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Copy of Zara - A Human Resources Perspective

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stephen carruthers

on 4 September 2013

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Transcript of Copy of Zara - A Human Resources Perspective

The initial approach: What to consider
A high performing
model

Key issues for Zara's next top model
Recommendations: How to prevent fashion faux pas
Issue 1 August 2013 $7.95 (GST INC)
Special Report
Zara styles for beginners
ON THE COVER
3 AUGUST 2013 ZARA
McKinsey 7S Model
ON THE COVER
3 MARCH 2012 ZARA
RECOMMENDATIONS
Recommendation 1
ON THE COVER
3 MARCH 2012 ZARA
RECOMMENDATIONS
ON THE COVER
3 MARCH 2012 ZARA
ON THE COVER
3 AUGUST 2013 ZARA
STRATEGY
Zara's Organisational Strategy
Being an international company Zara has adopted a localization strategy that is underpinned by cost leadership and differentiation.
Accommodates tastes and preferences at low cost across diverse national geographic locations in order to create customer value whilst increasing market share and profit margin.
Zara differentiates itself through quality service and a highly efficient supply chain management system.
ON THE COVER
3 AUGUST 2013 ZARA
HRM STRATEGY
Zara's HR Strategy
Polycentric approach which advocates for the recruitment of Spanish candidates into managerial positions in all the stores.
Ability to bridge the cultural gap between headquarters and all Zara chain stores.
Perpetuates the Spanish leadership style and culture of managing human capital.
ON THE COVER
3 AUGUST 2013 ZARA
STRUCTURE
The Organisational Struture
ON THE COVER
3 AUGUST 2013 ZARA
STRUCTURE
The Benefits of this Structure
It enables ZARA officers to more accurately monitor the performance of store, which simplified the problem of control.
It facilitated comparisons between stores, which improved the resource allocation process.
It stimulates managers of poorly performing divisions to look for ways of improving performance.
Low managerial hierarchy levels & Decentralize decision-making.
Limits the redundant administrative procedures.
Shorten the products life circle.
Information Technology management.
Upstream manufacturers-buyer-driven global chains.
ON THE COVER
3 AUGUST 2013 ZARA
STRUCTURE
Store Management Structure
ON THE COVER
3 AUGUST 2013 ZARA
CULTURE
The Organisational Culture at Zara
Attractive working climate
Internal promotion
Team work
Listen to the clients
82.8% of the employees are women
All top managers are Spanish
ON THE COVER
3 AUGUST 2013 ZARA
SYSTEMS
Production
Low Volume Production
Use of vast number of production, logistics and Internal Systems
Low Volume Production due to rapid change in fashions
Helps to Cut down on discounts
Changing Products quickly
Offers new distinct product
Helps to stay ahead of competitors
60% of total production in house
Just In Time Production
Takes place at specialised and centralised design and production centre
Helps to manage thousands of design specifications and physical Inventory
Helps to reduce waste and lead in time
ON THE COVER
3 AUGUST 2013 ZARA
SYSTEMS
Customer Service
Customer Service
First priority of Zara
Excellent customer service
Various strategies in place to ensure clear communication with customer
Employees are trained well
ON THE COVER
3 AUGUST 2013 ZARA
SYSTEMS
Communication
Customer input in Design
Takes suggestions and feedback from customers
Implements such suggestions in creating new designs
Ensures no style sits around for long period of time
Highly Effective Communication System
Constant exchange of Information throughout supply chain
Use of advanced technology makes information transfer easy
ON THE COVER
3 AUGUST 2013 ZARA
STAFF
Staffing Capability
Store Level Team
Store manager, assistance manager, section manager, sales person and store directors
Intelligence gathering efforts
Commission
Design and Manufacturing Level
Creative Teams
Review analysis and Implementation
Other Key Teams
Human Resource Team
Production Development Teams
ON THE COVER
3 AUGUST 2013 ZARA
SKILLS
Staffing Skills
Communication Skills
At all levels
Range of measures and strategies in place
Excellent Customer Service Skills
Sales Skills
Contribution of training in development of Skills
ON THE COVER
3 AUGUST 2013 ZARA
STYLE
The Spanish Culture - Cultural Dimensions
Hofstede (2007)
ON THE COVER
3 AUGUST 2013 ZARA
STAFF
Leadership at Zara
Multiple and significant reports and allegations of bullying and harassment from the top, driven down the organisation.
High profile examples - Sweden and Australia there were considerable reports of bullying and harassment made from low-level employees
Issues regarding breaks, time off, and ostracism for employees who questioned their rights.
ON THE COVER
3 AUGUST 2013 ZARA
STAFF
The bigger leadership picture
Issues in Sweden and Australia may be taken as samples of a wider systemic issue.
Stores opened in countries that have a low PDI may begin to face similar allegations from employees to the leadership team.
ON THE COVER
3 AUGUST 2013 ZARA
KEY ISSUES
Poor customer service (misalignment with strategy and culture)
Top managers - Spanish, bottleneck for store managers (misalignment with structure and culture)
Bullying perception from organizational leaders (misalignment with style, strategy and culture)
Strong reliance on Store Managers to uphold and maintain HR practices (misalignment between structure, strategy, skills and culture)
Misalignment - McKinsey 7s
ON THE COVER
3 AUGUST 2013 ZARA
KEY ISSUES
Under utilization of HR capabilities to enable company to adapt to changes taking place in the external environment.
Cost leadership/differentiation strategy has a high risk due to difficulties in producing products that offer the target customer differentiated features at a low cost.
External environment
Adoption of geocentric approach to recruitment which enables Zara to recruit Store Managers from a broad and diverse pool of candidates as opposed to just recruiting Spanish nationals.
This will foster career progression within the company and eliminate the structural bottleneck together with the bullying perception.
Recommendation 2
Incorporate Sales Team into the marketing mix and strategy of the business.
RECOMMENDATIONS
Recommendation 3
Build employee capability in global leadership at all levels of the company:
Shift from authoritarian to transformational leadership.
Encourage independent thinking, cultural intelligence and global market awareness.
Enable Zara to maintain its dominance in the global market.

Research on employee job satisfaction levels and develop measures to enhance organizational citizenship behaviours.


z
ON THE COVER
3 MARCH 2012 ZARA
ACTION
Any questions from the board?
ON THE COVER
3 AUGUST 2013 ZARA
McKinsey 7S Model
For an organization to perform well, these seven elements need to be aligned and mutually reinforcing.
McKinsey 7s Model identifies what needs to be realigned to improve performance, or to maintain alignment.
For example, what does a strategy of cost reduction mean for each element?
How did our team use the model?

1. Analyse the current situation through each 'lens' of the model
2. Identified misalignment between each element but placed an emphasis on 'Strategy'
3. Made a series of practical recommendations that will adjust and 're tune' the elements of the model.
Waterman, Peters & Phillip (1980)
Waterman, Peters & Phillip (1980)
ON THE COVER
3 AUGUST 2013 ZARA
Agenda
Justification of the model
Applying the model - Zara
Key issues
Recommendations
KEY POINTS:
Every employee has their place.
Hierarchical distance is accepted and normal.
Teamwork is considered as something totally natural.
Rules for everything, changes cause stress.
Confrontation is avoided.
ON THE COVER
3 AUGUST 2013 ZARA
STAFF
Spain
Sweden
Australia
57
36
31
Power Distances - Leadership at Zara
Spanish Management:
Bullying issues resemble the kind of behaviours assessed in a countries Power Distance score (PDI).
Spanish leaders place a priority on creating a structure where every employee has their place (Hofstede, 2005).
Everyone in Spanish society has his or her place and there is less equality the further you are down the hierarchy (Hofstede, 2005).
Sweden & Australia:
Place an emphasis on equality among their people and there is an equal distribution of power (Hofstede, 2005).
Employees are consulted with.
There is little or no place for control.
Participative communication.
ON THE COVER
3 MARCH 2012 ZARA
RECOMMENDATIONS
Recommendation 3 (Continued)

Initiate talent management strategies to recruit and retain and get the most out of high performing staff.

Initiate workforce planning activities to forecast future human capital needs in line with changes in external environment.

Introduce global virtual team management to strengthen performance management systems,cohesiveness and collaboration among Inditex business units.

Establish a country HR Manager to ensure adherence to national Occupational Health and Safety regulations in all the various countries.
ON THE COVER
3 MARCH 2012 ZARA
RECOMMENDATIONS
ON THE COVER
3 AUGUST 2013 ZARA
Zara
Part of a Inditex Group
18%
growth in sales (2012)
10.5M Euros
net sales (2012)
1,925 Stores
86 markets
21
online stores
Zara
Massimo Dutti
Pull and Bear
Uterqüe
Stradivarius
Bershka
Full transcript