensions and
Fons Trompenaars cultural factors. The comparison of the two models are based on the ways

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they are able to provide an explanation related to differences that exist between different
cultures (Beugelsdijk, Maseland & Van Hoorn, 2015).
The models are able to influence human thinking, performance, behaviour and feeling
in an effective manner. The sets of practices that are implemented by two models are based
on the difficulties that are faced by organizations due to the differences in culture. The
frameworks have some similarities and some major differences as well. The models can be
grouped into two major categories,
Relations developed between people – The two cultural differences are determined
with the help of the frameworks. Hofstede’s model differentiates between the individualism
and collectivism. On other hand, Trompenaars has been able to divide the distinction into two
major sets that are, universalism versus particularism and communitarianism versus
individualism (Chen et al., 2015).
Motivational orientation – The societies tend to choose ways so that they are able to
cope with uncertainties of the behaviours. Hofstede has been able to identify three major
measurements that include, masculinity versus feminity, amounts of the uncertainty
avoidance and power distance.
Attitude towards the time – Hofstede is able to determine the orientation between
long term and short term. Trompenaars on the other hand distinguishes between two major
measurements that include, sequential versus synchronic and inner versus outer time (Chua,
Roth & Lemoine, 2015).
The two frameworks based on cultural dimensions of the organization are able to
analyse different aspects in an effective manner. Hofstede’s analysis has been able to depict
the differences that exist between various aspects of the organization. On other hand,

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Trompenaars framework has been able to provide an analysis that is based on the measure of
national culture and the measurement of the culture of an organization as well (De Mooij,
2018).
4. An explanation of the theoretical framework you will use to analyse the organization,
including its main concepts
The theory of Hofstede’s cultural dimensions is mainly based on the framework that
revolves around the cross cultural communication. The dimensions are able to portray the
impact the culture the that is ingrained within the society on values of members who are a
part of the society. Dimensions of the culture are considered to be important factors when
international business is concerned. The original Hofstede model was developed with the
help of analysis that have been done based on value system of employees of IBM within the
years 1967 to 1973 (Diallo et al., 2018).
The original theory that was proposed mainly consisted of four dimensions that
include, power distance, individualism versus collectivism, masculinity versus feminity and
uncertainty avoidance. After the development of an independent study, a fifth dimension has
been included in the model is long term versus short term. The work that has been done by
Hofstede is able to serve as a base for various researchers who have aimed at studying the
differences between cultural aspects of two countries (French, 2015). The dimensions are
able to illustrate the values that are embedded deeply within the diverse cultures of
organizations. The values have a major impact on the ways by which people belonging to
different backgrounds are able to behave when they are placed in a certain situation. The six
cultural dimensions that have been defined by Hofstede are,

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Power distance – The dimension is able to explain the extent up to which the less
powerful members of the society are able to accept the proper distribution of power which is
able to take place in an unequal way.
Uncertainty avoidance – This dimension is able to describe the extent up to which the
people in a society are able to avoid the levels of uncertainty (Gurung & Prater, 2017).
Individualism vs. collectivism – The main focus of this dimension is based on the
question that is related to the preference levels of people to be left alone so that they are able
to look after themselves.
Masculinity vs. feminity – Masculinity can imply the preference of society is mainly
based on the heroism, assertiveness, material reward and achievement. On the other hand,
feminity is based on preference of society based on modesty, quality of the life, cooperation
and care for weak (Hofstede-insights.com., 2019).
Long term vs. short term – Long term orientation is able to describe the levels of
inclination that the society has towards the search for virtue. On the other hand, short term
orientation is related to the societies that are inclined towards establishment of absolute truth.
Indulgence vs. restraint – This dimension mainly revolves around degree up to which
societies are able to exercise control over impulses and the desires (Hofstede-insights.com.,
2019).
The six dimensions of Hofstede’s cultural dimensions are able to analyse different
aspects of national culture in a detailed manner. The organizations which aim at expanding
their operations in foreign countries can use the model in order to examine and understand
the differences that are present between the cultures of the countries (Kaasa, Vadi &
Varblane, 2016).

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Criticisms of Hofstede’s cultural dimension model – The depiction of the cultural
dimensions by Hofstede has been challenged. A major critique of the model is thereby
provided by Holden in the work that has been done based on cross cultural management.
Hofstede’s method based on cataloguing the culture based on periodic tables has been
challenged and criticised by Holden in a huge manner. The data which has been used for the
development of Hofstede’s model are old and the changes that have taken place in the
external environment have not been considered in the model (Matzler et al., 2016).
The organizations in the world have started implemented knowledge sharing,
encouraging empowerment, localisation and emphasizing cooperation. The essentialist
concept of Hofstede has been criticised as well. McSweeney has also criticised the
generalisations that have taken place based on the micro and the macro environment as well.
Major levels of generalisations have been made based on the national culture levels in the
Hofstede’s model. Myers and Tan also criticise the approach that has been implemented by
Hofstede from the angle of information systems (Mazanec et al., 2015). The researchers agree
that the understanding based on cultural differences is considered to be important for
successful deployment of the information technology. The concept related to national culture
that has been defined by Hofstede is considered to be an important part of the analysis that is
made with the help of this culture (McDonough, Barnes & Lopez-Pina, 2018).
5. An analysis of practice, issue, event or sub-unit which uses to chosen theoretical
framework and concepts
Zara is fast fashion based retail organizations that has its operations in different
countries. The culture that is followed in the different countries are able to affect the
operations of Zara in a huge manner. The origin of Zara is in Spain and the country in which
the organization has faced major levels of issues is China. The cultural aspects of the two

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countries will be analysed with the help of Hofstede’s cultural dimension framework (Meyer,
2018).
5.0 Power distance
This dimension of the is based on the levels of equality in the society and the attitudes
that are depicted towards the culture. The extent up to which less powerful members of the
organizations expect the equal distribution of power. China has scored 80 in this dimension,
that depicts that the levels of inequality in the organization and society is acceptable. The
formal authority is able to influence the formal authority. The score that has been received by
Spain in the dimension is 57 which shows that the society is hierarchical in nature. Zara has
thereby faced major levels of challenges that are related to the power distribution in the
organization (O’Brien et al., 2017).
Individualism
The second dimension is based on the degrees of interdependence which exists in the
society and the members of the organization. China has been able to score 20 in this
dimension that is able to depict the highly collectivist culture that is followed by people in the
society. People in the society are able to act based on the interests of a group. The score that
has been received by Spain in this dimension is 51 which is able to show that the society is
collectivist in nature. The major challenge that will be faced by Zara in China is based on the
strategies that will be developed by the organization (Saucier et al., 2015).
Masculinity
The third dimension of the model is based on the levels up to which the society is
driven by the achievement, success levels and competition. Success is thereby defined by the
person who is a winner in the field. A low score in the dimension is based on the dominance
of the values related to life quality and care for others in the society. China has received a

9CULTURAL ENVIROMENT OF ZARA
score of 66 in the dimension and can be considered to be a masculine society. The major
priority is provided by the society to work in comparison to the leisure and family (Shiraev &
Levy, 2016). Spain has received a score of 42 in the dimension and the major key word in the
country is consensus. Polarization is not considered in an effective manner. Competition is
also appreciated in the society of Spain. Zara will face issues based on the levels of
competition that exist among the employees in China as compared to employees who were a
part of its operations in Spain (Thomas & Peterson, 2017).
Uncertainty avoidance
The fourth dimension of the model is based on the extent up to which the members of
the society are feeling threatened by the unknown or ambiguous situations. China has
received a score of 30 in this dimension which is able to depict that the members of the
Chinese society are highly ambiguous to different situations. Spain has received a score of 86
in the dimension. This has been able to reflect that the people of Spain are keen to follow the
rules that have been developed rather than implementing any changes in the operations. Zara
has been able to implement change strategies in China which have been able to affect the
operations of the organization (Tsai & Men, 2017).
Long term orientation
The fifth dimension of the framework is considered to be the ways by which the
society is linked with the past in the process by which it aims at dealing with challenges
related to the present and the future. China has been able to score 87 in the dimension that has
been able to affect the culture of the organizations in the country. The pragmatic culture has
been able to affect the truth which is based on the situation, time and context. The score that
has been received by Spain in the dimension is 48 (Vaiman & Brewster, 2015). This has been
able to show that the country is normative in nature. The people in Spanish society mainly
believe in living in the moment rather than making long term based plans. Zara has developed

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short term fast fashion based strategies in Spain in order to develop the products that are
offered to the customers. On other hand, the short term strategies have not been able to affect
the operations of Zara in China (Hofstede-insights.com., 2019).
Indulgence
The sixth dimension is based on the ways by which the members of the society is
able to control different desires and impulses. The score that has been received by the
dimension is 24 which is able to show that the China has a restrained society. The emphasis
that has been provided to the levels of leisure by the Chinese society is lower as compared to
work based activities. The score that has been received by Spain in this dimension is 44. This
has been able to depict that the society of Spain is indulgent in nature (Hofstede-
insights.com., 2019). The levels of indulgence of the society in Spain has been able to affect
the strategies which have been developed by Zara. The high levels of indulgence have been
able to help in the development effective customer relationships. The lack of proper
indulgence in the society in China is considered to be an important part of the strategies
which have been developed by Zara in order to operate in fast fashion based retail industry of
Spain (Hofstede-insights.com., 2019).
The analysis of the cultural dimensions of the two countries including, China and
Spain has been able to depict that Zara has faced major levels of issues that are able to affect
the strategies which have been implemented in the two countries. The cultural challenge
which has been faced by the organization related to the development of a proper culture in the
physical stores is a major factor which has led to the closure of the flagship store of the
organization in China (Hofstede-insights.com., 2019).

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Conclusions
The report can be concluded by stating that Zara has started facing major issues that
are based on the cultural competency of the organizational operations in different countries.
The organization has its operations in many foreign countries. The differences that are
present in the cultures of the countries have played a major role in the ways by which the
strategies have been developed by Zara. The organization has faced huge levels of cultural
challenges in China and the organization also had to stop the operations of flagship store in
the country. Zara has not been able to operate in China in a profitable manner with the help of
its physical as well as the online stores in the country.
Recommendations
A major recommendation that can be provided to Zara is based on the analysis that
needs to be made by the organization in order to develop its operations in China.
The organization needs to provide training to the employees who are a part of the
physical store based operations in China. The training will play a key role in the ways by
which the levels of cultural intelligence of employees can be increased in an effective
manner.
Zara needs to develop strategies which are able to affect the operations of the
organiation in both the countries in a similar manner.
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