Report on Leadership and Management Strategies at Zara

This report provides a comprehensive analysis of Zara's leadership and management practices, examining the roles of managers and leaders in achieving organizational goals. It explores the differences between leadership and management, highlighting Zara's use of transformational leadership a...Read More

Management and
Operations

Table of Contents
INTRODUCTION...........................................................................................................................2
LO1..................................................................................................................................................2
P1 Define and compare the different roles and characteristics of a managers and a leaders 2
LO 2.................................................................................................................................................4
P2 Examine examples of how the role of a leader and the function of a manager in different
situational contexts.................................................................................................................4
P3 Apply different theories and models of approach.............................................................5
LO 3.................................................................................................................................................7
P4 Key approaches to operational management and the role of leaders and managers.........7
P5 Importance and value of operations management in achieving organisational goals.......8
LO 4.................................................................................................................................................9
P6 Factors of business environment that impact upon operational management and decision
making by leaders and managers............................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
1

INTRODUCTION
An effective management is a need of any organisation to optimise the operations and
reach desired business outcomes. Leadership provides a sustainable alignment with employees.
Managers and leaders take different initiatives to promote fluent operating of the operations.
Management and leadership are two basic pillars in foundation of efficient and smooth running
of business (White, 2016). This report describes roles of managers and leaders in achieving goals
and objectives of organisation are discussed in regards to Zara which is a world known clothing
retailer founded in 1975. Zara is the main brand of a apparel retailer, Inditex group. This group
takes responsibility of maintaining high speed supply chain for Zara.
LO1
P1 Define and compare the different roles and characteristics of a managers and a leaders
Zara is a clothing retailer of Spain Which is based in Arteixo, Galicia. This fashion group
is a part of apparel retailer naming Inditex group and it also owns other brands like Massimo
Dutti, Oysho, Zara Home etc. Zara is operating in 91 countries and having approximately 7000
stores across the world. A manager is a person who is responsible for guiding its subordinates in
achieving different tasks given to them. The various role of managers in Zara are customer
service, virtual merchandising, sales and stock management, human resource management, loss
prevention and operations.
Management structure refers to the organising of various levels of managing in the
organisation. In Zara, the top management is Mr. Pablo Isla who is the chairman of Inditex
Group. The board of directors of Zara are responsible for making decision of the company. It is
duty of these directors to set organisational goals and maximising value of the company in the
long term (Webb, 2017). The different roles of the board of directors at Zara are making relevant
decisions for administration and management of the company and decisions related to delegating
the management of teams. The most important factor of directors is to ensure that all decision
making policies of the company are favouring social and ethical responsibilities of all
stakeholders. Zara uses vertical integration strategy of supply chain that helps in meeting
customer needs because it has full control over production and distribution hence it saves time.
2

The Zara leaders focuses on providing a quality product to their customers and meeting
their expectations. Leaders of Zara have a strategic intent to make sustainable fashion and
providing quality clothes with affordable rates. Leaders focuses on making goals and objectives
for the company in order to maximise customer satisfaction ( Strande and Brdjanovic, 2014). For
doing so, Leaders perform several actions in organisation to increase value of brand in front of
others. Some of these are teamwork, belief in people, sustainability, striving for improvement.
On the basis of roles of both managers and leaders in organisation they can be
differentiated as below-
Basis Leadership Management
Meaning This is initiating goals and
objectives for the organisation
to increase profits for
company.
It includes various plans ans strategies
to be implemented in order to achieve
business goals.
Emphasis on Influencing teammates and
juniors to work for completing
tasks.
Managers give tactics and strategies to
accomplish personal and
organisational goals (Difference
Between Leader and Manager, 2019).
Power Leaders have authority to make
changes in functionality of
company.
Managers can make changes in rules
and regulations for employee's
benefit.
Focus on Leaders focuses on providing
new variety of clothing to its
customers (Shaheen,
InterDigital Technology Corp,
2014).
Management takes care of business
stability.
Strategies Leaders make proactive
strategies to maximise profits
for organisation.
Management is involved in making
reactive strategies.
3

Formulation of Rules, policies and guidelines
for company are made by
leaders.
Managers make rules, regulations and
strategies for subordinates for
achieving their personal and
organisational goals.
Example Leaders of Zara are providing
fashionable and quality clothes
to people and presently serving
in 99 countries.
Management ensures proper operating
of supply chain management and
providing clothes to customers within
time and building brand's value and
customer satisfaction.
(Source: Difference Between Leader and Manager. 2019)
Management theory followed in Zara is classical management approach. The classical
management approach followed in Zara is Taylor's scientific management approach. According
to this job the organisation hires those employees who have the right abilities for job (Pingili,
and et. al, 2014). On the other hand leadership style followed in Zara is transformational
leadership style. Leader of Zara focuses on motivating their employees and enhancing
productivity and efficiency of the company.
LO 2
P2 Examine examples of how the role of a leader and the function of a manager in different
situational contexts.
Zara Clothing is a part of Inditex Group which is dealing with two main product division
of Men's wear and Women's wear. Zara is very well known for providing innovative and quality
clothes to people around the world since 1975. Leaders and managers plays an important part in
making various decisions for organisation when it undergoes different business situations. The
different issues that are solved by managers are given below-
Marketing: Any organisation requires to initiate marketing of its Brand to increase it's
market area and seek new opportunities in business. Zara is doing well in business but then also
it is beneficial for organisations to initiate marketing campaigns and increase market share.
Managers and leaders of Zara are actively involved in implementing campaigns to promote new
fashion trends of clothing and material provided by it.
4

Political Issues: Zara is a Brand that is offering services in different countries and it is
facing different issues related to laws and regulations of government. It is responsibility of
managers and leaders to ensure employees are not affected by such problems and they work with
full concentration and dedication and support the company in maintain g brand value (Pelley,
Alcatel-Lucent, 2015).
Product: Zara is basically generating light coloured clothes for people. But there are
some countries where bright colours are preferred for parties and functions. Therefore it is duty
of managers and leaders to conduct a market survey and implement clothes which are acceptable
by customers of different areas.
Social Issues: Managers of Zara are responsible for protecting the firm and employees
from different social issues of the environment. Employees should be given value and
recognition in the organisation they are working. For example: Managers of Zara ensures to
provide good work culture and motivating employees to work hard in achieving organisational
goals (Palizban, Kauhaniemi, and Guerrero,2014).
P3 Apply different theories and models of approach
Leadership approach is defined as the different traits and characteristics followed by
leaders of organisation in solving various situations of business. A good leader is prepared for
handling problems and issues generated in functioning of its company. There are basically types
of leadership approach like transformational and transactional, qualities or trait approach,
functional or group approach, behavioural style approach. The leadership approach followed in
Zara is transformational leadership approach. This approach is used for improving the
performance of employees by creating a vision in their mind to work effectively and be
productive for business. In this kind of leadership approach leader sets an example for its
employees by performing well in the organisation. This transformational approach in an
organisation has positive as well as negative effects on employees work (Morschett, Schramm-
Klein and Zentes, 2015). This approach has both strength and weakness for any business -
STRENGHTH WEAKNESS
 In transformational approach, leaders
and mangers knows their role and
responsibilities in the organisation.
 In transformational leadership leaders
do not concentrate on real facts but they
rely on passion.
5

 Leaders have to think creative and
making new innovations for the product
of company.
 Zara's leaders work to improve their
quality and provide best fashionable
outfits to customers.
 Leaders work for making employees
think out of the box and build their
creative mind.
 Leaders expect results from team
members and if they fail to do so they
have to face consequences like less pay,
devaluation in company.
Management is defined as planning and organising strategies and plans to be
implemented in organisation in achieving goals and objectives of organisation. Different
management approaches are followed in various organisations to coordinate with subordinates
and work effectively at workplace. There are basically three types of management approaches
such as classical theory, behavioural theory and contingency theory. Zara follows classical
approach of management in its functioning and operations. Zara follows Taylor's Scientific
management approach and according to this managers and leaders hire those people who are
perfect for the job. Taylor's scientific management also states that employees are given proper
tools and work conditions in the organisation (Mendis, Muttaqi, and Perera, 2014). Because of
this management approach the employees of Zara are given good work conditions and high
technology. Different store mangers of Zara are given handheld computers for making reorders
of hot items in a short period of time. Modern management in Zara follows contingency
approach and in this approach organisational complexities are evaluated. Zara stores are located
in cities where high fashion stores are present and Zara offers less price than other brands. This
provides it a competitive advantage.
Strength and weakness of classical management approach is discussed below-
Strengths Weaknesses
 Classical theory gives different methods
to perform management operations in
 This is a tough management
approach.
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organisation (Liu, and et. al, 2015).
 Employees are given different tasks so
that the work is done efficiently.
 It is expensive for creativity and
human relation management.
LO 3
P4 Key approaches to operational management and the role of leaders and managers
Zara is a clothing retailer which provide a collection of fashionable clothes to people
around the world. It is presently serving in more than 91 countries and is successful in
maintaining brand value. It gives a good customer value and satisfaction to people (Kato, NEC
Corp, 2014). The different operations in management of Zara are inventory management,
logistics management, product design, material management, time scheduling, information
systems and suppliers and vendors. The key operations of Zara are described as below-
Design and production (Just in time production): Zara delivers clothing to people
through an integrated process called just in time. It is a Japanese concept in which waste is
eliminated in making of product. The product design of Zara includes designers, commercial
teams, procurement team and feedback from store managers. This ensures that product has
reached to customers. Decisions for a new design of product in Zara is discussed in one room
which involve all managers. It is a collaborative decision and takes very less time in innovating a
new product design.
Procurement: Zara is manufacturing 60% of the total products. It is associated with in
house production and hence it is flexible in fixation of prices, frequency and variety of new style
of products. Zara has 22 factories that work for one shift and it does not depend on suppliers and
manufacturers for placing advance orders. In Zara labour intensive jobs like sewing is
outsourced but cutting is done in house. It reduces the labour cost and helps in flexible meeting
of orders in time.
Information Systems: The use of technology in every organisation helps in maximising
the efficiency of operations and management. Managers and leaders of Zara are using technology
in complex tasks reducing errors (Binz, and et. al, 2014). Technology is used to know customer's
demand and identify kind of clothes which customers want and make them available in store.
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Inventory Management: Zara avoids building of inventories from the time of raw
material to end user. It does not follow the general trend of garment industry of putting of clothes
in inventory or stock. Models for inventory optimisation are followed by Zara to determine how
many clothes are needed in which sizes and delivered in stores within two weeks.
Centralised logistics and Distribution: Zara provides clothes and products to stores in
different stores at a fixed time. Orders of different stores are being prepared overnight and sent to
La Coruna . Generally the stores are provided garment stuff two times in a week. Garments are
fixed with label, price tag and hung up on hangers.
Low marketing/ Advertising cost: Zara does not spend money in advertising the products
of its brand. They believe in word of mouth advertising. They make customers happy by
providing good quality clothes and in return they are getting appreciation and advertisement
done by words of consumers.
Synergy between business and operation strategy: Managers of Zara believes in
diversification for its growth. Manufacturing and distribution of clothes is done within two
weeks of displaying of that product on catwalks.
P5 Importance and value of operations management in achieving organisational goals
Operations management refers to different functions and operations that provides goods
and services to customers. Zara is a clothing retail industry which has various operations
management activities such as inventory management, purchasing, quality check, logistics,
manufacturing and storage. Theses operations help the organisation to achieve its goals and
objectives within less time. If a company wants to sustain in business environment it is very
important to retain customers. This can be done by meeting the expectations and demands of
customers every time (Johnstone, 2016). Zara is successful in providing good services and
products across the world since many years. They take special care in fulfilling the requirements
of customers and give a variety of fashion clothing for men and women. The key operations used
in Zara are product development, supply chain management and manufacturing of products. All
these operations help to maximise profits for the company.
Business strategy and processes- Unlike other clothing retailer, Zara has its own supply
chain. When a design appears at catwalk of Zara, the original clothing is manufactured within
two weeks at the stores. Zara is able to do it because it has its own supply chain. This helps in
building customer relationship.
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Just in time- Zara believes in producing products/clothes at the time of customer
demand. Clothes at Zara are sold at a fixed price, offers and discounts are not used in stores of
Zara. They provide exclusive designs and quality of clothes people don't care about discounts
they just want to have them. This helps in achieving goals specified for the growth of company.
Inventory Management- Models for managing inventory are followed in Zara. Due to
this they are able to identify the number of stocks that is required in stores and it has to be
delivered within two weeks in stores. Due to this, optimisation of delivery and manufacturing
increases.
LO 4
P6 Factors of business environment that impact upon operational management and decision
making by leaders and managers
There are different internal as well as external factors that affects the organisational
operations and company's growth and development. The various external factors impacting the
decisions of leaders and managers are discussed as under-
1. Competitors : Competitors affects the decision making of a manager and leader as it is
important to know about strategies and plans of other competitors in business. Leaders
and managers should have a track on how other companies of same sector are competing
in business environment (Baboli, and et. al, 2014). Managers change the planning and
strategies in order to overcome threat of new brands which are entering into same
business. Additionally, whole strategy and tactics of organisation is changed to sustain in
business and make profits.
2. Customers : Demand of customer is changing day by day. It is duty of managers and
leaders to provide customers with new fashionable clothing at every time. Zara's
managers and leaders work upon reaching the demands of customers and giving them a
pleasant experience. Zara provides quality clothes to people and customer feel satisfied
and happy by the services of Zara. Offers and discounts are not offered by Zara clothing
but if it wants to remain in business it should be offering some discounts otherwise there
are other brands too which are providing good quality fashion clothing. For e.g. Hennes
& Mauritz (H&M) is the biggest competitor of Zara which is a good clothing brand
serving in many countries.
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3. Suppliers : Decision making of leaders and managers is affected by different suppliers it
posses (Bahmani-Firouzi and Azizipanah-Abarghooee, 2014). Zara is a best quality
retailer of clothing and as every other organisation they also rely on suppliers for raw
material and tools. Different tools required by Zara in designing clothes are product
development tools, pattern making tools, fabrics, threads, needle, sewing tools, Computer
assisted design tools, Fashion Art tools and general draping tools. It is necessary for
mangers and leaders of Zara to maintain a good relationship with the suppliers of the
company. In any case of emergency like a huge order, a healthy relation with suppliers
provide raw materials to company at short period of time because supplier respects
company's treatment and behaviour towards them.
Some other internal factors that affects the decision making of organisation's leaders and
managers are listed below-
Organisational culture- Organisational culture is the environment provided to employees
at work place. A positive environment at workplace makes employees feel motivated and
passionate about working hard and achieve organisational goals. Managers and leaders of Zara
gives different policies at workplace to provide good work culture to its people for positive
business outcomes.
Profit- Leaders and managers work in organisation to make profits for company. A
business cannot be run at loss (Johnstone, 2016). In Zara managers take steps in dividing work
load in chunks and giving every department a task to be performed. Leaders want to make their
employees profitable for themselves as well as for organisation.
Management- A good management is need of every organisation which wants to be in
business for long time. Managers and leaders work together in an organisation and help
employees in giving their best and performing in business (Binz, and et. al, 2014). Good
management leads to motivated and satisfied employees and this results in making organisation
profitable.
CONCLUSION
It is concluded from the above report that mangers and leaders play a very important role
in operating of every business. There are various leadership and management approaches
followed in different organisations by leaders and managers to increase profitability of
organisation such as transformational approach, contingency approach, classical management
10

theory etc. Every company has operations which are implemented in working and also there are a
number of key operations which are specific for an organisation. Strategies and plans are applied
by managers and leaders for efficient and effective functioning of organisation in long run.
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