Zara Company Organizational Management Theory

This paper evaluates the roles and functionalities of Zara’s management performance, in addition to its ethical and cultural diversity within the organization. It discusses Zara’s business strategy, ethics and ethical practices, and the role and legitimacy of Zara management functions. The paper also covers Zara’s leadership and organizational management theory.

Running head: PROJECT MANAGEMENT 1
Project Management
Institution Affiliation

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Executive Summary
The apparel fashion industry has been experiencing a considerable change such that a
majority of the retailers globally have expanded their business operations. As a result of these
prime stiff competition brought about by the continuous changes in the apparel industry has
led to the massive changes in the industry. However, the success of the apparel company is
mainly based on the company’s leadership and management approached applied. In the case
of Zara, the company has well-structured leadership and management. Thus it has been able
to become a leader in the apparel industry.

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Table of Contents
Introduction...........................................................................................................................................4
Background Information of Zara Company...........................................................................................4
Zara Company Organizational Management Theory.............................................................................5
The leadership of the Organization....................................................................................................6
The rationale for the Study Methodology..............................................................................................6
Zara’s Business Strategy.......................................................................................................................7
Ethics and Ethical Practice at Zara Company........................................................................................9
Role and Legitimacy of Zara Management Functions.........................................................................10
Roles and Functions Performed by Managers.....................................................................................10
Challenges and Risks Addressed by Managers in Today’s Changing Organizations.......................12
Conclusion...........................................................................................................................................12

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Introduction
In the last two decades, the apparel fashion industry has been experiencing a
considerable change such that a majority of the retailers globally have expanded their
business operations. As a result of these prime stiff competition brought about by the
continuous changes in the apparel industry has resulted in the massive modifications in the
industry. Some of the changes in the apparel industry include modification in the structural
features of the supply chain, the demand for lesser cost products, design elasticity,
distribution, and logistics. As a result, to enhance and keep this competitive speed in the
quickly changing apparel market, retailers have been forced to adapt to the “Quick Response”
strategy (Ülgen, & Forslund, 2015). Accordingly, these strategic plans are characterized
through the gain of competitive advantages by declining the time gaps between the design
and consumption of the apparel industry on a periodic basis.
In regard to the concept of “Quick Response,” the strategy has been described as a
business plan whose target is to lessen the procedures involved in the purchasing cycle to act
as a lead for realizing novel fashion products in stores to satisfy the customer demand when it
peaks (Cachon, & Swinney, 2011). Consequently, the idea of “Quick Response” has enabled
Zara Clothing Company in a range of ways like fast response production capacities, cost-
effective products for its consumers, as well as highly fashionable product design. In light of
this statement, the target of this paper is to critically evaluate the roles, as well as the
functionalities of Zara’s management performance, in addition to its ethical and cultural
diversity within the organization.
Background Information of Zara Company
Zara clothing company was founded in 1975 by Amancio Ortega and Rasalia Mera.
Accordingly, Zara is the flagship of Inditex (Industrial del Diseno Textil, S.A), it is a holding
corporation situated in Galicia to the North-western parts of Spain. Certainly, Zara has within

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a short span turned out to become an international and leading clothing retailer (Dua,
Huangb, & Liu, 2015). Reports show that in 2015, Zara had spread out over 7,000 of its
stores across the globe. On the same note, Zara has more than 30 online markets currently
with approximately 150,000 employees internationally (Sorescu, 2017). Zara is in possession
of a number of clothing chains for example, children’s fashion (Kiddy’s Class), and youth
casual clothes (Pull and Bear) trendy garments for young women (Stradivarius),
undergarment chain (Oyssho), Bershka (avantgarde clothing) as well as Zara home
(household textile). Accordingly, Zara has been able to rise to the current position because it
has adopted a flexible and innovative leadership management styles (Olanipekun, Abioro,
Akanni, Arulogun, & Rabiu, 2015). As a company, Zara’s success has been found in its
leadership management who strongly and solely focus on the company’s mission
“Committed to making sure that our customers are satisfied. As a Company, we pledge to
innovate our business to enhance customer’s experience consistently. We promise to offer the
latest designs from quality materials at affordable prices”.
Zara Company Organizational Management Theory
Leadership describes both the mission and vision statements for any organization that
desires to achieve its goals and objectives. As a result, the leadership has to focus on
motivating their teams to make sure that the company is in the position to achieve its goals.
Similarly, it is the task of the company’s mismanagement system and procedures to put
structures in place to ensure that the company can realize the set goals. Therefore, the best
point for a company’s success demands a well-organized leadership that can only be attained
through great management (Hill, Jones, & Schilling, 2014). The role of a leader is to fashion
a company’s vision for its long-term goals, and that of a manager is to create short-term
objectives. Accordingly, strategic leadership concentrates solely on the company’s entire
leadership through its executive management and normal leadership concentrates on the

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middle and low-level management. As a result, Zara clothing has adopted an effective
leadership strategy by incorporating the capacity to learn, adaptation as well as understanding
the setting that it operates.
The leadership of the Organization
The founder, as well as the former chief executive officer CEO of Zara Armanicio
Ortega, stands as the greatest pillar of the company. Ortega has set a leadership as well as a
vision for the company. Accordingly, he has a distinct leadership and management style
whose preference is for a close and personal interaction and humble. Ortega’s leadership style
is introverted, whereby he has a very low profile and hardly appears in public. Similarly, the
same is reflected in the entire company’s operations particularly corporate culture, such that it
does not advertise its products but only capitalize on spending resources on their products and
stores. Certainly, this has been facilitated by the company’s leadership style of wanting to
perceive a high-end store whereby the company is time and again situated in high-end
shopping centers close to luxury brands.
The rationale for the Study Methodology
Zara’s management style is consumer-oriented, to the extent that the company often
look ahead to understand exactly what its clients are in need of and then translates it into its
products offerings. Accordingly, Zara as a company entirely depends on its store managers to
finds out the demands of its customers to be in a position to translate back into the company’s
manufacturing. Thus, the leadership and management of Zara Company have taken a
transformational methodology as a strategy to motivate its workforce to go past their set
expectations to enhance an entrepreneurial culture. Indeed, this is conspicuously shown
through the company’s leadership values through teamwork, self-imposed quality standards,
and open communication that result in the right direction as well as a directive to its
employees and the company as a whole. Consequently, Zara’s customer-driven methodology

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is also shown to its employees, since it advocates for the development and growth of its
workforces by making sure that there is an effective leadership as well as management plan
in place. Certainly, this tactic has enabled Zara to promote understanding and learning within
its business model. Furthermore, Zara’s leadership style has shown a relationship to its
strategies which it uses in its business model.
Zara’s Business Strategy
Zara has an all-encompassing strategy whose target is to realize growth and
development through diversification using vertical integration (Wrigley, & Straker, 2016). As
a result, Zara has been able to adapt couture designs, circulates, and manufactures apparels by
retails apparels over a short period like one month of the original designs by the appearance
on catwalks. Accordingly, this is a glaring contrast as compared to the average time of more
than six months that other clothing companies take to produce products in the apparel sector.
Therefore, Zara is in possession of its supply chain and competes on its speed to market
literary embodying the idea of “quick fashion.” Some of the strategic approaches applied by
Zara clothing company include:
Just in Time Production: Zara has made sure that it can provide fashionable as well
as trendy products that cater for all its clients that is men, women, and children different
tastes using a regulated and integrated procedure is known as just in time production.
Therefore, the success of Zara Company centrally depends on its ability to keep a great
number of its products, in-house as a strategy to ensure that its factories can preserve over 80
percent of its capability for in-season modifications (Roll, 2015). Therefore, the in-house
production has made it possible for Zara to become more flexible regarding the quantity,
range in addition to frequent latest products that it keep on launching. Consequently, Zara’s
achievements are based on its highly sophisticated fabric sourcing, sewing and cutting
resources that are close to its headquarters located in Spain. Similarly, Zara is always

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concerned about its workforce wages and always works round the clock to make sure that it
pays its employees as compared to its rivals, which has helped the company to experience
low employee turnover.
Open communication: Zara’s managers have established an effective communication
with its customers. Thus, the company has a well-organized information flow whereby the
company listens keenly to its customer feedback regarding what they like, what they do not
like and what they anticipate for. Accordingly, Zara has a well-designed demand prediction
data which works instantly through the company’s well funneled back feedback flow to the
company’s designers who then immediately act towards customer’s feedback.
Lean inventory management: It is rare to come across any surplus inventory in Zara
warehouse. All through the company’s supply chain, Zara uses the word lean, which traverse
all the way from the materials to the finished apparels on the shelves (Olanipekun, Abioro,
Akanni, Arulogun, & Rabiu, 2015). Accordingly, Zara has placed an optimized inventory
model which is used to aid the organization in determining the quantity which is supposed to
be provided to each of its retail stores through shipments which moves out two times in a
week. The stock hat is delivered to Zara is strictly limited to make sure that every store only
receives what is only needed. As a result, inventory optimization model has enabled Zara
Company to build an outstanding company name of being an élite by avoiding the build-up of
unpopular stock.
Solid network circulation: Zara has a strong apparel distribution network which has
enabled it to deliver its clothing products among the European stores in less than a day and to
its Asian and American outlets in less than two days.

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Ethics and Ethical Practice at Zara Company
Zara Company flagship brand of the Indetix Group has won an ultimate as well as
reputable fashion standards having over 2,000 stores internationally. Currently, Zara
Company has shown an ethical concern towards it quick fashion firms. Some of the ethical
practices at Zara Company include:
Good labor conditions: According to the 2017 Ethical Fashion Report, which is
carried out a look at the company’s criteria that include payment made to employees,
employee empowerment initiatives and transparency. The report showed that Zara Company
policies supplier correlations and auditing are outstanding (Sorescu, 2017). As a result,
manufacturers and suppliers work in partnership with each other with the Inditex by abiding
by the code of conduct. On the same note, the traceability system has allowed the company
and its suppliers and manufacturers to understand the manner in which the company’s
products are created and the place they come from. Reports also, shows that Zara has
abolished child labor by not allowing underage employees. The company has also banned
forced labor as well as discrimination in the workplace.
Zara has started to comply with environmental matters. Inditex, the mother
company of Zara, has begun to repair as well as recycle its program known as Closing the
Loop. The target of the program is to provide its consumers the chance to drop off their used
clothes in-store (Haggège, Gauthier, & Rüling, 2017). Zara’s objective is to make sure that by
2020 it will no more send anything to landfills from its companies, factories, and stores.
Therefore, Zara has started to use the greenhouse gas protocol to provide a directive
measurement by giving reports regarding its carbon emissions by setting up an intensity
target to lower carbon emissions from its companies.

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Zara’s animal welfare rating is at its starting point. Zara’s Company animal
welfare policy consists of a strict ban on fur, stocking products, and angora tested on animals.
Additionally, Zara claims to source wool from exclusively non-mulesed sheep.
Role and Legitimacy of Zara Management Functions
Zara Company vision is to offer its clients with products of high quality while at the
same time making sure that it can develop a business which is sustainable. Therefore, the
company’s vision together with its management style that solely concentrates on its
customers’ needs depicts a humble leadership style, since it does not aim to be the leading
apparel brand in the world (Ülgen, & Forslund, 2015). Thus, it offers its consumers the best
quality goods to develop a sustainable business. Accordingly, Zari has outstanding business
values which are built on responsibility, such that it has developed a code of standards and
responsible business practices. Therefore, this code of conduct conducting help to give
direction to the company to act as a reaffirmation of its principles and values that should be
undertaken in all its operations (Wilhelm, Blome, Bhakoo, & Paulraj, 2016). Therefore, this
code is found in the following primary principles
i. Ethical and responsible operations
ii. Employee conduct
iii. Abiding by the apparel industry laws and regulations
iv. All shareholders are treated as honorable and fairly
v. The company’s practices should be done in a way that exclusively shows respect for
the environment.
Roles and Functions Performed by Managers
The primary role and function performed by managers in organizations include
planning, organizing, staffing, directing and controlling.

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Planning: It entails the selection and making of assumptions about the future by
formulating the necessary practices to realize a company’s goals. Planning is done to fulfill
the current gaps in an organization and forecasts the company’s future (Daft, & Marcic,
2016). In the case of Zara, the executive managers spend most of their time on planning while
the lower-level managers execute the plans made by the executive managers and make plans
for their departments.
Organising: It is a process that involves the allocation of tasks and responsibilities to
human beings, identification of relations and the integration of these activities to a common
goal, Zara has classified its responsibilities in a hierarchical structure with the aim to realize
the company’s structure.
Staffing: It is the process of appointing individuals and placing them in in the right
job position. Therefore, managers are supposed to find out the human resource requirements
by filling the organization structure with experienced personnel. In the case of Zara, the
managerial role includes hiring, training as well as developing employees to perform the
company’s tasks in the desired manner.
Directing: Once the plans have been put in place and the organization structure has
designed and appointed the necessary individuals in different posts, the role of managers is to
give direction by providing guidance, encouragements and leading of employees to
constructively contributes to the company goals (Kerzner, & Kerzner, 2017). Thus, managers
work by making sure that the planned process is realized through communication, motivation,
supervision, leadership, and teamwork amongst employees in the company.
Controlling: Control involves the assessing of company performance by applying the
right measures to ensure that performance can take place as it was it initially planned. Control
makes sure that a company can achieve its set goals and objectives by measuring a

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company’s performance and setting up performance standards by measuring the results
against the planned performance.
Challenges and Risks Addressed by Managers in Today’s Changing
Organizations
High employee turnover. There is a high turnover among employees today. Thus, to
tackle the issue managers are addressing the challenge by attacking and retaining the top
talent (Bromiley, McShane, Nair, & Rustambekov, 2015).
Rapid change in information exchange inspiring the need for a more robust risk
oversight (Hornstein, 2015). To solve these matter managers are applying different response
approaches identified early enough to aid in a fast response to risk matters and being able to
diffuse some of the adverse impacts at a timely basis.
Conclusion
In conclusion, the achievement of Zara Company is as a result of its well-organized
leadership and management strategies that it has adopted. Consequently, because of the
company’s outstanding performance strategy, it has been able to transform Zara’s apparel
industry, which has made it one of the leading clothing company globally. Additionally, Zara
has established exceptional ethical practices.

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