Zara and H&M: Organizational Structure, Culture, and Performance

This report provides a comparative analysis of the organizational structure and culture of Zara and H&M, two major players in the retail industry. It delves into the organizational behavior, mission management, and leadership styles employed by each company, highlighting how these elements influence employee behavior and overall performance. The report examines the functional structure adopted by Zara and the matrix structure utilized by H&M, discussing the advantages and disadvantages of each approach. It also explores the cultural dimensions of both companies, considering factors like team dynamics, communication, and employee motivation. The report further investigates the factors that contribute to organizational performance, emphasizing the crucial roles of organizational structure and culture in enhancing operational efficiency, productivity, and employee loyalty. The analysis includes discussions on ethical conduct, consumer satisfaction, and the importance of adapting leadership strategies to different situations. The report concludes by summarizing the key findings and emphasizing the positive impact of a well-defined organizational structure and culture on a company's ability to achieve its goals and objectives, retain skilled employees, and gain a competitive advantage.

ASSESSEMNT

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Structure and culture of Zara and its comparison with H&M.....................................................1
Factors contributing to organizations performance.....................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................5

INTRODUCTION
Organizational culture is a system of shared assumptions, values, and beliefs, which governs
how people behave in organizations. Present report will lay emphasis on Zara who is a retail
company based and headquartered in Spain. They are specialised in selling fashion products
including clothing, shoes, and perfumes. Present report will lay emphasis on structure and culture
followed by Zara. It will also lay impact on how these factors lays impact on performance level
of company.
MAIN BODY
Structure and culture of Zara and its comparison with H&M
Organizational behaviour, mission management and leadership: It is really important for
firm to have a better organizational behaviour so that they can consumer loyalty. Zara has been
engaged in continuously enhancing the way employee’s behaviour inside the firm. This has
given them an aspect to analyse needs and employees so that their performance level can be
enhanced. They have been engaged in making an environment which is flexible so no type of
issues is being faced by employees in the firm. Zara is been involved in maintaining and building
trusting relationship with their employees so that organization behaviour can be enhanced. This
has assisted firm in growing.
It has also been analysed that mission and vision of Zara is been made clear to all
employees. Company has provided employees with clear roles and responsibilities so that no
conflict among workers exits (Kava and et.al., 2018). This has assisted Zara in making their
organizational behaviour better by having a proper management related to mission and vision.
The roles and responsibilities of workers have been linked with goals and objectives of company.
Mission of Zara is to give consumers what they want and to get it faster than anyone else. In
order to achieve this, they are been engaged in providing training to employees so that their
motivation is been increased and they are able to gain competitive advantage.
Zara is making use of highly effective leaders who are been involved in bringing out the
most innovative and creative products so that needs and demands of consumers can be fulfilled.
This has also assisted Zara in increasing their sales as well as revenue. Situational leadership has
been used by leaders of company. In this leaders are been engaged in changing their strategy
according to their situation. This has assisted leaders in making their firms culture better.
1

Organization structure: It has been analysed that Fatehi has divided organization structure
on 5 bases; it includes functional, geographical, product, mixed and matrix. Firm can include in
designing the structure according to their preferences. It has been analysed from the research that
Zara has been involved in following functional structure. In this they have been involved in
dividing and distributing the roles and responsibilities on hierarchical basis. In these employees
know about who they need to report to and this structure is really helpful and easy for workers to
communicate with their peers. This organizational structure has increased the operational
efficiency and productivity as roles and responsibilities in cleared to every employee that has
reduced conflict.
On the other hand H&M follows the Matrix organization structure. It has been analysed
that general meeting is the highest authority in company which takes decision on their basis.
They provide share holders with forum where they can exercise their rights and duties. Under
Swedish law, the employees have the right to appoint employee representatives with deputies to
the company's board. It has been analysed that Share holder has been provided with the power to
make ultimate decisions on behalf of company. It is taken during annual general meeting.
Organizational culture: According to hofsetede cultural dimension model Zara is been
involved in following the corporate culture. In this they are working towards the development of
team dynamics through using open communication (Gordon, 2017). It has been analysed that
Zara is working in extremely uncertain environment and they are also operating in more than 70
countries. In order to make their organization culture better, the firm is laying emphasis on
following a lean structure. In this by developing and enhancing abilities of team Zara is been
engaged in increasing customer satisfaction. This is making culture better of firm and they have
been able to attract more positional employees towards them. It has also been analysed that Zara
is also been involved in motivating their employees to bring more innovative and creative
products and services so that their goals and objectives can be achieved. This has assisted them
in growing.
On the other hand H&M organizational culture according to Hofsetede model is based on
value driven working (González-Rodríguez and et.al., 2019). They have been involved in making
sure that task is been provided to all employees who are working with them. This has assisted
them in development skills and abilities of employees. It has made the employees more
productive and also it has assisted firm in making organizational culture better. H&M makes sure
2

that no type of workplace policies is been taking place as this will reduce efficiency of workers.
It can also increase the stress and makes employees unsatisfied. It will also lead to hampering of
organization culture. Leaders are been engaged in motivating employees by providing them with
training. They are also engaged in analysing their skills and abilities so that workers and
organization can grow. They work towards development of value and also motivated employees
to follow the ethical code of conduct.
Factors contributing to organizations performance
Organizational culture and structure is really important in improvising the organizational
performance and value of firm. It has been analysed that Zara has been engaged in following the
functional structure. In this the roles and responsibilities of employees are been clear, it has
assisted them in making organizational culture better. This has helped firm in attracting more
potential employees. It has also helped them in creating employee loyalty and belongingness. All
these aspects are really necessary for growth of firm.
It has been analysed that better organizations structure and culture has also increased the
operational efficiency and productivity level of firm. Leaders of Zara are making sure that
employees follow ethical code of conduct so that culture can be enhanced (Driskill, 2018). This
has also helped them in increasing consumer satisfaction which is really necessary for growth of
firm. They have been working on developing team dynamics so that organizational culture can
be enhanced. Zara is also making use of open communication so that they are able to know about
the needs and demands of employees. This has assisted Zara in making organizational culture
better. They have been able to retain skilled employees by making the organization culture
better.
CONCLUSION
From the above study, it has been summarised that company has been involved in following
functional structure. This has assisted them in making roles and responsibilities clear among
employees. They have also known about their reporting authority. It has laid positive impact on
performance level of firm. It has been analysed that company’s productivity and operational
efficiency has also been increased. They have been able to achieve their goals and objectives.
Leaders have also been involved in bringing out most innovative and creative products in order
to attract large range of consumers. They have been able to grab large markets share.
3

4

REFERENCES
Books and Journals
Driskill, G.W., 2018. Organizational culture in action: A cultural analysis workbook. Routledge.
González-Rodríguez, M.R. and et.al., 2019. Hotels’ corporate social responsibility practices,
organizational culture, firm reputation, and performance. Journal of Sustainable
Tourism, 27(3), pp.398-419.
Gordon, G., 2017. Guiding Organizational Culture. In Leadership through Trust (pp. 53-62).
Palgrave Macmillan, Cham.
Kava, C.M. and et.al., 2018. Organizational culture and the adoption of anti-smoking initiatives
at small to very small workplaces: An organizational level analysis.
5