Zara SA: Overcoming Cultural Challenges in Global Expansion

This report examines the cultural challenges faced by Zara SA, a Spanish fast-fashion retailer, in its international business operations. The introduction defines organizational culture and provides background on Zara. The main body discusses various challenges, including language and power dynamics, conflicts in cross-cultural teams, and managing corruption. Language barriers and differences in power structures are identified as significant issues, impacting communication and team effectiveness. The report highlights the importance of training, adopting a common language, and developing policies aligned with local laws to manage these challenges. Cross-cultural team conflicts, stemming from communication gaps and differing perspectives, are addressed, emphasizing the need for skilled employees, effective communication tools, and decision-making strategies. The report also examines the challenges of corruption in international business, emphasizing the importance of ethical behavior, anti-corruption policies, and transparency. The conclusion summarizes the key challenges and emphasizes the need for proactive management strategies to navigate cultural complexities in global business. The report offers insights into how Zara can overcome these obstacles to maintain successful international operations.

Managing across
cultures

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Culture is defined as the underlying beliefs, assumptions, values and ways of interacting
that contribute to the unique social and psychological environment of a company. Organisational
culture refers to a system of shared beliefs and attitudes that develop within a firm and guide the
behaviour of its members (Allen, Diefendorff and Ma, 2014). This report is related to ZARA SA
which is a which is a Spanish fast fashion retailer. This firm was founded in 1975 by Amancio
Ortega and Rosalia Mera. This firm manage 20 clothing collection and have its own fashion
brands such as Massimo Dutti, Pull&Bear, Stradivarius, Oysho, Zara Home and Uterque. It
produce clothing product in its various brands. In this assignment will discussed about the
challenges that can be faced by a company when it operate its business internationally and how
they can be manage by the management department of the organisation.
MAIN BODY
Organisational culture refers to the philosophies, attitudes, beliefs, behaviours and
practices that define an organisation. Now these days, organisation operate their business
globally for the purpose of gaining competitive advantages and they face various kind of
challenges. These issues affect the business of the firm positively as well as negatively. There are
various challenges which affect the culture of the organisations when they operating their
business internationally.
Language and power- It is the first challenge and high affect the culture of a company when it
operate and run its business international market. Language is a natural system of
conventionalized symbols that can be used by people to understood meaning. It basically refer
ton a way by which people make communication and interaction to others. When a company
operate its business then difference in language affect and create a challenge for the culture of
the firm. In an organisation there are number of people and they belong from different lace and
culture as well so they use different languages to make communication but companies specially
following a specific language within the firm. Cause of it, some of employees are not properly
communicate with others and share their ideas and views (Brett, Behfar and Sanchez-Burks,
2014). In Zara, this firm operate their business worldwide so there are various issues generate
and affect the culture of the firm. For example, some times this company face challenges related
to languages when it operate its business new international market cause different language and
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the employees are not able to understand it and it. For this the company hire local employee who
have good language skill, this positively affect the organisation. But cause of language difference
the employees are properly interact with them. And when they are doing work in a team, they do
not make comparability between them and not unable to achieve the aims in set period of time.
This affect the culture and beliefs of the firms. For managing this issues and problems, the
management department of Zara, conduct training and learning sessions so that the employees
can learn and gain knowledge and information about various languages (Crawford, Menger and
Kaufman, 2014). So that when the company operate its business in a new market, this challenge
did not affect the culture of the firm. By following a particular language such as English is the de
facto language of business which help the firm to manage the language diversity in a work
environment culture.
Power refers to the capacity of managing and moderate a firm by using and designing
strategies, techniques and policies. When a company operate a business international level then
the power of affect the culture of the firm. In different countries, there are various kind of rules
and polices that can be followed by the management department of the organisation if it
expanding its business there. In Zara, this factor affect the culture of the firm cause of different
policies and cause of reward power. But by following the all laws and polices of that nation
where it operate business the company manage the cultural issues. By managing the language
and power business the company can manage the international business culture. For example, in
Zara, the management department of the company can develop strategies and polices according
to the nations laws such as if the firm operate its business in Japan and the tax rate is high then
the company should develop organisational policies according to it. This help the firm in
managing culture issues that affect the business function, operation and activities.
Conflict in cross culture teams- Cross cultural teams can have the fair share of problems once
the novelty of interacting with new people fades. These kinds of issues are generating with a
company cause of language problem, cultural difference and others. When a firm orating
internationally then these kind of problems and challenges can be faced by the organisation.
Global firms are transferring people increasingly to other countries which creates cultural
diversity within work teams. Basically team refers to a group in which limited number of
employees are working for achieving a common goal (Deresky, 2017). In Zara, a team is a group
of individuals in which nu man and non human are consist and working together to achieve their
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shared aim. Teams are now an accepted form of planning, strategizing and operation, team based
management techniques are still evolving world over and when the company introduce the
additional element of cultural diversity. The reason of these kind of issues are communication
and language gap and expression which create challenges for international business.
The quality of communication is a key concern in cross cultural teams. In current era,
everyone could be speaking English, but certain forms of slang or colloquialisms may not be
clearly understood leading to misinterpretations (Gibbs and Boyraz, 2015). In Zara, the company
face these kind of problem and challenges when it operate its business internationally and recruit
employees globally. If the organisation establish a team for achieve the business objective of the
company then it face problem cause of various kind of diversity related to language, culture and
others. This create misinterpretations and it kept to a minimum if everybody aims for clarity,
otherwise team effectiveness is bound to suffer. For this the firm should hire skilled and
knowledgeable candidates who have various skills, such communication, problem solving and
others. To resolve these kind of issues the management department of the company select
qualified and responsible employees to develop or design a team which is beneficial for the
company to attain its objective.
Information gap is an another problem area fro the cross culture team. Everyday has to be
on the same wave length as far as information and data goes. For solving these kind of issues the
firm can use various different kind groupware software which allows access to shared database,
provide email services, allows sharing of work files, allows online chats, scheduling and tracking
of joint projects. When the employees are working in a team then it is important that they all
have good communication between them and shared each information related to the task. So that
they can have proper information about the work. In Zara, the management department of the
company use and enables their teams to share resources, information and talent regardless of
time or location. For solving the problem of cross culture team, the firm can use various
technologies and pre-emptive measures in areas like communication, information sharing,
motivation drivers and group dynamics and others help in managing cross culture team.
The other issue with international team is decision making. It is a team activity and given
the time zone differences. The team has to identify a mutually agreeable time band for direct
communication through conference calls or video conferencing (Kamoche and et. al., 2015).
When the company designing a team it also face problem of decision making that which kind of
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employees must be within the team who help the company in achieving its set objectives in given
period of time. For this, the management department of the firm can chose and select talented
and capable workers. The manger of the company can provide training and learning sessions so
that they can make improvement in their skills and knowledge and help the firm in resolving
issues related to team work. With the help of it, they can help the organisation in attaining its
business objectives (Palthe, 2014). For managing the cultural diversity, the management can
concern that a section of the team that has a certain cultural similarity or homogeneity may
attempt to dominate the team process and overrule the rest of the team.
Managing corruption- Corruption in international business concerns the making of unlawful
payment to the politicians, government officials and sometimes to mafia of a host country. It can
be act by which a company start to run its business in another nation fro the purpose of ran and
gain profit. When a large corporation decides to netter a forge in market, it must usually secure a
number of licenses, permits, registrations or other government approval. Before starting or
expanding a business in another of foreign country, the company must follow different kind of
rule s and regulations of that nations which are developed by the government of that country. In
Zara, if the company operate its busies globally then its is important it follow and design the
business s policies according that laws so that it can operate its business properly, effectively and
efficiently. Before starting a business in another nation, there are number of laws and regulations
and it is importation for the organisation that it must be registered in them if it operate its
business at that place. Because it help in reducing the risk of corruption so that the firm expand
effectively. In UK, there are some laws such as the Foreign Corrupt Practices Act and the
organisation Cooperation and Development etc. which help the company in legally operating the
business.
Organisations doing business internationally must increase their level of care on anti
bribery and anti corruption scenarios, especially when operating in locations that might be prone
to irregular behaviour. There are number of reason to increase corruption in the business of the
company such as lack of transparency in the business and unlawful business. In UK the
government develop an authority and association to make transparency in the organisation's
business such as Transparency International's Corruption Perceptions Index, it help the company
to provide them ranks according to their perceived levels of public sector corruption (Peretz,
Levi and Fried, 2015). In Zara, for managing the international business, the company must
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follow ethical behaviour by following all the laws and legislations that make and develop for
those firm which operate their business internationally. In Zara, the company operate its business
more ethically in Zimbabwe, Egypt and India because in scarce supply in corrupt business
environments relatively high.
In Zara, the company face these kind of challenges when it operate its business in these
nations. In this situation, the management department of the company can train the local
management and employees on anti corruption policies of the company's and global standards.
These training sessions will be helpful for managing the issues which are arising due to
corruption (Steers and Nardon, 2014). By providing a follow up system and mechanism to verify
the policies and by conducting periodic performance tests as well as public industry reports
analysis can be beneficial for the firm in managing these challenges.
These all are the challenges in the practice of managing across cultures in international
organisations. These issues are faced by an organisation when it operating its business
internationally and they affect the business of the firm.
CONCLUSION
From the above information it can be conclude that there are various challenges that can
be faced by an organisation when it operating its business at global level such as language and
communication issues, power and political, cross culture team, corruption and others. These
issues influence the business of the firm in both aspects as well as positive and negative. In this
essay defined about three challenges in the practice of managing across cultures in international
organisations.
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REFERENCES
Books & Journals
Allen, J. A., Diefendorff, J. M. and Ma, Y., 2014. Differences in emotional labor across cultures:
A comparison of Chinese and US service workers. Journal of Business and Psychology.
29(1). pp.21-35.
Brett, J., Behfar, K. and Sanchez-Burks, J., 2014. Managing cross-culture conflicts: A close look
at the implication of direct versus indirect confrontation. Handbook of research in
conflict management, pp.136-154.
Crawford, M., Menger, L. M. and Kaufman, M. R., 2014. ‘This is a natural process’: managing
menstrual stigma in Nepal. Culture, health & sexuality. 16(4). pp.426-439.
Deresky, H., 2017. International management: Managing across borders and cultures. Pearson
Education India.
Gibbs, J. L. and Boyraz, M., 2015. International HRM’s role in managing global teams. The
Routledge companion to international human resource management, pp.532-551.
Kamoche, K. and et. al., 2015. The dynamics of managing people in the diverse cultural and
institutional context of Africa. Personnel Review. 44(3). pp.330-345.
Palthe, J., 2014. Cross-level cultural congruence: Implications for managing diversity in
multinational corporations. Journal of Diversity Management (Online). 9(1). p.51.
Peretz, H., Levi, A. and Fried, Y., 2015. Organizational diversity programs across cultures:
effects on absenteeism, turnover, performance and innovation. The International
Journal of Human Resource Management. 26(6). pp.875-903.
Skinner, N. and et. al., 2014. Understanding and managing work–life interaction across the life
course: a qualitative study. Asia Pacific Journal of Human Resources. 52(1). pp.93-
109.
Steers, R. M. and Nardon, L., 2014. Managing in the global economy. Routledge.
Vangen, S. and Winchester, N., 2014. Managing cultural diversity in collaborations: A focus on
management tensions. Public Management Review. 16(5). pp.686-707.
Online
Issues in Cross Cultural Teams. 2018. [Online]. Available Through:
<https://www.teambuildingportal.com/articles/problems-and-symptoms/cross-cultural-
team>.
Corruption in International Business. 2019. [Online]. Available Through:
<https://courses.lumenlearning.com/suny-good-corporation-bad-corporation/chapter/10-
corruption-in-international-business/>.
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