Stakeholder Analysis for Zara: Engaging Employees and Suppliers Report

This report presents a stakeholder analysis of Zara, a leading fast-fashion retailer, focusing on the application of stakeholder theory. The analysis identifies key stakeholders, including employees and suppliers, categorizing them based on their roles and influence. The report highlights the importance of engaging these stakeholders, particularly those who may be neglected, to ensure business sustainability. Recommendations are provided for improving employee engagement through digital technologies, internal promotion, and talent development, and for enhancing supplier engagement by expanding distribution centers and optimizing inventory models. The conclusion emphasizes the strategic importance of stakeholder analysis in developing a comprehensive understanding of stakeholder relationships and addressing their key concerns.

Running head: MANAGING FOR SUSTAINABILITY
MANAGING FOR SUSTAINABILITY
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Introduction
Stakeholder theory puts forward that the primary aim of a business is to create substantial
degree of value for stakeholders. In order to expand and gain sustainability over time, businesses
must uphold the interests and welfare of its employees, customers, suppliers, communities
properly aligned and focussed on same direction (Qrunfleh & Tarafdar, 2014). The paper has
identified two of its primary stakeholders of Zara, one of the leading fast fashion retailers,
namely employees and suppliers who have been distinguished as neglected group and requires to
get engaged to the organization.
Source: Created by Author
Stakeholders Role Power
Owner Decision Making Internal Primary
Manager Decision Making Primary Internal
Employees ( Primary Internal ) Services Primary Internal
Customers (Primary External) Consumption Primary Internal
Suppliers ( External Primary ) Supply and Distribution External Primary
Government Funding External Primary

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Body
Recommendations for Zara to improve Employee Engagement
 Zara must invest in digital technologies in order to improve its level of employee
engagement. Reports of authors have been revealing cases of Zara’s weakened employee
engagement which has declined its competitive advantage in the industry (Qrunfleh &
Tarafdar, 2014).
 The company must distribute technologically advanced gadgets along with personal and
rapid communication with store managers.
 Furthermore, Zara can focus on internal promoting as one of the vital ways by which the
company can successfully fill the position by choosing an employee from within the
company. Chan et al. (2014) have generalized these characteristics as firm-specific
knowledge in which employees gain the competence to obtain knowledge, ideas and have
embedded within them the principles and standards of the organization.
 Furthermore, divergences in local context can be viewed through a lot of factors namely,
employee training, employment and turnover. Holweg and Helo (2014) have noted that
people management tends to adhere towards the norms and standards of the parent
company. Zara at this juncture should attract as well as develop competent local talent in
order to achieve successful localization. Chan et al. (2014) have emphasized on three
important steps which are proposed to accomplish this that related to the observable
presence in the local labour market, regulate selection criteria as per environment
analysis and sell careers rather than simply focusing on jobs.

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Recommendations for Zara to improve Suppliers Engagement
 Zara in order to improve its relationship with its supplier base must expand its
distribution centres in order to serve the U.S market. Authors have noted that expansion
can lead to an increase in manufacturing expense and aid the suppliers to reduce labour as
well as facilities cost in overseas market (Qrunfleh & Tarafdar, 2014). Additionally, the
enhanced engagement will also enable the company to reduce its shipping as well as tariff
costs.
 Meanwhile, Zara being one of the leading major fast fashion retailers, significant amount
of its production in-house and ensuring that its own factories reserve around 85% of their
production capacity for in-season adjustments (Holweg & Helo, 2014).
 Furthermore, the company can efficiently place its inventory optimization models in
order to facilitate the company to establish the quantity that should be delivered to every
single outlet of the company’s retail stores through timely shipments (Zara.com, 2019).
Conclusion
Hence to conclude, the purpose of stakeholder analysis process is to tactically develop a
strategic observation of the organization as well as the associations between the different
stakeholders and the areas of issues which are of utmost interest to them.

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References
Chan, T. K., Zheng, X., Cheung, C. M., Lee, M. K., & Lee, Z. W. (2014). Antecedents and
consequences of customer engagement in online brand communities. Journal of
Marketing Analytics, 2(2), 81-97.
Holweg, M., & Helo, P. (2014). Defining value chain architectures: Linking strategic value
creation to operational supply chain design. International Journal of Production
Economics, 147, 230-238.
Qrunfleh, S., & Tarafdar, M. (2014). Supply chain information systems strategy: Impacts on
supply chain performance and firm performance. International Journal of Production
Economics, 147, 340-350.
Zara.com. (2019). ZARA | New Collection Online. Retrieved from https://www.zara.com/in/

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