Zara's Global Business: Environment, Governance, and Decision Making

This report analyzes the global business environment of Zara, a prominent fast-fashion retailer. It examines the influence of globalization on Zara's organizational governance, structure, and various functions, including marketing and finance. The report also explores the impact of sustainable and ethical globalization on Zara's operations, highlighting the importance of adapting to cultural nuances and adhering to ethical practices. Furthermore, it evaluates different decision-making approaches within a global business context, considering political and economic factors, technological advancements, and legal and trading policies. The report also investigates various routes for Zara to enter international markets, such as licensing, international distributors, and joint ventures, while addressing the barriers the company may face, including political and economic factors, cultural differences, and logistical challenges. The report emphasizes the need for Zara to understand consumer preferences, adapt its strategies, and navigate complexities to achieve success in the global market.

GLOBAL BUSINESS
ENVIRONMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
P3 Globalisation influence on organizational governance and structure....................................1
P4 Sustainable and ethical globalization influences on organizational functions.......................3
P5 Different decision making ways ...........................................................................................4
P6 Routes to enter in international market and their barriers......................................................5
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Globalization provides many facilities to business that they use for their growth and
success. Global organization reflect their work performance according on the bases of
government rules that run business smoothly. International level reflect the environment of entire
business procedures within many countries. Organization faces many problems during the entire
process which impact on their business profit and growth.
The present report is bases on Zara which is famous fast fashion Retailer Company in
Arteixo in Galicia. It makes clothes for women and men as well as children (Shenkar Luo and
Chi, 2014). This report evaluates the influences of globalisation on organizations structure,
governance and other functions. It also explains impact of sustainable and ethical globalisation
on company’s function. Furthermore, study will evaluate different decision making ways which
work effectively in global businesses context and also justify different internationalism routes
that firm may adopt.
TASK
P3 Globalisation influence on organizational governance and structure
Globalization is the process of integration and interaction among companies, people and
governments of different nations. It considers by some form of capitalist enlargement which
entails integration of national and local economies into international. It grows due to progress in
communication tech and transportation with accrued global interaction comes the development
of international culture, ideas and trade (Dignam and Galanis, 2016). Globalization involves
services and products and economic assets of technology, capital and data.. The entire procedure
refers to organizations in which they spread their thoughts, goods, facilities and ideas throughout
the world, connecting and interacting with the other country's government and their cultures.
Globalization influence on organizational leadership and governance
Zara is one of the most famous fashionable clothing brand that offers trendy
cloths to all age group people according to their preferences. Most of their products are
manufactured in many countries like Portugal, Turkey, Spain and Morocco. Firm expands its
business globally for maximizing profit and raising its global brand image. (Bolman and Deal,
2017). Globalization impact on organization leadership style which make changes in the entire
functions. When firm entire at global level their leader need to make such modification
according to culture and values of people which is one of the most important part for business.
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Their leader should make their decision according to the rules and policies of government. They
meet their standards with the governance structure and operate by dictate certain measure of
consistency and uniformity.Globalisation impacts on leadership of management, Manager,
leaders and other management have to perform as per the regulation of country. If values and
culture of particular nation is different then leaders of Zara has to make changes in their
leadership style so that they can run their business in new country significantly.
But on the other side the entire procedures negatively impact on Zara business procedure.
It effects on their financial budgets and investment policies directly that reduce their employee's
performance levels.
Globalization influence on organizational structure and culture
Globalization means company interaction and integration with other countries and their
culture which impact on their whole business environment. (Efrat, 2014). It also influences
management structure and HRM decision making process. Zara expand their business at global
level which influence on their structure and culture as well. Their leader need to identify country
culture and structure which impact on their business. At global level have different values that
need to adopt by the organization. All people have their different preferences and life style which
firm need to understand.
Globalization impact on organizational functions
It influences on Zara business functions like, operations, marketing and finance.
Globalization process sets the activities of firm in different way that increases profitability and
productivity. Entering at global level organization make new marketing strategies and plans
according to current country within their languages which impact on their other functions.
P4 Sustainable and ethical globalization influence on organizational functions
Ethical and sustainable globalization refers to the appropriate ways of running business
functions and other activities. It follows trading rule and supply goods in accordance to
customer's needs and demands. Ethical globalization impacts on organization’s other functions.
It also impacts on HR decision making process and other department that make changes in their
work performances. Company follows the right procedures by apply ethical and sustainable
policies that help to run their business effectively and smoothly.
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Ethical globalization influence on Zara functions, they need to identify country culture
and marketing activity (Lawrence and Weber, 2014). Thus, for making business more successful
firm analyse some factors that help them during the entire process. On the other side sustainable
globalization also impact on organization activity like investment and capital flow which they
need to control.
It has incorporated national economic system by global trade, capital flows and
investment, has increased culture and social and technological connection.
Sustainable represent breakthrough and fundamental changes in people approach for
doing business worldwide. Thus, sustainable globalization influence on Zara functions and
business process effectively. They make clothes for men and women according to their
preference that make them happy and satisfied. At the global level have some different rules and
regulation that impact on organization activities like focus on material which they use for making
clothes, their quality, cost each and every thing that is related with its customer's. Sustainable
globalization focuses on people need and demands and also on the things which they are using in
their life styles. Company values and recognizes use of precious natural assets and demonstrate
respect for all consumer which is related with business and other people on economy.
Organization manufactures good quality products by using good material with in
affordable prices. It influences on other companies as well and they make changes according to
consumer safety and focusing on their health (De Medeiros and et.al., 2014). But sometime this
process impact negatively on business functions that minimize their income source and decrease
employee's turnover which is one of the biggest issue. It needs more investment and involvement
of organization departments that help in making decision according to the rules and policies for
beating their competitors.
P5 Evaluation of different ways in which decision making can give positive result to business
Identify political factors
Zara focuses on customer's needs and wants and managed their work according to that. It
needs to expand its business at global level for increasing profitability and productivity. Thus, for
that their managers have to make research on the international businesses' environment that aids
in identifying opportunities and threats in new market (Disadvantages of export and import,
2016). Firstly, their manager needs to identify the policies and rules of government that may
influence their business function. Zara makes its decision according to the global political
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situation and then make plan for conducting operations effectively. Organization’s manager
needs to understand foreign trade policy, environmental law and tax policy.
Identify the growth of economy-
Manager of Zara needs to look upon more things before making any decision such as
identify economic growth, inflation and interest rates. To spread the branches of organization
function and activities firm need to get all the information about population. They also identify
people requirement and understand the latest trend that consumer's like to follow (Hair Jr and
et.al., 2015). Manager wants to know about social culture, beliefs and attitudes of population for
expanding goods' facility at international level. Therefore, the whole effort makes their business
successful and better than its business competitors. By identify other plans or strategies they
design cloth's much different in way that garb the attention of economic people's. The entire
process help to achieve goals and increase profit and growth.
Identify the latest technology-
In this research process manager make planning and point out some factors which they
need to analyse that help in making their decision regarding to expand business at global level. In
the entire procedures they identify which technology is use by their competitors in their structure
and functions. They also have to measure the techniques which have been applied by other
organizations at international stage. Thus, after that they make changes in their procedures of
supply goods and services that run their business effectively. Manager adopts new ways of
producing products that is different to the other companies. Using new machines help Zara in
making their cloth's much faster. They exchange old method with current technology that helps
to identify consumer's requirement and needs which they expect.
Analyse legal and trading polices-
Thus, to expand business at global level manager of Zara need to stretch their research
more and more. In that process have many factors that impact on organization function and
decision making activity. Trading procedure is the most important part of expanding services and
products internationally, so for that they need to focus on environmental elements such as heavy
rain, flood etc. that directly effect on business. Therefore, manager takes their decision for
making eco-friendly things that is much harmless and safe. At the last point of their investigation
the most important factors which they need to identify is legal factor. Without following the
government rules and laws policies they cannot do anything. According to this stage they need to
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focus on employee's health and safety at workplace. Organization offer services accordance to
consumer's rights that make them comfortable with them and help to attract the other people as
well. Identify legal factor firm make their decision that meet with the objectives and goals of
their business. They successful run entire process and function smoothly.
P6 Routes to enter in international market and their barriers
Entry in international market is the biggest challenge for any business but Zara takes risk
for increasing profitability and productivity by entering into new market (Gubik and Karajz,
2014). There are many routes to enter into global market such as, Licensing, internet, joint
ventures, international agents and distributors and exporting.
 Licensing: Zara can expand its business at global level through using different
techniques. Licensing is the best route that supports organization in this activity. This is
the better way for entering Zara international market and expand business routes.
 International distributors and agents: Agents are rarely an early step into global
marketing. Agents are organizations and individual that make contract to Zara. They help
company to expand successfully They take ownership of goods and take commission on
products sold.
 Joint ventures: Joint ventures are the best route to entire into international businesses
market. Zara set their business and expand it by including existing ventures that
understand the culture and structure of government. It supports in establishing the branch
in new location and attracting local consumers, by this way business can earn more profit
and can become successful.
Barriers for entering into international market
Zara wants to expand its business and enter into international market for increasing profit
and make their reputation and position much higher than its competitors. Organization make
effort for expanding business at global level, but there are some barriers which impact on overall
process. Entering into international market their economy factor and political both make barrier
in the whole procedure (Barber, Metcalfe and Porteous, 2016). The biggest barriers in the entire
process is political factor changes is rules and regulation directly impact on trading activity. At
international market have different culture and values in their economy which directly affect
business growth and success. Cultural and logistical differences are one of the biggest difficulty
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that stop the process of expanding. Each country have their different life style, language and
culture which is one of the bigger challenge for organization. They need to understand and
identify their values that help firm to run business easily. Logistical means supply goods in
another country by following their rules and policies that is one of the most important barrier.
Zara established their business routes in another country where people use different language for
expressing their feeling and thoughts. They also have their own values and thoughts which they
follow since for so long. Thus, all these things are the barrier for Zara business which they need
to enter into international market.
CONCLUSION
The present report has been concluded the globalization impacts on organization function
and structure. In this report will explain about the importance joint venture which is one of the
best route for entering into international market. But on the other side the entire procedures face
many barriers such as cultural and logistical differences which impact on business growth.
Furthermore, identify political, economical and other factors impact on organization their
management take their effective decision which support to enter firm at global level.
Globalization influence on many functions of firm such as leadership, marketing, culture and the
entire structure.
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REFERENCES
Book and Journals
Barber, J., Metcalfe, S. and Porteous, M., 2016. Barriers to growth in small firms. Routledge.
Bolman, L.G. and Deal, T.E., 2017. Reframing organizations: Artistry, choice, and leadership.
John Wiley & Sons.
De Medeiros and et.al., 2014. Success factors for environmentally sustainable product
innovation: a systematic literature review. Journal of Cleaner Production. 65. pp.76-86.
Dignam, A. and Galanis, M., 2016. The globalization of corporate governance. Routledge.
Efrat, K., 2014. The direct and indirect impact of culture on innovation. Technovation. 34(1).
pp.12-20.
Gubik, A.S. and Karajz, S., 2014. The Choice of Foreign Market Entry Modes: The Role of
Resources and Industrial Driving Forces. Entrepreneurial Business and Economics
Review. 2(1). pp.49-63.
Hair Jr, J.F. and et.al., 2015. Essentials of business research methods. Routledge.
Lawrence, A.T. and Weber, J., 2014. Business and society: Stakeholders, ethics, public policy.
Tata McGraw-Hill Education.
Shenkar, O., Luo, Y. and Chi, T., 2014. International business. Routledge.
Tierney, W.G. and Lanford, M., 2015. An investigation of the impact of international branch
campuses on organizational culture. Higher Education. 70(2). pp.283-298.
Online
Disadvantages of export and import. 2016.[ONLINE].Available
through:<https://www.quora.com/What-are-disadvantages-of-export-and-import>
Modes of Entry into International Markets. 2018.[ONLINE].Available
through:<http://www.marketingteacher.com/modes-of-entry/>
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